<PAGE>
FILE NO. 33-88632
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------
A. Exact name of trust:
COLONIAL SEPARATE ACCOUNT D
B. Name of depositor:
CHUBB COLONIAL LIFE INSURANCE COMPANY
(formerly THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA)
C. Complete address of depositor's principal executive offices:
One Granite Place
Concord, NH 03301
D. Name and complete address of agent for service:
Ronald R. Angarella
President
Chubb Securities Corporation
One Granite Place
Concord, NH 03301
Copies to:
Charlene Grant, Esq.
Chubb Colonial Life Insurance Company
One Granite Place
Concord, NH 03301
Joan E. Boros, Esq.
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
<PAGE>
Washington, D.C. 20007
------------------
It is proposed that this filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1997 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(i)
[_] on (date) pursuant to paragraph (a)(i) of rule (485)
[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered:
Units of Interest in the Separate Account under Group Flexible Premium
Variable Life Insurance and Group Joint and Last Survivor Flexible
Premium Variable Life Insurance Policies.
F. Proposed maximum offering price to the public of the securities being
registered:
Registration of Indefinite Amount of Securities under the Securities Act
of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940.
G. Amount of filing fee:
An indefinite amount of the Registrant's securities has been registered
pursuant to a declaration, under Rule 24f-2 under the Investment Company
Act of 1940, set out in the initial Form S-6 Registration Statement. A
Pursuant to paragraph (b)(2) the issuer need not file a Rule 24f-2 Notice
because it did not sell any securities pursuant to such declarations
during the fiscal year ended December 31, 1996.
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this Registration
Statement.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(B) under the
Investment Company Act of 1940, with respect to the policies described in the
Prospectus.
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
<TABLE>
<CAPTION>
Item No. of
- -----------
Form N-8B-2 Caption of Prospectus
- ----------- --------------------------------------------------------------------------------
<S> <C>
1...... Cover Page
2...... Cover Page
3...... Not Applicable
4...... Distribution of the Group Policies and Certificates
5...... Chubb Colonial Life Insurance Company; Colonial Separate Account D
6...... Colonial Separate Account D
7...... Not Required
8...... Not Required
9...... Legal Proceedings
10...... Summary, Colonial Separate Account D; The Group Policies and Certificates;
Certificate Benefits and Rights; Calculation of Accumulation Value; Cash
Value Benefits; Other Matters; Federal Tax Matters
11...... Colonial Separate Account D, JPM Series Trust II
12...... JPM Series Trust II; Distribution of Group Policies and the Certificates
13...... JPM Series Trust II; General; Charges and Deductions; Optional Insurance
Benefits; Distribution of the Group Policies and Certificate
14...... The Group Policies and Certificates
15...... The Group Policies and Certificates
16...... Colonial Separate Account D, JPM Series Trust II
17...... Transfers; Telephone Transfers and Reallocations; Certificate Lapse;
Reinstatement; Certificate "Free Look", Optional Insurance Benefits; Cash
Value Benefits
18...... Colonial Separate Account D
19...... Annual Report; Confirmation
20...... Not Applicable
21...... Certificate Loans
22...... Colonial Separate Account D; Telephone Transfers, Loans and Reallocations
23...... Management of Chubb Colonial
24...... Not Applicable
25...... Chubb Colonial Life Insurance Company
26...... Not Applicable
27...... Chubb Colonial Life Insurance Company
28...... Chubb Colonial Life Insurance Company; Management of Chubb Colonial
29...... Chubb Colonial Life Insurance Company
30...... Not Applicable
31...... Not Applicable
32...... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<S> <C>
33...... Not Applicable
34...... Not Applicable
35...... Chubb Colonial Life Insurance Company
36...... Not Applicable
37...... Not Applicable
38-41... Distribution of the Group Policies and Certificates
42...... Not Applicable
43...... Not Applicable
Item No. of
- -----------
Form N-8B-2 Caption of Prospectus
- ----------- --------------------------------------------------------------------
44...... JPM Series Trust II; The Group Policies and Certificates; Charges
and Deductions; Calculation of Accumulation Value; Cash Value
Benefits; Distribution of the Group Policies and Certificates
45...... Not Applicable
46...... JPM Series Trust II; The Group Policies and Certificates; Charges
and Deductions; Calculation of Accumulation Value; Cash Value
Benefits
47...... Not Applicable
48...... Not Applicable
49...... Not Applicable
50...... Colonial Separate Account D
51...... Cover Page; The Group Policies and Certificates; Charges and Deductions;
Certificate Benefits and Rights; Calculation of Accumulation Value; Cash
Value Benefits; Other Matters
52...... JPM Series Trust II; Other Matters
53...... Federal Tax Matters
54...... Not Applicable
55...... Not Applicable
56...... Not Applicable
57...... Not Applicable
58...... Not Applicable
59...... Financial Statements
</TABLE>
<PAGE>
THE CHUBB HERITAGE SERIES
COLONIAL SEPARATE ACCOUNT D
GROUP FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
And
GROUP JOINT AND LAST SURVIVOR FLEXIBLE
PREMIUM VARIABLE LIFE INSURANCE POLICY
Issued by
Chubb Colonial Life Insurance Company
One Granite Place, P.O. Box 2086
Concord, New Hampshire 03301
(800) 248-2297
This Prospectus describes two forms of group flexible premium variable life
insurance policies issued by Chubb Colonial Life Insurance Company ("Chubb
Colonial") (formerly THE COLONIAL LIFE INSURANCE COMPANY OF AMERICA): a group
flexible premium variable life insurance policy form ("Chubb Colonial Heritage
I") and a group joint and last survivor flexible premium variable life insurance
policy form ("Chubb Colonial Heritage II") (collectively the "Group Policy" or
"Group Policies"). The persons and legal entities covered under the Group Policy
(the "Certificate Owners") possess all rights and interests under the Group
Policy. The Certificate Owners are provided with certificates of insurance
("Certificates") describing each Certificate Owner's rights, benefits, and
options under the Group Policy. The Certificates are designed to provide a
Certificate Owner with both lifetime insurance protection and maximum
flexibility in connection with premium payments and Death Benefits, together
with the opportunity to participate in the investment experience of Colonial
Separate Account D ("Separate Account D"). Although each Certificate contains a
schedule of intended premium payments ("Planned Periodic Premiums"), and an
intended frequency of premium payments ("Premium Frequency"), a Certificate
Owner may, subject to certain restrictions, vary the frequency and amount of the
premium payments and increase or decrease the level of life insurance benefits
payable under the Certificate. The flexibility allows a Certificate Owner to
provide for changing insurance needs within the framework of a single insurance
policy. Unlike traditional insurance protection providing fixed benefits, the
Certificate Owner participates in the investment experience of Separate Account
D. Accumulation Value under the Certificates will increase with positive
investment experience and decrease with negative investment experience.
Accumulation Value in Separate Account D is not guaranteed and could decline to
zero.
<PAGE>
A Certificate issued under Chubb Colonial Heritage I provides life
insurance coverage on one Insured, with the Death Benefit payable at the
Insured's death. A Certificate issued under Chubb Colonial Heritage II provides
life insurance coverage on two Insureds, with the Death Benefit payable upon the
death of the last surviving Insured. If Net Premiums are allocated to Separate
Account D, the amount of the Death Benefit may reflect the investment experience
of the chosen Divisions, as well as the frequency and amount of premiums, any
withdrawals of Cash Value, and the charges assessed in connection with the
Certificate. As long as the Certificate remains in force, the Death Benefit will
not be less than the current Specified Amount of the Certificate, reduced by any
outstanding indebtedness and any due and unpaid fees and charges. The minimum
initial Specified Amount is $500,000 for Colonial Heritage I and $2,000,000 for
Colonial Heritage II. After a withdrawal, the Specified Amount may not be
reduced to less than $250,000 for Chubb Colonial Heritage I and $500,000 for
Chubb Colonial Heritage II.
The Death Benefit is payable under two options. The Certificate Owner
will make two elections to determine the Death Benefit under the Certificate.
First, the Certificate Owner will choose one of two Death Benefit options
offered under the Certificate. Second, the Certificate Owner will choose the
Death Benefit qualification test, which is the method for qualifying the
Certificate as a life insurance contract for purposes of Federal tax law. In
general, under Death Benefit Option I, the Death Benefit payable under the
Certificate is equal to the current Specified Amount; under Death Benefit Option
II, the Death Benefit equals the current Specified Amount plus the Accumulation
Value of the Certificate on the date of death. The Certificate will also
increase the Death Benefit if necessary to ensure that the Certificate will
continue to qualify as life insurance under Federal tax laws. The Certificate
Owner may not change the Death Benefit qualification test once selected but may,
subject to certain restrictions, change from one death benefit option to the
other after the Certificate has been issued.
The initial premium payment must be sufficient to keep the Certificate
in force for at least three months. If a Certificate Owner chooses the
Guaranteed Death Benefit Rider, the Death Benefit will be guaranteed to never be
less than the Specified Amount, provided that a cumulative minimum premium
requirement is met. No premium payment may be less than $500.
The Certificate will remain in force so long as Cash Value exceeds
indebtedness and Cash Value less indebtedness is sufficient to pay certain
monthly charges imposed in connection with the Certificate. The Cash Value
equals the Accumulation Value less any Surrender Charge. Accumulation Value in
Separate Account D will reflect the investment experience of the chosen
Divisions, the amount and frequency of premium payments, any withdrawals, and
charges imposed in connection with the Certificate. Adherence to the schedule of
Planned Periodic Premiums will not assure the Certificate will remain in force.
The Certificate Owner bears the entire investment risk for all amounts allocated
to Separate Account D; no minimum Accumulation Value is guaranteed and the
Accumulation Value could decline to zero. So long as Cash Value exceeds
indebtedness and subject to certain conditions described in this Prospectus, a
Certificate Owner may obtain Certificate loans at any time after the first
Certificate anniversary and may make withdrawals at any time. Both withdrawals
and Certificate loans must be made prior to the Certificate's Maturity Date.
The Certificate Owner may allocate Net Premiums to one or more of the
Divisions or to Chubb Colonial's General Account on the Allocation Date. Each
Division will invest solely in a corresponding series (a "Portfolio") of JPM
Series Trust II (the "Trust"). Prior to the Allocation Date the Net Premiums
paid will be deposited in Chubb Colonial's General Account. There is a "free
look" period during which the Certificate Owner may cancel the Certificate. If
the Certificate Owner elects during this "free look" period to cancel the
Certificate, Chubb Colonial will reimburse, within seven days from the date the
Certificate is surrendered to Chubb Colonial, the full amount of premium paid.
The accompanying Prospectus for the Trust and the Statement of Additional
Information, available on request, describe the investment objectives and risks
of the five Portfolios of the Trust. The Certificates described in this
Prospectus are available in the State of New York only.
Chubb Colonial believes the Group Policies and Certificates will in general
receive favorable tax treatment under the Internal Revenue Code of 1986, as
amended ("the Code"). However, because there are issues as to which the law is
developing or changing, there can be no guarantees. Information in this
Prospectus is not intended as tax advice and Chubb Colonial recommends that
prospective purchasers rely only on the advice of a qualified tax adviser. A
prospective purchaser of a Certificate is advised that replacement of existing
insurance coverage may not be financially advantageous and should consult with
his or her financial advisers with respect to the Certificate. It may also not
be advantageous to purchase a Certificate if the prospective purchaser already
owns a flexible premium variable life insurance policy.
This Prospectus generally describes only the portion of the Certificates
involving Separate Account D. For a brief summary of Chubb Colonial's General
Account, see "THE GENERAL ACCOUNT."
This Prospectus Is Valid Only If Accompanied Or
Preceded By A Current Prospectus For
JPM Series Trust II
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES DIVISION, NOR HAS THE COMMISSION OR
ANY STATE SECURITIES DIVISION, PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Please Read This Prospectus Carefully and Retain It For Future Reference.
The Date of This Prospectus is May 5, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
DEFINITIONS............................................... 3
SUMMARY................................................... 5
CHUBB COLONIAL LIFE INSURANCE COMPANY..................... 10
COLONIAL SEPARATE ACCOUNT D............................... 10
Divisions.............................................. 10
JPM SERIES TRUST II....................................... 11
THE GROUP POLICIES AND CERTIFICATES....................... 12
General................................................ 12
Payment of Premiums.................................... 13
Guaranteed Death Benefit Premiums...................... 13
Premium Limitations.................................... 13
Allocation of Premiums................................. 13
Transfers.............................................. 14
Telephone Transfers, Loans and Reallocations........... 16
Certificate Lapse...................................... 16
Reinstatement.......................................... 16
Conversion............................................. 16
Certificate "Free Look"................................ 17
CHARGES AND DEDUCTIONS.................................... 17
Premium Charges........................................ 17
Monthly Deduction...................................... 18
Risk Charge............................................ 19
Surrender Charge....................................... 19
Administrative Fees.................................... 19
Other Charges.......................................... 20
CERTIFICATE BENEFITS AND RIGHTS........................... 20
Death Benefits......................................... 20
Guaranteed Death Benefit............................... 21
Combined Requests...................................... 21
Maturity of the Certificate............................ 21
Optional Insurance Benefits............................ 22
Settlement Options..................................... 22
CALCULATION OF ACCUMULATION VALUE......................... 23
Unit Values............................................ 24
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Net Investment Factor.................................. 24
Page
----
CASH VALUE BENEFITS....................................... 25
Surrender Privileges................................... 25
Certificate Loans...................................... 26
OTHER MATTERS............................................. 27
Voting Rights.......................................... 27
Additions, Deletions or Substitutions of Investments... 27
Annual Report.......................................... 28
Confirmation........................................... 28
Limitation on Right to Contest......................... 28
Misstatements.......................................... 28
Suicide................................................ 28
Beneficiaries.......................................... 29
Postponement of Payments............................... 29
Assignment............................................. 29
Illustration of Benefits and Values.................... 29
Non-Participating Certificate.......................... 29
THE GENERAL ACCOUNT....................................... 29
General Description.................................... 29
General Account Accumulation Value..................... 30
Determination of Charges............................... 30
Premium Deposit Fund................................... 30
DISTRIBUTION OF THE GROUP POLICIES AND CERTIFICATES....... 30
MANAGEMENT OF CHUBB COLONIAL.............................. 32
Executive Officers and Directors of Chubb Colonial..... 32
Executive Officers (Other Than Directors).............. 33
STATE REGULATION OF CHUBB COLONIAL........................ 34
FEDERAL TAX MATTERS....................................... 34
Tax Considerations....................................... 34
Certificate Proceeds..................................... 34
Charge for Chubb Colonial Income Taxes................... 37
EMPLOYEE BENEFIT PLANS.................................... 37
LEGAL PROCEEDINGS......................................... 37
EXPERTS................................................... 37
REGISTRATION STATEMENT.................................... 38
FINANCIAL STATEMENTS...................................... F-1
ILLUSTRATIONS............................................. A-1
</TABLE>
[THIS PROSPECTUS CONSTITUTES AN OFFERING ONLY IN THE STATE OF NEW YORK.
CHUBB COLONIAL DOES NOT AUTHORIZE ANY INFORMATION OR REPRESENTATIONS REGARDING
THE OFFERING DESCRIBED IN THIS PROSPECTUS OTHER THAN AS CONTAINED IN THIS
PROSPECTUS, THE PROSPECTUS OF THE TRUST OR THE STATEMENT OF ADDITIONAL
INFORMATION OF THE TRUST.]
<PAGE>
DEFINITIONS
In addition to terms which are defined elsewhere in this Prospectus, the
following words and phrases shall have the indicated meanings:
Accumulation Value--The total amount that a Certificate provides for
investment at any time plus the amount held as collateral for Certificate Debt.
Age--The Insured's age at his or her nearest birthday.
Allocation Date--The date when the initial premium is placed in the
Divisions and the General Account in accordance with the Certificate Owner's
allocation instructions in the application. The Allocation Date is 20 days from
the date the Certificate is issued.
Attained Age--The age of the Insured at his or her nearest birthday on the
last Certificate anniversary.
Beneficiary--The person, designated by the Certificate Owner in the
application, to receive the Death Benefit proceeds. If later changed, the
Beneficiary is as shown in the latest change filed with Chubb Colonial. If no
Beneficiary survives the Insured, the Certificate Owner or the Certificate
Owner's estate will be the Beneficiary. The interest of any Beneficiary is
subject to that of any assignee.
Cash Value--The Accumulation Value less any applicable Surrender Charge.
This amount less the amount of Certificate Debt is payable to the Certificate
Owner on the earlier of surrender of the Certificate or the Maturity Date.
Certificate--The form used to describe the Certificate Owners' rights,
benefits, and options under their respective Group Policies. The Certificate
will describe, among other things, (i) the benefits for the named Insured, (ii)
to whom the benefits are payable, and (iii) the limits and other terms of the
Group Policy as they pertain to the Insured.
Certificate Date--The date set forth in the Certificate, which is the date
requested by the Certificate Owner. If no date is requested, it is the date the
Certificate is issued. The Certificate Date is the date from which Certificate
years, Certificate months, and Certificate anniversaries will be determined. If
the Certificate Date should fall on the 29th, 30th, or 31st of a month, the
Certificate Date will be the 1st of the following month.
Certificate Debt--The sum of all unpaid Certificate loans and accrued
interest thereon.
Certificate Owner--The person or legal entity so designated in the
application or as subsequently changed. A Certificate Owner may be someone other
than the Insured. Certificate Owners possess all rights under their respective
Group Policies with respect to their Certificates.
Date of Receipt--Any business day of Chubb Colonial, prior to 4:00 P.M.
Eastern time, on which a notice or premium payment is received at Chubb
Colonial's Service Center.
Death Benefit--The amount, less the amount of Certificate Debt, which is
payable to the Beneficiary under the Certificate upon the death of the Insured
under Chubb Colonial Heritage I and the death of the last surviving Insured
under Chubb Colonial Heritage II.
Division--A separate division of Separate Account D which invests
exclusively in the shares of a specified Portfolio of the Trust.
<PAGE>
General Account--The assets of Chubb Colonial other than those allocated to
Separate Account D or any other separate account.
Group Policies--Refers to the Group Flexible Premium Variable Life
Insurance Policy and the Group Joint and Last Survivor Flexible Premium Variable
Life Insurance Policy described herein.
Insured(s)--The person(s) upon whose life the Certificate is issued.
Issue Age--The Insured's age at his or her nearest birthday on the
Certificate Date.
Joint Equal Age--On Chubb Colonial Heritage II, this will be calculated
pursuant to a formula which converts the specific age, gender and underwriting
classifications of the two Insureds into one age. The Joint Equal Age is used in
determining issue age limitations, minimum premiums and guaranteed death benefit
premiums.
Loan Value--Generally, 90% of a Certificate's Cash Value on the date of a
loan.
Maturity Date--Unless otherwise specified, the Maturity Date will be the
Certificate anniversary nearest to the Insured's 100th birthday for Chubb
Colonial Heritage I and the younger Insured's 100th birthday for Chubb Colonial
Heritage II.
Monthly Anniversary Date--The same day in each month as the Certificate
Date.
Net Premium--The gross premium less a 2.0% state tax charge, a 1.25%
federal deferred acquisition cost tax charge and a 3% sales charge.
Policyholder--The entity to whom a Group Policy is issued. The Policyholder
possesses no rights under the Group Policy.
Portfolio--A separate investment series of the Trust.
Proof of Death--One or more of the following:
(a) A copy of a certified death certificate.
(b) A copy of a certified decree of a court of competent jurisdiction as to
the finding of death.
(c) A written statement by a medical doctor who attended the Insured.
(d) Any other proof satisfactory to Chubb Colonial.
Separate Account D--Colonial Separate Account D, a separate investment
account created by Chubb Colonial to receive and invest Net Premiums paid under
the Certificates and other variable life insurance policies offered by Chubb
Colonial.
Service Center--Chubb Colonial's administrative service center, located at
One Granite Place, P.O. Box 2086, Concord, New Hampshire 03302, telephone number
(800) 997-4499.
Specified Amount--The face amount of the Certificate which is the minimum
death benefit payable under the Certificate.
Surrender Charge--A sales charge assessed only upon surrender or
withdrawal.
<PAGE>
Trust--JPM Series Trust II, a series mutual fund.
Valuation Date--Each day, as of the close of regular trading on the New
York Stock Exchange, which is currently 4:00 P.M. Eastern time, or any other
days as may be required.
Valuation Period--The period between two successive Valuation Dates,
commencing at the close of regular trading on the New York Stock Exchange on
each Valuation Date and ending at the close of regular trading on the New York
Stock Exchange on the next succeeding Valuation Date.
<PAGE>
SUMMARY
The discussion in this Prospectus assumes that there is no Certificate loan
outstanding. The terms under which the Group Policies and Certificates are
issued may also vary from those described in this Prospectus based on particular
circumstances. The description of the Group Policies and Certificates in this
Prospectus is subject to the terms of the Group Policy and Certificate and any
supplement or endorsement to them. An applicant may review a copy of the Group
Policy and Certificate and any supplement or endorsement to them on request.
What are the Group Policies and Certificates being offered?
This Prospectus describes two forms of group flexible premium variable life
insurance policies issued by The Chubb Colonial Life Insurance Company ("Chubb
Colonial"). Chubb Colonial Heritage I provides life insurance coverage on one
Insured, with the Death Benefit payable upon the death of such Insured. Chubb
Colonial Heritage II provides life insurance coverage on two Insureds, with a
Death Benefit payable only when the last surviving Insured dies. The Certificate
Owner may, subject to certain limitations, make premium payments in any amount
at any frequency. The Group Policies and Certificates are life insurance
contracts with death benefits, cash values, and other features traditionally
associated with life insurance. They are called "flexible premium" because,
unlike many insurance contracts, there are no fixed schedules for premium
payments, although each Certificate Owner may establish a schedule of premium
payments ("Planned Periodic Premiums"). This flexibility permits a Certificate
Owner to provide for evolving insurance needs within a single insurance product.
The minimum initial Specified Amount is $500,000 for Colonial Heritage I and
$2,000,000 for Chubb Colonial Heritage II. A Certificate Owner may increase or
decrease coverage. Increasing coverage under the Certificate, rather than
purchasing another policy, may save additional administrative costs. Increasing
coverage under the Certificate or purchasing another policy may require new
evidence of insurability. Increasing or decreasing coverage may have certain tax
consequences. See "FEDERAL TAX MATTERS".
The Certificates generally work as follows: a Certificate Owner
periodically pays a premium to Chubb Colonial. Chubb Colonial subtracts an
amount for state taxes, the federal deferred acquisition cost tax charge and the
sales charge from each premium. Chubb Colonial then places the Net Premium into
one or more of the five Divisions and/or Chubb Colonial's General Account as
directed by the Certificate Owner. Each Division invests its assets in a
corresponding Portfolio of the Trust. During the year, Chubb Colonial takes
charges from each Division and credits or charges each Division with its
respective investment experience. The cost of insurance charge, which is
deducted from each Certificate's Accumulation Value, varies monthly based on the
sex, Issue Age, Certificate year, rating class of the Insured(s), Specified
Amount of the Certificate, Death Benefit option and applicable corridor
percentage. A Certificate Owner will incur a Surrender Charge for a surrender or
withdrawal during the first five Certificate years. See "CHARGES AND DEDUCTIONS
- --Surrender Charge".
The Death Benefit is payable under two options. The Certificate Owner will
make two elections to determine the Death Benefit under the Certificate. First,
the Certificate Owner will choose one of two Death Benefit options offered under
the Certificate. Second, the Certificate Owner will choose the Death Benefit
qualification test, which is the method for qualifying the Certificate as a life
insurance contract for purposes of Federal tax law. In general, under Death
Benefit Option I, the Death Benefit payable under the Certificate is equal to
the current Specified Amount; under Death Benefit Option II, the Death Benefit
is equal to the Specified Amount plus the Accumulation Value of the Certificate
on the date of death. The Certificate will also increase the Death Benefit if
necessary to ensure that the Certificate will continue to qualify as life
insurance under Federal tax laws. The Certificate Owner may not change the Death
Benefit qualification test once selected but may, subject to certain
restrictions, change from Death Benefit Option I to Option II, and vice versa,
after the Certificate has been issued. Prospective Certificate Owners should be
aware that there is no guarantee of Accumulation Value in Separate Account D.
See
<PAGE>
"CERTIFICATE BENEFITS AND RIGHTS--Death Benefits".
All persons insured must meet specified age limits and certain health and
other standards called "Underwriting Standards". The smoking status of the
Insureds is generally reflected in the cost of insurance rates. However, for
Chubb Colonial Heritage I, distinctions between smokers and nonsmokers are only
made for Insureds age 15 and over. Certificates issued in certain jurisdictions
will not directly reflect the sexes of the Insureds in either the premium rates
or the charges and values under the Certificate.
What is the amount of the Premiums?
Premiums are flexible and the Certificate Owner may choose the amount and
frequency of premium payments provided each premium is at least $500. Chubb
Colonial reserves the right to limit the amount of any increase in premium
payment.
The first premium is due on the Certificate Date. The amount of the first
premium must be sufficient to keep the Certificate in force for three months.
Premiums are paid in advance, generally one year at a time; however, Chubb
Colonial accepts semi-annual, quarterly and monthly premium payments. Changes in
Premium Frequency and increases or decreases in the amount of Planned Periodic
Premiums may be made by the Certificate Owner. Chubb Colonial will notify
Certificate Owners if any premiums, scheduled or unscheduled, would cause their
Certificates to be deemed to be modified endowment contracts and allow for a
refund of the excess premium. See "FEDERAL TAX MATTERS--Certificate
Proceeds".
Failure to pay premiums in accordance with the schedule of Planned Periodic
Premiums will not automatically cause the Certificate to lapse. Unless the
Guaranteed Death Benefit Rider is in force and the conditions under the Rider
satisfied, it will lapse when the Cash Value less outstanding Certificate Debt
is insufficient to pay the monthly deduction for certain charges ("monthly
deduction") and a grace period expires without a sufficient payment by the
Certificate Owner. Conversely, payment of premiums in accordance with the
schedule of Planned Periodic Premiums does not necessarily mean that the
Certificate will remain in force. See "THE GROUP POLICIES AND CERTIFICATES--
Certificate Lapse".
The Guaranteed Death Benefit Rider guarantees that the Death Benefit will
never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
What is Colonial Separate Account D?
Separate Account D is a separate account established by Chubb Colonial
pursuant to the insurance laws of the State of New Jersey and organized as a
registered unit investment trust under the Investment Company Act of 1940 (the
"1940 Act"). Such registration does not involve any supervision by the
Securities and Exchange Commission (the "Commission") of the management or
investment practices or policies of Separate Account D. Separate Account D is
presently comprised of five Divisions, each of which buys shares at net asset
value of the corresponding series (a "Portfolio") of JPM Series Trust II (the
"Trust").
What is JPM Series Trust II?
The Trust is registered as an open-end diversified management company under
the 1940 Act. Its shares are offered only to the Divisions, whether now in
existence or to be established by Chubb Colonial, and to divisions of the Chubb
Separate Account C, a separate account established to fund certain variable life
insurance policies by Chubb Life Insurance Company of America, Chubb Colonial's
parent. The Trust's shares may also be offered to other separate accounts which
may be established by Chubb Colonial, Chubb Life, their affiliated insurance
companies or other insurance companies and to qualified pension and retirement
plans outside of the separate account context.
<PAGE>
The Trust presently has five classes of shares, each representing a
Portfolio having a specific investment objective. The present Portfolios of the
Trust are the JPM Treasury Money Market Portfolio, the JPM Bond Portfolio, the
JPM Equity Portfolio, the JPM Small Company Portfolio and the JPM International
Equity Portfolio.
The investment manager to the Trust is J.P. Morgan Investment Management,
Inc. ("JPMIM"), an affiliate of Morgan Guaranty Trust Company of New York
("Morgan Guaranty"). JPMIM receives fees from the Trust for providing investment
management services. The fees range from .20 percent to .60 percent of average
daily net assets of the Portfolios. See "JPM SERIES TRUST II".
What are the charges made by Chubb Colonial?
State Tax Charge and Federal DAC Tax Charge. These charges are deducted
from each premium payment, currently 2.0% for state premium and other local
taxes imposed on premiums and 1.25% as a federal deferred acquisition cost
("DAC") tax charge.
Sales Charge. A 3% sales charge is deducted from each premium payment. Also
see below "Surrender or Withdrawal Charges".
Cost of Insurance Charge. This charge is calculated on each Monthly
Anniversary Date and deducted from each Certificate's Accumulation Value. The
monthly current cost of insurance rate is based on the sex, Issue Age,
Certificate year, rating class of the Insured(s), Specified Amount, Death
Benefit option and applicable corridor percentage. Monthly cost of insurance
rates will be determined by Chubb Colonial based upon its expectations as to
future mortality experience. Cost of insurance rates are guaranteed not to
exceed or be increased above the maximum charge based upon the Commissioner's
1980 Standard Ordinary Mortality Table.
Charge for Mortality and Expense Risks. This charge is imposed daily at an
annual rate of .65% on the assets of each Division. Chubb Colonial will realize
net income from this charge to the extent it is not needed to provide benefits
and pay expenses under the Group Policies and Certificates.
Surrender or Withdrawal Charges. This sales charge is imposed at the time
of surrender or withdrawal during the first five Certificate years. It declines
annually from 5% to 0% of premiums paid in the first Certificate year.
Administrative Charge for Withdrawal or Transfer. Chubb Colonial charges
$100 for each withdrawal and for certain transfers between Divisions or between
the Divisions and the General Account. See "THE GROUP POLICIES AND
CERTIFICATES--Transfers" for a description of situations in which the transfer
charge will be imposed.
Guaranteed Death Benefit Charge. If the Guaranteed Death Benefit Rider is
added to the Certificate, a monthly charge of $.01 per $1,000 of Specified
Amount will be deducted each month from the Accumulation Value of the
Certificate.
Charge for Optional Rider Benefits. An additional charge is required if the
Certificate Owner elects to purchase certain optional insurance benefits by
rider. Charges are deducted monthly from a Certificate's
<PAGE>
Accumulation Value. See "CERTIFICATE BENEFITS AND RIGHTS--Optional Insurance
Benefits".
See "CHARGES AND EXPENSES" for a fuller description of charges under the
Certificates.
Is there a charge against Separate Account D for federal income tax?
Currently no charge is made against any Division for federal income taxes.
However, if Chubb Colonial incurs, or expects to incur, income taxes
attributable to any Division of this class of Group Policies and Certificates in
future years, it reserves the right to make a charge. See the discussion of the
federal DAC tax charge under "CHARGES AND DEDUCTIONS--Premium Charges".
How are amounts allocated to each Division or the General Account?
The Certificate Owner indicates in the application the allocation of Net
Premium among the Divisions and the General Account. The initial Net Premium is
allocated on the Allocation Date and Net Premiums received after the Allocation
Date are allocated generally on the Date of Receipt. The minimum percentage of
any Net Premium allocated to any Division or the General Account is 1%. The
Certificate Owner may change his or her allocation of future premium payments by
written notice to Chubb Colonial or by telephone, if the proper telephone
authorization is on file, without payment of any fee or penalty.
What is the relationship between the premium and the amount allocated to the
Divisions?
The initial Net Premium is allocated by Chubb Colonial on the Allocation
Date among the Divisions and the General Account as directed by the Certificate
Owner. Prior to the Allocation Date the initial Net Premium is held in Chubb
Colonial's General Account. The initial Net Premium is the initial gross
premium, plus any additional premium paid prior to the Allocation Date, less the
state tax charge, the federal DAC tax charge and the sales charge. These charges
also apply to subsequent premium payments.
What commissions are paid to agents?
The Group Policies and Certificates are sold by agents who represent
Chubb Colonial and are registered representatives of Chubb Securities
Corporation or other registered broker-dealers. Commissions payable to agents
are described under "DISTRIBUTION OF THE GROUP POLICIES AND CERTIFICATES".
What is the Death Benefit?
The Death Benefit under Chubb Colonial Heritage I is the amount payable to
the named Beneficiary when the person insured under the Certificate dies. The
Death Benefit under Chubb Colonial Heritage II is the amount payable to the
named Beneficiary when the last surviving Insured dies. The Death Benefit
proceeds will equal the Death Benefit of the Certificate, plus any additional
rider benefits included and then due, minus any outstanding Certificate Debt or
unpaid cost of insurance charges or charges for riders.
Under Option I, the Death Benefit will be equal to the greater of the
Specified Amount or the Accumulation Value of the Certificate on the date of
death multiplied by the corridor percentage. Under Option II, the Death Benefit
is equal to the Specified Amount plus the Accumulation Value of the Certificate
on the date of death; provided, however, that under Option II, the Death Benefit
can never be less than the Accumulation Value on the
<PAGE>
date of death multiplied by the corridor percentage. See "CERTIFICATE BENEFITS
AND RIGHTS--Death Benefits".
Under the Guaranteed Death Benefit Rider the Death Benefit is guaranteed to
never be less than the Specified Amount provided that a cumulative minimum
premium requirement is met.
How does the Accumulation Value of a Certificate vary in relation to the
Divisions' investment experience?
The Certificate provides for Accumulation Value equal to the total of the
Certificate's Accumulation Value in the Divisions and Accumulation Value in the
General Account. The Certificate's Accumulation Value will reflect the amount
and frequency of premium payments, the investment experience of the Divisions,
the value of Net Premiums (Net Premiums plus credited interest), if any,
allocated to the General Account, Certificate loans, any withdrawals, and any
charges imposed in connection with the Certificate. There is no minimum
guaranteed Accumulation Value.
What is the loan provision and how does a loan affect the Death Benefit,
Accumulation Value and Cash Value?
After the first Certificate anniversary, a Certificate Owner may borrow
against the Cash Value of his or her Certificate. Generally, the maximum loan
amount is 90% of the Cash Value of the Certificate on the date of the loan. Loan
interest is payable at the end of each Certificate year and all Certificate Debt
outstanding will be deducted from proceeds payable at the Insured's death for
Chubb Colonial Heritage I and at the death of the last surviving Insured for
Chubb Colonial Heritage II, upon maturity, or upon surrender.
When a Certificate loan is made, a portion of the Certificate's
Accumulation Value sufficient to secure the loan will be transferred to the
General Account. A Certificate loan removes the proceeds from the investment
experience of Separate Account D which will have a permanent effect on the
Accumulation Value, the Cash Value and the Death Benefit even if the loan is
repaid.
There are two types of loans available. See "CASH VALUE BENEFITS--
Certificate Loans" for a description of the two types of loans and their
applicable interest rates.
Is there a short-term cancellation right?
The Certificate Owner has the limited right to return a Certificate for
cancellation and full refund of all premiums paid. Chubb Colonial will cancel
the Certificate if it is returned by mail or personal delivery to Chubb
Colonial, or to the agent who sold the Certificate, within 20 days after the
delivery of the Certificate to the Certificate Owner. Chubb Colonial will return
to the Certificate Owner, within seven days, all payments received on the
Certificate.
What transfers is a Certificate Owner allowed?
A Certificate Owner may transfer Accumulation Value among the Divisions and
among the Divisions and the General Account. However, transfers out of the
General Account are subject to restrictions. Chubb Colonial currently permits up
to 24 transfers per Certificate year, twelve of which will not incur a transfer
charge. See "THE GROUP POLICIES AND CERTIFICATES--Transfers" for a more
complete description of the terms and conditions of the transfer privileges
under the Certificates.
<PAGE>
Are the benefits under the Certificates subject to federal income tax?
Under current interpretations of the tax laws, all Death Benefits paid
under the Certificates will generally be fully excludable from the gross income
of the Beneficiary for federal income tax purposes. Treasury regulations require
that investments underlying the Certificates be adequately diversified. Chubb
Colonial believes it is presently in compliance with the regulations and intends
to remain in compliance with such regulations and other federal tax law
requirements.
If a Certificate Owner elects to make certain transactions, including a
withdrawal, surrender or exchange of the Certificate, the Certificate Owner may
be taxed on a portion of any amounts paid to the Certificate Owner (which may
include any prior Certificate loans cancelled in the transaction). Also, if
premiums paid by a Certificate Owner exceed certain limits and the Certificate
is deemed a modified endowment contract, then any pre-death distributions,
including loans, surrenders and partial withdrawals, may be treated as income
taxable to the Certificate Owner and may also cause the Certificate Owner to
incur a penalty tax of 10%. Certificate Owners are advised to consult with their
own tax advisers with regard to the tax consequences of the Certificate. See
"FEDERAL TAX MATTERS".
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
Chubb Colonial Life Insurance Company ("Chubb Colonial") is a stock life
insurance company chartered in 1897 in New Jersey and has been continuously
engaged in the insurance business since that time. Prior to March 1, 1996, Chubb
Colonial was known as The Colonial Life Insurance Company of America. It is
licensed to do life insurance business in fifty states of the United States,
Puerto Rico, the U.S. Virgin Islands, and in the District of Columbia. Chubb
Colonial is a wholly-owned subsidiary of Chubb Life Insurance Company of
America, ("Chubb Life") Effective April 30, 1997 Chubb Life, a New Hampshire
Life insurance company which was formerly a wholly-owned subsidiary of The Chubb
Corporation, a New Hampshire life insurance company which is a wholly owned
subsidiary of Jefferson-Pilot Corporation, a North Carolina corporation. The
principal offices of Jefferson-Pilot Corporation are located at 100 North Greene
Street, Greensboro, North Carolina 27401. Its telephone number is 910-691-3000.
Chubb Life's home office and Chubb Colonial's service center are located at One
Granite Place, P.O. Box 2086, Concord, New Hampshire 03302, telephone number
(800) 248-2297. Chubb Colonial's total assets at December 31, 1996, were
$602,728,000.
Chubb Colonial writes life insurance. It is subject to New Jersey law
governing insurance, and is regulated and supervised by the New Jersey Insurance
Commissioner. Contemporaneous with the sale of Chubb Life and its subsidiaries
to Jefferson Pilot Corporation. Chubb Colonial is currently rated AA-(Excellent)
by Standard and Poor's Corporation and A (Excellent) by A.M. Best and Company.
These ratings do not apply to Separate Account D but merely reflect the opinion
of the rating company as to the relative financial strength of Chubb Colonial
and Chubb Colonial's ability to meet its contractual obligations to its policy
and certificate owners. Even though assets in Separate Account D are held
separately from Chubb Colonial's other assets, ratings of Chubb Colonial may
still be relevant to Certificate Owners since not all of Chubb Colonial's
contractual obligations relate to payments based on those segregated assets.
COLONIAL SEPARATE ACCOUNT D
Separate Account D is a separate account of Chubb Colonial established on
June 13, 1994 and governed by the insurance laws of the State of New Jersey.
Separate Account D is organized as a unit investment trust registered with the
Commission under the 1940 Act and is subject to that Act's requirements. Such
registration does not involve supervision of the management or investment
policies of Separate Account D or Chubb Colonial by the Commission. Chubb
Colonial is the depositor of Separate Account D. Under New Jersey law, the
assets of Separate Account D are held exclusively for the benefit of
Policyholders, Certificate Owners and persons entitled to payments under these
Group Policies and Certificates, and other variable life insurance policies
funded by Separate Account D. The income, realized or unrealized capital gains,
or capital losses of Separate Account D are credited to or charged against the
assets held in Separate Account D in accordance with the terms of the Group
Policies and Certificates, without regard to other income or capital gains or
losses of any other account arising out of any other business Chubb Colonial
conducts. Separate Account D is administered and accounted for as part of the
general business of Chubb Colonial, but the assets of Separate Account D are not
chargeable with liabilities arising out of any other business which Chubb
Colonial may conduct.
Chubb Colonial holds the assets of Separate Account D. These assets are
kept physically segregated and held separate and apart from the General Account.
Chubb Colonial maintains records of all purchases and redemptions of Trust
shares by each of the Divisions.
Divisions. Separate Account D presently has five Divisions but may, in
the future, add or delete investment Divisions. Each Division will invest
exclusively in shares representing an interest in a Portfolio of the Trust.
Investment income and other distributions to each Division of Separate
Account D arising from the applicable underlying Portfolio of the Trust
increases the assets of the corresponding Division of Separate Account D. The
income and both realized and unrealized gains or losses on the assets of each
Division of Separate Account D are credited to or charged against that Division
without regard to income, gains or losses from any other Division.
<PAGE>
JPM SERIES TRUST II
Separate Account D invests in shares of the Trust which is organized as a
Delaware business trust and is registered as an open-end diversified management
company under the 1940 Act. The Trust currently has five Portfolios each of
which has different objectives. The shares of each Portfolio are presently
offered to the Divisions and to divisions of the Chubb Separate Account C, a
separate account of Chubb Life Insurance Company of America, Chubb Colonial's
parent. The Trust's shares may also be offered to other separate accounts that
fund variable life insurance policies and variable annuity contracts which are
established by Chubb Colonial, Chubb Life or other insurance companies and to
qualified pension and retirement plans outside of the separate account context.
The assets of each Portfolio are maintained separately from the assets of the
other Portfolios and each Portfolio has investment objectives and policies which
are different from those of the other Portfolios. Thus, each Portfolio operates
as a separate investment fund, and the income, gains or losses of one Portfolio
has no effect on the investment performance of any other Portfolio.
The investment manager to the Trust is J.P. Morgan Investment Management,
Inc. ("JPMIM"), which is an affiliate of Morgan Guaranty Trust Company of New
York ("Morgan Guaranty").
An investment management fee is charged monthly against each Portfolio by
Chubb Investment Advisory at the annual rate of .20 percent of the average daily
net assets of the Resolute Treasury Money Market Portfolio, .30 percent of the
average daily net assets of the Resolute Bond Portfolio, .40 percent of the
average daily net assets of the Resolute Equity Portfolio, and .60 percent of
the average daily net assets of the Resolute Small Company Portfolio and the
Resolute International Equity Portfolio.
The investment objectives of each Portfolio are set forth below. There can
be no assurance that any of the Portfolios will achieve its stated objectives.
The specialized nature of each Portfolio gives rise to significant differences
in the relative investment potential and market and financial risks of each
Portfolio. Certificate Owners should consider the unique features of each
Portfolio before investing in any corresponding Division. For more detailed
information concerning each Portfolio, including a description of the investment
risks, reference is made to the Prospectus for the Trust which accompanies this
Prospectus, or the Statement of Additional Information for the Trust, available
upon request.
The JPM Treasury Money Market Portfolio seeks to provide current
income, maintain a high level of liquidity and preserve capital.
The JPM Bond Portfolio seeks to provide a high total return consistent
with moderate risk of capital and maintenance of liquidity.
The JPM Equity Portfolio seeks to provide a high total return from a
portfolio comprised of selected equity securities.
The JPM Small Company Portfolio seeks to provide a high total return
from a portfolio of equity securities of small companies.
The JPM International Equity Portfolio seeks to provide a high total
return from a portfolio of equity securities of foreign corporations.
<PAGE>
The Trust may find it necessary to take action to assure that the Group
Policies and Certificates qualify as life insurance under federal tax laws. The
Trust, for example, may alter the investment objectives of any Portfolio or take
other appropriate actions. See "OTHER MATTERS--Additions, Deletions or
Substitutions of Investments" and "FEDERAL TAX MATTERS".
Separate Account D will purchase shares of the Trust at net asset value in
connection with Net Premiums, transfers and loan repayments allocated to the
Divisions in accordance with the Certificate Owner's directions and will redeem
shares of the Trust to process transfers, Certificate loans, surrenders or
withdrawals and generally to meet contract obligations or make adjustments in
reserves. The Trust will sell and redeem its shares at net asset value as of the
Date of Receipt by Separate Account D of premium payments or notifications by a
Certificate Owner.
THE GROUP POLICIES AND CERTIFICATES
General. The Group Policies are issued to the banking corporation set
forth in the Group Policies and Certificates (the "Policyholder"). The
Policyholder possesses no rights under the Group Policies but holds the Group
Policies as trustee under a trust known as the Colonial Heritage Group Insurance
Trust. Chubb Colonial established the Colonial Heritage Group Insurance Trust
for the purpose of enabling participating financial institutions in the State of
New York which have applied for and been accepted as participants in the Group
Insurance Trust and have accepted its terms and conditions (the "Members") to
join together in the purchase and maintenance of the Group Policies.
Certificates of insurance may be issued to certain eligible persons (natural or
legal entity) who maintain at the time of application an account with, or whose
account is serviced by, a financial institution participating as a Member and
who have applied for insurance under this Group Policy. The Certificates
describe each Certificate Owner's rights, benefits and options under the Group
Policy. The Certificate is designed to provide the Certificate Owner with
lifetime insurance protection and flexibility in connection with the amount and
frequency of premium payments and the level of life insurance proceeds payable
under the Certificate. Chubb Colonial reserves the right to no longer accept any
new Insureds under a Group Policy as of a specified date.
Chubb Colonial Heritage I is a group flexible premium variable life
insurance policy which provides life insurance coverage on one Insured, with the
Death Benefit payable upon the death of such Insured. Chubb Colonial Heritage II
is a group flexible premium joint and last survivor variable life insurance
policy which provides life insurance coverage on two Insureds, with a Death
Benefit payable only when the last surviving Insured dies. The Certificate Owner
is not required to pay scheduled premiums to keep a Certificate in force but
may, subject to certain limitations, vary the frequency and amount of premium
payments. Moreover, subject to certain limitations, a Certificate Owner may
adjust the level of life insurance payable under the Certificate without having
to purchase a new policy by increasing or decreasing the Specified Amount. Thus,
as insurance needs or financial conditions change, the Certificate Owner has the
flexibility to adjust coverage and vary the premium payments. Death Benefits are
payable under two options as described in "CERTIFICATE BENEFITS AND RIGHTS--
Death Benefits".
To purchase a Certificate, a completed application must be submitted to
Chubb Colonial through the agent selling the Certificate. Applicants for
insurance must furnish satisfactory evidence of insurability. An Insured under
Chubb Colonial Heritage I must generally be between the ages of 0 and 80 and the
Insureds under Chubb Colonial Heritage II must generally be between 20 and 85
with only one Insured over the age of 80. The Joint Equal Age of the Insureds
under Chubb Colonial Heritage II cannot be over age 80. The smoking status of
each Insured is reflected in the cost of insurance rates; provided, however,
that under Chubb Colonial Heritage I distinctions between smokers and nonsmokers
are only made for Insureds age 15 and over.
The minimum Specified Amount at issue is $500,000 for Chubb Colonial
Heritage I and $2,000,000 for Chubb Colonial
<PAGE>
Heritage II. Chubb Colonial reserves the right to revise its rules from time to
time to specify different minimum Specified Amounts at issue. The specified
amounts for multiple trusts owning policies covering the same insureds may be
combined in order to reach the minimum specified amount. If the Specified
Amount applied for plus all other insurance in force which is underwritten by
Chubb Colonial or its affiliates exceeds an amount which varies between $300,000
and $2,000,000 based on various factors, Chubb Colonial will reinsure all or a
portion of the Certificate. Acceptance of an application or revocation of a
Certificate during the contestable period is subject to Chubb Colonial's
insurance underwriting rules and Chubb Colonial may, in its sole discretion,
reject any application or related premium for any good reason or contest a
Certificate.
Payment of Premiums. Premiums must be paid to Chubb Colonial at its
Service Center or through an authorized agent of Chubb Colonial for forwarding
to Chubb Colonial's Service Center. The initial premium may be wired to Chubb
Colonial's bank upon notification that the application has been approved by
Chubb Colonial. Subsequent premium payments may also be wired to Chubb
Colonial's bank. The financial institution transmitting the wired funds may
impose a charge for this service. In addition, Chubb Colonial has administrative
procedures whereby premium payments in response to billing notices are sent
directly to Chubb Colonial's bank. Unlike traditional insurance contracts, there
is no fixed schedule of premium payments on a Certificate either as to the
amount or the timing of the payment. A Certificate Owner may determine, within
specified limits, his or her own premium payment schedule. These limits will be
set forth by Chubb Colonial and will include an initial premium payment
sufficient to keep the Policy in force for at least three months, and may also
include limits on the total amount and frequency of payments in each Certificate
year. No premium payment may be less than $500. In order to help the Certificate
Owner obtain the insurance benefits desired, a Planned Periodic Premium and
Premium Frequency will be stated in each Certificate. This premium will usually
be based upon the Certificate Owner's insurance needs and financial abilities,
the current financial climate, the Specified Amount of the Certificate, and the
Insured's age, sex and risk class, as discussed with the agent. The Certificate
Owner is not required to pay such premiums and failure to make any premium
payment will not necessarily result in lapse of the Certificate, provided the
Certificate's Cash Value, less Certificate Debt, if any, is sufficient to pay
monthly deductions. Conversely, adherence to the schedule of Planned Periodic
Premiums will not assure that the Certificate will remain in force. See "THE
GROUP POLICIES AND CERTIFICATES--Certificate Lapse".
Guaranteed Death Benefit Premiums. If the Guaranteed Death Benefit Rider
is added to the Certificate, the Death Benefit is guaranteed to never be less
than the Specified Amount, provided the Certificate Owner pays a cumulative
minimum premium. This cumulative minimum premium is based on Issue Age, sex,
smoking status and underwriting class of the Insured(s) as well as the Specified
Amount and Death Benefit option. The premium is increased for increases in the
Specified Amount. See "CERTIFICATE BENEFITS AND RIGHTS--Optional Insurance
Benefits".
Premium Limitations. If, at any time during the year, a premium has been
paid which would result in a Certificate being deemed a modified endowment
contract, Chubb Colonial will so notify the Certificate Owner and allow the
Certificate Owner to request a refund of the excess premium, or other action, in
order to avoid having the Certificate be deemed to be a modified endowment
contract. A Certificate Owner, however, may choose to have the Certificate be
deemed a modified endowment contract, and, in that case, Chubb Colonial will not
refund the premiums. See "FEDERAL TAX MATTERS--Certificate Proceeds". Premium
payments less than the minimum amount of $500 will be returned to the
Certificate Owner.
Allocation of Premiums. Premium payments, net of the state premium tax
charge, the federal DAC tax charge and the sales charge plus interest earned
prior to the Allocation Date, will be allocated on the Allocation Date among the
Divisions and the General Account in accordance with the directions of the
Certificate Owner, as contained in the application. Prior to the Allocation Date
the initial Net Premium will be held in Chubb Colonial's General Account. Any
other premiums received prior to the Allocation Date will also be held in the
General Account. If the Certificate issued as applied for is not accepted or the
"free look" is exercised, no interest will be credited and Chubb Colonial will
retain any interest earned on the initial Net Premium. The minimum percentage of
any Net Premium payment allocated to any Division or the General Account is 1%.
The Certificate Owner may change his or her allocation of future premium
payments among the Divisions and the General Account by written
<PAGE>
notice to Chubb Colonial or by telephone without payment of any fee or penalty.
The allocation of each Net Premium to a Division will be determined first
by multiplying the Net Premium by the percentage to be allocated to each
Division as the Certificate Owner directs to determine the portion to be
invested in the Division. Each portion to be invested in each Division is then
divided by the unit value of that particular Division to determine the number of
units to be credited to a Certificate Owner. The unit value of each Division
will vary to reflect the investment experience of the corresponding underlying
Portfolio shares. For a description of the method of determining unit values see
"CALCULATION OF ACCUMULATION VALUE--Unit Values". Applicants should refer to
the Prospectus for the Trust which accompanies this Prospectus for a description
of how the assets of each Portfolio are valued.
All valuations in connection with the Certificate, e.g., with respect to
determining Cash Value in connection with Certificate loans or withdrawals, with
respect to determining Accumulation Value in connection with transfers or
payment of Death Benefits, and with respect to determining a Division's unit
value at the time of each Net Premium payment, will be made on the Date of
Receipt of the premium or the request for payment, loan, withdrawal or transfer
if such date is a Valuation Date; otherwise, such determination will be made on
the next succeeding day which is a Valuation Date. The Date of Receipt of a
premium payment sent directly to Chubb Colonial's bank pursuant to a billing
notice will be the date the payment is received at the bank and the value of any
Division to which the payment is allocated will be determined as of such date
provided such date is a Valuation Date; otherwise, such determination will be
made on the next succeeding day which is a Valuation Date.
Transfers. Accumulation Value may be transferred among the Divisions and
between the Divisions and the General Account. In addition to individual
transfer requests, Certificate Owners may elect either a Dollar Cost Averaging
feature or an Automatic Portfolio Re-Balancing feature which provides for
systematic transfers as described below. Transfer requests may be made in
writing or by telephone. The total amount transferred each time must be at least
$1,000 unless a lesser amount constitutes the entire Accumulation Value in a
Division or in the General Account. Accumulation Value transferred from one
Division or from the General Account into more than one Division, and/or into
the General Account, counts as one transfer. Similarly, transferring
Accumulation Value from more than one Division, and/or the General Account, into
one other Division or the General Account, counts as one transfer.
Chubb Colonial currently permits 12 transfers per Certificate year without
imposing a transfer charge. For transfers in excess of 12 in any Certificate
year, a transfer charge of $100 to cover administrative costs will be imposed
each time amounts are transferred and will be deducted on a pro-rata basis from
the Division or Divisions or the General Account into which the amount is
transferred. However, no transfer charge will be imposed on the transfer of the
initial Net Premium payments, plus interest earned, from the General Account to
the Divisions on the Allocation Date or on loan repayments. No transfer charge
will be imposed for transfers pursuant to the Dollar Cost Averaging or Automatic
Portfolio Re-Balancing features. Currently, a Certificate Owner may make up to
24 transfers per Certificate year. Chubb Colonial reserves the right to revoke
or modify transfer privileges and charges.
At any time, the Certificate Owner may transfer 100% of the Certificate's
Accumulation Value to the General Account and elect to have all future premium
payments allocated to the General Account. While 100% of the Certificate's
Accumulation Value and all future premium payments are allocated to the General
Account, the minimum period the Certificate will be in force will be fixed and
guaranteed. The minimum period will depend on the amount of Accumulation Value,
the Specified Amount, the sex, the Attained Age, and rating class of the Insured
at the time of transfer. The minimum period will decrease if the Certificate
Owner subsequently elects to increase the Specified Amount, elects to surrender
the Certificate, or elects to make a withdrawal. The minimum period will
increase if the Certificate Owner elects to decrease the Specified Amount,
additional premium payments are received, or Chubb Colonial credits a higher
interest rate or charges a lower cost of insurance rate than those guaranteed
for the General Account.
Except for transfers in connection with Dollar Cost Averaging, Automatic
Portfolio Re-Balancing and loan
<PAGE>
repayments, transfers out of the General Account to the Divisions are permitted
only once every 180 days and are limited in amount to the lesser of (a) 25% of
the Accumulation Value in the General Account not being held as loan collateral
or (b) $100,000. In addition, any other transfer rules, including minimum
transfer amounts, also apply. Chubb Colonial reserves the right to modify these
restrictions.
No transfer charge will be imposed for a transfer of all Accumulation Value
in Separate Account D to the General Account. However, any transfer from the
General Account to the Division(s) will be subject to the transfer charge,
unless it is one of the first 12 transfers in a Certificate year and except for
the transfer of the initial Net Premium payments, plus interest earned, from the
General Account, loan repayments, and transfers pursuant to the Dollar Cost
Averaging or Automatic Portfolio Re-Balancing features.
A feature called Dollar Cost Averaging is available to Certificate Owners
under which a Certificate Owner deposits or designates an amount, subject to a
minimum of $6,000, in the Resolute Treasury Money Market Division or the General
Account and elects to have a specified dollar amount (the "Periodic Transfer
Amount") automatically transferred to one or more of the Divisions on a
monthly, quarterly, or semi-annual basis. This feature allows Certificate
Owners to systematically invest in the Divisions at various prices which may be
higher or lower than the price a Certificate Owner would pay when investing the
entire amount at one time and at one price. Each Periodic Transfer Amount is
subject to a minimum amount of $500. A minimum of 1% of the Periodic Transfer
Amount must be transferred to any specified Division. These amounts are subject
to change at Chubb Colonial's discretion. If a transfer would reduce
Accumulation Value in the Resolute Treasury Money Market Division or the General
Account to less than the Periodic Transfer Amount, Chubb Colonial reserves the
right to include such remaining Accumulation Value in the amount transferred. At
the time a Certificate Owner elects the Dollar Cost Averaging feature, an
election is made between Fixed Amount Dollar Cost Averaging or Continuous Mode
Dollar Cost Averaging. Under Fixed Amount Dollar Cost Averaging, the feature
will continue until the Designated Amount has been transferred or the
Certificate Onwer gives notification of cancellation of the feature prior to
transfer of the entire Designated Amount. Once the Designated Amount has been
transferred, a new Dollar Cost Averaging election form must be completed if the
Certificate Owner wishes to have additional money dollar cost averaged. Under
Continuous Mode Dollar Cost Averaging, any amounts deposited into the Repository
Account, and not just the Designated Amount, will be transferred. Dollar Cost
Averaging is currently available to Certificate Owners at no charge. Although
Chubb Colonial reserves the right to assess a charge, no greater than cost and
with 30 days advance notice to Certificate Owners, it has no present intention
to do so.
An Automatic Portfolio Re-Balancing feature is also available to
Certificate Owners. This feature provides a method for re-establishing fixed
proportions between various types of investments on a systematic basis. Under
this feature, the allocation between Divisions and the General Account will be
automatically re-adjusted to the desired allocation, subject to a minimum of 1%
per Division or General Account, on a quarterly, semi-annual or annual basis.
A Certificate Owner may choose one of the two features. Transfers and
adjustments pursuant to these features will occur on a Certificate's Monthly
Anniversary Date in the month in which the transaction is to take place or the
next succeeding business day if the Monthly Anniversary Date falls on a holiday
or a weekend. The applicable authorization form must be on file at Chubb
Colonial before either feature may begin. Neither feature guarantees profits nor
protects against losses. Transfers under these features do not count toward the
12 free transfers or the 24 transfers currently allowed per year. Chubb Colonial
reserves the right to modify the terms and conditions of these features upon 30
days advance notice to Certificate Owners.
Telephone Transfers, Loans and Reallocations. Certificate Owners may
request by telephone transfers of Accumulation Value or reallocation of premiums
(including allocation changes pursuant to existing Dollar Cost Averaging and
Automatic Portfolio Re-Balancing programs), provided that the appropriate
authorization form is on file with Chubb Colonial. Chubb Colonial may also, in
its discretion, permit loans to be made by telephone, provided that the proper
authorization form is on file with Chubb Colonial. During periods of heavy
telephone transfers, implementing a telephone transfer may be difficult. If a
Certificate Owner is unable to reach Chubb Colonial via
<PAGE>
telephone, the Certificate Owner should send a written request to Chubb
Colonial via an express mailing service or via the Chubb Colonial telecopier
machine at (603) 226-5155. (Any transfer requests received via telecopier are
considered telephone transfers and are bound by the conditions outlined in the
signed authorization form.) Chubb Colonial reserves the right to discontinue
telephone transfers at any time without notice to the Certificate Owners.
Procedures have been established that are reasonably designed to reduce the risk
of unauthorized telephone transfers, loan requests or allocation changes. These
procedures include requiring personal identification information (such as social
security number and date of birth), tape recording calls and providing written
confirmations to Certificate Owners.
Certificate Lapse. Failure to make a premium payment on a Certificate will
not necessarily cause the Certificate to lapse. The duration of a Certificate
depends upon its Cash Value. The Certificate will remain in force so long as the
Cash Value, less any outstanding Certificate Debt, is sufficient to cover cost
of insurance and any rider charges. In the event the Cash Value, less any
outstanding Certificate Debt, is insufficient to pay these monthly cost of
insurance and rider charges ("monthly deduction") the Certificate Owner will be
given a sixty-one day period ("grace period") within which to make a premium
payment to avoid lapse. The premium required to avoid lapse must be sufficient
in amount, after the deduction of the state premium tax charge, the federal DAC
tax charge and the sales charge, to cover the monthly deduction for at least
three Certificate months. This required premium will be set forth in a written
notice which Chubb Colonial will send to the Certificate Owner thirty-one days
prior to the end of the grace period. The Certificate will continue in force
through the grace period, but if no payment is forthcoming, the Certificate will
terminate without value at the end of the grace period. If the Insured under
Chubb Colonial Heritage I or the last surviving Insured under Chubb Colonial
Heritage II dies during the grace period, the Death Benefit payable under the
Certificate will be reduced by the amount of the monthly deduction due and
unpaid and the amount of any outstanding Certificate Debt. In addition, if the
Cash Value of the Certificate at any time should decrease so the aggregate
amount of outstanding Certificate Debt secured by the Certificate exceeds the
Cash Value shown in the Certificate and an additional payment is not made within
sixty-one days the Certificate will lapse.
Reinstatement. If the Certificate lapses, the Certificate Owner may
reinstate the Certificate. The terms of the original Certificate will apply upon
reinstatement. The Accumulation Value, before payment of the required
reinstatement premium, will equal the Accumulation Value on the date of
termination. The Certificate year on reinstatement will be measured from the
Certificate Date. An application for reinstatement may be made any time within
five years of lapse and before the Maturity Date, but satisfactory proof of
insurability of the Insured under Chubb Colonial Heritage I or the Insureds or
surviving Insured under Chubb Colonial Heritage II and payment of a
reinstatement premium is required. The reinstatement premium, after deduction of
the state premium tax charge, the federal DAC tax charge and the sales charge,
must be sufficient to cover the monthly deduction for three Certificate months
following the effective date of reinstatement. If a loan was outstanding at the
time of lapse, Chubb Colonial will require, at the election of the Certificate
Owner, repayment or reinstatement of the loan before permitting reinstatement of
the Certificate. The effective date will be the date of approval of the
reinstatement application, which will be as of a Monthly Anniversary Date.
Conversion. If the Insured's coverage under the Group Policy ends for any
reason other than the non-payment of premiums, the Certificate Owner may convert
the insurance under the Group Policy to a comparable, individual policy without
evidence of insurability. The Certificate Owner must apply for the individual
policy and pay the first premium within 31 days after coverage under the Group
Policy ends. The new policy will be non-participating and issued subject to the
following:
(i) The policy will be on one of the forms Chubb Colonial customarily
issues at the time of conversion, other than term;
(ii) The policy will be issued at the amount and age applied for;
(iii) The amount of the policy may not exceed the Specified Amount of the
Certificate which ends; and
<PAGE>
(iv) The premium for the policy will be at Chubb Colonial's usual rate, and
it will be based on the amount of insurance, risk class, type of policy and age
at the policy issued date.
If the Insured dies during the time in which the Certificate is entitled to
be converted, Chubb Colonial will pay the Death Benefit which was in effect
under the Certificate just prior to its termination. Chubb Colonial will deduct
any overdue monthly deduction, which is applicable to the conversion period,
from the proceeds of the Insured's coverage. This will be done whether or not
the Certificate Owner actually applied for the individual policy. Any policy
issued pursuant to this provision will take effect at the end of the 31-day
period in which application must be made.
Certificate "Free Look". The Certificate Owner has a limited right to
return a Certificate for cancellation and a full refund of all premiums paid.
Chubb Colonial will cancel the Certificate if it is returned by mail or personal
delivery to Chubb Colonial, or to the agent who sold the Certificate, within 20
days after the delivery of the Certificate to the Certificate Owner. Chubb
Colonial will return to the Certificate Owner within seven days all payments
received on the Certificate. Prior to the Allocation Date the initial Net
Premium will be held in Chubb Colonial's General Account; Chubb Colonial will
retain any interest earned if the "free look" right is exercised.
CHARGES AND DEDUCTIONS
Premium Charges. Upon receipt of each premium payment and before
allocation of payment among the Divisions and the General Account, Chubb
Colonial will deduct a state premium tax charge of 2.0%. This charge is designed
to compensate Chubb Colonial for state premium taxes, franchise taxes and other
local taxes imposed on premiums by the State of New York and local
jurisdictions. The actual taxes imposed on Chubb Colonial may fall between 1.7%
and 2.5% of premiums received. As a result, the 2.0% charge may at times be
higher or lower than the actual taxes incurred by Chubb Colonial. Chubb Colonial
reserves the right to increase this charge to Certificate Owners up to a maximum
of 2.5%. Chubb Colonial does not expect to realize a profit from this
charge.
Chubb Colonial will also deduct from each premium a charge currently equal
to 1.25% to cover the estimated cost to Chubb Colonial of the federal income tax
treatment of the Group Policies' and Certificates' deferred acquisition costs
(the "federal DAC tax charge"). Chubb Colonial has determined that this charge
is reasonable in relation to Chubb Colonial's increased federal income tax
burden under the Code resulting from the receipt of premiums. Chubb Colonial
will not increase this charge under outstanding Group Policies and Certificates,
but reserves the right, subject to any required regulatory approval, to change
this charge for Group Policies and Certificates thereunder not yet issued in
order to correspond with changes in the DAC tax.
Chubb Colonial will deduct a sales charge of 3% from each premium payment
to compensate Chubb Colonial for the cost of selling the Certificates. The cost
of selling the Certificates includes, among other things, agents' commissions,
commission overrides, advertising and the printing of prospectuses and sales
literature. Under normal circumstances, the amount of this charge, plus the
Surrender Charge discussed below, are expected to compensate Chubb Colonial for
total sales expenses for that year. To the extent sales expenses in any one
Certificate year are not recovered by this 3% sales charge and the sales charge
imposed upon surrenders or withdrawals during the first five Certificate years,
the sales expenses may be recovered from other sources, including surplus, which
may include profits, if any, from the mortality and expense Risk Charge.
Monthly Deduction. On each Monthly Anniversary Date and on the
Certificate Date, Chubb Colonial will deduct from the Accumulation Value of a
Certificate an amount to cover certain charges and expenses incurred in
connection with the Certificate. The amount of the monthly deduction is equal to
the cost of insurance for the Certificate as described below, and the cost of
any optional benefits added by rider. The amount deducted will be deducted pro
rata from each of the Divisions and the General Account, excluding the amount
held in the General Account as loan collateral, in which the Certificate Owner
is invested.
<PAGE>
The cost of insurance is determined on a monthly basis, and is determined
separately for the initial Specified Amount and each subsequent increase in the
Specified Amount. The monthly current cost of insurance rate is based on the
sex, Issue Age, Certificate year, smoking status and rating class of the
Insured(s), Specified Amount, Death Benefit option and applicable corridor
percentage.
The cost of insurance is calculated as (i) multiplied by the result of (ii)
minus (iii) where:
(i) is the cost of insurance rate as described in the Cost of Insurance
Rates provision contained in the Certificate.
(ii) is the Death Benefit at the beginning of the Certificate month divided
by 1.00327374, to arrive at the proper values for the beginning of the month
assuming the guaranteed interest rate of 4% that is applicable to the General
Account portion of the Certificate; and
(iii) is the Accumulation Value at the beginning of the Certificate month.
If the corridor percentage is applicable, the Death Benefit used in the
foregoing calculation will reflect the corridor percentage. The cost of
insurance charge is not affected by the death of the first Insured to die under
Colonial Heritage II.
The monthly cost of insurance rate will be determined by Chubb Colonial
based upon expectations as to future mortality experience, but can never exceed
the rates shown in the table of Monthly Guaranteed Cost of Insurance Rates set
forth in the Certificate. Such guaranteed maximum rates are based on the
Commissioner's 1980 Standard Ordinary Mortality Table.
A guaranteed Monthly Deduction Adjustment will be calculated at the
beginning of each Certificate year. The Monthly Deduction Adjustment will be
allocated between the Divisions and the General Account in the same proportion
as premium payments. The Adjustment is calculated as (i) multiplied by the
result of (ii) minus (iii) minus (iv), but not less than zero, where:
(i) is a factor that varies by Specified Amount as follows:
Under $5,000,000............ .0001250
$5,000,000 to $9,999,999.... .0002500
$10,000,000 to $14,999,999.. .0003750
$15,000,000 and Above....... .0004583
(ii) is an amount no greater than the Accumulation Value at the
beginning of the Certificate year, and guaranteed to be at least the
Accumulation Value at the beginning of the Certificate year less any unloaned
funds in the General Account;
(iii) is the Guideline Single Premium at issue under Section 7702 of
the Code, increased on a pro-rata basis for any increase in Specified Amount;
and
(iv) is the outstanding Type A loan balance at the beginning of the
Certificate year. See "CASH VALUE BENEFITS--Certificate Loans" for a description
of Type A loans.
The Monthly Deduction Adjustment is the mechanism whereby Chubb Colonial
annually evaluates its mortality risk exposure on individual Certificates based
on, among other factors, the proceeds from all mortality charges, including the
cost of insurance charge and the mortality risk portion of the Risk Charge. The
insurance charges are
<PAGE>
set at rates designed to cover total anticipated mortality experience, i.e.,
Death Benefit payments, taking into consideration the risk that actual
experience may exceed Chubb Colonial's expectation. Of course, as the amount at
risk under any one Certificate decreases, i.e., Accumulation Value increases,
Chubb Colonial's exposure on such Certificate will be reduced. Moreover,
Chubb Colonial's risk decreases as the Specified Amount increases. The Monthly
Deduction Adjustment formula factors in Accumulation Value and Specified Amount.
Thus, the Monthly Deduction Adjustment may be translated into a net reduction of
the Risk Charge which is applied to the Accumulation Value. As shown in the
following table, the Monthly Deduction Adjustment may be expressed as a
reduction in the mortality portion of the Risk Charge, discussed below.
<TABLE>
<CAPTION>
Mortality Mortality
Monthly Risk Risk Effective
Mortality Deduction Charge Charge Mortality
Risk Adjust- Below Above Risk
Specified Amount Charge ment GSP* GSP* Charge
---------------- ------ ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
$500,000--$4,999,999 .55% .15% .55% .40% .475%
$5,000,000--$9,999,999 .55% .30% .55% .25% .40%
$10,000,000--$14,999,999 .55% .45% .55% .10% .325%
$15,000,000 and Above .55% .55% .55% .0% .275%
</TABLE>
- ------------
* Assumes that Accumulation Value, less any Type A loans, at the beginning of
the Certificate year is twice the Guideline Single Premium ("GSP").
Risk Charge. Chubb Colonial will also assess a charge on a daily basis
against each Division at an annual rate of .65% of the value of the Division to
compensate Chubb Colonial for its assumption of certain mortality and expense
risks in connection with the Certificate. Specifically, Chubb Colonial bears the
risk that the total amount of Death Benefit payable under the Certificate will
be greater than anticipated and Chubb Colonial also assumes the risk that the
actual cost incurred by it to administer the Certificate will not be covered by
charges assessed under the Certificate.
Surrender Charge. Upon surrender during the first five Certificate years,
Chubb Colonial will assess a contingent deferred sales charge. This contingent
deferred sales charge will be 5% of first year premiums for surrender during the
first Certificate year, 4% of first year premiums for surrender during the
second Certificate year, 3% of first year premiums for surrender during the
third Certificate year, 2% of first year premiums for surrender during the
fourth Certificate year and 1% of first year premiums for surrender during the
fifth Certificate year. There is no Surrender Charge assessed for surrender
after the fifth Certificate year. A pro rata portion of any Surrender Charge
will be assessed upon a withdrawal. The Certificate's Accumulation Value will be
reduced by the amount of any withdrawal plus any applicable pro-rata Surrender
Charge.
The Surrender Charge helps to compensate Chubb Colonial for the cost of
selling the Certificates, including the cost of advertising and the printing of
the Prospectus and sales literature.
Administrative Fees. An administrative fee equal to $100 is imposed for
each transfer among the Divisions or the General Account, after the first 12
transfers in a Certificate year and except for the transfer of the initial Net
Premium payments, plus interest, from the General Account on the Allocation
Date, loan repayments and transfers pursuant to the Dollar Cost Averaging and
Automatic Portfolio Re-Balancing features. For withdrawals, an administrative
fee equal to $100 will be charged. All administrative fees are no greater than
the anticipated expenses of providing such services.
Other Charges. Chubb Colonial also reserves the right to charge the assets
of each Division to provide for any income taxes or other taxes payable by Chubb
Colonial on the assets attributable to that Division. An investment advisory fee
for services provided by the Trust's investment manager and sub-investment
adviser and certain other
<PAGE>
operating expenses are deducted from the assets of each Portfolio of the Trust.
See "CHUBB SERIES TRUST".
CERTIFICATE BENEFITS AND RIGHTS
Death Benefits. So long as it remains in force, Chubb Colonial Heritage I
provides for the payment of life insurance proceeds upon the death of the
Insured and Chubb Colonial Heritage II provides for a Death Benefit payable upon
the death of the last surviving Insured. Proceeds will be paid to a named
Beneficiary or contingent Beneficiary. One or more Beneficiaries or contingent
Beneficiaries may be named. Life insurance proceeds may be paid in a lump sum or
under an optional payment plan. (See "SETTLEMENT OPTIONS" below.) Proceeds of
the Certificate will be reduced by any outstanding Certificate Debt and any due
and unpaid charges and increased by any benefits added by rider. Proceeds that
are payable in a lump sum will be increased to include interest as required by
applicable state law. Proceeds will ordinarily be paid within seven days after
Chubb Colonial receives due Proof of Death. Under Chubb Colonial Heritage II,
due Proof of Death must also be submitted at the time of the first death.
A Certificate Owner will make in the initial application two elections to
determine the Death Benefit under the Certificate. First, the Certificate Owner
will choose one of two Death Benefit options offered under the Certificate.
Second, the Certificate Owner will choose the Death Benefit qualification test,
which is the method for qualifying the Certificate as a life insurance contract
for purposes of Federal tax law. If no Death Benefit qualification test or
option is designated, the guideline premium test under Option I, as described
below, will be assumed by Chubb Colonial to have been selected.
The amount of life insurance proceeds payable under a Certificate will
depend upon the option in effect, as follows:
Option I: For Certificates issued pursuant to the cash value accumulation
test, the Death Benefit equals the greater of the current Specified Amount or
the Accumulation Value of the Certificate at the date of death multiplied by the
corridor percentage, as described below. For Certificates issued pursuant to
the guideline premium test, the Death Benefit equals the greater of the current
Specified Amount or the Accumulation Value of the Certificate at the date of
death multiplied by the corridor percentage, as described below.
Option II: The Death Benefit equals the current Specified Amount plus the
Accumulation Value of the Certificate on the date of death. For Certificates
issued pursuant to the cash value accumulation test, the Death Benefit will not
be less than the Accumulation Value on the date of death multiplied by the
corridor percentage, as described below. For Certificates issued pursuant to
the guideline premium test, the Death Benefit will not be less than the
Accumulation Value multiplied by the corridor percentage, as described below.
Option I emphasizes the impact of investment experience on Accumulation
Value rather than insurance coverage because the Specified Amount and the Death
Benefit, generally, remain stable. Under Option I, as Accumulation Value
increases and the Death Benefit does not increase, the amount at risk decreases.
Thus, the cost of insurance charges are imposed on a decreasing amount. Option
II emphasizes insurance coverage because favorable investment experience adds to
the Accumulation Value that provides an addition to the total Death Benefit.
Under Option II, favorable investment experience does not reduce the amount at
risk upon which cost of insurance charges are based.
The corridor percentage is a minimum ratio of Death Benefit to Accumulation
Value required pursuant to the cash value corridor test under Section 7702 of
the Code. The Certificate Owner has the option to select this minimum corridor
percentage under the Code or an alternative corridor percentage that produces a
higher corridor percentage beginning in Certificate year 25 which grades back to
the minimum corridor percentage at the Maturity Date. Use of the alternative
corridor percentage results in a higher ratio of Death Benefit to Accumulation
Value than that resulting from the use of the minimum corridor percentage
beginning in Certificate year 25. This higher ratio then gradually reduces
until, by the Maturity Date, it is equal to the ratio produced by use of the
minimum
<PAGE>
corridor percentage. Although use of the alternative corridor percentage results
in a higher Death Benefit than the minimum corridor percentage beginning in
Certificate year 25, this higher Death Benefit results in higher cost of
insurance charges which has the effect of reducing Accumulation Value and
consequently future Death Benefits.
The Certificate Owner will also choose from two Death Benefit qualification
tests available under a Certificate. Once elected, the Death Benefit
qualification test cannot be changed for the duration of the Certificate. The
available Death Benefit qualification test cannot be changed for the duration of
the Certificate. The available Death Benefit qualification tests are the cash
value accumulation test and the guideline premium test.
Generally, the cash value accumulation test requires that under the terms
of a Certificate, the Death Benefit must be sufficient so that the cash
surrender value, as defined in Section 7702 of the Internal Revenue Code, does
not at any time exceed the net single premium required to fund the future
benefits under the Certificate. If the Accumulation Value under a Certificate
is at any time greater than the net single premium at the Insured's age and sex
for the proposed Death Benefit, the Death Benefit will be incrased automatically
by multiplying the Accumulation Value by the corridor percentage computed in
compliance with the Code. A list of representative corridor percentages is set
forth in Appendix A to this Prospectus. The corridor percentages under the
Certificate vary according to the Age, sex, and underwriting classification of
the Insured(s), and the resulting Death Benefit determined by using the corridor
percentage will be at least equal to the amount required for the Certificate to
be deemed life insurance under Section 7702. The corridor percentage is
calculated using a four percent interest rate, or, if higher, the contractually
guaranteed interest rate and using mortality charges specified in the prevailing
Commissioner's standard table as of the time the Certificate is issued.
The guideline premium test limits the amount of premiums payable under a
Certificate to a certain amount for an Insured of a particular age and sex. The
test also applies a prescribed corridor percentage to determine a minimum ratio
of Death Benefit to Accumulation Value. A complete list of corridor percentages
is set forth in Appendix B to this Prospectus.
There are two main differences between the guideline premium test and the
cash value accumulation test. First, the guideline premium test limits the
amount of premium that may be paid into a Certificate. No such limits apply
under the cash value accumulation test. (However, any premium that wouild
incrase the net amount at risk is subject to evidence of insurability
satisfactory to Chubb Colonial.) Second, the factors that determine the minimum
Death Benefit relative to the Certificate's Accumulation Value are different.
Required increases in the minimum Death Benefit due to growth in Accumulation
Value will generally be greater under the cash value accumulation test than
under the guideline premium test. Certificate Owners who desire to pay premiums
in excess of the guideline premium test limitations should elect the cash value
accumulation test. Certificate Owners who do not desire to pay premiums in
excess of the guideline premium test limitations should consider the guideline
premium test. Applicants for a Certificate should consult a qualified tax
adviser in choosing a Death Benefit election.
The following examples demonstrate the determination of Death Benefits
under Options I and II for the cash value accumulation test and the guideline
premium test. The examples show a Chubb Colonial Heritage I certificate and a
Chubb Colonial Heritage II certificate, with the same Specified Amounts and
Accumulation Values. The Chubb Colonial Heritage I example assumes a Certificate
was issued to a male, non-smoker Insured, Age 45 at the time of calculation of
the Death Benefit and that there is no outstanding Certificate Debt. The Chubb
Colonial Heritage II example considers a Certificate issued to one male and one
female, both non-smokers, and both Age 45. The certificate is in its tenth
certificate year without any outstanding Certificate Debt and with both insureds
having attained age 55.
Chubb Colonial Heritage I
<TABLE>
<CAPTION>
Cash Value Guideline
Accumulation Test Premium Test
----------------- ------------
<S> <C> <C>
Specified Amount 1,000,000 1,000,000
Accumulation Value 500,000 500,000
Corridor Percentage 314% 215%
</TABLE>
<PAGE>
Death Benefit Option I 1,570,000 1,075,000
Death Benefit Option II 1,570,000 1,500,000
Chubb Colonial Heritage II
Specified Amount 2,000,000 2,000,000
Accumulation Value 1,000,000 1,000,000
Corridor Percentage 306% 150%
Death Benefit Option I 1,530,000 2,000,000
Death Benefit Option II 3,060,000 3,000,000
The Death Benefit option in effect may be changed by sending Chubb Colonial
a written request for change. The effective date of the change will be the first
Monthly Anniversary Date that coincides with or next follows the Date of Receipt
of such request. If the Death Benefit option is changed from Option II to Option
I, the Specified Amount will be increased by the Certificate's Accumulation
Value on the effective date of the change. Conversely, if the Death Benefit
option is changed from Option I to Option II, the Specified Amount will be
decreased by the Certificate's Accumulation Value on the effective date of the
change. Evidence of insurability satisfactory to Chubb Colonial will be required
on a change from Option I to Option II. A change in the Death Benefit option may
not be made if it would result in a Specified Amount which is less than a
minimum Specified Amount of $250,000 on Chubb Colonial Heritage I and $500,000
on Chubb Colonial Heritage II. A change in Death Benefit options will affect the
cost of insurance.
After a Certificate has been in force for one year, the Certificate Owner
may adjust the existing insurance coverage by increasing or decreasing the
Specified Amount. The increase or decrease must be at least $250,000 on Chubb
Colonial Heritage I and $500,000 on Chubb Colonial Heritage II. To make a
change, the Certificate Owner must send a written request and the Certificate to
Chubb Colonial's Service Center. Any change in the Specified Amount will affect
a Certificate Owner's cost of insurance charge. An increase in the Specified
Amount will affect the determination of the amount available for a Type A loan,
as explained below, and will affect the Monthly Deduction Adjustment, if any.
Decreases in the Specified Amount may affect the Monthly Deduction Adjustment
but will have no affect on the determination of the amount available for a Type
A loan. Any decrease in the Specified Amount will become effective on the
Monthly Anniversary Date after the Date of Receipt of the request. Any decrease
in Specified Amount will first apply to coverage provided by the most recent
Specified Amount increase, then to the next most recent increases successively
and finally to the coverage under the original application. By applying
decreases in this manner, savings, generally, may be realized by a Certificate
Owner since additional costs and limitations associated with increases in
Specified Amounts would be eliminated first.
To apply for an increase in the Specified Amount, a supplemental
application must be completed and evidence satisfactory to Chubb Colonial that
each Insured is insurable must be submitted. Any approved increase in the
Specified Amount will become effective on the date shown in the Supplemental
Certificate Specifications Page. Such increase will not become effective,
however, if the Certificate's Cash Value is insufficient to cover the deduction
for the cost of the increased insurance for the Certificate month following the
increase. Such an increase may require a payment or future increased Planned
Periodic Premiums.
GUARANTEED DEATH BENEFIT. The Certificate Owner may add a Guaranteed
Death Benefit Rider to the Certificate under which the Death Benefit is
guaranteed to never be less than the Specified Amount provided that a cumulative
minimum premium requirement is met. The premium requirement is based on Issue
Age, sex, smoking status, underwriting class, Specified Amount and Death Benefit
Option. If the Specified Amount is increased, an additional premium, based on
Attained Age, will be required for such increase. There is a monthly charge for
this Death Benefit Rider. See "Optional Insurance Benefits".
<PAGE>
Combined Requests. Certificate Owners may combine requests for changes in
the Specified Amount and the Death Benefit option and requests for withdrawals.
The requirements and limitations that apply to each change will apply to the
combined transactions, including any required evidence of insurability,
Specified Amount and premium limitations, effectiveness on the Monthly
Anniversary Date following the Date of Receipt of the request, and the
sufficiency of Cash Value to keep the Certificate in force for the month
following the transaction.
The effect of a combined transaction on the cost of insurance, the amount
of the Death Benefit proceeds and the premium limitations will be the net result
of such effects for each such transaction considered separately. Certificate
Owners should consider the net result of a combined transaction in light of
insurance needs, financial circumstances and tax consequences.
Maturity of the Certificate. As long as the Certificate remains in force,
Chubb Colonial will pay the Certificate's Cash Value, less outstanding
Certificate Debt, if any, on the Maturity Date. Benefits at maturity may be paid
in a lump sum or under an optional payment plan. The Maturity Date is the date
shown in the Certificate. To change the Maturity Date, a written request and the
Certificate must be sent to Chubb Colonial's Service Center. The Date of Receipt
for any request must be before the Maturity Date then in effect. The requested
Maturity Date must be (i) on a Certificate anniversary, (ii) at least one year
from the Date of Receipt of the request, (iii) after the tenth Certificate year
and (iv) on or before the Certificate anniversary nearest to the Insured's 100th
birthday for Chubb Colonial Heritage I and the younger Insured's 100th birthday
for Chubb Colonial Heritage II.
Optional Insurance Benefits. Subject to certain requirements, one or more
of the following optional insurance benefits may be added to a Certificate by
rider. More detailed information concerning such riders may be obtained from the
agent selling the Certificate. Additional riders, developed after the effective
date of this Prospectus, may also be available as optional insurance benefits to
the Certificate. The agent selling the Certificate should be consulted regarding
the availability of any such additional riders. The cost of any optional
insurance benefits will be deducted as part of the monthly deduction. See
"CHARGES AND DEDUCTIONS."
(a) Guaranteed Death Benefit Rider. This rider guarantees that the
Certificate will stay in force with a Death Benefit equal to the Specified
Amount, even if the Cash Value less Certificate Debt is not sufficient to pay
the monthly deduction, provided that cumulative premiums paid, less loans and
withdrawals, are greater than or equal to the guaranteed death benefit premium
multiplied by the number of months the Certificate has been in force. This
cumulative premium requirement must be met at all times for the rider to stay in
force. A monthly charge of $.01 per $1,000 of Specified Amount will be deducted
from the Certificate's Accumulation Value.
(b) Automatic Increase Rider. This rider allows for scheduled annual
increases in Specified Amount of from 1% to 7%, subject to certain limitations
set forth in the rider. There is a monthly charge per unit of Specified Amount
which varies by Issue Age on Colonial Heritage I and by Joint Equal Age at issue
on Colonial Heritage II.
(c) Certificate Exchange Option Rider. This rider is available on Colonial
Heritage II provided both Insureds are insurable. It allows Chubb Colonial
Heritage II to be exchanged for two individual Chubb Colonial Heritage I
Certificates, without evidence of insurability, each with a face amount equal to
one half of the Death Benefit under Chubb Colonial Heritage II at the time of
exchange, upon the Insureds' divorce or the occurrence of certain federal tax
law changes as specified in the rider. There is no charge for this rider.
(d) Extension of Maturity Date Rider. This rider allows the Certificate
Owner to extend the original Maturity Date of the Certificate under the terms
set forth in the rider.
(e) Exchange of Insured Rider. This benefit is available under Chubb
Colonial Heritage I, and provides that the Certificate may be exchanged for a
reissued certificate on the life of a substitute insured, subject to the
conditions stated in the rider. A charge of $150 will be assessed for exercising
the option. See "FEDERAL TAX MATTERS."
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Settlement Options. In addition to a lump sum payment of benefits under
the Certificate, any proceeds to be paid under the Certificate may be paid in
any of four methods. A settlement option may be designated by notifying Chubb
Colonial in writing. A lump sum payment of proceeds under the Certificate will
be made if a settlement option is not designated. Any amount left with Chubb
Colonial for payment under an optional payment plan will be transferred to the
account of the Beneficiary in the General Account on the date Chubb Colonial
receives written instructions. During the life of the Insured, the Certificate
Owner may select a plan. If a payment plan has not been chosen at the time the
Death Benefit becomes payable, a Beneficiary can choose a plan. If a Beneficiary
is changed, the payment plan selection will no longer be in effect unless the
Certificate Owner requests that it continue. An option may be elected only if
the amount of the proceeds is $2,000 or more. Chubb Colonial reserves the right
to change the interval of payments to 3, 6 or 12 months, if necessary, to
increase the guaranteed payments to at least $20 each.
Option A.
Installments of a specified amount. Payments of an agreed amount to be
made each month until the proceeds and interest are exhausted.
Option B.
Installments for a specified period. Payments to be made each month for
an agreed number of years.
Option C.
Life income. Payments to be made each month for the lifetime of the
payee. It is guaranteed that payments will be made for a minimum of 10, 15, or
20 years, as agreed upon.
Option D.
Interest. Payment of interest on the proceeds held by Chubb Colonial
calculated at the compound rate of 3% per year. Interest payments will be made
at 12, 6, 3 or 1 month intervals, as agreed upon.
The interest rate for Options A, B, and D will not be less than 3% per
year. The interest rate for Option C will not be less than 2 1/2% per year.
Interest in addition to that stated may be paid or credited from time to time
under any option, but only in the sole discretion of Chubb Colonial.
Unless otherwise stated in the election of an option, the payee of
Certificate benefits shall have the right to receive the withdrawal value under
that option. For Options A and D, the withdrawal value shall be any unpaid
balance of proceeds plus accrued interest. For Option B, the withdrawal value
shall be the commuted value of the remaining payments. Such value will be
calculated on the same basis as the original payments. For Option C, the
withdrawal value will be the commuted value of the remaining payments. Such
value will be calculated on the same basis as the original payments. To receive
this value under Option C, the payee must submit evidence of insurability
acceptable to Chubb Colonial. Otherwise, the withdrawal value shall be the
commuted value of any remaining guaranteed payments. If the payee should be
alive at the end of the guaranteed period, the payment will be resumed on that
date. The payment will then continue for the lifetime of the payee.
If a payee of Certificate benefits dies before the proceeds are exhausted
or the prescribed payments made, a final payment will be made in one sum to the
estate of the last surviving payee. The amount to be paid will be calculated as
described for the applicable option in the Withdrawal Value provision of the
Certificate.
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CALCULATION OF ACCUMULATION VALUE
The Certificate provides for an Accumulation Value, which will be
determined on a daily basis. Accumulation Value is the sum of the values in the
Divisions plus the value in the General Account. The Certificate's Accumulation
Value in the Divisions is calculated by units and unit values under the
Certificates, as described below. The Certificate's Accumulation Value will
reflect a number of factors, including the investment experience of the
Divisions that are invested in the Portfolios, any additional net premiums paid,
any withdrawals, any Certificate loans, and any charges assessed in connection
with the Certificate. Accumulation Values in Separate Account D are not
guaranteed as to dollar amount.
On the Allocation Date, the Accumulation Value in Separate Account D is the
initial premium payments, reduced by the state tax charge, the federal DAC tax
charge and the sales charge, plus interest earned prior to the Allocation Date,
and less the monthly deduction for the first Certificate month. On the
Allocation Date, the initial number of units credited to Separate Account D for
the Certificate will be established. At the end of each Valuation Period
thereafter, the Accumulation Value in a Division is (i) plus (ii) plus (iii)
minus (iv) minus (v) where:
(i) is the Accumulation Value in the Division on the preceding Valuation
Date multiplied by the net investment factor, as described below, for the
current Valuation Period,
(ii) is any Net Premium received during the current Valuation Period which
is allocated to the Division,
(iii) is all Accumulation Values transferred to the Division from another
Division or the General Account during the current Valuation Period,
(iv) is the Accumulation Values transferred from the Division to another
Division or the General Account and Accumulation Values transferred to secure a
Certificate loan during the current Valuation Period, and
(v) is all withdrawals from the Division during the current Valuation
Period.
In addition, whenever a Valuation Period includes the Monthly Anniversary
Date, the Accumulation Value at the end of such period is reduced by the portion
of the monthly deduction allocated to the Division.
The Certificate's total Accumulation Value in Separate Account D equals the
sum of the Certificate's Accumulation Value in each Division thereof.
Unit Values. Units are credited to a Certificate Owner upon allocation of
Net Premiums to a Division. Each Net Premium payment allocated to a Division
will increase the number of units in that Division. Both full and fractional
units are credited. The number of units and fractional units is determined by
dividing the Net Premium payment by the unit value of the Division to which the
payment has been allocated. The unit value of each Division is determined on
each Valuation Date. The number of units credited will not change because of
subsequent changes in unit value. The dollar value of each Division's units will
vary depending upon the investment performance of the corresponding Portfolio of
the Trust.
Certain transactions affect the number of units in a Division under a
Certificate. Loans, surrenders and withdrawals, withdrawal and transfer fees and
charges, the Surrender Charge, and monthly deductions involve the redemption of
units and will decrease the number of units. Transfers of Accumulation Value
among Divisions will reduce or increase the number of units in a Division, as
appropriate.
The unit value of each Division's units initially under the Certificates
was $10.00. Thereafter, the unit value of a Division on any Valuation Date is
calculated by multiplying (1) by (2) where:
(1) is the Division's unit value on the previous Valuation Date; and
(2) is the net investment factor for the Valuation Period then ended.
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The unit value of each Division's units on any day other than a Valuation
Date is the unit value as of the next Valuation Date and is used for the purpose
of processing transactions.
Net Investment Factor. The net investment factor measures the investment
experience of each Division and is used to determine changes in unit value from
one Valuation Period to the next Valuation Period. The net investment factor for
a Valuation Period is (i) divided by (ii) minus (iii) where:
(i) is (a) the value of the assets of the Division at the end of the
preceding Valuation Period, plus (b) the investment income and capital gains,
realized or unrealized, credited to the assets of the Division during the
Valuation Period for which the net investment factor is being determined, minus
(c) capital losses, realized or unrealized, charged against those assets during
the Valuation Period, minus (d) any amount charged against the Division for
taxes or any amount set aside during the Valuation Period by Chubb Colonial to
provide for taxes attributable to the operation or maintenance of that Division,
and
(ii) is the value of the assets of the Division at the end of the preceding
Valuation Period, and
(iii) is a charge no greater than .0017808% on a daily basis. This
corresponds to .65% on an annual basis for mortality and expense risks.
CASH VALUE BENEFITS
So long as it remains in force, the Certificate provides for certain
benefits prior to the Maturity Date. Subject to certain limitations, the
Certificate Owner may at any time obtain Cash Value by surrendering the
Certificate or making withdrawals from the Certificate. The Cash Value equals
the Accumulation Value less any Surrender Charge. In addition, the Certificate
Owner has certain Certificate loan privileges under the Certificate.
Surrender Privileges. As long as the Certificate is in force, a
Certificate Owner may surrender the Certificate or make a withdrawal from the
Certificate at any time by sending a written request along with the Certificate
to Chubb Colonial. See "FEDERAL TAX MATTERS--Certificate Proceeds."
The surrender value of the Certificate equals the Cash Value less any
outstanding Certificate Debt. The amount payable upon surrender of the
Certificate is the surrender value at the end of the Valuation Period during
which the request is received. The surrender value may be paid in a lump sum or
under one of the optional payment plans specified in the Certificate. Proceeds
will generally be paid within seven days of the Date of Receipt of a request for
surrender or withdrawal. See "CERTIFICATE BENEFITS AND RIGHTS--Settlement
Options."
A Certificate Owner can obtain a portion of the Certificate's Cash Value by
withdrawal of Cash Value from the Certificate. A withdrawal from a Certificate
is subject to the following conditions:
A. The amount withdrawn may not exceed the Cash Value less any outstanding
Certificate Debt.
B. The minimum amount that may be withdrawn is $5,000.
C. A charge of $100 will be deducted from the amount of each withdrawal.
Withdrawals generally will affect the Certificate's Accumulation Value,
Cash Value and the life insurance proceeds payable under the Certificate. The
Certificate's Cash Value will be reduced by the amount of the withdrawal. The
Certificate's Accumulation Value will be reduced by the amount of the withdrawal
plus any applicable pro-rata Surrender Charge. Life insurance proceeds payable
under the Certificate will generally be reduced by the amount of the withdrawal
plus any applicable pro-rata Surrender Charge, unless the withdrawal is
<PAGE>
combined with a request to maintain or increase the Specified Amount. See
"CERTIFICATE BENEFITS AND RIGHTS--Combined Requests".
Under Option I, which provides for life insurance proceeds equal to the
greater of the Specified Amount or the Accumulation Value of the Certificate at
the date of death multiplied by the corridor percentage, the Specified Amount
will be reduced by the amount of the withdrawal plus any applicable pro-rata
Surrender Charge. The Specified Amount remaining after a withdrawal may not be
less than $250,000 for Chubb Colonial Heritage I and $500,000 for Chubb Colonial
Heritage II. As a result, Chubb Colonial will not effectuate any withdrawal that
would reduce the Specified Amount below these minimums. If increases in
Specified Amount previously have occurred, a withdrawal will first reduce the
Specified Amount of the most recent increase, then the most recent increases
successively, then the coverage under the original application. If the life
insurance proceeds payable under either Death Benefit option, both before and
after the withdrawal, is the Accumulation Value multiplied by the corridor
percentage, a withdrawal generally will result in a reduction in life insurance
proceeds equal to the amount paid upon withdrawal, multiplied by the corridor
percentage then in effect.
Under Option II, which provides for life insurance proceeds equal to the
Specified Amount plus Accumulation Value, a reduction in Accumulation Value as a
result of a withdrawal will typically result in a dollar per dollar reduction in
the life insurance proceeds payable under the Certificate.
A Certificate Owner may allocate a withdrawal among the Divisions and the
General Account. If no such allocation is made, a withdrawal will be allocated
among the Divisions and the General Account in the same proportion that the
Accumulation Value in each Division and the Accumulation Value in the General
Account, less any Certificate Debt bears to the total Accumulation Value of the
Certificate, less any Certificate Debt, on the date of withdrawal. See "FEDERAL
TAX MATTERS--Certificate Proceeds".
Certificate Loans. So long as the Certificate remains in force, a
Certificate Owner may borrow money from Chubb Colonial at any time after the
first Certificate anniversary using the Certificate as the only security for the
loan. Loans have priority over the claims of any assignee or any other person.
Generally, the maximum loan amount is 90% of the Cash Value at the end of the
Valuation Period during which the loan request is received. The maximum amount
which may be borrowed at any given time is the maximum loan amount reduced by
any outstanding Certificate Debt.
Proceeds of Certificate loans ordinarily will be disbursed within seven
days from the Date of Receipt of a request for a loan by Chubb Colonial,
although payments may be postponed under certain circumstances. See "OTHER
MATTERS--Postponement of Payments". Chubb Colonial may, in its discretion,
permit loans to be made by telephone if the proper authorization form is on file
with Chubb Colonial. So long as the Certificate remains in force, the loan may
be repaid in whole or in part without penalty at any time while an Insured is
living.
When a Certificate loan is made, a portion of the Certificate's
Accumulation Value sufficient to secure the loan will be transferred to the
General Account. A Certificate loan removes the proceeds from the investment
experience of Separate Account D which will have a permanent effect on the
Accumulation Value and Death Benefit even if the loan is repaid. Any loan
interest that is due and unpaid will also be so transferred. Accumulation Value
equal to Certificate Debt in the General Account will accrue interest daily at
an annual rate of 6%. The Certificate Owner may allocate a Certificate loan
among the Divisions and the General Account. If no such allocation is made the
loan will be allocated among the Divisions and the General Account in the same
proportion that the Accumulation Value in each Division and the Accumulation
Value in the General Account less Certificate Debt bears to the total
Accumulation Value of the Certificate, less Certificate Debt, on the date of the
loan.
Chubb Colonial will charge interest on any outstanding Certificate loan
with such interest compounded annually. There are two types of loans available.
A Type A loan is charged the same interest rate as the interest credited to the
amount of Accumulation Value held in the General Account to secure loans. The
unloaned Type A balance is the Cash Value, less the threshold, and less the sum
of any outstanding Type A loans. The threshold is the
<PAGE>
Guideline Single Premium for this certificate at issue as defined in Section
7702 of the Internal Revenue Code of 1986 entitled "Life Insurance Contract
Defined." Any other loans are Type B loans. A Type B loan is charged an interest
rate of 6.85%. It is possible for one loan request to result in both a Type A
and a Type B loan. A request for a loan will be granted first as a Type A loan,
to the extent available, and then as a Type B loan. Once a Certificate loan is
granted, it remains a Type A or Type B until it is repaid. Increases in the
Specified Amount will affect the determination of the amount available for a
Type A loan; however, decreases in the Specified Amount will not have any such
effect. Interest is due and payable at the end of each Certificate year, and any
interest not paid when due becomes loan principal.
Where applicable, loans are subject to conditions and requirements of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as well as the
terms of any retirement plan in connection with which the Certificate has been
purchased. The ERISA rules relating to loans are complex and vary depending on
the individual circumstances of each Certificate. Employers and Certificate
Owners should consult with qualified advisers before exercising the loan
privileges.
Certificate Debt equals the total of all outstanding Certificate loans and
accrued interest on Certificate loans. If Certificate Debt exceeds Cash Value,
Chubb Colonial will notify the Certificate Owner and any assignee of record. A
payment at least equal to the amount of excess Certificate Debt above the Cash
Value must be made to Chubb Colonial within 61 days from the date Certificate
Debt exceeds Cash Value, otherwise, the Certificate will lapse and terminate
without value. In such event, the Certificate Owner may be taxed on the total
appreciation under the Certificate. The Certificate may, however, later be
reinstated, subject to satisfactory proof of insurability and the payment of a
reinstatement premium. See "THE CERTIFICATES--Reinstatement".
So long as the Certificate remains in force, Certificate Debt may be repaid
in whole or in part at any time during an Insured's life. If there is any
existing Certificate Debt, premium payments in the amount of the Planned
Periodic Premium, received at the Premium Frequency, will be applied as premium.
Premium payments in excess of the Planned Periodic Premium or premium payments
received other than at the Premium Frequency, will first be applied as
Certificate loan repayments, then as premium when the Certificate Debt is
repaid. For Certificate Owners with both Type A and Type B loans, repayments of
the loan will be applied first to Type B loans and then to Type A loans. Upon
repayment, the Certificate's Accumulation Value securing the repaid portion of
the debt in the General Account will be transferred to the Divisions and the
General Account using the same percentages used to allocate Net Premiums. Any
outstanding Certificate Debt is subtracted from life insurance proceeds payable
at the Insured's or last surviving Insured's death, from Accumulation Value upon
surrender, and from Cash Value payable on the Maturity Date.
OTHER MATTERS
Voting Rights. To the extent required by law, Chubb Colonial will vote the
Trust shares held in the various Divisions at regular and special shareholder
meetings of the Trust in accordance with instructions received from persons
having voting interests in Separate Account D. If, however, the 1940 Act or any
regulation thereunder should be amended or if the present interpretation thereof
should change and, as a result, Chubb Colonial determines that it is permissible
to vote the Trust shares in its own right, it may elect to do so. The number of
votes on which each Certificate Owner has the right to instruct will be
determined by dividing the Certificate's Accumulation Value in a Division by the
net asset value per share of the corresponding Portfolio in which the Division
invests, or as otherwise required by law. Fractional shares will be counted. The
number of votes on which the Certificate Owner has the right to instruct will be
determined as of the date coincident with the date established by the Trust for
determining shareholders eligible to vote at the meeting of the Trust. Voting
instructions will be solicited by written communications prior to such meeting
in accordance with procedures established by the Trust. Chubb Colonial will vote
Trust shares as to which no instructions are received in proportion to the
voting instructions which are received with respect to all Certificates
participating in the Trust in accordance with applicable law. Each person having
a
<PAGE>
voting interest will receive proxy material, reports and other materials
relating to the Trust. The shares held by Chubb Colonial, including shares for
which no voting instructions have been received, shares held in Separate Account
D representing charges imposed by Chubb Colonial against Separate Account D
under the Certificates and shares held by Chubb Colonial that are not otherwise
attributable to Certificates, will also be voted by Chubb Colonial in proportion
to instructions received from the owners of variable life insurance Certificates
funded through Separate Account D. Chubb Colonial reserves the right to vote any
or all such shares at its discretion to the extent consistent with then current
interpretations of the 1940 Act and rules thereunder.
Chubb Colonial may, when required by state insurance regulatory
authorities, disregard voting instructions if the instructions require that
shares be voted so as to cause a change in subclassification or investment
objective of the Trust or disapprove an investment advisory contract of the
Trust. In addition, Chubb Colonial may disregard voting instructions in favor of
changes initiated by a Certificate Owner in the investment policies or the
investment adviser of the Trust if Chubb Colonial reasonably disapproves of such
changes. A change would be disapproved only if the proposed change is contrary
to state law or prohibited by state regulatory authorities or Chubb Colonial
determined that the change would be inconsistent with the investment objectives
of Separate Account D or would result in the purchase of securities for Separate
Account D which vary from the general quality and nature of investments and
investment techniques utilized by other separate accounts created by Chubb
Colonial or any affiliate of Chubb Colonial which have similar investment
objectives. In the event that Chubb Colonial does disregard voting instructions,
a summary of that action and the reason for such actions will be included in the
next semi-annual report to the Certificate Owner.
Additions, Deletions or Substitutions of Investments. Chubb Colonial
reserves the right, subject to compliance with applicable law, to make additions
to, deletions from, or substitutions for the shares held by any Division or
which any Division may purchase. If shares of the Trust should no longer be
available for investment or if, in the judgment of Chubb Colonial's management,
further investment in shares of the Trust should become inappropriate in view of
the purposes of the Certificate, Chubb Colonial may substitute shares of any
other investment company for shares already purchased, or to be purchased in the
future under the Certificates. No substitution of securities will take place
without notice to and consent of Certificate Owners and without prior approval
of the Commission, all to the extent required by the 1940 Act. Any surrender of
a Certificate due to a change in a Portfolio's investment policy will incur any
applicable Surrender Charges.
Each class of Trust shares is subject to certain investment restrictions
which may not be changed without the approval of the majority of the holders of
such class. See the accompanying Prospectus for the Trust.
Annual Report. Each year a report will be sent to the Certificate Owner
which shows the current Accumulation Value, Cash Value, premiums paid and all
charges since the last annual report as well as the balance of outstanding
Certificate loans. Chubb Colonial will also send to the Certificate Owner the
reports required by the 1940 Act.
Confirmation. Confirmation notices (or other appropriate notification)
will be mailed promptly at the time of the following transactions:
(1) Certificate issue;
(2) receipt of premium payments;
(3) initial allocation among Divisions on the Allocation Date;
(4) transfers among Divisions;
(5) change of premium allocation;
<PAGE>
(6) change between Option I and Option II;
(7) increases or decreases in Specified Amount;
(8) withdrawals, surrenders or loans;
(9) receipt of loan repayments; and
(10) reinstatements; and
(11) redemptions due to insufficient funds.
Limitation on Right to Contest. Chubb Colonial will not contest or revoke
the insurance coverage provided under the Certificate, except for any subsequent
increase in Specified Amount, after the Certificate has been in force during the
lifetime of each Insured for a period of two years from the date it is issued.
Any increase in the Specified Amount will not be contested after such increase
has been in force during the lifetime of each Insured for two years following
the effective date of the increase. Any increase will be contestable within the
two year period only with regard to statements concerning this increase.
Misstatements. If the age or sex of an Insured has been misstated in an
application, including a reinstatement application, Chubb Colonial will adjust
the benefits payable to reflect the correct age or sex.
Suicide. The Certificate does not cover the risk of suicide within two
years from the date the Certificate is issued or two years from the date of any
increase in Specified Amount with respect to such increase, whether the Insured
is sane or insane, unless otherwise specified by state law. In the event of
suicide of any Insured within two years of the date the Certificate is issued,
the only liability of Chubb Colonial will be a refund of premiums paid, without
interest, less any Certificate Debt and less any withdrawal. In the event of
suicide by any Insured within two years of an increase in Specified Amount, the
only liability of Chubb Colonial with respect to the increase will be a refund
of the cost of insurance for such increase.
Under Chubb Colonial Heritage II, if the first death is by suicide and the
surviving Insured is classified by Chubb Colonial as insurable on the
Certificate Date, Chubb Colonial will issue, upon request of the Certificate
Owner and without evidence of insurability, an individual Certificate providing
coverage on the life of the surviving Insured equal to the coverage on the
Insureds for which premiums or cost of insurance was refunded.
Beneficiaries. The original Beneficiaries and contingent Beneficiaries
are designated by the Certificate Owner on the application. If changed, the
primary Beneficiary or contingent Beneficiary is as shown in the latest change
filed with Chubb Colonial. One or more primary or contingent Beneficiaries may
be named in the application. In such case, the proceeds of the Certificate will
be paid in equal shares to the survivors in the appropriate beneficiary class
unless requested otherwise by the Certificate Owner.
Postponement of Payments. Payment of any amount upon surrender,
withdrawal, Certificate loan, or benefits payable at death or maturity may be
postponed whenever: (i) the New York Stock Exchange is closed other than
customary week-end and holiday closings, or trading on the New York Stock
Exchange is restricted as determined by the Commission; (ii) the Commission by
order permits postponement for the protection of Certificate Owners; or (iii) an
emergency exists, as determined by the Commission, as a result of which disposal
of securities is not reasonably practical or it is not reasonably practicable to
determine the value of net assets in Separate Account D.
Assignment. Ownership of the Certificate can be assigned or the
Certificate can be assigned as collateral security. Chubb Colonial must be
notified in writing if the Certificate has been assigned. Each assignment will
be subject to any payments made or action taken by Chubb Colonial prior to its
notification of such assignment. Chubb Colonial is not responsible for the
validity of an assignment. A Certificate Owner's rights and the rights of the
<PAGE>
Beneficiary may be affected by an assignment.
Illustration of Benefits and Values. The Certificate Owner may request
illustrations of Death Benefits, Accumulation Values and Cash Values at any time
after the Certificate Date. Illustrations will be based on the existing
Accumulation Value and Cash Value at the time of the request and both the
maximum and the then current costs of insurance rates. Although Chubb Colonial
does not currently charge a fee for such illustrations, it reserves the right to
charge an administrative fee, not to exceed $25, to cover the cost of preparing
the illustrations.
Non-Participating Certificate. The Certificate does not share in any
surplus distributions of Chubb Colonial. No dividends are payable with respect
to the Certificate.
THE GENERAL ACCOUNT
Certificate Owners may allocate Net Premiums and transfer Accumulation Value to
the General Account. Because of exemptive and exclusionary provisions, interests
in the General Account have not been registered under the Securities Act of 1933
and the General Account has not been registered as an investment company under
the 1940 Act. Accordingly, neither the General Account nor any interests therein
are subject to the provisions of these Acts, and Chubb Colonial has been advised
that the staff of the Securities and Exchange Commission has not reviewed the
disclosures in this Prospectus relating to the General Account. Disclosures
regarding the General Account may, however, be subject to certain generally
applicable provisions of the federal securities laws relating to the accuracy
and completeness of statements made in prospectuses.
General Description. The General Account consists of all assets owned by
Chubb Colonial other than those in Separate Account D and other separate
accounts which have been or may be established by Chubb Colonial. Subject to
applicable law, Chubb Colonial has sole discretion over the investment of the
assets of the General Account.
A Certificate Owner may elect to allocate Net Premiums to the General
Account or to transfer Accumulation Value to or from the Divisions and the
General Account. The allocation or transfer of funds to the General Account does
not entitle a Certificate Owner to share in the investment experience of the
General Account. Instead, Chubb Colonial guarantees that Accumulation Value in
the General Account will accrue interest daily at an effective annual rate of at
least 4%, independent of the actual investment experience of the General
Account. Chubb Colonial is not obligated to credit interest at any higher rate,
although Chubb Colonial may, in its sole discretion, do so.
If the Certificate issued as applied for is not accepted or the "free
look" is exercised, no interest will be credited and Chubb Colonial will retain
any interest earned on the initial Net Premium.
General Account Accumulation Value. The Accumulation Value in the General
Account on the Allocation Date is equal to the portion of the Net Premium
payments, plus interest earned, which have been paid and allocated to the
General Account, less the portion of the first monthly deduction allocated to
the General Account.
Chubb Colonial guarantees that interest credited to each Certificate
Owner's Accumulation Value in the General Account will not be less than an
effective annual rate of at least 4%. Chubb Colonial may, IN ITS SOLE
DISCRETION, credit a higher rate of interest, although it is not obligated to
credit interest in excess of 4% per year, and might not do so. ANY INTEREST
CREDITED ON THE CERTIFICATE'S ACCUMULATION VALUE IN THE GENERAL ACCOUNT IN
EXCESS OF THE GUARANTEED RATE OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE
DISCRETION OF CHUBB COLONIAL. THE CERTIFICATE OWNER ASSUMES THE RISK THAT
INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4% PER YEAR.
Accumulation Value in the General Account that equals Certificate Debt will be
credited interest daily at an effective annual rate of 6%. The Accumulation
Value in the General Account will be calculated on each Monthly Anniversary Date
of the Certificate, or on any other date with consistent adjustments.
<PAGE>
Chubb Colonial guarantees that, at any time prior to the Maturity Date, the
Accumulation Value in the General Account will not be less than the amount of
the Net Premiums allocated or Accumulation Value transferred to the General
Account, plus interest at the rate of 4% per year, plus any excess interest
which Chubb Colonial credits and any amounts transferred into the General
Account, less the sum of all charges allocable to the General Account and any
amounts deducted from the General Account in connection with withdrawals or
transfers to Separate Account D.
Determination of Charges. The portion of the monthly deduction
attributable to the General Account will be determined as of the actual Monthly
Anniversary Date, even if the Monthly Anniversary Date does not fall on a
Valuation Date.
Premium Deposit Fund. As a convenience to Certificate Owners, Chubb
Colonial permits Certificate Owners to deposit funds in a premium deposit fund
("PDF"), subject to the terms and conditions of the appropriate agreement. Funds
deposited in the PDF earn interest at a minimum annual rate of 4%, with interest
credited on each monthly anniversary date. Interest on these funds is not tax
deferred and will be annually reported on Form 1099 to the Certificate Owner. An
amount equal to the Planned Periodic Premium will be transferred on the
Certificate date to pay premiums on the Certificate. Certificate Owners may
withdraw all or part of the funds from the PDF at any time. No commissions are
earned or paid until premium payments are made pursuant to transfers from the
PDF.
DISTRIBUTION OF THE GROUP POLICIES AND CERTIFICATES
The Group Policies and Certificates will be sold by individuals who, in
addition to being licensed as life insurance agents for Chubb Colonial, are also
registered representatives of Chubb Securities Corporation, the principal
underwriter of the Certificates, or of broker-dealers who have entered into
written sales agreements with the principal underwriter. Chubb Securities
Corporation is a New Hampshire corporation organized in 1969. Chubb Securities
Corporation is registered with the Securities and Exchange Commission under the
Securities and Exchange Act of 1934 as a broker-dealer and is a member of the
National Association of Securities Dealers, Inc. Each broker-dealer with whom
Chubb Securities Corporation has executed a selling agreement will receive as a
commission the full charge of 3% imposed on premiums. Any such broker-dealers
will be registered under the Securities Exchange Act of 1934 and their
representatives selling the Group Policies and Certificates will be authorized
under applicable insurance laws and regulations to sell insurance products of
this type. It is not expected that the compensation paid by Chubb Colonial in
connection with such sales will exceed that described above for sales by Chubb
Securities Corporation's registered representatives.
Chubb Colonial and Separate Account D have entered into a Distribution
Agreement with Chubb Securities Corporation which continues until terminated by
any party on 60 days notice. Chubb Securities Corporation is not obligated to
sell any specified amount of Certificates and may not assign its
responsibilities under the Distribution Agreement. Chubb Colonial reimburses
Chubb Securities Corporation for its expenses under the Distribution Agreement.
Chubb Securities Corporation is engaged in the sale and distribution of
various other securities, including other flexible premium variable life
policies. It acts as principal underwriter for other flexible premium variable
life policies and variable annuity contracts issued by Chubb Colonial and Chubb
Life Insurance Company of America, Chubb Colonial's parent, and for the Chubb
America Fund, Inc. and Chubb Investment Funds, Inc. mutual funds. It sells a
number of mutual fund shares as well as shares of other securities and limited
partnership interests in both public and private limited partnerships. Mutual
fund shares available for sale by Chubb Securities Corporation are sold pursuant
to non-exclusive selling agreements with the distributors of the mutual funds.
<PAGE>
MANAGEMENT OF CHUBB COLONIAL
Executive Officers and Directors of Chubb Colonial
Directors
Principal Occupation and
------------------------
Name Business Address
- ---- ----------------
Ronald R. Angarella........ Senior Vice President
Chubb Life Insurance Company of America
(also serves as Senior Vice President of Chubb
Colonial Life Insurance Company)
One Granite Place
Concord, NH 03301
*Frederick H. Condon....... Senior Vice President, General Counsel and
Secretary
Chubb Life Insurance Company of America
(also serves as Senior Vice President, General
Counsel and Secretary of Chubb Colonial Life
Insurance Company)
One Granite Place
Concord, NH 03301
*Charles C. Cornelio....... Executive Vice President, Chief Administrative
Officer, Assistant Secretary
Chubb Life Insurance Company of America
(also serves as Executive Vice President,
Chief Administrative Officer and Assistant
Secretary of Chubb Colonial Life Insurance Company)
One Granite Place
Concord, NH 03301
*Dean R. O'Hare............ Chairman and Chief Executive Officer
The Chubb Corporation
(also serves as Chairman of Chubb Colonial Life
Insurance Company)
15 Mountain View Road
P.O. Box 1615
Warren, NJ 07061-1615
*Theresa M. Stone.......... President and Chief Executive Officer
Chubb Life Insurance Company of America
(also serves as President and Chief Executive
Officer of Chubb Colonial Life Insurance Company)
One Granite Place
Concord, NH 03301
<PAGE>
*Richard V. Werner......... Executive Vice President and Chief Financial
Officer Chubb Life Insurance Company of America
(also serves as Executive Vice President and Chief
Financial Officer of Chubb Colonial Life Insurance
Company)
One Granite Place
Concord, NH 03301
* Executive Officer of
= ====================
Chubb Colonial
==============
Executive Officers (Other Than Directors)
<TABLE>
<CAPTION>
Name
- ----
<S> <C>
Vincent G. Mace, Jr........ Senior Vice President and Group Actuary
Michael O'Reilly........... Senior Vice President
Warren L. Reynolds......... Senior Vice President
Paul J. Strong............. Senior Vice President
John W. Wells.............. Senior Vice President
Arthur V. Anderson......... Vice President and Corporate Actuary
Thomas M. Bodrogi.......... Vice President
Margaret O. Cain........... Vice President
Rebecca M. Clark........... Vice President
Ronald H. Emery............ Vice President
J. Michael Gannon.......... Vice President and Counsel
Ned I. Gerstman............ Vice President
Donald M. Kane............. Vice President
Patrick A. Lang............ Vice President
Deborah A. Leitch.......... Vice President
Sandra M. MacIntyre........ Vice President
Edward C. Mackenzie........ Vice President
Donna L. Metcalf........... Vice President
Thomas E. Murphy, Jr. MD... Vice President
Kenneth L. Robinson, Jr.... Vice President
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
James M. Sandelli.......... Vice President
Russell C. Simpson......... Vice President and Treasurer
William A. Spencer......... Vice President
William H. Tate............ Vice President
John A. Thomas............. Vice President
Ernest J. Tsouros.......... Vice President
David G. Underwood II,MD.. Vice President
</TABLE>
The officers and employees of Chubb Colonial who have access to the assets of
Separate Account D are covered by a fidelity bond issued by Aetna Casualty and
Surety Company in the amount of $35,000,000.
STATE REGULATION OF CHUBB COLONIAL
Chubb Colonial is governed under the laws of the state of New Jersey
and is subject to regulation by the Insurance Commissioner of New Jersey. An
annual statement is filed with the New Jersey Insurance Commissioner on or
before March 1 of each year covering the operations and reporting on the
financial condition of Chubb Colonial as of December 31 of the preceding year.
Periodically, the Commissioner examines the assets and liabilities of Colonial
Life and Separate Account D and verifies their adequacy and a full examination
of Chubb Colonial's operations is conducted by the Commissioner at least every
five years.
In addition, Chubb Colonial is subject to the insurance laws and
regulations of other states within which it is licensed to operate. Generally,
the insurance department of any other state applies the laws of the state of
domicile in determining permissible investments.
FEDERAL TAX MATTERS
Tax Considerations. The following description is a brief summary of
some of the tax rules, primarily related to federal income taxes under the Code,
which, in the opinion of Chubb Colonial, are currently in effect and is not
intended as tax advice. Chubb Colonial believes that, as discussed below, the
Group Policies and Certificates will in general receive favorable tax treatment
under the Code. Because there are issues as to which the law is still developing
or may change, however, and because this information is not intended as tax
advice, Chubb Colonial recommends that the Certificate Owner or prospective
Certificate Owner rely only on the advice of a qualified tax adviser.
Certificate Proceeds. The Certificate contains provisions not found
in traditional life insurance policies providing only for fixed benefits.
However, under the Code, the Certificate should qualify as a life insurance
contract for federal income tax purposes, with the result that all Death
Benefits paid under the Certificate will generally be fully excludable from the
gross income of the Certificate's Beneficiary for federal income tax purposes
and, as long as the Group Policy and Certificate remain in force, income earned
on the Certificate will not be subject to federal income tax unless and until
there is a distribution from the Certificate. Certificate Owners should consult
with their own tax advisers in this regard.
The federal income tax treatment of a distribution from the
Certificate will depend on whether a Certificate is a life insurance policy and
also if it is determined to be a "modified endowment contract," as defined by
the Code. Chubb Colonial will notify a Certificate Owner if the amount of
premiums paid in would cause a Certificate to be a modified endowment contract
and will allow a refund of the excess premium. Thus, the Certificate Owner may
choose to have the Certificate treated as a modified endowment contract.
<PAGE>
A modified endowment contract is a life insurance policy which fails
to meet a "seven-pay" test. In general, a policy will fail the seven-pay test
if the cumulative amount of premiums paid under the policy at any time during
the first seven years exceeds a calculated premium level. The calculated seven-
pay premium level is based on a hypothetical policy issued on the same insured
persons and for the same intial death benefit which, under specified conditions
(which include the absence of expense and administrative charges), would be
fully paid for after seven years. Your certificate will be treated as a
modified endowment unless the cumulative premiums paid under your certificate,
at all times during the first seven policy years, are less than or equal to the
cumulative seven-pay premiums which would have been paid under the hypothetical
Certificate on or before such times.
Whenever there is a "material change" under a certificate, it will
generally be treated as a new contract for purposes of determining whether the
certificate is a modified endowment, and subject to a new seven-pay premium
period and a new seven-pay limit. The new seven-pay limit would be determined
taking into account, under a downward adjustment formula, the Certificate
Account Value of the policy at the time of such change. A materially changed
certificate would be considered a modified endowment if it failed to satisfy the
new seven-pay limit. A material change could occur as a result of a change in
death benefit option, the selection of additional benefits, the restoration of a
terminated certificate and certain other changes.
If the benefits under your certificate are reduced, for example, by
requesting a decrease in Face Amount or in some cases by making partial
withdrawals, terminating additional benefits under a rider, changing the death
benefit option, or as a result of policy termination, the calculated seven-pay
premium level will be redetermined based on the reduced level of benefits and
applied retroactively for purposes of the seven-pay test. If the premiums
previously paid are greater than the recalculated seven-pay premium level limit,
the certificate will become a modified endowment unless the policy owner
requests a refund of the excess premium. Generally, a life insurance policy
which is received in exchange for a modified endowment or a modified endowment
which terminates and is restored, will also be considered a modified endowment.
If a Certificate is deemed to be a modified endowment contract, any
distribution from the Certificate will be taxed in a manner comparable to
distributions from annuities (i.e., on an "income-first" basis); distributions
for this purpose include a loan, pledge, assignement or partial withdrawal. Any
such distributions will be considered taxable income to the extent accumulation
value under the Certificate exceeds investment in the Certificate.
A 10% penalty tax will apply to the taxable portion of such a
distribution. No penalty will apply to distributions (i) to taxpayers 59 1/2
years of age or older, (ii) in the case of a disability which can be expected to
result in death or to be of indefinite duration or (iii) received as part of a
series of substantially equal periodic annuity payments for the life (or life
expectancy) of the taxpayer or the joint lives (or joint life expectancies) of
the taxpayer and his beneficiary.
To the extent a Certificate becomes a modified endowment contract, any
distribution, including any loan, which occurs in the Certificate year it
becomes a modified endowment contract and in any year thereafter, will be
taxable income to the Certificate Owner to the extent accumulation value exceeds
investment. Also, any distributions within two years before a Certificate
becomes a modified endowment contract will also be income taxable to the
Certificate Owner, as described above. The Secretary of the Treasury has been
authorized to prescribe rules which would similarly treat other distributions
made in anticipation of a policy becoming a modified endowment contract. For
purposes of determining the amount of any distribution includable in income, all
modified endowment contract policies that fail the above-described tests which
are issued by the same insurer, or its affiliates, to the same Certificate Owner
during any calendar year are treated as one contract. The Secretary of the
Treasury is also authorized to issue regulations in this connection.
In addition to the distribution rules for modified endowment
contracts, the Code and proposed regulations thereunder require that reasonable
mortality and other charges be used in satisfying the definition of life
insurance. The death benefit under a Certificate which meets this definition
will continue to be excluded from the beneficiary's
<PAGE>
gross income. Chubb Colonial believes that the Certificates meet this
definition. However, there is uncertainty as to the meaning of "reasonable
mortality charges" and resultant uncertainties as to Chubb Colonial Heritage
II's qualification if a different definition is adopted by the Treasury
Department. As long as a Certificate does not violate the tests described above,
it will not fail to meet the tests of the Code and the general tax provisions
described herein still apply.
The foregoing summary does not purport to be complete or to cover all
situations, and, as always, there is some degree of uncertainty with respect to
the application of the current tax laws. In particular, prior to the issuance of
final regulations or other clarifications under certain sections of the Code,
there may be some uncertainties about the tax treatment of the Certificate with
respect to the mortality charges, substandard risks and any extension of the
Maturity Date. In addition to the provisions discussed above, the United States
Congress may consider other legislation which, if enacted, could adversely
affect the tax treatment of life insurance policies. Also, the Treasury
Department may amend current regulations or adopt new regulations with respect
to this and other Code provisions. Therefore, Certificate Owners are advised to
consult a tax adviser or attorney for more complete tax information,
specifically regarding the applicability of the Code provisions to an individual
Certificate Owner's situation.
Under normal circumstances, the Certificate is not a modified
endowment contract and loans received under the Certificate will be construed as
indebtedness of the Certificate Owner in the same manner as loans under a fixed
benefit life insurance policy and no part of any loan under the Certificate is
expected to constitute income to the Certificate Owner. Certificate Owners are
advised to consult a tax adviser or attorney regarding the deduction of interest
paid on loans.
Even if the Certificate is not a modified endowment contract, a
partial withdrawal together with a reduction in death benefits during the first
15 Certificate years may create taxable income for the Certificate Owner. The
amount of that taxable income is determined under a complex formula and it may
be equal to part or all of, but not greater than, the income on the contract. A
partial withdrawal made after the first 15 Certificate years will be taxed on a
recovery of premium-first basis, and will only be subject to federal income tax
to the extent such proceeds exceed the total amount of premiums the Certificate
Owner has paid that have not been previously withdrawn.
If a Certificate Owner makes a partial withdrawal, surrender, loan or
exchange of the Certificate, Chubb Colonial may be required to withhold federal
income tax from the portion of the money received by the Certificate Owner that
is includable in the Certificate Owner 's federal gross income. A Certificate
Owner who is not a corporation may elect not to have such tax withheld; however,
such election must be made before Chubb Colonial makes the payment. In addition,
if a Certificate Owner fails to provide Chubb Colonial with a correct taxpayer
identification number (usually a social security number) or if the Treasury
notifies Chubb Colonial that the taxpayer identification number which has been
provided is not correct, the election not to have such taxes withheld will not
be effective. In any case, a Certificate Owner is liable for payment of the
federal income tax on the taxable portion of money received, whether or not an
election to have federal income tax withheld is made. If a Certificate Owner
elects not to have federal income tax withheld, or if the amount withheld is
insufficient, then the Certificate Owner may be responsible for payment of
estimated tax. A Certificate Owner may also incur penalties under the estimated
tax rules if the withholding and estimated tax payments are insufficient.
Chubb Colonial suggests that Certificate Owners consult with a tax adviser or
attorney as to the tax implications of these matters.
In the event that a Certificate is owned by a trustee under a pension
or profit sharing plan, or similar deferred compensation arrangement, the tax
consequences of ownership or receipt of proceeds under the Certificate could
differ from those stated herein. However, if ownership of such a Certificate is
transferred from the plan to a plan participant (upon termination of employment,
for example), the Certificate will be subject to all of the federal tax rules
described above. A Certificate owned by a trustee under such a plan may be
subject to restrictions under ERISA and a tax adviser should be consulted
regarding any applicable ERISA requirements.
The Certificate may also be used in various arrangements, including
nonqualified deferred compensation or salary continuation plans, split dollar
insurance plans, executive bonus plans and others, where the tax consequences
<PAGE>
may vary depending on the particular facts and circumstances of each individual
arrangement. A tax adviser should be consulted regarding the tax attributes of
any particular arrangement where the value of it depends in part on its tax
consequences.
Federal estate and local estate, inheritance and other tax
consequences of ownership or receipt of Certificate proceeds depend upon the
circumstances of each Certificate Owner and Beneficiary.
Current Treasury regulations set standards for diversification of the
investments underlying variable life insurance policies in order for such
policies to be treated as life insurance. Chubb Colonial believes it presently
is in compliance with the diversification requirements as set forth in the
regulations and intends to remain in compliance with such diversification
requirements. If the diversification requirements are not satisfied, the
Certificate would not be treated as a life insurance contract. As a consequence
to the Certificate Owner, income earned on a Certificate would be taxable to the
Certificate Owner in the calendar quarter in which the diversification
requirements were not satisfied, and for all subsequent calendar quarters.
The Secretary of the Treasury may issue a regulation or a ruling which
will prescribe the circumstances in which a Certificate Owner's control of the
investments of a segregated asset account may cause the Certificate Owner,
rather than the insurance company, to be treated as the owner of the assets of
the account. The regulation or ruling could impose requirements that are not
reflected in the Certificate, relating, for example, to such elements of
Certificate Owner control as premium allocation, investment selection, transfer
privileges and investments in a division focusing on a particular investment
sector. It has also been suggested that, in certain circumstances, control over
the investment adviser might constitute prohibited Certificate Owner control.
Chubb Colonial believes that Certificate Owner control will not exist under the
Certificate. Because failure to comply with any such regulation or ruling
presumably would cause earnings on a Certificate Owner's interest in Separate
Account D to be includable in the Certificate Owner's gross income in the year
earned, Chubb Colonial has reserved certain rights to alter the Certificate and
investment alternatives so as to comply with such regulation or ruling. Colonial
Life believes that any such regulation or ruling would apply prospectively.
Since the regulation or ruling has not been issued, there can be no assurance as
to the content of such regulation or ruling or even whether application of the
regulation or ruling will be prospective. For these reasons, Certificate Owners
are urged to consult with their own tax advisers.
A Certificate Owner may elect to exchange Chubb Colonial Heritage II
for two individual Chubb Colonial Heritage I Certificates provided the
conditions under the Certificate Exchange Option Rider are met. This could have
adverse tax consequences including, but not limited to, the recognition of
taxable income in an amount up to any taxable gain in the Certificate at the
time of the exchange.
Charge for Chubb Colonial Income Taxes. Chubb Colonial is presently
taxed as a life insurance company under the provisions of the Code. The Code
specifically provides for adjustments in reserves for variable policies, and
Chubb Colonial will include flexible premium life insurance operations in its
tax return in accordance with these rules.
Currently no charge is made against Separate Account D for Chubb
Colonial's federal income taxes, or provisions for such taxes, that may be
attributable to Separate Account D. Chubb Colonial may charge each Division for
its portion of any income tax charged to Chubb Colonial on the Division or its
assets. See "CHARGES AND DEDUCTIONS--Premium Charges" for a description of the
federal DAC tax charge deducted from premium payments. Under present laws, Chubb
Colonial may incur state and local taxes (in addition to premium taxes) in
several states. At present, these taxes are not significant. If they increase,
however, Chubb Colonial may decide to make charges for such taxes or provisions
for such taxes against Separate Account D. Chubb Colonial would retain any
investment earnings on any tax charges accumulated in a Division. Any such
charges against Separate Account D or its Divisions could have an adverse effect
on the investment experience of such Division.
<PAGE>
EMPLOYMENT BENEFIT PLANS
Employers and employee organizations should consider, in consultation
with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of a Certificate in connection with an employment-related insurance or
benefit plan. The United States Supreme Court held, in a 1983 decision, that,
under Title VII, optional annuity benefits under a deferred compensation plan
could not vary on the basis of sex.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account D is a party
or to which the assets of any of the Divisions are subject. Chubb Colonial is
not involved in any litigation that is of material importance in relation to its
total assets or that relate to Separate Account D.
EXPERTS
The financial statements of Chubb Colonial as of December 31, 1996 and
for the year then ended, appearing in this Prospectus and Registration Statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere herein and in the Registration
Statement, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by
Michael J. LeBoeuf, FSA, MAAA as stated in the opinion filed as an exhibit to
the Registration Statement.
REGISTRATION STATEMENT
A Registration Statement has been filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, with respect
to the Group Policies and Certificates 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 D, Chubb Colonial
and the Group Policies and Certificates offered hereby. Statements contained in
this Prospectus as to the contents of the Group Policies and Certificates and
other legal instruments are summaries. For a complete statement of the terms
thereof reference is made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements of Chubb Colonial which are included in the
Prospectus should be considered only as bearing on the ability of Chubb Colonial
Life to meet its obligations under the Certificate. They should not be
considered as bearing on the investment experience of the assets held in
Separate Account D.
No financial statements of Separate Account D are included in this Prospectus
because, as of December 31, 1996, the end of Separate Account D's most recent
fiscal year, Separate Account D had no assets or liabilities and had not yet
commenced operations
In the second quarter of 1996, the Company announced a plan to exit the group
health insurance business. A definitive agreement was reached May 31, 1996 with
Healthsource Inc. under which Healthsource acquired the Company's 85% interest
in Chubb Health, Inc. The sale was completed on December 31, 1996. During the
fourth quarter of 1996, the Company's former Parent, The Chubb Corporation,
announced its intention to evaluate its strategic alternatives with respect to
the life insurance companies, including the possible sale or spin-off of the
business. The Chubb Corporation entered into a definitive agreement dated
February 23, 1997, to sell the Company to Jefferson-Pilot Corporation for
$875,000,000. The sale was effective April 30, 1997.
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
Chubb Colonial Life Insurance Company (Formerly The Colonial Life Insurance
Company of America)
We have audited the accompanying balance sheet of Chubb Colonial Life
Insurance Company as of December 31, 1996, and the related statements of
operations, shareholder's equity, and cash flows for the year 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 audit.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chubb Colonial Life Insurance
Company at December 31, 1996, and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Boston, Massachusetts
March 5, 1997
F-1
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
BALANCE SHEET
December 31, 1996
(In thousands)
<TABLE>
<S> <C>
ASSETS
Invested assets (Note 3)
Fixed maturities, held-to-maturity, at amortized cost $125,753
Fixed maturities, available-for-sale, at market 375,694
Equity securities, at market 7,140
Short term investments, at cost 7,031
Policy loans 23,993
Mortgage loans on real estate 4,626
--------
Total invested assets 544,237
Accrued investment income 9,286
Uncollected premiums 3,251
Reinsurance recoverable on life and
health policy liabilities 3,825
Deferred policy acquisition costs (Note 4) 28,753
Other assets (Note 5) 13,376
--------
Total assets $602,728
========
LIABILITIES
Policy liabilities
Policy fund balances $115,545
Future policy benefits 216,138
Policy and contract claims 50,618
Premiums paid in advance 1,243
Other policyholders' funds 13,256
--------
396,800
Federal income tax payable (Note 6) 140
Deferred federal income tax (Note 6) 745
Net liabilities of discontinued operations 9,158
Accrued expenses and other liabilities 18,872
--------
Total liabilities 425,715
--------
Commitments and contingent liabilities
(Notes 7 and 12)
SHAREHOLDER'S EQUITY
Common stock--$20 par value, 132,000 shares
authorized, issued and outstanding 2,640
Paid-in capital 26,460
Unrealized appreciation of investments,
net (Note 3) 4,120
Retained earnings 143,793
--------
Total shareholder's equity 177,013
--------
Total liabilities and shareholder's
equity $602,728
========
</TABLE>
See accompanying notes.
F-2
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
REVENUES
Premiums and policy charges (Note 9) $ 61,401
Net investment income (Note 3) 40,005
Realized investment gains (Note 3) 3,763
--------
Total revenues 105,169
BENEFITS, CLAIMS AND EXPENSES
Policy benefits and claims 68,097
Change in reserves for future policy
benefits (1,368)
--------
66,729
EXPENSES
Commissions and other operating expenses 21,463
Amortization of deferred policy
acquisition costs 2,718
--------
24,181
--------
Total benefits, claims and expenses 90,910
--------
Income from continuing operations
before federal income tax 14,259
Federal income tax (Note 6)
Current 3,709
Deferred 755
--------
4,464
Income from continuing operations 9,795
Discontinued operations (Note 2):
Income from operations, net of tax 315
Estimated loss on disposal, net of tax (12,628)
--------
Loss from discontinued operations (12,313)
--------
Net loss $ (2,518)
========
</TABLE>
See accompanying notes.
F-3
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
STATEMENT OF SHAREHOLDER'S EQUITY
Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Common stock
Balance, beginning and end of year $ 2,640
--------
Paid-in capital
Balance, beginning and end of year 26,460
--------
Unrealized appreciation (depreciation)
of investments, net
Balance, beginning of year 9,890
Change, net (Note 3) (5,770)
--------
Balance, end of year 4,120
--------
Retained earnings
Balance, beginning of year 150,324
Net loss (2,518)
Dividends paid (4,013)
--------
Balance, end of year 143,793
--------
Total shareholder's equity $177,013
========
</TABLE>
See accompanying notes.
F-4
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
STATEMENT OF CASH FLOWS
Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Net loss $ (2,518)
Adjustments to reconcile net income to
net cash provided by operating activities:
Decrease in future policy benefits,
policy and contract claims and
premiums paid in advance, net (14,560)
Decrease in uncollected premiums 2,407
Increase in policy acquisition costs
deferred, net of amortization (663)
Decrease in accrued investment income 108
Realized investment gains (3,763)
Accretion of investment discounts (290)
Provision for deferred income tax 755
Decrease in federal income tax payable (2,018)
Other, net 7,078
--------
Net cash used in operating activities (13,464)
INVESTING ACTIVITIES
Proceeds from sales of fixed maturities 71,289
Proceeds from maturities of fixed
maturities 53,381
Proceeds from sales of equity securities 18,571
Purchases of fixed maturities (119,513)
Purchases of equity securities (18,518)
Decrease in short term investments, net 2,052
Policy loans issued, net of repayments (887)
Mortgage loans, net 249
Collection of note receivable 26,000
Other, net 28
--------
Net cash provided by investing
activities 32,652
FINANCING ACTIVITIES
Deposits credited to policyholders' funds 20,489
Withdrawals from policyholders' funds (9,853)
Short term debt principal payment (26,000)
Dividends paid (4,013)
Increase in cash overdraft 189
--------
Net cash used in financing activities (19,188)
Increase (decrease) in cash 0
--------
Cash, beginning and end of year (Note 1) $ 0
========
</TABLE>
See accompanying notes
F-5
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles (GAAP). Chubb Colonial Life Insurance
Company (the Company), formerly The Colonial Life Insurance Company of America,
is wholly-owned by Chubb Life Insurance Company of America (Chubb Life). Chubb
Life is a wholly-owned subsidiary of The Chubb Corporation (the Parent). On
February 23, 1997, The Chubb Corporation entered into a definitive agreement to
sell Chubb Life and its subsidiaries, including the Company, to Jefferson-Pilot
Corporation. (see Note 13).
The Company is principally engaged in the sale of individual life insurance and
investment products. These products are marketed primarily through personal
producing general agents throughout the United States.
In the second quarter of 1996, the Company adopted a plan to exit the group
insurance business. Accordingly, the group insurance business has been
classified as discontinued operations in the financial statements. (see Note
2).
Affiliates of the Company include Chubb Sovereign Life Insurance Company
(Sovereign) and Chubb America Service Corporation (Chubb Service).
The financial statements reflect estimates and judgments made by management
which affect the reported amounts of 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.
RECOGNITION OF REVENUES, BENEFITS, CLAIMS AND EXPENSES:
UNIVERSAL LIFE PRODUCTS
Universal life products include universal life insurance and other interest-
sensitive life insurance policies. Revenues for universal life products consist
of policy charges for the cost of insurance, policy administration and
surrenders that have been assessed against policy account balances during the
period.
Policy fund liabilities for universal life and other interest-sensitive life
insurance policies are computed in accordance with the retrospective deposit
method and represent policy account balances before surrender charges.
Policy claims that are charged to expense include claims incurred in the period
in excess of related policy account balances. Other policy benefits include
interest credited to universal life and other interest-sensitive life insurance
policies. Interest crediting rates ranged from 4% to 6 1/2%.
F-6
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENT PRODUCTS
Investment products include structured settlement annuities and other
supplementary contracts without life contingencies. Revenues for investment
products consist of policy charges for the cost of insurance, policy
administration and surrenders that have been assessed against policy account
balances during the period. Deposits for these products are recorded as policy
fund liabilities, which are increased by interest credited to the liabilities
and decreased by withdrawals and administrative charges assessed against the
contract holders. Interest crediting rates ranged from 3 1/2% to 6 3/4%.
TRADITIONAL LIFE INSURANCE PRODUCTS
Traditional life insurance products include those products with fixed and
guaranteed premiums and benefits. Premium revenues for traditional life
insurance are recognized as revenues when due. The liabilities for future
policy benefits are computed by the net level premium method based on estimated
future investment yield, mortality and withdrawal experience. Interest rate
assumptions ranged from 3% to 9%. Mortality is calculated principally on an
experience multiple applied to select and ultimate tables in common usage in the
industry. Estimated withdrawals are determined principally based on industry
tables. Policy benefits and claims are charged to expense as incurred.
ACCIDENT AND HEALTH INSURANCE
Accident and health insurance premiums are earned on a monthly pro rata basis
over the terms of the policies. Benefits include paid claims plus an estimate
for known claims and claims incurred but not reported as of the balance sheet
date.
REINSURANCE
In the ordinary course of business, the Company assumes and cedes reinsurance
with other insurance companies. These arrangements minimize the maximum net
loss potential arising from large risks. Ceded reinsurance contracts do not
relieve the Company from its obligation to policyholders. The Company evaluates
the financial condition of its reinsurers and monitors concentrations of credit
risk arising from similar activities or economic characteristics of the
reinsurers to minimize its exposure to significant losses from reinsurer
insolvencies.
Reinsurance recoverable on life and health policy liabilities represent
estimates of the portion of such liabilities that will be recovered from
reinsurers, determined in a manner consistent with the liabilities associated
with the reinsured policies.
F-7
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring insurance contracts, principally commissions,
underwriting costs and certain variable field office expenses are deferred.
Deferred policy acquisition costs for universal life and investment contracts
are amortized over the lives of the contracts in relation to the present value
of estimated gross profits expected to be realized. Deferred policy acquisition
costs related to universal life and investment contracts are also adjusted to
reflect the effect that the unrealized gains or losses on investments classified
as available-for-sale would have had on the present value of estimated gross
profits had such gains or losses actually been realized. This adjustment is
excluded from income and charged or credited directly to the unrealized
appreciation or depreciation of the investments component of shareholder's
equity, net of applicable deferred income tax.
Traditional life insurance deferred policy acquisition costs are being amortized
over the premium-payment period of the related policies using assumptions
consistent with those used in computing policy benefit reserves.
INVESTED ASSETS
Short term investments, which have an original maturity of one year or less, are
carried at amortized cost.
Fixed maturities, which include bonds and redeemable preferred stocks, are
purchased to support the investment strategies of the Company. These strategies
are developed based on many factors, including rate of return, maturity, credit
risk, tax considerations and regulatory requirements. Those fixed maturities
which the Company has the ability and intent to hold to maturity are considered
held-to-maturity and carried at amortized cost. Fixed maturities which may be
sold prior to maturity to support the investment strategies of the Company are
considered available-for-sale and carried at market value as of the balance
sheet date.
Equity securities, which include common stocks and non-redeemable preferred
stocks, are carried at market value as of the balance sheet date.
Policy loans are carried at the unpaid balances. Mortgage loans on real estate
are carried at the unpaid balances, adjusted for amortization of premium or
discount.
Realized gains and losses on the sale of investments are determined on the basis
of the cost of the specific investments sold and are credited or charged to
income. Unrealized appreciation or depreciation of investments classified as
available-for-sale, net of the deferred policy acquisition costs adjustment
discussed above and the applicable deferred income tax, is excluded from income
and credited or charged directly to a separate component of shareholder's
equity.
F-8
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment used in operations are carried at cost less accumulated
depreciation. Depreciation is calculated using the straight-line method over
the estimated useful lives of the assets.
FEDERAL INCOME TAXES
The Company participates in the filing of a consolidated federal income tax
return with Chubb Life. Chubb Life joins in the filing of a consolidated
federal income tax return with its parent. Federal income tax is allocated as
if the Company and Chubb Life filed separate income tax returns.
Deferred income tax assets and liabilities are recognized for the expected
future tax effects attributable to temporary differences between the financial
reporting and tax bases of assets and liabilities, based on enacted tax rates
and other provisions of tax law. Deferred income taxes related to unrealized
appreciation or depreciation of investments classified as available-for-sale are
charged or credited directly to a separate component of shareholder's equity.
FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair values of financial instruments are based on quoted market prices where
available. Fair values of financial instruments for which quoted market prices
are not available are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rates and the estimates of future cash flows.
Accordingly, the derived fair value estimates cannot be substantiated by
comparison to independent markets and are not necessarily indicative of the
amounts that could be realized in immediate settlement of the instrument.
Certain financial instruments, particularly insurance contracts, are excluded
from fair value disclosure requirements.
F-9
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The methods and assumptions used to estimate the fair value of certain financial
instruments are as follows:
[ ] Fair values of fixed maturities with active markets are based on quoted
market prices. For fixed maturities that trade in less active markets, fair
values are obtained from independent pricing services. Fair values of fixed
maturities are principally a function of current interest rates. Care should
be used in evaluating the significance of these estimated market values.
[ ] Fair values of equity securities are based on quoted market prices.
[ ] The carrying value of short term investments approximates fair value due to
the short maturities of these investments.
[ ] Fair values of policy loans and mortgage loans are estimated using
discounted cash flow analyses and approximate carrying values.
[ ] The carrying value of short term debt approximates fair value due to the
short maturities of the debt.
The carrying value and fair value of financial instruments at December 31, 1996,
are as follows:
<TABLE>
<CAPTION>
CARRYING FAIR
VALUE VALUE
---------------------
(In thousands)
Assets
Fixed maturities
<S> <C> <C>
Held-to-maturity $125,753 $130,311
Available-for-sale 375,694 375,694
Equity securities 7,140 7,140
Short term investments 7,031 7,031
Policy loans 23,993 23,993
Mortgage loans on real estate 4,626 4,626
</TABLE>
CASH FLOW INFORMATION
In the statement of cash flows, short term investments are not considered to be
cash equivalents. Cash overdrafts included in accrued expenses and other
liabilities were $5,217,000 at December 31, 1996.
F-10
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. DISCONTINUED OPERATIONS
In the second quarter of 1996, the Company adopted a plan to exit the group
insurance business. Formerly, this business was the Company's group insurance
business segment.
Marketing of traditional group business was discontinued. Due to various
contractual and regulatory requirements, traditional group coverages will be
renewed in certain jurisdictions until an orderly transition to another carrier
or termination of the coverage can occur. It is expected that the exit from
this business will be completed by the end of 1998.
The identifiable assets and liabilities of the group insurance business as of
December 31, 1996 included in the accompanying balance sheet, by the respective
category, were as follows:
<TABLE>
<CAPTION>
(In thousands)
ASSETS
<S> <C>
Uncollected premium $ 3,030
Reinsurance recoverable on life and
health policy liabilities 1,742
Other assets 7,949
-------
$12,721
=======
LIABILITIES
Future policy benefits $ 4,963
Policy and contract claims 49,607
Premiums paid in advance 1,047
Accrued expenses and other
liabilities 4,466
-------
$60,083
=======
</TABLE>
In addition to the assets and liabilities above, sufficient invested assets were
held for the payment of group insurance liabilities. It is not practicable to
determine the specific invested assets associated with those liabilities.
The results of discontinued operations for the three months ended March 31, 1996
and the estimated loss on disposal were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Revenues $ 44,070
Benefits, claims and expenses 43,599
--------
Income from operations before income tax 471
Income tax 156
--------
Income from operations 315
Loss on disposal, net of tax of $6,800 (12,628)
--------
Loss from discontinued operations $(12,313)
========
</TABLE>
F-11
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. DISCONTINUED OPERATIONS (CONTINUED)
Income before income tax for discontinued operations reflects allocations of
investment income and expenses using allocation methods deemed to be reasonable.
Other acceptable allocation methods could produce different results.
3. INVESTED ASSETS
The sources of net investment income from continuing operations for the year
ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Fixed maturities $37,144
Equity securities 515
Short term investments 639
Policy loans 1,605
Mortgage loans 500
Other 204
-------
Gross investment income 40,607
Investment expenses 602
-------
Net investment income $40,005
=======
Realized investment gains and losses for the year ended December 31, 1996
were as follows:
(In thousands)
Gross realized investment gains
Fixed maturities $ 2,319
Equity securities 2,664
-------
$ 4,983
=======
Gross realized investment losses
Fixed maturities $ 512
Equity securities 708
-------
$ 1,220
=======
Net realized investment gains
Fixed maturities $ 1,807
Equity securities 1,956
-------
$ 3,763
=======
</TABLE>
Proceeds from sales of fixed maturities considered available-for-sale were
$71,289,000 in 1996. Gross gains of $2,319,000 and gross losses of $512,000
were realized on such sales.
F-12
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTED ASSETS (CONTINUED)
The components of net unrealized appreciation (depreciation) of investments
carried at market value as of December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(In thousands)
Equity securities
<S> <C>
Gross unrealized appreciation $ 197
Gross unrealized depreciation 63
-------
134
-------
Fixed maturities
Gross unrealized appreciation 9,697
Gross unrealized depreciation 2,492
-------
7,205
-------
7,339
Deferred policy acquisition costs
adjustment (1,001)
-------
6,338
Deferred tax liability, net 2,218
-------
$ 4,120
=======
</TABLE>
The cost of equity securities was $7,006,000 at December 31, 1996.
The change in unrealized appreciation or depreciation of investments carried at
market value for the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Change in unrealized appreciation of
equity securities $(1,045)
Change in unrealized appreciation of
fixed maturities (8,785)
Change in deferred policy acquisition
costs adjustment 952
-------
(8,878)
Deferred income tax 3,108
-------
$(5,770)
=======
</TABLE>
The unrealized appreciation or depreciation of fixed maturities carried at
amortized cost is not reflected in the financial statements. The change in net
unrealized appreciation of such fixed maturities was a decrease of $4,866,000
for the year ended December 31, 1996.
F-13
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTED ASSETS (CONTINUED)
The amortized cost and estimated market value of fixed maturities at December
31, 1996, were as follows:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
(In thousands)
Held-to-maturity
Taxable
U. S. Government and government
agency and authority obligations $ 4,133 $ 316 $ 4,449
Corporate bonds 65,141 4,989 70,130
Foreign bonds 3,000 422 3,422
Mortgage-backed securities 53,479 42 $1,211 52,310
-------------------------------------------------
Total held-to-maturity 125,753 5,769 1,211 130,311
-------------------------------------------------
Available-for-sale
Taxable
U. S. Government and government
agency and authority obligations 24,106 39 196 23,949
Corporate bonds 198,987 5,794 1,848 202,933
Foreign bonds 29,582 1,467 169 30,880
Mortgage-backed securities 114,405 2,397 190 116,612
Redeemable preferred stocks 1,409 89 1,320
-------------------------------------------------
Total available-for-sale 368,489 9,697 2,492 375,694
-------------------------------------------------
Total fixed maturities $494,242 $15,466 $3,703 $506,005
=================================================
</TABLE>
F-14
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTED ASSETS (CONTINUED)
The amortized cost and estimated market value of fixed maturities at December
31, 1996 by contractual maturity were as follows:
<TABLE>
<CAPTION>
HELD-TO-MATURITY AVAILABLE-FOR-SALE
-------------------------------------------
ESTIMATED ESTIMATED
AMORTIZED MARKET AMORTIZED MARKET
COST VALUE COST VALUE
-------------------------------------------
<S> <C> <C> <C> <C>
(In thousands)
Due in one year or less $ 4,999 $ 5,089 $ 1,172 $ 1,176
Due after one year through five years 18,091 19,372 37,944 39,571
Due after five years through ten years 34,453 37,046 98,077 101,263
Due after ten years 14,731 16,494 116,891 117,072
-------------------------------------------
Subtotal 72,274 78,001 254,084 259,082
Mortgage-backed securities 53,479 52,310 114,405 116,612
-------------------------------------------
$125,753 $130,311 $368,489 $375,694
===========================================
</TABLE>
Actual maturities could differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment
penalties.
4. DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs deferred and the related amortization charged to income
were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Balance, beginning of year $27,138
Costs deferred during year 3,381
Amortization during year (2,718)
Change in adjustment to reflect the effects of
unrealized depreciation of investments 952
-------
Balance, end of year $28,753
=======
5. PROPERTY AND EQUIPMENT
Property and equipment included in
other assets were as follows:
(In thousands)
Cost $22,897
Less accumulated depreciation 21,145
-------
$ 1,752
=======
</TABLE>
Depreciation expense related to property and equipment was $639,000 for 1996.
F-15
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. FEDERAL INCOME TAXES
The federal income tax provision for the year ended December 31, 1996 has been
computed using the tax rates and regulations in effect during the year. The
provision for federal income tax gives effect to permanent differences between
financial and taxable income. Accordingly, the effective tax rate is lower than
the statutory federal corporate tax rate. The reasons for the lower effective
tax rate were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Tax at statutory federal income tax
rate (35%) $4,991
Dividends received deduction and tax
exempt income (565)
Other 38
------
Federal income tax expense $4,464
======
</TABLE>
The tax effects of temporary differences that gave rise to deferred income tax
assets and liabilities at December 31, 1996 were as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Deferred income tax liabilities:
Deferred policy acquisition costs $ 7,510
Unrealized appreciation on investments 2,569
-------
Total deferred tax liabilities 10,079
Deferred income tax assets:
Future policy benefits 7,034
Other 2,300
-------
Total deferred tax assets 9,334
-------
Net deferred income tax liability $ 745
=======
</TABLE>
Prior to 1984, life insurance companies were allowed certain special deductions
for federal income tax purposes which could become subject to tax at normal
rates under certain circumstances, including distribution to shareholders.
These special deductions were set aside in a Policyholders' Surplus Account.
Under the 1984 Act, no further additions to this account are permitted. At
December 31, 1996, approximately $4,664,000 of untaxed retained earnings
remained. No income taxes have been provided since management does not
anticipate any transaction that would cause this remaining amount to become
taxable. The unrecognized deferred tax related to the Policyholders' Surplus
Account is $1,632,000.
Federal income taxes paid in 1996 were $5,728,000.
F-16
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. RELATED-PARTY TRANSACTIONS
SERVICE AGREEMENT
The Company entered into an agreement with Chubb Service, whereby Chubb Service
agrees to furnish to the Company, Chubb Life and other affiliated companies,
employee and administrative services and joint operations as may be mutually-
agreed upon. The net reimbursements paid to Chubb Service during 1996 were
$42,983,000. Amounts payable to Chubb Service, included in other liabilities,
at December 31, 1996 were $8,059,000.
The Company participates in the defined benefit noncontributory pension plan of
The Chubb Corporation which covers substantially all employees. Pension costs
allocated to the Company for the year ended December 31, 1996 were $637,000.
The costs were offset by a curtailment gain of $1,322,000 resulting from
workforce reductions.
The Company, with Chubb Life and its affiliates, provides certain other
postretirement benefits, principally health care and life insurance, to retired
employees and their beneficiaries and covered dependents. Substantially all
employees may become eligible for these benefits upon retirement if they meet
minimum age and years of service requirements. Postretirement benefit costs
allocated to the Company for the year ended December 31, 1996 were $578,000.
The costs were offset by a curtailment gain of $648,000 resulting from workforce
reductions.
Substantially all of the Company's employees are eligible to participate in the
stock ownership and incentive plans of The Chubb Corporation. The aggregate
costs associated with the plans were approximately $1,019,000 for the year ended
December 31, 1996.
REINSURANCE
The Company assumes from Chubb Life, under a modified-coinsurance agreement,
premiums and benefits related to interest-sensitive whole life and single
premium whole life contracts. The net reimbursements paid to Chubb Life during
1996 were $9,699,000. At December 31, 1996, the net receivable from Chubb Life
was $196,000.
NOTE RECEIVABLE
The Company has a loan agreement with an affiliate providing a $29,000,000
revolving line of credit. The interest rate was variable and was based on the
Company's cost of short term funds. Interest earned on this loan in 1996 was
$968,000. The outstanding balance was repaid in the fourth quarter of 1996. At
December 31, 1996, the agreement remains in effect.
F-17
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. RELATED-PARTY TRANSACTIONS (CONTINUED)
MORTGAGE GUARANTEE
The Company entered into an agreement, whereby it guaranteed a $10,000,000 first
mortgage obtained by Chubb Life on December 9, 1985. The first mortgage loan is
secured by a home office building, located at One Granite Place, Concord, NH.
The outstanding balance of the loan at December 31, 1996 was $4,369,000.
8. JOINT MARKETING AGREEMENT
The Company entered into an agreement with a health maintenance organization
(HMO) to jointly create, market and service managed care point-of-service
products in the State of New York. Net reimbursements paid to the HMO during
1996 were $351,000. At December 31, 1996 the net receivable from the HMO was
$7,679,000.
9. REINSURANCE
The Company is involved in both the cession and assumption of reinsurance with
other insurance companies. Risks are reinsured with other companies to permit
the recovery of a portion of the direct losses. The Company's reinsurance
activity is primarily with Chubb Life. The maximum amount of individual life
insurance retained on any one life, including accidental death benefits, is
$1,400,000.
Selected data regarding reinsurance amounts appearing in the financial
statements for 1996 were as follows:
<TABLE>
<CAPTION>
CEDED TO ASSUMED
DIRECT OTHER FROM OTHER NET
AMOUNT COMPANIES COMPANIES AMOUNT
-----------------------------------------
<S> <C> <C> <C> <C>
(In thousands)
Premiums earned and policy charges
for the year:
Life insurance $20,758 $ 199 $38,824 $59,383
Accident and health insurance 2,951 933 2,018
-----------------------------------------
Total premiums and policy charges $23,709 $1,132 $38,824 $61,401
=========================================
</TABLE>
Reinsurance recoveries of the Company which have been deducted from benefits,
claims and expenses in the income statement were $771,000 in 1996.
F-18
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. DIVIDEND RESTRICTIONS
The Company is required to file annual statements with state insurance
regulatory authorities prepared on an accounting basis prescribed or permitted
by such authorities (statutory basis). GAAP differs in certain respects from
statutory accounting practices.
A comparison of shareholder's equity on a GAAP basis and policyholders' surplus
on a statutory basis as of December 31, 1996 is as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
GAAP $177,013
Statutory 130,703
A comparison of GAAP and statutory net income for the year ended December 31,
1996 is as follows:
(In thousands)
GAAP $ (2,518)
Statutory 13,106
</TABLE>
The Company may pay dividends from statutory earned surplus as determined in
accordance with accounting practices prescribed or permitted by regulatory
authorities and the State of New Jersey. Dividend distributions exceeding the
greater of 10% of policyholders' surplus or statutory net income during the
preceding year are considered "extraordinary" and are subject to the prior
approval of the State of New Jersey Department of Insurance. The maximum
ordinary dividend distribution that may be made by the Company to Chubb Life
during 1997 is approximately $13,000,000.
11. DEBT AND CREDIT ARRANGEMENTS
The Company borrowed in the short term commercial paper market during 1996.
These notes were issued by Chubb Capital Corporation, a subsidiary of The Chubb
Corporation. The interest rate was variable and was based on Chubb Capital
Corporation's cost of funds. Interest paid on the borrowings in 1996 was
$1,206,000. The outstanding balance was repaid in the fourth quarter of 1996.
At December 31, 1996, the agreement remains in effect with no outstanding
borrowings.
F-19
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
12. LITIGATION
The Company is involved in pending or threatened lawsuits arising from the
normal conduct of its insurance business. Several suits have been brought
against the Company seeking both punitive and compensatory damages. Management
is of the opinion that these suits are substantially without merit, that valid
defenses exist, and that such litigation will not have a material effect on the
financial statements.
13. SUBSEQUENT EVENT RELATING TO CHANGE IN OWNERSHIP
The Chubb Corporation entered into a definitive agreement, dated February 23,
1997, to sell Chubb Life and its subsidiaries, including the Company, to
Jefferson-Pilot Corporation for $875,000,000 in cash, subject to various closing
adjustments and other customary conditions. The sale is subject to regulatory
approvals and is expected to be completed by the end of the second quarter of
1997.
F-20
<PAGE>
APPENDIX A
ILLUSTRATIONS OF ACCUMULATION VALUES
CASH VALUES AND DEATH BENEFITS
Following are a series of tables that illustrate how the Accumulation
Values, Cash Values and Death Benefits of a Certificate change with the
investment performance of the Trust. The tables show how the Accumulation
Values, Cash Values and Death Benefits of a Certificate issued to an Insured(s)
of a given age(s) and given premium would vary over time if the return on the
assets held in each Portfolio of the Trust were a constant gross annual rate of
0%, 6%, and 12%. The tables on pages A-3 through A-8 illustrate a Colonial
Heritage I Certificate issued to a male, age 35, under a standard rate non-
smoker underwriting risk classification. The tables on pages A-9 through A-14
illustrate a Colonial Heritage II Certificate issued to a male, age 40, under a
standard rate non-smoker underwriting risk classification and a female, age 35,
under a standard rate non-smoker underwriting risk classification. The
Accumulation Values, Cash Values and Death Benefits would be different from
those shown if the returns averaged 0%, 6%, and 12% over a period of years, but
fluctuated above and below those averages for individual Certificate years.
The amount of the Accumulation Value exceeds the Cash Value during the
first five Certificate years due to the Surrender Charge. For Certificate years
six and after, the Accumulation Value and Cash Value are equal, since the
Surrender Charge has been reduced to zero.
The second column shows the Accumulation Value of the premiums paid at
the stated interest rate. The third and sixth columns illustrate the
Accumulation Values and the fourth and seventh columns illustrate the Cash
Values of the Certificate over the designated period. The Accumulation Values
shown in the third column and the Cash Values shown in the fourth column assume
the monthly charge for cost of insurance is based upon the current cost of
insurance rates and assume a Monthly Deduction Adjustment which varies based on
the Specified Amount of the Certificate. The current cost of insurance rates,
which may be modified at any time, are based on the sex, Issue Age, Certificate
year, and rating class of the Insured(s). The cost of insurance discount may be
modified or terminated at any time. The Accumulation Values shown in the sixth
column and the cash values shown in the seventh column assume the monthly charge
for cost of insurance is based upon the maximum cost of insurance rates
allowable, which are based on the Commissioner's 1980 Standard Ordinary
Mortality Table. The fifth and eighth columns illustrate the Death Benefit of a
Certificate over the designated period. The illustrations of Death Benefits
reflect the same assumptions as the Accumulation Values and Cash Values. The
Death Benefit values also vary between tables, depending upon whether Option I
or Option II Death Benefits are illustrated.
The amounts shown for the Death Benefit, Accumulation Values, and Cash
Values reflect the fact that the net investment return of the Divisions of
Separate Account D is lower than the gross rates of return on the assets in the
Trust, as a result of expenses paid by the Trust and charges levied against the
Divisions of Separate Account D.
The certificate values shown take into account a daily investment
advisory fee equivalent to the maximum annual rate of .42% of the aggregate
average daily net assets of the Portfolios of the Trust plus an assumed charge
of .53% of the aggregate average daily net assets to cover expenses incurred by
the Trust. The .42% investment advisory fee is an average of the individual
investment advisory fees of the five Portfolios. See the attached Prospectus for
the Trust for a description of the assumption of expenses of the Trust in excess
of specified annual rates averaging .95%. The Certificate values also take into
account a daily charge to each Division of Separate Account D for assuming
mortality and expense risks which is equivalent to a charge at an annual rate of
.65% of the average net assets of the Divisions of Separate Account D. After
deduction of these amounts, the illustrated gross investment rates of 0%, 6% and
12% correspond to approximate net annual rates of -1.60%, 4.40% and 10.40%,
respectively.
The hypothetical values shown in the tables do not reflect any charges
for federal income taxes or other taxes other than the DAC tax. However, if, in
the future, any additional charges are made, the gross annual investment rate of
return would have to exceed the stated investment rates by a sufficient amount
to cover the tax charges in order to produce the Accumulation Values, Cash
Values and Death Benefits illustrated.
The tables illustrate the Certificate values that would result based
on hypothetical investment rates of return if premiums are paid in full at the
beginning of each year, if all Net Premiums are allocated to Separate Account
A-1
<PAGE>
D, and if no Certificate loans have been made. The values would vary from those
shown if the assumed annual premium payments were paid in installments during a
year. The values would also vary if the Certificate Owner varied the amount or
frequency of premium payments. The tables also assume that the Certificate Owner
has not requested an increase or decrease in Specified Amount, that no
withdrawals have been made and no Surrender Charges imposed, and that no
transfers have been made and no transfer charges imposed.
Upon request, Chubb Colonial will provide, without charge, a
comparable illustration based upon the proposed Insured's age, sex and rating
class the Specified Amount requested, the proposed frequency and amount of
premium payments and any available riders requested. Existing Certificate Owners
may request illustrations based on existing cash value at the time of request.
Chubb Colonial has reserved the right to charge an administrative fee of up to
$25 for such illustrations.
A-2
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,886 11,286 1,000,000 10,595 9,995 1,000,000
2 25,830 24,931 24,451 1,000,000 22,230 21,750 1,000,000
3 39,721 39,200 38,840 1,000,000 34,985 34,625 1,000,000
4 54,308 54,863 54,623 1,000,000 48,974 48,734 1,000,000
5 69,623 72,090 71,970 1,000,000 64,309 64,189 1,000,000
6 85,704 91,047 91,047 1,000,000 81,131 81,131 1,000,000
7 102,589 111,912 111,912 1,000,000 99,573 99,573 1,000,000
8 120,319 134,878 134,848 1,000,000 119,815 119,815 1,000,000
9 138,935 160,171 160,171 1,000,000 142,031 142,031 1,000,000
10 158,481 188,065 188,065 1,000,000 166,452 166,452 1,000,000
11 179,006 218,853 218,853 1,000,000 193,319 193,319 1,000,000
12 200,556 252,813 252,813 1,000,000 222,898 222,898 1,000,000
13 223,184 290,290 290,290 1,000,000 255,486 255,486 1,000,000
14 246,943 331,653 331,653 1,000,000 291,420 291,420 1,000,000
15 271,890 377,326 377,326 1,000,000 331,062 331,062 1,000,000
16 298,084 427,795 427,795 1,000,000 374,838 374,838 1,000,000
17 325,589 483,568 483,568 1,000,000 423,197 423,197 1,000,000
18 354,468 545,229 545,229 1,000,000 476,656 476,656 1,000,000
19 384,791 613,459 613,459 1,006,072(3) 535,811 535,811 1,000,000
20 416,631 688,889 688,889 1,081,556(3) 601,337 601,337 1,000,000
25 601,361 1,200,062 1,200,062 1,608,084(3) 1,047,628 1,047,628 1,403,821(3)
30 837,129 2,032,952 2,032,952 2,480,201(3) 1,770,761 1,770,761 2,160,328(3)
35 1,138,036 3,383,683 3,383,683 3,925,073(3) 2,933,181 2,933,181 3,402,491(3)
40 1,522,077 5,582,333 5,582,333 5,973,097(3) 4,812,992 4,812,992 5,149,902(3)
45 2,012,222 9,194,185 9,194,185 9,653,894(3) 7,892,220 7,892,220 8,286,831(3)
50 2,637,785 14,991,743 14,991,743 15,741,330(3) 12,769,449 12,769,449 13,407,921(3)
55 3,436,179 24,151,501 24,151,501 25,359,076(3) 20,314,120 20,314,120 21,329,826(3)
60 4,455,155 39,077,612 39,077,612 39,468,388(3) 32,567,955 32,567,955 32,893,635(3)
65 5,755,655 64,623,297 64,623,297 64,623,297(3) 53,870,652 53,870,652 53,870,652(3)
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-3
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,886 11,286 1,000,000 10,595 9,995 1,000,000
2 25,830 24,931 24,451 1,000,000 22,230 21,750 1,000,000
3 39,721 39,200 38,840 1,000,000 34,985 34,625 1,000,000
4 54,308 54,863 54,623 1,000,000 48,974 48,734 1,000,000
5 69,623 72,090 71,970 1,000,000 64,309 64,189 1,000,000
6 85,704 91,047 91,047 1,000,000 81,131 81,131 1,000,000
7 102,589 111,912 111,912 1,000,000 99,573 99,573 1,000,000
8 120,319 134,878 134,848 1,000,000 119,815 119,815 1,000,000
9 138,935 160,171 160,171 1,000,000 142,031 142,031 1,000,000
10 158,481 188,065 188,065 1,000,000 166,452 166,452 1,000,000
11 179,006 218,853 218,853 1,000,000 193,319 193,319 1,000,000
12 200,556 252,813 252,813 1,000,000 222,898 222,898 1,000,000
13 223,184 290,290 290,290 1,000,000 255,486 255,486 1,000,000
14 246,943 331,653 331,653 1,000,000 291,420 291,420 1,000,000
15 271,890 377,310 377,310 1,041,376(3) 331,062 331,062 1,000,000
16 298,084 427,565 427,565 1,141,598(3) 374,838 374,838 1,000,816(3)
17 325,589 482,782 482,782 1,250,405(3) 422,959 422,959 1,095,465(3)
18 354,468 543,417 543,417 1,363,976(3) 475,553 475,553 1,193,637(3)
19 384,791 610,002 610,002 1,482,305(3) 533,006 533,006 1,295,206(3)
20 416,631 683,057 683,057 1,612,014(3) 595,684 595,684 1,405,814(3)
25 601,361 1,167,914 1,167,914 2,382,544(3) 1,003,906 1,003,906 2,047,968(3)
30 837,129 1,924,182 1,924,182 3,425,044(3) 1,621,754 1,621,754 2,886,721(3)
35 1,138,036 3,084,822 3,084,822 4,874,019(3) 2,535,247 2,535,247 4,005,691(3)
40 1,522,077 4,836,767 4,836,767 6,868,209(3) 3,853,594 3,853,594 5,472,104(3)
45 2,012,222 7,436,738 7,436,738 9,742,127(3) 5,694,652 5,694,652 7,459,995(3)
50 2,637,785 11,242,932 11,242,932 13,716,377(3) 8,243,012 8,243,012 10,056,475(3)
55 3,436,179 16,770,292 16,770,292 19,453,539(3) 11,716,244 11,716,244 13,590,842(3)
60 4,455,155 24,842,026 24,842,026 27,574,649(3) 16,568,904 16,568,904 18,391,484(3)
65 5,755,655 38,057,808 38,057,808 39,580,120(3) 23,377,751 23,377,751 24,312,861(3)
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II
THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-4
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETRUN: 6% (4.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------- ---------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ --------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,228 10,628 1,000,000 9,976 9,376 1,000,000
2 25,830 22,876 22,396 1,000,000 20,329 19,849 1,000,000
3 39,721 34,905 34,545 1,000,000 31,048 30,688 1,000,000
4 54,308 47,374 47,134 1,000,000 42,142 41,902 1,000,000
5 69,623 60,326 60,206 1,000,000 53,613 53,493 1,000,000
6 85,704 73,783 73,783 1,000,000 65,470 65,470 1,000,000
7 102,589 87,761 87,761 1,000,000 77,708 77,708 1,000,000
8 120,319 102,277 102,277 1,000,000 90,349 90,349 1,000,000
9 138,935 117,358 117,358 1,000,000 103,388 103,388 1,000,000
10 158,481 133,016 133,016 1,000,000 116,850 116,850 1,000,000
11 179,006 149,290 149,290 1,000,000 130,726 130,726 1,000,000
12 200,556 166,187 166,187 1,000,000 145,024 145,024 1,000,000
13 223,184 183,741 183,741 1,000,000 159,769 159,769 1,000,000
14 246,943 201,963 201,963 1,000,000 174,984 174,984 1,000,000
15 271,890 220,876 220,876 1,000,000 190,668 190,668 1,000,000
16 298,084 240,523 240,523 1,000,000 206,840 206,840 1,000,000
17 325,589 260,901 260,901 1,000,000 223,481 223,481 1,000,000
18 354,468 282,022 282,022 1,000,000 240,576 240,576 1,000,000
19 384,791 303,927 303,927 1,000,000 258,120 258,120 1,000,000
20 416,631 326,630 326,630 1,000,000 276,090 276,090 1,000,000
25 601,361 453,154 453,154 1,000,000 372,351 372,351 1,000,000
30 837,129 604,525 604,525 1,000,000 479,062 479,062 1,000,000
35 1,138,036 790,823 790,823 1,000,000 595,811 595,811 1,000,000
40 1,522,077 1,033,445 1,033,445 1,105,786(3) 728,262 728,262 1,000,000
45 2,012,222 1,339,393 1,339,393 1,406,362(3) 900,696 900,696 1,000,000
50 2,637,785 1,705,848 1,705,848 1,791,140(3) 1,154,733 1,154,733 1,212,470(3)
55 3,436,179 2,133,960 2,133,960 2,240,658(3) 1,445,649 1,445,649 1,517,931(3)
60 4,455,155 2,668,795 2,668,795 2,695,483(3) 1,810,926 1,810,926 1,829,035(3)
65 5,755,655 3,397,172 3,397,172 3,397,172(3) 2,325,369 2,325,369 2,325,369(3)
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II
THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-5
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------- ---------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ --------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,228 10,628 1,000,000 9,976 9,376 1,000,000
2 25,830 22,876 22,396 1,000,000 20,329 19,849 1,000,000
3 39,721 34,905 34,545 1,000,000 31,048 30,688 1,000,000
4 54,308 47,374 47,134 1,000,000 42,142 41,902 1,000,000
5 69,623 60,326 60,206 1,000,000 53,613 53,493 1,000,000
6 85,704 73,783 73,783 1,000,000 65,470 65,470 1,000,000
7 102,589 87,761 87,761 1,000,000 77,708 77,708 1,000,000
8 120,319 102,277 102,277 1,000,000 90,349 90,349 1,000,000
9 138,935 117,358 117,358 1,000,000 103,388 103,388 1,000,000
10 158,481 133,016 133,016 1,000,000 116,850 116,850 1,000,000
11 179,006 149,290 149,290 1,000,000 130,726 130,726 1,000,000
12 200,556 166,187 166,187 1,000,000 145,024 145,024 1,000,000
13 223,184 183,741 183,741 1,000,000 159,769 159,769 1,000,000
14 246,943 201,963 201,963 1,000,000 174,984 174,984 1,000,000
15 271,890 220,876 220,876 1,000,000 190,668 190,668 1,000,000
16 298,084 240,523 240,523 1,000,000 206,840 206,840 1,000,000
17 325,589 260,901 260,901 1,000,000 223,481 223,481 1,000,000
18 354,468 282,022 282,022 1,000,000 240,576 240,576 1,000,000
19 384,791 303,927 303,927 1,000,000 258,120 258,120 1,000,000
20 416,631 326,630 326,630 1,000,000 276,090 276,090 1,000,000
25 601,361 453,154 453,154 1,000,000 372,351 372,351 1,000,000
30 837,129 603,535 603,535 1,074,293(3) 479,062 479,062 1,000,000
35 1,138,036 775,420 775,420 1,225,163(3) 595,811 595,811 1,000,000
40 1,522,077 966,192 966,192 1,371,993(3) 726,955 726,955 1,032,276(3)
45 2,012,222 1,172,600 1,172,600 1,536,106(3) 860,826 860,826 1,127,683(3)
50 2,637,785 1,391,676 1,391,676 1,697,845(3) 992,220 992,220 1,210,508(3)
55 3,436,179 1,622,394 1,622,394 1,881,977(3) 1,117,595 1,117,595 1,296,411(3)
60 4,455,155 1,871,353 1,871,353 2,077,201(3) 1,247,560 1,247,560 1,384,792(3)
65 5,755,655 2,224,610 2,224,610 2,313,594(3) 1,384,379 1,384,379 1,439,754(3)
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-6
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,571 9,971 1,000,000 9,358 8,758 1,000,000
2 25,830 20,901 20,421 1,000,000 18,505 18,025 1,000,000
3 39,721 30,936 30,576 1,000,000 27,416 27,056 1,000,000
4 54,308 40,723 40,483 1,000,000 36,086 35,846 1,000,000
5 69,623 50,286 50,166 1,000,000 44,503 44,383 1,000,000
6 85,704 59,629 59,629 1,000,000 52,662 52,662 1,000,000
7 102,589 68,749 68,749 1,000,000 60,543 60,543 1,000,000
8 120,319 77,641 77,641 1,000,000 68,151 68,151 1,000,000
9 138,935 86,310 86,310 1,000,000 75,465 75,465 1,000,000
10 158,481 94,744 94,744 1,000,000 82,493 82,493 1,000,000
11 179,006 102,956 102,956 1,000,000 89,206 89,206 1,000,000
12 200,556 110,909 110,909 1,000,000 95,591 95,591 1,000,000
13 223,184 118,599 118,599 1,000,000 101,641 101,641 1,000,000
14 246,943 126,007 126,007 1,000,000 107,344 107,344 1,000,000
15 271,890 133,124 133,124 1,000,000 112,673 112,673 1,000,000
16 298,084 139,955 139,955 1,000,000 117,618 117,618 1,000,000
17 325,589 146,464 146,464 1,000,000 122,128 122,128 1,000,000
18 354,468 152,620 152,620 1,000,000 126,150 126,150 1,000,000
19 384,791 158,423 158,423 1,000,000 129,642 129,642 1,000,000
20 416,631 163,832 163,832 1,000,000 132,536 132,536 1,000,000
25 601,361 183,783 183,783 1,000,000 136,228 136,228 1,000,000
30 837,129 186,196 186,196 1,000,000 113,994 113,994 1,000,000
35 1,138,036 159,528 159,528 1,000,000 44,415 44,415 1,000,000
40 1,522,077 80,997 80,997 1,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST __ THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-7
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,571 9,971 1,000,000 9,358 8,758 1,000,000
2 25,830 20,901 20,421 1,000,000 18,505 18,025 1,000,000
3 39,721 30,936 30,576 1,000,000 27,416 27,056 1,000,000
4 54,308 40,723 40,483 1,000,000 36,086 35,846 1,000,000
5 69,623 50,286 50,166 1,000,000 44,503 44,383 1,000,000
6 85,704 59,629 59,629 1,000,000 52,662 52,662 1,000,000
7 102,589 68,749 68,749 1,000,000 60,543 60,543 1,000,000
8 120,319 77,641 77,641 1,000,000 68,151 68,151 1,000,000
9 138,935 86,310 86,310 1,000,000 75,465 75,465 1,000,000
10 158,481 94,744 94,744 1,000,000 82,493 82,493 1,000,000
11 179,006 102,956 102,956 1,000,000 89,206 89,206 1,000,000
12 200,556 110,909 110,909 1,000,000 95,591 95,591 1,000,000
13 223,184 118,599 118,599 1,000,000 101,641 101,641 1,000,000
14 246,943 126,007 126,007 1,000,000 107,344 107,344 1,000,000
15 271,890 133,124 133,124 1,000,000 112,673 112,673 1,000,000
16 298,084 139,955 139,955 1,000,000 117,618 117,618 1,000,000
17 325,589 146,464 146,464 1,000,000 122,128 122,128 1,000,000
18 354,468 152,620 152,620 1,000,000 126,150 126,150 1,000,000
19 384,791 158,423 158,423 1,000,000 129,642 129,642 1,000,000
20 416,631 163,832 163,832 1,000,000 132,536 132,536 1,000,000
25 601,361 183,783 183,783 1,000,000 136,228 136,228 1,000,000
30 837,129 186,196 186,196 1,000,000 113,994 113,994 1,000,000
35 1,138,036 159,528 159,528 1,000,000 44,415 44,415 1,000,000
40 1,522,077 80,997 80,997 1,000,000 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-8
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,880 11,280 1,011,880 10,576 9,976 1,010,576
2 25,830 24,912 24,432 1,024,912 22,168 21,688 1,022,168
3 39,721 39,152 38,792 1,039,152 34,849 34,489 1,034,849
4 54,308 54,768 54,528 1,054,768 48,723 48,483 1,048,723
5 69,623 71,923 71,803 1,071,923 63,894 63,774 1,063,894
6 85,704 90,779 90,779 1,090,779 80,484 80,484 1,080,484
7 102,589 111,501 111,501 1,111,501 98,610 98,610 1,098,610
8 120,319 134,273 134,273 1,134,273 118,432 118,432 1,118,432
9 138,935 159,308 159,308 1,159,308 140,096 140,096 1,140,096
10 158,481 186,858 186,858 1,186,858 163,798 163,798 1,163,798
11 179,006 217,202 217,202 1,217,202 189,741 189,741 1,189,741
12 200,556 250,581 250,581 1,250,581 218,139 218,139 1,218,139
13 223,184 287,306 287,306 1,287,306 249,231 249,231 1,249,231
14 246,943 327,699 327,699 1,327,699 283,280 283,280 1,283,280
15 271,890 372,125 372,125 1,372,125 320,557 320,557 1,320,557
16 298,084 421,011 421,011 1,421,011 361,381 361,381 1,361,381
17 325,589 474,766 474,766 1,474,766 406,054 406,054 1,406,054
18 354,468 533,849 533,849 1,533,849 454,910 454,910 1,454,910
19 384,791 598,815 598,815 1,598,815 508,325 508,325 1,508,325
20 416,631 670,221 670,221 1,670,221 566,689 566,689 1,566,689
25 601,361 1,148,245 1,148,245 2,148,245 950,191 950,191 1,950,191
30 837,129 1,911,224 1,911,224 2,911,224 1,545,436 1,545,436 2,545,436
35 1,138,036 3,126,295 3,126,295 4,126,295 2,462,859 2,462,859 3,462,859
40 1,522,077 5,059,400 5,059,400 6,059,400 3,870,559 3,870,559 4,870,559
45 2,012,222 8,136,917 8,136,917 9,136,917 6,017,191 6,017,191 7,017,191
50 2,637,785 13,042,062 13,042,062 14,042,062 9,307,098 9,307,098 10,307,098
55 3,436,179 20,888,665 20,888,665 21,933,098(3) 14,359,916 14,359,916 15,359,916
60 4,455,155 33,510,513 33,510,513 34,510,513 22,256,727 22,256,727 23,256,727
65 5,755,655 54,068,415 54,068,415 55,068,415 33,665,063 33,665,063 34,665,063
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-9
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONAIL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 12% (10.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- --------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,880 11,280 1,011,880 10,576 9,976 1,010,576
2 25,830 24,912 24,432 1,024,912 22,168 21,688 1,022,168
3 39,721 39,152 38,792 1,039,152 34,849 34,489 1,034,849
4 54,308 54,768 54,528 1,054,768 48,723 48,483 1,048,723
5 69,623 71,923 71,803 1,071,923 63,894 63,774 1,063,894
6 85,704 90,779 90,779 1,090,779 80,484 80,484 1,080,484
7 102,589 111,501 111,501 1,111,501 98,610 98,610 1,098,610
8 120,319 134,273 134,273 1,134,273 118,432 118,432 1,118,432
9 138,935 159,308 159,308 1,159,308 140,096 140,096 1,140,096
10 158,481 186,858 186,858 1,186,858 163,798 163,798 1,163,798
11 179,006 217,202 217,202 1,217,202 189,741 189,741 1,189,741
12 200,556 250,581 250,581 1,250,581 218,139 218,139 1,218,139
13 223,184 287,306 287,306 1,287,306 249,231 249,231 1,249,231
14 246,943 327,699 327,699 1,327,699 283,280 283,280 1,283,280
15 271,890 372,125 372,125 1,372,125 320,557 320,557 1,320,557
16 298,084 421,011 421,011 1,421,011 361,381 361,381 1,361,381
17 325,589 474,766 474,766 1,474,766 406,054 406,054 1,406,054
18 354,468 533,849 533,849 1,533,849 454,910 454,910 1,454,910
19 384,791 598,815 598,815 1,598,815 508,325 508,325 1,508,325
20 416,631 670,221 670,221 1,670,221 566,689 566,689 1,566,689
25 601,361 1,146,578 1,146,578 2,339,020(3) 950,191 950,191 1,950,191
30 837,129 1,890,363 1,890,363 3,364,847(3) 1,538,356 1,538,356 2,738,273(3)
35 1,138,036 3,031,876 3,031,876 4,790,364(3) 2,408,523 2,408,523 3,805,466(3)
40 1,522,077 4,754,982 4,754,982 6,752,075(3) 3,664,477 3,664,477 5,203,557(3)
45 2,012,222 7,312,192 7,312,192 9,578,972(3) 5,418,579 5,418,579 7,098,338(3)
50 2,637,785 11,055,822 11,055,822 13,488,103(3) 7,846,713 7,846,713 9,572,990(3)
55 3,436,179 16,492,359 16,492,359 19,131,136(3) 11,156,222 11,156,222 12,941,217(3)
60 4,455,155 24,431,476 24,431,476 27,118,939(3) 15,780,170 15,780,170 17,515,988(3)
65 5,755,655 37,430,034 37,430,034 38,927,236(3) 22,115,986 22,115,986 23,115,986
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-10
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONAIL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,223 10,623 1,011,223 9,958 9,358 1,009,958
2 25,830 22,859 22,379 1,022,859 20,273 19,793 1,020,273
3 39,721 34,863 34,503 1,034,863 30,929 30,569 1,030,929
4 54,308 47,294 57,054 1,047,294 41,932 41,692 1,041,932
5 69,623 60,190 60,070 1,060,190 53,276 53,156 1,053,276
6 85,704 73,572 73,572 1,073,572 64,967 64,967 1,064,967
7 102,589 87,451 87,451 1,087,451 76,988 76,988 1,076,988
8 120,319 101,839 101,839 1,101,839 89,355 89,355 1,089,355
9 138,935 116,758 116,758 1,116,758 102,051 102,051 1,102,051
10 158,481 132,211 132,211 1,132,211 115,093 115,093 1,115,093
11 179,006 148,232 148,232 1,148,232 128,453 128,453 1,128,453
12 200,556 164,814 164,814 1,164,814 142,126 142,126 1,142,126
13 223,184 181,977 181,977 1,181,977 156,115 156,115 1,156,115
14 246,943 199,719 199,719 1,199,719 170,425 170,425 1,170,425
15 271,890 218,044 218,044 1,218,044 185,029 185,029 1,185,029
16 298,084 236,979 236,979 1,236,979 199,922 199,922 1,199,922
17 325,589 256,491 256,491 1,256,491 215,044 215,044 1,215,044
18 354,468 276,556 276,556 1,276,556 230,336 230,336 1,230,336
19 384,791 297,188 297,188 1,297,188 245,743 245,743 1,245,743
20 416,631 318,351 318,351 1,318,351 261,179 261,179 1,261,179
25 601,361 431,110 431,110 1,431,110 336,198 336,198 1,336,198
30 837,129 548,655 548,655 1,548,655 396,456 396,456 1,396,456
35 1,138,036 655,770 655,770 1,655,770 414,041 414,041 1,414,041
40 1,522,077 724,166 724,166 1,724,166 340,766 340,766 1,340,766
45 2,012,222 705,886 705,886 1,705,886 90,318 90,318 1,090,318
50 2,637,785 519,665 519,665 1,519,665 0 0 0
55 3,436,179 44,135 44,135 1,044,135 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONAIL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-11
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 6% (4.40% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED -------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- ---------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 11,223 10,623 1,011,223 9,958 9,358 1,009,958
2 25,830 22,859 22,379 1,022,859 20,273 19,793 1,020,273
3 39,721 34,863 34,503 1,034,863 30,929 30,569 1,030,929
4 54,308 47,294 47,054 1,047,294 41,932 41,692 1,041,932
5 69,623 60,190 60,070 1,060,190 53,276 53,156 1,053,276
6 85,704 73,572 73,572 1,073,572 64,967 64,967 1,064,967
7 102,589 87,451 87,451 1,087,451 76,988 76,988 1,076,988
8 120,319 101,839 101,839 1,101,839 89,355 89,355 1,089,355
9 138,935 116,758 116,758 1,116,758 102,051 102,051 1,102,051
10 158,481 132,211 132,211 1,132,211 115,093 115,093 1,115,093
11 179,006 148,232 148,232 1,148,232 128,453 128,453 1,128,453
12 200,556 164,814 164,814 1,164,814 142,126 142,126 1,142,126
13 223,184 181,977 181,977 1,181,977 156,115 156,115 1,156,115
14 246,943 199,719 199,719 1,199,719 170,425 170,425 1,170,425
15 271,890 218,044 218,044 1,218,044 185,029 185,029 1,185,029
16 298,084 236,979 236,979 1,236,979 199,922 199,922 1,199,922
17 325,589 256,491 256,491 1,256,491 215,044 215,044 1,215,044
18 354,468 276,556 276,556 1,276,556 230,336 230,336 1,230,336
19 384,791 297,188 297,188 1,297,188 245,743 245,743 1,245,743
20 416,631 318,351 318,351 1,318,351 261,179 261,179 1,261,179
25 601,361 431,110 431,110 1,431,110 336,198 336,198 1,336,198
30 837,129 548,655 548,655 1,548,655 396,456 396,456 1,396,456
35 1,138,036 655,770 655,770 1,655,770 414,041 414,041 1,414,041
40 1,522,077 724,166 724,166 1,724,166 340,766 340,766 1,340,766
45 2,012,222 705,886 705,886 1,705,886 90,318 90,318 1,090,318
50 2,637,785 519,665 519,665 1,519,665 0 0 0
55 3,436,179 44,135 44,135 1,044,135 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-12
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,566 9,966 1,010,566 9,341 8,741 1,009,341
2 25,830 20,885 20,405 1,020,885 18,454 17,974 1,018,454
3 39,721 30,899 30,539 1,030,899 27,312 26,952 1,027,312
4 54,308 40,655 40,415 1,040,655 35,910 35,670 1,035,910
5 69,623 50,176 50,056 1,050,176 44,232 44,112 1,044,232
6 85,704 59,465 59,465 1,059,465 52,273 52,273 1,052,273
7 102,589 68,517 68,517 1,068,517 60,008 60,008 1,060,008
8 120,319 77,326 77,326 1,077,326 67,441 67,441 1,067,441
9 138,935 85,894 85,894 1,085,894 74,548 74,548 1,074,548
10 158,481 94,207 94,207 1,094,207 81,333 81,333 1,081,333
11 179,006 102,279 102,279 1,102,279 87,764 87,764 1,087,764
12 200,556 110,063 110,063 1,110,063 93,824 93,824 1,093,824
13 223,184 117,555 117,555 1,117,555 99,502 99,502 1,099,502
14 246,943 124,729 124,729 1,124,729 104,782 104,782 1,104,782
15 271,890 131,572 131,572 1,131,572 109,632 109,632 1,109,632
16 298,084 138,088 138,088 1,138,088 114,039 114,039 1,114,039
17 325,589 144,226 144,226 1,144,226 117,942 117,942 1,117,942
18 354,468 149,950 149,950 1,149,950 121,278 121,278 1,121,278
19 384,791 155,254 155,254 1,155,254 123,998 123,998 1,123,998
20 416,631 160,087 160,087 1,160,087 126,022 126,022 1,126,022
25 601,361 175,634 175,634 1,175,634 123,687 123,687 1,123,687
30 837,129 169,737 169,737 1,169,737 92,440 92,440 1,092,440
35 1,138,036 129,633 129,633 1,129,633 13,565 13,565 1,013,565
40 1,522,077 35,673 35,673 1,035,673 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II
THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-13
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE I FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 35 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
$1,000,000 INITIAL SPECIFIED AMOUNT
ASSUMED ANNUAL PREMIUM (1): $12,000
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 12,600 10,566 9,966 1,010,566 9,341 8,741 1,009,341
2 25,830 20,885 20,405 1,020,885 18,454 17,974 1,018,454
3 39,721 30,899 30,539 1,030,899 27,312 26,952 1,027,312
4 54,308 40,655 40,415 1,040,655 35,910 35,670 1,035,910
5 69,623 50,176 50,056 1,050,176 44,232 44,112 1,044,232
6 85,704 59,465 59,465 1,059,465 52,273 52,273 1,052,273
7 102,589 68,517 68,517 1,068,517 60,008 60,008 1,060,008
8 120,319 77,326 77,326 1,077,326 67,441 67,441 1,067,441
9 138,935 85,894 85,894 1,085,894 74,548 74,548 1,074,548
10 158,481 94,207 94,207 1,094,207 81,333 81,333 1,081,333
11 179,006 102,279 102,279 1,102,279 87,764 87,764 1,087,764
12 200,556 110,063 110,063 1,110,063 93,824 93,824 1,093,824
13 223,184 117,555 117,555 1,117,555 99,502 99,502 1,099,502
14 246,943 124,729 124,729 1,124,729 104,782 104,782 1,104,782
15 271,890 131,572 131,572 1,131,572 109,632 109,632 1,109,632
16 298,084 138,088 138,088 1,138,088 114,039 114,039 1,114,039
17 325,589 144,226 144,226 1,144,226 117,942 117,942 1,117,942
18 354,468 149,950 149,950 1,149,950 121,278 121,278 1,121,278
19 384,791 155,254 155,254 1,155,254 123,998 123,998 1,123,998
20 416,631 160,087 160,087 1,160,087 126,022 126,022 1,126,022
25 601,361 175,634 175,634 1,175,634 123,687 123,687 1,123,687
30 837,129 169,737 169,737 1,169,737 92,440 92,440 1,092,440
35 1,138,036 129,633 129,633 1,129,633 13,565 13,565 1,013,565
40 1,522,077 35,673 35,673 1,035,673 0 0 0
45 0 0 0 0 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $12,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-14
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,469 15,669 2,000,000 16,465 15,665 2,000,000
2 34,400 34,643 34,003 2,000,000 34,626 33,986 2,000,000
3 52,962 54,700 54,220 2,000,000 54,657 54,177 2,000,000
4 72,410 76,834 76,514 2,000,000 76,749 76,429 2,000,000
5 92,831 101,258 101,098 2,000,000 101,112 100,952 2,000,000
6 114,272 128,209 128,209 2,000,000 127,978 127,978 2,000,000
7 136,786 157,946 157,946 2,000,000 157,600 157,600 2,000,000
8 160,425 190,760 190,760 2,000,000 190,261 190,261 2,000,000
9 185,246 227,018 227,018 2,000,000 226,321 226,321 2,000,000
10 211,309 267,079 267,079 2,000,000 266,133 266,133 2,000,000
11 238,674 311,344 311,344 2,000,000 310,087 310,087 2,000,000
12 267,408 360,252 360,252 2,000,000 358,610 358,610 2,000,000
13 297,578 414,288 414,288 2,000,000 412,176 412,176 2,000,000
14 329,257 473,991 473,991 2,000,000 471,307 471,307 2,000,000
15 362,520 539,953 539,953 2,000,000 536,582 536,582 2,000,000
16 397,446 612,832 612,832 2,000,000 608,640 608,640 2,000,000
17 434,118 693,355 693,355 2,000,000 688,189 688,189 2,000,000
18 472,624 782,328 782,328 2,000,000 776,019 776,019 2,000,000
19 513,055 880,642 880,642 2,000,000 873,004 873,004 2,000,000
20 555,508 989,288 989,288 2,000,000 980,120 980,120 2,000,000
25 801,815 1,730,426 1,730,426 2,318,771(3) 1,710,410 1,710,410 2,291,949(3)
30 1,116,173 2,950,957 2,950,957 3,600,167(3) 2,909,217 2,909,217 3,549,245(3)
35 1,517,381 4,953,791 4,953,791 5,746,398(3) 4,862,276 4,862,276 5,640,240(3)
40 2,029,436 8,237,310 8,237,310 8,813,922(3) 8,041,506 8,041,506 8,604,411(3)
45 2,682,963 13,627,980 13,627,980 14,309,379(3) 13,239,104 13,239,104 13,901,059(3)
50 3,517,046 22,340,730 22,340,730 23,457,766(3) 21,521,053 21,521,053 22,597,105(3)
55 4,581,572 36,208,307 36,208,307 38,018,722(3) 34,396,691 34,396,691 36,116,525(3)
60 5,940,206 58,830,352 58,830,352 59,418,655(3) 55,184,137 55,184,137 55,735,979(3)
65 7,674,207 97,276,069 97,276,069 97,276,069(3) 91,253,256 91,253,256 91,253,256(3)
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-15
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVORFLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICY
DEATH BENEFIT OPTION I;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,469 15,669 2,000,000 16,465 15,665 2,000,000
2 34,400 34,643 34,003 2,000,000 34,626 33,986 2,000,000
3 52,962 54,700 54,220 2,000,000 54,657 54,177 2,000,000
4 72,410 76,834 76,514 2,000,000 76,749 76,429 2,000,000
5 92,831 101,258 101,098 2,000,000 101,112 100,952 2,000,000
6 114,272 128,209 128,209 2,000,000 127,978 127,978 2,000,000
7 136,786 157,946 157,946 2,000,000 157,600 157,600 2,000,000
8 160,425 190,760 190,760 2,000,000 190,261 190,261 2,000,000
9 185,246 227,018 227,018 2,000,000 226,321 226,321 2,000,000
10 211,309 267,079 267,079 2,000,000 266,133 266,133 2,000,000
11 238,674 311,344 311,344 2,000,000 310,087 310,087 2,000,000
12 267,408 360,252 360,252 2,000,000 358,610 358,610 2,000,000
13 297,578 414,288 414,288 2,000,000 412,176 412,176 2,000,000
14 329,257 473,991 473,991 2,000,000 471,307 471,307 2,000,000
15 362,520 539,953 539,953 2,000,000 536,582 536,582 2,000,000
16 397,446 612,828 612,828 2,089,745(3) 608,634 608,634 2,075,441(3)
17 434,118 693,304 693,304 2,274,038(3) 688,086 688,086 2,256,922(3)
18 472,624 782,147 782,147 2,471,585(3) 775,635 775,635 2,451,007(3)
19 513,055 880,204 880,204 2,684,622(3) 872,056 872,056 2,659,769(3)
20 555,508 988,412 988,412 2,896,048(3) 978,209 978,209 2,866,153(3)
25 801,815 1,721,034 1,721,034 4,199,323(3) 1,689,859 1,689,859 4,123,255(3)
30 1,116,173 2,908,061 2,908,061 5,961,524(3) 2,817,166 2,817,166 5,775,190(3)
35 1,517,381 4,805,031 4,805,031 8,408,804(3) 4,552,858 4,552,858 7,967,502(3)
40 2,029,436 7,780,471 7,780,471 11,826,316(3) 7,137,450 7,137,450 10,848,924(3)
45 2,682,963 12,316,737 12,316,737 16,750,763(3) 10,813,142 10,813,142 14,705,873(3)
50 3,517,046 19,017,552 19,017,552 23,771,940(3) 15,863,525 15,863,525 19,829,407(3)
55 4,581,572 28,828,828 28,828,828 33,729,729(3) 22,713,082 22,713,082 26,574,306(3)
60 5,940,206 43,544,889 43,544,889 48,334,827(3) 32,126,761 32,126,761 35,660,705(3)
65 7,674,207 67,577,307 67,577,307 70,280,399(3) 45,168,488 45,168,488 46,975,228(3)
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-16
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------- ---------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ --------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,574 14,774 2,000,000 15,570 14,770 2,000,000
2 34,400 31,826 31,186 2,000,000 31,809 31,169 2,000,000
3 52,962 48,785 48,305 2,000,000 48,745 48,265 2,000,000
4 72,410 66,482 66,162 2,000,000 66,404 66,084 2,000,000
5 92,831 84,947 84,787 2,000,000 84,814 84,654 2,000,000
6 114,272 104,210 104,210 2,000,000 104,002 104,002 2,000,000
7 136,786 124,305 124,305 2,000,000 123,998 123,998 2,000,000
8 160,425 145,266 145,266 2,000,000 144,830 144,830 2,000,000
9 185,246 167,127 167,127 2,000,000 166,528 166,528 2,000,000
10 211,309 189,941 189,941 2,000,000 189,137 189,137 2,000,000
11 238,674 213,765 213,765 2,000,000 212,709 212,709 2,000,000
12 267,408 238,639 238,639 2,000,000 237,276 237,276 2,000,000
13 297,578 264,606 264,606 2,000,000 262,869 262,869 2,000,000
14 329,257 291,709 291,709 2,000,000 289,519 289,519 2,000,000
15 362,520 319,991 319,991 2,000,000 317,258 317,258 2,000,000
16 397,446 349,496 349,496 2,000,000 346,111 346,111 2,000,000
17 434,118 380,269 380,269 2,000,000 376,107 376,107 2,000,000
18 472,624 412,357 412,357 2,000,000 407,272 407,272 2,000,000
19 513,055 445,805 445,805 2,000,000 439,627 439,627 2,000,000
20 555,508 480,660 480,660 2,000,000 473,194 473,194 2,000,000
25 801,815 677,743 677,743 2,000,000 659,827 659,827 2,000,000
30 1,116,173 917,270 917,270 2,000,000 878,241 878,241 2,000,000
35 1,517,381 1,205,336 1,205,336 2,000,000 1,125,477 1,125,477 2,000,000
40 2,029,436 1,553,246 1,553,246 2,000,000 1,401,799 1,401,799 2,000,000
45 2,682,963 1,994,847 1,994,847 2,094,590(3) 1,727,469 1,727,469 2,000,000
50 3,517,046 2,545,818 2,545,818 2,673,109(3) 2,180,716 2,180,716 2,289,752(3)
55 4,581,572 3,195,155 3,195,155 3,354,913(3) 2,710,811 2,710,811 2,846,351(3)
60 5,940,206 4,003,263 4,003,263 4,043,296(3) 3,366,353 3,366,353 3,400,017(3)
65 7,674,207 5,085,578 5,085,578 5,085,578(3) 4,289,836 4,289,836 4,289,836(3)
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-17
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------- ---------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ --------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,574 14,774 2,000,000 15,570 14,770 2,000,000
2 34,400 31,826 31,186 2,000,000 31,809 31,169 2,000,000
3 52,962 48,785 48,305 2,000,000 48,745 48,265 2,000,000
4 72,410 66,482 66,162 2,000,000 66,404 66,084 2,000,000
5 92,831 84,947 84,787 2,000,000 84,814 84,654 2,000,000
6 114,272 104,210 104,210 2,000,000 104,002 104,002 2,000,000
7 136,786 124,305 124,305 2,000,000 123,998 123,998 2,000,000
8 160,425 145,266 145,266 2,000,000 144,830 144,830 2,000,000
9 185,246 167,127 167,127 2,000,000 166,528 166,528 2,000,000
10 211,309 189,941 189,941 2,000,000 189,137 189,137 2,000,000
11 238,674 213,765 213,765 2,000,000 212,709 212,709 2,000,000
12 267,408 238,639 238,639 2,000,000 237,276 237,276 2,000,000
13 297,578 264,606 264,606 2,000,000 262,869 262,869 2,000,000
14 329,257 291,709 291,709 2,000,000 289,519 289,519 2,000,000
15 362,520 319,991 319,991 2,000,000 317,258 317,258 2,000,000
16 397,446 349,496 349,496 2,000,000 346,111 346,111 2,000,000
17 434,118 380,269 380,269 2,000,000 376,107 376,107 2,000,000
18 472,624 412,357 412,357 2,000,000 407,272 407,272 2,000,000
19 513,055 445,805 445,805 2,000,000 439,627 439,627 2,000,000
20 555,508 480,660 480,660 2,000,000 473,194 473,194 2,000,000
25 801,815 677,743 677,743 2,000,000 659,827 659,827 2,000,000
30 1,116,173 917,270 917,270 2,000,000 878,241 878,241 2,000,000
35 1,517,381 1,204,740 1,204,740 2,108,295(3) 1,125,477 1,125,477 2,000,000
40 2,029,436 1,539,143 1,539,143 2,339,497(3) 1,396,323 1,396,323 2,122,411(3)
45 2,682,963 1,909,714 1,909,714 2,597,211(3) 1,665,151 1,665,151 2,264,605(3)
50 3,517,046 2,299,279 2,299,279 2,874,098(3) 1,914,593 1,914,593 2,393,241(3)
55 4,581,572 2,707,126 2,707,126 3,167,337(3) 2,141,762 2,141,762 2,505,862(3)
60 5,940,206 3,165,545 3,165,545 3,513,755(3) 2,361,150 2,361,150 2,620,876(3)
65 7,674,207 3,791,568 3,791,568 3,943,231(3) 2,581,702 2,581,702 2,684,970(3)
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-18
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLOLNIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,678 13,878 2,000,000 14,675 13,875 2,000,000
2 34,400 29,116 28,476 2,000,000 29,100 28,460 2,000,000
3 52,962 43,314 42,834 2,000,000 43,276 42,796 2,000,000
4 72,410 57,277 56,957 2,000,000 57,204 56,884 2,000,000
5 92,831 71,006 70,846 2,000,000 70,885 70,725 2,000,000
6 114,272 84,501 84,501 2,000,000 84,315 84,315 2,000,000
7 136,786 97,765 97,765 2,000,000 97,493 97,493 2,000,000
8 160,425 110,798 110,798 2,000,000 110,417 110,417 2,000,000
9 185,246 123,601 123,601 2,000,000 123,084 123,084 2,000,000
10 211,309 136,173 136,173 2,000,000 135,488 135,488 2,000,000
11 238,674 148,515 148,515 2,000,000 147,625 147,625 2,000,000
12 267,408 160,623 160,623 2,000,000 159,486 159,486 2,000,000
13 297,578 172,501 172,501 2,000,000 171,064 171,064 2,000,000
14 329,257 184,157 184,157 2,000,000 182,358 182,358 2,000,000
15 362,520 195,584 195,584 2,000,000 193,352 193,352 2,000,000
16 397,446 206,774 206,774 2,000,000 204,023 204,023 2,000,000
17 434,118 217,715 217,715 2,000,000 214,345 214,345 2,000,000
18 472,624 228,399 228,399 2,000,000 224,292 224,292 2,000,000
19 513,055 238,809 238,809 2,000,000 233,824 233,824 2,000,000
20 555,508 248,927 248,927 2,000,000 242,903 242,903 2,000,000
25 801,815 294,312 294,312 2,000,000 279,587 279,587 2,000,000
30 1,116,173 327,034 327,034 2,000,000 293,094 293,094 2,000,000
35 1,517,381 335,245 335,245 2,000,000 257,334 257,334 2,000,000
40 2,029,436 292,343 292,343 2,000,000 115,553 115,553 2,000,000
45 2,682,963 130,054 130,054 2,000,000 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II
THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-19
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE POLICY
DEATH BENEFIT OPTION I;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,678 13,878 2,000,000 14,675 13,875 2,000,000
2 34,400 29,116 28,476 2,000,000 29,100 28,460 2,000,000
3 52,962 43,314 42,834 2,000,000 43,276 42,796 2,000,000
4 72,410 57,277 56,957 2,000,000 57,204 56,884 2,000,000
5 92,831 71,006 70,846 2,000,000 70,885 70,725 2,000,000
6 114,272 84,501 84,501 2,000,000 84,315 84,315 2,000,000
7 136,786 97,765 97,765 2,000,000 97,493 97,493 2,000,000
8 160,425 110,798 110,798 2,000,000 110,417 110,417 2,000,000
9 185,246 123,601 123,601 2,000,000 123,084 123,084 2,000,000
10 211,309 136,173 136,173 2,000,000 135,488 135,488 2,000,000
11 238,674 148,515 148,515 2,000,000 147,625 147,625 2,000,000
12 267,408 160,623 160,623 2,000,000 159,486 159,486 2,000,000
13 297,578 172,501 172,501 2,000,000 171,064 171,064 2,000,000
14 329,257 184,157 184,157 2,000,000 182,358 182,358 2,000,000
15 362,520 195,584 195,584 2,000,000 193,352 193,352 2,000,000
16 397,446 206,774 206,774 2,000,000 204,023 204,023 2,000,000
17 434,118 217,715 217,715 2,000,000 214,345 214,345 2,000,000
18 472,624 228,399 228,399 2,000,000 224,292 224,292 2,000,000
19 513,055 238,809 238,809 2,000,000 233,824 233,824 2,000,000
20 555,508 248,927 248,927 2,000,000 242,903 242,903 2,000,000
25 801,815 294,312 294,312 2,000,000 279,587 279,587 2,000,000
30 1,116,173 327,034 327,034 2,000,000 293,094 293,094 2,000,000
35 1,517,381 335,245 335,245 2,000,000 257,334 257,334 2,000,000
40 2,029,436 292,343 292,343 2,000,000 115,553 115,553 2,000,000
45 2,682,963 130,054 130,054 2,000,000 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND
DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION
CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II
THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-20
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,469 15,669 2,016,469 16,465 15,665 2,016,465
2 34,400 34,643 34,003 2,034,643 34,625 33,985 2,034,625
3 52,962 54,700 54,220 2,054,700 54,655 54,175 2,054,655
4 72,410 76,832 76,512 2,076,832 76,745 76,425 2,076,745
5 92,831 101,254 101,094 2,101,254 101,103 100,943 2,101,103
6 114,272 128,201 128,201 2,128,201 127,960 127,960 2,127,960
7 136,786 157,933 157,933 2,157,933 157,567 157,567 2,157,567
8 160,425 190,736 190,736 2,190,736 190,204 190,204 2,190,204
9 185,246 226,978 226,978 2,226,978 226,229 226,229 2,226,229
10 211,309 267,017 267,017 2,267,017 265,987 265,987 2,265,987
11 238,674 311,248 311,248 2,311,248 309,861 309,861 2,309,861
12 267,408 360,106 360,106 2,360,106 358,270 358,270 2,358,270
13 297,578 414,072 414,072 2,414,072 411,674 411,674 2,411,674
14 329,257 473,676 473,676 2,473,676 470,576 470,576 2,470,576
15 362,520 539,500 539,500 2,539,500 535,531 535,531 2,535,531
16 397,446 612,186 612,186 2,612,186 607,145 607,145 2,607,145
17 434,118 692,442 692,442 2,692,442 686,084 686,084 2,686,084
18 472,624 781,049 781,049 2,781,049 773,077 773,077 2,773,077
19 513,055 878,862 878,862 2,878,862 868,921 868,921 2,868,921
20 555,508 986,827 986,827 2,986,827 974,491 974,491 2,974,491
25 801,815 1,719,233 1,719,233 3,719,233 1,685,170 1,685,170 3,685,170
30 1,116,173 2,914,160 2,914,160 4,914,160 2,827,322 2,827,322 4,827,322
35 1,517,381 4,852,961 4,852,961 6,852,961 4,641,162 4,641,162 6,641,162
40 2,029,436 7,978,376 7,978,376 9,978,376 7,487,794 7,487,794 9,487,794
45 2,682,963 12,972,531 12,972,531 14,972,531 11,889,102 11,889,102 13,889,102
50 3,517,046 20,892,352 20,892,352 22,892,352 18,643,560 18,643,560 20,643,560
55 4,581,572 33,474,364 33,474,364 35,474,364 29,013,332 29,013,332 31,013,332
60 5,940,206 53,668,533 53,668,533 55,668,533 45,022,236 45,022,236 47,022,236
65 7,674,207 86,427,333 86,427,333 88,427,333 68,017,463 68,017,463 70,017,463
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-21
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 12% (10.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ----------------------------------- ----------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ ---------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 16,469 15,669 2,016,469 16,465 15,665 2,016,465
2 34,400 34,643 34,003 2,034,643 34,625 33,985 2,034,625
3 52,962 54,700 54,220 2,054,700 54,655 54,175 2,054,655
4 72,410 76,832 76,512 2,076,832 76,745 76,425 2,076,745
5 92,831 101,254 101,094 2,101,254 101,103 100,943 2,101,103
6 114,272 128,201 128,201 2,128,201 127,960 127,960 2,127,960
7 136,786 157,933 157,933 2,157,933 157,567 157,567 2,157,567
8 160,425 190,736 190,736 2,190,736 190,204 190,204 2,190,204
9 185,246 226,978 226,978 2,226,978 226,229 226,229 2,226,229
10 211,309 267,017 267,017 2,267,017 265,987 265,987 2,265,987
11 238,674 311,248 311,248 2,311,248 309,861 309,861 2,309,861
12 267,408 360,106 360,106 2,360,106 358,270 358,270 2,358,270
13 297,578 414,072 414,072 2,414,072 411,674 411,674 2,411,674
14 329,257 473,676 473,676 2,473,676 470,576 470,576 2,470,576
15 362,520 539,500 539,500 2,539,500 535,531 535,531 2,535,531
16 397,446 612,186 612,186 2,612,186 607,145 607,145 2,607,145
17 434,118 692,442 692,442 2,692,442 686,084 686,084 2,686,084
18 472,624 781,049 781,049 2,781,049 773,077 773,077 2,773,077
19 513,055 878,862 878,862 2,878,862 868,921 868,921 2,868,921
20 555,508 986,827 986,827 2,986,827 974,491 974,491 2,974,491
25 801,815 1,718,338 1,718,338 4,192,746(3) 1,683,516 1,683,516 4,107,778(3)
30 1,116,173 2,903,661 2,903,661 5,952,506(3) 2,806,961 2,806,961 5,754,270(3)
35 1,517,381 4,797,912 4,797,912 8,396,346(3) 4,536,719 4,536,719 7,939,258(3)
40 2,029,436 7,769,088 7,769,088 11,809,014(3) 7,112,488 7,112,488 10,810,981(3)
45 2,682,963 12,298,859 12,298,859 16,726,449(3) 10,775,654 10,775,654 14,654,889(3)
50 3,517,046 18,990,086 18,990,086 23,737,608(3) 15,808,847 15,808,847 19,761,059(3)
55 4,581,572 28,787,330 28,787,330 33,681,176(3) 22,635,110 22,635,110 26,483,078(3)
60 5,940,206 43,482,343 43,482,343 48,265,401(3) 32,016,783 32,016,783 35,538,629(3)
65 7,674,207 67,480,381 67,480,381 70,179,596(3) 44,735,584 44,735,584 46,735,584
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
(3) Increase is due to adjustment by the corridor percentage. See "Death
Benefits".
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 12% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-22
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------- ---------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ --------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,574 14,774 2,015,574 15,570 14,770 2,015,570
2 34,400 31,826 31,186 2,031,826 31,809 31,169 2,031,809
3 52,962 48,785 48,305 2,048,785 48,743 48,263 2,048,743
4 72,410 66,481 66,161 2,066,481 66,400 66,080 2,066,400
5 92,831 84,943 84,783 2,084,943 84,806 84,646 2,084,806
6 114,272 104,204 104,204 2,104,204 103,988 103,988 2,103,988
7 136,786 124,294 124,294 2,124,294 123,973 123,973 2,123,973
8 160,425 145,248 145,248 2,145,248 144,789 144,789 2,144,789
9 185,246 167,099 167,099 2,167,099 166,463 166,463 2,166,463
10 211,309 189,898 189,898 2,189,898 189,037 189,037 2,189,037
11 238,674 213,701 213,701 2,213,701 212,561 212,561 2,212,561
12 267,408 238,547 238,547 2,238,547 237,061 237,061 2,237,061
13 297,578 264,475 264,475 2,264,475 262,564 262,564 2,262,564
14 329,257 291,525 291,525 2,291,525 289,092 289,092 2,289,092
15 362,520 319,736 319,736 2,319,736 316,667 316,667 2,316,667
16 397,446 349,147 349,147 2,349,147 345,304 345,304 2,345,304
17 434,118 379,795 379,795 2,379,795 375,015 375,015 2,375,015
18 472,624 411,719 411,719 2,411,719 405,808 405,808 2,405,808
19 513,055 444,953 444,953 2,444,953 437,678 437,678 2,437,678
20 555,508 479,529 479,529 2,479,529 470,618 470,618 2,470,618
25 801,815 673,476 673,476 2,673,476 650,334 650,334 2,650,334
30 1,116,173 902,708 902,708 2,902,708 846,950 846,950 2,846,950
35 1,517,381 1,158,266 1,158,266 3,158,266 1,028,513 1,028,513 3,028,513
40 2,029,436 1,409,274 1,409,274 3,409,274 1,123,184 1,123,184 3,123,184
45 2,682,963 1,572,562 1,572,562 3,572,562 973,827 973,827 2,973,827
50 3,517,046 1,479,164 1,479,164 3,479,164 322,779 322,779 2,322,779
55 4,581,572 900,701 900,701 2,900,701 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-23
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY OF AMERICA
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 6% (4.40% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ---------------------------------- ---------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ --------- ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 15,574 14,774 2,015,574 15,570 14,770 2,015,570
2 34,400 31,826 31,186 2,031,826 31,809 31,169 2,031,809
3 52,962 48,785 48,305 2,048,785 48,743 48,263 2,048,743
4 72,410 66,481 66,161 2,066,481 66,400 66,080 2,066,400
5 92,831 84,943 84,783 2,084,943 84,806 84,646 2,084,806
6 114,272 104,204 104,204 2,104,204 103,988 103,988 2,103,988
7 136,786 124,294 124,294 2,124,294 123,973 123,973 2,123,973
8 160,425 145,248 145,248 2,145,248 144,789 144,789 2,144,789
9 185,246 167,099 167,099 2,167,099 166,463 166,463 2,166,463
10 211,309 189,898 189,898 2,189,898 189,037 189,037 2,189,037
11 238,674 213,701 213,701 2,213,701 212,561 212,561 2,212,561
12 267,408 238,547 238,547 2,238,547 237,061 237,061 2,237,061
13 297,578 264,475 264,475 2,264,475 262,564 262,564 2,262,564
14 329,257 291,525 291,525 2,291,525 289,092 289,092 2,289,092
15 362,520 319,736 319,736 2,319,736 316,667 316,667 2,316,667
16 397,446 349,147 349,147 2,349,147 345,304 345,304 2,345,304
17 434,118 379,795 379,795 2,379,795 375,015 375,015 2,375,015
18 472,624 411,719 411,719 2,411,719 405,808 405,808 2,405,808
19 513,055 444,953 444,953 2,444,953 437,678 437,678 2,437,678
20 555,508 479,529 479,529 2,479,529 470,618 470,618 2,470,618
25 801,815 673,476 673,476 2,673,476 650,334 650,334 2,650,334
30 1,116,173 902,708 902,708 2,902,708 846,950 846,950 2,846,950
35 1,517,381 1,158,266 1,158,266 3,158,266 1,028,513 1,028,513 3,028,513
40 2,029,436 1,409,274 1,409,274 3,409,274 1,123,184 1,123,184 3,123,184
45 2,682,963 1,572,562 1,572,562 3,572,562 973,827 973,827 2,973,827
50 3,517,046 1,479,164 1,479,164 3,479,164 322,779 322,779 2,322,779
55 4,581,572 900,701 900,701 2,900,701 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 6% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-24
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
GUIDELINE PREMIUM TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED --------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,678 13,878 2,014,678 14,675 13,875 2,014,675
2 34,400 29,116 28,476 2,029,116 29,099 28,459 2,029,099
3 52,962 43,314 42,834 2,043,314 43,275 42,795 2,043,275
4 72,410 57,276 56,956 2,057,276 57,201 56,881 2,057,201
5 92,831 71,003 70,843 2,071,003 70,878 70,718 2,070,878
6 114,272 84,497 84,497 2,084,497 84,304 84,304 2,084,304
7 136,786 97,757 97,757 2,097,757 97,474 97,474 2,097,474
8 160,425 110,785 110,785 2,110,785 110,387 110,387 2,110,387
9 185,246 123,581 123,581 2,123,581 123,037 123,037 2,123,037
10 211,309 136,144 136,144 2,136,144 135,420 135,420 2,135,420
11 238,674 148,473 148,473 2,148,473 147,528 147,528 2,147,528
12 267,408 160,565 160,565 2,160,565 159,350 159,350 2,159,350
13 297,578 172,421 172,421 2,172,421 170,877 170,877 2,170,877
14 329,257 184,049 184,049 2,184,049 182,106 182,106 2,182,106
15 362,520 195,438 195,438 2,195,438 193,016 193,016 2,193,016
16 397,446 206,581 206,581 2,206,581 203,580 203,580 2,203,580
17 434,118 217,463 217,463 2,217,463 213,767 213,767 2,213,767
18 472,624 228,072 228,072 2,228,072 223,544 223,544 2,223,544
19 513,055 238,387 238,387 2,238,387 232,864 232,864 2,232,864
20 555,508 248,387 248,387 2,248,387 241,680 241,680 2,241,680
25 801,815 292,614 292,614 2,292,614 275,861 275,861 2,275,861
30 1,116,173 322,244 322,244 2,322,244 283,159 283,159 2,283,159
35 1,517,381 322,748 322,748 2,322,748 233,824 233,824 2,233,824
40 2,029,436 263,350 263,350 2,263,350 72,335 72,335 2,072,335
45 2,682,963 76,406 76,406 2,076,406 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE AND DEATH
BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY CHUBB COLONAIL LIFE, SEPARATE ACCOUNT D, OR JPM SERIES TRUST II THAT
THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER ANY PERIOD OF TIME.
A-25
<PAGE>
CHUBB COLONIAL LIFE INSURANCE COMPANY
CHUBB COLONIAL HERITAGE II JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT OPTION II;
CASH VALUE ACCUMULATION TEST ASSUMED HYPOTHETICAL GROSS
MALE NON-SMOKER ISSUE AGE 40 ANNUAL RATE OF RETURN: 0% (-1.60% NET)
FEMALE NON-SMOKER ISSUE AGE 35 ASSUMED ANNUAL PREMIUM (1): $16,000
$2,000,000 INITIAL SPECIFIED AMOUNT
<TABLE>
<CAPTION>
PREMIUMS ASSUMING CURRENT COSTS ASSUMING GUARANTEED COSTS
END ACCUMULATED ------------------------------- --------------------------------
OF AT 5% INTEREST ACCUMULATION CASH DEATH ACCUMULATION CASH DEATH
YEAR PER YEAR VALUE(2) VALUE(2) VALUE(2) BENEFITS(2) VALUE(2) BENEFIT(2)
- ---- -------------- ------------ -------- --------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,800 14,678 13,878 2,014,678 14,675 13,875 2,014,675
2 34,400 29,116 28,476 2,029,116 29,099 28,459 2,029,099
3 52,962 43,314 42,834 2,043,314 43,275 42,795 2,043,275
4 72,410 57,276 56,956 2,057,276 57,201 56,881 2,057,201
5 92,831 71,003 70,843 2,071,003 70,878 70,718 2,070,878
6 114,272 84,497 84,497 2,084,497 84,304 84,304 2,084,304
7 136,786 97,757 97,757 2,097,757 97,474 97,474 2,097,474
8 160,425 110,785 110,785 2,110,785 110,387 110,387 2,110,387
9 185,246 123,581 123,581 2,123,581 123,037 123,037 2,123,037
10 211,309 136,144 136,144 2,136,144 135,420 135,420 2,135,420
11 238,674 148,473 148,473 2,148,473 147,528 147,528 2,147,528
12 267,408 160,565 160,565 2,160,565 159,350 159,350 2,159,350
13 297,578 172,421 172,421 2,172,421 170,877 170,877 2,170,877
14 329,257 184,049 184,049 2,184,049 182,106 182,106 2,182,106
15 362,520 195,438 195,438 2,195,438 193,016 193,016 2,193,016
16 397,446 206,581 206,581 2,206,581 203,580 203,580 2,203,580
17 434,118 217,463 217,463 2,217,463 213,767 213,767 2,213,767
18 472,624 228,072 228,072 2,228,072 223,544 223,544 2,223,544
19 513,055 238,387 238,387 2,238,387 232,864 232,864 2,232,864
20 555,508 248,387 248,387 2,248,387 241,680 241,680 2,241,680
25 801,815 292,614 292,614 2,292,614 275,861 275,861 2,275,861
30 1,116,173 322,244 322,244 2,322,244 283,159 283,159 2,283,159
35 1,517,381 322,748 322,748 2,322,748 233,824 233,824 2,233,824
40 2,029,436 263,350 263,350 2,263,350 72,335 72,335 2,072,335
45 2,682,963 76,406 76,406 2,076,406 0 0 0
50 0 0 0 0 0 0 0
55 0 0 0 0 0 0 0
60 0 0 0 0 0 0 0
65 0 0 0 0 0 0 0
</TABLE>
- -------
(1) Assumes a $16,000 premium is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency
or in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
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 INVESTMENT RATES OF RETURN
MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT
RATES OF RETURN FOR JPM SERIES TRUST II. THE ACCUMULATION VALUE, CASH VALUE
AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE
ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0% OVER A PERIOD OF YEARS, BUT
FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO
REPRESENTATION CAN BE MADE BY CHUBB COLONIAL LIFE, SEPARATE ACCOUNT D, OR JPM
SERIES TRUST II THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR
ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
A-26
<PAGE>
PART II
UNDERTAKINGS TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant to
authority conferred in that section.
UNDERTAKING REGARDING INDEMNIFICATION
Pursuant to Rule 484(b)(1) of the Securities Act of 1933, insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant, the
Registrant has been advised that in the option of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer of controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATIONS REGARDING FEES AND CHARGES
The fees and charges deducted under the Contracts, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by Chubb Colonial Life Insurance Company.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following pages and documents:
The facing sheet
The prospectus consisting of _______ pages
The undertaking to file reports
The undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933
regarding indemnification
The signatures
Written consents of the following persons:
(a) Michael J. LeBoeuf, FSA, MAAA, contained in Exhibit 6 below.
(Incorporates by reference to Registrant's Post-Effective Amendment No. 2 to the
Registration Statement on Form S-6 of Colonial Separate Account D, filed on
February 27, 1996, File No. 33-88632.)
<PAGE>
(b) Ernst & Young LLP
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as to exhibits in Form N-8B-2:
(a) Certified Copy of Resolution of Board of Directors of The Colonial Life
Insurance Company of America establishing the Colonial Separate Account D.
(b) Not Applicable
(c) (i) Form of Distribution Agreement among The Colonial Life Insurance
Company of America, Colonial Separate Account D, and Chubb Securities
Corporation.
(ii) Specimen Variable Contracts Selling Agreement between Chubb
Securities Corporation and Selling Broker-Dealers.
(iii) Specimen District Manager's Agreement of Chubb Securities
Corporation.
(iv) Specimen Registered Representative's Agreement of Chubb Securities
Corporation.
(v) Schedule of Commissions.
(d) Not Applicable
(e) (i) Specimen flexible premium variable life insurance policy.
(ii) Specimen joint and last survivor flexible premium variable life
insurance policy.
(iii) Forms of Riders
(f) (i) Amended and Restated Charter, with all amendments, of The Colonial
Life Insurance Company of America./3/
(ii) By-Laws of The Colonial Life Insurance Company of America./3/
(g) Not Applicable
(h) (i) Investment Management Agreement between Chubb Series Trust and Chubb
Investment Advisory Corporation with respect to the Resolute Treasury Money
Market Portfolio./1/
(ii) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Bond
Portfolio./1/
(iii) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory.
<PAGE>
11. Form of Trust Agreement between The Colonial Life Insurance Company of
America and financial institution acting as trustee and Policyholder of
the Group Policies. /5/
12. (a) Memorandum regarding reliance on Order of the Commission.
(b) Memorandum regarding reliance on Order of the Commission to deduct
the DAC tax charge. /5/
13. EDGAR Financial Data Schedule. Not applicable.
14. Powers of Attorney /5/
- -------------
/1/ Incorporated by reference to Registrant's Pre-effective Amendment No. 2 to
the Registration Statement on Form N-1A, of Chubb Series Trust filed on
July 22, 1994, File No. 33-72834.
/2/ Incorporated by reference to the Registration Statement on Form N-1A of
Chubb Series Trust, filed on December 10, 1993, File No. 33-72834.
/3/ Incorporated by reference to the Registration Statement on Form S-6 of
Colonial Separate Account B, filed April 8, 1994, File No. 33-77496.
/4/ Incorporated by reference to the Registration Statement on Form S-6 of
Chubb Separate Account C, filed April 11, 1995, File No. 33-72830.
/5/ Incorporated by reference to the Registrant's Post-Effective Amendment No.
2 to the Registration Statement on Form S-6 of Colonial Separate Account D,
filed on February 27, 1996, File No. 33-88632.
<PAGE>
Corporation with respect to the Resolute Equity Portfolio/2//
(iv) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute Small Company
Portfolio/2/.
(v) Investment Management Agreement between Chubb Series Trust and
Chubb Investment Advisory Corporation with respect to the Resolute International
Equity Portfolio/2/.
(vi) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Treasury Money Market Portfolio/2/.
(vii) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Bond Portfolio/2/.
(viii) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Equity Portfolio/2/.
(ix) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute Small Company Portfolio/2/.
(x) Sub-Investment Management Agreement among Chubb Series Trust,
Chubb Investment Advisory Corporation and Morgan Guaranty Trust Company of New
York with respect to the Resolute International Equity Portfolio/2/.
(xi) Custodial Services Agreement between Chubb Series Trust, and
Morgan Guaranty Trust Company of New York/3/.
(i) Not applicable
(j) Application/4/
2. Specimen Policy (Same as 1(e)).
3. Opinion of counsel as to securities being registered/4/.
4. Not applicable.
5. Not applicable.
6. Actuarial opinions and consents of Michael J. LeBoeuf, FSA, MAAA/4/.
7. Consent of Ernst & Young LLP, independent auditors.
8. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the
1940 Act (to be filed by Amendment.)
9. Representations, description and undertakings regarding mortality and
expense risk charge, pursuant to Rule 6e-3(T)(b)(13)(iii)(F)/ 4/.
10. Form of Reinsurance Agreement/4/.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Colonial Separate Account C, certifies that is meets the requirements of
Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment
No. 3 to the Registration Statement and has duly caused this Post-Effective
Amendment No. 3 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in Concord, New Hampshire, on the 1st day of May, 1997.
(Seal)
Colonial Separate Account
(Registrant)
Chubb Colonial Life Insurance Company
(Depositor)
By: /s/ Frederick H. Condon
---------------------------------
Frederick H. Condon
Title: Senior Vice President,
General Counsel and Secretary
------------------------------
Attest:
/s/ Charles C. Cornelio
----------------------------------------
Charles C. Cornelio, Assistant Secretary
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Chubb Colonial
Life Insurance Company has duly caused this Post-Effective Amendment No. 3 to
the Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in Concord, New Hampshire on the 1st day of May, 1997.
CHUBB LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Frederick H. Condon
-----------------------------------------
Frederick H. Condon
Title: Senior Vice President, General Counsel
and Secretary
--------------------------------------
ATTEST:
/s/ Charles C. Cornelio
- ----------------------------------------
Charles C. Cornelio, Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signatures Title
---------- -----
- ------------------------------------ Director, Senior Vice President
Ronald R. Angarella
- ------------------------------------ Director, Senior Vice President,
Frederick H. Condon General Counsel and Secretary
- ------------------------------------ Director, Executive Vice President,
Charles C. Cornelio Chief Administrative Officer
and Assistant Secretary
- ------------------------------------ Director, Chairman
Dean R. O'Hare
- ------------------------------------ Director, President and Chief Executive
Theresa M. Stone Officer
- ------------------------------------ Director, Executive Vice President and
Richard V. Werner Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Pages
-----
Exhibit 7 Consent of Ernst & Young LLP
<PAGE>
EXHIBIT 7
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 5, 1997 for Chubb Colonial Life Insurance Company
(formerly "The Colonial Life Insurance Company of America") in Post-Effective
Amendment No. 3 to the Registration Statement (Form S-6 No. 33-88632) and
related Prospectus for the registration of units of interest in the Colonial
Separate Account D under group flexible premium variable life insurance and
group joint and last survivor flexible premium variable life insurance policies
offered by Chubb Colonial Life Insurance Company.
ERNST & YOUNG LLP
Boston, Massachusetts
May 6, 1997
