As filed with the Securities and Exchange Commission on
April 3, 1998
Registration No. 33-86500
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Post-Effective Amendment No. 4
to
Form S-6
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FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
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AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
(EXACT NAME OF REGISTRANT)
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AMERITAS LIFE INSURANCE CORP.
(Depositor)
5900 "O" Street
Lincoln, Nebraska 68510
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NORMAN M. KRIVOSHA
Secretary
Ameritas Life Insurance Corp.
5900 "O" Street
Lincoln, Nebraska 68510
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Title of Securities Being Registered: Securities of Unit Investment Trust
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Approximate Date of Proposed Public Offering: As soon as practicable after
effective date.
It is proposed that this filing will become effective:
[]immediate upon filing pursuant to paragraph b
[ ]on pursuant to paragraph a of Rule 485
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[x]on May 1, 1998 pursuant to paragraph b of Rule 485
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RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS
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ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 Ameritas Life Insurance Corp. - Separate Account LLVL
6 Ameritas Life Insurance Corp. - Separate Account LLVL
7 Not Required
8 Not Required
9 Legal Proceedings
10 Summary; Addition, Deletion or Substitution of Investments; Policy Benefits; Policy
Rights; Payment and Allocation of Premiums; General Provisions; Additional Insurance Benefits
(Riders); Voting Rights
11 Summary; The Funds
12 Summary; The Funds
13 Summary; The Funds; Charges and Deductions
14 Summary; Payment and Allocation of Premiums
15 Summary; Payment and Allocation of Premiums
16 Summary; The Funds
17 Summary, Policy Rights
18 Vanguard Variable Insurance Fund; Neuberger & Berman Advisers Management
Trust; Berger Institutional Products Trust; Fixed Account
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights; General Provisions
22 Not Applicable
23 Safekeeping of the Separate Account's Assets
24 General Provisions
25 Ameritas Life Insurance Corp.
26 Not Applicable
27 Ameritas Life Insurance Corp.
28 Executive Officers and Directors of ALIC; Ameritas Life Insurance Corp.
29 Ameritas Life Insurance Corp.
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Required
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
42 Not Applicable
43 Not Applicable
44 The Funds; Accumulation Value
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ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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45 Not Applicable
46 The Funds; Accumulation Value; Surrender Charge
47 Not Applicable
48 State Regulation of ALIC
49 Not Applicable
50 Ameritas Life Insurance Corp. Separate Account LLVL
51 Cover Page; Summary; Policy Benefits; Charges and
Deductions
52 Addition, Deletion or Substitution of Investments
53 Summary; Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Required
57 Not Required
58 Not Required
59 Financial Statements
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PROSPECTUS Ameritas Life Insurance Corp. Logo
FLEXIBLE PREMIUM 5900 "O" Street
VARIABLE UNIVERSAL LIFE P.O. Box 81889/Lincoln, NE 68501
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This Prospectus describes a flexible premium variable universal life insurance
policy ("Policy") offered by Ameritas Life Insurance Corp. ("ALIC"), a stock
life insurance company. The Policy is designed to provide insurance protection
until the Policy Anniversary nearest the Insured's 100th birthday and at the
same time provide flexibility to vary the frequency and amount of premium
payments and to increase or decrease the level of death benefits payable under
the Policy. This flexibility allows a Policyowner to provide for changing
insurance needs under a single insurance policy.
The Policy guarantees the Death Benefit as long as the Policy remains in force.
The Policyowner may choose death benefit Option A (generally, a level benefit
that equals the Specified Amount of the Policy) or Option B (a variable benefit
that generally equals the Specified Amount plus the Policy's Accumulation
Value). The minimum initial Specified Amount for a policy is generally $100,000,
lower specified amounts may be requested. The Policy provides for an
Accumulation Value that can be obtained through Partial Withdrawals, surrender
of the Policy, or through policy loans. There is no minimum guaranteed
Accumulation Value. During the first three years, ALIC agrees to keep the Policy
in force and provide a Guaranteed Death Benefit during that time, so long as the
cumulative monthly minimum Guaranteed Death Benefit Premium is paid.
The Policyowner has the right to examine the Policy and return it for a refund
for a limited time (see page 20). The initial premium payment will be allocated
to the Money Market portfolio of the Vanguard Variable Insurance Fund, as of the
Issue Date, for 13 days, after deducting premium charges of no greater than 5%
(currently, 3.5%) to pay for premium taxes and the expense of deferring the tax
deduction of policy acquisition costs. After the 13-day period (see page 22),
the Accumulation Value will be allocated to the Subaccounts of ALIC Separate
Account LLVL ("Separate Account") or the Fixed Account as selected by the
Policyowner. The Accumulation Value, the duration of the death benefit and, if
Option B is selected, the amount of the death benefit above the Specified
Amount, will vary with the investment experience of the selected Subaccounts or
the Fixed Account. The Accumulation Value will also be adjusted for other
factors, including the amount of charges imposed and the premium payments made.
The Policy will continue in force so long as the Net Cash Surrender Value is
sufficient to pay certain monthly charges imposed in connection with the Policy.
The assets of each Subaccount are invested in shares of a corresponding
portfolio of Vanguard Variable Insurance Fund ("Vanguard"), Neuberger & Berman
Advisers Management Trust ("Neuberger & Berman AMT") or Berger Institutional
Products Trust ("Berger IPT") (collectively the "Funds"). In this Separate
Account, Vanguard offers nine portfolios: Money Market, High-Grade Bond, High
Yield Bond, Balanced, Equity Income, Equity Index, Growth, Small Company Growth
and International; Neuberger & Berman AMT offers four portfolios: Limited
Maturity Bond, Growth, Partners, and Balanced; Berger IPT offers two portfolios:
Berger IPT-100 Fund and Berger IPT - Small Company Growth Fund. The accompanying
prospectuses for the various funds describe the investment objectives and
policies and the risks of each of the portfolios of the Funds. The investment
gains or losses of the monies placed in the various portfolio Subaccounts will
be experienced by the Policyowner.
Replacing existing insurance with a Policy or purchasing a Policy as a means to
obtain additional insurance protection if the purchaser already owns another
flexible premium variable life insurance policy may not be advantageous.
This Prospectus Must Be Accompanied or Preceded By Current Prospectuses For
Vanguard, Neuberger & Berman AMT and Berger IPT.
These securities are not deposits with, or obligations of, or guaranteed or
endorsed by, any financial institution; and the securities are not insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other agency. These securities involve investment risk, including the possible
loss of principal.
The Securities and Exchange Commission maintains a web site (http://www.sec.gov)
that contains other information regarding registrants that file electronically
with the Securities and Exchange Commission.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, OR BY ANY STATE SECURITIES REGULATORY AUTHORITY, NOR HAS
THE COMMISSION, OR ANY STATE SECURITIES REGULATORY AUTHORITY, PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Please Read This Prospectus Carefully And Retain It For Future Reference.
The Date of This Prospectus is May 1, 1998.
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LLVL 1
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TABLE OF CONTENTS PAGE
Definitions................................................................ 3
Summary.................................................................... 5
Ameritas Life Insurance Corp. and the Separate Account .................... 9
Ameritas Life Insurance Corp...................................... 9
Ameritas Life Insurance Corp. Separate Account LLVL............... 9
The Funds......................................................... 10
Investment Objectives and Policies Of The Funds' Portfolios....... 10
Fund Management Fees ............................................. 11
Addition, Deletion or Substitution of Investments................. 13
Fixed Account..................................................... 13
Policy Benefits............................................................ 14
Purposes of the Policy............................................ 14
Death Benefit Proceeds............................................ 14
Death Benefit Options............................................. 14
Methods of Affecting Insurance Protection......................... 16
Duration of Policy................................................ 16
Accumulation Value................................................ 16
Benefits at Maturity.............................................. 17
Payment of Policy Benefits........................................ 17
Policy Rights.............................................................. 18
Loan Benefits..................................................... 18
Surrenders........................................................ 18
Partial Withdrawals............................................... 19
Transfers......................................................... 19
Systematic Programs............................................... 20
Refund Privilege.................................................. 20
Exchange Privilege................................................ 20
Payment and Allocation of Premiums......................................... 21
Issuance of a Policy.............................................. 21
Premiums.......................................................... 21
Allocation of Premiums and Accumulation Value..................... 22
Policy Lapse and Reinstatement.................................... 22
Charges and Deductions..................................................... 23
Deductions From Premium Payment................................... 23
Charges Deducted from Accumulation Value.......................... 23
Surrender Charge.................................................. 24
Transfer Charge................................................... 24
Partial Withdrawal Charge......................................... 25
Daily Charges Against the Separate Account........................ 25
General Provisions......................................................... 25
Additional Insurance Benefits (Riders)..................................... 26
Distribution of the Policies............................................... 27
Federal Tax Matters........................................................ 28
Safekeeping of the Separate Account's Assets............................... 30
Third Party Services....................................................... 30
Voting Rights.............................................................. 30
State Regulation of ALIC................................................... 31
Executive Officers and Directors of ALIC................................... 31
Legal Matters.............................................................. 33
Legal Proceedings.......................................................... 33
Experts.................................................................... 34
Additional Information..................................................... 34
Financial Statements....................................................... 34
Ameritas Life Insurance Corp. Separate Account LLVL........................ 35
Ameritas Life Insurance Corp............................................... 51
Appendices................................................................. 71
The Policy, certain funds, and/or certain riders are not available in all
Sates.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESMAN, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
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2 LLVL
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DEFINITIONS
ACCUMULATION VALUE - The total amount that a Policy provides for investment at
any time. It is equal to the total of the Accumulation Value held in the
Separate Account, the Fixed Account, and any Accumulation Value held in the
general account which secures policy loans.
ALIC - Ameritas Life Insurance Corp., a stock life insurance company.
ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the policy has been in force.
BENEFICIARY - The person or persons designated in the application, unless later
changed, to receive the Death Benefit (see page 25 for "Beneficiary" and "Change
of Beneficiary").
DECLARED RATES - The interest rate declared by ALIC to be earned on amounts in
the Fixed Account, which ALIC guarantees to be no less than 3.5%.
DEATH BENEFITS - The amount of insurance coverage provided under the Policy.
DEATH BENEFIT PROCEEDS - The proceeds payable to the beneficiary upon receipt by
ALIC of Satisfactory Proof of Death of the Insured while the Policy is in force.
It is equal to: (l) the Death Benefit; plus (2) additional life insurance
proceeds provided by any riders; minus (3) any outstanding policy debt; minus
(4) any overdue monthly deduction, including the deduction for the month of
death.
FIXED ACCOUNT - An account that is a part of ALIC's General Account to which all
or a portion of net premiums and transfers may be allocated for accumulation at
fixed rates of interest.
GENERAL ACCOUNT - The General Account of ALIC includes all of ALIC assets except
those assets segregated into separate accounts.
GUARANTEED DEATH BENEFIT PREMIUM - A specified optional premium amount for the
first three policy years which, if paid in advance on a monthly or yearly
cumulative basis, after adjustment for policy loans or Partial Withdrawals, will
keep the Policy in force during the first three policy years, so long as other
policy provisions are met, even if the Net Cash Surrender Value is insufficient
to cover monthly deductions. This benefit is provided without an additional
policy charge.
INSURED - The person whose life is insured under the Policy.
ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy
Date.
ISSUE DATE - The date that all financial, contractual and administrative
requirements have been met and processed for the Policy.
MATURITY DATE - The date ALIC pays any net cash surrender value, if the Insured
is still living.
MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy
Date except should such monthly activity date fall on a date other than a
valuation date, the monthly activity date will be the next valuation date.
NET AMOUNT AT RISK - The amount by which the death benefit that would be payable
on a Monthly Activity Date exceeds the Accumulation Value on that date.
NET CASH SURRENDER VALUE - The Accumulation Value on the date of surrender less
any outstanding policy debt.
NET PREMIUM - Premium paid less the premium charges (See Premiums, page 21;
Charges and Deductions, page 23).
OUTSTANDING POLICY DEBT - The sum of all unpaid policy loans and accrued
interest on policy loans.
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LLVL 3
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PARTIAL WITHDRAWAL - A Policyowner's means of accessing a portion of the
Accumulation Value without terminating coverage under the Policy. A Partial
Withdrawal has limitations, is irrevocable, and has several policy cost and
coverage implications (See pages 19 and 25).
PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policyowner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force unless
the payments meet the requirements of the Guaranteed Death Benefit Premium.
POLICY - The Flexible Premium Variable Universal Life Insurance Policy offered
by ALIC and described in this Prospectus.
POLICYOWNER - The owner of the Policy, as designated in the application or as
subsequently changed. If a Policy has been absolutely assigned, the assignee is
the Policyowner. A collateral assignee is not the Policyowner.
POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.
POLICY DATE - As set forth in the Policy, the effective date for all coverage
provided in the application. The Policy Date is used to determine policy
anniversary dates, policy years and monthly activity dates. Policy anniversaries
are measured from the Policy Date. The Policy Date and the Issue Date will be
the same unless: 1) an earlier Policy Date is specifically requested, or 2) the
Issue Date is later because additional premiums or application amendments are
required at time of delivery. (See Issuance of a Policy, page 21).
POLICY YEAR - The period from one Policy Anniversary Date until the next Policy
Anniversary Date.
SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted:
(1) A certified copy of the death certificate;
(2) A Claimant Statement;
(3) The Policy; and
(4) Any other information that ALIC may reasonably require to establish the
validity of the claim.
SEPARATE ACCOUNT - Ameritas Life Insurance Corp. Separate Account LLVL, a
separate investment account established by ALIC to receive and invest the net
premiums paid under the Policy and allocated by the Policyowner to the Separate
Account.
SPECIFIED AMOUNT - The minimum death benefit under the Policy, as selected by
the Policyowner, which must be $100,000 or more at the Issue Date.
SUBACCOUNT - A subdivision of the Separate Account. Each Subaccount invests
exclusively in the shares of a specified portfolio of the Funds.
SURRENDER - Occurs when the policy is terminated before the maturity date during
the Insured's life for its net cash surrender value. Coverage under the policy
will terminate as of the date of a surrender.
VALUATION DATE - Any day on which the New York Stock Exchange is open for
trading.
VALUATION PERIOD - The period between two successive Valuation Dates, commencing
at the close of the New York Stock Exchange ("NYSE") on one Valuation Date and
ending at the close of the NYSE on the next succeeding Valuation Date.
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4 LLVL
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SUMMARY
The following summary of Prospectus information and diagram of the Policy should
be read in conjunction with the detailed information appearing elsewhere in this
Prospectus. Unless otherwise indicated, the description of the Policy contained
in this Prospectus assumes that the Policy is in force, current charges were
used, and there is no outstanding indebtedness.
Diagram of Policy
PREMIUM PAYMENTS
You can vary amount and frequency.
DEDUCTIONS FROM PREMIUMS
Premium taxes and the expense of deferring the
tax deduction of policy acquisition costs - 3.5%
This charge is guaranteed not to exceed 5%
There is no premium load to cover sales and distribution expenses.
NET PREMIUM
You direct the net premium to be invested in the Fixed Account or to the
Separate Account which offers fifteen different Subaccounts. The fifteen
Subaccounts invest in the corresponding portfolios (Funds) of the Vanguard
Variable Insurance Fund, the Neuberger & Berman Advisers Management Trust, or
the Berger Institutional Products Trust.
DEDUCTIONS FROM ASSETS
Monthly charge for cost of insurance and cost of any riders.
Monthly charge for administrative expenses ($9.00 per month the first policy
year and the 12-month period following an increase in specified amount, $4.50
per month currently thereafter). This charge is guaranteed not to exceed $9.00
per month.
Daily charge, at an annual rate of 0.75%, from the Subaccounts for mortality and
expense risks. This charge is guaranteed not to exceed .90%. This charge is not
deducted from Fixed Account assets.
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LIVING BENEFITS RETIREMENT BENEFITS DEATH BENEFITS
Partial Withdrawals may be made (subject to Loans may be taken at a Income tax free to
certain restrictions). The death benefit will be net zero interest rate after beneficiary.
reduced by the amount of the Partial Withdrawal. ten years or when the Available as lump
Up to fifteen free transfers may be made each year policyholder reaches 55 sum or under the
between the investment portfolios. (whichever occurs later). five payment meth-
Accelerated payment of up to 50% of the lowest Should the policy lapse ods available as
scheduled death benefit is available under certain while loans are outstanding retirement benefits.
conditions for Insureds suffering from terminal the portion of the loan
illness. attributable to earnings will
The policy may be surrendered at any time for its become taxable distributions.
Net Cash Surrender Value. The policy has no (See page 18).
surrender charge. However, there is a charge for Payments can be taken
Partial Withdrawals. under one or more of five
different payment options.
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LLVL 5
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THE ISSUER
The Policy is issued by Ameritas Life Insurance Corp. ("ALIC"), a Nebraska stock
life insurance company. A separate account of ALIC, Separate Account LLVL
("Separate Account"), has been established to hold the assets supporting the
Policy. The Separate Account has fifteen Subaccounts which correspond to, and
are invested in, the portfolios of the Funds discussed herein. (See ALIC and the
Separate Account, page 9, and The Funds, page 10). The financial statements for
ALIC can be found beginning on page 51.
THE POLICY
The policy is available for individuals and for corporations and other
institutions who wish to provide coverage and benefits for key employees.
This flexible premium variable universal life insurance policy ("Policy") allows
the Policyowner, within limitations, to choose: (a) the amount and frequency of
premium payments; (b) the manner in which the Policyowner's Accumulation Values
are invested; and (c) a choice of two death benefit options unless the Extended
Maturity Rider is in effect.
As long as the Policy remains in force, it will provide for: (1) life insurance
coverage on the Insured up to age 100; (2) an Accumulation Value; (3) surrender
rights (including Partial Withdrawals and Surrender); (4) policy loan
privileges; and (5) a variety of optional benefits and riders that may be added
to the Policy for an additional charge or without charge if certain minimum
premiums are paid.
PREMIUMS
This Policy differs in two important respects from a conventional life insurance
policy. First, the failure to pay a Planned Periodic Premium will not in itself
cause the Policy to lapse.
Second, a Policy can lapse even if Planned Periodic Premiums have been paid
unless the Guaranteed Death Benefit Premium requirements have been met. (See
Payment and Allocation of Premiums, page 21).
AMOUNTS. A minimum initial premium of at least 25% of the total first year
monthly deductions including charges for riders, and any substandard risk
adjustments must be paid in order to put the Policy in force. The minimum
initial premium is less than the Guaranteed Death Benefit Premium. After the
minimum initial premium is paid, unscheduled premiums may be paid in any amount
and at any frequency, subject only to the maximum and minimum limitations set by
ALIC and the maximum limitations set by Federal Income Tax Law. A Policyowner
may also choose a Planned Periodic Premium which may include the minimum
cumulative premiums necessary to keep in force the Guaranteed Death Benefit
Provision.
A Policy will lapse when the Net Cash Surrender Value is insufficient to pay the
monthly deduction unless the Guaranteed Death Benefit Provision is in effect. A
period of 61 days from the date written notice of lapse is mailed to the
Policyowner's last known address will be allowed for the Policyowner to make
sufficient payment to keep the Policy in force for the Policyowner (grace
period).
ALLOCATION OF NET PREMIUMS
The Policyowner may select the manner in which the new premiums are allocated
between the Fixed Account (See Fixed Account, page 13) and to one or more of the
Subaccounts.
Net premiums, which equal the premiums paid less the premium charges, are first
allocated for 13 days, as of the Issue Date, to the Subaccount for the Money
Market Portfolio of Vanguard. After the 13-day period the Accumulation Value
will be allocated as selected by the Policyowner. The Policyowner may change the
allocation instructions for premiums and may also make a special designation for
unscheduled premiums. Subject to certain charges and restrictions, a Policyowner
may also transfer amounts among the Subaccounts and the Fixed Account. (See
Allocation of Premiums and Accumulation Value, page 22).
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6 LLVL
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The various Subaccounts available invest in a corresponding portfolio of the
Funds. In this Separate Account, Vanguard offers nine portfolios: Money Market,
High-Grade Bond, High Yield Bond, Balanced, Equity Income, Equity Index, Growth,
Small Company Growth and International; Neuberger & Berman AMT offers four
portfolios: Limited Maturity Bond, Growth, Partners and Balanced; and Berger IPT
offers two portfolios: Berger IPT-100 Fund and Berger IPT-Small Company Growth
Fund. A summary of the investment objectives for these portfolios is set forth
at page 10 of this Prospectus, and detailed objectives of these portfolios are
described in the accompanying prospectuses for the Funds. There is no assurance
that these objectives will be met. The Policyowner bears the entire investment
risk for amounts allocated to the Subaccounts.
POLICY BENEFITS
DEATH BENEFIT PROCEEDS AND DEATH BENEFIT OPTIONS. While the Policy remains in
force, ALIC will pay the Death Benefit Proceeds to the Beneficiary upon receipt
of Satisfactory Proof of Death of the Insured. These proceeds may be paid in a
lump sum or in accordance with an optional payment plan.
The Policy provides for two death benefit options unless the Extended Maturity
Rider is in effect. Under either option, so long as the Policy remains in force,
the death benefit will not be less than the current Specified Amount of the
Policy adjusted for any policy indebtedness and any overdue monthly deductions.
The death benefit may, however, exceed the Specified Amount, depending upon the
investment experience of the Policy. Death Benefit Option A provides for a level
benefit equal to the current Specified Amount of the Policy, unless the
Accumulation Value of the Policy on the date of the Insured's death multiplied
by the applicable percentage set forth in the Policy is greater, in which case
the death benefit is equal to that larger amount. Death Benefit Option B
provides for a variable benefit equal to the current Specified Amount of the
Policy plus the Policy's Accumulation Value on the date of the Insured's death,
or if greater, the Accumulation Value of the Policy on the date of the Insured's
death multiplied by the applicable percentage set forth in the Policy. (See
Death Benefit Options, page 14).
If the Extended Maturity Rider is in effect, the Death Benefit will be the
Accumulation Value.
Optional insurance benefits offered under the Policy include: Guaranteed Death
Benefit provision; Children's Protection Rider; Cost Recovery Rider; Guaranteed
Insurability Rider; Payor Waiver of Monthly Deductions on Disability;
Accelerated Benefit Rider for Terminal Illness, Waiver of Monthly Deductions on
Disability. These riders are not available in every state. The cost, if any, of
these additional insurance benefits will be deducted from the Policy's
Accumulation Value as a part of the monthly deduction. The Guaranteed Death
Benefit provision is provided without cost but requires the described premium
payments.
BENEFITS AT MATURITY. On the Maturity Date of the Policy, if the Insured is
still living, the Policyowner will be paid the Net Cash Surrender Value of the
Policy.
ACCUMULATION VALUE BENEFITS. The Policy's Accumulation Value in the Separate
Account will reflect the amount and frequency of premium payments, the
investment experience of the chosen Subaccounts and the Fixed Account, policy
loans, any Partial Withdrawals, and any charges imposed in connection with the
Policy. The entire investment risk of the Separate Account is borne by the
Policyowner. ALIC does not guarantee a minimum Accumulation Value in the
Separate Account. (See Accumulation Value, page 16). It does guarantee the Fixed
Account.
The Policyowner may surrender the Policy at any time and receive its Net Cash
Surrender Value. Subject to certain limitations, the Policyowner may also make a
Partial Withdrawal from the Policy and obtain a portion of the Accumulation
Value at any time prior to the maturity date. Partial Withdrawals will reduce
both the Accumulation Value and the Death Benefit payable under the Policy. (See
Partial Withdrawals, page 19). A charge will be deducted from the amount paid
upon Partial Withdrawal. (See Partial Withdrawal Charge, page 25).
POLICY LOANS. Policy loans, secured by the Accumulation Value of the Policy, are
available. After the first policy anniversary, the Policyowner may obtain a loan
at "regular" loan interest rates, which shall not exceed 6% annually.
After the later of age 55 or the tenth policy anniversary, the Policyowner can
borrow against a limited amount of the Accumulation Value of the Policy at a
"reduced" interest rate, which reduced rate is currently 3.5% and shall not
exceed 4% annually ("reduced rate loan"). While the loan is outstanding, the
Policyowner earns 3.5% interest on the Accumulation Values securing the loans.
(For details concerning policy loan provisions, see page 18).
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LLVL 7
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Policy loans may have tax consequences and will affect earnings and Policy
Accumulation Values. Should the policy lapse while loans are outstanding the
portion of the loans attributable to earnings will become taxable distributions.
Should the Policy become a modified endowment contract, loans (including loans
to pay loan interest) will be taxable to the extent of any gain under the
Policy. Further, a 10% penalty tax also applies to the taxable portion of any
distribution prior to the Insured's age 59 1/2. (See Federal Tax Matters, page
28).
CHARGES
SALES CHARGE. There is no premium load to cover sales and distribution expenses.
PREMIUM CHARGES. Generally, a charge of no greater than 5% (currently 3.5%) of
each premium will be deducted to compensate ALIC for premium tax charges
(currently 2.5%) and the expenses of deferring the tax deduction of policy
acquisition costs (currently 1.0%) before placing any amount in a Subaccount or
the Fixed Account. ALIC does not expect to derive a profit from the premium
charges. (See Deductions From Premium Payment, page 23).
MONTHLY CHARGES AGAINST THE ACCUMULATION VALUE.
a) A monthly maintenance charge of up to $9.00 [currently ALIC is charging $9.00
per month ($108.00 per year) during the first Policy Year and during the
12-month period after an increase in specified amount, and $4.50 per month
($54.00 per year) thereafter] to compensate ALIC for the continuing
administrative costs of the Policy; plus
b) A monthly charge for the cost of insurance including the cost for any riders.
(See Charges Deducted from Accumulation Value, page 23).
SURRENDER CHARGE. This policy has no surrender charge. However, there is a
charge for Partial Withdrawals. (See below).
TRANSFER CHARGE. Fifteen transfers of Accumulation Value per policy year will be
permitted free of charge. A $10 administrative charge may be assessed for each
additional transfer. The transfer charge will be deducted from the amount
transferred. (See Transfer Charge, page 24).
PARTIAL WITHDRAWAL CHARGE. A maximum charge, not to exceed the lesser of $50 or
2% of the amount withdrawn may be deducted for each Partial Withdrawal.
(Currently, the charge is the lesser of $25 or 2%.) The charge will be deducted
from the amount paid as a result of the Partial Withdrawal and will compensate
ALIC for the administrative costs of Partial Withdrawals. A Partial Withdrawal
charge is not assessed when a Policy is surrendered. (See Partial Withdrawal
Charge, page 25).
DAILY CHARGES AGAINST THE SEPARATE ACCOUNT. A daily charge at an annual rate not
to exceed .90% (currently .75%) of the average daily net assets of each
Subaccount, but not the Fixed Account. This charge compensates ALIC for
mortality and expense risks assumed in connection with the Policy. (See Daily
Charges Against the Separate Account, page 25).
No additional charges are currently made against the Separate Account for
federal, state or local taxes. If there is a material change from the expected
treatment of ALIC under federal, state or local tax laws, ALIC may determine to
make deductions from the Separate Account to pay those taxes. (See Taxes, page
25).
In addition, because the Separate Account purchases shares of the Funds, the
value of the units in each Subaccount will reflect the net asset value of shares
of the various Funds held therein, and therefore, the investment advisory fee
and other expenses incurred by the Funds. (See The Funds, page 10).
TAX TREATMENT OF THE POLICY
Like death benefits payable under conventional life insurance policies, life
insurance proceeds payable under the Policy are excludable from the taxable
income of the Beneficiary. Should the Policy be deemed a modified endowment
contract (see Federal Tax Matters-Tax Status of the Policy, page 28), Partial
Withdrawals or Surrenders, assignments, policy pledges, and loans under the
Policy will be taxable to the Policyowner to the extent of any gain under the
Policy. Generally, a 10% penalty tax also applies to the taxable portion of any
distribution prior to the Insured reaching age 59 1/2. (For further detail
regarding taxation, see Federal Tax Matters, page 28).
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8 LLVL
<PAGE>
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REFUND PRIVILEGE
The Policyowner is granted a period of time (a "free look period") to examine a
Policy and return it for a refund. The Policyowner may cancel the Policy within
45 days after Part I of the application is signed, within 10 days after the
Policyowner receives the Policy, or 10 days after ALIC delivers a notice
concerning cancellation, whichever is later. The amount of the refund is the
greater of the premium paid or the premium paid adjusted by investment gains and
losses. (See Refund Privilege, page 20).
EXCHANGE PRIVILEGE
During the first 24 months after the policy date of the Policy, subject to
certain restrictions, the Policyowner may exchange the Policy for a flexible
premium adjustable life insurance policy issued and made available for exchange
by ALIC. The policy provisions and applicable charges for the new Policy will be
based on the same Policy Date and Issue Age as under the Policy. (See Exchange
Privilege, page 20).
ALIC AND THE SEPARATE ACCOUNT
AMERITAS LIFE INSURANCE CORP.
Ameritas Life Insurance Corp. ("ALIC") is a stock life insurance company
domiciled in Nebraska since 1887. ALIC is currently licensed to sell life
insurance in 49 states, and the District of Columbia. The Home Office of ALIC is
at 5900 "O" Street, Lincoln, Nebraska 68501.
ALIC and subsidiaries had total assets at December 31, 1997 of over $3.4
billion. ALIC enjoys a long standing A+ (Superior) rating from A.M. Best, an
independent firm that analyzes insurance carriers. ALIC also has been rated A
("Excellent") by Weiss Research, Inc., and has an AA ("Excellent") rating from
Standard & Poor's for claims-paying ability.
Effective January 1, 1998, ALIC converted from a mutual insurance company
structure to a mutual insurance holding company structure pursuant to the
Nebraska Mutual Insurance Holding Company Act. The conversion was approved by
the Nebraska State Department of Insurance and the policy owners of the mutual
company. As a result of the conversion, ALIC is wholly owned by Ameritas Holding
Company, which is wholly owned by Ameritas Mutual Insurance Holding Company.
There are no other owners of 5% or more of the outstanding voting securities of
ALIC.
Ameritas Investment Corp. ("AIC"), the principal underwriter of the policies,
may publish in advertisements and reports to Policyowners, the ratings and other
information assigned to ALIC by one or more independent rating services and
charts and other information concerning dollar cost averaging, portfolio
rebalancing, earnings sweep, tax-deference, diversification, asset allocation,
long term market trends, index performance, and other investment methods. ALIC
may also publish information about Veritas, ALIC's wholly owned,
direct-to-consumer subsidiary. The purpose of the ratings is to reflect the
financial strength and/or claims-paying ability of ALIC. The ratings do not
relate to the performance of the Separate Account.
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
Ameritas Life Insurance Corp. Separate Account LLVL ("the Separate Account") was
established under Nebraska law on August 24, 1994. The assets of the Separate
Account are held by ALIC and are segregated from all of ALIC's other assets.
These assets are not chargeable with liabilities arising out of any other
business which ALIC may conduct, including any income, gains, or losses of ALIC.
Although the assets maintained in the Separate Account will not be charged with
any liabilities arising out of ALIC's other business, all obligations arising
under the Policies are liabilities of ALIC who will maintain assets in the
Separate Account of a total market value at least equal to the reserve and other
contract liabilities of the Separate Account. Nevertheless, to the extent assets
in the Separate Account exceed ALIC's liabilities in the Separate Account, the
assets are available to cover the liabilities of ALIC's General Account. ALIC
may, from time to time, withdraw assets available to cover the General Account
obligations. The Separate Account is registered with the Securities and Exchange
Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a
unit investment trust, which
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LLVL 9
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is a type of investment company. This does not involve any SEC supervision of
the management or investment policies or practices of the Separate Account. For
state law purposes, the Separate Account is treated as a Division of ALIC.
THE FUNDS
There are currently fifteen Subaccounts within the Separate Account available to
Policyowners for new allocations. Each Subaccount of the Separate Account will
invest only in the shares of a corresponding portfolio of Vanguard, Neuberger &
Berman AMT, or Berger IPT (collectively the "Funds"). Each fund is registered
with the SEC under the 1940 Act as an open-end diversified management investment
company.
The assets of each portfolio of the Funds are held separate from the assets of
the other portfolios. Thus, each portfolio operates as a separate investment
portfolio, and the income or losses of one portfolio generally have no effect on
the investment performance of any other portfolio.
The investment objectives and policies of each portfolio are summarized below.
There is no assurance that any of the portfolios will achieve their stated
objectives. More detailed information, including a description of investment
objectives, policies, restrictions, expenses and risks, is in the prospectuses
for each of the Funds, which must accompany or precede this Prospectus. These
Prospectuses should be read carefully together with this Prospectus and
retained.
All underlying fund information, including Fund prospectuses, has been provided
to ALIC by the underlying Funds. ALIC has not independently verified this
information.
Each Policyowner should periodically consider the allocation among the
Subaccounts in light of current market conditions and the investment risks
attendant to investing in the Funds' various portfolios.
The Separate Account will purchase and redeem shares from the Portfolios at the
net asset value. Shares will be redeemed to the extent necessary for ALIC to
collect charges, pay the surrender values, Partial Withdrawals, and make policy
loans or to transfer assets from one Subaccount to another, or to the Fixed
Account, as requested by Policyowners. Any dividend or capital gain distribution
received is automatically reinvested in the corresponding Subaccount.
Since Vanguard, Neuberger & Berman AMT and Berger IPT are each designed to
provide investment vehicles for variable annuity or variable life insurance
contracts of various insurance companies and will be sold to separate accounts
of other insurance companies as investment vehicles for various types of
variable life insurance policies or variable annuity contracts, there is a
possibility that a material conflict may arise between the interests of the
Separate Account and one or more of the separate accounts of another
participating insurance company. In the event of a material conflict, the
affected insurance companies agree to take any necessary steps, including
removing its separate accounts from the Funds, to resolve the matter. The risks
of such mixed and shared funding are described further in the prospectuses of
the Funds.
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS' PORTFOLIOS
VANGUARD
MONEY MARKET PORTFOLIO seeks to provide a current income and a stable net asset
value of $1.00 per share. The Portfolio invests primarily in high-quality money
market instruments issued by financial institutions, nonfinancial corporations,
and the U.S. Government, state and municipal governments and their agencies or
instrumentalities, as well as repurchase agreements collateralized by such
securities.
HIGH-GRADE BOND PORTFOLIO seeks to parallel the investment results (income plus
capital change) of publicly-traded investment graded fixed-income securities in
the aggregate by attempting to duplicate the investment performance of a broad
investment grade bond index. The Portfolio invests primarily in a diversified
portfolio of U.S. Government, corporate and foreign dollar-denominated bonds and
mortgage-backed securities.
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10 LLVL
<PAGE>
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HIGH YIELD BOND PORTFOLIO seeks to provide a high level of current income by
investing in a diversified portfolio of lower quality, high-yielding corporate
debt securities (commonly referred to as "junk bonds").
BALANCED PORTFOLIO seeks to provide capital growth and a reasonable level of
current income by investing in a diversified portfolio of common stocks and
bonds.
EQUITY INCOME PORTFOLIO seeks to provide a high level of current income by
investing principally in dividend-paying equity securities.
EQUITY INDEX PORTFOLIO seeks to parallel the investment results of the Standard
& Poor's 500 Composite Stock Price Index (the "S & P 500"). The Portfolio
invests primarily in common stocks included in the S & P 500.
GROWTH PORTFOLIO seeks to provide long-term capital appreciation by investing
primarily in equity securities of seasoned U.S. companies with above-average
prospects for growth.
SMALL COMPANY GROWTH PORTFOLIO seeks to provide long-term growth in capital by
investing primarily in equity securities of small companies deemed to have
favorable prospects for growth.
INTERNATIONAL PORTFOLIO seeks to provide long-term capital appreciation by
investing primarily in equity securities of seasoned companies located outside
the United States.
NEUBERGER & BERMAN AMT
LIMITED MATURITY BOND PORTFOLIO seeks the highest current income consistent with
low risk to principal and liquidity; and secondarily, total return. Principal
series investments are short-to-intermediate term debt securities, primarily
investment grade.
GROWTH PORTFOLIO seeks capital appreciation, without regard to income. Principal
series investments are common stocks.
PARTNERS PORTFOLIO seeks capital growth. Principal series investments are common
stocks and other equity securities of established companies.
BALANCED PORTFOLIO seeks long-term capital growth and reasonable current income
without undue risk to principal. Principal series investments are common stocks
and short-to-intermediate term debt securities, primarily investment grade.
BERGER IPT
BERGER IPT-100 FUND seeks long-term capital appreciation. Current income is not
an investment objective. The Fund places primary emphasis on established
companies which it believes to have favorable growth prospects, regardless of
the company's size. Common stock usually constitutes all or most of the Fund's
investment portfolio, but the Fund remains free to invest in securities other
than common stocks.
BERGER IPT-SMALL COMPANY GROWTH FUND seeks capital appreciation. It invests
principally in a diversified group of equity securities of small growth
companies with market capitalization of less than $1 billion at the time of
initial purchase.
FUND MANAGEMENT FEES
Fee information relating to the underlying funds was provided to ALIC by the
underlying funds. ALIC has not independently verified the information received
from the underlying funds.
Vanguard's Fixed Income Group provides advisory services to the Money Market and
High-Grade Bond portfolios. Vanguard's Core Management Group provides advisory
services to the Equity Index portfolio. Newell Associates, Lincoln Capital
Management, and Granahan Investment Management, Inc., serve as independent
investment advisors to the Equity Income, Growth, and Small Company Growth
portfolios, respectively. Wellington Management Company serves as investment
advisor to the Balanced and High Yield Bond portfolios. The International
portfolio employs Schroder Capital Management International, Inc. as the
adviser. Vanguard charges a fee to each portfolio for providing corporate
management, administrative, distribution and shareholder accounting services.
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LLVL 11
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Neuberger & Berman Advisers Management Trust (the "Trust") is divided into
portfolios ("Portfolios"), each of which invests all of its net investable
assets in a corresponding series ("Series") of Advisers Managers Trust. The
figures reported under "Investment Management and Administration Fees" include
the aggregate of the administration fees paid by the Portfolio and the
management fees paid by its corresponding Series. Similarly, "Other Expenses"
includes all other expenses of the Portfolio and its corresponding Series.
Neuberger & Berman Management, Inc. ("NBMI") provides investment management
services to each Series that include, among other things, making and
implementing investment decisions and providing facilities and personnel
necessary to operate the Series. NBMI provides administrative services to each
Portfolio that include furnishing similar facilities and personnel to the
Portfolio. With the Portfolio's consent, NBMI is authorized to subcontract some
of its responsibilities under its administration agreement with the Portfolio to
third parties.
Each Portfolio bears all expenses of its operations other than those borne by
NBMI as administrator of the Portfolio and as distributor of its shares. Each
Series bears all expenses of its operations other than those borne by NBMI as
investment manager of the Series. These expenses include, but are not limited
to, for the Portfolios and the Series, legal and accounting fees and
compensation for trustees who are not affiliated with NBMI; for the Portfolios,
transfer agent fees and the cost of printing and sending reports and proxy
materials to shareholders; and for the Series, custodial fees for securities.
Any expenses which are not directly attributable to a specific Series are
allocated on the basis of the net assets of the respective Series.
NBMI has voluntarily undertaken to limit the listed Portfolio's expenses by
reimbursing each Portfolio for its operating expenses and its pro rata share of
its corresponding Series' operating expenses, excluding the compensation of
NBMI, taxes, interest, extraordinary expenses, brokerage commissions and
transaction costs, that exceed, in the aggregate, 1% per annum of the
Portfolio's average daily net asset value. This undertaking is subject to
termination on 60 days' prior written notice to the Portfolio.
The effect of any expense limitation by NBMI is to reduce operating expenses of
a portfolio and its corresponding Series and thereby increase total return.
Berger Associates provides investment advisory services to the Berger IPT Funds
available in the Separate Account. Berger Associates has voluntarily agreed to
waive its advisory fee and has voluntarily reimbursed the Funds for additional
expenses to the extent that normal operating expenses in any fiscal year,
including the management fee but excluding brokerage commissions, interest,
taxes and extraordinary expenses, of Berger IPT-100 Fund exceed 1.00%, and the
normal operating expenses in any fiscal year of the Berger IPT-Small Company
Growth Fund exceed 1.15%, of the respective Fund's average daily net assets.
<TABLE>
<CAPTION>
EXPENSES
INVESTMENT ADVISORY
PORTFOLIO & MANAGEMENT OTHER EXPENSES TOTAL
VANGUARD(1)
<S> <C> <C> <C>
Money Market .17% .04% .21%
High-Grade Bond .23% .06% .29%
High Yield Bond .27% .04% .31%
Balanced .29% .03% .32%
Equity Income .33% .04% .37%
Equity Index .20% .03% .23%
Growth .35% .03% .38%
Small Company Growth .35% .04% .39%
International .38% .08% .46%
NEUBERGER & BERMAN(2)
INVESTMENT MANAGEMENT
PORTFOLIO & ADMINISTRATION FEES OTHER EXPENSES TOTAL
<S> <C> <C> <C>
Limited Maturity .65% .12% .77%
Balanced .85% .19% 1.04%
Partners .80% .06% .86%
Growth .83% .07% .90%
</TABLE>
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12 LLVL
<PAGE>
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<TABLE>
<CAPTION>
BERGER IPT
INVESTMENT MANAGEMENT
PORTFOLIO & ADMINISTRATION FEES OTHER EXPENSES TOTAL
(reflect reimbursement) (reflect reimbursement)
<S> <C> <C> <C>
100 Fund .00% 1.00%(3) 1.00%(3)
Small Company Growth .00% 1.15%(4)) 1.15%(4)
</TABLE>
(1) 9/30/97 fiscal year end.
(2) 12/31/97 fiscal year end.
(3) Expenses reflect fee waiver and expense reimbursement. Absent such waiver
and reimbursement, "Other" Expenses would have been 8.43%; and "Total"
Expenses would have been 9.18%.
(4) Expenses reflect fee waiver and expense reimbursement. Absent such waiver
and reimbursement, "Other" Expenses would have been 4.91%; and "Total"
Expenses would have been 5.81%.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
ALIC reserves the right, subject to applicable law, and, if necessary, after
notice to and prior approval from the SEC and/or state insurance authorities, to
make additions to, deletions from, or substitutions for the shares that are held
in the Separate Account or that the Separate Account may purchase. The Separate
Account may, to the extent permitted by law, purchase other securities for other
contracts or permit a conversion between contracts upon request by the
Policyowners.
ALIC may, in its sole discretion, also establish additional Subaccounts of the
Separate Account, each of which would invest in shares corresponding to a new
portfolio of the Funds or in shares of another investment company having a
specified investment objective. ALIC may, in its sole discretion, establish new
Subaccounts or eliminate one or more Subaccounts if marketing needs, tax
considerations or investment conditions warrant. Any new Subaccounts may be made
available to existing Policyowners on a basis to be determined by ALIC.
If any of these substitutions or changes are made, ALIC may by appropriate
endorsement change the Policy to reflect the substitution or change. If ALIC
deems it to be in the best interest of Policyowners, and subject to any
approvals that may be required under applicable law, the Separate Account may be
operated as a management company under the 1940 Act, it may be deregistered
under that Act if registration is no longer required, or it may be combined with
other ALIC separate accounts. To the extent permitted by applicable law, ALIC
may also transfer the assets of the Separate Account associated with the
Policies to another separate account. In addition, ALIC may, when permitted by
law, restrict or eliminate any voting rights of Policyowners or other persons
who have voting rights as to the Separate Account.
The Policyowner will be notified of any material change in the investment policy
of any portfolio in which the Policyowner has an interest.
FIXED ACCOUNT
Policyowners may elect to allocate all or a portion of their premium payments to
the Fixed Account, and they may also transfer monies from the Separate Account
to the Fixed Account or from the Fixed Account to the Separate Account. (See
Transfers, page 19).
Payments allocated to the Fixed Account and transferred from the Separate
Account to the Fixed Account are placed in the General Account of ALIC, which
supports insurance and annuity obligations. The General Account includes all of
ALIC's assets, except those assets segregated in the separate accounts. ALIC has
the sole discretion to invest the assets of the General Account, subject to
applicable law. ALIC bears an investment risk for all amounts allocated or
transferred to the Fixed Account and interest credited thereto, less any
deduction for charges and expenses, whereas the Policyowner bears the investment
risk that the declared rate described below, may fall to a lower rate after the
expiration of a declared rate period. Because of exemptive and exclusionary
provisions, interests in the General Account have not been registered under the
Securities Act of 1933 (the "1933 Act") nor is the General Account registered as
an investment company under the Investment Company Act of 1940 (the "1940 Act").
Accordingly neither the General Account nor any interest therein is generally
subject to the provisions of the 1933 Act or 1940 Act.
We understand that the staff of the SEC has not reviewed the disclosures in this
Prospectus relating to the Fixed Account portion of the Contract; however,
disclosures regarding the Fixed Account portion of the Contract may be subject
to generally applicable provisions of the Federal Securities Laws regarding the
accuracy and completeness of statements made in prospectuses.
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LLVL 13
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ALIC guarantees that it will credit interest at an effective annual rate of at
least 3.5%. ALIC may, at its discretion, declare higher interest rate(s) for
amounts allocated or transferred to the General Account ("Declared Rate(s)").
Amounts allocated to the Fixed Account receive an interest rate declared
effective for the month of issue. The declared interest rate is guaranteed for
the remainder of the Policy Year. During subsequent Policy Years, all amounts in
the Fixed Account will earn the interest rate that was declared in the month of
the last Policy anniversary. Declared interest rates may be lower or higher than
the previous period.
POLICY BENEFITS
PURPOSES OF THE POLICY
The Policy is designed to provide the Policyowner with both lifetime insurance
protection to the policy anniversary nearest the Insured's 100th birthday and
flexibility in connection with the amount and frequency of premium payments and
with the level of life insurance proceeds payable under the Policy.
The Policyowner is not required to pay scheduled premiums to keep a Policy in
force, but may, subject to certain limitations, vary the frequency and amount of
premium payments. Moreover, the Policy allows a Policyowner to adjust the level
of death benefits payable under the Policy without having to purchase a new
Policy by increasing (with evidence of insurability) or decreasing the Specified
Amount. An increase in the Specified Amount will increase the optional
Guaranteed Death Benefit Premium required. Thus, as insurance needs or financial
conditions change, the Policyowner has the flexibility to adjust life insurance
benefits and vary premium payments.
The Death Benefit may, and the Accumulation Value will, vary with the investment
experience of the chosen Subaccounts of the Separate Account. Thus the
Policyowner benefits from any appreciation in value of the underlying assets,
but bears the investment risk of any depreciation in value. As a result, whether
or not a Policy continues in force may depend in part upon the investment
experience of the chosen Subaccounts. The failure to pay a planned periodic
premium will not necessarily cause the Policy to lapse, but the Policy could
lapse even if planned periodic premiums have been paid, depending upon the
investment experience of the Separate Account. ALIC agrees to keep the Policy in
force during the first three years and provide a Guaranteed Death Benefit during
that period so long as the cumulative monthly Guaranteed Death Benefit Premium
is paid even though the Guaranteed Death Benefit Premium allowed by contract may
not, after the payment of monthly insurance and administrative charges, generate
positive Net Cash Surrender Values.
DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, ALIC will, upon satisfactory proof of
the Insured's death, pay the Death Benefit Proceeds of a Policy in accordance
with the death benefit option in effect at the time of the Insured's death. The
amount of the death benefits payable will be determined at the end of the
Valuation Period during which the Insured's death occurred. The Death Benefit
Proceeds may be paid in a lump sum or under one or more of the payment options
set forth in the Policy. (See Payment Options, page 17).
Death Benefit Proceeds will be paid to the surviving beneficiary or
beneficiaries specified in the application or as subsequently changed. If no
beneficiary is chosen, the proceeds will be paid to the Policyowner's estate.
DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options, unless the Extended Maturity
Rider is in effect, and the Policyowner selects one of the options in the
application. The Death Benefit under either option will never be less than the
current Specified Amount of the Policy as long as the Policy remains in force
(see Policy Lapse and Reinstatement, page 22). The minimum initial Specified
Amount is generally $100,000, lower Specified Amounts may be requested. Defined
differences, assisted by graphic illustrations are as follows:
OPTION A.
Omitted graph illustrates payout under Death Benefit Option A, specifically by
showing the relationship over time, between the Specified Amount and the
Accumulation Value.
Death Benefit Option A. Pays a Face Amount of Death Benefit equal to the
Specified Amount or the Accumulation Value multiplied by the Death Benefit Ratio
(as illustrated at Point A) whichever is greater.
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14 LLVL
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Under Option A, the Death Benefit is the current Specified Amount of the Policy
or, if greater, the applicable percentage of Accumulation Value on the date of
death. The applicable percentage is 250% for Insureds with an attained age 40 or
younger on the policy anniversary prior to the date of death. For Insureds with
an attained age over 40 on that policy anniversary, the percentage declines. For
example, the percentage at age 40 is 250%, at age 50 is 185%, at age 60 is 130%,
at age 70 is 115%, at age 80 is 105%, and at age 95 is 100%. Accordingly, under
Option A the Death Benefit will remain level at the Specified Amount unless the
applicable percentage of Accumulation Value exceeds the current Specified
Amount, in which case the amount of the Death Benefit will vary as the
Accumulation Value varies. Policyowners who prefer to have favorable investment
performance, if any, reflected in higher Accumulation Value, rather than
increased insurance coverage, generally should select Option A.
OPTION B.
Omitted graph illustrates payout under Death Benefit Option B, specifically by
showing the relationships over time, between the Specified Amount and the
Accumulated Value.
Death Benefit Option B. Pays a Face Amount of Death Benefit equal to the
Specified Amount plus the Policy's Accumulation Value or the Accumulation Value
multiplied by the Death Benefit Ratio, whichever is greater.
Under Option B, the death benefit is equal to the current Specified Amount plus
the Accumulation Value of the Policy or, if greater, the applicable percentage
of the Accumulation Value on the date of death. The applicable percentage is the
same as under Option A: 250% for Insureds with an attained age 40 or younger on
the policy anniversary prior to the date of death, and for Insureds with an
attained age over 40 on that policy anniversary the percentage declines.
Accordingly, under Option B the amount of the death benefit will always vary as
the Accumulation Value varies (but will never be less than the Specified
Amount). Policyowners who prefer to have favorable investment performance, if
any, reflected in increased insurance coverage, rather than higher Accumulation
Values, generally should select Option B.
EXTENDED MATURITY. If the Extended Maturity Rider is in effect, the Death
Benefit will be the Accumulation Value.
CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed once per
year after the first policy year by sending ALIC a written request. The
effective date of such a change will be the monthly activity date on or
following the date the change is approved by ALIC. A change may have Federal Tax
consequences.
If the Death Benefit option is changed from Option A to Option B, the Death
Benefit after the change will equal the Specified Amount before the change plus
the Accumulation Value on the effective date of the change and will require
evidence of insurability before the change is made. If the death benefit option
is changed from Option B to Option A, the Specified Amount under Option A after
the change will equal the death benefit under Option B on the effective date of
change.
No charges will be imposed upon a change in Death Benefit option, nor will such
a change in and of itself result in an immediate change in the amount of a
Policy's Accumulation Value. However, a change in the Death Benefit option may
affect the monthly cost of insurance charge since this charge varies with the
Net Amount at Risk, which is the amount by which the Death Benefit that would be
payable on a monthly activity date exceeds the Accumulation Value on that date.
Changing from Option B to Option A will generally decrease, in the future, the
Net Amount at Risk, and therefore the cost of insurance charges. Changing from
Option A to Option B will increase the Net Amount at Risk. Such a change will
result in an immediate increase in the cost of insurance charges because of the
increased coverage. (See Charges and Deductions, page 23 and Federal Tax
Matters, page 28).
CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
policy year, a Policyowner may increase or decrease the Specified Amount of a
Policy. A change in Specified Amount may affect the cost of insurance rate and
the Net Amount at Risk, both of which may affect a Policyowner's cost of
insurance charge and have Federal Tax consequences. (See Charges and Deductions,
page 23 and Federal Tax Matters, page 28).
Any increase or decrease in the Specified Amount will become effective on the
Monthly Activity Date on or next following the date a written request is
approved by ALIC. The Specified Amount of a Policy may be changed only once per
year and ALIC may limit the size of a change in a policy year. The Specified
Amount remaining in force after any requested decrease may not be less than
$100,000 in the first three policy years and $75,000 thereafter. In addition, if
following the decrease in Specified Amount, the Policy would not comply with the
maximum premium limitations required by Federal Tax Law
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LLVL 15
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(See Premiums, page 21), the decrease may be limited or Accumulation Value may
be returned to the Policyowner at the Policyowner's election, to the extent
necessary to meet these requirements.
Increases in the Specified Amount will be allowed after the first policy year.
For an increase in the Specified Amount, a written supplemental application must
be submitted. ALIC may also require additional evidence of insurability.
Although an increase need not necessarily be accompanied by an additional
premium, in certain cases an additional premium will be required to effect the
requested increase. (See Premiums Upon Increases in Specified Amount, page 22).
The minimum amount of any increase is $25,000, and an increase cannot be made if
the Insured's attained age is over 80. An increase in the Specified Amount will
result in certain increased charges, which will be deducted from the
Accumulation Value of the Policy on each Monthly Activity Date. An increase in
the Specified Amount during the time the Guaranteed Death Benefit provision is
in effect will increase the premium requirements for that provision. (See
Charges and Deductions, page 23).
METHODS OF AFFECTING INSURANCE PROTECTION
A Policyowner may increase or decrease the pure insurance protection (Net Amount
at Risk) provided by a Policy - the difference between the Death Benefit and the
Accumulation Value - in several ways as insurance needs change. These ways
include increasing or decreasing the Specified Amount of insurance, changing the
level of premium payments, and making a Partial Withdrawal of the Policy's
Accumulation Value. Certain of these changes may have Federal Tax consequences.
The consequences of each of these methods will depend upon the individual
circumstances.
DURATION OF THE POLICY
The duration of the Policy generally depends upon the Accumulation Value. The
Policy will remain in force so long as the Net Cash Surrender Value is
sufficient to pay the monthly deduction. (See Charges Deducted from Accumulation
Value, page 23). Where, however, the Net Cash Surrender Value is insufficient to
pay the monthly deduction and the grace period expires without an adequate
payment by the Policyowner, the Policy will lapse and terminate without value.
(See Policy Lapse and Reinstatement, page 22). ALIC agrees to keep the policy in
force during the first three years and provide a Guaranteed Death Benefit so
long as the cumulative Guaranteed Death Benefit premium is paid. (See Additional
Insurance Benefits, page 26).
ACCUMULATION VALUE
The Policy's Accumulation Value in the Separate Account or the Fixed Account
will reflect the investment performance of the chosen Subaccounts of the
Separate Account or the Fixed Account, the net premiums paid, any Partial
Withdrawals, and the charges assessed in connection with the Policy. A
Policyowner may at any time surrender the Policy and receive the Policy's Net
Cash Surrender Value. (See Surrenders, page 18). There is no guaranteed minimum
Accumulation Value.
DETERMINATION OF ACCUMULATION VALUE. Accumulation Value is determined on each
Valuation Date. On the policy Issue Date, the Accumulation Value in a Subaccount
will equal the portion of any net premium allocated to the Subaccount, reduced
by the portion of the first monthly deductions allocated to that Subaccount.
(See Allocation of Premiums and Accumulation Value, page 22). Thereafter, on
each Valuation Date, the Accumulation Value of a Policy will equal:
(a) The aggregate of the values attributable to the Policy in each of the
Subaccounts on the Valuation Date, determined for each Subaccount by
multiplying the Subaccount's unit value by the number of Subaccount units
allocated to the Policy; plus
(b) The value of the Fixed Account; plus
(c) Any Accumulation Value impaired by policy debt held in the General Account;
plus
(d) Any net premiums received on that Valuation Date; less
(e) Any Partial Withdrawal, and its charge, made on that Valuation Date; less
(f) Any monthly deduction to be made on that Valuation Date; less
(g) Any federal or state income taxes charged against the Accumulation Value.
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In computing the Policy's Accumulation Value, the number of Subaccount units
allocated to the Policy is determined after any transfers among Subaccounts, or
the Fixed Account, (and deduction of transfer charges) but before any other
Policy transactions, such as receipt of net premiums and Partial Withdrawals, on
the Valuation Date. Because the Accumulation Value is dependent upon a number of
variables, a Policy's Accumulation Value cannot be predetermined.
THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount shall be
calculated by (i) multiplying the per share net asset value of the corresponding
Fund portfolio on the Valuation Date times the number of shares held by the
Subaccount, before the purchase or redemption of any shares on that date; minus
(ii) a charge not exceeding an annual rate of .90% for mortality and expense
risk; and (iii) dividing the result by the total number of units held in the
Subaccount on the Valuation Date, before the purchase or redemption of any units
on that date. (See Daily Charges Against the Separate Account, page 25).
BENEFITS AT MATURITY
If the Insured is living, ALIC will pay the Net Cash Surrender Value of the
Policy on the Maturity Date to the Policyowner. The Policy will mature on the
policy anniversary nearest the Insured's 100th birthday, if living, unless the
maturity has been extended by election of the Extended Maturity Rider.
PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven days
after ALIC receives Satisfactory Proof of Death. Accumulation Value benefits
will ordinarily be paid within seven days of receipt of a written request.
Payments may be postponed in certain circumstances. (See Postponement of
Payments, page 26). The Policyowner may decide the form in which the benefits
will be paid. During the Insured's lifetime, the Policyowner may arrange for the
Death Benefit Proceeds to be paid in a lump sum or under one or more of the
optional methods of payment described below. Changes must be in writing and will
revoke all prior elections. These choices are also available if the Policy is
surrendered or matures. If no election is made, ALIC will pay the benefits in a
lump sum. When death benefits are payable in a lump sum and no election for an
optional method of payment is in force at the death of the Insured, the
beneficiary may select one or more of the optional methods of payment. Further,
if the Policy is assigned, any amounts due to the assignee will first be paid in
one sum. The balance, if any, may be applied under any payment option. Once
payments have begun, the payment option may not be changed.
PAYMENT OPTIONS. The minimum amount of each payment is $100. If a payment would
be less than $100 ALIC has the right to make payments less often so that the
amount of each payment is at least $100. Once a payment option is in effect, the
proceeds will be transferred to ALIC's general account. ALIC may make other
payment options available in the future. For additional information concerning
these options, see the Policy itself. The following payment options are
currently available:
OPTION AI--INTEREST PAYMENT OPTION. ALIC will hold any amount applied under this
option. Interest on the unpaid balance will be paid or credited each month at a
rate determined by ALIC.
OPTION AII--FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed
fixed amount. Payments continue until the amount ALIC holds runs out.
OPTION B--FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any
period selected up to 20 years.
OPTION C--LIFETIME PAYMENT OPTION. Equal monthly payments are based on the life
of a named person. Payments will continue for the lifetime of that person.
Variations provide for guaranteed payments for a period of time.
OPTION D--JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based on the
lives of two named persons. While both are living, one payment will be made each
month. When one dies, the same payment will continue for the lifetime of the
other.
As an alternative to the above payment options, the proceeds may be paid in any
other manner approved by ALIC.
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POLICY RIGHTS
LOAN BENEFITS
LOAN PRIVILEGES. After the first policy anniversary, the Policyowner may borrow
up to 100% of the Net Cash Surrender Value after adjustment for loan interest
and guaranteed monthly deductions for the remainder of the policy year. The
loans will be made at regular and, as described below, reduced loan interest
rates. Loans usually are funded within seven days after receipt of a written
request. The loan may be repaid at any time while the Insured is living, prior
to the Maturity Date. Loans may have a tax consequence. (See Federal Tax
Matters, page 28).
LOAN INTEREST. ALIC charges interest to Policyowners at regular and reduced
rates. Regular loans will accrue interest on a daily basis at a rate of up to 6%
per year. ALIC is currently charging 5.5% on regular loans. If unpaid when due,
interest will be added to the amount of the loan and bear interest at the same
rate. After the later of age 55 or the tenth policy anniversary, the Policyowner
may borrow each year a limited amount of the Accumulation Value of the Policy at
a reduced interest rate. Interest will accrue on a daily basis at a rate of up
to 4% per year. ALIC is currently charging 3.5% interest on reduced rate loans.
The amount available at the reduced rate is 10% of the Accumulation Value as of
the later of age 55 or the 10th policy anniversary (the start date) times the
number of years since the start date, increased by the accrued interest charges
on the reduced loan amount.
EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to the
amount of the loan will be transferred from the Separate Account and/or the
Fixed Account to the General Account of ALIC as security for the indebtedness.
The Policyowner earns 3.5% interest on the Accumulation Values securing the
loans. The Accumulation Value transferred out of the Separate Account will be
allocated among the Subaccounts or the Fixed Account in accordance with the
instructions given when the loan is requested. The minimum amount which can
remain in a Subaccount or the Fixed Account as a result of a loan is $100. If no
instructions are given the amounts will be withdrawn in proportion to the
various Accumulation Values in the Subaccounts or the Fixed Account. If loan
interest is not paid when due in any Policy Year, on the Policy Anniversary
thereafter, ALIC will loan the interest and allocate the amount transferred to
secure the excess indebtedness among the Subaccounts and the Fixed Account as
set out just above. No charge will be imposed for these transfers. A policy loan
will permanently affect the Accumulation Value of a Policy, and may permanently
affect the amount of the Death Benefit Proceeds, even if the loan is repaid.
Interest earned on amounts held in the general account will be allocated to the
Subaccounts and the Fixed Account on each policy anniversary in the same
proportion that net premiums are being allocated to those Subaccounts and the
Fixed Account at the time. Upon repayment of indebtedness, the portion of the
repayment allocated in accordance with the repayment of indebtedness provision
(see below) will be transferred to increase the Accumulation Value in that
Subaccount or the Fixed Account.
OUTSTANDING POLICY DEBT. The outstanding policy debt equals the total of all
policy loans and accrued interest on policy loans. If the policy debt exceeds
the Accumulation Value, and any accrued expenses, the Policyowner must pay the
excess. ALIC will send a notice of the amount which must be paid. If the
Policyowner does not make the required payment within the 61 days after ALIC
sends the notice, the Policy will terminate without value. Should the policy
lapse while policy loans are outstanding the portion of the loans attributable
to earnings will become taxable. A Policyowner may lower the risk of a policy
lapsing while loans are outstanding as a result of a reduction in the market
value of investments in the various Subaccounts by investing in a diversified
group of lower risk investment portfolios and/or transferring the funds to the
Fixed Account and receiving a guaranteed rate of return. Should a substantial
reduction be experienced, the Policyowner may need to lower anticipated Partial
Withdrawals and loans, repay loans, make additional premium payments, or take
other action to avoid policy lapse. A lapsed Policy may later be reinstated.
(See Policy Lapse and Reinstatement, page 22).
REPAYMENT OF INDEBTEDNESS. Unscheduled premiums paid while a policy loan is
outstanding are treated as repayment of indebtedness only if the Policyowner so
requests. As indebtedness is repaid, the Accumulation Value in the general
account securing the indebtedness repaid will be allocated among the Subaccounts
and the Fixed Account in the same proportion that net premiums are being
allocated at the time of repayment.
SURRENDERS
At any time during the lifetime of the Insured and prior to the Maturity Date,
the Policyowner may Surrender the Policy by sending a written request to ALIC.
The amount available for Surrender is the Net Cash Surrender Value at the end of
the Valuation Period during which the Surrender request is received at ALIC's
Home Office. Surrenders will generally be paid within seven days of receipt of
the written request. (See Postponement of Payments, page 26). Surrenders may
have tax consequences. (See Tax Treatment of Policy Proceeds, page 29).
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If the Policy is being surrendered, the Policy itself must be returned to ALIC
along with the request. ALIC will pay the Net Cash Surrender Value. Coverage
under the Policy will terminate as of the date of a Surrender. A Policyowner may
elect to have the amount paid in a lump sum or under a payment option. (See
Payment Options, page 17).
PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a Partial Withdrawal may not
exceed the Net Cash Surrender Value on the date the request is received and may
not be less than $500. The Net Cash Surrender Value after a Partial Withdrawal
must be the greater of $1,000 or an amount sufficient to maintain the policy in
force for the remainder of the policy year.
The amount paid will be deducted from the Subaccounts or the Fixed Account
according to the instructions of the Policyowner when the Partial Withdrawal is
requested, provided that the minimum amount remaining in a Subaccount as a
result of the allocation is $100. If no instructions are given, the amounts will
be withdrawn in proportion to the various Accumulation Values in the Subaccounts
and/or Fixed Account.
The Death Benefit will be reduced by the amount of any Partial Withdrawal and
may affect the way in which the cost of insurance charge is calculated and the
Net Amount at Risk under the Policy. (See Monthly Deduction - Cost of Insurance,
page 24; Death Benefit Options - Methods of Affecting Insurance Protection, page
16). If Option B is in effect, the Specified Amount will not change, but the
Accumulation Value will be reduced.
The Specified Amount remaining in force after a Partial Withdrawal may not be
less than $100,000 during the first three policy years and $75,000 thereafter.
Any request for a Partial Withdrawal that would reduce the Specified Amount
below this amount will not be implemented. A Partial Withdrawal charge not to
exceed the lesser of $50 or 2% of the amount withdrawn is deducted from each
Partial Withdrawal amount paid. Currently, the charge is the lesser of $25 or 2%
of the amount withdrawn. (See Partial Withdrawal Charge, page 25).
TRANSFERS
Accumulation Value may be transferred among the Subaccounts of the Separate
Account and to the Fixed Account as often as desired. The transfers may be
ordered in person, by mail or by telephone. The total amount transferred each
time must be at least $250, or the balance of the Subaccount, if less. During
the 30-day period following the Policy Anniversary Date, transfers may be made
from the Fixed Account to various Subaccounts. The amount that may be
transferred is limited to the greater of: 25% of the Accumulation Value of the
Fixed Account; the amount of any transfer from the Fixed Account during the
prior thirteen months; or $1,000. This provision is not available while dollar
cost averaging from the Fixed Account. The minimum amount that may remain in a
Subaccount or the Fixed Account after a transfer is $100.
The privilege to initiate transactions by telephone will be made available to
Policyowners automatically. ALIC will employ reasonable procedures to confirm
that instructions communicated by telephone are genuine, and if it does not,
ALIC may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures ALIC follows for transactions initiated by
telephone include requiring the Policyowner to provide the policy number at the
time of giving transfer instructions; ALIC's tape recording of all telephone
transfer instructions; and the provision, by ALIC, of written confirmation of
telephone transactions.
The first fifteen transfers per policy year will be permitted free of charge.
Thereafter, a transfer charge of $10 may be imposed each additional time amounts
are transferred. This charge will be deducted pro rata from each Subaccount
(and, if applicable, the Fixed Account) in which the Policyowner is invested.
(See Transfer Charge, page 24). Transfers resulting from policy loans or
exercise of the exchange privilege will not be subject to a transfer charge and
will not be counted towards the fifteen free transfers per policy year. ALIC may
at any time revoke or modify the transfer privilege, including the minimum
amount transferable.
The Policy's transfer privilege is not intended to afford Policyowners a way to
speculate on short-term movements in the market. Accordingly, in order to
prevent excessive use of the transfer privilege that may potentially disrupt the
management of the Separate Account and increase transaction costs, the Separate
Account has established a policy of limiting excessive transfer activity.
You may make two substantive transfers from each Portfolio (at least 30 days
apart) during any calendar year. A substantive transfer is a transfer from a
Subaccount which exceeds the lesser of: i) 51% of the Accumulation Value or ii)
$100,000. This restriction does not limit non-substantive transfers and does not
apply to transfers from the Money Market portfolio. All transfers must be for at
least $250, or, if less, the balance of the Subaccount.
Transfers may be subject to additional restrictions at the fund level.
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SYSTEMATIC PROGRAMS
ALIC may offer systematic programs as discussed below. Transfers of Accumulation
Value made pursuant to these programs will be counted in determining whether the
transfer fee applies. Lower minimum amounts may be allowed to transfer as part
of a systematic program. There is no separate charge for participation in these
programs at this time. All other normal transfer restrictions, as described
above, apply.
PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, the Owner can
instruct ALIC to allocate Accumulation Value among the Subaccounts of the
Separate Account, on a systematic basis, in accordance with allocation
instructions specified by the Owner. The Fixed Account can not be used in this
program.
DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, the Owner can
instruct ALIC to automatically transfer, on a systematic basis, a predetermined
amount or percentage specified by the Owner from the Fixed Account or the Money
Market Subaccount to any other Subaccount(s). Dollar cost averaging is permitted
from the Fixed Account, if no more than 1/36th of the value of the Fixed Account
at the time dollar cost averaging is established is transferred each month.
EARNING SWEEP. Permits systematic redistribution of earnings among Subaccounts.
The Owner can request participation in the available programs when purchasing
the Policy or at a later date. The Owner can change the allocation percentage or
discontinue any program by sending written notice or calling the Home Office.
Other scheduled programs may be made available. ALIC reserves the right to
modify, suspend or terminate such programs at any time. Use of Systematic
Programs may not be advantageous, and does not guarantee success.
REFUND PRIVILEGE
The Policyowner may cancel the Policy within 10 days after the Policyowner
receives it, within 10 days after ALIC delivers a notice of the Policyowner's
right of cancellation, or within 45 days of completing Part I of the
application, whichever is later. If a Policy is canceled within this time period
the refund will be the greater of the premium paid or the premium paid adjusted
by investment gains or losses.
To cancel the Policy, the Policyowner must mail or deliver the policy and the
notice of cancellation to the selling agent, or to ALIC at the Home Office. A
refund of premiums paid by check may be delayed until the check has cleared the
Policyowner's bank. (See Postponement of Payments, page 26).
EXCHANGE PRIVILEGE
During the first 24 policy months after the Policy Date of the Policy, the
Policyowner may exchange the Policy for a flexible premium adjustable life
insurance policy approved for exchange and issued by ALIC. No new evidence of
insurability will be required.
The Policy Date, Issue Age and risk classification for the Insured will be the
same under the new Policy as under the old. In addition, the policy provisions
and applicable charges for the new Policy and its riders will be based on the
same Policy Date and Issue Age as under the Policy. Accumulation Values for the
exchange and payments will be established after making adjustments for
investment gains or losses and after recognizing variance, if any, between
payment or charges, dividends or Accumulation Values under the flexible contract
and under the new Policy. The Policyowner may elect either the same Specified
Amount or the same net amount at risk for the new Policy as under the old.
To make the change, the Policy, a completed application for exchange and any
required payment must be received by ALIC. The exchange will be effective on the
Valuation Date when all financial and contractual arrangements for the new
Policy have been completed.
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PAYMENT AND ALLOCATION OF PREMIUMS
ISSUANCE OF A POLICY
The policy is available for individuals and for corporations and other
institutions who wish to provide coverage and benefits for key employees.
Individuals wishing to purchase a Policy must complete an application and submit
it to ALIC. A Policy will generally be issued only to individuals 80 years of
age or less on their nearest birthday who supply satisfactory evidence of
insurability to ALIC. ALIC may, at its sole discretion, issue a Policy to an
individual above the age of 80. Acceptance is subject to ALIC's underwriting
rules, and ALIC reserves the right to reject an application for any reason.
The Policy Date is the effective date of coverage for all coverage applied for
in the original application. The Policy Date is used to determine policy
anniversary dates, policy years and policy months. The Policy Date and the Issue
Date will be the same unless: 1) an earlier Policy Date is specifically
requested, or 2) the Issue Date is later because additional premiums or
application amendments were needed. When there are additional requirements
before issue (see below) the Policy Date will be the date it is sent for
delivery and the Issue Date will be the date the requirements are met. The Issue
Date is the date that all financial, contractual and administrative requirements
have been met and processed for the Policy. When all required premiums and
application amendments have been received by ALIC in its Home Office, the Issue
Date will be the date the Policy is mailed to the Policyowner or sent to the
agent for delivery to the Policyowner. When application amendments or additional
premiums need to be obtained upon delivery of the Policy, the Issue Date will be
when the policy receipt and Federal Funds are received; and the application
amendments are received and reviewed in ALIC's Home Office. The initial premium
payment will be allocated to the Money Market Portfolio of the Vanguard Variable
Insurance Fund as of the issue date, for 13 days. After the expiration of the
refund period, the Accumulation Value will be allocated to the Subaccounts or
the Fixed Account as selected by the Policyowner.
Subject to approval, a Policy may be backdated, but the Policy Date may not be
more than six months prior to the date of the application. Backdating can be
advantageous if the Insured's lower Issue Age results in lower cost of insurance
rates. If a Policy is backdated, the minimum initial premium required will
include sufficient premium to cover the backdating period. Monthly deductions
will be made for the period the Policy Date is backdated.
Interim conditional insurance coverage may be issued prior to the policy date,
provided that certain conditions are met. Upon the completion of an application
and the payment of the required amount at the time of the application, the
amount of the interim coverage is limited to the smaller of: (a) the amount of
insurance applied for, (b) $100,000, or (c) $25,000 if the proposed Insured is
under age 10 or over age 60 at nearest birthday.
PREMIUMS
No insurance will take effect before an amount equal to or greater than the
minimum initial premium is received by ALIC in Federal Funds. The minimum
initial premium is 25% of the total first year charges and deductions including
charges for riders and any substandard risk adjustments. The minimum initial
premium is less than the Guaranteed Death Benefit Premium. Subsequent premiums
are payable at ALIC's Home Office.
Subject to certain limitations, a Policyowner has flexibility in determining the
frequency and amount of premiums. However, unless the Policyowner has paid
sufficient premiums to pay the cost of insurance, the monthly maintenance and
mortality and expense risk charges, the Policy may have a zero Net Cash
Surrender Value and lapse. ALIC agrees to keep the Policy in force during the
first three years and provide a Guaranteed Death Benefit so long as the
cumulative monthly Guaranteed Death Benefit Premium is paid even though, in
certain instances, these premiums may not, after the payment of monthly
insurance and administrative charges, generate positive Net Cash Surrender
Values. (See Additional Insurance Benefits (Riders), page 26).
PLANNED PERIODIC PREMIUMS. At the time the Policy is issued each Policyowner may
determine a Planned Periodic Premium schedule that provides for the payment of
level premiums at selected intervals. The Planned Periodic Premium schedule may
include the Guaranteed Death Benefit Premium. The Policyowner is not required to
pay premiums in accordance with this schedule. The Policyowner has considerable
flexibility to alter the amount and frequency of premiums paid. ALIC does
reserve the right to limit the number and amount of additional or unscheduled
premium payments.
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Policyowners can also change the frequency and amount of Planned Periodic
Premiums by sending a written request to the Home Office, although ALIC reserves
the right to limit any increase. Premium payment notices will be sent annually,
semi-annually or quarterly, depending upon the frequency of the Planned Periodic
Premiums. Payment of the Planned Periodic Premiums does not guarantee that the
Policy remains in force unless the Guaranteed Death Benefit provision is in
effect. Instead, the duration of the Policy depends upon the Policy's Net Cash
Surrender Value. (See Duration of the Policy, page 16). Unless the Guaranteed
Death Benefit provision is in effect, even if Planned Periodic Premiums are paid
by the Policyowner, the Policy will lapse any time the Net Cash Surrender Value
is insufficient to pay certain monthly charges, and a grace period expires
without a sufficient payment. (See Policy Lapse and Reinstatement, below).
PREMIUM LIMITATIONS. In no event may the total of all premiums paid, both
planned and unscheduled, exceed the current maximum premium limitations
established by federal tax laws.
If at any time a premium is paid which would result in total premiums exceeding
the current maximum premium limitation, ALIC will only accept that portion of
the premium which will make total premiums equal the maximum. Any part of the
premium in excess of that amount will be returned or applied as otherwise agreed
and no further premiums will be accepted until allowed by the current maximum
premium limitations prescribed by law. ALIC may require additional evidence of
insurability if any premium payment would result in an increase in the Policy's
net amount at risk on the date the premium is received.
PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the Accumulation
Value of the Policy at the time of an increase in the Specified Amount of the
Policy and the amount of the increase requested by Policyowner, an additional
premium payment may be required. ALIC will notify the Policyowner of any premium
required to fund the increase. This required premium must be made as a single
payment. The Accumulation Value of the Policy will immediately be increased by
the amount of the payment, less the applicable premium charge.
ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policyowner
allocates net premiums to one or more Subaccounts of the Separate Account or to
the Fixed Account. Allocations must be whole number percentages and must total
100%. The allocation for future net premiums may be changed without charge by
providing proper notification to the Home Office. If there is any outstanding
policy debt at the time of a payment, ALIC will treat the payment as a premium
payment unless otherwise instructed in proper written notice.
The initial premium payment will be allocated to the Money Market portfolio of
the Vanguard Variable Insurance Fund as of the Issue Date, for 13 days.
Thereafter, the Accumulation Value will be allocated to the Subaccounts or the
Fixed Account as selected by the Policyowner. Premium payments received by ALIC
prior to the Issue Date are held in the General Account until the Issue Date and
are credited with interest at a rate determined by ALIC for the period from the
date the payment has been converted into Federal Funds (monies of member banks
within the Federal Reserve System which are held on deposit at a Federal Reserve
Bank) that are available to ALIC. In no event will interest be credited prior to
the Policy Date.
ACCUMULATION VALUE. The value of the Subaccounts of the Separate Account will
vary with the investment performance of these Subaccounts and the Policyowner
bears the entire investment risk. This will affect the Policy's Accumulation
Value, and may affect the Death Benefit as well. Policyowners should
periodically review their allocations of premiums and values in light of market
conditions and overall financial planning requirements.
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike conventional life insurance policies, the failure to make a
Planned Periodic Premium payment will not itself cause the Policy to lapse.
Lapse will occur when the Net Cash Surrender Value is insufficient to cover the
monthly deduction and a grace period expires without a sufficient payment unless
the Guaranteed Death Benefit provision is in effect. The grace period is 61 days
from the date ALIC mails a notice that the grace period has begun. ALIC will
notify the Policyowner at the beginning of the grace period by mail addressed to
the last known address on file with ALIC. The notice will specify the premium
required to keep the Policy in force. Failure to pay the required amount within
the grace period will result in lapse of the Policy. If the Insured dies during
the grace period, any overdue monthly deductions and outstanding policy debt
will be deducted from the proceeds.
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If the Net Cash Surrender Value is insufficient to cover the monthly deduction,
the Policyowner must pay a premium during the grace period sufficient to cover
the monthly deductions and premium charges for the three policy months after
commencement of the grace period to avoid lapse. (See Charges and Deductions,
page 23).
REINSTATEMENT. A lapsed Policy may be reinstated any time within three years
(five years in Missouri) from the beginning of the grace period, but before the
Maturity Date. Reinstatement will be effected based on the Insured's
underwriting classification at the time of the reinstatement.
Reinstatement is subject to the following:
a. Evidence of insurability of the Insured satisfactory to ALIC (including
evidence of insurability of any person covered by a rider to reinstate the
rider);
b. Any policy debt will be reinstated with interest due and accrued;
c. The Policy cannot be reinstated if it has been surrendered for its full
surrender value;
d. The payment of a premium sufficient to pay monthly and other policy
deductions for the three months following reinstatement and to pay premium
charges on the premiums paid; and
e. If the reinstatement occurs during the first three Policy Years, you may pay
premiums in the amount necessary to meet the cumulative monthly requirements
of the Guaranteed Death Benefit Premium as of the date of reinstatement.
The amount of Accumulation Value on the date of reinstatement will be equal to
the amount of the Net Cash Surrender Value on the date of lapse, increased by
the premium paid at reinstatement, less the premium charges and the amounts
stated above. If any policy debt was reinstated, that debt will be held in
ALIC's General Account. Accumulation Value calculations will then proceed as
described under "Accumulation Value" on page 16.
The effective date of reinstatement will be the first Monthly Activity Date on
or next following the date of approval by ALIC of the application for
reinstatement.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate ALIC for:
(1) providing the insurance benefits set forth in the Policy and any optional
insurance benefits added by rider; (2) administering the Policy; (3) assuming
certain risks in connection with the Policy; and (4) incurring expenses in
distributing the Policy. The nature and amount of these charges are described
more fully below.
DEDUCTIONS FROM PREMIUM PAYMENT
SALES CHARGE. There is no premium load to cover sales and distribution expenses.
PREMIUM CHARGES. A deduction of up to 5% (currently 3.5%) of the premium will be
made from each premium payment to pay state premium taxes (currently 2.5%) and
the expense of deferring the tax deduction of policy acquisition costs
(currently 1.0%). The deduction represents an amount ALIC considers necessary to
pay all premium taxes imposed by the states and their subdivisions and to defray
the cost of capitalizing certain policy acquisition expenses as required by
Internal Revenue Code Section 848. ALIC does not expect to derive a profit from
the premium charges.
As to state premium taxes, these vary from state to state and currently range
from .75 percent to 3.5 percent. Therefore, the deduction ALIC makes from each
premium payment may be higher or lower than the actual premium tax imposed by a
particular jurisdiction. The rate of tax imposed is subject to change by
governmental entity.
CHARGES DEDUCTED FROM ACCUMULATION VALUE
MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on each
Monthly Activity Date thereafter from the Accumulation Value of the Policy to
compensate ALIC for administrative expenses and insurance provided. These
charges
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will be allocated among the Subaccounts, and the Fixed Account on a pro rata
basis. Each of these charges is described in more detail below.
MAINTENANCE CHARGE. To compensate ALIC for the ordinary administrative expenses
expected to be incurred in connection with a Policy, the monthly deduction
includes a $9.00 per policy charge (currently $9.00 the first policy year and
the first 12 months following an increase in Specified Amount and $4.50 during
all other months). This maintenance charge is levied throughout the life of the
Policy and is guaranteed not to increase above $9.00 per month. ALIC does not
expect to make any profit from the monthly maintenance charge.
COST OF INSURANCE. Because the cost of insurance depends upon several variables,
the cost for each policy month can vary from month to month. ALIC will determine
the monthly cost of insurance charges by multiplying the applicable cost of
insurance rate by the Net Amount at Risk for each policy month. The Net Amount
at Risk on any Monthly Activity Date is the amount by which the Death Benefit
which would have been payable on that Monthly Activity Date exceeds the
Accumulation Value on that date.
COST OF INSURANCE RATE. The annual cost of insurance rate is based on the
Insured's sex, attained age, policy duration, Specified Amount, and risk class.
The rate will vary if the Insured is a smoker, non-smoker, a preferred
non-smoker or is considered a substandard risk and rated with a tabular extra
rating. For the initial Specified Amount, the cost of insurance rate will not
exceed those shown in the Table of Policy Charges shown in the schedule pages of
the Policy. These guaranteed rates are based on the Insured's age nearest
birthday and are equal to the 1980 Commissioners Standard Ordinary Smoker and
Non-Smoker, Male and Female Mortality Tables. The current rates range between
40% and 100% of the rates based on the 1980 Commissioners Standard Ordinary
Tables, based on ALIC's own mortality experience. Policies issued on a unisex
basis are based upon the 1980 Commissioners Standard Ordinary Table B assuming
80% male and 20% female lives. The cost of insurance rates, and payment options
for policies issued in Montana and certain other states, or issued in connection
with certain employer sponsored arrangements are on a sex-neutral (unisex)
basis. Any change in the cost of insurance rates will apply to all persons of
the same age, sex, Specified Amount and risk class and whose policies have been
in effect for the same length of time.
If the underwriting class for any increase in the Specified Amount or for any
increase in Death Benefit resulting from a change in Death Benefit option from A
to B is not the same as the underwriting class at issue, the cost of insurance
rate for the increase will reflect the underwriting class which would apply for
such increase. Decreases will also be reflected in the cost of insurance rate as
discussed earlier.
The actual charges made during the policy year will be shown in the annual
report delivered to Policyowners.
RATE CLASS. The rate class of an Insured may affect the cost of insurance rate.
ALIC currently places Insureds into both standard rate classes and substandard
classes that involve a higher mortality risk. In an otherwise identical policy,
an Insured in the standard rate class will have a lower cost of insurance than
an Insured in a rate class with higher mortality risks. If a Policy is rated at
issue with a tabular extra rating, the guaranteed rate is a multiple of the
guaranteed rate for a standard issue. This multiple factor is shown in the
Schedule of Benefits in the Policy, and may be from 1.37 to 4 times the
guaranteed rate for a standard issue.
Insureds may also be assigned a flat extra rating to reflect certain additional
risks. The cost of insurance rate will be increased by the flat extra rating.
SURRENDER CHARGE
The policy has no surrender charge and may be surrendered at any time during the
Insured's lifetime for the policy's Net Cash Surrender Value. There is a charge,
however, for Partial Withdrawals. (See Partial Withdrawal Charge, page 25).
TRANSFER CHARGE
A transfer charge of $10.00 (guaranteed not to increase) may be imposed for each
additional transfer among the Subaccounts after fifteen per policy year to
compensate ALIC for the costs of effecting the transfer. Since the charge
reimburses ALIC for the cost of effecting the transfer only, ALIC does not
expect to make any profit from the transfer charge. This charge will be deducted
pro rata from each Subaccount (and, if applicable, the Fixed Account) in which
the Policyowner is invested. The transfer charge will not be imposed on
transfers that occur as a result of policy loans or the exercise of exchange
rights.
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PARTIAL WITHDRAWAL CHARGE
A charge currently not greater than the lesser of $25 or 2% of the amount
withdrawn (guaranteed not to be greater than the lesser of $50 or 2% of the
amount withdrawn) will be imposed for each Partial Withdrawal to compensate ALIC
for the administrative costs in effecting the requested payment and in making
necessary calculations for any reductions in Specified Amount which may be
required by reason of the Partial Withdrawal. A Partial Withdrawal charge is not
assessed when a Policy is surrendered.
DAILY CHARGES AGAINST THE SEPARATE ACCOUNT
A daily charge will be deducted from the value of the net assets of the Separate
Account to compensate ALIC for mortality and expense risks assumed in connection
with the Policy. This daily charge from the Separate Account is currently at the
rate of 0.002049% (equivalent to an annual rate of 0.75%) and will not exceed
0.002459% (equivalent to an annual rate of .90%) of the average daily net assets
of the Separate Account. The daily charge will be deducted from the net asset
value of the Separate Account, and therefore the Subaccounts, on each Valuation
Date. Where the previous day or days was not a Valuation Date, the deduction on
the Valuation Date will be 0.002049% (or 0.002459%, if applicable) multiplied by
the number of days since the last Valuation Date. No mortality and expense
charges will be deducted from the amounts in the Fixed Account.
ALIC believes that this level of charge is within the range of industry practice
for comparable flexible premium variable universal life policies.
The mortality risk assumed by ALIC is that Insureds may live for a shorter time
than assumed, and that an aggregate amount of death benefits greater than that
assumed accordingly will be paid. The expense risk assumed is that expenses
incurred in issuing and administering the policies will exceed the
administrative charges provided in the policies.
In addition to the charges against the Separate Account described just above,
management fees and expenses will be assessed by the Vanguard Variable Insurance
Fund, Neuberger & Berman Advisers Management Trust, and Berger Institutional
Products Trust against the amounts invested in the various portfolios. No
portfolio fees will be assessed against amounts placed in the Fixed Account.
TAXES. Currently, no additional charges are made against the Separate Account
for federal, state or local income taxes. ALIC may, however, make such a charge
in the future if income or gains within the Separate Account will incur any
federal, or any significant state or local income tax liability, or if the
federal, state or local tax treatment of ALIC changes. Charges for such taxes,
if any, would be deducted from the Separate Account and/or the Fixed Account.
(See Federal Tax Matters, page 28).
GENERAL PROVISIONS
THE CONTRACT. The Policy, the application, any supplemental applications, and
any riders, amendments or endorsements make up the entire contract. Only the
President, Vice President, Secretary or Assistant Secretary can modify the
Policy. Any changes must be made in writing, and approved by ALIC. 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 Policyowner is as shown in the application or subsequent
written endorsement. Subject to the rights of any irrevocable beneficiary and
any assignee of record, all rights, options, and privileges belong to the
Policyowner, if living; otherwise to any successor-owner or owners, if living;
otherwise to the estate of the last owner to die.
BENEFICIARY. The Policyowner may name both primary and contingent beneficiaries
in the application. Payments will be shared equally among beneficiaries of the
same class unless otherwise stated. If a beneficiary dies before the Insured,
payments will be made to any surviving beneficiaries of the same class;
otherwise to any beneficiary(ies) of the next class; otherwise to the owner;
otherwise to the estate of the owner.
CHANGE OF BENEFICIARY. The Policyowner may change the beneficiary by written
request at any time during the Insured's lifetime unless otherwise provided in
the previous designation of beneficiary. The change will take effect as of the
date the change is recorded at the Home Office. ALIC will not be liable for any
payment made or action taken before the change is recorded.
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CHANGE OF OWNER OR ASSIGNMENT. In order to change the owner of the Policy or
assign Policy rights, an assignment of the Policy must be made in writing and
filed with ALIC at its Home Office. The change will take effect as of the date
the change is recorded at the Home Office, and ALIC will not be liable for any
payment made or action taken before the change is recorded. Payment of proceeds
is subject to the rights of any assignee of record. A collateral assignment is
not a change of ownership.
PAYMENT OF PROCEEDS. The proceeds are subject first to any indebtedness to ALIC
and then to the interest of any assignee of record. The balance of any Death
Benefit Proceeds shall be paid in one sum to the designated beneficiary unless
an Optional Method of Payment is selected. If no beneficiary survives the
Insured, the proceeds shall be paid in one sum to the Policyowner, if living;
otherwise to any successor-owner, if living; otherwise to the Policyowner's
estate. Any proceeds payable on the Maturity Date or upon full surrender shall
be paid in one sum unless an Optional Method of Payment is elected.
INCONTESTABILITY. The Policy or reinstated Policy is incontestable after it has
been in force for two years from the policy date (or reinstatement effective
date) during the lifetime of the Insured. An increase in the Specified Amount or
addition of a rider after the Policy Date shall be incontestable after such
increase or addition has been in force for two years from its effective date
during the lifetime of the Insured. However, this two year provision shall not
apply to riders that provide disability or accidental death benefits.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Insured or any person
insured by rider has been misstated, the amount of the death benefit will be
adjusted. The Death Benefit will be adjusted to the amount that would be
purchased by the most recent cost of insurance deductions using the correct cost
of insurance rate.
SUICIDE. Suicide within two years of the Policy Date is not covered by the
Policy unless otherwise provided by a state's Insurance law. If the Insured,
while sane or insane, commits suicide within two years after the policy date,
ALIC will pay only the premiums received less any Partial Withdrawals, the cost
for riders and any outstanding policy debt. If the Insured, while sane or
insane, commits suicide within two years after the effective date of any
increase in the Specified Amount, ALIC's liability with respect to such increase
will only be its total cost of insurance applied to the increase. The laws of
Missouri provide that death by suicide at any time is covered by the Policy, and
further that suicide by an insane person may be considered an accidental death.
POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, Partial
Withdrawals, policy loans, benefits payable at death or maturity, and transfers
may be postponed whenever: (i) the New York Stock Exchange is closed other than
customary weekend and holiday closings, or trading on the New York Stock
Exchange is restricted as determined by the Securities and Exchange Commission;
(ii) the Commission by order permits postponement for the protection of
Policyowners; (iii) an emergency exists, as determined by the Commission, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to determine the value of the Separate Account's net
assets; or (iv) Surrender, loans or Partial Withdrawals from the Fixed Account
may be deferred for up to 6 months from the date of written request. Payments
under the Policy of any amounts derived from premiums paid by check may be
delayed until such time as the check has cleared the Policyowner's bank.
REPORTS AND RECORDS. ALIC will maintain all records relating to the Separate
Account and will mail to the Policyowner, at the last known address of record,
within 30 days after each Policy Anniversary, an annual report which shows the
current Accumulation Value, Net Cash Surrender Value, Death Benefit, premiums
paid, outstanding policy debt and other information. Quarterly statements are
also mailed detailing Policy activity during the calendar quarter. Instead of
receiving an immediate confirmation of transactions made pursuant to some types
of periodic payment plan (such as a dollar cost averaging program, or payment
made by automatic bank draft or salary reduction arrangement), the Policyowner
may receive confirmation of such transactions in their quarterly statements. The
Policyowner should review the information in these statements carefully. All
errors or corrections must be reported to ALIC immediately to assure proper
crediting to the Policy. ALIC will assume all transactions are accurately
reported on quarterly statements unless ALIC is otherwise notified within 30
days after receipt of the statement. The Policyowner will also be sent a
periodic report for the Funds and a list of the portfolio securities held in
each portfolio of the Funds.
ADDITIONAL INSURANCE BENEFITS (RIDERS)
Subject to certain requirements, one or more of the following additional
insurance benefits may be added to a Policy by rider. All riders are not
available in all states. The cost, if any, of additional insurance benefits will
be deducted as part of the monthly deduction. (See Charges Deducted From
Accumulation Value-Monthly Deduction, page 23).
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ACCELERATED BENEFIT RIDER FOR TERMINAL ILLNESS (LIVING BENEFIT RIDER). Upon
satisfactory proof of terminal illness after the two-year contestable period (no
waiting period in certain states) ALIC will accelerate the payment of up to 50%
of the lowest scheduled Death Benefit as provided by eligible coverages, less an
amount up to two guideline level premiums.
Future premium allocations after the payment of the benefit must be allocated to
the Fixed Account. Payment will not be made for amounts less than $4,000 or more
than $250,000 on all policies issued by ALIC or its affiliates. ALIC may charge
the lesser of 2% of the benefit or $50 as a Partial Withdrawal charge to cover
the costs of administration.
Satisfactory proof of terminal illness must include a written statement from a
licensed physician who is not related to the Insured or the Policyowner stating
that the Insured has a non-correctable medical condition that, with a reasonable
degree of medical certainty, will result in the death of the Insured in less
than 12 months (6 months in certain states) from the physician's statement.
Further, the condition must first be diagnosed while the Policy was in force.
The accelerated benefit first will be used to repay any outstanding policy loans
and unpaid loan interest, and will also affect future loans, Partial
Withdrawals, and Surrender. The accelerated benefit will be treated as a lien
against the policy Death Benefit and will thus reduce the proceeds payable on
the death of the Insured. There is no extra premium for this rider.
CHILDREN'S PROTECTION RIDER. Provides for term insurance on the Insured's
children, as defined in the rider. Under the terms of the rider, the Death
Benefit will be payable to the named beneficiary upon the death of any insured
child. Upon receipt of proof of the Insured's death before the rider terminates,
the rider will be considered paid up for the term of the rider.
GUARANTEED INSURABILITY RIDER. Provides that the Policyowner can purchase
additional insurance for the Insured by increasing the Specified Amount of the
Policy at certain future dates without evidence of insurability.
WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY. Provides, while the Insured is
disabled, for the waiver of monthly deduction for expense charges and the cost
of insurance charges including table ratings and flat extras for the policy and
all riders.
PAYOR WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY. Provides, while the covered
person is disabled, for the waiver of monthly deductions for expense charges and
the cost of insurance charges including table ratings and flat extras for the
policy and all riders. This rider is available for Insureds ages 0 to 14.
COST RECOVERY RIDER. This rider allows a one time special Partial Withdrawal
without reducing the Specified Amount. There is no charge for this rider.
EXTENDED MATURITY RIDER. This rider may be elected by submitting a written
request to ALIC during the 90 days prior to Maturity Date. If elected, as long
as the Surrender Value is greater than zero, the policy will remain in force for
purposes of providing a benefit at the time of the Insured's death. Once this
rider becomes effective, no further premium payments will be accepted, and no
monthly charges will be made for cost of insurance, riders or flat extra rating.
All other policy provisions not specifically noted herein will remain in effect
while the policy continues in force. Interest on policy loans will continue to
accrue and become part of the policy debt. This rider does not extend the
Maturity Date for purposes of determining benefits under any other riders. Death
Benefit Proceeds are payable to the beneficiary.
There is no extra premium for this rider. This rider is not available in all
states.
The Internal Revenue Service has not issued a ruling regarding the tax
consequences of this rider.
DISTRIBUTION OF THE POLICIES
Ameritas Investment Corp. ("AIC"), a wholly owned subsidiary of AMAL
Corporation, will act as the principal underwriter of the Policies, pursuant to
an Underwriting Agreement between itself and ALIC. AIC was organized under the
laws of the State of Nebraska on December 29, 1983 and is a registered
broker/dealer pursuant to the Securities Exchange Act of 1934 and a member of
the National Association of Securities Dealers. In 1997, AIC received gross
variable universal life compensation of $320,059, and retained $57,129 in
underwriting fees, and $23 in brokerage commissions on ALIC's variable universal
life policies.
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There is no premium load to cover sales and distribution expenses. To the extent
that sales and distribution expenses are paid, if at all, ALIC will pay them
from its other assets or surplus in its General Account, which include amounts
derived from mortality and expense risk charges and other charges made under the
Policy.
Policies can be purchased directly from ALIC through Veritas, ALIC's wholly
owned, direct-to-consumer subsidiary, with salaried employees who are Registered
Representatives of AIC and who will not receive compensation related to the
purchase.
Policies can be purchased from field representatives who are Registered
Representatives of AIC, or from Registered Representatives of other registered
broker-dealers authorized to sell the policies subject to applicable law. In
these situations, AIC or the other broker-dealer may receive compensation in an
amount no greater than 9% of the target first year premium paid plus the first
year cost of any riders, and 2% of excess first year premium. In years
thereafter, AIC or the other broker-dealer may receive asset based compensation
at an annualized rate of .1% per policy year of the Net Cash Surrender Value.
AIC or the other broker-dealer may pass a portion of this compensation on to the
Registered Representative or the manager of the Registered Representative.
Upon any subsequent increase in Specified Amount or any subsequent increase in
riders, marketing allowances will also be paid based on the amount of the
increase in Specified Amount or increase in rider.
FEDERAL TAX MATTERS
The following discussion provides a general description of the federal income
tax considerations associated with the Policy, and does not purport to be
complete or cover all situations. This discussion is not intended as tax advice.
No attempt has been made to consider in detail any applicable state or other tax
(except premium taxes, see discussion "Premium Charges," page 23) laws. This
discussion is based upon ALIC's understanding of the relevant laws at the time
of filing. Counsel and other competent advisors should be consulted for more
complete information before a Policy is purchased. ALIC makes no representation
as to the likelihood of the continuation of present federal income tax laws nor
of the interpretations by the Internal Revenue Service. Federal tax laws are
subject to change and thus tax consequences to the Insured, Policyowner or
Beneficiary may be altered.
(a) TAXATION OF ALIC. ALIC is taxed as a life insurance company under Part I
of Subchapter L of the Internal Revenue Code of 1986 (the "Code"). At
this time, since the Separate Account is not an entity separate from ALIC,
and its operations form a part of ALIC, it will not be taxed separately as
a "regulated investment company" under Subchapter M of the Code. Net
investment income and realized net capital gains on the assets of the
Separate Account are reinvested and automatically retained as a part of the
reserves of the Policy and are taken into account in determining the
Death Benefit and Accumulation Value of the Policy. ALIC believes that
Separate Account net investment income and realized net capital gains will
not be taxable to the extent that such income and gains are retained as
reserves under Policy.
ALIC does not currently expect to incur any additional federal income tax
liability attributable to the Separate Account with respect to the sale of
the Policies. Accordingly, no charge is being made currently to the
Separate Account for federal income taxes. If, however, ALIC determines
that it may incur such taxes attributable to the Separate Account, it may
assess a charge for such taxes against the Separate Account.
ALIC may also incur state and local taxes (in addition to premium taxes for
which a deduction from premiums is currently made). At present, they are
not charges against the Separate Account. If there is a material change in
state or local tax laws, charges for such taxes attributable to the
Separate Account, if any, may be assessed against the Separate Account.
(b) TAX STATUS OF THE POLICY. The Code (section 7702) includes a definition of
a life insurance contract for federal tax purposes, which places
limitations on the amount of premiums that may be paid for the Policy and
the relationship of the Accumulation Value to the Death Benefit. ALIC
believes that the Policy meets the statutory definition of a life insurance
contract. If the Death Benefit of a Policy is changed, the applicable
definitional limitations may change. In the case of a decrease in the death
benefit, a Partial Withdrawal, a change in Death Benefit option, or any
other such change that reduces future benefits under the Policy during the
first 15 years after a Policy is issued and that results in a cash
distribution to the Policyowners in order for the Policy to continue
complying with the section 7702 definitional limitations on premiums and
Accumulation Values, such distributions will be taxable as ordinary income
to the Policyowner (to the extent of any gain in the Policy) as prescribed
in section 7702.
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The Code (section 7702A) also defines a "modified endowment contract" for
federal tax purposes. If a life insurance policy is classified as a
modified endowment contract, distributions from it (including loans) are
taxed as ordinary income to the extent of any gain. This Policy will become
a "modified endowment contract" if the premiums paid into the Policy fail
to meet a 7-pay premium test as outlined in Section 7702A of the Code.
Certain benefits the Insured may elect under this Policy may be material
changes affecting the 7-pay premium test. These include (but are not
limited to) changes in Death Benefits and changes in the Specified Amount.
Should the Policy become a "modified endowment contract", Partial
Withdrawal or Surrenders, assignments, pledges, and loans (including loans
to pay loan interest) under the Policy will be taxable to the extent of any
gain under the Policy. A 10% penalty tax also applies to the taxable
portion of any distribution prior to the taxpayer's age 59 1/2 . The 10%
penalty tax does not apply if the taxpayer is disabled as defined under the
Code or if the distribution is paid out in the form of a life annuity on
the life of the Insured or the joint lives of the taxpayer and beneficiary.
One may avoid a Policy becoming a modified endowment contract by, among
other things, not making excessive payments or reducing benefits. Should
one deposit excessive premiums during a policy year, that portion that is
returned by ALIC within 60 days after the Policy Anniversary will reduce
the premiums paid to avoid the Policy becoming a modified endowment
contract. All modified endowment policies issued by ALIC to the same
Policyowner in any 12 month period are treated as one modified endowment
contract for purposes of determining taxable gain under Section 72(e) of
the Code. Any life insurance policy received in exchange for a modified
endowment contract will also be treated as a modified endowment contract. A
Policyowner should contact a competent tax professional before paying
additional premiums or making other changes to the Policy to determine
whether such payments or changes would cause the Policy to become a
modified endowment contract.
The Code (Section 817(h)) also authorizes the Secretary of the Treasury
(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 by the Treasury in temporary
regulations published in the Federal Register on March 2, 1989, which
affect how the Fund's assets may be invested.
ALIC does not have control over the Funds or their investments. However,
ALIC believes that the Funds will be operated in compliance with the
diversification requirements of the Internal Revenue Code. Thus, ALIC
believes that the Policy will be treated as a life insurance contract for
federal tax purposes.
In connection with the issuance of temporary regulations relating to the
diversification requirements, the Treasury announced that such regulations
do not provide guidance concerning the exten to which owners may
direct their investments to particular divisions of a separate account.
Regulations in this regard may be issued in the future. It is not clear
what these regulations will provide nor whether they will be prospective
only. It is possible that when regulations are issued, the Policy may need
to be modified to comply with such regulations. For these reasons, the
Company reserves the right to modify the Policy as necessary to
prevent the Policyowner from being considered the owner of the assets of
the Separate Account or otherwise to qualify the Policy for favorable tax
treatment.
The following discussion assumes that the Policy will qualify as a life
insurance contract for federal tax purposes.
(c) TAX TREATMENT OF POLICY PROCEEDS. ALIC believes that the Policy will be
treated in a manner consistent with a fixed benefit life insurance policy
for federal income tax purposes. Thus, ALIC believes that the death benefit
payable prior to the original maturity date will be generally excludable
from the gross income of the beneficiary under Section 101(a)(1) of the
Code and the Policyowner will not be deemed to be in constructive receipt
of the Accumulation Value under the Policy until its actual Surrender.
However, in the event of certain cash distributions under the Policy
resulting from any change which reduces future benefits under the Policy,
the distribution will be taxed in whole or in part as ordinary income (to
the extent of gain in the Policy). See discussion page 28, "Tax Status of
the Policy."
ALIC also believes that loans received under a Policy will be treated as
indebtedness of the Policyowner and that no part of any loan under a Policy
will constitute income to the Policyowner so long as the Policy remains in
force, unless the Policy becomes a modified endowment contract. Should the
policy lapse while policy loans are outstanding, the portion of the loans
attributable to earnings will become taxable. Generally, interest paid on
any loan under a Policy owned by an individual will not be tax-deductible.
Except for Policies with respect to a limited number of key persons of an
employer (both as defined in the Internal Revenue Code), and subject to
applicable interest rate caps, the Health Insurance Portability and
Accountability Act of 1996 (the "Health Insurance Act") generally repeals
the deduction for interest paid or accrued after October 13, 1995 on loans
from corporate owned life insurance Policies on the lives of individuals
who are or were officers, employees or persons financially interested in
the taxpayer's trade or business. Certain transitional rules for existing
indebtedness are included in the Health Insurance Act. The transitional
rules include a phase-out of the deduction for indebtedness
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incurred (1) before January 1, 1996, (or) (2) before January 1, 1997,
for Policies entered into in 1994 or 1995. The phase-out of the interest
expense deduction occurs over a transition period between October 13, 1995
and January 1, 1999. There is also a special rule for pre-June 21, 1986
Policies. The Taxpayer Relief Act of 1997 ("TRA '97"), further expanded
the interest deduction disallowance for businesses by providing, with
respect to policies issued after June 8, 1997, that no deduction is
allowed for interest paid or accrued on any indebtedness with respect to
life insurance covering the life of any individual (except as noted above
under pre-'97 law with respect to key persons and pre-June 21, 1986
policies). TRA '97 also provides that no deduction is permissible for
premiums paid on a life insurance policy if the taxpayer is directly or
indirectly a beneficiary under the policy. Also under TRA '97 and subject
to certain exceptions, for contracts issued after June 8, 1997, no
deduction is allowed for that portion of a taxpayer's interest expense
that's allocable to unborrowed policy cash values. This disallowance
generally does not apply to policies owned by natural persons. Policyowners
should consult a competent tax advisor concerning the tax implications of
these changes for their Policies.
The right to exchange the Policy for a flexible premium adjustable life
insurance policy (See Exchange Privilege, page 20), the right to change
owners (See General Provisions, page 25), and the provision for Partial
Withdrawals (See Surrenders, page 18) may have tax consequences depending
on the circumstances of such exchange, change, or Partial Withdrawal. Upon
Surrender or when maturity benefits are paid, if the amount received plus
any outstanding policy debt exceeds the total premiums paid, (the "basis"),
that are not treated as previously withdrawn by the Policyowner, the excess
generally will be taxed as ordinary income.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of Policy proceeds depend on
applicable law and the circumstances of each Policyowner or beneficiary. In
addition, if the Policy is used in connection with tax-qualified retirement
plans, certain limitations prescribed by the Internal Revenue Service on,
and rules with respect to the taxation of, life insurance protection
provided through such plans may apply. The advice of competent tax counsel
should be sought in connection with the use of life insurance in a
qualified plan.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
ALIC holds the assets of the Separate Account. The assets are kept physically
segregated and held separate and apart from the General Account assets, except
for the Fixed Account. ALIC maintains records of all purchases and redemptions
of Funds shares by each of the Subaccounts.
THIRD PARTY SERVICES
ALIC is aware that certain third parties are offering investment advisory
services in connection with the contracts. ALIC does not engage any such third
parties to offer such services of any type as part of the contract. Firms or
persons offering such services do so independently from any agency relationship
they may have with ALIC for the sale of contracts. ALIC takes no responsibility
for the investment allocations and transfers transacted on a contract owner's
behalf by such third parties or any investment allocation recommendations made
by such parties. Contract owners should be aware that fees paid for such
services are separate and in addition to fees paid under the contracts.
VOTING RIGHTS
ALIC is the legal holder of the shares held in the Subaccounts of the Separate
Account and as such has the right to vote the shares; to elect Directors of the
Funds, to vote on matters that are required by the 1940 Act and upon any other
matter that may be voted upon at a shareholders' meeting. To the extent required
by law, ALIC will vote all shares of the Funds held in the Separate Account at
regular and special shareholder meetings of the Funds in accordance with
instructions received from Policyowners based on the number of shares held as of
the record date declared by the Fund's Board of Directors.
The number of Fund shares in a Subaccount for which instructions may be given by
a Policyowner is determined by dividing the Policy's Accumulation Value held in
that Subaccount by the net asset value of one share in the corresponding
portfolio of the Fund. Fractional shares will be counted. Fund shares held in
each Subaccount for which no timely instructions from Policyowners are received
and Fund shares held in each Subaccount which do not support Policyowner
interests will be voted by ALIC in the same proportion as those shares in that
Subaccount for which timely instructions are received. Voting instructions to
abstain on any item to be voted will be applied on a pro rata basis to reduce
the votes eligible to be cast. Should applicable federal securities laws or
regulations permit, ALIC may elect to vote shares of the Fund in its own right.
DISREGARD OF VOTING INSTRUCTION. ALIC may, if required by state insurance
officials, disregard voting instructions if those instructions would require
shares to be voted to cause a change in the subclassification or investment
objectives or policies of one or more of the Funds' Portfolios, or to approve or
disapprove an investment adviser or principal underwriter for the Funds. In
addition, ALIC itself may disregard voting instructions that would require
changes in the investment objectives
- --------------------------------------------------------------------------------
30 LLVL
<PAGE>
- --------------------------------------------------------------------------------
or policies of any portfolio or in an investment adviser or principal
underwriter for the Funds, if ALIC reasonably disapproves those changes in
accordance with applicable federal regulations. If ALIC does disregard voting
instructions, it will advise Policyowners of that action and its reasons for the
action in the next annual report or proxy statement to Policyowners.
STATE REGULATION OF ALIC
ALIC, a stock life insurance company organized under the laws of Nebraska, is
subject to regulation by the Nebraska Department of Insurance. On or before
March 1 of each year an NAIC convention blank covering the operations and
reporting on the financial condition of ALIC and the Separate Account as of
December 31 of the preceding year must be filed with the Nebraska Department of
Insurance. Periodically, the Nebraska Department of Insurance examines the
liabilities and reserves of ALIC and the Separate Account.
In addition, ALIC is subject to the insurance laws and regulations of other
states within which it is licensed or may become licensed to operate. The
policies offered by the Prospectus are available in the various states as
approved. Generally, the Insurance Department of any other state applies the
laws of the state of domicile in determining permissible investments.
EXECUTIVE OFFICERS AND DIRECTORS OF ALIC
Shows name and position(s) with ALIC followed by the principal occupations for
the last five years.***
LAWRENCE J. ARTH, DIRECTOR, CHAIRMAN OF THE BOARD, & CHIEF EXECUTIVE OFFICER*
Director, Chairman of the Board, Chief Executive Officer: Ameritas Variable Life
Insurance Company; also serves as officer and/or director of other subsidiaries
and/or affiliates of Ameritas Life Insurance Corp.
KENNETH C. LOUIS, DIRECTOR, PRESIDENT AND CHIEF OPERATING OFFICER*
Director, Executive Vice President: Ameritas Variable Life Insurance Company;
also serves as officer and/or director of other subsidiaries and/or affiliates
of Ameritas Life Insurance Corp.
NORMAN M. KRIVOSHA, EXECUTIVE VICE PRESIDENT, SECRETARY AND CORPORATE GENERAL
COUNSEL*
Secretary and General Counsel: Ameritas Variable Life Insurance Company; also
serves as officer and/or director of other subsidiaries and/or affiliates of
Ameritas Life Insurance Corp.
JON C. HEADRICK, EXECUTIVE VICE PRESIDENT-INVESTMENTS AND TREASURER*
Treasurer: Ameritas Variable Life Insurance Company; also serves as officer
and/or director of other subsidiaries and/or affiliates of Ameritas Life
Insurance Corp.
JAMES P. ABEL, DIRECTOR**
President: NEBCO, Inc.
DUANE W. ACKLIE, DIRECTOR**
Chairman: Crete Carrier Corporation; Director: AMAL Corporation
ROBERT C. BARTH, SECOND VICE PRESIDENT AND ASSISTANT CONTROLLER*
ELDON BOHMONT, SECOND VICE PRESIDENT-INDIVIDUAL CLIENT SERVICES*
ROXANN BRENNFOERDER, VICE PRESIDENT-PENSIONS*
WAYNE E. BREWSTER, VICE PRESIDENT-VARIABLE SALES*
Senior Vice President-Variable Sales: Ameritas Variable Life Insurance Company.
ROBERT W. BUSH, EXECUTIVE VICE PRESIDENT-INDIVIDUAL INSURANCE*
Director, Senior Vice President Variable Operations and Administration: Ameritas
Variable Life Insurance Company; also serves as officer and/or director of other
subsidiaries and/or affiliates of Ameritas Life Insurance Corp.; Senior Vice
President: CUNA Mutual Insurance Group; also served as officer and/or director
of other subsidiaries and/or affiliates of CUNA.
JAN M. CONNOLLY, VICE PRESIDENT-CORPORATE OPERATIONS, PLANNING AND QUALITY*
WILLIAM W. COOK, JR., DIRECTOR**
Chairman, President, Chief Executive Officer: The Beatrice National Bank and
Trust Co.
- --------------------------------------------------------------------------------
LLVL 31
<PAGE>
- --------------------------------------------------------------------------------
GERALD B. DIMON, VICE PRESIDENT-HUMAN RESOURCES*
BERT A. GETZ, DIRECTOR**
President, Director: Globe Corporation; Director: Security Pacific Bank Arizona,
Security Pacific Bancorp Southwest, Bancwest Mortgage Corp., Security Pacific
Corporation, Security Pacific National Bank, Ellsworth Financial Corp., Iliff,
Thorn & Co., CalMat Co., Dean Foods Company, Continental Bank, Continental Bank
Corp.; Advisory Director: Myers Craig Vallone Co.; Trustee: Mayo Foundation
WILLIAM R. GIOVANNI, SENIOR VICE PRESIDENT AND CHIEF EXECUTIVE OFFICER-AIC*
Also serves as officer and director of an affiliate of Ameritas Life Insurance
Corp.; President: FirsTier Securities
LORI S. GOHDE, VICE PRESIDENT-GROUP UNDERWRITING AND PLANNING*
Vice President-Group: Woodmen Accident & Life Co.
THOMAS D. HIGLEY, VICE PRESIDENT - INDIVIDUAL FINANCIAL OPERATIONS AND ACTUARY*
Also serves as an officer of a subsidiary of Ameritas Life Insurance Corp.
LESLIE D. INMAN, VICE PRESIDENT - GROUP MARKETING AND PLANNING*
National Sales Director, VP and National Marketing Manager: American Bankers
Insurance
MIKE JASKOLKA, VICE PRESIDENT - INFORMATION SERVICES*
MARTY L. JOHNSON, SECOND VICE PRESIDENT - INDIVIDUAL UNDERWRITING*
KENNETH R. JONES, VICE PRESIDENT, CORPORATE COMPLIANCE AND ASSISTANT SECRETARY*
Vice President-Corporate Compliance and Assistant Secretary: Ameritas Variable
Life Insurance Company, also serves as officer of other subsidiaries and/or
affiliates of Ameritas Life Insurance Corp.
JAMES R. KNAPP, DIRECTOR**
President: The Brookhollow Group; General Partner: Windsor Associates
ROBERT F. KROHN, DIRECTOR**
Vice Chairman and Chief Executive Officer: PSI Group, Inc.; President: Krohn
Corporation; Chairman of the Board: Commercial Federal Corporation
WILLIAM W. LESTER, VICE PRESIDENT-SECURITIES*
Also serves as an officer of a subsidiary of Ameritas Life Insurance Corp.
WILFRED J. MADDUX, DIRECTOR**
President, Manager: Maddux Cattle Company
JOANN M. MARTIN, SENIOR VICE PRESIDENT - CONTROLLER AND CHIEF FINANCIAL OFFICER*
Controller: Ameritas Variable Life Insurance Company; also serves as an officer
and/or director of other subsidiaries and/or affiliates of Ameritas Life
Insurance Corp.
BRUCE R. MCMULLEN, M.D., VICE PRESIDENT AND MEDICAL DIRECTOR*
DAVID C. MOORE, EXECUTIVE VICE PRESIDENT - GROUP AND PENSIONS*
Also serves as officer and/or director of other subsidiaries and/or affiliates
of Ameritas Life Insurance Corp.
WILLIAM W. NELSON, VICE PRESIDENT - GROUP ADMINISTRATION AND CLAIMS*
Also serves as an officer of a subsidiary of Ameritas Life Insurance Corp.
- --------------------------------------------------------------------------------
32 LLVL
<PAGE>
- --------------------------------------------------------------------------------
DALE K. NIEBUHR, SECOND VICE PRESIDENT - AUDIT SERVICES*
GARY R. RAYMOND, VICE PRESIDENT - GROUP ACTUARY*
BARRY C. RITTER, SENIOR VICE PRESIDENT - INFORMATION SERVICES*
PAUL C. SCHORR, III, DIRECTOR**
President and CEO: ComCor Holding, Inc.; Chairman: Ebco/Commonwealth, Inc.;
President, Chief Executive Officer: Fishbach Corp., Commonwealth Companies, Inc.
WILLIAM C. SMITH, DIRECTOR**
Director: AMAL Corporation; President: William C. Smith & Co.; President,
Chairman, Chief Executive Officer: FirsTier Bank, N.A.; President, Chief
Operating Officer, Chairman, Chief Executive Officer: FirsTier Financial, Inc.
DONALD R. STADING, VICE PRESIDENT AND GENERAL COUNSEL - INSURANCE AND ASSISTANT
SECRETARY*
Also serves as officer and director of an affiliate of Ameritas Life Insurance
Corp.
NEAL E. TYNER, DIRECTOR, CHAIRMAN EMERITUS**
NET Consultants, Formerly Chairman of the Board and CEO of Ameritas Life
Insurance Corp.
KENNETH L. VANCLEAVE, VICE PRESIDENT - GROUP MANAGED CARE AND PARTNERING*
Also serves as officer and director of an affiliate of Ameritas Life Insurance
Corp.
WINSTON J. WADE, DIRECTOR**
Vice President-Network Infrastructure: U.S. West Communications; Vice
President-Technical Services: U.S. West Communication, Inc.
JON B. WEINBERG, VICE PRESIDENT-MORTGAGE LOANS AND REAL ESTATE* Also serves as
an officer of a subsidiary of Ameritas Life Insurance Corp.
STEVEN L. WELTON, VICE PRESIDENT-INDIVIDUAL MARKETING*
Assistant Vice President-Marketing Services: Northwestern National Life
Insurance Co.
* Principal business address: Ameritas Life Insurance Corp, 5900 "O" Street,
P.O. Box 81889, Lincoln, Nebraska 68501.
** Principal address for: James P. Abel, NEBCO, Inc., P.O. Box 80268, Lincoln,
Nebraska 68501; Duane W. Acklie, Crete Carrier Corporation, P.O. Box 81228,
Lincoln, Nebraska 68501; William W. Cook, Jr., The Beatrice National Bank
and Trust Company, P.O. Box 100, Beatrice, Nebraska 68310; Bert A. Getz,
Globe Corporation, Scottsdale Spectrum, 6730 N. Scottsdale Road, Suite 250,
Scottsdale, Arizona 85253; James R. Knapp, Brookhollow Group, One
Brookhollow Drive, Santa Ana, California 92705; Robert F. Krohn; PSI Group,
Inc., 10011 J Street, Omaha, Nebraska 68127; Wilfred Maddux, Maddux
Cattle Company, P.O. Box 217, Wauneta, Nebraska 69045; Paul C. Schorr,
III, ComCor Holding, Inc., 6940 "O" Street, Suite 336, P.O. Box 57310,
Lincoln, Nebraska 68505, William C. Smith, William C. Smith & Co.,
Cornhusker Plaza, Suite 401, 301 So. 13th Street, Lincoln, Nebraska 68508;
Neal E. Tyner, NET Consultants, 6940 O Street, Suite 324, Lincoln, Nebraska
68510; Winston J. Wade, c/o PMI-USW 843-1, P.O. Box 311, Mendham,
New Jersey 07945-0311.
*** Where an individual as held more than one position with an organization
during the last 5-year period, the last position held has been given.
LEGAL MATTERS
All matters of Nebraska law pertaining to the Policy, including the validity of
the Policy and ALIC's right to issue the Policy under Nebraska Insurance Law,
have been passed upon by Norman M. Krivosha, Executive Vice President, Secretary
and Corporate General Counsel.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. ALIC is not involved in
any litigation that is of material importance in relation to its ability to meet
its obligations under the Policies, or that relates to the Separate Account. AIC
is not involved in any litigation that is of material importance in relation to
its ability to perform under its underwriting agreement.
- --------------------------------------------------------------------------------
LLVL 33
<PAGE>
- --------------------------------------------------------------------------------
EXPERTS
The consolidated financial statements of ALIC as of December 31, 1997 and 1996,
and for each of the three years in the period ended December 31, 1997 , and the
financial statements of Separate Account LLVL as of December 31, 1997, and for
the two years then ended, included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein, and are included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by Thomas P.
McArdle, Assistant Vice President-Associate Actuary of Ameritas Life Insurance
Corp., as stated in the opinion filed as an exhibit to the registration
statement.
ADDITIONAL INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information set
forth in the registration statement and the amendments and exhibits to the
registration statement, to all of which reference is made for further
information concerning the Separate Account, ALIC and the Policy offered hereby.
Statements contained in this Prospectus as to the contents of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of ALIC which are included in this Prospectus should be
considered only as bearing on the ability of ALIC to meet its obligations under
the Policies. They should not be considered as bearing on the investment
performance of the assets held in the Separate Account.
- --------------------------------------------------------------------------------
34 LLVL
<PAGE>
- --------------------------------------------------------------------------------
This page left blank intentionally.
- --------------------------------------------------------------------------------
LLVL 35
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
Board of Directors
Ameritas Life Insurance Corp.
Lincoln, Nebraska
We have audited the accompanying statement of net assets of Ameritas Life
Insurance Corp. Separate Account LLVL as of December 31, 1997, and the related
statements of operations and changes in net assets for each of the two years in
the period then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned at December 31, 1997. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Ameritas Life Insurance Corp. Separate
Account LLVL as of December 31, 1997, and the results of its operations and
changes in its net assets for each of the two years in the period then ended, in
conformity with generally accepted accounting principles.
/s/Deloite & Touche LLP
Lincoln, Nebraska
February 2, 1998
- --------------------------------------------------------------------------------
36 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
STATEMENT OF NET ASSETS
-----------------------
DECEMBER 31, 1997
-----------------
ASSETS
INVESTMENTS AT NET ASSET VALUE:
<S> <C>
VANGUARD VARIABLE INSURANCE FUND:
---------------------------------
Money Market Portfolio - 7,218,268.940 shares at
$1.0000 per share (cost $7,218,269) $ 7,218,269
Equity Index Portfolio - 160,571.157 shares at
$25.4215 per share (cost $3,376,563) 4,081,960
Equity Income Portfolio - 81,200.304 shares at
$18.7780 per share (cost $1,321,458) 1,524,779
Growth Portfolio - 148,714.710 shares at
$21.5954 per share (cost $2,919,979) 3,211,554
Balanced Portfolio - 119,858.700 shares at
$17.0016 per share (cost $1,955,975) 2,037,790
High-Grade Bond Portfolio - 46,139.367 shares at
$10.7030 per share (cost $480,683) 493,830
International Portfolio - 159,524.666 shares at
$12.8538 per share (cost $2,125,629) 2,050,498
High Yield Bond Portfolio - 21,777.881 shares at
$10.5909 per share (cost $227,636) 230,647
Small Company Growth Portfolio - 34,377.906 shares at
$10.9626 per share (cost $364,647) 376,871
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
---------------------------------------------
Balanced Portfolio - 10,448.294 shares at
$17.80 per share (cost $166,271) 185,980
Growth Portfolio - 21,832.699 shares at
$30.54 per share (cost $563,170) 666,771
Partners Portfolio - 95,195.374 shares at
$20.60 per share (cost $1,627,667) 1,961,025
Limited Maturity Bond Portfolio - 4,291.165 shares at
$14.12 per share (cost $59,021) 60,591
BERGER INSTITUTIONAL PRODUCTS TRUST:
------------------------------------
100 Fund Portfolio - 1,781.412 shares at
$11.11 per share (cost $21,607) 19,791
Small Company Growth Portfolio - 17,219.256 shares at
$12.06 per share (cost $203,772) 207,664
----------------
NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS $ 24,328,020
================
The accompanying notes are an integral part of these financial statements.
</TABLE>
- --------------------------------------------------------------------------------
LLVL 37
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
----------------------------------------------
VANGUARD VARIABLE INSURANCE FUND
----------------------------------------------------
MONEY MARKET EQUITY INDEX EQUITY INCOME
TOTAL PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3)
---------------- --------------- ---------------- ---------------
1997
----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend distributions received $ 462,801 $ 245,562 $ 47,557 $ 24,444
Mortality and expense risk charge 110,634 33,383 20,371 5,918
---------------- --------------- ---------------- ---------------
NET INVESTMENT INCOME(LOSS) 352,167 212,179 27,186 18,526
---------------- --------------- ---------------- ---------------
REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS:
Net realized gain(loss) on investments 303,704 ----- 33,570 22,916
Net change in unrealized appreciation(depreciation) 1,466,662 ----- 633,010 181,981
---------------- --------------- ---------------- ---------------
NET GAIN(LOSS) ON INVESTMENTS 1,770,366 ----- 666,580 204,897
---------------- --------------- ---------------- ---------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,122,533 $ 212,179 $ 693,766 $ 223,423
================ =============== ================ ===============
1996
----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend distributions received $ 34,810 $ 32,053 $ ----- $ -----
Mortality and expense risk charge 14,813 4,536 2,639 867
---------------- --------------- ---------------- ---------------
NET INVESTMENT INCOME(LOSS) 19,997 27,517 (2,639) (867)
---------------- --------------- ---------------- ---------------
REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS:
Net realized gain(loss) on investments 73,977 ----- 12,616 6,453
Net change in unrealized appreciation(depreciation) 229,011 ----- 72,387 21,339
---------------- --------------- ---------------- ---------------
NET GAIN(LOSS) ON INVESTMENTS 302,988 ----- 85,003 27,792
---------------- --------------- ---------------- ---------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 322,985 $ 27,517 $ 82,364 $ 26,925
================ =============== ================ ===============
(1) Commenced business 01/09/96 (6) Commenced business 02/12/96
(2) Commenced business 01/31/96 (7) Commenced business 01/22/96
(3) Commenced business 02/06/96 (8) Commenced business 03/10/97
(4) Commenced business 01/22/96 (9) Commenced business 01/29/97
(5) Commenced business 02/12/96
The accompanying notes are an integral part of these financial statements.
</TABLE>
- --------------------------------------------------------------------------------
38 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(CONTINUED)
VANGUARD VARIABLE INSURANCE FUND
- -----------------------------------------------------------------------------------------------------------
SMALL
HIGH-GRADE HIGH YIELD COMPANY
GROWTH BALANCED BOND INTERNATIONAL BOND GROWTH
PORTFOLIO (4) PORTFOLIO (5) PORTFOLIO (6) PORTFOLIO (7) PORTFOLIO (8) PORTFOLIO (9)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ 24,821 $ 62,554 $ 17,945 $ 24,884 $ 7,800 $ 1,148
13,622 8,857 2,094 10,213 670 1,158
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
11,199 53,697 15,851 14,671 7,130 (10)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
70,741 86,534 ----- 19,354 254 -----
269,256 73,173 12,105 (87,836) 3,011 12,224
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
339,997 159,707 12,105 (68,482) 3,265 12,224
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 351,196 $ 213,404 $ 27,956 $ (53,811) $ 10,395 $ 12,214
================ ================ ================ ================ ================ ================
$ ----- $ ----- $ 2,757 $ ----- $ ----- $ -----
1,524 964 316 1,479 ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
(1,524) (964) 2,441 (1,479) ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
22,375 17,899 ----- 14,166 ----- -----
22,319 8,642 1,042 12,704 ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
44,694 26,541 1,042 26,870 ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 43,170 $ 25,577 $ 3,483 $ 25,391 $ ----- $ -----
================ ================ ================ ================ ================ ================
</TABLE>
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LLVL 39
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
STATEMENTS OF OPERATIONS
------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
----------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
-------------------------------------------------------------------
LIMITED
MATURITY
BALANCED GROWTH PARTNERS BOND
PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3) PORTFOLIO (4)
---------------- ---------------- ---------------- ---------------
1997
----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend distributions received $ 2,227 $ ----- $ 1,903 $ 1,514
Mortality and expense risk charge 1,062 3,818 8,694 289
---------------- ---------------- ---------------- ---------------
NET INVESTMENT INCOME(LOSS) 1,165 (3,818) (6,791) 1,225
---------------- ---------------- ---------------- ---------------
REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS:
Net realized gain(loss) on investments 5,717 34,617 29,308 ----
Net change in unrealized appreciation(depreciation) 16,398 83,104 267,038 1,122
---------------- ---------------- ---------------- ---------------
NET GAIN(LOSS) ON INVESTMENTS 22,115 117,721 296,346 1,122
---------------- ---------------- ---------------- ---------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 23,280 $ 113,903 $ 289,555 $ 2,347
================ ================ ================ ===============
1996
----
INVESTMENT INCOME:
Dividend distributions received $ ----- $ ----- $ ----- $ ----
Mortality and expense risk charge 294 814 1,338 42
---------------- ---------------- ---------------- ---------------
NET INVESTMENT INCOME(LOSS) (294) (814) (1,338) (42)
---------------- ---------------- ---------------- ---------------
REALIZED AND UNREALIZED GAIN(LOSS) ON INVESTMENTS:
Net realized gain(loss) on investments 92 253 115 8
Net change in unrealized appreciation(depreciation) 3,312 20,498 66,320 448
---------------- ---------------- ---------------- ---------------
NET GAIN(LOSS) ON INVESTMENTS 3,404 20,751 66,435 456
---------------- ---------------- ---------------- ---------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,110 $ 19,937 $ 65,097 $ 414
================ ================ ================ ===============
(1) Commenced business 01/31/96 (4) Commenced business 01/31/96
(2) Commenced business 01/22/96 (5) Commenced business 06/11/97
(3) Commenced business 02/06/96 (6) Commenced business 05/21/97
The accompanying notes are an integral part of these financial statements.
</TABLE>
- --------------------------------------------------------------------------------
40 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(CONTINUED)
BERGER INSTITUTIONAL PRODUCTS TRUST
----------------------------------
SMALL
COMPANY
100 FUND GROWTH
PORTFOLIO (5) PORTFOLIO (6)
---------------- ----------------
<S> <C>
$ 442 $ -----
54 431
---------------- ----------------
388 (431)
---------------- ----------------
693 -----
(1,816) 3,892
---------------- ----------------
(1,123) 3,892
---------------- ----------------
$ (735) $ 3,461
================ ================
$ ----- $ -----
----- -----
---------------- ----------------
----- -----
---------------- ----------------
----- -----
----- -----
---------------- ----------------
----- -----
---------------- ----------------
$ ----- $ -----
================ ================
</TABLE>
- --------------------------------------------------------------------------------
LLVL 41
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
----------------------------------------------
VANGUARD VARIABLE INSURANCE FUND
---------------------------------------------------
MONEY MARKET EQUITY INDEX EQUITY INCOME
TOTAL PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3)
---------------- ---------------- ---------------- ----------------
1997
<S> <C> <C> <C> <C>
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income(loss) $ 352,167 $ 212,179 $ 27,186 $ 18,526
Net realized gain(loss) on investments 303,704 ----- 33,570 22,916
Net change in unrealized appreciation(depreciation) 1,466,662 ----- 633,010 181,981
---------------- ---------------- ---------------- ----------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 2,122,533 212,179 693,766 223,423
NET INCREASE(DECREASE) FROM POLICYHOLDER TRANSACTIONS 16,472,031 5,731,104 2,039,686 984,196
---------------- ---------------- ---------------- ----------------
TOTAL INCREASE(DECREASE) IN NET ASSETS 18,594,564 5,943,283 2,733,452 1,207,619
---------------- ---------------- ---------------- ----------------
NET ASSETS AT JANUARY 1, 1997 5,733,456 1,274,986 1,348,508 317,160
---------------- ---------------- ---------------- ----------------
NET ASSETS AT DECEMBER 31, 1997 $ 24,328,020 $ 7,218,269 $ 4,081,960 $ 1,524,779
================ ================ ================ ================
1996
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income(loss) $ 19,997 $ 27,517 $ (2,639)$ (867)
Net realized gain(loss) on investments 73,977 ----- 12,616 6,453
Net change in unrealized appreciation(depreciation) 229,011 ----- 72,387 21,339
---------------- ---------------- ---------------- ----------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 322,984 27,517 82,364 26,925
NET INCREASE(DECREASE) FROM POLICYHOLDER TRANSACTIONS 5,410,471 1,247,469 1,266,144 290,235
---------------- ---------------- ---------------- ----------------
TOTAL INCREASE(DECREASE) IN NET ASSETS 5,733,456 1,274,986 1,348,508 317,160
---------------- ---------------- ---------------- ----------------
NET ASSETS AT JANUARY 1, 1996 ----- ----- ----- -----
---------------- ---------------- ---------------- ----------------
NET ASSETS AT DECEMBER 31, 1996 $ 5,733,456 $ 1,274,986 $ 1,348,508 $ 317,160
================ ================ ================ ================
(1) Commenced business 01/09/96 (6) Commenced business 02/12/96
(2) Commenced business 01/31/96 (7) Commenced business 01/22/96
(3) Commenced business 02/06/96 (8) Commenced business 03/10/97
(4) Commenced business 01/22/96 (9) Commenced business 01/29/97
(5) Commenced business 02/12/96
The accompanying notes are an integral part of these financial statements.
</TABLE>
- --------------------------------------------------------------------------------
42 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(CONTINUED)
VANGUARD VARIABLE INSURANCE FUND
--------------------------------------------------------------------------------------------------------
SMALL
HIGH-GRADE HIGH YIELD COMPANY
GROWTH BALANCED BOND INTERNATIONAL BOND GROWTH
PORTFOLIO (4) PORTFOLIO (5) PORTFOLIO (6) PORTFOLIO (7) PORTFOLIO (8) PORTFOLIO (9)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
$ 11,199 $ 53,697 $ 15,851 $ 14,671 $ 7,130 $ (10)
70,741 86,534 ----- 19,354 254 -----
269,256 73,173 12,105 (87,836) 3,011 12,224
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
351,196 213,404 27,956 (53,811) 10,395 12,214
2,154,152 1,428,768 357,373 1,524,915 220,252 364,657
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
2,505,348 1,642,172 385,329 1,471,104 230,647 376,871
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
706,206 395,618 108,501 579,394 ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 3,211,554 $ 2,037,790 $ 493,830 $ 2,050,498 $ 230,647 $ 376,871
================ ================ ================ ================ ================ ================
$ (1,524)$ (964)$ 2,441 $ (1,479)$ ----- $ -----
22,375 17,899 ----- 14,166 ----- -----
22,319 8,642 1,042 12,704 ----- -----
---------------- ---------------- ---------------- ---------------------------------------------------
43,170 25,577 3,483 25,391 ----- -----
663,036 370,041 105,018 554,003 ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
706,206 395,618 108,501 579,394 ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
----- ----- ----- ----- ----- -----
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
$ 706,206 $ 395,618 $ 108,501 $ 579,394 $ ----- $ -----
================ ================ ================ ================ ================ ================
</TABLE>
- --------------------------------------------------------------------------------
LLVL 43
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
----------------------------------------------
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
---------------------------------------------------------------------
LIMITED
MATURITY
BALANCED GROWTH PARTNERS BOND
PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3) PORTFOLIO (4)
-------------- ---------------- ---------------- ----------------
1997
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment income(loss) $ 1,165 $ (3,818)$ (6,791)$ 1,225
Net realized gain(loss) on investments 5,717 34,617 29,308 -----
Net change in unrealized appreciation(depreciation) 16,398 83,104 267,038 1,122
-------------- ---------------- ---------------- ----------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 23,280 113,903 289,555 2,347
NET INCREASE(DECREASE) FROM POLICYHOLDER TRANSACTIONS 74,276 228,396 1,107,185 32,342
-------------- ---------------- ---------------- ----------------
TOTAL INCREASE(DECREASE) IN NET ASSETS 97,556 342,299 1,396,740 34,689
-------------- ---------------- ---------------- ----------------
NET ASSETS AT JANUARY 1, 1997 88,424 324,472 564,285 25,902
-------------- ---------------- ---------------- ----------------
NET ASSETS AT DECEMBER 31, 1997 $ 185,980 $ 666,771 $ 1,961,025 $ 60,591
============== ================ ================ ================
1996
INCREASE(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income(loss) $ (294)$ (814)$ (1,338)$ (42)
Net realized gain(loss) on investments 92 253 115 8
Net change in unrealized appreciation(depreciation) 3,312 20,498 66,320 448
-------------- ---------------- ---------------- ----------------
NET INCREASE(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 3,110 19,937 65,097 414
NET INCREASE(DECREASE) FROM POLICYHOLDER TRANSACTIONS 85,314 304,535 499,188 25,488
-------------- ---------------- ---------------- ----------------
TOTAL INCREASE(DECREASE) IN NET ASSETS 88,424 324,472 564,285 25,901
-------------- ---------------- ---------------- ----------------
NET ASSETS AT JANUARY 1, 1996 ----- ----- ----- -----
-------------- ---------------- ---------------- ----------------
NET ASSETS AT DECEMBER 31, 1996 $ 88,424 $ 324,472 $ 564,285 $ 25,901
============== ================ ================ ================
(1) Commenced business 01/31/96 (4) Commenced business on 01/31/96
(2) Commenced business 01/22/96 (5) Commenced business on 06/11/97
(3) Commenced business 02/06/96 (6) Commenced business on 05/21/97
The accompanying notes are an integral part of these financial statements.
</TABLE>
- --------------------------------------------------------------------------------
44 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(CONTINUED)
BERGER INSTITUTIONAL PRODUCTS TRUST
- -------------------------------------
SMALL
COMPANY
100 FUND GROWTH
PORTFOLIO (5) PORTFOLIO (6)
---------------- ----------------
<S> <C>
$ 388 $ (431)
693 -----
(1,816) 3,892
---------------- ----------------
(735) 3,461
20,526 204,203
---------------- ----------------
19,791 207,664
---------------- ----------------
----- -----
================ ================
$ 19,791 $ 207,664
================ ================
$ -----$ -----
----- -----
----- -----
---------------- ----------------
----- -----
----- -----
---------------- ----------------
----- -----
---------------- ----------------
----- -----
---------------- ----------------
$ -----$ -----
================ ================
</TABLE>
- --------------------------------------------------------------------------------
LLVL 45
<PAGE>
- --------------------------------------------------------------------------------
This page left blank intentionally
- --------------------------------------------------------------------------------
46 LLVL
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------------------------------------
Ameritas Life Insurance Corp. Separate Account LLVL (the Account) was
established under Nebraska law on August 24, 1994. The assets of the Account are
held by Ameritas Life Insurance Corp. (ALIC) and are segregated from all of
ALIC's other assets.
The Account is registered under the Investment Company Act of 1940, as amended,
as a unit investment trust. At December 31, 1997, there are fifteen subaccounts
within the Account. Nine of the subaccounts invest only in a corresponding
Portfolio of the Vanguard Variable Insurance Fund which is a diversified
open-end management investment company managed by The Vanguard Group. Four of
the subaccounts invest only in a corresponding Portfolio of the Neuberger &
Berman Advisers Management Trust which is a diversified open-end management
investment company managed by Neuberger & Berman Management Incorporated. Two of
the subaccounts invest only in a corresponding Portfolio of the Berger
Institutional Products Trust which is a diversified open-end management
investment company managed by Berger Associates. Each Portfolio pays the manager
a monthly fee for managing its investments and business affairs. The assets of
the Account are carried at the net asset value of the underlying Portfolios of
the funds, and the value of the policyowners' units corresponds to the Account's
investment in the underlying subaccounts.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
VALUATION OF INVESTMENTS
The assets of the account are carried at the net asset value of the underlying
Portfolios of the Funds. The value of the policyowners' units corresponds to the
Account's investment in the underlying subaccounts. The availability of
investment portfolio and subaccount options may vary between products. Share
transactions and security transactions are accounted for on a trade date basis.
FEDERAL AND STATE TAXES
The operations of the Account are included in the federal income tax return of
ALIC, which is taxed as a life insurance company under the Internal Revenue
Code. ALIC has the right to charge the Account any federal income taxes, or
provision for federal income taxes, attributable to the operations of the
Account or to the policies funded in the Account. Currently, ALIC does not make
a charge for income or other taxes. Charges for state and local taxes, if any,
attributable to the Account may also be made.
2. POLICYHOLDER CHARGES
- ------------------------
ALIC charges the account for mortality and expense risks assumed. A daily charge
is made on the average daily value of the net assets representing equity of
policyowners held in each subaccount per each product's current policy
provisions. Additional charges are made at intervals and in amounts per each
product's current policy provisions. These charges are prorated against the
balance in each investment option of the policyowner, including the Fixed
Account option which is not reflected in this separate account.
- --------------------------------------------------------------------------------
LLVL 47
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
3. SHARES OWNED
- ----------------
The Account invests in shares of mutual funds. Share activity and total shares
owned are as follows:
VANGUARD VARIABLE INSURANCE FUND
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MONEY MARKET EQUITY INDEX EQUITY INCOME GROWTH BALANCED
PORTFOLIO (1) PORTFOLIO (2) PORTFOLIO (3) PORTFOLIO (4) PORTFOLIO (5)
---------------- --------------- ---------------- ---------------- ----------------
Shares owned at January 1, 1997 1,274,985.810 68,977.369 21,723.303 39,921.198 26,356.946
Shares acquired 33,061,438.440 132,217.038 71,066.379 135,646.593 103,263.991
Shares disposed 27,118,155.310 40,623.250 11,589.378 26,853.081 9,762.237
---------------- --------------- ---------------- ---------------- ----------------
Shares owned at December 31, 1997 7,218,268.940 160,571.157 81,200.304 148,714.710 119,858.700
================ =============== ================ ================ ================
Shares owned at January 1, 1996 ----- ----- ----- ----- -----
Shares acquired 6,549,300.150 81,127.644 25,593.798 43,455.725 27,155.684
Shares disposed 5,274,314.340 12,150.275 3,870.495 3,534.527 798.738
---------------- --------------- ---------------- ---------------- ----------------
Shares owned at December 31, 1996 1,274,985.810 68,977.369 21,723.303 39,921.198 26,356.946
================ =============== ================ ================ ================
(1) Commenced business 01/09/96 (8) Commenced business 03/10/97
(2) Commenced business 01/31/96 (9) Commenced business 01/29/97
(3) Commenced business 02/06/96 (10) Commenced business 01/31/96
(4) Commenced business 01/22/96 (11) Commenced business 01/22/96
(5) Commenced business 02/12/96 (12) Commenced business 02/06/96
(6) Commenced business 02/12/96 (13) Commenced business 01/31/96
(7) Commenced business 01/22/96
</TABLE>
- --------------------------------------------------------------------------------
48 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(CONTINUED)
VANGUARD VARIABLE INSURANCE FUND NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
- --------------------------------------------------------------- ------------------------------------------------------------------
SMALL LIMITED
HIGH-GRADE HIGH-YIELD COMPANY MATURITY
BOND INTERNATIONAL BOND GROWTH BALANCED GROWTH PARTNERS BOND
PORTFOLIO (6) PORTFOLIO (7) PORTFOLIO (8) PORTFOLIO (9) PORTFOLIO (10) PORTFOLIO (11) PORTFOLIO (12) PORTFOLIO (13)
- ------------- ------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
10,402.808 45,478.330 ----- ----- 5,554.279 12,586.203 34,240.606 1,843.518
48,976.148 175,097.691 57,152.830 58,091.174 7,945.804 20,902.519 87,117.912 7,782.264
13,239.589 61,051.355 35,374.949 23,713.268 3,051.789 11,656.023 26,163.144 5,334.617
- ------------- ------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------
46,139.367 159,524.666 21,777.881 34,377.906 10,448.294 21,832.699 95,195.374 4,291.165
============= ============= =============== ================ ============== ================ ================ ================
----- ----- ----- ----- ----- ----- ----- -----
16,079.128 54,688.548 ----- ----- 5,783.296 13,583.830 40,372.867 2,210.932
5,676.320 9,210.218 ----- ----- 229.017 997.627 6,132.261 367.414
- ------------- ------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------
10,402.808 45,478.330 ----- ----- 5,554.279 12,586.203 34,240.606 1,843.518
============= ============= =============== ================ ============== ================ ================ ================
</TABLE>
- --------------------------------------------------------------------------------
LLVL 49
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
SEPARATE ACCOUNT LLVL
---------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
3. SHARES OWNED (CONTINUED)
- ----------------------------
The Account invests in shares of mutual funds. Share activity and total shares
owned are as follows:
BERGER INSTITUTIONAL PRODUCTS TRUST
-------------------------------------
SMALL
COMPANY
100 FUND GROWTH
PORTFOLIO (1) PORTFOLIO (2)
---------------- -------------------
<S> <C> <C>
Shares owned at January 1, 1997 ----- -----
Shares acquired 2,859.270 38,912.582
Shares disposed 1,077.858 21,693.326
---------------- -------------------
Shares owned at December 31, 1997 1,781.412 17,219.256
================ ===================
Shares owned at January 1, 1996 ----- -----
Shares acquired ----- -----
Shares disposed ----- -----
---------------- -------------------
Shares owned at December 31, 1996 ----- -----
================ ===================
(1) Commenced business 06/11/97
(2) Commenced business 05/21/97
</TABLE>
- --------------------------------------------------------------------------------
50 LLVL
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
Board of Directors
Ameritas Life Insurance Corp.
Lincoln, Nebraska
We have audited the accompanying consolidated balance sheets of Ameritas
Life Insurance Corp. and subsidiaries as of December 31, 1997 and 1996, and the
related statements of operations, equity, and cash flows for each of the three
years in the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Ameritas Life Insurance Corp.
and subsidiaries as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997, in conformity with generally accepted accounting principles.
/s/Deloitte & Touche LLP
Lincoln, Nebraska
February 2, 1998
- --------------------------------------------------------------------------------
LLVL 51
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
(in thousands)
DECEMBER 31
----------------------------
ASSETS 1997 1996
----------- -----------
Investments:
<S> <C> <C>
Fixed maturity securities held to maturity (fair value $792,856 - 1997, $ 754,581 $ 775,875
$798,991 - 1996)
Fixed maturity securities available for sale (amortized cost $462,831 -
1997, $408,467 - 1996) 479,990 415,705
Equity securities (cost $59,383 - 1997, $43,079 - 1996) 108,744 75,215
Mortgage loans on real estate 228,709 226,776
Loans on insurance policies 70,638 68,017
Real estate, less accumulated depreciation ($18,324 - 1997, $11,589 - 43,085 33,636
1996)
Other investments 33,971 46,295
Short-term investments 655 1,541
------------ ------------
Total investments 1,720,373 1,643,060
Cash and cash equivalents 83,139 77,142
Accrued investment income 25,186 25,176
Deferred policy acquisition costs 164,564 146,405
Property and equipment, less accumulated depreciation ($29,199 - 1997,
$29,910 - 1996) 20,191 17,532
Other assets 16,668 13,453
Separate accounts 1,437,165 1,037,359
------------ ------------
Total $ 3,467,286 $ 2,960,127
============ ============
LIABILITIES AND EQUITY
Policy and contract reserves $ 364,168 $ 367,614
Policy and contract claims 27,467 21,420
Accumulated contract values 1,039,938 1,007,734
Unearned policy charges 13,177 13,492
Unearned reinsurance ceded allowance 1,763 1,252
Federal income taxes--
Current 339 9,351
Deferred 46,236 36,083
Dividends payable 10,134 10,317
Other liabilities 41,467 35,532
Separate accounts 1,436,677 1,037,359
------------ ------------
Total Liabilities 2,981,366 2,540,154
------------ ------------
Commitments and contingencies
Minority interest in subsidiary 24,483 20,809
Policyowners' contingency reserves 419,797 373,923
Net unrealized investment gain 41,640 25,241
------------ ------------
Total Equity 461,437 399,164
------------ ------------
Total $ 3,467,286 $ 2,960,127
============ ============
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
- --------------------------------------------------------------------------------
52 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(in thousands)
YEARS ENDED DECEMBER 31
-----------------------------------------------
1997 1996 1995
---------------- --------------- ------------
INCOME:
Insurance revenues:
Premiums:
<S> <C> <C> <C>
Life insurance $ 26,794 $ 26,855 $ 30,857
Accident and health insurance 181,952 163,557 163,659
Contract charges 57,199 49,667 38,629
Reinsurance, net (1,037) (6,205) (5,559)
Reinsurance ceded allowance 2,475 1,746 1,446
Investment revenues:
Investment income, net 137,744 126,862 124,549
Realized gains, net 10,295 13,103 4,471
Other 14,987 8,961 6,936
---------------- --------------- ------------
430,409 384,546 364,988
---------------- --------------- ------------
BENEFITS AND EXPENSES:
Policy benefits:
Death benefits 20,710 18,402 17,072
Surrender benefits 10,084 10,708 9,401
Accident and health benefits 130,908 112,005 112,935
Interest credited 66,788 65,494 64,598
Increase (decrease) in policy and contract reserves (3,307) (5,060) 959
Other 13,589 12,849 13,265
Sales and operating expenses 90,737 77,086 70,414
Amortization of deferred policy acquisition costs 16,441 16,790 9,405
---------------- -------------- ------------
345,950 308,274 298,049
---------------- -------------- ------------
INCOME BEFORE DIVIDENDS, FEDERAL INCOME TAXES AND MINORITY
INTEREST IN EARNINGS OF SUBSIDIARY 84,459 76,272 66,939
Dividends appropriated for policyowners 10,158 10,367 10,543
---------------- -------------- ------------
INCOME BEFORE FEDERAL INCOME TAXES AND MINORITY INTEREST IN
EARNINGS OF SUBSIDIARY 74,301 65,905 56,396
Income taxes - current 26,401 29,081 16,954
Income taxes - deferred 39 (1,560) 694
Total federal income taxes ---------------- -------------- ------------
26,440 27,521 17,648
---------------- -------------- ------------
INCOME BEFORE MINORITY INTEREST IN EARNINGS OF SUBSIDIARY 47,861 38,384 38,748
Minority interest in earnings of subsidiary (1,987) (1,259) -
---------------- -------------- ------------
NET INCOME $ 45,874 $ 37,125 $ 38,748
================ ============== ============
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
- --------------------------------------------------------------------------------
LLVL 53
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF EQUITY
---------------------------------
(IN THOUSANDS)
POLICYOWNERS' NET UNREALIZED
CONTINGENCY INVESTMENT TOTAL
RESERVES GAIN/(LOSS) EQUITY
---------------- ---------------- ---------------
<S> <C> <C> <C>
BALANCE, January 1, 1995 $ 298,050 $ 977 $ 299,027
Net unrealized investment gains, net - 30,683 30,683
Net income 38,748 - 38,748
---------------- ---------------- ---------------
BALANCE, December 31, 1995 336,798 31,660 368,458
Net unrealized investment losses, net - (6,446) (6,446)
Minority interest in net unrealized investment
losses, net - 27 27
Net income 37,125 - 37,125
---------------- ---------------- ---------------
BALANCE, December 31, 1996 373,923 25,241 399,164
Net unrealized investment gains, net - 16,557 16,557
Minority interest in net unrealized investment
gains, net - (158) (158)
Net income 45,874 - 45,874
---------------- ---------------- ---------------
BALANCE, December 31, 1997 $ 419,797 $ 41,640 $ 461,437
================ ================ ===============
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
- --------------------------------------------------------------------------------
54 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(in thousands)
YEARS ENDED DECEMBER 31
-------------------------------------------------
1997 1996 1995
-------------- -------------- --------------
OPERATING ACTIVITIES
- --------------------
<S> <C> <C> <C>
Net income $ 45,874 $ 37,125 $ 38,748
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 5,275 4,231 4,346
Amortization of deferred policy acquisition costs 16,441 16,790 9,405
Policy acquisition costs deferred (36,117) (30,611) (20,954)
Interest credited to contract values 66,788 65,494 64,598
Amortization of discounts or premiums (1,747) (1,513) (1,630)
Net realized gains on investment transactions (10,295) (13,103) (4,471)
Deferred income taxes 39 (1,560) 694
Minority interest in earnings of subsidiary 1,987 1,259 -
Change in assets and liabilities:
Accrued investment income (10) (1,071) 1,088
Other assets (3,239) (1,372) (1,583)
Policy and contract reserves (3,446) 2,266 1,001
Policy and contract claims 6,047 2,538 (506)
Unearned policy charges (315) (2,141) (657)
Unearned reinsurance ceded allowance 511 373 103
Federal income taxes payable - current (7,977) 1,300 (1,698)
Dividends payable (183) (111) 100
Other liabilities 6,509 5,445 (911)
-------------- -------------- --------------
Net cash from operating activities 86,142 85,339 87,673
-------------- -------------- --------------
INVESTING ACTIVITIES
- --------------------
Purchase of investments:
Fixed maturity securities held to maturity (39,522) (122,182) (105,019)
Fixed maturity securities available for sale (115,864) (40,572) (40,468)
Equity securities (29,432) (19,925) (13,017)
Mortgage loans on real estate (56,251) (57,248) (28,841)
Real estate (1,676) (642) (589)
Short-term investments (2,124) (5,844) (14,884)
Other investments (6,026) (23,073) (12,569)
Proceeds from sale of investments:
Fixed maturity securities available for sale 16,419 4,774 2,919
Equity securities - unaffiliated 19,914 18,676 13,167
Equity securities - affiliated - 190 -
Real estate 1,723 951 737
Other investments 649 7,949 7,828
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
- --------------------------------------------------------------------------------
LLVL 55
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(in thousands)
YEARS ENDED DECEMBER 31
-----------------------------------------------
1997 1996 1995
-------------- -------------- ------------
INVESTING ACTIVITIES (CONTINUED)
- --------------------------------
Proceeds from maturities or repayment of investments:
<S> <C> <C> <C>
Fixed maturity securities held to maturity $ 68,069 $ 71,317 $ 102,794
Fixed maturity securities available for sale 45,942 36,519 15,868
Mortgage loans on real estate 49,750 34,594 25,120
Real estate - - 219
Other investments 6,278 15,106 4,955
Short-term investments 3,050 16,571 4,022
Purchase of property and equipment (5,413) (3,711) (1,803)
Proceeds from sale of property and equipment 45 78 99
Net change in loans on insurance policies (2,622) 1,252 310
-------------- -------------- ------------
Net cash from investing activities (47,091) (65,220) (39,152)
-------------- -------------- ------------
FINANCING ACTIVITIES
- --------------------
Contribution for minority interest in subsidiary 1,530 22,445 -
Net change in accumulated contract values (34,584) (47,186) (17,286)
-------------- -------------- ------------
Net cash from financing activities (33,054) (24,741) (17,286)
-------------- -------------- ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,997 (4,622) 31,235
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 77,142 81,764 50,529
-------------- -------------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 83,139 $ 77,142 $ 81,764
============== ============== ============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes $ 34,397 $ 27,748 $ 18,652
The accompanying notes to consolidated financial statements are an integral part of these statements.
</TABLE>
- --------------------------------------------------------------------------------
56 LLVL
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
.
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------------------------------------
NATURE OF OPERATIONS
Ameritas Life Insurance Corp. is a mutual life insurance company chartered by
the State of Nebraska. Its operations consist of life and health insurance and
annuity and pension contracts. The Company operates in the United States and,
including its subsidiaries, is authorized to do business in all 50 states and
the District of Columbia. Wholly owned insurance subsidiaries include First
Ameritas Life Insurance Corp. of New York and Pathmark Assurance Company. The
Company is also a 66% owner of AMAL Corporation (incorporated March 8, 1996),
which owns 100% of Ameritas Variable Life Insurance Company and Ameritas
Investment Corp. In addition to the insurance subsidiaries, the Company conducts
other diversified financial-service-related operations through the following
wholly owned subsidiaries: Veritas Corp. (a marketing organization for low-load
insurance products); Ameritas Investment Advisors, Inc. (an advisor providing
investment management services to the Company and other insurance companies);
and Ameritas Managed Dental Plan, Inc. (a prepaid dental organization).
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Ameritas Life
Insurance Corp. (Ameritas or the Company) and its majority-owned subsidiaries.
References to the Company relate to Ameritas and all subsidiaries. These
consolidated financial statements exclude the effects of all material
intercompany transactions.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The principal accounting and reporting practices followed are:
INVESTMENTS
The Company classifies its securities into categories based upon the Company's
intent relative to the eventual disposition of the securities. The first
category, held to maturity securities, includes fixed maturity securities which
the Company has the positive intent and ability to hold to maturity. These
securities are carried at amortized cost. The second category, available for
sale securities, may be sold to address the liquidity and other needs of the
Company. Securities classified as available for sale are carried at fair value
on the balance sheet with unrealized gains and losses excluded from income and
reported as a separate component of equity net of related deferred acquisition
costs and income tax effects. The third category, trading securities, is for
debt and equity securities acquired for the purpose of selling them in the near
term. The Company has not classified any of its securities as trading
securities.
Equity securities (common stock and nonredeemable preferred stock) are valued at
fair value.
Mortgage loans on real estate are carried at amortized cost less an allowance
for estimated uncollectible amounts. SFAS No. 114, "Accounting by Creditors for
Impairment of a Loan," which was amended by SFAS No. 118, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosures,"
requires that an impaired loan be measured at the present value of expected
future cash flows, or alternatively, the observable market price or the fair
value of the collateral. The Company adopted these standards as of January 1,
1995, with no material impact on its financial position or results of
operations.
- --------------------------------------------------------------------------------
LLVL 57
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -----------------------------------------------------------------------
(CONTINUED)
- -----------
Investment real estate owned directly by the Company is carried at cost less
accumulated depreciation and allowances for estimated losses. Real estate
acquired through foreclosure is carried at the lower of cost or fair value minus
estimated costs to sell.
Other investments primarily include investments in venture capital partnerships
and real estate joint ventures accounted for using the equity method, and
securities owned by the broker dealer subsidiary valued at fair value. Changes
in the fair value of the securities owned by the broker dealer are included in
investment income.
Short-term investments are carried at amortized cost, which approximates fair
value.
Realized investment gains and losses on sales of securities are determined on
the specific identification method. Write-offs of investments that decline in
value below cost on other than a temporary basis and the change in the
allowances for mortgage loans and wholly owned real estate are included with
realized investment gains and losses in the consolidated statements of
operations.
The Company records write-offs or allowances for its investments based upon an
evaluation of specific problem investments. The Company reviews, on a continual
basis, all invested assets to identify investments where the Company may have
credit concerns. Investments with credit concerns include those the Company has
identified as experiencing a deterioration in financial condition.
CASH EQUIVALENTS
The Company considers all highly liquid debt securities purchased with a
remaining maturity of less than three months to be cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost less accumulated depreciation. The
Company provides for depreciation of property and equipment using straight-line
and accelerated methods over the estimated useful lives of the assets.
SEPARATE ACCOUNTS
The Company operates separate accounts on which the earnings or losses accrue
exclusively to contractholders. The assets (principally investments) and
liabilities of each account are clearly identifiable and distinguishable from
other assets and liabilities of the Company. The separate accounts are an
investment alternative for pension, variable life, and variable annuity products
which the Company markets. Amounts are reported at fair value.
PREMIUM REVENUE AND BENEFITS TO POLICYOWNERS
RECOGNITION OF PARTICIPATING AND TERM LIFE, ACCIDENT AND HEALTH AND ANNUITY
PREMIUM REVENUE AND BENEFITS TO POLICYOWNERS
Participating life insurance products include those products with fixed and
guaranteed premiums and benefits on which dividends are paid by the Company.
Premiums on participating and term life products and certain annuities with life
contingencies (immediate annuities) are recognized as premium revenue when due.
Accident and health insurance premiums are recognized as premium revenue over
the time period to which the premiums relate. Benefits and expenses are
associated with earned premiums so as to result in recognition of profits over
the premium-paying period of the contracts. This association is accomplished by
means of the provision for liabilities for future policy benefits and the
amortization of deferred policy acquisition costs.
RECOGNITION OF UNIVERSAL LIFE-TYPE CONTRACTS REVENUE AND BENEFITS TO
POLICYOWNERS
Universal life-type policies are insurance contracts with terms that are not
fixed and guaranteed. The terms that may be changed could include one or more of
the amounts assessed the policyowner, premiums paid by the policyowner or
interest accrued to policyowners' balances. Amounts received as payments for
such contracts are reflected as deposits and are not reported as premium
revenues.
- --------------------------------------------------------------------------------
58 LLVL
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------
(CONTINUED)
- -----------
Revenues for universal life-type policies consist of charges assessed against
policy account values for deferred policy loading, mortality risk expense, the
cost of insurance and policy administration. Policy benefits and claims that are
charged to expense include interest credited to contracts and benefit claims
incurred in the period in excess of related policy account balances.
RECOGNITION OF INVESTMENT CONTRACT REVENUE AND BENEFITS TO POLICYOWNERS
Contracts that do not subject the Company to risks arising from policyowner
mortality or morbidity are referred to as investment contracts. Deposit
administration plans and certain deferred annuities are considered investment
contracts. Amounts received as payments for such contracts are reflected as
deposits and are not reported as premium revenues.
Revenues for investment products consist of investment income and policy
administration charges. Contract benefits that are charged to expense include
benefit claims incurred in the period in excess of related contract balances,
and interest credited to contract balances.
POLICY ACQUISITION COSTS
Those costs of acquiring new business, which vary with and are directly related
to the production of new business, have been deferred to the extent that such
costs are deemed recoverable from future premiums. Such costs include
commissions, certain costs of policy issuance and underwriting, and certain
agency expenses.
Costs deferred related to term life insurance are amortized over the
premium-paying period of the related policies, in proportion to the ratio of
annual premium revenues to total anticipated premium revenues. Such anticipated
premium revenues are estimated using the same assumptions used for computing
liabilities for future policy benefits.
Costs deferred related to participating life, universal life-type policies and
investment-type contracts are amortized generally over the lives of the
policies, in relation to the present value of estimated gross profits from
mortality, investment and expense margins. The estimated gross profits are
reviewed periodically based on actual experience and changes in assumptions.
A roll-forward of the amounts reflected in the consolidated balance sheets as
deferred policy acquisition costs is as follows:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------
1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Beginning balance $ 146,405 $ 130,420 $ 126,619
Acquisition costs deferred 36,117 30,611 20,954
Amortization of deferred policy acquisition costs (16,441) (16,790) (9,405)
Adjustment for unrealized investment (gain)/loss (1,517) 2,164 (7,748)
- ------------------------------------------------------------------------------------------------------------------
Ending balance $ 164,564 $ 146,405 $ 130,420
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
To the extent that unrealized gains or losses on available for sale securities
would result in an adjustment of deferred policy acquisition costs had those
gains or losses actually been realized, the related unamortized deferred policy
acquisition costs are recorded as an adjustment of the unrealized investment
gains or losses included in policyowners' contingency reserves.
- --------------------------------------------------------------------------------
LLVL 59
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------------------------------------
(CONTINUED)
- -----------
FUTURE POLICY AND CONTRACT BENEFITS
Liabilities for future policy benefits for participating and term life contracts
and additional coverages offered under policy riders are calculated using the
net level premium method and assumptions as to investment yields, mortality,
withdrawals and dividends. The assumptions are based on projections of past
experience and include provisions for possible unfavorable deviation. These
assumptions are made at the time the contract is issued. These liabilities are
shown as policy and contract reserves.
Liabilities for future policy and contract benefits on universal life-type and
investment-type contracts are based on the policy account balance, and are shown
as accumulated contract values.
The liabilities for future policy and contract benefits for group disabled life
reserves and long-term disability reserves are based upon interest rate
assumptions and morbidity and termination rates from published tables, modified
for Company experience.
DIVIDENDS TO POLICYOWNERS
A portion of the Company's business has been issued on a participating basis.
The amount of policyowners' dividends to be paid is determined annually by the
Board of Directors.
INCOME TAXES
The Company, with the exception of AMAL and its subsidiaries, files a
consolidated life/non-life tax return. An agreement among the members of the
consolidated group provides for distribution of consolidated tax results as if
filed on a separate return basis. The provision for income taxes includes
amounts currently payable and deferred income taxes resulting from the
cumulative differences in assets and liabilities determined on a tax return and
financial statement basis at the current enacted tax rates.
RECLASSIFICATIONS
Certain items on the prior year financial statements have been restated to
conform to current year presentation.
2. INVESTMENTS
- ---------------
Investment income summarized by type of investment was as follows:
YEARS ENDED DECEMBER 31
----------------------------------------
1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fixed maturity securities held to maturity $ 59,700 $ 59,366 $ 58,937
Fixed maturity securities available for sale 32,605 30,039 30,160
Equity securities 1,899 1,571 1,508
Mortgage loans on real estate 19,866 19,376 17,948
Real estate 12,317 9,699 9,644
Loans on insurance policies 4,341 4,265 4,290
Other investments 15,494 8,572 6,906
Short-term investments and cash and cash equivalents 4,266 5,069 5,083
- -------------------------------------------------------------------------------------------------------------------------
Gross investment income 150,488 137,957 134,476
Investment expenses 12,744 11,095 9,927
- -------------------------------------------------------------------------------------------------------------------------
Net investment income $ 137,744 $ 126,862 $ 124,549
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
60 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
2. INVESTMENTS (CONTINUED)
- ---------------------------
Net pretax realized investment gains (losses) were as follows:
YEARS ENDED DECEMBER 31
---------------------------------------
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net gains (losses) on disposals, including calls, of investments
Fixed maturity securities held to maturity $ 1,059 $ 237 $ 2,944
Fixed maturity securities available for sale 494 802 175
Equity securities 6,787 11,439 1,131
Mortgage loans on real estate 959 66 138
Real estate 502 136 224
Other 564 503 (91)
- ------------------------------------------------------------------------------------------------------------------------
10,365 13,183 4,521
- ------------------------------------------------------------------------------------------------------------------------
Provisions for losses on investments
Mortgage loans on real estate (20) (80) (50)
Real estate (50) -- --
- ------------------------------------------------------------------------------------------------------------------------
Net pretax realized investment gains $ 10,295 $ 13,103 $ 4,471
- ------------------------------------------------------------------------------------------------------------------------
Proceeds from sales of securities and gross gains and losses realized on those sales were as follows:
YEAR ENDED DECEMBER 31, 1997
--------------------------------------
Proceeds Gains Losses
- ------------------------------------------------------------------------------------------------------------------------
Fixed maturity securities available for sale $ 16,419 $ 161 $ 8
Equity securities 19,914 7,725 938
- ------------------------------------------------------------------------------------------------------------------------
$ 36,333 $ 7,886 $ 946
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996
-------------------------------------
Proceeds Gains Losses
- ------------------------------------------------------------------------------------------------------------------------
Fixed maturity securities available for sale $ 4,774 $ 30 $ 247
Equity securities 18,676 11,796 357
- ------------------------------------------------------------------------------------------------------------------------
$ 23,450 $ 11,826 $ 604
- ------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1995
-------------------------------------
Proceeds Gains Losses
- ------------------------------------------------------------------------------------------------------------------------
Fixed maturity securities available for sale $ 2,919 $ -- $ 66
Equity securities 13,167 2,601 1,470
- ------------------------------------------------------------------------------------------------------------------------
$ 16,086 $ 2,601 $ 1,536
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
LLVL 61
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
2. INVESTMENTS (CONTINUED)
- ---------------------------
The amortized cost and fair value of investments in securities by type of investment were as follows:
DECEMBER 31, 1997
------------------------------------------------------
GROSS UNREALIZED
AMORTIZED -------------------------- FAIR
COST GAINS LOSSES VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed maturity securities held to maturity
U.S. Corporate $ 448,344 $ 23,764 $ 423 $ 471,685
Mortgage-backed 147,741 6,523 14 154,250
U.S. Treasury securities and obligations of
U.S. government agencies 82,107 5,764 -- 87,871
Foreign 76,389 2,769 108 79,050
- -------------------------------------------------------------------------------------------------------------------------
Total fixed maturity securities held to maturity 754,581 38,820 545 792,856
- -------------------------------------------------------------------------------------------------------------------------
Fixed maturity securities available for sale
U.S. Corporate 282,265 11,742 280 293,727
Mortgage-backed 86,370 1,957 165 88,162
Asset-backed 7,997 169 -- 8,166
U.S. Treasury securities and obligations of
U.S. government agencies 67,342 3,455 242 70,555
Foreign 18,857 524 1 19,380
- -------------------------------------------------------------------------------------------------------------------------
Total fixed maturity securities available for sale 462,831 17,847 688 479,990
- -------------------------------------------------------------------------------------------------------------------------
Equity securities 59,383 49,893 532 108,744
Short-term investments 655 -- -- 655
- -------------------------------------------------------------------------------------------------------------------------
Total available for sale securities 522,869 67,740 1,220 589,389
- -------------------------------------------------------------------------------------------------------------------------
Total $ 1,277,450 $ 106,560 $ 1,765 $ 1,382,245
- -------------------------------------------------------------------------------------------------------------------------
The December 31, 1997, equity balance was increased by $16,557 (including an
increase in the carrying value of the securities of $27,152, decreased by $1,517
of related adjustments to deferred acquisition costs and $9,078 in deferred
income taxes) to reflect the net 1997 unrealized gain on securities classified
as available for sale previously carried at amortized cost.
</TABLE>
- --------------------------------------------------------------------------------
62 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
2. INVESTMENTS (CONTINUED)
- ---------------------------
DECEMBER 31, 1996
----------------------------------------------------
GROSS UNREALIZED
AMORTIZED -------------------------- FAIR
COST GAINS LOSSES VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fixed maturity securities held to maturity
U.S. Corporate $ 457,030 $ 17,953 $ 3,001 $ 471,982
Mortgage-backed 165,847 5,087 847 170,087
U.S. Treasury securities and obligations of
U.S. government agencies 84,418 3,611 249 87,780
Foreign 68,580 1,380 818 69,142
- ------------------------------------------------------------------------------------------------------------------------
Total fixed maturity securities held to maturity 775,875 28,031 4,915 798,991
- ------------------------------------------------------------------------------------------------------------------------
Fixed maturity securities available for sale
U.S. Corporate 241,022 7,944 2,780 246,186
Mortgage-backed 77,964 969 875 78,058
U.S. Treasury securities and obligations of
U.S. government agencies 70,627 2,765 1,023 72,369
Foreign 18,854 410 172 19,092
- ------------------------------------------------------------------------------------------------------------------------
Total fixed maturity securities available for sale 408,467 12,088 4,850 415,705
- ------------------------------------------------------------------------------------------------------------------------
Equity securities 43,079 33,236 1,100 75,215
Short-term investments 1,541 -- -- 1,541
- ------------------------------------------------------------------------------------------------------------------------
Total available for sale securities 453,087 45,324 5,950 492,461
- ------------------------------------------------------------------------------------------------------------------------
Total $ 1,228,962 $ 73,355 $ 10,865 $ 1,291,452
- ------------------------------------------------------------------------------------------------------------------------
The December 31, 1996, equity balance was decreased by $6,446 (including a
decrease in the carrying value of the securities of $12,246, increased by $2,164
of related adjustments to deferred acquisition costs and $3,636 in deferred
income taxes) to reflect the net 1996 unrealized gain on securities classified
as available for sale previously carried at amortized cost.
The amortized cost and fair value of fixed maturity securities by contractual
maturity at December 31, 1997, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
AVAILABLE FOR SALE HELD TO MATURITY
---------------------------------------------------------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
- -----------------------------------------------------------------------------------------------------------------------------------
Due in one year or less $ 22,495 $ 22,560 $ 15,437 $ 15,620
Due after one year through five years 122,517 127,006 122,983 128,111
Due after five years through ten years 169,090 174,075 327,442 343,013
Due after ten years 54,362 68,018 140,978 151,862
Mortgage-backed and asset-backed securities 94,367 88,331 147,741 154,250
- -----------------------------------------------------------------------------------------------------------------------------------
Total $ 462,831 $ 479,990 $ 754,581 $ 792,856
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
LLVL 63
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
3. INCOME TAXES
- ----------------
The items that give rise to deferred tax assets and liabilities relate to the following:
YEARS ENDED DECEMBER 31
-----------------------------
1997 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net unrealized investment gains $ 29,569 $ 20,116
Equity in subsidiaries 9,992 7,905
Deferred policy acquisition costs 47,713 43,247
Prepaid expenses 3,246 2,373
Other 2,327 2,234
- -------------------------------------------------------------------------------------------------------------------------
Gross deferred tax liability 92,847 75,875
- -------------------------------------------------------------------------------------------------------------------------
Future policy and contract benefits 30,593 24,386
Deferred future revenues 6,091 6,126
Policyowner dividends 3,547 3,610
Pension and postretirement benefits 2,715 2,643
Other 3,665 3,027
- -------------------------------------------------------------------------------------------------------------------------
Gross deferred tax asset 46,611 39,792
- -------------------------------------------------------------------------------------------------------------------------
Net deferred tax liability $ 46,236 $ 36,083
- -------------------------------------------------------------------------------------------------------------------------
The difference between the U.S. federal income tax rate and the consolidated tax provision rate is summarized as
follows:
YEARS ENDED DECEMBER 31
------------------------------------------
1997 1996 1995
- -------------------------------------------------------------------------------------------------------------------------
Federal statutory tax rate 35.0 % 35.0 % 35.0 %
Equity in subsidiaries 2.4 1.2 1.0
Surplus tax (2.7) 7.1 (5.2)
Other 0.9 (1.5) 0.5
- -------------------------------------------------------------------------------------------------------------------------
Effective tax rate 35.6 % 41.8 % 31.3 %
- -------------------------------------------------------------------------------------------------------------------------
The "surplus tax," IRC Section 809, is an imputation of income to mutual life
insurance companies according to a formula based on a comparison of the returns
of equity of the mutual and stock segments of the life insurance industry. The
Company's provision for its surplus tax is based on the Company's best estimate
of what its final surplus tax will be.
4. EMPLOYEE AND AGENT BENEFIT PLANS
- ------------------------------------
PENSION PLANS
The Company has a noncontributory defined benefit retirement plan covering
substantially all employees. Plan benefits are based on years of credited
service and the employee's compensation during the last five years of
employment. The Company's funding policy is to make contributions each year at
least equal to the minimum funding requirements for tax-qualified retirement
plans. Pension costs include current service costs, which are accrued and funded
on a current year basis, and past service costs, which are amortized over the
average remaining service life of all employees on the adoption date. The assets
of this plan are not segregated.
</TABLE>
- --------------------------------------------------------------------------------
64 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
4. EMPLOYEE AND AGENT BENEFIT PLANS (CONTINUED)
- ------------------------------------------------
Periodic pension expense for the Company included the following components:
YEARS ENDED DECEMBER 31
---------------------------------------------
1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned during the year $ 1,408 $ 1,223 $ 1,349
Interest cost on projected benefit obligation 1,496 1,866 1,894
Actual return on plan assets (3,329) (2,817) (2,844)
Net amortization and deferral 1,836 932 1,148
- ---------------------------------------------------------------------------------------------------------------------------
Net periodic pension expense $ 1,411 $ 1,204 $ 1,547
- ---------------------------------------------------------------------------------------------------------------------------
The following table sets forth the funded status of the Company's plans:
DECEMBER 31
--------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated benefit obligation
Vested $ 15,184 $ 13,173
Nonvested 1,099 323
Effect of projected future compensation increases 6,949 5,761
- ---------------------------------------------------------------------------------------------------------------------------
Projected benefit obligation 23,232 19,257
Plan assets at fair value 24,271 20,153
- ---------------------------------------------------------------------------------------------------------------------------
Plan assets in excess of projected benefit obligation 1,039 896
Unrecognized net loss (875) (1,159)
Unrecognized transition obligation 1,236 1,331
- ---------------------------------------------------------------------------------------------------------------------------
Net pension asset $ 1,400 $ 1,068
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The projected benefit obligation was determined using an assumed discount rate
of 7.25% and 7.5% for 1997 and 1996, respectively, and a weighted-average
assumed long-term rate of compensation increase of 4.5% for 1997 and 1996. The
assumed long-term rate of return on plan assets was 8.0% for 1997 and 1996.
The Company has generally funded annually the maximum allowed under IRS
regulations. The Company made contributions totaling $1,744 in 1997, $1,600 in
1996, and $1,500 in 1995.
The Company's employees and agents also participate in defined contribution
plans that cover substantially all full-time employees and agents. Company
contributions were $868 in 1997 and $800 in both 1996 and 1995.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides certain health care and life insurance benefits to retired
employees. These benefits are a specified percentage of premium until age 65 and
a flat dollar amount thereafter. Employees become eligible for these benefits
upon the attainment of age 55, 15 years of service and participation in the
Company medical plan for the immediately preceding five years.
- --------------------------------------------------------------------------------
LLVL 65
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
4. EMPLOYEE AND AGENT BENEFIT PLANS (CONTINUED)
- ------------------------------------------------
The Company has adopted a 401(h) plan to fund its postretirement benefit
obligation. Funding of $425, $440 and $300 was made in 1997, 1996 and 1995,
respectively. The accumulated postretirement benefit obligation and the accrued
postretirement benefit liability were as follows:
DECEMBER 31
---------------------------
1997 1996
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Retirees $ 2,145 $ 2,451
Fully eligible active plan participants 462 396
Other active plan participants 1,891 1,899
- ------------------------------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation 4,498 4,746
Plan assets (1,767) (1,252)
Unrecognized gain 1,516 1,040
- ------------------------------------------------------------------------------------------------------------------------
Accrued postretirement benefit liability $ 4,247 $ 4,534
- ------------------------------------------------------------------------------------------------------------------------
Net periodic postretirement benefit costs consisted of the following components:
YEARS ENDED DECEMBER 31
--------------------------------------------
1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
Service costs $ 158 $ 177 $ 200
Interest cost on accumulated postretirement benefit plan 304 315 310
Net amortization and deferral (77) (35) (10)
Expected return on assets (89) (57) (34)
- -------------------------------------------------------------------------------------------------------------------------
Net periodic postretirement benefit costs $ 296 $ 400 $ 466
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The assumed health care cost trend line rate used in measuring the accumulated
postretirement benefit obligation, for pre-65 employees, was 9.5% in 1995
decreasing linearly each successive year until it reaches 5.5% after 1999, after
which it remains constant. A one-percentage-point increase in the assumed health
care cost trend rate for each year would increase the accumulated postretirement
health care cost by approximately 3%, the current service cost by 7%, and
interest costs by 3%. The assumed discount rate used in determining the
accumulated postretirement benefit obligation was 7.25% and 7.5% in 1997 and
1996, respectively.
5. POLICYOWNERS' CONTINGENCY RESERVES
- --------------------------------------
STATUTORY SURPLUS AND NET INCOME
Net income of Ameritas and its insurance subsidiaries, as determined in
accordance with statutory accounting practices, was $47,200, $44,100 and $29,700
for 1997, 1996 and 1995, respectively. The Company's statutory surplus was
$311,300, $257,300 and $204,700 at December 31, 1997, 1996 and 1995,
respectively. The Company is required to maintain a certain level of
policyowners' contingency reserves to be in compliance with state laws and
regulations. Company policyowners' contingency reserves are monitored by state
regulators to ensure compliance with risk based capital requirements.
- --------------------------------------------------------------------------------
66 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
6. REINSURANCE
- ---------------
In the ordinary course of business, the Company assumes and cedes reinsurance
with other insurers and reinsurers. These arrangements provide greater
diversification of business and limit the maximum net loss potential on large
risks.
The effect of reinsurance on premiums earned is as follows:
YEARS ENDED DECEMBER 31
-----------------------------------------------
1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assumed $ 9,740 $ 6,344 $ 2,725
Ceded (10,777) (12,549) (8,284)
- ---------------------------------------------------------------------------------------------------------------------------------
$ (1,037) $ (6,205) $ (5,559)
- ---------------------------------------------------------------------------------------------------------------------------------
The Company remains contingently liable in the event that a reinsurer is unable
to meet the obligations ceded under the reinsurance agreement.
7. RESERVE FOR UNPAID CLAIMS
- -----------------------------
The change in the liability for unpaid accident and health claims and claim
adjustment expenses is summarized as follows:
1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
Balance at January 1 $ 17,957 $ 14,925 $ 15,383
Reinsurance reserves (net) (89) 121 (86)
- --------------------------------------------------------------------------------------------------------------------------------
17,868 15,046 15,297
- --------------------------------------------------------------------------------------------------------------------------------
Incurred related to:
Current year 132,940 117,610 119,116
Prior year (4,675) (2,051) (2,030)
- --------------------------------------------------------------------------------------------------------------------------------
Total incurred 128,265 115,559 117,086
- --------------------------------------------------------------------------------------------------------------------------------
Paid related to:
Current year 112,255 99,742 104,492
Prior year 13,193 12,995 12,845
- --------------------------------------------------------------------------------------------------------------------------------
Total paid 125,448 112,737 117,337
- --------------------------------------------------------------------------------------------------------------------------------
20,685 17,868 15,046
Reinsurance reserves (net) 1,748 89 (121)
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31 $ 22,433 $ 17,957 $ 14,925
- ---------------------------------------------------------------------------------------------------------------------------------
The liability for unpaid accident and health claims and claim adjustment
expenses is included in policy and contract claims on the consolidated balance
sheets.
</TABLE>
- --------------------------------------------------------------------------------
LLVL 67
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
8. COMMITMENTS AND CONTINGENCIES
- ---------------------------------
INVESTMENTS
Securities commitments of $25,848 and $16,935, and mortgage loan and real estate
commitments of $17,742 and $14,247 were outstanding for investments to be
purchased in subsequent years as of December 31, 1997 and 1996, respectively.
These commitments have been made in the normal course of investment operations
and are not reflected in the accompanying financial statements. The Company's
exposure to credit loss is represented by the contractual notional amount of
those instruments. The Company uses the same credit policies and collateral
requirements in making commitments and conditional obligations as it does for
on-balance sheet instruments.
STATE LIFE AND HEALTH GUARANTY FUNDS
As a condition of doing business, all states and jurisdictions have adopted laws
requiring membership in life and health insurance guaranty funds. Member
companies are subject to assessments each year based on life, health or annuity
premiums collected in the state. In some states these assessments may be applied
against premium taxes. The Company has estimated its costs related to past
insolvencies and has provided a reserve included in other liabilities of $2,325
and $2,250 as of December 31, 1997 and 1996, respectively.
LITIGATION
From time to time, the Company and its subsidiaries is subject to litigation in
the normal course of business. Management does not believe that the Company is
party to any such pending litigation which would have a material adverse effect
on its financial statements or future operations.
9. FAIR VALUE OF FINANCIAL INSTRUMENTS
- ---------------------------------------
The following disclosures are made regarding fair value information about
certain financial instruments for which it is practicable to estimate that
value. In cases where quoted market prices are not available, fair values are
based on estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. In that regard, the derived
fair value estimates, in many cases, could not be realized in immediate
settlement of the instrument. All nonfinancial instruments are excluded from
disclosure requirements. Accordingly, the aggregate fair value amounts presented
do not represent the underlying value of the Company.
The fair value estimates presented herein are based on pertinent information
available to management as of December 31, 1997 and 1996. Although management is
not aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date; therefore, current estimates of
fair value may differ significantly from the amounts presented herein.
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for each class of financial instrument for which it is
practicable to estimate a value:
FIXED MATURITY SECURITIES -- For publicly traded securities, fair value
is determined using an independent pricing source. For securities
without a readily ascertainable fair value, the value has been
determined using an interest rate spread matrix based upon quality,
weighted average maturity and Treasury yields.
EQUITY SECURITIES -- For publicly traded securities, fair value is
determined using prices from an independent pricing source.
- --------------------------------------------------------------------------------
68 LLVL
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
9. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
- ---------------------------------------------------
LOANS ON INSURANCE POLICIES -- Fair values for loans on insurance
policies are estimated using a discounted cash flow analysis at
interest rates currently offered for similar loans. Loans on insurance
policies with similar characteristics are aggregated for purposes of
the calculations.
MORTGAGE LOANS ON REAL ESTATE -- Mortgage loans in good standing are
valued on the basis of discounted cash flow. The interest rate that is
assumed is based upon the weighted average term of the mortgage and
appropriate spread over Treasuries.
OTHER INVESTMENTS -- Fair values for venture capital partnerships are
estimated based on values as last reported by the partnership and
discounted for their lack of marketability. Real estate partnerships
are carried on the equity method and are excluded from the fair value
disclosure.
SHORT-TERM INVESTMENTS -- The carrying amount approximates fair value
because of the short maturity of these instruments.
CASH AND CASH EQUIVALENTS -- The carrying amounts equal fair value.
ACCRUED INVESTMENT INCOME -- Fair value equals book value.
ACCUMULATED CONTRACT VALUES -- Funds on deposit with a fixed maturity
are valued at discounted present value using market interest rates.
Funds on deposit which do not have fixed maturities are carried at the
amount payable on demand at the reporting date, which approximates fair
value.
COMMITMENTS -- The estimated fair value of commitments approximates
carrying value because the fees currently charged for these
arrangements and the underlying interest rates approximate market.
<TABLE>
<CAPTION>
Estimated fair values are as follows:
DECEMBER 31
----------------------------------------------------------------
1997 1996
----------------------------- ---------------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Fixed maturity securities
Held to maturity $ 754,581 $ 792,856 $ 775,875 $ 798,991
Available for sale 479,990 479,990 415,705 415,705
Equity securities 108,744 108,744 75,215 75,215
Loans on insurance policies 70,638 63,356 68,017 60,743
Mortgage Loans on real estate 228,709 240,583 226,776 234,750
Other investments 22,717 32,466 24,143 33,301
Short-term investments 655 655 1,541 1,541
Cash and cash equivalents 83,139 83,139 77,142 77,142
Accrued investment income 25,186 25,186 25,176 25,176
Financial liabilities:
Accumulated contract values excluding amounts
held under insurance contracts 764,505 764,998 756,029 756,194
</TABLE>
- --------------------------------------------------------------------------------
LLVL 69
<PAGE>
- --------------------------------------------------------------------------------
AMERITAS LIFE INSURANCE CORP.
-----------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
----------------------------------------------------
(IN THOUSANDS)
(continued)
10. SUBSEQUENT EVENT
- --------------------
Effective January 1, 1998, the Company converted from a mutual insurance company
structure to a mutual insurance holding company structure pursuant to the
Nebraksa Mutual Insurance Holding Company Act. The conversion was approved by
the Nebraska State Department of Insurance and the policyowners of the mutual
company.
- --------------------------------------------------------------------------------
70 LLVL
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX A
ILLUSTRATIONS OF DEATH BENEFITS AND NET CASH SURRENDER VALUES
The following tables illustrate how the Net Cash Surrender Values and Death
Benefits of a Policy may change with the investment experience of the Fund. The
tables show how the Net Cash Surrender Values and Death Benefits of a Policy
issued to an Insured of a given age and specified underwriting risk
classification who pays the given premium at issue would vary over time if the
investment return on the assets held in each portfolio of the Funds were a
uniform, gross, after-tax annual rate of 0%, 6%, or 12%. The tables on pages 72
through 75 illustrate a Policy issued to a male, age 45, under a Preferred rate
non-smoker underwriting risk classification. This policy provides for a standard
smoker and non-smoker, and preferred non-smoker classification and different
rates for certain Specified Amounts. The Net Cash Surrender Values and Death
Benefits would be different from those shown if the gross annual investment
rates of return averaged 0%, 6%, and 12% over a period of years, but fluctuated
above and below those averages for individual policy years, or if the Insured
were assigned to a different underwriting risk classification.
The second column of the tables shows the accumulated value of the premiums paid
at 5%. The following columns show the Net Cash Surrender Values and the Death
Benefits for uniform hypothetical rates of return shown in these tables. The
tables on pages 72 and 74 are based on the current cost of insurance rates,
current expense deductions and the current percent of premium loads. These
reflect the basis on which ALIC currently sells its Policies. The maximum cost
of insurance rates allowable under the Policy are based upon the 1980
Commissioner's Standard Ordinary Smoker and Non-Smoker, Male and Female
Mortality Tables. ALIC anticipates reflecting future improvements in actual
mortality experience through adjustments in the current cost of insurance rates
actually applied. ALIC also anticipates reflecting any future improvements in
expenses incurred by applying lower percent of premiums of loads and other
expense deductions. The death benefits and cash values shown in the tables on
pages 73 and 75 are based on the assumption that the maximum allowable cost of
insurance rates as described above ("guaranteed cost") and maximum allowable
expense deductions are made throughout the life of the Policy.
The amounts shown for the Net Cash Surrender Values and Death Benefits reflect
the fact that the net investment return of the Subaccounts is lower than the
gross, after-tax return of the assets held in the Funds as a result of expenses
paid by the Fund and charges levied against the Subaccounts. The values shown
take into account an average of the daily expenses paid by each portfolio
available for investment (the equivalent to an annual rate of .58% of the
aggregate average daily net assets of the Fund), and the daily charge by ALIC to
each Subaccount for assuming mortality and expense risks (which is equivalent to
a charge at an annual rate of 0.75% on pages 72 and 74 and at an annual rate of
.90% on pages 73 and 75 of the average net assets of the Subaccounts). Berger
Associates has voluntarily agreed to waive its advisory fee and has voluntarily
reimbursed the Funds for additional expenses to the extent that normal operating
expenses in any fiscal year, including the management fee but excluding
brokerage commissions, interest, taxes and extraordinary expenses, of Berger
IPT-100 Fund exceed 1.00%, and the normal operating expenses in any fiscal year
of the Berger IPT-Small Company Growth Fund exceed 1.15%, of the respective
Fund's average daily net assets. NBMI has agreed to reimburse each Neuberger &
Berman Portfolio for its operating expenses and its pro rata share of its
corresponding series' operating expenses, excluding the compensation of NBMI,
taxes, interest, extraordinary expenses, brokerage commissions, and transaction
costs that exceed 1% of the portfolio's average daily net asset value. These
agreements are expected to continue in future years but may be terminated at any
time. The illustrated gross annual investment rates of return of 0%, 6%, and 12%
were computed after deducting these amounts and correspond to approximate net
annual rates of -1.33%, 4.67%, and 10.67% on page 72 and 74 and -1.48%, 4.52%,
and 10.52% respectively, on pages 73 and 75.
The hypothetical values shown in the tables do not reflect any additional
charges for Federal Income tax burden attributable to the Separate Account,
since ALIC is not currently making such charges. However, such charges may be
made in the future and, in that event, the gross annual investment rate of
return would have to exceed 0 percent, 6 percent, or 12 percent by an amount
sufficient to cover the tax charges in order to produce the Death Benefits and
values illustrated. (See Federal Tax Matters, page 28).
The tables illustrate the policy values that would result based upon the
hypothetical investment rates of return if premiums are paid as indicated, if
all net premiums are allocated to the Separate Account, and if no policy loans
have been made. The tables are also based on the assumptions that the
policyowner has not requested an increase or decrease in the initial Specified
Amount, that no Partial Withdrawals have been made, and that no more than
fifteen transfers have been made in any policy year so that no transfer charges
have been incurred. Illustrated values would be different if the proposed
Insured were female, a smoker, in substandard risk classification, or were
another age, or if a higher or lower premium was illustrated.
Upon request, ALIC will provide comparable illustration based upon the proposed
Insured's age, sex and underwriting classification, the Specified Amount, the
Death Benefit option, and Planned Periodic Premium schedule requested, and any
available riders requested. In addition, upon client request, illustrations may
be furnished reflecting allocation of premiums to specified Subaccounts. Such
illustrations will reflect the expenses of the portfolio in which the Subaccount
invests.
- --------------------------------------------------------------------------------
LLVL 71
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Illustration of Policy Values
Ameritas Life Insurance Corp.
ENDOWMENT AT AGE 100
Male Issue Age: 45 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $4800
INITIAL SPECIFIED AMOUNT: $250000
DEATH BENEFIT OPTION: A
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.33% Net) ( 4.67% Net) ( 10.67% Net)
------------------------- ------------------------- -------------------------
Accumulated
End Of Premiums At Net Cash Net Cash Net Cash
Policy 5% Interest Surrender Death Surrender Death Surrender Death
Year Per Year Value Benefit Value Benefit Value Benefit
---- -------- ----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5040 4162 250000 4426 250000 4691 250000
2 10332 8231 250000 9022 250000 9846 250000
3 15888 12154 250000 13739 250000 15455 250000
4 21723 15952 250000 18603 250000 21561 250000
5 27849 19631 250000 23628 250000 28318 250000
6 34281 23202 250000 28832 250000 35713 250000
7 41035 26665 250000 34225 250000 43852 250000
8 48127 30076 250000 39872 250000 52873 250000
9 55573 33441 250000 45790 250000 62879 250000
10 63392 36761 250000 51994 250000 73981 250000
15 108755 52273 250000 87475 250000 150429 250000
20 166652 63934 250000 130372 250000 277997 339156
Ages
70 240544 70042 250000 183313 250000 487121 565060
75 334851 67753 250000 252318 269980 830058 888162
80 455213 51003 250000 340157 357165 1396196 1466006
85 608830 2036 250000 446649 468982 2312360 2427978
</TABLE>
1) Assumes an annual $4800 premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT 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 CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY ALIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
72 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Illustration of Policy Values
Ameritas Life Insurance Corp.
ENDOWMENT AT AGE 100
Male Issue Age: 45 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $4800
INITIAL SPECIFIED AMOUNT: $250000
DEATH BENEFIT OPTION: A
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.48% Net) ( 4.52% Net) ( 10.52% Net)
------------------------- ------------------------- -------------------------
Accumulated
End Of Premiums At Net Cash Net Cash Net Cash
Policy 5% Interest Surrender Death Surrender Death Surrender Death
Year Per Year Value Benefit Value Benefit Value Benefit
---- -------- ----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5040 4162 250000 4426 250000 4691 250000
2 10332 7627 250000 8397 250000 9200 250000
3 15888 10985 250000 12492 250000 14129 250000
4 21723 14234 250000 16715 250000 19523 250000
5 27849 17367 250000 21065 250000 25425 250000
6 34281 20385 250000 25548 250000 31893 250000
7 41035 23274 250000 30157 250000 38977 250000
8 48127 26022 250000 34888 250000 46739 250000
9 55573 28622 250000 39739 250000 55248 250000
10 63392 31057 250000 44704 250000 64583 250000
15 108755 40396 250000 71202 250000 127459 250000
20 166652 43372 250000 100334 250000 232932 284177
Ages
70 240544 35554 250000 131723 250000 405232 470069
75 334851 7577 250000 166402 250000 683141 730960
80 455213 0* 0* 209133 250000 1136522 1193348
85 608830 0* 0* 275018 288768 1851843 1944435
</TABLE>
* In the absence of an additional premium the Policy would lapse.
1) Assumes an annual $4800 premium is paid at the beginning of each policy year.
Values would be different if premiums with a different frequency or in different
amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT 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 CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY ALIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
LLVL 73
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Illustration of Policy Values
Ameritas Life Insurance Corp.
ENDOWMENT AT AGE 100
Male Issue Age: 45 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $14500
INITIAL SPECIFED AMOUNT: $250000
DEATH BENEFIT OPTION: B
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.33% Net) ( 4.67% Net) ( 10.67% Net)
------------------------- ------------------------- -------------------------
Accumulated
End Of Premiums At Net Cash Net Cash Net Cash
Policy 5% Interest Surrender Death Surrender Death Surrender Death
Year Per Year Value Benefit Value Benefit Value Benefit
---- -------- ----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 15225 13392 263392 14218 264218 15045 265045
2 31211 26561 276561 29054 279054 31646 281646
3 47996 39451 289451 44475 294475 49909 299909
4 65621 52083 302083 60528 310528 70028 320028
5 84127 64463 314463 77243 327243 92205 342205
6 103559 76602 326602 94659 344659 116667 366667
7 123962 88500 338500 112808 362808 143654 393654
8 145385 100221 350221 131784 381784 173501 423501
9 167879 111771 361771 151631 401631 206516 456516
10 191498 123152 373152 172389 422389 243039 493039
15 328533 177079 427079 290848 540848 492241 742241
20 503428 223371 473371 434966 684966 900627 1150627
Ages
70 726644 259561 509561 607882 857882 1569356 1820453
75 1011530 282014 532014 812107 1062107 2664810 2914810
80 1375125 284930 534930 1048101 1298101 4461152 4711152
85 1839174 256380 506380 1309239 1559239 7383420 7752591
</TABLE>
1) Assumes an annual $14500 premium is paid at the beginning of each policy
year. Values would be different if premiums with a different frequency or in
different amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT 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 CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY ALIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
74 LLVL
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Illustration of Policy Values
Ameritas Life Insurance Corp.
ENDOWMENT AT AGE 100
Male Issue Age: 45 Non-Smoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $14500
INITIAL SPECIFED AMOUNT: $250000
DEATH BENEFIT OPTION: B
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
0% Hypothetical Gross 6% Hypothetical Gross 12% Hypothetical Gross
Annual Investment Return Annual Investment Return Annual Investment Return
(-1.48% Net) ( 4.52% Net) ( 10.52% Net)
------------------------- ------------------------- -------------------------
Accumulated
End Of Premiums At Net Cash Net Cash Net Cash
Policy 5% Interest Surrender Death Surrender Death Surrender Death
Year Per Year Value Benefit Value Benefit Value Benefit
---- -------- ----- ------- ----- ------- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 15225 13392 263392 14218 264218 15045 265045
2 31211 25771 275771 28232 278232 30793 280793
3 47996 37894 287894 42805 292805 48121 298121
4 65621 49762 299762 57957 307957 67191 317191
5 84127 61368 311368 73706 323706 88176 338176
6 103559 72710 322710 90072 340072 111271 361271
7 123962 83776 333776 107065 357065 136680 386680
8 145385 94553 344553 124698 374698 164629 414629
9 167879 105030 355030 142982 392982 195369 445369
10 191498 115188 365188 161924 411924 229170 479170
15 328533 160774 410774 266949 516949 455912 705912
20 503428 195807 445807 389620 639620 820295 1070295
Ages
70 726644 215809 465809 528292 778292 1404857 1654857
75 1011530 213810 463810 677821 927821 2342539 2592539
80 1375125 177419 427419 824857 1074857 3845234 4095234
85 1839174 93371 343371 951110 1201110 6248110 6560515
</TABLE>
1) Assumes an annual $14500 premium is paid at the beginning of each policy
year. Values would be different if premiums with a different frequency or in
different amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals may
cause this policy to lapse because of insufficient cash value.
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, DEATH BENEFIT OPTION SELECTED,
PREVAILING INTEREST RATES AND RATES OF INFLATION. THE DEATH BENEFIT AND CASH
VALUE FOR A CONTRACT 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 CONTRACT YEARS. NO REPRESENTATIONS
CAN BE MADE BY ALIC OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
- --------------------------------------------------------------------------------
LLVL 75
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
76 LLVL
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LLVL 77
<PAGE>
- --------------------------------------------------------------------------------
INCORPORATION BY REFERENCE
The Registrant, ALIC Separate Account LLVL, Registration 33-86500 purchases or
will purchase units from the portfolios of three funds at the direction of its
policyholders. The prospectuses of these funds will be distributed with this
prospectus and are hereby incorporated by reference. The prospectuses
incorporated by reference are as follows:
The Vanguard Variable Insurance Fund
Registration No. 33-32216
Neuberger & Berman Advisers Management Trust
Registration No. 2-88566
Berger Institutional Products Trust
Registration No. 33-63493
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore, or hereafter duly adopted pursuant to authority conferred
in that section.
Registrant makes the following representation pursuant to the National
Securities Markets Improvements Act of 1996:
Ameritas Life Insurance Corp. represents that 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 the
insurance company.
RULE 484 UNDERTAKING
ALIC's By-laws provide as follows:
The Company shall indemnify any person who was, or is a party, or is threatened
to be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative by reason
of the fact that he is or was a director, officer, or employee of the Company or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses including attorney's fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding to the full extent authorized by the laws of
Nebraska.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has 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 the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant 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, the registrant 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.
REPRESENTATION PURSUANT TO RULE 6E-3(T)
This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ameritas Life Insurance Corp. Separate Account LLVL, certifies that it meets all
the requirements of effectiveness of this Post-Effective Amendment No. 4 to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and 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 Lincoln,
County of Lancaster, State of Nebraska on this 3rd day of April, 1998.
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVA, Registrant
AMERITAS LIFE INSURANCE CORP., Depositor
Attest: /s/Norman M. Krivosha By: /s/Lawrence J. Arth
------------------------ -----------------------
Secretary Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Principal Officers of Ameritas
Life Insurance Corp. on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/Lawrence J. Arth Director, Chairman of the Board April 3, 1998
- -------------------- and Chief Executive Officer
Lawrence J. Arth
/s/Kenneth C. Louis Director, President and April 3, 1998
- -------------------- Chief Operating Officer
Kenneth C. Louis
/s/Norman M. Krivosha Executive Vice President, Secretary April 3, 1998
- --------------------- and Corporate General Counsel
Norman M. Krivosha
/s/Jon C. Headrick Executive Vice President-Investments April 3, 1998
- ------------------- and Treasurer
Jon C. Headrick
/s/JoAnn M. Martin Senior Vice President-Controller April 3, 1998
- ------------------- and Chief Financial Officer
JoAnn M. Martin
/s/James P. Abel
- ------------------- Director April 3, 1998
James P. Abel
/s/Duane W. Acklie
- --------------------- Director April 3, 1998
Duane W. Acklie
/s/William W. Cook, Jr.
- ----------------------- Director April 3, 1998
William W. Cook, Jr.
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
- ------------------ Director April 3, 1998
Bert A. Getz
/s/James R. Knapp
- ------------------- Director April 3, 1998
James R. Knapp
/s/Robert F. Krohn
- ------------------- Director April 3, 1998
Robert F. Krohn
/s/Wilfred J. Maddux
- -------------------- Director April 3, 1998
Wilfred J. Maddux
/s/Paul C. Schoor, III
- ---------------------- Director April 3, 1998
Paul C. Schorr, III
/s/William C. Smith
- -------------------- Director April 3, 1998
William C. Smith
/s/Neal E. Tyner
- ------------------ Director April 3, 1998
Neal E. Tyner
- ------------------- Director April 3, 1998
Winston J. Wade
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ameritas Life Insurance Corp. Separate Account LLVL, certifies that it meets all
the requirements of effectiveness of this Post-Effective Amendment No. 4 to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and 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 Lincoln,
County of Lancaster, State of Nebraska on this 3rd day of April, 1998.
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVA, Registrant
AMERITAS LIFE INSURANCE CORP., Depositor
Attest: By:
----------------------- -----------------------------
Secretary Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Principal Officers of Ameritas
Life Insurance Corp. on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
- -------------------- Director, Chairman of the Board April 3, 1998
Lawrence J. Arth and Chief Executive Officer
- ------------------- Director, President and April 3, 1998
Kenneth C. Louis Chief Operating Officer
- -------------------- Executive Vice President, Secretary April 3, 1998
Norman M. Krivosha and Corporate General Counsel
- ------------------- Executive Vice President-Investments April 3, 1998
Jon C. Headrick and Treasurer
- -------------------- Senior Vice President-Controller April 3, 1998
JoAnn M. Martin and Chief Financial Officer
Director April 3, 1998
- -----------------
James P. Abel
- -------------------- Director April 3, 1998
Duane W. Acklie
- ---------------------- Director April 3, 1998
William W. Cook, Jr.
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/Bert A. Getz
- ----------------- Director April 3, 1998
Bert A. Getz
- ------------------- Director April 3, 1998
James R. Knapp
- ------------------- Director April 3, 1998
Robert F. Krohn
- -------------------- Director April 3, 1998
Wilfred J. Maddux
- --------------------- Director April 3, 1998
Paul C. Schorr, III
- -------------------- Director April 3, 1998
William C. Smith
- ------------------- Director April 3, 1998
Neal E. Tyner
- ------------------- Director April 3, 1998
Winston J. Wade
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Ameritas Life Insurance Corp. Separate Account LLVL, certifies that it meets all
the requirements of effectiveness of this Post-Effective Amendment No. 4 to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and 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 Lincoln,
County of Lancaster, State of Nebraska on this 3rd day of April, 1998.
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVA, Registrant
AMERITAS LIFE INSURANCE CORP., Depositor
Attest: By:
----------------------- -----------------------------
Secretary Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the Directors and Principal Officers of Ameritas
Life Insurance Corp. on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
- -------------------- Director, Chairman of the Board April 3, 1998
Lawrence J. Arth and Chief Executive Officer
- ------------------- Director, President and April 3, 1998
Kenneth C. Louis Chief Operating Officer
- -------------------- Executive Vice President, Secretary April 3, 1998
Norman M. Krivosha and Corporate General Counsel
- ------------------- Executive Vice President-Investments April 3, 1998
Jon C. Headrick and Treasurer
- -------------------- Senior Vice President-Controller April 3, 1998
JoAnn M. Martin and Chief Financial Officer
- ------------------- Director April 3, 1998
James P. Abel
- ------------------- Director April 3, 1998
Duane W. Acklie
- ---------------------- Director April 3, 1998
William W. Cook, Jr.
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
- ----------------- Director April 3, 1998
Bert A. Getz
- ------------------- Director April 3, 1998
James R. Knapp
- ------------------- Director April 3, 1998
Robert F. Krohn
- -------------------- Director April 3, 1998
Wilfred J. Maddux
- --------------------- Director April 3, 1998
Paul C. Schorr, III
- -------------------- Director April 3, 1998
William C. Smith
- ------------------- Director April 3, 1998
Neal E. Tyner
/s/Winston J. Wade
- ------------------- Director April 3, 1998
Winston J. Wade
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 75 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representations pursuant to Rule 6e-3(T) and the National Securities Markets
Improvements Act of 1996.
The signatures.
Written consents of the following:
(a) Thomas P. McArdle
(b) Norman M. Krivosha
(c) Deloitte & Touche LLP Independent Auditors
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2.
(1) Resolution of the Board of Directors of ALIC authorizing
establishment of the Separate Account.
(2) Not applicable.
(3) (a) Proposed form of Principal Underwriting Agreement.
(b) Proposed form of Selling Agreement.*
(c) Commission schedule.*
(4) Not applicable.
(5) (a) Form of Policy.
(b) Form of Policy riders.
(6) (a) Articles of Incorporation of ALIC.
(b) Bylaws of ALIC.*
(7) (a) Participation Agreement in the Vanguard Variable
Insurance Fund.*
(b) Participation Agreement in the Neuberger & Berman Advisers
Management Trust.*
(c) Participation Agreement (Berger IPT).**
(9) Not applicable.
(10) Application for Policy.
(11) Memorandum describing ALIC's exchange procedure.
(12) Memorandum describing ALIC's issuance, transfer, and redemption
procedures for the Policy.
2. (a)(b)Opinion and Consent of Norman M. Krivosha, Executive Vice
President, Secretary and Corporate General Counsel of Ameritas Life
Insurance Corp.
3. No financial statements are omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I.
4. Not applicable
5. See Financial Data Schedules.
7. (a)(b) Opinion and Consent of Thomas P. McArdle.
8. Consent of Deloitte & Touche LLP.
9. Form of Notice of Withdrawal Right and Refund pursuant to
Rule 6e-3(T)(b)(13)(viii) under the Investment Company Act of 1940.
10. Actuary Opinion in Support of Exemptive Application
* Incorporated by reference to the initial registration statement for
Ameritas Life Insurance Corp.Separate Account LLVA
(File No. 333-5529), filed on June 7, 1996.
** Incorporated by reference to the Pre-Effective Amendment No. 1 for
the Ameritas Life Insurance Corp. Separate Account LLVA
(File No. 333-5529), filed on October 3, 1996.
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
99.1.(1) Resolution of the Board of Directors of ALIC
authorizing establishment of the Separate Account
99.1.(3)(a) Proposed form of Principal Underwriting Agreement
99.1.(5)(a) Form of Policy
99.1.(5)(b) Form of Policy riders
99.1.(6)(a) Articles of Incorporation of ALIC
99.1.(10) Application of Policy
99.1.(11) Memorandum describing ALIC's exchange procedure
99.1.(12) Memorandum describing ALIC's issuance, transfer, and
redemption procedures for the Policy
99.2.(a)(b) Opinion and Consent of Norman M. Krivosha, Executive Vice
President, Secretary and Corporate General Counsel of
Ameritas Life Insurance Corp.
99.7.(a)(b) Opinion and Consent of Thomas P. McArdle.
99.8. Consent of Deloitte & Touche LLP.
99.9. Form of Notice of Withdrawl Right and Refund pursuant to
Rule 6e-3(T)(b)(13)(viii)under the Investment Company Act
of 1940.
99.10. Actuary Opinion in Support of Exemptive Application
CERTIFICATION
I Norman M. Krivosha, duly elected and qualified Secretary of Ameritas Life
Insurance Corp., Lincoln, Nebraska, hereby certify that the attached resolution
is a true and exact copy of a resolution adopted by the Executive Committee of
Ameritas Life Insurance Corp., on August 24, 1994. I further certify that the
attached resolution is in full force and effect.
IN WITNESS WHEREOF, I have affixed my name as Secretary and have caused the
corporate seal of said corporation to be hereunto affixed this 9 day of
November, 1994.
/s/ Norman M. Krivosha
----------------------
Secretary
AMERITAS LIFE INSURANCE CORP.
CORPORATE SEAL
<PAGE>
RESOLUTION #2
BE IT RESOLVED, that the Board of Directors of Ameritas Life Insurance
Corp. ("Company"), pursuant to the provisions of Section 44-402.01 of the
Nebraska Insurance Code, hereby establishes a separate account designated
"Ameritas Life Insurance Corp. Separate Account LLVL" (hereinafter "Separate
Account") for the following use and purposes, and subject to such conditions as
hereinafter set forth:
FURTHER RESOLVED, that Separate Account is established for the purpose of
providing for the issuance by the Company of variable life insurance contracts,
and shall constitute a separate account into which are allocated amounts paid to
or held by the Company under such life insurance contracts;
FURTHER RESOLVED, that the income, gains and losses, whether or not
realized, from assets allocated to Separate Account shall, in accordance with
the life insurance contracts, be credited to or charged against such account
without regard to other income, gains, or losses of the company; and
FURTHER RESOLVED, that Separate Account shall be divided into Investment
Subdivisions, each Investment Subdivision in Separate Account shall invest in
the shares of a designated mutual fund portfolio and net premiums under life
insurance contracts shall be allocated to the eligible portfolios set forth in
the life insurance contracts in accordance with instructions received from
owners of the life insurance contracts; and
FURTHER RESOLVED, that the Board of Directors expressly reserves the right
to add or remove any Investment Subdivision of Separate Account as it may
hereafter deem necessary or appropriate; and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, be and they hereby are,
severally authorized to invest such amount or amounts of the Company's cash in
Separate Account or in any Investment Subdivision thereof as may be deemed
necessary or appropriate to facilitate the commencement of Separate Account's
operations and/or to meet any minimum capital requirements under the Investment
Company Act of 1940; and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, be, and they hereby
are, severally authorized to transfer cash from time to time between the
Company's general
<PAGE>
account and Separate Account as deemed necessary or
appropriate and consistent with the terms of the life insurance contracts; and
FURTHER RESOLVED, that the Board of Directors of the Company reserves the
right to change the designation of Separate Account hereafter to such other
designation as it may deem necessary or appropriate; and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, with such assistance
from the Company's independent certified public accountants, legal counsel and
independent consultants or others as they may require, be and they hereby are,
severally authorized and directed to take all action necessary to: (a) Register
Separate Account as a unit investment trust under the Investment Company Act of
1940, as amended; (b) Register the life insurance contracts in such amounts,
which may be an indefinite amount, as the said officers of the Company shall
from time to time deem appropriate under the Securities Act of 1933; and (c)
Take all other actions which are necessary in connection with the offering of
said life insurance contracts for sale and the operation of Separate Account in
order to comply with the Investment Company Act of 1940, the Securities Exchange
Act of 1934, and the Securities Act of 1933, and other federal laws, including
the filing of any amendments to registration statements, any undertakings, and
any applications for exemptions from the Investment Company Act of 1940 or other
applicable federal laws as the said officers of the Company shall deem necessary
or appropriate; and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, hereby are severally
authorized and empowered to prepare, execute and cause to be filed with the
Securities and Exchange Commission on behalf of Separate Account and by the
Company as sponsor and depositor a Form of Notification of Registration
Statement under the Securities Act of 1933 registering the life insurance
contracts and any and all amendments to the foregoing on behalf of Separate
Account and the Company and on behalf of and as attorneys-in-fact for the
principal executive officer and/or the principal financial officer and/or the
principal accounting officer and/or any other officer of the Company; and
FURTHER RESOLVED, that Norman M. Krivosha, Secretary, is appointed as agent
for service under any such registration statement, duly authorized to receive
communications and notices from the Securities and Exchange Commission with
respect thereto; and
<PAGE>
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, hereby is severally
authorized on behalf of Separate Account and on behalf of the Company to take
any and all action that each of them may deem necessary or advisable in order to
offer an sell the life insurance contracts, including any registrations, filings
and qualifications both of the Company, its officers, agents and employees, and
of the policies, under the insurance and securities laws of any of the states of
the United States of America or other jurisdictions, and in connection therewith
to prepare, execute, deliver and file all such applications, reports, covenants,
resolutions, applications for exemptions, consents to service of process and
other papers and instruments as may be required under such laws, and to take any
and all further action which the said officers or legal counsel of the Company
may deem necessary or desirable (including entering into whatever agreements and
contracts may be necessary) in order to maintain such registrations or
qualifications for as long as the said officer or legal counsel deem it to be in
the best interests of Separate Account and the Company; and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, be, and they hereby
are, severally authorized in the names and on behalf of Separate Account and the
Company to execute and file irrevocable written consents on the part of Separate
Account and of the Company to be used in such states wherein such consents to
service of process may be requisite under the insurance or securities laws
therein in connection with said registration or qualification of the life
insurance contracts and to appoint the appropriate state official, or such other
person as may be allowed by said insurance or securities laws, agent of Separate
Account and of the Company for the purpose of receiving and accepting process;
and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, be, and hereby is,
severally authorized to establish procedures under which the Company will
institute procedures for providing voting rights for owners of the life
insurance contracts with respect to securities owned by Separate Account; and
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others, is hereby severally
authorized to execute such agreement or agreements as deemed necessary and
appropriate (i) with Ameritas Investment Corp. ("AIC") or other qualified entity
under which AIC or such other entity will be appointed principal underwriter and
distributor for the life insurance contracts and
<PAGE>
(ii) with one or more qualified banks or other qualified entities
to provide administrative and/or custodial services in connection with the
establishment and maintenance of Separate Account and the design, issuance, and
administration of the life insurance contracts.
FURTHER RESOLVED, that because Separate Account will invest solely in
the securities issued by specific mutual fund corporations registered under the
Investment Company Act of 1940, the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, without full power to act without the others, are hereby severally
authorized to execute whatever agreements as may be necessary or appropriate to
enable such investments to be made.
FURTHER RESOLVED, that the Chairman of the Board, President, any Vice
President, the Treasurer, the Secretary, or any Assistant Vice President, and
each of them, with full power to act without the others are hereby severally
authorized to execute and deliver such agreements and other documents and do
such acts and things as each of them may deem necessary or desirable to carry
out the foregoing resolutions and the intent and purposes thereof.
EXECUTIVE COMMITTEE
AUGUST 24, 1994
PRINCIPAL UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT made this 1st day of November, 1995, by and
---- --------- --
between Ameritas Investment Corp., (hereinafter the "Underwriter") and Ameritas
Life Insurance Corp. hereinafter the "Insurance Company"), on its own behalf and
on behalf of Ameritas Life Insurance Corp. Separate Account LLVL (hereinafter
the "Account"), separate account of the Insurance Company, as follows:
WHEREAS, the Account was established under authority of resolution of
the Insurance Company's Board of Directors on August 24, 1994, in order to set
aside and invest assets attributable to certain flexible premium variable
universal life contracts (hereinafter "Contracts") issued by the Insurance
Company;
WHEREAS, the Insurance Company has registered or will register the
Account as a unit investment trust under the Investment Company Act of 1940 (the
"Investment Company Act") and has registered or will register the Contracts
under the Securities Act of 1933;
WHEREAS, the Underwriter is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Insurance Company and the Account desire to have Contracts
sold and distributed through the Underwriter and the Underwriter is willing to
sell and distribute such Contracts under the terms stated herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Insurance Company grants to the Underwriter the right to
be, and the Underwriter agrees to serve as distributor and
principal underwriter of the Contracts during the term of this
Agreement. The Underwriter agrees to use its best efforts to
solicit applications for the Contracts at its own expense, and
otherwise to perform all duties and functions which are
necessary and proper for the distribution of the Policies.
2. All premiums for Contracts shall be remitted promptly in full
together with such application, forms, and any other required
documentation to the Insurance Company. Checks or money orders
in payment of premiums shall be drawn to the order of
"Ameritas Life Insurance Corp.".
3. The Underwriter agrees to offer the Contracts for sale in
accordance with the prospectuses in effect. The Underwriter is
not authorized to give any information or to make any
representations concerning the contracts other than those
contained in the current prospectuses filed with the
Securities and Exchange Commission or in such sales literature
as may be developed and authorized by the Insurance Company in
conjunction with the Underwriter.
4. On behalf of the Account, the Insurance Company shall furnish
the Underwriter with copies of all prospectuses, financial
statements and other documents which the Underwriter
reasonably requests for use in connection with the
distribution of the Contracts.
1
<PAGE>
5. The Underwriter represents that it is duly registered as a
broker-dealer under the 1934 Act and is a member in good
standing of the NASD and, to the extent necessary to offer
the Contracts, shall be duly registered or otherwise qualified
under the securities laws and insurance laws of any state or
other jurisdiction. The Underwriter shall be responsible for
carrying out its sales and underwriting obligations hereunder
in continued compliance with the NASD Rules of Fair Practice
and federal and state securities laws and regulations. Without
limiting the generality of the foregoing, the Underwriter
agrees that it shall be fully responsible for:
(a) ensuring that no person shall offer or sell the
Contracts on its behalf until such person is duly
registered as a representative of the Underwriter,
duly licensed and appointed by the Insurance Company,
and appropriately licensed, registered or otherwise
qualified to offer and sell such Contracts under the
federal securities laws and any applicable securities
laws and insurance laws of each state or other
jurisdiction in which such Contracts may be lawfully
sold, in which the Insurance Company is licensed to
sell the Contracts and in which such persons shall
offer or sell the Contracts; and
(b) training, supervising, and controlling all such
persons for purposes of complying on a continuous
basis with the NASD Rules of Fair Practice and with
federal and state securities law requirements
applicable in connection with the offer and sale of
the Contracts. In this connection, the Underwriter
shall:
(1) conduct such training (including the
preparation and utilization of training
materials) as in the opinion of the
Underwriter is necessary to accomplish the
purposes of this Agreement;
(2) establish and implement reasonable written
procedures for supervision of sales
practices of agents, representatives or
brokers selling the Contracts; and
(3) take reasonable steps to ensure that its
associated persons shall not make
recommendations to an applicant to purchase
a Contract and shall not sell a Contract in
the absence of reasonable grounds to believe
that the purchase of the Contract is
suitable for such applicant.
6. Notwithstanding anything in this Agreement to the contrary,
the Underwriter is hereby authorized to enter into sales
agreements with other independent broker-dealers for the sale
of the Contracts. All such sales agreements entered into by
the Underwriter shall provide that each independent broker-
dealer will assume full responsibility for continued
compliance by itself and its associated persons with the NASD
Rules of Fair Practice and applicable federal and state
securities laws. All associated persons of such independent
broker-dealers soliciting applications for the Contracts shall
be duly and appropriately licensed or appointed for the sale
of the Contracts under the Federal and state securities laws
and the insurance laws of the applicable states or
jurisdictions in which such Contracts may be lawfully sold.
7. The Insurance Company shall apply for the proper insurance
licenses in the appropriate states or jurisdictions for the
designated persons associated with the Underwriter or with
other independent broker-dealers which have entered into
agreements with the Underwriter for the sale of the Contracts,
provided that the Insurance Company reserves the right to
refuse to appoint any proposed registered representative as an
agent or broker, and to terminate an agent or broker once
appointed.
2
<PAGE>
8. The Insurance Company and the Underwriter shall cause to be
maintained and preserved for the periods prescribed such
accounts, books, and other documents as are required of
them by the Investment Company Act of 1940, the 1934 Act, and
any other applicable laws and regulations. The books, accounts
and records of the Insurance Company, the Account, and the
Underwriter as to all transactions hereunder shall be
maintained so as to disclose clearly and accurately the nature
and details of the transactions. The Insurance Company shall
maintain such books and records of the Underwriter pertaining
to the sale of the Contracts and required by the 1934 Act as
may be mutually agreed upon from time to time by the Insurance
Company and the Underwriter; provided that such books and
records shall be the property of the Underwriter, and shall at
all times be subject to such reasonable periodic, special or
other examination by the SEC and all other regulatory bodies
having jurisdiction. The Insurance Company shall be
responsible for sending all required confirmations on customer
transactions in compliance with applicable regulations, as
modified by any exemption or other relief obtained by the
Insurance Company. The Underwriter shall cause the Insurance
Company to be furnished with such reports as the Insurance
Company may reasonably request for the purpose of meeting its
reporting and recordkeeping requirements under the insurance
laws of the State of Nebraska and any other applicable states
or jurisdictions.
9. The Insurance Company shall have the responsibility for paying
(i) all commissions or other fees to associated persons of the
Underwriter which are due for the sale of the Contracts and
(ii) any compensation to other independent broker-dealers and
their associated persons due under the terms of any sales
agreements between the Underwriter and such broker-dealers.
Notwithstanding the preceding sentence, no associated person
or broker-dealer shall have an interest in any deductions or
other fees payable to the Underwriter pursuant to the terms of
this Agreement.
10. The Insurance Company shall reimburse the Underwriter for all
costs and expenses incurred by the Underwriter in furnishing
the services, materials, and supplies required by the terms of
this Agreement and may pay Underwriter a concession for sales
of the policies as may be agreed by the parties from time to
time.
11. The Insurance Company agrees to indemnify the Underwriter for
any losses incurred as a result of any action taken or omitted
by the Underwriter, or any of its officers, agents or
employees, in performing their responsibilities under this
Agreement in good faith and without willful misfeasance, gross
negligence, or reckless disregard of such obligations.
12. (a) This Agreement may be terminated by either party
hereto upon 60 days' written notice to the other
party.
(b) This Agreement may be terminated upon written notice
of one party to the other party hereto in the event
of bankruptcy or insolvency of the party to which
notice is given.
(c) This Agreement may be terminated at any time upon the
mutual written consent of the parties thereto.
(d) The Underwriter shall not assign or delegate its
responsibilities under this Agreement without the
written consent of the Insurance Company.
(e) Upon termination of this Agreement, all
authorizations, right and obligations shall cease
except the obligations to settle accounts hereunder,
including payments of premiums or contributions
subsequently received for Contracts in
3
<PAGE>
effect at the time of termination or issued pursuant
to applications received by the Insurance Company
prior to termination.
13. This Agreement is subject to and its terms are to be
interpreted and construed in accordance with the provisions of
the Investment Company Act and the 1934 Act, and the rules,
regulations, and rulings thereunder and is subject to the
provisions of the NASD Rules of Fair Practice. Without
limiting the generality of the foregoing, the term "assigned"
shall not include any transaction exempted from section
15(b)(2) of the Investment Company Act.
The Underwriter shall submit to all regulatory and
administrative entities having jurisdiction over the
operations of the Accounts, present or future; and will
provide any information, reports or other material which any
such entity by reason of this Agreement may request or require
pursuant to applicable laws or regulations.
14. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
15. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Nebraska.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, and seals to be affixed, as of the day and year first above written.
AMERITAS INVESTMENT CORP
Attest:
/s/Lori J. Streeter By: /s/Jon C. Headrick
- -------------------- --------------------
AMERITAS LIFE INSURANCE CORP.
Attest:
/s/Lori J. Streeter By: /s/Norman M. Krivosha
- -------------------- -----------------------
4
INSURED FIELD (1)
POLICY NUMBER FIELD (3)
POLICY TYPE LOW LOAD VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. NET CASH SURRENDER VALUE,
IF ANY, PAYABLE AT MATURITY. DEATH BENEFIT PROCEEDS PAYABLE AT DEATH OF INSURED
PRIOR TO MATURITY DATE. FLEXIBLE PREMIUMS PAYABLE DURING LIFETIME OF INSURED
UNTIL MATURITY DATE (AGE 100). SOME BENEFITS REFLECT INVESTMENT RESULTS.
NON-PARTICIPATING.
THIS POLICY'S ACCUMULATION VALUE IN THE SEPARATE ACCOUNT IS BASED ON
THE INVESTMENT EXPERIENCE OF THAT ACCOUNT, AND MAY INCREASE OR
DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE
SECTION 7.
THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) MAY BE
FIXED OR MAY VARY UNDER THE CONDITIONS DESCRIBED IN SECTIONS 9 AND
10.
Ameritas Life Insurance Corp. agrees to pay the death benefit
proceeds of this policy to the Beneficiary on receipt of
satisfactory proof of death of the Insured while this policy is in
force.
/s/ Kenneth C. Louis /s/ Norman M. Krivosha
President Secretary
"NOTICE OF TEN-DAY RIGHT TO EXAMINE POLICY"
YOU ARE URGED TO READ THIS POLICY CAREFULLY. IF, AFTER EXAMINATION,
YOU ARE DISSATISFIED WITH IT FOR ANY REASON, YOU MAY RETURN IT TO
THE SELLING AGENT OR TO AMERITAS LIFE INSURANCE CORP. AT ONE
AMERITAS WAY, P.O. BOX 81889, LINCOLN, NEBRASKA 68501-1889, FOR
A REFUND WITHIN (1) TEN DAYS FROM THE DATE OF DELIVERY OF THE
POLICY, (2) TEN DAYS AFTER MAILING OR DELIVERY OF A CANCELLATION
NOTICE, OR (3) FORTY-FIVE DAYS AFTER PART I OF THE APPLICATION IS
SIGNED, WHICHEVER IS LATER. IF ALLOWED BY STATE LAW, THE AMOUNT OF
THE REFUND WILL EQUAL THE GREATER OF THE PREMIUMS PAID OR THE
PREMIUMS PAID ADJUSTED BY INVESTMENT GAINS AND LOSSES. OTHERWISE,
THE AMOUNT OF THE REFUND WILL EQUAL THE GROSS PREMIUMS PAID.
PLEASE READ AND CAREFULLY CHECK THE COPY OF THE APPLICATION
ATTACHED TO THIS POLICY. THIS APPLICATION IS A PART OF YOUR POLICY
AND THIS POLICY WAS ISSUED ON THE BASIS THAT THE ANSWERS TO ALL
QUESTIONS AND THE INFORMATION SHOWN ON THIS APPLICATION ARE TRUE
AND COMPLETE. IF ANY INFORMATION SHOWN ON IT IS NOT TRUE AND
COMPLETE, TO THE BEST OF YOUR KNOWLEDGE, OR IF ANY PAST MEDICAL
HISTORY HAS BEEN OMITTED, PLEASE NOTIFY AMERITAS LIFE INSURANCE
CORP. OF LINCOLN, NEBRASKA, WITHIN TEN DAYS FROM THE DATE OF
DELIVERY OF THE POLICY TO YOU.
AMERITAS LIFE INSURANCE CORP. LOGO
A STOCK COMPANY
LINCOLN, NEBRASKA
Form 4055
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POLICY SCHEDULE
Insured: John D Specimen Policy Number: 1103839710
Initial Specified Policy Date: October 1, 1997
Amount of Insurance: $100,000
*Planned Annual
Issue Age - Sex: 35 Male Periodic Premium: $802.08
Owner: John D Specimen Initial Premium: $802.08
Initial Death Benefit Option is A, current specified amount.
Guaranteed Death Benefit Premium For Policy $802.08
Minimum Initial Premium $69.00
Underwriting Class
The Insured was a Nonsmoker when this policy was issued. The
underwriting class is Standard.
First Year Values
The current annual cost of insurance rate per $1000 is $1.05.
Loans
The maximum loan interest rate is 6.00%. The interest credited on any
loaned part of the values will be 3.50%.
Modes of Payment for Planned Periodic Premiums:
Annual Semi-Annual Quarterly Monthly
$802.08 $401.04 $200.52 $66.84
* This reflects the planned premium and mode you selected at issue. For
further information, see policy SECTION 3. PREMUIM PAYMENTS.
Form 4055-1
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SCHEDULE OF BENEFITS
Insured: John D Specimen Policy Number: 1103839710
Initial
Specified Amount Maturity or
Benefit of Insurance Expiration Date*
- ------- ------------ ----------------
Flexible Premium Variable $100,000 October 1, 2062
Life With Adjustable
Death Benefit
Form 4055**
* NOTE: It is possible that coverage may not continue to the maturity
date (age 100) if premium payments are not sufficient. Even if coverage
continues to the maturity date, there may, in fact, be little or no net
cash surrender value to be paid.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
Form 4055 1.1
<PAGE>
SCHEDULE OF BENEFITS
(Continued)
Insured: John D Specimen Policy Number: 1103839710
Initial
Specified Amount Annual Maturity or
Benefit of Insurance Premium* Expiration Year
- ------- ------------ -------- ---------------
Cost Recovery Rider 2062
Form CRR 4094**
Reduced Loan Interest Rate Rider 2062
Form PLR 4094**
Accelerated Benefit Rider 2062
For Terminal Illness
Form TIR 45**
* For any rider, this is the annual rider cost of insurance at issue. (NOTE:
These amounts shown are not additional premiums due but are the amounts
deducted from the accumulation value.) See each rider for further
information.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
Form 4055 1.2
<PAGE>
LIST OF SUBACCOUNTS AND PORTFOLIOS
Each subaccount of the Ameritas Life Insurance Company (ALIC) Separate Account
LLVL invests in a specific portfolio of the following funds:
Vanguard Variable Insurance Fund ("Vanguard")
Neuberger & Berman Advisors Management Trust ("Neuberger & Berman AMT")
Berger Institution Products Trust ("Berger IPT")
INITIAL
CORRESPONDING ALLOCATION OF
FUND PORTFOLIO SUBACCOUNT NET PREMIUMS
Vanguard Money Market Money Market Subaccount 0%
High-Grade Bond High-Grade Bond Subaccount 0%
High Yield Bond High Yield Bond Subaccount 0%
Balanced Balanced Subaccount 50%
Equity Income Equity Income Subaccount 0%
Equity Index Equity Index Subaccount 50%
Growth Growth Subaccount 0%
Small Company Growth Small Company Growth Subaccount 0%
International International Subaccount 0%
Neuberger & Limited Maturity Bond Limited Maturity Bond Subaccount 0%
Berman Balanced Balanced Subaccount 0%
AMT Partners Partners Subaccount 0%
Growth Growth Subaccount 0%
Berger IPT 100 Fund 100 Fund Subaccount 0%
Small Company Growth Fund Small Company Growth Fund Subaccount 0%
Net premiums may also be allocated to the ALIC Fixed Account.
INITIAL
ALLOCATION OF
NET PREMIUMS
0%
ALIC Fixed Account
Form 4055 1.3
<PAGE>
SCHEDULE OF CHARGES
ADMINISTRATIVE EXPENSE CHARGE:
The maximum annual administrative expense charge is $108.
PREMIUM CHARGES:
The maximum percent of premium charge for premium taxes is 5% of
premiums received. The current percent of premium charge for the first
policy year is 3 1/2%.
TRANSFER CHARGE:
The first 15 transfers per year are free. Thereafter, there may be a
$10 charge for each transfer.
MAXIMUM PARTIAL WITHDRAWAL CHARGE:
The maximum charge for each partial withdrawal is the lesser of $50 or
2% of amount withdrawn. The current charge in the first policy year is
the lesser of $25 or 2% of the amount withdrawn.
Form 4055 1.4
<PAGE>
TABLE OF POLICY CHARGES
ANNUAL BASIS
Insured: John D Specimen Policy Number: 1103839710
Issue Age - Sex: 35 Male Policy Date: October 1, 1997
SCHEDULE OF GUARANTEED ANNUAL COST OF INSURANCE RATES*
Policy Year Rate Per $1,000 Policy Year Rate Per $1,000
Beginning Of Amount Beginning Of Amount
October 1 At Risk October 1 At Risk
- ----------- --------------- ----------- ---------------
1995 $1.05 2028 $28.50
1996 $1.77 2029 $31.38
1997 $1.88 2030 $34.63
1998 $2.00 2031 $38.91
1999 $2.14 2032 $42.56
2000 $2.29 2033 $47.44
2001 $2.47 2034 $52.92
2002 $2.65 2035 $58.80
2003 $2.86 2036 $65.06
2004 $3.07 2037 $71.64
2005 $3.32 2038 $78.47
2006 $3.59 2039 $85.72
2007 $3.88 2040 $93.67
2008 $4.19 2041 $102.52
2009 $4.54 2042 $112.52
2010 $4.91 2043 $123.79
2011 $5.35 2044 $136.11
2012 $5.86 2045 $149.20
2013 $6.43 2046 $162.80
2014 $7.09 2047 $176.79
2015 $7.82 2048 $190.89
2016 $8.63 2049 $205.29
2017 $9.49 2050 $220.19
2018 $10.42 2051 $235.84
2019 $11.47 2052 $252.75
2020 $12.64 2053 $271.63
2021 $13.94 2054 $295.65
2022 $15.42 2055 $329.96
2023 $17.11 2056 $384.55
2024 $19.02 2057 $480.20
2025 $21.13 2058 $657.98
2026 $23.40 2059 $1,000.00
2027 $25.86
* The rates shown are annual rates per $1000 of insurance. To calculate
the monthly rate, the annual rate is divided by 12 and rounded to the
nearest five decimal places. These rates apply to the basic policy and
do not include cost for riders. The rates shown have been adjusted if
this policy was issued with a tabular and/or flat rating as shown on
the schedule page.
Form 4055 1.5
<PAGE>
TABLE OF CONTENTS
SCHEDULE PAGES
SECTION 1. DEFINITIONS
SECTION 2. GENERAL PROVISIONS
2.1 Meaning of In Force
2.2 When This Policy Terminates
2.3 The Policy and its Parts
2.4 Representations and Contestability
2.5 Misstatement of Age or Sex
2.6 Suicide
2.7 The Owner
2.8 The Beneficiary
2.9 Changing the Beneficiary
2.10 Assigning the Policy
2.11 Non-Participating
SECTION 3. PREMIUM PAYMENTS
3.1 Initial Premium
3.2 Guaranteed Death Benefit Premium
3.3 Planned Periodic Premiums
3.4 Unscheduled Premiums
3.5 Premium Limits
3.6 Where to Pay Premiums
3.7 Premium Charges
3.8 Allocation of Net Premiums
SECTION 4. GRACE PERIOD AND REINSTATEMENT
4.1 Grace Period
4.2 Continuation of Insurance
4.3 Reinstating the Policy
SECTION 5. SEPARATE ACCOUNT
5.1 The Account
5.2 The Subaccounts
5.3 Valuation of Assets
5.4 Transfer Among Subaccounts
5.5 The Funds
5.6 Portfolio Changes
SECTION 6. THE FIXED ACCOUNT
6.1 The Fixed Account
6.2 Transfers Among the Fixed Account and the Subaccounts
FORM 4055-2
<PAGE>
SECTION 7. ACCUMULATION VALUE
7.1 How Accumulation Value of the Policy is Determined
7.2 Accumulation Value of the Subaccounts
7.3 Net Asset Value
7.4 Subaccount Unit Value
7.5 Accumulation Value of the Fixed Account
7.6 Interest Credits
7.7 Administrative Expense Charge
7.8 Monthly Deduction
7.9 Cost of Insurance
7.10 Cost of Insurance Rates
7.11 Annual Report
7.12 Illustrative Reports
SECTION 8. POLICY SURRENDER AND PARTIAL
WITHDRAWAL
8.1 Surrender of the Policy
8.2 Net Cash Surrender Value
8.3 Partial Withdrawal
8.4 Postponement of Payments
SECTION 9. DEATH BENEFIT
9.1 Death Benefit Proceeds
9.2 Interest on Proceeds
9.3 Death Benefit
9.4 Postponement of Payment
SECTION 10. POLICY CHANGES AND EXCHANGE
OF POLICY
10.1 Change in Death Benefit Options
10.2 Change in the Specified Amount
10.3 Decreasing the Specified Amount
10.4 Increasing the Specified Amount
10.5 Time Period for Exchange
SECTION 11. LOAN BENEFITS
11.1 Making a Policy Loan
11.2 Interest
11.3 Other Borrowing Rules
11.4 Repaying a Policy Debt
SECTION 12. PAYMENT OPTIONS
12.1 Payment Option Rules
12.2 Description of Options
SECTION 13. NOTES ON OUR COMPUTATIONS
13.1 Basis of Computations
13.2 Methods of Computing Values
TABLES OF SETTLEMENT OPTIONS
<PAGE>
SECTION 1. DEFINITIONS
"ACCUMULATION VALUE" means the total amount of value held in your accounts at
any time. It is equal to the total of the accumulation value held in the
Account, the Fixed Account, and the accumulation value held in the general
account which secures policy loans.
"BENEFICIARY" means the person to whom the death benefit proceeds are payable
upon the death of the Insured. The beneficiary is named by the Owner in the
application. If changed, the beneficiary is as shown in the latest change filed
and recorded with us. If no beneficiary survives the Insured, the Owner or the
Owner's estate will be the beneficiary. The interest of any beneficiary is
subject to that of any assignee.
"DEATH BENEFIT" means the total amount of insurance coverage provided under the
selected death benefit option of the policy.
"DEATH BENEFIT PROCEEDS" means the proceeds payable to the beneficiary upon
receipt by us of the satisfactory proof of the death of the Insured while the
policy is in force. It is equal to: (1) the death benefit; plus (2) any
additional life insurance proceeds provided by any riders; minus (3) any
outstanding policy debt; minus (4) any overdue monthly deductions, including the
deduction for the month of death.
"GUARANTEED DEATH BENEFIT PREMIUM" is an optional premium amount shown on the
policy schedule pages. If the owner makes cumulative premium payments, less any
partial withdrawals or policy loans, equal to or greater than cumulative
Guaranteed Death Benefit Premiums, we will guarantee that this policy remains in
force on each monthly activity date during the first three policy years. See
Section 3 for further discussion of the Guaranteed Death Benefit Premium,
planned periodic premiums and your options for guaranteeing coverage in the
first three policy years.
"INITIAL PREMIUM" as shown on the schedule pages is the greater of the amount
received with the application or the Minimum Initial Premium.
"INSURED" means the person upon whose life the policy is issued.
"ISSUE AGE" means the age at the Insured's nearest birthday on the policy date.
"ISSUE DATE" means the date that all financial, contractual, and administrative
requirements have been completed and processed. The issue date will be shown in
a confirmation notice sent to you.
"MATURITY DATE" means the date we pay any net cash surrender value, if the
Insured is still living. This date is shown on the schedule pages.
"MINIMUM INITIAL PREMIUM" as shown on the schedule pages is the minimum premium
required to put this policy in force.
"MONTHLY ACTIVITY DATE" means the same date in each succeeding month as the
policy date except that whenever the monthly activity date falls on a date other
than a valuation date, the monthly activity date will be deemed the next
valuation date.
"MONTHLY DEDUCTIONS" means the deductions taken from the Accumulation Value on
the monthly activity date. These deductions are equal to: 1) the current cost of
insurance charge; 2) the administrative expense charge; 3) any flat extra rating
charge; and 4) rider charges.
"NET CASH SURRENDER VALUE" means the accumulation value on any valuation date
less any outstanding policy debt.
"NET PREMIUM" means the premium paid less the percent of premium charges.
"OUTSTANDING POLICY DEBT" means the sum of all unpaid policy loans and accrued
interest on policy loans.
"OWNER" means the owner of the policy, as designated in the application or as
subsequently changed. If a policy has been absolutely assigned, the assignee is
the Owner. A collateral assignee is not the Owner. See Section 2.7 for the
rights and privileges of the Owner.
Form 4055-3
<PAGE>
"PERCENT OF PREMIUM CHARGE" is an amount deducted from each premium received to
cover certain expenses. This charge is a percentage of the premium. The
applicable percentage can be found in Section 3.7 of the policy.
"PLANNED PERIODIC PREMIUM" means a selected scheduled premium of a level amount
at a fixed interval. The initial planned periodic premium you selected is shown
on the schedule page. See Section 3.3 of the policy.
"POLICY DATE" means the effective date for all coverage provided in the
application. The policy date is used to determine policy anniversary dates,
policy years and monthly activity dates. Policy anniversaries are measured from
the policy date. The policy date and the issue date will be the same unless: 1)
an earlier policy date is specifically requested, or 2) the issue date will be
later if additional premiums or application amendments are required at the time
of delivery.
"POLICY YEAR" means the period from one policy anniversary date until the next
policy anniversary date.
"SEC" means the Securities and Exchange Commission.
"SATISFACTORY PROOF OF DEATH" means all of the following must be submitted:
(1) A certified copy of the death certificate;
(2) A Notice of Death Claim;
(3) The Policy; and
(4) Any other information that we may reasonably require to establish the
validity of the claim.
"SPECIFIED AMOUNT" means the minimum death benefit under the policy while the
policy remains in force. The initial specified amount is shown on the schedule
pages. Adjustments and changes to the specified amount can occur as discussed in
Section 10.
"SURRENDER" means this policy may be terminated before the maturity date during
the Insured's life for its net cash surrender value. See Section 8 of the
policy.
"VALUATION DATE" is as of the close of trading of the New York Stock Exchange on
each day on which the Exchange is open for trading.
"YOU" AND "YOUR" refer to the Owner of this policy. The Insured may or may not
be the Owner.
"WE", "US" AND "OUR" refer to Ameritas Life Insurance Corp. Our Home Office
means our administrative office at One Ameritas Way, P.O. Box 81889, Lincoln,
Nebraska 68501-1889.
SECTION 2. GENERAL PROVISIONS
2.1 MEANING OF IN FORCE
The policy will remain in force as long as on each monthly activity date the net
cash surrender value is sufficient to cover monthly deductions.
However, this policy will remain in force during the first three policy years,
even if the net cash surrender value is insufficient to cover monthly
deductions, if cumulative premiums paid, less any partial withdrawals or policy
loans, equal or exceed cumulative Guaranteed Death Benefit Premiums.
2.2 WHEN THIS POLICY TERMINATES
This policy will terminate on the earliest of:
(1) Any monthly activity date when the net cash surrender value is
insufficient to cover monthly deductions and the grace period ends without
sufficient premium being paid. However, if this occurs during the first
three policy years and cumulative premiums paid, less any partial
withdrawals or policy loans, equal or exceed cumulative Guaranteed Death
Benefit Premiums, then the policy will not terminate;
(2) The Insured dies;
<PAGE>
(3) You request the coverage be terminated and you return this policy; or
(4) This policy matures.
2.3 THE POLICY AND ITS PARTS
This policy is a legal contract between you and us. It is issued in return for
the application and payment in advance of the initial premium as described in
Section 3.1. The policy, application, any supplemental applications, riders,
endorsements, and amendments are the entire contract. No change in this policy
will be valid unless it is in writing, attached to this policy, and approved by
either the president or secretary of the company. No agent may change this
policy or waive any of its provisions.
2.4 REPRESENTATIONS AND CONTESTABILITY
We rely on statements made in the application. In the absence of fraud, they are
considered representations and not warranties. We can contest this policy for
any material misrepresentation of fact. The misrepresentation must have been
made in the application attached to the policy when issued or in a supplemental
application made a part of the policy when a change in coverage went into
effect.
We cannot contest this policy after it has been in force during the Insured's
life for two years from the policy date. Nor can we contest any increased
benefits later than two years after the effective date of the increased benefits
during the Insured's life. Any increase or reinstatement will be contestable,
within the two year period, only with regard to statements made in the
supplemental application. This provision does not apply to riders with their own
contestability provision.
2.5 MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured or any person insured by rider has been
misstated on the application, the death benefit and any additional benefits
provided will be those which would be purchased by the most recent deduction for
the cost of insurance and the cost of any additional benefits at the Insured
person's correct age or sex.
2.6 SUICIDE
If the Insured commits suicide while sane or insane, within two years from the
policy date, we will limit the proceeds. The limited amount will equal all
premiums paid for this policy, less outstanding policy debt, partial
withdrawals, and the cost for riders.
If the Insured commits suicide, while sane or insane, within two years from the
effective date of any increase in the specified amount, we will limit the
proceeds payable with respect to the increase. The proceeds thus limited will
equal the total cost of insurance applicable to the increase.
2.7 THE OWNER
While the Insured is living you have all the benefits, rights and privileges
under this policy. These include naming a successor owner, changing the
beneficiary, assigning this policy, enjoying all policy benefits, and
exercising all policy options.
If you are not the Insured, you should name a successor-owner who will become
the Owner if you die before the Insured. If you die before the Insured and there
is no successor-owner, ownership will pass to your estate.
2.8 THE BENEFICIARY
You can name primary and contingent beneficiaries. Your original beneficiary
choice is shown in the attached application.
Unless a payment plan is chosen, the proceeds payable at the Insured's death
will be paid in a lump sum to the primary beneficiary. If the primary
beneficiary dies before the Insured, the proceeds will be paid to the contingent
beneficiary. If no beneficiary survives the Insured, the proceeds will be paid
to your estate.
2.9 CHANGING THE BENEFICIARY
You may change the beneficiary during the Insured's lifetime. We do not limit
the number of changes that may be made. To make the change, we must receive a
completed Change of Beneficiary form and
Form 4055-4
<PAGE>
any other forms required by the Home Office. The change will take effect as of
the date we record it at the Home Office, even if the Insured dies before we do
so. Each change will be subject to any payment we made or any other action we
took before the change is recorded.
2.10 ASSIGNING THE POLICY
You may assign this policy. For an assignment to bind us, we must receive a
signed copy in the Home Office. We are not responsible for the validity of any
assignment.
An assignment is subject to any policy debt. Policy debt is discussed in Section
11.
2.11 NON-PARTICIPATING
This policy is non-participating. In other words, no dividends will be paid
under this policy.
SECTION 3. PREMIUM PAYMENTS
3.1 INITIAL PREMIUM
An initial premium at least equal to the Minimum Initial Premium must be paid on
or before delivery of the policy. The initial premium shown on the schedule
pages is the greater of the amount received with the application or the Minimum
Initial Premium.
3.2 GUARANTEED DEATH BENEFIT PREMIUM
You have the option to pay a planned premium based on the annual Guaranteed
Death Benefit Premium. This premium is shown on the schedule pages.
During the first three policy years, if cumulative premiums paid, less any
partial withdrawals or policy loans, equal or exceed cumulative Guaranteed Death
Benefit Premiums, then this policy will not terminate even if the net cash
surrender value is insufficient to cover monthly deductions. This guarantee
option is only available during the first three policy years. See Sections 2.1
and 2.2.
3.3 PLANNED PERIODIC PREMIUM
This is a flexible premium policy. You may choose to pay planned periodic
premiums, and as indicated in Section 3.2, you may elect to base your planned
periodic premiums on the Guaranteed Death Benefit Premium. However, planned
periodic premiums are not required. The amount and frequency of the planned
periodic premiums you selected when the policy was issued is shown on the
schedule pages. You can change the frequency of the payments or the amount by
sending a written request to the Home Office. Premiums may not be paid after the
maturity date. We reserve the right to limit the amount and frequency of the
planned periodic premiums you choose to pay.
3.4 UNSCHEDULED PREMIUMS
Any premium we receive under this policy in an amount different from the planned
periodic premiums will be considered an unscheduled premium. Unscheduled
premiums can be made at any time while the policy is in force.
3.5 PREMIUM LIMITS
We reserve the right to limit the amount and frequency of premium payments. We
will not accept that portion of a premium payment which affects the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended. This excess amount will be returned to you.
3.6 WHERE TO PAY PREMIUMS
Each premium after the first one is payable at our Home Office. Upon request, a
receipt signed by our Secretary or an Assistant Secretary will be given for any
premium payment.
3.7 PREMIUM CHARGES
The percent of premium charge is deducted from each premium payment received.
The percent of
<PAGE>
premium charge is a maximum of 5%. We have the option of charging the current
percent of premium charge which can be less than the maximum. The premium charge
will be shown in the annual report.
3.8 ALLOCATION OF NET PREMIUMS
As of the issue date, net premiums then received will be allocated to a money
market Subaccount. As of the 13th day after the issue date, the accumulation
value will be allocated to the Subaccounts or to the Fixed Account which you
have selected on the application. Any additional premium received will be
allocated in accordance with your instructions. You may change the allocation of
later premiums without charge. The allocation will apply to future premiums
after we receive the change. The Subaccounts and the Fixed Account are discussed
in Sections 5 and 6.
SECTION 4. GRACE PERIOD AND REINSTATEMENT
4.1 GRACE PERIOD
If the net cash surrender value on any monthly activity date is not sufficient
to cover monthly deductions, a grace period of 61 days will be allowed for the
payment of a premium sufficient to cover these deductions. However, if this
occurs during the first three policy years and you have paid cumulative
premiums, less any partial withdrawals or policy loans, equal to or in excess of
cumulative Guaranteed Death Benefit Premiums as defined in Section 3.2, this
policy will remain in force as long as you continue to meet the Guaranteed Death
Benefit Premium requirement.
The 61 day grace period will begin on the day we mail a notice of the necessary
premium. We will mail this notice to you at your last known address and to any
assignee of record. If sufficient premium is not paid by the end of the grace
period, this policy will terminate without value.
If the Insured dies during the grace period, the overdue monthly deductions will
be deducted from the death proceeds.
4.2 CONTINUATION OF INSURANCE
Insurance coverage under this policy and any benefits provided by any rider(s)
will be continued through the grace period.
4.3 REINSTATING THE POLICY
If the Insured is living and application is made within three years from the
beginning of any grace period, this policy can be considered for reinstatement
if it terminated because a grace period ended without sufficient premium being
paid.
To apply for reinstatement, you must send evidence satisfactory to us that the
Insured is insurable. The effective date of the reinstatement will be the first
monthly activity date on or next following the date the application for
reinstatement is approved.
Reinstatement will require you to pay a premium at least equal to three times
the current month's monthly deductions. However, we will accept a larger
premium. If reinstatement occurs during the first three policy years, you may
pay a premium equal to the monthly prorata portion of the Guaranteed Death
Benefit Premium that would have been due if the policy had not lapsed in order
to continue to meet the Guaranteed Death Benefit Premium requirement.
This policy cannot be reinstated if it has been surrendered for its net cash
surrender value, nor can it be reinstated after the maturity date. Any policy
debt will be reinstated.
Form 4055-5
<PAGE>
SECTION 5. SEPARATE ACCOUNT
5.1 THE ACCOUNT
The word Account, where we use it in this policy without qualification, means
the Ameritas Life Insurance Corp. Separate Account LLVL. This is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. It is also subject to the laws of Nebraska. We own the assets of the
Account and keep them separate from the assets of our general account.
The Account is used only to fund the variable benefits provided under this
policy and any other variable life policies supported by the Account.
The assets of the Account will be available to cover the liabilities of our
general account only to the extent that the assets of the Account exceed the
liabilities of the Account arising under the variable life policies supported by
the Account.
5.2 THE SUBACCOUNTS
The Account has several Subaccounts. We list them in the schedule pages. You
determine, using percentages, how the net premium will be allocated among the
Subaccounts. You may choose to allocate nothing to a particular Subaccount, but
any allocation you make must be at least 10%. You may not choose a fractional
percent. The allocations to the Subaccounts along with allocations to the Fixed
Account must total 100%. The assets of each Subaccount will be used to buy
shares in a corresponding portfolio of the funding vehicles designated in the
policy schedule pages. (See "The Funds" below.) Income and realized and
unrealized gains or losses from the assets of each Subaccount of the Account are
credited to or charged against that Subaccount without regard to income, gains
or losses in the other Subaccounts of the Account, our general account or any
other separate accounts.
5.3 VALUATION OF ASSETS
We will determine the value of the assets of each Subaccount at the end of each
valuation date.
5.4 TRANSFER AMONG SUBACCOUNTS
You may transfer amounts among Subaccounts as often as you wish in a policy
year. The transfer will take effect on the later of the date designated in the
request or on the valuation date following receipt of the written request at our
Home Office.
Each transfer must be for a minimum of $250 or the balance in the Subaccount, if
less. The first 15 transfers per policy year will be allowed free of charge.
Thereafter, a $10.00 transfer charge may be deducted from the accumulation
value. The minimum amount which can remain in a Subaccount or in the Fixed
Account as a result of a transfer is $100.00. Any amount below this minimum must
be included in the amount transferred.
5.5 THE FUNDS
The word Funds, where we use it in this policy without qualification, means the
funding vehicles designated in the policy schedule pages. The Funds are
registered with the SEC under the Investment Company Act of 1940 as diversified
open-end management investment companies. The Funds bear their own expenses. The
Funds have several portfolios; there is a portfolio that corresponds to each of
the Subaccounts of the Account. We list these portfolios in the schedule pages.
5.6 PORTFOLIO CHANGES
A portfolio of the Funds might, in our judgement, become unsuitable for
investment by a Subaccount. This might happen because of a change in investment
policy, because of a change in laws or regulations, because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the Funds, or to invest in
another fund. But we would first notify and receive approval from the SEC and
the Nebraska Insurance Department. This approval process is on file with the
insurance commissioner of the state where this policy is delivered. If the SEC
requires that such action receive approval from a majority of the policyholders
in the Account, then you will be notified of your right to vote. You will be
notified of any material change in the investment policy of any portfolio in
which you have an interest. If you are dissatisfied with any change, you always
have the option to transfer all or a portion of your accumulation value to the
Fixed Account (See Section 6.2) or to one of the other available Subaccounts
(See Section 5.4).
<PAGE>
SECTION 6. THE FIXED ACCOUNT
6.1 THE FIXED ACCOUNT
Net premiums allocated to and transfers to the Fixed Account under the policy
become part of the general account assets of Ameritas Life Insurance Corp. which
support annuity and insurance obligations. The Fixed Account includes all of
Ameritas Life Insurance Corp.'s assets, except those assets segregated in
separate accounts. Ameritas Life Insurance Corp. maintains the sole discretion
to invest the assets of the Fixed Account, subject to applicable law.
You determine, using percentages, how the premium will be allocated to the Fixed
Account. You may choose to allocate nothing to the Fixed Account. The minimum
allocation must be at least 10%; you may not choose a fractional percentage. The
allocations to the Fixed Account along with allocations to the Subaccounts must
total 100%.
6.2 TRANSFERS AMONG THE FIXED ACCOUNT AND THE SUBACCOUNTS
You may transfer into the Fixed Account from the Subaccounts at any time during
the policy year.
You may make one transfer out of the Fixed Account to any of the other
Subaccounts only during the 30 day period following each policy anniversary.
----
The allowable transfer amount out of the Fixed Account is limited to the greater
of:
1. 25% of the Fixed Account Balance; or
2. any Fixed Account transfer which occurred during the prior 13 months; or
3. $1,000.
Transfers into or from the Fixed Account will be subject to the same transfer
charges and minimums that are applied to transfers among the Subaccounts. See
Section 5.4.
SECTION 7. ACCUMULATION VALUE
7.1 HOW ACCUMULATION VALUE OF THE POLICY IS DETERMINED
The accumulation value of the policy on the issue date is:
a. The net premiums received by us on or before the issue date; minus
b. Any monthly deductions due on or before the issue date.
The accumulation value of this policy on a valuation date is equal to the total
of the values in each Subaccount and the Fixed Account, plus the accumulation
value impaired by policy debt which is held in the general account, plus any net
premium received on that valuation date but not yet allocated.
7.2 ACCUMULATION VALUE OF THE SUBACCOUNTS
To compute the accumulation value held in the Subaccounts on any valuation date,
we multiply each Subaccount's unit value (defined in Section 7.4 below) by the
number of Subaccount units allocated to the policy.
The number of Subaccount units will increase when:
a. Net premiums are credited to that Subaccount;
b. Transfers from other Subaccounts are credited to that Subaccount; or
c. Policy debt (principal or interest) is repaid, or interest is
credited from the amount held in the general account to secure the
policy debt.
Form 4055-6
<PAGE>
The number of Subaccount units will decrease when:
a. A policy loan is taken from that Subaccount;
b. A partial withdrawal, and its charge, is taken from that Subaccount;
c. A portion of the monthly deduction is taken from that Subaccount;
d. A transfer, and its charge, is made from that Subaccount to other
Subaccounts; or
e. Policy loan interest not paid when due is taken from that Subaccount.
Each transaction above will increase or decrease the number of Subaccount units
allocated to the policy by an amount equal to the dollar value of the
transaction divided by the current unit value.
7.3 NET ASSET VALUE
The net asset value of the shares of each portfolio of the Fund is determined
once daily as of the close of business of the New York Stock Exchange on days
when the Exchange is open for business. The net asset value is determined by
adding the values of all securities and other assets of the portfolio,
subtracting liabilities and expenses and dividing by the number of outstanding
shares of the portfolio. Expenses, including the investment advisory fee payable
to the Investment Advisor, are accrued daily.
7.4 SUBACCOUNT UNIT VALUE
For each Subaccount, the value of an accumulation unit (unit value) was set when
the Subaccount was established. These initial unit values can be found in the
schedule pages. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value may increase or decrease from one
valuation date to the next.
The unit value of each Subaccount on any valuation date shall be calculated as
follows:
a. The per share net asset value of the corresponding Fund portfolio
on the valuation date times the number of shares held by the
Subaccount, before the purchase or redemption of any shares on that
date; minus
b. A charge not exceeding an annual rate of .90% times the value of
the assets of each subaccount on the valuation date for mortality
and expense risk; divided by
c. The total number of units held in the Subaccount on the valuation
date before the purchase or redemption of any units on that date.
When transactions are made, the actual dollar amounts are converted to
accumulation units. The number of accumulation units for a transaction is found
by dividing the dollar amount of the transaction by the current unit value.
7.5 ACCUMULATION VALUE OF THE FIXED ACCOUNT
The accumulation value of the Fixed Account on a valuation date is equal to:
a. The net premiums credited to the Fixed Account; plus
b. Any transfers from the Subaccounts credited to the Fixed Account;
plus
c. Any policy debt (principal or interest) repaid, or interest credited
from the amount held in the general account to secure the policy
debt; minus
d. Any policy loan taken from the Fixed Account; minus
e. Any partial withdrawal and its charge taken from the Fixed Account;
minus
f. The portion of the monthly deduction taken from the Fixed Account;
minus
g. Any transfer and its charge made from the Fixed Account; minus
h. Any policy loan interest not paid when due taken from the Fixed
Account; plus
i. Interest credits.
<PAGE>
7.6 INTEREST CREDITS
We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 3.5%. We may, at our
discretion, credit a higher current rate of interest.
7.7 ADMINISTRATIVE EXPENSE CHARGE
On each monthly activity date, one-twelfth of an annual charge called the
administrative expense charge will be deducted from the accumulation value. The
guaranteed maximum amount we can charge is $108 per policy for each policy year.
This charge is guaranteed. We have the option of charging current administrative
expense charges, which can be less than the guaranteed, and will be stated in
the annual report.
We will charge the guaranteed amount during the first 12 policy months following
an increase in the specified amount.
7.8 MONTHLY DEDUCTION
The monthly deduction is a charge made each policy month against the
accumulation value allocated to the Account and to the Fixed Account. Monthly
deductions will be deducted from the Subaccounts and the Fixed Account in the
same proportion as the balances held in the Subaccounts and the Fixed Account.
The monthly deduction is equal to:
a. The administrative expense charge; plus
b. The cost of insurance for the current policy month, including the
cost for any riders; plus
c. One-twelfth of any flat extra rating charge.
Refer to the "Table of Policy Charges" and the "Schedule of Charges" in the
schedule pages for further details.
7.9 COST OF INSURANCE
The cost of insurance will be figured each month. It is the cost for this policy
(including any increases in the specified amount) plus the cost for any riders.
The cost for this policy is equal to:
a. the death benefit on the monthly activity date, discounted at the
guaranteed rate of interest for the Fixed Account for one month; less
b. the accumulation value on the monthly activity date, after all
monthly deductions have been taken except for the cost of
insurance;
c. the above result multiplied by the monthly cost per $1,000 of
insurance (as described below in the Cost of Insurance Rates
section); divided
d. by $1,000.
The charge made during the policy year will be shown on the annual report.
7.10 COST OF INSURANCE RATES
For the initial specified amount, the cost of insurance rates will not exceed
those shown in the column of guaranteed cost of insurance rates. These annual
rates are shown in the "Table of Policy Charges" in the schedule pages. To
calculate the monthly rates, divide by 12 and round to the nearest five decimal
places.
Each year, the annual cost of insurance rates will be declared for the next
policy year. These rates will be based on the issue age, specified amount,
policy year, and sex of the Insured. The rate will vary by the Insured's
underwriting class.
Insureds will be considered smokers on the policy anniversary nearest the
Insured's 20th birthday and charged smoker cost of insurance rates. Prior to
reaching this anniversary, the Insured will be sent a notification and forms to
be completed and returned to the Home Office providing evidence of a non-smoker
status. If the Insured cannot qualify as a non-smoker or fails to return the
forms giving evidence of a non-smoker status, then that Insured will continue to
be charged current smoker rates.
<PAGE>
If the policy is rated at issue with extra premiums, the guaranteed rates shown
are a multiple of the guaranteed rates for a standard issue. This multiple
factor is shown on the schedule page. The cost of insurance rate for the first
policy year is shown on the schedule page.
Any change in the cost of insurance rates will apply to all policies having the
same issue age, specified amount, policy year, sex, plan, issue month,
classification and guaranteed cost of insurance rates as this policy.
7.11 ANNUAL REPORT
Each year the Owner will be mailed an annual report that shows the progress of
the policy. This report will show for the last policy year:
a. premiums paid;
b. expense charges;
c. interest credits; and
d. cost of insurance.
As of the date of the report, the following values will be shown:
a. accumulation value;
b. specified amount of insurance;
c. death benefit; and
d. outstanding debt, if any.
7.12 ILLUSTRATIVE REPORTS
The Owner may request a report illustrating future values of the policy under
both guaranteed and current assumptions. A reasonable fee not to exceed $50 may
be charged for this report.
SECTION 8. POLICY SURRENDER AND PARTIAL WITHDRAWALS
8.1 SURRENDER OF THE POLICY
The policy may be surrendered before the maturity date at any time during the
Insured's life for its net cash surrender value.
8.2 NET CASH SURRENDER VALUE
The amount payable upon surrender is the accumulation value on the valuation
date we receive your written request, less any outstanding policy debt. The net
cash surrender value is payable in one lump sum or under one of the payment
options. See Section 12.
8.3 PARTIAL WITHDRAWAL
A partial withdrawal of this policy may be made after the first three months for
any amount of at least $500 subject to the following rules:
a. The net cash surrender value remaining after a partial withdrawal
must be at least $1,000 or an amount sufficient to maintain the
policy in force for the remainder of the policy year.
b. A partial withdrawal is irrevocable.
c. Request must be made to us in writing on a form approved by us.
d. A partial withdrawal will not be allowed if the resulting specified
amount after the withdrawal is less than $100,000 in the first
three years and $75,000 thereafter.
e. A withdrawal charge will be deducted from the amount withdrawn. The
charge will not exceed the lesser of $50 and 2% of the amount
withdrawn.
f. Only one withdrawal is permitted per policy year.
Partial withdrawals will affect other policy values. The accumulation value will
be reduced by the amount of the partial withdrawal. If Death Benefit
<PAGE>
Option A is in effect on the date of a partial withdrawal, the specified amount
will also be reduced by the amount of the partial withdrawal. These reductions
will also reduce the death benefits. See Section 9.
You may tell us how to allocate the partial withdrawal among the Subaccounts and
the Fixed Account, provided that the minimum amount remaining in a Subaccount
and the Fixed Account as a result of the allocation is $100. If you do not, or
if there is not enough value in any Subaccount or the Fixed Account, the partial
withdrawal will be allocated among the Subaccounts and the Fixed Account in the
same proportion that the policy's accumulation value in each Subaccount and the
Fixed Account bears to the total accumulation value in all Subaccounts and the
Fixed Account on the date we receive the request in our Home Office.
8.4 POSTPONEMENT OF PAYMENTS
We will usually pay any amounts payable from the Subaccounts as a result of
surrender, partial withdrawals, or policy loans within seven (7) days after we
receive written request in our Home Office in a form satisfactory to us. We can
postpone such payments or any transfers of amounts between Subaccounts if:
a. The New York Stock Exchange is closed other than customary weekend
and holiday closings or trading on the New York Stock Exchange is
restricted as determined by the SEC; or
b. The SEC by order permits the postponement for the protection of
policyowners; or
c. An emergency exists as determined by the SEC, as a result of which
disposal of securities is not reasonable, practicable, or it is not
reasonable or practicable to determine the value of the net assets
of the Account.
We may defer the payment of a full surrender, partial withdrawals or policy
loans from the Fixed Account for up to six months from the date we receive your
written request.
SECTION 9. DEATH BENEFIT
9.1 DEATH BENEFIT PROCEEDS
The death benefit proceeds payable to the beneficiary upon our receipt of
satisfactory proof of the death of the Insured while this policy is in force
will equal:
a. The death benefit; plus
b. Any additional life insurance proceeds provided by any rider; minus
c. Any outstanding policy debt; minus
d. Any overdue monthly deductions including the deduction for the
month of death.
9.2 INTEREST ON PROCEEDS
Death benefit proceeds that are paid in one lump sum will include interest at a
rate of 3% per annum (or higher if required by state law) from the date of death
to the date of payment.
9.3 DEATH BENEFIT
Subject to the provisions of this policy, the death benefit at any time prior to
the maturity date shall be either Option A or Option B.
Option A: Basic Coverage
The death benefit will be the greater of:
a. The current specified amount; or
<PAGE>
b. A percentage of the accumulation value on the date of death, where
the applicable percentage is determined from the table shown below.
Option B: Basic Coverage Plus Accumulation Value
The death benefit will be the greater of:
a. The current specified amount plus the accumulation value on the
date of death; or
b. A percentage of the accumulation value on the date of death, where
the applicable percentage is determined from the table shown below.
Insured's Applicable Insured's Applicable
Age* Percentage Age* Percentage
- --------- ---------- --------- ----------
40 or less 250% 51 178%
41 243 52 171
42 236 53 164
43 229 54 157
44 222 55 150
45 215 56 146
46 209 57 142
47 203 58 138
48 197 59 134
49 191 60 130
50 185 61 128
(CONTINUED AT TOP OF NEXT COLUMN)
Insured's Applicable Insured's Applicable
Age* Percentage Age* Percentage
- --------- ---------- ------ ----------
62 126 72 111
63 124 73 109
64 122 74 107
65 120 75-90 105
66 119 91 104
67 118 92 103
68 117 93 102
69 116 94 101
70 115 95-100 100
71 113
*Insured's Age means the attained age at the beginning of the policy year.
The initial death benefit option is shown in the schedule pages. It may be
changed as described in Section 10.1.
9.4 POSTPONEMENT OF PAYMENT
We will usually pay any death benefit proceeds within seven (7) days after we
receive satisfactory proof of death.
SECTION 10. POLICY CHANGES AND EXCHANGE OF POLICY
10.1 CHANGE IN DEATH BENEFIT OPTIONS
You may change the death benefit option which is shown on the schedule pages and
is referred to in Section 9. The death benefit option may not be changed in the
first policy year and may only be changed once a year thereafter. The change
will become effective on the first monthly activity date on or next following
the date we approve your requested change.
A change from Option A to Option B will require satisfactory evidence of
insurability. If you change from Option A to Option B, the death benefit after
the change will equal the specified amount prior to
the change, plus the accumulation account as of the date of change. A change
from Option B to Option A will change the specified amount to an amount equal to
the death benefit as of the date of change.
10.2 CHANGE IN THE SPECIFIED AMOUNT
After the policy has been in effect for one year, you can increase or decrease
the specified amount. To make a change, send a written request to our Home
Office. Any change will be effective on the monthly activity date on or next
following the date we approve the request, unless you specify a later date. You
may only change the specified amount once a year.
<PAGE>
10.3 DECREASING THE SPECIFIED AMOUNT
A decrease in the specified amount is subject to the following conditions:
a. A decrease may not be made during the first policy year nor during
the first 12 policy months following an increase in specified
amount.
b. The specified amount in effect after any decrease may not be less
than $100,000 in the first three policy years and $75,000
thereafter.
c. The resulting specified amount after a decrease may not affect the
tax qualifications of this policy as described in Section 7702 of
the Internal Revenue Code, as amended.
A decrease in the specified amount will reduce the specified amount in the
following order:
a. The specified amount provided by the most recent increase;
b. the next most recent increases successively; and
c. the initial specified amount.
10.4 INCREASING THE SPECIFIED AMOUNT
Any increase of the specified amount is subject to the following conditions:
a. An increase may not be made in the first policy year.
b. A supplemental application for the increase and satisfactory
evidence of insurability of the Insured must be received.
c. The minimum amount of any increase is $25,000.
d. An increase cannot be made if the Insured's age nearest birthday is
over 80.
e. If an increase occurs during the second or third policy years, the
Guaranteed Death Benefit Premium for the policy will be
recalculated for future periods based on the current specified
amount.
f. At the time of the increase, the accumulation value less any
outstanding policy debt must be at least equal to 12 times the
current month's monthly deduction reflecting the increase in
specified amount. If this value is not sufficient to support these
monthly deductions for at least one year beyond the effective date
of the increase, additional premiums may be required. You will be
notified of any additional premium due.
10.5 TIME PERIOD FOR EXCHANGE
You may exchange this policy while it is in force for a new policy on the life
of the Insured, without new evidence of insurability, at any time within 24
months of the policy date shown in the schedule pages. The new policy will be
issued on the following basis:
1. The policy date, issue age, specified amount, and risk class of the Insured
will be the same as for this policy.
2. It will be a flexible premium adjustable life insurance policy available for
exchange issued by Ameritas Life Insurance Corp. on the exchange date.
3. The policy provisions and applicable charges for the new policy and its
riders will be the same as those which would have applied had the policy
been issued originally.
4. Any outstanding policy debt must be repaid.
5. It will be subject to:
-any assignments;
-any partial withdrawals;
-any accumulation value adjustment required; and
-any cost or credit of exchange.
To make the change, you must send this policy, a completed application for
exchange, and any required payment to our Home Office.
The change will be effective on the valuation date when all financial and
contractual arrangements for the new policy have been completed.
Form 4055-9
<PAGE>
SECTION 11. LOAN BENEFITS
This policy has loan benefits that are described below. The amount of
outstanding loans plus accrued interest is called outstanding policy debt. Any
outstanding policy debt will be deducted from proceeds payable at the Insured's
death, on maturity, or on surrender.
11.1 MAKING A POLICY LOAN
After the first policy anniversary, you may obtain a policy loan from us. This
policy is the only security required. The maximum available loan amount is equal
to the net cash surrender value at the time of the loan less the guaranteed
monthly deductions remaining for the balance of the policy year, less interest
on the policy debt including the requested loan to the next policy anniversary
date.
11.2 INTEREST
The maximum interest rate on any loan is 6% per year. We have the option of
charging less. It accrues daily and becomes a part of the policy debt. Interest
payments are due on each anniversary date. If interest is not paid when due, it
will be added to the policy debt and will bear interest at the rate charged on
the loan.
11.3 OTHER BORROWING RULES
When a policy loan is made, or when interest is not paid when due, an amount
sufficient to secure the policy debt is transferred out of the Account and the
Fixed Account and into our general account. You may tell us how to allocate that
accumulation value among the Subaccounts and the Fixed Account provided that the
amount remaining in a Subaccount or the Fixed Account as a result of the
allocation is $100. Without specific direction, the accumulation value will be
allocated among the Subaccounts and the Fixed Account in the same proportion
that the policy's accumulation value in each Subaccount and the Fixed Account
bears to the total accumulation value in all Subaccounts and the Fixed Account
on the date we make the loan.
Accumulation value in the general account will be credited with 3.5% interest
annually. The interest earned will be allocated to the Subaccounts and the Fixed
Account in the same manner as net premiums.
If the policy debt exceeds the accumulation value less any accrued expenses and
charges, you must pay the excess. We will send you a notice of the amount you
must pay. If you do not pay this amount within 61 days after we send notice, the
policy will terminate without value. We will send the notice to you and to any
assignee of record at our Home Office.
Any loan transaction will permanently affect the values of this policy.
11.4 REPAYING A POLICY DEBT
You can repay a policy debt in part or in full anytime during the Insured's life
prior to the maturity date while this policy is in force. Repayment must be
specifically identified as such by you. When a loan repayment is made,
accumulation value in the general account related to that payment will be
transferred into the Subaccounts and the Fixed Account in the same proportion
that net premiums are being allocated.
SECTION 12. PAYMENT OPTIONS
Life insurance proceeds, the net cash surrender value, or benefits at maturity
will be paid in one lump sum if no option is chosen. Subject to the rules stated
below, all or part of the proceeds can be paid under a payment option.
During the Insured's life, you can choose a payment option. A beneficiary can
choose a payment option if you have not chosen one at the Insured's death.
<PAGE>
12.1 PAYMENT OPTION RULES
There are several important payment option rules:
a. An association, corporation, partnership or fiduciary can only
receive a lump sum payment or a payment under Option b.
b. If this policy is assigned, any amount due to the assignee will
first be paid in one sum. The balance, if any, may be applied under
any payment option.
c. If the payments under any option come to less than $100 each, we
have the right to make payments at less frequent intervals.
d. The rate of interest payable under Options a(i), a(ii) and b is
guaranteed at 3% compounded annually. Payments under Option c and d
are based on the 1983 A-G Individual Annuity Tables projected 17
years at 3-1/2% interest.
To choose an option, you must send a written request satisfactory to us to our
Home Office.
12.2 DESCRIPTION OF OPTIONS
Option ai
Interest Payment Option. We will hold any amount applied under this option.
Interest on the unpaid balance will be paid or credited each month at a rate
determined by us.
Option aii
Fixed Amount Payable Option. Each payment will be for an agreed fixed amount.
Payments continue until the amount we hold runs out.
Option b
Fixed Period Payment Option. Equal payments will be made for any period
selected, up to 20 years.
Option c
Lifetime Payment Option. Equal monthly payments are based on the life of a named
person. Payments will continue for the lifetime of that person. Variations
provide for guaranteed payments for a period of time or a lump sum refund.
Option d
Joint Lifetime Payment Option. Equal monthly payments are based on the lives of
two named persons. While both are living, one payment will be made each month.
When one dies, payments will continue for the lifetime of the other. Variations
provide for a reduced amount of payment during the lifetime of the surviving
person.
SECTION 13. NOTES ON OUR COMPUTATIONS
13.1 BASIS OF COMPUTATION
In our computations, we assume that the minimum values and reserves held for
benefits guaranteed in the Fixed Account will earn interest at an annual rate of
3.5%. We use mortality rates from the Commissioners 1980 Standard Ordinary
Smoker and Nonsmoker, Male and Female Continuous Function Mortality Tables in
computing minimum values and reserves for this policy. For ages 0-19 we use
rates based on the aggregate table. For ages above 19, the nonsmoker values from
these Tables are used when the Insured is a nonsmoker and the smoker values from
these Tables are used where the Insured is a smoker. The male values from these
Tables are used where the Insured is a male. The female values from these Tables
are used where the Insured is a female.
13.2 METHODS OF COMPUTING VALUES
We have filed a detailed statement of the method we use to compute policy values
and benefits with the state where this policy was delivered. All these values
and benefits are not less than those required by the laws of that state.
Reserves are calculated in accordance with the Standard Non-Forfeiture Law and
Valuation Law of the state in which this policy is delivered. In no instance
will reserves be less than the net cash surrender values.
Form 4055-10
<PAGE>
<TABLE>
<CAPTION>
TABLES OF SETTLEMENT OPTIONS
TABLE B (OPTION B) TABLE D (OPTION D)
MONTHLY INSTALLMENTS FOR MONTHLY INSTALLMENTS FOR EACH $1,000 OF NET PROCEEDS
EACH $1,000 OF NET PROCEEDS
MALE & MALE & MALE & MALE& MALE &
YEARS MONTHLY YEARS MONTHLY AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE
- ------------------------------- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 84.47 11 8.86 40 3.56 50 3.94 60 4.60 70 5.88 80 8.76
2 42.86 12 8.24 41 3.59 51 3.99 61 4.69 71 6.07 81 9.21
3 28.99 13 7.71 42 3.62 52 4.04 62 4.78 72 6.27 82 9.71
4 22.06 14 7.26 43 3.65 53 4.10 63 4.89 73 6.50 83 10.25
5 17.91 15 6.87 44 3.69 54 4.16 64 5.00 74 6.74 84 10.81
- ------------------------------ ---------------------------------------------------------------------------
6 15.14 16 6.53 45 3.72 55 4.22 65 5.12 75 7.01 85 11.51
7 13.16 17 6.23 46 3.76 56 4.29 66 5.25 76 7.30
8 11.68 18 5.96 47 3.80 57 4.36 67 5.39 77 7.62
9 10.53 19 5.73 48 3.84 58 4.43 68 5.54 78 7.96
10 9.61 20 5.51 49 3.89 59 4.51 69 5.70 79 8.34
- ------------------------------ -----------------------------------------------------------
</TABLE>
INCOME FOR PAYMENTS OTHER THAN MONTHLY WILL BE FURNISHED BY THE HOME OFFICE
UPON REQUEST.
TABLE D VALUES FOR COMBINATIONS OF AGES NOT SHOWN AND VALUES FOR 2 MALES OR
2 FEMALES WILL BE FURNISHED BY THE HOME OFFICE UPON REQUEST.
TABLE C (OPTION C) MONTHLY INSTALLMENTS FOR EACH $1,000 OF NET PROCEEDS
<TABLE>
<CAPTION>
MALE FEMALE
- ---------------------------------------------------- ----------------------------------------------------
LIFE MONTHS CERTAIN CASH LIFE MONTHS CERTAIN CASH
AGE ONLY 60 120 180 240 REF AGE ONLY 60 120 180 240 REF.
- ---------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40 3.84 3.84 3.83 3.82 3.80 3.77 40 3.64 3.64 3.63 3.63 3.62 3.60
41 3.88 3.88 3.87 3.86 3.83 3.81 41 3.67 3.67 3.66 3.66 3.65 3.63
42 3.93 3.93 3.92 3.90 3.87 3.84 42 3.70 3.70 3.70 3.69 3.68 3.66
43 3.98 3.97 3.96 3.94 3.91 3.88 43 3.74 3.74 3.73 3.73 3.71 3.70
44 4.02 4.02 4.01 3.99 3.95 3.92 44 3.78 3.78 3.77 3.76 3.75 3.73
- ----------------------------------------------------- --------------------------------------------------
45 4.08 4.07 4.06 4.03 3.99 3.97 45 3.82 3.82 3.81 3.80 3.78 3.77
46 4.13 4.13 4.11 4.08 4.04 4.01 46 3.86 3.86 3.85 3.84 3.82 3.80
47 4.19 4.18 4.16 4.13 4.09 4.06 47 3.90 3.90 3.89 3.88 3.86 3.84
48 4.25 4.24 4.22 4.18 4.13 4.11 48 3.95 3.95 3.94 3.93 3.90 3.88
49 4.31 4.30 4.28 4.24 4.18 4.16 49 4.00 4.00 3.99 3.97 3.95 3.93
- ----------------------------------------------------- --------------------------------------------------
50 4.37 4.37 4.34 4.30 4.23 4.21 50 4.05 4.05 4.04 4.02 3.99 3.97
51 4.44 4.43 4.40 4.36 4.29 4.27 51 4.10 4.10 4.09 4.07 4.04 4.02
52 4.51 4.50 4.47 4.42 4.34 4.32 52 4.16 4.16 4.15 4.12 4.09 4.07
53 4.59 4.58 4.54 4.48 4.40 4.38 53 4.22 4.22 4.20 4.18 4.14 4.12
54 4.67 4.66 4.62 4.55 4.45 4.45 54 4.29 4.28 4.26 4.23 4.19 4.17
- ----------------------------------------------------- --------------------------------------------------
55 4.76 4.74 4.70 4.62 4.51 4.52 55 4.35 4.35 4.33 4.30 4.24 4.23
56 4.85 4.83 4.78 4.70 4.57 4.59 56 4.42 4.42 4.40 4.36 4.30 4.29
57 4.94 4.92 4.87 4.77 4.64 4.66 57 4.50 4.49 4.47 4.43 4.36 4.35
58 5.04 5.02 4.96 4.85 4.70 4.74 58 4.58 4.57 4.54 4.50 4.42 4.42
59 5.15 5.13 5.06 4.94 4.76 4.82 59 4.67 4.66 4.62 4.57 4.48 4.48
- ----------------------------------------------------- --------------------------------------------------
60 5.27 5.24 5.16 5.02 4.83 4.90 60 4.76 4.74 4.71 4.65 4.55 4.56
61 5.39 5.36 5.27 5.11 4.89 4.99 61 4.85 4.84 4.80 4.73 4.62 4.63
62 5.52 5.49 5.38 5.20 4.95 5.08 62 4.95 4.94 4.89 4.81 4.68 4.71
63 5.66 5.62 5.50 5.30 5.02 5.18 63 5.06 5.05 4.99 4.90 4.75 4.80
64 5.81 5.77 5.63 5.39 5.08 5.29 64 5.18 5.16 5.10 4.99 4.82 4.89
- ----------------------------------------------------- --------------------------------------------------
65 5.98 5.92 5.76 5.49 5.14 5.39 65 5.30 5.28 5.21 5.08 4.89 4.98
66 6.15 6.09 5.90 5.59 5.20 5.51 66 5.44 5.41 5.33 5.18 4.96 5.08
67 6.33 6.26 6.04 5.69 5.26 5.62 67 5.58 5.55 5.45 5.28 5.03 5.19
68 6.53 6.45 6.19 5.79 5.32 5.75 68 5.73 5.70 5.59 5.39 5.10 5.30
69 6.74 6.64 6.34 5.89 5.37 5.88 69 5.90 5.86 5.73 5.50 5.17 5.42
- ----------------------------------------------------- --------------------------------------------------
70 6.96 6.85 6.50 5.99 5.42 6.02 70 6.07 6.03 5.87 5.61 5.24 5.54
71 7.20 7.06 6.66 6.09 5.46 6.16 71 6.26 6.21 6.03 5.72 5.30 5.67
72 7.46 7.29 6.83 6.18 5.51 6.31 72 6.47 6.40 6.19 5.83 5.36 5.81
73 7.73 7.53 7.00 6.28 5.54 6.47 73 6.69 6.62 6.36 5.94 5.42 5.96
74 8.02 7.79 7.17 6.36 5.58 6.63 74 6.94 6.84 6.54 6.05 5.47 6.11
- ----------------------------------------------------- --------------------------------------------------
75 8.32 8.05 7.34 6.45 5.61 6.81 75 7.20 7.08 6.72 6.16 5.51 6.28
76 8.66 8.34 7.52 6.53 5.64 6.99 76 7.48 7.34 6.91 6.27 5.56 6.45
77 9.01 8.63 7.69 6.60 5.66 7.19 77 7.78 7.61 7.10 6.37 5.59 6.64
78 9.39 8.94 7.87 6.67 5.68 7.39 78 8.11 7.90 7.30 6.46 5.63 6.83
79 9.80 9.27 8.04 6.74 5.70 7.60 79 8.47 8.21 7.50 6.55 5.65 7.03
- ----------------------------------------------------- --------------------------------------------------
80 10.23 9.61 8.20 6.79 5.71 7.83 80 8.85 8.54 7.70 6.63 5.68 7.25
81 10.70 9.96 8.37 6.85 5.72 8.06 81 9.27 8.89 7.90 6.71 5.70 7.48
82 11.20 10.32 8.52 6.89 5.73 8.31 82 9.72 9.26 8.09 6.78 5.71 7.72
83 11.72 10.69 8.67 6.93 5.74 8.57 83 10.21 9.64 8.28 6.84 5.73 7.98
84 12.29 11.07 8.81 6.97 5.75 8.84 84 10.74 10.05 8.46 6.89 5.74 8.25
85 12.89 11.46 8.95 7.00 5.75 9.13 85 11.32 10.47 8.63 6.94 5.74 8.53
- ----------------------------------------------------- --------------------------------------------------
</TABLE>
INCOME FOR PAYMENTS OTHER THAN MONTHLY WILL BE FURNISHED BY THE HOME OFFICE UPON
REQUEST.
TABLE C VALUES FOR AGES BELOW 40 AND ABOVE 85, AND VALUES FOR 300 AND 360 MONTHS
CERTAIN WILL BE FURNISHED BY THE HOME OFFICE UPON REQUEST.
Form 4055-11
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. NET CASH SURRENDER VALUE
IF ANY, PAYABLE AT MATURITY. DEATH BENEFIT PROCEEDS PAYABLE AT
DEATH OF INSURED PRIOR TO MATURITY DATE. FLEXIBLE PREMIUMS PAYABLE
DURING LIFETIME OF INSURED UNTIL MATURITY DATE (AGE 100).
SOME BENEFITS REFLECT INVESTMENT RESULTS. NON-PARTICIPATING.
Form 4055
NOTICE: AS OF THE EFFECTIVE DATE OF THIS RIDER, IT IS UNCERTAIN WHAT EFFECT THE
RECEIPT OF BENEFITS UNDER THIS RIDER WILL HAVE ON YOUR TAX STATUS. PLEASE
CONSULT YOUR PERSONAL TAX ADVISOR PRIOR TO REQUESTING SUCH BENEFITS.
ACCELERATED BENEFIT RIDER
FOR TERMINAL ILLNESS
CONSIDERATION
This rider is attached to and made a part of your policy and is issued in
consideration of the application. A copy of the application is attached to the
policy.
PREMIUMS
There are no additional premiums or cost of insurance deductions for this rider.
BENEFITS
We will pay an accelerated benefit to you if the Applicant is terminally ill,
subject to the provisions of this rider. This amount will be paid as a lump sum.
Payments other than as a lump sum may be made at your request, subject to our
approval.
DEFINITIONS
APPLICANT: The Applicant is the person who is terminally ill. The Applicant may
be the insured under the base policy or may be an insured who has coverage under
a rider attached to the base policy.
EFFECTIVE DATE: The effective date of coverage under this rider will be as
follows:
1. The policy date will be the effective date for all coverage provided in
the original application.
2. For any rider issued after the policy date, the effective date will be
the date shown on a supplement to the schedule pages.
ELIGIBLE COVERAGES: Eligible Coverages under this rider will be as follows:
1. When the Applicant is the base insured, Eligible Coverages will be the
base policy and any life insurance riders attached to the policy which
provide coverage on the base insured.
2. When the Applicant is other than the base insured, Eligible Coverages
will be the rider which is providing coverage.
Eligible Coverages will be determined as of the date we receive satisfactory
proof of terminal illness at the Home Office. Coverage will only be considered
eligible when it is outside its two year contestable period and has more than
two years until its maturity or final expiration date. Eligible Coverages will
also not include any possible future coverages provided by an optional purchase
or guaranteed insurability rider.
ELIGIBLE AMOUNT: Eligible Amount is that portion of the current specified amount
of the base policy considered "eligible" under Eligible Coverages. For any
Eligible Coverages which are provided by life insurance riders, the Eligible
Amount will be the lowest scheduled death benefit within two years after
satisfactory proof of terminal illness is received at the Home Office.
MAXIMUM ACCELERATED BENEFIT: For each Applicant, the maximum benefit if 50% of
the Eligible Amount for each Applicant, less an amount up to two guideline level
premiums for the base policy and any riders. This maximum benefit is subject to
the limitations described in the Total Accelerated Benefit provision.
TERMINAL ILLNESS: A non-correctable medical condition that, with a reasonable
degree of medical certainty, will result in the death of the Applicant in less
than 12 months from the date of the physician's statement and that was first
diagnosed while the policy was in force.
"YOU" AND "YOUR" refer to the owner of the policy to which this rider is
attached. The Owner may also be the Applicant.
"WE", "US" or "OUR" refer to Ameritas Life Insurance Corp. Our Home Office is
5900 "O" Street, Lincoln, Nebraska 68510.
SATISFACTORY PROOF OF TERMINAL ILLNESS
Before payment of any accelerated benefit, we will require you to provide us
with proof, satisfactory to us, that the Applicant has a terminal illness.
Satisfactory proof will include a properly completed claim form and a written
statement from a duly licensed physician who is licensed in the United States
and who is not yourself or the Applicant, nor related to either the Applicant or
yourself. We reserve the right to obtain a second medical opinion at our
expense.
TIR 45 Rev. 12-90
<PAGE>
EFFECT ON YOUR POLICY
The accelerated benefit first will be used to repay any outstanding policy loans
and unpaid loan interest. The accelerated benefit will be treated as a lien
against your policy values.
Death proceeds which are payable on the death of the Applicant will be reduced
by the amount of the lien and any policy loans, plus accrued interest.
After payment of the accelerated benefit, we will require that future premium
allocations be made to the Fixed Account. If sufficient premium to keep the
policy in force is not paid by the end of the grace period, premiums will be
paid by an addition to the lien for up to two years from the date we receive
satisfactory proof of terminal illness. After this two year period, you are
required to pay premiums when due to keep the policy in force. If the policy
lapses, the lien, any policy loans, and accrued interest will be deducted from
any cash values.
Your access to the cash surrender value of your policy and to the cash surrender
value of any riders through policy loans, partial withdrawals, if permitted, or
full surrender is limited to any excess of the cash surrender value over the
lien including any accrued interest.
INTEREST
We will charge interest on the amount of the lien. The interest accrues daily at
the same interest rate as the policy's loan interest rate. If a loan provision
is not included in the policy, interest accrues daily at an effective annual
interest rate of 8%.
Accrued interest will be added to the lien on the policy anniversary. Interest
does not continue to accrue on the lien when the lien and any policy loans, plus
accrued interest, equals the death benefit (prior to the deduction of the lien,
policy loans and accrued interest) of the policy and any riders.
CONDITIONS
The payment of any accelerated benefit is subject to the following conditions:
1. Any Eligible Coverages must be in force on the date we receive
satisfactory proof of terminal illness.
2. Any cash surrender value, without considering the effect of any
outstanding policy loans, must be less than the maximum accelerated
benefit.
3. We will not make payment of any accelerated benefit if that payment would
be less than $4,000.
4. The release of any collateral assignees, the release of all parties to
any "split dollar" agreements and the approval of any irrevocable
beneficiaries is required.
5. The policy must be collaterally assigned to us for an amount equal to the
lien and accrued interest. No changes to the policy are permitted without
our consent.
6. This rider allows for the accelerated payment of death benefit proceeds,
which would otherwise be payable to your beneficiary. This is not meant
to cause you to involuntarily be required to access and exhaust these
benefits. Therefore, you are not eligible for this benefit:
a. If you are required by law to use this benefit to meet the claims of
creditors, whether in bankruptcy or otherwise; or
b. If you are required by a government agency to use this benefit in
order to apply for, obtain, or otherwise keep a government benefit or
entitlement.
ADDITIONAL BENEFIT
If the maximum accelerated benefit for each Applicant is not paid initially and
it has been less than 12 months from the date we receive satisfactory proof of
terminal illness, an additional accelerated benefit may be paid up to the
difference, but for not less than $4,000. We may require additional satisfactory
proof of terminal illness at this time.
TOTAL ACCELERATED BENEFIT
The total amount we will pay as an accelerated benefit will not exceed $250,000
due to the terminal illness of any one Applicant even if there is more than one
policy with us or one of our affiliates which provides coverage on the
Applicant.
<PAGE>
ADMINISTRATIVE CHARGE
We may charge a one-time administrative charge which will be deducted from the
accelerated benefit. This charge will not exceed $50.
GENERAL PROVISIONS
INCONTESTABILITY: The validity of this rider cannot be contested after it has
been in force while the Applicant is alive for a period of two years from the
effective date of the rider.
REINSTATEMENT: This rider may be reinstated with the policy. It will be
reinstated if you meet the requirements for policy reinstatement. If you have
received benefits under this rider, the lien with accrued interest may be paid
or it will be reinstated as if the policy had never terminated.
TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:
1. On surrender of this rider to us; or
2. On termination of the policy to which this rider is attached.
NONPARTICIPATING: This rider is nonparticipating.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider.
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
TIR 45 Rev. 12-90
<PAGE>
CHILDREN'S PROTECTION RIDER
LEVEL TERM INSURANCE
CONSIDERATION
This rider is issued in consideration of the application and the payment of its
cost of insurance. A copy of the application is attached to the policy. The cost
of insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for this policy.
DEFINITIONS
COST OF INSURANCE: The cost of insurance for this rider is shown on the schedule
page.
DEPENDENT CHILD: A dependent child is a child born of a marriage, a stepchild, a
legally adopted child of the Insured or any child for which the Insured is
legally responsible. To qualify as a dependent child, the child must be at least
15 days of age and have not yet reached the rider anniversary nearest his or her
25th birthday. The child must either:
1. Be named in the application and the date of such application must be
before the child's 18th birthday; or
2. Qualify as a dependent child after the date of the application but before
the child's 18th birthday.
EFFECTIVE DATE: The effective date of coverage under this rider shall be as
follows:
1. The policy date shall be the effective date for all coverage provided in
the original application.
2. For any rider issued after the policy date, the effective date shall be
the date shown on a supplement to the schedule page.
3. For any insurance that has been reinstated, the effective date shall be
the monthly activity date that falls on or next follows the date we
approve the reinstatement.
EXPIRATION DATE: The date is also shown on the schedule page. It is the date on
which this rider is no longer effective.
RIDER BENEFICIARY: Unless otherwise provided, the owner will be the rider
beneficiary. If the owner is not living, then the beneficiary will be the
owner's spouse. If the spouse becomes the beneficiary and then dies, the
beneficiary will be the estate of the spouse. If there is no spouse when the
owner dies, the beneficiary will be the estate of the owner.
RIDER OWNER: The owner of the policy is the owner of this rider unless otherwise
provided. If the owner dies, the owner's spouse will become the owner. If the
spouse becomes the owner, and then dies, ownership will pass to the spouse's
estate. If there is no spouse at the owner's death, then ownership will pass to
the owner's estate.
RIDER SPECIFIED AMOUNT OF INSURANCE: The rider specified amount of insurance is
the insurance payable under this rider. The amount is shown on the schedule
page.
BENEFITS
We agree to pay the rider specified amount of insurance if a dependent child
dies while the policy and this rider are in force. The rider beneficiary will
receive the proceeds. Satisfactory proof of death of the dependent child is
required.
GENERAL PROVISIONS
INCONTESTABILITY: While the Insured and any dependent children covered are
alive, the validity of this rider cannot be contested after it has been in force
for a period of 2 years from the effective date of the rider or from the date of
reinstatement.
REINSTATEMENT: This rider may be reinstated with the policy if no more than 3
years have passed since the beginning of the grace period. Reinstatement must
occur before the expiration date of this rider. The requirements for
reinstatement are:
1. Receipt by us of satisfactory evidence of insurability of the Insured and
of each dependent child for whom coverage is being reinstated.
2. Payment of the minimum cost of insurance sufficient to keep the rider in
force for 3 months.
CPR 45
<PAGE>
DEATH OF THE INSURED: On the death of the Insured, the insurance under this
rider becomes paid-up term insurance. It will expire for each dependent child on
the earliest of the expiration date of this rider or the rider anniversary
nearest the child's 25th birthday.
The paid-up insurance may be surrendered for any or all of the dependent
children. It may be surrendered for its cash value which is the present value of
future guaranteed benefits. If surrender is within 30 days after a rider
anniversary, the cash value will not be less than the value on that anniversary.
The amounts will be furnished by the company on request.
SUICIDE PROVISION: If any dependent child covered under this rider commits
suicide while sane or in sane or takes his or her own life while insane within 2
years of the effective date of this rider or any reinstatement of this rider,
the total liability shall be the cost of insurance for such child.
Payment under this provision will not affect the coverage of any other dependent
child under this rider. The cost of insurance for this rider will not be
increased.
If the Insured commits suicide while sane or insane or takes his or her own life
while insane, this rider will become paid-up for each covered dependent child as
provided in "Death of the Insured".
TERMINATION OF RIDER: This rider will automatically terminate for all dependent
children on the earliest of these conditions:
1. The expiration date of this rider,
2. The monthly activity date on or next following the date we receive your
written request.
3. The surrender of this rider to us,
4. Termination of this policy; or
5. The policy maturity date.
Coverage under this rider will terminate for each dependent child on the
earliest of these conditions:
1. The rider anniversary nearest the dependent child's 25th birthday.
2. On conversion of this coverage. See "Conversion".
CONVERSION
While the policy and this rider are in full force, this rider may be
converted (exchanged) for a different policy. Evidence of insurability will not
be required.
Conversion can be made to a permanent nonpension policy subject to the following
rules:
1. No riders may be added to the new policy without satisfactory evidence of
insurability.
2. Application must be made and the first premium for the new policy paid
to us before this rider terminates for the dependent child on whom
coverage is being converted.
3. The dependent child on whom coverage is being converted must be alive on
the policy date of the new policy (the date of conversion).
4. The policy date of the new policy will be the date of conversion.
5. The new policy must be subject to our then current rules as to the amount
and the kind of policy issued and premiums charged.
Coverage under this rider for each dependent child may be converted at any time:
a. on or before the expiration date of this rider; or
b. the rider anniversary nearest the child's 25th birthday, whichever
occurs first.
The amount of the new policy will depend on when this rider is converted.
If coverage under this rider is converted before the termination of the rider
for a dependent child, the new policy will be for a face amount of insurance not
greater than the rider face amount of insurance. If coverage is converted at the
time of termination, the new policy will be for a face amount of insurance not
greater than 5 times the rider face amount of insurance.
<PAGE>
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE DEDUCTIONS AFTER RIDER TERMINATION DATE: We will not be
liable for the cost of insurance payments paid on this rider after it terminates
except to return them.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider.
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
CPR 45
<PAGE>
AMERTIAS LIFE INSURANCE CORP. LOGO
COST RECOVERY RIDER
CONSIDERATION
This rider is issued in consideration of the application. A copy of the
application is attached to the policy.
COST OF INSURANCE
There is no cost of insurance for this rider.
DEFINITIONS
OPTION DATE: The option date is the date on which you may choose to make a
special partial withdrawal. It is the first policy anniversary after (1) no
premium payments have been made for 6 policy years, and (2) the policy has been
in force for 10 years.
EFFECTIVE DATE: The effective date of coverage under this rider shall be as
follows:
1. The Policy Date shall be the effective date for all coverage provided in
the original application.
2. For any insurance that has been reinstated, the effective date shall be
the monthly activity date on or next following the date we approve the
reinstatement.
EXPIRATION DATE: This date is also shown in the schedule pages. It is the date
on which this rider is no longer effective.
While the policy and this rider are in force, you may elect to make a special
partial withdrawal. The specified amount of insurance will not be reduced by
this special partial withdrawal. The following conditions must be met in order
to make the special partial withdrawal:
1. There must be no policy debt on the date of the withdrawal.
2. The option may only be elected once and must be elected on the option
date defined above.
3. The amount which may be withdrawn cannot exceed the lesser of:
a. The sum of premiums paid,
b. $100,000, or
c. The net cash surrender value at the time of the withdrawal.
4. The amount of the partial withdrawal will be reduced by any partial
withdrawals made prior to the option date. It will also be reduced by a
withdrawal charge not to exceed $50.
5. We may delay making payment for up to six (6) months.
ELECTION OF OPTION
To elect to make this special partial withdrawal, you must give us propoer
written notice sixty (60) days prior to the option date. The regular partial
withdrawal provisions in the policy will not apply to his special partial
withdrawal.
GENERAL PROVISIONS
INCONTESTABILITY: The validity of this rider may be contested at any time.
REINSTATEMENT: This rider may be reinstated with the policy if no more than 3
years have passed since the date of termination if you meet the requirements for
reinstatement for the policy.
TERMINATION OF RIDER: This reider will automatically terminate on the earliest
of these conditions:
1. On the option date regardless of whether the option is elected;
2. On the expiration date of this rider;
3. On termination of the policy; or
4. On the policy maturity date.
NONPARTICIPATING: This ride is nonparticipating.
CRR 4094
<PAGE>
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of this policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider.
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
<PAGE>
AMERITAS LIFE INSURANCE CORP. LOGO
NOTICE: PLEASE CONSULT YOUR TAX ADVISOR. THERE MAY BE TAX CONSEQUENCES TO THE
ELECTION OF THIS BENEFIT.
EXTENDED MATURITY RIDER
BENEFITS
The Maturity Date of your policy may be extended beyond the date shown in the
policy schedule pages by your written election. The election must be made during
the 90-day period prior to the Maturity Date.
PREMIUMS
There are no extra premiums or cost of insurance deductions for this rider.
EFFECT ON YOUR POLICY AND ANY RIDERS
During the extension period:
1. We will not accept further premium payments.
2. We will not make the monthly deduction from your accumulation value for
the cost of insurance for the policy, for any riders, nor for any flat
extra rating charges.
3. The new Maturity Date will be the date of death of the Insured.
4. The death benefit will be the accumulation value.
5. This rider will not extend benefits past the original Maturity Date on
any other rider attached to your policy.
All other provisions of your policy and of any riders attached to your policy
not noted above will remain in effect while your policy and riders continue in
force.
TERMINATION OF RIDER
This rider will automatically terminate on the earliest of these conditions:
1. On your written request.
2. On surrender of this rider to us.
3. On termination of your policy.
4. On the date your surrender value is zero or less.
EFFECTIVE DATE
This rider will become effective on the policy date. However, if this rider is
added to an in-force policy, this rider will not become effective until the
effective date shown below.
EFFECTIVE DATE OF RIDER:
________________________________________________________
APPLIES ONLY WHEN RIDER IS ADDED TO AN IN-FORCE POLICY).
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivsosha /s/ Kenneth C. Louis
Secretary President
EMR 4095-A
<PAGE>
AMERITAS LIFE INSURANCE CORP. LOGO
GUARANTEED INSURABILITY RIDER
CONSIDERATION
This rider is issued in consideration of the application and payment of its
cost of insurance. A copy of the application is attached to the policy. The cost
of insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.
BENEFITS
You may buy additional insurance on the life of the Insured by increasing the
specified amount of insurance of the policy, subject to the provisions below.
Evidence of insurability is not required. The amount of the increase is equal to
the election amount. The policy and this rider must be in force and all due
premiums must have been paid during the option period before an option can be
effective.
DEFINITIONS
ELECTION AMOUNT: The election amount is the amount of the additional insurance
which is issued as an increase in the specified amount of insurance of the
policy. You must choose the election amount at the time this rider is issued.
The election amount you have chosen and the regular option dates are shown on
the schedule pages.
REGULAR OPTION DATES: The regular option dates are the policy anniversaries on
which the Insured's age at nearest birthday is 25, 28, 31, 34, 37 and 40.
ALTERNATE OPTION DATES: You may also choose an alternate option date in lieu of
a regular option date after:
1. the first marriage of the Insured after the effective date of this rider;
or
2. the birth of a child born of a marriage of the Insured, or for which the
Insured is legally responsible; or
3. the legal adoption of a child by the Insured.
Only one alternate option date may be chosen between the effective date of the
rider and the first regular option date and between each pair of successive
regular option dates.
Election of an alternative option will replace the next regular option date.
Therefore, the next regular option cannot be elected.
OPTION PERIOD: The option period is the time during which you may choose to
elect an option. For a regular option date, the option period is the 31 day
period on either side of such date. For an alternate option date, the option
period is the 60 days immediately after such date.
EFFECTIVE DATE: This date of coverage under this rider shall be as follows:
1. The policy date shall be the effective date for all coverage provided in
the original application.
2. For any instance that has been reinstated, the effective date shall be
the monthly activity date that falls on or next follows the date we
approve the reinstatement.
EXPIRATION DATE: This date is shown on the schedule page. It is the date on
which this rider is no longer effective.
CONDITIONS
Options elected under this rider are subject to the following conditions:
1. The increased specified amount will be subject to any ratings and
restrictions under the policy.
2. If any rider which provides total and permanent disability benefits is
attached to the policy, the disability benefits may be increased to cover
the increased specified amount without evidence of insurability. No
other riders may be added without satisfactory evidence of insurability.
3. If an option is effective while disability benefits are currently being
provided by a rider,
GIR 4093
<PAGE>
the disability benefit will be increased. This increase in disability
benefits will reflect any necessary higher minimum premium requirements
for the policy as if the increased insurance were issued as a separate
policy at the attained age of the Insured.
4. If a regular option is chosen, the effective date of the increased
specified amount will be the later of the regular option date or the
effective date of the election. If an alternate option is chosen, the
effective date will be the effective date of the election.
5. The election of an option will be effective when any required premium is
paid and written application signed by both you and the Insured is made
to us during an option period.
6. The Insured must be alive on the effective date.
7. The increase in specified amount will be treated in the same manner as an
increase granted under the terms of the policy to which this rider is
attached, except that the requirement of evidence of insurability will
be waived. Please see the Death Benefit provision in the policy for more
information.
GENERAL PROVISIONS
REINSTATEMENT: Coverage under this rider may be reinstated with the policy if no
more than 3 years have passed since the beginning of the policy grace period.
Reinstatement must occur before the expiration date of this rider. Such
reinstatement may occur any time before the last regular option date. The
requirements for reinstatement are:
1. Receipt by us of satisfactory evidence of insurability for the Insured.
2. Payment of the minimum cost of insurance sufficient to keep the rider in
force for 3 months.
RIDER TERMINATION DATE: This rider will terminate on the earliest of these
conditions:
1. The expiration date of this rider which is the policy anniversary nearest
the Insured's 40th birthday.
2. The effective date of an alternate option if between ages 37 and 40.
3. The surrender of this rider to us.
4. On the monthly activity date on or next following the date we receive
written request from you.
5. The termination of the policy.
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE DEDUCTIONS AFTER RIDER TERMINATION DATE: We will not be
liable for the cost of insurance deductions on this rider after it terminates
except to return them.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider.
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
<PAGE>
AMERITAS LIFE INSURANCE CORP. LOGO
PAYOR WAIVER OF MONTHLY DEDUCTIONS ON
DISABILITY OF A COVERED PERSON
CONSIDERATION
This rider is issued in return for the application and payment of its cost of
insurance. A copy of the application is attached to the policy. The cost of
insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.
COST OF INSURANCE
The calculation of the monthly cost of insurance for this rider is described in
the attached table.
DEFINITIONS
DISABILITY BENEFIT: For purposes of this rider, the disability benefit refers to
the monthly deduction on each monthly activity date for the base policy and any
riders and is equal to:
1. the current cost of insurance charge for the base policy and any riders;
2. the expense charges; and
3. the charges for specified amount increases, if any.
TOTAL DISABILITY: Total disability must begin after the effective date and
before the expiration date of this rider. It must result from bodily injury
which occurs or sickness which first manifests itself while this rider is in
force.
Total Disability means:
1. Total loss of the sight of both eyes. This loss must be irrecoverable;
or
2. Total loss of the use of both hands, both feet, or one hand and one foot.
This loss must be irrecoverable; or
3. The incapacity of the Covered Person to engage in any substantial duties
of his or her occupation for at least six consecutive months.
(Substantial duties includes managerial or supervisory functions.)
During the first 24 months of total disability, occupation means the usual
work, employment, business or profession in which the Covered Person was
engaged immediately before the date of disability. This includes
attendance at school or college as a full-time student. After 24 months of
total disability a Covered Person who is engaged in any occupation for
remuneration or profit will not be considered totally disabled.
COVERED PERSON: The Covered Person is the person on whom disability benefit
coverage is being offered. The applicant is the Covered Person until the
automatic substitution date. On and after this date, the Insured is the Covered
Person.
AUTOMATIC SUBSTITUTION DATE: The automatic substitution date is the policy
anniversary nearest the Insured's 23rd birthday.
ELECTION PERIOD: The election period begins on the policy anniversary nearest
the Insured's 18th birthday and ends on the automatic substitution date.
EFFECTIVE DATE: The effective date of coverage under this ride shall be as
follows:
1. The policy date shall be the effective date for all coverage provided in
the original application.
2. For any rider issued after the policy date, the effective date shall be
the date shown on a supplement to the schedule pages.
3. For any insurance that has been reinstated, the effective date shall be
the monthly activity date on or next following the date we approve the
reinstatement.
EXPIRATION DATE: This date is also shown on the schedule pages. It is the date
on which this rider is no longer effective.
PDIS 4094
<PAGE>
BENEFITS
While the Covered Person is totally disabled, the disability benefit will not be
deducted from the accumulation value. During this time, the policy and any
rider(s) will continue to be in force.
Monthly deductions falling due before we approve a claim for benefits will
continue to be deducted from the accumulation value. However, after total
disability has continued for six (6) consecutive months and we approve the
claim, any disability benefit which otherwise could have been paid under the
provisions of this rider will be credited to the accumulation value.
If total disability begins after the grace period, no benefit under this rider
will be paid.
COVERAGE CHANGES
We will provide disability benefit coverage on the applicant until the automatic
substitution date. At that time, the coverage automatically shifts to the
Insured. During the election period, on written request, coverage may be shifted
from the applicant to the Insured. This will be subject to evidence of
insurability of the Insured. This election, once we accept it, is irrevocable
(it cannot be changed).
If the applicant is the Covered Person and becomes totally disabled, the
disability benefit continues during a period of total disability until the
automatic substitution date. At that time, the Insured automatically
becomes the Covered Person. The disability benefit will cease and we will resume
deducting the cost of insurance for this rider from the accumulation value. If
the Insured is the Covered Person and becomes totally disabled, the disability
benefit continues so long as the disability continues. If the Insured becomes
totally disabled before the automatic substitution date, the disability benefit
will begin as of that date. It will continue as long as the disability
continues.
If the applicant dies before the beginning of the election period, no benefits
will be payable except that the disability benefit will not be deducted from the
accumulation value until the first day of the election period. At that time, the
Insured automatically becomes the Covered Person. If the applicant dies during
the election period, the Insured automatically becomes the Covered Person.
GENERAL PROVISIONS
NOTICE OF DISABILITY: To receive this benefit, written notice of claim must be
received at the Home Office. It must be received: (a) while the Covered Person
is living; (b) while the Covered Person is totally disabled; and (c) not later
than 9 months after the Covered Person has become totally disabled.
If such notice is not furnished in the required time limit, the claim will not
be accepted. But a late claim will be accepted if it can be shown that it was
not reasonably possible to meet the requirements and that notice was given as
soon as was reasonably possible. In no event, however, will the Covered Person
receive any benefit under this rider for a period beyond one year before the
date on which notice was received.
PROOF OF TOTAL DISABILITY: The disability benefit will not commence until we
receive satisfactory written proof that the Covered Person is totally disabled.
Proof must be presented at the Home Office: (a) while the Covered Person is
living; (b) before total disability has ended or been interrupted; and (c)
within 12 months after we receive the notice of total disability. Forms approved
by us must be used.
Similar proof that the total disability is continuing may be required at
reasonable intervals. If the Covered Person fails to furnish such proof, the
disability benefit will cease.
INCONTESTABILITY: While the Covered Person is alive, the validity of this rider
cannot be contested after it has been in force for a period of 2 years from the
effective date of the rider.
REINSTATEMENT: This rider may be reinstated with the policy subject to the
policy reinstatement provision. Reinstatement must occur before the expiration
date of this rider. Such reinstatement may occur before the policy anniversary
nearest the Covered Person's 60th birthday. The requirements for reinstatement
are:
1. Evidence of insurability is required on both the applicant and the
Insured, if the applicant is the Covered Person. Otherwise, evidence of
insurability will be required only on the Insured. This evidence must be
satisfactory to us.
2. Payment of the minimum cost of insurance sufficient to keep this rider in
force for 3 months.
<PAGE>
EXCLUSIONS: The Covered Person will not be eligible for the disability benefit
if the total disability on which the claim is based results from:
1. Self-inflicted bodily injury while sane or insane; other than accidental
injury; or
2. War or any act of war, whether declared or not, regardless of whether the
Covered Person is in the military, naval or air service.
TERMINATION OF RIDER: This rider will automatically terminate on the earliest
of these conditions:
1. On the expiration date of this rider;
2. On the monthly activity date on or next following the date we receive
your written request;
3. On surrender of this rider to us;
4. On termination of the policy;
5. On assignment of the policy; or
6. On the policy maturity date.
TERM RIDERS: If a renewable and convertible term rider is attached to the policy
during a benefit period, the cost of insurance for that rider will be waived
until the expiration date. If the Owner elects to convert that term rider, no
benefits will be paid under this rider on the conversion policy.
CHANGE OF POLICY: Once the disability benefit commences, you cannot change the
specified amount of insurance (except for any increases(s) which result from
exercising options under any Guaranteed Insurability Rider), the death benefit
option, the mode of the planned periodic premium payments, or change the policy
to another form of insurance.
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE PAYMENTS AFTER THE RIDER HAS TERMINATED: We will not be liable
for the cost of insurance payments on this rider after it terminates except to
return them.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider.
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
PDIS 4094
<PAGE>
COST OF INSURANCE TABLE
On each monthly activity date, the monthly cost of insurance for this rider is
equal to the product of A times B where:
A is a factor based on the attained age, sex and smoking habit of the
Covered Person and is shown in the table below. (Note: If this rider is
issued with a special rating, this factor will be increased based on that
rating. Any special rating will be shown on the Policy Schedule.)
B is the monthly deduction for the policy, including any table ratings and
any riders attached to the policy except for this rider.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MALE RATES FEMALE RATES MALE RATES FEMALE RATES
Ages Non-Smoker Smoker Non-Smoker Smoker Ages Non-Smoker Smoker Non-Smoker Smoker
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 0.0362 0.0328 30 0.0361 0.0525 0.0414 0.0523
1 0.0362 0.0328 31 0.0361 0.0525 0.0414 0.0523
2 0.0362 0.0328 32 0.0361 0.0525 0.0414 0.0537
3 0.0362 0.0328 33 0.0361 0.0525 0.0414 0.0559
4 0.0362 0.0328 34 0.0361 0.0525 0.0414 0.0575
5 0.0362 0.0328 35 0.0369 0.0531 0.0414 0.0611
6 0.0362 0.0328 36 0.0390 0.0551 0.0415 0.0628
7 0.0362 0.0338 37 0.0409 0.0573 0.0435 0.0641
8 0.0362 0.0352 38 0.0433 0.0595 0.0457 0.0661
9 0.0362 0.0371 39 0.0459 0.0618 0.0479 0.0661
10 0.0362 0.0381 40 0.0467 0.0621 0.0460 0.0661
11 0.0362 0.0388 41 0.0472 0.0628 0.0478 0.0661
12 0.0362 0.0374 42 0.0479 0.0632 0.0483 0.0661
13 0.0362 0.0370 43 0.0505 0.0639 0.0513 0.0668
14 0.0362 0.0419 44 0.0543 0.0645 0.0551 0.0704
15 0.0362 0.0419 45 0.0547 0.0666 0.0564 0.0719
16 0.0362 0.0419 46 0.0554 0.0681 0.0576 0.0731
17 0.0362 0.0419 47 0.0603 0.0702 0.0629 0.0797
18 0.0362 0.0419 48 0.0659 0.0763 0.0691 0.0875
19 0.0362 0.0419 49 0.0730 0.0840 0.0777 0.0979
20 0.0253 0.0362 0.0243 0.0413 50 0.0797 0.0855 0.0849 0.0992
21 0.0253 0.0362 0.0267 0.0456 51 0.0903 0.0960 0.0971 0.1116
22 0.0253 0,0362 0.0289 0.0489 52 0.1028 0.1030 0.1120 0.1149
23 0.0253 0.0362 0.0308 0.0523 53 0.1014 0.1081 0.1146 0.1177
24 0.0253 0.0365 0.0322 0.0523 54 0.1044 0.1115 0.1299 0.1376
25 0.0253 0.0409 0.0348 0.0523 55 0.1133 0.1281 0.1517 0.1609
26 0.0283 0.0447 0.0356 0.0523 56 0.1297 0.1421 0.1540 0.1819
27 0.0308 0.0484 0.0377 0.0523 57 0.1425 0.1571 0.1695 0.2058
28 0.0336 0.0525 0.0393 0.0523 58 0.1564 0.1731 0.1917 0.1917
29 0.0361 0.0525 0.0414 0.0523 59 0.1700 0.1700 0.2150 0.2150
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
PDIS 4094
<PAGE>
AMERITAS LIFE INSURANCE CORP. LOGO
WAIVER OF MONTHLY DEDUCTIONS ON
DISABILITY
CONSIDERATION
This rider is issued in return for the application and payment of its cost of
insurance. A copy of the application is attached to the policy. The cost of
insurance for this rider is deducted from the accumulation value at the same
time and in the same manner as the cost of insurance for the policy.
COST OF INSURANCE
The calculation of the monthly cost of insurance for this rider is described in
the attached table.
DEFINITIONS
DISABILITY BENEFIT: For purposes of this rider, the disability benefit refers to
the monthly deduction on each monthly activity date for the base policy and any
riders and is equal to:
1. the current cost of insurance charge for the base policy and any riders;
2. the expense charges; and
3. the charges for specified amount increases, if any.
TOTAL DISABILITY: Total disability must begin after the effective date and
before the expiration date of this rider. It must result from bodily injury
which occurs or sickness which first manifests itself while this rider is in
force.
Total Disability means:
1. Total loss of the sight of both eyes. This loss must be irrecoverable;
or
2. Total loss of the use of both hands, both feet, or one hand and one foot.
This loss must be irrecoverable; or
3. The incapacity of the Insured to engage in any substantial duties of his
or her occupation for at least six consecutive months. (Substantial
duties includes managerial or supervisory functions.) During the first 24
months of total disability, occupation means the usual work, employment,
business or profession in which the Insured was engaged immediately
before the date of disability. This includes attendance at school or
college as a full-time student. After 24 months of total disability, an
Insured who is engaged in any occupation for remuneration or profit will
not be considered totally disabled.
EFFECTIVE DATE: The effective date of coverage under this rider shall be as
follows:
1. The policy date shall be the effective date for all coverage provided in
the original application.
2. For any rider issued after the policy date, the effective date shall be
the date shown on a supplement to the schedule pages.
3. For any insurance that has been reinstated, the effective date shall be
the monthly activity date on or next following the date we approve
the reinstatement.
EXPIRATION DATE: This date is also shown on the schedule pages. It is the date
on which this rider is no longer effective.
BENEFITS
While the Insured is totally disabled, the disability benefit will not be
deducted from the accumulation value. During this time, the policy and any
rider(s) will continue to be in force.
Monthly deductions falling due before we approve a claim for benefits will
continue to be deducted from the accumulation value. However, after total
disability has continued for six (6) consecutive months and we approve the
claim, any disability benefit which otherwise could have been paid under the
provisions of this rider will be credited to the accumulation value.
If the total disabilty begins after the grace period, no benefit under this
rider will be paid.
WDIS 4094
<PAGE>
GENERAL PROVISIONS
NOTICE OF DISABILITY: To receive this benefit, written notice of claim must be
received at the Home Office. It must be received: (a) while the Insured is
living; (b) while the Insured is totally disabled; and (c) not later than 9
months after the Insured has become totally disabled.
If such notice is not furnished in the required time limit, the claim will not
be accepted. But a late claim will be accepted if it can be shown that it was
not reasonably possible to meet the requirements and that notice was given as
soon as was reasonably possible. In no event, however, will the Insured receive
any benefit under this rider for a period beyond one year before the date on
which notice was received.
PROOF OF TOTAL DISABILITY: The disability benefit will commence once we receive
satisfactory written proof that the Insured is totally disabled. Proof must be
presented at the Home Office: (a) while the Insured is living; (b) before total
disability has ended or been interrupted; and (c) within 12 months after we
receive the notice of total disability. Forms approved by us must be used.
Similar proof that the total disability is continuing may be required at
reasonable intervals. If the Insured fails to furnish such proof, the disability
benefit will cease.
INCONTESTABILITY: While the Insured is alive, the validity of this rider cannot
be contested after it has been in force for a period of 2 years from the
effective date of this rider.
REINSTATEMENT: Coverage under this rider may be reinstated with the policy
subject to the policy reinstatement provision. Reinstatement must occur before
the expiration date of this rider. Such reinstatement may occur any time before
the policy anniversary nearest the Insured's 60th birthday. The requirements for
reinstatement are:
1. Receipt of satisfactory evidence of insurability.
2. Payment of the minimum cost of insurance sufficient to keep this rider in
force for 3 months.
Exclusions: The insured will not be eligible for the disability benefit if the
total disability on which the claim is based results from:
1. Self-inflicted bodily injury while sane or insane, other than accidental
injury; or
2. War or any act of war, whether declared or not, regardless of whether the
Insured is in the military, naval or air service.
TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:
1. On the expiration date of this rider;
2. On the monthly activity date on or next following the date we receive your
written request;
3. On surrender of this rider to us;
4. On termination of this policy; or
5. On the policy maturity date.
TERM RIDERS: If a renewable and convertible term rider is attached to the policy
during a benefit period, the cost of insurance for that rider will be waived
until the expiration date. If the Owner elects to convert that term rider, no
benefits will be paid under this rider on the conversion policy.
CHANGE OF POLICY: Once the disability benefit commences, you cannot change the
specified amount of insurance (except for any increase(s) which result from
exercising options under any Guaranteed Insurability Rider), the death benefit
option, the mode of the planned periodic premium payments, or change the policy
to another form of insurance.
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE PAYMENTS AFTER THE RIDER HAS TERMINATED: We will not be liable
for the cost of insurance payments on this rider after it terminates except to
return them.
INCORPORATION OF POLICY PROVISIONS INTO RIDER:
The provisions of the policy are hereby referred to and made a part of this
rider.
AMERITAS LIFE INSURANCE CORP.
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
<PAGE>
COST OF INSURANCE TABLE
On each monthly activity date, the monthly cost of insurance for this rider is
equal to the product of A times B where:
A is a factor based on the attained age, sex and smoking habit of the Insured
and is shown in the table below. (Note: If this rider is issued with a
special rating, this factor will be increased based on that rating. Any
special rating will be shown on the Policy Schedule).
B is the monthly deduction for the policy, including any table ratings and any
riders attached to the policy except for this rider.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MALE RATES FEMALE RATES MALE RATES FEMALE RATES
Ages Non-Smoker Smoker Non-Smoker Smoker Ages Non-Smoker Smoker Non-Smoker Smoker
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15 0.0362 0.0419 40 0.0467 0.0621 0.0460 0.0661
16 0.0362 0.0419 41 0.0472 0.0628 0.0478 0.0661
17 0.0362 0.0419 42 0.0479 0.0632 0.0483 0.0661
18 0.0362 0.0419 43 0.0505 0.0639 0.0513 0.0668
19 0.0362 0.0419 44 0.0543 0.0645 0.0551 0.0704
20 0.0253 0.0362 0.0243 0.0413 45 0.0547 0.0666 0.0564 0.0719
21 0.0253 0.0362 0.0267 0.0456 46 0.0554 0.0681 0.0576 0.0731
22 0.0253 0.0362 0.0289 0.0489 47 0.0603 0.0702 0.0629 0.0797
23 0.0253 0.0362 0.0308 0.0523 48 0.0659 0.0763 0.0691 0.0875
24 0.0253 0.0365 0.0322 0.0523 49 0.0730 0.0840 0.0777 0.0979
25 0.0253 0.0409 0.0348 0.0523 50 0.0797 0.0855 0.0849 0.0992
26 0.0283 0.0447 0.0356 0.0523 51 0.0903 0.0960 0.0971 0.1116
27 0.0308 0.0484 0.0377 0.0523 52 0.1028 0.1030 0.1120 0.1149
28 0.0336 0.0525 0.0393 0.0523 53 0.1014 0.1081 0.1146 0.1177
29 0.0361 0.0525 0.0414 0.0523 54 0.1044 0.1115 0.1299 0.1376
30 0.0361 0.0525 0.0414 0.0523 55 0.1133 0.1281 0.1517 0.1609
31 0.0361 0.0525 0.0414 0.0523 56 0.1297 0.1421 0.1540 0.1819
32 0.0361 0.0525 0.0414 0.0537 57 0.1425 0.1571 0.1695 0.2058
33 0.0361 0.0525 0.0414 0.0559 58 0.1564 0.1731 0.1917 0.1917
34 0.0361 0.0525 0.0414 0.0575 59 0.1700 0.1700 0.2150 0.2150
35 0.0369 0.0531 0.0414 0.0611
36 0.0390 0.0551 0.0415 0.0628
37 0.0409 0.0573 0.0435 0.0641
38 0.0433 0.0595 0.0457 0.0661
39 0.0459 0.0618 0.0479 0.0661
- --------------------------------------------------------------------------------
</TABLE>
WDIS 4094
<PAGE>
AMERITAS LIFE INSURANCE CORP. LOGO
REDUCED LOAN INTEREST RATE RIDER
CONSIDERATION
This rider is issued in consideration of the application. A copy of the
application is attached to the policy.
COST
There is no cost for this rider.
DEFINITIONS
START DATE: The 10th policy anniversary or the policy anniversary nearest the
Insured's 55th birthday, whichever is later.
RIDER AMOUNT: For the policy year following the Start Date, the Rider Amount is
equal to 10% of the accumulation value on the Start Date. For each subsequent
policy year, the Rider Amount is equal to the Rider Amount in the prior policy
year times 1.04 plus 10% of the accumulation value on the Start Date.
EXAMPLE: For issue age 35, the Start Date is the policy anniversary nearest the
55th birthday. Assume that at age 55, the accumulation value is $100,000.
Policy Year After Age Rider Amount
--------------------- ------------
55 $10,000.00
56 20,400.00
57 31,216.00
58 42,444.64
59 54,163.23
60 66,329.75
61 78,982.94
62 92,142.26
63 105,827.95
64 120,061.07
65 134,863.51
66 150,258.05
67 166,268.38
For subsequent ages
continue with above formula
BENEFITS
On and after the Start Date, the total loan up to the Rider Amount will be
charged a reduced interest rate. Total loan means any outstanding policy debt
plus new loans. Total loans up to the Rider Amount are subject to the
availability of loans as described in the loan provisions of the policy.
INTEREST
After the Start Date, the total loan up to the Rider Amount will be charged an
effective loan interest rate not to exceed 4% per year. Loans in excess of the
Rider Amount will be charged the interest rate as stated in the loan provisions
of the policy.
The interest credited on the borrowed portion of the accumulation value will be
3.5%.
GENERAL PROVISIONS
EFFECTIVE DATE: The effective date of this rider shall be the policy date.
For any insurance that has been reinstated, the effective date shall be the
monthly activity date on or next following the date we approved the
reinstatement.
INCONTESTABILITY: The validity of this rider cannot be contested.
REINSTATEMENT: This rider may be reinstated with the policy if no more than 3
years have passed since the date of termination. You must meet the requirements
for reinstatement of the policy as described in the policy.
TERMINATION OF RIDER: This rider will automatically terminate on the earliest of
these conditions:
1. On surrender of this rider to us;
2. On termination of the policy;
3. On the policy maturity date.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of this policy are
hereby referred to and made apart of this rider unless otherwise specified in
this rider.
AMERITAS LIFE INSURANCE CORP. LOGO
/s/ Norman M. Krivosha /s/ Kenneth C. Louis
Secretary President
PLR 4094
RESTATED ARTICLES OF INCORPORATION
OF
AMERITAS LIFE INSURANCE CORP.
MARCH 31, 1998
ARTICLE I
Section 1
Name
----
The name of the Corporation is Ameritas Life Insurance Corp. (the
"Corporation"). The principal place of business of the Corporation shall be at
Lincoln, Lancaster County, Nebraska.
Section 2
Resident Agent
--------------
The resident agent to the Corporation shall be Norman M. Krivosha whose address
is the Corporation office located at 5900 "O" Street, Lincoln, Nebraska.
ARTICLE II
Section 1
The Restated Articles of Incorporation shall commence and be in existence on
January 1, 1998 at 12:01 a.m.
Section 2
Duration
--------
The period of the Corporation's duration is perpetual.
ARTICLE III
Purposes
--------
The purposes for which the Corporation is organized are:
(a) To transact a life, including variable life, and accident and
health insurance business to the extent and in the manner permitted
by law and in accordance with such licenses, certificates of
authority, and permits
<PAGE>
as the regulatory agencies of the states and jurisdictions in
which the Corporation may transact business, shall issue to it;
(b) To issue policies, certificates, bonds and other contracts of
insurance conforming in all particulars with the laws and
regulations relating thereto;
(c) To enter into reinsurance contracts and treaties; and
(d) To do everything necessary, proper, advisable or convenient for
the accomplishment of the purposes hereinabove set forth, and to do
all other things incidental thereto or connected therewith which are
not forbidden by the laws of the State of Nebraska or by these
Articles of Incorporation.
ARTICLE IV
Section 1
Authorized Shares
-----------------
The total number of shares which the Corporation has authority to issue is 25
million shares of capital stock, having a par value of $0.10 per share.
Section 2
The Board of Directors may determine, in whole or in part, the preferences,
limitations, and relative rights within the limits set forth in Neb. Rev. Stat.
Section 21-2035, of (a) any class of shares before the issuance of any share of
that class or (b) one or more series within a class before the issuance of any
shares of that series.
ARTICLE V
Section 1
The business and affairs of the Corporation shall be conducted by a Board of
Directors numbering not less than nine (9) nor more than twenty-one (21) divided
into three classes as nearly equal in number as may be, as the By-laws of the
Corporation shall provide. At least three (3) directors shall be residents of
Nebraska. The term of office of each director shall be three (3) years and until
his or her successor shall be elected and qualified.
-2-
<PAGE>
Section 2
The Board of Directors shall exercise all of the corporate powers of the
Corporation, except as otherwise provided by law, and shall manage all the
property, business, and affairs of the Corporation. The majority of the Board of
Directors shall constitute a quorum. The Board of Directors may provide for the
appointment of an Executive Committee from among its number and may, to the
extent allowed by law, delegate to such Committee any or all of its powers and
authority not reserved or restricted by these Articles. Such delegation of
powers and authority shall be set out in the By-laws of the Corporation.
Section 3
The Board of Directors shall have full power from time-to-time to make, alter,
amend or rescind by-laws, rules, and regulations for the conduct of the business
and affairs of the Corporation in conformity with the provisions of these
Articles of Incorporation and to employ or provide for the employment of such
officers and agents and appoint such committees as it may, in its discretion,
find appropriate for the conduct of such business and affairs.
Section 4
The initial Board of Directors shall consist of thirteen (13) members. The
initial Board of Directors who shall serve a term expiring at the annual meeting
of the Corporation in year set forth following their respective names above and
until their successors are elected and qualified shall be:
James P. Abel 2000
Duane W. Acklie 1998
Lawrence J. Arth 1998
William W. Cook, Jr. 1998
Bert A. Getz 1999
James R. Knapp 2000
Robert F. Krohn 1999
Kenneth C. Louis 1998
Wilfred J. Maddux 1999
Paul C. Schorr, III 2000
William C. Smith 1999
Neal E. Tyner 2000
Winston J. Wade 1998
Section 5
Any vacancy in the Board of Directors occurring during the term of any director
may be filled by the Board of Directors for the period from and after the
appointment of such individual until the next regular election of directors, at
which time the newly appointed director shall stand for election for the
remaining unexpired term of such
-3-
<PAGE>
director. Such a selection shall be made by a majority vote of the full number
of directors.
Section 6
The Board of Directors shall annually elect either a Chairman of the Board or a
President or both, either of whom may be designated by the Board of Directors as
the Chief Executive Officer or Chief Operating Officer, or both, a Secretary, a
Treasurer, and such Vice Presidents as may be provided for by the By-laws, and
shall appoint or employ or provide for the appointment or employment of such
additional officers and employees as the Board of Directors shall determine to
be desirable. One person may hold more than one executive office at a time,
except that the Chairman of the Board or the President may not hold the office
of Secretary, Treasurer or Vice President.
ARTICLE VI
Section 1
The annual meeting of the shareholders shall be held at the Home Office of the
Corporation on such day and at such time of day as may be determined by the
Board of Directors, but in no event later than June 30, of each year. Special
meetings of Corporation may be called at any time by the Chief Executive Officer
and shall be called by the Chief Executive Officer upon request from the
majority of the Board of Directors. Notice of every special meeting of
Corporation shall be delivered to each of the shareholders entitled to vote at
his or her last known address not less than ten (10) nor more than fifty (50)
days prior to the date set for the meeting. Such notice shall state the date and
place of the special meeting, as well as the purpose for which it is called.
Section 2
A quorum at any annual or special meeting of the members of the Corporation
shall consist of a majority of the outstanding shares.
ARTICLE VII
Pursuant to the provisions of Neb. Rev. Stat. Section 21-20,110, the Corporation
obligates itself in advance to provide indemnification in accordance with the
provisions of Neb. Rev. Stat. Section 21-20,105 and shall be obligated to
provide indemnification to the fullest extent permitted by law, including the
provisions of Neb. Rev. Stat. Sections 21-20,102 to 21-20,111.
-4-
<PAGE>
ARTICLE VIII
Except as otherwise provided by law, these Articles may be amended at any annual
meeting of the members by a vote of two-thirds of the qualified voters present
and voting in person or by proxy or at a special meeting of the members by a
like vote, but no amendment shall be acted upon at a special meeting unless the
notice of such meeting includes a copy of the proposed amendment.
-5-
<PAGE>
CERTIFICATION
I, Norman M. Krivosha, duly elected and qualified Secretary of Ameritas
Life Insurance Corp., Lincoln, Nebraska, hereby certify that the attached
Restated Articles of Incorporation, is a true and exact copy of the Restated
Articles of Incorporation duly adopted by the Board of Directors of Ameritas
Life Insurance Corp. on February 27, 1998, and that said Restated Articles of
Incorporation are in full force and effect.
IN WITNESS WHEREOF, I have affixed my name as Secretary and have caused the
corporate seal of said corporation to be hereunto affixed this 1st day
----------
of April, 1998.
-------------
/s/Norman M. Krivosha
---------------------------
Secretary
Ameritas Life Insurance Corp.
Corporate Seal
APPLICATION FOR AMERITAS LIFE INSURANCE CORP. 1010-L
VARIABLE UNIVERSAL (HEREINAFTER REFERRED TO AS ALIC)
LIFE (LL-VUL) ONE AMERITAS WAY
P.O. BOX 81889
Part 1 LINCOLN, NE 68501-1889
- --------------------------------------------------------------------------------
Instructions: Please print clearly in black ink. This form will be photocopied.
- --------------------------------------------------------------------------------
1 INSURED
If no policy owner _________________________ __________________________
is specified in Name: Last/First/MI Social Security #
section 2, the
Insured will be _________________________ __________________________
the policy owner. Address Date of Birth: mo. day yr.
_________________________ __________________________
City/State/Zip Birthplace (State)
_________________________ [ ] Male [ ] Female
Occupation Employer
Is this insurance part of
an employer-sponsored plan? [ ] Yes [ ] No
- --------------------------------------------------------------------------------
2 POLICY OWNER
Complete only if _________________________ ____________________________
different from Full Name Social Security #/Tax ID #
the Insured.
_________________________ ____________________________
(IF A TRUST, GIVE Relationship to Insured Date of Birth: mo. day yr.
TRUSTEE, TRUST NAME
& TRUST DATE) _________________________
Occupation Employer ____________________________
Trust Date: mo. day yr.
- --------------------------------------------------------------------------------
3 MAILING ADDRESS ______________________________________________________
OF OWNER Address
All notices will be ______________________________________________________
sent to this address. City/State/Zip
- --------------------------------------------------------------------------------
4 BENEFICIARY
Unless otherwise _________________________ ____________________________
indicated, multiple Primary Relationship to Insured
beneficiaries shall
be paid equally or _________________________ ____________________________
to the survivor(s). Contingent Relationship to Insured
- -------------------------------------------------------------------------------
5 DEATH BENEFIT Amount of Insurance $ _____ Death Benefit Option
(select only one)
[] Option A (DEATH BENEFIT
IS THE AMOUNT OF
INSURANCE)
[] Option B (DEATH BENEFIT
IS THE AMOUNT OF
INSURANCE PLUS THE
ACCUMULATION VALUE)
- --------------------------------------------------------------------------------
6 TOBACCO USE Has the Proposed Insured smoked one or [ ] Yes [ ] No
more cigarettes in the past twelve months?
Has the Proposed Insured used any form [ ]Yes [ ] No
of tobacco in the past twelve months?
(IF YES, PLEASE EXPLAIN THE TYPE OF USE AND FREQUENCY)
____________________________________________________________
- --------------------------------------------------------------------------------
7 OPTIONAL RIDERS [] Waiver of Monthly [] Children's Protection Rider
Deductions
[] Payor Waiver of Monthly [] Guaranteed Insurability
Deductions (ONLY IF Option (ONLY IF INSURED IS
INSURED IS AGE 14 & AGE 37 & UNDER)
UNDER) $ ______________________________
[] _______________________ Election Amount (MIN. $25,000,
MAX. $50,000)
- --------------------------------------------------------------------------------
8 PREMIUM [] Annual [] Semi-Annual [] Quarterly [] Monthly Bank
MODE [] Single $ _______ [] Payroll Deduction Draft*
Please select (COMPLETE THE
which frequency AUTOMATIC BANK
you would like to DRAFT SECTION
make payments. FOUND ON THE
OPTIONAL PROGRAMS
PAGE)
[]1035 Exchange $___ from _______________ (COMPLETE ABSOLUTE
(NAME OF COMPANY) ASSIGNMENT FORM
INCLUDED IN
BOOKLET)
Planned Modal Premium $___ Initial Premium (paid with
application $ ________________
- --------------------------------------------------------------------------------
ALL PREMIUM CHECK MUST BE MADE PAYABLE TO AMERITAS LIFE INSURANCE CORP.
DO NOT LEAVE THE PAYEE BLANK OR MAKE CHECK PAYABLE TO THE REPRESENTATIVE.
041197P
LL-VUL REV. 10-96 Page 1 of 4 Pages
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
9 ALLOCATION VANGUARD NEUBERGER & BERMAN BERGER
Whole VARIABLE INSURANCE FUND ADVISORS MANAGEMENT TRUST INSTITUTIONAL PRODUCTS TRUST
percentages <S> <C> <C>
only, must Money Market ______% Limited Maturity Bond ________% IPT-100 Fund ________%
total 100%. High Grade Bond ______% Balanced ________% IPT Small Co. Growth Fund ____%
High Yield Bond ______% Partners ________% ______________________________%
Balanced ______% Growth ________% ______________________________%
Equity Income ______% ______________________________% ______________________________%
Equity Index ______% ______________________________% ALIC
Growth ______% ______________________________% Fixed Account ________________%
Small Company Growth ______% ______________________________%
International ______% ______________________________% Total______________________100%
</TABLE>
- --------------------------------------------------------------------------------
10 TELEPHONE I hereby authorize and direct ALIC to make allowable
AUTHORIZATION transfers of funds or reallocation of net premiums
among available subaccounts or to complete other financial
Unless waived, transactions as may be allowed by the ALIC at the time
the policy owner of request, based upon instructions received from the
will have Policy Owner by phone. ALIC will not be liable
automatic for following instructions communicated by telephone that
telephone it reasonably believes to be genuine. ALIC will employ
transfer reasonable procedures, including requiring the policy
authorization. number to be stated, tape recording all instructions, and
mailing written confirmations. If ALIC does not employ
reasonable procedures to confirm that instructions
communicated by telephone are genuine, ALIC may be liable
for any losses due to unauthorized or fraudulent
instructions.
I understand: a) all telephone transactions will be
recorded; and b) this authorization will continue to be in
force until the earlier of (1) written revocation by the
Policy Owner is received by ALIC or (2) ALIC discontinues
this privilege.
[] I elect NOT to have telephone transfer authorization.
- --------------------------------------------------------------------------------
11 EXISTING LIFE YEAR TYPE OF
INSURANCE AMOUNT PURCHASED POLICY NAME OF COMPANY
List all life a. ___________ __________ ___________ __________________
insurance
existing on b. ___________ __________ ___________ __________________
life of
Insured. (If c. ___________ __________ ___________ __________________
"None" so
state)
- --------------------------------------------------------------------------------
12 REPLACEMENT Will the proposed policy replace or change any [] YES []NO
existing annuity or insurance policy?
(IF YES, PLEASE NOTE BELOW WHICH OF THE COVERAGES
LISTED IN Q.11 ABOVE ARE INTENDED TO BE REPLACED.
IF AN ANNUITY IS BEING REPLACED, PROVIDE COMPANY
NAME AND YEAR ISSUED.)
- --------------------------------------------------------------------------------
13 OTHER a. Has any company declined, postponed, []Yes [] No
COVERAGE modified, cancelled or refused to renew,
reinstate or issue insurance on the life
Please explain of the Proposed Insured? (IF YES, PLEASE
any yes answers. EXPLAIN)
_____________________________________________
NAME OF COMPANY REASON
b. Is any other life insurance application []Yes [] No
now pending or contemplated for the
Proposed Insured with any other company?
(IF YES, PLEASE EXPLAIN)
_____________________________________________
NAME OF COMPANY
- --------------------------------------------------------------------------------
14 OTHER Has the Proposed Insured:
INFORMATION
a. Been charged with a driving violation, []Yes [] No
Please explain had their licensed suspended or had any
any yes answers. restriction placed on their license within
the past 5 years?
(IF YES, GIVE DRIVER'S LICENSE
NUMBER) __________ STATE OF ISSUE ________
b. Participated in any vehicle racing, []Yes [] No
parachuting, hang gliding, scuba diving
or rodeos within the past 2 years, or is
any such activity comtemplated?
c. Flown within the past 3 years as a pilot, []Yes [] No
student pilot, crew member or had any
flying duties or is any such activity
contemplated?
d. Contemplate travel or residence in a []Yes [] No
foreign county in the near future?
(IF SO, WHERE) _________________________
- --------------------------------------------------------------------------------
LL-VUL REV. 10-96 Page 2 of 4 Pages
<PAGE>
- -------------------------------------------------------------------------------
15 HEALTH HISTORY Please provide the name and complete address of the
Answer the physician or medical center who would have the most current
following and complete medical records for the Proposed Insured.
questions
regarding the Name of personal physician/medical center__________________
Proposed Insured. (IF NONE, SO STATE)
Address____________________________________________________
Use Section 18 STREET CITY STATE ZIP
or attach a
separate sheet Reason last consulted ___________ Date ____________________
if necessary What treatment was given or medication prescribed? ________
to explain
"yes" answers. Has the Proposed Insured: (IF YES, PLEASE EXPLAIN)
NORTH CAROLINA 1. Ever been treated by a physician or other health care
RESIDENTS DO NOT professional in the last ten years for any of the
RESPOND TO following: Heart trouble, stroke, heart murmur, elevated
QUESTION 15.5. blood pressure, lung or respiratory disorder, tumor,
cancer, digestive disorder, diabetes, nervous or mental
MAINE RESIDENTS, disorder? (EXPLAIN) []Yes [] No
YOU MAY ANSWER 2. Consulted a physician or been examined or treated at a
QUESTION 2. "NO" hospital or other medical facility in the last five
IF YOU HAVE years? []Yes [] No
TESTED POSITIVE 3. Ever used narcotics, barbiturates, amphetamines,
FOR HIV AND cocaine, LSD, marijuana or hallucinogenic
HAVE NOT drugs? (EXPLAIN) []Yes [] No
DEVELOPED 4. Ever received counseling or treatment for the use
SYMPTOMS OF THE of alcohol or drugs? (EXPLAIN) []Yes [] No
DISEASE AIDS. 5. Ever been a member of any support group for the use of
alcohol or drugs? (EXPLAIN) []Yes [] No
Exact Height ____ ft.____in. Exact Weight________lbs.
[] Gained [] Lost_________ pounds in past year.
- --------------------------------------------------------------------------------
16 SUITABILITY a. Annual income from occupation $___
INFORMATION b. Annual income from other
sources $___ Indicate source(s)______
Questions a. c. Projected income for next (DIVIDENDS, RENTAL INCOME
through e. 12 months INTEREST, ETC.)
and the d. Estimated net worth
Investment (excluding home) $___
Objectives/ e. Tax Bracket ____
Risk Tolerance
section apply Investment Objectives Risk Tolerance
to the --------------------- -------------- (MULTIPLE INVESTMENT
Applicant OBJECTIVES MAY BE
(Policy Owner) ____ Long Term Gain ___ Low Risk SELECTED AND RANKED
if different ____ Short Term Gain ___ Medium Risk EQUALLY. FOR RISK
from the ____ Income ___ Speculative TOLERANCE, PLEASE
Proposed ____ Tax Advantaged ___ High Risk RANK 1 = HIGH)
Insured. ____ Safety of
Principal
Has the Proposed Insured used a different
name within the last five years?
(IF YES, LIST NAMES) ___________________________ []Yes [] No
Is the Proposed Insured a citizen of the
United States? _________________________________ []Yes [] No
If the Proposed Insured is a juvenile, are all
brothers and sisters (if any) insured for
an amount equal to or greater than this child?
(IF NO, EXPLAIN)________________________________ []Yes [] No
If the Proposed Insured is a juvenile, what is
the total amount of life insurance in force
on the parent(s)? $____________
- --------------------------------------------------------------------------------
17 TELEPHONE Home Phone: ( )___________ Best time to call: [] a.m. [] p.m.
INTERVIEW Business Phone: ( )_______ [] a.m. [] p.m.
To expidite If there are not the phone numbers of the
the Proposed Insured, who will be contacting?
underwriting
process, we ________________________________________ ____________________
may contact (NAME) (RELATIONSHIP)
you for a
personal (SHOW ANY UNUSUAL NAME PRONUNCIATION PHONETICALLY)____________
history
interview.
- --------------------------------------------------------------------------------
18 SPECIAL
INSTRUCTIONS
- --------------------------------------------------------------------------------
19 ENDORSEMENTS/ No change in the amount, plan, classification or benefits
CORRECTIONS will be effective unless agreed to in writing by the owner.
This space will not be used in MD, PA, WV or any other state
if not allowed by Statute or Insurance Dept. Regs.
Home Office
Use Only
- --------------------------------------------------------------------------------
LL-VUL REV. 10-96 Page 3 of 4 Pages
<PAGE>
- --------------------------------------------------------------------------------
20 AGREEMENTS I AGREE AS FOLLOWS:
1. Any policy including any endorsements issued as a result
NOTE FOR KENTUCKY of this application will, with this application and any
AND OHIO RESIDENTS: supplemental applications, be the entire insurance
Any person who, contract.
with intent to 2. No agent, broker or medical examiner can: a) waive the
defraud or knowing answers to any questions in this application; b) make or
that he is change any insurance contract; or c) waive any rights or
facilitating a rules of ALIC.
fraud against an 3. EXCEPT AS SPECIFIED OTHERWISE IN A RECEIPT PROVIDED UPON
insurer, submits A PAYMENT OF PREMIUM AT THE TIME OF APPLICATION,
an application INSURANCE WILL NOT BE EFFECTIVE UNTIL ALL OF THE
or files a claim FOLLOWING ARE MET: A) THE POLICY ISSUED BY ALIC IS
containing a false DELIVERED TO AND ACCEPTED BY THE APPLICANT; B) THE FIRST
or deceptive FULL PREMIUM IS PAID.
statement is 4. ALIC may change this application by an appropriate
guilty of notation in the space marked "Endorsements and
insurance fraud. Corrections": a) to correct apparent errors or
omissions; and b) to conform it with any policy rider
that may be issued. No change will be made in the
following without the applicant's written consent: a)
amount of insurance; b) plan of insurance;
c) classification of risks; or d) benefits. Acceptance
of any policy issued under this application ratifies any
amendments.
5. I UNDERSTAND THAT: A) THE AMOUNT AND DURATION OF THE
DEATH BENEFIT MAY VARY WITH INVESTMENT EXPERIENCE, LOANS
AND OTHER SPECIFIED CONDITIONS; B) POLICY VALUES NOT IN
THE FIXED ACCOUNT WILL INCREASE OR DECREASE IN
ACCORDANCE WITH THE EXPERIENCE OF THE SELECTED
INVESTMENT OPTIONS OF THE SEPARATE ACCOUNT; C) THE
AMOUNT OF THE BENEFIT PAYABLE ON SURRENDER IS NOT
GUARANTEED, BUT IS DEPENDENT ON THE THEN SURRENDER
VALUE; D) ILLUSTRATIONS OF BENEFITS, INCLUDING THE
DEATH BENEFIT, ARE AVAILABLE UPON REQUEST; AND E) THIS
POLICY MEETS MY INVESTMENT OBJECTIVES AND ANTICIPATED
FINANCIAL NEEDS.
- --------------------------------------------------------------------------------
21 DISCLOSURES I hereby acknowledge receipt of the current prospectus, and
any supplements, for this policy.
- --------------------------------------------------------------------------------
22 AUTHORIZATION I authorize any licensed physician, medical practitioner,
This authoriza- hospital, clinic or other medically related facility
tion or a photo- insurance company, Equifax or any information service or
copy of it, shall financial institution, family member, or associate to
remain valid for release to ALIC or any person or entity acting on its
use by ALIC for behalf, any personal information which is on file and
two (2) years relates to my/our health or mental condition, general
from the date character driving records, use of alcohol and drugs, and
below. hobbies of a hazardous nature.
In addition, I authorize the Medical Information Bureau
(MIB) to release to ALIC or its reinsurers, any personal
information which is on file and relates to me/us.
I also agree that I have received and read the "Notice of
ALIC's Insurance Information Practices," MIB and
Investigative Consumer Reports. I also understand that my
authorized representative and I can receive a copy of this
authorization if we so desire.
- --------------------------------------------------------------------------------
23 SUBSTITUTE W-9 I certify under penalty of perjury that: 1) the number
CERTIFICATION shown on this form is my correct taxpayor identification
number (or I am waiting for a number to be issued to me);
and 2) I am not subject to backup withholding because:
a) I am exempt from backup withholding, or b) I have not
been notified by the Internal Revenue Service that I am
subject to backup withholding as a result of a failure to
report all interest or dividends, or c) the IRS has
notified me that I am no longer subject to backup
withholding.
You must cross out item 2 if you have been notified
by the IRS that you are currently subject to backup
withholding because of underreporting interest or dividends
on your tax return.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT
TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
- --------------------------------------------------------------------------------
24 SIGNATURES I represent to the best of my knowledge and belief that all
statements and answers to this application are complete and
true.
Dated at (City, State) ____________On this Date____________
X ________________________ X ____________________________
Signature of Proposed Signature of Policy Owner
Insured (Parent or if NOT Proposed Insured,
Guardian if Juvenile) Parent or Guardian. (If a
Corporation or Trust, show
full name)
X _________________________________________________________
Signature(s) and Title of Officer or Trustee(s)
- --------------------------------------------------------------------------------
25 REPRESENTATIVE'S/ Do you have any knowledge or reason to believe that
AGENT'S replacement of existing insurance or annuity coverage may
STATEMENT be involved? []Yes [] No
Policy Delivery: I certify that: (1) the information provided by the owner
- --------------- has been accurately recorded; (2) a current prospectus and
Send to: []Owner all supplements were delivered; and (3) I have reasonable
[]Repre- grounds to recommend the purchase of the policy as suitable
sentative or the owner.
If not completed,
policy will be ___________________________________________________________
mailed to owner. Signature of Registered Representative/Agent
Medical Requirements __________________________________________________________
- -------------------- Representative/Agent Name (PLEASE PRINT) Code
[] Representative
to order ___________________________________________________________
[] Home Office to Agency or Broker/Dealer (PLEASE PRINT) Code
order
- --------------------------------------------------------------------------------
LL-VUL REV. 10-96 Page 4 of 4 Pages B/D Review
DESCRIPTION OF AMERITAS LIFE INSURANCE CORP'S (ALIC'S)
METHOD OF COMPUTING EXCHANGE ADJUSTMENTS PURSUANT
TO RULE 6e-3(T)(b)(13)(v)(B) UNDER THE INVESTMENT
COMPANY ACT OF 1940
This document explains the method that ALIC will use to compute cash values and
payments due when a flexible premium variable life insurance policy (the Policy)
is exchanged for a flexible premium adjustable life insurance policy (the new
policy) issued by ALIC or one of its affiliated companies.
The policyowner may exchange the Policy while it is in force for a new policy on
the life of the Insured, without new evidence of insurability, at any time
within 24 months of the policy date shown on the schedule page of the Policy. To
make the exchange, the policyowner must send the Policy, a completed application
for exchange and any required payment to ALIC's Home Office.
To make this exchange, no monthly deduction under the Policy can be unpaid
beyond a grace period; any outstanding debt on the policy must be repaid or
liquidated; any assignment must be released or continued on the new policy; and
any amount required to pay the first premium on the new policy and any cost for
exchange must be paid.
The new policy will have the same policy date, issue age and risk class of the
Insured as the Policy. The new policy will be a flexible premium adjustable life
insurance policy issued by ALIC or its affiliates at the time of exchange. The
policy provisions and applicable charges for the new policy and its riders will
be the same as those which would have applied had the new policy been issued
originally.
The accumulation value of the new policy on the exchange date will equal the
cash surrender value of the Policy on the valuation date immediately prior to
the exchange date plus the accumulation value provided by any net premium
credited to the new policy on the exchange date, less monthly deductions under
the new policy. If any loan was liquidated (i.e. remained unpaid at the time of
the exchange), the specified amount of the new policy will be reduced by the
amount of such liquidated loan.
The change will be effective on the valuation date next following the date all
financial and contractual arrangements for the new policy have been completed
and processed.
No further adjustments are made in values and payments upon an exchange.
DESCRIPTION OF AMERITAS LIFE INSURANCE
CORP.'S ISSUANCE, TRANSFER AND REDEMPTION PROCEDURES
FOR POLICIES PURSUANT TO RULE 6e-3 (T)(b)(12)(ii)
UNDER THE INVESTMENT COMPANY ACT OF 1940
Set forth below is the information called for under Rule 6e-3 (T) (b) (12) (ii)
under the Investment Company Act of 1940 ("1940 Act"). That rule provides an
exemption for separate accounts, their investment advisors, principal
underwriters and sponsoring insurance company from Sections 22(d), 22(e), and
27(c)(1) of the 1940 Act, and Rule 22(c)-2 promulgated thereunder, for issuance,
transfer and redemption procedures under flexible premium variable life
insurance policies in the extent necessary to comply with Rule 6e-3(T), state
administrative law or established administrative procedures of the life
insurance company. In order to qualify for the exemption, procedures must be
reasonable, fair and non-discriminatory and they must be disclosed in the
registration statement filed by the separate account.
ALIC's Separate Account LLVL (the "Account") is registered under the 1940 Act.
Within the Account are investment Subaccounts, which as of September 12, 1995
are expected to be the Vanguard Variable Insurance Fund ("Vanguard Funds") Money
Market, High-Grade Bond, Balanced, Equity Index, Equity Income, Growth and
International Subaccounts; the Neuberger & Berman Advisers Management Trust
("Neuberger & Berman Funds") Limited Maturity Bond, Growth, Partners, and
Balanced Subaccounts. Procedures apply equally to each Subaccount and for
purposes of this description are defined in terms of the Account, except where a
discussion of both the Account and its Subaccounts is necessary. Each Subaccount
invests in shares of a corresponding portfolio of the Vanguard Funds and the
Neuberger & Berman Funds. The investment experience of the Subaccounts of the
Account depends on the market performance of the corresponding Fund portfolios.
Although flexible premium variable life insurance policies funded through the
Account may also provide for fixed benefits supported by ALIC's general account,
except as otherwise explicitly stated herein, this description assumes that net
premiums are allocated exclusively to the Account and that all transactions
involve only the Subaccounts of the Account.
I. PROCEDURES RELATING TO ISSUANCE AND PURCHASE OF THE POLICIES
------------------------------------------------------------
Set out below is a summary of the principal policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, an "issuance or purchase" transaction. The
summary shows that, because of the insurance nature of the policies,
the procedures involved necessarily differ in certain significant
respects from the purchase procedures for mutual funds and contractual
plans.
The chief differences revolve around the structure of the cost of
insurance and the insurance underwriting (evaluation of risk) process.
There are also certain policy provisions such as Guaranteed Death
Benefit, reinstatement and loan repayment which do not result in the
issuance of a policy but which require certain payments by the
Policyowner and may involve a transfer of assets supporting the policy
values into the Account.
A. Cost of Insurance Rates, Guaranteed Death Benefit Premiums and
------------------------------------------------------------------
Underwriting Standards
----------------------
Costs of insurance rates, and Guaranteed Death Benefit Premiums
for ALIC's policies will not be the same for all Policyowners. The
chief reason is that the principle of pooling and distribution of
mortality risks is based upon the assumption that each Policyowner
pays a cost of insurance charge commensurate with the Insured's
mortality risk which is actuarially determined based upon factors
such as age, sex, health and occupation. In the context of life
insurance, a uniform mortality charge (the "cost of insurance
charge") for all insureds would discriminate unfairly in favor of
those Insureds representing greater mortality risks to the
disadvantage of
1
<PAGE>
those representing lesser risks. Accordingly, although there will
be a uniform "public offering price" for all Policyowners, because
premiums are flexible and amounts allocated to the Account will be
subject to the same deductions, there will be a different "price"
for each actuarial category of policyholders because different
cost of insurance rates will apply. The "price" will also vary
based on the net amount at risk. While not all Insureds will be
subject to the same cost of insurance rate, there will be a single
cost of insurance rate for all persons of the same age, sex, risk,
size of policy and smoking class and whose policies have been in
effect for the same length of time.
The Guaranteed Death Benefit premium as described below reflects
the different cost of insurance rates for males and females, and
varies by age.
Current cost of insurance rates will be determined by ALIC based
upon expectations as to future mortality experience. The cost of
insurance rates are guaranteed to not exceed rates based upon the
Commissioner's 1980 Standard Ordinary Smoker and Nonsmoker, Male
and Female Mortality Tables. A table showing the maximum cost of
insurance rates reflecting the actuarial risk class of the Insured
will be part of the policy. The current cost of insurance charge
will be included in the annual report.
ALIC will require a minimum initial premium of at least 25% of the
total first year monthly deductions including charges for riders,
and any substandard risk adjustments to be received into ALIC's
home office in good federal funds to put the policy in force. This
premium is less than the Guaranteed Death Benefit Premium. The
payment of the minimum initial premium will not guarantee that the
policy remains in force. The annual Guaranteed Death Benefit
Premium will vary by sex and policy size and reflects the initial
specified amount for the policy and any riders. For policies
issued on a Unisex basis, the costs of insurance rates are based
upon a 80% male/20% female assumption and are guaranteed not to
exceed the cost of insurance rates based upon the 1980 CSO-B
Unisex Table. The annual Guaranteed Death Benefit premiums for the
policy were calculated to never exceed the SEC guideline premium
which is defined by using 5% interest, the standard guaranteed
cost of insurance rates, the percent of premium loads, the per
policy administrative charges, an annual mode, and the level death
benefit option with any applicable tax corridor death benefits.
Policyowners, with the help of the registered representative, may
determine a planned periodic premium payment schedule that
provides for a level premium payable at a fixed interval. This
payment schedule may include the premiums required for the
Guaranteed Death Benefit Provision. Factors considered in setting
the planned periodic premium payment schedule and selecting the
death benefit option include, but are not limited to, the
Insured's age and risk classification; the Policyowner's economic
circumstances including future obligations, retirement and tax
sheltering needs; the Policyowner's judgment regarding market
needs; the death benefit needs of the beneficiary; and the desire
to qualify for the Guaranteed Death Benefit Provision. Payment of
premiums in accordance with this schedule is not, however,
mandatory and failure to do so will not of itself cause the policy
to lapse. Instead, Policyowners may make premium payments in any
amount at any frequency, subject only to the initial premium
requirements described above and any minimum acceptable premium
amount and maximum premium limitations including those set forth
in the Internal Revenue Code. If at any time a premium is paid
which would result in total premiums exceeding the current IRC
maximum premium limitation, ALIC will accept only that portion of
the premium which will make total premiums equal such maximum. Any
portion of the premium in excess of such maximum will be returned
to the Policyowner and no further premiums will be accepted until
allowed by the then current maximum premium limitations set forth
in the Internal Revenue Code.
The policy will remain in force so long as the surrender value is
sufficient to pay the monthly deductions imposed in connection
with the policy or so long as the cumulative Guaranteed Death
Benefit premiums are paid on the policy. Thus, without exercising
the guaranteed death benefit
2
<PAGE>
option, a premium, if any, that must be paid to keep the policy in
force depends upon the net accumulation value of the policy which
in turn depends on such factors as the investment experience of
the Account and the cost of insurance charge reflecting the cost
of insurance rate and the net amount at risk.
The policies will be offered and sold pursuant to ALIC's
established underwriting standards and in accordance with state
insurance laws. State insurance laws prohibit unfair
discrimination among Insureds but recognize that premiums and cost
of insurance rates may be based upon factors such as age, sex,
health and occupation.
B. Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application form from a prospective
Policyowner, ALIC will follow certain insurance underwriting
(i.e., evaluation of risk) procedures designed to determine
whether the proposed Insured is insurable. In some cases, the
process may involve such verification procedures as medical
examinations and may require that further information be provided
by the proposed Insured before a determination can be made. A
policy cannot be issued, i.e., physically issued through ALIC's
computerized issue system, until this underwriting procedure has
been completed.
The date on which the insurance coverage applied for on the
proposed Insured begins is called the policy date. Interim
insurance may be provided under the terms of the conditional
receipt, described later in this section. The policy date
represents the first day of the policy year and therefore
determines the policy anniversary and monthly activity date.
Suicide and contestable periods are measured from the policy date.
The policy date and the issue date are normally the same date
unless an earlier policy date is requested or the issue date is a
later date as described herein.
The issue date is the date that all financial, contractual, and
administrative requirements have been completed and processed for
the policy. When all required premiums and application amendments
have been received by ALIC in its Home Office, the issue date will
be the date the policy is mailed to the policyholder or sent to
the agent for delivery to the policyholder. This will normally
also be the policy date. When application amendments or additional
premiums need to be obtained upon delivery of the policy, the
issue date will be when the policy receipt, the application
amendments and/or funds are received in ALIC's Home Office and the
application amendments are reviewed. The issue date marks the date
on which benefits begin to vary in accordance with the investment
performance of the Subaccounts. It is shown on the confirmation
notice.
Any premiums submitted with the application will be held in ALIC's
general account prior to the issue date. Amounts held in the
general account are credited with interest at a rate determined by
ALIC for the period from the date funds are received by ALIC
(except in the case of insufficient funds) until the issue date,
but in no event will interest be credited prior to the policy
date. On the issue date, ALIC will allocate the initial net
premiums to the Money Market subaccount corresponding to the Money
Market portfolio of the Vanguard funds. After a 13-day period the
monies will be allocated to the designated Subaccounts.
If interim conditional receipt insurance on the proposed Insured
is desired pending the issue of the policy, ALIC will require a
payment at the time of application equal to the greater of $15.00
or one modal premium for the amount of life insurance applied for.
Such interim insurance is conditional with time and amount
limitations. These conditions are shown in the Conditional
3
<PAGE>
Receipt section of the application as follows:
1. This interim insurance will be effective upon the death of a
proposed Insured before the policy delivery when ALL of these
conditions are met:
a. The greater of $15.00 or one modal premium for the amount
and plan of life insurance applied for is paid; and
b. All medical examinations, tests, and related data required
by ALIC's rules are completed for each proposed Insured
within 60 days of the date of Part I of the Application.
2. The insurance for each proposed Insured which will be effective
before policy delivery is limited to the smaller of:
a. The combined amount in force and applied for with ALIC and
its affiliated companies;
b. $100,000; or
c. $25,000 if the proposed Insured is under age 10 or over age
60 at his or her nearest birthday.
((a), (b) and (c) above include life insurance and accidental
death benefits.)
3. If one or more conditions in Paragraph No. 1 on any proposed
Insured are not completely met, then ALIC is liable only to
return any premium paid for coverage on that proposed Insured.
Any insurance in effect because of the Conditional Receipt will
end at the earliest of:
a. The date notice is mailed that the application is not
accepted; or
b. At the end of 60 days from the date of this Receipt.
4. "Effective Date" means the latest of these dates;
a. The date of the Application in Part 1;
b. The date all medical data or tests required by ALIC's rules,
if any, are completed;
c. The policy date asked for in the Application, or
d. The date on which the proposed Insured is at least 4 days of
age.
The minimum initial specified amount at issue is $100,000 under
ALIC's current rules. ALIC reserves the right to revise its rules
from time to time to specify a different minimum initial specified
amount for subsequently issued policies.
C. Premium Processing
------------------
The net premiums are credited to the policy Account as of the
valuation date next following the day that the premium payments
accompanied by proper notice are received by ALIC with the
possible exception of the first net premium which is credited on
the issue date as described in the preceding section. "Proper
notice", for purposes of this paragraph, means that the policy
number and the manner in which the payment is to be allocated
(premium payment vs. loan repayment) must be indicated. The
valuation date is as of the close of trading of the New York Stock
Exchange on each day on which the Exchange is open for trading.
The net premium equals
4
<PAGE>
the premium paid less a premium charge of up to 5% (currently
3.5%) to defray the expense of state premium taxes and the cost of
deferring the tax deduction on certain policy acquisition costs.
The policy does not have a premium charge or sales load except the
5% charge described herein. There is no sales load and there is no
surrender charge.
The prospective owner at the time the application is taken will
indicate the percentage allocation of the net premiums to the
Subaccounts of the Account or to the fixed account. All net
premiums will be allocated in accordance with the Policyowner's
proper written instructions. ALIC will permit the Policyowner to
change the allocation of later net premiums without charge.
"Proper", for purposes of this paragraph, means that the
notice/instructions must include the policy number(s) to which the
instructions apply. Any such change will apply to future net
premiums received after ALIC receives the change. If the request
for change in allocation is made incorrectly, net premiums will be
allocated in accordance with the most recent instructions on
ALIC's records until an allocation or correction is received from
the Policyowner.
If there is no allocation or the allocation is incorrect on the
application, net premiums will be held in ALIC's general account
until an allocation or correction is received from the
Policyowner; the issue date will be after such correction is
received.
Any unscheduled premiums received will be allocated in accordance
with the Policyowner's prior instructions for net premiums. The
Policyowner at the time that an unscheduled premium is paid may
specify the amount (not less than $25 per Subaccount or fixed
account) or the percentages of the unscheduled premium payment to
be allocated among the Subaccounts. Any special instructions for
allocating unscheduled net premiums will be followed with no
charge.
The minimum percentage of each net premium (scheduled or
unscheduled) that may be allocated to any Subaccount of the
Account or the fixed account is 10%. All percentages must be
expressed in whole numbers and must total 100%.
D. Reinstatement
-------------
During the Insured's life, the policy can be considered for
reinstatement if it terminated because a grace period ended
without sufficient payment being paid. Any reinstatement must be
done within three years from the end of the grace period. (This
period will be longer if required by state law.) The policy cannot
be reinstated if it has been surrendered for its net cash
surrender value, nor can it be reinstated after the maturity date.
A written application for reinstatement must be made to ALIC.
Reinstatement will be effected based upon the insured's
underwriting classifications at the time of reinstatement.
Reinstatement is subject to the following:
a. Evidence of insurability of the Insured satisfactory to ALIC
(including evidence of insurability of any person covered by a
rider to reinstate the rider);
b. Any policy debt will be reinstated with interest due and
accrued;
c. The policy cannot be reinstated if it has been surrendered for
its net cash surrender value;
d. The payment of a premium sufficient to pay premium charges on
the premium paid and monthly and other policy charges for the
next three policy months; and
e. If the reinstatement occurs during the first three years, the
owner may pay premiums in the amount necessary to meet the
cumulative monthly requirement of the Guaranteed Death Benefit
premium as of the date of reinstatement, as if the policy had
not lapsed.
5
<PAGE>
The effective date of the reinstatement will be the first monthly
activity date on or next following the date the application for
reinstatement is approved and the required payment received.
ALIC will treat the amount paid upon reinstatement as a premium.
It will deduct the appropriate percent of premium charge. The
accumulation value of the reinstated policy will immediately upon
reinstatement be equal to this net premium payment plus the
accumulation value on the date of lapse, less the amounts stated
above. If any policy debt was reinstated, that debt will be held
in ALIC's general account. Accumulation value calculations will
then proceed as described in the policy.
E. Repayment of Loan
-----------------
A loan made under the policy may be repaid at any time with an
amount equal to the original loan plus loan interest. ALIC charges
interest to policyholders at regular and reduced rates. After the
later of age 55 or the tenth policy anniversary (the start date),
the policyholder can borrow each year a limited amount of the
accumulation value of the policy at a reduced interest rate.
Interest will accrue on a daily basis at a rate of up to 4% per
year. The amount available at the reduced rate is 10% of the
accumulation value, as of the start date, times the number of
years since the start date increased by the accrued interest
charges on the reduced loan amount. Regular loans will accrue
interest on a daily basis at a rate of up to 6% per year. If
unpaid when due, interest will be added to the amount of the loan
and bear interest at the same rate.
When a policy loan is made or when loan interest is not paid when
due, an amount of accumulation value sufficient to secure the
policy debt is transferred out of the Account into ALIC's general
account. The amount of the accumulation value attributable to
outstanding policy debt will be credited with interest at an
annual rate of 3.5%. ALIC will retain the difference between that
rate and the loan interest rate, if any, to cover loan investment
expenses, income taxes, if any, and processing costs.
When a loan repayment is made, the accumulation value in the
general account related to that payment will be transferred to the
Subaccounts or the fixed account in the same proportion that net
premiums are being allocated unless otherwise instructed. The 3.5%
annual interest credited on outstanding policy debt will also be
annually allocated to the Subaccounts in the same proportion that
net premiums are being allocated.
F. Correction of Misstatement of Age, and Sex
------------------------------------------
If ALIC discovers that the age or sex of the Insured or of any
person insured by rider has been misstated, it will adjust the
death benefits under the policy.
The death benefit will be adjusted to the amount that would be
purchased by the most recent cost of insurance deductions using
the correct cost of insurance rate.
II. TRANSFER AMONG SUBACCOUNTS
--------------------------
The Account currently has 11 Subaccounts, each of which is invested in
shares of a corresponding portfolio of the Vanguard Variable Insurance
Fund and the Neuberger & Berman Advisers Management Trust which are
registered under the 1940 Act as open-end diversified management
investment companies. All 11 are available to the Policyowner of the
policy. The Policyowner may transfer accumulation value amounts from one
Subaccount to another. ALIC will make no charge for the first fifteen
transfers each policy year; thereafter, a $10.00 transfer charge may be
deducted from the amount transferred. ALIC will effectuate transfers and
determine all values in connection with transfers on the later of the
date designated in the request or on the valuation date next following
receipt of the written request at ALIC's Home Office. All transfers
included in the request are treated as one transfer transaction.
Transfers may also be made from the Subaccounts to the Fixed Account.
6
<PAGE>
Transfers of up to the greater of: 25% of the accumulation value of the
fixed account; the amount of any transfer from the Fixed Account during
the prior thirteen months; or $1,000 may be made from the Fixed Account
to the various subaccounts during the 30-day period following the yearly
anniversary of the policy.
Each transfer must be for a minimum of $250 or the balance in the
Subaccount or Fixed Account, if less. The minimum amount which can
remain in a Subaccount or Fixed Account as a result of a transfer is
$100. Any amount below this minimum must be included in the amount
transferred.
Transfers resulting from policy loans and the exercise of exchange
privileges will not be subject to a transfer charge. In addition, such
transfers will not be counted for purposes of the limitation of free
transfers.
The request for amounts to be transferred may be in terms of dollars,
such as a request to transfer $5,000 from one Subaccount to another or
to the Fixed Account, or may be in terms of a percentage reallocation
among Subaccounts or the Fixed Account. In the later case, the
percentages must be in whole numbers and meet the requirements for net
premium reallocations.
The Policy's transfer privilege is not intended to afford Policyowners a
way to speculate on short-term movements in the market. Accordingly, in
order to prevent excessive use of the transfer privilege that may
potentially disrupt the management of the Account and increase
transaction costs, the Account has established a policy of limiting
excessive transfer activity to two substantive transfers from each
Portfolio (at least 30 days apart) during any calendar year. A
substantive transfer is a transfer from a Subaccount for the lesser of:
i) 51% of the Accumulation Value or ii) $100,000. This restriction does
not limit non-substantive transfers and does not apply to transfers from
the Money Market portfolio.
III. "REDEMPTION PROCEDURES": SURRENDER AND RELATED TRANSACTIONS
-----------------------------------------------------------
Set out below is a summary of the principal policy provisions and
administrative procedures which might be deemed to constitute, either
directly or indirectly, a "redemption" transaction. The summary shows
that, because of the insurance nature of the policies, the procedures
involved necessarily differ in certain significant respects from the
redemption procedures for mutual funds and contractual plans.
A. Surrender and Partial Withdrawals
---------------------------------
At any time before the earlier of the death of the Insured or the
maturity date, the Policyowner, with the consent of any assignee,
may surrender the policy or partially withdraw part of the values
by sending a written request to ALIC. To surrender the policy
under current procedures, the policy itself must also be returned
to ALIC.
The amount payable upon surrender of the policy is the
accumulation value on the valuation date next following the date
ALIC receives written request less any outstanding policy debt.
This amount is the net cash surrender value. Surrenders will
generally be paid by mailing a check to the Policyowner within 7
days of receipt of the written request and the policy.
In lieu of payment of the net cash surrender value in a lump sum
upon surrender of a policy, an election may be made to apply all
or a portion of the proceeds under one of the fixed benefit
payment options described in the policy. The fixed benefit payment
options are subject to the restrictions and limitations set forth
in the policy, and will be paid by ALIC.
A partial withdrawal of accumulation values may be made for an
amount of at least $500 subject to the following rules:
7
<PAGE>
1. The net cash surrender value in all Subaccounts or the fixed
account after partial withdrawal must be the greater of $1,000
or an amount sufficient to maintain the policy in force for the
remainder of the policy year.
2. Only one partial withdrawal per policy year can be made.
3. A request for withdrawal must be on a form approved by ALIC.
Partial withdrawals are irrevocable.
A partial withdrawal charge guaranteed to be the lesser of $50 or
2% of the amount of the partial withdrawal will be deducted from
the amount of each partial withdrawal. The current partial
withdrawal charge is the lesser of $25 or 2% of the amount of the
partial withdrawal.
The amount of the partial withdrawal, including the charge, will
be deducted from the policy's accumulation value on the date that
the request is received. The owner may designate how to allocate
the partial withdrawal among the Subaccounts or fixed account
provided that the minimum amount remaining in a Subaccount as a
result of such allocation is $100. If no allocation designation is
received, the partial withdrawal will be allocated in the same
proportion that the accumulation value in each bears to the total
accumulation value in all of the Subaccounts and the fixed account
on the date ALIC receives the request in its Home Office.
Partial withdrawals affect policy values. The accumulation value
will be reduced by the amount of the partial withdrawal. If Death
Benefit Option A is in effect on the date of the partial
withdrawal, the specified amount may also be reduced by the amount
of the partial withdrawal. These reductions reduce the death
benefits. If the request for a partial withdrawal would cause the
specified amount to be reduced below ALIC's minimum specified
amount, the request for the partial withdrawal will not be
implemented and the owner will be so notified in writing. ALIC's
minimums for the specified amount after decreases are currently
$100,000 for the first 3 policy years and $75,000 after the first
3 policy years. These minimums may be revised from time to time by
ALIC.
NOTE: Payment may be postponed whenever: 1) the New York Stock
Exchange is closed other than customary weekend and holiday
closings, or trading on the New York Stock Exchange is restricted
as determined by the Commission; 2) the Commission by order
permits postponement for the protection of Policyowners; or 3) an
emergency exists, as determined by the Commission, as a result of
which disposal of securities is not reasonably practicable or it
is not reasonably practicable to determine the value of the
Account's net assets. Surrenders or partial withdrawals from the
fixed account may be deferred for up to six months from the date
of written request. Payments under the policy of any amount paid
by check may be postponed until such time as the check has cleared
the owner's bank.
B. Death Benefit Proceeds Claims and Maturity Benefit
--------------------------------------------------
As long as the policy remains in force, ALIC will generally pay
death benefit proceeds to the named beneficiary in accordance with
the designated death benefit option within 7 days after receipt of
due proof of the death of the Insured. (Payment may be postponed
under certain circumstances as described in the preceding
section.)
The death benefit proceeds will equal:
1. The death benefit; plus
2. Any additional death benefit proceeds provided by riders; minus
3. Any outstanding policy debt; minus
8
<PAGE>
4. Any overdue monthly deductions including the deduction for the
month of death.
A claim during the suicide or contestable period may be limited as
provided in the policy.
The death benefit will vary by the Death Benefit Option A or B in
effect at the time of death. It will never be less than the
current specified amount of the policy.
Option A: Basic Coverage
The death benefit will be the greater of:
1. The current specified amount; or
2. A percentage of the accumulation value, where the applicable
percentage is determined from the then effective tax corridor
table as shown in the policy.
Option B: Basic Coverage Plus Cash Value
The death benefit will be the greater of:
1. The current specified amount plus the accumulation value; or
2. A percentage of the accumulation value, where the applicable
percentage is determined from the then effective tax corridor
table as shown in the policy.
The accumulation value used for determining the amount of death
benefit will be as of the valuation date when the Insured died.
ALIC's requirements for satisfactory proof of death include:
1. A certified copy of the death certificate;
2. A Claimant Statement;
3. The policy; and
4. Any other information which ALIC may reasonably require to
establish the validity of the contract.
In lieu of payment of the death benefit proceeds in a lump sum,
the beneficiary may elect to apply all or any part of the proceeds
under one of the fixed benefit payment options described in the
policy. The fixed benefit payment options are subject to the
restrictions and limitations set forth in the policy. These
options will be paid by ALIC.
The amount of the benefit payable at maturity is the accumulation
value less any outstanding debt of the Policy on the maturity
date. This benefit will only be paid if the Insured is living on
the policy maturity date. The policy will mature on the policy
anniversary nearest the Insured's 100th birthday.
C. Policy Loans
------------
After the first policy anniversary, the owner may obtain a policy
loan from ALIC. The policy is the only security required. The
maximum loan amount is 100% of the net cash surrender value less
any guaranteed charges and accrued expenses as of the date of the
policy loan and after adjustment for loan interest and guaranteed
policy charges for the remainder of the policy year. The available
loan amount at any time is the maximum loan amount less any
outstanding policy
9
<PAGE>
debt. ALIC charges interest to policyholders at regular and
reduced rates. After the later of age 55 or the tenth policy
anniversary, the policyholder can borrow each year a limited
amount of the accumulation value of the policy at a reduced
interest rate. Interest payments are due on each anniversary date.
If interest is not paid when due, it will be added to the policy
debt and bear interest at the same rate as the loan. Interest will
accrue on a daily basis at a rate of up to 4% per year. The amount
available at the reduced rate is 10% of the accumulation value as
of the later of age 55 or the 10th policy anniversary (the start
date) times the number of years since the start date increased by
the accrued interest charges on the reduced loan amount. Regular
loans may accrue interest on a daily basis at a rate of up to 6%
per year.
When a policy loan is made, or when interest is not paid when due,
an amount of accumulation value sufficient to secure the policy
debt is transferred out of the Account or the fixed account and
into ALIC's general account. The owner may specify how to allocate
that accumulation value among the Subaccounts or the fixed account
provided that the minimum amount remaining in a Subaccount or
fixed account as a result of the allocation is $100. If no
allocation is made, the accumulation value will be allocated among
the Subaccounts or the fixed account in the same proportion that
the policy's accumulation value in each Subaccount or the fixed
account bears to the total accumulation value in all Subaccounts
or the fixed account on the date of loan.
The loan will generally be paid 7 days after receipt of a written
request; payment may be postponed under the circumstances
described earlier under III Paragraph A "Surrender and Partial
Withdrawals".
Accumulation value in the general account will be credited 3.5%
interest annually. The interest earned will be allocated annually
to the Subaccounts or the fixed account in the same manner as net
premiums.
If the policy debt exceeds the accumulation value, the owner must
pay the excess. ALIC will send notice of the amount due. If this
amount is not paid within 61 days after the notice is sent, the
policy will terminate without value. ALIC will send the notice to
the owner and to any assignee of record at the Home office.
Any loan transaction may permanently affect the values of this
policy.
D. Policy Lapse
------------
Lapse will occur when (a) policy debt exceeds the accumulation
value, (b) the net cash surrender value is insufficient to cover
the monthly deduction, or (c) the pro rata portion of the
Guaranteed Death Benefit Premium for the policy and its riders is
not paid throughout the first three policy years, the net cash
surrender value is insufficient to cover the monthly deductions,
and a grace period expires without a sufficient payment.
If the policy debt exceeds the accumulation value less any accrued
expenses, the owner must pay an amount equal to all excess
indebtedness within 61 days after ALIC mails notice in order to
avoid lapse.
If the net cash surrender value on a monthly activity date is not
sufficient to cover the monthly deduction, and the Guaranteed
Death Benefit provision is not in effect, a grace period of 61
days will be allowed for the payment of a premium sufficient to
cover the monthly deductions. The grace period will begin on the
day ALIC mails notices of the necessary premium to the owner and
any assignee of record in its Home Office.
If a sufficient payment is made during a grace period, it will be
treated as a premium payment and the net premium so paid will be
allocated among the Subaccounts and the fixed account in
accordance with the Policyowner's current instructions and any
monthly deductions due will be charged. If a sufficient payment is
not made during a grace period, the policy will lapse.
10
<PAGE>
If the insured dies after notice of payment due, but before the
expiration of a grace period, any due and unpaid monthly
deductions will be deducted from the death benefit proceeds.
Reinstatement may be permitted under the conditions described
earlier after policy lapse.
11
Norman Krivosha Ameritas Life Insurance Corp. Logo
Executive Vice President
Secretary and Corporate General Counsel
________________________________________________________________________________
One Ameritas Way/P.O. Box 81889/Lincoln, NE 68501-1889/(402)467-7176
April 3, 1998
Ameritas Life Insurance Corp.
5900 "O" Street
P.O. Box 81889
Lincoln, Nebraska 68501
Gentlemen:
With reference to the Post-Effective Amendment No. 4 to Registration Statement
No. 33-86500 on Form S-6 filed by Ameritas Life Insurance Corp. and Ameritas
Life Insurance Corp. Separate Account LLVL with the Securities & Exchange
Commission covering flexible premium life insurance policies, I have examined
such documents and such laws as I considered necessary and appropriate, and on
the basis of such examination, it is my opinion that:
1. Ameritas Life Insurance Corp. is duly organized and validly existing
under the laws of the State of Nebraska and has been duly authorized
to issue individual flexible premium variable life policies by the
Insurance Department of the State of Nebraska.
2. Ameritas Life Insurance Corp. Separate Account LLVL is a duly
authorized and existing separate account established pursuant to the
provisions of Section 44-402.01 of the Statutes of the State of
Nebraska.
3. The flexible premium variable life policies, when issued as
contemplated by said Form S-6 Registration Statement, will constitute
legal, validly issued and binding obligations of Ameritas Life
Insurance Corp.
I hereby consent to the filing of this opinion as an exhibit to the
Post-Effective Amendment No. 4 to said Form S-6 Registration Statement and to
the use of my name under the caption "Legal Matters" in the Prospectus contained
in the Registration Statement.
Sincerely,
/s/ Norman Krivosha
Norman Krivosha
Executive Vice President,
Secretary and Corporate General Counsel
Ameritas Life Insurance Corp. Logo
________________________________________________________________________________
One Ameritas Way/P.O. Box 81889/Lincoln, NE 68501-1889
(402)467-1122/(800)745-6665/Facsimile:(402)467-7956
April 3, 1998
Ameritas Life Insurance Corp.
5900 "O" Street
P.O. Box 81889
Lincoln, Nebraska 68501
Gentlemen:
This opinion is furnished in connection with the registration by Ameritas Life
Insurance Corp., of a flexible premium variable life insurance policy
("Contract") under the Securities Act of 1933. With reference to Post-Effective
Amendment No. 4 to Registration Statement No. 33-86500 on Form S-6 describes the
Contract. The form of Contract was prepared under my direction and I am familiar
with the Registration Statement and Exhibits thereto. This contract was
developed and filed under Securities and Exchange Commission Rule 6E-3(T), as
interpreted at this time by the SEC staff. In my opinion:
The illustrations of death benefits and cash values included
in the section entitled "Illustrations of Death Benefits and Cash
Values" in the Appendices of the prospectus, based on the
assumptions stated in the illustrations, are consistent with
the provisions of the Contract. The rate structure of the
Contract has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations,
appear more favorable to prospective purchasers of the Contract
for male age 45, than to prospective purchasers of the Contract
for other ages or for females.
I hereby consent to the use of this opinion as an exhibit to the Post-Effective
Amendment No. 4 to the Registration Statement and to the reference to my name
under the heading "Experts" in the prospectus.
Very truly yours,
/s/ Thomas P. McArdle
Thomas P. McArdle
Assistant Vice President and
Associate Actuary
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the use in this Post-Effective Amendment No. 4 to Registration
Statement No. 33-86500 of Ameritas Life Insurance Corp. Separate Account LLVL of
our reports dated February 2, 1998, on the financial statements of Ameritas
Life Insurance Corp.and Ameritas Life Insurance Corp. Separate Account LLVL
appearing in the Prospectus, which is a part of such Registration Statement,
and to the reference to us under the heading "Experts" in such Prospectus.
/s/Deloitte & Touche LLP
Lincoln, Nebraska
April 2, 1998
<PAGE>
Ameritas Variable Life Insurance Company Logo
- --------------------------------------------------------------------------------
One Ameritas Way / P. O. Box 82550 / Lincoln, NE 68501-2550
JOHN D SPECIMEN Policy Number: 1109005440
PO BOX 81889 Social Security Number: ###-##-####
LINCOLN NE 68501-1889 Insured: John D Specimen
RE: Notice of Cancellation Right
Mr. Specimen:
Thank you for selecting this Low-Load Variable Universal Life insurance policy
which combines the guarantees of insurance with the opportunities of investment.
We believe it will serve you well.
This letter is sent to you in accordance with the laws administered by the
United States Securities and Exchange Commission (SEC). Please read it carefully
and retain with your important records.
Low-Load Variable Universal Life is a variable universal life insurance policy
in which you may direct your net premiums into one or more of the investment
accounts ranging from the Fixed Account (managed by ALIC) to the various
portfolios in ALIC's Separate Account LLVL managed or administered by Vanguard
Variable Insurance Fund, Neuberger & Berman Advisors Management Trust or Berger
Institutional Products Trust. If you choose one or more of these portfolios,
your benefits depend on their investment experience.
Under the requirements of the SEC and your policy, you have the right to return
this policy for cancellation within (1) 10 days from the date of receipt of this
policy, or (2) 10 days from the date of receipt of this notice, or (3) 45 days
from the date you signed the application, whichever is later. The amount of the
refund is the greater of the premiums paid or the premiums paid adjusted by
investment gains or losses. Please review the prospectus for details of Low-Load
Variable Universal Life expenses and your cancellation right, and also the
attachments to this letter which provide further details on your right of
cancellation.
While we hope you are pleased with your ownership of this policy, if you should
decide to exercise this right of cancellation, complete the enclosed form and
return your policy within the time period outlined above.
Please do not hesitate to contact our Individual Client Services Department
(1-800-745-6665) with any questions you may have about the insurance coverage,
investment options, expenses, or your rights as a policyholder. Again, thank you
for your confidence in Ameritas Life Insurance Corp., Vanguard Variable
Insurance Fund, Neuberger & Berman Advisors Management Trust, Berger
Institutional Products Trust and Low-Load Variable Universal Life.
Sincerely,
/s/Kenneth C. Louis
President
Form 4055 (1-1)
<PAGE>
Ameritas Variable Life Insurance Company Logo
- --------------------------------------------------------------------------------
One Ameritas Way / P. O. Box 82550 / Lincoln, NE 68501-2550
JOHN D SPECIMEN Policy Number: 1109005440
PO BOX 81889 Social Security Number: ###-##-####
LINCOLN NE 68501-1889 Insured: John D Specimen
LOW-LOAD VARIABLE UNIVERSAL LIFE INSURANCE POLICY
In determining whether or not to exercise your right to cancel, you should
consider, among other things: the insurance and investment needs served by your
policy, the projected cost of your policy and the deductions from the premiums
before the payment is allocated to the various investments available in the
policy.
You have been given a prospectus which describes the deductions from each
premium payment which is a current 3.5% premium charge (guaranteed maximum of
5%). This charge is used to pay state and federal taxes.
Deductions from the accumulation value in your accounts include:
A monthly administrative expense charge of $9.00 during the first year
and $4.50 thereafter (could be increased to a maximum of $9.00 in the
future).
A monthly cost of insurance based on the current cost of insurance
rates now in effect (could be increased in the future to the TABLE OF
POLICY CHARGES shown in your policy).
A current mortality and expense charge of 0.75% of the accumulation
value (could be increased to a guaranteed maximum of 0.90% in the
future).
There is no surrender charge on this policy at any time. If you later decide to
surrender the policy, the full accumulation value less any outstanding policy
debt will be available to you.
Form 4055 (1-2)
<PAGE>
Ameritas Variable Life Insurance Company Logo
- --------------------------------------------------------------------------------
One Ameritas Way / P. O. Box 82550 / Lincoln, NE 68501-2550
JOHN D SPECIMEN Policy Number: 1109005440
PO BOX 81889 Social Security Number: ###-##-####
LINCOLN NE 68501-1889 Insured: John D Specimen
***INSTRUCTIONS***
PLEASE READ CAREFULLY
RE: Request for Cancellation
If, after reading the enclosed notice, you elect to return your policy for
cancellation, please:
1. Sign and date the bottom portion of this form.
2. Mail this notice together with your policy to:
Ameritas Life Insurance Corp.
One Ameritas Way, P.O. Box 81889
Lincoln, Nebraska 68501-1889
3. Make certain that the postmark of the return envelope is on or
before the last date permitted for cancellation as described
in the attached letter.
***TO BE COMPLETED BY OWNER***
TO: Ameritas Life Insurance Corp. (ALIC)
Pursuant to the terms of the notice previously furnished me by ALIC, I hereby
return the policy numbered above (The "Policy") for cancellation and request a
refund. The amount of the refund will be the greater of the premiums paid or the
premiums paid adjusted by investment gains or losses. I hereby release ALIC from
any and all claims arising out of or in connection with the sale or issuance of
the policy under state insurance law and I hereby acknowledge that ALIC's sole
liability with respect to the policy is the refund to me.
- ------------------------------------ -----------------------------------
Date Signature of Policyowner
Form 4055 (1-3)
ACTUARIAL OPINION
Date: November 15, 1994
Re: DAC Tax Charge for Policy Form 4055
Ameritas Life Insurance Corp. experiences an increased tax burden resulting from
Section 848 of the Internal Revenue Code of 1986, which was enacted in 1990 to
modify the federal income tax of life insurance companies. Section 848 requires
life insurance companies to capitalize and amortize part of their general
expenses for the current year. Under prior law these expenses were deductible in
full from the current year's gross income.
The amount of deductions that would have to be amortized rather than deducted in
the year incurred is a percentage of the current year's net premiums received in
connection with certain types of insurance contracts.
From an economic perspective, taking into account the time value of money, the
tax burden of the insurance company is increased as it is related to those
contracts covered by Section 848. This increased burden has been referred to as
the "DAC tax". The impact of this DAC tax can be compared to that of a state
premium tax since the amount of general deductions that must be capitalized and
amortized is measured by premiums paid and the increased federal tax burden
results from the receipt of those premiums.
Reasonableness of DAC Tax Charge
- --------------------------------
Policy Form 4055 includes a percent of premium charge, guaranteed not to exceed
5.00%. The DAC tax charge, equal to 1.00% of each premium payment, is included
in the percent of premium charge and will be deducted from each premium payment
to cover the estimated cost of the DAC tax. This charge is within the range of
the DAC tax charge of various leading insurance companies; the following table
shows the DAC tax charge that is included in some variable universal life policy
forms:
Company DAC Tax Charge
------- --------------
Merrill Lynch 1.25%
Provident Mutual 1.25%
Prudential 1.25%
John Hancock 1.25%
New England 1.00%
The 1.00% charge is reasonably related to the additional federal income tax
burden which Ameritas will experience, taking into account the benefit of
amortization permitted by Section 848 and the use of a 10 percent discount rate
in computing the cost of the increased tax burden and the future deductions
resulting from such amortization.
<PAGE>
Reasonableness of Cost of Capital
- ---------------------------------
Ameritas determines its cost of capital as the after tax rate of return it seeks
to earn on its surplus. The following factors are generally considered in the
determination of the cost of capital:
1. The risk-free rate of return that can be expected to be earned
over the long-term, based on current market rates, inflation
and expected future interest rate trends.
2. The premium needed to earn over the risk-free rate to
compensate for the risk profile of the insurance business.
3. Information available about the rates of return earned by
other life insurance companies.
Considering these factors, it is reasonable to use a 10% discount rate, i.e.
cost of capital, in the determination of the DAC tax charge.
Appropriateness of the Factors Used to Determine the Cost of Capital
- --------------------------------------------------------------------
Ameritas makes sure that its projected rates of return are adequate to support
its anticipated growth. If the rate of return is too low, surplus will decrease
or will not increase sufficiently to support anticipated growth.
Ameritas seeks to maintain a ratio of surplus to assets that it establishes
based on its judgment of the risks represented by various components of its
assets and liabilities. Maintaining the ratio of surplus to assets is critical
for the maintenance of competitive ratings from various rating agencies and
competitive pricing on new and inforce business.
Therefore, it is appropriate to consider the factors shown above in the
determination of Ameritas' cost of capital.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> LLVL VANGUARD MONEY MARKET
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 7,218,269
<INVESTMENTS-AT-VALUE> 7,218,269
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 7,218,269
<SHARES-COMMON-PRIOR> 1,274,986
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 7,218,269
<DIVIDEND-INCOME> 245,562
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 33,383
<NET-INVESTMENT-INCOME> 212,179
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 212,179
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 33,061,438
<NUMBER-OF-SHARES-REDEEMED> 27,118,155
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,943,283
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
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<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> LLVL VANGUARD EQUITY INDEX
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 3,376,563
<INVESTMENTS-AT-VALUE> 4,081,960
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 160,571
<SHARES-COMMON-PRIOR> 68,977
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 705,397
<NET-ASSETS> 4,081,960
<DIVIDEND-INCOME> 47,557
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 20,371
<NET-INVESTMENT-INCOME> 27,186
<REALIZED-GAINS-CURRENT> 33,570
<APPREC-INCREASE-CURRENT> 633,010
<NET-CHANGE-FROM-OPS> 693,766
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 132,217
<NUMBER-OF-SHARES-REDEEMED> 40,623
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,733,452
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> LLVL VANGUARD EQUITY INCOME
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,321,458
<INVESTMENTS-AT-VALUE> 1,524,779
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 81,200
<SHARES-COMMON-PRIOR> 21,723
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 203,321
<NET-ASSETS> 1,524,779
<DIVIDEND-INCOME> 24,444
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 5,918
<NET-INVESTMENT-INCOME> 18,526
<REALIZED-GAINS-CURRENT> 22,916
<APPREC-INCREASE-CURRENT> 181,981
<NET-CHANGE-FROM-OPS> 223,423
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 71,066
<NUMBER-OF-SHARES-REDEEMED> 11,589
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,207,619
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> LLVL - VANGUARD GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 2,919,979
<INVESTMENTS-AT-VALUE> 3,211,554
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 148,715
<SHARES-COMMON-PRIOR> 39,921
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 291,575
<NET-ASSETS> 3,211,554
<DIVIDEND-INCOME> 24,821
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 13,622
<NET-INVESTMENT-INCOME> 11,199
<REALIZED-GAINS-CURRENT> 70,741
<APPREC-INCREASE-CURRENT> 269,256
<NET-CHANGE-FROM-OPS> 351,196
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 135,647
<NUMBER-OF-SHARES-REDEEMED> 26,853
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,505,348
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> LLVL - VANGUARD BALANCED
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,955,975
<INVESTMENTS-AT-VALUE> 2,037,790
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 119,859
<SHARES-COMMON-PRIOR> 26,357
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 81,815
<NET-ASSETS> 2,037,790
<DIVIDEND-INCOME> 62,554
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 8,857
<NET-INVESTMENT-INCOME> 53,697
<REALIZED-GAINS-CURRENT> 86,534
<APPREC-INCREASE-CURRENT> 73,173
<NET-CHANGE-FROM-OPS> 213,404
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 103,264
<NUMBER-OF-SHARES-REDEEMED> 9,762
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,642,172
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> LLVL - VANGUARD HIGH GRADE BOND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 480,683
<INVESTMENTS-AT-VALUE> 493,830
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 46,139
<SHARES-COMMON-PRIOR> 10,403
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,147
<NET-ASSETS> 493,830
<DIVIDEND-INCOME> 17,945
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 2,094
<NET-INVESTMENT-INCOME> 15,851
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 12,105
<NET-CHANGE-FROM-OPS> 27,956
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 48,976
<NUMBER-OF-SHARES-REDEEMED> 13,240
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 385,329
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> LLVL - VANGUARD INTERNATIONAL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 2,125,629
<INVESTMENTS-AT-VALUE> 2,050,498
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 0
<PAYABLE-FOR-SECURITIES> 0
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> LLVL VANGUARD HIGH YIELD
<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> DEC-31-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> LLVL VANGUARD SMALL COMPANY GROWTH
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> LLVL - NEUBERGER & BERMAN BALANCED
<S> <C>
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<PERIOD-END> DEC-31-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> LLVL - NEUBERGER & BERMAN GROWTH
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> LLVL - NEUBERGER & BERMAN PARTNERS
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> LLVL - NEUBERGER & BERMAN LIMITED MATURITY BOND
<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> DEC-31-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 14
<NAME> LLVL - BERGER IPT 100 FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
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<ACCUM-APPREC-OR-DEPREC> (1,816)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 15
<NAME> LLVL - BERGER IPT SMALL COMPANY GROWTH
<S> <C>
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</TABLE>
