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File Number 33-85496
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
POST-EFFECTIVE AMENDMENT NUMBER 4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MINNESOTA LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
(Name of Trust)
Minnesota Life Insurance Company
(formerly The Minnesota Mutual Life Insurance Company)
(Depositor)
400 Robert Street North, St. Paul, Minnesota 55101-2098
(Depositor's Principal Executive Offices)
Dennis E. Prohofsky
Senior Vice President, General Counsel and Secretary
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101-2098
(Agent for Service)
Copy to:
J. Sumner Jones, Esq.
Jones & Blouch L.L.P.
1025 Thomas Jefferson St., N.W.
Suite 405 West
Washington, D.C. 20007
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (check appropriate box)
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on (date) pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
X on May 3, 1999 pursuant to paragraph (a)(1) of Rule 485
---
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
___ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
TITLE OF SECURITIES BEING REGISTERED:
Variable Universal Life Insurance Policies
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MINNESOTA LIFE
VARIABLE UNIVERSAL LIFE ACCOUNT
OF
MINNESOTA LIFE INSURANCE COMPANY
CROSS REFERENCE TO ITEMS
REQUIRED BY FORM N-8B-2
N-8B-2 Item Caption in Prospectus
1. Cover Page
2. Cover Page; General Descriptions, Minnesota Life Insurance
Company, Variable Universal Life Account
3. Not Applicable
4. Distribution of Policies
5. General Descriptions, Variable Universal Life Account
6. General Descriptions, Variable Universal Life Account
7. General Descriptions, Variable Universal Life Account
8. Financial Statements
9. Legal Proceedings
10. Summary; Detailed Information About the Variable Universal Life
Insurance Policy; Charges; Voting Rights
11. Summary; Detailed Information About the Variable Universal Life
Insurance Policy; General Descriptions, Advantus Series Fund,
Inc., Fidelity Variable Insurance Products Fund, and Fidelity
Variable Insurance Products Fund II
12. Summary; Detailed Information About the Variable Universal Life
Insurance Policy; General Descriptions, Advantus Series Fund,
Inc., Fidelity Variable Insurance Products Fund, and Fidelity
Variable Insurance Products Fund II
13. Detailed Information About the Variable Universal Life Insurance
Policy; Charges
14. Detailed Information About the Variable Universal Life Insurance
Policy; Applications and Policy Issue
15. Detailed Information About the Variable Universal Life Insurance
Policy; Policy Premiums
16. Account Values
17. Summary; Detailed Information About the Variable Universal Life
Insurance Policy; Account Values
18. General Descriptions, Advantus Series Fund, Inc., Fidelity
Variable Insurance Products Fund, and Fidelity Variable Insurance
Products Fund II
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19. General Matters Relating to the Policy
20. Not Applicable
21. Account Values; Policy Loans
22. Not Applicable
23. Not Applicable
24. General Matters Relating to the Policy; General Provisions of the
Group Contract
25. General Descriptions, Minnesota Life Insurance Company
26. Not Applicable
27. General Descriptions, Minnesota Life Insurance Company
28. Directors and Principal Officers of Minnesota Life
29. General Descriptions, Minnesota Life Insurance Company
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. General Descriptions, Minnesota Life Insurance Company
36. Not Applicable
37. Not Applicable
38. Distribution of Policies
39. Distribution of Policies
40. Not Applicable
41. Distribution of Policies
42. Not Applicable
43. Not Applicable
44. Detailed Information About the Variable Universal Life Insurance
Policy; Policy Values
45. Not Applicable
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46. Not Applicable
47. Detailed Information About the Variable Universal Life Insurance
Policy; Policy Loans; Surrender
48. Not Applicable
49. Not Applicable
50. General Descriptions, Variable Universal Life Account
51. Summary; Detailed Information About the Variable Universal Life
Insurance Policy; Policy Charges
52. Summary; General Descriptions, Variable Universal Life Account;
Advantus Series Fund, Inc.; Fidelity Variable Insurance Products
Fund; Fidelity Variable Insurance Products Fund II
53. Federal Tax Status
54. Not Applicable
55. Not Applicable
56. Not Applicable
57. Not Applicable
58. Not Applicable
59. Financial Statements
<PAGE>
Prospectus
Minnesota Life Variable
Universal Life Account
Variable Universal Life Insurance Policy
This prospectus describes Variable Universal Life Insurance Policies issued by
Minnesota Life Insurance Company ("Minnesota Life"). The policies are designed
for use in group-sponsored insurance programs to provide life insurance
protection and the flexibility to vary premium payments. Certificates setting
forth or summarizing the rights of the owners and/or insureds will be issued
under the group contract. Individual policies can also be issued in connection
with group-sponsored insurance programs in circumstances where a group
contract is not issued.
The owner may allocate net premiums to one or more of the sub-accounts of a
separate account of Minnesota Life called the Minnesota Life Variable
Universal Life Account (herein "separate account"). Net premiums may also be
allocated to a guaranteed account of Minnesota Life. To the extent of the
investment of a policy in the separate account, the account value will vary
with the investment experience of the sub-accounts of the separate account.
There is no guaranteed minimum value associated with the separate account and
its sub-accounts.
The separate account invests its assets in shares of Advantus Series Fund,
Inc., Fidelity's Variable Insurance Products Fund, and Fidelity's Variable
Insurance Products Fund II (the "Funds"). The Funds have nineteen Portfolio s
which are available. They are:
. Growth Portfolio
. Bond Portfolio
. Money Market
Portfolio
. Asset Allocation
Portfolio
. Mortgage Securities
Portfolio
. Index 500 Portfolio
. Capital Appreciation
Portfolio
. International Stock
Portfolio
. Small Company Growth
Portfolio
. Maturing Government
Bond
. Value Stock Portfolio
. Small Company Value
Portfolio
. Global Bond Portfolio
. Index 400 Mid-Cap
Portfolio
. Macro-Cap Value
Portfolio
. Micro-Cap Growth
Portfolio
. Fidelity VIP--High
Income Portfolio
. Fidelity VIP--Equity-
Income Portfolio
. Fidelity VIP II--
Contrafund Portfolio
Portfolio (target
maturity of 2010)
Although the Maturing Government Bond Portfolio with a target maturity of 2002
is included in this prospectus, it is not available for premium allocations or
transfers effective May 1, 1997.
THIS PROSPECTUS MUST BE ACCOMPANIED BY THE CURRENT PROSPECTUSES OF THE FUNDS.
THIS PROSPECTUS SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE.
THE POLICIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC"). NEITHER THE SEC NOR ANY STATE HAS DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATIONS TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, MN 55101-2098
651.665.3500 Tel
www.minnesotamutual.com
Dated: May 3, 1999
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Table of Contents
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<TABLE>
<CAPTION>
Page
<S> <C>
Special Terms.............................................................. 2
Summary.................................................................... 3
Condensed Financial Information............................................ 8
General Descriptions....................................................... 10
Minnesota Life Insurance Company......................................... 10
Variable Universal Life Account.......................................... 10
Advantus Series Fund, Inc................................................ 11
Fidelity Variable Insurance Products Funds............................... 11
Additions, Deletions or Substitutions.................................... 12
The Guaranteed Account................................................... 12
General Description.................................................... 13
Guaranteed Account Value............................................... 13
Information About the Policy............................................... 14
Applications and Policy Issue............................................ 14
Policy Premiums.......................................................... 14
Death Benefit............................................................ 15
Change in Face Amount.................................................... 17
Payment of Death Benefit Proceeds........................................ 17
Account Values........................................................... 18
Policy Loans............................................................. 20
Surrender and Partial Surrender.......................................... 21
Transfers................................................................ 21
Dollar Cost Averaging.................................................... 23
Free Look................................................................ 23
Conversion Right to an Individual Policy................................. 24
Continuation of Group Coverage........................................... 24
Charges.................................................................. 24
Premium Expense Charges................................................ 25
Account Value Charges.................................................. 25
Separate Account Charges............................................... 27
Fund Charges............................................................. 27
Guarantee of Certain Charges............................................. 29
Additional Benefits...................................................... 29
General Matters Relating to the Policy................................... 30
General Provisions of the Group Contract................................. 33
Other Matters.............................................................. 33
Federal Tax Status....................................................... 33
Year 2000 Computer Problem............................................... 36
Directors and Principal Officers of Minnesota Life....................... 37
Voting Rights............................................................ 38
Distribution of Policies................................................. 38
Legal Matters............................................................ 39
Legal Proceedings........................................................ 39
Experts.................................................................. 39
Registration Statement................................................... 39
Financial Statements of Minnesota Life Variable Universal Life Account.....
Financial Statements of Minnesota Life Insurance Company and
Subsidiaries..............................................................
Appendix I-Illustrations of Account Values and Death Benefits..............
Appendix II-Policy Loan Example............................................
</TABLE>
1
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Special Terms
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As used in this prospectus, the following terms have the indicated meanings:
Account Value: The sum of the separate account value, guaranteed account value
and loan account value.
Attained Age: The issue age of the insured plus the number of completed policy
years.
Beneficiary: The person(s) named in an application for insurance or by later
designation to receive policy proceeds in the event of the insured's death. A
beneficiary may be changed as set forth in the policy and this prospectus.
Certificate: A document issued to the owner of a policy issued under a group
contract setting forth or summarizing the owner's rights and benefits.
Code: The Internal Revenue Code of 1986, as amended.
Contractholder: The entity that is issued a group contract.
Eligible Member: A member of the group seeking insurance who meets the
requirements stated on the specification pages of the group contract or policy
to be an owner and/or insured of a policy under the group-sponsored program.
Face Amount: The minimum amount of death benefit proceeds paid upon the death
of the insured, so long as the policy remains in force and there are no
outstanding policy loans. The face amount is shown on the specifications page
attached to the policy.
Funds: The mutual fund or separate investment portfolio within a series mutual
fund which we have designated as an eligible investment for the Variable
Universal Life Account, currently, Advantus Series Fund, Inc. and its
Portfolios, Fidelity's Variable Insurance Products Fund and its Portfolios,
and Fidelity's Variable Insurance Products Fund II and its Portfolio.
General Account: All of our assets other than those in the Variable Universal
Life Account or in other separate accounts established by us.
Group Contract: A Variable Universal Life Insurance Policy issued to the
contractholder.
Group Sponsor: The employer, association or organization that is sponsoring a
program of insurance for the group members.
Guaranteed Account: Assets other than the loan account value that are
attributable to a policy and held in our general account.
Guaranteed Account Value: The sum of all net premiums and transfers allocated
to the guaranteed account and interest declared thereon and experience
credits, minus amounts transferred to the separate account or removed in
connection with a partial surrender or policy loan and minus charges assessed
against the guaranteed account value.
Individual Insurance: Insurance provided under a group contract or under an
individual policy issued in connection with a group-sponsored insurance
program on a group member or a member's spouse.
Insured: The person whose life is covered by life insurance under a policy.
This term may include a group member and a member's spouse.
Issue Age: The insured's age at his or her last birthday as of the issue date.
Issue Date: The effective date of an insured's coverage under a policy.
Loan Account: The portion of the general account attributable to policy loans
under policies of this type.
Loan Account Value: Assets held in our general account as collateral for
outstanding policy loans under a policy, together with accrued interest.
Maturity Date: The 95th birthday of the insured or a later birthday which is
established for policies issued under the group-sponsored insurance program.
Member: An individual belonging to the group seeking insurance.
Monthly Anniversary: The first day of each calendar month on, or following,
the issue date.
Net Cash Value: The account value of a policy less any outstanding policy
loans and accrued policy loan interest charged and less
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any charges due. It is the amount an owner may obtain through surrender of the
policy.
Owner: The owner of a policy, as designated in the application or as
subsequently changed. An owner may be changed as set forth in the policy and
this prospectus.
Policy: Either the certificate or the individual policy offered by us and
described in this prospectus.
Policy Anniversary: The same day and month in each succeeding year as the
policy date, or the same day and month in each succeeding year as the date
agreed to between the contractholder and us. The policy anniversary is shown on
the specifications page attached to the policy.
Policy Date: The first day of the calendar month on, or following, the issue
date. This is the date from which policy years and policy months are measured.
Policy Month: A calendar month.
Policy Year: A period of one year measured from the policy date and from each
successive policy anniversary.
Separate Account: Minnesota Life Variable Universal Life Account, a separate
investment account with nineteen "sub-accounts" (each investing in a different
Portfolio of the Funds), the investment experience of each of which is separate
from that of our general account and our other assets.
Separate Account Value: The sum of all sub-account values.
Series Fund: The Advantus Series Fund, Inc., a mutual fund of the series type
which is an investment alternative for the Variable Universal Life Account.
Sub-Account Value: The number of units of a sub-account credited to a policy
times the current unit value for that sub-account.
Unit: An accounting device used to determine the interest of a policy in a sub-
account of the Variable Universal Life Account.
Valuation Date: Each date on which a Fund Portfolio is valued.
Valuation Period: The period between successive valuation dates measured from
the time of one determination to the next.
VIP: Fidelity's Variable Insurance Products Fund, a mutual fund of the series
type which is an investment alternative of the Variable Universal Life Account.
VIP II: Fidelity's Variable Insurance Products Fund II, a mutual fund of the
series type which is an investment alternative of the Variable Universal Life
Account.
We, Our, Us: Minnesota Life Insurance Company.
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Summary
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The following summary is designed to answer certain general questions
concerning the policy and to give a brief overview of the more significant
policy features. This summary is not comprehensive. You should review the
information contained elsewhere in this prospectus.
What is a universal life insurance policy?
A universal life insurance policy is an adjustable benefit life insurance
policy. Itallows for the accumulation of cash values while the policy's life
insurance coverage remains in force and which permits the flexible payment of
premiums. An adjustable benefit policy has a stated face amount of insurance
payable in the event of the death of the insured, which is supported by the
deduction of specified monthly charges from the cash values. This amount of
insurance may be increased or decreased by the owner of the policy, without the
necessity of issuing a new policy for that owner. There are limitations to
these changes and we may require evidence of insurability before requested
increases go into effect. In addition, the coverage for an insured is provided
without specifying the frequency and amount of each premium payment (as is the
practice for scheduled premium life insurance policies). The time and amount of
the payment of premium may be determined by the owner. The life insurance
coverage will remain in force for an insured so long as monthly charges may be
deducted from the existing balance in the policy's net cash values. Subject to
restrictions described herein, an owner may also make payments in excess of
that minimum amount required to keep a policy in force. If cash values are
3
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insufficient for the payment of the required monthly charges, then a premium
payment is required or the life insurance coverage provided to the owner will
lapse.
A universal life insurance policy is intended for the use of persons who
wish to combine both life insurance and the accumulation of cash values. Such
a policy may be inappropriate for individuals seeking life insurance
protection which is the equivalent of term-type coverage.
What makes the policy "variable"?
The policy is termed "variable" because unlike a universal life policy which
provides for the accumulation of policy values at fixed rates determined by
the insurance company, variable universal life insurance policy values may be
invested in a separate account of ours called the Minnesota Life Variable
Universal Life Account ("separate account"). The sub-accounts of the separate
account invest in corresponding Portfolios of the Funds. Thus, the owner's
account value, to the extent invested in the sub-account of the separate
account, will vary with the positive or negative investment experience of the
corresponding Portfolios of the Funds.
The account values of the policies, to the extent invested in sub-accounts
of the separate account, have no guaranteed minimum account value. Therefore,
the owner bears the risk that adverse investment performance may depreciate
the owner's investment in the policy. The policy also offers the owner the
opportunity to have the account value appreciate more rapidly than it would
under comparable fixed benefit policies by virtue of favorable investment
performance. In addition, under some policies, the death benefit will also
increase and decrease (but not below the guaranteed amount) with investment
experience.
Owners seeking the traditional insurance protections of a guaranteed account
value may allocate net premiums to the policy's guaranteed account option
which provides for guaranteed accumulation at a fixed rate of interest.
Additional information on this option may be found under the heading "The
Guaranteed Account."
What variable investment options are available?
The separate account currently invests in nineteen Portfolios of the Funds.
Not all of the Portfolios of the Funds may be made available for investment by
the separate account. The Maturing Government Bond Portfolio with a maturity
of 2002 is included in this prospectus, but it is not available for premium
allocations or transfers effective May 1, 1997. Owners may direct their funds
to the following Series Fund Portfolios:
Growth Portfolio
Bond Portfolio
Money Market Portfolio
Asset Allocation Portfolio
Mortgage Securities Portfolio
Index 500 Portfolio
Capital Appreciation Portfolio
International Stock Portfolio
Small Company Growth Portfolio
Maturing Government Bond Portfolio--2010
Value Stock Portfolio
Small Company Value Portfolio
Global Bond Portfolio
Index 400 Mid-Cap Portfolio
Macro-Cap Value Portfolio
Micro-Cap Growth Portfolio
Owners may also direct their funds to the following additional Portfolios:
Fidelity Variable Insurance Products Fund--High Income Portfolio
Fidelity Variable Insurance Products Fund--Equity-Income Portfolio
Fidelity Variable Insurance Products Fund II--Contrafund Portfolio
There is no assurance that any Portfolio will meet its objectives. Additional
information concerning investment objectives may be found in the attached Fund
prospectuses.
How can net premiums be allocated?
In the initial application for life insurance, the owner may indicate the
desired allocation of net premiums among the guaranteed account and the
available sub-accounts of the separate account. All future net premiums will
be allocated in the same proportion until the owner sends us a written request
to change the allocation. Similarly, the owner may transfer amounts from one
sub-account to another by sending us a written request or by calling us.
What death benefit options are offered under the policy?
We offer two death benefit options under the policy. Under "Option A", a
level death benefit, the death benefit is the face amount of the policy. Under
"Option B", a variable
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death benefit, the death benefit is the face amount of the policy plus the net
cash value. So long as a policy remains in force and there are no policy
loans, the minimum death benefit under either option will be at least equal to
the current face amount. The death benefit proceeds will be adjusted by the
amount of any charges due or overpaid and any outstanding policy loans and
accrued policy loan interest charged determined as of the date of death. The
group sponsor will select one death benefit option of the two we offer for all
policies in a single group-sponsored program. Once selected, a death benefit
option under a policy shall remain unchanged.
There is a minimum initial face amount for the policy which is stated on the
specification pages of the policy. The owner may generally change the face
amount, but evidence of insurability of the insured may be required for
certain face amount increases.
To whom do we pay death benefits?
Death benefit proceeds will be paid to the named beneficiary when the
insured under a policy dies. Benefits under the policy may be paid in a single
sum or under an elected settlement option.
Does the owner have access to the account values?
Yes. The net cash value, subject to the limitations in the policy, is
available to the owner during the insured's lifetime. The net cash value may
be used to provide:
. retirement income,
. as collateral for a policy loan,
. to continue some amount of insurance protection without payment of premiums
or
. to obtain cash by surrendering the policy in full or in part.
The owner may borrow, as a policy loan, an amount up to 90 percent of the
owner's account value less any loan account value. Each alternative for
accessing the owner's account value may be subject to conditions described in
the policy or under the heading "Account Values" of this prospectus.
What charges are associated with the policy?
We assess certain charges against each premium payment and the account
values under each policy and against the asset value of the separate account.
These charges, which are largely designed to cover our expenses in providing
insurance protection and in distributing and administering the policies are
fully described under the heading "Charges" of this prospectus. The specific
charges are shown on the specifications page of the policy. There are also
advisory fees and expenses which are assessed against the asset value of each
of the portfolios of the Funds.
Premium Expense Charges
Premium expense charges vary based on the group-sponsored insurance program
under which the policy is issued. We may deduct from premium paid, a
percentage of premium for a sales charge, not to exceed 5 percent, and a
percentage of premium for a premium tax charge, not to exceed 4 percent. We
will also deduct a percentage of premium as a federal tax charge to recover a
portion of our estimated cost for the federal income tax treatment of deferred
acquisition costs. If a policy is considered an individual policy under the
Omnibus Budget Reconciliation Act, as amended, ("OBRA") the charge will not
exceed 1.25 percent of premium. If a policy is considered to be a group policy
under OBRA, the charge will not exceed .25 percent of premium.
Account Value Charges
The charges deducted as part of the monthly deduction vary based on the
group-sponsored insurance program under which the policy is issued. Each
month, we may deduct from a policy's account value the sum of the following
applicable items:
. an administration charge;
. a cost of insurance charge; and
.the cost of any additional insurance
benefits provided by rider. The administration charge will never exceed $4 per
month. Additional information is provided under the heading "Monthly
Deduction."
For policies under some group-sponsored insurance programs, a partial
surrender transaction charge will be assessed against the net cash value to
cover administrative processing costs. The charge will not exceed the lesser
of $25 or 2 percent of the amount withdrawn.
There is currently no transfer charge assessed on transfers of net cash
value between the guaranteed account and the separate account or among the
sub-accounts of the separate account. A charge, not to exceed $10 per
transfer, may be imposed in the future.
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Separate Account Charges
We assess a mortality and expense risk charge against the separate account
assets. This charge will vary based on the group-sponsored insurance program
under which the policy is issued. The annual rate will not exceed .50 percent
of the average daily assets of the separate account. This annual rate is based
on the actuarial risk associated with the group that the cost of insurance and
other charges will be insufficient to cover the actual mortality experience
and other costs in connection with the policies.
We reserve the right to deduct a charge against the separate account assets,
or make other provisions, for any additional tax liability we may incur with
respect to the separate account or the policies, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums
for state premium taxes and federal taxes. No such charge or provision is made
at the present time.
Fund Charges Shares of the Funds are purchased for the separate account at
their net asset value, which reflects advisory fees and expenses which are
assessed against the net asset value of each of the Portfolios of the Funds.
Advantus Capital Management, Inc. ("Advantus Capital") acts as the investment
adviser to the Series Fund.
Advantus Capital is a wholly-owned subsidiary of Minnesota Life. For more
information about the Series Fund, see the prospectus of Advantus Series Fund,
Inc. which is attached to this prospectus.
The Fidelity Management and Research Company (FMR), a subsidiary of FMR
Corp., is adviser to each of VIP High Income Portfolio, VIP Equity-Income
Portfolio and VIP II Contrafund Portfolio. For more information about the
Funds, see the prospectus of the Variable Insurance Products Funds which is
attached to this prospectus.
In addition to the investment advisory fees, other direct expenses are
charged against the assets of the Funds.
Are the benefits under a policy subject to federal income tax?
We believe that the owner's policy should qualify as a life insurance
contract for federal income tax purposes. Assuming that a policy qualifies as
a life insurance contract for federal income tax purposes, the benefits under
policies described in this prospectus should receive the same tax treatment
under the Code as benefits under traditional fixed benefit life insurance
policies. Therefore, death proceeds payable under variable life insurance
policies should be excludable from the beneficiary's gross income for federal
income tax purposes. The owner should not be in constructive receipt of the
net cash values of the policy until actual distribution.
Under recent legislation the tax treatment described above relating to
distributions is available only for policies not described as "modified
endowment contracts." Policies described as modified endowment contracts are
treated as life insurance with respect to the tax treatment of death proceeds
and the tax-free inside buildup of yearly account value increases. Any amounts
received by the owner, such as experience credits, loans and amounts received
from partial or total surrender of the policy will be subject to the same tax
treatment as amounts received under an annuity during the accumulation period.
Annuity tax treatment includes the 10 percent additional income tax imposed on
the portion of any distribution that is included in income, except:
. where the distribution or loan is made on or after the owner attains age 59
1/2,
. is attributable to the owner becoming disabled, or
. is part of a series of substantially equal periodic payments for the life of
the owner or the joint lives of the owner and beneficiary.
A determination as to whether a policy is a modified endowment contract and
subject to this special tax treatment will require an examination of the
premium paid in relation to the death benefit of the policy. A policy would be
a modified endowment contract if the cumulative premiums during the first
seven contract years exceed the sum of the net level premiums which would be
paid under a seven-pay life policy. In addition, a policy which is subject to
a material change will be treated as a new policy on the date that such a
material change takes effect. A determination must be made at that time to
test whether such a policy meets the seven-pay standard by taking into account
the previously existing account value.
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Can the owner return the policy?
For a limited time after the application for the policy and its delivery,
the policy may be returned for a refund of all premium payments within the
terms of its "free look" or right of cancellation provision.
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Condensed Financial Information
- --------------------------------------------------------------------------------
The financial statements of Minnesota Life Insurance Company and Minnesota
Life Variable Universal Life Account may be found in this prospectus.
The table below gives per unit information about each sub-account where the
mortality and expense risk charge amounts to .50 percent on an annual basis for
the years ended December 31, 1998, 1997 and 1996 and the period from March 8,
1995, commencement of operations, to December 31, 1995. This information should
be read in conjunction with the financial statements and related notes of
Minnesota Life Variable Universal Life Account (where the mortality and expense
risk charge amounts to .50 percent on an annual basis) included in this
prospectus.
<TABLE>
<CAPTION>
1998 1997 1996 1995
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<S> <C> <C> <C> <C>
Growth Sub-Account:
Unit value at beginning of period................... $ 1.29 $ 1.10 $1.00
Unit value at end of period ........................ $ 1.71 $ 1.29 $1.10
Number of units outstanding at end of period ....... 297,099 10,583 5,717
Bond Sub-Account:
Unit value at beginning of period................... $ 1.09 $ 1.07 $1.00
Unit value at end of period ........................ $ 1.19 $ 1.09 $1.07
Number of units outstanding at end of period ....... 3,719 2,462 1,708
Money Market Sub-Account:
Unit value at beginning of period................... $ 1.07 $ 1.03 $1.00
Unit value at end of
period ............................................ $ 1.12 $ 1.07 $1.03
Number of units outstanding at end of period ....... 4,453 2,822 1,163
Asset Allocation Sub-Account:
Unit value at beginning of period................... $ 1.24 $ 1.11 $1.00
Unit value at end of
period ............................................ $ 1.47 $ 1.24 $1.11
Number of units outstanding at end of period ....... 187,443 5,376 2,487
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- --------- ------- -------
<S> <C> <C> <C> <C>
Mortgage Securities Sub-Account:
Unit value at beginning of period ............. $ 1.10 $ 1.05 $1.00
Unit value at end of period.................... $ 1.20 $ 1.10 $1.05
Number of units outstanding at end of period... 1,743 1,353 1,116
Index 500 Sub-Account:
Unit value at beginning of period ............. $ 1.41 $ 1.16 $1.00
Unit value at end of period.................... $ 1.86 $ 1.41 $1.16
Number of units outstanding at end of period... 1,231,985 902,194 457,639
Capital Appreciation Sub-Account:
Unit value at beginning of period.............. $ 1.32 $ 1.13 $1.00
Unit value at end of period.................... $ 1.68 $ 1.32 $1.13
Number of units outstanding at end of period... 11,926 8,725 5,583
International Stock Sub-Account:
Unit value at beginning of period.............. $ 1.25 $ 1.05 $1.00
Unit value at end of period.................... $ 1.39 $ 1.25 $1.05
Number of units outstanding at end of period... 7,857 4,601 3,688
Small Company Growth Sub-Account:
Unit value at beginning of period.............. $ 1.28 $ 1.21 $1.00
Unit value at end of period.................... $ 1.37 $ 1.28 $1.21
Number of units outstanding at end of period... 64,545 41,743 34,825
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ------ ----- -----
<S> <C> <C> <C> <C>
Value Stock Sub-Account:
Unit value at beginning of period..................... $ 1.51 $1.16 $1.00
Unit value at end of period .......................... $ 1.83 $1.51 $1.16
Number of units outstanding at end of period ......... 10,536 5,585 4,016
</TABLE>
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Maturing Government Bond 2002 Sub-Account:
Unit value at beginning of period....................... $ 1.06 $ 1.00*
Unit value at end of period............................. $ 1.14 $ 1.06
Number of units outstanding at end of period............ 1,000 1,000
Maturing Government Bond 2006 Sub-Account:
Unit value at beginning of period....................... $ 1.08 $ 1.00*
Unit value at end of period............................. $ 1.21 $ 1.08
Number of units outstanding at end of period............ 1,000 1,000
Maturing Government Bond 2010 Sub-Account:
Unit value at beginning of period....................... $ 1.10 $ 1.00*
Unit value at end of period............................. $ 1.29 $ 1.10
Number of units outstanding at end of period............ 1,000 1,000
Contrafund Sub-Account:
Unit value at beginning of period....................... $ 1.11 $ 1.00*
Unit value at end of period............................. $ 1.38 $ 1.11
Number of units outstanding at end of period............ 31,208 30,361
High Income Sub-Account:
Unit value at beginning of period....................... $ 1.07 $ 1.00*
Unit value at end of period............................. $ 1.25 $ 1.07
Number of units outstanding at end of period............ 31,854 29,956
Equity-Income Sub-Account:
Unit value at beginning of period....................... $ 1.06 $ 1.00*
Unit value at end of period............................. $ 1.36 $ 1.06
Number of units outstanding at end of period............ 33,024 30,306
</TABLE>
* The information for the sub-account is shown for the period from May 1, 1996
to December 31, 1996. May 1, 1996 was the effective date of the 1933 Act
Registration.
The table below gives per unit information about each sub-account where the
mortality and expense risk charge is zero on an annual basis for the year
ended December 31, 1998 and the period from June 24, 1997, commencement of
operations, to December 31, 1997. This information should be read in
conjunction with the financial statements and related notes of Minnesota Life
Variable Universal Life Account (where the mortality and expense risk charge
is zero on an annual basis) included in this prospectus.
<TABLE>
<CAPTION>
1998 1997
-------- ----------
<S> <C> <C>
Index 500 Sub-Account:
Unit value at beginning of period......................... $ $ 1.00
Unit value at end of period............................... $ 1.17
Number of units outstanding at end of period.............. 27,829,987
</TABLE>
The table below gives per unit information about each sub-account where the
mortality and expense risk charge amounts to .25 percent on an annual basis
for the years ended December 31, 1998 and 1997. This information should be
read in conjunction with the financial statements and related notes of
Minnesota Life Variable Universal Life Account (where the mortality and
expense risk charge amounts to .25 percent on an annual basis) included in
this prospectus.
<TABLE>
<CAPTION>
1998 1997
-------- ------
<S> <C> <C>
Growth Sub-Account:
Unit value at beginning of period.......................... $ $ 1.00(b)
Unit value at end of period................................ $ 1.31
Number of units outstanding at end of period............... 92,564
Bond Sub-Account:
Unit value at beginning of period.......................... $ 1.00(b)
Unit value at end of period................................ $ 1.10
Number of units outstanding at end of period............... 48,295
Money Market Sub-Account:
Unit value at beginning of period.......................... $ 1.00(b)
Unit value at end of period................................ $ 1.05
Number of units outstanding at end of period............... 95,600
Asset Allocation Sub-Account:
Unit value at beginning of period.......................... $ 1.00(b)
Unit value at end of period................................ $ 1.18
Number of units outstanding at end of period............... 52,163
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
1998 1997
---- -------
<S> <C> <C>
Mortgage Securities Sub-Account:
Unit value at beginning of period............................. $ 1.00(b)
Unit value at end of period................................... $ 1.09
Number of units outstanding at end of period.................. 10,899
Index 500 Sub-Account:
Unit value at beginning of period............................. $ 1.00(a)
Unit value at end of period................................... $ 1.27
Number of units outstanding at end of period.................. 236,786
Capital Appreciation Sub-Account:
Unit value at beginning of period............................. $ 1.00(b)
Unit value at end of period................................... $ 1.27
Number of units outstanding at end of period.................. 73,554
International Stock Sub-Account:
Unit value at beginning of period............................. $ 1.00(b)
Unit value at end of period................................... $ 1.11
Number of units outstanding at end of period.................. 55,984
Small Company Growth Sub-Account:
Unit value at beginning of period............................. $ 1.00(a)
Unit value at end of period................................... $ 1.09
Number of units outstanding at end of period.................. 91,750
Maturing Government Bond 2002 Sub-Account:
Unit value at beginning of period............................. $ 1.00(c)
Unit value at end of period................................... $ 1.10
</TABLE>
<TABLE>
<CAPTION>
1998 1997
---- -------
<S> <C> <C>
Number of units outstanding at end of period.................. 19,858
Value Sub-Account:
Unit value at beginning of period............................. $ 1.00(a)
Unit value at end of period................................... $ 1.16
Number of units outstanding at end of period.................. 43,594
Contrafund Sub-Account:
Unit value at beginning of period............................. $ 1.00(b)
Unit value at end of period................................... $ 1.21
Number of units outstanding at end of period.................. 81,894
High Income Sub-Account:
Unit value at beginning of period............................. $ 1.00(b)
Unit value at end of period................................... $ 1.16
Number of units outstanding at end of period.................. 23,732
Equity-Income Sub-Account:
Unit value at beginning of period............................. $ 1.00(b)
Unit value at end of period................................... $ 1.25
Number of units outstanding at end of period.................. 156,865
</TABLE>
- -------
(a) For the period from January 24, 1997, commencement of operations, to De-
cember 31, 1997.
(b) For the period from January 29, 1997, commencement of operations, to De-
cember 31, 1997.
(c) For the period from April 2, 1997, commencement of operations, to December
31, 1997.
- --------------------------------------------------------------------------------
General Descriptions
- --------------------------------------------------------------------------------
MINNESOTA LIFE INSURANCE COMPANY
We are Minnesota Life Insurance Company ("Minnesota Life"), a life insurance
company organized under the laws of Minnesota. Minnesota Life was formerly
known as The Minnesota Mutual Life Insurance Company ("Minnesota Mutual"), a
mutual life insurance company organized in 1880 under the laws of Minnesota.
On October 1, 1998, a plan of reorganization created a mutual insurance
holding company named Minnesota Mutual Companies, Inc. Minnesota Mutual
reorganized as a stock insurance company subsidiary of the new holding company
and took the new name Minnesota Life. Our home office is at 400 Robert Street
North, St. Paul, Minnesota 55101-2098, telephone: (651) 665-3500. We are
licensed to do a life insurance business in all states of the United States
(except New York where we are an authorized reinsurer), the District of
Columbia, Canada, Puerto Rico and Guam.
VARIABLE UNIVERSAL LIFE ACCOUNT
On August 8, 1994, the separate account was established in accordance with
Minnesota insurance law. The separate account is registered as a "unit
investment trust" with the Securities and Exchange Commission under the
Investment Company Act of 1940. Such registration does not signify that the
Securities and Exchange Commission supervises the management, or the
investment practices or policies, of the separate account. The separate
account meets the definition of a "separate account" under the federal
securities laws.
We are the legal owner of the assets in the separate account. The
obligations to policy owners and beneficiaries arising under the policies are
general corporate obligations of Minnesota Life and thus our general assets
back the policies. The Minnesota law under which the separate account was
established provides that the assets of the separate account shall not be
chargeable with liabilities
10
<PAGE>
arising out of any other business which we may conduct, but shall be held and
applied exclusively to the benefit of the holders of those variable life
insurance policies for which the separate account was established. The
investment performance of the separate account is entirely independent of both
the investment performance of our guaranteed account and of any other separate
account which we may have established or may later establish.
The separate account has nineteen sub-accounts. Each sub-account invests in
shares of a corresponding Portfolio of the Funds. Not all of the Portfolios of
the Funds may be available for investment by the separate account. Although
the Maturing Government Bond Portfolio with a maturity of 2002 is included in
this prospectus, it is not available for premium allocations or transfers
effective May 1, 1997.
The separate account currently invests in the Advantus Series Fund, Inc.,
Fidelity's Variable Insurance Products Fund, and Fidelity's Variable Insurance
Products Fund II.
ADVANTUS SERIES FUND, INC.
The Series Fund is a mutual fund of the series type which is registered with
the Securities and Exchange Commission as a diversified, open-end management
investment company (except for Global Bond Portfolio which is operated as a
non-diversified open-end management investment company). Such registration
does not signify that the Commission supervises the management, or the
investment practices or policies, of the Series Fund. Currently, the Series
Fund issues its shares, continually and without sales charge, only to us and
certain of our separate accounts, including the Variable Universal Life
Account. The Series Fund may be used in the future as the underlying
investment medium for separate accounts of the Northstar Life Insurance
Company, our wholly-owned life insurance subsidiary domiciled in the state of
New York. Shares of the Series Fund are sold and redeemed at net asset value.
The Series Fund's investment adviser is Advantus Capital Management, Inc.
("Advantus Capital"). It acts as an investment adviser to the Series Fund
pursuant to an advisory agreement. Advantus Capital is a wholly-owned
subsidiary of Minnesota Life.
While Advantus Capital acts as investment adviser for the Series Fund and
its Portfolios, Winslow Capital Management, Inc., a Minnesota corporation with
principal offices in Minneapolis, Minnesota, has been retained under an
investment sub-advisory agreement to provide investment advice to the Capital
Appreciation Portfolio. Similarly, Templeton Investment Counsel, Inc., a
Florida corporation with principal offices in Fort Lauderdale, Florida, has
been retained under an investment sub-advisory agreement to provide investment
advice to the International Stock Portfolio. Advantus Capital has entered into
a sub-advisory agreement with Julius Baer Investment Management Inc. ("Julius
Baer"), a Delaware corporation with primary offices in New York, New York,
under which Julius Baer provides advisory services to the Global Bond
Portfolio. Advantus Capital has entered into a sub-advisory agreement with
J.P. Morgan Investment Management Inc. ("Morgan Investment"), a Delaware
corporation with primary offices in New York, New York, under which Morgan
Investment provides advisory services to the Macro-Cap Value Portfolio.
Advantus Capital has entered into a sub-advisory agreement with Wall Street
Associates ("Wall Street"), a California corporation with primary offices in
La Jolla, California, under which Wall Street provides advisory services to
the Micro-Cap Growth Portfolio.
The Series Fund currently has nineteen investment Portfolios, sixteen of
which are available to policy owners for the allocation of premiums or for
transfers. A series of the Series Fund's common stock is issued for each
Portfolio. The assets of each Portfolio are separate from the others and each
has different investment objectives and policies. Therefore, each Portfolio
operates as a separate investment fund and the investment performance of one
has no affect on the investment performance of any other Portfolio.
All dividends and capital gains distributions from each Portfolio are
automatically reinvested in shares of that Portfolio at net asset value.
For more information about the Series Fund and its Portfolios, see the
attached Advantus Series Fund, Inc. prospectus.
FIDELITY VARIABLE INSURANCE PRODUCTS FUNDS
The policy also provides for sub-accounts of the Variable Universal Life
Account which invests in shares of other registered investment companies. VIP
has two Portfolios
11
<PAGE>
which are available to the Variable Universal Life Account. They are the High
Income Portfolio and the Equity-Income Portfolio. VIP II has one Portfolio
which is available to the Variable Universal Life Account. It is the
Contrafund Portfolio. There is no guaranteed minimum value associated with the
separate account and its sub-accounts. Both VIP and VIP II issue their shares,
continually and without sales charge, only to us and to separate accounts of
other insurance companies, both affiliated and unaffiliated with the
investment adviser of VIP and VIP II.
The investment adviser of VIP and VIP II is Fidelity Management & Research
Company ("FMR"), 82 Devonshire Street, Boston, Massachusetts. FMR handles the
business affairs and, with the assistance of affiliates for certain
Portfolios, chooses the investments for VIP and VIP II. Fidelity Management &
Research (U.K.) Inc., in London, England, and Fidelity Management & Research
(Far East) Inc., in Tokyo, Japan, both serve as sub-advisers for the VIP High
Income and VIP II Contrafund Portfolios. The parent company of these entities
is FMR Corp.
The assets of each Portfolio are separate from the others and each has
different investment objectives and policies. Therefore, each Portfolio
operates as a separate investment fund and the investment performance of one
has no affect on the investment performance of any other Portfolio. All
dividends and capital gains distributions from each Portfolio are
automatically reinvested in shares of that Portfolio at net asset value.
For more information about VIP and VIP II and the Portfolios, see the
prospectus for Fidelity's Variable Insurance Products Fund and Variable
Insurance Products Fund II.
ADDITIONS, DELETIONS OR SUBSTITUTIONS
We reserve the right to add, combine or remove any sub-accounts of the
Variable Universal Life Account when permitted by law. Each additional sub-
account will purchase shares in a new portfolio or mutual fund. New sub-
accounts may be established when, in our sole discretion, marketing, tax,
investment or other conditions warrant such action. We will use similar
considerations should there be a determination to eliminate one or more of the
sub-accounts of the separate account. Any new investment option will be made
available to existing owners on whatever basis we may determine.
We retain the right, subject to any applicable law, to make substitutions
with respect to the investments of the sub-accounts of the separate account.
If investment in a Portfolio of the Funds should no longer be possible or if
we determine it becomes inappropriate for policies of this class, we may
substitute another mutual fund or portfolio for a sub-account. Substitution
may be made with respect to existing account values and future premium
payments. A substitution may be made only with any necessary approval of the
Securities and Exchange Commission.
We reserve the right to transfer assets of the separate account as
determined by us to be associated with the policies to another separate
account. A transfer of this kind may require the approval of state regulatory
authorities and of the Securities and Exchange Commission.
We also reserve the right, when permitted by law, to restrict or eliminate
any voting right of owners or other persons who have voting rights as to the
separate account, and to combine the separate account with one or more other
separate accounts, and to de-register the separate account under the
Investment Company Act of 1940.
Shares of the Portfolios of the Series Fund are also sold to other of our
separate accounts, which are used to receive and invest premiums paid under
other variable annuity contracts and variable life policies issued by us.
Shares of VIP and VIP II are sold to other life insurance companies' separate
accounts for the purpose of funding other variable annuity and variable life
insurance contracts. 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.
THE GUARANTEED ACCOUNT
The owner may allocate net premiums and may transfer net cash values in the
policy, subject to policy limitations, to our guaranteed account.
Because of exemptive and exclusionary provisions, interests in Minnesota
Life's guaranteed account have not been registered under the Securities Act of
1933, and the guaranteed account has not been registered
12
<PAGE>
as an investment company under the Investment Company Act of 1940. Therefore,
neither the guaranteed account nor any interest therein is subject to the
provisions of these Acts, and Minnesota Life has been advised that the staff
of the SEC does not review disclosures relating to it. Disclosures regarding
the guaranteed account may, however, be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.
This prospectus describes a Variable Universal Life Insurance Policy and is
generally intended to serve as a disclosure document only for the aspects of
the policy relating to the sub-accounts of the separate account. For more
information about the guaranteed account, please see the policy and the
summary information provided immediately below.
General Description Minnesota Life's general account consists of all assets
owned by Minnesota Life other than those in the separate account and any other
separate accounts which we may establish. The guaranteed account is that
portion of the general assets of Minnesota Life, exclusive of policy loans,
which is attributable to the policy described herein and others of its class.
The description is for accounting purposes only and does not represent a
division of the general account assets for the specific benefit of policies of
this class. Allocations to the guaranteed account become part of the general
assets of Minnesota Life and are used to support insurance and annuity
obligations and are subject to the claims of our creditors. Subject to
applicable law, we have sole discretion over the investment of assets of the
guaranteed account. Owners do not share in the actual investment experience of
the assets in the guaranteed account.
A portion or all the net premiums may be allocated or transferred to
accumulate at a fixed rate of interest in the guaranteed account, though we
reserve the right to restrict the allocation of premium into the guaranteed
account. Such amounts are guaranteed by us as to principal and a minimum rate
of interest. Transfers from the guaranteed account to the sub-accounts of the
separate account are subject to certain limitations with respect to timing and
amount. These restrictions are described under the heading "Transfers."
Guaranteed Account Value Minnesota Life bears the full investment risk for
amounts allocated to the guaranteed account and guarantees that interest
credited to each owner's account value in the guaranteed account will not be
less than the minimum guaranteed annual rate without regard to the actual
investment experience of the guaranteed account. For group-sponsored programs
implemented prior to May 3, 1999, the minimum guaranteed annual rate is 4
percent. For group-sponsored programs implemented on or after May 3, 1999, the
minimum guaranteed annual rate is 3 percent.We may, at our sole discretion,
credit a higher rate of interest ("excess interest") although we are not
obligated to do so. Any interest credited on the policy's account value in the
guaranteed account in excess of the guaranteed minimum rate per year will be
determined at our sole discretion. The owner assumes the risk that interest
credited may not exceed the guaranteed minimum rate.
Even if excess interest is credited to the guaranteed account value, no
excess interest will be credited to the loan account value in the guaranteed
account. However, the loan account value will be credited interest at a rate
which is not less than 6 percent per annum.
13
<PAGE>
- --------------------------------------------------------------------------------
Information About the Policy
- --------------------------------------------------------------------------------
APPLICATIONS AND POLICY ISSUE
We will generally issue a group contract to a group, as defined and
permitted by state law. For example, a group contract may be issued to an
employer, whose employees and/or their spouses may become insured thereunder
so long as the person is within a class of members eligible to be included in
the group contract. The class(es) of members eligible to be insured by a
policy under the group contract are set forth in that group contract's
specification pages. The group contract will be issued upon receipt of an
application for the group contract signed by a duly authorized officer of the
group wishing to enter into a group contract and the acceptance of that
application by a duly authorized officer of Minnesota Life at its home office.
Individuals wishing to purchase a policy insuring an eligible member under a
group-sponsored program must complete the appropriate application for life
insurance and submit it to our home office. If the policy is approved, we will
issue to the group sponsor either a certificate or an individual policy to
give to the owner. The issue of a group contract or individual policy and
their associated forms is always subject to the approval of those documents
for use by state insurance regulatory authorities.
Individuals who satisfy the eligibility requirements under a particular
group contract may be required to submit to a simplified underwriting
procedure which requires satisfactory responses to certain health questions in
the application and to provide, in some cases, medical information. Acceptance
of an application is subject to our underwriting rules, and we reserve the
right to reject an application for any reason.
A policy will not take effect until the owner signs the appropriate
application for insurance, the initial premium has been paid prior to the
insured's death, the insured is eligible, and we approve the completed
application. The date on which the last event occurs shall be the effective
date of coverage ("issue date").
POLICY PREMIUMS
A premium must be paid to put a policy in force, and may be remitted to us
by the group sponsor on behalf of the owner. The initial premium for a policy
must cover the premium expense charges and the first month's deductions. A
premium must also be paid when there is insufficient net cash value to pay the
monthly deduction necessary to keep the policy in force.
When the policy is established, the policy's specification pages may show
premium payments scheduled and the amounts of those payments. However, under
the policy, the owner may elect to omit making those premium payments. Failure
to pay one or more premium payments will not cause the policy to lapse until
such time as the net cash value is insufficient to cover the next monthly
deduction. Moreover, as mentioned above, the owner may also skip premium
payments scheduled. Therefore, unlike traditional insurance policies, a policy
does not obligate the owner to pay premiums in accordance with a rigid and
inflexible premium schedule.
Failure of a group sponsor to remit the authorized premium payments may
cause the group contract to terminate. Nonetheless, provided that there is
sufficient net cash value to prevent the certificate from lapsing, the owner's
insurance can be converted to an individual policy of life insurance in the
event of such termination. (See "Conversion Right to an Individual Policy.")
The owner's insurance can also continue if the insured's eligibility under the
group-sponsored insurance program terminates because the insured is no longer
a part of the group or otherwise fails to satisfy the eligibility requirements
set forth in the specifications page to the group contract or individual
policy. (See "Continuation of Group Coverage.")
Premium Limitations After the payment of the initial premium, premiums may be
paid at any time in any amount while the insurance is in force under the
policy. Since the policy permits flexible premium payments, it may become a
modified endowment contract. (See "Federal Tax Status.") When we receive the
application, our systems will test the owner's elected premium schedule to
determine, if it is paid as scheduled and if there is no change made to the
owner's policy, whether it will result in the owner's policy being
14
<PAGE>
classified as a modified endowment contract for federal income tax purposes.
Our systems will continue to test the owner's policy with each premium payment
to determine whether the policy has attained this tax status. If we determine
that the policy has attained the status of a modified endowment contract, we
will mail the owner a notice. The owner will be given a limited amount of
time, subject to the restrictions under the Code, to request that the policy
maintain the modified endowment contract status. If the owner does not request
to have this tax status maintained, the excess premium amounts paid that
caused this tax status will be returned with interest at the end of the policy
year to avoid the policy being classified as a modified endowment contract.
The owner may request an immediate refund if it is desired earlier.
Allocation of Net Premiums and Account Value Net premiums, which are premiums
after the deduction of the charges assessed against premiums, are allocated to
the guaranteed account or sub-accounts of the separate account which, in turn,
invest in shares of the Funds.
The owner makes the selection of the sub-accounts and/or the guaranteed
account on the application for the policy. The owner may change the allocation
instructions for future premiums by giving us a written request. The
allocation to the guaranteed account or to any sub-account of the separate
account must be at least 10 percent of the net premium. We reserve the right
to delay the allocation of net premiums to named sub-accounts for a period of
10 days after policy issue or policy change. This right, which has not been
implemented to date, will be exercised by us only when we believe economic
conditions make such an allocation necessary to reduce market risk during the
"free look" period. If we exercise this right, net premiums will be allocated
to the Money Market Sub-Account until the end of that period.
We reserve the right to restrict the allocation of net premiums to the
guaranteed account for policies under some group-sponsored programs. For these
policies, the allocation of net premiums to the Guaranteed Account will range
from 0 percent to 50 percent.
Lapse Unlike traditional life insurance policies, the failure to make a
premium payment following the payment of the premium which puts the policy
into force will not itself cause a policy to lapse. Lapse will occur only when
the net cash value is insufficient to cover the monthly deduction, and the
subsequent grace period expires without sufficient payment being made.
The grace period is 61 days. The grace period will start on the day we mail
the owner a notice that the policy will lapse if the premium amount specified
in the notice is not paid by the end of the grace period. We will mail this
notice on any policy's monthly anniversary when the net cash value is
insufficient to pay for the monthly deduction for the insured. The notice will
specify the amount of premium required to keep the policy in force and the
date the premium is due. If we do not receive the required amount within the
grace period, the policy will lapse and terminate. The grace period does not
apply to the first premium payment.
Reinstatement A lapsed policy may be reinstated, any time within three years
from the date of lapse, provided the insured is living and subject to the
limitations described below. Reinstatement is made by payment of an amount
that, after the deduction of premium expense charges, is large enough to cover
all monthly deductions which have accrued on the policy up to the effective
date of reinstatement, plus the monthly deductions for the two months
following the effective date of reinstatement. If any policy loans and policy
loan interest charged is not repaid, this indebtedness will be reinstated
along with the insurance. No evidence of the insured's insurability will be
required during the first 31 days following lapse, but will be required from
the 32nd day to three years from the date of lapse.
The amount of account value on the date of reinstatement will be equal to
the amount of any policy loans and policy loan interest charged reinstated
increased by the net premiums paid at the time of reinstatement.
The effective date of reinstatement will be the date we approve the
application for reinstatement. There will be a full monthly deduction for the
policy month that includes that date.
DEATH BENEFIT
If the policy is in force at the time of the insured's death, upon receipt
of due proof of death, we will pay the death benefit proceeds
15
<PAGE>
of the policy based on the death benefit option elected by the contractholder.
The group sponsor may choose one of two death benefit options for all
participants under the group-sponsored program. Once elected, the death
benefit option under a policy shall remain unchanged. There is a level death
benefit ("Option A") and a variable death benefit ("Option B"). The death
benefit under either option will never be less than the current face amount of
the policy as long as the policy remains in force and there are no policy
loans. The face amount elected must be at least the minimum stated on the
specification pages of the policy.
Option A Under Option A, the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death while the
policy is in force; plus
(2) the amount of the cost of insurance for the portion of the policy month
from the date of death to the end of the policy month; less
(3) any outstanding policy loans and accrued policy loan interest charged;
less
(4) any unpaid monthly deductions determined as of the date of the insured's
death.
Option B Under Option B, the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death while the
policy is in force; plus
(2) the amount of the owner's account value as of the date we receive due
proof of death satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the policy month
from the date of death to the end of the policy month; plus
(4) any monthly deductions taken under the certificate since the date of
death; less
(5) any outstanding policy loans and accrued policy loan interest charged;
less
(6) any unpaid monthly deductions determined as of the date of the insured's
death.
At issue, the group sponsor may choose between two tests that may be used to
determine if a policy qualifies as life insurance as defined by Section 7702
of the Code. Once a test is selected for a policy, it shall remain unchanged
for that policy. The two tests are the Guideline Premium Test and the Cash
Value Accumulation Test. The test selected will determine how the death
benefit is calculated in the event the account value or the premiums paid
exceed certain limits established under Section 7702.
The Cash Value Accumulation Test requires that the death benefit must be
greater than the account value times a specified percentage. The Guideline
Premium/Cash Value Corridor Test limits the amount of premiums which may be
paid given the current death benefit of the policy in addition to requiring
that the death benefit must be greater than the account value times a
specified percentage. Each policy will be tested at the end of each month for
compliance to the test chosen for that policy. Under either test, if the death
benefit is not greater than the applicable percentage of the account value, or
for the Guideline Premium/Cash Value Corridor Test, the premiums paid exceed
the limit for the current death benefit, we will increase the face amount or
return premium with interest to maintain compliance with IRC Section 7702.
For the Cash Value Accumulation Test, the applicable percentage by which to
multiply the account value to determine the minimum death benefit requirement
varies by the age and underwriting class of the insured. The following table
contains illustrative applicable percentages for this test for the non-tobacco
underwriting class:
<TABLE>
<CAPTION>
Attained Applicable
Age Percentage
-------- ----------
<S> <C>
35 441%
45 316
55 231
65 175
75 140
</TABLE>
For the Guideline Premium/Cash Value Corridor Test, the applicable
percentage by which to multiply the account value to determine the minimum
death benefit requirement varies only by the age of the insured. The following
table contains the applicable percentages for the account value portion of
this test:
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<TABLE>
<CAPTION>
Appli- Appli- Appli-
cable cable cable
Attained Percent- Attained Percent- Attained Percent-
Age age Age age Age age
- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
40 & below 250% 54 157% 68 117%
41 243 55 150 69 116
42 236 56 146 70 115
43 229 57 142 71 113
44 222 58 138 72 111
45 215 59 134 73 109
46 209 60 130 74 107
47 203 61 128 75-90 105
48 197 62 126 91 104
49 191 63 124 92 103
50 185 64 122 93 102
51 178 65 120 94 101
52 171 66 119 95 0
53 164 67 118
</TABLE>
The premium limit under the Guideline Premium/Cash Value Corridor Test
varies by the amount of the death benefit, the policy year, age and
underwriting class of the insured as well as the charges under policy. You may
call us at (800) 843-8358, during our normal business hours of 8:00 a.m. to
4:45 p.m., Central Time, if you would like us to calculate the maximum premium
you may pay under your policy for this test. If you pay up to the maximum
premium amount your policy may be qualified as a modified endowment contract.
(See "Federal Tax Status.")
CHANGE IN FACE AMOUNT
Subject to certain limitations set forth below, an owner may increase or
decrease the face amount of a policy. A written request must be sent directly
to us for a change in the face amount. A change in the face amount will affect
the net amount at risk which affects the cost of insurance charge. (See
"Charges.") In addition, a change in the face amount of a policy may result in
a material change in the policy that may cause it to become a modified
endowment contract. More information on this subject and possible federal
income tax consequences of this result is provided under the heading "Federal
Tax Status."
Increases If an increase in the current face amount is applied for, we reserve
the right to require evidence of insurability from the insured. The increase
will become effective on the monthly anniversary on or following approval of
the change or on any other date mutually agreed upon between the owner and us.
Although an increase need not necessarily be accompanied by an additional
premium (unless it is required to meet the next monthly deduction), the net
cash value in effect immediately after the increase must be sufficient to
cover the next monthly deduction.
With respect to premiums allocated to an increase, the owner will have the
same "free look," conversion, and refund rights with respect to an increase as
with the initial purchase of the owner's policy. (See "Free Look.")
Decreases Any decrease in the face amount will become effective on the monthly
anniversary on or following our receipt of the written request. However, the
amount of insurance on any insured may not be reduced to less than the minimum
face amount indicated on the specification page which is attached to the
owner's policy. Generally, this amount will be at least $10,000. If, following
a decrease in face amount, the policy would not comply with the maximum
premium limitations required by federal tax law (see "Federal Tax Status"),
the decrease may be limited or the account value may be returned to the owner
(at the owner's election), to the extent necessary to meet these requirements.
PAYMENT OF DEATH BENEFIT PROCEEDS
The amount payable as death proceeds upon the insured's death will be the
death benefit under the option elected by the group sponsor. The death benefit
proceeds will also include any amounts payable under any riders.
If a rider permitting the accelerated payment of death benefit proceeds has
been added to the policy, the death benefit may be paid in a single lump sum
prior to the death of the insured and may be less than otherwise would be paid
upon death of the insured. (See "Additional Benefits.")
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death. Payment may, however, be postponed in certain circumstances.
(See "Postponement of Payments.") Under Option A death benefit, interest will
be paid on the death benefit from the date of the insured's death until the
date of payment. Under Option B death benefit, interest will be paid on the
face amount of insurance from the date of the insured's death until the date
of payment. The account value will remain as invested in the guaranteed
account and/or separate account
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until the date of payment; therefore, the account value may increase or
decrease in value from the date of the insured's death to the date of the
payment of death benefit proceeds. Interest will also be paid on any charges
taken under the policy since the date of death, from the date the charge was
taken until the date of payment. Interest will be at an annual rate determined
by us, but never less than the minimum guaranteed rate,annually, or the
minimum rate required by state law. For group-sponsored programs implemented
prior to May 3, 1999, the minimum guaranteed annual rate is 4 percent. For
group-sponsored programs implemented on or after May 3, 1999, the minimum
guaranteed annual rate is 3 percent.
Death benefit proceeds will be paid to the surviving beneficiary specified
on the application or as subsequently changed. The owner may arrange for death
benefit proceeds to be paid in a single lump sum or under one of the optional
methods of settlement described below.
When no election for an optional method of settlement is in force at the
death of the insured, the beneficiary may select one or more of the optional
methods of settlement at any time before death benefit proceeds are paid. (See
"Settlement Options.")
An election or change of method of settlement must be in writing. A change
in beneficiary revokes any previous settlement election.
ACCOUNT VALUES
The policy provides the owner certain account value benefits. Subject to
certain limitations, the owner may obtain access to the net cash value portion
of the account value of the policy. The owner may borrow against the policy's
loan value and may surrender the policy in whole or in part. The owner may
also transfer the net cash value between the guaranteed account and the sub-
accounts of the separate account or among the sub-accounts of the separate
account.
We will send the owner a report each year as of the policy anniversary
advising the owner of the policy's account values, the face amount and the
death benefit as of the date of the report. It will also summarize policy
transactions during the year, including premiums paid and their allocation,
policy charges, policy loan activity and the net cash value. It will be as of
a date within two months of its mailing. We will also, upon the owner's
request, send the owner an additional statement of past transactions at any
time for a $15 fee, which will be deducted from the portion of account value
that the owner specifies.
Also, upon request made to us at our home office, we will provide
information on the account value of a policy to the owner. Such requests may
be in writing, by telephone or by facsimile transmission, using the numbers
and procedures for providing telephone or facsimile transfer instructions.
(See "Transfers.")
Determination of the Guaranteed Account Value The guaranteed account value is
the sum of all net premium payments allocated to the guaranteed account. This
amount will be increased by any interest, experience credits, loan repayments,
policy loan interest credits and transfers into the guaranteed account. This
amount will be reduced by any policy loans, loan interest charged, partial
surrenders, transfers into the sub-accounts of the separate account and
charges assessed against the owner's guaranteed account value. Interest is
credited on the guaranteed account value of the policy at a rate of not less
than the minimum guaranteed annual rate, compounded annually. For group-
sponsored programs implemented prior to May 3, 1999, the minimum guaranteed
annual rate is 4 percent. For group-sponsored programs implemented on or after
May 3, 1999, the minimum guaranteed annual rate is 3 percent. We guarantee the
minimum rate for the life of the policy without regard to the actual
experience of the guaranteed account. As conditions permit, we may credit
additional amounts of interest to the guaranteed account value. The owner's
guaranteed account value is guaranteed by us. It cannot be reduced by any
investment experience of the separate account.
Determination of the Separate Account Value The policy's separate account
value is determined separately. The separate account value is not guaranteed.
The determination of the separate account value is made by multiplying the
current number of sub-account units credited to a policy by the current sub-
account unit value. A unit is a measure of a policy's interest in a sub-
account. The number of units credited with respect to each net premium payment
is
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<PAGE>
determined by dividing the portion of the net premium payment allocated to
each sub-account by the then current unit value for that sub-account. The
number of units so credited is determined as of the end of the valuation
period during which we receive the owner's premium at our home office.
Once determined, the number of units credited to the owner's policy will not
be affected by changes in the unit value. However, the number of units will be
increased by the allocation of subsequent net premiums, lump sum net premiums,
experience credits and transfers to that sub-account. The number of additional
units credited is determined by dividing the net premiums, policy experience
credits and transfers to that sub-account by the then current unit value for
that sub-account. The number of units of each sub-account credited to the
owner's policy will be decreased by policy charges to the sub-account, policy
loans and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The reduction in the number of units
credited is determined by dividing the deductions to that sub-account, policy
loans and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account by the then current unit value for that sub-
account. The number of sub-account units will decrease to zero on a policy
surrender.
Unit Value The unit value of a sub-account will be determined on each
valuation date. The amount of any increase or decrease will depend on the net
investment experience of that sub-account. The value of a unit for each sub-
account was originally set at $1.00 on the first valuation date. For any
subsequent valuation date, its value is equal to its value on the preceding
valuation date multiplied by the net investment factor for that sub-account
for the valuation period ending on the subsequent valuation date.
Net Investment Factor The net investment factor for a valuation period is the
gross investment rate for such valuation period, less a deduction for the
mortality and expense risk charge under this policy which is assessed at the
annual rate stated on the specification pages of the policy against the
average daily net assets of each sub-account of the separate account. The
gross investment rate is equal to:
(1) the net asset value per share of a share held by the Funds in the sub-
account of the separate account determined at the end of the current
valuation period; plus
(2) the per share amount of any dividend or capital gains distribution by the
Funds if the "ex-dividend" date occurs during the current valuation
period; with the sum divided by
(3) the net asset value per share of the share of the Funds held in the sub-
account determined at the end of the preceding valuation period.
Daily Values We determine the value of the units in each sub-account on each
day on which the Portfolios of the Funds are valued. The net asset value of
the Funds' shares is computed once daily, and, in the case of the Money Market
Portfolio, after the declaration of the daily dividend, as of the primary
closing time for business on the New York Stock Exchange (as of the date
hereof the primary close of trading is 3:00 p.m. Central Time, but this time
may be changed) on each day, Monday through Friday, except (i) days on which
changes in the value of a Fund's Portfolio securities will not materially
affect the current net asset value of such Fund's shares, (ii) days during
which no shares of a Fund are tendered for redemption and no order to purchase
or sell such Fund's shares is received by such Fund and (iii) customary
national business holidays on which the New York Stock Exchange is closed for
trading.
Although the account value for each policy is determinable on a daily basis,
we update our records to reflect that value on each monthly anniversary. We
also make policy value determinations as of the date of the insured's death
and on a policy adjustment, surrender, and lapse. When the policy value is
determined, we will assess and update to the date of the transaction those
charges made against the owner's account value, namely the administration
charge and the cost of insurance charge. Increases or decreases in policy
values will not be uniform for all policies but will be affected by policy
transaction activity, cost of insurance charges and the existence of policy
loans.
To illustrate the operation of the policy under various assumptions, we have
prepared several tables, along with additional explanatory text, that may be
of assistance. For these tables, please see Appendix I,
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"Illustrations of Account Values and Death Benefits."
POLICY LOANS
The owner may borrow from us using only the policy as the security for the
loan. The owner may borrow up to an amount equal to (a) less (b), where (a) is
90 percent of the owner's account value and (b) is any outstanding policy
loans plus accrued policy loan interest charged. A loan taken from, or secured
by a policy, may have federal income tax consequences. (See "Federal Tax
Status.") The maximum loan amount is determined as of the date we receive the
owner's request for a loan.
Any policy loan paid to the owner in cash must be in an amount of at least
$100. We will charge interest on the loan in arrears. At the owner's request,
we will send the owner a loan request form for his or her signature. The owner
may also obtain a policy loan by calling us during our normal business hours
of 8:00 a.m. to 4:45 p.m., Central Time. Should the owner make a telephone
call to us, he or she will be asked for personal identification and policy
number. More information on the procedures to make telephone calls to us is
provided under the heading "Transfers."
When the owner takes a loan, we will reduce the net cash value by the amount
borrowed. This determination will be made as of the end of the valuation
period during which the loan request is received at our home office. Unless
the owner directs us otherwise, the policy loan will be taken from the
guaranteed account value and separate account value in the same proportion
that those values bear to each other and, as to the separate account value,
from each sub-account in the proportion that the sub-account value of each
such sub-account bears to the owner's separate account value. The number of
units to be canceled will be based upon the value of the units as of the end
of the valuation period during which we receive the owner's loan request at
our home office. The amount borrowed continues to be part of the account
value, as the amount borrowed becomes part of the loan account value where it
will accrue loan interest credits and will be held in our general account. A
policy loan has no immediate effect on the owner's account value since at the
time of the loan the account value is the sum of the guaranteed account value,
separate account value and the loan account value. When a loan is to come from
the guaranteed account value, we have the right to postpone a loan payment for
up to six months.
If a policy enters a grace period when there is an outstanding loan balance,
the owner will have to make a loan repayment to keep the policy in force. We
will give the owner notice of our intent to terminate the policy and the loan
repayment required to keep it in force. The time for repayment will be within
31 days after our mailing of the notice.
Policy Loan Interest The interest rate on a policy loan will be 8 percent per
year. Interest charged will be based on a daily rate, which if compounded for
the number of calendar days in the year will equal 8 percent annually, and
compounded for the number of days since loan interest charges were last
updated.
The outstanding loan balance will increase as the interest charged on the
policy loan accrues. The net cash value will decrease as the outstanding loan
balance increases. Interest is due at the end of the policy month. If the
owner does not pay in cash the interest accrued at the end of the policy
month, this unpaid interest will be added to the amount of the policy loan.
The new loan will be subject to the same rate of interest as the loan in
effect.
Interest is also credited to the amount of the policy loan in the loan
account value. Interest credits on a policy loan shall be at a rate which is
not less than 6 percent per year. Interest credited will be based on a daily
rate, which if compounded for the number of calendar days in the year will be
at least 6 percent annually, and compounded for the number of days since loan
interest charges were last updated.
Policy Loan Repayments If the owner's policy is in force, the owner's loan can
be repaid in part or in full at any time before the insured's death. The
owner's loan may also be repaid within 60 days after the date of the insured's
death, if we have not paid any of the benefits under the policy. Any loan
repayment must be at least $100 unless the balance due is less than $100.
Loan repayments may only be allocated to the guaranteed account. The owner
may reallocate amounts in the guaranteed account among the sub-accounts of the
separate accounts, subject to the limitations in this prospectus and the
policy on such transfers.
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Loan repayments reduce the owner's outstanding loan balance by the amount of
the loan repayment. Loan repayments will be applied first to interest accrued
since the end of the prior policy month. Any remaining portion of the
repayment will then reduce the loan. The net cash value will increase by the
amount of the loan repayment.
A policy loan, whether or not it is repaid, will have a permanent effect on
the account value because the investment results of the sub-accounts will
apply only to the amount remaining in the sub-accounts. The effect could be
either positive or negative. If net investment results of the sub-accounts are
greater than the rate credited on the loan, the account value will not
increase as rapidly as it would have if no loan had been made. If investment
results of the sub-accounts are less than the rate credited on the loan, the
account value will be greater than if no loan had been made. For an example of
the effect of a policy loan on a policy and its death benefit, please see
Appendix II, "Policy Loan Example."
SURRENDER AND PARTIAL SURRENDER
The owner may also request a surrender or a partial surrender of the policy
at any time while the insured is living. To make a surrender, the owner sends
us a written request for its surrender. The owner is then paid the net cash
value of the policy, computed as of the end of the valuation period during
which we receive the surrender request at our home office. That payment can be
in cash or, at the option of the owner, can be applied on a settlement option.
A surrender or partial surrender may have federal income tax consequences.
(See "Federal Tax Status.")
A partial surrender of the net cash value of the policy is also permitted in
any amount equal to at least the minimum established for policies under the
group-sponsored insurance program. The minimum will never exceed $500. The
maximum partial surrender is equal to an amount that would cause the net cash
value after the partial surrender to be 10 percent of the account value
immediately prior to the partial surrender. We reserve the right to limit the
number of partial surrenders to one per policy month. A partial surrender will
cause a decrease in the face amount equal to the amount surrendered if the
policy has a level death benefit (Option A). A partial surrender has no effect
on the face amount of an Option B death benefit. However, since the account
value is reduced by the amount of the partial surrender, the death benefit is
reduced by the same amount, as the account value represents a portion of the
death benefit proceeds.
On a partial surrender, the owner may designate the sub-accounts of the
separate account from which a partial surrender is to be taken or whether it
is to be taken in whole or in part from the guaranteed account. Otherwise,
partial surrenders will be deducted from the guaranteed account value and
separate account value in the same proportion that those values bear to each
other and, as to the separate account value, from each sub-account in the
proportion that the sub-account value of each such sub-account bears to the
separate account value. We will tell the owner, on request, what amounts are
available for a partial surrender under the policy.
A transaction charge will be assessed against the net cash value in
connection with a partial surrender for policies under some group-sponsored
insurance programs. The amount of the charge will never exceed the lesser of
$25 or 2 percent of the amount withdrawn. The charge will be allocated to the
guaranteed account value and the separate account value in the same proportion
as those values bear to each other and, as to the separate account value, from
each sub-account in the same proportion that the sub-account value of each
such sub-account bears to the separate account value.
Payment of a surrender or partial surrender will be made as soon as
possible, but not later than seven days after our receipt of the owner's
written request for surrender. However, if any portion of the net cash value
to be surrendered is attributable to a premium payment made by non-guaranteed
funds such as a personal check, we will delay mailing that portion of the
surrender proceeds until we have reasonable assurance that the payment has
cleared and that good payment has been collected. The amount the owner
receives on surrender may be more or less than the total premiums paid under
the policy.
TRANSFERS
The policy allows for transfers, a reallocation of the net cash value
between the guaranteed account and the separate
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account or among the available sub-accounts of the separate account.
There are restrictions to such transfers. The amount to be transferred to or
from a sub-account or the guaranteed account must be at least $250. If the
balance is less than $250, the entire sub-account value or the guaranteed
account value must be transferred. If a transfer would reduce the sub-account
value from which the transfer is to be made to less than $250, we reserve the
right to include that remaining sub-account value in the amount transferred.
We also reserve the right to limit the number of transfers to one per policy
month.
For transfers from the sub-accounts of the separate account, we will credit
and cancel units on the basis of sub-account unit values as of the end of the
valuation period during which the owner's written or telephone request is
received at our home office.
From time to time the separate account may receive a transfer request that
Minnesota Life regards as disruptive to the efficient management of the sub-
accounts of the separate account. This could be because of the timing of the
request and the availability of settlement proceeds in federal funds in the
underlying portfolio of the fund, the size of the transfer amount involved or
the trading history of the investor.
A transfer or exchange from one sub-account to another is generally treated
as a simultaneous sale of units currently held and the purchase of units where
a new investment is desired. In the event that cumulative redemptions from a
sub-account on a given day equal or exceed $5,000,000, and if the investment
adviser of the underlying portfolio of the fund determines that selling
securities to satisfy the redemptions could be harmful to the fund, some
requested transfers or exchanges may be denied. In addition, any transfer
request or requests affecting a particular sub-account which, individually or
collectively with other transfer requests submitted by the owner of multiple
individual policies or by the owners of certificates under a single group
contract for that sub-account on a given day, equal or exceed $5,000,000 may
be denied unless all such transfer requests are received by 12:00 p.m. central
time. In these events, the order of such redemptions from the fund will be as
follows: all automatic exchanges (for example, dollar cost averaging), written
transfer or exchange requests, faxed transfer and exchange requests, and
telephone transfer and exchange requests. Transfer and exchange requests will
be processed in the order of receipt within their respective category. In no
event will there be any limitation on redemptions in connection with
surrenders, partial surrenders or loans. The owner will be notified when these
limitations are imposed on a transfer request.
In the event of disruptive circumstances which don't result in the denial of
a request as outlined above, the size or timing of the transfer may make it
impossible for the exchange to occur on the same day. In that event, the
request for exchange will be treated as a request for a transfer of units on
the date of the receipt of the request. The price of the new units will also
be completed on that day and that determination will be used as the basis for
determining the number of units outstanding in the sub-account. However, the
transfer of the redemption proceeds and the purchase of units, and shares in
the new portfolio, will be accomplished only when federal funds are received
from the sale to allow the purchase and sale without disruption. Should the
transfer not be completed because of non-payment, Minnesota Life will
reimburse the separate account for any decline in the price of the units to
the time of the cancellation. Similarly, any fees or disbursements resulting
from any legal action because of the non-payment will similarly be the
liability of Minnesota Life. The owner will be notified when this limitation
is imposed on a transfer request.
Transfers from the guaranteed account will be dollar amounts deducted at the
end of the day on which the transfer request is received at our home office. A
transfer is subject to a transaction charge. Currently, no such charge is
imposed on a transfer, but a charge, up to a maximum of $10, may be imposed in
the future.
The owner's instructions for transfer may be made in writing or the owner,
or a person authorized by the owner, may make such changes by telephone. To do
so, the owner may call us at (800) 843-8358 during our normal business hours
of 8:00 a.m. to 4:45 p.m., Central Time. Owners may also submit their requests
for transfer, surrender or other transactions to us by facsimile (FAX)
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transmission. Our FAX number is (651) 665-4827.
Transfers made pursuant to a telephone call are subject to the same
conditions and procedures as would apply to written transfer requests. During
periods of marked economic or market changes, owners may experience difficulty
in implementing a telephone transfer due to a heavy volume of telephone calls.
In such a circumstance, owners should consider submitting a written transfer
request while continuing to attempt a telephone redemption. We reserve the
right to restrict the frequency of--or otherwise modify, condition, terminate
or impose charges upon--telephone transfer privileges. For more information on
telephone transfers, contact us.
We will make this telephone transfer service available to all policy owners.
We will employ reasonable procedures to satisfy ourselves that instructions
received from policy owners are genuine and, to the extent that we do not, we
may be liable for any losses due to unauthorized or fraudulent instructions.
We require policy owners to identify themselves in those telephone
conversations through policy numbers and such other information as we may deem
to be reasonable. We record telephone transfer instruction conversations and
we provide the policy owners with a written confirmation of the telephone
transfers.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account is limited to 20 percent
(or $250 if greater) of the guaranteed account balance. Transfers to or from
the guaranteed account are limited to one such transfer per policy year. We
may further restrict transfers from the guaranteed account by requiring that
the request is received by us postmarked in the 30-day period before or after
the last day of the policy anniversary. Requests for such transfers which meet
these conditions would be effective after we approve them at our home office.
Although we currently intend to continue to permit transfers in the
foreseeable future, the policy provides that we may modify the transfer
privilege, by changing the minimum amount transferable, by altering the
frequency of transfers, by imposing a transfer charge, by prohibiting
transfers, or in such other manner as we may determine at our discretion.
DOLLAR COST AVERAGING
We currently offer a dollar cost averaging option enabling the owner to
preauthorize automatic monthly or quarterly transfers from the Money Market
Sub-Account to any of the other sub-accounts. The transfers will occur on
monthly anniversaries. Dollar cost averaging is a systematic method of
investing in which securities are purchased at regular intervals in fixed
dollar amounts so that the cost of the securities is averaged over time and
possibly over various market values. Since the value of the units will vary
over time, the amounts allocated to a sub-account will result in the crediting
of a greater number of units when the unit value is low and a lesser number of
units when the unit value is high. Dollar cost averaging does not guarantee
profits, nor does it assure that a policy will not have losses.
To elect dollar cost averaging the owner must have at least $3,000 in the
Money Market Sub-Account. The automatic transfer amount from the Money Market
Sub-Account must be at least $250. The minimum amount that may be transferred
to any one of the other sub-accounts is $50. Currently, there is no charge for
this service. We reserve the right to discontinue, modify or suspend the
dollar cost averaging program at any time.
A dollar cost averaging request form is available to the owner upon request.
On the form the owner will designate the specific dollar amount to be
transferred, the sub-accounts to which the transfer is to be made, the desired
frequency of the transfer and the total number of transfers to be made. If at
any time while the dollar cost averaging option is in effect, the amount in
the Money Market Sub-Account is insufficient to cover the amount designated to
be transferred the current election in effect will terminate.
An owner may instruct us at any time to terminate the dollar cost averaging
election by a written or telephone request to our home office. The amount from
which transfers were being made will remain in the Money Market Sub-Account
unless a transfer request is made.
FREE LOOK
It is important to us that the owner is satisfied with the policy after it
is issued. If the owner is not satisfied with it, the owner
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may return the policy to us within 10 days after the owner receives it. If the
policy is returned, the owner will receive within seven days of the date we
receive the notice of cancellation a full refund of the premiums paid.
A request for an increase in face amount also may be canceled. The request
for cancellation must be made within the 10 days, or that period required by
applicable state law, after the owner receives the new policy specification
pages for the increase.
Upon cancellation of an increase, the owner may request that we refund the
amount of the additional charges deducted in connection with the increase.
This will equal the amount by which the monthly deductions since the increase
went into effect exceeded the monthly deductions which would have been made
without the increase. If no request is made, we will increase the policy's
account value by the amount of these additional charges. This amount will be
allocated among the sub-accounts of the separate account and guaranteed
account in the same manner as it was deducted.
CONVERSION RIGHT TO AN INDIVIDUAL POLICY
If life insurance provided under the group contract is not continued upon
termination of the insured's eligibility under the group contract, or if the
group contract terminates or is amended so as to terminate the insurance, the
owner may convert the insurance under the group contract to an individual
policy of life insurance with us subject to the following:
(1) The owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home
office within 31 days of the date the owner's insurance terminates under
the group contract.
(2) The owner may convert all or a part of the group insurance in effect on
the date that the owner's coverage terminated to any individual life
insurance policy we offer, except a policy of term insurance. We will
issue the individual policy on the policy forms we then use for the plan
of insurance the owner has requested. The premium charge for this
insurance will be based upon the insured's age as of his or her nearest
birthday.
(3) If the insured should die within 31 days of the date that the group
contract terminates, the full amount of insurance that could have been
converted under this policy will be paid.
In the case of the termination of the group contract, we may require that an
insured under a certificate issued under the group contract be so insured for
at least five years prior to the termination date in order to qualify for the
above conversion privilege.
CONTINUATION OF GROUP COVERAGE
If the insured's eligibility under a group contract ends, the owner's
current group
coverage may continue unless the certificate is no longer in force or the
limitations below are true as of the date eligibility ends:
(1) The group contract has terminated; or
(2) The owner has less than the required minimum in his or her net cash value
after deduction of charges for the month in which eligibility ends. The
required minimum will vary based on the group-sponsored program under
which the policy is issued. The minimum will never be higher than $250.
The insurance amount will not change unless the owner requests a change. We
reserve the right to alter all charges not to exceed the maximums. These
charges may be higher than those applicable to policies under the group
contract that have not been continued under this provision.
Termination of the group contract by the contractholder or us will not
terminate the insurance then in force under the terms of the continuation
provision. The group contract will be deemed to remain in force solely for the
purpose of continuing such insurance, but without further obligation of the
contractholder.
CHARGES
Charges will be deducted in connection with the policies to compensate us
for providing the insurance benefits set forth in the policies, administering
the policies, incurring expenses in distributing the policies and assuming
certain risks in connection with the policies. Charges will vary based on the
group-sponsored insurance program under which the policy is issued. We will
determine charges pursuant to our established actuarial procedures, and in
doing so we will not discriminate unreasonably or unfairly against any person
or class of persons. These
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charges for policies under a group-sponsored insurance program are shown on
the specifications page of the policy. There are also advisory fees and
expenses which are assessed against the asset value of each of the portfolios
of the Funds.
Premium Expense Charges
The premium expense charges described below will be deducted from each premium
payment we receive. The remaining amount, or net premium, will be allocated to
the guaranteed account and/or sub-accounts of the separate account, as
directed by the owner, and become part of the policy's net cash value.
Sales Charge We may deduct a sales charge from each premium paid under the
policy. Sales charges vary based on the group-sponsored insurance program
under which the policy is issued. The charge will never exceed 5 percent of
each premium paid. The sales charge will be determined based on a variety of
factors, including enrollment procedures, the size and type of the group, the
total amount of premium payments to be received, any prior existing
relationship with the group sponsor, the level of commissions paid to agents
and brokers and their affiliated broker-dealers, and other circumstances of
which we are not presently aware. We may waive the sales charge for premiums
received as a result of Internal Revenue Code section 1035 exchanges from
another policy. In addition, we may waive the sales charge for premiums paid
by designated payors under a group-sponsored insurance program (for example,
insureds versus the group sponsor).
The amount of the sales charge in any policy year cannot be specifically
related to sales expenses for that year. To the extent that sales expenses are
not recovered from the sales charge, we will recover them from our other
assets or surplus, which may include profits from the mortality and expense
risk charge or the cost of insurance charge.
Premium Tax Charge We will deduct a percentage of premium charge, not to
exceed 4 percent of each premium received for premium taxes. Premium tax
charges vary based on the group-sponsored insurance program under which the
policy is issued. This charge is to compensate us for our payment of premium
taxes that are imposed by various states and local jurisdictions. Currently,
the range of premium taxes imposed by the states varies from 0.75 percent to
3.5 percent. A state in which a policy is issued may impose a tax that is
higher or lower than the charge deducted under the policy. Accordingly, the
charge for the policy may be higher or lower than the premium tax actually
imposed on the policy. We may waive the premium tax charge for premiums
received as a result of Internal Revenue Code section 1035 exchanges from
another policy.
Federal Tax Charge Due to a 1990 federal tax law change under the Omnibus
Budget Reconciliation Act of 1990 ("OBRA"), as amended, insurance companies
are generally required to capitalize and amortize certain policy acquisition
expenses rather than currently deducting such expenses. This has resulted in
an additional corporate income tax liability for insurance companies. For
policies deemed to be group policies for purposes of OBRA, we make a charge of
up to 0.25 percent of each premium payment to compensate us for the additional
corporate taxes we pay for these policies. OBRA imposes a higher policy
acquisition expense to be capitalized on policies deemed to be individual
contracts under OBRA which results in significantly higher corporate income
tax liability for those deemed individual contracts. Thus, under policies
deemed to be individual contracts under OBRA, we make a charge of up to 1.25
percent of each premium payment. This additional charge is treated as a sales
load for purposes of determining compliance with the limitations on sales
loads imposed by the Investment Company Act of 1940 and applicable regulations
thereunder. We may waive the federal tax charge for premiums received as a
result of Internal Revenue Code section 1035 exchanges from another policy.
Account Value Charges
The premium expense charges described above will be deducted form each premium
payment we receive. The remaining amount, or net premium, will be allocated to
the guaranteed account and/or sub-accounts of the separate account, as
directed by the owner, and become part of the policy's net cash value. The
account value charges described below will be deducted from the net cash
value. If the net cash value is
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insufficient to cover the account value charges, the policy will lapse unless
sufficient payment is received within the grace period.
Monthly Deduction The charges deducted as part of the monthly deduction vary
based on the group-sponsored insurance program under which the policy is
issued. As of the policy date and each subsequent monthly anniversary, we will
deduct an amount from the net cash value of the owner's policy to cover
certain charges and expenses incurred in connection with the policy. The
monthly deduction will be the sum of the applicable items: (1) an
administration charge; (2) a cost of insurance charge; and (3) the cost of any
additional insurance benefits provided by rider. The monthly deduction will be
assessed against the guaranteed account value and the separate account value
in the same proportion that those values bear to each other and, as to the
separate account, from each sub-account in the proportion that the sub-account
value in such sub-account bears to the separate account value of the policy.
We may deduct an administration charge from the net cash value of the policy
each month. The administration charge will never exceed $4 per month. This
charge is to compensate us for expenses incurred in the administration of the
policies. These expenses include the costs of processing enrollments,
determining insurability, and establishing and maintaining policy records.
Differences in the administration charge applicable to specific group-
sponsored insurance programs will be determined based on expected differences
in the administrative costs for the policies or in the amount of revenues that
we expect to derive from the charge. Such differences may result, for example,
from the number of eligible members in the group, the type and scope of
administrative support provided by the group sponsor, the expected average
policy size, and the features to be included in policies under the group-
sponsored insurance program. This charge is not designed to produce a profit.
The monthly cost of insurance will be calculated by multiplying the
applicable cost of insurance rate based on the insured's attained age and rate
class by the net amount at risk for each policy month. The net amount at risk
for a policy month is the difference between the death benefit and the account
value. The net amount at risk may be affected by changes in the face amount of
the policy or by changes in the account value.
The cost of insurance rates are generally determined at the beginning of
each policy year, although changes may be made at other times if warranted due
to a change in the underlying characteristics of the group, changes in
benefits included in policies under the group-sponsored insurance program,
experience of the group, changes in the expense structure, or a combination of
these factors.
Cost of insurance rates for each group-sponsored insurance program are
determined based on a variety of factors related to group mortality including
gender mix, average amount of insurance, age distribution, occupations,
industry, geographic location, participation, level of medical underwriting
required, degree of stability in the charges sought by the group sponsor,
prior mortality experience of the group, number of actual or anticipated
owners electing the continuation option, and other factors which may affect
expected mortality experience. In addition, cost of insurance rates may be
intended to cover expenses to the extent they are not covered by the other
policy charges. Changes in the current cost of insurance rates may be made
based on any factor which affects the actual or expected mortality or expenses
of the group.
Any changes in the current cost of insurance rates will apply to all persons
of the same attained age and rate class under the group-sponsored insurance
program. We and the group sponsor will agree to the number of classes and
characteristics of each rate class. The classes may vary by tobacco users and
non-tobacco users, active and retired status, owners of coverage continued
under the continuation provision and other owners, and/or any other
nondiscriminatory classes agreed to by the group sponsor.
The current cost of insurance rates will not be greater than the guaranteed
cost of insurance rates set forth in the policy. These guaranteed rates are
125 percent of the maximum rates that could be charged based on 1980
Commissioners Standard Ordinary Mortality Tables ("1980 CSO Table"). The
guaranteed rates are higher than 100 percent of the 1980 CSO Table because we
use a simplified underwriting approach and may issue policies that do not
require medical evidence of insurability. The current cost of
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insurance rates are generally lower than 100 percent of the 1980 CSO Table.
(For purposes of premiums under Section 7702 of the Internal Revenue Code of
1986, as amended, we will use 100 percent of the 1980 CSO Table.)
Partial Surrender Transaction Charge For policies under some group-sponsored
insurance programs, a transaction charge will be assessed against the net cash
value for each partial surrender to cover the administrative costs incurred in
processing the partial surrender. The charge will not exceed the lesser of $25
or 2 percent of the amount withdrawn. This charge will be assessed in the same
manner as the monthly deduction. This charge is not designed to produce a
profit.
Transfer Charge There is currently no charge assessed on transfers of net cash
value between the guaranteed account and the separate account or among the
sub-accounts of the separate account. A charge, not to exceed $10 per
transfer, may be imposed in the future.
Separate Account Charges
We assess a mortality and expense risk charge directly against the separate
account assets. This charge will vary based on the group-sponsored insurance
program under which the policy is issued. The annual rate will not exceed .50
percent of the average daily assets of the separate account. The mortality and
expense risk charge compensates us for assuming the risk that the cost of
insurance and other charges will be insufficient to cover the actual mortality
experience and other costs in connection with the policies.
Differences in the mortality and expense risk charge rates applicable to
different group-sponsored insurance programs will be determined by us based on
differences in the levels of mortality and expense risk under those contracts.
Differences in mortality and expense risk arise principally from the fact
that: (1) the factors used to determine cost of insurance and administration
charges are more uncertain for some group-sponsored insurance programs than
for others; and (2) our ability to recover any unexpected mortality and
administration costs will also vary from group-sponsored insurance program to
group-sponsored insurance program, depending on the charges established for
policies issued under the group-sponsored insurance program, and on other
financial factors.
We reserve the right to deduct a charge against the separate account assets,
or make other provisions for, any additional tax liability we may incur with
respect to the separate account or the polices, to the extent that those
liabilities exceed the amounts recovered through the deduction from premiums
for state premium taxes and federal taxes. No such charge or provision is made
at the present time.
Fund Charges
Advantus Capital Management, Inc. ("Advantus Capital"), acts as the
investment adviser to the Series Fund. Advantus Capital is a wholly-owned
subsidiary of Minnesota Life. For more information about the Series Fund, see
the prospectus of Advantus Series Fund, Inc. which is attached to this
prospectus.
The Fidelity Management and Research Company (FMR), a subsidiary of FMR
Corp., is adviser to each of VIP High Income Portfolio, VIP Equity-Income
Portfolio and VIP II Contrafund Portfolio. For more information about the
Funds, see the prospectus of the Variable Insurance Products Funds which is
attached to this prospectus.
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The chart below shows the advisory fees and portfolio expense fees for the
Funds as of December 31, 1998.
The advisory fees for the Series Fund are made pursuant to a contractual
agreement between the Series Fund and Advantus Capital Management, Inc. The
advisory fees for VIP and VIP II are made pursuant to a contractual agreement
between VIP and VIP II and Fidelity Management & Research Company ("FMR").
The Series Fund portfolio expense fees reflect the actual expenses incurred
by each portfolio unless the actual expenses exceed the cap. The portfolio
expense fee is capped at 0.15 percent for all Series Fund portfolios except
the International Stock and Global Bond Portfolios, which are capped at 1.00
percent. Any Series Fund portfolio expenses incurred in excess of the cap are
voluntarily absorbed by Minnesota Life. For a description of the arrangement
whereby Minnesota Life voluntarily absorbs certain expenses of the Series
Fund, see "Investment Adviser" in the attached prospectus for Advantus Series
Fund, Inc. The portfolio expense fees shown are expected to decrease as the
amount of assets in the portfolios increases.
The portfolio expense fees for the VIP Equity Income Portfolio and the VIP
II Contrafund Portfolio reflect reductions based on arrangements FMR or the
funds have entered into with third parties who either paid or reduced a
portion of the portfolio expenses.
<TABLE>
<CAPTION>
Investment Portfolio Expense
Fund/Portfolio Name Advisory Fee Actual or Cap Total
- ------------------- ------------ ----------------- -----
<S> <C> <C> <C>
SERIES FUND
Growth 0.50% 0.03% 0.53%
Bond 0.50% 0.05% 0.55%
Money Market 0.50% 0.08% 0.58%
Asset Allocation 0.50% 0.03% 0.53%
Mortgage Securities 0.50% 0.07% 0.57%
Index 500 0.40% 0.04% 0.44%
Capital Appreciation 0.75% 0.03% 0.78%
International Stock 0.70%* 0.24% 0.94%
Small Company Growth 0.75% 0.04% 0.79%
Maturing Government Bond 2010 0.25% 0.15% 0.40%
Value Stock 0.75% 0.04% 0.79%
Small Company Value 0.75% 0.15% 0.90%
Global Bond 0.60% 0.53% 1.13%
Index 400 Mid-Cap 0.40% 0.15% 0.55%
Macro-Cap Value 0.70% 0.15% 0.85%
Micro-Cap Growth 1.10% 0.15% 1.25%
VIP
VIP High Income 0.58%** 0.12% 0.70%
VIP Equity-Income 0.49%** 0.09% 0.58%
VIP II
VIP II Contrafund 0.59%** 0.11% 0.70%
AVERAGE % % %
---- ---- ----
</TABLE>
* The advisory fee for this portfolio is a variable fee decreasing with
increased asset size. This figure represents the actual 1998 average.
** The advisory fee for each of these portfolios is calculated by adding a
group fee to an individual fund fee rate and multiplying the result by each
fund's or portfolio's average net assets. These figures represent the actual
1998 averages.
Although the Maturing Government Bond Portfolio with a target maturity of
2002 is included in this prospectus, it is not available for premium
allocations or transfers effective May 1, 1997. The investment advisory fee
for this portfolio is .25 percent (effective April 1, 1998) and the portfolio
expense fee is .15 percent.
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GUARANTEE OF CERTAIN CHARGES
We guarantee and will not increase the following charges for policies under
a group-sponsored insurance program: (1) the sales charge; (2) the federal tax
charge (unless there is a change in the law regarding the federal income tax
treatment of deferred acquisition cost); (3) the maximum cost of insurance
charge; (4) the maximum administration charge; (5) the maximum partial
surrender transaction charge; (6) the maximum transfer charge; and (7) the
maximum separate account charge for mortality and expense risk.
ADDITIONAL BENEFITS
Subject to certain requirements, one or more of the following additional
insurance benefits may be added to the policy by rider. However, some group
contracts may not offer each of the additional benefits described below.
Certain riders may not be available in all states. The descriptions below are
intended to be general; the terms of the policy riders providing the
additional benefits may vary from state to state, and the policy should be
consulted. New benefit riders which are subsequently developed may be offered
under some group-sponsored programs, and the terms of the riders will be
identified in the policy. The cost of any additional insurance benefits will
be deducted as part of the monthly deduction.
Accelerated Benefits Agreement All policies, where allowed by state law, will
be issued with the Accelerated Benefits Agreement. Eligibility requirements
and conditions for payment of accelerated benefits are described in the
agreement. The agreement provides for an accelerated payment of all or a
portion of the death benefit proceeds in a single sum or any other mutually
acceptable manner if the insured is terminally ill as defined in the
agreement, provided the policy has not been assigned and it does not have an
irrevocable beneficiary. All accelerated benefits will be paid to the insured
unless the insured validly assigns them otherwise. If the insured dies before
all payments have been made, we will pay the remainder to the beneficiary
under the policy in one lump sum.
The amount of accelerated benefit available will be the death benefit
multiplied by the accelerated benefit factor. The accelerated benefit factor
will be calculated using the following considerations: the insured's age,
gender, and option applied for; and certain assumptions including, but not
limited to, expected future premiums, and the insured's life expectancy. We
will subtract a processing charge of up to $150 before paying the benefit.
This charge is not designed to produce a profit.
The addition of an Accelerated Benefits Agreement and/or the receipt of
amounts under such an Agreement may have tax consequences. The insured should
seek assistance from a personal tax adviser.
Waiver Agreement Provides for the waiver of the monthly deductions while the
insured is totally disabled, subject to certain limitations described in the
rider agreement. The insured must have become disabled before the age of 60.
Accidental Death and Dismemberment Provides additional insurance if the
insured dies or becomes dismembered as a result of an accidental bodily
injury, as defined in the rider. Under the terms of the rider, the additional
benefits provided in the policy will be paid upon receipt of proof by us that
the death or dismemberment resulted directly from accidental injury and
independently of all other causes. The death or dismemberment must occur
within 180 days after the date of the injury and before the insured's 70th
birthday.
Children's Rider Provides for term insurance on the insured's children, as
specified in the rider. To be eligible for the insurance, the child must be of
eligible age as indicated in the rider and be dependent upon the insured for
financial support. Under terms of the rider, the death benefit will be payable
to the person insured by the policy to which the rider is attached.
Spouse and Child Rider Provides for term insurance on the insured's spouse and
children, as specified in the rider. To be eligible for the insurance, spouse
and children must meet the eligibility requirements indicated in the rider.
Under terms of the rider, the death benefit will be payable to the person
insured by the policy to which the rider is attached.
Policyholder Contribution Rider Allows the contractholder to pay for all or a
portion of the monthly charges under the policy without affecting the account
value which may
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<PAGE>
accumulate due to employee-paid net premiums. The portion of the net premium
paid by the contractholder will be allocated to the guaranteed account. On the
same day such premium is allocated, the charges the contractholder intends to
cover will be deducted from the guaranteed account value.
GENERAL MATTERS RELATING TO THE POLICY
Postponement of Payments Normally, we will pay any policy proceeds within
seven days after our receipt of all the documents required for such a payment.
Other than the death proceeds for a policy with an Option B death benefit, for
which the account value portion of the death benefit is determined as of the
date of payment, the amount of payment will be determined as of the end of the
valuation period during which a request is received at our home office.
However, we reserve the right to defer policy payments, including policy
loans, for up to six months from the date of the owner's request, if such
payments are based upon policy values which do not depend on the investment
performance of the separate account. In that case, if we postpone a payment
other than a policy loan payment for more than 31 days, we will pay the owner
interest at the greater of 4 percent per year or the minimum rate required by
state law for the period beyond that time that payment is postponed. For
payments based on policy values which do depend on the investment performance
of the separate account, we may defer payment only: (a) for any period during
which the New York Stock Exchange is closed for trading (except for normal
holiday closing); or (b) when the Securities and Exchange Commission has
determined that a state of emergency exists which may make such payment
impractical.
The Policy The policy, the attached application, endorsements, any application
for an increase in face amount and any application for reinstatement
constitute the entire contract between the owner and us. Apart from the rights
and benefits described in the policy and incorporated by reference into the
group contract, the owner has no rights under the group contract. All
statements made by the owner or insured in the application are considered
representations and not warranties, except in the case of fraud. Only
statements in the application and any supplemental applications can be used to
contest a claim or the validity of the policy. Any change to the policy must
be approved in writing by the President, a Vice President or Secretary of
Minnesota Life. No agent has the authority to alter or modify any of the
terms, conditions or agreements of the policy or to waive any of its
provisions.
Control of Policy The insured will be considered the owner of the policy
unless another person is shown as the owner in the application. Ownership may
be changed, however, by assigning the policy as described below. The owner is
entitled to all rights provided by the policy, prior to its maturity date.
After the maturity date, the owner cannot change the payee nor the mode of
payment, unless otherwise provided in the policy. Any person whose rights of
ownership depend upon some future event will not possess any present rights of
ownership. If there is more than one owner at a given time, all must exercise
the rights of ownership. If the owner should die, and the owner is not the
insured, the owner's interest will go to his or her estate unless otherwise
provided.
Beneficiary The owner may name one or more beneficiaries on the application to
receive the death benefit. The owner may choose to name a beneficiary that the
owner cannot change without the beneficiary's consent. This is called an
irrevocable beneficiary. If the owner has not named an irrevocable
beneficiary, the owner has reserved the right to change the beneficiary by
filing a subsequent written request with us. In that event, we will pay the
death benefit to the beneficiary named in the most recent change of
beneficiary request as provided for in the policy.
If a beneficiary dies before the insured, that beneficiary's interest in the
policy ends with that beneficiary's death. Only those beneficiaries who
survive the insured will be eligible to share in the proceeds. If no
beneficiary survives the insured we will pay the proceeds according to the
following order of priority:
(1) The insured's lawful spouse, if living; otherwise
(2) The personal representative of the insured's estate.
Change of Beneficiary If the owner has reserved the right to change the
beneficiary, the owner can file a written request with us to
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<PAGE>
change the beneficiary. If the owner has named an irrevocable beneficiary, the
written consent of the irrevocable beneficiary will be required. The owner's
written request will not be effective until it is recorded in our home office
records. After it has been so recorded, it will take effect as of the date the
owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
Settlement Options The death benefit proceeds of a policy will be payable if
we receive due proof satisfactory to us of the insured's death while it is in
force. The proceeds will be paid from our home office and in a single sum
unless a settlement option has been selected.
We will pay interest on the face amount of single sum death proceeds from
the date of the insured's death until the date of payment at any annual rate
to be determined by us, but never less than the minimum guaranteed rate,
compounded annually, or the minimum rate required by state law. For group-
sponsored programs implemented prior to May 3, 1999, the minimum guaranteed
annual rate is 4 percent. For group-sponsored programs implemented on or after
May 3, 1999, the minimum guaranteed annual rate is 3 percent. Death benefits
proceeds arising from the account value, as under Option B, will continue to
reflect the separate account experience until the time of payment of those
amounts.
The proceeds of a policy may be paid in other than a single sum and the
owner may, during the lifetime of the insured, request that we pay the
proceeds under one of the policy's settlement options. We may also use any
other method of payment acceptable to both the owner and us. Unless the owner
elects otherwise, a beneficiary may select a settlement option after the
insured's death. A settlement option may be selected only if the payments are
to be made to a natural person in that person's own right.
Each settlement option is payable in fixed amounts as described below. A
person electing a settlement option will be asked to sign an agreement
covering the election which will state the terms and conditions of the
payments. The payments do not vary with the investment performance of the
separate account.
(1) Interest Payments This option will provide payment of interest on the
proceeds at such times and for a period that is agreeable to the person
electing the settlement option and us. Withdrawal of proceeds may be made
in amounts of at least $500. At the end of the period, any remaining
proceeds will be paid in either a single sum or under any other method we
approve.
(2) Fixed Period Annuity This is an annuity payable in monthly installments
for a specified number of years, from one to twenty years. The amount of
guaranteed payments for each $1,000 of proceeds applied would be shown on
the settlement option agreement.
(3) Life Annuity This is an annuity payable monthly during the lifetime of the
person who is to receive the income and terminating with the last monthly
payment immediately preceding that person's death. We may require proof of
the age and gender of the annuitant. The amount of guaranteed payments for
each $1,000 of proceeds applied would be shown in the settlement option
agreement. It would be possible under this option for the annuitant to
receive only one annuity payment if he or she died prior to the due date
of the second annuity payment, two if he or she died before the due date
of the third annuity payment, etc.
(4) Payments of a Specified Amount This is an annuity payable in a specified
amount until the proceeds and interest are fully paid.
The minimum amount of interest we will pay under any settlement option will
never be less than the minimum guaranteed annual rate, compounded annually, or
the minimum rate required by state law. For group-sponsored programs
implemented prior to May 3, 1999, the minimum guaranteed annual rate is 4
percent. For group-sponsored programs implemented on or after May 3, 1999, the
minimum guaranteed annual rate is 3 percent. Additional interest earnings, if
any, on deposits under a settlement option will be payable as determined by
us.
Policy Changes We reserve the right to limit the number of policy changes to
one per policy year and to restrict such changes in the first policy year. For
this purpose, changes include increases or decreases in face amount. No change
will be permitted
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that would result in the death benefit under a policy being included in gross
income due to not satisfying the requirements of Section 7702 of the Internal
Revenue Code or any applicable successor provision.
Conformity with Statutes If any provision in a policy is in conflict with the
laws of the state governing the policy, the provision will be deemed to be
amended to conform to such laws.
Claims of Creditors To the extent permitted by law, neither the policy nor any
payment thereunder will be subject to the claims of creditors or to any legal
process.
Incontestability After a policy has been in force during the insured's lifetime
for two years from the policy date, we cannot contest the insurance for any
loss that is incurred more than two years after the policy date, unless the net
cash value has dropped below the amount necessary to pay the insured's cost of
insurance on the insured's life. However, if there has been an increase in the
amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable. We may elect to waive our
right to contest the insurance for any loss that is incurred within two years
after the policy issue date where the policy replaces existing coverage.
Assignment The policy may be assigned. However, we will not be bound by any
assignment unless it is in writing and filed at our home office in St. Paul,
Minnesota, and we send the owner an acknowledged copy. We assume no
responsibility for the validity or effect of any assignment of the policy or of
any interest in it. Any claim made by an assignee will be subject to proof of
the assignee's interest and the extent of the assignment. A valid assignment
will take precedence over any claim of a beneficiary.
Suicide If the insured, whether sane or insane, dies by suicide, within two
years of the original policy date, our liability will be limited to an amount
equal to the premiums paid for the policy. If there has been a face amount
increase for which we required evidence of insurability, and if the insured
dies by suicide within two years from the effective date of the increase, our
liability with respect to the increase will be limited to an amount equal to
the premiums paid for that increase.
If the insured is a Missouri citizen when the policy is issued, this
provision does not apply on the issue date of the policy, or on the effective
date of any increase in face amount, unless the insured intended suicide when
the policy, or any increase in face amount, was applied for.
If the insured is a citizen of Colorado or North Dakota, the duration of this
suicide provision is for one year instead of two.
Misstatement of Age If the age of the insured has been misstated, the death
benefit and account value will be adjusted. The adjustment will be the
difference between two amounts accumulated with interest. These two amounts
are:
(1) the monthly cost of insurance charges that were paid; and
(2) the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating
guaranteed account values for that time period.
Experience Credits Each year we will determine if this class of policies and
this policy will receive an experience credit. Experience credits, if received,
may be added to the owner's account value or, if the owner elects, they may be
paid in cash.
An experience credit applied to the account value will be allocated to the
guaranteed account or to the sub-accounts of the separate account in accordance
with the owner's current instructions for the allocation of net premiums. In
the absence of such instructions, experience credits will be allocated to the
guaranteed account value and separate account value in the same proportion that
those account values bear to each other and, as to the account value in the
separate account, to each sub-account in the proportion that the sub-account
value bears to the separate account value.
Reports Each year we will send the owner a report. This report will show the
policy's status on the policy anniversary. It will include the account value,
the face amount and the death benefit as of the date of the report. It will
also show the premiums paid during the year, policy loan activity and the
policy value. The report will be sent to the owner without
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<PAGE>
cost. The report will be as of a date within two months of its mailing.
GENERAL PROVISIONS OF THE GROUP CONTRACT
Issuance The group contract will be issued upon receipt of an application for
group insurance signed by a duly authorized officer of the group sponsor and
acceptance by a duly authorized officer of Minnesota Life at our home office.
Termination The contractholder may terminate a group contract by giving us 31
days prior written notice of the intent to terminate. In addition, we may
terminate a group contract or any of its provisions on 61 days' notice. We may
elect to limit the situations in which we may exercise our right to terminate
the group contract to situations where, in the absence of fraud or the non-
payment of premiums, during any twelve month period, the aggregate specified
face amount for all policies under the group contract or the number of policies
under a group contract decrease by certain amounts or below the minimum
permissible levels we establish for the group contract. No individual may
become insured under the group contract after the effective date of a notice of
termination. However, if the group contract terminates, policies may be allowed
to convert to individual coverage as described under the heading "Conversion
Right to an Individual Policy."
Termination of the group contract by the contractholder or us will not
terminate the insurance then in force under the terms of the continuation
provision. The group contract will be deemed to remain in force solely for the
purpose of continuing such insurance, but without further obligation of the
contractholder.
Right to Examine Group Contract The contractholder may terminate the group
contract within 10 days, or that period required by law, after receiving it. To
cancel the group contract, the contractholder should mail or deliver the group
contract to us.
Entire Group Contract The group contract, the attached copy of the
contractholder's application and any additional agreements constitute the
entire contract between the contractholder and us. All statements made by the
contractholder, any owner or any insured will be deemed representations and not
warranties. A misstatement will not be used in any contest or to reduce claim
under the group contract, unless it is in writing. A copy of the application
containing such misstatement must have been given to the contractholder or to
the insured or to his or her beneficiary, if any.
Ownership of Group Contract The contractholder owns the group contract. The
group contract may be changed or amended by agreement between us and the
contractholder without the consent of, or notice to, any person claiming rights
or benefits under the group contract. However, unless the contractholder owns
all of the certificates issued under the group contract, the contractholder
does not have any ownership interest in the certificates issued under the group
contract. The rights and benefits under the certificates of the owners,
insureds and beneficiaries are as set forth in this prospectus and in the
certificates.
- --------------------------------------------------------------------------------
Other Matters
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS
The discussion contained herein is general in nature and is not intended as
tax advice. Each person concerned should consult a competent tax adviser. No
attempt is made to consider any applicable state or other tax laws. In
addition, this discussion is based on our understanding of federal income tax
laws as they are currently interpreted. No representation is made regarding the
likelihood of continuation of current income tax laws or the current
interpretations of the Internal Revenue Service.
We are taxed as a "life insurance company" under the Internal Revenue Code.
The operations of the separate account form a part of, and are taxed with, our
other business activities. Currently, no federal income tax is payable by us on
income dividends received by the separate account or on capital gains arising
from the separate account's activities. The separate account is not taxed as a
"regulated investment
33
<PAGE>
company" under the Code and it does not anticipate any change in that tax
status.
Under Section 7702 of the Code, life insurance contracts such as the
policies will be treated as life insurance under the Code if certain tests are
met. Guidance on how these tests are to be applied is limited.
However, the Internal Revenue Service has issued proposed regulations that
would specify what will be considered reasonable mortality charges under
Section 7702. In light of these proposed regulations and the other available
guidance on the application of the tests under Section 7702, we generally
believe that a policy issued in respect of a standard risk should meet the
statutory definition of a life insurance contract under Section 7702. With
respect to a policy issued on a substandard basis (i.e., a premium class
involving higher than standard mortality risk), there is insufficient guidance
to determine if such a policy would satisfy the Section 7702 definition of a
life insurance contract. If it is subsequently determined that a policy does
not satisfy Section 7702, we may take whatever steps are appropriate and
necessary to attempt to cause such a policy to comply with Section 7702.
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the separate account to be
"adequately diversified" in order for the policy to be treated as a life
insurance contract for federal tax purposes. The separate account, through the
Funds, intends to comply with the diversification requirements prescribed in
Regulations Section 1.817-5, which affect how the Funds' assets may be
invested. Although the investment adviser of the Series Fund is an affiliate
of Minnesota Life, Minnesota Life does not have control over the Fund or its
investments. Nonetheless, Minnesota Life believes that each Portfolio of the
Series Fund in which the separate account owns shares will be operated in
compliance with the requirements prescribed by the Treasury.
In certain circumstances, owners of variable life policies may be considered
the owners, for federal income tax purposes, of the assets of a separate
account used to support their policies. In those circumstances, income and
gains from the separate account assets would be includable in the variable
life owner's gross income. The IRS has stated in published rulings that a
variable policy owner will be considered the owner of separate account assets
if the policy owner possesses incidents of ownership in those assets, such as
the ability to exercise the investment control over the assets. The Treasury
Department has also announced, in connection with the issuance of regulations
concerning investment diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
contract owner), rather than the insurance company, to be treated as the owner
of the assets in the account." This announcement also states that guidance
would be issued by way of regulations or rulings on the "extent to which
policyholders may direct their investments to particular subaccounts without
being treated as owners of the underlying assets."
The ownership rights under the policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, the owner of a policy has the choice of one or more sub-accounts in
which to allocate net purchase payments and policy values, and may be able to
transfer among sub-accounts more frequently than in such rulings. Minnesota
Life does not believe that the ownership rights of an owner of a policy would
result in any contract owner being treated as the owner of the assets of the
separate account. However, Minnesota Life does not know what standards would
be applied if the Treasury Department should proceed to issue regulations or
rulings on this issue. Minnesota Life therefore reserves the right to modify
the policy as necessary to attempt to prevent a policy owner from being
considered the owner of a pro rata share of the assets of the separate
account.
The following discussion assumes that the policy will qualify as a life
insurance contract for federal income tax purposes.
On the death of the insured, the death benefit provided by the policies will
be excludable from the gross income of the beneficiary under Section 101(a) of
the Internal Revenue Code. The owner is not currently taxed on any part of his
or her interest until the owner actually receives cash from the policy.
However, taxability may also be determined by the individual's
34
<PAGE>
contributions to the policy and prior policy activity. We also believe that
policy loans will be treated as indebtedness and will not be currently taxable
as income to the policy owner. However, a surrender or partial surrender may
have tax consequences. On surrender, an owner will generally not be taxed on
values received except to the extent that they exceed the gross premiums paid
under the policy. An exception to this general rule occurs in the case of a
partial surrender, a decrease in the face amount, or any other change that
reduces benefits under the policy in the first 15 years after the policy is
issued and that results in a cash distribution to the owner in order for the
policy to continue complying with the Section 7702 definitional limits. In
that case, such distribution may be taxed in whole or in part as ordinary
income (to the extent of any gain in the policy) under rules prescribed in
Section 7702. Premiums for additional benefits are not used in the calculation
for computing the tax on account values.
It should be noted, however, that the tax treatment described above is
available only for policies not characterized as a modified endowment
contract. In general, the tests to make such a determination will have an
impact on policies which have a high premium in relation to the death benefit.
Thus, under these tests, generally the cumulative premiums paid on a life
insurance policy during the first seven contract years cannot exceed the sum
of the net level premiums which would be paid under a seven-pay life policy.
If the cumulative premiums during the first seven contract years exceed the
seven-pay life premiums, the policy is a modified endowment contract.
Modified endowment contracts would still be treated as life insurance with
respect to the tax treatment of death proceeds and to the extent that the
inside build-up of account value would not be taxed on a yearly basis.
However, any amounts received by the owner, such as loans and amounts received
from partial or total surrender of the contract would be subject to the same
tax treatment as the same amounts received under an annuity (i.e., such
distributions are generally treated as taxable income to the extent that the
account value immediately before the distribution exceeds the investment in
the policy). This annuity tax treatment includes the 10 percent additional
income tax which would be imposed on the portion of any distribution that is
included in income except where the distribution or loan is made on or after
the owner attains age 59 1/2, or is attributable to the policy owner becoming
disabled, or as part of a series of substantially equal periodic payments for
the life of the policy owner or the joint lives of the policy owner and
beneficiary.
The modified endowment contract rules apply to all policies entered into on
or after June 21, 1988. It should be noted, in addition, that a policy which
is subject to a "material change" shall be treated as newly entered into on
the date on which such material change takes effect. Appropriate adjustment
shall be made in determining whether such a policy meets the seven-pay test by
taking into account the previously existing cash surrender value. While
certain adjustments described herein may result in a material change, the law
provides that any cost of living increase described in the regulations and
based upon an established broad-based index will not be treated as a material
change if any increase is funded ratably over the remaining period during
which premiums are required to be paid under the policy. To date, no
regulations under this provision have been issued. Certain reductions in
benefits may also cause a policy to become a modified endowment contract.
Due to the policy's flexibility, classification of a policy as a modified
endowment contract will depend upon the circumstances of each policy.
Accordingly, a prospective policy owner should contact a competent tax adviser
before purchasing a policy to determine the circumstances under which the
policy would be a modified endowment contract. In addition, an owner should
contact a competent tax adviser before paying any lump sum premiums or making
any other change to, including an exchange of, a policy to determine whether
that premium or change would cause the policy (or the new policy in the case
of an exchange) to be treated as a modified endowment contract.
All modified endowment contracts issued by us (or an affiliated company) to
the same owner during any calendar year will be treated as one modified
endowment contract for purposes of determining the amount includable in gross
income under Section 72(e) of the Code. Additional rules may be
35
<PAGE>
promulgated under this provision to prevent avoidance of its effects through
serial contracts or otherwise. A life insurance policy received in exchange
for a modified endowment contract will also be treated as a modified endowment
contract.
Generally, interest paid on any loan under a life insurance contract is not
deductible. An owner should consult a competent tax adviser before deducting
any loan interest.
The policy may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance
plans, executive bonus plans, retiree medical benefit plans and others. The
tax consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a policy in any arrangement the value of which
depends in part on its tax consequences, you should be sure to consult a
qualified tax adviser regarding the tax attributes of the particular
arrangement. Moreover, in recent years, Congress has adopted new rules
relating to corporate owned life insurance. Any business contemplating the
purchase of a new life insurance contract or a change in an existing contract
should consult a tax adviser.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of policy proceeds depend upon the
circumstances of each policy owner or beneficiary. A competent tax adviser
should be consulted for further information.
It should be understood that the foregoing description of the federal income
tax consequences under the policies is not exhaustive and that special rules
are provided with respect to situations not discussed. Statutory changes in
the Internal Revenue Code, with varying effective dates, and regulations
adopted thereunder may also alter the tax consequences of specific factual
situations. Due to the complexity of the applicable laws, any person
contemplating the purchase of a variable life insurance policy or exercising
elections under such a policy may want to consult a tax adviser. For further
information, a qualified tax adviser should be consulted.
At the present time, we make no charge to the separate account or from
premium payments for any federal, state or local taxes (other than state
premium taxes and federal taxes under OBRA) that we incur that may be
attributable to such account or to the policies. We, however, reserve the
right in the future to make a charge for any such tax or other economic burden
resulting from the application of the tax laws that we determine to be
properly attributable to the separate account or the policies.
YEAR 2000 COMPUTER PROBLEM
The services provided by Minnesota Life to the Separate Account and its
policy owners depend on the smooth functioning of its computer systems. Many
computer software systems in use today cannot distinguish the year 2000 from
the year 1900 because of the way that dates are encoded, stored and
calculated. That failure could have a negative impact on the ability of
Advantus Capital and Minnesota Life to provide services to contract owners.
Minnesota Life has been actively working on necessary changes to its computer
systems to deal with the year 2000. Although there can be no assurance of
complete success, Minnesota Life believes that it will be able to resolve
these issues on a timely basis and that there will be no material adverse
impact on its ability to provide services to the Separate Account.
In addition, Minnesota Life's operations could be impacted by its service
providers' or suppliers' year 2000 efforts. Minnesota Life has undertaken an
initiative to assess the efforts of organizations where there is a significant
business relationship; however there is no assurance that Minnesota Life will
not be affected by year 2000 problems of other organizations.
36
<PAGE>
DIRECTORS AND PRINCIPAL OFFICERS OF MINNESOTA LIFE
<TABLE>
<CAPTION>
Directors Principal Occupation
--------- --------------------
<C> <S>
Giulio Agostini Senior Vice President, Finance and Administrative
Services, 3M, St. Paul, Minnesota
Anthony L. Andersen Chair-Board of Directors, H. B. Fuller Company, St.
Paul, Minnesota (Adhesive Products) since June 1995,
prior thereto for more than five years President and
Chief Executive Officer, H. B. Fuller Company
Leslie S. Biller Vice Chairmanand Chief Operating Officer, Wells
Fargo & Company, San Francisco, California (Banking)
John F. Grundhofer President, Chairman and Chief Executive Officer,
U.S. Bancorp, Minneapolis, Minnesota (Banking)
David S. Kidwell, Ph.D. Dean and Professor of Finance, The Curtis L. Carlson
School of Management, University of Minnesota,
Minneapolis, Minnesota
Reatha C. King, Ph.D. President and Executive Director, General Mills
Foundation, Minneapolis, Minnesota
William B. Lawson, Sr. Chairman and Chief Executive Officer, Lawson
Software, Minneapolis, Minnesota
Thomas E. Rohricht Of Counsel,Doherty, Rumble & Butler Professional
Association, St. Paul, Minnesota (Attorneys)
Robert L. Senkler Chairman of the Board, President and Chief Executive
Officer, Minnesota Life Insurance Company since
August 1995; prior thereto for more than five years
Vice President and Actuary, Minnesota Life Insurance
Company
Michael E. Shannon Chairman, Chief Financial and Administrative
Officer, Ecolab Inc., St. Paul, Minnesota (Develops
and Markets Cleaning and Sanitizing Products)
Frederick T. Weyerhaeuser Retired since April 1998, prior thereto Chairman and
Treasurer, Clearwater Investment Trust since May
1996, prior thereto for more than five years,
Chairman, Clearwater Management Company, St. Paul,
Minnesota (Financial Management)
Principal Officers (other than Directors)
Name Position
---- --------
John F. Bruder Senior Vice President
Keith M. Campbell Senior Vice President
Robert E. Hunstad Executive Vice President
James E. Johnson Senior Vice President and Actuary
Dennis E. Prohofsky Senior Vice President, General Counsel and Secretary
Gregory S. Strong Senior Vice President and Chief Financial Officer
Terrence M. Sullivan Senior Vice President
Randy F. Wallake Senior Vice President
William N. Westhoff Senior Vice President and Treasurer
</TABLE>
37
<PAGE>
All Directors who are not also officers of Minnesota Life have had the
principal occupation (or employers) shown for at least five years. All
officers of Minnesota Life have been employed by Minnesota Life for at least
five years with the exception of Mr. Westhoff. Mr. Westhoff has been employed
by Minnesota Life since April 1998. Prior thereto, Mr. Westhoff was employed
by American Express Financial Corporation, Minneapolis, Minnesota, from August
1994 to October 1997 as Senior Vice President, Global Investments and from
November 1989 to July 1994 as Senior Vice President, Fixed Income Management.
VOTING RIGHTS
We will vote the shares of the Funds held in the various sub-accounts of the
Variable Universal Life Account at regular and special shareholder meetings of
the Funds in accordance with the owner's instructions. If, however, the
Investment Company Act of 1940, as amended, or any regulation thereunder
should change and we determine that it is permissible to vote the shares of
the Funds in our own right, we may elect to do so. The number of votes as to
which the owner has the right to instruct will be determined by dividing his
or her sub-account value by the net asset value per share of the corresponding
Portfolio of the Funds. Fractional shares will be counted. The number of votes
as to which the owner has the right to instruct will be determined as of the
date coincident with the date established by the Funds for determining
shareholders
eligible to vote at the meeting of the Funds. Voting instructions will be
solicited in writing prior to the meeting in accordance with procedures
established by the Funds. We will vote shares of the Funds held by the
separate account as to which no instructions are received in proportion to the
voting instructions which are received from policy owners with respect to all
policies participating in the separate account. Each owner having a voting
interest will receive proxy material, reports and other material relating to
the Funds.
We may, when required by state insurance regulatory authorities, disregard
voting instructions if the instructions require that shares be voted so as to
cause a change in sub-classification or investment policies of the Funds or
approve or disapprove an investment advisory contract of the Funds. In
addition, we may disregard voting instructions in favor of changes in the
investment policies or the investment adviser of one or more of the Funds if
we reasonably disapprove of such changes. A change would be disapproved only
if the proposed change is contrary to state law or disapproved by state
regulatory authorities on a determination that the change would be detrimental
to the interests of policy owners or if we determine that the change would be
inconsistent with the investment objectives of the Funds or would result in
the purchase of securities for the Funds which vary from the general quality
and nature of investments and investment techniques utilized by other separate
accounts created by us or any of our affiliates which have similar investment
objectives. In the event that we disregard voting instructions, a summary of
that action and the reason for such action will be included in the owner's
next semi-annual report.
DISTRIBUTION OF POLICIES
The policies will be sold by state licensed life insurance producers who are
also registered representatives of Ascend Financial Services, Inc. ("Ascend
Financial") or of other broker-dealers who have entered into selling
agreements with Ascend Financial. Ascend Financial acts as principal
underwriter for the policies. Ascend Financial is a wholly-owned subsidiary of
Advantus Capital Management, Inc. Advantus Capital Management, Inc. is a
registered investment adviser.
Ascend Financial Services, Inc., whose address is 400 Robert Street North,
St. Paul, Minnesota 55101-2098, is a registered broker-dealer under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. The policies are sold in the states where their sale
is lawful. The insurance underwriting and the determination of a proposed
insured's risk classification and whether to accept or reject an application
for a policy is done in accordance with our rules and standards.
Commissions to registered representatives on the sale of policies will be
premium-based, asset-based or a fixed amount. Commissions for policies under a
group-sponsored insurance program will not exceed the equivalent of 50 percent
of the portion of all premiums paid in the initial year to cover the cost of
insurance, 7 percent of all premiums paid in the initial year in excess of the
amount to cover the cost of insurance,
38
<PAGE>
and 7 percent of all premiums paid after the initial year.
The commission schedule for a group-sponsored insurance program will be
determined based on a variety of factors, including enrollment procedures, the
size and type of the group, the total amount of premium payments to be
received, any prior existing relationship with the group sponsor, the
sophistication of the group sponsor, and other circumstances of which we are
not presently aware.
In addition, Ascend Financial or Minnesota Life will pay, based uniformly on
the sales of the policies by registered representatives, credits which allow
registered representatives (agents) who are responsible for sales of the
policies to attend conventions and other meetings sponsored by Minnesota Life
or its affiliates for the purpose of promoting the sale of insurance and/or
investment products offered by Minnesota Life and its affiliates. Such credits
may cover the registered representatives' transportation, hotel
accommodations, meals, registration fees, etc.
LEGAL MATTERS
Legal matters in connection with federal securities laws applicable to the
issue and sale of the policies have been passed upon by Jones & Blouch L.L.P.,
1025 Thomas Jefferson Street, N.W., Suite 405 West, Washington, D.C. 20007.
All other legal matters, including the right to issue such policies under
Minnesota law and applicable regulations thereunder, have been passed upon by
Donald F. Gruber, Assistant General Counsel of Minnesota Life.
LEGAL PROCEEDINGS
As an insurance company, we are ordinarily involved in litigation. Minnesota
Life is of the opinion that such litigation is not material with respect to
the policies or the separate account.
EXPERTS
The separate financial statements of Minnesota Life Variable Universal Life
Account and the consolidated financial statements of Minnesota Life included
in this prospectus have been audited by KPMG Peat Marwick LLP, independent
auditors, 4200 Norwest Center, 90 South Seventh Street, Minneapolis, Minnesota
55402, whose reports thereon appear elsewhere herein, and have been so
included in reliance upon the authority of said firm as experts in accounting
and auditing.
Actuarial matters included in this prospectus have been examined by Robert
M. Olafson, F.S.A., Vice President and Actuary of Minnesota Life, as stated in
his opinion filed as an exhibit to the Registration Statement.
REGISTRATION STATEMENT
We have filed a Registration Statement under the Securities Act of 1933, as
amended, with the Securities and Exchange Commission with respect to the
policies offered hereby. This prospectus does not contain all the information
set forth in the registration statement and amendments thereto and the
exhibits filed as a part thereof, to all of which reference is hereby made for
further information concerning the separate account, Minnesota Life, and the
policies. Statements contained in this prospectus as to the contents of
policies and other legal instruments are summaries, and reference is made to
such instruments as filed.
39
<PAGE>
- --------------------------------------------------------------------------------
Appendix I
- --------------------------------------------------------------------------------
Illustrations of Account Values and Death Benefits
The following tables illustrate how the account value and death benefit of a
policy change with the investment experience of the sub-accounts of the
separate account. The tables show how the account values and death benefit of a
policy issued to an insured of a given age and at a given premium would vary
over time if the investment return on the assets held in each sub-account of
the separate account were a uniform, gross, after-tax rate of 0 percent, 6
percent or 12 percent. In addition, the account values and death benefits would
be different from those shown if the gross annual investment rates of return
averaged 0 percent, 6 percent and 12 percent over a period of years, but
fluctuated above and below those averages for individual policy years.
The tables illustrate both a policy issued to an insured, age 45 and to an
insured, age 55, in a group-sponsored program issued a group contract. This
assumes a $4.00 monthly administration charge, a 3 percent sales load charge, a
2 percent premium tax charge, and a .25 percent federal tax charge. Cost of
insurance charges used in the tables are either the guaranteed maximums or
assumed levels as described in the following paragraph. If a particular policy
has different administration, sales, tax, or cost of insurance charges, the
account values and death benefits would vary from those shown in the tables.
The illustrations of death benefits also vary between tables depending upon
whether the level or variable type death benefits are illustrated.
The account value column in the tables with the heading "Using Maximum
Mortality Charges" shows the accumulated value of premiums paid reflecting
deduction of the charges described above and monthly charges for the cost of
insurance based on the guaranteed maximum rate when there has been simplified
underwriting, which is 125 percent of the maximum allowed under the 1980
Commissioners Standard Ordinary ("CSO") Mortality Table. The account value
column in the table with the heading "Using Current Mortality Charges" shows
the accumulated value of premiums paid reflecting deduction of the charges
described above and monthly charges for the cost of insurance at an assumed
level which is substantially less than the guaranteed rate. Actual cost of
insurance charges for a policy depend on a variety of factors as described in
"Account Value Charges."
The amounts shown for the hypothetical account value and death benefit as of
each policy year reflect the fact that the net investment return on the assets
held in the sub-accounts is lower than the gross, after-tax return. This is
because expenses of the Fund and a daily mortality and expense risk charge
assessed against the net assets of the Variable Universal Life Account are
deducted from the gross return. The mortality and expense risk charge reflected
in the illustrations is at an annual rate of .50 percent. The investment
expenses illustrated represent an average of the investment advisory fee
charged for all nineteen Portfolios of the Funds. The investment advisory fee
for each Portfolio for the last fiscal year is shown under the heading "Fund
Charges" in this prospectus. In addition to the deduction for the investment
advisory fee, the illustrations also reflect a deduction for Portfolio costs
and expenses for the last fiscal year, as illustrated under the heading "Fund
Charges" in this prospectus. Therefore, gross annual rates of return of 0
percent, 6 percent and 12 percent correspond to approximate net annual rates of
return of -1.25 percent, 4.75 percent and 10.75 percent.
The tables reflect the fact that no charges for federal, state or local
income taxes are currently made against the Variable Universal Life Account. If
such a charge is made in the future, it will take a higher gross rate of return
to produce after-tax returns of 0 percent, 6 percent and 12 percent than it
does now which produce the account values and death benefits illustrated.
Additionally, the hypothetical values shown in the tables assume that the
policy for which values are illustrated is not deemed an individual policy
under OBRA, and therefore the values do not reflect the additional 1 percent of
premium expense charge to cover Minnesota Life's increased federal tax expense
in that situation.
The tables illustrate the policy values that would result based upon the
investment rates of return if the premiums are paid on a monthly basis, and if
no policy loans have been made. The tables are also based on the assumptions
that no partial surrenders have been made, that no transfer charges were
incurred and that no optional riders have been requested. The policy values in
the tables also may reflect an increase in the face amount of insurance to the
minimum amount necessary to maintain the policy's qualification as life
insurance under Section 7702 of the Code. Further, the tables may show a
decrease in the face amount to a level that the account value immediately prior
to the decrease plus the additional illustrated premiums with interest can
provide.
Upon request, we will provide a comparable illustration based on the proposed
insured's age, the face amount of insurance, premium amount and frequency of
payment, the group size and gender mix among other characteristics of the group
and the insurance program.
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- --------------------------------------------------------------------------------
Variable Universal Life
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION A
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ 1,398 $100,000 $ 1,443 $100,000 $ 1,488 $100,000
2 47 1,800 2,758 100,000 2,935 100,000 3,115 100,000
3 48 1,800 4,082 100,000 4,478 100,000 4,898 100,000
4 49 1,800 5,371 100,000 6,076 100,000 6,855 100,000
5 50 1,800 6,614 100,000 7,721 100,000 8,994 100,000
6 51 1,800 7,824 100,000 9,427 100,000 11,348 100,000
7 52 1,800 8,980 100,000 11,177 100,000 13,921 100,000
8 53 1,800 10,094 100,000 12,986 100,000 16,751 100,000
9 54 1,800 11,156 100,000 14,847 100,000 19,858 100,000
10 55 1,800 12,157 100,000 16,755 100,000 23,267 100,000
15 60 1,800 16,258 100,000 27,127 100,000 46,347 100,000
20 65 1,800 18,303 100,000 38,900 100,000 85,180 102,900
25 70 1,800 16,568 100,000 51,831 100,000 149,977 172,474
30 75 1,800 7,132 100,000 65,867 100,000 255,574 271,074
</TABLE>
(1)A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2)Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
* This illustration uses assumed mortality charges for a group-sponsored
program issued a group contract. Actual cost of insurance charges for a
policy depend on a variety of factors as described in "Account Value
Charges."
103
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION A
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING MAXIMUM MORTALITY CHARGES
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $1,059 $100,000 $ 1,094 $100,000 $ 1,128 $100,000
2 47 1,800 2,068 100,000 2,201 100,000 2,338 100,000
3 48 1,800 3,024 100,000 3,322 100,000 3,637 100,000
4 49 1,800 3,927 100,000 4,453 100,000 5,035 100,000
5 50 1,800 4,771 100,000 5,592 100,000 6,539 100,000
6 51 1,800 5,553 100,000 6,734 100,000 8,156 100,000
7 52 1,800 6,265 100,000 7,874 100,000 9,893 100,000
8 53 1,800 6,901 100,000 9,004 100,000 11,760 100,000
9 54 1,800 7,453 100,000 10,116 100,000 13,765 100,000
10 55 1,800 7,915 100,000 11,204 100,000 15,921 100,000
15 60 1,800 8,685 100,000 16,095 100,000 29,683 100,000
20 65 1,800 5,813 100,000 19,007 100,000 51,215 100,000
25 70 1,800 0 0 16,819 100,000 88,449 101,716
30 75 1,800 0 0 2,110 100,000 153,481 162,753
</TABLE>
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LiFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
104
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION B
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ 1,521 $51,521 $ 1,571 $ 51,571 $ 1,619 $ 51,619
2 47 1,800 3,011 53,011 3,203 53,203 3,400 53,400
3 48 1,800 4,471 54,471 4,902 54,902 5,359 55,359
4 49 1,800 5,900 55,900 6,668 56,668 7,516 57,516
5 50 1,800 7,294 57,294 8,500 58,500 9,887 59,887
6 51 1,800 8,658 58,658 10,407 60,407 12,499 62,499
7 52 1,800 9,982 59,982 12,379 62,379 15,366 65,366
8 53 1,800 11,271 61,271 14,427 64,427 18,523 68,523
9 54 1,800 12,520 62,520 16,547 66,547 21,994 71,994
10 55 1,800 13,723 63,723 18,738 68,738 25,807 75,807
15 60 1,800 19,050 69,050 30,830 80,830 51,388 101,388
20 65 1,800 22,886 72,886 44,744 94,744 92,482 142,482
25 70 1,800 24,261 74,261 59,737 109,737 158,025 208,025
30 75 1,800 21,445 71,445 73,918 123,918 261,794 311,794
</TABLE>
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
* This illustration uses assumed mortality charges for a group-sponsored
program issued a group contract. Actual cost of insurance charges for a
policy depend on a variety of factors as described in "Account Value
Charges."
105
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION B
ISSUE AGE 45
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$1,800
(MONTHLY PREMIUM--$150)(1)
USING MAXIMUM MORTALITY CHARGES
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 $1,800 $ 1,333 $51,333 $ 1,377 $51,377 $ 1,419 $ 51,419
2 47 1,800 2,628 52,628 2,796 52,796 2,968 52,968
3 48 1,800 3,883 53,883 4,259 54,259 4,658 54,658
4 49 1,800 5,098 55,098 5,765 55,765 6,503 56,503
5 50 1,800 6,269 56,269 7,315 57,315 8,518 58,518
6 51 1,800 7,396 57,396 8,906 58,906 10,716 60,716
7 52 1,800 8,473 58,473 10,537 60,537 13,113 63,113
8 53 1,800 9,498 59,498 12,205 62,205 15,727 65,727
9 54 1,800 10,466 60,466 13,907 63,907 18,574 68,574
10 55 1,800 11,374 61,374 15,640 65,640 21,676 71,676
15 60 1,800 14,925 64,925 24,705 74,705 41,947 91,947
20 65 1,800 16,356 66,356 33,951 83,951 73,212 123,212
25 70 1,800 14,552 64,552 41,980 91,980 121,121 171,121
30 75 1,800 7,783 57,783 46,284 96,284 194,273 244,273
</TABLE>
(1) A premium payment of $150 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
106
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION A
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ 2,151 $100,000 $ 2,221 $100,000 $ 2,290 $100,000
2 57 3,000 4,231 100,000 4,503 100,000 4,781 100,000
3 58 3,000 6,243 100,000 6,852 100,000 7,500 100,000
4 59 3,000 8,167 100,000 9,252 100,000 10,452 100,000
5 60 3,000 10,018 100,000 11,720 100,000 13,682 100,000
6 61 3,000 11,787 100,000 14,254 100,000 17,217 100,000
7 62 3,000 13,458 100,000 16,841 100,000 21,078 100,000
8 63 3,000 15,014 100,000 19,470 100,000 25,293 100,000
9 64 3,000 16,458 100,000 22,150 100,000 29,918 100,000
10 65 3,000 17,764 100,000 24,863 100,000 34,989 100,000
15 70 3,000 21,852 100,000 38,928 100,000 69,800 100,000
20 75 3,000 19,280 100,000 53,295 100,000 131,160 138,940
25 80 3,000 5,859 100,000 69,670 100,000 233,439 245,111
30 85 3,000 0 0 94,547 100,000 398,807 418,747
</TABLE>
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
* This illustration uses assumed mortality charges for a group-sponsored
program issued a group contract. Actual cost of insurance charges for a
policy depend on a variety of factors as described in "Account Value
Charges."
107
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION A
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$100,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING MAXIMUM MORTALITY CHARGES
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $1,478 $100,000 $ 1,526 $100,000 $ 1,574 $100,000
2 57 3,000 2,849 100,000 3,035 100,000 3,225 100,000
3 58 3,000 4,111 100,000 4,523 100,000 4,961 100,000
4 59 3,000 5,261 100,000 5,987 100,000 6,793 100,000
5 60 3,000 6,290 100,000 7,418 100,000 8,724 100,000
6 61 3,000 7,185 100,000 8,802 100,000 10,756 100,000
7 62 3,000 7,929 100,000 10,120 100,000 12,891 100,000
8 63 3,000 8,500 100,000 11,350 100,000 15,125 100,000
9 64 3,000 8,874 100,000 12,465 100,000 17,457 100,000
10 65 3,000 9,028 100,000 13,441 100,000 19,891 100,000
15 70 3,000 5,758 100,000 15,373 100,000 34,159 100,000
20 75 3,000 0 0 7,084 100,000 54,222 100,000
25 80 3,000 0 0 0 0 90,153 100,000
30 85 3,000 0 0 0 0 162,337 170,454
</TABLE>
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
108
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION B
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING ASSUMED MORTALITY CHARGES*
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ 2,460 $52,460 $ 2,540 $ 52,540 $ 2,618 $ 52,618
2 57 3,000 4,859 54,859 5,169 55,169 5,487 55,487
3 58 3,000 7,198 57,198 7,893 57,893 8,631 58,631
4 59 3,000 9,466 59,466 10,703 60,703 12,070 62,070
5 60 3,000 11,671 61,671 13,610 63,610 15,840 65,840
6 61 3,000 13,806 63,806 16,611 66,611 19,971 69,971
7 62 3,000 15,860 65,860 19,700 69,700 24,488 74,488
8 63 3,000 17,824 67,824 22,868 72,868 29,422 79,422
9 64 3,000 19,697 69,697 26,118 76,118 34,816 84,816
10 65 3,000 21,463 71,463 29,437 79,437 40,702 90,702
15 70 3,000 28,432 78,432 46,844 96,844 79,200 129,200
20 75 3,000 30,868 80,868 64,069 114,069 137,909 187,909
25 80 3,000 27,697 77,697 79,444 129,444 228,361 278,361
30 85 3,000 18,619 68,619 91,815 141,815 371,001 421,001
</TABLE>
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
* This illustration uses assumed mortality charges for a group-sponsored
program issued a group contract. Actual cost of insurance charges for a
policy depend on a variety of factors as described in "Account Value
Charges."
109
<PAGE>
- --------------------------------------------------------------------------------
Variable Universal Life (continued)
- --------------------------------------------------------------------------------
DEATH BENEFIT OPTION B
ISSUE AGE 55
FACE AMOUNT OF INSURANCE--$50,000
ANNUAL PREMIUM--$3,000
(MONTHLY PREMIUM--$250)(1)
USING MAXIMUM MORTALITY CHARGES
<TABLE>
<CAPTION>
-ASSUMING HYPOTHETICAL INVESTMENT RETURNS OF-
0% GROSS(2) 6% GROSS(2) 12% GROSS(2)
(-1.25% NET) (4.75% NET) (10.75% NET)
END OF
POL ATT ANNUAL ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YR AGE PREMIUM VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ --- ------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 $3,000 $ 2,092 $52,092 $ 2,160 $52,160 $ 2,227 $ 52,227
2 57 3,000 4,104 54,104 4,367 54,367 4,636 54,636
3 58 3,000 6,033 56,033 6,619 56,619 7,242 57,242
4 59 3,000 7,878 57,878 8,917 58,917 10,066 60,066
5 60 3,000 9,635 59,635 11,256 61,256 13,123 63,123
6 61 3,000 11,296 61,296 13,630 63,630 16,430 66,430
7 62 3,000 12,852 62,852 16,031 66,031 20,003 70,003
8 63 3,000 14,293 64,293 18,445 68,445 23,858 73,858
9 64 3,000 15,605 65,605 20,861 70,861 28,010 78,010
10 65 3,000 16,780 66,780 23,266 73,266 32,479 82,479
15 70 3,000 20,340 70,340 34,780 84,780 60,546 110,546
20 75 3,000 18,610 68,610 43,479 93,479 100,636 150,636
25 80 3,000 8,484 58,484 44,637 94,637 156,122 206,122
30 85 3,000 0 0 31,629 81,629 231,942 281,942
</TABLE>
(1) A premium payment of $250 is assumed to be paid monthly at the beginning of
each policy month.
(2) Assumes no policy loan has been made.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF RETURN MAY BE MORE
OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT ALLOCATIONS MADE BY AN OWNER, AND PREVAILING INTEREST RATES. THE
DEATH BENEFITS AND ACCOUNT VALUES FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL 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. NO REPRESENTATIONS CAN BE MADE BY MINNESOTA LIFE OR THE FUND THAT THESE
HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER
ANY PERIOD OF TIME.
110
<PAGE>
- --------------------------------------------------------------------------------
Appendix II
- --------------------------------------------------------------------------------
Policy Loan Example
As an example of the effect of a policy loan upon the policy account value and
the death benefit, assume a policy of an insured age 45 with the following
characteristics: The Variable Universal Life Policy has an Option B death
benefit with a level face amount of $50,000. Further, assume that 100 percent
of net premiums are invested in the sub-accounts of the Variable Universal Life
Account, that the gross investment rate in the Variable Universal Life Account
was 12 percent each year and that Minnesota Life deducted assumed mortality
charges. This situation is shown in Appendix I, "Illustrations of Account
Values and Death Benefits."
Now assume that the insured, who is also the owner of the policy, takes a
policy loan in the amount of $5,000 at the end of the fourth policy year.
When a policy loan is taken, the net cash value is reduced by the amount
borrowed and any accrued interest subsequently charged. The amount borrowed
continues to be a part of the account value, as the amount borrowed becomes
part of the loan account value where it will accrue loan interest credits and
will be held in our general account. Interest is charged on the policy loan at
a policy loan interest rate of 8 percent per year. Interest is also credited to
a policy when there is a policy loan. Interest credits on the policy loan are
at a rate which is not less than the policy loan interest rate less 2 percent
per year. Assume the interest credits in this example will be at 6 percent per
year.
The following table shows the effect on the end of fifth year account value
and death benefit, if a policy loan of $5,000 is made at the end of the fourth
year.
<TABLE>
<CAPTION>
End of Year End of Year
Account Value Death Benefit
With Loan Without Loan With Loan Without Loan
--------- ------------ --------- ------------
<S> <C> <C> <C>
$9,647 $9,887 $59,647 $59,887
</TABLE>
Note that the difference in the account values here represents the difference
between the actual policy performance in the sub-accounts of the Variable
Universal Life Account and the interest credited on the principal amount of the
policy loan. If interest credited on a policy loan exceeds the policy
performance, then a policy with a loan will have a greater value than a policy
with no loan activity. Where policy performance exceeds the interest credited
on a policy loan, the resulting policy value will be lower than it would have
been if the loan were not made.
Now consider an identical situation to that above except that the death
benefit is under Option A with a face amount of insurance of $100,000. This
situation is also shown in Appendix I, "Illustrations of Account Values and
Death Benefits." The following table shows the effect on the same fifth year
values if a policy loan of $5,000 is made at the end of the fourth year.
<TABLE>
<CAPTION>
End of Year End of Year
Account Value Death Benefit
With Loan Without Loan With Loan Without Loan
--------- ------------ --------- ------------
<S> <C> <C> <C>
$8,754 $8,994 $100,000 $100,000
</TABLE>
The account values above under the "With Loan" headings include the loan
account value, that is, the amount of the loan plus accrued interest
subsequently credited. If the insured were to surrender the policy at the end
of the fifth year, he or she would receive only the net cash value in the sub-
accounts of the Variable Universal Life Account. The net cash value equals the
account value less the loan account value since there are no charges due.
Similarly, if the insured were to die at the end of the fifth year we would
pay out the death benefit listed under the "With Loan" heading less the loan
account value.
111
<PAGE>
PART II
OTHER INFORMATION
<PAGE>
INDEMNIFICATION UNDERTAKING
The State of Minnesota has an indemnification statute, found at Minnesota
Statutes 300.083, as amended, effective January 1, 1984, which required
indemnification of individuals only under the circumstances described by the
statute. Expenses incurred in the defense of any action, including attorneys'
fees, may be advanced to the individual, after a written request, by the Board
of Directors. The Board of Directors must receive an undertaking from the
individual to repay any amount advanced unless it is ultimately determined that
he or she is entitled to be indemnified by the corporation as authorized by the
statute and after a determination that the facts then known to those making the
determination would not preclude indemnification.
Indemnification is required for persons made a part to a proceeding by reason of
their official capacity so long as they acted in good faith, received no
improper personal benefit and have not been indemnified by another organization.
In the case of a criminal proceeding, they must also have had no reasonable
cause to believe the conduct was unlawful. In respect to other acts arising out
of official capacity: (1) where the person is acting directly for the
corporation there must be a reasonable belief by the person that his or her
conduct was in the best interests of the corporation or; (2) where the person is
serving another organization or plan at the request of the corporation, the
person must have reasonably believed that his or her conduct was not opposed to
the best interests of the corporation. In the case of persons not directors,
officers or policy-making employees, determination of eligibility for
indemnification may be made by a board-appointed committee of which a director
is a member. For other employees, directors and officers, the determination of
eligibility is made by the Board or a committee of the Board, special legal
counsel, the shareholders of the corporation or pursuant to a judicial
proceeding.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of
Minnesota Life Insurance Company and Minnesota Life Variable Universal Life
Account pursuant to the foregoing provisions, or otherwise, The Minnesota Mutual
Life Insurance Company and Minnesota Mutual Variable Universal Life Account have
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Minnesota Life Insurance Company and
Minnesota Life Variable Universal Life Account of expenses incurred or paid by
a director, officer or controlling person of Minnesota Life Insurance Company
and Minnesota Life Variable Universal Life Account in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, Minnesota
Life Insurance Company and Minnesota Life Variable Universal Life Account will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
RULE 26(E) REPRESENTATION
Minnesota Life Insurance Company hereby represents that, as to the variable life
insurance policies which are the subject of this Registration Statement, File
No. 33-85496, the fees and charges deducted under the contract, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred and the risks assumed by Minnesota Life Insurance
Company.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The Facing Sheet.
Cross Reference Sheet.
Part I
The prospectus consisting of 111 pages.
Part II
Undertakings and Representations
The Signatures.
Written consents of the following persons to be added by amendment:
Donald F. Gruber, Esq.
KPMG Peat Marwick LLP
Robert M. Olafson, F.S.A.
Jones & Blouch L.L.P.
The following Exhibits:
A. Exhibits described in Item IX(A) of Form N-8B-2.
(1) The indenture or agreement under the terms of which the trust was
organized or issued securities.
Resolution of the Board of Trustees of The Minnesota Mutual Life
Insurance Company dated August 8, 1994 filed as this Exhibit to
Registrant's Form S-6, File Number 33-85496, Post-Effective
Amendment Number 2, is hereby incorporated by reference.
(2) The indenture or agreement pursuant to which the proceeds of payments
of securities are held by the custodian or trustee, if such indenture
or agreement is not the same as the indenture or agreement referred to
immediately above.
None.
(3) Distributing Policies:
(a) Agreements between the trust and principal underwriter or between
the depositor and principal underwriter.
Distribution Agreement filed as this Exhibit to
Registrant's Form S-6, File Number 33-85496, Post-Effective
Amendment Number 2, is hereby incorporated by reference.
(b) Specimen of typical agreements between principal underwriter and
dealers, managers, sales supervisors and salesmen.
Agent Sales Agreement filed as this Exhibit to Registrant's
Form S-6, File Number 33-85496, Post-Effective Amendment
Number 2, is hereby incorporated by reference.
(c) Schedules of sales commissions referred to in Item 38(c).
Sales Commission Schedule filed as this Exhibit to
Registrant's Form S-6, File Number 33-85496, Post-Effective
Amendment Number 2, is hereby incorporated by reference.
(4) Any agreement between the depositor, principal underwriter and the
custodian or trustee other than indentures or agreements set forth
<PAGE>
above as paragraphs (1), (2) and (3) with respect to the trust or its
securities.
None.
(5) The form of each type of security.
(a) Group Variable Universal Life Policy, form MHC-94-18660
Rev. 1-95.
(b) Group Variable Universal Life Policy Certificate, Level Death
Benefit, form MHC-94-18661 Rev. 1-95.
(c) Group Variable Universal Life Policy Certificate, Variable Death
Benefit, form MHC-94-18662 Rev. 1-95.
(d) Special Rider for use with Group Policy, form MHC-94-18672
Rev. 1-95.
(e) Spouse Coverage for use with Group Policy Certificate, Level
Death Benefit, form MHC-94-18670 Rev. 1-95.
(f) Spouse Coverage for use with Group Policy Certificate, Variable
Death Benefit, form MHC-94-18671 Rev. 1-95
(g) Waiver Agreement, Certificate Supplement, for use with Group
Policy, form MHC-94-18676.
(h) Children's Rider, Certificate Supplement, for use with Group
Policy, form MHC-94-18679.
(i) Accidental Death and Dismemberment Rider, Certificate Supplement,
for use with Group Policy, form MHC-94-18680.
(j) Accelerated Benefits Agreement, for use with Group Policy, form
MHC-94-18677.
(k) Accelerated Benefits, Certificate Supplement, for use with Group
Policy, form MHC-94-18678.
(l) Policy Rider - Children's Benefit, for use with Group Policy,
form MHC-94-18681.
<PAGE>
(m) Policy Rider - Accidental Death and Dismemberment, for use with
Group Policy, form MHC-94-18682.
(n) Policy Rider - Waiver of Premium, for use with Group Policy, form
MHC-94-18683.
(o) Individual Variable Universal Life Policy, Level Death Benefit,
form MHC-94-18665 Rev. 1-95.
(p) Individual Variable Universal Life Policy, Variable Death
Benefit, form MHC-94-18673 Rev. 1-95.
(q) Individual Policy Rider - Accelerated Benefits Agreement, for use
with the Individual Policy, form MHC-94-18686.
(r) Individual Policy Rider - Accidental Death and Dismemberment
Benefit, for use with the Individual Policy, form MHC-94-18687.
(s) Individual Policy Rider - Waiver Agreement, for use with the
Individual Policy, form MHC-94-18688.
(t) Individual Policy Rider - Children's Benefit, for use with the
Individual Policy, form MHC-94-18689.
(u) Policyholder Contribution Rider, for use with the Group Policy,
form MHC-96-18701.
(v) Policyholder Contribution Certificate Supplement, for use with
the Group Policy, form MHC-96-18702.
(w) Spouse and Child Term Life Insurance Policy Rider, for use with
the Group Policy, form MHC-96-18703.
(x) Spouse and Child Term Life Insurance Certificate Supplement, for
use with the Group Policy, form MHC-96-18704.
(6) The certificate of incorporation or other instrument of organization
and bylaws of the depositor.
(a) Restated Certificate of Incorporation of the Depositor.
(b) Bylaws of the Depositor.
(7) Any insurance policy under a contract between the trust and the
insurance company or between the depositor and the insurance company,
together with the table of insurance premiums.
None.
<PAGE>
(8) Any agreement between the trust or the depositor concerning the trust
with the issuer, depositor, principal underwriter or investment
adviser of any underlying investment company or any affiliated person
of such persons.
None.
(9) All other material not entered into in the ordinary course of business
of the trust or of the depositor concerning the trust.
None.
(10) Form of application for a periodic payment plan certificate.
(a) Group Variable Universal Life Policy.
(i) Group Variable Universal Life Policy Application, form MHC-
94-18663 Rev. 2-96.
(ii) Group Variable Universal Life Policy, Individual
enrollment, form MHC-94-18664 Rev. 2-96, employer/employee
paid.
(iii) Group Variable Universal Life Policy, Individual
enrollment, form MHC-94-18684 Rev. 2-96, employee paid.
(iv) Group Variable Universal Life Policy, Individual
enrollment, form MHC-94-18685 Rev. 2-96, employer paid.
(v) Group Variable Universal Life Policy, Evidence of
Insurability form, form MHC-94-18669.
(vi) Group Variable Universal Life Policy, Spouse Enrollment,
form MHC-94-18667 Rev. 2-96.
B. A specimen copy of each security being registered.
See Exhibits listed under A.(5) above.
C. An opinion of counsel as to the legality of the securities being
registered.
Opinion and Consent of Donald F. Gruber, Esq., to be supplied by
amendment.
D. Consent of KPMG Peat Marwick LLP., to be supplied by amendment.
E. Opinion and Consent of Mr. Robert M. Olafson, F.S.A., to be supplied by
amendment.
F. Consent of Jones & Blouch L.L.P., to be supplied by amendment.
G. Minnesota Life Insurance Company - Power of Attorney to Sign Registration
Statements.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Depositor,
Minnesota Life Insurance Company, has duly caused this Post-Effective Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Saint Paul, and State of Minnesota, on
the 3rd day of March, 1999.
MINNESOTA LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
(Registrant)
By: MINNESOTA LIFE INSURANCE COMPANY
By
-----------------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the Depositor,
Minnesota Life Insurance Company, has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the Undersigned, thereunto
duly authorized, in the City of Saint Paul, and State of Minnesota, on the 3rd
day of March, 1999.
MINNESOTA LIFE INSURANCE COMPANY
By
-----------------------------------------------
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, the Registration
Statement has been signed below by the following persons in their capacities
with the Depositor and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
Chairman of the March 3, 1999
- -------------------------- Board, President
Robert L. Senkler and Chief
Executive Officer
* Director
- --------------------------
Giulio Agostini
* Director
- --------------------------
Anthony L. Andersen
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director
- --------------------------
John F. Grundhofer
* Director
- --------------------------
David S. Kidwell, Ph.D.
* Director
- --------------------------
Reatha C. King, Ph.D.
Director
- --------------------------
William B. Lawson, Sr.
* Director
- --------------------------
Thomas E. Rohricht
* Director
- --------------------------
Michael E. Shannon
*
- -------------------------- Director
Frederick T. Weyerhaeuser
Vice President March 3, 1999
- -------------------------- (chief financial officer)
Gregory S. Strong
Vice President March 3, 1999
- -------------------------- (chief accounting officer)
Gregory S. Strong
Attorney-in-Fact March 3, 1999
- --------------------------
Dennis E. Prohofsky
</TABLE>
*Pursuant to power of attorney dated October 19, 1998, a copy of which is filed
herewith.
<PAGE>
Exhibit EXHIBIT INDEX
Number Description of Exhibit
- ------ ----------------------
A.5(a) Group Variable Universal Life Policy, form MHC-94-18660 Rev. 1-95.
A.5(b) Group Variable Universal Life Policy Certificate, Level Death
Benefit, form MHC-94-18661 Rev. 1-95.
A.5(c) Group Variable Universal Life Policy Certificate, Variable Death
Benefit, form MHC-94-18662 Rev. 1-95.
A.5(d) Special Rider for use with Group Policy, form MHC-94-18672 Rev.
1-95.
A.5(e) Spouse Coverage for use with Group Policy Certificate, Level Death
Benefit, form MHC-94-18670 Rev. 1-95.
A.5(f) Spouse Coverage for use with Group Policy Certificate, Variable
Death Benefit, form MHC-94-18671 Rev. 1-95.
A.5(g) Waiver Agreement, Certificate Supplement, for use with Group
Policy, form MHC-94-18676.
A.5(h) Children's Rider, Certificate Supplement, for use with Group
Policy, form MHC-94-18679.
A.5(i) Accidental Death and Dismemberment Rider, Certificate Supplement,
for use with Group Policy, form MHC-94-18680.
A.5(j) Accelerated Benefits Agreement, for use with Group Policy, form
MHC-94-18677.
A.5(k) Accelerated Benefits, Certificate Supplement, for use with Group
Policy, form MHC-94-18678.
A.5(l) Policy Rider - Children's Benefit, for use with Group Policy, form
MHC-94-18681.
A.5(m) Policy Rider - Accidental Death and Dismemberment, for use with
Group Policy, form MHC-94-18682.
A.5(n) Policy Rider - Waiver of Premium, for use with Group Policy, form
MHC-94-18683.
A.5(o) Individual Variable Universal Life Policy, Level Death Benefit,
form MHC-94-18665 Rev. 1-95.
A.5(p) Individual Variable Universal Life Policy, Variable Death Benefit,
form MHC-94-18673 Rev. 1-95.
A.5(q) Individual Policy Rider - Accelerated Benefits Agreement, for use
with the Individual Policy, form MHC-94-18686.
A.5(r) Individual Policy Rider - Accidental Death and Dismemberment
Benefit, for use with the Individual Policy, form MHC-94-18687.
A.5(s) Individual Policy Rider - Waiver Agreement, for use with the
Individual Policy, form MHC-94-18688.
A.5(t) Individual Policy Rider - Children's Benefit, for use with the
Individual Policy, form MHC-94-18689.
A.5(u) Policyholder Contribution Rider, for use with the Group Policy,
form MHC-96-18701.
A.5(v) Policyholder Contribution Certificate Supplement, for use with the
Group Policy, form MHC-96-18702.
A.5(w) Spouse and Child Term Life Insurance Policy Rider, for use with
the Group Policy, form MHC-96-18703.
A.5(x) Spouse and Child Term Life Insurance Certificate Supplement, for
use with the Group Policy, form MHC-96-18704.
A.6(a) Restated Certificate of Incorporation of the Depositor.
A.6(b) Bylaws of the Depositor.
A.10(a)(i) Group Variable Universal Life Policy Application, form MHC-94-
18663 Rev. 2-96.
A.10(a)(ii) Group Variable Universal Life Policy, Individual enrollment, form
MHC-94-18664 Rev. 2-96.
A.10(a)(iii) Group Variable Universal Life Policy, Individual
enrollment, form MHC-94-18684 Rev. 2-96.
A.10(a)(iv) Group Variable Universal Life Policy, Individual enrollment, form
MHC-94-18685 Rev. 2-96.
A.10(a)(v) Group Variable Universal Life Policy, Evidence of Insurability
form, form MHC-94-18669.
A.10(a)(vi) Group Variable Universal Life Policy, Spouse Enrollment, form MHC-
94-18667 Rev. 2-96.
G. The Minnesota Mutual Life Insurance Company - Power of Attorney to
Sign Registration Statements.
<PAGE>
================================================================================
MINNESOTA LIFE GROUP INSURANCE POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance . 400 Robert Street North . St. Paul, Minnesota
55101-2098
- --------------------------------------------------------------------------------
READ YOUR POLICY CAREFULLY
- ---------------------------
This policy was issued to the policyholder on the issue date shown on the
specifications page attached to this policy. We promise to pay the benefits
provided by this policy, subject to the conditions, limitations and exceptions
of this policy. We make this promise and issue this policy in consideration of
the application for this policy and the payment of the premiums. The Minnesota
Life Insurance Company is a subsidiary of Minnesota Mutual Companies, Inc., a
mutual insurance holding company. The policyholder is a member of Minnesota
Mutual Companies, Inc., which holds its annual meetings on the first Tuesday in
March of each year at 3 p.m. local time. The meetings are held at 400 Robert
Street North, St. Paul, Minnesota 55101-2098.
RIGHT TO CANCEL
- ----------------
It is important to us that the policyholder is satisfied with this policy after
it is issued. If the policyholder is not satisfied with it, the policyholder may
return the policy to us or our agent within 10 days after the policyholder
receives it. The policyholder may also cancel this policy by delivering or
mailing a written notice or sending a telegram to Minnesota Life Insurance
Company (Minnesota Life), 400 Robert Street North, St. Paul, Minnesota 55101-
2098 and returning the policy before midnight of the 10th day after the
policyholder received the policy. Notice given by mail and return of the policy
by mail are effective on being postmarked, properly addressed and postage
prepaid. If the policyholder returns the policy, the policyholder will receive,
within 7 days of the date we receive a notice of cancellation, a full refund of
any premiums the policyholder has paid.
Signed for Minnesota Life Insurance Company at St. Paul, Minnesota on
the issue date.
Dennis E. Prohefsky Robert L. Senkler
Secretary President
FOR OPTION A, THE INITIAL DEATH BENEFIT FOR PERSONS INSURED UNDER THIS POLICY
WILL EQUAL THE FACE AMOUNT SHOWN ON EACH CERTIFICATE. FOR OPTION B THE INITIAL
DEATH BENEFIT FOR PERSONS INSURED UNDER THIS POLICY WILL EQUAL THE FACE AMOUNT
SHOWN ON EACH CERTIFICATE PLUS THE INITIAL ACCOUNT VALUE, IF ANY. FOR OPTION B,
THEREAFTER, THE DEATH BENEFIT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE
ACCOUNT INVESTMENT EXPERIENCE.
THE ACCOUNT VALUES OF THE CERTIFICATES ISSUED UNDER THIS POLICY WILL VARY FROM
DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING
UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. THERE IS NO GUARANTEED MINIMUM
ACCOUNT VALUE.
TABLE OF CONTENTS
Definitions.................. 2 Separate Account............. 6
General Information.......... 3 Account Values............... 8
Death Benefit................ 3 Surrenders and Withdrawals... 8
Payment of Proceeds.......... 4 Policy Loans................. 9
Premiums..................... 5 Termination.................. 10
Policy Charges............... 5 Conversion Privilege......... 10
Additional Information....... 10
VARIABLE GROUP UNIVERSAL LIFE INSURANCE . NONPARTICIPATING
MHC-94-18660 Rev. 1-95 Minnesota Life 1
<PAGE>
SPECIFICATIONS PAGE
GROUP POLICY
===============================================================================
GENERAL INFORMATION
- -------------------
POLICYHOLDER: POLICY NUMBER:
ELIGIBLE GROUP MEMBER
- ---------------------
An eligible group member is a person who is actively working at his or her
employer's normal place of business at least ______ hours per week on the date
he or she signs an application for coverage, and for ______ hours per week for
each of the ______ weeks(s) immediately prior to the date his or her application
for coverage (except retirees or other persons as designated) is approved by
Minnesota Mutual.
INSURANCE INFORMATION
- ---------------------
Issue Date:
First Policy Anniversary:
Minimum Face Amount: $
Maximum Face Amount: $
Maximum Guaranteed Issue:* $
*See details in this policy's application for qualifications.
Death Benefit Option: You have chosen the death benefit option for all
certificates issued under this policy. Option _____ is the death benefit
option plan.
IRC Section 7702 Test applied is:
OTHER BENEFITS AVAILABLE
- ------------------------
CHARGES
- -------
Sales Load % Administration Fee: $
Federal Tax % Partial Surrender Fee: $ $25.00 or 2% of amount
State Tax % withdrawn, whichever is less.
SEPARATE ACCOUNT SEPARATE ACCOUNT CHARGE
- ---------------- -----------------------
The Minnesota Life Variable Universal Life Account Mortality and Expense
Risk Charge: 0.5%
ACCOUNT OPTIONS
- ---------------
Guaranteed Account
Sub-Account Options:
F. MHC-47708 Rev. 2-96
<PAGE>
DEFINITIONS
- ------------
When we use the following words, this is what we mean:
account value
The sum of the values under the separate account, the guaranteed account and the
loan account of a certificate. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
actively at work
To be actively at work for the purposes of this policy, the eligible person must
be currently working at the employer's normal place of business at least ____
hours a week. A person is not considered actively at work if not at work due to
illness or injury.
age
Age at last birthday.
certificate anniversary
The same day in each succeeding year as the certificate date.
certificate date
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine certificate monthly
anniversaries, certificate months and certificate years.
certificate month
A calendar month in which insurance is provided under a certificate of this
policy.
certificate year
A period of twelve consecutive months, measured from the certificate date and
each successive certificate anniversary, during which coverage is provided under
a certificate of this policy.
eligible insured
A person who meets the requirements on the specifications page attached to this
policy.
face amount
The face amount of insurance on the life of the insured as shown on the
specifications page of the owner's certificate.
MHC-94-18660 Rev. 1-95 Minnesota Life 2
<PAGE>
fund
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
general account
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
guaranteed account value
Assets other than the loan account value that are held in our general account
and attributable to a certificate issued under this policy, and others of its
class.
insured
An eligible insured who becomes insured under a certificate issued under this
policy.
issue date
The date coverage under this policy may become effective. The issue date is
shown on the policy specifications page attached to this policy.
lapse
A lapse of a certificate means the insurance coverage under that certificate has
terminated due to non-payment of a premium during its grace period in an amount
that, after the deduction of percentage of premium charges, is sufficient to
cover the monthly deductions due at the time the notice was sent.
loan account
The portion of the general account which is attributable to policy loans under
certificates issued under this policy and others of its class.
loan account value
The sum of all outstanding loans and accrued policy loan interest credited under
a given certificate issued under this policy.
maturity date
The 95th birthday of the insured.
monthly anniversary
The same day of each succeeding month as the certificate date.
MHC-94-18660 Rev. 1-95 Minnesota Life 3
<PAGE>
net cash value
The account value under a certificate issued under this policy, less any
outstanding policy loans and accrued policy loan interest charged and any
charges over due. It is the amount an owner may obtain through surrender of
that certificate.
net premium
The premium less policy charges assessed against the premium. The net premium is
the amount or amounts which are allocated to the guaranteed account and/or the
separate account on behalf of an insured.
owner
An owner of a certificate issued under this policy.
policy anniversary
The same day and month in each succeeding year as the policy date.
policy date
The first day of the calendar month on or following the issue date of the
policy.
policyholder
The owner of this group policy as specified and identified on the specifications
page attached to this policy.
separate account
The separate investment account created by us to receive and invest net premiums
received for a certificate issued under this policy. The particular Separate
Account for this policy is the Variable Universal Life Account. We established
this separate account for this class of policies under Minnesota Law. The
separate account is composed of several sub-accounts. We own the assets of the
separate account. However, those assets not in excess of separate account
liabilities are not subject to claims arising out of any other business in which
we engage.
separate account value
The sum of all sub-account values.
sub-account
One or more sub-accounts constituting the separate account.
sub-account value
MHC-94-18660 Rev. 1-95 Minnesota Life 4
<PAGE>
The current number of sub-account units credited to a certificate issued under
this policy multiplied by the current sub-account unit value.
unit
A measure of the owner's interest in a sub-account of the separate account.
valuation date
Any date on which a fund is valued.
valuation period
The period between successive valuation dates measured from the time of one
determination to the next.
we, our, us
Minnesota Life Insurance Company
GENERAL INFORMATION
- --------------------
WHAT IS THE POLICYHOLDER'S AGREEMENT WITH US?
This policy and the policyholder's application contain the entire contract
between the policyholder and us. Any statements the policyholder makes in the
application or an insured makes in his or her application will, in the absence
of fraud, be considered representation and not warranties. Also, any statement
the policyholder makes will not be used to void this policy nor defend against a
claim under this policy unless the statement is contained in the policyholder's
application. Any statement an insured makes will not be used to void the
insured's insurance unless the statement is contained in the application
attached to the insured's certificate.
No change or waiver of any of the provisions of this policy, or of any
certificate issued under it, will be valid unless made in writing by us. It
must be signed by our president, a vice president, secretary or an assistant
secretary. No agent or other person has the authority to change or waive any
provision of this policy or of any certificate issued under it.
WHAT IS THE EFFECTIVE DATE OF AN ELIGIBLE INSURED'S INSURANCE?
Upon receipt of an application for insurance under this policy from an eligible
insured, the effective date of the insured person's insurance will be the later
of:
1. the date on which we approve that person's application; and
2. the date on which the first premium contribution is paid for that person.
This effective date is shown on the specifications page of the owner's
certificate.
MHC-94-18660 Rev. 1-95 Minnesota Life 5
<PAGE>
MAY THIS POLICY BE AMENDED?
This policy may be amended at any time the policyholder and we agree to amend
it. The consent of the insureds is not required to amend this policy or any
certificates issued under it. Any amendment will be without prejudice to any
claim in connection with a loss sustained prior to the effective date of the
amendment.
DEATH BENEFIT
- --------------
WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
The amount of the death benefit depends on whether Option A or Option B is
selected by the policyholder as the death benefit option under this policy. The
death benefit option selected by the policyholder will be the death benefit
option for all certificates issued under this policy. Once elected, the death
benefit option shall remain unchanged.
The amount of the death benefit for Option A will be determined as follows:
1. the amount of the cost of insurance for the portion of the certificate month
from the date of death to the end of the certificate month; less
2. The face amount of insurance on the insured's date of death while the policy
is in force; plus
3. any outstanding policy loans and accrued policy loan interest charged; less
4. any unpaid monthly deductions determined as of the date of the insured's
death.
The amount of the death benefit for Option B will be determined as follows:
1. The face amount of insurance on the insured's date of death while the policy
is in force; plus
2. the amount of the owner's account value as of the date we receive due proof
of death satisfactory to us; plus
3. the amount of the cost of insurance for the portion of the certificate month
from the date of death to the end of the certificate month; plus
4. any monthly deductions taken under the certificate since the date of death;
less
5. any outstanding policy loans and accrued policy loan interest charged; less
6. any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under the certificate
for which the death benefit has been paid.
We intend that each certificate under this policy qualify as a life insurance
policy as defined by Section 7702 of the Internal Revenue Code, as amended. We
reserve the right to either increase the face amount of insurance on the life of
the insured for which a certificate has been issued hereunder, return any excess
net cash value or limit the amount of premium contributions
we will accept on behalf of any certificate issued hereunder in order to
maintain such qualification.
CAN THE OWNER CHANGE THE DEATH BENEFIT OPTION?
No.
MHC-94-18660 Rev. 1-95 Minnesota Life 6
<PAGE>
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF AN INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page of the owner's certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to the policy and to
the certificate. If an increase in the current face amount is applied for, we
reserve the right to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on any insured may not be reduced to
less than the amount shown on the specifications page attached to this policy.
If following a decrease in face amount, the certificate would not comply with
the maximum premium limitations required by federal law, the decrease may be
limited or net cash value may be returned to the owner (at the owner's
election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Decreases in the face amount of insurance are effective on the monthly
certificate anniversary on or following receipt of the written request by us.
However, if the owner requests that the decrease become effective on a specified
future date, we will make the decrease effective on the certificate monthly
anniversary on or next following the date requested.
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay the death benefit upon due proof satisfactory to us that the insured
died while insured under a certificate issued hereunder. Under Option A, we
will pay interest on the death benefit from the date of the insured's death
until the date of payment.
Under Option B, we will pay interest on the face amount of insurance from the
date of the insured's death until the date of payment. We will pay interest on
any charges taken under the certificate since the date of death from the date
the charge was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of four percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
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PAYMENT OF PROCEEDS
- --------------------
TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the certificate owner's application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
policy ends with that beneficiary's death. Only those beneficiaries who survive
the insured will be eligible to share in the proceeds. If no beneficiary
survives the insured or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
1. the insured's lawful spouse; if living; otherwise,
2. the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
Yes, if the owner has reserved the right to change the beneficiary, the owner
may file a written request with us to change the beneficiary. If the owner has
not reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. The owner's written request will not
be effective until it is recorded in our home office records. After it has been
so recorded, it will take effect as of the date the owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the
owner of the certificate requests a settlement option, he or she will be asked
to sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of
the separate account.
1. INTEREST PAYMENTS: Payment of interest on the proceeds at such times and for
a period as may be agreed upon between the owner of a certificate and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end
of the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
2. FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
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3. LIFE ANNUITY: An annuity payable monthly for the lifetime of the annuitant
and ending with the last monthly payment due prior to the annuitant's death.
4. PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount until
the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not
be permitted to change the elected settlement option.
PREMIUMS
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WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put a certificate issued hereunder in force. This
initial premium must be of an amount that, after the deduction of percentage-of-
premium charges, will cover the first month's deductions plus $20. A premium
must also be paid at such time when there is insufficient net cash value to pay
the monthly deductions necessary to keep the certificate in force. Premiums paid
after the initial premium may be in any amount of $20 or greater.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Certificates issued under this policy have a 61-day grace period. The grace
period will start on the day we mail the owner a notice of lapse. This will
notify the owner that the certificate will lapse if the premium amount specified
in the notice is not paid by the end of the grace period and the net cash value
is insufficient to cover the monthly deductions. We will mail this notice on
any certificate monthly anniversary date when the net cash value for the insured
under the certificate is insufficient to cover the monthly deductions for that
insured. The certificate of insurance will remain in effect during the 61-day
grace period. If sufficient premium is not paid by the end of the grace period,
the insured's coverage with insufficient net cash value will lapse at the end of
that 61-day period. The grace period does not apply to the first premium
payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount stated above will be paid if death occurs during the
grace period.
POLICY CHARGES
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WHAT TYPE OF CHARGES ARE THERE UNDER THIS POLICY?
Charges under this policy are those which we assess against the premiums and the
account value under each certificate and the separate account assets
attributable to the policy.
WHAT CHARGES ARE ASSESSED AGAINST PREMIUMS?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
MHC-94-18660 Rev. 1-95 Minnesota Life 9
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1. The sales load is for distribution expenses for this class of policies. This
sales load charge shall not exceed five percent of each premium paid.
2. The federal tax charge is to compensate us for the corporate federal income
taxes that result from a sale of this policy. The federal tax charge is 1.25
percent of each premium paid if the policy is deemed to be an individual
contract under the Omnibus Budget Reconciliation Act of 1990, as amended, and
0.25 percent if deemed a group contract under that Act.
3. The state premium tax charge is the average premium tax we pay to state and
local governments for this class of policies. This charge is currently two
percent. The charge is not guaranteed and may be increased in the future, but
only as necessary to cover our premium taxes.
WHAT CHARGES ARE ASSESSED AGAINST THE NET CASH VALUE OF THE CERTIFICATES ISSUED
UNDER THE POLICY?
Against the net cash value of any certificate issued under this policy, we
assess as monthly deductions: (1) the administration charge; (2) the cost of
insurance charge; and (3) the charge for any additional benefits provided by
rider. We also will assess against the net cash value a transaction charge at
the end of the day on which the transaction occurs.
1. The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for the policy. The
maximum administration charge is $4 per month. This charge will be assessed
on the certificate date and on each succeeding certificate monthly
anniversary.
2. The cost of insurance charge is for providing the death benefit under each
certificate under this policy. The charge is calculated by multiplying the
net amount at risk under each certificate by a rate which varies with the
insured's age and rate class. The rate is guaranteed not to exceed rates
determined on the basis of 125 percent of the 1980 Commissioners Standard
Ordinary Mortality Table. The net amount at risk for each certificate is the
difference between the death benefit and the account value. This charge will
be assessed on the certificate date and on each succeeding certificate
monthly anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
3. The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
4. A transaction charge will be assessed for each partial withdrawal to cover
the administrative costs incurred in processing the partial withdrawal. The
amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between sub-
accounts. The amount charged will not exceed $10. Any transaction charge will
be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of each certificate. They
will be assessed against the guaranteed account value and the separate account
value in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the sub-
account value of each such sub-account bears to the separate account value.
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WHAT CHARGES ARE ASSESSED AGAINST SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of any certificate issued under this policy. We also reserve the right to
charge or make provision for income taxes payable by us based on separate
account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the policy. The mortality and
expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
- -----------------
HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of the
Minnesota insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of this policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
policy are listed on the specifications page attached to this policy. Net
premiums will be allocated to the various sub-accounts of the separate account
or any other sub-account which we may add in the future, as elected by the owner
of each certificate issued under the policy. We reserve the right to add,
combine or remove any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the policies of this class, we may substitute
another fund. Substitution may be with respect to both existing policy values
and future premiums. The investment policy of the separate account may not be
changed, however, without the approval of the regulatory authorities of the
State of Minnesota. If required, that approval process will be on file with the
regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which this policy
belongs, to another separate account. If
MHC-94-18660 Rev. 1-95 Minnesota Life 11
<PAGE>
such a transfer is made, the term "separate account" as used in this policy,
shall then mean the separate account to which the assets are transferred. A
transfer of this kind may require the advance approval of state regulatory
authorities.
We reserve the right to, when permitted by law:
1. restrict or eliminate any voting right of owners or other persons who have
voting rights as to the separate account; and
2. combine the separate account with one or more other separate accounts; and
3. to de-register the separate account under the Investment Company Act of 1940.
HOW ARE NET PREMIUMS ALLOCATED?
They are allocated either to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for a certificate of insurance issued hereunder. Allocations may be
changed for future premiums. The owner may do this by giving us a written
request. A change will not take effect until it is recorded by us in our home
office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least ten percent of the net premium. We reserve the
right to restrict the allocation of premium. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub-
accounts. Such a delay will be for a period of 30 days after issuance of a
certificate under this policy. This right will be exercised by us only when we
believe economic conditions make such a delay necessary to reduce market risk
during the free look period of the certificate. If we exercise this right, net
premiums will be allocated to the money market sub-account until the end of that
period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THE POLICY?
Yes. Transfers from a sub-account of the separate account may be made in writing
or by telephone. For transfers out of the separate account or among the sub-
accounts of the separate account, we will credit and cancel units based on the
sub-account unit values as of the end of the valuation period during which the
owner's written or telephone request is received at our home office. For
transfers out of the guaranteed account, a dollar amount will be transferred
based on the owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made each certificate month for each certificate
issued hereunder. The amount to be transferred to or from a sub-account of the
separate account or the guaranteed
MHC-94-18660 Rev. 1-95 Minnesota Life 12
<PAGE>
account must be at least $250. If the balance in the guaranteed account or in
the sub-account from which the transfer is to be made is less than $250, the
entire account value attributable to that sub-account or the guaranteed account
must be transferred. If a transfer would reduce the account value in the sub-
account from which the transfer is to be made to less than $250 we reserve the
right to include that remaining amount in the sub-account with the amount
transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to twenty
percent (or $250 if greater) of the guaranteed account value. Transfers to or
from the guaranteed account may be limited to one such transfer per certificate
year. We may further restrict transfers by requiring that the request is
received by us or postmarked in the 30-day period before or after the last day
of the certificate anniversary. Requests for transfers which meet these
conditions would be effective after we approve and record them at our home
office.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units credited to a sub-account under an owner's certificate will
be increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, loan interest credits and transfers to that sub-
account. The number of units credited to a sub-account under an owner's
certificate will be decreased by deductions to that sub-account, policy loans
and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a certificate termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this policy
which are assessed against separate account assets. The gross investment rate is
equal to:
MHC-94-18660 Rev. 1-95 Minnesota Life 13
<PAGE>
1. The net asset value per share of a fund share held in the sub-account of the
separate account determined at the end of the current valuation period; plus
2. the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
3. the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
ACCOUNT VALUES
- --------------
WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to the certificate's net cash value. The net cash
value is the account value of the certificate issued under this policy, less any
outstanding policy loans and accrued policy loan interest charged and any
charges overdue.
HOW IS THE ACCOUNT VALUE DETERMINED?
It is determined separately for each certificate and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited to
the certificate, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to a sub-account under an owner's
certificate will not be affected by changes in the unit value. However, the
number of units will be increased by the allocation of subsequent net premiums,
policy experience credits, loan repayments, loan interest credits and transfers
to that sub-account. The number of units credited to a sub-account under an
owner's certificate will be decreased by deductions to that sub-account, policy
loans and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
The separate account value of each insured is not guaranteed.
The guaranteed account value of each insured is guaranteed by us. It cannot be
reduced by the investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of each insured under
this policy. Interest is credited daily at a rate of not less than four percent
per year, compounded annually. We guarantee this minimum rate for the life of
the policy.
MHC-94-18660 Rev. 1-95 Minnesota Life 14
<PAGE>
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
- ---------------------------
MAY A CERTIFICATE BE SURRENDERED?
Yes. The owner of a certificate may request the surrender of a certificate at
any time while the insured under that certificate is living.
WHAT IS THE SURRENDER VALUE OF THE CERTIFICATE?
The surrender value of a certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A PARTIAL SURRENDER PERMITTED?
Yes. The owner may make a partial surrender of the net cash value of a
certificate. The amount of a partial surrender must be $500 or more and it
cannot exceed the amount available as a policy loan. A partial surrender will
cause a decrease in the face amount equal to the amount surrendered under those
certificates issued with a level death benefit, Option A. A partial surrender
has no effect on the face amount of an Option B death benefit. However, since
the account value is reduced by the amount of the partial surrender, the death
benefit under Option B will be reduced by this same amount at the time of the
partial surrender. We reserve the right to change the minimum amount or limit
the number of times the owner may make a partial surrender.
MAY THE OWNER DIRECT US AS TO HOW PARTIAL SURRENDERS WILL BE TAKEN FROM THE NET
CASH VALUE?
Yes. The owner may tell us the sub-accounts from which a partial surrender is
to be taken or whether it is to be taken in whole or in part from the guaranteed
account as to the certificate of any insured. If the owner does not, partial
surrenders will be deducted from the guaranteed account value and separate
account value in the same proportion that those values bear to each other and,
as to the separate account value, from each sub-account in the proportion that
the sub-account value of each such sub-account bears to the separate account
value.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of each certificate a report. This report will
show the status of the certificate. It will include the account value, the face
amount as of the date of the report, the premiums paid during the year and their
allocation, policy charges, policy loan activity and the net cash value. The
report will be sent without cost to the owner. If the policyholder owns all of
the certificates, a consolidated report will be sent. The report will be as of a
date within two months of its mailing.
MHC-94-18660 Rev. 1-95 Minnesota Life 15
<PAGE>
POLICY LOANS
- -------------
CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the policyholder's
request for a loan. We will require the owner's written or telephone request
for a policy loan. The policy and its certificate will be the only security
required for a loan. We will charge interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone payment of a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A POLICY LOAN ON ANY CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is any outstanding
policy loans plus accrued policy loan interest charged. The maximum loan amount
will be determined as of the date we receive the policyholder's written or
telephone request for a loan at our home office.
WHAT IS THE EFFECT OF A POLICY LOAN?
When a loan is taken on a certificate, we will reduce the net cash value of the
certificate by the amount borrowed. This determination will be made as of the
end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value,
as the amount borrowed becomes part of the loan account value where it will
accrue loan interest credits and will be held in our general account.
HOW DOES A POLICY LOAN REDUCE NET CASH VALUE ON A CERTIFICATE?
Unless the owner directs us otherwise, the policy loan will be taken from a
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of any certificate may decrease between premium due dates.
The net cash value will decrease by the same amount of any decrease in account
value or increase in the amount borrowed or in the interest due on the loan of
the certificate. If a certificate has a policy loan and no net cash value, the
certificate will lapse.
WHAT IS THE INTEREST RATE ON POLICY LOANS?
The interest rate charged on a policy loan will be eight percent per year.
As the interest charged on a policy loan accrues, the net cash value decreases.
Interest is due at the end of the certificate month. If the total interest
accrued at the end of the certificate month is
MHC-94-18660 Rev. 1-95 Minnesota Life 16
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not paid, this interest will be added to the loan amount borrowed and charged
the same rate of interest as the loan.
WHAT IS THE RATE OF INTEREST CREDITED TO A CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan account value shall be at a rate which
is not less than six percent per year.
WHEN ARE INTEREST CREDITS ON A POLICY LOAN ALLOCATED TO A CERTIFICATE'S
GUARANTEED ACCOUNT VALUE?
Interest credits are allocated to the guaranteed account value at the time of a
loan repayment.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the certificate is in force.
The loan may also be repaid within 60 days after the date of the insured's
death, if we have not paid any of the death benefits under that certificate.
Any loan repayment must be at least $100 unless the balance due is less than
$100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN ACCOUNT VALUES AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments increase the net cash value of a certificate by the amount of
the loan repayment The loan repayment will be applied first to the interest
charged on the principal amount borrowed. Any remaining portion of the
repayment will then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
WHAT HAPPENS IF A LOAN ON A CERTIFICATE IS NOT REPAID?
If a certificate has a policy loan, the certificate will remain in force so long
as it has net cash value. If it does not have sufficient net cash value, it
will lapse.
In this event, to keep a certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate a
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
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WHEN DOES THIS GROUP POLICY TERMINATE?
The may terminate this group policy by giving us 31 days prior written notice.
In addition, we may terminate the group policy or any of its provisions on 61
days prior written notice. No
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individual may become insured under this group policy after the effective date
of such a notice of termination. After termination of the policy, the
certificates issued thereunder, may be allowed to convert to individual coverage
as described below under the "Conversion Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THIS GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
1 61 days after we mail a warning notice of lapse on a certificate monthly
anniversary in which the net cash value is insufficient to pay for the
monthly deductions and no premium is paid during the grace period;
2 the date the group policy terminates, if no conversion or continuation is
made effective;
3 the date an owner surrenders the certificate or requests that we terminate
the insurance;
4 the 95th birthday of the insured.
----
WILL THE OWNER OF A CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice of lapse before terminating the insurance.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage of premium charges, is large enough to cover all monthly deductions
which have accrued on that certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to 3 years from the date
of lapse.
CONVERSION PRIVILEGE
- ---------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If life insurance provided by a certificate under this policy ceases
because of termination of employment or of membership in the class or classes
eligible for coverage under this policy, or if the group policy terminates or is
amended so as to terminate the insurance, an owner under this policy may convert
the insurance under the group policy to an individual policy of life insurance
with us subject to the following:
1. The owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home office
within 31 days of the date the insurance terminates under the group policy.
2. The owner may convert all or a part of the group insurance in effect on the
date that his or her coverage is terminated to an individual life insurance
policy offered by us, except a policy of
MHC-94-18660 Rev. 1-95 Minnesota Life 18
<PAGE>
term insurance. We will issue the individual policy on the policy forms we
then use for the plan of insurance the owner has requested. The premium
charge for this insurance will be based upon the insured's age as of his or
her nearest birthday.
3. If the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that could
have been converted under this policy will be paid.
In the case of the termination of the group policy, we may require that an
insured under a certificate be so insured for at least five years prior to the
termination date in order to qualify for the above conversion privilege.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under this policy ends, the current group coverage
may continue unless the certificate is no longer in force or the limitations
below are true:
1. The group policy has terminated; or
2. There is less than $10 in the certificate's net cash value after deduction
of charges for the month in which eligibility ends.
The insurance amount will not change unless the owner requests a change. We
reserve the right to alter the administration fee not to exceed $4 per month and
the monthly cost of insurance up to the maximum in Table A if the insurance is
continued.
ADDITIONAL INFORMATION
- -----------------------
WILL THIS POLICY RECEIVE EXPERIENCE CREDITS?
Each year we will determine if this policy will receive an experience credit.
Experience credits, if received, will be added to the account value of a
certificate issued under this policy or, if elected by the owner, may be paid in
cash. An experience credit applied to the account value will be allocated to
the guaranteed account value or the sub-accounts of the separate account in
accordance with the owner's current instructions for the allocation of net
premiums. In the absence of such instructions, experience credits will be
allocated to the guaranteed account and the separate account in the same
proportion as those values bear to each other and, as to the separate account
value, to each sub-account in the proportion that the sub-account value of each
such sub-account bears to the separate account value.
MAY AN OWNER ASSIGN ANY INTEREST UNDER THE CERTIFICATE ISSUED UNDER THIS POLICY?
Yes. However, we will not be bound by an assignment of the certificate or of
any interest in it unless:
1. It is made as a written instrument;
2. The owner files the original instrument or a certified copy with us at our
home office; and
3. We send the owner an acknowledged copy.
MHC-94-18660 Rev. 1-95 Minnesota Life 19
<PAGE>
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
1. the monthly cost of insurance charges that were paid, and;
2. the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
If an insured, whether sane or insane, dies by suicide, within two years of the
certificate date, our liability will be limited to an amount equal to the
premiums paid for that insured. If there has been an increase in the face
amount of insurance for which we required evidence of insurability, and if the
insured dies by suicide within two years of the effective date of the increase,
our liability with respect to that increase will be limited to the cost of
insurance charge attributable to such increase.
If the insured is a Missouri citizen when the certificate of insurance becomes
effective, this provision does not apply on the certificate date, or on the
effective date of any increase in the face amount of insurance, unless the
insured intended suicide when the certificate of insurance, or any increase, was
applied for.
If the insured is a citizen of Colorado or North Dakota, the duration of this
suicide provision is for one year instead of two years.
ARE INSURANCE AND RELATED RECORDS OF THE POLICYHOLDER'S POLICY OPEN FOR
INSPECTION?
Yes. The records shall be open to inspection by us, at all reasonable times,
for any purposes relating to the provisions of this policy.
MHC-94-18660 Rev. 1-95 Minnesota Life 20
<PAGE>
WILL THE INSURED RECEIVE A CERTIFICATE OF PARTICIPATION?
Within 30 days of the effective date of an owner's insurance, we will furnish
the with a certificate of insurance for delivery to the owner.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this policy the owner may
direct us with respect to the voting rights of fund shares held by us and
attributable to this policy.
COULD THE PAYMENT OF POLICY PROCEEDS BE POSTPONED?
Normally, we will pay any policy proceeds within seven days after our receipt of
all the documents required for such a payment. Other than the death proceeds,
which are determined as of the date of death of the insured, the amount of
payment will be determined as of the end of the during which a request is
received at our home office. If such payments are based upon policy values which
do not depend on the investment performance of the separate account, however, we
reserve the right to defer policy payments, including policy loans, for up to
six months from the date of the owner's request. In that case, if we postpone a
payment other than a policy loan payment for more than 31 days, we will pay the
owner interest at the greater of four percent per year or the rate required by
law for the period beyond that time that payment is postponed. For payments
based on account values which do depend on the investment performance of the
separate account, we may defer payment only: (a) for any period during which the
New York Stock Exchange is closed for trading (except for normal holiday
closing); or (b) when the Securities and Exchange Commission has determined that
a state of emergency exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS POLICY CONFORM WITH STATE LAW?
Yes. If any provision in this policy, or in the certificates issued under this
policy, is in conflict with the laws of the state governing the policy or the
certificates, the provision will be deemed to be amended to conform to such
laws.
COULD ANY PAYMENTS MADE UNDER THIS POLICY BE SUBJECT TO CLAIMS OF CREDITORS?
To the extent permitted by law, neither this policy, certificates issued under
this policy, nor any payment thereunder will be subject to the claims of
creditors or to any legal process.
WHEN WILL THE POLICY BE ISSUED?
The policy will be issued upon receipt of a signed policy application signed by
a duly authorized officer of the group sponsor and acceptance by a duly
authorized officer of Minnesota Life at our home office.
MHC-94-18660 Rev. 1-95 Minnesota Life 21
<PAGE>
WHO HAS OWNERSHIP OF THE POLICY?
The policyholder shown on the specifications page attached to this policy owns
the group policy. The group policy may be changed or ended by agreement between
us and the policyholder without the consent of, or notice to, any person
claiming rights or benefits under the policy. However, unless the policyholder
is the owner of all the certificates issued under the group policy, the
policyholder does not have any ownership interest in the certificates issued
under the group policy. The rights and benefits under the certificates are that
of the owners of the certificates and of the insureds and beneficiaries as set
forth in this policy and in the certificates.
ARE POLICY CHANGES LIMITED?
We reserve the right to limit the number of policy changes to one per
certificate year and to restrict such changes in the first certificate year. For
this purpose, changes include increases or decreases in the face amount of
insurance.
MHC-94-18660 Rev. 1-95 Minnesota Life 22
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
Guaranteed Maximum Monthly Cost of Insurance Rate
on a Smoker Distinct Basis
per $1,000 Net Amount at Risk
<TABLE>
<CAPTION>
Maximum Maximum Maximum
Attained Monthly Attained Monthly Attained Monthly
Age* Rate Age* Rate Age* Rate
---- ---- ---- ---- ---- ----
Non-Smokers Smokers Non-Smokers Smokers Non-Smokers Smokers
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
* This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18660 Rev. 1-95 Minnesota Life 23
<PAGE>
================================================================================
MINNESOTA LIFE CERTIFICATE OF INSURANCE
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North .
St. Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
RIGHT TO CANCEL
- ----------------
It is important to us that you are satisfied with this certificate after it is
issued. If you are not satisfied with it, you may return the certificate to us
or our agent within 10 days after you receive it. You may also cancel this
certificate by delivering or mailing a written notice or sending a telegram to
The Minnesota Mutual Life Insurance Company (Minnesota Life), 400 Robert
Street North, St. Paul, Minnesota 55101-2098 and returning the certificate
before midnight of the 10th day after you received this certificate. Notice
given by mail and return of the certificate by mail are effective on being
postmarked, properly addressed and postage prepaid. If you return this
certificate, you will receive, within 7 days of the date we receive a notice of
cancellation, a full refund of any premiums you have paid. Upon cancellation of
this certificate, it will be void from the beginning as if it never had been
issued.
THE INITIAL DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN ON THIS CERTIFICATE.
THE ACCOUNT VALUES UNDER THIS CERTIFICATE WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
TABLE OF CONTENTS
General Information.............. 2 Account Values................... 7
Definitions...................... 2 Surrenders and Withdrawals....... 8
Death Benefit.................... 3 Policy Loans..................... 8
Payment of Proceeds.............. 4 Termination...................... 9
Premiums......................... 5 Conversion Privilege............. 10
Policy Charges................... 5 Additional Information........... 10
Separate Account................. 6
VARIABLE GROUP UNIVERSAL LIFE INSURANCE . LEVEL DEATH BENEFIT
MHC-94-18661 Rev. 1-95 Minnesota Life 1
<PAGE>
================================================================================
MINNESOTA LIFE SPECIFICATIONS
INDIVIDUAL POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North .
St. Paul, Minnesota 55101-1098
- --------------------------------------------------------------------------------
POLICYHOLDER: POLICY ID:
SPONSOR:
Insured:
INSURANCE INFORMATION
- ---------------------
Face Amount: $
Anniversary Date:
Minimum Face Amount Available: $
Maximum Face Amount Available: $
Planned Premium: $
Age at Issue:
Identification Number:
CHARGES AGAINST PREMIUM FIXED MONTHLY CHARGES
- ---------------------- ---------------------
Sales Load
Federal Tax
State Tax
SEPARATE ACCOUNT CHARGE
-----------------------
Mortality and Expense Risk Charge:
If a partial surrender is made, we will assess a charge of $25 or two percent of
the amount withdrawn, whichever is less.
ELECTED DIRECTORS ADDITIONAL AGREEMENTS
- ----------------- ---------------------
ACCOUNT OPTIONS AND ELECTIONS
- -----------------------------
SUB-ACCOUNT OPTIONS AND ELECTIONS
- ---------------------------------
IRC SECTION 7702 TEST APPLIED IS:
F.MHC 47898 Rev 2-96
<PAGE>
GENERAL INFORMATION
- --------------------
WHAT IS YOUR AGREEMENT WITH US?
You are insured under the group policy identified on the application attached to
this certificate. The attached application is a part of this certificate. This
certificate summarizes the principal provisions of the group policy that affect
your life insurance coverage. The provisions summarized in this certificate are
subject in every respect to the group policy. You may examine the group policy
at the principal office of the policyholder during regular working hours.
We retain the right to amend this certificate at any time without your consent.
Any amendment will be without prejudice to any claim incurred for benefits prior
to the date of the amendment.
Any statement made in your application will, in the absence of fraud, be
considered representations and not warranties. Also, any statement made will not
be used to void this certificate nor defend against a claim unless the statement
is contained in your application.
This certificate is issued in consideration of your application and the payment
of the required premium contributions.
WHAT IS THE EFFECTIVE DATE OF YOUR INSURANCE?
Upon receipt of your application for insurance, the effective date of your
insurance will be the later of:
1. the date on which we approve your application; and
2. the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
certificate.
DEFINITIONS
- ------------
When we use the following words, this is what we mean:
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and the
loan account of this certificate. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
ACTIVELY AT WORK
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least ____ hours a week.
A person is not considered actively at work if not at work due to illness or
injury.
MHC -94-18661 Rev. 1-95 Minnesota Life 2
<PAGE>
AGE
Your age at last birthday.
CERTIFICATE ANNIVERSARY
The same day in each succeeding year as the certificate date.
CERTIFICATE DATE
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine monthly
anniversaries, certificate months and certificate years.
CERTIFICATE MONTH
A calendar month in which insurance is provided under this certificate.
CERTIFICATE YEAR
A period of twelve consecutive certificate months, measured from the certificate
date and each successive certificate anniversary, during which coverage is
provided under this certificate.
ELIGIBLE INSURED
You are an eligible insured if you:
1. are under age ___; and
2. were actively at work for each of the ____ weeks immediately prior to the
date your application for coverage under the group policy is approved by us;
and
3. are identified by the policyholder as a person eligible to be insured under
the Policyholder's policy.
FACE AMOUNT
The minimum death benefit under this certificate so long as the insurance
coverage under this certificate remains in force.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
GENERAL ACCOUNT
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT VALUE
MHC -94-18661 Rev 1-95 Minnesota Life 3
<PAGE>
Assets other than the loan account value that are held in our general account
and attributable to a certificate issued under this policy, and others of its
class.
INSURED
An eligible insured who becomes insured under this certificate.
LAPSE
A lapse of this certificate means the insurance coverage under this certificate
has terminated due to non-payment of a premium during its grace period in an
amount that, after the deduction of percentage-of-premium charges, is sufficient
to cover the monthly deductions due at the time we provide notice of lapse.
LOAN ACCOUNT
The portion of the general account which is attributable to loans under this
certificate.
LOAN ACCOUNT VALUE
The sum of all outstanding loans and accrued policy loan interest credited under
this certificate.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same date in each succeeding month as the certificate date.
NET CASH VALUE
The account value under this certificate, less any outstanding policy loans and
accrued policy loan interest charged and any charges over due. It is the amount
you may obtain through surrender of this certificate.
NET PREMIUM
The premium less charges assessed against the premium. The net premium is the
amount or amounts which are allocated to the guaranteed account and/or the
separate account on your behalf.
OWNER
An owner of a certificate issued under the group policy.
POLICYHOLDER
MHC-94-18661 Rev. 1-95 Minnesota Life 4
<PAGE>
The owner of the group policy, as identified on the specifications page attached
to this certificate.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for the certificate. The particular separate account for this
certificate is the Variable Universal Life Account. We established this
separate account for this class of policies under Minnesota Law. The separate
account is composed of several sub-accounts. We own the assets of the separate
account. However, those assets not in excess of separate account liabilities
are not subject to claims arising out of any other business in which we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your certificate multiplied
by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
WE, OUR, US
Minnesota Life Insurance Company.
YOU, YOUR
The owner of this certificate named on the application.
DEATH BENEFIT
- -------------
WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
MHC-94-18661 Rev. 1-95 Minnesota Life 5
<PAGE>
This certificate of insurance provides for a level death benefit.
The amount of the death benefit will be determined as follows:
1. The face amount of insurance on the insured's date of death while this
certificate is in force; plus
2. the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; less
3. any outstanding policy loans and accrued policy loan interest charged; less
4. any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this
certificate.
We intend that this certificate qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this certificate in order to maintain such qualification.
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF THE INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to this certificate.
If an increase in the current face amount is applied for, we reserve the right
to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this
certificate. If following a decrease in face amount, this certificate would not
comply with the maximum premium limitations required by federal law, the
decrease may be limited or net cash value may be returned to the owner (at the
owner's election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Decreases in the face amount of insurance are effective on the monthly
anniversary on or following receipt by us of your written request. However, if
the owner requests that the decrease become effective on a specified future
date, we will make the decrease effective on the monthly anniversary on or next
following the date requested.
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
WHEN WILL THE DEATH BENEFIT BE PAID?
MHC-94-18661 Rev. 1-95 Minnesota Life 6
<PAGE>
We will pay the death benefit upon due proof satisfactory to us that the insured
died while insured under this certificate. We will pay interest on the death
benefit from the date of the insured's death until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of four percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
PAYMENT OF PROCEEDS
- -------------------
TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
certificate ends with that beneficiary's death. Only those beneficiaries who
survive the insured will be eligible to share in the proceeds. If no beneficiary
survives the insured or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
1. the insured's lawful spouse, if living; otherwise
2. the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
If the owner has reserved the right to change the beneficiary, the owner may
file a written request with us to change the beneficiary. If the owner has not
reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. The owner's written request will not
be effective until it is recorded in our home office records. After it has been
so recorded, it will take effect as of the date the owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
MHC-94-18661 Rev. 1-95 Minnesota Life 7
<PAGE>
Each settlement option is paid in fixed amounts as described below. If the
owner of this certificate requests a settlement option, he or she will be asked
to sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of
the separate account.
1. INTEREST PAYMENTS: Payment of interest on the proceeds at such times and for
a period as may be agreed upon between the owner of this certificate and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end
of the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
2. FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
3. LIFE ANNUITY: An annuity payable monthly for the lifetime of the annuitant
and ending with the last monthly payment due prior to the annuitant's death.
4. PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount
until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not
be permitted to change the elected settlement option.
PREMIUMS
- --------
WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put this certificate in force. This initial premium
must be of an amount that, after the deduction of percentage-of-premium charges,
will cover the first month's deductions plus $20. A premium must also be paid at
such time when there is insufficient net cash value to pay the monthly
deductions necessary to keep this certificate in force. Premiums paid after the
initial premium may be in any amount of $20 or greater.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Yes. This certificates has a 61-day grace period. The grace period will start
on the day we mail the owner a notice of lapse. This certificate will lapse if
the premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deductions.
We will mail this notice on any certificate monthly anniversary date when the
net cash value for the insured under this certificate is insufficient to cover
the monthly deductions. This certificate of insurance will remain in effect
during the 61-day grace period. If sufficient premium is not paid by the end of
the grace period, the insured's coverage will lapse. The grace period does not
apply to the first premium payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount provided under this certificate will be paid if death
occurs during the grace period.
MHC-94-18661 Rev. 1-95 Minnesota Life 8
<PAGE>
POLICY CHARGES
- --------------
WHAT TYPE OF CHARGES ARE THERE UNDER THIS CERTIFICATE?
Charges under this certificate are those which we assess against the premiums
and the account value under this certificate and the separate account assets
attributable to this certificate.
WHAT CHARGES ARE ASSESSED AGAINST PREMIUMS?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
1. The sales load is for distribution expenses for this class of certificates.
This sales load charge shall not exceed five percent of each premium paid.
2. The federal tax charge is to compensate us for the corporate federal income
taxes that result from a sale of this certificate. The federal tax charge is
1.25 percent of each premium paid if this certificate is deemed to be an
individual contract under the Omnibus Budget Reconciliation Act of 1990, as
amended, and 0.25 percent if deemed a group contract under that Act.
3. The state premium tax charge is the average premium tax we pay to state and
local governments for this class of certificates. This charge is currently
two percent. The charge is not guaranteed and may be increased in the
future, but only as necessary to cover our premium taxes.
WHAT CHARGES ARE ASSESSED AGAINST THE NET CASH VALUE OF THIS CERTIFICATE?
We assess as monthly deductions: (1) the administration charge; (2) the cost of
insurance charge; and (3) the charge for any additional benefits provided by
rider. We also will assess against the net cash value a transaction charge at
the end of the day on which the transaction occurs.
1. The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for this certificate. The
maximum administration charge is $4 per month. This charge will be assessed
on the certificate date and on each succeeding monthly anniversary.
2. The cost of insurance charge is for providing the death benefit under this
certificate. The charge is calculated by multiplying the net amount at risk
under this certificate by a rate which varies with the insured's age and
rate class. The rate is guaranteed not to exceed rates determined on the
basis of 125 percent of the 1980 Commissioners Standard Ordinary Mortality
Table. The net amount at risk for this certificate is the difference between
the death benefit and the account value. This charge will be assessed on the
certificate date and on each succeeding monthly anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
3. The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
4. A transaction charge will be assessed for each partial withdrawal to cover
the administrative costs incurred in processing the partial withdrawal. The
amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between
MHC-94-18661 Rev. 1-95 Minnesota Life 9
<PAGE>
sub-accounts. The amount charged will not exceed $10. Any transaction charge
will be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of this certificate. They
will be assessed against the guaranteed account value and the separate account
value in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the sub-
account value of each such sub-account bears to the separate account value.
WHAT CHARGES ARE ASSESSED AGAINST SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this certificate. We also reserve the right to charge or make
provision for income taxes payable by us based on separate account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the group policy. The mortality
and expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
- ----------------
How was the separate account established?
We established the separate account in accordance with certain provisions of the
Minnesota insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of the group policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
certificate are listed on the specifications page attached to this certificate.
Net premiums will be allocated to the various sub-accounts of the separate
account or any other sub-account which we may add in the future, as elected by
the owner of this certificate. We reserve the right to add, combine or remove
any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the certificates of this class, we may substitute
another fund. Substitution may be with respect to both existing certificate
values and future premiums. The investment policy of the separate account may
not be changed, however,
MHC-94-18661 Rev. 1-95 Minnesota Life 10
<PAGE>
without the approval of the regulatory authorities of the State of Minnesota. If
required, that approval process will be on file with the regulatory authorities
of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which the group policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this certificate, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may
require the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
1. restrict or eliminate any voting right of owners or other persons who have
voting rights as to the separate account; and
2. combine the separate account with one or more other separate accounts; and
3. to de-register the separate account under the Investment Company Act of
1940.
HOW ARE NET PREMIUMS ALLOCATED?
They are allocated either to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for this certificate. Allocations may be changed for future
premiums. The owner may do this by giving us a written request. A change will
not take effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least ten percent of the net premium. We reserve the
right to restrict the allocation of premium. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub-
accounts. Such a delay will be for a period of 30 days after issuance of this
certificate. This right will be exercised by us only when we believe economic
conditions make such a delay necessary to reduce market risk during this period.
If we exercise this right, net premiums will be allocated to the money market
sub-account until the end of that period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS CERTIFICATE?
Yes. Transfers from a sub-account of the separate account may be made in
writing or by telephone. For transfers out of the separate account or among
the sub-accounts of the separate account, we will credit and cancel units based
on the sub-account unit values as of the end of the valuation period during
which the owner's written or telephone request is received at our home office.
For transfers
MHC-94-18661 Rev. 1-95 Minnesota Life 11
<PAGE>
out of the guaranteed account, a dollar amount will be transferred based on the
owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this certificate each month. The
amount to be transferred to or from a sub-account of the separate account or
the guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less than $250
we reserve the right to include that remaining amount in the sub-account with
the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to twenty
percent (or $250 if greater) of the guaranteed account value. Transfers to or
from the guaranteed account may be limited to one such transfer per certificate
year. We may further restrict transfers by requiring that the request is
received by us or postmarked in the 30-day period before or after the last day
of the certificate anniversary. Requests for transfers which meet these
conditions would be effective after we approve and record them at our home
office.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this certificate will be
increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, interest credits and transfers to that sub-account.
The number of units credited to a sub-account under this certificate will be
decreased by deductions to that sub-account, policy loans and loan interest
charged, transfers from that sub-account and partial surrenders from that sub-
account. The number of sub-account units will decrease to zero on this
certificate's termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
MHC-94-18661 Rev. 1-95 Minnesota Life 12
<PAGE>
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this
certificate which are assessed against separate account assets. The gross
investment rate is equal to:
1. The net asset value per share of a fund share held in the sub-account of the
separate account determined at the end of the current valuation period; plus
2. the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
3. the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
ACCOUNT VALUES
- --------------
WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to this certificate's net cash value. The net cash
value is the account value of this certificate, less any outstanding policy
loans and accrued policy loan interest charged and any charges overdue.
HOW IS THE ACCOUNT VALUE DETERMINED?
It is determined separately for this certificate and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited to
the certificate, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to a sub-account under an owner's
certificate will not be affected by changes in the unit value. However, the
number of units will be increased by the allocation of subsequent net premiums,
experience credits, loan repayments, loan interest credits and transfers to that
sub-account. The number of units credited to a sub-account under an owner's
certificate will be decreased by deductions to that sub-account, policy loans
and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
The separate account value is not guaranteed.
The guaranteed account value is guaranteed by us. It cannot be reduced by the
investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
MHC-94-18661 Rev. 1-95 Minnesota Life 13
<PAGE>
Yes. Interest is credited on the guaranteed account value of each insured under
the group policy. Interest is credited daily at a rate of not less than four
percent per year, compounded annually. We guarantee this minimum rate for the
life of the group policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
- --------------------------
MAY THIS CERTIFICATE BE SURRENDERED?
Yes. The owner of this certificate may request the surrender of this
certificate at any time while the insured under this certificate is living.
WHAT IS THE SURRENDER VALUE OF THIS CERTIFICATE?
The surrender value of this certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A PARTIAL SURRENDER PERMITTED?
Yes. The owner may make a partial surrender of the net cash value under this
certificate. The amount of a partial surrender must be $500 or more and it
cannot exceed the amount available as a policy loan. A partial surrender will
cause a decrease in the face amount equal to the amount surrendered. We reserve
the right to change the minimum amount or limit the number of times the owner
may make a partial surrender.
MAY THE OWNER DIRECT US AS TO HOW PARTIAL SURRENDERS WILL BE TAKEN FROM THE NET
CASH VALUE?
Yes. The owner may tell us the sub-accounts from which a partial surrender is
to be taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not, partial surrenders will be deducted from the
guaranteed account value and separate account value in the same proportion that
those values bear to each other and, as to the separate account value, from each
sub-account in the proportion that the sub-account value of each such sub-
account bears to the separate account value.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of this certificate a report. This report
will show the status of this certificate. It will include the account value, the
face amount as of the date of the report, the premiums paid during the year and
their allocation, certificate charges, policy loan activity and the net cash
value. The report will be sent without cost to the owner. If the policyholder
owns all of
MHC-94-18661 Rev. 1-95 Minnesota Life 14
<PAGE>
the certificates, a consolidated report will be sent. The report will be as of a
date within two months of its mailing.
POLICY LOANS
- ------------
CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. We will require the owner's written or telephone request for a policy
loan. The certificate will be the only security required for a loan. We will
charge interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A POLICY LOAN ON THIS CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is outstanding policy
loans plus accrued policy loan interest charged. The maximum loan amount will
be determined as of the date we receive the owner's written or telephone request
for a loan at our home office.
WHAT IS THE EFFECT OF A POLICY LOAN?
When a loan is taken on this certificate, we will reduce the net cash value of
this certificate by the amount borrowed. This determination will be made as of
the end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value,
as the amount borrowed becomes part of the loan account value where it will
accrue loan interest credits and will be held in our general account.
HOW DOES A POLICY LOAN REDUCE NET CASH VALUE ON THIS CERTIFICATE?
Unless the owner directs us otherwise, the policy loan will be taken from this
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this certificate may decrease between premium due dates.
The net cash value will decrease by the same amount of any decrease in account
value or increase in the amount borrowed or in the interest due on the loan of
this certificate. If this certificate has a policy loan and no net cash value,
this certificate will lapse.
WHAT IS THE INTEREST RATE ON POLICY LOANS?
The interest rate charged on a policy loan will be eight percent per year.
MHC-94-18661 Rev. 1-95 Minnesota Life 15
<PAGE>
As the interest charged on a policy loan accrues, the net cash value decreases.
Interest is due at the end of the certificate month. If the total interest
accrued at the end of the certificate month is not paid, this interest will be
added to the loan amount borrowed and charged the same rate of interest as the
loan.
WHAT IS THE RATE OF INTEREST CREDITED TO THIS CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan account value shall be at a rate of
not less than six percent per year.
WHEN ARE INTEREST CREDITS ON A POLICY LOAN ALLOCATED TO THIS CERTIFICATE'S
GUARANTEED ACCOUNT VALUE?
Interest credits are allocated to the guaranteed account value at the time of a
loan repayment.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the certificate is in force.
The loan may also be repaid within 60 days after the date of the insured's
death, if we have not paid any of the death benefits under this certificate.
Any loan repayment must be at least $100 unless the balance due is less than
$100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN ACCOUNT VALUES AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments increase the net cash value of a certificate by the amount of
the loan repayment The loan repayment will be applied first to the interest
charged on the principal amount borrowed. Any remaining portion of the
repayment will then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
WHAT HAPPENS IF A LOAN ON THIS CERTIFICATE IS NOT REPAID?
If this certificate has a policy loan, the certificate will remain in force so
long as it has net cash value. If it does not have sufficient net cash value,
it will lapse.
In this event, to keep this certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
- -----------
WHEN DOES THE GROUP POLICY TERMINATE?
MHC-94-18661 Rev. 1-95 Minnesota Life 16
<PAGE>
The policyholder may terminate this group policy by giving us 31 days prior
written notice. In addition, we may terminate the group policy or any of its
provisions on 61 days prior written notice. No individual may become insured
under the group policy after the effective date of such a notice of termination.
After termination of the group policy, this certificate may be allowed to
convert to individual coverage as described below under the "Conversion
Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THE GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
1 61 days after we mail a warning notice of lapse on a certificate monthly
anniversary in which the net cash value is insufficient to pay for the
monthly deductions and no premium is paid during the grace period;
2 the date the group policy terminates, if no conversion or continuation is
made effective;
3 the date an owner surrenders this certificate or requests that we terminate
the insurance;
4 the 95th birthday of the insured.
WILL THE OWNER OF THIS CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice of lapse before terminating the insurance.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage of premium charges, is large enough to cover all monthly deductions
which have accrued on this certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to three years from the
date of lapse.
CONVERSION PRIVILEGE
- --------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the life insurance provided by this certificate ceases because of
termination of employment or of membership in the class or classes eligible for
coverage under the group policy, or if the group policy terminates or is amended
so as to terminate the insurance, an owner under this certificate may convert
the insurance under this certificate to an individual policy of life insurance
with us subject to the following:
1. The owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home office
within 31 days of the date the insurance terminates under the group policy.
MCH-94-18661 Rev. 1-95 Minnesota Life 17
<PAGE>
2. The owner may convert all or a part of the group insurance in effect on the
date that his or her coverage is terminated to an individual life insurance
policy offered by us, except a policy of term insurance. We will issue the
individual policy on the policy forms we then use for the plan of insurance
the owner has requested. The premium charge for this insurance will be based
upon the insured's age as of his or her nearest birthday.
3. If the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that could
have been converted under this policy will be paid.
In the case of the termination of the group policy, we may require that an
insured under this certificate be so insured for at least five years prior to
the termination date in order to qualify for the above conversion privilege.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under the group policy ends, the current group
coverage may continue unless the certificate is no longer in force or the
limitations below are true:
1. The group policy has terminated; or
2. There is less than $10 in the certificate's net cash value after deduction
of charges for the month in which eligibility ends.
The insurance amount will not change unless the owner requests a change. We
reserve the right to alter the administration fee not to exceed $4 per month and
the monthly cost of insurance up to the maximum in Table A if the insurance is
continued.
ADDITIONAL INFORMATION
- ----------------------
MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS CERTIFICATE?
Yes. However, we will not be bound by an assignment of this certificate or of
any interest in it unless:
1. It is made as a written instrument;
2. The owner files the original instrument or a certified copy with us at our
home office; and
3. We send the owner an acknowledged copy.
MCH-94-18661 Rev. 1-95 Minnesota Life 18
<PAGE>
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
1. the monthly cost of insurance charges that were paid, and;
2. the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured, whether sane or insane, dies by suicide, within two years
of the certificate date, our liability will be limited to an amount equal to the
premiums paid for that insured. If there has been an increase in the face
amount of insurance for which we required evidence of insurability, and if the
insured dies by suicide within two years of the certificate date of the
increase, our liability with respect to that increase will be limited to the
cost of insurance charge attributable to such increase.
If the insured is a Missouri citizen when the certificate of insurance becomes
effective, this provision does not apply on the certificate's effective date, or
on the effective date of any increase in the face amount of insurance, unless
the insured intended suicide when the certificate of insurance, or any increase,
was applied for.
If the insured is a citizen of Colorado or North Dakota, the duration of this
suicide provision is for one year instead of two years.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this certificate the owner
may direct us with respect to the voting rights of fund shares held by us and
attributable to this certificate.
COULD THE PAYMENT OF CERTIFICATE PROCEEDS BE POSTPONED?
MHC-94-18661 Rev. 1-95 Minnesota Life 19
<PAGE>
Normally, we will pay any certificate proceeds within seven days after our
receipt of all the documents required for such a payment. Other than the death
proceeds, which are determined as of the date of death of the insured, the
amount of payment will be determined as of the end of the valuation period
during which a request is received at our home office. If such payments are
based upon certificate values which do not depend on the investment performance
of the separate account, however, we reserve the right to defer certificate
payments, including certificate loans, for up to six months from the date of the
owner's request. In that case, if we postpone a payment other than a policy loan
payment for more than 31 days, we will pay the owner interest at the greater of
four percent per year or the rate required by law for the period beyond that
time that payment is postponed. For payments based on account values which do
depend on the investment performance of the separate account, we may defer
payment only: (a) for any period during which the New York Stock Exchange is
closed for trading (except for normal holiday closing); or (b) when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS CERTIFICATE CONFORM WITH STATE LAW?
Yes. If any provision in this certificate is in conflict with the laws of the
state governing the certificate, the provision will be deemed to be amended to
conform to such laws.
COULD ANY PAYMENTS MADE UNDER THIS CERTIFICATE BE SUBJECT TO CLAIMS OF
CREDITORS?
To the extent permitted by law, neither the group policy, certificates issued
under the group policy, nor any payment thereunder will be subject to the claims
of creditors or to any legal process.
WHO HAS OWNERSHIP OF THE GROUP POLICY?
The policyholder owns the group policy. The group policy may be changed or
ended by agreement between us and the policyholder without the consent of, or
notice to, any person claiming rights or benefits under the policy. However,
unless the policyholder is the owner of all the certificates issued under the
group policy, the policyholder does not have any ownership interest in the
certificates issued under the group policy. The rights and benefits under the
certificates are that of the owners of the certificates, and that of the
insureds and beneficiaries as set forth in this certificate.
ARE POLICY CHANGES LIMITED?
Currently, the frequency of policy changes are not limited. However, we reserve
the right to limit the number of policy changes to one per certificate year and
to restrict such changes in the first certificate year. For this purpose,
changes include increases or decreases in the face amount of insurance.
MCH-94-18661 Rev. 1-95 Minnesota Life 20
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
Guaranteed Maximum Monthly Cost of Insurance Rate
on a Smoker Distinct Basis
per $1,000 Net Amount at Risk
<TABLE>
<CAPTION>
Maximum Maximum Maximum
Attained Monthly Attained Monthly Attained Monthly
Age* Rate Age* Rate Age* Rate
---- ---- ---- ---- ---- ----
Non-Smokers Smokers Non-Smokers Smokers Non-Smokers Smokers
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
* This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18661 Rev. 1-95 Minnesota Life 21
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
Guaranteed Maximum Monthly Cost of Insurance Rate
on a Uni-Smoker Basis
per $1,000 Net Amount at Risk
<TABLE>
<CAPTION>
Maximum Maximum Maximum
Attained Monthly Attained Monthly Attained Monthly
Age* Rate Age* Rate Age* Rate
---- ---- ---- ---- ---- ----
Uni-Smokers Uni-Smokers Uni-Smokers
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
* This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18661 Rev. 1-95 Minnesota Life 22
<PAGE>
EX99.A5C
================================================================================
MINNESOTA LIFE CERTIFICATE OF INSURANCE
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North .
St. Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
RIGHT TO CANCEL
- ---------------
It is important to us that you are satisfied with this certificate after it is
issued. If you are not satisfied with it, you may return the certificate to us
or our agent within 10 days after you receive it. You may also cancel this
certificate by delivering or mailing a written notice or sending a telegram to
Minnesota Life Insurance Company (Minnesota Life), 400 Robert Street North, St.
Paul, Minnesota 55101-2098 and returning the certificate before midnight of the
10th day after you received this certificate. Notice given by mail and return of
the certificate by mail are effective on being postmarked, properly addressed
and postage prepaid. If you return this certificate, you will receive, within 7
days of the date we receive a notice of cancellation, a full refund of any
premiums you have paid. Upon cancellation of this certificate, it will be void
from the beginning as if it never had been issued.
THE INITIAL DEATH BENEFIT FOR THE PERSON INSURED UNDER THIS CERTIFICATE WILL
EQUAL THE FACE AMOUNT SHOWN ON THIS CERTIFICATE PLUS THE INITIAL ACCOUNT VALUE
IF ANY. THEREAFTER, IT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT
INVESTMENT EXPERIENCE.
THE ACCOUNT VALUES UNDER THIS CERTIFICATE WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
TABLE OF CONTENTS
General Information............ 2 Account Values...................... 7
Definitions.................... 2 Surrender and Withdrawals........... 8
Death Benefit.................. 3 Policy Loans........................ 8
Payment of Proceeds............ 4 Termination......................... 9
Premiums....................... 5 Conversion Privilege................ 10
Policy Charges................. 5 Additional Information.............. 10
Separate Account............... 6
VARIABLE GROUP UNIVERSAL LIFE INSURANCE . VARIABLE DEATH BENEFIT
MHC-94-18662 Rev. 1-95 Minnesota Life 1
<PAGE>
================================================================================
MINNESOTA LIFE SPECIFICATIONS
INDIVIDUAL POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North .
St. Paul, Minnesota 55101-1098
- --------------------------------------------------------------------------------
POLICYHOLDER: POLICY ID:
SPONSOR:
Insured:
INSURANCE INFORMATION
- ---------------------
Face Amount: $
Anniversary Date:
Minimum Face Amount Available: $
Maximum Face Amount Available: $
Planned Premium: $
Age at Issue:
Identification Number:
CHARGES AGAINST PREMIUM FIXED MONTHLY CHARGES
- ----------------------- ---------------------
Sales Load %
Federal Tax %
State Tax % SEPARATE ACCOUNT CHARGE
-----------------------
Mortality and Expense Risk
Charge:
If a partial surrender is made, we will assess a charge of $25 or two percent of
the amount withdrawn, whichever is less.
ELECTED RIDERS ADDITIONAL AGREEMENTS
- -------------- ---------------------
ACCOUNT OPTIONS AND ELECTIONS
- -----------------------------
SUB-ACCOUNT OPTIONS AND ELECTIONS
- ---------------------------------
IRC SECTION 7702 TEST APPLIED IS:
- ---------------------------------
F.MHC-7898 Rev. 2-96
<PAGE>
GENERAL INFORMATION
- -------------------
WHAT IS YOUR AGREEMENT WITH US?
You are insured under the group policy identified on the application attached to
this certificate. The attached application is a part of this certificate. This
certificate summarizes the principal provisions of the group policy that affect
your life insurance coverage. The provisions summarized in this certificate are
subject in every respect to the group policy. You may examine the group policy
at the principal office of the policyholder during regular working hours.
We retain the right to amend this certificate at any time without your consent.
Any amendment will be without prejudice to any claim incurred for benefits prior
to the date of the amendment.
Any statement made in your application will, in the absence of fraud, be
considered representations and not warranties. Also, any statement made will not
be used to void this certificate nor defend against a claim unless the statement
is contained in your application.
This certificate is issued in consideration of your application and the payment
of the required premium contributions.
WHAT IS THE EFFECTIVE DATE OF YOUR INSURANCE?
Upon receipt of your application for insurance, the effective date of your
insurance will be the later of:
1. the date on which we approve your application; and
2. the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
certificate.
DEFINITIONS
- -----------
When we use the following words, this is what we mean:
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and the
loan account of this certificate. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
ACTIVELY AT WORK
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least _____ hours a week.
A person is not considered actively at work if not at work due to illness or
injury.
MHC-94-18662 Rev. 1-95 Minnesota Life 2
<PAGE>
AGE
Your age at last birthday.
CERTIFICATE ANNIVERSARY
The same day in each succeeding year as the certificate date.
CERTIFICATE DATE
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine monthly
anniversaries, certificate months and certificate years.
CERTIFICATE MONTH
A calendar month in which insurance is provided under this certificate.
CERTIFICATE YEAR
A period of twelve consecutive certificate months, measured from the certificate
date and each successive certificate anniversary, during which coverage is
provided under this certificate.
ELIGIBLE INSURED
You are an eligible insured if you:
1. are under age _____; and
2. were actively at work for each of the _____ weeks immediately prior to the
date your application for coverage under the group policy is approved by
us; and
3. are identified by the policyholder as a person eligible to be insured under
the Policyholder's policy.
FACE AMOUNT
The minimum death benefit under this certificate so long as the insurance
coverage under this certificate remains in force.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
GENERAL ACCOUNT
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT VALUE
MHC-94-18662 Rev. 1-95 Minnesota Life 3
<PAGE>
Assets other than the loan account value that are held in our general account
and attributable to a certificate issued under this policy, and others of its
class.
INSURED
An eligible insured who becomes insured under this certificate.
LAPSE
A lapse of this certificate means the insurance coverage under this certificate
has terminated due to non-payment of a premium during its grace period in an
amount that, after the deduction of percentage-of-premium charges, is sufficient
to cover the monthly deductions due at the time we provide notice of the lapse.
LOAN ACCOUNT
The portion of the general account which is attributable to loans under this
certificate.
LOAN ACCOUNT VALUE
The sum of all outstanding loans and accrued policy loan interest credited under
this certificate.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same date in each succeeding month as the certificate date.
NET CASH VALUE
The account value under this certificate issued, less any outstanding policy
loans and accrued policy loan interest charged and any charges over due. It is
the amount you may obtain through surrender of this certificate.
NET PREMIUM
The premium less charges assessed against the premium. The net premium is the
amount or amounts which are allocated to the guaranteed account and/or the
separate account on your behalf.
OWNER
An owner of a certificate issued under the group policy.
POLICYHOLDER
MHC-94-18662 Rev. 1-95 Minnesota Life 4
<PAGE>
The owner of the group policy, as identified on the specifications page attached
to this certificate.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for the certificate. The particular separate account for this
certificate is the Variable Universal Life Account. We established this
separate account for this class of policies under Minnesota Law. The separate
account is composed of several sub-accounts. We own the assets of the separate
account. However, those assets not in excess of separate account liabilities
are not subject to claims arising out of any other business in which we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your certificate multiplied
by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
WE, OUR, US
Minnesota Life Insurance Company.
YOU, YOUR
The owner of this certificate named on the application.
DEATH BENEFIT
- -------------
MHC-94-18662 Rev. 1-95 Minnesota Life 5
<PAGE>
WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
This certificate of insurance provides for a variable death benefit, varying
with the amount of the net cash value of the certificate. The amount of the
death benefit will be determined as follows:
1. The face amount of insurance on the insured's date of death while this
certificate is in force; plus
2. the amount of the owner's account value as of the date we receive due proof
of death satisfactory to us; plus
3. the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
4. any monthly deductions taken under the certificate since the date of death;
less
5. any outstanding policy loans and accrued policy loan interest charged; less
6. any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this
certificate.
We intend that this certificate qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this certificate in order to maintain such qualification.
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF THE INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to this certificate.
If an increase in the current face amount is applied for, we reserve the right
to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this
certificate. If following a decrease in face amount, this certificate would not
comply with the maximum premium limitations required by federal law, the
decrease may be limited or net cash value may be returned to the owner (at the
owner's election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Decreases in the face amount of insurance are effective on the monthly
anniversary on or following receipt by us of your written request. However, if
the owner requests that the decrease become effective on a specified future date
we will make the decrease effective on the monthly anniversary or next following
the date requested.
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
MHC-94-18662 Rev. 1-95 Minnesota Life 6
<PAGE>
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay interest on the face amount of insurance from the date of the
insured's death until the date of payment. We will pay interest on any charges
taken under this certificate since the date of death from the date the charge
was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of four percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
PAYMENT OF PROCEEDS
- -------------------
TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
certificate ends with that beneficiary's death. Only those beneficiaries who
survive the insured will be eligible to share in the proceeds. If no beneficiary
survives the insured or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
1. the insured's lawful spouse, if living; otherwise;
2. the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
If the owner has reserved the right to change the beneficiary, the owner may
file a written request with us to change the beneficiary. If the owner has not
reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. The owner's written request will not
be effective until it is recorded in our home office records. After it has been
so recorded, it will take effect as of the date the owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
MHC-94-18662 Rev. 1-95 Minnesota Life 7
<PAGE>
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the
owner of this certificate requests a settlement option, he or she will be asked
to sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of
the separate account.
1. INTEREST PAYMENTS: Payment of interest on the proceeds at such times and for
a period as may be agreed upon between the owner of this certificate and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end
of the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
2. FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
3. LIFE ANNUITY: An annuity payable monthly for the lifetime of the annuitant
and ending with the last monthly payment due prior to the annuitant's death.
4. PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount
until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not
be permitted to change the elected settlement option.
PREMIUMS
- --------
WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put this certificate in force. This initial premium
must be of an amount that, after the deduction of percentage-of-premium charges,
will cover the first month's deductions plus $20. A premium must also be paid at
such time when there is insufficient net cash value to pay the monthly
deductions necessary to keep this certificate in force. Premiums paid after the
initial premium may be in any amount of $20 or greater.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Yes. This certificates has a 61-day grace period. The grace period will start
on the day we mail the owner a notice of lapse. This certificate will lapse if
the premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deductions.
We will mail this notice on any certificate monthly anniversary date when the
net cash value for the insured under this certificate is insufficient to cover
the monthly deductions. This certificate of insurance will remain in effect
during the 61-day grace period. If sufficient premium is not paid by the end of
the grace period, the insured's coverage will lapse. The grace period does not
apply to the first premium payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
MHC-94-18662 Rev. 1-95 Minnesota Life 8
<PAGE>
The death benefit amount provided under this certificate will be paid if death
occurs during the grace period.
POLICY CHARGES
- --------------
WHAT TYPE OF CHARGES ARE THERE UNDER THIS CERTIFICATE?
Charges under this certificate are those which we assess against the premiums
and the account value under this certificate and the separate account assets
attributable to this certificate.
WHAT CHARGES ARE ASSESSED AGAINST PREMIUMS?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
1. The sales load is for distribution expenses for this class of certificates.
This sales load charge shall not exceed five percent of each premium paid.
2. The federal tax charge is to compensate us for the corporate federal income
taxes that result from a sale of this certificate. The federal tax charge is
1.25 percent of each premium paid if this certificate is deemed to be an
individual contract under the Omnibus Budget Reconciliation Act of 1990, as
amended, and 0.25 percent if deemed a group contract under that Act.
3. The state premium tax charge is the average premium tax we pay to state and
local governments for this class of certificates. This charge is currently
two percent. The charge is not guaranteed and may be increased in the
future, but only as necessary to cover our premium taxes.
WHAT CHARGES ARE ASSESSED AGAINST THE NET CASH VALUE OF THIS CERTIFICATES?
We assess as monthly deductions: (1) the administration charge; (2) the cost of
insurance charge; and (3) the charge for any additional benefits provided by
rider. We also will assess against the net cash value a transaction charge at
the end of the day on which the transaction occurs.
1. The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for this certificate. The
maximum administration charge is $4 per month. This charge will be assessed
on the certificate date and on each succeeding monthly anniversary.
2. The cost of insurance charge is for providing the death benefit under this
certificate. The charge is calculated by multiplying the net amount at risk
under this certificate by a rate which varies with the insured's age and
rate class. The rate is guaranteed not to exceed rates determined on the
basis of 125 percent of the 1980 Commissioners Standard Ordinary Mortality
Table. The net amount at risk for this certificate is the difference between
the death benefit and the account value. This charge will be assessed on the
certificate date and on each succeeding monthly anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
MHC-94-18772 Rev. 1-95 Minnesota Life 9
<PAGE>
3. The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
4. A transaction charge will be assessed for each partial withdrawal to cover
the administrative costs incurred in processing the partial withdrawal. The
amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between
sub-accounts. The amount charged will not exceed $10. Any transaction charge
will be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of this certificate. They
will be assessed against the guaranteed account value and the separate account
value in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the sub-
account value of each such sub-account bears to the separate account value.
WHAT CHARGES ARE ASSESSED AGAINST SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this certificate. We also reserve the right to charge or make
provision for income taxes payable by us based on separate account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the group policy. The mortality
and expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
- ----------------
HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of the
Minnesota insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of the group policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
certificate are listed on the specifications page attached to this certificate.
Net premiums will be allocated to the various sub-accounts of the separate
account or any other sub-accounts which we may add in the future, as elected by
the owner of this certificate. We reserve the right to add, combine or remove
any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
MHC-94-18662 Rev. 1-95 Minnesota Life 10
<PAGE>
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the certificates of this class, we may substitute
another fund. Substitution may be with respect to both existing certificate
values and future premiums. The investment policy of the separate account may
not be changed, however, without the approval of the regulatory authorities of
the State of Minnesota. If required, that approval process will be on file with
the regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which the group policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this certificate, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may
require the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
1. restrict or eliminate any voting right of owners or other persons who have
voting rights as to the separate account; and
2. combine the separate account with one or more other separate accounts; and
3. to de-register the separate account under the Investment Company Act of
1940.
HOW ARE NET PREMIUMS ALLOCATED?
They are allocated either to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for this certificate. Allocations may be changed for future
premiums. The owner may do this by giving us a written request. A change will
not take effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least ten percent of the net premium. We reserve the
right to restrict the allocation of premium. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub-
accounts. Such a delay will be for a period of 30 days after issuance of this
certificate. This right will be exercised by us only when we believe economic
conditions make such a delay necessary to reduce market risk during this period.
If we exercise this right, net premiums will be allocated to the money market
sub-account until the end of that period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MHC-94-18662 Rev. 1-95 Minnesota Life 11
<PAGE>
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS CERTIFICATE?
Yes. Transfers from a sub-account of the separate account may be made in
writing or by telephone. For transfers out of the separate account or among
the sub-accounts of the separate account, we will credit and cancel units based
on the sub-account unit values as of the end of the valuation period during
which the owner's written or telephone request is received at our home office.
For transfers out of the guaranteed account, a dollar amount will be transferred
based on the owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this certificate each month. The
amount to be transferred to or from a sub-account of the separate account or
the guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less than
$250, we reserve the right to include that remaining amount in the sub-account
with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to twenty
percent (or $250 if greater) of the guaranteed account value. Transfers to or
from the guaranteed account may be limited to one such transfer per certificate
year. We may further restrict transfers by requiring that the request is
received by us or postmarked in the 30-day period before or after the last day
of the certificate anniversary. Requests for transfers which meet these
conditions would be effective after we approve and record them at our home
office.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this certificate will be
increased by the allocation of subsequent net premiums, policy experience
credits loan repayments, interest credits and transfers to that sub-account. The
number of units credited to a sub-account under this certificate will be
decreased by deductions to the sub-account, policy loans and loan interest
charged, transfers from that sub-account and partial surrenders from that sub-
account. The number of sub-account units will decrease to on this certificate's
termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account.
MHC-94-18662 Rev. 1-95 Minnesota Life 12
<PAGE>
The value of a unit for each sub-account was originally set at $1.00 on the
first valuation date. For any subsequent valuation date, its value is equal to
its value on the preceding valuation date multiplied by the net investment
factor for that sub-account for the valuation period ending on the subsequent
valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this
certificate which are assessed against separate account assets. The gross
investment rate is equal to:
1. The net asset value per share of a fund share held in the sub-account of the
separate account determined at the end of the current valuation period; plus
2. the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
3. the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
ACCOUNT VALUES
- --------------
WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to this certificate's net cash value. The net cash
value is the account value of this certificate, less any outstanding policy
loans and accrued policy loan interest charged and any charges overdue.
HOW IS THE ACCOUNT VALUE DETERMINED?
It is determined separately for this certificate and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited to
the certificate, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to a sub-account under an owner's
certificate will not be affected by changes in the unit value. However, the
number of units will be increased by the allocation of subsequent net premiums,
policy experience credits loan repayments, loan interest credits and transfers
to that sub-account. The number of units credited to a sub-account under an
owner's certificate will be decreased by deductions to that sub-account, policy
loans and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
The separate account value is not guaranteed.
MHC-94-18662 Rev. 1-95 Minnesota Life 13
<PAGE>
The guaranteed account value is guaranteed by us. It cannot be reduced by the
investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of each insured under
the group policy. Interest is credited daily at a rate of not less than four
percent per year, compounded annually. We guarantee this minimum rate for the
life of the group policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
- --------------------------
MAY THIS CERTIFICATE BE SURRENDERED?
Yes. The owner of this certificate may request the surrender of this
certificate at any time while the insured under this certificate is living.
WHAT IS THE SURRENDER VALUE OF THIS CERTIFICATE?
The surrender value of this certificate is the net cash value.
The determination of the surrender value is made as of the end of the during
which we receive the surrender request at our home office.
IS A PARTIAL SURRENDER PERMITTED?
Yes. The owner may make a partial surrender of the net cash value under this
certificate. The amount of a partial surrender must be $500 or more and it
cannot exceed the amount available as a policy loan. A partial surrender has no
effect on the face amount of the death benefit. However, since the account
value is reduced by the amount of the partial surrender, the death benefit will
be reduced by this same amount at the time of the partial surrender. We reserve
the right to change the minimum amount or limit the number of times the owner
may make a partial surrender.
MAY THE OWNER DIRECT US AS TO HOW PARTIAL SURRENDERS WILL BE TAKEN FROM THE NET
CASH VALUE?
Yes. The owner may tell us the sub-accounts from which a partial surrender is
to be taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not, partial surrenders will be deducted from the
guaranteed account value and separate account value in the same proportion that
those values bear to each other and, as to the separate account value, from each
sub-account in the proportion that the sub-account value of each such sub-
account bears to the separate account value.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
MHC-94-18662 Rev. 1-95 Minnesota Life 14
<PAGE>
Each year we will send the owner of this certificate a report. This report will
show the status of this certificate. It will include the account value, the
face amount as of the date of the report, the premiums paid during the year and
their allocation, certificate charges, policy loan activity and the net cash
value. The report will be sent without cost to the owner. If the policyholder
owns all of the certificates, a consolidated report will be sent. The report
will be as of a date within two months of its mailing.
POLICY LOANS
- ------------
CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. We will require the owner's written or telephone request for a policy
loan. The certificate will be the only security required for a loan. We will
charge interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A POLICY LOAN ON THIS CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is any outstanding
policy loans plus accrued policy loan interest charged. The maximum loan amount
will be determined as of the date we receive the owner's written or telephone
request for a loan at our home office.
WHAT IS THE EFFECT OF A POLICY LOAN?
When a loan is taken on this certificate, we will reduce the net cash value of
this certificate by the amount borrowed. This determination will be made as of
the end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value,
as the amount borrowed becomes part of the loan account value where it will
accrue loan interest credit, and will be held in our general account.
HOW DOES A POLICY LOAN REDUCE NET CASH VALUE ON THIS CERTIFICATE?
Unless the owner directs us otherwise, the policy loan will be taken from this
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this certificate may decrease between premium due dates.
The net cash value will decrease by the same amount of any decrease in account
value or increase in the amount borrowed or in the interest due on the loan of
this certificate. If this certificate has a policy loan and no net cash value,
this certificate will lapse.
MHC-94-18662 Rev. 1-95 Minnesota Life 15
<PAGE>
WHAT IS THE INTEREST RATE ON POLICY LOANS?
The interest rate charged on a policy loan will be eight percent per year.
As the interest charged on a policy loan accrues, the net cash value decreases.
Interest is due at the end of the certificate month. If the total interest
accrued at the end of the certificate month is not paid, this interest will be
added to the loan amount borrowed and charged the same rate of interest as the
loan.
WHAT IS THE RATE OF INTEREST CREDITED TO THIS CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan account value shall be at a rate not
less than six percent per year.
WHEN ARE INTEREST CREDITS ON A POLICY LOAN ALLOCATED TO THIS CERTIFICATE'S
GUARANTEED ACCOUNT VALUE?
As interest credits on a policy loan accrue, the account value increases.
Interest credits are allocated to the guaranteed account or sub-accounts of the
separate account at the time of a loan repayment.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the certificate is in force. The loan may also be repaid within 60 days
after the date of the insured's death, if we have not paid any of the death
benefits under this certificate. Any loan repayment must be at least $100
unless the balance due is less than $100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN ACCOUNT VALUES AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments increase the net cash value of a certificate by the amount of
the loan repayment. The loan repayment will be applied first to the interest
charged on the principal amount borrowed. Any remaining portion of the
repayment will then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
WHAT HAPPENS IF A LOAN ON THIS CERTIFICATE IS NOT REPAID?
If this certificate has a policy loan, the certificate will remain in force so
long as it has net cash value. If it does not have sufficient cash value, it
will lapse.
In this event, to keep this certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
MHC-94-18662 Rev. 1-95 Minnesota Life 16
<PAGE>
TERMINATION
- -----------
WHEN DOES THE GROUP POLICY TERMINATE?
The policyholder may terminate this group policy by giving us 31 days prior
written notice. In addition, we may terminate the group policy or any of its
provisions on 61 days prior written notice. No individual may become insured
under the group policy after the effective date of such a notice of termination.
After termination of the group policy, this certificate may be allowed to
convert to individual coverage as described below under the "Conversion
Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THE GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
1. 61 days after we mail a warning notice of lapse on a certificate monthly
anniversary in which the net cash value is insufficient to pay for the
monthly deductions and no premium is paid during the grace period;
2. the date the group policy terminates, if no conversion or continuation is
made effective;
3. the date an owner surrenders this certificate or requests that we terminate
the insurance;
4. the 95th birthday of the insured.
WILL THE OWNER OF THIS CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice before terminating the insurance.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to 3 years from the date
of lapse.
CONVERSION PRIVILEGE
- --------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the life insurance provided by this certificate ceases because of
termination of employment or of membership in the class or classes eligible for
coverage under the group policy, or if the group policy terminates or is amended
so as to terminate the insurance, an owner under this certificate may
MHC-94-18662 Rev. 1-95 Minnesota Life 17
<PAGE>
convert the insurance under this certificate to an individual policy of life
insurance with us subject to the following:
1. The owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home office
within 31 days of the date the insurance terminates under the group policy.
2. The owner may convert all or a part of the group insurance in effect on the
date that his or her coverage is terminated to an individual life insurance
policy offered by us, except a policy of term insurance. We will issue the
individual policy on the policy forms we then use for the plan of insurance
the owner has requested. The premium charge for this insurance will be based
upon the insured's age as of his or her nearest birthday.
3. If the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that could
have been converted under this policy will be paid.
In the case of the termination of the group policy, we may require that an
insured under this certificate be so insured for at least five years prior to
the termination date in order to qualify for the above conversion privilege.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under the group policy ends, the current group
coverage may continue unless the certificate is no longer in force or the
limitations below are true:
1. The group policy has terminated; or
2. There is less than $10 in the certificate's net cash value after deduction
of charges for the month in which eligibility ends.
The insurance amount will not change unless the owner requests a change. We
reserve the right to alter the administration fee not to exceed $4 per month and
the monthly cost of insurance up to the maximum in Table A if the insurance is
continued.
ADDITIONAL INFORMATION
- ----------------------
MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS CERTIFICATE?
MHC-94-18662 Rev. 1-95 Minnesota Life 18
<PAGE>
Yes. However, we will not be bound by an assignment of this certificate or of
any interest in it unless:
1. It is made as a written instrument;
2. The owner files the original instrument or a certified copy with us at our
home office; and
3. We send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
1. the monthly cost of insurance charges that were paid, and;
2. the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured, whether sane or insane, dies by suicide, within two years
of the certificate date, our liability will be limited to an amount equal to the
premiums paid for that insured. If there has been an increase in the face
amount of insurance for which we required evidence of insurability, and if the
insured dies by suicide within two years of the effective date of the increase,
our liability with respect to that increase will be limited to the cost of
insurance charge attributable to such increase.
If the insured is a Missouri citizen when the certificate of insurance becomes
effective, this provision does not apply on the certificate's effective date, or
on the effective date of any increase in the face amount of insurance, unless
the insured intended suicide when the certificate of insurance, or any increase,
was applied for.
MHC-94-18662 Rev. 1-95 Minnesota Life 19
<PAGE>
If the insured is a citizen of Colorado or North Dakota, the duration of this
suicide provision is for one year instead of two years.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this certificate the owner
may direct us with respect to the voting rights of fund shares held by us and
attributable to this certificate.
COULD THE PAYMENT OF CERTIFICATE PROCEEDS BE POSTPONED?
Normally, we will pay any certificate proceeds within seven days after our
receipt of all the documents required for such a payment. Other than the death
proceeds, which are determined as of the date of death of the insured, the
amount of payment will be determined as of the end of the valuation period
during which a request is received at our home office. If such payments are
based upon certificate values which do not depend on the investment performance
of the separate account, however, we reserve the right to defer certificate
payments, including certificate loans, for up to six months from the date of the
owner's request. In that case, if we postpone a payment other than a policy
loan payment for more than 31 days, we will pay the owner interest at the
greater of four percent per year or the rate required by law for the period
beyond that time that payment is postponed. For payments based on account values
which do depend on the investment performance of the separate account, we may
defer payment only: (a) for any period during which the New York Stock Exchange
is closed for trading (except for normal holiday closing); or (b) when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS CERTIFICATE CONFORM WITH STATE LAW?
Yes. If any provision in this certificate is in conflict with the laws of the
state governing the certificate, the provision will be deemed to be amended to
conform to such laws.
COULD ANY PAYMENTS MADE UNDER THIS CERTIFICATE BE SUBJECT TO CLAIMS OF
CREDITORS?
To the extent permitted by law, neither the group policy, certificates issued
under the group policy, nor any payment thereunder will be subject to the claims
of creditors or to any legal process.
WHO HAS OWNERSHIP OF THE GROUP POLICY?
The policyholder owns the group policy. The group policy may be changed or
ended by agreement between us and the policyholder without the consent of, or
notice to, any person claiming rights or benefits under the policy. However,
unless the policyholder is the owner of all the certificates issued under the
group policy, the policyholder does not have any ownership interest in the
certificates issued under the group policy. The rights and benefits under the
certificates are that of the owners of the certificates, and that of the
insureds and beneficiaries as set forth in this certificate.
ARE POLICY CHANGES LIMITED?
Currently, the frequency of policy changes are not limited. However, we reserve
the right to limit the number of policy changes to one per certificate year and
to restrict such changes in the first
MHC-94-18662 Rev. 1-95 Minnesota Life 20
<PAGE>
certificate year. For this purpose, changes include increases or decreases in
the face amount of insurance.
MHC-94-18662 Rev. 1-95 Minnesota Life 21
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
Guaranteed Maximum Monthly Cost of Insurance Rate
on a Smoker Distinct Basis
per $1,000 Net Amount at Risk
<TABLE>
<CAPTION>
Maximum Maximum Maximum
Attained Monthly Attained Monthly Attained Monthly
Age* Rate Age* Rate Age* Rate
---- ---- ---- ---- ---- ----
Non-Smokers Smokers Non-Smokers Smokers Non-Smokers Smokers
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
* This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18662 Rev. 1-95 Minnesota Life 22
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
Guaranteed Maximum Monthly Cost of Insurance Rate
on a Uni-Smoker Basis
per $1,000 Net Amount at Risk
<TABLE>
<CAPTION>
Maximum Maximum Maximum
Attained Monthly Attained Monthly Attained Monthly
Age* Rate Age* Rate Age* Rate
---- ---- ---- ---- ---- ----
Uni-Smokers Uni-Smokers Uni-Smokers
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
* This is the insured employee's attained age as of the last certificate
anniversary.
</TABLE>
MHC-94-18662 Rev. 1-95 Minnesota Life 23
<PAGE>
================================================================================
MINNESOTA LIFE SPOUSE'S COVERAGE RIDER
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company - 400 Robert Street North - St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This agreement amends the group policy to which it is attached, and is issued in
consideration of the timely payment of the required premium. This agreement is
subject to every term, condition, limitation, and provision of the group policy
unless otherwise expressly provided herein. Minnesota Life Insurance Company is
a subsidiary of Minnesota Mutual Companies, Inc. The policyholder is a member of
Minnesota Mutual Companies, Inc., which holds its annual meetings on the first
Tuesday in May of each year at 3 p.m. local time. The meetings are held at 400
Robert Street North, St. Paul, Minnesota 55101-2098.
WHAT IS THE PURPOSE OF THE AGREEMENT?
This agreement makes available variable universal life insurance on the life of
the eligible employee's eligible spouse.
DEFINITIONS
- -----------
For purposes of construing the terms and conditions of coverage for spouses
under the terms of the group policy, the terms and definitions listed below are
used in place of the terms and definitions stated in the policy:
ACTIVELY AT WORK
To be actively at work for purposes of this policy, the eligible spouse must be
currently working at his or her normal place of business at least hours a week.
A person is not considered actively at work if not at work due to illness or
injury.
ELIGIBLE INSURED
A spouse is an eligible insured if he or she:
1. is under ____; and
2. was actively at work for each of the _____ weeks immediately prior to the
date his or her application for coverage under this policy is approved by
us; and
3. is currently legally married to an individual defined as an eligible
insured under the terms of the group policy to which this rider is
attached.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
MHC-94-18672 Rev. 1-95 Minnesota Life 1
<PAGE>
================================================================================
EX99.A5E
MINNESOTA LIFE CERTIFICATE OF INSURANCE
SPOUSE COVERAGE
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company.400 Robert Street North.St. Paul,
Minnesota 55101-2098
- --------------------------------------------------------------------------------
RIGHT TO CANCEL
- ---------------
It is important to us that you are satisfied with this certificate after it is
issued. If you are not satisfied with it, you may return the certificate to us
or our agent within 10 days after you receive it. You may also cancel this
certificate by delivering or mailing a written notice or sending a telegram to
Minnesota Life Insurance Company (Minnesota Life), 400 Robert Street North, St.
Paul, Minnesota 55101-2098 and returning the certificate before midnight of the
10th day after you received this certificate. Notice given by mail and return of
the certificate by mail are effective on being postmarked, properly addressed
and postage prepaid. If you return this certificate, you will receive, within 7
days of the date we receive a notice of cancellation, a full refund of any
premiums you have paid. Upon cancellation of this certificate, it will be void
from the beginning as if it never had been issued.
THE INITIAL DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN ON THIS CERTIFICATE.
THE ACCOUNT VALUES UNDER THIS CERTIFICATE WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C> <C>
General Information......................... 2 Account Values......................... 7
Definitions................................. 2 Surrenders and Withdrawals............. 8
Death Benefit............................... 3 Policy Loans........................... 8
Payment of Proceeds......................... 4 Termination............................ 9
Premiums.................................... 5 Conversion Privilege................... 10
Policy Charges.............................. 5 Additional Information................. 10
Separate Account............................ 6
</TABLE>
VARIABLE GROUP UNIVERSAL LIFE INSURANCE . LEVEL DEATH BENEFIT
MHC-94-18670 Rev. 1-95 Minnesota Life 1
<PAGE>
================================================================================
MINNESOTA LIFE SPECIFICATIONS
INDIVIDUAL POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company 400 Robert Street North St.
Paul, Minnesota 55101-1098
- --------------------------------------------------------------------------------
POLICYHOLDER: POLICY ID:
SPONSOR:
Insured:
INSURANCE INFORMATION
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Face Amount: $
Anniversary Date:
Minimum Face Amount Available: $
Maximum Face Amount Available: $
Planned Premium: $
Age at Issue:
Identification Number:
CHARGES AGAINST PREMIUM FIXED MONTHLY CHARGES
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Sales Load
Federal Tax
State Tax SEPARATE ACCOUNT CHARGE
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Mortality and Expense Risk Charge:
If a partial surrender is made, we will assess a charge of $25 or two percent of
the amount withdrawn, whichever is less.
ELECTED RIDERS ADDITIONAL AGREEMENTS
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ACCOUNT OPTIONS AND ELECTIONS
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SUB-ACCOUNT OPTIONS AND ELECTIONS
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IRC SECTION 7702 TEST APPLIED IS:
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F MHC-47898 Rev. 2-96
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GENERAL INFORMATION
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WHAT IS YOUR AGREEMENT WITH US?
You are insured under the group policy identified on the application attached to
this certificate. The attached application is a part of this certificate. This
certificate summarizes the principal provisions of the group policy that affect
your life insurance coverage. The provisions summarized in this certificate are
subject in every respect to the group policy. You may examine the group policy
at the principal office of the policyholder during regular working hours.
We retain the right to amend this certificate at any time without your consent.
Any amendment will be without prejudice to any claim incurred for benefits prior
to the date of the amendment.
Any statement made in your application will, in the absence of fraud, be
considered representations and not warranties. Also, any statement made will not
be used to void this certificate nor defend against a claim unless the statement
is contained in your application.
This certificate is issued in consideration of your application and the payment
of the required premium contributions.
WHAT IS THE EFFECTIVE DATE OF YOUR INSURANCE?
Upon receipt of your application for insurance, the effective date of your
insurance will be the later of:
1. the date on which we approve your application; and
2. the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
certificate.
DEFINITIONS
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When we use the following words, this is what we mean:
account value
The sum of the values under the separate account, the guaranteed account and the
loan account of this certificate. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
actively at work
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least _____ hours a week.
A person is not considered actively at work if not at work due to illness or
injury.
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age
Your age at last birthday.
certificate anniversary
The same day in each succeeding year as the certificate date.
certificate date
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine monthly
anniversaries, certificate months and certificate years.
certificate month
A calendar month in which insurance is provided under this certificate.
certificate year
A period of twelve consecutive certificate months, measured from the certificate
date and each successive certificate anniversary, during which coverage is
provided under this certificate.
eligible insured
You are an eligible insured if you:
1. are under age _____; and
2. were actively at work for each of the _____ weeks immediately prior to the
date your application for coverage under the group policy is approved by us;
and
3. are currently legally married to an individual defined as an eligible
insured under the terms of the group policy.
face amount
The minimum death benefit under this certificate so long as the insurance
coverage under this certificate remains in force.
fund
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
general account
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
guaranteed account value
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Assets other than the loan account value that are held in our general account
and attributable to a certificate issued under this policy, and others of its
class.
insured
An eligible insured who becomes insured under this certificate.
lapse
A lapse of this certificate means the insurance coverage under this certificate
has terminated due to non-payment of a premium during its grace period in an
amount that, after the deduction of percentage-of-premium charges, is sufficient
to cover the monthly deductions due at the time we provide notice of lapse.
loan account
The portion of the general account which is attributable to loans under this
certificate.
loan account value
The sum of all outstanding loans and accrued policy loan interest credited under
this certificate.
maturity date
The 95th birthday of the insured.
monthly anniversary
The same date in each succeeding month as the certificate date.
net cash value
The account value under this certificate, less any outstanding policy loans and
accrued policy loan interest charged and any charges over due. It is the amount
you may obtain through surrender of this certificate.
net premium
The premium less charges assessed against the premium. The net premium is the
amount or amounts which are allocated to the guaranteed account and/or the
separate account on your behalf.
owner
An owner of a certificate issued under the group policy.
policyholder
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The owner of the group policy, as identified on the specifications page attached
to this certificate.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for the certificate. The particular separate account for this
certificate is the Variable Universal Life Account. We established this separate
account for this class of policies under Minnesota Law. The separate account is
composed of several sub-accounts. We own the assets of the separate account.
However, those assets not in excess of separate account liabilities are not
subject to claims arising out of any other business in which we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your certificate multiplied
by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
WE, OUR, US
Minnesota Life Insurance Company.
YOU, YOUR
The owner of this certificate named on the application.
DEATH BENEFIT
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WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
This certificate of insurance provides for a level death benefit. The amount of
the death benefit will be determined as follows:
1. The face amount of insurance on the insured's date of death while this
certificate is in force; plus
2. the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; less
3. any outstanding policy loans and accrued policy loan interest charged; less
4. any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this
certificate.
We intend that this certificate qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this certificate in order to maintain such qualification.
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF THE INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to this certificate.
If an increase in the current face amount is applied for, we reserve the right
to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this
certificate. If following a decrease in face amount, this certificate would not
comply with the maximum premium limitations required by federal law, the
decrease may be limited or net cash value may be returned to the owner (at the
owner's election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Decreases in the face amount of insurance are effective on the monthly
anniversary on or following receipt by us of your written request. However, if
the owner requests that the decrease become effective on a specified future date
we will make the decrease effective on the monthly anniversary on or next
following the date requested.
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
WHEN WILL THE DEATH BENEFIT BE PAID?
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We will pay the death benefit upon due proof satisfactory to us that the insured
died while insured under this certificate. We will pay interest on the death
benefit from the date of the insured's death until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of four percent per year compounded annually, or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
PAYMENT OF PROCEEDS
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TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
certificate ends with that beneficiary's death. Only those beneficiaries who
survive the insured will be eligible to share in the proceeds. If no beneficiary
survives the insured or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
1. the insured's lawful spouse, if living; otherwise;
2. the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
If the owner has reserved the right to change the beneficiary, the owner may
file a written request with us to change the beneficiary. If the owner has not
reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. The owner's written request will not
be effective until it is recorded in our home office records. After it has been
so recorded, it will take effect as of the date the owner signed the request .
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
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CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the
owner of this certificate requests a settlement option, he or she will be asked
to sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of
the separate account.
1. INTEREST PAYMENTS: Payment of interest on the proceeds at such times and for
a period as may be agreed upon between the owner of this certificate and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end
of the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
2. FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
3. LIFE ANNUITY: An annuity payable monthly for the lifetime of the annuitant
and ending with the last monthly payment due prior to the annuitant's death.
4. PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount
until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not
be permitted to change the elected settlement option.
PREMIUMS
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WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put this certificate in force. This initial premium
must be of an amount that, after the deduction of percentage-of-premium charges,
will cover the first month's deductions plus $20. A premium must also be paid at
such time when there is insufficient net cash value to pay the monthly
deductions necessary to keep this certificate in force. Premiums paid after the
initial premium may be in any amount of $20 or greater.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Yes. This certificate has a 61-day grace period. The grace period will start
on the day we mail the owner a notice of lapse. This certificate will lapse if
the premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deductions.
We will mail this notice on any certificate monthly anniversary date when the
net cash
MHC-94-18670 Rev. 1-95 Minnesota Life 8
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value for the insured under this certificate is insufficient to cover
the monthly deductions. This certificate of insurance will remain in effect
during the 61-day grace period. If sufficient premium is not paid by the end of
the grace period, the insured's coverage will lapse. The grace period does not
apply to the first premium payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount provided under this certificate will be paid if death
occurs during the grace period.
POLICY CHARGES
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WHAT TYPE OF CHARGES ARE THERE UNDER THIS CERTIFICATE?
Charges under this certificate are those which we assess against the premiums
and the account value under this certificate and the separate account assets
attributable to this certificate.
WHAT CHARGES ARE ASSESSED AGAINST PREMIUMS?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
1. The sales load is for distribution expenses for this class of certificates.
This sales load charge shall not exceed five percent of each premium paid.
2. The federal tax charge is to compensate us for the corporate federal income
taxes that result from a sale of this certificate. The federal tax charge is
1.25 percent of each premium paid if this certificate is deemed to be an
individual contract under the Omnibus Budget Reconciliation Act of 1990, as
amended, and 0.25 percent if deemed a group contract under that Act.
3. The state premium tax charge is the average premium tax we pay to state and
local governments for this class of certificates. This charge is currently
two percent. The charge is not guaranteed and may be increased in the
future, but only as necessary to cover our premium taxes.
WHAT CHARGES ARE ASSESSED AGAINST THE NET CASH VALUE OF THIS CERTIFICATE?
We assess as monthly deductions: (1) the administration charge; (2) the cost of
insurance charge; and (3) the charge for any additional benefits provided by
rider. We also will assess against the net cash value a transaction charge at
the end of the day on which the transaction occurs.
1. The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for this certificate. The
maximum administration charge is $4 per month. This charge will be assessed
on the certificate date and on each succeeding monthly anniversary.
2. The cost of insurance charge is for providing the death benefit under this
certificate. The charge is calculated by multiplying the net amount at risk
under this certificate by a rate which varies with the insured's age and
rate class. The rate is guaranteed not to exceed rates determined on the
basis of 125 percent of the 1980 Commissioners Standard Ordinary Mortality
Table. The net amount at risk for this certificate is the difference between
the death benefit and the account
MHC-94-18670 Rev. 1-95 Minnesota Life 9
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value. This charge will be assessed on the certificate date and on each
succeeding monthly anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
3. The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
4. A transaction charge will be assessed for each partial withdrawal to cover
the administrative costs incurred in processing the partial withdrawal. The
amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between
sub-accounts. The amount charged will not exceed $10. Any transaction charge
will be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of this certificate. They
will be assessed against the guaranteed account value and the separate account
value in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the sub-
account value of each such sub-account bears to the separate account value.
WHAT CHARGES ARE ASSESSED AGAINST SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this certificate. We also reserve the right to charge or make
provision for income taxes payable by us based on separate account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the group policy. The mortality
and expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
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HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of the
Minnesota insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of the group policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
certificate are listed on the specifications page attached to this certificate.
Net premiums will be allocated to the various sub-accounts of the separate
account or any other sub-account which we may add in the future, as
MHC-94-18670 Rev. 1-95 Minnesota Life 10
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elected by the owner of this certificate. We reserve the right to add, combine
or remove any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the certificates of this class, we may substitute
another fund. Substitution may be with respect to both existing certificate
values and future premiums. The investment policy of the separate account may
not be changed, however, without the approval of the regulatory authorities of
the State of Minnesota. If required, that approval process will be on file with
the regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which the group policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this certificate, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may require
the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
1. restrict or eliminate any voting right of owners or other persons who have
voting rights as to the separate account; and
2. combine the separate account with one or more other separate accounts; and
3. to de-register the separate account under the Investment Company Act of 1940.
HOW ARE NET PREMIUMS ALLOCATED?
They are allocated either to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for this certificate. Allocations may be changed for future
premiums. The owner may do this by giving us a written request. A change will
not take effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least ten percent of the net premium. We reserve the
right to restrict the allocation of premium.
If we do so, no more than fifty percent of the net premium may be allocated to
the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub-
accounts. Such a delay will be for a period of 30 days after issuance of this
certificate. This right will be exercised by us only when we believe economic
conditions make such a delay necessary to reduce market risk during this period.
If we exercise this right, net premiums will be allocated to the money market
sub-account until the end of that period.
WHAT IS A TRANSFER?
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A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS CERTIFICATE?
Yes. Transfers from a sub-account of the separate account may be made in writing
or by telephone. For transfers out of the separate account or among the sub-
accounts of the separate account, we will credit and cancel units based on the
sub-account unit values as of the end of the valuation period during which the
owner's written or telephone request is received at our home office. For
transfers out of the guaranteed account, a dollar amount will be transferred
based on the owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this certificate each month. The amount
to be transferred to or from a sub-account of the separate account or the
guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less than
$250, we reserve the right to include that remaining amount in the sub-account
with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to 20 percent
(or $250 if greater) of the guaranteed account value. Transfers to or from the
guaranteed account may be limited to one such transfer per certificate year. We
may further restrict transfers by requiring that the request is received by us
or postmarked in the 30-day period before or after the last day of the
certificate anniversary. Requests for transfers which meet these conditions
would be effective after we approve and record them at our home office.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this certificate will be
increased by the allocation of subsequent net premiums, policy experience
credits loan repayments, interest credits and transfers to that sub-account. The
number of units credited to a sub-account under this certificate will be
decreased by deductions to the sub-account, policy loans and loan interest
charged, transfers from that sub-account and partial surrenders from that sub-
account. The number of sub-account units will decrease to zero on this
certificate's termination.
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HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation period, its value is equal to its value on the preceding valuation
date multiplied by the net investment factor for that sub-account for the
valuation period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this
certificate which are assessed against separate account assets. The gross
investment rate is equal to:
1. The net asset value per share of a fund share held in the sub-account of the
separate account determined at the end of the current valuation period; plus
2. the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
3. the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
ACCOUNT VALUES
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WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to this certificate's net cash value. The net cash
value is the account value of this certificate, less any outstanding policy
loans and accrued policy loan interest charged and any charges overdue.
HOW IS THE ACCOUNT VALUE DETERMINED?
It is determined separately for this certificate and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited to
the certificate, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to a sub-account under an owner's
certificate will not be affected by changes in the unit value. However, the
number of units will be increased by the allocation of subsequent net premiums,
policy experience credits loan repayments, loan interest credits and transfers
to that sub-account. The number of units credited to a sub-account under an
owner's certificate will be decreased by deductions to that sub-account, policy
loans and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a certificate termination.
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IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
The separate account value is not guaranteed.
The guaranteed account value is guaranteed by us. It cannot be reduced by the
investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of each insured under
the group policy. Interest is credited daily at a rate of not less than four
percent per year, compounded annually. We guarantee this minimum rate for the
life of the group policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
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MAY THIS CERTIFICATE BE SURRENDERED?
Yes. The owner of this certificate may request the surrender of this certificate
at any time while the insured under this certificate is living.
WHAT IS THE SURRENDER VALUE OF THIS CERTIFICATE?
The surrender value of this certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A PARTIAL SURRENDER PERMITTED?
Yes. The owner may make a partial surrender of the net cash value under this
certificate. The amount of a partial surrender must be $500 or more and it
cannot exceed the amount available as a policy loan. A partial surrender will
cause a decrease in the face amount equal to the amount surrendered. We reserve
the right to change the minimum amount or limit the number of times the owner
may make a partial surrender.
MAY THE OWNER DIRECT US AS TO HOW PARTIAL SURRENDERS WILL BE TAKEN FROM THE NET
CASH VALUE?
Yes. The owner may tell us the sub-accounts from which a partial surrender is to
be taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not, inform us of his or her choice, partial
surrenders will be deducted from the guaranteed account value and separate
account value in the same proportion that those values bear to each other and,
as to the separate account value, from each sub-account in the proportion that
the sub-account value of each such sub-account bears to the separate account
value.
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HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of this certificate a report. This report will
show the status of this certificate. It will include the account value, the
face amount as of the date of the report, the premiums paid during the year and
their allocation, certificate charges, policy loan activity and the net cash
value. The report will be sent without cost to the owner. If the policyholder
owns all of the certificates, a consolidated report will be sent. The report
will be as of a date within two months of its mailing.
POLICY LOANS
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CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. We will require the owner's written or telephone request for a policy
loan. The certificate will be the only security required for a loan. We will
charge interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A POLICY LOAN ON THIS CERTIFICATE?
The total amount available for a loan under any certificate is (a) minus (b),
where (a) is ninety percent of the account value and (b) is any outstanding
policy loans plus accrued policy loan interest charged. The maximum loan amount
will be determined as of the date we receive the owner's written or telephone
request for a loan at our home office.
WHAT IS THE EFFECT OF A POLICY LOAN?
When a loan is taken on this certificate, we will reduce the net cash value of
this certificate by the amount borrowed. This determination will be made as of
the end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value,
as the amount borrowed becomes part of the loan account value where it will
accrue loan interest credit, and will be held in our general account.
HOW DOES A POLICY LOAN REDUCE NET CASH VALUE ON THIS CERTIFICATE?
Unless the owner directs us otherwise, the policy loan will be taken from this
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this certificate may decrease between premium due dates.
The net cash value will decrease by the same amount of any decrease in account
value or increase in the amount
MHC-94-18670 Rev. 1-95 Minnesota Life 15
<PAGE>
borrowed or in the interest due on the loan of this certificate. If this
certificate has a policy loan and no net cash value, this certificate will
lapse.
WHAT IS THE INTEREST RATE ON POLICY LOANS?
The interest rate charged on a policy loan will be eight percent per year.
As the interest charged on a policy loan accrues, the net cash value decreases.
Interest is due at the end of the certificate month. If the total interest
accrued at the end of the certificate month is not paid, this interest will be
added to the loan amount borrowed and charged the same rate of interest as the
loan.
WHAT IS THE RATE OF INTEREST CREDITED TO THIS CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan account value shall be at a rate of
not less than six percent per year.
WHEN ARE INTEREST CREDITS ON A POLICY LOAN ALLOCATED TO THIS CERTIFICATE'S
GUARANTEED ACCOUNT VALUE?
Interest credits are allocated to the guaranteed account value at the time of a
loan repayment.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the certificate is in force. The loan may also be repaid within 60 days
after the date of the insured's death, if we have not paid any of the death
benefits under this certificate. Any loan repayment must be at least $100
unless the balance due is less than $100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN ACCOUNT VALUES AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments increase the net cash value of a certificate by the amount of
the loan repayment. The loan repayment will be applied first to the interest
charged on the principal amount borrowed. Any remaining portion of the
repayment will then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
WHAT HAPPENS IF A LOAN ON THIS CERTIFICATE IS NOT REPAID?
If this certificate has a policy loan, the certificate will remain in force so
long as it has net cash value. If it does not have sufficient net cash value,
it will lapse.
In this event, to keep this certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
certificate and the loan repayment required to
MHC-94-18670 Rev. 1-95 Minnesota Life 16
<PAGE>
keep it in force. The time for repayment will be within 61 days after our
mailing of the warning notice of lapse.
TERMINATION
- -----------
WHEN DOES THE GROUP POLICY TERMINATE?
The policyholder may terminate this group policy by giving us 31 days prior
written notice. In addition, we may terminate the group policy or any of its
provisions on 61 days prior written notice. No individual may become insured
under the group policy after the effective date of such a notice of termination.
After termination of the group policy, this certificate may be allowed to
convert to individual coverage as described below under the "Conversion
Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THE GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
1. 61 days after we mail a warning notice of lapse on a certificate monthly
anniversary in which the net cash value is insufficient to pay for the
monthly deductions and no premium is paid during the grace period;
2. the date the group policy terminates, if no conversion or continuation is
made effective;
3. the date an owner surrenders this certificate or requests that we terminate
the insurance;
4. the 95th birthday of the insured.
WILL THE OWNER OF THIS CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice of lapse before terminating the insurance.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to three years from the
date of lapse.
CONVERSION PRIVILEGE
- --------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the life insurance provided by this certificate ceases because of
termination of employment or of membership in the class or classes eligible for
coverage under the group policy, or if the group
MHC-94-18670 Rev. 1-95 Minnesota Life 17
<PAGE>
policy terminates or is amended so as to terminate the insurance, an owner under
this certificate may convert the insurance under this certificate to an
individual policy of life insurance with us subject to the following:
1. The owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home office
within 31 days of the date the insurance terminates under the group policy.
2. The owner may convert all or a part of the group insurance in effect on the
date that his or her coverage is terminated to an individual life insurance
policy offered by us, except a policy of term insurance. We will issue the
individual policy on the policy forms we then use for the plan of insurance
the owner has requested. The premium charge for this insurance will be based
upon the insured's age as of his or her nearest birthday.
3. If the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that could
have been converted under this policy will be paid.
In the case of the termination of the group policy, we may require that an
insured under this certificate be so insured for at least five years prior to
the termination date in order to qualify for the above conversion privilege.
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under the group policy ends, the current group
coverage may continue unless the certificate is no longer in force or the
limitations below are true:
1. The group policy has terminated; or
2. There is less than $10 in the certificate's net cash value after deduction
of charges for the month in which eligibility ends.
The insurance amount will not change unless the owner requests a change. We
reserve the right to alter the administration fee not to exceed $4 per month and
the monthly cost of insurance up to the maximum in Table A if the insurance is
continued.
ADDITIONAL INFORMATION
- ----------------------
MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS CERTIFICATE?
MHC-94-18670 Rev. 1-95 Minnesota Life 18
<PAGE>
Yes. However, we will not be bound by an assignment of this certificate or of
any interest in it unless:
1. It is made as a written instrument;
2. The owner files the original instrument or a certified copy with us at our
home office; and
3. We send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
1. the monthly cost of insurance charges that were paid, and;
2. the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured, whether sane or insane, dies by suicide, within two years
of the certificate date, our liability will be limited to an amount equal to the
premiums paid for that insured. If there has been an increase in the face
amount of insurance for which we required evidence of insurability, and if the
insured dies by suicide within two years of the certificate date of the
increase, our liability with respect to that increase will be limited to the
cost of insurance charge attributable to such increase.
If the insured is a Missouri citizen when the certificate of insurance becomes
effective, this provision does not apply on the certificate's effective date, or
on the effective date of any increase in the face amount of insurance, unless
the insured intended suicide when the certificate of insurance, or any increase,
was applied for.
If the insured is a citizen of Colorado or North Dakota, the duration of this
suicide provision is for one year instead of two years.
MHC-94-18670 Rev. 1-95 Minnesota Life 19
<PAGE>
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this certificate the owner
may direct us with respect to the voting rights of fund shares held by us and
attributable to this certificate.
COULD THE PAYMENT OF CERTIFICATE PROCEEDS BE POSTPONED?
Normally, we will pay any certificate proceeds within seven days after our
receipt of all the documents required for such a payment. Other than the death
proceeds, which are determined as of the date of death of the insured, the
amount of payment will be determined as of the end of the valuation period
during which a request is received at our home office. If such payments are
based upon certificate values which do not depend on the investment performance
of the separate account, however, we reserve the right to defer certificate
payments, including certificate loans, for up to six months from the date of the
owner's request. In that case, if we postpone a payment other than a policy loan
payment for more than 31 days, we will pay the owner interest at the greater of
four percent per year or the rate required by law for the period beyond that
time that payment is postponed. For payments based on account values which do
depend on the investment performance of the separate account, we may defer
payment only: (a) for any period during which the New York Stock Exchange is
closed for trading (except for normal holiday closing); or (b) when the
Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS CERTIFICATE CONFORM WITH STATE LAW?
Yes. If any provision in this certificate is in conflict with the laws of the
state governing the certificate, the provision will be deemed to be amended to
conform to such laws.
COULD ANY PAYMENTS MADE UNDER THIS CERTIFICATE BE SUBJECT TO CLAIMS OF
CREDITORS?
To the extent permitted by law, neither the group policy, certificates issued
under the group policy, nor any payment thereunder will be subject to the claims
of creditors or to any legal process.
WHO HAS OWNERSHIP OF THE GROUP POLICY?
The policyholder owns the group policy. The group policy may be changed or
ended by agreement between us and the policyholder without the consent of, or
notice to, any person claiming rights or benefits under the policy. However,
unless the policyholder is the owner of all the certificates issued under the
group policy, the policyholder does not have any ownership interest in the
certificates issued under the group policy. The rights and benefits under the
certificates are that of the owners of the certificates, and that of the
insureds and beneficiaries as set forth in this certificate.
ARE POLICY CHANGES LIMITED?
Currently, the frequency of policy changes are not limited. However, we reserve
the right to limit the number of policy changes to one per certificate year and
to restrict such changes in the first certificate year. For this purpose,
changes include increases or decreases in the face amount of insurance.
MHC-94-18670 Rev. 1-95 Minnesota Life 20
<PAGE>
<TABLE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A SMOKER DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
-------- ------- --------- ------- -------- -------
NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS
------------ ------- ----------- ------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11 .456 13.886
13 0.104 0.104 48 0.439 0.813 83 12 .649 15.034
14 0.118 0.118 49 0.474 0.882 84 13 .943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
*This is the insured employee's attained age as of the last certificate
anniversary.
</TABLE>
MHC-94-18670 Rev. 1-95 Minnesota Life 21
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-SMOKER BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
- ---------- ----------- -------- ----------- -------- -----------
UNI-SMOKERS UNI-SMOKERS UNI-SMOKERS
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18670 Rev. 1-95 Minnesota Life 22
<PAGE>
Minnesota Life
400 Robert Street North . St. Paul, Minnesota 55101-2098
VARIABLE GROUP UNIVERSAL LIFE INSURANCE . LEVEL DEATH BENEFIT
<PAGE>
================================================================================
MINNESOTA LIFE CERTIFICATE OF INSURANCE
SPOUSE COVERAGE
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company 400 Robert Street North St. Paul,
Minnesota 55101-2098
- --------------------------------------------------------------------------------
RIGHT TO CANCEL
- ---------------
It is important to us that you are satisfied with this certificate after it is
issued. If you are not satisfied with it, you may return the certificate to us
or our agent within 10 days after you receive it. You may also cancel this
certificate by delivering or mailing a written notice or sending a telegram to
Minnesota Life Insurance Company (Minnesota Life), 400 Robert Street North, St.
Paul, Minnesota 55101-2098 and returning the certificate before midnight of the
tenth day after you received this certificate. Notice given by mail and return
of the certificate by mail are effective on being postmarked, properly addressed
and postage prepaid. If you return this certificate, you will receive, within 7
days of the date we receive a notice of cancellation, a full refund of any
premiums you have paid. Upon cancellation of this certificate, it will be void
from the beginning as if it never had been issued.
THE INITIAL DEATH BENEFIT FOR THE PERSON INSURED UNDER THIS CERTIFICATE WILL
EQUAL THE FACE AMOUNT SHOWN ON THIS CERTIFICATE PLUS THE INITIAL ACCOUNT VALUE,
IF ANY. THEREAFTER, IT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT
INVESTMENT EXPERIENCE.
THE ACCOUNT VALUES UNDER THIS CERTIFICATE WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <S> <C>
General Information.............2 Account Values...........................13
Definitions.....................2 Surrenders and Withdrawals...............14
Death Benefit...................6 Policy Loans.............................15
Payment of Proceeds.............7 Termination..............................17
Premiums........................8 Conversion Privilege.....................18
Policy Charges..................9 Additional Information...................19
Separate Account................10
</TABLE>
VARIABLE GROUP UNIVERSAL LIFE INSURANCE VARIABLE DEATH BENEFIT
MHC-94-18671 Rev. 1-95 Minnesota Life 1
<PAGE>
================================================================================
MINNESOTA LIFE SPECIFICATIONS
INDIVIDUAL POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company 400 Robert Street North St. Paul, Minnesota
55101-1098
- --------------------------------------------------------------------------------
POLICYHOLDER: POLICY ID:
SPONSOR:
Insured:
INSURANCE INFORMATION
- ---------------------
Face Amount: $
Anniversary Date:
Minimum Face Amount Available: $
Maximum Face Amount Available: $
Planned Premium: $
Age at Issue:
Identification Number:
CHARGES AGAINST PREMIUM FIXED MONTHLY CHARGES
- ----------------------- ---------------------
Sales Load
Federal Tax
State Tax
SEPARATE ACCOUNT CHARGE
Mortality and Expense Risk
Charge:
If a partial surrender is made, we will assess a charge of $25 or two percent of
the amount withdrawn, whichever is less.
ELECTED RIDERS ADDITIONAL AGREEMENTS
- -------------- ---------------------
ACCOUNT OPTIONS AND ELECTIONS
- -----------------------------
SUB-ACCOUNT OPTIONS AND ELECTIONS
- ---------------------------------
IRC SECTION 7702 TEST APPLIED IS:
- --------------------------------
F MHC-47898 Rev. 2-96
<PAGE>
GENERAL INFORMATION
- -------------------
WHAT IS YOUR AGREEMENT WITH US?
You are insured under the group policy identified on the application attached to
this certificate. The attached application is a part of this certificate. This
certificate summarizes the principal provisions of the group policy that affect
your life insurance coverage. The provisions summarized in this certificate are
subject in every respect to the group policy. You may examine the group policy
at the principal office of the policyholder during regular working hours.
We retain the right to amend this certificate at any time without your consent.
Any amendment will be without prejudice to any claim incurred for benefits prior
to the date of the amendment.
Any statement made in your application will, in the absence of fraud, be
considered representations and not warranties. Also, any statement made will not
be used to void this certificate nor defend against a claim unless the statement
is contained in your application.
This certificate is issued in consideration of your application and the payment
of the required premium contributions.
WHAT IS THE EFFECTIVE DATE OF YOUR INSURANCE?
Upon receipt of your application for insurance, the effective date of your
insurance will be the later of:
1. the date on which we approve your application; and
2. the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
certificate.
DEFINITIONS
- -----------
When we use the following words, this is what we mean:
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and the
loan account of this certificate. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
ACTIVELY AT WORK
MHC-94-18671 Rev. 1-95 Minnesota Life 2
<PAGE>
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least hours a week.
A person is not considered actively at work if not at work due to illness or
injury.
AGE
Your age at last birthday.
CERTIFICATE ANNIVERSARY
The same day in each succeeding year as the certificate date.
CERTIFICATE DATE
The first day of the calendar month on or following a certificate's effective
date of coverage. This is the date from which we determine monthly
anniversaries, certificate months and certificate years.
CERTIFICATE MONTH
A calendar month in which insurance is provided under this certificate.
CERTIFICATE YEAR
A period of twelve consecutive certificate months, measured from the
certificate date and each successive certificate anniversary, during which
coverage is provided under this certificate.
ELIGIBLE INSURED
You are an eligible insured if you:
1. are under age ; and
2. were actively at work for each of the weeks immediately prior to the
date your application for coverage under the group policy is approved by us;
and
3. are currently legally married to an individual defined as an eligible
insured under the terms of the group policy.
FACE AMOUNT
The minimum death benefit under this certificate so long as the insurance
coverage under this certificate remains in force.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
MHC-94-18671 Rev. 1-95 Minnesota Life 3
<PAGE>
GENERAL ACCOUNT
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT VALUE
Assets other than the loan account value that are held in our general account
and attributable to a certificate issued under this policy, and others of its
class.
INSURED
An eligible insured who becomes insured under this certificate.
LAPSE
A lapse of this certificate means the insurance coverage under this certificate
has terminated due to non-payment of a premium during its grace period in an
amount that, after the deduction of percentage-of-premium charges, is sufficient
to cover the monthly deductions due at the time we provide notice of the lapse.
LOAN ACCOUNT
The portion of the general account which is attributable to loans under this
certificate.
LOAN ACCOUNT VALUE
The sum of all outstanding loans and accrued policy loan interest credited under
this certificate.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same date in each succeeding month as the certificate date.
NET CASH VALUE
The account value under this certificate issued, less any outstanding policy
loans and accrued policy loan interest charged and any charges over due. It is
the amount you may obtain through surrender of this certificate.
NET PREMIUM
MHC-94-18671 Rev. 1-95 Minnesota Life 4
<PAGE>
The premium less charges assessed against the premium. The net premium is the
amount or amounts which are allocated to the guaranteed account and/or the
separate account on your behalf.
OWNER
An owner of a certificate issued under the group policy.
POLICYHOLDER
The owner of the group policy, as identified on the specifications page attached
to this certificate.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net premiums
received for the certificate. The particular separate account for this
certificate is the Variable Universal Life Account. We established this
separate account for this class of policies under Minnesota Law. The separate
account is composed of several sub-accounts. We own the assets of the separate
account. However, those assets not in excess of separate account liabilities
are not subject to claims arising out of any other business in which we engage.
SEPARATE ACCOUNT VALUE
The sum of all sub-account values.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your certificate multiplied
by the current sub-account unit value.
UNIT
A measure of the owner's interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
MHC-94-18671 Rev. 1-95 Minnesota Life 5
<PAGE>
WE, OUR, US
Minnesota Life Insurance Company.
YOU, YOUR
The owner of this certificate named on the application.
DEATH BENEFIT
- -------------
WHAT IS THE AMOUNT OF THE DEATH BENEFIT?
This certificate of insurance provides for a variable death benefit, varying
with the amount of the net cash value of the certificate. The amount of the
death benefit will be determined as follows:
1. The face amount of insurance on the insured's date of death while this
certificate is in force; plus
2. the amount of the owner's account value as of the date we receive due
proof of death satisfactory to us; plus
3. the amount of the cost of insurance for the portion of the certificate
month from the date of death to the end of the certificate month; plus
4. any monthly deductions taken under the certificate since the date of
death; less
5. any outstanding policy loans and accrued policy loan interest charged;
less
6. any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this
certificate.
We intend that this certificate qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this certificate in order to maintain such qualification.
WHAT IS THE FACE AMOUNT OF INSURANCE ON THE LIFE OF THE INSURED?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this certificate.
MAY THE FACE AMOUNT OF INSURANCE CHANGE?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to this certificate.
If an increase in the current face amount is applied for, we reserve the right
to require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this
certificate. If following a decrease in face amount, this certificate would not
comply with the maximum premium limitations required by federal law, the
decrease may
MHC-94-18671 Rev. 1-95 Minnesota Life 6
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be limited or net cash value may be returned to the owner (at the
owner's election), to the extent necessary to meet these requirements.
WHEN WILL CHANGES IN THE FACE AMOUNT OF INSURANCE BECOME EFFECTIVE?
Decreases in the face amount of insurance are effective on the monthly
anniversary on or following receipt by us of your written request. However, if
the owner requests that the decrease become effective on a specified future date
we will make the decrease effective on the monthly anniversary or next following
the date requested.
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between the
policyholder and us.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay interest on the face amount of insurance from the date of the
insured's death until the date of payment. We will pay interest on any charges
taken under this certificate since the date of death from the date the charge
was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of 4 percent per year compounded annually, or the rate required by law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
PAYMENT OF PROCEEDS
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TO WHOM WILL WE PAY THE DEATH BENEFIT?
We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE BEFORE THE INSURED?
If a beneficiary dies before the insured, that beneficiary's interest in this
certificate ends with that beneficiary's death. Only those beneficiaries who
survive the insured will be eligible to share in the proceeds. If no
beneficiary survives the insured or if a beneficiary is not named, we will pay
the proceeds according to the following order of priority:
1. the insured's lawful spouse, if living; otherwise;
2. the personal representative of the insured's estate.
MAY THE OWNER CHANGE THE BENEFICIARY?
If the owner has reserved the right to change the beneficiary, the owner may
file a written request with us to change the beneficiary. If the owner has not
reserved the right to change the beneficiary,
MHC-94-18671 Rev. 1-95 Minnesota Life 7
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the written consent of the irrevocable beneficiary will be required. The owner's
written request will not be effective until it is recorded in our home office
records. After it has been so recorded, it will take effect as of the date the
owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
CAN DEATH BENEFIT PROCEEDS BE PAID IN OTHER THAN A SINGLE SUM?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
WHAT ARE THE SETTLEMENT OPTIONS AVAILABLE?
Each settlement option is paid in fixed amounts as described below. If the
owner of this certificate requests a settlement option, he or she will be asked
to sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of
the separate account.
1. INTEREST PAYMENTS: Payment of interest on the proceeds at such times and for
a period as may be agreed upon between the owner of this certificate and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end
of the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
2. FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
3. LIFE ANNUITY: An annuity payable monthly for the lifetime of the annuitant
and ending with the last monthly payment due prior to the annuitant's death.
4. PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount
until the proceeds and interest are fully paid.
CAN A BENEFICIARY REQUEST A PAYMENT UNDER A SETTLEMENT OPTION?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner or insured may provide that the beneficiary will not
be permitted to change the elected settlement option.
PREMIUMS
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WHEN AND HOW OFTEN ARE PREMIUMS DUE?
A premium must be paid to put this certificate in force. This initial premium
must be of an amount that, after the deduction of percentage-of-premium charges,
will cover the first month's deductions plus $20. A premium must also be paid at
such time when there is insufficient net cash value to pay
MHC-94-18671 Rev. 1-95 Minnesota Life 8
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the monthly deductions necessary to keep this certificate in force. Premiums
paid after the initial premium may be in any amount of $20 or greater.
IS THERE A GRACE PERIOD FOR THE PAYMENT OF PREMIUMS?
Yes. This certificate has a 61-day grace period. The grace period will start
on the day we mail the owner a notice of lapse. This certificate will lapse if
the premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deductions.
We will mail this notice on any certificate monthly anniversary date when the
net cash value for the insured under this certificate is insufficient to cover
the monthly deductions. This certificate of insurance will remain in effect
during the 61-day grace period. If sufficient premium is not paid by the end of
the grace period, the insured's coverage will lapse. The grace period does not
apply to the first premium payment.
WHAT IS THE AMOUNT OF THE DEATH BENEFIT DURING THE GRACE PERIOD?
The death benefit amount provided under this certificate will be paid if death
occurs during the grace period.
POLICY CHARGES
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WHAT TYPE OF CHARGES ARE THERE UNDER THIS CERTIFICATE?
Charges under this certificate are those which we assess against the premiums
and the account value under this certificate and the separate account assets
attributable to this certificate.
WHAT CHARGES ARE ASSESSED AGAINST PREMIUMS?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
1. The sales load is for distribution expenses for this class of certificates.
This sales load charge shall not exceed 5 percent of each premium paid.
2. The federal tax charge is to compensate us for the corporate federal
income taxes that result from a sale of this certificate. The federal tax
charge is 1.25 percent of each premium paid if this certificate is deemed
to be an individual contract under the Omnibus Budget Reconciliation Act
of 1990, as amended, and 0.25 percent if deemed a group contract under
that Act.
3. The state premium tax charge is the average premium tax we pay to state
and local governments for this class of certificates. This charge is
currently 2 percent. The charge is not guaranteed and may be increased in
the future, but only as necessary to cover our premium taxes.
WHAT CHARGES ARE ASSESSED AGAINST THE NET CASH VALUE OF THIS CERTIFICATE?
We assess as monthly deductions: (1) the administration charge; (2) the cost of
insurance charge; and (3) the charge for any additional benefits provided by
rider. We also will assess against the net cash value a transaction charge at
the end of the day on which the transaction occurs.
MHC-94-18671 Rev. 1-95 Minnesota Life 9
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1. The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for this certificate.
The maximum administration charge is $4 per month. This charge will be
assessed on the certificate date and on each succeeding monthly
anniversary.
2. The cost of insurance charge is for providing the death benefit under this
certificate. The charge is calculated by multiplying the net amount at
risk under this certificate by a rate which varies with the insured's age
and rate class. The rate is guaranteed not to exceed rates determined on
the basis of 125 percent of the 1980 Commissioners Standard Ordinary
Mortality Table. The net amount at risk for this certificate is the
difference between the death benefit and the account value. This charge
will be assessed on the certificate date and on each succeeding monthly
anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
3. The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
4. A transaction charge will be assessed for each partial withdrawal to cover
the administrative costs incurred in processing the partial withdrawal. The
amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between
sub-accounts. The amount charged will not exceed $10. Any transaction charge
will be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of this certificate. They
will be assessed against the guaranteed account value and the separate account
value in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the sub-
account value of each such sub-account bears to the separate account value.
WHAT CHARGES ARE ASSESSED AGAINST SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this certificate. We also reserve the right to charge or make
provision for income taxes payable by us based on separate account assets.
WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with the group policy. The mortality
and expense risk charge is deducted from the separate account assets daily at an
annual rate not to exceed 0.50 percent of the separate account assets.
SEPARATE ACCOUNT
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HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
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<PAGE>
We established the separate account in accordance with certain provisions of the
Minnesota insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of the group policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
certificate are listed on the specifications page attached to this certificate.
Net premiums will be allocated to the various sub-accounts of the separate
account or any other sub-accounts which we may add in the future, as elected by
the owner of this certificate. We reserve the right to add, combine or remove
any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the certificates of this class, we may substitute
another fund. Substitution may be with respect to both existing certificate
values and future premiums. The investment policy of the separate account may
not be changed, however, without the approval of the regulatory authorities of
the State of Minnesota. If required, that approval process will be on file with
the regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which the group policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this certificate, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may
require the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
1. restrict or eliminate any voting right of owners or other persons who have
voting rights as to the separate account; and
2. combine the separate account with one or more other separate accounts; and
3. to de-register the separate account under the Investment Company Act of
1940.
HOW ARE NET PREMIUMS ALLOCATED?
They are allocated either to the guaranteed account and/or to the sub-accounts
of the separate account. Initially, the allocation elected is indicated in the
application for this certificate. Allocations
MHC-94-18671 Rev. 1-95 Minnesota Life 11
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may be changed for future premiums. The owner may do this by giving us a written
request. A change will not take effect until it is recorded by us in our home
office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least 10 percent of the net premium. We reserve the right
to restrict the allocation of premium. If we do so, no more than 50 percent of
the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub-
accounts. Such a delay will be for a period of 30 days after issuance of this
certificate. This right will be exercised by us only when we believe economic
conditions make such a delay necessary to reduce market risk during this period.
If we exercise this right, net premiums will be allocated to the money market
sub-account until the end of that period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS CERTIFICATE?
Yes. Transfers from a sub-account of the separate account may be made in
writing or by telephone. For transfers out of the separate account or among
the sub-accounts of the separate account, we will credit and cancel units based
on the sub-account unit values as of the end of the valuation period during
which the owner's written or telephone request is received at our home office.
For transfers out of the guaranteed account, a dollar amount will be transferred
based on the owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this certificate each month. The
amount to be transferred to or from a sub-account of the separate account or
the guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less than
$250, we reserve the right to include that remaining amount in the sub-account
with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to 20 percent
(or $250 if greater) of the guaranteed account value. Transfers to or from the
guaranteed account may be limited to one such transfer per certificate year. We
may further restrict transfers by requiring that the request is received by us
or postmarked in the 30-day period before or after the last day of the
certificate anniversary. Requests for transfers which meet these conditions
would be effective after we approve and record them at our home office.
MHC-94-18671 Rev. 1-95 Minnesota Life 12
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HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this certificate will be
increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, interest credits and transfers to that sub-account.
The number of units credited to a sub-account under this certificate will be
decreased by deductions to that sub-account, policy loans and loan interest
charged, transfers from that sub-account and partial surrenders from that sub-
account. The number of sub-account units will decrease to zero on this
certificate's termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such, less a deduction for the charges under this certificate which are
assessed against separate account assets. The gross investment rate is equal
to:
1. The net asset value per share of a fund share held in the sub-account of
the separate account determined at the end of the current valuation period;
plus
2. the per share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
3. the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
ACCOUNT VALUES
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WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
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Yes. The owner has access to this certificate's net cash value. The net cash
value is the account value of this certificate, less any outstanding policy
loans and accrued policy loan interest charged and any charges overdue.
HOW IS THE ACCOUNT VALUE DETERMINED?
It is determined separately for this certificate and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited to
the certificate, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to a sub-account under an owner's
certificate will not be affected by changes in the unit value. However, the
number of units will be increased by the allocation of subsequent net premiums,
policy experience credits, loan repayments, loan interest credits and transfers
to that sub-account. The number of units credited to a sub-account under an
owner's certificate will be decreased by deductions to that sub-account, policy
loans and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a certificate termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
The separate account value is not guaranteed.
The guaranteed account value is guaranteed by us. It cannot be reduced by the
investment experience of the guaranteed account.
IS INTEREST CREDITED ON THE GUARANTEED ACCOUNT VALUE?
Yes. Interest is credited on the guaranteed account value of each insured under
the group policy. Interest is credited daily at a rate of not less than 4
percent per year, compounded annually. We guarantee this minimum rate for the
life of the group policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
SURRENDERS AND WITHDRAWALS
- --------------------------
MAY THIS CERTIFICATE BE SURRENDERED?
Yes. The owner of this certificate may request the surrender of this
certificate at any time while the insured under this certificate is living.
WHAT IS THE SURRENDER VALUE OF THIS CERTIFICATE?
MHC-94-18671 Rev. 1-95 Minnesota Life 14
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The surrender value of this certificate is the net cash value.
The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A PARTIAL SURRENDER PERMITTED?
Yes. The owner may make a partial surrender of the net cash value under this
certificate. The amount of a partial surrender must be $500 or more and it
cannot exceed the amount available as a policy loan. A partial surrender has no
effect on the face amount of the death benefit. However, since the account
value is reduced by the amount of the partial surrender, the death benefit will
be reduced by this same amount at the time of the partial surrender. We reserve
the right to change the minimum amount or limit the number of times the owner
may make a partial surrender.
MAY THE OWNER DIRECT US AS TO HOW PARTIAL SURRENDERS WILL BE TAKEN FROM THE NET
CASH VALUE?
Yes. The owner may tell us the sub-accounts from which a partial surrender is
to be taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not inform us of his or her choice, partial
surrenders will be deducted from the guaranteed account value and separate
account value in the same proportion that those values bear to each other and,
as to the separate account value , from each sub-account in the proportion that
the sub-account value of each such sub-account bears to the separate account
value.
HOW WILL THE OWNER KNOW THE STATUS OF A CERTIFICATE?
Each year we will send the owner of this certificate a report. This report will
show the status of this certificate. It will include the account value, the
face amount as of the date of the report, the premiums paid during the year and
their allocation, certificate charges, policy loan activity and the net cash
value. The report will be sent without cost to the owner. If the policyholder
owns all of the certificates, a consolidated report will be sent. The report
will be as of a date within two months of its mailing.
POLICY LOANS
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CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. We will require the owner's written or telephone request for a policy
loan. The certificate will be the only security required for a loan. We will
charge interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A POLICY LOAN ON THIS CERTIFICATE?
MHC-94-18671 Rev. 1-95 Minnesota Life 15
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The total amount available for a loan under any certificate is (a) minus (b),
where (a) is 90 percent of the account value and (b) is any outstanding policy
loans plus accrued policy loan interest charged. The maximum loan amount will be
determined as of the date we receive the owner's written or telephone request
for a loan at our home office.
WHAT IS THE EFFECT OF A POLICY LOAN?
When a loan is taken on this certificate, we will reduce the net cash value of
this certificate by the amount borrowed. This determination will be made as of
the end of the valuation period during which the loan request is received at our
home office. The amount borrowed continues to be a part of the account value, as
the amount borrowed becomes part of the loan account value where it will accrue
loan interest credits and will be held in our general account.
HOW DOES A POLICY LOAN REDUCE NET CASH VALUE ON THIS CERTIFICATE?
Unless the owner directs us otherwise, the policy loan will be taken from this
certificate's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value of
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this certificate may decrease between premium due dates.
The net cash value will decrease by the same amount of any decrease in account
value or increase in the amount borrowed or in the interest due on the loan of
this certificate. If this certificate has a policy loan and no net cash value,
this certificate will lapse.
WHAT IS THE INTEREST RATE ON POLICY LOANS?
The interest rate charged on a policy loan will be 8 percent per year.
As the interest charged on a policy loan accrues, the net cash value decreases.
Interest is due at the end of the certificate month. If the total interest
accrued at the end of the certificate month is not paid, this interest will be
added to the loan amount borrowed and charged the same rate of interest as the
loan.
WHAT IS THE RATE OF INTEREST CREDITED TO THIS CERTIFICATE AS A RESULT OF A LOAN?
Interest credits which accrue on the loan account value shall be at a rate not
less than 6 percent per year.
WHEN ARE INTEREST CREDITS ON A POLICY LOAN ALLOCATED TO THIS CERTIFICATE'S
GUARANTEED ACCOUNT VALUE?
Interest credits are allocated to the guaranteed account value at the time of a
loan repayment.
MHC-94-18671 Rev. 1-95 Minnesota Life 16
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WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the certificate is in force. The loan may also be repaid within 60 days
after the date of the insured's death, if we have not paid any of the death
benefits under this certificate. Any loan repayment must be at least $100
unless the balance due is less than $100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN ACCOUNT VALUES AND THE GUARANTEED ACCOUNT
VALUE?
Loan repayments increase the net cash value of a certificate by the amount of
the loan repayment. The loan repayment will be applied first to the interest
charged on the principal amount borrowed. Any remaining portion of the
repayment will then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
WHAT HAPPENS IF A LOAN ON THIS CERTIFICATE IS NOT REPAID?
If this certificate has a policy loan, the certificate will remain in force so
long as it has net cash value. If it does not have sufficient cash value, it
will lapse.
In this event, to keep this certificate in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
certificate and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
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WHEN DOES THE GROUP POLICY TERMINATE?
The policyholder may terminate this group policy by giving us 31 days prior
written notice. In addition, we may terminate the group policy or any of its
provisions on 61 days prior written notice. No individual may become insured
under the group policy after the effective date of such a notice of termination.
After termination of the group policy, this certificate may be allowed to
convert to individual coverage as described below under the "Conversion
Privilege" section.
WHEN DOES A CERTIFICATE OF INSURANCE UNDER THE GROUP POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
1 61 days after we mail a warning notice of lapse on a certificate monthly
anniversary in which the net cash value is insufficient to pay for the monthly
deductions and no premium is paid during the grace period;
MHC-94-18671 Rev. 1-95 Minnesota Life 17
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2 the date the group policy terminates, if no conversion or continuation is
made effective;
3 the date an owner surrenders this certificate or requests that we terminate
the insurance;
4 the 95th birthday of the insured.
WILL THE OWNER OF THIS CERTIFICATE RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice before terminating the insurance.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this certificate up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to three years from the
date of lapse.
CONVERSION PRIVILEGE
- --------------------
IS THERE A CONVERSION PRIVILEGE TO AN INDIVIDUAL POLICY?
Yes. If the life insurance provided by this certificate ceases because of
termination of employment or of membership in the class or classes eligible for
coverage under the group policy, or if the group policy terminates or is amended
so as to terminate the insurance, an owner under this certificate may convert
the insurance under this certificate to an individual policy of life insurance
with us subject to the following:
1. The owner's written application to convert to an individual policy and the
first premium for the individual policy must be received in our home office
within 31 days of the date the insurance terminates under the group policy.
2. The owner may convert all or a part of the group insurance in effect on the
date that his or her coverage is terminated to an individual life insurance
policy offered by us, except a policy of term insurance. We will issue the
individual policy on the policy forms we then use for the plan of insurance
the owner has requested. The premium charge for this insurance will be based
upon the insured's age as of his or her nearest birthday.
3. If the insured should die within 31 days of the date that insurance
terminated under the group policy, the full amount of insurance that could
have been converted under this policy will be paid.
In the case of the termination of the group policy, we may require that an
insured under this certificate be so insured for at least five years prior to
the termination date in order to qualify for the above conversion privilege.
MHC-94-18671 Rev. 1-95 Minnesota Life 18
<PAGE>
CAN GROUP INSURANCE COVERAGE BE CONTINUED ONCE THE OWNER'S ELIGIBILITY ENDS?
If the owner's eligibility under the group policy ends, the current group
coverage may continue unless the certificate is no longer in force or the
limitations below are true:
1. The group policy has terminated; or
2. There is less than $10 in the certificate's net cash value after deduction
of charges for the month in which eligibility ends.
The insurance amount will not change unless the owner requests a change. We
reserve the right to alter the administration fee not to exceed $4 per month and
the monthly cost of insurance up to the maximum in Table A if the insurance is
continued.
ADDITIONAL INFORMATION
- ----------------------
MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS CERTIFICATE?
Yes. However, we will not be bound by an assignment of this certificate or of
any interest in it unless:
1. It is made as a written instrument;
2. The owner files the original instrument or a certified copy with us at our
home office; and
3. We send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
MHC-94-18671 Rev. 1-95 Minnesota Life 19
<PAGE>
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
1. the monthly cost of insurance charges that were paid, and;
2. the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the certificate date, we cannot contest the insurance for any
loss that is incurred more than two years after the certificate date, unless the
net cash value has dropped below the amount necessary to pay the insured's cost
of insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then, to
the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured, whether sane or insane, dies by suicide, within two years
of the certificate date, our liability will be limited to an amount equal to the
premiums paid for that insured. If there has been an increase in the face
amount of insurance for which we required evidence of insurability, and if the
insured dies by suicide within two years of the effective date of the increase,
our liability with respect to that increase will be limited to the cost of
insurance charge attributable to such increase.
If the insured is a Missouri citizen when the certificate of insurance becomes
effective, this provision does not apply on the certificate's effective date, or
on the effective date of any increase in the face amount of insurance, unless
the insured intended suicide when the certificate of insurance, or any increase,
was applied for.
If the insured is a citizen of Colorado or North Dakota, the duration of this
suicide provision is for one year instead of two years.
DOES THE OWNER HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If the owner has separate account units under this certificate, the owner
may direct us with respect to the voting rights of fund shares held by us and
attributable to this certificate.
COULD THE PAYMENT OF CERTIFICATE PROCEEDS BE POSTPONED?
Normally, we will pay any certificate proceeds within seven days after our
receipt of all the documents required for such a payment. Other than the death
proceeds, which are determined as of the date of death of the insured, the
amount of payment will be determined as of the end of the
MHC-94-18671 Rev. 1-95 Minnesota Life 20
<PAGE>
valuation period during which a request is received at our home office. If such
payments are based upon certificate values which do not depend on the investment
performance of the separate account, however, we reserve the right to defer
certificate payments, including certificate loans, for up to six months from the
date of the owner's request. In that case, if we postpone a payment other than
a policy loan payment for more than 31 days, we will pay the owner interest at
the greater of 4 percent per year or the rate required by law for the period
beyond that time that payment is postponed. For payments based on account
values which do depend on the investment performance of the separate account, we
may defer payment only: (a) for any period during which the New York Stock
Exchange is closed for trading (except for normal holiday closing); or (b) when
the Securities and Exchange Commission has determined that a state of emergency
exists which may make such payment impractical.
WILL THE PROVISIONS OF THIS CERTIFICATE CONFORM WITH STATE LAW?
Yes. If any provision in this certificate is in conflict with the laws of the
state governing the certificate, the provision will be deemed to be amended to
conform to such laws.
COULD ANY PAYMENTS MADE UNDER THIS CERTIFICATE BE SUBJECT TO CLAIMS OF
CREDITORS?
To the extent permitted by law, neither the group policy, certificates issued
under the group policy, nor any payment thereunder will be subject to the claims
of creditors or to any legal process.
WHO HAS OWNERSHIP OF THE GROUP POLICY?
The policyholder owns the group policy. The group policy may be changed or
ended by agreement between us and the policyholder without the consent of, or
notice to, any person claiming rights or benefits under the policy. However,
unless the policyholder is the owner of all the certificates issued under the
group policy, the policyholder does not have any ownership interest in the
certificates issued under the group policy. The rights and benefits under the
certificates are that of the owners of the certificates, and that of the
insureds and beneficiaries as set forth in this certificate.
ARE POLICY CHANGES LIMITED?
Currently, the frequency of policy changes are not limited. However, we reserve
the right to limit the number of policy changes to one per certificate year and
to restrict such changes in the first certificate year. For this purpose,
changes include increases or decreases in the face amount of insurance.
MHC-94-18671 Rev. 1-95 Minnesota Life 21
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A SMOKER DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
---- ---- ---- ---- ---- ----
NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18671 Rev. 1-95 Minnesota Life 22
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-SMOKER BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
---- ---- ---- ---- ---- ----
UNI-SMOKERS UNI-SMOKERS UNI-SMOKERS
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18671 Rev. 1-95 Minnesota Life 23
<PAGE>
MINNESOTA LIFE
400 Robert Street North . St. Paul, Minnesota 55101-2098
VARIABLE GROUP UNIVERSAL LIFE INSURANCE . VARIABLE DEATH BENEFIT
<PAGE>
================================================================================
MINNESOTA LIFE CERTIFICATE SUPPLEMENT (WAIVER AGREEMENT)
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company 400 Robert Street North St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This is issued in consideration of your application and the timely payment of
the additional required premium. The provisions summarized in this supplement
are subject in every respect to the group policy and amendments thereto.
WHAT DOES THE WAIVER OF DEDUCTION BENEFIT PROVIDE?
If you become totally and permanently disabled, as hereinafter defined, while
under age 60, upon receipt of due proof of such disability, your insurance
(including all applicable riders) under the group policy will be continued in
force, subject to the following provisions and without payment of premiums for
you during the uninterrupted continuance of such total and permanent disability.
WHAT IS "TOTAL" DISABILITY?
Total disability is a disability which occurs while your insurance is in force
and results from an accidental injury or a disease that continuously prevents
you from engaging in an occupation. You must be under the care of a licensed
physician other than yourself. During the first 24 months of total disability,
"occupation" means your regular occupation. After 24 months, it means any
occupation for which you are reasonably fitted by education, training or
experience.
Your total and irrevocable loss of the following shall be considered total
disability even if you engage in an occupation:
1. the sight of both eyes; or
2. the use of both hands; or
3. the use of both feet; or
4. the use of one hand and one foot.
WHAT IS "PERMANENT" DISABILITY?
Total disability will be considered permanent only after it has exited
continuously for at least six months.
HOW LONG WILL INSURANCE BE CONTINUED?
If you become totally and permanently disabled, insurance will be continued;
1. until your 95th birthday; or
2. until the date you are no longer totally and permanently disabled; or
3. until the date you terminate or surrender your insurance;
MHC-94-18676 Minnesota Life 1
<PAGE>
whichever occurs first.
WHAT WILL BE CONSIDERED DUE PROOF OF DISABILITY?
You must furnish evidence satisfactory to us that your total disability:
1. commenced while insurance on your life under the group policy was in force;
and
2. commenced before your 60th birthday; and
3. was continuous for six months or more.
We will, from time to time, also require additional proof satisfactory to us
that you continue to be totally and permanently disabled. We may also required
you to submit to one or more medical examinations at our expense. However, we
will not require a medical examination of you more frequently than once a year
if the total disability has continued for two years.
ARE THERE ANY LIMITATIONS?
This benefit will not be effective if your total disability results directly
from intentionally self-inflicted injuries or from an act of war while you are
serving in the military, naval or air forces of any country at war, declared or
undeclared.
WHEN MUST WE BE NOTIFIED?
We must receive written notice of your total disability at our home office:
1. while you are living and totally disabled; and
2. not later than one year after the termination of your insurance under the
group policy; and
3. within one year of the date you request as the date for the commencement of
this benefit.
However, the failure to give this notice within the time provided will not
invalidate the claim if it is shown that notice was given as soon as reasonably
possible.
WHAT IS YOUR COST FOR THIS BENEFIT?
Your cost for this benefit is shown on the specifications page attached to your
certificate.
WHAT IF YOU INSURANCE UNDER THE GROUP POLICY LAPSES?
If your insurance lapses before notice of your total and permanent disability is
received at our home office, your insurance will be continued only if the notice
is received within one year after your insurance lapses. Also, the total
disability must have commenced prior to the date the net cash value became zero
or during the grace period allowed.
WHEN IS THE BENEFIT UNDER THIS AGREEMENT INCONTESTABLE?
This agreement is subject to the incontestability provision of the group policy
for each insured.
CAN INSURANCE THAT WAS CONTINUED UNDER THIS AGREEMENT BE CONVERTED?
MHC-94-18676 Minnesota Life 2
<PAGE>
Yes. Insurance under the group policy may be converted as set forth in your
certificate during the insured's lifetime and within 31 days after the insured
ceases to be totally and permanently disabled.
IS THIS BENEFIT RETROACTIVE?
Yes. The cost of insurance, cost of riders, and administration fees falling due
before we approve the insured's total disability claim will be deducted from
your account value. If the claim is approved, those charges which were deducted
after the insured became totally and permanently disabled will be credited to
your account value.
WILL YOUR ACCOUNT BE CREDITED WITH PREMIUM CONTRIBUTIONS AS A RESULT OF THIS
BENEFIT?
No. Except for interest which accrues on the account value, the account value
will not increase whole insurance is being continued under this agreement.
Nothing contained herein will prohibit you from paying premiums.
This agreement is effective as of the policy date.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
MCH-94-18676 Minnesota Life 3
<PAGE>
EX.99A5H
================================================================================
MINNESOTA LIFE CERTIFICATE SUPPLEMENT (CHILDREN'S BENEFIT)
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This supplement is issued in consideration for your application for children's
coverage and for the payment of the additional monthly charge. The provisions
summarized in this supplement are subject to every term, condition, exclusion,
limitation and provision of the group policy as amended, unless otherwise
expressly provided for herein.
WHAT DOES THIS SUPPLEMENT PROVIDE?
This supplement provides life insurance on the lives of your eligible children.
WHAT MEMBERS OF YOUR FAMILY ARE ELIGIBLE FOR CHILDREN'S COVERAGE?
The following members of your family are eligible for insurance under this
supplement:
Your unmarried child or children, including stepchildren living in your
household and children legally adopted, who
(i) are between the ages of 14 days and 23 years; and
(ii) are dependent upon you for financial support.
Any child who, subsequent to your certificate effective date, meets the
requirements of this provision will become insured on the date he or she so
qualifies.
DEATH BENEFIT
- -------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED CHILD?
The amount of life insurance on each insured child is shown on the
specifications page attached to your certificate.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt of written proof satisfactory to us
that a child insured under this supplement died. All payments by us are payable
at our home office. Proof of any claim under this supplement must be submitted
in writing to our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this supplement will be paid to you.
MHC-94-18679 Minnesota Life 1
<PAGE>
ADDITIONAL INFORMATION
- ----------------------
WHEN DOES INSURANCE ON YOUR ELIGIBLE CHILDREN BECOME EFFECTIVE?
Insurance on your eligible children becomes effective when your completed
application for children's coverage is approved by us; however, in no event will
insurance on your eligible children be effective before your insurance under the
group policy is effective.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS SUPPLEMENT?
The monthly cost to you for insurance under this supplement is shown on the
specifications page attached to your certificate.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this supplement will be charged to your account.
WHEN DOES INSURANCE ON AN INSURED CHILD TERMINATE?
Insurance on the life of a child insured under this supplement will terminate on
the earliest of:
(1) the date you request that insurance on your eligible children be
terminated:
(2) the date the child is no longer eligible for insurance under this
supplement;
(3) the date you are no longer insured under the group policy.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED CHILD?
No. The insurance on an insured child will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18679 Minnesota Life 2
<PAGE>
================================================================================
EX99.A5I
MINNESOTA LIFE CERTIFICATE SUPPLEMENT
(ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT)
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This supplement is issued in consideration for your application for accidental
death and dismemberment coverage and for the payment of the additional monthly
charge. The provisions summarized in this supplement are subject to every term,
condition, exclusion, limitation and provision of the group policy as amended,
unless otherwise expressly provided for herein.
WHAT DOES THIS SUPPLEMENT PROVIDE?
This supplement provides an accidental death and dismemberment benefit which is
subject to all of the provisions of the group policy and this supplement.
"You" as used in this supplement, means the insured person named on the
specifications page attached to your certificate who applied for accidental
death and dismemberment insurance.
ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
- ------------------------------------------
WHEN WILL THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT BE PAYABLE?
We will pay the accidental death and dismemberment benefit upon receipt of
written proof satisfactory to us that you died or suffered dismemberment as a
result of an accidental injury. All payments by us are payable at our home
office. Proof of any claim under this supplement must be submitted in writing to
our home office.
The proceeds will be paid in a single sum. We will pay interest on the proceeds
from the date of your death or dismemberment until the date of payment. Interest
will be at an annual rate determined by us.
WHAT DOES DEATH OR DISMEMBERMENT BY ACCIDENTAL INJURY MEAN?
Death or dismemberment by accidental injury as used in this supplement means
that your death or dismemberment results, directly and independently of all
other causes, from an accidental drowning or from an accidental injury which was
unintended, unexpected, and unforeseen. The injury must occur while your
coverage under this supplement is in force. Your death or dismemberment must
occur within 180 days after the date of the injury. In no event will we pay the
accidental death or dismemberment benefit where your death or dismemberment
results from or is caused, directly or indirectly, by any of the following:
(1) suicide whether sane or insane;
(2) your commission of a felony;
MHC-94-18680 Minnesota Life 1
<PAGE>
(3) bodily or mental infirmity, illness or disease;
(4) drugs, poisons, gases or fumes, voluntarily taken, administered, absorbed,
inhaled, ingested or injected, unless administered on the advice of a
physician;
(5) bacterial infection, other than infection occurring simultaneously with,
and as a result of, the accidental injury;
(6) travel or flight in or on, or descent from or with, any kind of military
aircraft;
(7) war or any act of war whether declared or undeclared.
WHAT IS THE AMOUNT OF THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT?
The amount of your benefit is as listed below.
Life....................................................Face Amount of Insurance
Both Hands or Both Feet or Sight of Both Eyes...........Face Amount of Insurance
One Hand and One Foot...................................Face Amount of Insurance
One Foot and Sight of One Eye...........................Face Amount of Insurance
One Hand and Sight of One Eye...........................Face Amount of Insurance
Sight of One Eye............................One-half of Face Amount of Insurance
One Hand or One Foot........................One-half of Face amount of Insurance
Your Face Amount of Insurance is shown on the specifications page attached to
your certificate. Loss of hands or feet means complete severance at or above the
wrists or ankle joints. Loss of sight means the entire and irrecoverable loss of
sight. Your dismemberment must result from a single accident. Benefits are not
cumulative over successive accidents.
TO WHOM WILL WE PAY THE PROCEEDS?
We will pay death proceeds to the beneficiary or beneficiaries who are named in
your application unless you subsequently change the beneficiary. In that event,
we will pay death proceeds to the beneficiary named in your last change of
beneficiary request. Proceeds for other losses shall be paid to you.
ADDITIONAL INFORMATION
- ----------------------
WHEN DOES INSURANCE UNDER THIS SUPPLEMENT BECOME EFFECTIVE? Insurance under this
supplement becomes effective when your completed application for accidental
death and dismemberment coverage is approved by us and the first premium is
paid; however, in no event will insurance provided by this supplement be
effective before your certificate effective date as shown on the specifications
page attached to your certificate.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS SUPPLEMENT?
MHC-94-18680 Minnesota Life 2
<PAGE>
The monthly cost to you for insurance under this supplement is shown on the
specifications page attached to your certificate.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this supplement will be charged to your account.
WHEN DOES INSURANCE UNDER THIS SUPPLEMENT TERMINATE?
Insurance under this supplement will automatically end on the earliest of the
following dates:
(1) when any premium remains unpaid after the end of the grace period; or
(2) when the group policy is surrendered, matures or ends; or
(3) on the last day for which premiums have been paid following your notice
of termination of coverage provided by this supplement; or
(4) on your 70th birthday; or
(5) when we pay a claim to you under this rider.
WHEN IS THE BENEFIT UNDER THIS SUPPLEMENT INCONTESTABLE?
Coverage provided by this supplement is subject to the incontestability
provision of the group policy.
WILL ACCOUNT VALUES ACCUMULATE UNDER THIS SUPPLEMENT?
No. Your insurance under this supplement will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18680 Minnesota Life 3
<PAGE>
================================================================================
MINNESOTA LIFE ACCELERATED BENEFITS AGREEMENT
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company 400 Robert Street North St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This agreement amends the group policy to which it is attached and is subject to
all its terms and conditions.
WHAT DOES THIS AGREEMENT PROVIDE?
This agreement provides for the accelerated payment of the death benefits
provided under the group policy.
If the insured has a terminal condition, as defined in this agreement, the
insured may request an accelerated benefit. If we agree to pay an accelerated
benefit, the cash values, loan values and the death benefit under the insured's
certificate will be reduced.
DEFINITIONS
- -----------
When we use the following words, this is what we mean:
DEATH BENEFIT
The face amount of the insured's certificate less any existing loans or
indebtedness under the certificate and less any term insurance provided by an
additional benefit agreement.
ACCELERATED BENEFIT
The amount of the death benefit we will pay if the insured is eligible under
this agreement. We will calculate the accelerated benefit amount by multiplying
the death benefit by the accelerated benefit factor.
PHYSICIAN
An individual who is licensed to practice medicine or treat illness in the state
in which treatment is received. This does not include the insured, or a member
of the insured's immediate family.
IMMEDIATE FAMILY
The insured's spouse, child, parent, grandparent, grandchild, brothers and
sisters and their spouses.
TERMINAL CONDITION
- ------------------
WHAT IS A TERMINAL CONDITION?
MHC-94-18677 Minnesota Life 1
<PAGE>
A condition caused by sickness or accident which directly results in a life
expectancy of twelve months or less.
WHAT EVIDENCE DO WE REQUIRE OF THE INSURED'S TERMINAL CONDITION?
We must be given evidence that satisfies us that the insured's life expectancy,
because of sickness or accident, is twelve months or less. That evidence must
include certification by a licensed physician. We reserve the right to ask for
independent medical verification of a terminal condition.
PAYMENT OF ACCELERATED BENEFIT
- ------------------------------
HOW DO WE CALCULATE THE ACCELERATED BENEFIT FACTOR?
When we calculate this factor, we will consider the insured's age and sex, and
the option applied for. We will also base our calculation on certain
assumptions, which we may change from time to time, including but not limited to
assumptions about:
1. expected future premiums; and
2. the insured's life expectancy.
HOW DO WE CALCULATE THE ACCELERATED BENEFIT?
We will multiply the death benefit by the accelerated benefit factor to
determine the accelerated benefit available.
IS THERE A PROCESSING CHARGE?
Yes. We will subtract a processing charge of up to $150 from the accelerated
benefit before we pay that benefit.
WHAT ARE THE CONDITIONS FOR THE PAYMENT OF AN ACCELERATED BENEFIT?
We will consider the payment of an accelerated benefit, subject to all of the
following conditions:
1. Coverage must be in force other than as extended term insurance and all
premiums due must be fully paid.
2. Application must be made in writing and in a form which is satisfactory to
us. We will tell an applicant what form is required.
3. The certificate must not be assigned.
4. The certificate must not have an irrevocable beneficiary.
IS THE REQUEST FOR AN ACCELERATED BENEFIT VOLUNTARY?
Yes. An accelerated benefit under this agreement is not intended to cause the
insured to involuntarily reduce the death proceeds ultimately payable to the
named beneficiary. An accelerated benefit will be made available on a voluntary
basis only. Therefore:
MHC-94-18677 Minnesota Life 2
<PAGE>
1. If an insured is required by law to use this option to meet the claims of
creditors, whether in bankruptcy or otherwise, the insured is not eligible
for this benefit.
2. If an insured is required by a government agency to use this option in order
to apply for, obtain, or keep a government benefit or entitlement, the
insured is not eligible for this benefit.
HOW WILL WE PAY THE ACCELERATED BENEFIT?
We will pay the accelerated benefit in one lump sum or in any other mutually
agreeable manner.
IS THERE A MINIMUM OR MAXIMUM DEATH BENEFIT FOR AN ACCELERATED BENEFIT?
Yes. We reserve the right to set a minimum death benefit to be eligible for an
accelerated benefit under this agreement. If we do so, it will be at least
$10,000.
The maximum death benefit to be eligible for an accelerated benefit is
$1,000,000.
WHAT IS THE EFFECT ON AN INSURED'S COVERAGE OF THE RECEIPT OF AN ACCELERATED
BENEFIT?
If an insured elects to receive accelerated benefits which total the entire
accelerated benefit available under this agreement, the insured's coverage and
all other benefits under the certificate based on the insured's life will end.
Any insurance under an insurd's certificate on the life of someone other than
the insured will stay in effect; we will waive all future premiums for that
insurance, subject to all applicable provisions of the insured's coverage and of
any riders thereto.
DOES AN INSURED HAVE TO TAKE THE ENTIRE ACCELERATED BENEFIT?
No. The insured may choose to receive a partial accelerated benefit. If he or
she does so, the insured's remaining coverage will stay in force.
The insured may reapply or the payment of the remaining accelerated benefit at
any time. However, we may ask for further satisfactory evidence that the insured
meets all requirements for the accelerated benefit. We reserve the right to
charge an additional processing charge.
If a partial accelerated benefit is chosen, coverage will remain in force and
premiums will be reduced. The face amount, cash values and outstanding loans
under the certificate will be reduced. The face amount, cash value and
outstanding loans under the certificate will be reduced in the same proportion
as the reduction in the death benefit resulting from receipt of accelerated
benefits.
If an insured elects to receive only a part of the accelerated benefit amount
available under this agreement, the remaining death benefit under the
certificate must be at least $25,000.
TO WHOM WILL WE PAY ACCELERATED BENEFITS?
All accelerated benefits will be paid to the insured unless the insured validly
assign them otherwise. If the insured dies before all payments have been made,
we will pay the remainder to
MHC-94-18677 Minnesota Life 3
<PAGE>
the beneficiary under the certificate in one lump sum. The one sum we pay will
be the present value of the payments that remain, using the interest rate we use
to determine the payments.
DO WE HAVE THE RIGHT TO OBTAIN INDEPENDENT MEDICAL VERIFICATION?
Yes. We retain the right to have the insured medically examined at our own
expense to verify the insured's medical condition. We may do this as often as
reasonably required while accelerated benefits are being considered or paid.
TERMINATION OF AGREEMENT
- -------------------------
WHEN DOES THIS AGREEMENT TERMINATE?
This agreement will end at the earliest of:
1. the date any premium due under the insured's certificate remains unpaid at
the end of the grace period; or
2. the date we receive written request to cancel this agreement; or
3. the date an insured's certificate matures, is surrendered, terminated or
continued in force as extended term or reduced paid-up insurance; or
4. the date of the insured's death; or
5. when the group policy is surrendered, matures or ends.
This agreement is effective as of the effective date shown on the specifications
page attached to the insured's certificate.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
MHC-94-18677 Minnesota Life 4
<PAGE>
================================================================================
EX99.A5K
MINNESOTA LIFE CERTIFICATE SUPPLEMENT
ACCELERATED BENEFITS AGREEMENT
- --------------------------------------------------------------------------------
Minnesota Life Insurance Life Company.400 Robert Street North.
St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This certificate supplement amends the certificate to which it is attached and
is subject to all its terms and conditions.
WHAT DOES THIS CERTIFICATE SUPPLEMENT PROVIDE?
This certificate supplement provides for the accelerated payment of the death
benefits provided under the certificate to which it is attached.
If the insured has a terminal condition, as defined in this agreement, the
insured may request an accelerated benefit. If we agree to pay an accelerated
benefit, your cash values, loan values and the death benefit under your
certificate will be reduced.
DEFINITIONS
- -----------
When we use the following words, this is what we mean:
DEATH BENEFIT
The face amount of the insured's certificate less any existing loans or
indebtedness under the certificate and less any term insurance provided by an
additional benefit agreement.
ACCELERATED BENEFIT
The amount of the death benefit we will pay if you are eligible under this
certificate supplement. We will calculate the accelerated benefit amount by
multiplying the death benefit by the accelerated benefit factor.
PHYSICIAN
An individual who is licensed to practice medicine or treat illness in the state
in which treatment is received. This does not include you, the insured, or a
member of your or the insured's immediate family.
IMMEDIATE FAMILY
The insured's or your spouse, child, parent, grandparent, grandchild, brothers
and sisters and their spouses.
TERMINAL CONDITION
- ------------------
MHC-94-18678 Minnesota Life 1
<PAGE>
WHAT IS A TERMINAL CONDITION?
A condition caused by sickness or accident which directly results in a life
expectancy of twelve months or less.
WHAT EVIDENCE DO WE REQUIRE OF THE INSURED'S TERMINAL CONDITION?
We must be given evidence that satisfies us that the insured's life expectancy,
because of sickness or accident, is twelve months or less. That evidence must
include certification by a licensed physician. We reserve the right to ask for
independent medical verification of a terminal condition.
PAYMENT OF ACCELERATED BENEFIT
- ------------------------------
HOW DO WE CALCULATE THE ACCELERATED BENEFIT FACTOR?
When we calculate this factor, we will consider the insured's age and sex, and
the option applied for. We will also base our calculation on certain
assumptions, which we may change from time to time, including but not limited to
assumptions about:
(1) expected future premiums; and
(2) the insured's life expectancy.
HOW DO WE CALCULATE THE ACCELERATED BENEFIT?
We will multiply the death benefit by the accelerated benefit factor to
determine the accelerated benefit available.
IS THERE A PROCESSING CHARGE?
Yes. We will subtract a processing charge of up to $150 from the accelerated
benefit before we pay that benefit to you.
WHAT ARE THE CONDITIONS FOR THE PAYMENT OF AN ACCELERATED BENEFIT?
We will consider the payment of an accelerated benefit, subject to all of the
following conditions:
(1) Your certificate must be in force other than as extended term insurance
and all premiums due must be fully paid.
(2) You must make application in writing and in a form which is satisfactory
to us. We will tell you what form is required.
(3) The certificate must not be assigned.
(4) The certificate must not have an irrevocable beneficiary.
IS THE REQUEST FOR AN ACCELERATED BENEFIT VOLUNTARY?
MHC-94-18678 Minnesota Life 2
<PAGE>
Yes. An accelerated benefit under this certificate supplement is not intended to
cause you to involuntarily reduce the death proceeds ultimately payable to the
named beneficiary. An accelerated benefit will be made available on a voluntary
basis only. Therefore:
(1) If you are required by law to use this option to meet the claims of
creditor, whether in bankruptcy or otherwise, you are not eligible for
this benefit.
(2) If you are required by a government agency to use this option in order to
apply for, obtain, or keep a government benefit or entitlement, you are
not eligible for this benefit.
HOW WILL WE PAY THE ACCELERATED BENEFIT?
We will pay the accelerated benefit in one lump sum or in any other mutually
agreeable manner.
IS THERE A MINIMUM OR MAXIMUM DEATH BENEFIT FOR AN ACCELERATED BENEFIT?
Yes. We reserve the right to set a minimum death benefit to be eligible for an
accelerated benefit under this certificate supplement. If we do so, it will be
at least $1,000.
The maximum death benefit to be eligible for an accelerated benefit is
$1,000,000.
WHAT IS THE EFFECT ON YOUR CERTIFICATE OF THE RECEIPT OF AN ACCELERATED BENEFIT?
If an insured elects to receive accelerated benefits which total the entire
accelerated benefit available under this certificate supplement, your
certificate and all other benefits under your certificate based on the
insured's life will end. Any insurance under your certificate on the life of
someone other than the insured will stay in effect; we will waive all future
premiums for that insurance, subject to the provision of your certificate and of
any riders thereto.
DO YOU HAVE TO TAKE THE ENTIRE ACCELERATED BENEFIT?
No. You may choose to receive a partial accelerated benefit. If you do so, your
certificate will stay in force.
You may reapply for the payment of the remaining accelerated benefit at any
time. However, we may ask for further satisfactory evidence that the insured
meets all requirements for the accelerated benefit. We reserve the right to
charge an additional processing charge.
If you choose a partial accelerated benefit, your certificate will remain in
force and premiums will be reduced. The face amount, cash values and outstanding
loans of your certificate will be reduced in the same proportion as the
reduction in the death benefit resulting from your receipt of accelerated
benefits.
If you elect to receive only a part of the accelerated benefit amount available
to you under this certificate supplement, the remaining death benefit under your
certificate must be at least $25,000.
TO WHOM WILL WE PAY ACCELERATED BENEFITS?
MHC-94-18678 Minnesota Life 3
<PAGE>
All accelerated benefits will be paid to you unless you validly assign them
otherwise. If the insured dies before all payments have been made, we will pay
the remainder to the beneficiary under the certificate in one lump sum. The one
sum we pay will be the present value of the payments that remain, using the
interest rate we use to determine the payments.
DO WE HAVE THE RIGHT TO OBTAIN INDEPENDENT MEDICAL VERIFICATION?
Yes. We retain the right to have the insured medically examined at our own
expense to verify the insured's medical condition. We may do this as often as
reasonably required while accelerated benefits are being considered or paid.
TERMINATION OF AGREEMENT
- ------------------------
WHEN DOES THIS AGREEMENT TERMINATE?
This agreement will end at the earliest of:
(1) the date any premium due for your certificate remains unpaid at the end of
the grace period; or
(2) the date we receive written request to cancel this certificate supplement;
or
(3) the date your certificate matures, is surrendered, terminated or
continued in force as extended term or reduced paid-up insurance; or
(4) the date of the insured's death; or
(5) when the group policy is surrendered, matures or ends.
This certificate supplement is effective as of the effective date on the
specifications page attached to your certificate.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18678 Minnesota Life 4
<PAGE>
================================================================================
EX99.A5L
MINNESOTA LIFE POLICY RIDER CHILDREN'S BENEFIT
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This rider amends the group policy to which it is attached, and is subject to
every term, condition, exclusion, limitation and provision of the group policy
unless otherwise expressly provided for herein.
WHAT IS THE PURPOSE OF THIS RIDER?
This rider provides life insurance on the lives of the primary insured's
eligible children. To obtain children's coverage under this rider, the
primary insured must apply for children's coverage and pay an additional monthly
charge.
WHAT MEMBERS OF THE PRIMARY INSURED'S FAMILY ARE ELIGIBLE FOR CHILDREN'S
COVERAGE?
The following members of the primary insured's family are eligible for insurance
under this rider:
The primary insured's unmarried child or children, including stepchildren living
in his or her household and children legally adopted, who
(i) are between the ages of 14 days and 23 years; and
(ii) are dependent upon the primary insured for financial support.
Any child who, subsequent to the primary insured's certificate effective date,
meets the requirements of this provision will become insured on the date he or
she so qualifies.
DEATH BENEFIT
- -------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED CHILD?
The amount of life insurance on each insured child is shown on the
specifications page attached to the primary insured's certificate.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt of written proof satisfactory to us
that a child insured under the rider died. All payments by us are payable at our
home office. Proof of any claim under this rider must be submitted in writing to
our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this rider will be paid to the primary insured.
MHC-94-18681 Minnesota Life 1
<PAGE>
ADDITIONAL INFORMATION
- -----------------------
WHEN DOES INSURANCE ON THE PRIMARY INSURED'S ELIGIBLE CHILDREN BECOME EFFECTIVE?
Insurance on the primary insured's eligible children becomes effective when the
primary insured's completed application for children's coverage is approved by
us; however, in no event will insurance on the primary insured's eligible
children be effective before the primary insured's insurance under the group
policy is effective.
WHAT IS THE MONTHLY COST TO THE PRIMARY INSURED FOR INSURANCE UNDER THIS RIDER?
The monthly cost to the primary insured for insurance under this rider is shown
on the specifications page attached to the insured's certificate.
WHEN WILL THE PRIMARY INSURED'S ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this rider will be charged to the primary insured's account.
WHEN DOES INSURANCE ON AN ELIGIBLE CHILD TERMINATE?
Insurance on the life of a child insured under this rider will terminate on the
earliest of:
1. the date the primary insured requests that insurance on his or her eligible
children be terminated;
2. the date the child is no longer eligible for insurance under this rider;
3. the date the primary insured is no longer insured under the group policy.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED CHILD?
No. The insurance on an insured child will not accumulate account values.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
MHC-94-18681 Minnesota Life 2
<PAGE>
================================================================================
EX99.A5M
MINNESOTA LIFE POLICY RIDER
ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This rider amends the group policy to which it is attached, and is subject to
every term, condition, exclusion, limitation and provision of the group policy
unless otherwise expressly provided for herein.
WHAT DOES THIS RIDER PROVIDE?
This rider provides an accidental death and dismemberment benefit which is
subject to all of the provisions of the group policy and this rider.
ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT
- ------------------------------------------
WHEN WILL THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT BE PAYABLE?
We will pay the accidental death and dismemberment benefit upon receipt of
written proof satisfactory to us that the insured died or suffered dismemberment
as a result of an accidental injury. All payments by us are payable at our home
office. Proof of any claim under this rider must be submitted in writing to our
home office.
The proceeds will be paid in a single sum. We will pay interest on the proceeds
from the date of the insured's death or dismemberment until the date of payment.
Interest will be at an annual rate determined by us.
WHAT DOES DEATH OR DISMEMBERMENT BY ACCIDENTAL INJURY MEAN?
Death or dismemberment by accidental injury as used in this rider means that the
insured's death or dismemberment results, directly and independently of all
other causes, from an accidental drowning or from an accidental injury which was
unintended, unexpected, and unforeseen. The injury must occur while the
insured's coverage under this rider is in force. The insured's death or
dismemberment must occur within 180 days after the date of the injury. In no
event will we pay the accidental death or dismemberment benefit where the
insured's death or dismemberment results from or is caused directly or
indirectly by any of the following:
1. suicide, whether sane or insane;
2. the insured's commission of a felony;
3. bodily or mental infirmity, illness or disease;
4. drugs, poisons, gases or fumes, voluntarily taken, administered, absorbed,
inhaled, ingested or injected, unless administered on the advice of a
physician;
5. bacterial infection, other than infection occurring simultaneously with, and
as a result of, the accidental injury;
MHC-94-18682 Minnesota Life 1
<PAGE>
6. travel or flight in or on, or descent from or with, any kind of military
aircraft;
7. war or any act of war, whether declared or undeclared.
WHAT IS THE AMOUNT OF THE ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT?
The amount of the insured's benefit is as listed below.
FOR LOSS OF
Life....................................................Face Amount of Insurance
Both Hands or Both Feet or Sight of Both Eyes...........Face Amount of Insurance
One Hand and One Foot...................................Face Amount of Insurance
One Foot and Sight of One Eye...........................Face Amount of Insurance
One Hand and Sight of One Eye...........................Face Amount of Insurance
Sight of One Eye............................One-half of Face Amount of Insurance
One Hand or One Foot........................One-half of Face Amount of Insurance
The insured's Face Amount of Insurance is shown on the specifications page
attached to the insured's certificate. Loss of hands or feet means complete
severance at or above the writs or ankle joints. Loss of sight means the entire
and irrevocable loss of sight. An insured's dismemberment must result from a
single accident. Benefits are not cumulative over successive accidents.
TO WHOM WILL WE PAY THE PROCEEDS?
We will pay death proceeds to the beneficiary or beneficiaries who are named in
the insured's application unless the insured subsequently changes the
beneficiary. In that event, we will pay death proceeds to the beneficiary named
in the insured's last change of beneficiary request. Proceeds for other losses
shall be paid to the insured.
ADDITIONAL INFORMATION
- ----------------------
WHEN DOES INSURANCE UNDER THIS RIDER BECOME EFFECTIVE?
Insurance under this rider becomes effective when the insured's complete
application for accidental death and dismemberment coverage is approved by us
and the first premium is paid; however, in no event will insurance provided by
this rider be effective before the insured's insurance under the group policy is
effective.
WHAT IS THE MONTHLY COST TO THE INSURED FOR INSURANCE UNDER THIS RIDER?
The cost of this benefit for each insured is shown on the specifications page
attached to the insured's certificate.
WHEN WILL INSURED'S ACCOUNT BE CHARGED?
On the first day of each policy month the monthly cost for insurance under this
rider will be charged to the insured's account.
MHC-94-18682 Minnesota Life 2
<PAGE>
WHEN DOES INSURANCE UNDER THIS RIDER TERMINATE?
The insured's coverage under this rider will automatically end on the earliest
of the following dates:
(1) when any premium remains unpaid after the end of the grace period; or
(2) when the group policy is surrendered, matures or ends; or
(3) on the last day for which premiums have been paid following the insured's
notice of termination of coverage provided under this rider; or
(4) on the insured's 70th birthday; or
(5) when we pay a claim to you under this rider.
WHEN IS THE BENEFIT UNDER THIS RIDER INCONTESTABLE?
Coverage provided by this rider is subject to the incontestability provision of
the group policy for each insured.
WILL ACCOUNT VALUES ACCUMULATE UNDER THIS RIDER?
No. The insured's insurance under this rider will not accumulate values.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18682 Minnesota Life 3
<PAGE>
EX99.A5N
================================================================================
MINNESOTA LIFE POLICY RIDER WAIVER AGREEMENT
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------
This agreement amends the group policy to which it is attached, and is issued in
consideration of the required premium. This agreement provides a waiver of
charges for those insured employees whose employer selected the waiver of
premium benefit on its application. This agreement is subject to every term,
condition, exclusion, limitation, and provision of the group policy unless
otherwise expressly provided for herein.
WHAT DOES THE WAIVER OF PREMIUM BENEFIT PROVIDE?
If an insured employee becomes totally and permanently disabled, as hereinafter
defined, while under age 60, upon receipt of due proof of such disability, the
insured employee's insurance under the group policy (including applicable
riders) will be continued in force, subject to the following provisions and
without payment of premiums for such insured employee, during the uninterrupted
continuance of such total and permanent disability.
WHAT IS "TOTAL" DISABILITY?
Total disability is a disability which occurs while the insured employee's
insurance is in force and which results from an accidental injury or a disease
that continuously prevents the insured employee from engaging in an occupation.
The insured employee must be under the care of a licensed physician other than
the insured employee. During the first 24 months of total disability,
"occupation" means the insured employee's regular occupation. After 24 months,
it means any occupation for which the insured employee is reasonably fitted by
education, training or experience.
The insured employee's total and irrevocable loss of the following shall be
considered total disability even if the insured employee engages in an
occupation:
1. the sight of both eyes; or
2. the use of both hands; or
3. the use of both feet; or
4. the use of one hand and one foot.
WHAT IS "PERMANENT" DISABILITY?
Total disability will be considered permanent only after it has existed
continuously for a least six months.
HOW LONG WILL INSURANCE BE CONTINUED?
If the insured employee becomes totally and permanently disabled, insurance will
be continued:
MHC-94-18683 Minnesota Life 1
<PAGE>
1. until the insured employee's 95th birthday; or
2. until the date the insured employee is no longer totally and permanently
disabled; or
3. until the date the insured employee terminates or surrenders his or her
insurance; or
4. until the date the group policy terminates;
whichever occurs first.
However, the termination of the group policy shall have no effect on the claim
of any insured who is disabled, as set forth in this agreement, at the time the
group policy terminates.
WHAT WILL BE CONSIDERED DUE PROOF OF DISABILITY?
The insured employee must furnish evidence satisfactory to us that his or her
total disability:
1. commenced while his or her insurance under the group policy was in force;
and
2. commenced before the insured employee's 60th birthday; and
3. was continuous for six months or more.
We will, from time to time, also require additional proof satisfactory to us
that the insured employee continues to be totally and permanently disabled. We
may also require the insured employee to submit to one or more medical
examinations at our expense. However, we will not require a medical examination
of the insured employee more frequently than once a year if the total disability
has continued for two years.
ARE THERE ANY LIMITATIONS?
Insurance will not be continued if the insured employee's total disability
results from intentionally self-inflicted injuries or from an act of war while
the insured employee is serving in the military, naval or air forces of any
country at war, declared or undeclared.
WHEN MUST WE BE NOTIFIED?
We must receive written notice of the insured employee's total disability at our
home office:
1. while the insured employee is living and totally disabled; and
2. not later than one year after the termination of the insured employee's
insurance under the group policy; and
3. within one year of the date the insured employee requests as the date for
the commencement of this benefit.
However, the failure to give this notice within the time provided will not
invalidate the claim if it is shown that notice was given as soon as reasonably
possible.
WHAT IS THE INSURED EMPLOYEE'S COST FOR THIS BENEFIT?
The cost of the benefit is included in the planned monthly premium amount shown
on the specifications page attached to the insured's certificate.
MHC-94-18683 Minnesota Life 2
<PAGE>
WHAT IF THE INSURED EMPLOYEE'S INSURANCE UNDER THE GROUP POLICY LAPSES?
If the insured employee's insurance lapses before notice of the insured
employee's total disability is received at our home office, the insured
employee's insurance will be continued only if the notice is received within one
year after his or her insurance lapses. Also, the total disability must have
commenced prior to the date the net cash value became zero or during the grace
period allowed.
WHEN IS THE BENEFIT UNDER THIS AGREEMENT INCONTESTABLE?
This agreement is subject to the incontestability provision for each insured
employee.
CAN INSURANCE THAT WAS CONTINUED UNDER THIS AGREEMENT BE CONVERTED?
Yes. Insurance under this group policy may be converted during the insured
employee's lifetime and within 31 days after he or she ceases to be totally and
permanently disabled.
IS THIS BENEFIT RETROACTIVE?
Yes. The cost of insurance, cost of riders, and administration fees falling due
before we approve the insured employee's total and permanent disability claim
will be deducted from his or her account value. If the insured employee's claim
for benefits under this agreement is approved, those charges which were deducted
after the total and permanent disability began will be credited to the insured
employee's account value.
WILL THE INSURED EMPLOYEE'S ACCOUNT BE CREDITED WITH PREMIUM CONTRIBUTIONS AS A
RESULT OF THIS BENEFIT?
No. Except for interest which accrues on the account value, the account value
will not increase while insurance is being continued under this agreement.
Nothing contained herein will prohibit an insured employee from making premium
contributions.
This agreement is effective as of the effective date shown on the insured
employee's profile page.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18683 Minnesota Life 3
<PAGE>
EX99.A5O
================================================================================
MINNESOTA LIFE INDIVIDUAL POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
READ YOUR POLICY CAREFULLY
- --------------------------
This is a legal contract between you and us. We promise to pay the benefits
provided by this policy, subject to the provisions of this policy. We make this
promise and issue this policy in consideration of: (1) the application for this
policy; and (2) the payment of the required premiums.
Minnesota Life Insurance Company is a subsidiary of Minnesota Mutual Companies,
Inc., a mutual insurance holding company. The owner is a member of Minnesota
Mutual Companies, Inc., which holds its annual meetings on the first Tuesday in
March of each year at 3 p.m. local time. The meetings are held at 400 Robert
Street North, St. Paul, Minnesota 55101-2098.
RIGHT TO CANCEL
- ---------------
It is important to us that you are is satisfied with this policy after it is
issued. If you are not satisfied with it, you may return the policy to us or our
agent within 10 days after you receive it. You may also cancel this policy by
delivering or mailing a written notice or sending a telegram to Minnesota Life
Insurance Company (Minnesota Life), 400 Robert Street North, St. Paul, Minnesota
55101-2098 and returning the policy before midnight of the 10th day after you
received this policy. Notice given by mail and return of the policy by mail are
effective on being postmarked, properly addressed and postage prepaid. If you
return this policy, you will receive, within 7 days of the date we receive a
notice of cancellation, a full refund of any premiums you have paid. Upon
cancellation of this policy, it will be void from the beginning as if it never
had been issued.
Signed for Minnesota Life Insurance Company at St. Paul, Minnesota on the policy
date.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
THE INITIAL DEATH BENEFIT WILL EQUAL THE FACE AMOUNT SHOWN IN THIS POLICY.
THE ACCOUNT VALUES UNDER THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE
OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. THERE IS NO
GUARANTEED MINIMUM ACCOUNT VALUE.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <S> <C>
Definitions.....................2 Separate Account......................10
General Information.............4 Account Values........................13
Death Benefit...................5 Policy Loans..........................14
Payment of Proceeds.............6 Termination...........................16
Premiums........................8 Additional Information................17
Policy Charges..................8
</TABLE>
VARIABLE UNIVERSAL LIFE INSURANCE . LEVEL DEATH BENEFIT . NONPARTICIPATING
MHC-94-18665 Rev. 1-95 Minnesota Life 1
<PAGE>
Definitions
- -----------
When we use the following words, this is what we mean:
account value
The sum of the values under the separate account, the guaranteed account and the
loan account of this policy. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
actively at work
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least _____ hours a week.
A person is not considered actively at work if not at work due to illness or
injury.
age
The insured's age at last birthday.
eligible insured
A person is eligible for insurance under this policy if the person:
1. is under age _____; and
2. was actively at work for each of the weeks immediately prior to the date
your application for coverage under this policy is approved by us, or are
legally married to an eligible insured; and
3. is identified by the plan sponsor as a person who is eligible to be insured
under the plan sponsor's employee benefit plan.
face amount
The minimum death benefit under this policy so long as the insurance coverage
under this policy remains in force.
fund
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
general account
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
guaranteed account value
MHC-94-18665 Rev. 1-95 Minnesota Life 2
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Assets other than the loan account value that are held in our general account
and attributable to this policy, and others of its class.
insured
An eligible insured who becomes insured under this policy.
lapse
A lapse of this policy means the insurance coverage under this policy has
terminated due to non-payment of a premium during its grace period in an amount
that, after the deduction of percentage-of-premium charges, is sufficient to
cover the monthly deductions due at the time we provide notice of lapse.
loan account
The portion of the general account which is attributable to loans under this
policy. A loan account value is the sum of all outstanding loans and accrued
loan interest credited under this policy.
maturity date
The 95th birthday of the insured.
monthly anniversary
The same date in each succeeding month as the policy date.
net cash value
The account value under this policy, less any outstanding policy loans and
accrued policy loan interest charged and any charges over due. It is the amount
you may obtain through surrender of this policy.
net premium
The premium less charges assessed against the premium. The net premium is the
amount or amounts which are allocated to the guaranteed account and/or the
separate account on your behalf.
plan sponsor
The employer, association, or organization which makes this insurance available
to its eligible insureds.
policy anniversary
The same day in each succeeding year as the policy date.
policy date
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The date coverage under this policy may become effective. The policy date is
shown on the specifications page attached to this policy.
separate account
The separate investment account created by us to receive and invest net premiums
received for this policy. The particular Separate Account for this policy is
the Variable Universal Life Account. We established this separate account for
this class of policies under Minnesota Law. The separate account is composed of
several sub-accounts. We own the assets of the separate account. However,
those assets not in excess of separate account liabilities are not subject to
claims arising out of any other business in which we engage.
sub-account
One or more sub-accounts, constituting the separate account.
sub-account value
The current number of sub-account units credited to your policy multiplied by
the current sub-account unit value.
unit
A measure of your interest in a sub-account of the separate account.
valuation date
Any date on which a fund is valued.
valuation period
The period between successive valuation dates measured from the time of one
determination to the next.
we, our, us
Minnesota Life Insurance Company.
you, your, policyowner
The owner of the policy, as shown in the application, unless subsequently
changed as provided for in this policy. The owner may be someone other than the
insured.
General Information
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What is your agreement with us?
This policy, your application and any supplemental application(s) contain the
entire contract between you and us. Any statements made in your application or
any supplemental application(s) will, in the absence of fraud, be considered
representations and not warranties. Also, any
MHC-94-18665 Rev. 1-95 Minnesota Life 4
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statement you or an insured made will not be used to void this policy nor defend
against a claim under this policy unless the statement is contained in the
application or any supplemental application(s).
No change or waiver of any of the provisions of this policy will be valid unless
made in writing by us and signed by our president, a vice president, our
secretary or assistant secretary. No agent or other person has the authority to
change or waive any provision of this policy.
Any additional benefit rider attached to this policy will become a part of this
policy and will be subject to all the terms and conditions of this policy unless
we state otherwise in the rider.
Can this policy be amended?
Yes. This policy may be amended at any time you and we agree to amend it. Any
amendment will be without prejudice to any claim in connection with a loss
sustained prior to the effective date of the amendment.
How do you exercise your rights under the policy?
You can exercise all the rights under this policy during an insured's lifetime
by making a written request to us. This includes the right to change the
ownership. If your policy is assigned, we will also require the written consent
of the assignee. If you have designated an irrevocable beneficiary, the written
consent of that beneficiary will also be required.
What is the effective date of this insurance?
Upon receipt of your application for insurance, the effective date of this
insurance will be the later of:
1. the date on which we approve your application; and
2. the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this policy.
Death Benefit
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What is the amount of the death benefit?
The amount of the death benefit will be determined as follows:
1. The face amount of insurance on the insured's date of death while this policy
is in force; plus
2. the amount of the cost of insurance for the portion of the policy month from
the date of death to the end of the policy month; less
3. any outstanding policy loans and accrued policy loan interest charged; less
4. any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this policy.
MHC-94-18665 Rev. 1-95 Minnesota Life 5
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We intend that this policy qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right to
either increase the face amount of insurance on the life of the insured, return
any excess net cash value or limit the amount of premium contributions we will
accept under this policy in order to maintain such qualification.
What is the face amount of insurance on the life of the insured?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this policy.
May the face amount of insurance change?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to this policy. If
an increase in the current face amount is applied for, we reserve the right to
require evidence of insurability from the insured.
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced to
less than the amount shown on the specifications page attached to this policy.
If, following a decrease in face amount, this policy would not comply with the
maximum premium limitations required by federal law, the decrease may be limited
or net cash value may be returned to the owner (at the owner's election), to the
extent necessary to meet these requirements.
When will changes in the face amount of insurance become effective?
Decreases in the face amount of insurance are effective on the monthly
anniversary on or following receipt of the written request by us. However, if
the owner requests that the decrease become effective on a specified future date
we will make the decrease effective on the policy monthly anniversary on or next
following the date requested.
Increases are effective on the monthly policy anniversary on or following the
date we approve the change, or any other date mutually agreed upon between you
and us.
When will the death benefit be paid?
We will pay interest on the face amount of insurance from the date of the
insured's death until the date of payment. We will pay interest on any charges
taken under this policy since the date of death from the date the charge was
taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of 4 percent per year compounded annually or the rate required by law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
Payment of Proceeds
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To whom will we pay the death benefit?
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We will pay the death benefit proceeds to the surviving beneficiary specified on
the application or as subsequently changed.
What happens if one or all of the beneficiaries die before the insured?
If a beneficiary dies before the insured, that beneficiary's interest in this
policy ends with that beneficiary's death. Only those beneficiaries who survive
the insured will be eligible to share in the proceeds. If no beneficiary
survives the insured or if a beneficiary is not named, we will pay the proceeds
according to the following order of priority:
1. the insured's lawful spouse, if living; otherwise,
2. the personal representative of the insured's estate.
May the owner change the beneficiary?
If the owner has reserved the right to change the beneficiary, the owner may
file a written request with us to change the beneficiary. If the owner has not
reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. Your written request will not be
effective until it is recorded in our home office records. After it has been so
recorded, it will take effect as of the date the owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
Can death benefit proceeds be paid in other than a single sum?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected only
if the payments are to be made to a natural person in that person's own right.
What are the settlement options available?
Each settlement option is paid in fixed amounts as described below. If the owner
of this policy requests a settlement option, he or she will be asked to sign an
agreement covering the election which will state the terms and conditions of the
payments. The payments do not vary with the performance of the separate account.
1. Interest Payments: Payment of interest on the proceeds at such times and
for a period as may be agreed upon between the owner of this policy and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end
of the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
2. Fixed Period Annuity: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
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3. Life Annuity: An annuity payable monthly for the lifetime of the annuitant
and ending with the last monthly payment due prior to the annuitant's death.
4. Payments of a Specified Amount: Monthly payments of a specified amount until
the proceeds and interest are fully paid.
Can a beneficiary request a payment under a settlement option?
Yes. A beneficiary may select a settlement option, but only after the insured's
death. However, an owner may provide that the beneficiary will not be permitted
to change the elected settlement option.
Premiums
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When and how often are premiums due?
A premium must be paid to put this policy in force. This initial premium must
be of an amount that, after the deduction of percentage-of-premium charges, will
cover the first month's deductions plus $20. A premium must also be paid at such
time when there is insufficient net cash value to pay the monthly deductions
necessary to keep this policy in force. Premiums paid after the initial premium
may be in any amount of $20 or greater.
Is there a grace period for the payment of premiums?
Yes. This policy has a 61-day grace period. The grace period will start on the
day we mail the owner a notice of lapse. This policy will lapse if the premium
amount specified in the notice is not paid by the end of the grace period and
the net cash value is insufficient to cover the monthly deductions. We will
mail this notice on any policy monthly anniversary date when the net cash value
for the insured under this policy is insufficient to cover the monthly
deductions. This policy of insurance will remain in effect during the 61-day
grace period. If sufficient premium is not paid by the end of the grace period,
the insured's coverage will lapse. The grace period does not apply to the first
premium payment.
What is the amount of the death benefit during the grace period?
The death benefit amount provided under this policy will be paid if death occurs
during the grace period.
Policy Charges
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What type of charges are there under this policy?
Charges under this policy are those which we assess against the premiums and the
account value under this policy and the separate account assets attributable to
this policy.
What charges are assessed against premiums?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
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1. The sales load is for distribution expenses for this class of policies.
This sales load charge shall not exceed five percent of each premium paid.
2. The federal tax charge is to compensate us for the corporate federal income
taxes that result from a sale of this policy. The federal tax charge is 1.25
percent of each premium paid if this policy is deemed to be an individual
contract under the Omnibus Budget Reconciliation Act of 1990, as amended,
and 0.25 percent if deemed a group contract under that Act.
3. The state premium tax charge is the average premium tax we pay to state and
local governments for this class of policies. This charge is currently 2
percent. The charge is not guaranteed and may be increased in the future,
but only as necessary to cover our premium taxes.
WHAT CHARGES ARE ASSESSED AGAINST THE NET CASH VALUE OF THIS POLICY?
Against the net cash value of this policy, we assess as monthly deductions: (1)
the administration charge; (2) the cost of insurance charge; and (3) the charge
for any additional benefits provided by rider. We also will assess against the
net cash value a transaction charge at the end of the day on which the
transaction occurs.
1. The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for this policy. The
maximum administration charge is $4 per month. This charge will be assessed
on the policy date and on each succeeding monthly policy anniversary.
2. The cost of insurance charge is for providing the death benefit under this
policy. The charge is calculated by multiplying the net amount at risk under
this policy by a rate which varies with the insured's age and rate class.
The rate is guaranteed not to exceed rates determined on the basis of 125
percent of the 1980 Commissioners Standard Ordinary Mortality Table. The net
amount at risk for this policy is the difference between the death benefit
and the account value. This charge will be assessed on the policy date and
on each succeeding monthly anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
3. The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
4. A transaction charge will be assessed for each partial withdrawal to cover
the administrative costs incurred in processing the partial withdrawal. The
amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between
sub-accounts. The amount charged will not exceed $10. Any transaction charge
will be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of this policy. They will
be assessed against the guaranteed account value and the separate account value
in the same proportion that those values bear to each other and, as to the
separate account value, from each sub-account in the proportion that the sub-
account value in each such sub-account bears to the separate account value.
WHAT CHARGES ARE ASSESSED AGAINST SEPARATE ACCOUNT ASSETS?
We assess a mortality and expense risk charge against the separate account
assets of this policy. We also reserve the right to charge or make provision
for income taxes payable by us based on separate account assets.
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WHAT IS THE MORTALITY AND EXPENSE RISK CHARGE?
This charge is for assuming the risks that the cost of insurance charge will be
insufficient to cover actual mortality experience and that the other charges
will not cover our expenses in connection with this class of policies. The
mortality and expense risk charge is deducted from the separate account assets
daily at an annual rate not to exceed 0.50 percent of the separate account
assets.
SEPARATE ACCOUNT
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HOW WAS THE SEPARATE ACCOUNT ESTABLISHED?
We established the separate account in accordance with certain provisions of the
Minnesota insurance law.
WHAT IS THE PURPOSE OF THE SEPARATE ACCOUNT?
The purpose of the separate account is to hold assets attributable to the
variable portion of this policy and others of its class.
WHAT SEPARATE ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is divided into sub-accounts. Those available to this
policy are listed on the specifications page attached to this policy. Net
premiums will be allocated to the various sub-accounts of the separate account
or any other sub-account which we may add in the future, as elected by the owner
of this policy. We reserve the right to add, combine or remove any sub-accounts
of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
For each sub-account, there is a fund for the investment of that sub account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we determine
it becomes inappropriate for the policies of this class, we may substitute
another fund. Substitution may be with respect to both existing policy values
and future premiums. The investment policy of the separate account may not be
changed, however, without the approval of the regulatory authorities of the
State of Minnesota. If required, that approval process will be on file with the
regulatory authorities of the state in which this policy is delivered.
WHAT CHANGES MAY WE MAKE TO THE SEPARATE ACCOUNT?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which this policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this policy, shall then mean the separate account
to which the assets are transferred. A transfer of this kind may require the
advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
MHC-94-18665 Rev. 1-95 Minnesota Life 10
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1. restrict or eliminate any voting right of owners or other persons who have
voting rights as to the separate account; and
2. combine the separate account with one or more other separate accounts; and
3. to de-register the separate account under the Investment Company Act of
1940.
HOW ARE NET PREMIUMS ALLOCATED?
They are allocated either to the guaranteed account and/or to the separate
account and its sub-accounts. Initially, the allocation elected is indicated in
the application for this policy. Allocations may be changed for future
premiums. The owner may do this by giving us a written request. A change will
not take effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least 10 percent of the net premium. We reserve the
right to restrict the allocation of premium. If we do so, no more than 50
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub
accounts. Such a delay will be for a period of 30 days after issuance of this
policy. This right will be exercised by us only when we believe economic
conditions make such a delay necessary to reduce market risk during this period.
If we exercise this right, net premiums will be allocated to the money market
sub-account until the end of that period.
WHAT IS A TRANSFER?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account.
MAY THE OWNER MAKE TRANSFERS OF AMOUNTS UNDER THIS POLICY?
Yes. Transfers from a sub-account of the separate account may be made in
writing or by telephone. For transfers out of the separate account or among
the sub-accounts of the separate account, we will credit and cancel units based
on the sub-account unit values as of the end of the valuation period during
which the owner's written or telephone request is received at our home office.
For transfers out of the guaranteed account, a dollar amount will be transferred
based on the owner's guaranteed account value at the time of transfer.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Only one transfer may be made under this policy each month. The amount to
be transferred to or from a sub-account of the separate account or the
guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less than
$250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the account
value in the sub-account from which the transfer is to be made to less than
$250, we reserve the right to include that remaining amount in the sub-account
with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to 20 percent
(or $250 if greater) of the guaranteed
MHC-94-18665 Rev. 1-95 Minnesota Life 11
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account value. Transfers to or from the guaranteed account may be limited to one
such transfer per policy year. We may further restrict transfers by requiring
that the request is received by us or postmarked in the 30-day period before or
after the last day of the policy anniversary. Requests for transfers which meet
these conditions would be effective after we approve and record them at our home
office.
HOW ARE UNITS DETERMINED?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to each
sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
HOW ARE UNITS INCREASED OR DECREASED?
The number of units of each sub-account credited to this policy will be
increased by the allocation of subsequent net premiums, policy experience
credits, loan repayments, interest credits and transfers to that sub-account.
The number of units credited to a sub-account of this policy will be decreased
by deductions to the sub-account, policy loans and loan interest charged,
transfers from that sub-account and partial surrenders from that sub-account.
The number of sub-account units will decrease to zero on this policy's
termination.
HOW IS A UNIT VALUED?
The unit value will increase or decrease on each valuation date. The amount of
any increase or decrease will depend on the net investment experience of the
sub-accounts of the separate account. The value of a unit for each sub-account
was originally set at $1.00 on the first valuation date. For any subsequent
valuation date, its value is equal to its value on the preceding valuation date
multiplied by the net investment factor for that sub-account for the valuation
period ending on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment rate
for such valuation period, less a deduction for the charges under this policy
which are assessed against separate account assets. The gross investment rate
is equal to:
1. The net asset value per share of a fund share held in the sub-account of the
separate account determined at the end of the current valuation period; plus
2. the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
3. the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
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ACCOUNT VALUES
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WILL THE OWNER HAVE ACCESS TO THE NET CASH VALUE?
Yes. The owner has access to this policy's net cash value. The net cash value
is the account value of this policy, less any outstanding policy loans and
accrued policy loan interest charged and any charges overdue.
HOW IS THE ACCOUNT VALUE DETERMINED?
It is determined separately for this policy and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited to
the policy, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to this policy under an owner's
policy will not be affected by changes in the unit value. However, the number
of units will be increased by the allocation of subsequent net premiums, policy
experience credits, loan repayments, loan interest credits and transfers to that
sub-account. The number of units credited to a sub-account under an owner's
policy will be decreased by deductions to that sub-account, policy loans and
loan interest charged, transfers from that sub-account and partial surrenders
from that sub-account. The number of sub-account units will decrease to zero on
a policy termination.
IS THE SEPARATE ACCOUNT VALUE GUARANTEED?
The separate account value is not guaranteed.
The guaranteed account value is guaranteed by us. It cannot be reduced by the
investment experience of the guaranteed account.
ARE THERE LIMITATIONS ON TRANSFERS?
Yes. Interest is credited on the guaranteed account value under this policy.
Interest is credited daily at a rate of not less than 4 percent per year,
compounded annually. We guarantee this minimum rate for the life of the
policy.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GUARANTEED ACCOUNT?
Yes. As conditions permit, we may credit additional amounts of interest to the
guaranteed account value.
MAY THIS POLICY BE SURRENDERED?
Yes. The owner of this policy may request the surrender of this policy at any
time while the insured under this policy is living.
WHAT IS THE SURRENDER VALUE OF THIS POLICY?
The surrender value of this policy is the net cash value.
MHC-94-18665 Rev. 1-95 Minnesota Life 13
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The determination of the surrender value is made as of the end of the valuation
period during which we receive the surrender request at our home office.
IS A PARTIAL SURRENDER PERMITTED?
Yes. The owner may make a partial surrender of the net cash value under this
policy. The amount of a partial surrender must be $500 or more and it cannot
exceed the amount available as a policy loan. A partial surrender will cause a
decrease in the face amount equal to the amount surrendered. We reserve the
right to change the minimum amount or limit the number of times the owner may
make a partial surrender.
MAY THE OWNER DIRECT US AS TO HOW PARTIAL SURRENDERS WILL BE TAKEN FROM THE NET
CASH VALUE?
Yes. The owner may tell us the sub-accounts from which a partial surrender is
to be taken or whether it is to be taken in whole or in part from the guaranteed
account. If the owner does not, partial surrenders will be deducted from the
guaranteed account value and separate account value in the same proportion that
those values bear to each other and, as to the separate account value, from each
sub-account in the proportion that the sub-account value of each such sub-
account bears to the separate account value.
HOW WILL THE OWNER KNOW THE STATUS OF A POLICY?
Each year we will send the owner of this policy a report. This report will show
the status of this policy. It will include the account value, the face amount
as of the date of the report, the premiums paid during the year and their
allocation, policy charges, policy loan activity and the net cash value. The
report will be sent without cost to the owner. The report will be as of a date
within two months of its mailing.
POLICY LOANS
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CAN THE OWNER BORROW AGAINST THE NET CASH VALUE?
Yes. The owner may borrow an amount of at least $100 and up to the maximum loan
amount. This amount is determined as of the date we receive the request for a
loan. We will require the owner's written or telephone request for a policy
loan. The policy will be the only security required for a loan. We will charge
interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
WHAT IS THE MAXIMUM LOAN AMOUNT AVAILABLE FOR A POLICY LOAN?
The total amount available for a loan under this policy is (a) minus (b), where
(a) is 90 percent of the account value and (b) is any outstanding policy loans
plus accrued policy loan interest charged. The maximum loan amount will be
determined as of the date we receive the owner's written or telephone request
for a loan at our home office.
WHAT IS THE EFFECT OF A POLICY LOAN?
MHC-94-18665 Rev. 1-95 Minnesota Life 14
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When a loan is taken on this policy, we will reduce the net cash value of this
policy by the amount borrowed. This determination will be made as of the end of
the valuation period during which the loan request is received at our home
office. The amount borrowed continues to be a part of the account value, as the
amount borrowed becomes part of the loan account value where it will accrue loan
interest credits, and will be held in our general account.
HOW DOES A POLICY LOAN REDUCE NET CASH VALUE ON THIS POLICY?
Unless the owner directs us otherwise, the policy loan will be taken from this
policy's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the separate account
value, from each sub-account in the proportion that the sub-account value in
each such sub-account bears to the separate account value. The number of units
to be canceled will be based upon the value of the units as of the end of the
valuation period during which the loan request is received at our home office.
The net cash value of this policy may decrease between premium due dates. The
net cash value will decrease by the same amount of any decrease in account value
or increase in the amount borrowed or in the interest due on the loan of this
policy. If this policy has a policy loan and no net cash value, this policy
will lapse.
WHAT IS THE INTEREST RATE ON POLICY LOANS?
The interest rate charged on a policy loan will be eight percent per year.
As the interest charged on a policy loan accrues, the net cash value decreases.
Interest is due at the end of the policy month. If the total interest accrued
at the end of the policy month is not paid, this interest will be added to the
loan amount borrowed and charged the same rate of interest as the loan.
WHAT IS THE RATE OF INTEREST CREDITED TO THIS POLICY AS A RESULT OF A LOAN?
Interest credits which accrue on the loan account value shall be at a rate which
is not less than six percent per year.
WHEN ARE INTEREST CREDITS ON A POLICY LOAN ALLOCATED TO THIS POLICY'S GUARANTEED
ACCOUNT VALUE?
Interest credits are allocated to the guaranteed account value at the time of a
loan repayment.
WHEN AND IN WHAT AMOUNT SHOULD LOAN REPAYMENTS BE MADE?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the policy is in force. The loan may also be repaid within 60 days after
the date of the insured's death, if we have not paid any of the death benefits
under this policy. Any loan repayment must be at least $100 unless the balance
due is less than $100.
HOW DO LOAN REPAYMENTS AFFECT THE LOAN ACCOUNT VALUES AND THE GUARANTEED ACCOUNT
VALUE?
MHC-94-18665 Rev. 1-95 Minnesota Life 15
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Loan repayments increase the net cash value of a policy by the amount of the
loan repayment The loan repayment will be applied first to the interest charged
on the principal amount borrowed. Any remaining portion of the repayment will
then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
WHAT HAPPENS IF A LOAN ON THIS POLICY IS NOT REPAID?
If this policy has a policy loan, the policy will remain in force so long as it
has net cash value. If it does not have sufficient net cash value, it will
lapse.
In this event, to keep this policy in force, the owner will have to make a loan
repayment. We will give the owner notice of our intent to terminate this policy
and the loan repayment required to keep it in force. The time for repayment
will be within 61 days after our mailing of the warning notice of lapse.
TERMINATION
- -----------
WHEN DOES THIS POLICY TERMINATE?
The insurance on the life of an insured will terminate on the earliest of:
1 61 days after we mail a warning notice of lapse on a policy monthly
anniversary in which the net cash value is insufficient to pay for the
monthly deductions and no premium is paid during the grace period;
2 the date an owner surrenders this policy or requests that we terminate the
insurance;
3 the 95th birthday of the insured.
WILL THE OWNER OF THIS POLICY RECEIVE NOTICE PRIOR TO THE TERMINATION OF
INSURANCE?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice of lapse before terminating the insurance.
CAN INSURANCE ON THE LIFE ON AN INSURED BE REINSTATED AFTER TERMINATION?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this policy up to the effective date of reinstatement plus
the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31 days
following lapse, but will be required from the 32nd day to three years from the
date of lapse.
MHC-94-18665 Rev. 1-95 Minnesota Life 16
<PAGE>
ADDITIONAL INFORMATION
- ----------------------
WILL THIS POLICY RECEIVE EXPERIENCE CREDITS?
Each year we will determine if this policy will receive an experience credit.
Experience credits, if received, will be added to the account value of this
policy or, if elected by the owner, may be paid in cash. An experience credit
applied to the account value will be allocated to the guaranteed account value
or the sub-accounts of the separate account in accordance with the owner's
current instructions for the allocation of net premiums. In the absence of such
instructions, experience credits will be allocated to the guaranteed account and
the separate account in the same proportion as those values bear to each other
and, as to the separate account value, to each sub-account in the proportion
that the sub-account value of each sub-account bears to the separate account
value.
MAY THE OWNER ASSIGN ANY INTEREST UNDER THIS POLICY?
Yes. However, we will not be bound by an assignment of this policy or of any
interest in it unless:
1. It is made as a written instrument;
2. The owner files the original instrument or a certified copy with us at our
home office; and
3. We send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is based
on an assignment, we may require proof of interest of the claimant. A valid
assignment will take precedence over any claim of a beneficiary.
WHAT IF AN INSURED'S AGE IS MISSTATED?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
1. the monthly cost of insurance charges that were paid, and;
2. the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
WHEN DOES AN INSURED'S INSURANCE BECOME INCONTESTABLE?
After the insurance has been in force during the insured's lifetime for a two
year period from the policy date, we cannot contest the insurance for any loss
that is incurred more than two years after the policy date, unless the net cash
value has dropped below the amount necessary to pay the insured's cost of
insurance on the insured's life. However, if there has been an increase in the
amount of insurance for which we required evidence of insurability, then, to the
extent of the increase, any loss which occurs within two years of the effective
date of the increase will be contestable.
MHC-94-18665 Rev. 1-95 Minnesota Life 17
<PAGE>
IS THERE A SUICIDE EXCLUSION?
Yes. If an insured, whether sane or insane, dies by suicide, within two years
of the policy date, our liability will be limited to an amount equal to the
premium paid for that insured. If there has been an increase in the face amount
of insurance for which we required evidence of insurability, and if the insured
dies by suicide within two years of the effective date of the increase, our
liability with respect to that increase will be limited to the cost of insurance
charge attributable to such increase.
ARE INSURANCE AND RELATED RECORDS OF THE PLAN SPONSOR OPEN FOR INSPECTION?
Yes. The plan sponsor's records shall be open to inspection by us, at all
reasonable times, for any purposes relating to the provisions of the policy.
DO YOU HAVE ANY ADDITIONAL VOTING RIGHTS?
Yes. If you have separate account units under this policy you may direct us
with respect to the voting rights of fund shares held by us and attributable to
this policy.
COULD THE PAYMENT OF POLICY PROCEEDS BE POSTPONED?
Normally, we will pay any policy proceeds within seven days after our receipt of
all the documents required for such a payment. Other than the death proceeds,
which are determined as of the date of death of the insured, the amount of
payment will be determined as of the end of the valuation period during which a
request is received at our home office. However, we reserve the right to defer
policy payments, including policy loans, for up to six months from the date of
the owner's request, if such payments are based upon policy values which do not
depend on the investment performance of the separate account. In that case, if
we postpone a payment other than a policy loan payment for more than 31 days, we
will pay the owner interest at the greater of four percent per year or the rate
required by law for the period beyond that time that payment is postponed. For
payments based on account values which do depend on the investment performance
of the separate account, we may defer payment only: (a) for any period during
which the New York Stock Exchange is closed for trading (except for normal
holiday closing); or (b) when the Securities and Exchange Commission has
determined that a state of emergency exists which may make such payment
impractical.
WILL THE PROVISIONS OF THIS POLICY CONFORM WITH STATE LAW?
Yes. If any provision in this policy is in conflict with the laws of the state
governing the policy, the provision will be deemed to be amended to conform to
such laws.
COULD ANY PAYMENTS MADE UNDER THIS POLICY BE SUBJECT TO CLAIMS OF CREDITORS?
To the extent permitted by law, neither this policy nor any payment hereunder
will be subject to the claims of creditors or to any legal process.
ARE POLICY CHANGES LIMITED?
MHC-94-18665 Rev. 1-95 Minnesota Life 18
<PAGE>
Currently, the frequency of policy changes are not limited. However, we reserve
the right to limit the number of policy changes to one per policy year and to
restrict such changes in the first policy year. For this purpose, changes
include increases or decreases in the face amount of insurance.
MHC-94-18665 Rev. 1-95 Minnesota Life 19
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A SMOKER DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
---- ---- ---- ---- ---- ----
NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS
----------- ------- ----------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18665 Rev. 1-95 Minnesota Life 20
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-SMOKER BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
---- ---- ---- ---- ---- ----
UNI-SMOKERS UNI-SMOKERS UNI-SMOKERS
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18665 Rev. 1-95 Minnesota Life 21
<PAGE>
Minnesota Life
400 Robert Street North . St. Paul, Minnesota 55101-2098
VARIABLE UNIVERSAL LIFE INSURANCE . LEVEL DEATH BENEFIT. NONPARTICIPATING
MHC-94-18665 Rev. 1-95 Minnesota Life 22
<PAGE>
EX99.A5P
================================================================================
MINNESOTA LIFE INDIVIDUAL POLICY
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St. Paul, Minnesota
55101-2098
- --------------------------------------------------------------------------------
READ YOUR POLICY CAREFULLY
- --------------------------
This is a legal contract between you and us. We promise to pay the benefits
provided by this policy, subject to the provisions of this policy. We make
this promise and issue this policy in consideration of: (1) the application
for this policy; and (2) the payment of the required premiums.
Minnesota Life Insurance Company is a subsidiary of Minnesota Mutual Companies,
Inc., a mutual insurance holding company. The owner is a member of Minnesota
Mutual Companies, Inc., which holds its annual meetings on the first Tuesday in
March of each year at 3 p.m. local time. The meetings are held at 400 Robert
Street North, St. Paul, Minnesota 55101-2098.
RIGHT TO CANCEL
- ---------------
It is important to us that you are satisfied with this policy after it is
issued. If you are not satisfied with it, you may return the policy to us or our
agent within 10 days after you receive it. You may also cancel this policy by
delivering or mailing a written notice or sending a telegram to Minnesota Life
Insurance Company (Minnesota Life), 400 Robert Street North, St. Paul, Minnesota
55101-2098 and returning the policy before midnight of the tenth day after you
received this policy. Notice given by mail and return of the policy by mail are
effective on being postmarked, properly addressed and postage prepaid. If you
return this policy, you will receive, within 7 days of the date we receive a
notice of cancellation, a full refund of any premiums you have paid. Upon
cancellation of this policy, it will be void from the beginning as if it never
had been issued.
Signed for Minnesota Life Insurance Company at St. Paul, Minnesota on the policy
date.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
THE INITIAL DEATH BENEFIT FOR THE PERSON INSURED UNDER THIS POLICY WILL EQUAL
THE FACE AMOUNT SHOWN IN THIS POLICY, PLUS THE INITIAL ACCOUNT VALUE, IF ANY.
THE DEATH BENEFIT THEREAFTER MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE
ACCOUNT INVESTMENT EXPERIENCE.
THE ACCOUNT VALUES UNDER THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY
INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE.
THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <S> <C>
DEFINITIONS 2 SEPARATE ACCOUNT 10
GENERAL INFORMATION 4 ACCOUNT VALUES 13
DEATH BENEFIT 5 POLICY LOANS 14
PAYMENT OF PROCEEDS 7 TERMINATION 16
PREMIUMS 8 ADDITIONAL INFORMATION 17
POLICY CHARGES 8
</TABLE>
VARIABLE UNIVERSAL LIFE INSURANCE - VARIABLE DEATH BENEFIT. NONPARTICIPATING
MHC-94-18673 Rev. 1-95 Minnesota Life 1
<PAGE>
DEFINITIONS
- -----------
When we use the following words, this is what we mean:
ACCOUNT VALUE
The sum of the values under the separate account, the guaranteed account and
the loan account of this policy. They are identified as the separate account
value, the guaranteed account value, and the loan account value, respectively.
ACTIVELY AT WORK
To be actively at work for the purposes of this policy, you must be currently
working at your employer's normal place of business at least ____ hours a
week. A person is not considered actively at work if not at work due to
illness or injury.
AGE
The insured's age at last birthday.
ELIGIBLE INSURED
A person is eligible for insurance under this policy if the person:
(1) is under age ___; and
(2) was actively at work for each of the ____ weeks immediately prior to the
date your application for coverage under this policy is approved by us, or are
legally married to an eligible insured; and
(3) is identified by the plan sponsor as a person who is eligible to be
insured under the plan sponsor's employee benefit plan.
FACE AMOUNT
The minimum death benefit under this policy so long as the insurance coverage
under this policy remains in force.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which we designate as an eligible investment for the separate account and it
sub-accounts.
MHC-94-18673 Rev. 1-95 Minnesota Life 2
<PAGE>
GENERAL ACCOUNT
All assets of Minnesota Life other than those in the separate account or in
other separate accounts established by us.
GUARANTEED ACCOUNT VALUE
Assets other than the loan account value that are held in our general account
and attributable to this policy, and others of its class.
INSURED
An eligible insured who becomes insured under this policy.
LAPSE
A lapse of this policy means the insurance coverage under this policy has
terminated due to non-payment of a premium during its grace period in an
amount that, after the deduction of percentage-of-premium charges, is
sufficient to cover the monthly deductions due at the time we provide notice
of lapse.
LOAN ACCOUNT
The portion of the general account which is attributable to loans under this
policy. A loan account value is the sum of all outstanding loans and accrued
loan interest credited under this policy.
MATURITY DATE
The 95th birthday of the insured.
MONTHLY ANNIVERSARY
The same date in each succeeding month as the policy date.
NET CASH VALUE
The account value under this policy, less any outstanding policy loans and
accrued policy loan interest charged and any charges over due. It is the
amount you may obtain through surrender of this policy.
NET PREMIUM
The premium less charges assessed against the premium. The net premium is the
amount or amounts which are allocated to the guaranteed account and/or the
separate account on your behalf.
MHC-94-18673 Rev. 1-95 Minnesota Life 3
<PAGE>
PLAN SPONSOR
The employer, association, or organization which makes this insurance
available to its eligible insureds.
POLICY ANNIVERSARY
The same day in each succeeding year as the policy date.
POLICY DATE
The date coverage under this policy may become effective. The policy date is
shown on the specifications page attached to this policy.
SEPARATE ACCOUNT
The separate investment account created by us to receive and invest net
premiums received for this policy. The particular Separate Account for this
policy is the Variable Universal Life Account. We established this separate
account for this class of policies under Minnesota Law. The separate account
is composed of several sub-accounts. We own the assets of the separate
account. However, those assets not in excess of separate account liabilities
are not subject to claims arising out of any other business in which we
engage.
SUB-ACCOUNT
One or more sub-accounts constituting the separate account.
SUB-ACCOUNT VALUE
The current number of sub-account units credited to your policy multiplied by
the current sub-account unit value.
UNIT
A measure of your interest in a sub-account of the separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
MHC-94-18673 Rev. 1-95 Minnesota Life 4
<PAGE>
WE, OUR, US
Minnesota Life Insurance Company.
YOU, YOUR, POLICYOWNER
The owner of the policy, as shown in the application, unless subsequently
changed as provided for in this policy. The owner may be someone other than
the insured.
GENERAL INFORMATION
- -------------------
What is your agreement with us?
This policy, your application and any supplemental application(s) contain the
entire contract between you an us. Any statements made in your application or
any supplemental application(s) will, in the absence of fraud, be considered
representations and not warranties. Also, any statement you or an insured
made will not be used to void this policy nor defend against a claim under
this policy unless the statement is contained in the application or any
supplemental application(s).
No change or waiver of any of the provisions of this policy will be valid
unless made in writing by us and signed by our president, a vice president,
our secretary or assistant secretary. No agent or other person has the
authority to change or waive any provision of this policy.
Any additional benefit rider attached to this policy will become a part of
this policy and will be subject to all the terms and conditions of this policy
unless we state otherwise in the rider.
Can this policy be amended?
Yes. This policy may be amended at any time you and we agree to amend it.
Any amendment will be without prejudice to any claim in connection with a loss
sustained prior to the effective date of the amendment.
How do you exercise your rights under the policy?
You can exercise all the rights under this policy during an insured's lifetime
by making a written request to us. This includes the right to change the
ownership. If your policy is assigned, we will also require the written
consent of the assignee. If you have designated an irrevocable beneficiary,
the written consent of that beneficiary will also be required.
What is the effective date of this insurance?
Upon receipt of your application for insurance, the effective date of this
insurance will be the later of:
MHC-94-18673 Rev. 1-95 Minnesota Life 5
<PAGE>
(1) the date on which we approve your application; and
(2) the date on which the first premium contribution is paid.
This effective date is shown on the specifications page attached to this
policy.
DEATH BENEFIT
- -------------
What is the amount of the death benefit?
The amount of the death benefit will be determined as follows:
(1) The face amount of insurance on the insured's date of death while this
policy is in force; plus
(2) the amount of the owner's account value as of the date we receive due
proof of the insured's death satisfactory to us; plus
(3) the amount of the cost of insurance for the portion of the policy month
from the date of death to the end of the policy month; plus
(4) any monthly deductions taken under the policy since the date of death;
less
(5) any outstanding policy loans and accrued policy loan interest charged;
less
(6) any unpaid monthly deductions determined as of the date of the insured's
death.
Payment of the death benefit will extinguish our liability under this policy.
We intend that this policy qualify as a life insurance policy as defined by
Section 7702 of the Internal Revenue Code, as amended. We reserve the right
to either increase the face amount of insurance on the life of the insured,
return any excess net cash value or limit the amount of premium contributions
we will accept under this policy in order to maintain such qualification.
What is the face amount of insurance on the life of the insured?
The face amount of insurance on the life of the insured is as shown on the
specifications page attached to this policy.
May the face amount of insurance change?
Yes. The owner may apply for a change through a written request in compliance
within the limitations on the specifications page attached to this policy. If
an increase in the current face amount is applied for, we reserve the right to
require evidence of insurability from the insured.
MHC-94-18673 Rev. 1-95 Minnesota Life 6
<PAGE>
If a decrease in the current face amount is requested, we will grant the
request. However, the amount of insurance on the insured may not be reduced
to less than the amount shown on the specifications page attached to this
policy. If following a decrease in face amount, this policy would not comply
with the maximum premium limitations required by federal law, the decrease may
be limited or net cash value may be returned to the owner (at the owner's
election), to the extent necessary to meet these requirements.
When will changes in the face amount of insurance become effective?
Decreases in the face amount of insurance are effective on the monthly policy
anniversary on or following receipt of the written request by us. However, if
the owner requests that the decrease become effective on a specified future
date we will make the decrease effective on the policy monthly anniversary on
or next following the date requested.
Increases are effective on the monthly anniversary on or following the date we
approve the change, or any other date mutually agreed upon between you and us.
When will the death benefit be paid?
We will pay interest on the face amount of insurance from the date of the
insured's death until the date of payment. We will pay interest on any
charges taken under this policy since the date of death from the date the
charge was taken until the date of payment.
Interest will be at an annual rate determined by us, but never less than the
greater of four percent per year compounded annually or the rate required by
law.
Death benefit proceeds will ordinarily be paid within seven days after we
receive all information required for such payment, including due proof of the
insured's death.
PAYMENT OF PROCEEDS
- -------------------
To whom will we pay the death benefit?
We will pay the death benefit proceeds to the surviving beneficiary specified
on the application or as subsequently changed.
What happens if one or all of the beneficiaries die before the insured?
If a beneficiary dies before the insured, that beneficiary's interest in this
policy ends with that beneficiary's death. Only those beneficiaries who
survive the insured will be eligible to share in the proceeds. If no
beneficiary survives the insured or if a beneficiary is not named, we will pay
the proceeds according to the following order of priority:
(1) the insured's lawful spouse; if living; otherwise,
MHC-94-18673 Rev. 1-95 Minnesota Life 7
<PAGE>
(2) the personal representative of the insured's estate.
May the owner change the beneficiary?
If the owner has reserved the right to change the beneficiary, the owner may
file a written request with us to change the beneficiary. If the owner has
not reserved the right to change the beneficiary, the written consent of the
irrevocable beneficiary will be required. Your written request will not be
effective until it is recorded in our home office records. After it has been
so recorded, it will take effect as of the date the owner signed the request.
However, if the insured dies before the request has been so recorded, the
request will not be effective as to those proceeds we have paid before the
owner's request was so recorded.
Can death benefit proceeds be paid in other than a single sum?
Yes. An owner may request that we pay the death benefit proceeds under one of
the following settlement options. We may also use any other method of payment
that is agreeable to the owner and us. A settlement option may be selected
only if the payments are to be made to a natural person in that person's own
right.
What Are The Settlement Options Available?
Each settlement option is paid in fixed amounts as described below. If the
owner of this policy requests a settlement option, he or she will be asked to
sign an agreement covering the election which will state the terms and
conditions of the payments. The payments do not vary with the performance of
the separate account.
(1) INTEREST PAYMENTS: Payment of interest on the proceeds at such times and
for a period as may be agreed upon between the owner of this policy and us.
Withdrawal of proceeds may be made in amounts of at least $500. At the end of
the period, any remaining proceeds will be paid in either a single sum or
under any other method we approve.
(2) FIXED PERIOD ANNUITY: An annuity payable in monthly installments for a
specified number of years, from one to twenty years.
(3) LIFE ANNUITY: An annuity payable monthly for the lifetime of the
annuitant and ending with the last monthly payment due prior to the
annuitant's death.
(4) PAYMENTS OF A SPECIFIED AMOUNT: Monthly payments of a specified amount
until the proceeds and interest are fully paid.
Can a beneficiary request a payment under a settlement option?
Yes. A beneficiary may select a settlement option, but only after the
insured's death. However, an owner may provide that the beneficiary will not
be permitted to change the elected settlement option.
MHC-94-18673 Rev. 1-95 Minnesota Life 8
<PAGE>
PREMIUMS
- --------
When and how often are premiums due?
A premium must be paid to put this policy in force. This initial premium must
be of an amount that, after the deduction of percentage-of-premium charges,
will cover the first month's deductions plus $20. A premium must also be paid
at such time when there is insufficient net cash value to pay the monthly
deductions necessary to keep this policy in force. Premiums paid after the
initial premium may be in any amount of $20 or greater.
Is there a grace period for the payment of premiums?
Yes. This policy has a 61 day grace period. The grace period will start on
the day we mail the owner a notice of lapse. This policy will lapse if the
premium amount specified in the notice is not paid by the end of the grace
period and the net cash value is insufficient to cover the monthly deductions.
We will mail this notice on any policy monthly anniversary date when the net
cash value for the insured under this policy is insufficient to cover the
monthly deductions. This policy of insurance will remain in effect during the
61 day grace period. If sufficient premium is not paid by the end of the
grace period, the insured's coverage will lapse. The grace period does not
apply to the first premium payment.
What is the amount of the death benefit during the grace period?
The death benefit amount provided under this policy will be paid if death
occurs during the grace period.
POLICY CHARGES
- --------------
What type of charges are there under this policy?
Charges under this policy are those which we assess against the premiums and
the account value under this policy and the separate account assets
attributable to this policy.
What charges are assessed against premiums?
Against premiums paid, we will assess: (1) a sales load, (2) a federal tax
charge, and (3) a state premium tax charge as percentage-of-premium charges.
(1) The sales load is for distribution expenses for this class of policies.
This sales load charge shall not exceed five percent of each premium paid.
(2) The federal tax charge is to compensate us for the corporate federal
income taxes that result from a sale of this policy. The federal tax charge
is 1.25 percent of each premium paid if this
MHC-94-18673 Rev. 1-95 Minnesota Life 9
<PAGE>
policy is deemed to be an individual contract under the Omnibus Budget
Reconciliation Act of 1990, as amended, and 0.25 percent if deemed a group
contract under that Act.
(3) The state premium tax charge is the average premium tax we pay to state
and local governments for this class of policies. This charge is currently
two percent. The charge is not guaranteed and may be increased in the future,
but only as necessary to cover our premium taxes.
What charges are assessed against the net cash value of this policy?
Against the net cash value of this policy, we assess as monthly deductions: (1)
the administration charge; (2) the cost of insurance charge; and (3) the charge
for any additional benefits provided by rider. We also will assess against the
net cash value a transaction charge at the end of the day on which the
transaction occurs.
(1) The administration charge is for administrative expenses, including those
attributable to the records we create and maintain for this policy. The
maximum administration charge is $4 per month. This charge will be assessed on
the policy date and on each succeeding monthly policy anniversary.
(2) The cost of insurance charge is for providing the death benefit under this
policy. The charge is calculated by multiplying the net amount at risk under
this policy by a rate which varies with the insured's age and rate class. The
rate is guaranteed not to exceed rates determined on the basis of 125 percent of
the 1980 Commissioners Standard Ordinary Mortality Table. The net amount at risk
for this policy is the difference between the death benefit and the account
value. This charge will be assessed on the policy date and on each succeeding
monthly anniversary.
The policy charges described as Table A attached herein are maximum cost of
insurance charges.
(3) The charge for any additional benefits provided by rider, if any, are
deducted as part of the monthly cost of insurance deduction.
(4) A transaction charge will be assessed for each partial withdrawal to
cover the administrative costs incurred in processing the partial withdrawal.
The amount of the charge is the lesser of $25 or two percent of the amount
withdrawn. We may also assess a charge for any transfer of funds between sub-
accounts. The amount charged will not exceed $10. Any transaction charge
will be assessed at the end of the day on which the transaction occurs.
Charges will be assessed against the net cash value of this policy. They
will be assessed against the guaranteed account value and the separate account
value in the same proportion that those values bear to each other and, as to
the separate account value, from each sub-account in the proportion that the
account value in such sub-account bears to the separate account value in all
of the sub-accounts for this policy.
MHC-94-18673 Rev. 1-95 Minnesota Life 10
<PAGE>
What charges are assessed against separate account assets?
We assess a mortality and expense risk charge against the separate account
assets of this policy. We also reserve the right to charge or make provision
for income taxes payable by us based on separate account assets.
What is the mortality and expense risk charge?
This charge is for assuming the risks that the cost of insurance charge will
be insufficient to cover actual mortality experience and that the other
charges will not cover our expenses in connection with this class of policies.
The mortality and expense risk charge is deducted from the separate account
assets daily at an annual rate not to exceed 0.50 percent of the separate
account assets.
SEPARATE ACCOUNT
- -----------------
How was the separate account established?
We established the separate account in accordance with certain provisions of
the Minnesota insurance law.
What is the purpose of the separate account?
The purpose of the separate account is to hold assets attributable to the
variable portion of this policy and others of its class.
What separate account options are available?
The separate account is divided into sub-accounts. Those available to this
policy are listed on the specifications page attached to this policy. Net
premiums will be allocated to the various sub-accounts of the separate account
or any other sub-account which we may add in the future, as elected by the
owner. We reserve the right to add, combine or remove any sub-accounts of the
separate account.
What are the investments of the separate account?
For each sub-account, there is a fund for the investment of that sub-account's
assets. The assets of the sub-accounts are invested in the funds at net asset
value. If investment in a fund should no longer be possible or if we
determine it becomes inappropriate for the policies of this class, we may
substitute another fund. Substitution may be with respect to both existing
policy values and future premiums. The investment policy of the separate
account may not be changed, however, without the approval of the regulatory
authorities of the State of Minnesota. If required, that approval process
will be on file with the regulatory authorities of the state in which this
policy is delivered.
MHC-94-18673 Rev. 1-95 Minnesota Life 11
<PAGE>
What changes may we make to the separate account?
We reserve the right to transfer assets of the separate account which we
determine to be associated with the class of policies to which this policy
belongs, to another separate account. If such a transfer is made, the term
"separate account" as used in this policy, shall then mean the separate
account to which the assets are transferred. A transfer of this kind may
require the advance approval of state regulatory authorities.
We reserve the right to, when permitted by law:
(1) restrict or eliminate any voting right of owners or other persons who
have voting rights as to the separate account; and
(2) combine the separate account with one or more other separate accounts;
and
(3) to de-register the separate account under the Investment Company Act of
1940.
How are net premiums allocated?
They are allocated either to the guaranteed account and/or to the separate
account and its sub-accounts. Initially, the allocation elected is indicated
in the application for this policy. Allocations may be changed for future
premiums. The owner may do this by giving us a written request. A change
will not take effect until it is recorded by us in our home office.
Allocations must be expressed in whole percentages. The allocation to any
alternative must be at least ten percent of the net premium. We reserve the
right to restrict the allocation of premium. If we do so, no more than fifty
percent of the net premium may be allocated to the guaranteed account.
We reserve the right to delay the allocation of net premiums to named sub-
accounts. Such a delay will be for a period of 30 days after issuance of this
policy. This right will be exercised by us only when we believe economic
conditions make such a delay necessary to reduce market risk during this
period. If we exercise this right, net premiums will be allocated to the
money market sub-account until the end of that period.
What is a transfer?
A transfer is a reallocation of the net cash value between the guaranteed
account and the separate account or among the sub-accounts of the separate
account for a given owner.
May the owner make transfers of amounts under this policy?
Yes. Transfers from a sub-account of the separate account may be made in
writing or by telephone. For transfers out of the separate account or among
the sub-accounts of the separate account, we will credit and cancel units
based on the sub-account unit values as of the end of the valuation period
during which the owner's written or telephone request is received at our home
MHC-94-18673 Rev. 1-95 Minnesota Life 12
<PAGE>
office. For transfers out of the guaranteed account, a dollar amount will be
transferred based on the owner's guaranteed account value at the time of
transfer.
Are there limitations on transfers?
Yes. Only one transfer may be made under this policy each month. The amount
to be transferred to or from a sub-account of the separate account or the
guaranteed account must be at least $250. If the balance in the guaranteed
account or in the sub-account from which the transfer is to be made is less
than $250, the entire account value attributable to that sub-account or the
guaranteed account must be transferred. If a transfer would reduce the
account value in the sub-account from which the transfer is to be made to less
than $250 we reserve the right to include that remaining amount in the sub-
account with the amount transferred.
The maximum amount of net cash value to be transferred out of the guaranteed
account to the sub-accounts of the separate account may be limited to twenty
percent (or $250 if greater) of the guaranteed account value. Transfers to or
from the guaranteed account may be limited to one such transfer per policy
year. We may further restrict transfers by requiring that the request is
received by us or postmarked in the 30-day period before or after the last
day of the policy anniversary. Requests for transfers which meet these
conditions would be effective after we approve and record them at our home
office.
How are units determined?
The number of units credited with respect to each net premium payment is
determined by dividing the portion of the net premium payment allocated to
each sub-account by the then current unit value for that sub-account. This
determination is made as of the end of the valuation period during which the
premium is received at our home office. Once determined, the number of units
will not be affected by changes in the unit value.
How are units increased or decreased?
The number of units of each sub-account credited to this policy will be
increased by the allocation of subsequent net premiums, policy experience
credit, loan repayments, interest credits and transfers to that sub-account. The
number of units credited to a sub-account under this policy will be decreased by
deductions to the sub-account, policy loans and loan interest charged, transfers
from that sub-account and partial surrenders from that sub-account. The number
of sub-account units will decrease to zero on this policy's termination.
How is a unit valued?
The unit value will increase or decrease on each valuation date. The amount
of any increase or decrease will depend on the net investment experience of
the sub-accounts of the separate account. The value of a unit for each sub-
account was originally set at $1.00 on the first valuation date. For any
subsequent valuation date, its value is equal to its value on the preceding
valuation date multiplied by the net investment factor for that sub-account
for the valuation period ending on the subsequent valuation date.
MHC-94-18673 Rev. 1-95 Minnesota Life 13
<PAGE>
What is the net investment factor for each sub-account?
The net investment factor is a measure of the net investment experience of a
sub-account during the valuation period.
The net investment factor for a valuation period is: the gross investment
rate for such valuation period, less a deduction for the charges under this
policy which are assessed against separate account assets. The gross
investment rate is equal to:
(1) The net asset value per share of a fund share held in the sub-account of
the separate account determined at the end of the current valuation period;
plus
(2) the per-share amount of any dividend or capital gain distributions by the
fund if the "ex-dividend" date occurs during the current valuation period,
divided by
(3) the net asset value per share of that fund share held in the sub-account
determined at the end of the preceding valuation period.
ACCOUNT VALUES
- --------------
Will the owner have access to the net cash value?
Yes. The owner has access to this policy's net cash value. The net cash
value is the account value of this policy, less any outstanding policy loans
and accrued policy loan interest charged and any charges overdue.
How is the account value determined?
It is determined separately for this policy and separately for the separate
account value and loan account value. The separate account value will include
all sub-accounts of the separate account.
The separate account value is the sum of units of each sub-account, credited
to the policy, multiplied by the accumulation unit value for that sub-account.
Once determined, the number of units credited to this policy under an owner's
policy will not be affected by changes in the unit value. However, the number
of units will be increased by the allocation of subsequent net premiums,
policy experience credits, loan repayments, loan interest credits and transfers
to that sub-account. The number of units credited to a sub-account under an
owner's policy will be decreased by deductions to that sub-account, policy loans
and loan interest charged, transfers from that sub-account and partial
surrenders from that sub-account. The number of sub-account units will decrease
to zero on a policy termination.
Is the separate account value guaranteed?
The separate account value is not guaranteed.
MHC-94-18673 Rev. 1-95 Minnesota Life 14
<PAGE>
The guaranteed account value is guaranteed by us. It cannot be reduced by the
investment experience of the guaranteed account.
Is interest credited on the guaranteed account value?
Yes. Interest is credited on the guaranteed account value under this policy.
Interest is credited daily at a rate of not less than four percent per year,
compounded annually. We guarantee this minimum rate for the life of the
policy.
May additional interest be credited on the guaranteed account?
Yes. As conditions permit, we may credit additional amounts of interest to
the guaranteed account value.
May this policy be surrendered?
Yes. The owner of this policy may request the surrender of this policy at any
time while the insured under this policy is living.
What is the surrender value of this policy?
The surrender value of this policy is the net cash value. The determination
of the surrender value is made as of the end of the valuation period during
which we receive the surrender request at our home office.
Is a partial surrender permitted?
Yes. The owner may make a partial surrender of the net cash value under this
policy. The amount of a partial surrender must be $500 or more and it cannot
exceed the amount available as a policy loan. A partial surrender has no
effect on the face amount of this policy. However, since the account value is
reduced by the amount of the partial surrender, the death benefit will be
reduced by this same amount at the time of the partial surrender. We reserve
the right to change the minimum amount or limit the number of times the owner
may make a partial surrender.
May the owner direct us as to how partial surrenders will be taken from the
net cash value?
Yes. The owner may tell us the sub-accounts from which a partial surrender is
to be taken or whether it is to be taken in whole or in part from the
guaranteed account. If the owner does not, partial surrenders will be
deducted from the guaranteed account value and separate account value in the
same proportion that those values bear to each other and, as to the separate
account value, from each sub-account in the sub-account value of each such
sub-account bears to the separate account value.
MHC-94-18673 Rev. 1-95 Minnesota Life 15
<PAGE>
How will the owner know the status of a policy?
Each year we will send the owner of this policy a report. This report will
show the status of this policy. It will include the account value, the face
amount as of the date of the report, the premiums paid during the year and
their allocation, policy charges, policy loan activity and the net cash
value. The report will be sent without cost to the owner. The report will be
as of a date within two months of its mailing.
POLICY LOANS
- ------------
Can the owner borrow against the net cash value?
Yes. The owner may borrow an amount of at least $100 and up to the maximum
loan amount. This amount is determined as of the date we receive the request
for a loan. We will require the owner's written or telephone request for a
policy loan. The policy will be the only security required for a loan. We
will charge interest on the loan in arrears.
When a loan is to come from the guaranteed account value, we have the right to
postpone a loan for up to six months.
What is the maximum loan amount available for a policy loan?
The total amount available for a loan under this policy is (a) minus (b),
where (a) is ninety percent of the account value and (b) is any outstanding
policy loans plus accrued policy loan interest charged. The maximum loan
amount will be determined as of the date we receive the owner's written or
telephone request for a loan at our home office.
What is the effect of a policy loan?
When a loan is taken on this policy, we will reduce the net cash value of this
policy by the amount borrowed. This determination will be made as of the end
of the valuation period during which the loan request is received at our home
office. The amount borrowed becomes part of the loan account value as the
amount borrowed is transferred to the loan account value where it will accrue
loan interest credits and will be held in our general account.
How does a policy loan reduce net cash value on this policy?
Unless the owner directs us otherwise, the policy loan will be taken from this
policy's guaranteed account value and separate account value in the same
proportion that those values bear to each other and, as to the net cash value
in the separate account, from each sub-account in the proportion that the sub-
account value in such sub-account bears to the separate account value. The
number of units to be canceled will be based upon the value of the units as of
the end of the valuation period during which the loan request is received at
our home office.
MHC-94-18673 Rev. 1-95 Minnesota Life 16
<PAGE>
The net cash value of this policy may decrease between premium due dates.
The net cash value will decrease by the same amount of any decrease in account
value or increase in the amount borrowed or in the interest due on the loan of
this policy. If this policy has a policy loan and no net cash value, this
policy will lapse.
What is the interest rate on policy loans?
The interest rate charged on a policy loan will be eight percent per year.
As the interest charged on a policy loan accrues, the net cash value
decreases. Interest is due at the end of the policy month. If the total
interest accrued at the end of the policy month is not paid, this interest
will be added to the loan amount borrowed and charged the same rate of
interest as the loan.
What is the rate of interest credited to this policy as a result of a loan?
Interest credits which accrue on the loan account value shall be at a rate
which is not less than six percent per year.
When are interest credits on a policy loan allocated to this policy's
guaranteed account value?
Interest credits are allocated to the guaranteed account value at the time of
a loan repayment.
When and in what amount should loan repayments be made?
A policy loan and the interest charged on the loan may be repaid in full or in
part at any time before the insured's death so long as the insurance coverage
under the policy is in force. The loan may also be repaid within 60 days
after the date of the insured's death, if we have not paid any of the death
benefits under this policy. Any loan repayment must be at least $100 unless
the balance due is less than $100.
How do loan repayments affect the loan account values and the guaranteed
account value?
Loan repayments increase the net cash value of a policy by the amount of the
loan repayment The loan repayment will be applied first to the interest
charged on the principal amount borrowed. Any remaining portion of the
repayment will then reduce the original loan principal amount.
When a loan repayment is made, the interest credits in the loan account value
are transferred to the general account value in the same proportion that loan
interest charged has been reduced due to the loan repayment. Also, an amount
equal to the amount of loan principal repaid is transferred from the loan
account value to the general account value.
MHC-94-18673 Rev. 1-95 Minnesota Life 17
<PAGE>
What happens if a loan on this policy is not repaid?
If this policy has a policy loan, the policy will remain in force so long as
it has net cash value. If it does not have sufficient net cash value, it will
lapse.
In this event, to keep this policy in force, the owner will have to make a
loan repayment. We will give the owner notice of our intent to terminate this
policy and the loan repayment required to keep it in force. The time for
repayment will be within 61 days after our mailing of the warning notice of
lapse.
TERMINATION
- -----------
When does this policy terminate?
The insurance on the life of an insured will terminate on the earliest of:
(1) 61 days after we mail a warning notice of lapse on a policy monthly
anniversary in which the net cash value is insufficient to pay for the monthly
deductions and no premium is paid during the grace period;
(2) the date an owner surrenders this policy or requests that we terminate
the insurance;
(3) the 95th birthday of the insured.
Will the owner of this policy receive notice prior to the termination of
insurance?
If the owner's insurance will be terminated because the net cash value is less
than that required to pay the monthly deductions, we will give the owner at
least 61 days prior written notice of lapse before terminating the insurance.
Can insurance on the life on an insured be reinstated after termination?
Insurance terminated due to the insufficiency of the net cash value to pay for
the monthly deductions may be reinstated. Reinstatement must occur while the
insured is living and any time within three years from the date of lapse.
Reinstatement is made by payment of an amount that, after the deduction of
percentage-of-premium charges, is large enough to cover all monthly deductions
which have accrued on this policy up to the effective date of reinstatement
plus the monthly deductions for the two months following the effective date of
reinstatement. If any policy loans and policy loan interest charged is not
repaid, this indebtedness will be reinstated along with the insurance. No
evidence of the insured's insurability will be required during the first 31
days following lapse, but will be required from the 32nd day to three years
from the date of lapse.
MHC-94-18673 Rev. 1-95 Minnesota Life 18
<PAGE>
ADDITIONAL INFORMATION
- ----------------------
WILL THIS POLICY RECEIVE EXPERIENCE CREDITS?
Each year we will determine if this policy will receive an experience credit.
Experience credits, if received, will be added to the account value of, this
policy or, if elected by the owner, may be paid in cash. An experience credit
applied to the account value will be allocated to the guaranteed account value
or the sub-accounts of the separate account in accordance with the owners
current instructions for the allocation of net premiums. In the absence of such
instructions, experience credits will be allocated to the guaranteed account and
the separate account in the same proportion as those values bear to each other
and, as to the separate account value, to each sub-account in the proportion
that the sub-account value of each such sub-account bears to the separate
account value.
May the owner assign any interest under this policy?
Yes. However, we will not be bound by an assignment of this policy or of any
interest in it unless:
(1) It is made as a written instrument;
(2) The owner files the original instrument or a certified copy with us at
our home office; and
(3) We send the owner an acknowledged copy.
We are not responsible for the validity of any assignment. If a claim is
based on an assignment, we may require proof of interest of the claimant. A
valid assignment will take precedence over any claim of a beneficiary.
What if an insured's age is misstated?
If the age of the insured has been misstated, the death benefit and account
value will be adjusted. The adjustment will be the difference between two
amounts accumulated with interest. These two amounts are:
(1) the monthly cost of insurance charges that were paid, and;
(2) the monthly cost of insurance charges that should have been paid based on
the insured's correct age.
The interest rates used are the rates that were used in accumulating the
guaranteed account values.
MHC-94-18673 Rev. 1-95 Minnesota Life 19
<PAGE>
When does an insured's insurance become incontestable?
After the insurance has been in force during the insured's lifetime for a two
year period from the policy date, we cannot contest the insurance for any loss
that is incurred more than two years after the policy date, unless the net
cash value has dropped below the amount necessary to pay the insured's cost of
insurance on the insured's life. However, if there has been an increase in
the amount of insurance for which we required evidence of insurability, then,
to the extent of the increase, any loss which occurs within two years of the
effective date of the increase will be contestable.
Is there a suicide exclusion?
Yes. If an insured, whether sane or insane, dies by suicide, within two years
of the policy date, our liability will be limited to an amount equal to the
premium paid for that insured. If there has been an increase in the face
amount of insurance for which we required evidence of insurability, and if the
insured dies by suicide within two years of the effective date of the
increase, our liability with respect to that increase will be limited to the
cost of insurance charge attributable to such increase.
Are insurance and related records of the plan sponsor open for inspection?
Yes. The plan sponsor's records shall be open to inspection by us, at all
reasonable times, for any purposes relating to the provisions of the policy.
Do you have any additional voting rights?
Yes. If you have separate account units under this policy you may direct us
with respect to the voting rights of fund shares held by us and attributable
to this policy.
Could the payment of policy proceeds be postponed?
Normally, we will pay any policy proceeds within seven days after our receipt
of all the documents required for such a payment. Other than the death
proceeds, which are determined as of the date of death of the insured, the
amount of payment will be determined as of the end of the valuation period
during which a request is received at our home office. However, we reserve
the right to defer policy payments, including policy loans, for up to six
months from the date of the owner's request, if such payments are based upon
policy values which do not depend on the investment performance of the
separate account. In that case, if we postpone a payment other than a policy
loan payment for more than 31 days, we will pay the owner interest at the
greater of four percent per year or the rate required by law for the period
beyond that time that payment is postponed. For payments based on account
values which do depend on the investment performance of the separate account,
we may defer payment only: (a) for any period during which the New York Stock
Exchange is closed for trading (except for normal holiday closing); or (b)
when the Securities and Exchange Commission has determined that a state of
emergency exists which may make such payment impractical.
MHC-94-18673 Rev. 1-95 Minnesota Life 20
<PAGE>
Will the provisions of this policy conform with state law?
Yes. If any provision in this policy is in conflict with the laws of the
state governing the policy, the provision will be deemed to be amended to
conform to such laws.
Could any payments made under this policy be subject to claims of creditors?
To the extent permitted by law, neither this policy nor any payment hereunder
will be subject to the claims of creditors or to any legal process.
Are policy changes limited?
Currently, the frequency of policy changes are not limited. However, we
reserve the right to limit the number of policy changes to one per policy year
and to restrict such changes in the first policy year. For this purpose,
changes include increases or decreases in the face amount of insurance.
MHC-94-18673 Rev. 1-95 Minnesota Life 21
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A SMOKER DISTINCT BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
-------- -------- -------- ------- -------- -----
NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS NON-SMOKERS SMOKERS
------------- ------- ----------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.254 0.254 35 0.174 0.265 70 3.427 5.191
1 0.102 0.102 36 0.184 0.285 71 3.797 5.648
2 0.098 0.098 37 0.197 0.310 72 4.230 6.171
3 0.096 0.096 38 0.210 0.338 73 4.724 6.757
4 0.093 0.093 39 0.225 0.369 74 5.273 7.405
5 0.088 0.088 40 0.243 0.406 75 5.864 8.100
6 0.084 0.084 41 0.261 0.445 76 6.491 8.815
7 0.079 0.079 42 0.281 0.488 77 7.149 9.540
8 0.077 0.077 43 0.302 0.534 78 7.845 10.278
9 0.076 0.076 44 0.324 0.584 79 8.600 11.058
10 0.076 0.076 45 0.350 0.636 80 9.439 11.904
11 0.082 0.082 46 0.377 0.691 81 10.384 12.841
12 0.091 0.091 47 0.407 0.749 82 11.456 13.886
13 0.104 0.104 48 0.439 0.813 83 12.649 15.034
14 0.118 0.118 49 0.474 0.882 84 13.943 16.241
15 0.129 0.163 50 0.514 0.958 85 15.311 17.473
16 0.139 0.179 51 0.559 1.043 86 16.737 18.705
17 0.147 0.192 52 0.611 1.140 87 18.205 19.973
18 0.152 0.202 53 0.671 1.249 88 19.710 21.295
19 0.156 0.208 54 0.736 1.367 89 21.271 22.625
20 0.158 0.212 55 0.808 1.492 90 22.908 24.006
21 0.157 0.212 56 0.885 1.624 91 24.659 25.457
22 0.154 0.210 57 0.967 1.760 92 26.588 27.118
23 0.152 0.208 58 1.056 1.903 93 28.870 29.192
24 0.149 0.204 59 1.156 2.056 94 31.894 32.006
25 0.146 0.199 60 1.268 2.228
26 0.144 0.197 61 1.395 2.424
27 0.143 0.197 62 1.544 2.650
28 0.143 0.198 63 1.714 2.904
29 0.144 0.202 64 1.903 3.184
30 0.146 0.208 65 2.110 3.480
31 0.149 0.215 66 2.332 3.788
32 0.153 0.223 67 2.568 4.104
33 0.159 0.235 68 2.823 4.434
34 0.166 0.249 69 3.105 4.792
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18673 Rev. 1-95 Minnesota Life 22
<PAGE>
TABLE A
MINNESOTA LIFE INSURANCE COMPANY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATE
ON A UNI-SMOKER BASIS
PER $1,000 NET AMOUNT AT RISK
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM MAXIMUM
ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY
AGE* RATE AGE* RATE AGE* RATE
- ---------- ----------- -------- ----------- -------- -----------
UNI-SMOKERS UNI-SMOKERS UNI-SMOKERS
----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
0 0.254 35 0.214 70 3.835
1 0.102 36 0.229 71 4.214
2 0.098 37 0.246 72 4.654
3 0.096 38 0.265 73 5.157
4 0.093 39 0.287 74 5.712
5 0.088 40 0.312 75 6.310
6 0.084 41 0.339 76 6.941
7 0.079 42 0.368 77 7.599
8 0.077 43 0.398 78 8.289
9 0.076 44 0.431 79 9.033
10 0.076 45 0.465 80 9.857
11 0.082 46 0.502 81 10.784
12 0.091 47 0.541 82 11.835
13 0.104 48 0.583 83 13.006
14 0.118 49 0.629 84 14.270
15 0.134 50 0.681 85 15.605
16 0.148 51 0.739 86 16.991
17 0.159 52 0.805 87 18.421
18 0.168 53 0.879 88 19.895
19 0.174 54 0.960 89 21.422
20 0.176 55 1.047 90 23.024
21 0.177 56 1.138 91 24.740
22 0.176 57 1.234 92 26.640
23 0.173 58 1.334 93 28.901
24 0.171 59 1.444 94 31.905
25 0.167 60 1.568
26 0.166 61 1.709
27 0.166 62 1.871
28 0.166 63 2.055
29 0.169 64 2.259
30 0.172 65 2.478
31 0.178 66 2.711
32 0.184 67 2.956
33 0.193 68 3.217
34 0.202 69 3.507
</TABLE>
*This is the insured employee's attained age as of the last certificate
anniversary.
MHC-94-18673 Rev. 1-95 Minnesota Life 23
<PAGE>
MINNESOTA LIFE
400 Robert Street North -- St. Paul, Minnesota 55101-2098
VARIABLE UNIVERSAL LIFE INSURANCE -- VARIABLE DEATH BENEFIT --
NONPARTICIPATING
MHC-94-18673 Rev. 1-95 Minnesota Life 24
<PAGE>
================================================================================
EX99.A5Q
MINNESOTA LIFE INDIVIDUAL POLICY RIDER
ACCELERATED BENEFITS AGREEMENT
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company.400 Robert Street North.St. Paul,
Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This rider amends the policy to which it is attached and is subject to all its
terms and conditions.
WHAT DOES THIS POLICY RIDER PROVIDE?
This policy rider provides for the accelerated payment of the death benefits
provided under the policy to which it is attached.
If the insured has a terminal condition, as defined in this agreement, the
insured may request an accelerated benefit. If we agree to pay an accelerated
benefit, your cash values, loan values and the death benefit under your policy
will be reduced.
DEFINITIONS
- -----------
When we use the following words, this is what we mean:
DEATH BENEFIT
The face amount of the insured's policy less any existing loans or indebtedness
under the policy and less any term insurance provided by an additional benefit
agreement.
ACCELERATED BENEFIT
The amount of the death benefit we will pay if you are eligible under this
policy rider. We will calculate the accelerated benefit amount by multiplying
the death benefit by the accelerated benefit factor.
PHYSICIAN
An individual who is licensed to practice medicine or treat illness in the state
in which treatment is received. This does not include you, the insured, or a
member of your or the insured's immediate family.
IMMEDIATE FAMILY
The insured's or your spouse, child, parent, grandparent, grandchild, brothers
and sisters and their spouses.
TERMINAL CONDITION
- ------------------
MHC-94-18686 Minnesota Life 1
<PAGE>
What is a terminal condition?
A condition caused by sickness or accident which directly results in a life
expectancy of twelve months or less.
What evidence do we require of the insured's terminal condition?
We must be given evidence that satisfies us that the insured's life expectancy,
because of sickness or accident, is twelve months or less. That evidence must
include certification by a licensed physician. We reserve the right to ask for
independent medical verification of a terminal condition.
Payment of Accelerated Benefit
- ------------------------------
How do we calculate the accelerated benefit factor?
When we calculate this factor, we will consider the insured's age and sex, and
the option applied for. We will also base our calculation on certain
assumptions, which we may change from time to time, including but not limited to
assumptions about:
1. expected future premiums; and
2. the insured's life expectancy.
How do we calculate the accelerated benefit?
We will multiply the death benefit by the accelerated benefit factor to
determine the accelerated benefit available.
Is there a processing charge?
Yes. We will subtract a processing charge of up to $150 from the accelerated
benefit before we pay that benefit to you.
What are the conditions for the payment of an accelerated benefit?
We will consider the payment of an accelerated benefit, subject to all of the
following conditions:
1. Your policy must be in force other than as extended term insurance and all
premiums due must be fully paid.
2. You must make application in writing and in a form which is satisfactory to
us. We will tell you what form is required.
3. The policy must not be assigned.
4. The policy must not have an irrevocable beneficiary.
MHC-94-18686 Minnesota Life 2
<PAGE>
Is the request for an accelerated benefit voluntary?
Yes. An accelerated benefit under this policy rider is not intended to cause you
to involuntarily reduce the death proceeds ultimately payable to the named
beneficiary. An accelerated benefit will be made available on a voluntary basis
only. Therefore:
1. If you are required by law to use this option to meet the claims of
creditors, whether in bankruptcy or otherwise, you are not eligible for this
benefit.
2. If you are required by a government agency to use this option in order to
apply for, obtain, or keep a government benefit or entitlement, you are not
eligible for this benefit.
How will we pay the accelerated benefit?
We will pay the accelerated benefit in one lump sum or in any other mutually
agreeable manner.
Is there a minimum or maximum death benefit for an accelerated benefit?
Yes. We reserve the right to set a minimum death benefit to be eligible for an
accelerated benefit under policy rider. If we do so, it will be at least
$10,000.
The maximum death benefit to be eligible for an accelerated benefit is
$1,000,000.
What is the effect on your policy of the receipt of an accelerated benefit?
If an insured elects to receive accelerated benefits which total the entire
accelerated benefit available under this policy rider, your policy and all other
benefits under your policy based on the insured's life will end. Any insurance
under your policy on the life of someone other than the insured will stay in
effect; we will waive all future premiums for that insurance, subject to the
provisions of your policy nd of any riders thereto.
Do you have to take the entire accelerated benefit?
No. You may choose to receive a partial accelerated benefit. If you do so, you
policy will stay in force.
You may reapply for the payment of the remaining accelerated benefit at any
time. However, we may ask for further satisfactory evidence that the insured
meets all requirements of the accelerated benefit. WE reserve the right to
charge an additional processing charge.
If you choose a partial accelerated benefit, your policy will remain in force
and premiums will be reduced. The face amount, cash values and outstanding loans
of your policy will be reduced in the same proportion as the reduction in the
death benefit resulting from your receipt of accelerated benefits.
MHC-94-18686 Minnesota Life 3
<PAGE>
If you elect to receive only a part of the accelerated benefit amount available
to you under this policy rider, the remaining death benefit under your policy
must be at least $25,000.
To whom will we pay accelerated benefits?
All accelerated benefits will be paid to you unless you validly assign them
otherwise. If the insured dies before all payments have been made, we will pay
the remainder to the beneficiary under the policy in one lump sum. The one sum
we pay will be the present value of the payments that remain, using the interest
rate we use to determine the payments.
Do we have the right to obtain independent medical verification?
Yes. We retain the right to have the insured medically examined at our own
expense to verify the insured's medical condition. We may do this as often as
reasonably required while accelerated benefits are being considered or paid.
Termination Of Agreement
- ------------------------
When does this agreement terminate?
This agreement will end at the earliest of:
1. the date any premium due for your policy remains unpaid at the end of the
grace period; or
2. the date we receive written request to cancel this policy rider; or
3. the date your policy matures, is surrendered, terminated or continued in
force as extended term or reduce paid-up insurance; or
4. the date of the insured's death.
This policy rider is effective as of the effective date on the specifications
page attached to your policy.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
MHC-94-18686 Minnesota Life 4
<PAGE>
================================================================================
EX99.A5R
MINNESOTA LIFE INDIVIDUAL POLICY RIDER
(ACCIDENTAL DEATH AND DISMEMBERMENT BENEFIT)
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
General Information
- -------------------
This rider is issued in consideration for your application for accidental death
and dismemberment coverage and for the payment of the additional monthly charge.
The provisions summarized in this rider are subject to every term, condition,
exclusion, limitation and provision of the policy as amended, unless otherwise
expressly provided for herein,.
What does this rider provide?
This rider provides an accidental death and dismemberment benefit which is
subject to all of the provisions of the policy nd this rider.
"You" as used in this rider, means the insured person named on the
specifications page attached to your policy who applied for accidental death and
dismemberment insurance.
Accidental Death and Dismemberment Benefit
- ------------------------------------------
When will the accidental death and dismemberment benefit be payable?
We will pay the accidental death and dismemberment benefit upon receipt of
written proof satisfactory to us that you died or suffered dismemberment as a
result of an accidental injury. All payments by us are payable at our home
office. Proof of any claim under this rider must be submitted in writing to our
home office.
The proceeds will be paid in a single sum. We will pay interest on the proceeds
from the date of your death or dismemberment until the date of payment. Interest
will be at an annual rate determined by us.
What does death or dismemberment by accidental injury mean?
Death or dismemberment by accidental injury as used in this rider means that
your death or dismemberment results, directly and independently of all other
causes, from an accidental drowning or from an accidental injury which was
unintended, unexpected, and unforeseen. The injury must occur while your
coverage under this rider is in force. Your death or dismemberment must occur
within 180 days after the date of the injury. In no event will we pay the
accidental death or dismemberment benefit where your death or dismemberment
results from or is caused, directly or indirectly, by any of the following:
1. suicide whether sane or insane;
2. your commission of a felony;
3. bodily or mental infirmity, illness or disease;
MHC-94-18687 Minnesota Life 1
<PAGE>
4. drugs, poisons, gases or fumes, voluntarily taken, administered, absorbed,
inhaled, ingested or injected, unless administered on the advice of a
physician;
5. bacterial infection, other than infection occurring simultaneously with, and
as a result of, the accidental injury;
6. travel or flight in or on, or descent from or with, any kind of military
aircraft;
7. war or any act of war whether declared or undeclared.
What is the amount of the accidental death and dismemberment benefit?
The amount of your benefit is as listed below.
FOR LOSS OF
Life....................................................Face Amount of Insurance
Both Hands or Both Feet or Sight of Both Eyes...........Face Amount of Insurance
One Hand and One Foot...................................Face Amount of Insurance
One Foot and Sight of One Eye...........................Face Amount of Insurance
One Hand and Sight of One Eye...........................Face Amount of Insurance
Sight of One Eye............................One-half of Face Amount of Insurance
One Hand or One Foot........................One-half of Face Amount of Insurance
Your Face Amount of Insurance is shown on the specifications page attached to
your policy. Loss of hands or feet means complete severance at or above the
wrists or ankle joints. Loss of sight means the entire and irrecoverable loss of
sight. Your dismemberment must result from a single accident. Benefits are not
cumulative over successive accidents.
To whom will we pay the proceeds?
We will pay death proceeds to the beneficiary or beneficiaries who are named in
your application unless you subsequently change the beneficiary. In that event,
we will pay death proceeds to the beneficiary named in your last change of
beneficiary request. Proceeds for other losses shall be paid to you.
Additional Information
- ----------------------
When does insurance under this rider become effective?
Insurance under this rider becomes effective when your completed application for
accidental death and dismemberment coverage is approved by us and the first
premium is paid; however, in no event will insurance provided by this rider be
effective before your policy effective date as shown on the specifications page
attached to your policy.
What is the monthly cost to you for insurance under this rider?
The monthly cost to you for insurance under this rider is shown on the
specifications page attached to your policy.
MHC-94-18687 Minnesota Life 2
<PAGE>
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each policy month, the monthly cost for insurance under this
rider will be charged to your account.
WHEN DOES INSURANCE UNDER THIS RIDER TERMINATE?
Insurance under this rider will automatically end on the earliest of the
following dates:
1. when any premium remains unpaid after the end of the grace period; or
2. when the policy is surrendered, matures or ends; or
3. on the last day for which premiums have been paid following your notice of
termination of coverage provided by this rider; or
4. on your 70th birthday; or
5. when we pay a claim to you under this rider.
WHEN IS THE BENEFIT UNDER THIS RIDER INCONTESTABLE?
Coverage provided by this rider is subject to the incontestability provision of
the policy.
WILL ACCOUNT VALUES ACCUMULATE UNDER THIS RIDER?
No. Your insurance under this rider will not accumulate account values.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18687 Minnesota Life 3
<PAGE>
================================================================================
EX99.A5S
MINNESOTA LIFE INDIVIDUAL POLICY RIDER (WAIVER AGREEMENT)
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This is issued in consideration of your application and the timely payment of
the additional required premium. The provisions summarized in this rider are
subject in every respect to the policy and amendments thereto.
WHAT DOES THE WAIVER OF DEDUCTION BENEFIT PROVIDE?
If you become totally and permanently disabled, as hereinafter defined, while
under age 60, upon receipt of due proof of such disability, your insurance
(including all applicable riders) under the policy will be continued in force,
subject to the following provisions and without payment of premiums for you
during the uninterrupted continuance of such total and permanent disability.
WHAT IS "TOTAL" DISABILITY?
Total disability is a disability which occurs while your insurance in force and
results from an accidental injury or a disease that continuously prevents you
from engaging in an occupation. You must be under the care of a licensed
physician other than yourself. During the first 24 months of total disability,
"occupation" means your regular occupation. After 24 months, it means any
occupation for which you are reasonably fitted by education, training or
experience.
Your total and irrevocable loss of the following shall be considered total
disability even if you engage in any occupation:
1. the sight of both eyes; or
2. the use of both hands; or
3. the use of both feet; or
4. the use of one hand and one foot.
WHAT IS "PERMANENT" DISABILITY?
Total disability will be considered permanent only after it has existed
continuously for at least six months.
HOW LONG WILL INSURANCE BE CONTINUED?
If you become totally and permanently disabled, insurance will be continued:
MHC-94-18688 Minnesota Life 1
<PAGE>
1. until your 95th birthday; or
2. until the date you are no longer totally and permanently disabled; or
3. until the date you terminate or surrender your insurance;
whichever occurs first.
WHAT WILL BE CONSIDERED DUE PROOF OF DISABILITY?
You must furnish evidence satisfactory to us that your total disability:
1. commenced while insurance n your life under the policy was in force; and
2. commenced before your 60th birthday; and
3. was continuous for six months or more.
We will, from time to time, also require additional proof satisfactory to us
that you continue to be totally and permanently disabled. We may also require
you to submit to one or more medical examinations at our expense. However, we
will not require a medical examination of you more frequently than once a year
if the total disability has continued for two years.
ARE THERE ANY LIMITATIONS?
This benefit will not be effective if your total disability results directly
from intentionally self-inflicted injuries or from an act of war while you are
serving in the military, naval or air forces of any country at war, declared or
undeclared.
WHEN MUST WE BE NOTIFIED?
We must receive written notice of your total disability at our home office:
1. while you are living and totally disabled; and
2. not later than one year after the termination of your insurance under the
policy; and
3. within one year of the date you request as the date for the commencement of
this benefit.
However, the failure to give this notice within the time provided will not
invalidate the claim if it is shown that notice was given as soon as reasonably
possible.
WHAT IS YOUR COST FOR THIS BENEFIT?
Your cost for this benefit is shown on the specifications page attached to your
policy.
WHAT IF YOUR INSURANCE UNDER THE POLICY LAPSES?
If your insurance lapses before notice of your total and permanent disability is
received at our home office, your insurance will be continued only if the notice
is received within one year after your insurance lapses. Also, the total
disability must have commenced prior to the date the net cash value became zero
or during the grace period allowed.
MHC-94-18688 Minnesota Life 2
<PAGE>
WHEN IS THE BENEFIT UNDER THIS AGREEMENT INCONTESTABLE?
This agreement is subject to the incontestability provision of the policy for
each insured.
CAN INSURANCE THAT WAS CONTINUED UNDER THIS AGREEMENT BE CONVERTED?
Yes. Insurance under the policy may be converted as set for in your policy
during the insrued's lifetime and within 31 days after the insured ceases to be
totally and permanently disabled.
IS THIS BENEFIT RETROACTIVE?
Yes. The cost of insurance, cost of riders, and administration fees falling due
before we approve the insured's total disability claim will be deducted from
your account value. If the claim is approved, those charges which were deducted
after the insured became totally and permanently disabled will be credited to
your account value.
WILL YOUR ACCOUNT BE CREDIT WITH PREMIUM CONTRIBUTIONS AS A RESULT OF THIS
BENEFIT?
No. Except for interest which accrues on the account value, the account value
will not increase while insurance is being continued under this agreement.
Nothing contained herein will prohibit you from paying premiums.
This agreement is effective as of the policy date.
/s/ Dennis E. Prohofsky /s/ Robert L. Senkler
Secretary President
MHC-94-18688 Minnesota Life 3
<PAGE>
================================================================================
MINNESOTA LIFE INDIVIDUAL POLICY RIDER (CHILDREN'S BENEFIT)
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company - 400 Robert Street North - St.
Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- -------------------
This rider is issued in consideration for your application for children's
coverage and for the payment of the additional monthly charge. The provisions
summarized in this rider are subject to every term, condition, exclusion,
limitation and provision of the policy as amended, unless otherwise expressly
provided for herein.
WHAT DOES THIS RIDER PROVIDE?
This rider provides life insurance on the lives of your eligible children.
WHAT MEMBERS OF YOUR FAMILY ARE ELIGIBLE FOR CHILDREN'S COVERAGE?
The following members of your family are eligible for insurance under this
rider:
Your unmarried child or children, including stepchildren living in your
household and children legally adopted, who
(i) are between the ages of 14 days and 23 years; and
(ii) are dependent upon you for financial support.
Any child who, subsequent to your policy effective date, meets the requirements
of this provision will become insured on the date he or she so qualifies.
DEATH BENEFIT
- -------------
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED CHILD?
The amount of life insurance on each insured child is shown on the
specifications page attached to your policy.
WHEN WILL THE DEATH BENEFIT BE PAYABLE?
We will pay the death benefit upon receipt of written proof satisfactory to us
that a child insured under this rider died. All payments by us are payable at
our home office. Proof of any claim under this rider must be submitted in
writing to our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this rider will be paid to you.
ADDITIONAL INFORMATION
- ----------------------
MHC-94-18689 Minnesota Life 1
<PAGE>
WHEN DOES INSURANCE ON YOUR ELIGIBLE CHILDREN BECOME EFFECTIVE?
Insurance on your eligible children becomes effective when your completed
application for children's coverage is approved by us; however, in no event will
insurance on your eligible children be effective before your insurance under the
policy is effective.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS RIDER?
The monthly cost to you for insurance under this rider is shown on the
specifications page attached to your policy.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each policy month, the monthly cost for insurance under this
rider will be charged to your account.
WHEN DOES INSURANCE ON AN INSURED CHILD TERMINATE?
Insurance on the life of a child insured under this rider will terminate on the
earliest of:
1. the date you request that insurance on your eligible children be
terminated;
2. the date the child is no longer eligible for insurance under this rider;
3. the date you are no longer insured under the policy.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED CHILD?
No. The insurance on an insured child will not accumulate account values.
/s/Dennis E. Prohofsky /s/Robert L. Senkler
Secretary President
MHC-94-18689 Minnesota Life 2
<PAGE>
Exhibit 99.A5U
MINNESOTA LIFE Policyholder Contribution Rider
Minnesota Life Insurance Company . 400 Robert Street North . St. Paul, Minnesota
55101-2098
GENERAL INFORMATION
This rider amends the group policy to which it is attached. This rider is
subject to every term, condition, exclusion, limitation, and provision of the
group policy unless otherwise expressly provided for herein.
WHAT DOES THIS RIDER PROVIDE?
This rider allows a policyholder to pay for a portion or all of the monthly
charges under the policy without affecting the account value under the policy
which may accumulate due to employee paid net premiums.
PREMIUMS
- --------
HOW WILL PREMIUMS BE ALLOCATED?
The portion of the net premium paid by the policyholder which is to cover the
charges designated by the policyholder will be paid through the guaranteed
account. The remaining portion of the premium will be allocated to the
guaranteed account and/or to the sub-accounts of the separate account, according
to the allocation elected in the application for coverage, or as subsequently
changed by the owner.
HOW WILL CHARGES BE ASSESSED AGAINST THE ACCOUNT VALUE?
The charges which are to be paid by the policyholder will be deducted from the
guaranteed account value on the same day the policyholder paid premium
designated to cover those charges is received. Any remaining charges to be
assessed against the account value will be deducted on the certificate date and
on each succeeding certificate monthly anniversary according to the terms set
forth in the group policy to which this rider is attached.
TERMINATION
- -----------
This rider will terminate on the earlier of:
(1) the date the policyholder requests termination of this rider; and
(2) the date the group policy terminates.
Secretary President
MHC-96-18701 Minnesota Life 1
<PAGE>
Exhibit 99.A5V
Minnesota Life Policyholder Contribution Certificate Supplement
Minnesota Life Insurance Compnay . 400 Robert Street North . St. Paul, Minnesota
55101-2098
GENERAL INFORMATION
This supplement is issued in consideration of your application, and timely
payment of the required premium. This supplement is subject to every term,
condition, exclusion, limitation, and provision of the group policy unless
otherwise expressly provided for herein. You may examine the group policy at
the principal office of the policyholder during regular working hours.
WHAT DOES THIS POLICYHOLDER CONTRIBUTION SUPPLEMENT PROVIDE?
This supplement allows a policyholder to pay for a portion or all of the monthly
charges under the policy without affecting your account value under the policy
which may accumulate due to net premiums paid by you.
PREMIUMS
HOW WILL PREMIUMS BE ALLOCATED?
The portion of the net premium paid by the policyholder which is to cover the
charges designated by the policyholder will be paid through the guaranteed
account. The remaining portion of the premium will be allocated to the
guaranteed account and/or to the sub-accounts of the separate account, according
to the allocation elected in your application for coverage, or as subsequently
changed by you.
HOW WILL CHARGES BE ASSESSED AGAINST THE ACCOUNT VALUE?
The charges which are to be paid by the policyholder will be deducted from the
guaranteed account value on the same day the policyholder paid premium
designated to cover those charges is received. Any remaining charges to be
assessed against the account value will be deducted on the certificate date and
on each succeeding certificate monthly anniversary according to the terms set
forth in the group policy.
TERMINATION
This supplement will terminate on the earlier of:
(1) the date the policyholder requests termination of this supplement; and
(2) the date the group policy terminates.
Secretary President
MHC-96-18702 Minnesota Life 1
<PAGE>
Exhibit 99.A5W
MINNESOTA LIFE SPOUSE AND CHILD TERM LIFE INSURANCE POLICY
Minnesota Life Insurance Comapny . 400 Robert Street North . St. Paul, Minnesota
55101-2098
GENERAL INFORMATION
This rider amends the group policy to which it is attached, and is subject to
every term, condition, exclusion, limitation, and provision of the group policy
unless otherwise expressly provided for herein.
WHAT DOES THIS RIDER PROVIDE?
This rider provides term life insurance on the lives of the primary insured's
eligible spouse and children. To obtain coverage under this rider, the primary
insured must apply for spouse and child coverage and pay an additional monthly
charge.
WHAT MEMBERS OF THE PRIMARY INSURED'S FAMILY ARE ELIGIBLE FOR COVERAGE?
The following members of the primary insured's family are eligible for coverage
under this rider:
(1) the primary insured's lawful spouse who is not legally separated from the
primary insured, and who is not eligible for insurance as an employee under
the policy to which this rider is attached; and
(2) the primary insured's unmarried child or children, stepchildren, and
legally adopted children, who are living at home, are between the ages of 14
days and 23 years, and who are dependent on the primary insured for
financial support.
Any child who, subsequent to the effective date of the primary insured's
certificate supplement for Spouse and Child Term Life Insurance, meets the
requirements of this provision will become insured on the date he or she so
qualifies.
DEATH BENEFIT
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED FAMILY MEMBER?
The amount of life insurance on each insured family member is shown on the
specifications page attached to the group policy.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay the death benefit upon receipt at our home office of written proof
satisfactory to us that a spouse or child insured under this rider has died.
All payments made by us are payable from our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this rider will be paid to the primary insured.
MHC-96-18703
<PAGE>
ADDITIONAL INFORMATION
WHEN DOES INSURANCE ON THE PRIMARY INSURED'S ELIGIBLE SPOUSE AND CHILDREN BECOME
EFFECTIVE?
Insurance on the primary insured's eligible spouse and children becomes
effective when the primary insured's completed application for spouse and child
coverage is approved by us; however, in no event will insurance on the primary
insured's eligible spouse and children be effective before the primary insured's
insurance under the group policy is effective.
WHAT IS THE MONTHLY COST TO THE PRIMARY INSURED FOR INSURANCE UNDER THIS RIDER?
The monthly cost to the primary insured for insurance under this rider is shown
on the specifications page attached to the group policy.
WHEN WILL THE PRIMARY INSURED'S ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this rider will be charged to the primary insured's account.
WHEN DOES INSURANCE ON AN ELIGIBLE SPOUSE OR CHILD TERMINATE?
Insurance on the life of a spouse or child insured under this rider will
terminate on the earliest of:
(1) the date the primary insured requests that insurance on his or her eligible
spouse and children be terminated;
(2) the date the spouse or child is no longer eligible for insurance under this
rider;
(3) the date the primary insured is no longer insured under the group policy.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED SPOUSE OR CHILD?
No. The insurance on an insured spouse or child will not accumulate account
values.
Secretary President
MHC-96-18703 Minnesota Life 1
<PAGE>
Exhibit 99.A5X
MINNESOTA LIFE SPOUSE AND CHILD TERM LIFE INSURANCE CERTIFICATE SUPPLEMENT
Minnesota Life Insurance Company . 400 Robert Street North . St. Paul, Minnesota
55101-2098
GENERAL INFORMATION
This supplement is issued in consideration for your application for spouse and
child coverage and for the payment of the additional monthly charge. The
provisions summarized in this supplement are subject to every term, condition,
exclusion, limitation, and provision of the group policy as amended, unless
otherwise expressly provided for herein.
WHAT DOES THIS SUPPLEMENT PROVIDE?
This supplement provides term life insurance on the lives of your eligible
spouse and children.
WHAT MEMBERS OF YOUR FAMILY ARE ELIGIBLE FOR COVERAGE?
The following members of your family are eligible for coverage under the Spouse
and Child Term Life Insurance Policy Rider attached to the group policy:
(1) your lawful spouse who is not legally separated from you, and who is not
eligible for insurance as an employee under the policy to which the Spouse
and Child Term Life Insurance Policy Rider is attached; and
(2) your unmarried child or children, stepchildren, and legally adopted
children, who are living at home, are between the ages of 14 days and 23
years, and who are dependent on you for financial support.
Any child who, subsequent to the effective date of your certificate supplement
for Spouse and Child Term Life Insurance, meets the requirements of this
provision will become insured on the date he or she so qualifies.
DEATH BENEFIT
WHAT IS THE AMOUNT OF LIFE INSURANCE ON EACH INSURED FAMILY MEMBER?
The amount of life insurance on each insured family member is shown on the
specifications page attached to your certificate.
WHEN WILL THE DEATH BENEFIT BE PAID?
We will pay the death benefit upon receipt at our home office of written proof
satisfactory to us that your spouse or child insured under this supplement has
died. All payments made by us are payable from our home office.
TO WHOM WILL WE PAY THE PROCEEDS?
All proceeds payable under this supplement will be paid to you.
<PAGE>
ADDITIONAL INFORMATION
WHEN DOES INSURANCE ON YOUR ELIGIBLE SPOUSE AND CHILDREN BECOME EFFECTIVE?
Insurance on your eligible spouse and children becomes effective when your
completed application for spouse and child coverage is approved by us; however,
in no event will insurance on your eligible spouse and children be effective
before your insurance under the group policy is effective.
WHAT IS THE MONTHLY COST TO YOU FOR INSURANCE UNDER THIS SUPPLEMENT?
The monthly cost to you for insurance under this supplement is shown on the
specifications page attached to your certificate.
WHEN WILL YOUR ACCOUNT BE CHARGED?
On the first day of each certificate month, the monthly cost for insurance under
this supplement will be charged to your account.
WHEN DOES INSURANCE ON AN ELIGIBLE SPOUSE OR CHILD TERMINATE?
Insurance on the life of a spouse or child insured under this supplement will
terminate on the earliest of:
(1) the date you request that insurance on your eligible spouse and children
be terminated;
(2) the date the spouse or child is no longer eligible for insurance under this
supplement;
(3) the date you are no longer insured under the group policy.
WILL ACCOUNT VALUES ACCUMULATE FOR AN INSURED SPOUSE OR CHILD?
No. The insurance on an insured spouse or child will not accumulate account
values.
Secretary President
MHC-96-18704 Minnesota Life 1
<PAGE>
EXHIBIT 6(A)
RESTATED CERTIFICATE OF INCORPORATION
OF
MINNESOTA LIFE INSURANCE COMPANY
Robert L. Senkler and Dennis E. Prohofsky, respectively, the President and
Secretary of Minnesota Life Insurance Company, a corporation under and existing
by virtue of the laws of the State of Minnesota, do hereby certify that the
following Restated Certificate of Incorporation was duly adopted by an
affirmative vote of a majority of the stockholders at a special meeting of the
Company on December 10, 1998.
This Restated Certificate of Incorporation of Minnesota Life Insurance Company
supersedes and takes the place of the existing Certificate of Incorporation and
all amendments to it:
ARTICLE I
The name of the Company is Minnesota Life Insurance Company (the "Company").
ARTICLE II
The principal office of the Company shall be located at 400 Robert Street North,
Saint Paul, Minnesota 55101-2098.
ARTICLE III
The Company is incorporated for the purpose of transacting the business of and
making insurance upon the lives of individuals and every assurance pertaining
thereto or connected therewith, to grant, purchase and dispose of annuities and
endowments of every kind and description whatsoever, to provide an indemnity
against death and for weekly or other periodic indemnity for disability
occasioned by accident or sickness to the person of the assured and to have all
the further rights, powers and privileges granted or permitted life insurance
companies organized under the provisions of Minnesota Statutes, Chapter 300, and
all Acts amendatory thereof or additional thereto.
ARTICLE IV
The duration and continuation of the Company shall be perpetual.
ARTICLE V
The authorized capital stock of this Company shall be 5,000,000 shares initially
paid in by operation of Minnesota Statutes Section 60A.077 and subsequently paid
in cash, consisting of shares of Common Stock, with par value of $1.00 per
share. Each share of the Common Stock shall have one vote per share.
No shareholder of the Company shall have any pre-emptive or preferential right,
nor be entitled as such as a matter of right, to subscribe for or purchase any
part of any new or additional issue
<PAGE>
of stock of the Company of any class or series, whether issued for money or for
consideration other than money, or of any issue of securities convertible into
stock of the Company.
ARTICLE VI
The corporate powers of the Company shall be vested in a Board of Directors of
at least five persons and shall be exercised by the Board of Directors and by
such officers, agents, employees and committees as the Board of Directors may,
in its discretion, from time to time appoint and empower. The Board of
Directors shall have the power from time to time to make, amend or repeal such
bylaws, rules and regulations for the transaction of the business of the Company
as the Board of Directors may deem expedient and as are not inconsistent with
this Certificate of Incorporation or the constitution or other laws of the State
of Minnesota.
The directors of the Company shall be divided into three classes, as nearly
equal in number as reasonably possible: the first class, the second class and
the third class. Each such director shall serve for a term ending on the third
annual meeting of stockholders following the annual meeting at which such
director was elected, provided, that the directors first elected to the first
class shall serve for a term ending upon the election of directors at the annual
meeting in 2000, the directors first elected to the second class shall serve for
a term ending upon the election of directors at the annual meeting in 2001, and
the directors first elected to the third class shall serve for a term ending
upon the election of directors at the annual meeting in 2002.
At each annual election, commencing at the annual meeting in 2000, the
successors to the class of directors whose term expires at that time shall be
elected by stockholders to hold office for a term of three years to succeed
those directors whose term expires, so that the term of one class of directors
shall expire each year.
Notwithstanding the requirement that the three classes of directors shall be as
nearly equal in number of directors as reasonably possible, in the event of any
change in the authorized number of directors, each director then continuing to
serve as such shall nevertheless continue as a director of the class of which he
or she is a member until the expiration of his or her current term, or his or
her prior resignation, disqualification, disability or removal. There shall be
no cumulative voting in the election of the directors.
Any vacancy on the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office, an increase in the number of
directorships or other cause shall be filled only by the affirmative vote of a
majority of directors then in office, although less than a quorum or by the sole
remaining director. A director so chosen shall hold office for a term expiring
at the annual meeting at which the term of the class to which he or she has been
elected expires. If the number of directors is changed, any increase or
decrease shall be apportioned among the three classes by a two-thirds (2/3) vote
of the directors then in office. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
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<PAGE>
ARTICLE VII
The incumbent members of the Board of Directors as of the date of the filing of
this Restated Certificate of Incorporation shall continue to be directors of the
Company until their successors are duly elected and qualified in accordance with
the bylaws. The current members of the Board of Directors who shall continue to
be directors of the Company and their respective addresses are:
NAME OF DIRECTOR ADDRESS
Giulio Agostini 3M
3M Center - Executive 220-14W-08
St. Paul, MN 55144-1000
Anthony L. Andersen H. B. Fuller Company
2424 Territorial Road
St. Paul, MN 55114
Leslie S. Biller Norwest Corporation
Sixth and Marquette
Minneapolis, MN 55479-1052
John F. Grundhofer U.S. Bancorp
601 2nd Avenue South
Suite 2900
Minneapolis, MN 55402-4302
Harold V. Haverty 701 Fourth Avenue South, Suite 300
Minneapolis, MN 55415
David S. Kidwell The Curtis L. Carlson School of Management
University of Minnesota
321 19th Avenue South
Minneapolis, MN 55455
Reatha C. King General Mills Foundation
P O Box 1113
Minneapolis, MN 55440
Thomas E. Rohricht Doherty, Rumble & Butler P.A.
2800 Minnesota World Trade Center
30 East Seventh Street
St. Paul, MN 55101-4999
Terry T. Saario Bravo!, LLC
900 Hennepin Avenue
Minneapolis, MN 55403
-3-
<PAGE>
Robert L. Senkler Minnesota Life Insurance Company
400 Robert Street North
St. Paul, MN 55101
Michael E. Shannon Ecolab, Inc.
370 Wabasha Street
Ecolab Center
St. Paul, MN 55102
Frederick T. Weyerhaeuser Clearwater Investment Trust
332 Minnesota Street
Suite W-2090
St. Paul, MN 55101-1308
ARTICLE VIII
A director of the Company shall not be liable to the Company or the stockholders
of the Company for monetary damages for a breach of the fiduciary duty of care
as a director, except to the extent such exemption from liability or limitation
thereof is not permitted under the Minnesota Statutes, Section 300.64, as the
same currently exists or hereafter is amended. Specifically such exemption
shall not apply to:
(a) a breach of the director's duty of loyalty to the Company or its
stockholders;
(b) acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of the law;
(c) acts prohibited under Minnesota Statutes, Section 300.60, as the same
currently exists or is hereafter amended;
(d) payment of a dividend when the Company is insolvent;
(e) intentional neglect or refusal to perform a duty imposed by law;
(f) a transaction from which the director derives an improper personal
benefit; or
(g) an act or omission occurring prior to the date when this Restated
Certificate of Incorporation became effective.
ARTICLE IX
In no event shall any funds or investments be held in the name of any individual
who is an officer or employee of the Company. The Board of Directors shall
designate those banks and financial institutions in which the Company funds
shall be deposited. The Board by separate resolution also shall designate the
persons authorized to withdraw or transfer funds held in those accounts. No
funds shall be withdrawn or transferred from those accounts except upon the
authorization of the person or persons so authorized.
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<PAGE>
ARTICLE X
The annual meeting of the Company shall be held on the first Tuesday in May of
each year, if not a legal holiday, and if a legal holiday, then on the next day
not a legal holiday.
ARTICLE XI
The Company is authorized to issue any or all of its policies with or without
participation in profits, savings or unabsorbed portions of premiums; to
classify such policies issued on a participating or nonparticipating basis; and
to determine the right to participate and the extent of participation of any
class or classes of such policies, at the discretion of the Board of Directors.
The declaration and crediting of any policy dividend shall be subject to
approval by majority vote of the Minnesota Mutual Companies, Inc. Board of
Directors.
ARTICLE XII
This Restated Certificate of Incorporation may be amended at any annual meeting
of the Company, or any special meeting of the Company called for that expressly
stated purpose, by the affirmative vote of a majority of the stockholders.
IN WITNESS WHEREOF, the undersigned have executed this Restated Certificate of
Incorporation.
_________________, 1998 _________________________________
Robert L. Senkler
Chairman of the Board, President
and Chief Executive Officer
_________________, 1998 _________________________________
Dennis E. Prohofsky
Senior Vice President, Secretary
and General Counsel
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<PAGE>
EXHIBIT 6(B)
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
As adopted on October 1, 1998
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I STOCKHOLDERS.................................................. 1
Section 1.1 Annual Meeting.............................................. 1
Section 1.2 Special Meetings............................................ 1
Section 1.3 Place and Hour of Meeting................................... 1
Section 1.4 Notice of Meetings; Record Date............................. 1
Section 1.5 Quorum...................................................... 2
Section 1.6 Voting Rights............................................... 2
Section 1.7 Voting by Proxy............................................. 2
Section 1.8 Voting of Shares by Certain Holders......................... 2
ARTICLE II BOARD OF DIRECTORS........................................... 3
Section 2.1 Number...................................................... 3
Section 2.1 Non-overlapping Directors................................... 3
Section 2.2 Filling of Vacancies........................................ 3
Section 2.3 Place of Meeting, Corporate Books........................... 3
Section 2.4 Regular Meetings............................................ 3
Section 2.5 Special Meetings............................................ 4
Section 2.6 Quorum...................................................... 4
Section 2.7 Compensation of Directors................................... 4
Section 2.8 Action by Unanimous Written Consent of Directors............ 4
Section 2.9 Removal..................................................... 4
ARTICLE III COMMITTEES OF THE BOARD..................................... 5
Section 3.1 Creation of Committees...................................... 5
Section 3.2 Appointments................................................ 5
Section 3.3 Qualifications.............................................. 5
Section 3.4 Committee Chairs............................................ 5
Section 3.5 Meetings.................................................... 5
Section 3.6 Quorum...................................................... 5
Section 3.7 Vacancies................................................... 6
Section 3.8 Minutes and Reports......................................... 6
Section 3.9 Audit Committee............................................. 6
Section 3.10 Investment Committee....................................... 7
Section 3.11 Committee of Non-Overlapping Directors..................... 7
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV OFFICERS...................................................... 7
Section 4.1 Number....................................................... 7
Section 4.2 Election..................................................... 7
Section 4.3 Term of Office............................................... 8
Section 4.4 Removal...................................................... 8
Section 4.5 Vacancies.................................................... 8
Section 4.6 Duties of Officers........................................... 8
Section 4.7 Absence or Disability........................................ 9
ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES........... 9
ARTICLE VI DISPOSITION OF FUNDS AND INVESTMENTS.......................... 9
Section 6.1 Funds and Investments........................................ 9
Section 6.2 Deposits..................................................... 10
ARTICLE VII CORPORATE STOCK.............................................. 10
Section 7.1 Certificates for Shares...................................... 10
Section 7.2 Transfer of Shares........................................... 10
Section 7.3 Transfer Books............................................... 10
ARTICLE VIII AMENDMENTS.................................................. 10
</TABLE>
<PAGE>
BYLAWS
OF
MINNESOTA LIFE INSURANCE COMPANY
ARTICLE I
STOCKHOLDERS
SECTION 1.1 ANNUAL MEETING.
The annual meeting of stockholders shall be held on the first Tuesday in May of
each year, if not a legal holiday, and if a legal holiday, then on the next day
not a legal holiday, when members of the Board of Directors shall be elected to
succeed those whose terms are then expiring and such other business shall be
transacted as may properly be brought before the meeting.
SECTION 1.2 SPECIAL MEETINGS.
Special meetings of stockholders for the transaction of such business as may
properly come before the meeting may be called by order of the Board of
Directors or by stockholders holding together at least a majority of all the
shares of the Company entitled to vote at the meeting. Business transacted at
all special meetings of stockholders shall be confined to the purpose or
purposes stated in the notice of the meeting.
SECTION 1.3 PLACE AND HOUR OF MEETING.
Every annual meeting of stockholders shall commence at such hour as shall be
determined by the Board of Directors. Every meeting of stockholders, whether an
annual or a special meeting, shall be held at the principal office of the
Company at 400 Robert Street North in the City of Saint Paul, in the State of
Minnesota (the "Home Office"), or at such other place as may be selected by the
Board of Directors.
SECTION 1.4 NOTICE OF MEETINGS; RECORD DATE.
Notice of each meeting of stockholders shall be mailed to each stockholder of
the Company not less than thirty days previous to such meeting, and every such
notice shall state the day and hour and the place at which the meeting is to be
held and, in the case of any special meeting, shall indicate briefly the purpose
or purposes thereof. The Board of Directors may fix in advance a date, not less
than twenty calendar days preceding the dates of the aforenamed occurrences, as
a record date for the determination of the shareholders entitled to notice of,
and to vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
shares. In such case, such stockholders, and only such stockholders as are
stockholders of the Company of record on the record date so fixed, are entitled
to notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Company after such record date so fixed. If the
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<PAGE>
Board of Directors shall not set a record date for the determination of the
stockholders entitled to notice of, and to vote at, a meeting of stockholders,
only the stockholders who are stockholders of record at the close of business on
the 20th day preceding the date of the meeting are entitled to notice of, and to
vote at, the meeting and any adjournment of the meeting.
SECTION 1.5 QUORUM.
A majority of the outstanding shares entitled to notice of and to vote at a
meeting, present in person or by proxy conforming the requirements of Section
1.7 of these bylaws, shall constitute a quorum for the transaction of any
business coming before any regular or special meeting of stockholders duly and
properly called, except as provided by law, the Restated Certificate of
Incorporation of the Company, or these bylaws. If, however, such quorum of
stockholders shall not be present or represented at any meeting of stockholders,
the stockholders entitled to vote thereat, present in person or by proxy, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a requisite number of stockholders shall be
present. At any such adjourned meeting at which the requisite number of
stockholders shall be represented, any business may be transacted which might
have been transacted at the meeting as originally notified.
SECTION 1.6 VOTING RIGHTS.
Each outstanding share of Common Stock shall be entitled to one vote upon each
matter submitted to a vote at any annual or special meeting of stockholders.
SECTION 1.7 VOTING BY PROXY.
Any stockholder may vote by proxy at any meeting of stockholders. To be valid,
the proxy appointment must be in writing and must be filed with, and received
by, the Secretary at the Home Office of the Company at least five days before
the meeting at which it is to be used, exclusive of the day of the meeting, but
inclusive of the day of receipt and filing of the proxy. A proxy appointment
may be for a specified period of time not to exceed one year. A proxy may be
revoked by a stockholder at any time by written notice to the Secretary of the
Company, or by executing a new proxy appointment and filing it as required
herein, or by personally appearing and exercising his or her rights as a
stockholder at any meeting of the stockholders.
SECTION 1.8 VOTING OF SHARES BY CERTAIN HOLDERS.
(a) Shares of stock in the name of another corporation, foreign or
domestic, are to be voted by such officer, agent, or proxy as the bylaws of such
corporation may determine.
(b) Shares of stock in the name of a deceased person are to be voted
by his executor or administrator in person or by proxy.
(c) Shares of stock in the name of a fiduciary, such as guardian,
curator, or trustee are to be voted by such fiduciary either in person or by
proxy, provided the books of the Company show the stock to be in the name of
such fiduciary in such capacity.
(d) Shares of stock in the name of a receiver are to be voted by such
receiver, and shares held by, or in the control of, a receiver are to be voted
by such receiver without the
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<PAGE>
transfer thereof into his name, if such voting authority is contained in an
appropriate order of the court by which such receiver was appointed.
(e) Shares of stock which have been pledged are to be voted by the
pledgor until the shares of stock have been transferred into the name of the
pledgee, and thereafter, the pledgee is entitled to vote the shares so
transferred.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.1 NUMBER.
The Board of Directors shall consist of such number of Directors, not fewer than
five or more than sixteen, as the Board shall from time to time determine.
SECTION 2.1 NON-OVERLAPPING DIRECTORS.
Commencing with the first annual election of directors, and unless and until
Minnesota Mutual Companies, Inc. (or any successor mutual insurance holding
company) is converted from a mutual insurance holding company to a stock
company, the Board of Directors shall at all times include at least three
directors who are not concurrently serving as directors on the board(s) of
Minnesota Mutual Companies, Inc., Securian Holding Company or Securian Financial
Group, Inc. ("Non-overlapping Directors").
SECTION 2.2 FILLING OF VACANCIES.
If the office of any Director becomes vacant for any reason, a majority of the
remaining Directors may choose a successor. Each Director so chosen shall hold
office until the next regular annual meeting of the shareholders and until his
or her successor has been duly elected and qualified. Not more than one-third
of the maximum number of Directors may be so chosen by the Board between regular
annual meetings of the shareholders.
SECTION 2.3 PLACE OF MEETING, CORPORATE BOOKS.
The Board of Directors may hold its meetings and keep the books of the Company
at the Home Office of the Company, or at such other place or places as they may
from time to time by resolution determine, except as otherwise required by law.
SECTION 2.4 REGULAR MEETINGS.
Regular meetings of the Board shall be held at such times and places as are
fixed from time to time by resolution of the Board. Notice need not be given of
those regular meetings of the Board held at the times and places fixed by
resolution, nor need notice be given of adjourned meetings. If either or both
the time or place of a regular meeting are other than that fixed by resolution,
a telephonic or written notice shall be given to each Director not less than
twenty-four hours prior to the time of that regular meeting.
-3-
<PAGE>
SECTION 2.5 SPECIAL MEETINGS.
Special meetings of the Board may be held at any time upon call either of the
Chair of the Board, or of the Chief Executive Officer, or upon written request
of any three or more directors. Except as otherwise provided, notice of a
special meeting shall be given to each director either in writing or by
telephone. Notice of at least seventy-two hours prior to the meeting time is
required if written notice is deposited in the United States mail in the City of
Saint Paul. Notice of at least twenty-four hours prior to the meeting time is
required if written notice is left at either the place of business or residence
of each director. Notice of at least six hours prior to the meeting time is
required if all directors are personally either served with a written notice or
contacted by telephone. Notice need not be given to the directors of adjourned
special meetings. Also, special meetings may be held at any time without notice
if all of the directors are present, or if, before the meeting, those not
present waive such notice in writing. Notice of a special meeting shall state
the purpose of the meeting.
SECTION 2.6 QUORUM.
At all meetings of the Board of Directors, a majority of the directors then in
office shall be necessary and sufficient to constitute a quorum for the
transaction of business, but if, at any meeting, less than a quorum shall be
present, a majority of those present may adjourn the meeting from time to time,
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute or by the Restated Certificate of
Incorporation of the Company or by these bylaws.
SECTION 2.7 COMPENSATION OF DIRECTORS.
Members of the Board of Directors, who are not salaried officers of the Company,
shall receive such annual compensation as shall be fixed from time to time by
resolution of the Board of directors; and, in addition, the directors who are
not salaried officers of the Company shall receive a sum in such amount as shall
be fixed from time to time by resolution of the Board of Directors, and the
expenses of attendance, if any, for attendance at each regular or special
meeting of the Board, whether or not an adjournment be had because of the
absence of a quorum.
SECTION 2.8 ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS.
If all the directors severally or collectively consent in writing to any action
taken or to be taken by the directors, such consents have the same force and
effect as a unanimous vote of the directors at a meeting duly held, and may be
stated as such in any certificate or document filed with the Secretary of State
of Minnesota or any other state in the United States of America or other
Country. The Secretary of the Company shall file such consents with the minutes
of the meetings of the Board of Directors.
SECTION 2.9 REMOVAL.
Any director or the entire Board of Directors may be removed at any time but
only for cause or pursuant to the Company's retirement policy in effect when the
director was first elected.
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<PAGE>
ARTICLE III
COMMITTEES OF THE BOARD
SECTION 3.1 CREATION OF COMMITTEES.
The following designated standing committees of the Board are hereby authorized
and created: Audit, Investment, and Non-overlapping Directors. In addition,
the Board is authorized to create any other committee or committees of the Board
as the Board from time to time deems necessary. The name, duration and duties
of each other committee and the number of members thereof shall be as prescribed
in the action creating the committee. In the event the Board of Directors
creates an Executive Committee invested with the full powers of the Board of
Directors between meetings of the Board of Directors, then that Committee must
have at least the same proportion of Non-overlapping Directors as does the full
Board of Directors.
SECTION 3.2 APPOINTMENTS.
The members of each standing Board committee shall consist of those Directors
appointed by the Board of Directors. Each Director appointed to a Board
committee shall continue to serve on that committee at the will and pleasure of
the Board for the period specified in his or her appointment or until his or her
earlier death, resignation or removal.
SECTION 3.3 QUALIFICATIONS.
Each Director is qualified to be appointed and successively reappointed to one
or more committees.
SECTION 3.4 COMMITTEE CHAIRS.
The Board shall appoint one of the members of each of the Board committees to
chair that committee and, in its discretion, may also appoint one of the members
of each of the committees to serve as a vice chair of that committee. If
neither the committee chair nor the committee vice chair is present at a meeting
of a committee, the committee members present at that committee meeting shall
elect another committee member to chair that meeting.
SECTION 3.5 MEETINGS.
Each committee shall meet at such times as the chair of that committee may
designate or as a majority of that committee may determine, subject to a minimum
of not less than two meetings per calendar year.
SECTION 3.6 QUORUM.
A majority of each Board committee shall constitute a quorum at each meeting of
that committee. At any meeting of a committee at which a quorum is present, the
committee may continue to transact business until adjournment, even though
committee member(s) may have left the meeting so that less than a quorum is
present at the meeting. If a quorum is not present for a committee meeting, the
chair of that committee may request the Board to appoint a sufficient number of
other directors to serve as members of the committee only for that meeting, so
as to obtain a quorum. If the Board makes the requested appointments, any
action so taken at the committee meeting shall be valid and binding.
-5-
<PAGE>
SECTION 3.7 VACANCIES.
In the case of the death, resignation or removal of a member of a committee, the
Board may appoint another Director to fill the vacancy so created on that
committee for the balance of the unexpired appointment. The appointment shall
be subject to the qualifications set forth for that committee.
SECTION 3.8 MINUTES AND REPORTS.
Each committee shall keep a written record of its acts and proceedings and shall
submit that record to the Board of Directors at a regular meeting of the Board
and at such other times as requested by the Board or when a majority of the
committee deems it desirable to do so. Failure to submit a record will not,
however, invalidate any action taken by the committee prior to the time the
record of the action was, or should have been, submitted to the Board. The
minutes of each committee shall be recorded by the person designated by the
chair of that committee.
SECTION 3.9 AUDIT COMMITTEE.
The Audit Committee shall consist of not fewer than four directors that are not
officers or employees of Minnesota Mutual Companies, Inc. or any of its
subsidiaries. The committee shall have the following powers and duties:
(a) Annually recommend to the Board a firm of independent certified public
accountants to audit the Company's books, records and accounts.
(b) Approve the scope of audits to be conducted by the independent
certified public accountants, taking into account the principal risks inherent
in the Company's business and the recommendations from the independent
accountants as to scope of audit.
(c) Review all recommendations made by the independent certified public
accountants in their audit reports to the Board.
(d) Approve the scope of audits to be conducted by the Company's internal
auditors and review the reports of those audits.
(e) Review the reports which result from the examinations of the Company
conducted by state insurance authorities.
(f) Review corporate litigation involving extra-contractual damages.
(g) Periodically review the Company's plans for data security and disaster
recovery.
(h) Advise the Board of the results of the committee's reviews and
recommendations resulting therefrom.
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<PAGE>
SECTION 3.10 INVESTMENT COMMITTEE.
The Investment Committee shall consist of not fewer than four directors and
shall have the following powers and duties which shall be exercised not less
than once every twelve months:
(a) Review the written investment policy for the Company investments,
recommend changes thereto, and submit to the Board for its approval and adoption
the policy and procedures for the ensuing twelve months.
(b) Review all investments of Company funds, including their acquisition
and sale and report findings to the Board.
(c) Furnish the Board with summaries of investment transactions.
(d) Review compliance with the written investment policy and valuation
procedures and submit findings to the Board.
SECTION 3.11 COMMITTEE OF NON-OVERLAPPING DIRECTORS.
The Committee of Non-overlapping Directors shall consist of not fewer than three
Non-overlapping Directors (as described in Section 2.1 of these bylaws) and
shall have the following powers and duties:
(a) Review all agreements and material transactions between and among the
Company, its affiliates and subsidiaries to assure that such agreements and
transactions are fair and reasonable and that they comply with Minnesota
Statutes, Section 60D, and all Acts amendatory thereof or additional thereto.
For purposes of this section, the term "material" shall have the definition set
forth in Minnesota Statutes, Section 60D.19, subd. 4, as it may be amended from
time to time.
(b) Such other powers and duties as determined by the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER.
The officers of the Company shall be a Chief Executive Officer, a President, one
or more Vice Presidents, a Treasurer, an Actuary, a Controller, a Secretary, and
one or more Assistant Secretaries. In addition, there may be such other
officers as the Board of Directors from time to time may deem necessary. One
individual may hold two or more offices, except those of President and
Secretary.
SECTION 4.2 ELECTION.
Officers shall be elected or appointed by the Board of Directors.
-7-
<PAGE>
SECTION 4.3 TERM OF OFFICE.
Each officer shall serve for the term stated in his or her election or
appointment or until his or her earlier death, resignation or removal.
SECTION 4.4 REMOVAL.
Any officer may be removed from office, with or without cause, at any time by
the affirmative vote of the majority of the Board of Directors then in office.
SECTION 4.5 VACANCIES.
Any vacancy in any office from any cause may be filled by the Board of Directors
at its next meeting.
SECTION 4.6 DUTIES OF OFFICERS.
The duties of the officers shall be as follows:
(a) CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have
general active management of the business of the Company and, in the absence of
the Chair of the Board, shall preside at all meetings of the members and the
Board of Directors, and shall see that all orders and resolutions of the Board
are carried into effect. Except where, by law, the signature of the President
is required, the Chief Executive Officer shall possess the same power as the
President to sign and execute all authorized certificates, contracts, bonds, and
other obligations of the Company.
(b) PRESIDENT. The President, in the absence of the Chair of the Board
and the Chief Executive Officer, shall preside at all meetings of the members
and the Board of Directors. The President shall be the chief administrative
officer of the Company and shall have the power to sign and execute all
authorized certificates, contracts, bonds, and other obligations of the Company.
The President also shall perform such other duties as are incident to the office
or are properly required of him or her by the Board or the Chief Executive
Officer.
(c) VICE PRESIDENTS. Each Vice President will perform those duties as
from time to time may be assigned by the Chief Executive Officer. In the absence
of the President, a Vice President designated by the Board of Directors shall
perform the duties of the President. A Vice President shall have the power to
sign and execute all authorized certificates, contracts, bonds and other
obligations of the Company. One or more of the Vice Presidents may be entitled
Executive Vice President, Senior Vice President, Vice President, Second Vice
President, or such other variation thereof as may be designated by the Board.
(d) SECRETARY. The Secretary shall give notice and keep the minutes of
all meetings of the members and of the Board of Directors and shall give and
serve all notices of the Company. The Secretary or an Assistant Secretary shall
have the power to sign with the Chief Executive Officer, President, or any Vice
President in the name of the Company all authorized certificates, contracts,
bonds, or other obligations of the company and may affix the Company Seal
thereto. The Secretary shall have charge and custody of the books and papers of
the Company and in general shall perform all duties incident to the office of
Secretary, except as
-8-
<PAGE>
otherwise specifically provided in these bylaws, and such other duties as from
time to time may be assigned by the Chief Executive Officer. If Assistant
Secretaries are elected or appointed, they shall have those powers and perform
those duties as from time to time may be assigned to them by the Chief Executive
Officer and, in the absence of the Secretary, one of them shall perform the
duties of the Secretary.
(e) TREASURER. The Treasurer shall have those powers and shall perform
those duties as from time to time may be assigned by the Chief Executive
Officer. If Assistant Treasurers are elected or appointed, they shall have
those powers and perform those duties as from time to time may be assigned to
them by the Chief Executive Officer and, in the absence of the Treasurer, one of
them shall perform the duties of the Treasurer.
(f) CONTROLLER. The Controller shall have those powers and shall perform
those duties as from time to time may be assigned by the Chief Executive
Officer.
(g) ACTUARY. The Actuary shall have those powers and shall perform those
duties as from time to time may be assigned by the Chief Executive Officer.
(h) OTHER OFFICERS. Other officers elected or appointed by the Board of
Directors shall have those powers and perform those duties as from time to time
may be assigned by the Chief Executive Officer.
SECTION 4.7 ABSENCE OR DISABILITY.
In the case of the absence or disability of any officer of the Company or of any
person authorized to act in his or her place during such period of absence or
disability, the Board of Directors from time to time may delegate the powers and
duties of such officer to any other officer, or any Director, or any other
person whom they may select.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
The Company shall, to the fullest extent permitted under Minnesota Statutes,
Section 300.083, as the same currently exists or hereafter is amended, indemnify
(and advance expenses to) the directors, officers and employees of this Company.
The provisions of this Article shall not be deemed to limit or preclude
indemnification of a director, officer or employee by the Company for any
liability which has not been eliminated by the provisions of this Article.
ARTICLE VI
DISPOSITION OF FUNDS AND INVESTMENTS
SECTION 6.1 FUNDS AND INVESTMENTS.
All funds and investments of the Company shall be held in the name of "Minnesota
Life Insurance Company" or its nominee or as otherwise provided in accordance
with applicable Minnesota Statutes, as amended from time to time. In no event
shall any funds or investments be held in the name of any individual who is an
officer or employee of the Company.
-9-
<PAGE>
SECTION 6.2 DEPOSITS.
The Board of Directors shall designate those banks and financial institutions in
which Company funds shall be deposited. The Board by separate resolution also
shall designate the persons authorized to withdraw or transfer funds held in
those accounts. No funds shall be withdrawn or transferred from those accounts
except upon the authorization of the person or persons so authorized.
ARTICLE VII
CORPORATE STOCK
SECTION 7.1 CERTIFICATES FOR SHARES.
The Board of Directors is to prescribe the form of the certificate(s) of stock
of the Company. The certificate is to be signed by the President or Vice
President and by the Secretary, Treasurer, or Assistant Secretary or Assistant
Treasurer, is to be sealed with the seal of the Company and is to be numbered
consecutively. The name of the owner of the certificate, the number of shares
of stock represented thereby, and the date of issue are to be recorded on the
books of the Company. Certificates of stock surrendered to the Company for
transfer are to be canceled, and new certificates of stock representing the
transferred shares issued. New stock certificates may be issued to replace
lost, destroyed or mutilated certificates upon such terms and with such security
to the Company as the Board of Directors may require.
SECTION 7.2 TRANSFER OF SHARES.
Shares of stock of the Company may be transferred on the books of the Company by
the delivery of the certificates representing such shares to the Company for
cancellation, and with an assignment in writing on the back of the certificate
executed by the person named in the certificates as the owner thereof, or by a
written power of attorney executed for such purpose by such person. The person
registered on the books of the Company as the owner of shares of stock of the
Company is deemed the owner thereof and is entitled to all rights of ownership
with respect to such shares.
SECTION 7.3 TRANSFER BOOKS.
Transfer books are to be maintained under the direction of the Secretary,
showing the ownership and transfer of all certificates of stock issued by the
Company.
ARTICLE VIII
AMENDMENTS
These bylaws may be amended by the Board of Directors or by the stockholders at
a regular meeting, or at a special meeting called for that expressly-stated
purpose, by the affirmative vote of a majority of the stockholders present, in
person or by proxy, at the meeting.
-10-
<PAGE>
================================================================================
Exhibit 99.A10AI
[Logo of
Minnesota Life] EMPLOYER'S APPLICATION
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St. Paul, Minnesota
55101-2098
- --------------------------------------------------------------------------------
Application is hereby made to Minnesota Life Insurance Company for a Variable
Group Universal Life Insurance Plan providing life insurance and other
supplemental benefits as indicated below.
- --------------------------------------------------------------------------------
APPLICANT (Policyholder) NATURE OF BUSINESS
- --------------------------------------------------------------------------------
ADDRESS (Street, City, State, Zip Code)
- --------------------------------------------------------------------------------
KEY CONTACT AND TITLE TELEPHONE NUMBER FAX NUMBER
- --------------------------------------------------------------------------------
PLAN EFFECTIVE DATE
- --------------------------------------------------------------------------------
Coverage Applied For (check all that apply).
- --------------------------------------------
[_] Variable Group Universal Life (employer paid)
[_] Accidental Death & Dismemberment
[_] Waiver of Premium
[_] Spouse Variable Group Universal Life
[_] Variable Group Universal Life (employee paid)
[_] Child Term Life Rider
[_] Spouse/Child Term Life Rider
[_] Policyholder Contribution Rider
[_] Other
------------------------------------
Plan Design
- -----------
[_] Option A (Level Death Benefit)
[_] Option B (Variable Death Benefit)
Employee
Minimum Coverage $
--------------------------
Maximum Coverage $
--------------------------
Guaranteed Issue Amount $
--------------------------
IRC Section 7702 Tests
- ----------------------
[_] Cash Value Accumulation Test
[_] Guideline Premium Test
Spouse
Minimum Coverage $
--------------------------
Maximum Coverage $
--------------------------
Guaranteed Issue Amount $ *
--------------------------
* To be eligible for the guaranteed issue amount specified above, an eligible
employee's spouse must be actively working outside his or her home at least
____ hours per week on the date he or she signs an application for coverage,
and for ____ hours per week for each of the ____ week(s) immediately prior to
the date his or her application for coverage is approved by Minnesota Life.
Child Term Rider
Flat Coverage Amounts
$ Cost $
------------------------ -----------------------
$ Cost $
------------------------ -----------------------
$ Cost $
------------------------ -----------------------
Schedule of insurance - please attach a list of coverage amounts for each
employee classification.
When do changes in coverage apply? (Check only one and give date if applicable.)
[_] First of the month on or following the salary change.
[_] During annual open enrollment.
[_] Other.
Date:
------------------------
Date:
------------------------
Eligibility: An eligible employee must be actively working at his or her
employer's normal place of business at least ____ hours per week on the date he
or she signs an application for coverage, and for ____ hours per week for each
of the ____ week(s) immediately prior to the date his or her application for
coverage (except retirees or other persons as designated) is approved by
Minnesota Life.
Are retirees or any other persons not actively at work to be included in this
plan? [_] Yes [_] No
(If yes, please attach a list of retirees or other persons, their ages, amounts
of insurance, and under what circumstances we are providing coverage.)
MHC-94-18663 Rev. 2-96
<PAGE>
Minnesota Mutual Agrees to Provide:
1. A life insurance plan to those who have satisfied the eligibility and any
underwriting requirements;
2. Enrollment materials necessary to implement the plan;
3. All Underwriting, Claims and Actuarial services necessary for plan
administration.
The Participating Employer Agrees to Provide:
1. Employee information to Minnesota Life to facilitate preparation of
enrollment materials and plan set-up.
2. Payroll deduction facilities to collect premiums from insured employees,
accounting for such premiums, and remittance of such premiums to Minnesota
Life.
3. Reasonable administrative assistance to Minnesota Life with regard to
notification of insured terminations, cancellations, changes in payroll
deduction authorizations, and distributing materials to employees.
Minnesota Life can terminate this agreement by giving the participating employer
61 days advance written notice. The participating employer can terminate this
agreement by giving Minnesota Life 31 days advance written notice. This
agreement is effective (date) ________________________ and will remain in effect
for a one-year period. Unless terminated by either party, this agreement shall
automatically renew for additional one-year periods.
I agree that because this application is for a Variable Group Universal Life
policy, that Minnesota Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
- --------------------------------------------------------------------------------
PARTICIPATING EMPLOYER
- --------------------------------------------------------------------------------
BY TITLE DATE
- --------------------------------------------------------------------------------
EIN NUMBER SIGNATURE
[X]
- --------------------------------------------------------------------------------
FOR MINNESOTA LIFE
- --------------------------------------------------------------------------------
AGENT, BROKER OR REGISTERED REPRESENTATIVE
- --------------------------------------------------------------------------------
AGENCY DATED AT ON
- --------------------------------------------------------------------------------
AGENT/BROKER/REGISTERED SIGNATURE
REPRESENTATIVE LICENSE [X]
- --------------------------------------------------------------------------------
MHC-94-18663 Rev. 2-96
<PAGE>
================================================================================
[Logo of Minnesota Life] VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St. Paul, Minnesota
55101-2098
- --------------------------------------------------------------------------------
POLICY NUMBER:
EMPLOYEE APPLICATION
===========================
Insured's Information
- --------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
[_]M [_]F
- --------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
EMPLOYER EMPLOYMENT LOCATION
- --------------------------------------------------------------------------------
DATE OF EMPLOYMENT ANNUAL SALARY DAYTIME TELEPHONE NUMBER
- --------------------------------------------------------------------------------
[_] Yes [_] No Have you used tobacco in any form during the past 12 months?
[_] Yes [_] No Will the insurance applied for replace or change an existing
life insurance policy or annuity?
[_] Yes [_] No On the date you sign this application, are you actively working
at your employer's normal place of business at least ____ hours
per week?
- --------------------------------------------------------------------------------
To be eligible for insurance under the group policy an employee must be actively
working at his or her employer's normal place of business at least ____ hours
per week on the date he or she signs this application for coverage, and for ____
hours per week for each of the ____ week(s) immediately prior to the date this
application for coverage is approved by Minnesota Life.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
- --------------------------------------------------------------------------------
MAILING ADDRESS
================================================================================
Insurance Information
================================================================================
-----------------------
(1) Employer Paid $ [x] Salary
Insurance Amount: =======================
(2) Employee Paid -----------------------
Insurance Amount $ [x] Salary
(if applying for over the =======================
guaranteed issue amount, please
complete Evidence of Insurability form.)
(3) Total Insurance Amount: -----------------------
$ [x] Salary
=======================
(4) Spouse/Child Term Rider -----------------------
(if elected, please list $ $
names and dates of birth =======================
below.)
(5) Child Term Rider ---------------
(if elected, please list $
names and dates of birth ===============
below.)
Employer Premium: (1) -----------------------
$
=======================
Employee Premium: (2) -----------------------
$
=======================
Additional Amount Paid: (3) -----------------------
$
=======================
Spouse/Child Rider -----------------------
Premium: (4) $
=======================
Child Rider Premium: (5) -----------------------
$
=======================
Total Premium: -----------------------
(Add Lines 1-5) $
=======================
- --------------------------------------------------------------------------------
Child's Name Date of Birth Child's Name Date of Birth
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MHC-94-18664 Rev. 2-96 Minnesota Life 1
<PAGE>
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must
be in increments of 1%.)
% Guaranteed Account
- -----
Sub-Account Options:
<TABLE>
<CAPTION>
FIXED BALANCE EQUITY
- ----- ------- ------
<S> <C> <C>
_____% Bond _____% Asset Allocation _____% Capital Appreciation
_____% Maturing Government Bond 2010 _____% Growth
_____% Money Market _____% Index 500
_____% Mortgage _____% International Stock
_____% VIP High Income _____% Small Company
_____% Global Bond _____% Value Stock
_____% VIP Equity-Income
_____% VIP II Contrafund
_____% Small Company Value
_____% Index 400 Mid-Cap
_____% Micro-Cap Growth
_____% Macro-Cap Value
</TABLE>
Owner
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given the insured by policy terms. Policy transactions between
Minnesota Life and the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)
- ------------------------------------------------------------------------------
Relationship to Proposed Insured
--------------------------------
Tax I.D. Number or Social Security Number
-----------------------
Owner's Address
--------------------------------------------------------------
City State Zip Code
-------------------------------- ---------------- --------
I agree that because this application is for a Variable Group Universal Life
policy, that Minnesota Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
MHC-94-18664 Rev. 2-96 Minnesota Life 2
<PAGE>
INVESTMENT SUITABILITY - TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: If the proposed insured and proposed Owner are not the same, the proposed
Owner must complete questions 9-11 also.
1. Have you received the prospectus for the Minnesota
Life Variable Universal Life Account, which includes
prospectuses for the Advantus Series Fund, Inc., and
the Fidelity's Variable Insurance Products Funds? [_] Yes [_] No
2. Would you like us to send you a Statement of Additional
Information referred to in the prospectuses named
above? [_] Yes [_] No
3. Are you a spouse or dependent child of a person who is
an employee of Minnesota Life or one of its
subsidiaries? [_] Yes [_] No
4. Dependents: [_] Spouse Age [_] Children Ages
----- ----------
5. Current Approximate:
Annual Income $ Assets $ Debt $ Tax Bracket %
------- ------- ------- -------
6. Other Investments:
Savings $--------- Balanced/Total Return Funds $---------
Insurance Cash Value $--------- Stock Funds $---------
Real Estate $--------- Bond Funds $---------
Business Interests $--------- Individual Stocks $---------
Retirement Funds $--------- Individual Bonds $---------
Other -------------- $---------
7. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
----- Capital Preservation/Conservative Income ----- Growth
----- Current Income ----- Aggressive Growth
----- Total Return/Conservative Growth
8. Risk Tolerance (please check one):
[_] Low Risk [_] Moderate Risk [_] High Risk
Please answer the following questions if the proposed Insured and the proposed
Owner are not the same.
9. Employer
-----------------------------------------------------------------
Address
------------------------------------------------------------------
Occupation Years Employed
---------------------------------- --------------
10. Are you of legal age in the state of your mailing address? [_] Yes [_] No
11. Face amount of life insurance in force (on the proposed Owner) $
---------
- ------------------------------------------------------------------------------
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
FOR HOME OFFICE USE
- ------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
- ------------------------------------------------------------------------------
MHC-94-18664 Rev. 2-96 Minnesota Life 3
<PAGE>
================================================================================
[Logo of Minnesota Life] VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . 400 Robert Street North . St. Paul, Minnesota
55101-2098
- --------------------------------------------------------------------------------
POLICY NUMBER:
EMPLOYEE APPLICATION
===========================
Insured's Information
- --------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
[_]M [_]F
- --------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
EMPLOYER EMPLOYMENT LOCATION
- --------------------------------------------------------------------------------
DATE OF EMPLOYMENT ANNUAL SALARY DAYTIME TELEPHONE NUMBER
- --------------------------------------------------------------------------------
[_] Yes [_] No Have you used tobacco in any form during the past 12 months?
[_] Yes [_] No Will the insurance applied for replace or change an existing
life insurance policy or annuity?
[_] Yes [_] No On the date you sign this application, are you actively working
at your employer's normal place of business at least ____ hours
per week?
- --------------------------------------------------------------------------------
To be eligible for insurance under the group policy an employee must be actively
working at his or her employer's normal place of business at least ____ hours
per week on the date he or she signs this application for coverage, and for ____
hours per week for each of the ____ week(s) immediately prior to the date this
application for coverage is approved by Minnesota Life.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
- --------------------------------------------------------------------------------
MAILING ADDRESS
================================================================================
Insurance Information
================================================================================
-----------------------
(1) Employer Paid $ [x] Salary
Insurance Amount: =======================
(if applying for over the
guaranteed issue amount, please
complete Evidence of Insurability form.)
(2) Spouse/Child Term Rider -----------------------
(if elected, please list $ $
names and dates of birth =======================
below.)
(3) Child Term Rider ---------------
(if elected, please list $
names and dates of birth ===============
below.)
Employee Premium: (1) -----------------------
$
=======================
Additional Amount Paid: (2) -----------------------
$
=======================
Spouse/Child Rider -----------------------
Premium: (3) $
=======================
Child Rider Premium: (4) -----------------------
$
=======================
Total Premium: -----------------------
(Add Lines 1-4) $
=======================
- --------------------------------------------------------------------------------
SPOUSE'S NAME DATE OF BIRTH
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Child's Name Date of Birth Child's Name Date of Birth
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MHC-94-18684 Rev. 2-96 Minnesota Life 1
<PAGE>
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must
be in increments of 1%.)
% Guaranteed Account
- -----
Sub-Account Options:
<TABLE>
<CAPTION>
FIXED BALANCED EQUITY
- ----- -------- ------
<S> <C> <C>
______% Bond ______% Asset Allocation ______% Capital Appreciation
______% Maturing Government Bond 2010 ______% Growth
______% Money Market ______% Index 500
______% Mortgage ______% International Stock
______% VIP High Market ______% Small Company
______% Global Bond ______% Value Stock
______% VIP Equity-Income
______% VIP II Contrafund
______% Small Company Value
______% Index 400 Mid-Cap
______% Micro-Cap Growth
______% Macro-Cap Value
</TABLE>
Owner
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given the insured by policy terms. Policy transactions between
Minnesota Life and the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)
- ------------------------------------------------------------------------------
Relationship to Proposed Insured
--------------------------------
Tax I.D. Number or Social Security Number
-----------------------
Owner's Address
--------------------------------------------------------------
City State Zip Code
-------------------------------- ---------------- --------
I agree that because this application is for a Variable Group Universal Life
policy, that Minnesota life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
MHC-94-18684 Rev. 2-96 Minnesota Life 2
<PAGE>
INVESTMENT SUITABILITY - TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: If the proposed Insured and proposed Owner are not the same, the proposed
Owner must complete questions 9-11 also.
1. Have you received the prospectus for the Minnesota
Life Variable Universal Life Account, which includes
prospectuses for the Advantus Series Fund Inc., and the
Fidelity's Variable Insurance Products Funds? [_] Yes [_] No
2. Would you like us to send you a Statement of Additional
Information referred to in the prospectuses named
above? [_] Yes [_] No
3. Are you a spouse or dependent child of a person who is
an employee of Minnesota Life or one of its
subsidiaries? [_] Yes [_] No
4. Dependents: [_] Spouse Age [_] Children Ages
----- ----------
5. Current Approximate:
Annual Income $ Assets $ Debt $ Tax Bracket %
------- ------- ------- -------
6. Other Investments:
Savings $--------- Balanced/Total Return Funds $---------
Insurance Cash Value $--------- Stock Funds $---------
Real Estate $--------- Bond Funds $---------
Business Interests $--------- Individual Stocks $---------
Retirement Funds $--------- Individual Bonds $---------
Other -------------- $---------
7. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
----- Capital Preservation/Conservative Income ----- Growth
----- Current Income ----- Aggressive Growth
----- Total Return/Conservative Growth
8. Risk Tolerance (please check one):
[_] Low Risk [_] Moderate Risk [_] High Risk
Please answer the following questions if the proposed Insured and the proposed
Owner are not the same.
9. Employer
-----------------------------------------------------------------
Address
------------------------------------------------------------------
Occupation Years Employed
---------------------------------- --------------
10. Are you of legal age in the state of your mailing address? [_] Yes [_] No
11. Face amount of life insurance in force (on the proposed Owner) $
---------
- ------------------------------------------------------------------------------
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
FOR HOME OFFICE USE
- ------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
- ------------------------------------------------------------------------------
MHC-94-18684 Rev. 2-96 Minnesota Life 3
<PAGE>
================================================================================
[Logo of Minnesota Life] VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . Group Insurance . 400 Robert Street North .
St. Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
POLICY NUMBER:
EMPLOYEE APPLICATION
===========================
Insured's Information
- --------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
[_]M [_]F
- --------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE
- --------------------------------------------------------------------------------
EMPLOYER EMPLOYMENT LOCATION
- --------------------------------------------------------------------------------
DATE OF EMPLOYMENT ANNUAL SALARY DAYTIME TELEPHONE NUMBER
- --------------------------------------------------------------------------------
[_] Yes [_] No Have you used tobacco in any form during the past 12 months?
[_] Yes [_] No Will the insurance applied for replace or change an existing
life insurance policy or annuity?
[_] Yes [_] No On the date you sign this application, are you actively working
at your employer's normal place of business at least ____ hours
per week?
- --------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
- --------------------------------------------------------------------------------
MAILING ADDRESS
- --------------------------------------------------------------------------------
To be eligible for insurance under the group policy an employee must be actively
working at his or her employer's normal place of business at least ____ hours
per week on the date he or she signs this application for coverage, and for ____
hours per week for each of the ____ week(s) immediately prior to the date this
application for coverage is approved by Minnesota Life.
- --------------------------------------------------------------------------------
Insurance Information
================================================================================
-----------------------
(1) Employer Paid $ [x] Salary
Insurance Amount: =======================
(2) Spouse/Child Term Rider -----------------------
(if elected, please list $ $
names and dates of birth =======================
below.)
(3) Child Term Rider ---------------
(if elected, please list $
names and dates of birth ===============
below.)
Employer Premium: (1) -----------------------
$
=======================
Additional Amount Paid: (2) -----------------------
$
=======================
Spouse/Child Rider -----------------------
Premium: (3) $
=======================
Child Rider Premium: (4) -----------------------
$
=======================
Total Premium: -----------------------
(Add Lines 1-4) $
=======================
- --------------------------------------------------------------------------------
SPOUSE'S NAME DATE OF BIRTH
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Child's Name Date of Birth Child's Name Date of Birth
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MHC-94-18685 Rev. 2-96 Minnesota Life 1
<PAGE>
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must
be in increments of 1%.)
% Guaranteed Account
- -----
Sub-Account Options:
<TABLE>
<CAPTION>
FIXED BALANCED EQUITY
- ----- -------- ------
<S> <C> <C>
______% Bond ______% Asset Allocation ______% Capital Appreciation
______% Maturing Government Bond 2010 ______% Growth
______% Money Market ______% Index 500
______% Mortgage ______% International Stock
______% VIP High Income ______% Small Company
______% Global Bond ______% Value Stock
______% VIP Equity-Income
______% VIP II Contrafund
______% Small Company Value
______% Index 400 Mid-Cap
______% Micro-Cap Growth
______% Macro-Cap Value
</TABLE>
Owner
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given the insured by policy terms. Policy transactions between
Minnesota Life and the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)
- ------------------------------------------------------------------------------
Relationship to Proposed Insured
--------------------------------
Tax I.D. Number or Social Security Number
-----------------------
Owner's Address
--------------------------------------------------------------
City State Zip Code
-------------------------------- ---------------- --------
I agree that because this application is for a Variable Group Universal Life
policy, that Minnesota Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
MHC-94-18685 Rev. 2-96 Minnesota Life 2
<PAGE>
INVESTMENT SUITABILITY - TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: If the proposed Insured and proposed Owner are not the same, the proposed
Owner must complete questions 9-11 also.
1. Have you received the prospectus for the Minnesota
Life Variable Universal Life Account, which includes
propectuses for the Advantus Series Fund, Inc., and the
Fidelity's Variable Insurance Products Funds? [_] Yes [_] No
2. Would you like us to send you a Statement of Additional
Information referred to in the prospectuses named
above? [_] Yes [_] No
3. Are you a spouse or dependent child of a person who is
an employee of Minnesota Life or one of its
subsidiaries? [_] Yes [_] No
4. Dependents: [_] Spouse Age [_] Children Ages
----- ----------
5. Current Approximate:
Annual Income $ Assets $ Debt $ Tax Bracket %
------- ------- ------- -------
6. Other Investments:
Savings $--------- Balanced/Total Return Funds $---------
Insurance Cash Value $--------- Stock Funds $---------
Real Estate $--------- Bond Funds $---------
Business Interests $--------- Individual Stocks $---------
Retirement Funds $--------- Individual Bonds $---------
Other -------------- $---------
7. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
----- Capital Preservation/Conservative Income ----- Growth
----- Current Income ----- Aggressive Growth
----- Total Return/Conservative Growth
8. Risk Tolerance (please check one):
[_] Low Risk [_] Moderate Risk [_] High Risk
Please answer the following questions if the proposed Insured and the proposed
Owner are not the same.
9. Employer
-----------------------------------------------------------------
Address
------------------------------------------------------------------
Occupation Years Employed
---------------------------------- --------------
10. Are you of legal age in the state of your mailing address? [_] Yes [_] No
11. Face amount of life insurance in force (on the proposed Owner) $
---------
- ------------------------------------------------------------------------------
EMPLOYEE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
FOR HOME OFFICE USE
- ------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
- ------------------------------------------------------------------------------
MHC-94-18685 Rev. 2-96 Minnesota Life 3
<PAGE>
================================================================================
EX99.A10A
MINNESOTA LIFE EVIDENCE OF INSURABILITY
- --------------------------------------------------------------------------------
The Minnesota Life Insurance Company . Group Insurance . 400 Robert
Street North . St. Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
PLAN SPONSOR/POLICYHOLDER POLICY NUMBER
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
[_] M [_] F
- ----------------------------------------------------------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE DAYTIME TELEPHONE NUMBER
- ----------------------------------------------------------------------------------------------------------------------------------
FOR HOME TELEPHONE NUMBER OCCUPATION DATE OF EMPLOYMENT SALARY HEIGHT WEIGHT INSURANCE AMOUNT APPLIED
<S> <C> <C>
Yes No
[_] [_] 1. During the past three years, have you for any reason consulted a physician or other health care
provider, or been hospitalized?
[_] [_] 2. Have you ever been treated for or advised that you had any of the following: heart, lung, nervous,
kidney, or liver disorder; high blood pressure; drug abuse including alcohol; cancer or tumor;
diabetes?
[_] [_] 3. Have you ever been diagnosed as having AIDS, ARC, or any disorder of your immune system; or had a
test showing evidence of antibodies to the AIDS virus (positive HIV test)?
</TABLE>
If the answer is "Yes", give particulars on the reverse side. Please include
dates, name and address of physicians or hospitals, the reason for the visit or
consultation and, in your own words, the diagnosis that was made.
The information contained in this application is true and complete to the best
of my knowledge and belief. To determine my insurability or for claim purposes,
I authorize any person(s), medical practitioner, institution, insurance company
or the Medical Information Bureau to give any medical or non-medical information
about me including alcohol or drug abuse, to Minnesota Life Insurance Company
("Company"), St. Paul, Minnesota 55101-2098 and its reinsurers. I authorize all
said sources, except the Medical Information Bureau, to give such information to
any agency employed by Minnesota Life Insurance Company to collect and transmit
such information. I understand in determining eligibility for insurance or
benefits, this information may be made available to underwriting, claims,
medical and support staff to Minnesota Life Insurance Company.
This information shall be valid for 26 months from the date this application is
signed. A photocopy shall be as valid as the original. I have read this
authorization and the Consumer Privacy Notice on the back, and understand I may
receive copies. The guaranteed amount of insurance will be effective only if
this application is dated prior to the end of the enrollment period. The Company
shall incur no liability until this application is approved by the Company and
the first premium paid while my health and other conditions affecting my
insurability are as described on this application.
- --------------------------------------------------------------------------------
SIGNATURE DATE
X
- --------------------------------------------------------------------------------
MHC-94-18669
<PAGE>
ADDITIONAL HEALTH INFORMATION:
<TABLE>
<CAPTION>
Name and
Address of
Doctor, Diagnosis
Question Clinic, Reason for and
Name Number Hospital Consultation Treatment
<S> <C> <C> <C> <C>
</TABLE>
IMPORTANT NOTICE
The information you provide will be treated as confidential except that
Minnesota Life Insurance Company or its reinsurers may make a brief report
thereon to the Medical Information Bureau, a non-profit membership organization
of life insurance companies which operates an information exchange on behalf of
its members. Upon request by another member insurance company to which you have
applied for life or health insurance coverage or to which a claim is submitted,
the Medical Information Bureau will supply such company with the information it
may have in its files.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. If you question the accuracy of
information in the Bureau's File, you may contact the Bureau and seek a
correction in accordance with the procedures set forth in the Federal Fair
Credit Reporting Act. The address of the Bureau's information office is Post
Office Box 105, Essex Station, Boston, MA 02112; Telephone (617)426-3660.
Minnesota Life Insurance Company may also release the information in its file to
other life insurance companies to whom you apply for life or health insurance or
to whom a claim for benefits may be submitted. Personal information may be
obtained in connection with this application from you or others in certain
circumstances without your authorization. You have a right to know about and
correct any personal information about you in our files. If you would like a
more detailed explanation of our information practices, please contact: Group
Underwriting Department, Minnesota Life Insurance Company, 400 Robert Street
North, St. Paul, Minnesota 55101-2098.
MINNESOTA LIFE
Minnesota Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101-2098
FOR HOME OFFICE USE ONLY
<TABLE>
<CAPTION>
EMPLOYEE SPOUSE CHILD
<S> <C> <C> <C> <C> <C>
[_] Approved [_] Approved [_] Approved
[_] Declined [_] Declined [_] Declined
[_] Declined as Incomplete [_] Declined as Incomplete [_] Declined as Incomplete
- ------------------------------------------------------------------------------------------------------------------------------------
By: Date: By: Date: By: Date:
Currently in force Currently Applied for Currently in force Currently Applied for Currently in force Currently
Applied for
GI: $______ GI: $______ GI: $______ GI: $_______ GI: $______ GI: $_______
U/W: $______ U/W: $______ U/W: $______ U/W: $_______ U/W: $______ U/W: $_______
</TABLE>
<PAGE>
================================================================================
[Logo of Minnesota Life] VARIABLE GROUP UNIVERSAL LIFE APPLICATION
- --------------------------------------------------------------------------------
Minnesota Life Insurance Company . Group Insurance . 400 Robert Street North .
St. Paul, Minnesota 55101-2098
- --------------------------------------------------------------------------------
POLICY NUMBER:
SPOUSE APPLICATION
===========================
Insured's Information
- --------------------------------------------------------------------------------
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER GENDER
[_]M [_]F
- --------------------------------------------------------------------------------
STREET ADDRESS CITY STATE ZIP CODE DAYTIME TELEPHONE NUMBER
================================================================================
- --------------------------------------------------------------------------------
BENEFICIARY'S NAME SOCIAL SECURITY NUMBER RELATIONSHIP AND CLASS
- --------------------------------------------------------------------------------
MAILING ADDRESS
- --------------------------------------------------------------------------------
[_] Yes [_] No Have you used tobacco in any form during the past 12 months?
[_] Yes [_] No Will the insurance applied for replace or change an existing
life insurance policy or annuity?
[_] Yes [_] No On the date you sign this application, are you actively working
outside your home at least ____ hours per week?
- --------------------------------------------------------------------------------
To be eligible for the guaranteed issue amount an eligible employee's spouse
must be actively working outside his or her home for at least ____ hours
per week on the date he or she signs this application for coverage, and for ____
hours per week for each of the ____ week(s) immediately prior to the date this
application for coverage is approved by Minnesota Life. If you have answered yes
to the third question, and you meet the eligibility requirements as stated
above, you are eligible for the spouse guaranteed issue amount as specified on
the policyholder's application to the group.
- --------------------------------------------------------------------------------
Employee Information
================================================================================
NAME DATE OF BIRTH SOCIAL SECURITY NUMBER
- --------------------------------------------------------------------------------
EMPLOYER DATE OF EMPLOYMENT EMPLOYMENT LOCATION
- --------------------------------------------------------------------------------
EMPLOYEE IDENTIFICATION NUMBER
- --------------------------------------------------------------------------------
================================================================================
Insurance Information
================================================================================
-----------------------
Insurance Amount: $
=======================
Child Term Rider ---------------
(if elected, please list $
names and dates of birth ===============
below.)
Premium Amount: (1) -----------------------
$
=======================
Additional Amount Paid: (2) -----------------------
$
=======================
Child Rider Premium: (3) -----------------------
$
=======================
Total Premium: -----------------------
(Add Lines 1-3) $
=======================
NOTE: You or your spouse may choose children's coverage, NOT both.
- --------------------------------------------------------------------------------
Child's Name Date of Birth Child's Name Date of Birth
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MHC-94-18667 Rev. 2-96 Minnesota Life 1
<PAGE>
ACCOUNT OPTIONS
Please select the allocation of net premium:
(Allocations must total 100%. Minimum of 10% in any account, allocations must
be in increments of 1%.)
% Guaranteed Account
- -----
Sub-Account Options:
<TABLE>
<CAPTION>
FIXED BALANCE EQUITY
- ----- ------- ------
<S> <C> <C>
_____% Bond _____% Asset Allocation _____% Capital Appreciation
_____% Maturing Government Bond 2010 _____% Growth
_____% Money Market _____% Index 500
_____% Mortgage _____% International Stock
_____% VIP High Income _____% Small Company
_____% Global Bond _____% Value Stock
_____% VIP Equity-Income
_____% VIP II Contrafund
_____% Small Company Value
_____% Index 400 Mid-Cap
_____% Micro-Cap Growth
_____% Macro-Cap Value
</TABLE>
Owner
The Proposed Insured will be the Owner of any policy issued on this application,
unless requested otherwise below. The Owner has every benefit, right or
privilege given the insured by policy terms. Policy transactions between
Minnesota Life and the Owner do not require the Insured's notice or consent.
Name (If a Corporation, give the state in which it is incorporated)
- ------------------------------------------------------------------------------
Relationship to Proposed Insured
--------------------------------
Tax I.D. Number or Social Security Number
-----------------------
Owner's Address
--------------------------------------------------------------
City State Zip Code
-------------------------------- ---------------- --------
I agree that because this application is for a Variable Group Universal Life
policy, that Minnesota Life, if it is unable for any reason to collect funds for
units which have been allocated to a sub-account under the policy applied for,
may redeem for itself the full value of such units. If such units are no longer
available, it may recover that value from any other units of equal value
available under the policy.
I UNDERSTAND THAT THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) OF
THE POLICY APPLIED FOR MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT
RESULTS OF THE SUB-ACCOUNTS OF THE SEPARATE ACCOUNT. I UNDERSTAND THAT THE
ACCOUNT VALUE OF THE POLICY APPLIED FOR INCREASES AND DECREASES DEPENDING ON THE
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE FOR NET
PREMIUMS INVESTED IN THE SUB-ACCOUNTS.
SPOUSE'S SIGNATURE (or owner's if different) DATE
X
- ------------------------------------------------------------------------------
MHC-94-18667 Rev 2-96 Minnesota Life 2
<PAGE>
INVESTMENT SUITABILITY - TO BE COMPLETED BY OWNER
NASD rules require inquiry concerning the financial condition of individuals
applying for variable policies. The proposed Owner must supply such information
so that an informed judgement may be made as to the suitability of the
investment for the Owner.
NOTE: If the proposed Insured and proposed Owner are not the same, the proposed
Owner must complete questions 9-11 also.
1. Have you received the prospectus for the Minnesota
Life Variable Universal Life Account, which includes
prospectuses for the Advantus Series Fund, Inc., and
the Fidelity's Variable Insurance Products Funds? [_] Yes [_] No
2. Would you like us to send you a Statement of Additional
Information referred to in the prospectuses named
above? [_] Yes [_] No
3. Are you an employee of Minnesota Life or an employee
of one of its subsidiaries? [_] Yes [_] No
4. Are you a spouse or dependent child of an employee of
Minnesota Life or a subsidiary? [_] Yes [_] No
5. Are you an employee of a NASD firm? [_] Yes [_] No
6. Dependents: [_] Spouse Age [_] Children Ages
----- ----------
7. Current Approximate:
Annual Income $ Assets $ Debt $ Tax Bracket %
------- ------- ------- -------
8. Other Investments:
Savings $--------- Balanced/Total Return Funds $---------
Insurance Cash Value $--------- Stock Funds $---------
Real Estate $--------- Bond Funds $---------
Business Interests $--------- Individual Stocks $---------
Retirement Funds $--------- Individual Bonds $---------
Other -------------- $---------
9. Ranking of Investment Objectives - (Rank 1-5, in order of importance):
----- Capital Preservation/Conservative Income ----- Growth
----- Current Income ----- Aggressive Growth
----- Total Return/Conservative Growth
10. Risk Tolerance (please check one):
[_] Low Risk [_] Moderate Risk [_] High Risk
Please answer the following questions if the proposed Insured and the proposed
Owner are not the same.
11. Employer
-----------------------------------------------------------------
Address
------------------------------------------------------------------
Occupation Years Employed
---------------------------------- --------------
12. Are you of legal age in the state of your mailing address? [_] Yes [_] No
- ------------------------------------------------------------------------------
SPOUSE'S SIGNATURE (OR OWNER'S IF DIFFERENT) DATE
X
- ------------------------------------------------------------------------------
FOR HOME OFFICE USE
- ------------------------------------------------------------------------------
SUITABILITY ACCEPTED BY REGISTERED PRINCIPAL DATE
- ------------------------------------------------------------------------------
MHC-94-18667 Rev. 2-96 Minnesota Life 3
<PAGE>
Exhibit G
Minnesota Life Insurance Company
Power of Attorney
To Sign Registration Statements
WHEREAS, Minnesota Life Insurance Company ("Minnesota Life") has
established certain separate accounts to fund certain variable annuity and
variable life insurance contracts, and
WHEREAS, Variable Fund D ("Fund D") is a separate account of Minnesota Life
registered as a unit investment trust under the Investment Company Act of 1940
offering variable annuity contracts registered under the Securities Act of 1933,
and
WHEREAS, Variable Annuity Account ("Variable Annuity Account") is a
separate account of Minnesota Life registered as a unit investment trust under
the Investment Company Act of 1940 offering variable annuity contracts
registered under the Securities Act of 1933, and
WHEREAS, Variable Life Account ("Variable Life Account") is a separate
account of Minnesota Life registered as a unit investment trust under the
Investment Company Act of 1940 offering variable adjustable life insurance
policies registered under the Securities Act of 1933,
WHEREAS, Group Variable Annuity Account ("Group Variable Annuity Account")
is a separate account of Minnesota Life which has been established for the
purpose of issuing group annuity contracts on a variable basis and which is to
be registered as a unit investment trust under the Investment Company Act of
1940 offering group variable annuity contracts and certificates to be registered
under the Securities Act of 1933;
WHEREAS, Minnesota Life Variable Universal Life Account ("Variable
Universal Life Account") is a separate account of Minnesota Life which has been
established for the purpose of issuing group and individual variable universal
life insurance policies on a variable basis and which is to be registered as a
unit investment trust under the Investment Company Act of 1940 offering group
and individual variable universal life insurance policies to be registered under
the Securities Act of 1933;
NOW THEREFORE, We, the undersigned Directors of Minnesota Mutual, do hereby
appoint Dennis E. Prohofsky and Garold M. Felland, and each of them
individually, as attorney in fact for the purpose of signing in their names and
on their behalf as Directors of Minnesota Life and filing with the Securities
and Exchange Commission Registration Statements, or any amendment thereto, for
the purpose of: a) registering contracts and policies of Fund D, the Variable
Annuity Account, the Variable Life Account, the Group Variable Annuity Account
and the Variable Universal Life Account for sale by those entities and Minnesota
Life under the Securities Act of 1933; and b) registering Fund D, the Variable
Annuity Account, the Variable Life Account, the Group Variable Annuity Account
and the Variable Universal Life Account as unit investment trusts under the
Investment Company Act of 1940.
Signature Title Date
--------- ----- ----
/s/ Robert L. Senkler Chairman of the Board, October 19, 1998
----------------------- President and Chief
Robert L. Senkler Executive Officer
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Giulio Agostini Director October 19, 1998
- -------------------------------
Giulio Agostini
/s/ Anthony L. Andersen Director October 19, 1998
- -------------------------------
Anthony L. Andersen
/s/ Leslie S. Biller Director October 19, 1998
- -------------------------------
Leslie S. Biller
/s/ John F. Grundhofer Director October 19, 1998
- -------------------------------
John F. Grundhofer
/s/ David S. Kidwell, Ph.D. Director October 19, 1998
- -------------------------------
David S. Kidwell, Ph.D.
Director
- -------------------------------
William B. Lawson, Sr.
/s/ Reatha C. King, Ph.D. Director October 19, 1998
- -------------------------------
Reatha C. King, Ph.D.
/s/ Thomas E. Rohricht Director October 19, 1998
- -------------------------------
Thomas E. Rohricht
/s/ Michael E. Shannon Director October 19, 1998
- -------------------------------
Michael E. Shannon
/s/ Frederick T. Weyerhaeuser Director October 19, 1998
- -------------------------------
Frederick T. Weyerhaeuser
