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PROSPECTUS
[AMERITAS LIFE INSURANCE CORP. LOGO]
5900 "O" Street
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE P.O. Box 81889/Lincoln, Nebraska 68501
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This prospectus describes a flexible premium variable universal life insurance
policy ("Policy") offered by Ameritas Life Insurance Corp. ("Ameritas"). Like
traditional life insurance policies, the Policy provides Death Benefits to
Beneficiaries and gives you, the Policy Owner, the opportunity to increase the
Policy's Accumulation Value. Unlike traditional policies, this Policy lets you
vary the frequency and amount of premium payments, rather than follow a fixed
premium payment schedule. It also lets you change the level of Death Benefits
payable as often as once each year. This flexibility lets you provide for your
changing insurance needs under a single insurance policy.
The Policy is different from traditional life insurance policies in another
important way: you select how Policy premiums will be invested. Although each
Policy Owner is guaranteed a minimum Death Benefit, the Accumulation Value of
the Policy, as well as the actual Death Benefit, will vary with the performance
of investments you select.
The investment options available through the Policy include investment
portfolios from Calvert Variable Series, Inc. ("CVS Social Portfolios"),
Vanguard Variable Insurance Fund ("Vanguard"), Neuberger Berman Advisers
Management Trust ("Neuberger Berman AMT"), Berger Institutional Products Trust
("Berger IPT") and Rydex Variable Trust ("Rydex") (collectively the "Funds").
Each of these portfolios has its own investment objective and policies. These
are described in the prospectuses for each investment portfolio which must
accompany this prospectus. You may also choose to allocate premium payments to
the Fixed Account managed by Ameritas.
A Policy will be issued after Ameritas accepts a prospective Policy Owner's
application. Generally, an application must specify a Death Benefit no less than
$100,000, although lower amounts may be requested. The Policy is generally
available to cover individuals who are age 80 or less at their nearest birthday.
However, Ameritas may insure individuals above the age of 80, at its sole
discretion. A Policy, once purchased, may generally be canceled within 10 days
after you receive it.
This prospectus is designed to assist you in understanding the opportunity and
risks associated with the purchase of a Policy. Prospective Policy Owners are
urged to read the prospectus carefully and retain it for future reference.
This prospectus includes a summary of the most important features of the Policy,
information about Ameritas, a list of the investment portfolios to which you may
allocate payments, as well as a detailed description of the Policy. The appendix
to the prospectus includes tables designed to illustrate how Accumulation Values
and Death Benefits may change with the investment experience of the Investment
Options.
This prospectus must be accompanied by a prospectus for each of the investment
portfolios available through the Policy.
Although the Policy is designed to provide life insurance, it is considered to
be a security. It is not a deposit with, an obligation of, or guaranteed or
endorsed by any banking institution through which it may be purchased, nor is it
insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other agency. The purchase of a Policy involves investment risk,
including the possible loss of principal. The Policy Owner bears the entire
investment risk for monies placed in Separate Account LLVL under this Policy.
For this reason, the Policy may not be suitable for all individuals. It may not
be advantageous to purchase a Policy as a replacement for another type of life
insurance or as a way to obtain additional insurance protection if the purchaser
already owns another variable universal life insurance policy.
The Securities and Exchange Commission ("SEC") maintains a web site
(http://www.sec.gov) that contains other information regarding registrants that
file electronically with the Securities and Exchange Commission.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
May 1, 2000
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TABLE OF CONTENTS
<TABLE>
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PAGE
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DEFINITIONS................................................. 3
SUMMARY..................................................... 5
YEAR 2000................................................... 11
AMERITAS, THE SEPARATE ACCOUNT AND THE FUNDS................ 12
Ameritas Life Insurance Corp. ............................ 12
Ameritas Life Insurance Corp. Separate Account LLVL....... 12
The Funds................................................. 13
Investment Objectives and Policies Of The Funds'
Portfolios.............................................. 14
Addition, Deletion or Substitution of Investments......... 16
Fixed Account............................................. 16
POLICY BENEFITS............................................. 17
Purposes of the Policy.................................... 17
Death Benefit Proceeds.................................... 17
Death Benefit Options..................................... 17
Methods of Affecting Insurance Protection................. 19
Duration of the Policy.................................... 19
Accumulation Value........................................ 19
Benefits at Maturity...................................... 20
Payment of Policy Benefits................................ 20
POLICY RIGHTS............................................... 21
Loan Benefits............................................. 21
Surrenders................................................ 22
Partial Withdrawals....................................... 22
Transfers................................................. 23
Systematic Programs....................................... 24
Refund Privilege.......................................... 24
Exchange Privilege........................................ 24
PAYMENT AND ALLOCATION OF PREMIUMS........................ 24
Issuance of a Policy.................................... 24
Premiums................................................ 25
Allocation of Premiums and Accumulation Value........... 26
Policy Lapse and Reinstatement.......................... 26
CHARGES AND DEDUCTIONS.................................... 27
Deductions From Premium Payment......................... 27
Charges Deducted from Accumulation Value................ 28
Surrender Charge........................................ 29
Transfer Charge......................................... 29
Partial Withdrawal Charge............................... 29
Daily Charges Against the Separate Account.............. 29
GENERAL PROVISIONS.......................................... 30
ADDITIONAL INSURANCE BENEFITS (RIDERS)...................... 32
DISTRIBUTION OF THE POLICIES................................ 33
FEDERAL TAX MATTERS......................................... 34
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS................ 37
THIRD PARTY SERVICES........................................ 37
VOTING RIGHTS............................................... 37
STATE REGULATION OF AMERITAS................................ 38
EXECUTIVE OFFICERS AND DIRECTORS OF AMERITAS................ 38
LEGAL MATTERS............................................... 40
LEGAL PROCEEDINGS........................................... 40
EXPERTS..................................................... 40
ADDITIONAL INFORMATION...................................... 40
FINANCIAL STATEMENTS........................................ 41
AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVL......... F-I-2
AMERITAS LIFE INSURANCE CORP................................ F-II-1
APPENDICES.................................................. A-1
</TABLE>
The Policy, certain Funds, and/or certain riders are not available in all
States.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, 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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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 Separate
Account LLVL, the Fixed Account, and any Accumulation Value held in the General
Account which secures policy loans.
AMERITAS ("we, us, our") - 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.
DEATH BENEFITS - The amount of insurance coverage provided under the Policy.
DEATH BENEFIT PROCEEDS - The proceeds payable to the beneficiary upon receipt by
Ameritas 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 Ameritas' 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 Ameritas includes all of Ameritas'
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.
INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered
under this 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 Ameritas 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.
OUTSTANDING POLICY DEBT - The sum of all unpaid policy loans and accrued
interest on policy loans.
PARTIAL WITHDRAWAL - A Policy Owner'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.
PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policy Owner is not required to follow this schedule, nor
does following this schedule ensure that the
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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 Ameritas and described in this Prospectus.
POLICY OWNER ("you, your") - 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 Policy Owner. A collateral assignee is not the
Policy Owner.
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.
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 Ameritas may reasonably require to
establish the validity of the claim.
SEPARATE ACCOUNT LLVL - Ameritas Life Insurance Corp. Separate Account LLVL, a
separate investment account established by Ameritas to receive and invest the
net premiums paid under the Policy and allocated by the Policy Owner to Separate
Account LLVL.
SPECIFIED AMOUNT - The minimum death benefit under the Policy, as selected by
the Policy Owner, which must be $100,000 or more at the Issue Date.
SUBACCOUNT - A subdivision of Separate Account LLVL. 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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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 Policy Debt.
DIAGRAM OF POLICY
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PREMIUM PAYMENTS
You can vary amount and frequency.
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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.
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NET PREMIUM
You direct the net premium to be invested in the Fixed Account or in Separate
Account LLVL which offers 25 different Subaccounts. The Subaccounts invest in
the corresponding portfolios of CVS Social Portfolios, Vanguard, Neuberger
Berman AMT, Berger IPT or Rydex
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DEDUCTIONS FROM ASSETS
Monthly charge for cost of insurance and cost of any riders. The charge varies
by the Policy duration and Specified Amount and the Attained Age, gender, and
risk class of the Insured.
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.
Fund expense charges, which ranged from .20% to 2.17% at the most recent
fiscal year end, are also deducted.
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LIVING BENEFITS
Partial Withdrawals may be made (subject to certain restrictions). The death
benefit will be reduced by the amount of the Partial Withdrawal. Partial
withdrawals are subject to a maximum charge of the lesser of $50 (currently
$25) or 2% of the amount withdrawn. Up to fifteen free transfers may be made
each year between the investment portfolios. After 15 free transfers each
Policy Year, ALIC may assess a fee of $10 per transfer.
Accelerated payment of up to 50% of the lowest scheduled Death Benefit is
available under certain conditions for Insureds suffering from terminal
illness.
The Policy may be surrendered at any time for its Net Cash Surrender Value. The
Policy has no surrender charge. However, there is a charge for Partial
Withdrawals.
RETIREMENT BENEFITS
Loans may be taken at a net zero interest rate after ten years. Should the
Policy lapse while loans are outstanding the portion of the loan attributable
to earnings will become taxable distributions. (See page 22).
Payments can be taken under one or more of five different payment options.
DEATH BENEFITS
Generally, Death Benefit income is income tax free to the Beneficiary.
Available as lump sum or under the five payment methods available as
retirement benefits.
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SUMMARY
This summary is intended to highlight the most important features of the Policy
that you, as a prospective Policy Owner, should consider. You will find more
detailed information in the main portion of the prospectus. As you review this
summary, note the capitalized terms. Each is defined in the Definitions section
of this prospectus. This summary and all other parts of this prospectus are
qualified in their entirety by the terms of the Policy, which is available upon
request from Ameritas.
WHO ISSUES THE POLICY?
Ameritas issues the Policy. The Policy is available for individuals and for
corporations and other institutions who wish to provide coverage and benefits
for key employees. A separate account of Ameritas, Separate Account LLVL has
been established to hold the assets supporting the Policy. Separate Account LLVL
has 25 Subaccounts which correspond to, and are invested in, the portfolios of
the Funds discussed herein. (See the section on Ameritas, the Separate Account
and The Funds). The financial statements for Ameritas can be found beginning on
page F-II-1.
WHY SHOULD I CONSIDER PURCHASING THE POLICY?
The primary purpose of the Policy is to provide life insurance protection on the
Insured named in the Policy. This means that, so long as the Policy is in force,
it will provide for:
- - life insurance coverage on the Insured up to age 100
- - an Accumulation Value
- - Surrender rights (including Partial Withdrawals and Surrender)
- - Policy loan privileges
- - a variety of optional benefits and riders that you may add to the Policy for
an additional charge or without charge if certain minimum premiums are paid
- - the payment of benefits to the Policy Owner, if living, on the Maturity Date
This Policy lets you choose, within limitations: (1) the amount and frequency of
premium payments; (2) how your Accumulation Values are invested; and (3) from
two death benefit options.
The Policy also includes an investment component. This means that, so long as
the Policy is in force, you will be responsible for selecting the manner in
which Net Premium will be invested. Thus, the value of a Policy will reflect
your investment choices over the life of the Policy.
WHAT ARE THE CHARGES ASSOCIATED WITH OWNERSHIP OF A POLICY?
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 Ameritas 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. Ameritas does not expect to derive a profit from the premium
charges. (See the section on Deductions From Premium Payment.)
MONTHLY CHARGES AGAINST THE ACCUMULATION VALUE.
a) A monthly maintenance charge of up to $9.00 (currently Ameritas is charging
$9.00 per month during the first Policy Year and during any 12-month period
after an increase in specified amount, and $4.50 per month thereafter) to
compensate Ameritas 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 the section on Charges Deducted from Accumulation Value.)
DAILY CHARGES AGAINST THE SEPARATE ACCOUNT. A daily charge will be imposed 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 Ameritas
for mortality and expense risks assumed in connection with the Policy. (See the
section on Daily Charges Against the Separate Account.).
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No additional charges are currently made against Separate Account LLVL for
federal, state or local taxes. If there is a material change from the expected
treatment of Ameritas under federal, state or local tax laws, Ameritas may
determine to make deductions from Separate Account LLVL to pay those taxes. (See
the section on Taxes.)
SURRENDER CHARGE. This policy has no surrender charge. However, there is a
charge for Partial Withdrawals. (See below).
TRANSFER CHARGE. The first 15 transfers of Accumulation Value per policy year
are free of charge. Then a $10 administrative charge may be assessed for each
additional transfer. The transfer charge will be deducted from the amount
transferred. (See the section on Transfer Charge.)
PARTIAL WITHDRAWAL CHARGE. Ameritas may deduct a charge, not to exceed the
lesser of $50 or 2% of the amount withdrawn 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
Ameritas for the administrative costs of Partial Withdrawals. A Partial
Withdrawal charge is not assessed when a Policy is surrendered. (See the section
on Partial Withdrawal Charge.)
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FUND EXPENSE SUMMARY. Fee information about the Funds was provided to Ameritas
by the Funds. Ameritas has not independently verified such information. The
amount of expenses borne by each portfolio for the fiscal year ended December
31, 1999, was as follows:
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WAIVERS AND/OR
TOTAL
(Reflecting
INVESTMENT waivers and/or
ADVISORY & OTHER REIMBURSEMENTS, REIMBURSEMENTS,
PORTFOLIO MANAGEMENT EXPENSES TOTAL IF ANY IF ANY)
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VANGUARD(1)
Money Market 0.16% 0.04% 0.20% -- 0.20%
High-Grade Bond 0.19% 0.04% 0.23% -- 0.23%
High Yield Bond 0.26% 0.03% 0.29% -- 0.29%
Balanced 0.27% 0.02% 0.29% -- 0.29%
Equity Income 0.31% 0.02% 0.33% -- 0.33%
Equity Index 0.17% 0.01% 0.18% -- 0.18%
Growth 0.33% 0.02% 0.35% -- 0.35%
Small Company Growth 0.45% 0.04% 0.49% -- 0.49%
International 0.38% 0.08% 0.46% -- 0.46%
CVS SOCIAL PORTFOLIOS
Social Small Cap Growth 1.00% 0.58%(2) 1.58% -- 1.58%
Social Mid Cap Growth 0.90% 0.21%(2) 1.11% -- 1.11%
Social International Equity 1.10% 0.50%(2) 1.60%(3) -- 1.60%
Social Balanced 0.70% 0.19%(2) 0.89% -- 0.89%
NEUBERGER BERMAN AMT
Liquid Asset 0.65% 0.44% 1.09% 0.08%(4) 1.01%
Limited Maturity Bond 0.65% 0.11% 0.76% -- 0.76%
Growth 0.84% 0.08% 0.92% -- 0.92%
Partners 0.80% 0.07% 0.87% -- 0.87%
Balanced 0.85% 0.17% 1.02% -- 1.02%
BERGER IPT
Growth Fund 0.75% 1.44% 2.19% 1.19% 1.00%(7)
Small Company Growth 0.90% 0.63% 1.53% 0.38% 1.15%(7)
RYDEX(9)
Nova Fund 0.74% 0.80% 1.55% -- 1.55%
Ursa Fund 0.90% 0.83% 1.73% -- 1.73%
OTC Fund 0.75% 0.80% 1.96% -- 1.96%
Precious Metals Fund 0.75% 1.42% 2.17% -- 2.17%
U.S. Government Bond Fund 0.50% 1.02% 1.52% -- 1.52%
</TABLE>
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(1) Vanguard has a 9/30/99 fiscal year end. (All other Funds have a 12/31/99
fiscal year end.)
(2) "Other Expenses" reflect an indirect fee. Net fund operating expenses after
reductions for fees paid indirectly would be as follows:
<TABLE>
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CVS Social Small Cap Growth 1.15%
CVS Social Mid Cap Growth 1.02%
CVS Social International Equity 1.50%
CVS Social Balanced 0.86%
</TABLE>
(3) Total expenses have been restated to reflect expenses expected to be
incurred in 2000, resulting from a change in 1999 to the administrative
agreement, as approved by the shareholders.
(4) NBMI has undertaken through May 1, 2001 to reimburse certain operating
expenses, including the compensation of NBMI (with respect to all portfolios
but the Liquid Asset Portfolio), taxes, interest, extraordinary expenses,
brokerage commissions and transaction costs, that exceed, in the aggregate,
1% of the average daily net asset value.
(5) Expenses reflect fee waiver and reimbursement.
(6) For the period ending December 31, 1999, there were no waivers or
reimbursements.
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WHAT PREMIUM MUST BE PAID TO KEEP A POLICY IN FORCE?
This Policy differs from a conventional life insurance policy in two important
ways. 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 the section on Payment and Allocation of Premiums.)
You must pay at least 25% of the total first year monthly deductions including
charges for riders, and any substandard risk adjustments in order to put the
Policy in force. This minimum initial premium is less than the Guaranteed Death
Benefit Premium. After the minimum initial premium is paid, you may pay
additional unscheduled premiums in any amount and at any frequency, subject only
to the maximum and minimum limitations set by Ameritas and the federal tax law
limits on total premiums paid. You 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 its Net Cash Surrender Value is not sufficient to pay
the monthly deduction for insurance and administrative charges, unless the
Guaranteed Death Benefit Provision is in effect. A 61 day period from the date
written notice of lapse is mailed to the Policy Owner's last known address will
be allowed for the Policy Owner to make sufficient payment to keep the Policy in
force (grace period).
HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED TO ME?
Your Policy will be issued after a completed application is accepted, and the
initial premium payment is received, by Ameritas at its Home Office. Ameritas'
Home Office is located at 5900 "O" Street, Lincoln, NE 68501. Your initial
premium will be allocated to the Money Market Subaccount for 13 days following
the Issue Date, and then will be allocated to the Subaccounts and/or the Fixed
Account, according to selections you made in your application. You have the
right to examine your Policy and return it for a refund for a limited time, even
after the Issue Date. (See the section on Refund Privilege.)
You may make subsequent premium payments according to your Planned Periodic
Premium schedule; although you are not required to do so. Ameritas will send
premium payment notices to you according to any schedule you select. When
Ameritas receives your premium payment at its Home Office, the premium charge
for taxes will be deducted and the Net Premium will be allocated to the
Subaccounts and/or the Fixed Account according to your selections. (See the
sections on Allocation of Net Premiums and Deductions from Premium Payment.)
As already noted, the Policy provides you considerable flexibility in
determining the frequency and amount of premium payments. This flexibility is
not, however, unlimited. You should keep certain factors in mind in determining
the payment schedule that is best suited to your needs. These include maximum
premium limits established under the federal tax laws and the impact that
reduced premium payments may have on the Net Cash Surrender Value of your
Policy. (See the sections on Premium Limitations and Planned Periodic Premiums.)
HOW DOES THE INVESTMENT COMPONENT OF MY POLICY WORK?
Ameritas has established Separate Account LLVL, which is separate from all other
assets of Ameritas, as a vehicle to receive and invest premiums received from
Policy Owners. Separate Account LLVL is divided into separate Subaccounts. Each
Subaccount invests exclusively in shares of one of the investment portfolios
available through the Policy. You may allocate Net Premiums to one or more
Subaccounts, or to Ameritas' Fixed Account in your initial application. These
allocations may be changed by notifying Ameritas' Home Office. The aggregate
value of your interests in the Subaccounts and the Fixed Account will represent
the Accumulation Value of your Policy (See the section on Accumulation Value.)
You may make transfers among the Investment Options. All transfers are subject
to the limits we set. We will only allow transfers with regard to Rydex
according to administrative rules we have set. The Policy's Accumulation Value
in Separate Account LLVL 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 Separate Account LLVL
is borne by the Policy Owner. Ameritas does not guarantee a minimum
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Accumulation Value in Separate Account LLVL. (See the section on Accumulation
Value.) Ameritas does guarantee the Fixed Account.
WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE POLICY?
The Investment Options available through the Policy include 25 investment
portfolios, each of which is a separate series of a mutual fund from CVS Social
Portfolios, Vanguard, Neuberger Berman AMT, Berger IPT and Rydex. These
portfolios are listed in the Fund Expense Summary, above.
Details about the investment objectives and policies of each of the available
investment portfolios, including management fees and expenses, appear in the
section on The Funds. There is no assurance that these objectives will be met.
The Policy Owner bears the entire investment risk for amounts allocated to the
Subaccounts. In addition to the listed portfolios, you may also elect to
allocate Net Premiums to Ameritas' Fixed Account. (See the section on Fixed
Account.)
HOW DOES THE LIFE INSURANCE COMPONENT OF A POLICY WORK?
A Policy provides for the payment of a minimum Death Benefit upon the death of
the Insured. The amount of the minimum Death Benefit -- sometimes referred to as
the Specified Amount of your Policy -- is chosen by you at the time your Policy
is established. However, Death Benefit Proceeds -- the actual amount that will
be paid after Ameritas receives Satisfactory Proof of Death of the
Insured -- will vary over the life of your Policy, depending on which of the two
available coverage options you select.
If you choose Option A, Death Benefit Proceeds payable under your Policy will be
the Specified Amount of your Policy or the applicable percentage of its
Accumulation Value, whichever is greater. If you choose Option B, Death Benefit
Proceeds payable under your Policy will be the Specified Amount of your Policy
PLUS the Accumulation Value of your Policy, or if it is higher, the applicable
percentage of the Accumulation Value on the date of death. In either case, the
applicable percentage is established based on the age of the Insured at the date
of death (See the section on Death Benefit Options.)
If the Extended Maturity Rider is in effect, the Death Benefit will be the
Accumulation Value.
ARE THERE ANY RISKS INVOLVED IN OWNING A POLICY?
Yes. Over the life of your Policy, the Subaccounts to which you allocate your
premiums will fluctuate with changes in the stock market and overall economic
factors. These fluctuations will be reflected in the Accumulation Value of your
Policy and may result in loss of principal. For this reason, the purchase of a
Policy may not be suitable for all individuals. It may not be advantageous to
purchase a Policy to replace or augment your existing insurance arrangements.
Appendix A includes tables illustrating the impact that hypothetical market
returns would have on Accumulation Values under a Policy.
IS THE ACCUMULATION VALUE OF MY POLICY AVAILABLE BEFORE THE MATURITY DATE
WITHOUT SURRENDER?
Yes. You may access the value of your Policy in one of two ways. First, you may
obtain a loan, secured by the Policy, after the first Policy anniversary. The
maximum amount you may borrow is 100% of the Net Cash Surrender Value after
adjustment for loan interest and guaranteed monthly deductions for the remainder
of the Policy Year. The maximum interest rate on any such loan is 6% annually;
the current rate is 5.5% annually. After the tenth Policy anniversary, you may
borrow each year against a limited amount of the Accumulation Value at a reduced
rate. Any loan transaction will permanently affect the values of the Policy.
Further, a 10% penalty tax may apply. (See the section on Federal Tax Matters.)
If the Outstanding Policy Debt exceeds the Policy's Accumulation Value and any
accrued expenses, you must pay the excess, or the Policy may terminate without
value. If the Policy lapses while policy loans are outstanding, the portion of
the loans attributable to earnings will become taxable. (See the section on Loan
Benefits.)
You may also access the value of your Policy by making a partial withdrawal. A
partial withdrawal may not exceed the Net Cash Surrender Value, and the Net Cash
Surrender Value after a partial withdrawal must be the greater of $1,000 or an
amount sufficient to keep the Policy in force for the remainder of the Policy
Year. Partial withdrawals will reduce both the Accumulation Value and the Death
Benefit payable under the Policy. Ameritas may deduct a charge from each partial
withdrawal (See the section on Partial Withdrawals.)
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You may, of course, surrender the Policy at any time and receive its Net Cash
Surrender Value. However, Surrender terminates your life insurance protection.
CAN I ADJUST DEATH BENEFITS?
Yes. After the first Policy anniversary you may adjust the Death Benefit by
changing the Death Benefit option. You may also adjust the Death Benefit by
decreasing the Specified Amount of the Policy after the first Policy Year. A
change in the Specified Amount and a change in the Death Benefit option may only
be made once per year, and are subject to certain limits. No change will be
allowed if the resulting Specified Amount is less than the minimum allowed. 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. A change
in the Death Benefit option from Option A to Option B will require satisfactory
evidence of insurability. Finally, if, following the decrease in Specified
Amount, the Policy would not comply with the premium limitations required by
federal tax law, we may limit the decrease or return Accumulation Value in order
to meet the requirements of the federal tax law. (See the section on Death
Benefit Options.)
WHAT IS THE 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 the section on Federal Tax Matters-Tax Status of the Policy),
Partial Withdrawals or Surrenders, assignments, policy pledges, and loans under
the Policy will be taxable to the Policy Owner 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 Policy Owner reaching age 59 1/2. (For further
detail regarding taxation, see the section on Federal Tax Matters.)
MAY I RETURN THE POLICY FOR A REFUND OR EXCHANGE IT FOR ANOTHER POLICY?
REFUND PRIVILEGE. You have a period of time (a "free look period") to examine a
Policy and return it for a refund. You may cancel the Policy within 45 days
after Part I of the application is signed, within 10 days after you receive the
Policy, or 10 days after Ameritas 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 the section on
Refund Privilege.)
EXCHANGE PRIVILEGE. During the first 24 months after the Policy Date of the
Policy, subject to certain restrictions, you may exchange the Policy for a
flexible premium adjustable life insurance policy issued and made available for
exchange by Ameritas. 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 the section on Exchange Privilege.)
WHEN DOES MY POLICY TERMINATE?
You may terminate your Policy by Surrendering the Policy during the lifetime of
the Insured for its Net Cash Surrender Value. (See the section on Surrenders.)
As noted above, your Policy will terminate if you fail to maintain sufficient
Net Cash Surrender Value to cover policy charges. (See the section on Duration
of the Policy.)
Finally, your Policy will terminate on its Maturity Date if the named Insured is
living on that date, unless you have elected the extended maturity rider. The
Maturity Date is the policy anniversary nearest to the Insured's 100th birthday.
On the Maturity Date, Ameritas will pay you an amount equal to the Accumulation
Value of your Policy, less any Outstanding Policy Debt. (See the section on
Benefits at Maturity.)
YEAR 2000
Like other insurance companies and their separate accounts, Ameritas and
Separate Account LLVL could be adversely affected if the computer systems they
rely upon do not properly process date-related information and data involving
the years 2000 and after. This issue arose because both mainframe and PC-based
computer hardware and software have traditionally used two digits to identify
the year. For example, the year 1998 is input, stored and calculated as "98."
Similarly, the year 2000 would be input, stored and
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calculated as "00." If computers assume this means 1900, it could cause errors
in calculations, comparisons, and other computing functions.
Like all insurance companies, Ameritas makes extensive use of dates and date
calculations. We began a corporate-wide Year 2000 (Y2K) project in mid-1996. Our
goal is to ensure that our computer systems continue to operate smoothly with no
service disruptions before, during or after the year 2000.
As of April 15, 2000, Ameritas has experienced no known Y2K problems. All of our
computer application and operating systems had been updated for the year 2000 by
December 31, 1998. Continuous testing and monitoring throughout 1999 helped
Ameritas continue to meet our contractual and service obligations to our
customers. In addition to our internal efforts, Ameritas is working closely with
vendors and other business partners to confirm that they too are addressing Y2K
issues on a timely basis. We believe that we are Y2K - compliant; however, in
the event we or our service providers, vendors, financial institutions or others
with which we conduct business, fail to be Y2K - compliant, there would be a
materially adverse effect on us. Certain vendors and/or business partners, due
to their exposure to foreign markets, may face additional Y2K issues. Please see
the Funds' prospectuses for information on the Funds' preparedness for Y2K.
AMERITAS, THE SEPARATE ACCOUNT AND THE FUNDS
AMERITAS LIFE INSURANCE CORP.
Ameritas Life Insurance Corp. ("Ameritas") is a stock life insurance company
domiciled in Nebraska since 1887. Ameritas and its subsidiaries are currently
licensed to sell life insurance and annuities in 50 states, and the District of
Columbia. The Home Office of Ameritas is at 5900 "O" Street, Lincoln, Nebraska
68501. Ameritas's telephone number is 800-255-9678 and its website address is
www.ameritas.com.
Ameritas and subsidiaries had total assets at December 31, 1999 of over $4.8
billion. Ameritas enjoys a long standing A+ (Superior) rating for financial
strength and operating performance from A.M. Best, an independent firm that
analyzes insurance carriers. This is the second highest of Best's 15 categories.
Ameritas has been rated A- (Excellent) by Weiss Research, Inc., for fiscal
strength. This is the third highest of Weiss' 16 categories. Ameritas also has
an AA (Very Strong) rating from Standard & Poor's for insurer financial
strength. This is the third highest of Standard & Poor's 21 ratings.
Effective January 1, 1998, Ameritas 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.
Effective January 1, 1999, Ameritas Mutual Holding Company and Acacia Mutual
Holding Corporation merged to form Ameritas Acacia Mutual Holding Company.
Ameritas is wholly owned by Ameritas Holding Company, which is wholly owned by
Ameritas Acacia Mutual Holding Company. There are no other owners of 5% or more
of the outstanding voting securities of Ameritas.
Ameritas Investment Corp. ("AIC"), the principal underwriter of the Policies,
may publish in advertisements and reports to Policy Owners, the ratings and
other information assigned to Ameritas by one or more independent rating
services. The purpose of the ratings is to reflect the financial strength of
Ameritas. The ratings do not relate to the performance of Separate Account LLVL.
Published material may also include 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 programs and methods.
AMERITAS LIFE INSURANCE CORP. SEPARATE ACCOUNT LLVL
Ameritas Life Insurance Corp. Separate Account LLVL ("Separate Account LLVL")
was established under Nebraska law on August 24, 1994. The assets of Separate
Account LLVL are held by Ameritas and are segregated from all of Ameritas' other
assets. These assets are not chargeable with liabilities arising out of any
other business which Ameritas may conduct, including any income, gains, or
losses of Ameritas. Although the assets maintained in Separate Account LLVL will
not be charged with any liabilities arising out of Ameritas' other business, all
obligations arising under the Policies are liabilities of Ameritas who
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will maintain assets in Separate Account LLVL of a total market value at least
equal to the reserve and other contract liabilities of Separate Account LLVL.
Nevertheless, to the extent assets in Separate Account LLVL exceed Ameritas'
liabilities in Separate Account LLVL, the assets are available to cover the
liabilities of Ameritas' General Account. Ameritas may, from time to time,
withdraw assets available to cover the General Account obligations. Separate
Account LLVL is registered with the Securities and Exchange Commission ("SEC")
under the Investment Company Act of 1940 ("1940 Act") as a unit investment
trust, which is a type of investment company. This does not involve any SEC
supervision of the management or investment policies or practices of Separate
Account LLVL. For state law purposes, Separate Account LLVL is treated as a
Division of Ameritas.
THE FUNDS
There are currently 25 Subaccounts within Separate Account LLVL available to
Policy Owners for new allocations. Each Subaccount of Separate Account LLVL will
invest only in the shares of a corresponding portfolio of CVS Social Portfolios,
Vanguard, Neuberger Berman AMT, Berger IPT, or Rydex (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 Calvert Variable Series, Inc. portfolios invest with the philosophy that
long-term rewards to investors will come from those organizations whose
products, services, and methods enhance the human condition and the traditional
American values of individual initiative, equality of opportunity and
cooperative effort. Investments are selected on the basis of their ability to
contribute to the dual objectives of financial soundness and social criteria.
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 Ameritas by the underlying Funds. Ameritas has not independently
verified this information.
The investments in the Funds may be managed by Fund managers which manage one or
more other mutual funds that have similar names, investment objectives, and
investment styles as the Funds. You should be aware that the Funds are likely to
differ from the other mutual funds in size, cash flow pattern, and tax matters.
Thus, the holdings and performance of the Funds can be expected to vary from
those of the other mutual funds.
Each Policy Owner 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.
Separate Account LLVL will purchase and redeem shares from the Portfolios at the
net asset value. Shares will be redeemed to the extent necessary for Ameritas 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 Policy Owners. Any dividend or capital gain
distribution received is automatically reinvested in the corresponding
Subaccount.
Since CVS Social Portfolios, Vanguard, Neuberger Berman AMT, Berger IPT and
Rydex 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 Separate Account LLVL 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
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separate accounts from the Funds, to resolve the matter. Where applicable, 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
CVS SOCIAL PORTFOLIOS
CVS SOCIAL SMALL CAP GROWTH PORTFOLIO seeks to provide long-term capital
appreciation by investing primarily in equity securities of companies that have
small market capitalizations. It invests at least 65% of assets in the common
stocks of small-cap companies. Returns in the portfolio will be mostly from the
changes in the price of the portfolio's holdings (capital appreciation). The
portfolio currently defines small-cap companies as those with market
capitalization of $1 billion or less at the time the portfolio initially
invests.
CVS SOCIAL MID CAP GROWTH PORTFOLIO seeks to provide long-term capital
appreciation by investing primarily in a nondiversified portfolio of the equity
securities of mid-sized companies that are undervalued but demonstrate a
potential for growth. It invests primarily in the common stocks of mid-size
companies. Returns in the portfolio will be mostly from the changes in the price
of the portfolio's holdings (capital appreciation.) The portfolio currently
defines mid-cap companies as those within the range of market capitalizations of
the S&P's Mid-Cap 400 Index. Most companies in the Index have a capitalization
of $500 million to $10 billion.
CVS SOCIAL INTERNATIONAL EQUITY PORTFOLIO seeks to provide a high total return
consistent with reasonable risk by investing primarily in a globally diversified
portfolio for equity securities. It invests primarily in the common stocks of
mid- to large-cap companies using a value approach. The portfolio identifies
those countries with markets and economies that it believes currently provide
the most favorable climate for investing. The portfolio invests primarily in
more developed economies and markets. No more that 5% of Portfolio assets are
invested in the U.S.
CVS SOCIAL BALANCED PORTFOLIOS seeks to achieve a competitive total return
through an actively managed portfolio of stocks, bonds and money market
instruments which offer income and capital growth opportunity and which satisfy
the investment and social criteria. Typically it invests about 60% of its assets
in stocks and 40% in bonds or other fixed-income investments. Stock investments
are primarily common stock in large-cap companies, while the fixed-income
investments are primarily a wide variety of investment grade bonds.
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
short-term 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. An investment in the Portfolio is
not insured or guaranteed by the Federal Deposit Insurance Corporation or any
other government agency. Although the Portfolio seeks to preserve the level of
your investment at $1.00 per share, it is possible to lose money by investing in
the Portfolio.
HIGH-GRADE BOND PORTFOLIO seeks to provide a high level of income by attempting
to parallel the investment results (income plus capital change) of a broad-based
market index of publicly-traded, investment grade fixed-income securities. The
Portfolio invests in a diversified sample of fixed income and mortgage-backed
securities included in the Lehman Brothers Aggregate Bond Index.
HIGH YIELD BOND PORTFOLIO seeks to provide a high level of current income by
investing in a diversified portfolio of lower quality, higher-risk,
high-yielding corporate debt securities (commonly referred to as "junk bonds").
BALANCED PORTFOLIO seeks to conserve capital, while providing moderate income
and moderate long-term growth of capital and income. The Portfolio invests in a
diversified portfolio of common stocks and bonds.
EQUITY INCOME PORTFOLIO seeks to provide a relatively high level of current
income and the potential for long-term growth of capital and income by investing
principally in dividend-paying stocks with the potential for capital
appreciation.
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EQUITY INDEX PORTFOLIO seeks to provide long-term growth of capital and income
by attempting to parallel the investment results of a broad-based market index
of stocks of large U.S. companies. The Portfolio invests primarily in common
stocks included in the Standard & Poor's 500 Composite Stock Price Index.
GROWTH PORTFOLIO seeks to provide long-term growth of capital by investing
primarily in large capitalization stocks of high-quality seasoned U.S. companies
with records of superior growth.
SMALL COMPANY GROWTH PORTFOLIO seeks to provide long-term growth of capital by
investing primarily in equity securities of small companies deemed to have
favorable prospects for growth and price appreciation.
INTERNATIONAL PORTFOLIO seeks to provide long-term growth of capital 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. This Fund
invests mainly in investment grade bonds and other debt securities from U.S.
Government and corporate issuers.
GROWTH PORTFOLIO seeks growth of capital. Principal series investments are
common stocks.
PARTNERS PORTFOLIO seeks capital growth. Principal series investments are common
stocks of mid- to large-cap companies.
BALANCED PORTFOLIO seeks long-term capital growth and reasonable current income
without undue risk to principal. Principal series investments are common stocks
and investment grade bonds and other debt securities from U.S. Government and
corporate issuers.
BERGER IPT
BERGER IPT-GROWTH 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 whose market capitalization, at the time of initial purchase, is less
than the 12-month average of the maximum market capitalization for companies
included in the Russell 2000 Index. This average is updated monthly.
RYDEX
NOVA FUND -- seeks to provide investment returns that are 150% of the daily
price movement of the S&P 500 Index. The Fund invests a significant extent in
futures contracts and options on: securities, futures contracts, and stock
indexes. The Fund holds U.S. Government securities to collateralize these
futures and options contracts.
URSA FUND -- seeks to provide investment results that will inversely correlate
to the performance of the S&P 500 Index. The Fund invests a significant extent
in futures contracts and options on: securities, futures contracts, and stock
indexes. The Fund holds U.S. Government securities to collateralize these
futures and options contracts.
OTC FUND -- seeks to provide investment results that correspond to a benchmark
for over-the-counter securities. The Fund's current benchmark is the NASDAQ 100
Index. The Fund invests principally in securities of companies included in the
NASDAQ 100 index.
PRECIOUS METALS FUND -- seeks to provide capital appreciation by investing in
U.S. and foreign companies that are involved in the precious metals sector. They
will include exploration, mining, production and development, and other precious
metals related services.
U.S. GOVERNMENT BOND FUND -- seeks to provide investment results that correspond
to a benchmark for U.S. Government securities. The Fund's current benchmark is
120% of the daily price movement of the Long Treasury Bond. The Fund invests
principally in U.S. Government securities, futures contracts, and
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options. Some of the Fund's U.S. Government securities will be used to
collateralize these futures and options contracts.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
Ameritas reserves the right, subject to applicable law, to add, delete, combine,
or substitute investments in Separate Account LLVL if, in our judgment,
marketing needs, tax considerations, or investment conditions warrant. This may
happen due to a change in law or a change in a Fund's objectives or
restrictions, or for some other reason. Ameritas may operate Separate Account
LLVL 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
Ameritas separate accounts. Ameritas may also transfer the assets of Separate
Account LLVL to another separate account. If necessary, we will notify the SEC
and/or state insurance authorities and will obtain any required approvals before
making these changes.
If any changes are made, Ameritas may, by appropriate endorsement, change the
Policy to reflect the changes. In addition, Ameritas may, when permitted by law,
restrict or eliminate any voting rights of Policy Owners or other persons who
have voting rights as to Separate Account LLVL. Ameritas will determine the
basis for making any new Subaccounts available to existing Policy Owners.
You will be notified of any material change in the investment policy of any Fund
in which you have an interest.
FIXED ACCOUNT
You may elect to allocate all or a portion of your Net Premium to the Fixed
Account, and you may also transfer monies between Separate Account LLVL and the
Fixed Account. (See the section on Transfers.)
Payments allocated to the Fixed Account and transferred from Separate Account
LLVL to the Fixed Account are placed in Ameritas' General Account. The General
Account includes all of Ameritas' assets, except those assets segregated in the
separate accounts. Ameritas has the sole discretion to invest the assets of the
General Account, subject to applicable law. Ameritas 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. The Policy Owner
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 nor is the General Account
registered as an investment company under the Investment Company Act of 1940.
Accordingly neither the General Account nor any interest in it is generally
subject to the provisions of the 1933 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 Policy; however,
disclosures regarding the Fixed Account portion of the Policy may be subject to
generally applicable provisions of the federal securities laws regarding the
accuracy and completeness of statements made in prospectuses.
Ameritas guarantees that it will credit interest at a declared rate of at least
3.5%. 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 later 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 increase or decrease from
previous periods.
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POLICY BENEFITS
The rights and benefits under the Policy are summarized in this prospectus;
however prospectus disclosure regarding the Policy is qualified in its entirety
by the Policy itself, a copy of which is available upon request from Ameritas.
PURPOSES OF THE POLICY
The Policy is designed to provide you 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.
You are 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 you to adjust the level of death benefits
payable under the Policy without having to purchase a new Policy. You can
accomplish this 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, you have 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 Separate Account LLVL. Thus you benefit
from any appreciation in value of the underlying assets, but bear 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 Separate Account LLVL. Ameritas 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, Ameritas 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 the section on Payment Options.)
Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries you specified in the application or as subsequently changed. If
you do not choose a Beneficiary, the proceeds will be paid to you, as the Policy
Owner, or to your estate.
DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options, unless the Extended Maturity
Rider is in effect. If the Extended Maturity Rider is in effect the Death
Benefit will be the Accumulation Value. Extension of the Maturity Date may
result in adverse tax consequences. (See the section on Additional Insurance
Benefits (Riders) -- Extended Maturity Rider.)The Policy Owner 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 the section on Policy Lapse and Reinstatement.) The
minimum initial Specified Amount is generally $100,000. Lower Specified Amounts
may be requested. The Net Amount at Risk for Option A will generally be less
than the Net Amount at Risk for Option B. If you choose Option A, your cost of
insurance deduction will generally be lower than if you choose Option B. (See
the section on Charges and Deductions.) The following graphs illustrate the
differences in the two Death Benefit options.
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OPTION A.
(OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION A, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE
ACCUMULATION VALUE.)
[GRAPH]
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.
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 Attained Age 40 is 250%, at Attained Age 50 is 185%,
at Attained Age 60 is 130%, at Attained Age 70 is 115%, at Attained Age 80 is
105%, and at Attained 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.
Policy Owners 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
ACCUMULATION VALUE.)
[GRAPH]
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). Policy Owners who prefer to have favorable investment performance, if
any, reflected in increased insurance coverage, rather than higher Accumulation
Values, generally should select Option B.
CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed once per
year after the first Policy Year by sending Ameritas 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 Ameritas. 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
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the change. Ameritas 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 the sections on Charges and Deductions, and Federal Tax
Matters.)
CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
Policy Year, you 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 your cost of insurance charge and have
federal tax consequences. (See the sections on Charges and Deductions, and
Federal Tax Matters.)
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 Ameritas. The Specified Amount of a Policy may be changed only once
per year and Ameritas 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 (See the
section on Premiums), the decrease may be limited or Accumulation Value may be
returned to the Policy Owner at the Policy Owner'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. Ameritas 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 the section on Premiums Upon Increases in Specified
Amount.) 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 the
section on Charges and Deductions.)
METHODS OF AFFECTING INSURANCE PROTECTION. You 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 the section on
Charges Deducted from Accumulation Value.) 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 Policy Owner, the Policy will
lapse and terminate without value. (See the section on Policy Lapse and
Reinstatement.) Ameritas 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 the section on Additional
Insurance Benefits.)
ACCUMULATION VALUE. The Policy's Accumulation Value in Separate Account LLVL or
the Fixed Account will reflect the investment performance of the chosen
Subaccounts of Separate Account LLVL or the Fixed Account, the net premiums
paid, any Partial Withdrawals, and the charges assessed in connection
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with the Policy. You may at any time surrender the Policy and receive the
Policy's Net Cash Surrender Value. (See the section on Surrenders.) 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 the section on Allocation of Premiums and Accumulation Value.) Thereafter,
on each Valuation Date, the Accumulation Value of a Policy will equal:
(1) 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
(2) The value of the Fixed Account; plus
(3) Any Accumulation Value impaired by policy debt held in the General
Account; plus
(4) Any net premiums received on that Valuation Date; less
(5) Any Partial Withdrawal, and its charge, made on that Valuation Date;
less
(6) Any monthly deduction to be made on that Valuation Date; less
(7) Any federal or state income taxes charged against the Accumulation
Value.
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 is calculated
by (1) multiplying the net asset value per share of each Fund portfolio on the
Valuation Date times the number of shares held by that Subaccount, before the
purchase or redemption of any shares on that Valuation Date; minus (2) a charge
not exceeding an annual rate of .90% for mortality and expense risk; and (3)
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 Valuation
Date. (See the section on Daily Charges Against the Separate Account.)
VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which the
New York Stock Exchange ("NYSE") is open for trading. The net asset value for
each Fund portfolio is determined as of the close of regular trading on the
NYSE. The net investment return for each Subaccount and all transactions and
calculations with respect to the Policies as of any Valuation Date are
determined as of that time. The transaction cut-off time for receipt by us of
Premium Payments and all transactions with respect to Rydex is 1:30 p.m. Central
time. Rydex requests received after the cutoff time will be executed on the
following business day. A Valuation Period is the period between two successive
Valuation Dates, commencing at the close of the NYSE on each Valuation Date and
ending at the close of the NYSE on the next succeeding Valuation Date.
BENEFITS AT MATURITY
If the Insured is living, we will pay the Net Cash Surrender Value of the Policy
on the Maturity Date to the Policy Owner. 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. The Policy may be
subject to certain adverse tax consequences when continued beyond the original
scheduled Maturity Date. (See the section on Additional Insurance Benefits
(Riders) -- Extended Maturity Rider.)
PAYMENT OF POLICY BENEFITS
We will usually pay Death Benefit Proceeds under the Policy within seven days
after we receive 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 the section on
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Postponement of Payments.) You may decide the form in which the benefits will be
paid. During the Insured's lifetime, you 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, we 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 be paid first 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 We have 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 Ameritas' General Account. We 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:
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.
FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed fixed
amount. Payments continue until the amount we hold runs out.
FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any period
selected up to 20 years.
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.
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 us.
POLICY RIGHTS
LOAN BENEFITS
LOAN PRIVILEGES. After the first Policy anniversary, you 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 the section on Federal Tax
Matters.)
LOAN INTEREST. Ameritas charges interest to Policy Owners at regular and reduced
rates. Regular loans will accrue interest on a daily basis at a rate of up to 6%
per year. Ameritas 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 tenth Policy anniversary, the Policy Owner may borrow each
year a limited amount of the Accumulation Value at a reduced interest rate. For
those loans, interest will accrue on a daily basis at a rate of up to 4% per
year. Ameritas is currently charging 3.5% interest on reduced rate loans. The
amount available at the reduced rate is 10% of the Accumulation Value 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 Investment Options to the
General Account as security for the loan. The Policy Owner earns 3.5% interest
on the Accumulation Values securing the loans. The Accumulation Value
transferred will be allocated from the Investment Options according to the
instructions you give when you request the loan. The minimum amount which can
remain in a Subaccount or the Fixed Account as a
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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 Investment
Options. In any Policy Year that loan interest is not paid when due, Ameritas
will add the interest due to the principal amount of the Policy loan on the next
Policy anniversary. This loan interest due will be transferred from the
Investment Options as set out above. No charge will be made 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
Investment Options on each policy anniversary in the same proportion that Net
Premiums are being allocated to those Investment Options 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 Investment Option.
OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of all
policy loans and accrued interest on policy loans. If the Outstanding Policy
Debt exceeds the Accumulation Value, and any accrued expenses, the Policy Owner
must pay the excess. Ameritas will send a notice of the amount which must be
paid. If the Policy Owner does not make the required payment within the 61 days
after Ameritas sends the notice, the Policy will terminate without value
("lapse"). Should the Policy lapse while policy loans are outstanding the
portion of the loans attributable to earnings will become taxable. You 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, you 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 the section on Policy Lapse and Reinstatement.)
REPAYMENT OF INDEBTEDNESS. Unscheduled premiums paid while a policy loan is
outstanding are treated as repayment of indebtedness only if the Policy Owner 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 Policy Owner may Surrender the Policy by sending a written request to
Ameritas. 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 Ameritas's Home Office. Surrenders will generally be paid within seven days
of receipt of the written request. (See the section on Postponement of
Payments.) Surrenders may have tax consequences. (See the section on Tax
Treatment of Policy Proceeds.)
If the Policy is being Surrendered, the Policy itself must be returned to
Ameritas along with the request. Ameritas will pay the Net Cash Surrender Value.
Coverage under the Policy will terminate as of the date of a Surrender. A Policy
Owner may elect to have the amount paid in a lump sum or under a payment option.
(See the section on Payment Options.)
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 your instructions when you request the Partial Withdrawal. However,
the minimum amount that can remain 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 Investment Options.
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 the sections on Monthly
Deduction - Cost of Insurance and Death Benefit Options - Methods of Affecting
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Insurance Protection.) If Death Benefit 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 fee which does not 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 the section on Partial
Withdrawal Charge.)
TRANSFERS
Accumulation Value may be transferred among the Subaccounts of Separate Account
LLVL and to the Fixed Account as often as desired. However, you may only make
transfers out of the Fixed Account during the 30-day period following each
Policy Anniversary Date. The transfers may be ordered in person, by mail, by
telephone or, when available, through our website. The total amount transferred
each time must be at least $250, or the balance of the Subaccount, if less. The
minimum amount that may remain in a Subaccount or the Fixed Account after a
transfer is $100.
The first 15 transfers per Policy Year will be permitted free of charge. After
that, 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 Policy Owner is invested. (See the
section on Transfer Charge.) Transfers may be subject to additional restrictions
at the Fund level. 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 15 free transfers per Policy Year. Ameritas may at any time
revoke or modify the transfer privilege, including the minimum amount
transferable.
The transaction cut-off time for receipt by us of Premium Payments and all
transactions with respect to Rydex is 1:30 p.m. Central time. Rydex requests
received after the cutoff time will be executed on the following business day.
Transfers out of the Fixed Account are limited to the greater of (1) 25% of the
Fixed Account attributable to the Policy; (2) the largest transfer made by the
Policy Owner out of the Fixed Account during the last 13 months; or (3) $1,000.
This provision is not available while dollar cost averaging from the Fixed
Account.
The privilege to initiate transactions by telephone or through our website, when
available, will be made available to Policy Owners automatically. Ameritas will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine, and if it does not, Ameritas may be liable for any losses
due to unauthorized or fraudulent instructions. The procedures Ameritas follows
for transactions initiated by telephone include, but are not limited to,
requiring the Policy Owner to provide the Policy number at the time of giving
transfer instructions; Ameritas' tape recording of all telephone transfer
instructions; and the provision, by Ameritas, of written confirmation of
telephone transactions.
When available, procedures for making transfers through our website can be
accessed at the Internet address stated in the Ameritas Life Insurance Corp.
section of this prospectus.
The Policy's transfer privilege is not intended to afford Policy Owners 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 Separate Account LLVL and increase transaction costs, Separate
Account LLVL 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: 1) 51% of the Accumulation Value or 2)
$100,000. This restriction does not limit non-substantive transfers and does not
apply to transfers from the Money Market portfolio or the Rydex portfolios.
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SYSTEMATIC PROGRAMS
Ameritas may offer systematic programs as discussed below. These programs will
be subject to administrative guidelines Ameritas may establish from time to
time. We will count your transfers in these programs when determining whether
the transfer fee applies. Lower minimum amounts may be allowed to transfer as
part of a systematic program. No other separate fee is assessed when you choose
one of these programs. All other normal transfer restrictions, as described
above, apply.
PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can instruct
Ameritas to allocate Accumulation Value among the Subaccounts of Separate
Account LLVL on a systematic basis, in accordance with your allocation
instructions. The Fixed Account can not be used in this program.
DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can instruct
Ameritas to automatically transfer, on a systematic basis, a predetermined
amount or specified percentage 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.
You can request participation in the available programs when purchasing the
Policy or at a later date. You 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. Ameritas reserves the right to
modify, suspend or terminate such programs at any time. Participation in any
systematic program will automatically terminate upon death of the Insured. Use
of systematic programs may not be advantageous, and does not guarantee success.
REFUND PRIVILEGE
You may cancel the Policy within 10 days after you receive it, within 10 days
after Ameritas delivers a notice of your 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 Policy Owner must mail or deliver the policy and the
notice of cancellation to the selling agent, or to Ameritas at the Home Office.
A refund of premiums paid by check may be delayed until the check has cleared
the Policy Owner's bank. (See the section on Postponement of Payments.)
EXCHANGE PRIVILEGE
During the first 24 policy months after the Policy Date of the Policy, the
Policy Owner may exchange the Policy for a flexible premium adjustable life
insurance policy approved for exchange and issued by Ameritas. 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 Policy Owner 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 Ameritas. The exchange will be effective on
the Valuation Date when all financial and contractual arrangements for the new
policy have been completed.
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.
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Individuals wishing to purchase a Policy must complete an application and submit
it to Ameritas. 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 Ameritas. Ameritas may, at its sole discretion, issue a Policy
to an individual above the age of 80. Acceptance is subject to Ameritas'
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 Ameritas in its Home
Office, the Issue Date will be the date the Policy is mailed to the Policy Owner
or sent to the agent for delivery to the Policy Owner. 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 Ameritas'
Home Office (federal funds are monies of member banks within the Federal Reserve
System which are held on deposit at a Federal Reserve Bank). 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. Then, the Accumulation Value
will be allocated to the Subaccounts or the Fixed Account as selected by the
Policy Owner.
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 $100,000.
PREMIUMS
No insurance will take effect before an amount equal to or greater than the
minimum initial premium is received by Ameritas 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 Ameritas' Home Office.
Subject to certain limitations, a Policy Owner has flexibility in determining
the frequency and amount of premiums. However, unless the Policy Owner 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. Ameritas 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 the section on Additional Insurance Benefits (Riders).)
PLANNED PERIODIC PREMIUMS. At the time the Policy is issued each Policy Owner
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 Policy Owner is not
required to pay premiums in accordance with this schedule. The Policy Owner has
considerable flexibility to alter the amount and frequency of premiums paid.
Ameritas does reserve the right to limit the number and amount of additional or
unscheduled premium payments.
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Policy Owners can also change the frequency and amount of Planned Periodic
Premiums by sending a written request to the Home Office, although Ameritas
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 the section on Duration of the Policy.)
Unless the Guaranteed Death Benefit provision is in effect, even if Planned
Periodic Premiums are paid by the Policy Owner, 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 the section on Policy
Lapse and Reinstatement.)
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, Ameritas 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. Ameritas 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 Policy Owner, an additional
premium payment may be required. Ameritas will notify the Policy Owner 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 Policy Owner
allocates net premiums to one or more Subaccounts of Separate Account LLVL 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, Ameritas 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. Then,
the Accumulation Value will be allocated to the Subaccounts or the Fixed Account
as selected by the Policy Owner. Premium payments received by Ameritas 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 Ameritas for the period from the
date the payment has been converted into federal funds that are available to
Ameritas. In no event will interest be credited prior to the Policy Date.
ACCUMULATION VALUE. The value of the Subaccounts of Separate Account LLVL will
vary with the investment performance of these Subaccounts and the Policy Owner
bears the entire investment risk. This will affect the Policy's Accumulation
Value, and may affect the Death Benefit as well. Policy Owners 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 Ameritas mails a notice that the grace period has begun. Ameritas
will notify the Policy Owner at the beginning of the grace period by mail
addressed to the last known address on file with Ameritas. The notice will
specify
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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.
If the Net Cash Surrender Value is insufficient to cover the monthly deduction,
the Policy Owner 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 the section on Charges and
Deductions.)
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. We will reinstate your Policy based on the Insured's underwriting
classification at the time of the reinstatement.
Reinstatement is subject to the following:
(1) Evidence of insurability of the Insured satisfactory to Ameritas
(including evidence of insurability of any person covered by a rider
to reinstate the rider);
(2) Any policy debt will be reinstated with interest due and accrued;
(3) The Policy cannot be reinstated if it has been surrendered for its
full Net Cash Surrender Value;
(4) 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
(5) 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
Ameritas' General Account. Accumulation Value calculations will then proceed as
described under the section on Accumulation Value.
The effective date of reinstatement will be the first Monthly Activity Date on
or next following the date of approval by Ameritas of the application for
reinstatement.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate Ameritas
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 Ameritas considers
necessary to pay all premium taxes imposed by the states and their subdivisions
and to defray
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the cost of capitalizing certain policy acquisition expenses as required by
Internal Revenue Code Section 848. Ameritas 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 Ameritas 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 Ameritas for administrative expenses and insurance provided. These
charges will be allocated from the Investment Options on a pro rata basis. Each
of these charges is described in more detail below.
MAINTENANCE CHARGE. To compensate Ameritas 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. Ameritas
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. Ameritas 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.
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
Ameritas' 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. The unisex
rates will be higher than those applicable to females and lower than those
applicable to males. 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 Policy Owners.
The rate class of an Insured will affect the cost of insurance rate. Ameritas
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 rate
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.
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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 the section on Partial Withdrawal
Charge.)
TRANSFER CHARGE
A charge of $10.00 (guaranteed not to increase) for each transfer among the
Investment Options in excess of 15 per Policy Year may be imposed to compensate
Ameritas for the costs of processing the transfer. Since the charge reimburses
Ameritas for the cost of processing the transfer only, Ameritas does not expect
to make any profit from the transfer charge. This charge will be deducted pro
rata from each Investment option in which the Policy Owner 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.
PARTIAL WITHDRAWAL CHARGE
A charge will be imposed for each Partial Withdrawal. This charge will
compensate Ameritas for the administrative costs of processing the requested
payment and in making necessary calculations for any reductions in Specified
Amount which may be required because of the Partial Withdrawal. This charge is
currently 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). 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 Separate
Account LLVL to compensate Ameritas for mortality and expense risks assumed in
connection with the Policy. This daily charge from Separate Account LLVL 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 Separate Account LLVL. The daily charge will be deducted
from the net asset value of Separate Account LLVL, 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 the applicable daily
rate 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.
Ameritas 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 Ameritas is that Insureds may live for a shorter
time than assumed, and that an aggregate amount of death benefits paid will be
greater than initially estimated. The expense risk assumed is that expenses
incurred in issuing and administering the policies will exceed the
administrative charges provided in the policies.
FUND MANAGEMENT FEES
Fee information relating to the underlying funds was provided to Ameritas by the
underlying funds. Ameritas 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 Company, 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. Each portfolio reimburses Vanguard for the costs of providing
corporate management, administrative, distribution and shareholder accounting
services.
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Calvert Asset Management Company Inc., an affiliate of Ameritas, is investment
adviser of the CVS Social Portfolios. Other Calvert entities may provide
administrative services to certain of the portfolios.
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 the Trust. The figures reported
under "Investment Advisory & Management" 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 management 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.
Berger LLC provides investment advisory services to the Berger IPT Funds
available in Separate Account LLVL. Berger LLC agreed to waive its advisory fee
and reimburse 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-Growth 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.
PADCO Advisors II, Inc., investment advisor of the Rydex Variable Trust, and
PADCO Service Company, Inc., servicer to the Rydex Variable Trust, may from time
to time volunteer to waive fees and/or reimburse expenses. For the period ending
December 31, 1999, there were no waivers or reimbursements.
Policy Owners who choose to allocate Net Premiums to one or more of the
Subaccounts will also bear a pro rata share of the management fees and expenses
paid by each of the investment portfolios in which the various Subaccounts
invest. No such management fees are assessed against Net Premiums allocated to
the Fixed Account. (See the summary section for the Fund Expense Summary.)
TAXES. Currently, no additional charges are made against Separate Account LLVL
for federal, state or local income taxes. Ameritas may, however, make such a
charge in the future if income or gains within Separate Account LLVL will incur
any federal, or any significant state or local income tax liability, or if the
federal, state or local tax treatment of Ameritas changes. Charges for such
taxes, if any, would be deducted from Separate Account LLVL and/or the Fixed
Account. (See the section on Federal Tax Matters.)
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 Ameritas. 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. The rights and benefits under
the Policy are summarized in this prospectus. The Policy controls the rights and
benefits. A copy of the Policy is available upon request from Ameritas.
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CONTROL OF POLICY. The Policy Owner 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 Policy
Owner, if living; otherwise to any successor-owner or owners, if living;
otherwise to the estate of the last Policy Owner to die.
BENEFICIARY. The Policy Owner 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 Policy
Owner; otherwise to the estate of the Policy Owner.
CHANGE OF BENEFICIARY. The Policy Owner 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. Ameritas will not be liable for
any payment made or action taken before the change is recorded.
CHANGE OF OWNER OR ASSIGNMENT. In order to change the Policy Owner of the Policy
or assign Policy rights, an assignment of the Policy must be made in writing and
filed with Ameritas at its Home Office. The change will take effect as of the
date the change is recorded at the Home Office, and Ameritas 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
Ameritas 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 Policy Owner, if living;
otherwise to any successor-owner, if living; otherwise to the Policy Owner's
estate. Any proceeds payable on the Maturity Date or upon Surrender shall be
paid in one sum unless an optional method of payment is elected.
INCONTESTABILITY. Ameritas can not contest the Policy or reinstated Policy while
the Insured is alive after it has been in force for two years from the Policy
Date (or reinstatement effective date). After the Policy Date, Ameritas cannot
contest an increase in the Specified Amount or addition of a rider while the
Insured is alive, after such increase or addition has been in force for two
years from its effective date. 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. The Policy does not cover suicide within two years of the Policy Date
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, Ameritas 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, Ameritas' 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: (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 SEC; (2) the SEC by order permits
postponement for the protection of Policy Owners; (3) an emergency exists, as
determined by the SEC, as a result of which disposal of securities is not
reasonably practicable or it is not reasonably practicable to determine the
value of Separate Account LLVL's net assets; or (4) 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
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of any amounts derived from premiums paid by check may be delayed until such
time as the check has cleared the Policy Owner's bank.
REPORTS AND RECORDS. Ameritas will maintain all records relating to Separate
Account LLVL and will mail to the Policy Owner, 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 Policy Owner may receive confirmation of such transactions in
their quarterly statements. The Policy Owner should review the information in
these statements carefully. All errors or corrections must be reported to
Ameritas immediately to assure proper crediting to the Policy. Ameritas will
assume all transactions are accurately reported on quarterly statements unless
Ameritas is otherwise notified within 30 days after receipt of the statement.
The Policy Owner 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 the section on Charges Deducted From Accumulation Value-Monthly Deduction.)
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) Ameritas 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
Ameritas or its affiliates. Ameritas 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
Policy Owner 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 Policy Owner 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.
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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 Ameritas 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 Outstanding 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. The Policy may be subject to certain adverse
tax consequences when continued beyond the Maturity Date. Due to the
lack of specific guidance by the Internal Revenue Service on this issue,
the result is not certain. If the Policy is not treated as a life
insurance contract for federal income tax purposes after the original
scheduled Maturity Date, among other things, the Death Benefit may be
taxable to the recipient. The Policy Owner should consult a qualified
tax advisor regarding the possible adverse tax consequences resulting
from extension of the original scheduled Maturity Date.
DISTRIBUTION OF THE POLICIES
Ameritas Investment Corp. (AIC), a wholly owned subsidiary of AMAL Corporation
(which is majority owned by Ameritas), will act as the principal underwriter of
the Policies, pursuant to an Underwriting Agreement between itself and Ameritas.
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 1999,
AIC received gross variable universal life compensation of $198,771, and
retained $10,753 in underwriting fees, and $19 in brokerage commissions on
Ameritas' variable universal life policies.
AIC offers its clients a wide variety of financial products and services and has
the ability to execute stock and bond transactions on a number of national
exchanges. AIC also serves as principal underwriter for Ameritas' variable
annuities, and for Ameritas Variable Life Insurance Company's variable life and
variable annuities. It also has executed selling agreements with a variety of
mutual funds, unit investment trusts and direct participation programs.
There is no premium load to cover sales and distribution expenses. To the extent
that sales and distribution expenses are paid, if at all, Ameritas 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 Ameritas through its direct consumer
services, 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.
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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.
Ameritas may reduce or waive the sales charge and/or other charges on any Policy
sold to directors, officers or employees of Ameritas or any of its affiliates,
employees and registered representatives of any broker-dealer that has entered
into a sales agreement with Ameritas or AIC and the spouses or children of the
above persons. In no event will any such reduction or waiver be permitted where
it would be unfairly discriminatory to any person.
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
laws except premium taxes. (See the section on Deductions From Premium Payment.)
This discussion is based upon Ameritas' 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. Ameritas 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,
Policy Owner or Beneficiary may be altered.
(1) TAXATION OF AMERITAS. Ameritas 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 Separate Account LLVL is not an entity separate from
Ameritas, and its operations form a part of Ameritas, 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 Separate Account LLVL 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.
Ameritas believes that Separate Account LLVL 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.
Ameritas does not currently expect to incur any additional federal income
tax liability attributable to Separate Account LLVL with respect to the
sale of the Policies. Accordingly, no charge is being made currently to
Separate Account LLVL for federal income taxes. If, however, Ameritas
determines that it may incur such taxes attributable to Separate Account
LLVL, it may assess a charge for such taxes against Separate Account LLVL.
Ameritas 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 Separate Account LLVL. If there is a material
change in state or local tax laws, charges for such taxes attributable to
Separate Account LLVL, if any, may be assessed against Separate Account
LLVL.
(2) 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. Ameritas
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.
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 Policy Owner 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, full Surrenders, assignments, pledges, and loans (including
loans to pay loan
LLVL
34
<PAGE> 35
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 distribution is made because 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 taxpayer 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 the insurance company 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 Ameritas to the same Policy Owner 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 Policy Owner
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 Separate Account LLVL to be "adequately diversified" in
order for the Policy to be treated as a life insurance contract for
federal tax purposes. If the Policy is not treated as life insurance
because it fails the diversification requirements, the Policy Owner is
then subject to federal income tax on gain in the Policy as it is earned.
Separate Account LLVL, 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.
Ameritas does not have control over the Funds or their investments.
However, Ameritas believes that the Funds will be operated in compliance
with the diversification requirements of the Internal Revenue Code. Thus,
Ameritas 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 extent to which policy 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,
Ameritas reserves the right to modify the Policy as necessary to prevent
the Policy Owner from being considered the owner of the assets of Separate
Account LLVL 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.
(3) TAX TREATMENT OF POLICY PROCEEDS. Ameritas believes that the Policy will
be treated in a manner consistent with a fixed benefit life insurance
policy for federal income tax purposes. Thus, Ameritas 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 Policy Owner will not be deemed to
be in constructive receipt of the Accumulation Value under the Policy
until its actual Surrender. However, there are certain exceptions to the
general rule that death benefit proceeds are non-taxable. Federal, state
and local tax consequences of ownership of or receipt of proceeds under a
policy depends on the circumstances of each Policy Owner and Beneficiary.
Distributions From Policies That Are Not "Modified Endowment Contracts."
Distributions (while the Insured is still alive) from a Policy that is not
a modified endowment contract are generally treated as first a recovery of
the investment in the Policy and then only after the return of all such
investment, as disbursing taxable income. However, in the case of a
decrease in the Death Benefit,
LLVL
35
<PAGE> 36
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 Policy Owner in order for the Policy to continue complying with the
Section 7702 defined limits on premiums and Accumulation Values, such
distributions may be taxable in whole or in part as ordinary income to the
Policy Owner ( to the extent of any gain in the Policy) as prescribed in
Section 7702. In addition, upon a complete Surrender or lapse of a Policy
that is not a "modified endowment contract," if the amount received plus
the amount of any outstanding Policy debt exceeds the total investment in
the Policy, the excess will generally be treated as ordinary income for
tax purposes. Investment in the Policy means (1) the total amount of any
premiums paid for the Policy plus the amount of any loan received under
the Policy to the extent the loan is included in gross income of the
Policy Owner minus (2) the total amount received under the Policy by the
Policy Owner that was excludable from gross income, excluding any
non-taxable loan received under the Policy.
Ameritas also believes that loans received under a Policy that is not a
"modified endowment contract" will be treated as debt of the Policy Owner
and that no part of any loan under a Policy will constitute income to the
Policy Owner 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 repealed
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 then
existing debt are included in the Health Insurance Act. The transitional
rules include a phase-out of the deduction for debt 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 occurred
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 debt 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). Any material change in a
policy (including a material increase in the death benefit) may cause the
policy to be treated as a new policy for purposes of the rule. 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 policies 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. Policy Owners should consult a competent tax
advisor concerning the tax implications of these changes for their
Policies.
Distributions From Policies That Are "Modified Endowment Contracts."
Should the Policy become a "modified endowment contract" partial
withdrawals, full 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 made prior to the taxpayer's age
59 1/2. The 10% penalty tax does not apply if the distribution is made
because 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
taxpayer or the joint lives of the taxpayer and Beneficiary.
The right to exchange the Policy for a flexible premium adjustable life
insurance policy (see the section on Exchange Privilege), the right to
change Policy Owners (see the section on General Provisions), and the
provision for Partial Withdrawals (see the section on Surrenders) may have
LLVL
36
<PAGE> 37
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 Policy Owner, 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 Policy Owner 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. Further, the tax
consequences of using the Policy in nonqualified plan arrangements may
vary depending on the particular facts and circumstances of the
arrangement. The advice of competent counsel should be sought in
connection with the use of life insurance in a qualified or nonqualified
plan.
YOU SHOULD CONSULT QUALIFIED TAX AND/OR LEGAL ADVISORS TO OBTAIN COMPLETE
INFORMATION ON FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLICABLE TO
YOUR PARTICULAR SITUATION.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
Ameritas holds the assets of Separate Account LLVL. The assets are kept
physically segregated and held separate and apart from the General Account
assets, except for the Fixed Account. Ameritas maintains records of all
purchases and redemptions of Fund shares by each of the Subaccounts.
THIRD PARTY SERVICES
Ameritas is aware that certain third parties are offering investment advisory
services in connection with the Policies. Ameritas does not engage any such
third parties to offer such services of any type as part of the Policy. Firms or
persons offering such services do so independently from any agency relationship
they may have with Ameritas for the sale of Policies. Ameritas takes no
responsibility for the investment allocations and transfers transacted on a
Policy Owner's behalf by such third parties or any investment allocation
recommendations made by such parties. Policy Owners should be aware that fees
paid for such services are separate and in addition to fees paid under the
Policies.
VOTING RIGHTS
Ameritas is the legal holder of the shares held in the Subaccounts of Separate
Account LLVL 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 shareholder meetings of the Funds. To the
extent required by law, Ameritas will vote all shares of the Funds held in
Separate Account LLVL at regular and special shareholder meetings of the Funds
in accordance with instructions received from Policy Owners 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 Policy Owner 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.
The number of votes will be determined as of the record date established by the
Portfolio. Voting instructions will be solicited by written communication prior
to the shareholder meeting in accordance with procedures established by the
Funds.
Fund shares held in each Subaccount for which no timely instructions from Policy
Owners are received and Fund shares held in each Subaccount which do not support
Policy Owner interests will be voted by Ameritas 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, Ameritas may elect to vote shares of the
Fund in its own right.
LLVL
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<PAGE> 38
DISREGARD OF VOTING INSTRUCTION. Ameritas 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, Ameritas itself may disregard voting instructions that would require
changes in the investment objectives or policies of any portfolio or in an
investment adviser or principal underwriter for the Funds, if Ameritas
reasonably disapproves those changes in accordance with applicable federal
regulations. If Ameritas does disregard voting instructions, it will advise
Policy Owners of that action and its reasons for the action in the next annual
report or proxy statement to Policy Owners.
STATE REGULATION OF AMERITAS
Ameritas, 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 Ameritas and Separate Account LLVL 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 Ameritas and Separate Account LLVL.
In addition, Ameritas 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 AMERITAS
This list shows name and position(s) with Ameritas followed by the principal
occupations for the last five years. Where an individual has held more than one
position with an organization during the last 5-year period, the last position
held has been given.
LAWRENCE J. ARTH, DIRECTOR, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER*
Chairman and Chief Executive Officer: Ameritas Acacia Mutual Holding Company and
Ameritas Holding Company; 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*
Executive Vice President: Ameritas Acacia Mutual Holding Company and Ameritas
Holding Company; 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.
JAMES P. ABEL, DIRECTOR**
President: NEBCO, Inc.
DUANE W. ACKLIE, DIRECTOR**
Chairman: Crete Carrier Corporation; Director: AMAL Corporation
HALUK ARITURK, EXECUTIVE VICE PRESIDENT - AMERITAS ACACIA SHARED SERVICES
CENTER*
Senior Vice President, Operations and Chief Actuary: Acacia Life Insurance
Company; also serves as officer and/or director of subsidiaries and/or
affiliates of Acacia Life Insurance Company.
ROBERT C. BARTH, VICE PRESIDENT AND CONTROLLER*
Controller: Ameritas Variable Life Insurance Company.
ROBERT W. CLYDE, DIRECTOR**
Executive Vice President: Ameritas Acacia Mutual Holding Company and Ameritas
Holding Company; President and Chief Operating Officer: Acacia National Life
Insurance Company.
LLVL
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<PAGE> 39
JAN M. CONNOLLY, SENIOR VICE PRESIDENT - OPERATIONS, PLANNING AND QUALITY*
Senior Vice President - Operations, Planning and Quality: Ameritas Acacia Mutual
Holding Company and Ameritas Holding Company
WILLIAM W. COOK, JR., DIRECTOR**
Chairman, Chief Executive Officer: The Beatrice National Bank and Trust Co.
BERT A. GETZ, DIRECTOR**
Chairman and President: 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, PRESIDENT AND CHIEF EXECUTIVE
OFFICER-AIC*
Also serves as officer and director of an affiliate of Ameritas Life Insurance
Corp.; President: FirsTier Securities
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**
Chairman: The Brookhollow Group; General Partner: Windsor Associates
ROBERT F. KROHN, DIRECTOR**
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 AND CHIEF FINANCIAL OFFICER*
Senior Vice President, Chief Financial Officer and Corporate Treasurer: Ameritas
Acacia Mutual Holding Company and Ameritas Holding Company; Director, Vice
President and Chief Financial Officer: Ameritas Variable Life Insurance Company;
also serves as an officer and/or director of other subsidiaries and/or
affiliates of Ameritas Life Insurance Corp.
CHARLES T. NASON, DIRECTOR**
Vice Chairman and President: Ameritas Acacia Mutual Holding Company and Ameritas
Holding Company; Chairman of the Board and Chief Executive Officer, Director:
Acacia National Life Insurance Company; Chairman, President and Chief Executive
Officer: Acacia Life Insurance Company.
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, SENIOR VICE PRESIDENT, SECRETARY AND CORPORATE GENERAL
COUNSEL*
Senior Vice President and Deputy General Counsel: Ameritas Acacia Mutual Holding
Company and Ameritas Holding Company; 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.
LLVL
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<PAGE> 40
NEAL E. TYNER, DIRECTOR, CHAIRMAN EMERITUS**
NET Consultants, Formerly Chairman of the Board and CEO of Ameritas Life
Insurance Corp.
RICHARD W. VAUTRAVERS, SENIOR VICE PRESIDENT AND CORPORATE ACTUARY*
Senior Vice President and Corporate Actuary: Ameritas Acacia Mutual Holding
Company, Ameritas Holding Company and Acacia National Life Insurance Company.
WINSTON J. WADE, DIRECTOR**
Vice President-Network Infrastructure: U.S. West Communications; Vice
President-Technical Services: U.S. West Communication, Inc.
- ---------------
* 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; Robert W. Clyde, Acacia National Life Insurance
Company, 7315 Wisconsin Avenue, Bethesda, Maryland 20814; 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; Charles T. Nason, Acacia National Life Insurance Company, 7315
Wisconsin Avenue, Bethesda, Maryland 20814; 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.
LEGAL MATTERS
All matters of Nebraska law pertaining to the Policy, including the validity of
the Policy and Ameritas' right to issue the Policy under Nebraska Insurance Law,
have been passed upon by Donald R. Stading, Senior Vice President, Secretary and
Corporate General Counsel.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account LLVL is a party or to
which the assets of Separate Account LLVL are subject. Ameritas 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 Separate Account
LLVL. AIC is not involved in any litigation that is of material importance in
relation to its ability to perform under its underwriting agreement.
EXPERTS
The consolidated financial statements of Ameritas as of December 31, 1999 and
1998, and for each of the three years in the period ended December 31, 1999, and
the financial statements of the subaccounts of Separate Account LLVL as of
December 31, 1999, and for each of the three years in the period 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 Russell J
Wittgen Vice President - Individual Product Management 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 Separate Account LLVL, Ameritas 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.
LLVL
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<PAGE> 41
FINANCIAL STATEMENTS
The financial statements of Ameritas which are included in this Prospectus
should be considered only as bearing on the ability of Ameritas to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in Separate Account LLVL.
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<PAGE> 42
INDEPENDENT AUDITORS' REPORT
Board of Directors
Ameritas Life Insurance Corp.
Lincoln, Nebraska
We have audited the accompanying statement of net assets of each of the
subaccounts of Ameritas Life Insurance Corp. Separate Account LLVL (comprising,
respectively, the Money Market Portfolio, Equity Index Portfolio, Equity Income
Portfolio, Growth Portfolio, Balanced Portfolio, High-Grade Bond Portfolio,
International Portfolio, High Yield Bond Portfolio (commenced March 10, 1997),
and Small Company Growth Portfolio (commenced January 29, 1997) of the Vanguard
Variable Insurance Fund; the Balanced Portfolio, Growth Portfolio, Partners
Portfolio, Limited Maturity Bond Portfolio, and Liquid Assets Portfolio
(commenced November 15, 1999) of the Neuberger & Berman Advisers Management
Trust; the 100 Fund Portfolio (commenced June 11, 1997), and Small Company
Growth Portfolio (commenced May 21, 1997) of the Berger Institutional Products
Trust; the Nova Portfolio (commenced July 6, 1999) OTC Portfolio (commenced July
1, 1999), Precious Metals Portfolio (commenced August 10, 1999), Ursa Portfolio
(commenced July 27, 1999), and U.S. Government Bond Portfolio (commenced October
6, 1999) of the Rydex Variable Trust; and the EAFE Equity Index Portfolio
(commenced November 29, 1999), and Equity 500 Index Portfolio (commenced
November 29, 1999) of the BT Insurance Funds Trust) as of December 31, 1999, and
the related statements of operations and changes in net assets for each of the
three 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, 1999. 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 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 each of the subaccounts constituting
Ameritas Life Insurance Corp. Separate Account LLVL as of December 31, 1999, and
the results of its operations and changes in net assets for each of the three
years in the period then ended, in conformity with generally accepted accounting
principles.
/s/ DELOITTE & TOUCHE LLP
Lincoln, Nebraska
February 5, 2000
F-I- 1
<PAGE> 43
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
INVESTMENTS AT NET ASSET VALUE:
VANGUARD VARIABLE INSURANCE FUND:
Money Market Portfolio -- 10,908,224.550 shares at
$1.0000 per share (cost $10,908,225).................. $10,908,225
Equity Index Portfolio -- 415,859.239 shares at
$38.1500 per share (cost $11,650,145)................. 15,865,030
Equity Income Portfolio -- 175,828.807 shares at
$20.2833 per share (cost $3,298,811).................. 3,566,389
Growth Portfolio -- 386,088.181 shares at $32.9238 per
share (cost $9,588,268)............................... 12,711,490
Balanced Portfolio -- 240,439.131 shares at $16.3679
per share (cost $4,015,342)........................... 3,935,484
High-Grade Bond Portfolio -- 133,849.264 shares at
$10.1712 per share (cost $1,454,625).................. 1,361,408
International Portfolio -- 279,415.076 shares at
$18.0791 per share (cost $3,884,321).................. 5,051,573
High Yield Bond Portfolio -- 72,423.288 shares at
$9.5466 per share (cost $748,365)..................... 691,396
Small Company Growth Portfolio -- 161,092.846 shares at
$18.8588 per share (cost $1,787,935).................. 3,038,018
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST:
Balanced Portfolio -- 23,541.878 shares at $20.89 per
share (cost $376,296)................................. 491,790
Growth Portfolio -- 40,447.572 shares at $37.27 per
share (cost $996,349)................................. 1,507,481
Partners Portfolio -- 174,407.311 shares at $19.64 per
share (cost $3,129,094)............................... 3,425,359
Limited Maturity Bond Portfolio -- 6,849.778 shares at
$13.24 per share (cost $95,313)....................... 90,691
Liquid Assets Portfolio -- 0 shares at $1.00 per share
(cost $0)............................................. --
BERGER INSTITUTIONAL PRODUCTS TRUST:
100 Fund Portfolio -- 20,044.368 shares at $19.22 per
share (cost $265,456)................................. 385,252
Small Company Growth Portfolio -- 55,390.560 shares at
$23.51 per share (cost $788,206)...................... 1,302,232
RYDEX VARIABLE TRUST:
Nova Portfolio -- 60,263.009 shares at $18.57 per share
(cost $1,058,760)..................................... 1,119,084
OTC Portfolio -- 53,533.346 shares at $38.52 per share
(cost $1,590,039)..................................... 2,062,104
Precious Metals Portfolio -- 0 shares at $5.43 per
share ($0 cost)....................................... --
Ursa Portfolio -- 10,790.826 shares at $5.35 per share
(cost ($30,999)....................................... 57,732
U.S. Government Bond Portfolio -- 0 shares at $10.17
per share ($0 cost)................................... --
BT INSURANCE FUNDS TRUST:
EAFE Equity Index Portfolio -- 15.508 shares at $13.60
per share (cost $206)................................. 211
Equity 500 Index Portfolio -- 878.859 shares at $15.18
per share (cost $13,020).............................. 13,340
-----------
Net Assets Representing Equity of Policyowners.... $67,584,289
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-I- 2
<PAGE> 44
[THIS PAGE INTENTIONALLY LEFT BLANK]
F-I- 3
<PAGE> 45
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
VANGUARD VARIABLE INSURANCE FUND
-------------------------------------------
MONEY MARKET EQUITY INDEX EQUITY INCOME
TOTAL PORTFOLIO PORTFOLIO PORTFOLIO
---------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received............. $1,237,100 $530,330 $ 148,939 $ 89,324
Mortality and expense risk charge........... 393,110 78,492 86,778 25,269
---------- -------- ---------- ---------
NET INVESTMENT INCOME (LOSS).................. 843,990 451,838 62,161 64,055
---------- -------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions............. 1,086,374 -- 129,342 25,767
Net change in unrealized appreciation
(depreciation)........................... 6,830,638 -- 2,087,028 (242,393)
---------- -------- ---------- ---------
NET GAIN (LOSS) ON INVESTMENTS................ 7,917,012 -- 2,216,370 (216,626)
---------- -------- ---------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................... $8,761,002 $451,838 $2,278,531 $(152,571)
========== ======== ========== =========
1998
INVESTMENT INCOME:
Dividend distributions received............. $ 887,746 $446,322 $ 88,442 $ 62,950
Mortality and expense risk charge........... 242,752 62,330 44,946 16,755
---------- -------- ---------- ---------
NET INVESTMENT INCOME (LOSS).................. 644,994 383,992 43,496 46,195
---------- -------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions............. 1,061,059 -- 31,074 14,132
Net change in unrealized appreciation
(depreciation)........................... 3,364,606 -- 1,422,460 306,650
---------- -------- ---------- ---------
NET GAIN (LOSS) ON INVESTMENTS................ 4,425,665 -- 1,453,534 320,782
---------- -------- ---------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................... $5,070,659 $383,992 $1,497,030 $ 366,977
========== ======== ========== =========
1997
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 distributions............. 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
========== ======== ========== =========
</TABLE>
- ---------------
(1) Commenced business 03/10/97
(2) Commenced business 01/29/97
The accompanying notes are an integral part of these financial statements.
F-I- 4
<PAGE> 46
<TABLE>
<CAPTION>
VANGUARD VARIABLE INSURANCE FUND
---------------------------------------------------------------------------------
SMALL
HIGH-GRADE HIGH YIELD COMPANY
GROWTH BALANCED BOND INTERNATIONAL BOND GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO(2)
---------- --------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 53,215 $ 139,619 $ 100,678 $ 55,048 $ 61,240 $ 10,793
67,410 28,606 12,093 29,215 5,343 13,679
---------- --------- --------- -------- -------- ----------
(14,195) 111,013 88,585 25,833 55,897 (2,886)
---------- --------- --------- -------- -------- ----------
510,527 176,705 -- 120,581 -- --
1,522,989 (139,022) (119,221) 823,178 (40,137) 1,111,307
---------- --------- --------- -------- -------- ----------
2,033,516 37,683 (119,221) 943,759 (40,137) 1,111,307
---------- --------- --------- -------- -------- ----------
$2,019,321 $ 148,696 $ (30,636) $969,592 $ 15,760 $1,108,421
========== ========= ========= ======== ======== ==========
$ 32,780 $ 116,090 $ 40,993 $ 43,651 $ 33,203 $ 6,273
34,924 20,046 5,086 20,770 2,934 5,841
---------- --------- --------- -------- -------- ----------
(2,144) 96,044 35,907 22,881 30,269 432
---------- --------- --------- -------- -------- ----------
313,459 239,670 2,291 -- 803 1,045
1,308,658 (22,651) 12,857 419,205 (19,842) 126,551
---------- --------- --------- -------- -------- ----------
1,622,117 217,019 15,148 419,205 (19,039) 127,596
---------- --------- --------- -------- -------- ----------
$1,619,973 $ 313,063 $ 51,055 $442,086 $ 11,230 $ 128,028
========== ========= ========= ======== ======== ==========
$ 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
========== ========= ========= ======== ======== ==========
</TABLE>
F-I- 5
<PAGE> 47
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
-----------------------------------
BALANCED GROWTH PARTNERS
PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- ---------
<S> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received........................... $ 4,225 $ -- $ 35,509
Mortality and expense risk charge......................... 2,052 7,887 23,344
-------- -------- ---------
NET INVESTMENT INCOME (LOSS)................................ 2,173 (7,887) 12,165
-------- -------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... 6,259 50,640 61,754
Net change in unrealized appreciation (depreciation)...... 104,554 455,481 124,559
-------- -------- ---------
NET GAIN (LOSS) ON INVESTMENTS.............................. 110,813 506,121 186,313
-------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $112,986 $498,234 $ 198,478
======== ======== =========
1998
INVESTMENT INCOME:
Dividend distributions received........................... $ 4,578 $ -- $ 8,593
Mortality and expense risk charge......................... 1,618 5,470 18,794
-------- -------- ---------
NET INVESTMENT INCOME (LOSS)................................ 2,960 (5,470) (10,201)
-------- -------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... 32,161 155,681 270,666
Net change in unrealized appreciation (depreciation)...... (8,769) (47,951) (161,651)
-------- -------- ---------
NET GAIN (LOSS) ON INVESTMENTS.............................. 23,392 107,730 109,015
-------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 26,352 $102,260 $ 98,814
======== ======== =========
1997
INVESTMENT INCOME:
Dividend distributions received........................... $ 2,227 $ -- $ 1,903
Mortality and expense risk charge......................... 1,062 3,818 8,694
-------- -------- ---------
NET INVESTMENT INCOME (LOSS)................................ 1,165 (3,818) (6,791)
-------- -------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... 5,717 34,617 29,308
Net change in unrealized appreciation (depreciation)...... 16,398 83,104 267,038
-------- -------- ---------
NET GAIN (LOSS) ON INVESTMENTS.............................. 22,115 117,721 296,346
-------- -------- ---------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ 23,280 $113,903 $ 289,555
======== ======== =========
</TABLE>
- ---------------
(1) Commenced business 06/11/97
(2) Commenced business 05/21/97
(3) Commenced business 11/15/99
(4) Commenced business 07/06/99
(5) Commenced business 07/01/99
(6) Commenced business 08/10/99
The accompanying notes are an integral part of these financial statements.
F-I- 6
<PAGE> 48
<TABLE>
<CAPTION>
NEUBERGER & BERMAN BERGER INSTITUTIONAL
ADVISERS MANAGEMENT TRUST PRODUCTS TRUST RYDEX VARIABLE TRUST
------------------------------- ---------------------------- ------------------------------------------
LIMITED SMALL COMPANY PRECIOUS
MATURITY LIQUID ASSETS 100 FUND GROWTH NOVA OTC METALS
BOND PORTFOLIO PORTFOLIO(3) PORTFOLIO(1) PORTFOLIO(2) PORTFOLIO(4) PORTFOLIO(5) PORTFOLIO(6)
--------------- ------------- ------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 6,551 $43 $ 60 $ -- $ 48 $ -- $ 1
806 8 1,795 4,176 1,193 1,964 29
------- --- -------- -------- ------- -------- -------
5,745 35 (1,735) (4,176) (1,145) (1,964) (28)
------- --- -------- -------- ------- -------- -------
-- -- -- -- 3,398 758 284
(5,201) -- 112,115 489,553 60,324 472,065 (1,335)
------- --- -------- -------- ------- -------- -------
(5,201) -- 112,115 489,553 63,722 472,823 (1,051)
------- --- -------- -------- ------- -------- -------
$ 544 $35 $110,380 $485,377 $62,577 $470,859 $(1,079)
======= === ======== ======== ======= ======== =======
$ 3,417 $-- $ 294 $ 160 $ -- $ -- $ --
440 -- 745 2,053 -- -- --
------- --- -------- -------- ------- -------- -------
2,977 -- (451) (1,893) -- -- --
------- --- -------- -------- ------- -------- -------
-- -- 77 -- -- -- --
(991) -- 9,498 20,582 -- -- --
------- --- -------- -------- ------- -------- -------
(991) -- 9,575 20,582 -- -- --
------- --- -------- -------- ------- -------- -------
$ 1,986 $-- $ 9,124 $ 18,689 $ -- $ -- $ --
======= === ======== ======== ======= ======== =======
$ 1,514 $-- $ 442 $ -- $ -- $ -- $ --
289 -- 54 431 -- -- --
------- --- -------- -------- ------- -------- -------
1,225 -- 388 (431) -- -- --
------- --- -------- -------- ------- -------- -------
-- -- 693 -- -- -- --
1,122 -- (1,816) 3,892 -- -- --
------- --- -------- -------- ------- -------- -------
1,122 -- (1,123) 3,892 -- -- --
------- --- -------- -------- ------- -------- -------
$ 2,347 $-- $ (735) $ 3,461 $ -- $ -- $ --
======= === ======== ======== ======= ======== =======
</TABLE>
F-I- 7
<PAGE> 49
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
RYDEX VARIABLE TRUST
-------------------------------
U.S. GOVERNMENT
URSA BOND
PORTFOLIO(1) PORTFOLIO(2)
------------ ---------------
<S> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received........................... $ 340 $ 944
Mortality and expense risk charge......................... 2,800 165
------- --------
NET INVESTMENT INCOME (LOSS)................................ (2,460) 779
------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... 26,731 (12,264)
------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. 26,731 (12,264)
------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $24,271 $(11,485)
======= ========
1998
INVESTMENT INCOME:
Dividend distributions received........................... $ -- $ --
Mortality and expense risk charge......................... -- --
------- --------
NET INVESTMENT INCOME (LOSS)................................ -- --
------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... -- --
------- --------
NET GAIN (LOSS) DISTRIBUTIONS............................... -- --
------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ -- $ --
======= ========
1997
INVESTMENT INCOME:
Dividend distributions received........................... $ -- $ --
Mortality and expense risk charge......................... -- --
------- --------
NET INVESTMENT INCOME (LOSS)................................ -- --
------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... -- --
------- --------
NET GAIN (LOSS) ON INVESTMENTS.............................. -- --
------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ $ -- $ --
======= ========
</TABLE>
- ---------------
(1) Commenced business 07/27/99
(2) Commenced business 10/06/99
(3) Commenced business 11/29/99
(4) Commenced business 11/29/99
The accompanying notes are an integral part of these financial statements.
F-I- 8
<PAGE> 50
<TABLE>
<CAPTION>
BT INSURANCE FUNDS TRUST
-------------------------------
EQUITY 500 EAFE EQUITY
INDEX INDEX
PORTFOLIO(3) PORTFOLIO(4)
------------ ------------
<S> <C> <C>
$191 $ 2
6 --
---- ----
185 2
---- ----
358 1
322 5
---- ----
680 6
---- ----
$865 $ 8
==== ====
$ -- $ --
-- --
---- ----
-- --
---- ----
-- --
-- --
---- ----
-- --
---- ----
$ -- $ --
==== ====
$ -- $ --
-- --
---- ----
-- --
---- ----
-- --
-- --
---- ----
-- --
---- ----
$ -- $ --
==== ====
</TABLE>
F-I- 9
<PAGE> 51
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
VANGUARD VARIABLE INSURANCE FUND
---------------------------------------------
MONEY MARKET EQUITY INDEX EQUITY INCOME
TOTAL PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net Investment income (loss)............. $ 843,990 $ 451,838 $ 62,161 $ 64,055
Net realized gain distributions.......... 1,086,374 -- 129,342 25,767
Net change in unrealized appreciation
(depreciation)........................ 6,830,638 -- 2,087,028 (242,393)
----------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................ 8,761,002 451,838 2,278,531 (152,571)
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS............................. 16,303,693 672,661 5,466,260 693,551
----------- ----------- ----------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 25,064,695 1,124,499 7,744,791 540,980
----------- ----------- ----------- ----------
NET ASSETS AT JANUARY 1, 1999.............. 42,519,594 9,783,726 8,120,239 3,025,409
----------- ----------- ----------- ----------
NET ASSETS AT DECEMBER 31, 1999............ $67,584,289 $10,908,225 $15,865,030 $3,566,389
=========== =========== =========== ==========
1998
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net Investment income (loss)............. $ 644,994 $ 383,992 $ 43,496 $ 46,195
Net realized gain distributions.......... 1,061,059 -- 31,074 14,132
Net change in unrealized appreciation
(depreciation)........................ 3,364,606 -- 1,422,460 306,650
----------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................ 5,070,659 383,992 1,497,030 366,977
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS............................. 13,120,915 2,181,465 2,541,249 1,133,653
----------- ----------- ----------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 18,191,574 2,565,457 4,038,279 1,500,630
----------- ----------- ----------- ----------
NET ASSETS AT JANUARY 1, 1998.............. 24,328,020 7,218,269 4,081,960 1,524,779
----------- ----------- ----------- ----------
NET ASSETS AT DECEMBER 31, 1998............ $42,519,594 $ 9,783,726 $ 8,120,239 $3,025,409
=========== =========== =========== ==========
1997
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net Investment income (loss)............. $ 352,167 $ 212,179 $ 27,186 $ 18,526
Net realized gain distributions.......... 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 POLICYOWNER
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
=========== =========== =========== ==========
</TABLE>
- ---------------
(1) Commenced business 03/10/97
(2) Commenced business 01/29/97
The accompanying notes are an integral part of these financial statements.
F-I- 10
<PAGE> 52
<TABLE>
<CAPTION>
VANGUARD VARIABLE INSURANCE FUND
- ----------------------------------------------------------------------------------------
HIGH-GRADE HIGH YIELD SMALL COMPANY
GROWTH BALANCED BOND INTERNATIONAL BOND GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO (2)
----------- ---------- ---------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
$ (14,195) $ 111,013 $ 88,585 $ 25,833 $ 55,897 $ (2,886)
510,527 176,705 -- 120,581 -- --
1,522,989 (139,022) (119,221) 823,178 (40,137) 1,111,307
----------- ---------- ---------- ---------- -------- ----------
2,019,321 148,696 (30,636) 969,592 15,760 1,108,421
3,913,696 181,062 515,801 566,065 128,017 484,023
----------- ---------- ---------- ---------- -------- ----------
5,933,017 329,758 485,165 1,535,657 143,777 1,592,444
----------- ---------- ---------- ---------- -------- ----------
6,778,473 3,605,726 876,243 3,515,916 547,619 1,445,574
----------- ---------- ---------- ---------- -------- ----------
$12,711,490 $3,935,484 $1,361,408 $5,051,573 $691,396 $3,038,018
=========== ========== ========== ========== ======== ==========
$ (2,144) $ 96,044 $ 35,907 $ 22,881 $ 30,269 $ 432
313,459 239,670 2,291 -- 803 1,045
1,308,658 (22,651) 12,857 419,205 (19,842) 126,551
----------- ---------- ---------- ---------- -------- ----------
1,619,973 313,063 51,055 442,086 11,230 128,028
1,946,946 1,254,873 331,358 1,023,332 305,742 940,675
----------- ---------- ---------- ---------- -------- ----------
3,566,919 1,567,936 382,413 1,465,418 316,972 1,068,703
----------- ---------- ---------- ---------- -------- ----------
3,211,554 2,037,790 493,830 2,050,498 230,647 376,871
----------- ---------- ---------- ---------- -------- ----------
$ 6,778,473 $3,605,726 $ 876,243 $3,515,916 $547,619 $1,445,574
=========== ========== ========== ========== ======== ==========
$ 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
=========== ========== ========== ========== ======== ==========
</TABLE>
F-I- 11
<PAGE> 53
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NEUBERGER & BERMAN ADVISERS
MANAGEMENT TRUST
-----------------------------------
BALANCED GROWTH PARTNERS
PORTFOLIO PORTFOLIO PORTFOLIO
--------- ---------- ----------
<S> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income (loss).............................. $ 2,173 $ (7,887) $ 12,165
Net realized gain distributions........................... 6,259 50,640 61,754
Net change in unrealized appreciation (depreciation)...... 104,554 455,481 124,559
-------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 112,986 498,234 198,478
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS....... 139,558 54,404 231,435
-------- ---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 252,544 552,638 429,913
-------- ---------- ----------
NET ASSETS AT JANUARY 1, 1999............................... 239,246 954,843 2,995,446
-------- ---------- ----------
NET ASSETS AT DECEMBER 31, 1999............................. $491,790 $1,507,481 $3,425,359
======== ========== ==========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income (loss).............................. $ 2,960 $ (5,470) $ (10,201)
Net realized gain distributions........................... 32,161 155,681 270,666
Net change in unrealized appreciation (depreciation)...... (8,769) (47,951) (161,651)
-------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 26,352 102,260 98,814
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS....... 26,914 185,812 935,607
-------- ---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 53,266 288,072 1,034,421
-------- ---------- ----------
NET ASSETS AT JANUARY 1, 1998............................... 185,980 666,771 1,961,025
-------- ---------- ----------
NET ASSETS AT DECEMBER 31, 1998............................. $239,246 $ 954,843 $2,995,446
======== ========== ==========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income (loss).............................. $ 1,165 $ (3,818) $ (6,791)
Net realized gain distributions........................... 5,717 34,617 29,308
Net change in unrealized appreciation (depreciation)...... 16,398 83,104 267,038
-------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 23,280 113,903 289,555
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS....... 74,276 228,396 1,107,185
-------- ---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 97,556 342,299 1,396,740
-------- ---------- ----------
NET ASSETS AT JANUARY 1, 1997............................... 88,424 324,472 564,285
-------- ---------- ----------
NET ASSETS AT DECEMBER 31, 1997............................. $185,980 $ 666,771 $1,961,025
======== ========== ==========
</TABLE>
- ---------------
(1) Commenced business 06/11/97
(2) Commenced business 05/21/97
(3) Commenced business 11/15/99
(4) Commenced business 07/06/99
(5) Commenced business 07/01/99
(6) Commenced business 08/10/99
The accompanying notes are an integral part of these financial statements.
F-I- 12
<PAGE> 54
<TABLE>
<CAPTION>
NEUBERGER & BERMAN ADVISERS BERGER INSTITUTIONAL
MANAGEMENT TRUST PRODUCTS TRUST RYDEX VARIABLE TRUST
--------------------------- --------------------------- ------------------------------------------
LIMITED SMALL
MATURITY COMPANY PRECIOUS
BOND LIQUID ASSETS 100 FUND GROWTH NOVA OTC METALS
PORTFOLIO PORTFOLIO(3) PORTFOLIO(1) PORTFOLIO(2) PORTFOLIO(4) PORTFOLIO(5) PORTFOLIO(6)
---------- -------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 5,745 $ 35 $ (1,735) $ (4,176) $ (1,145) $ (1,964) $ (28)
-- -- -- -- 3,398 758 284
(5,201) -- 112,115 489,553 60,324 472,065 (1,335)
------- ---- -------- ---------- ---------- ---------- -------
544 35 110,380 485,377 62,577 470,859 (1,079)
35,066 (35) 101,163 414,511 1,056,507 1,591,245 1,079
------- ---- -------- ---------- ---------- ---------- -------
35,610 -- 211,543 899,888 1,119,084 2,062,104 --
------- ---- -------- ---------- ---------- ---------- -------
55,081 -- 173,709 402,344 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
$90,691 $ -- $385,252 $1,302,232 $1,119,084 $2,062,104 $ --
======= ==== ======== ========== ========== ========== =======
$ 2,977 $ -- $ (451) $ (1,893) $ -- $ -- $ --
-- -- 77 -- -- -- --
(991) -- 9,498 20,582 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
1,986 -- 9,124 18,689 -- -- --
(7,496) -- 144,794 175,991 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
(5,510) -- 153,918 194,680 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
60,591 -- 19,791 207,664 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
$55,081 $ -- $173,709 $ 402,344 $ -- $ -- $ --
======= ==== ======== ========== ========== ========== =======
$ 1,225 $ -- $ 388 $ (431) $ -- $ -- $ --
-- -- 693 -- -- -- --
1,122 -- (1,816) 3,892 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
2,347 -- (735) 3,461 -- -- --
32,342 -- 20,526 204,203 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
34,689 -- 19,791 207,664 -- -- --
------- ---- -------- ---------- ---------- ---------- -------
25,902 -- -- -- -- -- --
------- ---- -------- ---------- ---------- ---------- -------
$60,591 $ -- $ 19,791 $ 207,664 $ -- $ -- $ --
======= ==== ======== ========== ========== ========== =======
</TABLE>
F-I- 13
<PAGE> 55
AMERITAS LIFE INSURANCE CORP.
SEPARATE ACCOUNT LLVL
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
RYDEX VARIABLE TRUST
-------------------------------
U.S. GOVERNMENT
URSA BOND
PORTFOLIO(1) PORTFOLIO(2)
------------ ---------------
<S> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income (loss).............................. $(2,460) $ 779
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... 26,731 (12,264)
------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ 24,271 (11,485)
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS....... 33,461 11,485
------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... 57,732 --
------- --------
NET ASSETS AT JANUARY 1, 1999............................... -- --
------- --------
NET ASSETS AT DECEMBER 31, 1999............................. $57,732 $ --
======= ========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income (loss).............................. $ -- $ --
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... -- --
------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ -- --
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS....... -- --
------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... -- --
------- --------
NET ASSETS AT JANUARY 1, 1998............................... -- --
------- --------
NET ASSETS AT DECEMBER 31, 1998............................. $ -- $ --
======= ========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net Investment income (loss).............................. $ -- $ --
Net realized gain distributions........................... -- --
Net change in unrealized appreciation (depreciation)...... -- --
------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS................................................ -- --
NET INCREASE (DECREASE) FROM POLICYOWNER TRANSACTIONS....... -- --
------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... -- --
------- --------
NET ASSETS AT JANUARY 1, 1997............................... -- --
------- --------
NET ASSETS AT DECEMBER 31, 1997............................. $ -- $ --
======= ========
</TABLE>
- ---------------
(1) Commenced business 07/27/99
(2) Commenced business 10/06/99
(3) Commenced business 11/29/99
(4) Commenced business 11/29/99
The accompanying notes are an integral part of these financial statements.
F-I- 14
<PAGE> 56
<TABLE>
<CAPTION>
BT INSURANCE FUNDS TRUST
---------------------------
EQUITY 500 EAFE EQUITY
INDEX INDEX
PORTFOLIO(3) PORTFOLIO(4)
------------ ------------
<S> <C> <C>
$ 185 $ 2
358 1
322 5
------- ----
865 8
12,475 203
------- ----
13,340 211
------- ----
-- --
------- ----
13,340 $211
======= ====
$ -- $ --
-- --
-- --
------- ----
-- --
-- --
------- ----
-- --
------- ----
-- --
------- ----
$ -- $ --
======= ====
$ -- $ --
-- --
-- --
------- ----
-- --
-- --
------- ----
-- --
------- ----
-- --
------- ----
$ -- $ --
======= ====
</TABLE>
F-I- 15
<PAGE> 57
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, 1999, there are twenty three
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. Five 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. Five of the
subaccounts invest only in a corresponding Portfolio at the Rydex Variable Trust
which is a diversified open-end management investment company managed by PADCO
Advisors II, Inc. Two of the subaccounts invest only in a corresponding
Portfolio of BT Insurance Funds Trust which is a diversified open-end management
investment company managed by Bankers Trust Company. Each Portfolio pays the
manager a monthly fee for managing its investments and business affairs.
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. 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. POLICYOWNER 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.
F-I- 16
<PAGE> 58
[THIS PAGE INTENTIONALLY LEFT BLANK]
F-I- 17
<PAGE> 59
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:
<TABLE>
<CAPTION>
VANGUARD VARIABLE INSURANCE FUND
-----------------------------------------------------------------------------
MONEY MARKET EQUITY INDEX EQUITY INCOME GROWTH BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Shares owned at January 1,
1999..................... 9,783,726.040 252,539.764 141,075.624 238,478.783 210,958.652
Shares acquired............ 23,792,709.000 335,301.217 113,857.050 293,941.209 104,873.679
Shares disposed............ 22,668,210.490 171,981.742 79,103.867 146,331.811 75,393.200
-------------- ----------- ----------- ----------- -----------
Shares owned at December
31, 1999................. 10,908,224.550 415,859.239 175,828.807 386,088.181 240,439.131
============== =========== =========== =========== ===========
Shares owned at January 1,
1998..................... 7,218,268.940 160,571.157 81,200.304 148,714.710 119,858.700
Shares acquired............ 15,650,323.440 241,112.370 152,559.334 212,357.265 153,032.898
Shares disposed............ 13,084,866.340 149,143.763 92,684.014 122,593.192 61,932.946
-------------- ----------- ----------- ----------- -----------
Shares owned at December
31, 1998................. 9,783,726.040 252,539.764 141,075.624 238,478.783 210,958.652
============== =========== =========== =========== ===========
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
============== =========== =========== =========== ===========
</TABLE>
- ---------------
(1) Commenced business 03/10/97
(2) Commenced business 01/29/97
F-I- 18
<PAGE> 60
<TABLE>
<CAPTION>
VANGUARD VARIABLE INSURANCE FUND NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
--------------------------------------------------------- ----------------------------------------------
SMALL
HIGH-GRADE HIGH-YIELD COMPANY
BOND INTERNATIONAL BOND GROWTH BALANCED GROWTH PARTNERS
PORTFOLIO PORTFOLIO PORTFOLIO(1) PORTFOLIO(2) PORTFOLIO) PORTFOLIO PORTFOLIO
----------- ------------- ------------ ------------ ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
80,311.175 233,573.775 54,187.996 123,053.709 14,641.746 36,319.622 158,238.030
286,186.942 207,748.779 138,967.424 141,527.577 16,966.995 25,814.812 92,357.332
232,648.853 161,907.478 120,732.132 103,488.440 8,066.863 21,686.862 76,188.051
----------- ----------- ----------- ----------- ---------- ---------- -----------
133,849.264 279,415.076 72,423.288 161,092.846 23,541.878 40,447.572 174,407.311
=========== =========== =========== =========== ========== ========== ===========
46,139.367 159,524.666 21,777.881 34,377.906 10,448.294 21,832.699 95,195.374
75,804.160 193,442.989 92,142.577 131,425.948 38,561.561 44,261.721 162,050.110
41,632.352 119,393.880 59,732.462 42,750.145 34,368.109 29,774.798 99,007.454
----------- ----------- ----------- ----------- ---------- ---------- -----------
80,311.175 233,573.775 54,187.996 123,053.709 14,641.746 36,319.622 158,238.030
=========== =========== =========== =========== ========== ========== ===========
10,402.808 45,478.330 -- -- 5,554.279 12,586.203 34,240.606
48,976.148 175,097.691 57,152.830 58,091.174 7,945.804 20,902.519 87,117.912
13,239.589 61,051.355 35,374.949 23,713.268 3,051.789 11,656.023 26,163.144
----------- ----------- ----------- ----------- ---------- ---------- -----------
46,139.367 159,524.666 21,777.881 34,377.906 10,448.294 21,832.699 95,195.374
=========== =========== =========== =========== ========== ========== ===========
</TABLE>
F-I- 19
<PAGE> 61
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:
<TABLE>
<CAPTION>
NEUBERGER & BERMAN BERGER INSTITUTIONAL
ADVISERS MANAGEMENT TRUST PRODUCTS TRUST
-------------------------- ---------------------------
LIMITED SMALL
MATURITY COMPANY
BOND LIQUID ASSETS 100 FUND GROWTH
PORTFOLIO PORTFOLIO(1) PORTFOLIO(2) PORTFOLIO(3)
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Shares owned at January 1, 1999............... 3,985.613 -- 13,476.264 32,764.181
Shares acquired............................... 23,226.166 24,075.620 41,644.575 95,522.364
Shares disposed............................... 20,362.001 24,075.620 35,076.471 72,895.985
---------- ---------- ---------- ----------
Shares owned at December 31, 1999............. 6,849.778 -- 20,044.368 55,390.560
========== ========== ========== ==========
Shares owned at January 1, 1998............... 4,291.165 -- 1,781.412 17,219.256
Shares acquired............................... 16,961.787 -- 31,043.806 57,521.740
Shares disposed............................... 17,267.339 -- 19,348.954 41,976.815
---------- ---------- ---------- ----------
Shares owned at December 31, 1998............. 3,985.613 -- 13,476.264 32,764.181
========== ========== ========== ==========
Shares owned at January 1, 1997............... 1,843.518 -- -- --
Shares acquired............................... 7,782.264 -- 2,859.270 38,912.582
Shares disposed............................... 5,334.617 -- 1,077.858 21,693.326
---------- ---------- ---------- ----------
Shares owned at December 31, 1997............. 4,291.165 -- 1,781.412 17,219.256
========== ========== ========== ==========
</TABLE>
- ---------------
(1) Commenced business 11/15/99
(2) Commenced business 06/11/97
(3) Commenced business 05/21/97
(4) Commenced business 07/06/99
(5) Commenced business 07/01/99
(6) Commenced business 08/10/99
(7) Commenced business 07/27/99
(8) Commenced business 10/06/99
(9) Commenced business 11/29/99
(10) Commenced business 11/29/99
F-I- 20
<PAGE> 62
<TABLE>
<CAPTION>
RYDEX VARIABLE TRUST BT INSURANCE FUNDS TRUST
--------------------------------------------------------------------------- ----------------------------
PRECIOUS U.S. GOVERNMENT EQUITY 500 EAFE EQUITY
NOVA OTC METALS URSA BOND INDEX INDEX
PORTFOLIO(4) PORTFOLIO(5) PORTFOLIO(6) PORTFOLIO(7) PORTFOLIO(8) PORTFOLIO(9) PORTFOLIO(10)
------------ ------------ ------------ ------------ --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- --
72,787.816 68,461.684 5,119.774 509,706.979 68,648.305 883.331 16.229
12,524.807 14,928.338 5,119.774 498,916.153 68,648.305 4.472 0.721
---------- ---------- ---------- ----------- ---------- ------- ------
60,263.009 53,533.346 -- 10,790.826 -- 878.859 15.508
========== ========== ========== =========== ========== ======= ======
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ------- ------
-- -- -- -- -- -- --
========== ========== ========== =========== ========== ======= ======
-- -- -- -- -- -- --
-- -- -- -- -- -- --
-- -- -- -- -- -- --
---------- ---------- ---------- ----------- ---------- ------- ------
-- -- -- -- -- -- --
========== ========== ========== =========== ========== ======= ======
</TABLE>
F-I- 21
<PAGE> 63
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. (a wholly owned subsidiary of Ameritas Holding Company) and
subsidiaries as of December 31, 1999 and 1998, and the related consolidated
statements of operations, comprehensive income, stockholder's equity, and cash
flows for each of the three years in the period ended December 31, 1999. 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, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
Lincoln, Nebraska
February 5, 2000
F-II- 1
<PAGE> 64
AMERITAS LIFE INSURANCE CORP.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------
1999 1998
---------- ----------
<S> <C> <C>
ASSETS
Investments:
Fixed maturity securities held to maturity (fair value
$582,445 -- 1999, $620,543 -- 1998).................... $ 590,661 $ 586,419
Fixed maturity securities available for sale (amortized
cost $373,762 -- 1999, $466,025 -- 1998)............... 364,388 484,491
Redeemable preferred stock -- affiliate................... 25,000 --
Equity securities (cost $70,421 -- 1999,
$59,411 -- 1998)....................................... 159,819 121,905
Mortgage loans on real estate............................. 245,058 222,151
Loans on insurance policies............................... 37,645 29,047
Real estate, less accumulated depreciation
($13,083 -- 1999, $17,431 -- 1998)..................... 25,319 33,420
Other investments......................................... 47,416 45,104
Short-term investments.................................... 295 1,341
---------- ----------
Total investments................................. 1,495,601 1,523,878
Cash and cash equivalents................................... 47,538 79,019
Accrued investment income................................... 19,025 20,104
Deferred policy acquisition costs........................... 207,117 171,201
Property and equipment, less accumulated depreciation
($31,001 -- 1999, $31,985 -- 1998)........................ 23,829 20,946
Reinsurance receivable -- affiliate......................... 35,921 --
Other assets................................................ 22,339 21,903
Closed block assets......................................... 308,490 309,326
Separate accounts........................................... 2,728,169 1,954,931
---------- ----------
TOTAL............................................. $4,888,029 $4,101,308
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy and contract reserves................................ $ 106,097 $ 100,190
Policy and contract claims.................................. 30,091 29,823
Accumulated contract values................................. 965,246 1,019,849
Unearned policy charges..................................... 11,343 12,160
Unearned reinsurance ceded allowance........................ 1,768 1,480
Federal income taxes--
Current................................................... 7,660 6,710
Deferred.................................................. 52,690 50,795
Other liabilities........................................... 45,757 45,509
Closed block liabilities.................................... 334,769 334,622
Separate accounts........................................... 2,728,169 1,954,931
---------- ----------
TOTAL LIABILITIES................................. 4,283,590 3,556,069
---------- ----------
COMMITMENTS AND CONTINGENCIES
Minority interest in subsidiary............................. 29,519 27,523
Common stock, par value $0.10 per share, 25,000,000 shares
authorized, issued and outstanding........................ 2,500 2,500
Additional paid-in capital.................................. 5,000 5,000
Retained earnings........................................... 512,575 459,065
Accumulated other comprehensive income...................... 54,845 51,151
---------- ----------
TOTAL STOCKHOLDER'S EQUITY........................ 574,920 517,716
---------- ----------
TOTAL............................................. $4,888,029 $4,101,308
========== ==========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-II- 2
<PAGE> 65
[PAGE INTENTIONALLY LEFT BLANK]
F-II- 3
<PAGE> 66
AMERITAS LIFE INSURANCE CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
INCOME:
Insurance revenues:
Premiums:
Life Insurance......................................... $ 15,181 $ 21,159 $ 26,794
Accident and health insurance.......................... 270,263 256,742 181,952
Contract charges.......................................... 77,877 68,145 57,199
Reinsurance, net.......................................... (572) 19,930 (1,037)
Reinsurance, ceded allowance.............................. 3,986 3,667 2,475
Investment revenues:
Investment income, net.................................... 120,265 130,102 137,744
Realized gains, net....................................... 10,913 14,288 10,295
Other....................................................... 30,951 23,011 14,987
Gain/(loss) in closed block................................. 2,751 (105) --
-------- -------- --------
531,615 536,939 430,409
-------- -------- --------
BENEFITS AND EXPENSES:
Policy benefits:
Death benefits............................................ 14,642 19,879 20,710
Surrender benefits........................................ 137 6,730 10,084
Accident and health benefits.............................. 190,452 200,405 130,908
Interest credited......................................... 62,939 68,698 66,788
Increase/(decrease) in policy and contract reserves....... 6,290 (2,570) (3,307)
Other..................................................... 12,815 21,920 23,747
Sales and operating expenses................................ 137,830 126,199 90,737
Amortization of deferred policy acquisition costs........... 17,329 18,584 16,441
-------- -------- --------
442,434 459,845 356,108
-------- -------- --------
Income before federal income taxes and minority interest in
earnings of subsidiary.................................... 89,181 77,094 74,301
Income taxes -- current..................................... 32,130 27,229 26,401
Income taxes -- deferred.................................... 923 157 39
-------- -------- --------
Total federal income taxes........................... 33,053 27,386 26,440
-------- -------- --------
Income before minority interest in earnings of subsidiary... 56,128 49,708 47,861
Minority interest in earnings of subsidiary................. (2,618) (2,940) (1,987)
-------- -------- --------
NET INCOME.................................................. $ 53,510 $ 46,768 $ 45,874
======== ======== ========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-II- 4
<PAGE> 67
AMERITAS LIFE INSURANCE CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Net Income.................................................. $53,510 $46,768 $45,874
Other comprehensive income (loss), net of tax:
Unrealized gains on securities:
Unrealized holding gains arising during period (net of
deferred tax of $2,664 -- 1999, $6,913 -- 1998, and
$11,628 -- 1997)..................................... 6,155 12,646 21,290
Reclassification adjustment for gains included in net
income (net of deferred tax of $1,659 -- 1999,
$1,635 -- 1998, and $2,548 -- 1997).................. (3,082) (3,036) (4,733)
Minority interest...................................... 621 (99) (158)
------- ------- -------
Other comprehensive income................................ 3,694 9,511 16,399
------- ------- -------
Comprehensive income........................................ $57,204 $56,279 $62,273
======= ======= =======
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-II- 5
<PAGE> 68
AMERITAS LIFE INSURANCE CORP.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER TOTAL
---------------- PAID - IN RETAINED COMPREHENSIVE STOCKHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS INCOME EQUITY
------ ------ ---------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1997........ -- $ -- $ -- $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
------ ------ ------ -------- ------- --------
Issuance of common stock...... 25,000 2,500 5,000 (7,500) -- --
Net realized investment gains,
net........................ -- -- -- -- 9,610 9,610
Minority interest in net
unrealized investment
gains, net................. -- -- -- -- (99) (99)
Net income.................... -- -- -- 46,768 -- 46,768
------ ------ ------ -------- ------- --------
BALANCE, December 31, 1998...... 25,000 2,500 5,000 459,065 51,151 517,716
------ ------ ------ -------- ------- --------
Net unrealized investment
gains, net................. -- -- -- -- 3,073 3,073
Minority interest in net
unrealized investment
losses, net................ -- -- -- -- 621 621
Net income.................... -- -- -- 53,510 -- 53,510
------ ------ ------ -------- ------- --------
BALANCE, December 31, 1999...... 25,000 $2,500 $5,000 $512,575 $54,845 $574,920
====== ====== ====== ======== ======= ========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-II- 6
<PAGE> 69
[THIS PAGE INTENTIONALLY LEFT BLANK]
F-II- 7
<PAGE> 70
AMERITAS LIFE INSURANCE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------------
1999 1998 1997
-------- --------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 53,510 $ 46,768 $ 45,874
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation and amortization............................. 5,899 5,717 5,275
Amortization of deferred policy acquisition costs......... 18,544 19,090 16,441
Policy acquisition costs deferred......................... (45,600) (40,349) (36,117)
Interest credited to contract values...................... 65,577 69,487 66,788
Amortization of discounts or premiums..................... (3,615) (4,611) (1,747)
Net realized gains on investment transactions............. (11,554) (14,288) (10,295)
Deferred income taxes..................................... 923 157 39
Minority interest in earnings of subsidiary............... 2,618 2,940 1,987
Change in assets and liabilities:
Accrued investment income.............................. 1,057 (455) (10)
Other assets........................................... (2,869) (6,544) (3,239)
Policy and contract reserves........................... 3,187 (2,798) (3,446)
Policy and contract claims............................. 441 3,992 6,047
Unearned policy charges................................ (817) (1,017) (315)
Unearned reinsurance ceded allowance................... 288 (283) 511
Federal income taxes payable -- current................ 950 5,422 (7,977)
Dividends payable...................................... (96) 479 (183)
Other liabilities...................................... 2,080 6,039 6,509
Cash from closed block................................. (4,343) (2,526) --
-------- --------- ---------
Net cash from operating activities........................ 86,180 87,220 86,142
-------- --------- ---------
INVESTING ACTIVITIES
Purchase of investments:
Fixed maturity securities held to maturity................ (57,469) (62,244) (39,522)
Fixed maturity securities available for sale.............. (92,268) (137,319) (115,864)
Equity securities......................................... (34,982) (21,944) (29,432)
Redeemable preferred stock -- affiliate................... (25,000) -- --
Mortgage loans on real estate............................. (80,702) (68,518) (56,251)
Real estate............................................... (1,218) (998) (1,676)
Short-term investments.................................... (390) (1,632) (2,124)
Other investments......................................... (30,695) (16,343) (6,026)
Proceeds from sale of investments:
Fixed maturity securities available for sale.............. 7,762 22,282 16,419
Equity securities......................................... 30,527 24,681 19,914
Real estate............................................... 13,831 14,117 1,723
Other investments......................................... 1,162 4,166 649
Proceeds from maturities or repayment of investments:
Fixed maturity securities held to maturity................ 61,486 84,662 68,069
Fixed maturity securities available for sale.............. 127,068 60,503 45,942
Mortgage loans on real estate............................. 53,826 37,810 49,750
Short-term investments.................................... 1,445 958 6,278
Other investments......................................... 18,487 5,325 3,050
Purchase of property and equipment.......................... (6,753) (4,002) (5,413)
Proceeds from sale of property and equipment................ 27 43 45
Net change in loans on insurance policies................... (6,859) (3,377) (2,622)
Closed block investing activities........................... (2,765) 178 --
-------- --------- ---------
Net cash from investing activities........................ (23,480) (61,652) (47,091)
-------- --------- ---------
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-II- 8
<PAGE> 71
AMERITAS LIFE INSURANCE CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
FINANCING ACTIVITIES:
Contribution for minority interest in subsidiary............ $ -- $ -- $ 1,530
Net change in accumulated contract values................... (96,953) (30,380) (34,584)
Closed block financing activities........................... 2,772 692 --
-------- -------- --------
Net cash from financing activities........................ (94,181) (29,688) (33,054)
-------- -------- --------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS............ (31,481) (4,120) 5,997
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............ 79,019 83,139 77,142
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 47,538 $ 79,019 $ 83,139
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes.................................. $ 30,992 $ 21,936 $ 34,397
NON-CASH ACTIVITIES:
Issuance of common stock.................................. $ -- $ 7,500 $ --
Assets transferred to closed block........................ -- 307,754 --
Liabilities transferred to closed block................... -- 332,223 --
Assets transferred on block co-insurance.................. 57,648 -- --
Accumulated contract values ceded in block co-insurance... 59,561 -- --
Release of deferred policy acquisition costs on block
co-insurance........................................... 1,815 -- --
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
F-II- 9
<PAGE> 72
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND NATURE OF OPERATIONS
Ameritas Life Insurance Corp. (Ameritas) is a wholly owned subsidiary of
Ameritas Holding Company (AHC) which is a wholly owned subsidiary of Ameritas
Acacia Mutual Holding Corporation (AAMHC).
In 1998, the Board of Directors of Ameritas Mutual Insurance Holding Company
(AMIHC) and Acacia Mutual Holding Corporation (AMHC) approved and adopted a plan
of merger under which the two would merge to form AAMHC. In addition, their two
wholly owned subsidiaries, AHC and Acacia Financial Group, Ltd. (AFG), would
merge to form Ameritas Holding Company. Public information hearings on the
proposed merger were held on November 20, 1998 with the Nebraska Insurance
Director and on December 17, 1998 with the D.C. Insurance Commissioner.
Following the commissioner's approval a special meeting with the eligible
members of AMHC was held on December 22, 1998 and the members of AMIHC on
December 29, 1998. With the members approval, the merger became effective
January 1, 1999. The business combination was accounted for as a pooling of
interests.
On September 13, 1997, the Board of Directors of Ameritas adopted the Plan which
authorized the reorganization (Reorganization) of Ameritas into a mutual
insurance holding company structure. The Nebraska Department of Insurance held a
public hearing on the Reorganization on October 14, 1997 and approved the Plan
on October 24, 1997. The policyowners' of Ameritas approved the Plan on December
8, 1997 and the Reorganization became effective on January 1, 1998 (effective
date).
Pursuant to the Reorganization, Ameritas (i) formed AMIHC as a mutual insurance
holding company under the insurance laws of the State of Nebraska, (ii) formed
AHC as an intermediate stock holding company under the general laws of the State
of Nebraska, and (iii) amended and restated its Charter and Articles of
Incorporation to authorize the issuance of capital stock and the continuance of
its existence as a stock life insurance company under the same name. As of the
effective date of the Reorganization, the membership interests and the
contractual rights of the policyowners of Ameritas were separated -- the
membership interests automatically became, by operation of law, membership
interests in AMIHC and the contractual rights remained in Ameritas. Each person
who becomes the owner of a designated policy issued by Ameritas after the
effective date of the Reorganization will become a member of AMIHC and have a
membership interest in AMIHC so long as such policy remains in force. The
membership interests in AMIHC follow, and are not severable, from the policy
from which the membership interest in AMIHC is derived.
On the effective date, Ameritas issued 25 million of its authorized shares of
capital stock to AMIHC. AMIHC then contributed all of these to AHC in exchange
for 20 million shares of its common stock. As a result, AHC directly owns
Ameritas, and AMIHC indirectly owns Ameritas, through AHC. The reorganization
was accounted for at historical cost in a manner similar to a pooling of
interests. Accordingly, the accompanying financial statements and disclosures
reflect the operations of Ameritas for all periods presented.
Ameritas' insurance operations consist of life and health insurance and annuity
and pension contracts. Ameritas and its subsidiaries operates 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.
Ameritas 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. (a broker/dealer). In addition to the subsidiaries noted above,
Ameritas 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); and Ameritas Managed Dental Plan,
Inc. (A prepaid dental organization).
F-II- 10
<PAGE> 73
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
CLOSED BLOCK
Effective October 1, 1998 (the Effective Date) Ameritas formed a closed block
(the Closed Block) of policies, under an arrangement approved by the Insurance
Department of the State of Nebraska, to provide for dividends on policies that
were in force on the Effective Date and which were within the classes of
individual policies for which Ameritas had a dividend scale in effect on the
Effective Date. The Closed Block was designed to give reasonable assurance to
owners of affected policies that the assets will be available to support such
policies including maintaining dividend scales in effect at the Effective Date,
if the experience underlying such scales continues. The assets, including
revenue thereon, will accrue solely to the benefit of the owners of policies
included in the block until the block is no longer in effect.
The financial results of the Closed Block, while prepared on a GAAP basis,
reflect the provisions of the approved arrangement and not the actual results of
operations and financial position. The arrangement provides for the level of
expenses charged to the Closed Block, actual expenses related to the Closed
Block operations are charged outside of the Closed Block; therefore the
contribution or loss from the Closed Block does not represent the actual
operations of the Closed Block.
Summarized financial information of the Closed Block as of December 31, 1999 and
1998 and for the year ended December 31, 1999 and for the period from October 1,
1998 to December 31, 1998, is as follows:
<TABLE>
<CAPTION>
CLOSED BLOCK
--------------------
1999 1998
-------- --------
<S> <C> <C>
ASSETS:
Fixed maturity securities held to maturity (fair value
$136,940 -- 1999; $156,499 -- 1998).................... $139,517 $148,398
Fixed maturity securities available for sale (amortized
cost $58,087 -- 1999; $53,679 -- 1998)................. 56,443 56,384
Mortgage loans on real estate............................. 42,949 38,756
Loans on insurance policies............................... 43,229 44,968
Cash and cash equivalents................................. 5,992 1,656
Accrued investment income................................. 5,559 5,537
Deferred policy acquisition costs......................... 11,149 12,364
Other assets.............................................. 3,652 1,263
-------- --------
Total Closed Block Assets.............................. $308,490 $309,326
======== ========
LIABILITIES:
Policy and contract reserves.............................. $258,460 $261,180
Policy and contract claims................................ 1,809 1,636
Accumulated contract values............................... 58,878 59,196
Dividends payable......................................... 10,517 10,613
Other liabilities......................................... 5,105 1,997
-------- --------
Total Closed Block Liabilities......................... $334,769 $334,622
======== ========
INCOME, BENEFITS AND EXPENSES:
Premiums.................................................. $ 16,827 $ 4,354
Investment income, net.................................... 20,844 5,054
Policy benefits........................................... (20,261) (5,123)
Sales and operating expenses.............................. (2,835) (812)
Amortization of deferred policy acquisition costs......... (1,215) (506)
Dividends appropriated for policyowners................... (10,609) (3,072)
-------- --------
Gain/(Loss) in Closed Block............................ $ 2,751 $ (105)
======== ========
</TABLE>
F-II- 11
<PAGE> 74
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Ameritas Life
Insurance Corp. and its majority-owned subsidiaries (the Company). These
consolidated financial statements exclude the effects of all material
intercompany transactions.
USE OF ESTIMATES
The preparation of consolidated 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 consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain items on the prior year financial statements have been reclassified to
conform to current year presentation.
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 operations
and reported as a separate component of stockholder's equity included in
accumulated other comprehensive income, 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, and are classified as available for sale.
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. Total impaired loans as of December 31, 1999 and 1998,
and the associated interest income were not material.
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 cost or equity method
(depending upon percentage ownership), and
F-II- 12
<PAGE> 75
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
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 gains 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.
F-II- 13
<PAGE> 76
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
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 in accumulated contract values and are
not reported as premium revenues.
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 in accumulated contract values 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.
F-II- 14
<PAGE> 77
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
A roll-forward of the amounts reflected in the consolidated balance sheets as
deferred policy acquisition costs is as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Beginning balance........................................... $171,201 $164,564 $146,405
Acquisition costs deferred.................................. 45,694 40,324 36,117
Amortization of deferred policy acquisition costs........... (17,329) (18,584) (16,441)
Amount transferred to closed block.......................... -- (12,845) --
Adjustment for unrealized investment (gain)/loss............ 7,551 (2,258) (1,517)
-------- -------- --------
Ending balance.............................................. $207,117 $171,201 $164,564
======== ======== ========
</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 stockholder's equity.
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 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
All companies included in these consolidated financial statements, 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, generally,
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.
Federal income tax returns have been examined by the Internal Revenue Service
(IRS) through 1995. The IRS is currently examining the Company's 1996 through
1998 federal income tax returns. Management is currently appealing certain
adjustments proposed by the IRS for tax years 1988 and 1990
F-II- 15
<PAGE> 78
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
through 1995, and believes adequate provisions have been made for any additional
taxes which may become due with respect to the adjustments proposed by the IRS.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, entitled "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133). The statement requires that
all derivatives (including certain derivatives embedded in contracts) be
recorded on the balance sheet and measured at fair value. SFAS No. 133 requires
that changes in the fair value of derivatives be recognized currently in
operations unless specific hedge accounting criteria are met. If such criteria
are met, the derivative's gain or loss will offset related results of the hedged
item in the statement of operations. A company must formally document, designate
and assess the effectiveness of transactions to apply hedge accounting
treatment.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000, with
earlier implementation permitted. The statement must be implemented as of the
beginning of a quarter and retroactive application to financial statements of
prior periods is prohibited. The Company has not determined the financial
statement impact of adopting this statement.
2. INVESTMENTS
Investment income summarized by type of investment was as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Fixed maturity securities held to maturity.................. $ 45,001 $ 53,680 $ 59,700
Fixed maturity securities available for sale................ 32,213 33,846 32,605
Equity securities........................................... 1,764 1,783 1,899
Mortgage loans on real estate............................... 19,085 20,312 19,866
Real estate................................................. 9,883 11,871 12,317
Loans on insurance policies................................. 2,254 3,849 4,341
Other investments........................................... 15,943 9,639 15,494
Short-term investments and cash and cash equivalents........ 5,493 8,665 4,266
-------- -------- --------
Gross investment income................................... 131,636 143,645 150,488
Investment expenses......................................... 11,371 13,543 12,744
-------- -------- --------
Net investment income..................................... $120,265 $130,102 $137,744
======== ======== ========
</TABLE>
F-II- 16
<PAGE> 79
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
2. INVESTMENTS -- (CONTINUED)
Net pretax realized investment gains (losses) were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net gains (losses) on disposals, including calls, of
investments
Fixed maturity securities held to maturity................ $ (817) $ 2,235 $ 1,059
Fixed maturity securities available for sale.............. (1,816) 1,906 494
Equity securities......................................... 6,556 2,764 6,787
Mortgage loans on real estate............................. 282 1,583 959
Real estate............................................... 6,548 5,877 502
Other..................................................... 83 (2) 564
-------- -------- --------
10,836 14,363 10,365
-------- -------- --------
Provisions for losses on investments
Mortgage loans on real estate............................. (43) (100) (20)
Real estate............................................... 120 25 (50)
-------- -------- --------
Net pretax realized investment gains........................ $ 10,913 $ 14,288 $ 10,295
======== ======== ========
</TABLE>
Proceeds from sales of securities and gross gains and losses realized on those
sales were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
--------------------------------
PROCEEDS GAINS LOSSES
-------- -------- --------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $ 7,762 $ 6 $ 80
Equity securities........................................... 30,527 8,330 1,774
-------- -------- --------
$ 38,289 $ 8,336 $ 1,854
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
--------------------------------
PROCEEDS GAINS LOSSES
-------- -------- --------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $ 22,282 $ 242 $ 301
Equity securities........................................... 24,681 3,874 1,110
-------- -------- --------
$ 46,963 $ 4,116 $ 1,411
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
--------------------------------
PROCEEDS GAINS LOSSES
-------- -------- --------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $ 16,419 $ 161 $ 8
Equity securities........................................... 19,914 7,725 938
-------- -------- --------
$ 36,333 $ 7,886 $ 946
======== ======== ========
</TABLE>
F-II- 17
<PAGE> 80
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
2. INVESTMENTS -- (CONTINUED)
The amortized cost and fair value of investments in securities by type of
investment were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------
GROSS UNREALIZED
AMORTIZED ------------------
COST GAINS LOSSES FAIR VALUE
--------- ------- ------- ----------
<S> <C> <C> <C> <C>
Fixed maturity securities held to maturity
U.S. Corporate...................................... $369,467 $ 4,280 $11,368 $362,379
Mortgage-backed..................................... 96,708 1,474 898 97,284
Asset-backed........................................ 5,498 -- 306 5,192
U.S. Treasury securities and obligations of
U.S. government agencies......................... 48,547 1,989 116 50,420
Foreign............................................. 70,441 43 3,314 67,170
-------- ------- ------- --------
Total fixed maturity securities held to
maturity....................................... 590,661 7,786 16,002 582,445
-------- ------- ------- --------
Redeemable preferred stock -- affiliate............... 25,000 -- -- 25,000
-------- ------- ------- --------
Total held to maturity securities................ 615,661 7,786 16,002 607,445
-------- ------- ------- --------
Fixed maturity securities available for sale
U.S. Corporate...................................... 255,640 1,370 10,122 246,888
Mortgage-backed..................................... 70,844 108 1,750 69,202
Asset-backed........................................ 11,999 -- 303 11,696
U.S. Treasury securities and obligations of
U.S. government agencies......................... 23,083 1,830 157 24,756
Foreign............................................. 12,196 87 437 11,846
-------- ------- ------- --------
Total fixed maturity securities available for
sale........................................... 373,762 3,395 12,769 364,388
-------- ------- ------- --------
Equity securities................................... 70,421 91,549 2,151 159,819
Short-term investments.............................. 295 -- -- 295
-------- ------- ------- --------
Total available for sale securities.............. $444,478 $94,944 $14,920 $524,502
======== ======= ======= ========
</TABLE>
F-II- 18
<PAGE> 81
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
2. INVESTMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
---------------------------------------------
GROSS UNREALIZED
AMORTIZED ------------------
COST GAINS LOSSES FAIR VALUE
--------- ------- ------- ----------
<S> <C> <C> <C> <C>
Fixed maturity securities held to maturity
U.S. Corporate...................................... $351,099 $20,258 $ 417 $370,940
Mortgage-backed..................................... 114,146 6,294 -- 120,440
U.S. Treasury securities and obligations of
U.S. government agencies......................... 57,879 5,870 -- 63,749
Foreign............................................. 63,295 2,231 112 65,414
-------- ------- ------- --------
Total fixed maturity securities held to
maturity....................................... 586,419 34,653 529 620,543
-------- ------- ------- --------
Fixed maturity securities available for sale
U.S. Corporate...................................... 305,576 12,361 466 317,471
Mortgage-backed..................................... 80,018 1,295 19 81,294
Asset-backed........................................ 7,998 202 -- 8,200
U.S. Treasury securities and obligations of
U.S. government agencies......................... 58,841 4,425 -- 63,266
Foreign............................................. 13,592 668 -- 14,260
-------- ------- ------- --------
Total fixed maturity securities available for
sale........................................... 466,025 18,951 485 484,491
-------- ------- ------- --------
Equity securities................................... 59,411 63,511 1,017 121,905
Short-term investments.............................. 1,341 -- -- 1,341
-------- ------- ------- --------
Total available for sale securities.............. $526,777 $82,462 $ 1,502 $607,737
======== ======= ======= ========
</TABLE>
The amortized cost and fair value of fixed maturity securities by contractual
maturity at December 31, 1999 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.
<TABLE>
<CAPTION>
AVAILABLE FOR SALE HELD TO MATURITY
--------------------- ---------------------
AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Due in one year or less............................. $ 17,363 $ 17,508 $ 11,810 $ 11,788
Due after one year through five years............... 120,461 118,239 163,223 162,980
Due after five years through ten years.............. 112,064 107,804 216,196 210,580
Due after ten years................................. 41,031 39,940 97,227 94,621
Mortgage-backed and asset-backed securities......... 82,843 80,897 102,205 102,476
-------- -------- -------- --------
Total............................................. $373,762 $364,388 $590,661 $582,445
======== ======== ======== ========
</TABLE>
F-II- 19
<PAGE> 82
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
3. INCOME TAXES
The items that give rise to deferred tax assets and liabilities relate to the
following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------
1999 1998
-------- --------
<S> <C> <C>
Net unrealized investment gains............................. $ 33,060 $ 35,211
Equity in subsidiaries...................................... 13,414 12,058
Deferred policy acquisition costs........................... 63,753 53,003
Prepaid expenses............................................ 4,048 3,903
Other....................................................... 3,033 2,277
-------- --------
Gross deferred tax liability................................ 117,308 106,452
-------- --------
Future policy and contract benefits......................... 46,650 38,333
Deferred future revenues.................................... 5,697 5,845
Policyowner dividends....................................... 3,681 3,715
Pension and postretirement benefits......................... 3,494 2,917
Other....................................................... 5,096 4,847
-------- --------
Gross deferred tax asset.................................... 64,618 55,657
-------- --------
Net deferred tax liability................................ $ 52,690 $ 50,795
======== ========
</TABLE>
The difference between the U.S. federal income tax rate and the consolidated tax
provision rate is summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Federal statutory tax rate.................................. 35.0% 35.0% 35.0%
Equity in subsidiaries...................................... 2.0 2.6 2.4
Surplus tax................................................. -- -- (2.7)
Other....................................................... 0.1 (2.1) 0.9
---- ---- ----
Effective tax rate........................................ 37.1% 35.5% 35.6%
==== ==== ====
</TABLE>
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 has an approximate $1.5 million capital loss carryforward available as
of December 31, 1999. At December 31, 1999 the Company provided for a valuation
allowance against the net deferred tax asset related to the capital loss
carryforward.
4. RELATED PARTY TRANSACTIONS
In addition to Ameritas, AHC is also a 100% owner of Acacia Life Insurance
Company, an insurance company domiciled in Washington, D.C., which in turn is a
100% owner of Acacia National Life Insurance Company, an insurance company
domiciled in Virginia.
Ameritas and its affiliates provide technical, financial, legal, marketing and
investment advisory support to the Acacia companies under administrative service
agreements which were effective July 1, 1999. The cost of these services for the
year ended December 31, 1999 was $4,372.
On December 20, 1999, Ameritas purchased $25,000 of redeemable preferred stock
from Acacia Life Insurance Company. The stock, which pays dividends in an amount
per annum equal to 8% and is non-voting, provides for redemption in equal
installments beginning in 2005 with final redemption on or by January 1, 2015.
F-II- 20
<PAGE> 83
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
4. RELATED PARTY TRANSACTIONS -- (CONTINUED)
Effective June 30, 1999, Ameritas' 66% indirectly owned subsidiary, Ameritas
Variable Life Insurance Company (AVLIC), agreed to 100% co-insure its equity
index annuity business to their 34% owner in a non-cash transaction. In December
1999 through assumption reinsurance the co-insured block was reduced
approximately 40%. The receivable of $35,921 from this affiliate which supports
the remaining co-insurance obligation is secured by a letter of credit.
During 1999, AVLIC formed a variable insurance trust (VIT). A 66% indirectly
owned subsidiary, Ameritas Investment Corp., serves as the investment advisor
and another affiliate provides administrative services to the VIT. At December
31, 1999 separate account assets under the VIT totaled $1,066,249.
5. EMPLOYEE AND AGENT BENEFIT PLANS
The Company has a noncontributory defined benefit 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 the plan are not
segregated.
The Company also provides certain health care 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.
The following tables provide a reconciliation of the changes in the plans'
benefit obligations and fair value of assets over the two-year period ended
December 31, 1999, and a statement of the funded status as of December 31 of
both years:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
------------------ ----------------
1999 1998 1999 1998
------- ------- ------ ------
<S> <C> <C> <C> <C>
Reconciliation of benefit obligation
Benefit obligation at beginning of year................. $30,746 $23,232 $4,024 $4,498
Service cost............................................ 2,420 1,970 172 141
Interest cost........................................... 2,083 1,777 257 251
Actuarial (gain)/loss................................... (3,314) 4,488 (418) (711)
Benefits paid........................................... (2,637) (721) (232) (155)
------- ------- ------ ------
Benefit obligation at end of year....................... $29,298 $30,746 $3,803 $4,024
------- ------- ------ ------
Reconciliation of fair value of plan assets
Fair value of plan assets at beginning of year.......... $28,268 $24,271 $1,887 $1,767
Actual return on plan assets............................ 3,214 2,517 126 120
Employer contributions.................................. 2,278 2,201 -- --
Benefits paid........................................... (2,637) (721) (291) --
------- ------- ------ ------
Fair value of plan assets at end of year................ $31,123 $28,268 $1,722 $1,887
======= ======= ====== ======
</TABLE>
F-II- 21
<PAGE> 84
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
5. EMPLOYEE AND AGENT BENEFIT PLANS -- (CONTINUED)
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
------------------ ------------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Funded Status
Funded status at end of year.......................... $ 1,825 $(2,478) $(2,081) $(2,137)
Unrecognized net actuarial (gain)/loss................ (1,168) 3,086 (2,373) (2,075)
Unrecognized prior service cost....................... 1,049 1,143 (13) (15)
------- ------- ------- -------
Prepaid/(accrual) benefit cost........................ $ 1,706 $ 1,751 $(4,467) $(4,227)
======= ======= ======= =======
</TABLE>
Periodic pension expense for the Company included the following components:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Service cost................................................ $ 2,420 $ 1,970 $ 1,408
Interest cost............................................... 2,083 1,777 1,496
Expected return on plan assets.............................. (3,214) (2,517) (3,329)
Amortization of transition (asset) obligation............... 94 94 94
Amortization of net loss.................................... 939 526 1,742
------- ------- -------
Net periodic benefit cost................................... $ 2,322 $ 1,850 $ 1,411
======= ======= =======
</TABLE>
Periodic post-retirement medical expense for the Company included the following
components:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Service cost................................................ $172 $141 $158
Interest cost............................................... 257 251 304
Expected return on plan assets.............................. (132) (124) (89)
Amortization of prior service cost.......................... (2) (2) --
Amortization of net gain.................................... (114) (130) (77)
---- ---- ----
Net periodic benefit cost................................... $181 $136 $296
==== ==== ====
</TABLE>
The assumptions used in the measurement of the Company's benefit obligation are
shown in the following table:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
----------------- ---------------
1999 1998 1999 1998
----- ----- ---- ----
<S> <C> <C> <C> <C>
Weighted-average assumptions as of December 31
Discount rate............................................ 7.50% 6.75% 7.50% 6.75%
Expected return on plan assets........................... 8.00 8.00 7.50 7.50
Rate of compensation increase............................ 4.50 4.50 -- --
</TABLE>
The assumed health care trend line rate used in measuring the accumulated
post-retirement benefit obligation, for pre-65 employees, was 6.5% in 1998
decreasing to 5.5% in 1999, after which it remains constant.
F-II- 22
<PAGE> 85
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
5. EMPLOYEE AND AGENT BENEFIT PLANS -- (CONTINUED)
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A 1% change in health care trend rates would
have the following effects:
<TABLE>
<CAPTION>
1% INCREASE 1% DECREASE
----------- -----------
<S> <C> <C>
Effect on total of service and interest cost components of
net periodic postretirement health care benefit cost...... $ 21 $ (20)
Effect on the health care component of the accumulated
post-retirement benefit obligation........................ $117 $(110)
</TABLE>
The Company's employees and agents also participate in defined contribution
plans that cover substantially all full-time employees and agents. Company
contributions were $959 in 1999, $852 in 1998 and $868 in 1997.
6. INSURANCE REGULATORY MATTERS
STATUTORY SURPLUS AND NET INCOME
Net income of Ameritas and its insurance subsidiaries, as determined in
accordance with statutory accounting practices, was $51,200, $41,000, and
$47,200 for 1999, 1998 and 1997, respectively and statutory surplus was
$413,200, $357,700, and $311,300 at December 31, 1999, 1998 and 1997,
respectively. Insurance companies are required to maintain a certain level of
surplus to be in compliance with state laws and regulations. Surplus is
monitored by state regulators to ensure compliance with risk based capital
requirements.
Under statutes of the Insurance Department of the State of Nebraska, the amount
of dividends payable to stockholders are limited.
7. 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:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Assumed..................................................... $ 13,529 $ 32,191 $ 9,740
Ceded....................................................... (14,101) (12,261) (10,777)
-------- -------- --------
$ (572) $ 19,930 $ (1,037)
======== ======== ========
</TABLE>
The Company remains contingently liable in the event that a reinsurer is unable
to meet the obligations ceded under the reinsurance agreement.
F-II- 23
<PAGE> 86
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
8. RESERVE FOR UNPAID CLAIMS
The change in the liability for unpaid accident and health claims and claim
adjustment expenses is summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Balance at January 1........................................ $ 27,658 $ 22,433 $ 17,957
Reinsurance reserves (net).................................. (2,561) (1,748) (89)
-------- -------- --------
25,097 20,685 17,868
-------- -------- --------
Incurred related to:
Current year.............................................. 196,147 186,940 132,940
Prior year................................................ (8,206) (6,678) (4,675)
-------- -------- --------
Total incurred......................................... 187,941 180,262 128,265
-------- -------- --------
Paid related to:
Current year.............................................. 171,312 161,843 112,255
Prior year................................................ 16,890 14,007 13,193
-------- -------- --------
Total paid........................................ 188,202 175,850 125,448
-------- -------- --------
24,836 25,097 20,685
Reinsurance reserves (net).................................. 2,208 2,561 1,748
-------- -------- --------
Balance at December 31...................................... $ 27,044 $ 27,658 $ 22,433
======== ======== ========
</TABLE>
The liability for unpaid accident and health claims and claim adjustment
expenses is included in policy and contract claims on the consolidated balance
sheets.
9. COMMITMENTS AND CONTINGENCIES
INVESTMENTS
Securities commitments of $24,802 and $30,545, and mortgage loan and real estate
commitments of $9,897 and $8,284 were outstanding for investments to be
purchased in subsequent years as of December 31, 1999 and 1998, 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.
LINE OF CREDIT
The Company has a $25,000 unsecured line of credit available at December 31,
1999. No balance was outstanding at any time during 1999 or 1998.
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 $3,000
and $2,650 as of December 31, 1999 and 1998, respectively.
F-II- 24
<PAGE> 87
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
9. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
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.
10. 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 on 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, 1999 and 1998. 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.
LOANS ON INSURANCE POLICIES -- Fair value for loans on insurance
policies is 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 value for venture capital partnerships is
estimated based on values as last reported by the partnership and
discounted for their lack of marketability. Real estate partnerships are
carried on the cost or 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, REDEEMABLE PREFERRED STOCK-AFFILIATE, AND
REINSURANCE RECEIVABLE-AFFILIATE -- The carrying amounts equal fair value.
ACCRUED INVESTMENT INCOME -- Fair value equals book value.
F-II- 25
<PAGE> 88
AMERITAS LIFE INSURANCE CORP.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
10. FAIR VALUE OF FINANCIAL INSTRUMENTS -- (CONTINUED)
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.
Estimated fair values are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
------------------------------------------------
1999 1998
---------------------- ----------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Financial assets:
Fixed maturity securities
Held to maturity............................... $590,661 $ 582,445 $586,419 $ 620,543
Available for sale............................. 364,388 364,388 484,491 484,491
Redeemable preferred stock -- affiliate........... 25,000 25,000 -- --
Equity securities................................. 159,819 159,819 121,905 121,905
Loans on insurance policies....................... 37,645 36,304 29,047 30,332
Mortgage loans on real estate..................... 245,058 241,952 222,151 238,006
Other investments................................. 32,419 35,398 23,901 28,391
Short-term investments............................ 295 295 1,341 1,341
Cash and cash equivalents......................... 47,538 47,538 79,019 79,019
Accrued investment income......................... 19,025 19,025 20,104 20,104
Reinsurance receivable -- affiliate............... 35,921 35,921 -- --
Financial liabilities:
Accumulated contract values excluding amounts held
under insurance contracts...................... 672,020 669,289 783,275 786,152
</TABLE>
F-II- 26
<PAGE> 89
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 A-3
through A-6 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 A-3 and A-5 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 Ameritas 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. Ameritas anticipates reflecting future improvements in actual
mortality experience through adjustments in the current cost of insurance rates
actually applied. Ameritas 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 Net Cash Surrender Values shown in
the tables on pages A-4 and A-6 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 0.90% of the
aggregate average daily net assets of the Fund), and the daily charge by
Ameritas to each Subaccount for assuming mortality and expense risks (which is
equivalent to a charge at an annual rate of 0.75% on pages A-3 and A-5 and at an
annual rate of .90% on pages A-4 and A-6 of the average net assets of the
Subaccounts). Berger Associates has agreed to waive its advisory fee and
reimburse 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 Growth 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. 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 -1.65%, 4.35%, and 10.35% on pages A-3 and A-5 and -1.80%, 4.20%, and
10.20% respectively, on pages A-4 and A-6.
The hypothetical values shown in the tables do not reflect any additional
charges for Federal Income tax burden attributable to Separate Account LLVL,
since Ameritas 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 the section on Federal Tax
Matters.)
LLVL
A- 1
<PAGE> 90
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 Separate Account LLVL, and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner 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 illustrations 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. These illustrations may be provided to you in
printed form by your registered representative. ALIC may also make these
illustrations available to you by electronic means, such as through our website.
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
A- 2
<PAGE> 91
ILLUSTRATION OF POLICY VALUES
AMERITAS LIFE INSURANCE CORP
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nonsmoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $4800
INITIAL SPECIFIED AMOUNT:$250,000
DEATH BENEFIT OPTION: A
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
<TABLE>
<CAPTION>
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
GROSS ANNUAL GROSS ANNUAL GROSS ANNUAL
INVESTMENT RETURN INVESTMENT RETURN INVESTMENT RETURN
(-1.65% NET) (4.35% NET) (10.35% NET)
ACCUMULATED ----------------- ----------------- ---------------------
END OF PREMIUMS AT ACCUMU- ACCUMU- ACCUMU-
POLICY 5% INTEREST LATION DEATH LATION DEATH LATION DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- -------- -------------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,040 4,148 250,000 4,412 250,000 4,677 250,000
2 10,332 8,190 250,000 8,979 250,000 9,801 250,000
3 15,889 12,073 250,000 13,651 250,000 15,360 250,000
4 21,723 15,820 250,000 18,454 250,000 21,423 250,000
5 27,849 19,436 250,000 23,398 250,000 28,049 250,000
6 34,282 22,933 250,000 28,502 250,000 35,311 250,000
7 41,036 26,312 250,000 33,7704 250,000 43,279 250,000
8 48,128 29,629 250,000 39,296 250,000 52,084 250,000
9 55,574 32,890 250,000 45,024 250,000 61,822 250,000
10 63,393 36,095 250,000 51,032 250,000 72,595 250,000
15 108,756 50,907 250,000 85,038 250,000 146,067 250,000
20 166,652 61,660 250,000 125,330 250,000 266,950 323,622
Ages 70 240,545 66,676 250,000 173,857 250,000 462,419 532,067
75 334,852 63,088 250,000 235,751 250,000 778,355 824,526
80 455,214 44,724 250,000 314,835 326,535 1,292,483 1,340,868
85 608,831 0 0* 409,176 423,721 2,112,253 2,186,776
</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 O%, 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
A- 3
<PAGE> 92
ILLUSTRATION OF POLICY VALUES
AMERITAS LIFE INSURANCE CORP
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nonsmoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $4800
INITIAL SPECIFIED AMOUNT:$250,000
DEATH BENEFIT OPTION: A
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.80% NET) (4.20% NET) (10.20% NET)
ACCUMULATED ------------------------- ------------------------- -------------------------
END OF PREMIUMS AT ACCUMU- ACCUMU- ACCUMU-
POLICY 5% INTEREST LATION DEATH LATION DEATH LATION DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ ----------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,040 4,141 250,000 4,406 250,000 4,671 250,000
2 10,332 7,580 250,000 8,349 250,000 9,149 250,000
3 15,889 10,901 250,000 12,401 250,000 14,031 250,000
4 21,723 14,103 250,000 16,567 250,000 19,355 250,000
5 27,849 17,181 250,000 20,844 250,000 25,165 250,000
6 34,282 20,132 250,000 25,236 250,000 31,510 250,000
7 41,036 22,947 250,000 29,736 250,000 38,438 250,000
8 48,128 25,613 250,000 34,338 250,000 46,004 250,000
9 55,574 28,122 250,000 39,038 250,000 54,271 250,000
10 63,393 30,458 250,000 43,828 250,000 63,309 250,000
15 108,756 39,211 250,000 69,037 250,000 123,503 250,000
20 166,652 41,478 250,000 95,910 250,000 222,846 270,001
Ages
70 240,545 32,874 250,000 123,392 250,000 383,537 441,102
75 334,852 4,085 250,000 150,833 250,000 638,997 676,646
80 455,214 0* 0* 177,872 250,000 1,049,846 1,088,799
85 608,831 0* 0* 210,345 250,000 1,688,387 1,747,469
</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 O%, 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
A- 4
<PAGE> 93
ILLUSTRATION OF POLICY VALUES
AMERITAS LIFE INSURANCE CORP
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nonsmoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $14500
INITIAL SPECIFIED AMOUNT:$250,000
DEATH BENEFIT OPTION: B
USING CURRENT SCHEDULE OF COST OF INSURANCE RATES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.65% NET) (4.35% NET) (10.35% NET)
ACCUMULATED ------------------------- ------------------------- -------------------------
END OF PREMIUMS AT ACCUMU- ACCUMU- ACCUMU-
POLICY 5% INTEREST LATION DEATH LATION DEATH LATION DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
------ ----------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 15,225 13,348 263,348 14,174 264,174 15,001 265,001
2 31,211 26,431 276,431 28,919 278,919 31,506 281,506
3 47,997 39,194 289,194 44,197 294,197 49,609 299,609
4 65,622 51,661 301,661 60,051 310,051 69,493 319,493
5 84,128 63,838 313,838 76,508 326,508 91,347 341,347
6 103,559 75,737 325,737 93,603 343,603 115,381 365,381
7 123,962 87,361 337,361 111,359 361,359 141,819 391,819
8 145,385 98,774 348,774 129,868 379,868 170,973 420,973
9 167,879 109,984 359,984 149,166 399,166 203,128 453,128
10 191,498 120,994 370,994 169,289 419,289 238,597 488,597
15 328,534 172,632 422,632 283,011 533,011 478,340 728,340
20 503,429 216,035 466,035 419,039 669,039 865,338 1,115,338
Ages
70 726,645 248,920 498,920 579,2536 829,253 1,489,390 1,739,390
75 1,011,531 267,871 517,871 764,548 1,014,548 2,496,020 2,746,020
80 1,375,127 267,356 517,356 973,354 1,223,354 4,120,751 4,370,751
85 1,839,177 235,827 485,827 1,196,546 1,446,546 6,728,036 7,064,438
</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 O%, 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
A- 5
<PAGE> 94
ILLUSTRATION OF POLICY VALUES
AMERITAS LIFE INSURANCE CORP
ENDOWMENT AT AGE 100
Male Issue Age: 45 Nonsmoker Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $14500
INITIAL SPECIFIED AMOUNT:$250,000
DEATH BENEFIT OPTION: B
USING MAXIMUM ALLOWABLE SCHEDULE OF COST OF INSURANCE RATES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.80% NET) (4.20% NET) (10.20% NET)
ACCUMULATED ------------------------- ------------------------- -------------------------
END OF PREMIUMS AT ACCUMU- ACCUMU- ACCUMU-
POLICY 5% INTEREST LATION DEATH LATION DEATH LATION DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
------ ----------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 15,225 13,328 263,328 14,154 264,154 14,980 264,980
2 31,211 25,622 275,622 28,076 278,076 30,631 280,631
3 47,997 37,624 287,624 42,510 292,510 47,802 297,802
4 65,622 49,333 299,333 57,471 307,471 66,643 316,643
5 84,128 60,745 310,745 72,972 322,972 87,315 337,315
6 103,559 71,861 321,861 89,029 339,029 109,998 359,998
7 123,962 82,668 332,668 105,650 355,650 134,880 384,880
8 145,385 93,155 343,155 122,838 372,838 162,167 412,167
9 167,879 103,313 353,313 140,604 390,604 192,087 442,087
10 191,498 113,126 363,126 158,948 408,948 224,887 474,887
15 328,534 156,623 406,623 259,581 509,581 442,763 692,763
20 503,429 189,119 439,119 374,923 624,923 787,418 1,037,418
Ages
70 726,645 206,372 456,372 502,366 752,366 1,331,374 1,581,374
75 1,011,531 201,711 451,711 635,625 885,625 2,189,318 2,439,318
80 1,375,127 163,176 413,176 760,100 1,010,100 3,540,295 3,790,295
85 1,839,177 78,084 328,084 856,193 1,106,193 5,669,552 5,953,030
</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 O%, 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
A- 6
