<PAGE>
As filed with the Securities and Exchange Commission January 22, 1999
File No. 33-89988
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
POST-EFFECTIVE AMENDMENT NO. 5
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: Separate Account VL II
B. Name of depositor: Hartford Life and Annuity Insurance Company
C. Complete address of depositor's principal executive offices:
P. O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Thomas S. Clark, Esq.
Hartford Life and Annuity Insurance Company
P. O. Box 2999
Hartford, CT 06104-2999
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
-----
on May 1, 1999 pursuant to paragraph (b) of Rule 485
-----
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-----
X on May 1, 1999 pursuant to paragraph (a)(1) 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: Pursuant to Rule
24f-2 under the Investment Company Act of 1940, the Registrant has
registered an indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the
securities being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable
after the effective date of this registration statement.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
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1. Cover page
2. Cover page
3. Not applicable
4. Hartford; Distribution of the Policies
5. Summary - Separate Account VL II; Separate Account VL II -
General
6. Separate Account VL II - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; Separate Account VL II - Funds; Detailed
Description of Policy Benefits and Provisions - Application
for a Policy; Other Matters - Voting Rights, Dividends
11. Summary; Separate Account VL II - Funds
12. Summary; Separate Account VL II - Funds
13. Deductions and Charges from the Account Value; Distribution
of the Policies; Federal Tax Considerations
14. Detailed Description of Policy Benefits and Provisions -
Application for a Policy
15. Detailed Description of Policy Benefits and Provisions -
Allocation of Premium Payments
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
16. Separate Account VL II - Funds; Detailed Description of
Policy Benefits and Provisions - Allocation of Premium
Payments
17. Summary; Detailed Description of Policy Benefits and
Provisions - Surrender, The Right to Examine or Exchange
a Policy
18. Separate Account VL II - Funds; Deduction and Charges from
the Account Value; Federal Tax Considerations
19. Other Matters - Statements to Policy Owners
20. Not applicable
21. Detailed Description of Policy Benefits and Provisions -
Policy Loans
22. Not applicable
23. Safekeeping of the Separate Account's Assets
24. Other Matters - Assignment
25. Hartford
26. Not applicable
27. Hartford
28. Hartford
29. Hartford
30. Not applicable
31. Not applicable
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
32. Not applicable
33. Not applicable
34. Not applicable
35. Distribution of the Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
39. Hartford; Distribution of the Policies
40. Not applicable
41. Hartford; Distribution of the Policies
42. Not applicable
43. Not applicable
44. Detailed Description of Policy Benefits and Provisions -
Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Policy Benefits and Provisions -
Premiums - Amount Payable on Surrender of the Policy
47. Separate Account VL II - Funds
48. Cover page; Hartford
49. Not applicable
50. Separate Account VL II - General
51. Summary; Hartford; Detailed Description of Policy Benefits
and Provisions; Other Matters - Beneficiary
52. Separate Account VL II - Funds, Investment Advisers
53. Federal Tax Considerations
54. Not Applicable
<PAGE>
PART I
<PAGE>
STAG LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICIES
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
[LOGO] TELEPHONE: 1-800-231-5453
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This Prospectus describes information you should know before you purchase Stag
Variable Life Last Survivor variable life insurance policy. Please read it
carefully.
Stag Variable Life Last Survivor is a contract between you and Hartford Life and
Annuity Insurance Company. You agree to make sufficient premium payments to us,
and we agree to pay a death benefit to your beneficiary. The policy is a last
survivor flexible premium variable life insurance policy. It is:
X Last survivor, because we pay a death benefit after the death of the last
surviving insured.
X Flexible premium, because you may add payments to your policy after the first
payment.
X Variable, because the value of your life insurance policy will fluctuate with
the performance of the underlying investment options you select and the
Fixed Account.
At purchase, you allocate your payments to "Sub-Accounts" or subdivisions of our
Separate Account, an account that keeps your life insurance policy assets
separate from our company assets. These Sub-Accounts then purchase shares of
mutual funds set up exclusively for variable annuity or variable life insurance
products. These funds are not the same mutual funds that you
buy through your stockbroker or through a retail mutual fund, but they may have
similar investment strategies and the same portfolio managers as retail mutual
funds. This life insurance policy offers you Funds with investment strategies
ranging from conservative to aggressive and you may pick those Funds that meet
you investment style. The Sub-Accounts and the funds are listed below:
<TABLE>
<CAPTION>
SUB-ACCOUNT PURCHASES SHARES OF:
- ---------------------------------------- ------------------------------------------------------------
<S> <C>
Hartford Advisers Fund Sub-Account -- Class IA of Hartford Advisers HLS Fund, Inc. ("Hartford
Advisers HLS Fund")
Hartford Bond Fund Sub-Account -- Class IA of Hartford Bond HLS Fund, Inc. ("Hartford Bond HLS
Fund")
Hartford Capital Appreciation Fund -- Class IA of Hartford Capital Appreciation HLS Fund, Inc.
Sub-Account ("Hartford Capital Appreciation HLS Fund")
Hartford Dividend and Growth Fund -- Class IA of Hartford Dividend and Growth HLS Fund, Inc.
Sub-Account ("Hartford Dividend and Growth HLS Fund")
Hartford Growth and Income Fund -- Class IA of Hartford Growth and Income HLS Fund, Inc.
Sub-Account ("Hartford Growth and Income HLS Fund")
Hartford Index Fund Sub-Account -- Class IA of Hartford Index HLS Fund, Inc. ("Hartford Index
HLS Fund")
Hartford International Advisers Fund -- Class IA of Hartford International Advisers HLS Fund, Inc.
Sub-Account ("Hartford International Advisers HLS Fund")
Hartford International Opportunities -- Class IA of Hartford International Opportunities HLS Fund,
Fund Sub-Account Inc. ("Hartford International Opportunities HLS Fund")
Hartford MidCap Fund Sub-Account -- Class IA of Hartford MidCap HLS Fund, Inc. ("Hartford MidCap
HLS Fund")
Hartford Mortgage Securities Fund -- Class IA of Hartford Mortgage Securities HLS Fund, Inc.
Sub-Account ("Hartford Mortgage Securities HLS Fund")
Hartford Money Market Fund -- Class IA of Hartford Money Market HLS Fund, Inc. ("Hartford
Sub-Account Money Market HLS Fund")
Hartford Small Company Fund -- Class IA of Hartford Small Company HLS Fund, Inc. ("Hartford
Sub-Account Small Company HLS Fund")
Hartford Stock Fund Sub-Account -- Class IA of Hartford Stock HLS Fund, Inc. ("Hartford Stock
HLS Fund")
Putnam VT Asia Pacific Growth Fund -- Class IA of Putnam VT Asia Pacific Growth Fund of the Putnam
Sub-Account Variable Trust
Putnam VT Diversified Income Fund -- Class IA of Putnam VT Diversified Income Fund of Putnam
Sub-Account Variable Trust
Putnam VT Global Asset Allocation Fund -- Class IA of Putnam VT Global Asset Allocation Fund of Putnam
Sub-Account Variable Trust
Putnam VT Global Growth Fund -- Class IA of Putnam VT Global Growth Fund of Putnam Variable
Sub-Account Trust
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUB-ACCOUNT PURCHASES SHARES OF:
- ---------------------------------------- ------------------------------------------------------------
Putnam VT Growth and Income Fund -- Class IA of Putnam VT Growth and Income Fund of Putnam
Sub-Account Variable Trust
<S> <C>
Putnam VT Health Sciences Fund -- Class IA of Putnam VT Health Sciences Fund of Putnam
Sub-Account Variable Trust
Putnam VT High Yield Fund -- Class IA of Putnam VT High Yield Fund of Putnam Variable
Sub-Account Trust
Putnam VT International Growth Fund -- Class IA of Putnam VT International Growth Fund of Putnam
Sub-Account Variable Trust
Putnam VT International Growth and -- Class IA of Putnam VT International Growth and Income Fund
Income Fund Sub-Account of Putnam Variable Trust
Putnam VT International New -- Class IA of Putnam VT International New Opportunities Fund
Opportunities Fund Sub-Account of Putnam Variable Trust
Putnam VT Investors Fund Sub-Account -- Class IA of Putnam VT Investors Fund of Putnam Variable
Trust
Putnam VT Money Market Fund -- Class IA of Putnam VT Money Market Fund of Putnam Variable
Sub-Account Trust
Putnam VT New Opportunities Fund -- Class IA of Putnam VT New Opportunities Fund of Putnam
Sub-Account Variable Trust
Putnam VT New Value Fund -- Class IA of Putnam VT New Value Fund of Putnam Variable
Sub-Account Trust
Putnam VT OTC & Emerging Growth Fund -- Class IA of Putnam VT OTC & Emerging Growth Fund of Putnam
Sub-Account Variable Trust
Putnam VT The George Putnam Fund of -- Class IA of Putnam VT The George Putnam Fund of Boston of
Boston Sub-Account Putnam Variable Trust
Putnam VT U.S. Government and High -- Class IA of Putnam VT U.S. Government and High Quality Bond
Quality Bond Fund Sub-Account Fund of Putnam Variable Trust
Putnam VT Utilities Growth and Income -- Class IA of Putnam VT Utilities Growth and Income Fund of
Fund Sub-Account Putnam Variable Trust
Putnam VT Vista Fund Sub-Account -- Class IA of Putnam VT Vista Fund of Putnam Variable Trust
Putnam VT Voyager Fund Sub-Account -- Class IA of Putnam VT Voyager Fund of Putnam Variable Trust
Fidelity VIP Equity-Income Portfolio -- Fidelity VIP Equity-Income Portfolio of Variable Insurance
Sub-Account Products Fund
Fidelity VIP Overseas Portfolio -- Fidelity VIP Overseas Portfolio of Variable Insurance
Sub-Account Products Fund
Fidelity VIP II Asset Manager Portfolio -- Fidelity VIP II Asset Manager Portfolio of Variable
Sub-Account Insurance Products Fund II
</TABLE>
You may also allocate some or all of your premium payments to the Fixed Account,
which pays an interest rate. Payments put in the Fixed Account are not
segregated from our assets like the assets of the Separate Account.
If you decide to buy this life insurance policy, you should keep this prospectus
for your records. Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these securities, or
determined if this Prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
This Prospectus can also be obtained from the Securities and Exchange
Commission's website (HTTP://WWW.SEC.GOV).
This life insurance policy IS NOT:
- - a bank deposit or obligation
- - federally insured
- - endorsed by any bank or governmental agency
- - available for sale in all states
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PROSPECTUS DATED: MAY 1, 1999
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 3
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SPECIAL TERMS......................................................... 5
SUMMARY............................................................... 7
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS................ 10
General............................................................. 10
Premiums............................................................ 10
Premium Payment Flexibility....................................... 10
Allocation of Premium Payments.................................... 10
Accumulation Units................................................ 10
Accumulation Unit Values.......................................... 10
Premium Limitation................................................ 11
Account Values.................................................... 11
Amount Payable on Surrender of the Policy......................... 11
Load Refund....................................................... 11
Partial Withdrawals............................................... 11
Transfers of Account Value.......................................... 11
Amount and Frequency of Transfers................................. 11
Transfers to or from Sub-Accounts................................. 12
Transfers from the Fixed Account.................................. 12
Dollar Cost Averaging Option Program.............................. 12
Policy Loans........................................................ 12
Loan Interest..................................................... 12
Credited Interest................................................. 13
Preferred Loan.................................................... 13
Loan Repayments................................................... 13
Termination Due to Excessive Indebtedness......................... 13
Effect of Loans on Account Value.................................. 13
Death Benefit....................................................... 13
Death Benefit Options............................................. 13
Option Change..................................................... 13
Death Benefit Guarantee........................................... 13
Minimum Death Benefit............................................. 14
Supplemental Face Amount.......................................... 14
Unscheduled Increases and Decreases in Face Amount................ 14
Benefits at Maturity................................................ 14
Lapse and Reinstatement............................................. 14
Policy Lapse and Grace Period..................................... 14
Death Benefit Guarantee Default and Grace Period.................. 15
Reinstatement..................................................... 15
The Right to Examine or Exchange a Policy........................... 15
Surrender........................................................... 15
Valuation of Payments and Transfers................................. 16
Application for a Policy............................................ 16
Reduced Charges for Eligible Groups................................. 16
Deductions from the Premium......................................... 16
Premium Processing Charge......................................... 16
Premium Tax Charge and Federal Tax Charge......................... 16
Front-End Sales Load.............................................. 16
Deductions and Charges From the Account Value....................... 17
Monthly Deduction Amounts......................................... 17
Charges Against the Funds......................................... 18
HARTFORD.............................................................. 18
SEPARATE ACCOUNT VL II................................................ 19
General............................................................. 19
</TABLE>
<PAGE>
4 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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<TABLE>
<CAPTION>
PAGE
----
Funds............................................................... 19
<S> <C>
Hartford Funds.................................................... 19
Putnam Funds...................................................... 20
Fidelity VIP Funds................................................ 21
Investment Advisers................................................. 22
Hartford Funds.................................................... 22
Putnam Funds...................................................... 22
Fidelity VIP Funds................................................ 22
THE FIXED ACCOUNT..................................................... 23
OTHER MATTERS......................................................... 23
Voting Rights....................................................... 23
Statements to Policy Owners......................................... 24
Limit on Right to Contest........................................... 24
Misstatement as to Age.............................................. 24
Payment Options..................................................... 24
Beneficiary......................................................... 24
Assignment.......................................................... 25
Dividends........................................................... 25
SUPPLEMENTAL BENEFITS................................................. 25
Last Survivor Exchange Option Rider................................. 25
Estate Protection Rider............................................. 25
Maturity Date Extension Rider....................................... 25
Yearly Renewable Term Life Insurance Rider.......................... 25
EXECUTIVE OFFICERS AND DIRECTORS...................................... 26
DISTRIBUTION OF THE POLICIES.......................................... 30
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS.......................... 30
FEDERAL TAX CONSIDERATIONS............................................ 31
General............................................................. 31
Taxation of Hartford and the Separate Account....................... 31
Income Taxation of Policy Benefits - Generally...................... 31
Diversification Requirements........................................ 32
Ownership of the Assets in the Separate Account..................... 32
Tax Deferral During Accumulation Period............................. 32
Modified Endowment Contracts........................................ 33
Estate and Generation Skipping Taxes................................ 33
Life Insurance Purchased for Use in Split Dollar Arrangements....... 34
Federal Income Tax Withholding...................................... 34
Non-Individual Ownership of Policies................................ 34
Other............................................................... 34
Life Insurance Purchases by Non-resident Aliens and Foreign
Corporations....................................................... 34
LEGAL PROCEEDINGS..................................................... 34
LEGAL MATTERS......................................................... 34
YEAR 2000............................................................. 34
EXPERTS............................................................... 35
REGISTRATION STATEMENT................................................ 35
APPENDIX A -- ILLUSTRATIONS OF DEATH BENEFITS AND ACCOUNT VALUES...... 36
FINANCIAL STATEMENTS..................................................
</TABLE>
THE POLICIES MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 5
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The value used to determine certain Policy benefits and charges.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL DEATH BENEFIT GUARANTEE PREMIUM: An annual amount of premium shown in a
Policy's specifications page required to keep the Death Benefit guarantee in
effect and used to calculate the Cumulative Death Benefit Guarantee Premium.
ATTRIBUTABLE: In calculating the front-end sales load, agent commissions and
mortality and expense risk charge, premiums (in the case of the front-end sales
load or commissions) and Account Value (in the case of the mortality and expense
risk charge) are Attributable to the Basic Face Amount and Supplemental Face
Amount in the same ratio that the initial Basic Face Amount and the initial
Supplemental Face Amount, respectively, bear to the initial Face Amount. For
example, if 60% of Your initial Face Amount represents Basic Face Amount and 40%
represents Supplemental Face Amount, then 60% of each premium (in the case of
the sales load or commissions) or 60% of Your Account Value (in the case of the
mortality and expense risk charge) is Attributable to Basic Face Amount and the
remaining 40% is Attributable to Supplemental Face Amount.
BASIC FACE AMOUNT: On the Policy Date, the Basic Face Amount equals the Basic
Face Amount shown on Your Policy's specifications page as of the Date of Issue.
Thereafter, the Basic Face Amount may change in accordance with the terms of the
Policy.
CASH SURRENDER VALUE: The Account Value less all Indebtedness.
CODE: The Internal Revenue Code of 1986, as amended.
COST OF INSURANCE: An amount deducted as part of the Monthly Deduction Amount to
help cover Hartford's anticipated mortality costs and other expenses.
CUMULATIVE DEATH BENEFIT GUARANTEE PREMIUM: The sum of the number of completed
Policy Years plus the completed portion of the current Policy Year (expressed as
the number of completed months divided by 12), multiplied by the Annual Death
Benefit Guarantee Premium.
DATE OF ISSUE: The date from which the Policy's suicide and incontestability
provisions are measured.
DEATH BENEFIT: On the Policy Date, the Death Benefit equals the Face Amount.
Thereafter it may change in accordance with the terms of the Policy.
DEATH BENEFIT OPTION: The Death Benefit Option in effect determines how the
Death Benefit is calculated. For a description of the three Death Benefit
Options provided, see "Detailed Description of Policy Benefits and Provisions --
Death Benefit."
DEATH PROCEEDS: The amount which We will pay on the death of the last surviving
Insured. This amount equals the Death Benefit less any Indebtedness and less any
due and unpaid Monthly Deduction Amount occurring during a grace period.
FACE AMOUNT: The Basic Face Amount plus the Supplemental Face Amount.
FIXED ACCOUNT: The portion of Account Value invested in the General Account.
FUNDS: The registered open-end management investment companies in which assets
of the Separate Account may be invested.
GENERAL ACCOUNT: All assets of Hartford other than those allocated to its
separate accounts, including the Separate Account.
GUIDELINE ANNUAL PREMIUM: The level annual premium payment necessary to provide
the future benefits under a Policy through maturity, based on certain
assumptions specified under federal securities laws. These assumptions include
mortality charges based on the 1980 Commissioners' Standard Ordinary Mortality
Smoker or Nonsmoker Table, age last birthday, an assumed annual net rate of
return of 5% per year, and deduction of the guaranteed fees and charges
specified in a Policy. For purposes of the Policy, the Guideline Annual Premium
is used only in limiting front-end sales loads.
HARTFORD (ALSO "WE," "US," "OUR"): Hartford Life and Annuity Insurance Company.
IN WRITING: In a written form satisfactory to Us.
INDEBTEDNESS: The outstanding loan on a Policy, including any interest due or
accrued.
INSUREDS: The two persons on whose lives a Policy is issued.
ISSUE AGE: As of the Policy Date, the age of each Insured on his/her last
birthday.
LOAN ACCOUNT: An account established for any amounts transferred from the Fixed
Account and the Sub-Accounts as a result of Policy loans. Amounts are held as
collateral and are credited with interest. Amounts held in the Loan Account are
not subject to the investment experience of the Separate Account.
MATURITY DATE: The date on which a Policy matures.
MONTHLY ACTIVITY DATE: The Policy Date and the same date in each succeeding
month as the Policy Date, except that
<PAGE>
6 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
whenever the Monthly Activity Date falls on a date other than a Valuation Day,
the Monthly Activity Date will be deemed the next Valuation Day.
MONTHLY DEDUCTION AMOUNT: The fees and charges deducted from the Account Value
on the Monthly Activity Date.
NATIONAL SERVICE CENTER: Hartford's National Service Center located in
Minneapolis, Minnesota.
NET PREMIUM: The amount of each premium actually allocated to the Account Value,
after a deduction as a percentage of premium is made for the premium processing
charge, premium tax, and federal tax charges and front-sales load attributable
to a Policy.
PLANNED PREMIUMS: The amount of premiums that You intend to pay, as indicated on
the application and shown on a Policy's specifications page.
POLICY: A last survivor flexible premium variable life insurance contract issued
by Hartford and described in this Prospectus.
POLICY ANNIVERSARY: An anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
determined.
POLICY OWNER (ALSO "YOU," "YOUR"): The person having rights to benefits under a
Policy during the lifetime of the two Insureds. A Policy Owner may or may not be
one of the Insureds.
POLICY YEAR: An annual period computed from the Policy Date.
PRO RATA BASIS: An allocation method based on the proportion of the Account
Value in the Fixed Account and in each Sub-Account.
SEC: The U.S. Securities and Exchange Commission.
SEPARATE ACCOUNT (ALSO "SEPARATE ACCOUNT VL II"): An account established by
Hartford to separate the assets funding the Policies from other assets of
Hartford.
SUB-ACCOUNT: A subdivision of the Separate Account.
SUPPLEMENTAL FACE AMOUNT: On the Policy Date, the Supplemental Face Amount is
shown on a Policy's specifications page. Thereafter, the Supplemental Face
Amount may change according to the terms of the Policy.
TARGET PREMIUM: The amount of level premium required to support a whole life
insurance policy with a net interest rate of 5%, assuming that the initial Face
Amount is entirely Basic Face Amount. The Policy charges used in determining the
level premium amount are maximum guaranteed cost of insurance rates for standard
risks, actual premium tax rates, a 1.25% premium charge for processing, a 1.25%
premium charge for federal tax and other maximum policy deductions or charges,
exclusive of any additional rider charges.
VALUATION DAY: Every day that the New York Stock Exchange is open for trading.
The value of the Separate Account is determined at the close of the New York
Stock Exchange (generally, 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
VIP: Variable Insurance Products Fund of Fidelity Management & Research Company.
VIP II: Variable Insurance Products Fund II of Fidelity Management & Research
Company.
YOU: the Policy Owner.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 7
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SUMMARY
HOW DO I PURCHASE THE LIFE INSURANCE POLICY?
You apply for life insurance by completing an application. You may be
required to undergo a medical examination. If you are accepted, you choose the
timing and amount of premium to be paid. For a limited time, at least 10 days
after you receive your life insurance policy, you may cancel it. A longer period
is provided in certain cases.
WHAT OPTIONS DO I HAVE UNDER THE POLICY?
You select options tailored to your specific life insurance needs. The
Policy options fall into three major categories:
- - Death Benefit Options -- You are able to select various levels and patterns
of Death Benefits. See "Detailed Description of Policy Benefits and
Provisions -- Death Benefit."
- - Investment Options -- You have the choice of allocating the Account Value
among a maximum of nine of the Policy's 37 investment choices (36
Sub-Accounts and the Fixed Account). See "Funds."
- - Premium Options -- You have the flexibility to choose, within limits, the
amount of the initial premium and the amount and frequency of subsequent
premiums. See "Detailed Description of Policy Benefits and Provisions --
Premiums -- Premium Payment Flexibility."
WHAT ARE THE DEATH BENEFIT OPTIONS?
There are three Death Benefit Options:
- - a level Death Benefit equal to the Face Amount ("Option A");
- - a variable Death Benefit equal to the Face Amount plus the Account Value
("Option B"); or
- - an increasing Death Benefit equal to the Face Amount plus the sum of premiums
paid ("Option C").
At the death of the last surviving Insured, we will pay the Death Proceeds
to the beneficiary you select. The Death Proceeds equal the Death Benefit less
any Indebtedness and less any due and unpaid Monthly Deduction Amount occurring
during a grace period. Scheduled and unscheduled increases in Face Amount may be
requested. See "Detailed Description of Policy Benefits and Provisions -- Death
Benefit."
DOES THE POLICY HAVE CASH VALUES?
Yes. The value of your policy will fluctuate with the performance of the
underlying investments, as well as the interest credited to the Fixed Account
and the Loan Account, and deductions for the Monthly Deduction Amount. There is
no minimum guaranteed Account Value and you bear the risk of investment in the
Funds. However, if the Death Benefit guarantee is in effect, the Policy will not
lapse due to poor investment performance. See "Detailed Description of Policy
Benefits and Provisions -- Premiums -- Account Values."
WHAT CHARGES ARE DEDUCTED FROM PREMIUM PAYMENTS?
Before any premium is allocated to the Account Value, we deduct a percentage
of premium for:
- - a premium processing charge;
- - a premium tax and federal tax charge; and
- - a front-end sales load.
The amount of each premium (after such deductions) allocated to the Account
Value is your Net Premium.
PREMIUM PROCESSING CHARGE -- We deduct a 1.25% charge from each premium
payment for premium collection costs and premium and processing costs.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE -- We deduct a premium tax charge
to cover premium-based taxes assessed against Hartford by a state or other
governmental entity. The charge will vary by locale, depending on the tax rates
in effect at the time a Policy is issued. The range for such premium taxes
generally is between 0% and 4%.
We also deduct a charge of 1.25% of each premium for federal taxes imposed
under Section 848 of the Internal Revenue Code.
FRONT-END SALES LOAD -- The front-end sales load is a charge deducted from
each premium to cover expenses related to the sale and distribution of the
Policy. There are three types of front-end sales loads.
1. The current and maximum front-end sales load for premiums paid Attributable
to the Basic Face Amount up to the Target Premium is:
- - 50% in the first Policy Year;
- - 15% in Policy Years 2 through 5;
- - 10% in Policy Years 6 through 10; and
- - 2% in Policy Years 11 through 20.
After Policy Year 20, the current front-end sales load is 0%, with a maximum
of 2%.
2. The current and maximum front-end sales load for premiums Attributable to
the Basic Face Amount in excess of the Target Premium is:
- - 9% in Policy Year 1;
- - 4% in Policy Years 2 through 10; and
- - 2% in Policy Years 11 through 20.
<PAGE>
8 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
After Policy Year 20, the current front-end sales load is 0%, with a maximum
of 2%.
3. The current and maximum front-end sales load for all premiums Attributable
to the Supplemental Face Amount is:
- - 4% in Policy Years 1 through 10; and
- - 2% in Policy Years 11 through 20.
After Policy Year 20, the current front-end sales load is 0%, with a maximum
of 2%.
WHAT CHARGES ARE DEDUCTED FROM ACCOUNT VALUE?
Each month we will subtract a Monthly Deduction Amount from your Account Value.
The Monthly Deduction Amount is subtracted pro rata your Account Value allocated
to the Fixed Account and the Sub-Accounts on each Monthly Activity Date.
The Monthly Deduction Amount equals the sum of:
(a) the Cost of Insurance;
(b) the charges for additional benefits provided by rider, if any;
(c) the charges for "special" insurance class rating, if any;
(d) the monthly administrative fee and issue charge;
(e) the mortality and expense risk charge, and
(f) any Face Amount increase fee.
WHAT FEES DO I PAY FOR THE UNDERLYING FUNDS?
The following table shows the annual fees paid for the underlying Funds:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER EXPENSES OPERATING EXPENSES
FEES (BEFORE (BEFORE EXPENSE (BEFORE WAIVERS/
FEE WAIVERS) REIMBURSEMENTS) REIMBURSEMENTS) (1)
------------ --------------- -------------------
<S> <C> <C> <C>
Hartford Advisers Fund................................. 0.634% 0.014% 0.648%
Hartford Bond Fund..................................... 0.505% 0.017% 0.522%
Hartford Capital Appreciation Fund..................... 0.641% 0.015% 0.656%
Hartford Dividend and Growth Fund...................... 0.662% 0.011% 0.673%
Hartford Growth and Income Fund (2).................... 0.750% 0.150% 0.900%
Hartford Index Fund.................................... 0.400% 0.015% 0.415%
Hartford International Advisers Fund................... 0.775% 0.094% 0.869%
Hartford International Opportunities Fund.............. 0.699% 0.081% 0.780%
Hartford MidCap Fund................................... 0.775% 0.071% 0.846%
Hartford Money Market Fund............................. 0.450% 0.017% 0.467%
Hartford Mortgage Securities Fund...................... 0.450% 0.030% 0.480%
Hartford Small Company Fund............................ 0.772% 0.017% 0.789%
Hartford Stock Fund.................................... 0.458% 0.013% 0.471%
Putnam VT Asia Pacific Growth Fund..................... 0.800% 0.270% 1.070%
Putnam VT Diversified Income Fund...................... 0.690% 0.110% 0.800%
Putnam VT Global Asset Allocation Fund................. 0.660% 0.110% 0.770%
Putnam VT Global Growth Fund........................... 0.600% 0.150% 0.750%
Putnam VT Growth and Income Fund....................... 0.470% 0.040% 0.510%
Putnam VT Health Sciences Fund (3)..................... 0.700% 0.340% 1.040%
Putnam VT High Yield Fund.............................. 0.660% 0.060% 0.720%
Putnam VT International Growth Fund (3)................ 0.800% 0.470% 1.270%
Putnam VT International Growth and Income Fund......... 0.800% 0.320% 1.120%
Putnam VT International New Opportunities Fund (3)..... 1.200% 0.680% 1.880%
Putnam VT Investors Fund (3)........................... 0.650% 0.330% 0.980%
Putnam VT Money Market Fund............................ 0.450% 0.090% 0.540%
Putnam VT New Opportunities Fund....................... 0.580% 0.050% 0.630%
Putnam VT New Value Fund............................... 0.700% 0.150% 0.850%
Putnam VT OTC & Emerging Growth Fund (3)............... 0.700% 0.340% 1.040%
Putnam VT The George Putnam Fund of Boston (3)......... 0.650% 0.360% 1.010%
Putnam VT US Government and High Quality Bond Fund..... 0.610% 0.080% 0.690%
Putnam VT Utilities Growth and Income Fund............. 0.670% 0.070% 0.740%
Putnam VT Vista Fund................................... 0.650% 0.220% 0.870%
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER EXPENSES OPERATING EXPENSES
FEES (BEFORE (BEFORE EXPENSE (BEFORE WAIVERS/
FEE WAIVERS) REIMBURSEMENTS) REIMBURSEMENTS) (1)
------------ --------------- -------------------
Putnam VT Voyager Fund................................. 0.540% 0.050% 0.590%
<S> <C> <C> <C>
Fidelity VIP Equity-Income Portfolio (4)............... 0.500% 0.080% 0.580%
Fidelity VIP Overseas Portfolio (4).................... 0.750% 0.170% 0.920%
Fidelity VIP II Asset Manager Portfolio (4)............ 0.550% 0.100% 0.650%
</TABLE>
- ---------
(1) "Management Fees" generally represent the fees paid to the investment
adviser or its affiliate for investment and administrative services
provided. "Other Expenses" are expenses (other than "Management Fees") which
are deducted from the fund including legal, accounting and custodian fees.
For a complete description of the services provided in consideration of the
operating expenses deducted, please see the accompanying Funds prospectuses.
(2) Hartford Growth and Income Fund is a new Fund. "Total Fund Operating
Expenses" are based on annualized estimates of such expenses to be incurred
in the current fiscal year. HL Investment Advisors, Inc. has agreed to waive
its fees for the Hartford Growth and Income Fund until the assets of the
Funds (excluding assets contributed by companies affiliated with HL
Investment Advisors, Inc.) reach $20 million. After this waiver, the
"Management Fee" would be 0.200%, the "Other Expenses" would be 0.150% and
"Total Fund Operating Expenses" would be 0.350%.
(3) The "Management Fees" and "Other Expenses" shown in the table above do not
reflect an expense limitation. After an expense limitation, "Management
Fees," "Other Expenses" and "Total Fund Operating Expenses" would have been:
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OPERATING
FEES OTHER EXPENSES EXPENSES
---------- --------------- ---------------
<S> <C> <C> <C>
Putnam VT Health Sciences Fund*......... 0.560% 0.340% 0.900%
Putnam VT International Growth Fund..... 0.730% 0.470% 1.200%
Putnam VT International New
Opportunities Fund..................... 0.920% 0.680% 1.600%
Putnam VT Investors Fund*............... 0.520% 0.330% 0.850%
Putnam VT OTC & Emerging Growth Fund*... 0.560% 0.340% 0.900%
Putnam VT The George Putnam Fund of
Boston*................................ 0.490% 0.360% 0.850%
</TABLE>
*Estimated "Management Fees, "Other Expenses" and "Total Fund Operating
Expenses."
(4) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian whereby credits realized, as a result of
uninvested cash balances were used to reduce custodian expenses. Including
these reductions, the "Total Operating Expenses" presented in the table
would have been 0.570% for Fidelity VIP Equity-Income Portfolio, 0.900% for
Fidelity VIP Overseas Portfolio and 0.640% for Fidelity VIP II Asset Manager
Portfolio.
MAY I TAKE A LOAN ON THE POLICY?
Yes, you may obtain a cash loan from Hartford. The Policy secures the loan.
Indebtedness may not exceed 90% of the Account Value at the time the loan is
requested. See "Detailed Description of Policy Benefits and Provisions -- Policy
Loans."
MAY I SURRENDER THE POLICY?
At any time prior to the Maturity Date, you may surrender your Policy,
provided your Policy has a Cash Surrender Value. See "Detailed Description of
Policy Benefits and Provisions -- Surrender."
You may have to pay tax on the money you take out and, if you take money out
before you are age 59 1/2 you may have to pay a tax penalty.
IS IT POSSIBLE FOR THE POLICY TO TERMINATE?
Your Policy could terminate if the value of the Policy becomes too low to
support the Policy's monthly charges and fees. If this occurs, we will notify
you in writing. You will then have a 61-day grace period in order for you to pay
additional amounts to prevent the Policy from terminating. The Policy will not
lapse if the Death Benefit guarantee is in effect. See "Detailed Description of
Policy Benefits and Provisions -- Lapse and Reinstatement."
WHAT ABOUT TAXES?
Under current tax law, your Beneficiaries will receive the Death Proceeds
free of federal income tax. However, you may be subject to income tax if you
receive any loans, surrenders or other amounts from the Policy, and you may be
subject to a 10% penalty tax.
There are circumstances (usually if you want to prefund future benefits in
seven years or less) when a Policy may become a Modified Endowment Contract
under federal tax law. In such case, loans and other pre-death distributions are
includable in gross income on an income-first basis. A 10% penalty tax may be
imposed on income distributed before you attain age 59 1/2. You should consult a
qualified tax adviser before taking steps that may affect whether a Policy
becomes a Modified Endowment Contract.
<PAGE>
10 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
See "Federal Tax Considerations -- Modified Endowment Contracts" for a
discussion of the "seven-pay test."
DETAILED DESCRIPTION OF
POLICY BENEFITS
AND PROVISIONS
GENERAL
This Prospectus describes a last survivor flexible premium variable life
insurance Policy that offers You considerable flexibility in selecting the
timing and amount of premium payments.
PREMIUMS
PREMIUM PAYMENT FLEXIBILITY -- You have considerable flexibility as to when
and in what amounts You pay premiums.
Prior to Policy issue, You can choose a Planned Premium, within a range
determined by Hartford, based on the Face Amount and each Insured's sex (except
where unisex rates apply), Issue Age and risk classification. We will send You
premium notices for Planned Premiums. Such notices may be sent on an annual,
semi-annual or quarterly basis. You may also have premiums automatically
deducted monthly from Your checking account. The Planned Premiums and payment
mode You select are shown on Your Policy's specifications page. You may change
the Planned Premiums, subject to Our minimum amount rules then in effect.
A Policy will not lapse as long as the Cash Surrender Value is sufficient to
cover the Monthly Deduction Amounts or the Death Benefit guarantee is in effect.
For more details, see "Detailed Description of Policy Benefits and Provisions --
Lapse and Reinstatement."
ALLOCATION OF PREMIUM PAYMENTS -- The initial Net Premium will be allocated
to the Hartford Money Market Fund Sub-Account on the later of the Policy Date or
the date We receive the premium.
The value in the Hartford Money Market Fund Sub-Account will then be
allocated to the Fixed Account and the Sub-Accounts according to the premium
allocation specified in the Policy application on the latest of (a) 45 days
after the Policy application is signed; (b) ten days after We mail or personally
deliver a Notice of Withdrawal Right to You; or (c) the date We receive the
final requirement to put the Policy in force.
Any additional Net Premiums received by Us prior to such date will be
allocated to the Hartford Money Market Sub-Account.
You may change Your premium allocation upon request In Writing. Portions of
the premium allocated to the Fixed Account and the Sub-Accounts must be whole
percentages of 10% or more of the total premium. Subsequent Net Premiums will be
allocated to the Fixed Account and the Sub-Accounts according to Your most
recent instructions. Currently, the Account Value may be allocated to a maximum
of nine Sub-Accounts. (Hartford reserves the right to increase the number of
allocable investment options to more than nine in the future.) If We receive a
premium payment and Your most recent premium allocation instructions would
violate the foregoing allocation limitation, We will allocate the Net Premium to
the Fixed Account and the Sub-Accounts on a Pro Rata Basis.
A Policy Owner receives several different types of notification as to what
his or her current premium allocation is. The initial allocation chosen by a
Policy Owner is shown in his or her Policy. Each transaction confirmation
received after a premium payment will show how a Net Premium has been allocated.
Additionally, each quarterly statement summarizes the current premium allocation
in effect for such Policy.
ACCUMULATION UNITS -- Net Premiums allocated to the Sub-Accounts are used to
credit Accumulation Units to such Sub-Accounts.
The number of Accumulation Units in each Sub-Account to be credited to a
Policy (including the initial allocation to the Hartford Money Market Fund Sub-
Account) and the amount credited to the Fixed Account will be determined, first,
by multiplying the Net Premium by the appropriate allocation percentage in order
to determine the portion of the Net Premium to be invested in the Fixed Account
or the Sub-Account. Each portion of a Net Premium to be invested in a
Sub-Account is then divided by the value of the Accumulation Units in that
particular Sub-Account next computed following receipt of the premium payment.
The resulting figure is the number of Accumulation Units to be credited to each
Sub-Account.
ACCUMULATION UNIT VALUES -- The Accumulation Unit Value for each Sub-Account
will vary to reflect the investment experience of the applicable Fund and will
be determined on each Valuation Day by multiplying the Accumulation Unit Value
of the particular Sub-Account on the preceding Valuation Day by the Net
Investment Factor for that Sub-Account for the Valuation Period then ended. The
Net Investment Factor for each of the Sub-Accounts is equal to the net asset
value per share of the corresponding Fund at the end of the Valuation Period
(plus the per share amount of any dividend or capital gain distributions paid by
that Fund in the Valuation Period then ended) divided by
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
the net asset value per share of the corresponding Fund at the beginning of the
Valuation Period.
All valuations in connection with a Policy, e.g., with respect to
determining Account Value, in connection with Policy loans, or in calculation of
Death Benefits, or with respect to determining the number of Accumulation Units
to be credited to a Policy with each premium payment, other than the initial
premium payment, will be made on the date the request or premium payment is
received by Hartford at the National Service Center, provided such date is a
Valuation Day. Otherwise such determination will be made on the next succeeding
date which is a Valuation Day.
PREMIUM LIMITATION -- If premiums are received which would cause a Policy to
fail to meet the definition of a life insurance policy in accordance with the
Code, We reserve the right to refund the excess premium payments and any
interest thereon within 60 days after the end of a Policy Year.
A premium payment that results in an increase in the Death Benefit greater
than the amount of the premium will be accepted only after We approve evidence
of insurability.
ACCOUNT VALUES -- As with traditional life insurance, each Policy will have
an Account Value. There is no minimum guaranteed Account Value.
The Account Value of a Policy changes on a daily basis and will be computed
on each Valuation Day. The Account Value will vary to reflect the investment
experience of the Sub-Accounts, the interest credited to the Fixed Account and
the Loan Account, and the Monthly Deduction Amounts.
A Policy's Account Value is related to the net asset value of the Funds
associated with the Sub-Accounts, if any, to which Net Premiums on the Policy
have been allocated. The Account Value in the Sub-Accounts on any Valuation Day
is calculated by multiplying the number of Accumulation Units in each
Sub-Account as of the Valuation Day by the current value of Accumulation Units
in that Sub-Account and then totaling the result for all the Sub-Accounts. A
Policy's Account Value equals the Account Value in all of the Sub-Accounts plus
the value of the Fixed Account and the Loan Account. The Policy's Cash Surrender
Value, which is the net amount available upon surrender of the Policy, is the
Account Value less any Indebtedness. See "-- Accumulation Unit Values," above.
AMOUNT PAYABLE ON SURRENDER OF THE POLICY -- A Policy Owner may elect to
fully surrender his or her Policy without the consent of the beneficiary
(provided the designation of beneficiary is not irrevocable) as long as such
Policy is in effect. Upon surrender, the Policy Owner will receive the Cash
Surrender Value determined as of the later of (a) the date on which Hartford
receives the Policy Owner's request for surrender In Writing (b) the date
requested by the Policy Owner. The Policy will terminate on the later of (x) the
date of receipt by Hartford of the request In Writing or (y) the date the Policy
Owner requests the surrender to be effective.
LOAD REFUND -- If a Policy is surrendered during the first two Policy Years,
the Policy Owner may be entitled to payment of a refund in addition to the Cash
Surrender Value.
The refund will be equal to the excess, if any, of the sum of the actual
front-end sales load charged to date, divided by:
1. the sum of 30% of payments in aggregate amount less than or equal to one
Guideline Annual Premium plus 10% of payments in aggregate amount greater
than one Guideline Annual Premium but not more than two Guideline Annual
Premiums; plus
2. 9% of each payment made in excess of two Guideline Annual Premiums.
PARTIAL WITHDRAWALS -- One partial withdrawal is allowed per month (between
any successive Monthly Activity Dates). The minimum partial withdrawal allowed
is $500. The maximum partial withdrawal is the Cash Surrender Value, less
$1,000. If the Death Benefit Option then in effect is Option A or Option C, the
Face Amount is reduced by the amount of the partial withdrawal. The minimum Face
Amount required after a partial withdrawal is subject to Our rules then in
effect. Unless specified otherwise, the partial withdrawal will be deducted on a
Pro Rata Basis from the Fixed Account and the Sub-Accounts. Currently, Hartford
does not impose a partial withdrawal charge. However, Hartford reserves the
right to impose in the future a partial withdrawal charge of up to $50.
TRANSFERS OF ACCOUNT VALUE
AMOUNT AND FREQUENCY OF TRANSFERS -- Upon request and as long as Your Policy
is in effect, You may transfer amounts among the Fixed Account and the
Sub-Accounts. Transfers may be made by request In Writing or by calling Our
National Service Center at 1-800-231-5453. Transfers by telephone may be made by
the agent of record or by the attorney-in-fact pursuant to a power of attorney.
Telephone transfers may not be permitted in some states. The policy of Hartford
and its agents and affiliates is that they will not be responsible for losses
resulting from acting upon telephone requests reasonably believed to be genuine.
We will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine; otherwise, We may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures We follow for
transactions initiated by telephone include requiring callers to provide certain
identifying information for themselves (if they are not Policy Owners) and the
Policy Owner. All transfer instructions communicated to Us by telephone are tape
recorded.
<PAGE>
12 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
The amounts which may be transferred and the number of transfers will be
limited by Our rules then in effect.
Currently, the Policy Owner may make one transfer per calendar month free of
charge, excluding any transfers made pursuant to Your enrollment in the dollar
cost averaging option program. Each subsequent transfer in excess of one per
calendar month will be subject to a transfer charge of up to $25.
We reserve the right to limit at a future date the size of transfers and
remaining balances and the number and frequency of transfers.
TRANSFERS TO OR FROM SUB-ACCOUNTS -- In the event of a transfer to a
Sub-Account, We will increase the number of Accumulation Units credited to the
Sub-Account to which the transfer is being made. The increase will equal:
1. the amount transferred, divided by
2. the value of Accumulation Units in the Sub-Account to which the transfer is
being made, determined as of the next Valuation Day after We receive Your
transfer request In Writing.
In the event of a transfer from a Sub-Account, the number of Accumulation
Units credited to the Sub-Account from which the transfer is being made will be
reduced.
The reduction will be determined by dividing:
1. the amount transferred, by
2. the value of the Accumulation Units in the Sub-Account from which the
transfer is being made, determined as of the next Valuation Day after We
receive Your transfer request In Writing.
TRANSFERS FROM THE FIXED ACCOUNT -- In addition to the conditions set forth
above, transfers from the Fixed Account are subject to the following:
(a) the transfer must occur during the 30-day period following each Policy
Anniversary; and
(b) if Your accumulated value in the Fixed Account exceeds $1,000, the amount
transferred from the Fixed Account in any Policy Year may not exceed 25% of
the accumulated value in the Fixed Account on the transfer date.
DOLLAR COST AVERAGING OPTION PROGRAM -- You may elect to allocate Your Net
Premiums among the Sub-Accounts and the Fixed Account pursuant to the dollar
cost averaging (DCA) option program. If You choose the DCA option program, Your
Net Premiums will be deposited into the Hartford Money Market Fund Sub-Account.
Each month, amounts will be withdrawn monthly from that Sub-Account and
allocated to the other investment options, in accordance with Your allocation
instructions. The transfer date will be the monthly anniversary of the first
transfer under Your initial DCA election. The first transfer will commence
within five business days after Hartford receives Your initial election, either
In Writing or by telephone, subject to the telephone transfer procedures
described above. The dollar amount will be allocated to the investment options
that You specify, in the proportions that You specify. If, on any transfer date,
Your Cash Value allocated to the Hartford Money Market Fund Sub-Account is less
than the amount You have elected to transfer, Your DCA program will terminate.
You may cancel Your DCA election by notice In Writing to Hartford or by
calling Our National Service Center at 1-800-231-5453.
The main objective of the DCA program is to minimize the impact of
short-term price fluctuations. The DCA program allows Policy Owners to take
advantage of market fluctuations. Since the same dollar amount is transferred to
other investment options at set intervals, the DCA program allows You to
purchase more Accumulation Units when prices are low and fewer Accumulation
Units when prices are high. Therefore, a lower average cost per Accumulation
Unit may be achieved over the long term. However, it is important to understand
that a DCA program does not assure a profit or protect against loss in a
declining market. Policy Owners who choose the DCA program should have the
financial ability to continue making investments through periods of low price
levels.
POLICY LOANS
A Policy Owner may obtain a cash loan from Hartford as long as his or her
Policy is in effect, without the consent of the beneficiary (provided the
designation of beneficiary is not irrevocable)..................................
The loan is secured by the Policy. Total
Indebtedness at the time the new loan is requested (including the accrued
interest on prior loans plus the amount of the requested loan) may not exceed
90% of the Account Value.
The amount of each loan will be transferred on a Pro Rata Basis from the
Fixed Account and each of the Sub-Accounts (unless the Policy Owner specifies
otherwise) to the Loan Account. The Loan Account is a mechanism used to ensure
that any outstanding Indebtedness remains fully secured by the Account Value.
LOAN INTEREST -- Interest will accrue daily on Indebtedness at the Policy
Loan Rate, which is the interest rate as shown in the Policy. On each Monthly
Activity Date, the difference between the value of the Loan Account and the
Indebtedness will be transferred on a Pro Rata Basis from the Fixed Account and
the Sub-Accounts to the Loan Account.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
CREDITED INTEREST -- A Loan Account, other than a Loan Account established
pursuant to a Preferred Loan as described in "-- Preferred Loan," below, will be
credited with interest in the following manner: During the first ten Policy
Years, any amounts in the Loan Account will be credited with interest at the
rate of 2% (in most states). Thereafter, the Loan Account will be credited with
interest at the rate of 3% (in most states).
PREFERRED LOAN -- If, at any time after the tenth Policy Anniversary, the
Account Value exceeds the total of all premiums paid since issue, a Preferred
Loan is available. The amount available for a Preferred Loan is the amount by
which the Account Value exceeds total premiums paid. The amount of the Loan
Account which equals a Preferred Loan will be credited with interest at a rate
of 4% (in most states). The amount of Indebtedness that qualifies as a Preferred
Loan is determined on each Monthly Activity Date.
LOAN REPAYMENTS -- You can repay any part of or the entire Indebtedness at
any time while Your Policy is in force and either of the Insureds is alive. The
amount of Policy loan repayment will be deducted from the Loan Account and will
be allocated among the Fixed Account and the Sub-Accounts in the same percentage
as premiums are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS -- If total Indebtedness equals or
exceeds Account Value, Your Policy will terminate 61 days after We have mailed
notice to Your last known address and to the last known address of any assignees
of record. If sufficient loan repayment is not made by the end of such 61 day
period, Your Policy will terminate without value.
EFFECT OF LOANS ON ACCOUNT VALUE -- A Policy loan, whether or not repaid,
will have a permanent effect on Your Account Value because the investment
results of each Sub-Account will apply only to the amount remaining in such
Sub-Accounts. In addition, the rate of interest credited to the Fixed Account
will usually be different than the rate credited to the Loan Account. The longer
a Policy loan is outstanding, the greater the effect on Your Account Value is
likely to be. Such effect could be favorable or unfavorable. If the Fixed
Account and the Sub-Accounts earn more than the annual interest rate for funds
held in the Loan Account, a Policy Owner's Account Value will not increase as
rapidly as it would have had no Policy loan been made. If the Fixed Account and
the Sub-Accounts earn less than the Loan Account, the Policy Owner's Account
Value will be greater than it would have been had no Policy loan been made.
Additionally, if not repaid, the aggregate amount of the outstanding
Indebtedness will reduce the Death Proceeds and the Cash Surrender Value
otherwise payable.
DEATH BENEFIT
Each Policy provides for the payment of the Death Proceeds to the named
beneficiary upon the death of the last surviving Insured. The Death Proceeds
payable to the beneficiary equal the Death Benefit less any Indebtedness and
less any due and unpaid Monthly Deduction Amount occurring during a grace
period. The Death Benefit depends on the Death Benefit Option You select, the
minimum Death Benefit provision, and whether or not the Death Benefit guarantee
is in effect.
DEATH BENEFIT OPTIONS -- There are three Death Benefit Options: (1) the
Level Death Benefit Option ("Option A"), (2) the Return of Account Value Death
Benefit Option ("Option B"), and (3) the Return of Premium Death Benefit Option
("Option C"). Subject to the minimum Death Benefit described below, the Death
Benefit under each option is as follows:
1. Under Option A, the Face Amount.
2. Under Option B, the Face Amount plus the Account Value.
3. Under Option C, the Face Amount plus the sum of the premiums paid.
OPTION CHANGE -- You may change Your Death Benefit Option to Option A or
Option B without evidence of insurability. If a change to Option A is elected,
the Face Amount will become that amount available as a Death Benefit immediately
prior to the option change. If a change to Option B is elected, the Face Amount
will become that amount available as a Death Benefit immediately prior to the
option change, reduced by the then-current Account Value. Changing Your Death
Benefit Option does not result in any fees or charges against your Policy.
However, you should consult a competent tax adviser regarding the possible
adverse tax consequences resulting from a change in Your Death Benefit Option.
Any unscheduled increase in the Face Amount will be deemed an increase in
the Supplemental Face Amount.
DEATH BENEFIT GUARANTEE -- The Death Benefit guarantee is a Policy feature
that is attached to every Policy at issue, unless the Supplemental Face Amount
exceeds the Basic Face Amount. If the premiums paid during Policy Year 1 are
less than the Annual Death Benefit Guarantee Premium, the Death Benefit
guarantee will be removed from the Policy.
After Policy Year 1, the Death Benefit guarantee will be in effect as long
as the cumulative premiums paid into the Policy, less any withdrawals from the
Policy, equal or exceed the Cumulative Death Benefit Guarantee Premium. The
Death Benefit guarantee period will expire at the end of: (1) Policy Year 10 or
(2) the life expectancy of the last surviving Insured (based on the 1980
Commissioners' Standard Ordinary Mortality Smoker or Nonsmoker Table, age last
birthday), whichever period was chosen under Your Policy.
<PAGE>
14 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
If the Death Benefit guarantee is in effect, payment of the Basic Face
Amount upon the death of the last surviving Insured will be guaranteed,
regardless of a Policy's investment performance. The Death Benefit guarantee is
in effect if:
(a) the Death Benefit guarantee period has not expired;
(b) the Supplemental Face Amount has never exceeded, and is not scheduled to
exceed, the Basic Face Amount; and
(c) on each Monthly Activity Date, the cumulative premiums paid into a Policy,
less withdrawals from such Policy, equal or exceed the Cumulative Death
Benefit Guarantee Premium.
MINIMUM DEATH BENEFIT -- Notwithstanding the above, Your Policy has a
minimum Death Benefit equal to the Account Value multiplied by a percentage
specified in such Policy. Such percentage varies according to the Policy Year
and each Insured's Issue Age, sex (where unisex rates are not used) and
insurance class, but may be increased by You in Your Policy application.
EXAMPLES OF THE MINIMUM DEATH BENEFIT:
<TABLE>
<CAPTION>
A B
---------- ----------
<S> <C> <C>
Face Amount............................ $ 100,000 $ 100,000
Account Value on Date of Death......... 46,500 34,000
Specified Percentage................... 250% 250%
Death Benefit Option................... Level Level
</TABLE>
In Example A, the minimum Death Benefit equals $116,250, i.e., the greater
of $100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified percentage of 250%). This amount,
less any outstanding Indebtedness, constitutes the Death Proceeds payable to the
beneficiary.
In Example B, the minimum Death Benefit is $100,000, i.e., the greater of
$100,000 (the Face Amount) or $85,000 (the Account Value of $34,000, multiplied
by the specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
payment option (see "Other Matters -- Payment Options").
SUPPLEMENTAL FACE AMOUNT -- If You selected Supplemental Face Amount
coverage on Your Policy application, the amount of such coverage is shown on the
Policy's specifications page, subject to any scheduled changes You instructed in
Your Policy application and any unscheduled increases and/or decreases in Face
Amount, as described below. You may discontinue a scheduled increase by request
In Writing. A decrease in Face Amount, other than as a result of a partial
withdrawal, will affect Your scheduled increases in Face Amount.
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT -- At any time after the
first Policy Year, You may request In Writing a change in the Face Amount.
The minimum amount by which the Face Amount can be increased or decreased is
based on Our rules then in effect.
Any unscheduled increase in the Face Amount will be deemed an increase in
the Supplemental Face Amount. All requests to increase the Face Amount must be
applied for on a new application and accompanied by Your Policy. All requests
will be subject to evidence of insurability satisfactory to Us. Any increase
approved by Us will be effective on the date shown on the new Policy
specifications page, provided that the deduction for the Cost of Insurance for
the first month is made.
Each unscheduled increase in Face Amount is subject to an increase fee of
$.05 per $1,000 of each increase per month for the first five Policy Years from
the date of each increase.
An unscheduled decrease in the Face Amount will be effective on the Monthly
Activity Date following the date We receive the request In Writing. The
remaining Face Amount must not be less than that specified by Our minimum rules
then in effect. Decreases will be applied first to the Supplemental Face Amount
and then to the Basic Face Amount.
We reserve the right to limit the number of increases and/or decreases made
under a Policy to no more than one in any 12 month period.
BENEFITS AT MATURITY
If either Insured under Your Policy is living on the Maturity Date, upon
surrender of Your Policy to Hartford, Hartford will pay to You the Cash
Surrender Value. On the Maturity Date, Your Policy will terminate and Hartford
will have no further obligations under such Policy.
LAPSE AND REINSTATEMENT
POLICY LAPSE AND GRACE PERIOD -- A Policy will be in default on any Monthly
Activity Date on which its Cash Surrender Value is not sufficient to cover the
Monthly Deduction Amount. A 61-day period, called the "grace period," will begin
from the date of default. Hartford will mail the Policy Owner and any assignee
written notice of the amount of premium that will be required to continue the
defaulting Policy in force at least 30 days before the end of the grace period.
The premiums required will be no greater than the amount required to pay three
Monthly Deduction Amounts as of the day the grace period began. Unless the Death
Benefit Guarantee is in effect, such Policy will terminate without value if the
required premium is not paid by
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
the end of the grace period. If the Death Benefit guarantee is in effect and
sufficient premium has not been paid by the end of the grace period, the Death
Benefit will be reduced to the Basic Face Amount and any riders will no longer
be in force. If the last surviving Insured dies during the grace period, We will
pay the Death Proceeds.
DEATH BENEFIT GUARANTEE DEFAULT AND GRACE PERIOD -- If the cumulative
premiums, less withdrawals, are not sufficient to maintain the Death Benefit
guarantee in effect, the lapse and grace period provisions for the Death Benefit
guarantee will apply as follows:
On every Monthly Activity Date during the Death Benefit guarantee period, We
will compare the cumulative premiums received, less withdrawals, to the
Cumulative Death Benefit Guarantee Premium for the Death Benefit guarantee
period in effect.
If the cumulative premiums received, less withdrawals, are less than the
Cumulative Death Benefit Guarantee Premium, the Death Benefit guarantee will be
deemed to be in default as of that Monthly Activity Date. A grace period of 61
days from the date of default will begin. We will mail to You and any assignee
written notice of the amount of premium required to continue the Death Benefit
guarantee.
At the end of the grace period under a ten-year guarantee period, the Death
Benefit guarantee will be removed from the Policy if We have not received the
amount of the required premium. You will receive a written notification of the
change.
At the end of the grace period under the last survivor life expectancy
guarantee period, the Death Benefit guarantee will be removed from Your Policy
if We have not received the amount of the required premium, subject to the
following exception: If Your Policy is in the first ten Policy Years and the
cumulative premiums received, less withdrawals, equal or exceed the Cumulative
Death Benefit Guarantee Premium for the ten-year period, We will change the
Death Benefit guarantee period to ten years. In this case, We will send You
notification of:
(a) the ten-year period, measured from the Policy Date; and
(b) the Annual Death Benefit Guarantee Premium for that ten-year period.
REINSTATEMENT -- Unless the Policy has been surrendered, the Policy may be
reinstated prior to the Maturity Date, provided:
(a) the Insureds alive at the end of the grace period are also alive on the date
of reinstatement;
(b) You make Your request In Writing within five years from the date the Policy
lapsed;
(c) You submit satisfactory evidence of insurability;
(d) any Policy Indebtedness is repaid or carried over to the reinstated Policy;
and
(e) You pay sufficient premium to (1) cover all Monthly Deduction Amounts that
are due and unpaid during the Grace Period and (2) keep Your Policy in force
for three months after the date of reinstatement.
The Account Value on the reinstatement date will reflect:
(a) the Account Value at the time of termination; plus
(b) Net Premiums derived from premiums paid at the time of reinstatement.
Upon reinstatement, any Indebtedness at the time of termination must be
repaid or carried over to the reinstated Policy.
THE RIGHT TO EXAMINE OR EXCHANGE A POLICY
A prospective purchaser has a limited right to return a Policy for
cancellation. If a Policy is returned, by mail or personal delivery to Hartford
or to the agent who sold such Policy, to be canceled (a) within ten calendar
days after receipt of the Policy by the Policy Owner, (b) within ten days of
Hartford's mailing a Notice of Right to Withdraw, or (c) within 45 days of
signing of the Policy application (whichever is later, and subject to applicable
state regulation), Hartford will return to the Prospective purchaser, within
seven days thereafter, the greater of (x) the premium paid, less any
Indebtedness, or (y) the sum of (1) the Account Value, less any Indebtedness, on
the date the returned Policy is received by Hartford or its agent and (2) any
deductions under such Policy or by the Funds for taxes, charges or fees.
Once a Policy is in effect, it may be exchanged during the first 24 months
after its issuance for a non-variable last survivor life insurance policy
offered by Us or an affiliate on the life of the Insureds. No evidence of
insurability will be required. The new policy will have an amount at risk which
equals or is less than the amount at risk in effect on the date of exchange.
Premiums under the new policy will be based on the same risk classifications as
the Policy for which the policy was exchanged. An exchange of a Policy under
such circumstances should be a tax-free transaction under Section 1035 of the
Code.
SURRENDER
You may surrender Your Policy to Us at any time prior to the Maturity Date,
provided Your Policy has a Cash Surrender Value. You may surrender the Policy to
Us. Upon such surrender, We will pay You the Cash Surrender Value. Our liability
under the Policy will cease as of the date of Your request for surrender.
<PAGE>
16 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
VALUATION OF PAYMENTS AND TRANSFERS
We value the Policy on every Valuation Day.
We will pay Death Proceeds, Cash Surrender Values, Partial Withdrawals, and
loan amounts allocable to the Sub-Accounts within seven days after We receive
all the information needed to process any such payment, unless (a) the New York
Stock Exchange is closed, (b) trading is restricted by the SEC, or (c) the SEC
declares that an emergency exists.
Hartford may defer payment of any amounts not allocable to the Sub-Accounts
for up to six months from the date on which We receive the request In Writing.
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford. Within limits, an applicant may choose the initial Face Amount.
Policies generally will be issued only on the lives of Insureds between the ages
of 20 and 80 who supply evidence of insurability satisfactory to Hartford.
(Hartford may extend the age 80 limit to higher ages for the older Insured, in
which case certain age and risk classification restrictions on the younger
Insured will apply.) Acceptance is subject to Hartford's underwriting rules and
Hartford reserves the right to reject a Policy application for any reason. No
change in the terms or conditions of a Policy will be made without the consent
of the Policy Owner.
A Policy will go into effect on the Policy Date only after Hartford has
received all outstanding delivery requirements and the initial premium. The
Policy Date is the date used to determine all future cyclical transactions on
the Policy, e.g., Monthly Activity Date and Policy Years.
REDUCED CHARGES FOR ELIGIBLE GROUPS
Certain of the charges and deductions described below may be reduced for
Policies issued in connection with a specific plan, in accordance with Our rules
in effect as of the date the Policy application is approved. To qualify for such
a reduction, a plan must satisfy certain criteria, e.g., as to the size of the
plan, the expected number of participants and the anticipated premium payment
from the plan. Generally, the sales contacts and effort, administrative costs
and mortality cost per Policy vary, based on such factors as the size of the
plan, the purposes for which Policies are purchased and certain characteristics
of the plan's members. The amount of reduction and the criteria for
qualification will be reflected in the reduced sales effort and administrative
costs resulting from, and the different mortality experience expected as a
result of, sales to qualifying plans. We may modify, from time to time on a
uniform basis, the amounts of reductions and the criteria for qualification.
Reductions in these charges will not be unfairly discriminatory against any
person, including the affected Policy Owners invested in Separate Account VL II.
DEDUCTIONS FROM THE PREMIUM
Before the allocation of the premium to the Account Value, a deduction as a
percentage of premium is made for the premium processing charge, the premium tax
and federal tax charges and the front-end sales load. The amount of each premium
allocated to the Account Value after all such deductions are made is Your Net
Premium.
PREMIUM PROCESSING CHARGE -- A 1.25% charge is deducted from each premium
payment for premium collection costs and premium and Policy processing costs.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE -- We deduct a percentage of each
premium payment as a premium tax charge to cover premium-based taxes assessed
against Us by a state or other governmental entity. This percentage will vary by
locale, depending on the tax rates in effect at the time the Policy is Issued.
The range of such charge generally is between 0% and 4%.
We also deduct a 1.25% charge from each premium payment to cover the
estimated costs to Us of the federal income tax treatment of the Policies'
deferred acquisition costs under Section 848 of the Code. We have determined
that this charge is reasonable in relation to Our increased federal income tax
burden resulting from the receipt of premiums.
FRONT-END SALES LOAD -- The front-end sales load is a charge deducted from
each premium payment based on (1) the amount of premium paid in relation to the
Target Premium, (2) the Policy Year in which the premium is paid and (3) the
amount of the premium Attributable to the Basic Face Amount and to the
Supplemental Face Amount. See "Special Terms," page - , for a definition of
"Target Premium."
Both current and maximum front-end sales loads for premiums Attributable to
the Basic Face Amount up to the Target Premium is 50% in the first Policy Year,
15% in Policy Years 2 through 5, 10% in Policy Years 6 through 10, and 2% in
Policy Years 11 through 20. Thereafter, the current front-end sales load is 0%,
with a maximum of 2%.
Both current and maximum front-end sales loads for premiums Attributable to
the Basic Face Amount in excess of the Target Premium is 9% in Policy Year 1, 4%
in Policy Years 2 through 10 and 2% in Policy Years 11 through 20. Thereafter,
the current front-end sales load is 0%, with a maximum of 2%.
Both current and maximum front-end sales loads for all premiums Attributable
to the Supplemental Face Amount is 4% in Policy Years 1 through 10 and 2% in
Policy Years 11
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 17
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through 20. Thereafter, the current front-end sales load is 0%, with a maximum
of 2%.
Front-end sales loads which cover expenses relating to the sale and
distribution of the Policies may be reduced for certain sales of Policies under
circumstances, which may result in savings of such sales and distribution
expenses.
EXAMPLE OF FRONT-END SALES LOADS/IMPACT
OF REFUND OF LOAD
An example of the actual front-end sales loads and the impact of the load
refund, if any (see "-- Premiums -- Load Refund"), for a Policy is shown below.
The example uses the same specific information (i.e., Issue Age, Face Amount,
premium level, etc.) as the illustration at the end of this Prospectus.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $1,000,000 Basic Face Amount
Issue Ages/Sex/Class: 65/Male/Preferred
65/Female/Preferred
Guideline Annual Premium: $36,042
Annual Planned Premium: $27,000
</TABLE>
IMPACT OF FRONT-END SALES LOAD/REFUND OF LOADS
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE CUMULATIVE AMOUNT OF
POLICY PREMIUM FRONT-END NON-REFUNDABLE REFUND UPON
YEAR PAID SALES LOADS SALES LOADS SURRENDER
- ---------- ----------- ----------- --------------- ------------
<S> <C> <C> <C> <C>
1 $27,000.00 $12,771.00 $ 8,098.96 $4,672.04
2 54,000.00 16,602.30 12,548.31 4,053.99
</TABLE>
DEDUCTIONS AND CHARGES FROM
THE ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS -- On the Policy Date and on each subsequent
Monthly Activity Date, Hartford will deduct the Monthly Deduction Amount from
the Account Value to cover certain charges and expenses incurred in connection
with a Policy. Each Monthly Deduction Amount will be deducted on a Pro Rata
Basis from the Fixed Account and each of the Sub-Accounts. The Monthly Deduction
Amount will vary from month to month.
The Monthly Deduction Amount equals the sum of:
(a) the charge for the Cost of Insurance;
(b) the charges for additional benefits provided by rider, if any;
(c) the charges for "special" insurance class rating, if any;
(d) the monthly administrative fee and issue charge;
(e) the mortality and expense risk charge; and
(f) any Face Amount increase fee.
(A) Cost of Insurance Charge
The charge for the Cost of Insurance is equal to:
(i) Cost of Insurance rate per $1,000, multiplied by
(ii) amount at risk, divided by
(iii) $1,000.
The amount at risk equals the Death Benefit less the Account Value on that
date, prior to assessing the Monthly Deduction Amount.
The Cost of Insurance charge is to cover Hartford's anticipated mortality
costs. For standard risks, the Cost of Insurance rate will not exceed those
based on the 1980 Commissioners' Standard Ordinary Mortality Smoker or
Nonsmoker Table, age last birthday. A table of guaranteed Cost of Insurance
rates per $1,000 will be included in each Policy; however, Hartford reserves
the right to use rates less than those shown in the table. Substandard risks
will be charged a higher Cost of Insurance rate that will not exceed rates
based on a multiple of the 1980 Commissioners' Standard Ordinary Mortality
Smoker or Nonsmoker Table, age last birthday. The multiple will be based on
the Insureds' risk classes. Hartford will determine the Cost of Insurance
rate at the start of each Policy Year. Any changes in the Cost of Insurance
rate will be made uniformly for all Insureds of the same issue ages, sexes
and risk classes and whose coverage has been in force for the same length of
time. No change in insurance class or cost will occur on account of
deterioration of the Insureds' health.
Because a Policy's Account Value and Death Benefit may vary from month to
month, the Cost of Insurance may also vary on each Monthly Activity Date.
On each Monthly Activity Date during the last 25 Policy Years before the
Maturity Date, Hartford will apply a discount to the Cost of Insurance rate,
provided You qualify for such discount. The discount equals 10%, multiplied
by the ratio of the Basic Face Amount at the Policy's issue date to the Face
Amount at the Policy's issue date, as shown on the Policy's specifications
page. To qualify for the discount, the Policy must have been in force at
least 15 Policy Years and the ratio of the then-current Account Value to the
then-current Death Benefit must equal at least the qualifying ratio
described below. The qualifying ratio is 0% with 25 Policy Years remaining
until the Maturity Date and increases by three percentage points each Policy
Year thereafter. For example, with ten Policy Years remaining until the
Maturity Date the qualifying ratio is 45%, and with one Policy Year
remaining the qualifying ratio is 72%. This discount may not be available in
all states.
<PAGE>
18 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
(B) Rider Charge
If a Policy includes riders, a charge applicable to the riders is made
from the Account Value on each Monthly Activity Date.
The charge applicable to these riders is to compensate Hartford for the
anticipated cost of providing supplemental benefits and is specified on the
applicable rider.
For a description of the available riders, see "Supplemental Benefits,"
page - .
(C) Special Class Charge
A charge for a special insurance class rating of an Insured may be made
against the Account Value, if applicable. This charge is to compensate
Hartford for the additional mortality risk associated with individuals in
these classes.
(D) Monthly Administrative Fee and Issue Charge
We will assess a current monthly administrative fee to compensate Hartford
for administrative costs in connection with the Policies. The current
monthly administrative fee is the sum of $7.50 per month, plus $0.01 per
month per $1000 of Face Amount at the Policy issue date, paid in Policy
Years 1 through 10. On a blended rate basis, the charge for all Policy Years
is guaranteed never to exceed the sum of $10.00 per month, plus $0.03 per
month per $1000 of Basic Face Amount at the Policy issue date, and $15.00
per month plus $0.05 per month per $1000 of Supplemental Face Amount at the
Policy issue date. This guaranteed charge is a blended rate based on the
ratio of the initial Basic Face Amount and the initial Supplemental Face
Amount to the initial Face Amount. For example, if the initial Basic Face
Amount was $200,000 and the initial Supplemental Face Amount was $50,000,
then the ratio of initial Basic Face Amount to initial Face Amount is .80
($200,000 divided by $250,000) and the ratio of initial Supplemental Face
Amount to initial Face Amount is .20 ($50,000 divided by $250,000). The
blended guaranteed charge would be $11.00 per month (.80, multiplied by
$10.00, plus .20 multiplied by $15.00) and $.034 per thousand of Face Amount
(.80, multiplied by $.03, plus .20 multiplied by $.05).
Additionally, in the first five Policy Years, We assess a monthly issue
charge to compensate Hartford for the up-front costs to underwrite and issue a
Policy. The issue charge is the sum of $20.00 per month for the first five
Policy Years plus $.05 per $1000 of Face Amount at the date the Policy is issued
or unscheduled Supplemental Face Amount increase per month for the first five
years from the date of Policy issue or the date of increase.
The sum of the premium processing charges, the monthly administrative fee
and the issue charge will not exceed the cost Hartford incurs in providing
administrative services under the Policies.
(E) Mortality and Expense Risk Charge
A charge currently is made for mortality and expense risks assumed by
Hartford. This charge is allocated to the General Account. Hartford may
profit from this charge (see "-- Premiums -- Account Values").
The current mortality and expense risk charge for any Monthly Activity
Date is equal to:
(i) the current mortality and expense risk rate; multiplied by
(ii) the portion of the Account Value allocated to the Sub-Accounts on the
Monthly Activity Date prior to assessing the Monthly Deduction Amount.
The current guaranteed mortality and expense risk rate for the first ten
Policy Years is 0.80%. Thereafter, the current and maximum rate is 0.80% on
the first $100,000 of Account Value as determined just prior to Hartford
assessing the Monthly Deduction Amount. On the remaining Account Value, the
current mortality and expense risk rate is 0.25% and the maximum rate is
0.40% for Account Value attributable to the Basic Face Amount and 0.50% for
Account Value attributable to the Supplemental Face Amount.
The mortality risk assumed by Hartford is that the actual Cost of
Insurance charges specified in the Policy will be insufficient to meet
actual claims. The expense risk assumed is that expenses incurred in issuing
and administering the Policies will exceed the administrative charges set in
a Policy. Hartford may profit from the mortality and expense risk charge and
may use any such profits for any proper purpose, including any difference
between the cost it incurs in distributing the Policies and the proceeds of
the front-end sales load.
CHARGES AGAINST THE FUNDS
The investment performance of each Fund reflects the management fee that the
Fund pays to its investment manager as well as other operating expenses that the
Fund incurs. Investment management fees are generally daily fees computed as a
percentage of a Fund's average daily net assets as an annual rate. Please read
the prospectus for each Fund for complete details.
HARTFORD
Hartford Life and Annuity Insurance Company ("Hartford") is a stock life
insurance company engaged in the
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
business of writing life insurance and annuities, both individual and group, in
all states of the United States and the District of Columbia, except New York.
We were originally incorporated under the laws of Wisconsin on January 9, 1956,
and we subsequently redomiciled to Connecticut. Our offices are located in
Simsbury, Connecticut; however, our mailing address is P.O. Box 2999, Hartford,
CT 06104-2999. We are ultimately controlled by The Hartford Financial Services
Group, Inc., one of the largest financial service providers in the United
States.
HARTFORD'S RATINGS
<TABLE>
<CAPTION>
EFFECTIVE
DATE OF
RATING AGENCY RATING RATING BASIS OF RATING
- --------------------------- ----------- ----------- -----------------------
<S> <C> <C> <C>
A.M. Best and Company, 9/9/97 A+ Financial soundness and
Inc........................ operating performance.
Standard & Poor's.......... 1/23/98 AA Insurer financial
strength
Duff & Phelps.............. 1/23/98 AA+ Claims paying ability
</TABLE>
SEPARATE ACCOUNT VL II
GENERAL
Separate Account VL II, a separate account of Hartford, was established on
September 30, 1994 pursuant to the insurance laws of the State of Connecticut
and organized as a unit investment trust registered with the SEC under the
Investment Company Act of 1940. The Separate Account meets the definition of
"separate account" under federal securities law. Under Connecticut law, the
assets of the Separate Account are held exclusively for the benefit of Policy
Owners and persons entitled to payments under the Policies. The assets of the
Separate Account are not chargeable with liabilities arising out of any other
business which Hartford may conduct.
FUNDS
The assets of each Sub-Account are invested exclusively in shares of one of
the Funds. A Policy Owner may allocate premium payments among the Sub-Accounts.
Policy Owners should review the following brief descriptions of the investment
objectives of the Funds in connection with such allocation. We do not guarantee
the investment results of any of the underlying Funds. Since each underlying
Fund has different investment objectives, each is subject to different risks.
These risks and the Funds' expenses are more fully described in the accompanying
Funds' prospectus, and Statement of Additional Information, which may be ordered
from us. The Funds' prospectus should be read in conjunction with this
Prospectus before investing. All investment options may not be available in all
states.
HARTFORD FUNDS
HARTFORD ADVISERS HLS FUND
Seeks maximum long-term total rate of return by investing in common stocks
and other equity securities, bonds and other debt securities, and money market
instruments. Sub-advised by Wellington Management Company, LLP ("Wellington").
HARTFORD BOND HLS FUND
Seeks maximum current income consistent with preservation of capital by
investing primarily in investment grade fixed-income securities. Up to 20% of
the total assets of this Fund may be invested in debt securities rated in the
highest category below investment grade ("Ba" by Moody's Investor Services, Inc.
or "BB" by Standard & Poor's) or, if unrated, are determined to be of comparable
quality by the Fund's investment adviser. Securities rated below investment
grade are commonly referred to as "high yield-high risk securities" or "junk
bonds." For more information concerning the risks associated with investing in
such securities, please refer to the section in the accompanying prospectus for
the Funds entitled "Hartford Bond HLS Fund, Inc." Sub-advised by The Hartford
Investment Management Company, Inc. ("HIMCO").
HARTFORD CAPITAL APPRECIATION HLS FUND
Seeks growth of capital by investing in equity securities selected solely on
the basis of potential for capital appreciation. Sub-advised by Wellington
Management.
HARTFORD DIVIDEND AND GROWTH HLS FUND
Seeks a high level of current income consistent with growth of capital by
investing primarily in dividend paying equity securities. Sub-advised by
Wellington Management.
HARTFORD GROWTH AND INCOME HLS FUND
Seeks growth of capital and current income by investing primarily in equity
securities with earnings growth potential and steady or rising dividends.
Sub-advised by Wellington Management.
HARTFORD INDEX HLS FUND
Seeks to provide investment results that approximate the price and yield
performance of publicly traded common stocks in the aggregate, as represented by
the Standard & Poor's 500 Composite Stock Price Index.* Sub-advised by HIMCO.
* "STANDARD & POOR'S-REGISTERED TRADEMARK-," "S&P-REGISTERED TRADEMARK-," "S&P
500-REGISTERED TRADEMARK-," "STANDARD & POOR'S 500," AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD
LIFE AND ANNUITY INSURANCE COMPANY. THE HARTFORD INDEX FUND, INC. ("INDEX
FUND") IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND
STANDARD & POOR'S MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF
INVESTING IN THE INDEX FUND.
<PAGE>
20 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
HARTFORD INTERNATIONAL ADVISERS HLS FUND
Seeks maximum long-term total return by investing in a portfolio of equity,
debt and money market securities. Securities in which the Fund invests primarily
will be denominated in non-U.S. currencies and will be traded in non-U.S.
markets. Sub-advised by Wellington Management.
HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND
Seeks growth of capital by investing primarily in equity securities issued
by non-U.S. companies. Sub-advised by Wellington Management.
HARTFORD MIDCAP HLS FUND
Seeks to achieve long-term capital growth through capital appreciation by
investing primarily in equity securities of companies with market
capitalizations within the range represented by the Standard & Poor's MidCap 400
Index. Sub-advised by Wellington Management.
HARTFORD MONEY MARKET HLS FUND
Seeks maximum current income consistent with liquidity and preservation of
capital. Sub-advised by HIMCO.
HARTFORD MORTGAGE SECURITIES HLS FUND
Seeks maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related securities,
including securities issued by the Government National Mortgage Association.
Sub-advised by HIMCO.
HARTFORD SMALL COMPANY HLS FUND
Seeks growth of capital by investing primarily in equity securities within
the range represented by the Russell 2000 Index selected on the basis of
potential for capital appreciation. Sub-advised by Wellington Management.
HARTFORD STOCK HLS FUND
Seeks long-term growth by investing primarily in equity securities.
Sub-advised by Wellington Management.
PUTNAM FUNDS
PUTNAM VT ASIA PACIFIC GROWTH FUND
Seeks capital appreciation by investing primarily in securities of companies
located in Asia and in the Pacific Basin. The fund's investments will normally
include common stocks, preferred stocks, securities convertible into common
stocks or preferred stocks, and warrants to purchase common stocks or preferred
stocks.
PUTNAM VT DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing
in the following three sections of the fixed income securities markets: a U.S.
Government and Investment Grade Sector, a High Yield Sector (which invests
primarily in securities commonly known as "junk bonds"), and an International
Sector. See the special considerations for investments in high-yield securities
described in the Fund prospectus.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities and international fixed income securities.
PUTNAM VT GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified portfolio of
common stocks.
PUTNAM VT GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common
stocks that offer potential for capital growth, current income, or both.
PUTNAM VT HEALTH SCIENCES FUND
Seeks capital appreciation by investing at least 80% of its assets (other
than assets invested in U.S. government securities, short-term debt obligations,
and cash or money market instruments) in common stocks and other securities of
companies in the health sciences industries.
PUTNAM VT HIGH YIELD FUND
Seeks high current income and, when consistent with this objective, a
secondary objective of capital growth, by investing primarily in high-yielding,
lower-rated fixed income securities, constituting a portfolio which Putnam
Management believes does not involve undue risk to income or principal. See the
special considerations for investments in high-yield securities described in the
Fund prospectus.
PUTNAM VT INTERNATIONAL GROWTH FUND
Seeks capital appreciation by investing primarily in equity securities of
companies located in a country other than the United States.
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND
Seeks capital growth, and a secondary objective of high current income by
investing primarily in common stocks that offer potential for capital growth and
may, when consistent with its investment objectives, invest in common stocks
that offer potential for current income. Under normal market conditions, the
fund expects to invest substantially all of its assets in securities principally
traded on markets outside of the United States.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND
Seeks long term capital appreciation by investing in companies that have
above-average growth prospects due to the fundamental growth of their market
sector. Under normal market conditions, the fund expects to invest substantially
all of its total assets, other than cash or short-term investments held pending
investment, in common
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
stocks, preferred stocks, convertible preferred stocks, convertible bonds and
other equity securities principally traded in securities markets outside the
United States.
PUTNAM VT INVESTORS FUND
Seeks long-term growth of capital and any increased income that results from
this growth by investing primarily in common stocks that Putnam Management
believes afford the best opportunity for capital growth over the long term.
PUTNAM VT MONEY MARKET FUND
Seeks as high a rate of current income as Putnam Management believes is
consistent with preservation of capital and maintenance of liquidity by
investing in high-quality money market instruments.
PUTNAM VT NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Management believes
possess above-average long-term growth potential.
PUTNAM VT NEW VALUE FUND
Seeks long-term capital appreciation by investing primarily in common stocks
that Putnam Management believes are undervalued at the time of purchase and have
the potential for long-term capital appreciation.
PUTNAM VT OTC & EMERGING GROWTH FUND
Seeks capital appreciation by investing primarily in common stocks that
Putnam Management believes have potential for capital appreciation significantly
greater than that of market averages.
PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON
Seeks to provide a balanced investment composed of a well-diversified
portfolio of stocks and bonds which will produce both capital growth and current
income.
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by investing
primarily in securities issued or guaranteed as to principal and interest by the
U.S. Government or by its agencies or instrumentalities and in other debt
obligations rated at least A by a nationally recognized securities rating agency
such as Standard & Poor's or Moody's Investor Services, Inc. or, if not rated,
determined by Putnam Management to be of comparable quality.
PUTNAM VT UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments in
debt and equity securities issued by companies in the public utilities
industries.
PUTNAM VT VISTA FUND
Seeks capital appreciation by investing in a diversified portfolio of common
stocks which Putnam Management believes have the potential for above-average
capital appreciation.
PUTNAM VT VOYAGER FUND
Seeks capital appreciation by investing primarily in common stocks of
companies that Putnam Management believes have potential for capital
appreciation that is significantly greater than that of market averages.
FIDELITY VIP FUNDS
FIDELITY VIP EQUITY-INCOME PORTFOLIO
Seeks reasonable income by investing primarily in income-producing equity
securities. In choosing these securities, the Portfolio manager will also
consider the potential for capital appreciation. The Portfolio's goal is to
achieve a yield which exceeds the composite yield on the securities comprising
the Standard & Poor's Index 500.
In addition, the Portfolio may invest in high-yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
FIDELITY VIP OVERSEAS PORTFOLIO
Seeks long-term growth of capital primarily through investments in foreign
securities and provides a means for aggressive investors to diversify their own
portfolios by participating in companies and economies outside of the United
States.
In addition, the Portfolio may invest in high-yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio. International funds have increased economic and
political risks as they are exposed to events and factors in the various world
markets. These risks may be greater for funds that invest in emerging markets.
FIDELITY VIP II ASSET MANAGER PORTFOLIO
Seeks high total return with reduced risk over the long-term by allocating
its assets among stocks, bonds and short-term money market instruments.
In addition, the Portfolio may invest in high-yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
<PAGE>
22 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
Each Hartford Fund, except for the Hartford Growth and Income HLS Fund, is a
separate Maryland corporation registered with the Securities and Exchange
Commission as an open-end management investment company. The Hartford Growth and
Income HLS Fund is a diversified series of Hartford Series Fund, Inc., a
Maryland corporation, also registered with the Securities and Exchange
Commission as an open-end management investment company. The shares of each Fund
have been divided into Class IA and Class IB. Only Class IA shares are available
in this Policy. The Putnam Funds are portfolios of the Putnam Variable Trust,
which is organized as a business trust under the laws of Massachusetts and is an
open-end series investment company under the Investment Company Act of 1940. The
Fidelity VIP Funds are a series of two diversified open-end management
investment companies, each organized as a Massachusetts business trust with
multiple portfolios. The Fidelity VIP Equity-Income Portfolio and the Fidelity
VIP Overseas Portfolio are portfolios of VIP. The Fidelity VIP II Asset Manager
Portfolio is a portfolio of VIP II.
Each Fund continuously issues an unlimited number of full and fractional
shares of beneficial interest in such Fund. Such shares are offered to separate
accounts, including the Separate Account, established by Hartford or one of its
affiliated companies specifically to fund the Policies and other policies issued
by Hartford or its affiliates, as permitted by the Investment Company Act of
1940.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Hartford nor the Funds
currently foresee any such disadvantages either to variable life insurance
policy owners or to variable annuity contract owners, the Board of Directors for
the Hartford Funds, the Board of Trustees for the Putnam Funds and the Board of
Trustees for Fidelity VIP Funds (collectively, the "Boards") intend to monitor
events in order to identify any material conflicts between such policy owners
and such contract owners and to determine what action, if any, should be taken
in response thereto. If the Boards were to conclude that separate funds should
be established for variable annuity and variable life insurance separate
accounts, Hartford will bear the attendant expenses.
All investment income of, and other distributions to, each Sub-Account
arising from the applicable Fund are reinvested in shares of that Fund at net
asset value. The income and realized gains and/or losses on the assets of each
Sub-Account are therefore separate and are credited to or charged against the
Sub-Account without regard to income, gains and/or losses from any other
Sub-Account or from any other business of Hartford. Hartford will purchase
shares in a Fund in connection with premium payments allocated to the applicable
Sub-Account in accordance with Policy Owners' directions and will redeem shares
in the Funds to meet Policy obligations or make adjustments in reserves, if any.
The Funds are required to redeem Fund shares at net asset value and generally to
make payment within seven days.
Hartford reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from or substitutions for the Separate
Account and the Sub-Accounts which fund the Policies. If shares of any of the
Funds should no longer be available for investment, or if, in the judgment of
Hartford's management, further investment in shares of any Fund should become
inappropriate in view of the purposes of the Policies, Hartford may substitute
shares of another Fund for shares already purchased, or to be purchased in the
future, under the Policies. No substitution of securities will take place
without notice to and consent of Policy Owners and without prior approval of the
SEC, to the extent required by the Investment Company Act of 1940. Subject to
Policy Owner approval, if required, Hartford also reserves the right to end the
registration under the Investment Company Act of 1940 of the Separate Account or
any other separate accounts of which it is the depositor and which may fund the
Policies.
Each Fund is subject to certain investment restrictions which may not be
changed without the approval of a majority of the shareholders of the Fund. For
further information, see the prospectuses for the Funds accompanying this
Prospectus.
INVESTMENT ADVISERS
HARTFORD FUNDS -- Hartford Funds are sponsored and administered by Hartford
Life and Annuity Insurance Company. HL Investment Advisors, LLC ("HL Advisors")
serves as the investment adviser. Wellington Management Company, LLP
("Wellington Management") and The Hartford Investment Management Company
("HIMCO") serve as sub-investment advisors and provide day to day investment
services.
PUTNAM FUNDS -- Putnam Management, One Post Office Square, Boston, MA 02109,
serves as the investment manager for the Putnam Funds. An affiliate, Putnam
Advisory Company, Inc., manages domestic and foreign institutional accounts and
mutual funds. Another affiliate, Putnam Fiduciary Trust Company, provides
investment advice to institutional clients under its banking and fiduciary
policies. Putnam Management and its affiliates are wholly-owned subsidiaries of
Marsh & McLennan Companies, Inc., a publicly owned holding company whose
principal businesses are international insurance brokerage and employee benefit
consulting.
FIDELITY VIP FUNDS -- The Fidelity VIP Funds are managed by Fidelity
Management & Research Company ("FMR"), whose principal business address is 82
Devonshire Street, Boston, Massachusetts 02109. FMR, one of America's largest
investment management organizations, is composed
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
of a number of different companies which provide a variety of financial services
and products. FMR, founded in 1946, is the original Fidelity company. It
provides investment research and portfolio management services to a number of
mutual funds and other clients. Various Fidelity companies perform certain
activities required to operate VIP and VIP II.
THE FIXED ACCOUNT
THAT PORTION OF THE POLICIES RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE
STAFF OF THE SEC. THE FOLLOWING DISCLOSURE ABOUT THE FIXED ACCOUNT MAY BE
SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES
LAWS REGARDING THE ACCURACY AND COMPLETENESS OF DISCLOSURE.
Premium Payments and Account Values allocated to the Fixed Account become a
part of the general assets of Hartford. Hartford invests the assets of the
General Account in accordance with applicable law governing the investments of
insurance company general accounts.
The Fixed Account minimum credited rate is shown in the Contract. Currently,
Hartford guarantees that it will credit interest at a rate of not less than 4%
per year, compounded annually, to amounts allocated under the Policies to the
Fixed Account. Hartford may credit interest at a rate in excess of the Fixed
Account minimum credited rate; however, Hartford is not obligated to credit any
interest in excess of the Fixed Account minimum credited rate. There is no
specific formula for the determination of excess interest credits. Some of the
factors that Hartford may consider in determining whether to credit excess
interest to amounts allocated to the Fixed Account and the amount thereof, are
general economic trends, rates of return currently available and anticipated on
Hartford's investments, regulatory and tax requirements and competitive factors.
ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF THE
FIXED ACCOUNT MINIMUM CREDITED RATE WILL BE DETERMINED IN THE SOLE DISCRETION OF
HARTFORD. THE POLICY OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO FIXED
ACCOUNT ALLOCATIONS MAY NOT EXCEED THE FIXED ACCOUNT MINIMUM CREDITED RATE.
The Fixed Account may not be available in all states.
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford will vote
the shares of the Funds at regular and special meetings of the shareholders of
the Funds in accordance with instructions from Policy Owners (or the assignee of
a Policy, as the case may be) having a voting interest in the Separate Account.
The number of shares held in the Separate Account which are allocable to each
Policy Owner is determined by dividing the Policy Owner's interest in each
Sub-Account by the net asset value of the applicable shares of the Funds.
Hartford will vote shares for which no instructions have been given and shares
which are not allocable to Policy Owners (i.e., shares owned by Hartford) in the
same proportion as it votes shares for which it has received instructions.
However, if the Investment Company Act of 1940 or any rule promulgated
thereunder should be amended, however, or if Hartford's present interpretation
of the law should change and, as a result, Hartford determines it is permitted
to vote the shares of the Funds in its own right, it may elect to do so.
The voting interests of a Policy Owner (or the assignee of a Policy) in the
Funds will be determined as follows: A Policy Owner may cast one vote for each
full or fractional Accumulation Unit owned under a Policy and allocated to a
Sub-Account, the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by a Policy, amounts transferred from the Sub-
Account(s) to the Loan Account(s) in connection with the loan (see "Detailed
Description of Policy Benefits and Rights -- Policy Loans," page - ) will not
be considered in determining the voting interests of that Policy Owner. Policy
Owners should review the prospectuses for the Funds which accompany this
Prospectus to determine matters on which shareholders may vote.
Hartford may disregard voting instructions when required by state insurance
regulatory authorities if such instructions require that the shares be voted so
as to cause a change in the sub-classification or investment objective of one or
more of the Funds or to approve or disapprove an investment advisory policy for
the Funds. In addition, Hartford may disregard voting instructions in favor of
changes initiated by a Policy Owner in the investment policy of or the
investment advisers to the Funds if Hartford 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. In the event
Hartford does disregard voting instructions, a summary of
<PAGE>
24 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
that action and the reasons for such action will be included in the next
periodic report to Policy Owners.
STATEMENTS TO POLICY OWNERS
We will send You a statement at least once each Policy Year, showing:
(a) the current Account Value, Cash Surrender Value and Face Amount;
(b) the premiums paid, Monthly Deduction Amounts and Policy loans since the last
report;
(c) the amount of any Indebtedness;
(d) notifications required by the provisions of Your Policy; and
(e) any other information required by the Insurance Department of the state
where Your Policy was delivered.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of a Policy after it has been in
effect during the lifetime of the Insureds for two years from the Issue Date. If
a Policy is reinstated, the two year period is measured from the date of
reinstatement. Any increase in the Supplemental Face Amount for which evidence
of insurability was obtained is contestable during the lifetime of the Insureds
for two years from its effective date. In addition, if either Insured commits
suicide in the two year period, or such period as specified in state law, the
benefit payable will be limited to the premiums paid less any Indebtedness and
partial withdrawals.
MISSTATEMENT AS TO AGE
If the age of an Insured is incorrectly stated, the amount of Death Benefit
will be appropriately adjusted as specified in Your Policy.
PAYMENT OPTIONS
Proceeds under the Policies may be paid in a lump sum or may be applied to
one of Hartford's payment options. The minimum amount that may be placed under a
payment option is $5,000, unless Hartford consents to a lesser amount subject to
the then-current rules of Hartford. Once payments under the Second Option, the
Third Option or the Fourth Option commence, no surrender of a Policy may be made
for the purpose of receiving a lump sum settlement in lieu of the life insurance
payments.
The following payment options are available under the Policies:
FIRST OPTION -- Interest Income
Payments of interest at the rate We declare, but not less than 3 1/2% per
year, on the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option (with interest of not less than 3 1/2% per year) is exhausted. The final
payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected, which may be
from one to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- An annuity payable monthly during the lifetime of the
annuitant and terminating with the last monthly payment due preceding the
death of the annuitant.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- An annuity providing
monthly income to the annuitant for a fixed period of 120 months and for as
long thereafter as the annuitant shall live.
The tables in the Policies provide for guaranteed dollar amounts of monthly
payments for each $1,000 applied under the four payment options. Under the
Fourth Option, the amount of each payment will depend upon the age of the
annuitant at the time the first payment is due. If any periodic payment due any
payee is less than $200, Hartford may make payments less often.
The table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table, set back one year with a net investment rate of 3.5% per annum.
The tables for the First, Second and Third Options are based on a net investment
rate of 3.5% per annum. However, Hartford may, from time to time, at Our
discretion if mortality appears more favorable and interest rates justify, apply
other tables which will result in higher monthly payments for each $1,000
applied under one or more of the four payment options.
Hartford will make any other arrangements for income payments as Hartford
and the Policy Owner may agree on.
BENEFICIARY
A prospective purchaser in a Policy application names the beneficiary under
the Policy. You may change the beneficiary (unless irrevocably named) during the
lifetime of the Insureds by request In Writing to Hartford. If no beneficiary is
living when the last surviving Insured dies, the Death
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
Proceeds will be paid to the Policy Owner if living or, otherwise, to the Policy
Owner's estate.
ASSIGNMENT
A Policy may be assigned as collateral for a loan or other obligation.
Hartford is not responsible for any payment made or action taken before receipt
of notice In Writing of such assignment. Proof of interest must be filed with
any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
SUPPLEMENTAL BENEFITS
The following supplemental benefits are among the options that may be
included in a Policy by rider, subject to the restrictions and limitations set
forth therein.
LAST SURVIVOR EXCHANGE OPTION RIDER
We will exchange Your Policy for two individual policies on the life of each
Insured, subject to the conditions stated in the Policy rider.
ESTATE PROTECTION RIDER
We will pay a term insurance benefit upon receipt of due proof of the last
surviving Insured's death while Your Policy and the rider are in force, subject
to the conditions stated in the rider.
MATURITY DATE EXTENSION RIDER
Subject to certain Death Benefit and premium restrictions, We will extend
the Maturity Date to the date of the death of the second Insured to die,
regardless of the age of either Insured. See "Federal Tax Considerations --
Income Taxation of Policy Benefits," page - .
YEARLY RENEWABLE TERM LIFE INSURANCE RIDER
While the Policy and the rider thereto are in force, We will pay the term
life insurance amount upon receipt of due proof of death of the designated
Insured, subject to the conditions stated in the rider.
<PAGE>
26 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH HARTFORD LIFE, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Bossen, Wendell J., 64 Vice President, 1995** Vice President (1992-Present), Hartford Life and Accident
Insurance Company; Vice President (1992-Present),
Hartford Life Insurance Company; President
(1992-Present), International Corporate Marketing Group,
Inc.
Boyko, Gregory A., 46 Senior Vice President, Chief Vice President & Controller (1995-1997), Hartford;
Financial Officer & Director (1997-Present); Senior Vice President, Chief
Treasurer, 1997 Financial Officer & Treasurer (1997-Present); Vice
Director, 1997* President & Controller (1995-1997), Hartford Life and
Accident Insurance Company; Director (1997-Present);
Senior Vice President, Chief Financial Officer &
Treasurer (1997-Present); Vice President and Controller
(1995-1997), Hartford Life Insurance Company; Senior
Vice President, Chief Financial Officer & Treasurer
(1997-Present), Hartford Life, Inc.; Chief Financial
Officer (1994-1995), IMG American Life; Senior Vice
President (1992-1994), Connecticut Mutual Life Insurance
Company.
Cummins, Peter W., 60 Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice
President, (1997-Present); Vice President (1989-1997),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Vice President
(1989-1997); Senior Vice President (1997-Present); Vice
President (1989-1997), Hartford Life Insurance Company.
de Raismes, Ann M., 47 Senior Vice President, 1997 Director Vice President (1994-1997), Hartford; Senior Vice
of Human Resources, President (1997-Present); Vice President (1994-1997);
1994 Assistant Vice President (1992-1994); Director of Human
Resources (1991-Present), Hartford Life and Accident
Insurance Company; Senior Vice President (1997-Present);
Vice President (1994-1997); Assistant Vice President
(1992-1994); Director of Human Resources (1991-Present),
Hartford Life Insurance Company; Vice President, Human
Resources (1997-Present), Hartford Life, Inc.
Dooley, James R., 61 Vice President, 1993 Director, Information Services (1973-1997), Hartford Life
Insurance Company.
Fitch, Timothy M., 45 Vice President, 1995 Vice President (1995-Present); Actuary (1994-Present);
Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President
(1995-Present); Actuary (1994-Present); Assistant Vice
President (1992-1995), Hartford Life Insurance Company.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD LIFE, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Foy, David T., 31 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Vice
President (1998-Present), Assistant Vice President
(1995-1998), Hartford Life Insurance Company.
Garrett, Richard J., 53 Vice President, 1994 Treasurer (1994-1997), Hartford; Vice President
Assistant Treasurer, 1997 (1993-Present); Assistant Treasurer (1997-Present);
Treasurer (1984-1997), Hartford Life and Accident
Insurance Company; Vice President, (1993-Present);
Assistant Treasurer (1997-Present); Treasurer
(1986-1997), Hartford Life Insurance Company; Vice
President (1997-Present), Hartford Life, Inc.
Gillette, Donald J., 52 Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
Vice President (1995-1997), Hartford Life and Accident
Insurance Company; Assistant Vice President
(1995-Present), Hartford Life Insurance Company.
Ginnetti, John P., 52 Executive Vice President and Senior Vice President - Individual Life and Annuity
Director, Asset Management Division (1988-1994), Hartford; Director (1988-Present);
Services, 1994 Director (1988-Present); Executive Vice President &
Director, 1988 Director, Asset Management Services (1994-Present);
Senior Vice President - Individual Life and Annuity
Division (1988-1994), Hartford Life and Accident
Insurance Company; Executive Vice President, Asset
Management, Hartford Life, Inc. (1997-Present).
William A. Godfrey, III, 41 Senior Vice President, 1997 Senior Vice President (1997-Present), Hartford; Senior
Vice President (1997-Present), Hartford Life and
Accident Insurance Company; Vice President Information
Technology (1997-Present), Hartford Life, Inc.
Godkin, Lynda, 44 Senior Vice President, 1997 General Assistant General Counsel and Secretary (1994-1995),
Counsel, 1996 Corporate Secretary, Hartford; Director (1997-Present); Senior Vice President
1996 Director, 1997* (1997-Present); General Counsel (1996-Present);
Corporate Secretary (1995-Present); Associate General
Counsel (1995-1996); Assistant General Counsel and
Secretary (1994-1995); Counsel (1990-1994), Hartford
Life and Accident Insurance Company; Senior Vice
President (1997-Present); General Counsel
(1996-Present); Corporate Secretary (1995-Present);
Director (1997-Present); Associate General Counsel
(1995-1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life
Insurance Company; Vice President and General Counsel
(1997-Present), Hartford Life, Inc.
</TABLE>
<PAGE>
28 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD LIFE, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Grady, Lois W., 53 Senior Vice President, 1998 Vice President (1994-1998), Hartford; Senior Vice
Vice President, 1994 President (1998-Present); Vice President (1993-1997);
Assistant Vice President (1987-1993), Hartford Life and
Accident Insurance Company; Senior Vice President
(1998-Present); Vice President (1994-1997); Assistant
Vice President (1987-1994), Hartford Life Insurance
Company.
Graham, Christopher, 47 Vice President, 1997
Hunt, Mark E., 37 Vice President, 1998 Assistant Vice President (1997-1998), Hartford; Vice
President (1998-Present), Hartford Life and Accident
Insurance Company.
Joyce, Stephen T., 39 Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
Vice President (1994-1997), Hartford Life and Accident
Insurance Company; Vice President (1997-Present);
Assistant Vice President (1994-1997), Hartford Life
Insurance Company.
Keeler, Michael D., 37 Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
Insurance Company.
Kerzner, Robert A., 46 Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President
Vice President, 1997 (1994-1998), Hartford; Senior Vice President
(1998-Present); Vice President (1994-1997); Regional
Vice President (1991-1994), Hartford Life Insurance
Company.
Levenson, David N., 31 Vice President, 1998 Assistant Vice President (1997-1998), Hartford.
Malchodi, William B. Jr., 50 Vice President, 1994 Vice President (1994-Present); Director of Taxes
(1992-1998), Hartford Life and Accident Insurance
Company; Vice President (1994-Present); Director of
Taxes (1991-1998), Hartford Life Insurance Company.
Marra, Thomas M., 39 Executive Vice President, 1996 Senior Vice President (1993-1996); Director of Individual
Director, Individual Life and Annuities (1991-1993), Hartford; Director
Annuity Division, 1993 (1994-Present); Executive Vice President (1995-Present);
Director, 1994* Director, Individual Life and Annuity Division
(1994-Present); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1997), Hartford
Life and Accident Insurance Company; Director
(1994-Present); Executive Vice President (1995-Present);
Director, Individual Life and Annuity Division
(1994-Present); Senior Vice President (1994-1995); Vice
President (1989-1994); Actuary (1987-1995), Hartford
Life Insurance Company; Executive Vice President,
Individual Life and Annuities (1997-Present), Hartford
Life, Inc.
Matthieson, Steven L., 53 Vice President, 1984 Director of New Business (1984-1997), Hartford.
</TABLE>
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD LIFE, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
O'Halloran, Michael C., 51 Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
Insurance Company; Vice President (1997-Present),
Hartford Life Insurance Company; Corporate Secretary
(1997-Present), Hartford Life, Inc.; Senior Associate
General Counsel (1988-Present), Director of Corporate
Law (1994-Present), The Hartford Financial Services
Group.
Raymond, Craig R., 37 Senior Vice President, 1997 Chief Vice President (1993-1997); Assistant Vice President
Actuary, 1994 (1992-1993); Actuary (1989-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present);
Vice President (1993-1997); Actuary (1990-1995),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Chief Actuary
(1994-Present); Vice President (1993-1997); Assistant
Vice President (1992-1993); Actuary (1989-1994),
Hartford Life Insurance Company; Vice President and
Chief Actuary (1997-Present), Hartford Life, Inc.
Schrandt, David T., 50 Vice President, 1987 Treasurer (1987-1997); Controller (1987-1997), Hartford.
Smith, Lowndes A., 58 President, 1989 Chief Operating Officer (1989-1997), Hartford; Director
Chief Executive Officer, 1997 (1981-Present); President (1989-Present); Chief
Director, 1985* Executive Officer (1997-Present); Chief Operating
Officer (1989-1997), Hartford Life and Accident
Insurance Company; Director (1981-Present); President
(1989-Present), Chief Executive Officer (1997-Present);
Chief Operating Officer (1989-1997), Hartford Life
Insurance Company; Chief Executive Officer and President
and Director (1997-Present), Hartford Life, Inc.
Welnicki, Raymond P., 49 Senior Vice President & Vice President (1993-1994), Hartford; Director
Director, Employee Benefit (1994-Present); Senior Vice President (1995-Present);
Division, 1994 Director, Employee Benefit Division (1997-Present); Vice
Director, 1994* President (1993-1995), Hartford Life and Accident
Insurance Company; Senior Vice President, Employee
Benefits (1997-Present), Hartford Life, Inc.; Board of
Directors, Ethix Corp.
Welsh, Walter C., 51 Senior Vice President, 1997 Senior Vice President (1997-Present); Vice President
(1994-1997); Assistant Vice President (1992-1995),
Hartford Life and Accident Insurance Company; Senior
Vice President (1997-Present); Vice President
(1995-1997); Assistant Vice President (1992-1995),
Hartford Life Insurance Company; Vice President,
Government Affairs (1997-Present), Hartford Life, Inc.
</TABLE>
<PAGE>
30 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD LIFE, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Zlatkus, Lizabeth H., 39 Senior Vice President, 1997 Director, Vice President (1994-1997); Assistant Vice President
1994* (1992-1994), Hartford; Director (1994-Present); Senior
Vice President (1997-Present); Vice President
(1994-1997); Assistant Vice President (1992-1994),
Hartford Life and Accident Insurance Company; Vice
President, Group Life and Disability (1997-Present),
Hartford Life, Inc.
Znamierowski, David M., 38 Senior Vice President, 1997 Director, Director (1998-Present); Senior Vice President
1998 (1997-Present), Hartford Life and Accident Insurance
Company; Director (1998-Present); Senior Vice President
(1997-Present); Director, Risk Management Strategy
(1996-Present); Vice President (1997), Hartford Life
Insurance Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President,
Investment Strategy & Policy, Aetna Life and Casualty
Company.
</TABLE>
- ---------
* Denotes year of election to Board of Directors of Hartford.
** Affiliated company of The Hartford Financial Services Group, Inc.
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
DISTRIBUTION OF THE POLICIES
Hartford intends to sell the Policies in all jurisdictions where it is
licensed to do business. The Policies will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc. ("HESCO"), 200 Hopmeadow Street, Simsbury,
CT 06089, or certain other registered broker-dealers. Any sales representative
or employee selling the Policies is qualified to sell variable life insurance
policies under applicable federal and state laws. Each broker-dealer selling the
Policies is registered with the SEC under the Securities Exchange Act of 1934
and all such broker-dealers are members of the National Association of
Securities Dealers, Inc. HESCO is the principal underwriter for the Policies.
During the first Policy Year, the maximum sales commission payable to
Hartford agents, independent registered insurance brokers, and other registered
broker-dealers is 45% of the premiums paid up to a Target Premium and 5% of any
excess. In Policy Years 2 through 10, such sales commissions will not exceed
5.5% of premiums paid. Thereafter, agent commissions will not exceed 2% of
premiums paid. Sales commissions may be less for premiums attributable to
Supplemental Face Amount. Additionally, expense allowances may be paid. A sales
representative may be required to return all or a portion of the commissions
paid if a Policy sold by such sales representative terminates prior to the
Policy's second Policy Anniversary.
Broker-dealers or financial institutions are compensated according to a
schedule set forth by HESCO and any applicable rules or regulations for variable
insurance compensation. Compensation is generally based on premium payments made
by Policy Owners. This compensation is usually paid from the sales charges
described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HESCO, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institutions based on total sales
by the broker-dealer or financial institution of insurance products. These
payments, which may be different for broker-dealers or financial institutions,
will be made by HESCO, its affiliates or Hartford out of their own assets and
will not effect the amounts paid by the Policy Owners to purchase, hold or
surrender variable insurance products.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
The assets of the Separate Account are held by Hartford and are kept
physically segregated and held separate and apart from the General Account.
Hartford maintains records of all purchases and redemptions of shares of the
Funds. Additional protection for the assets of the Separate
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 31
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Account is afforded by Hartford's blanket fidelity bond issued by Aetna Casualty
and Surety Company in the aggregate amount of $50 million, covering all of the
officers and employees of Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE POLICY IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE, OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A POLICY DESCRIBED
HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these Policies cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. This discussion of federal tax
considerations is based upon Hartford's understanding of existing federal income
tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Code. Accordingly, the Separate
Account will not be taxed as a "regulated investment company" under Subchapter M
of the Code. Investment income and realized capital gains on the assets of the
Separate Account (the underlying Funds) are reinvested and are taken into
account in determining the value of the Accumulation Units. (See "Detailed
Description of Policy Benefits and Provisions -- Accumulation Unit Values"). As
a result, such investment income and realized capital gains are automatically
applied to increase reserves under the Policy.
Hartford does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY BENEFITS - GENERALLY
For federal income tax purposes, the Policies should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is generally excluded from the gross income of the
Beneficiary. Also, a life insurance policy owner is generally not taxed on
increments in the policy value until the policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a policy that is treated as life insurance. Hartford intends to monitor premium
levels to assure compliance with the Section 7702 requirements.
Although Hartford believes that the Last Survivor Policies are in compliance
with Section 7702 of the Code, the manner in which Section 7702 should be
applied to certain features of a joint survivorship life insurance contract is
not directly addressed by Section 7702. In the absence of final regulations or
other guidance issued under Section 7702, there is necessarily some uncertainty
whether a last survivor life insurance policy will meet the Section 7702
definition of a life insurance contract.
Hartford also believes that any loan received under a Policy will be treated
as Indebtedness of the Policy Owner, and that no part of any loan under a Policy
will constitute income to the Policy Owner. A surrender or assignment of the
Policy may have tax consequences depending upon the circumstances. Policy Owners
should consult a qualified tax adviser concerning the effect of such changes.
During the first fifteen Policy Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Policy.
The Last Survivor Exchange Option Rider permits, under limited
circumstances, a Policy to be split into two individual policies on the life of
each of the Insureds. A Policy split may have adverse tax consequences. It is
not clear whether a Policy split will be treated as a nontaxable exchange or
transfer under the Code. Unless a Policy split is so treated, among other
things, the split or transfer will result in the recognition of taxable income
on the gain in the Policy. In addition, it is not clear whether, in all
circumstances, the individual policies that result from a Policy split would be
treated as life insurance policies under Section 7702 of the Code or would be
classified as modified endowment contracts. The Policy Owner should consult a
qualified tax adviser regarding the possible adverse tax consequences of a
Policy split.
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the death of the last surviving insured. If the
Maturity Date of the Policy is extended by rider, Hartford believes the Policy
will continue to be treated as a life insurance contract for
<PAGE>
32 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
Federal income tax purposes after the scheduled Maturity Date. However, due to
the lack of specific guidance on this issue, the result is not certain. If the
Policy is not treated as a life insurance contract for federal income tax
purposes after the scheduled Maturity Date, among other things, the Death
Proceeds may be taxable to the recipient. The Policy Owner should consult a
qualified tax adviser regarding the possible adverse tax consequences resulting
from an extension of the scheduled Maturity Date.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
contract for any period during which the investments made by the separate
account or underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Policy is not treated as
a life insurance contract, the Policy Owner will be subject to income tax on the
annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, Hartford may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either Hartford or the
Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford intends
to administer all contracts subject to the diversification requirements in a
manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN
THE SEPARATE ACCOUNT
In certain circumstances, variable life insurance contract owners may be
considered the owners, for federal income tax purposes, of the assets of a
segregated asset account, such as the Separate Account, used to support their
contracts. In those circumstances, income and gains from the segregated asset
account would be includable in the contract owners' gross income. The Internal
Revenue Service (the "IRS") has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses certain incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. In addition,
the Treasury Department announced, in connection with the issuance of
regulations concerning investment diversification, that those regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular sub-accounts [of a segregated asset account] without
being treated as owners of the underlying assets." As of the date of this
Prospectus, no such guidance has been issued.
The ownership rights under the contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of the assets of a segregated
asset account. For example, a Policy Owner of this Policy has the choice of more
investment options to which to allocate premium payments and Separate Account
values, and may be able to transfer among investment options more frequently,
than in such rulings. These differences could result in the Policy Owner being
treated as the owner of a portion of the assets of the Separate Account. In
addition, Hartford does not know what standards will be set forth in the
regulations or rulings that the Treasury Department has stated it expects to
issue. Hartford therefore reserves the right to modify the contract as necessary
to attempt to prevent Policy Owners from being considered the owners of the
assets of the Separate Account. However, there is no assurance that such efforts
would be successful.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any
increase in a Policy Owner's contract value is generally not taxable to the
Policy Owner unless amounts are received (or are deemed to be received) under
the contract prior to the Insured's death. If there is a total withdrawal from
the contract, then the surrender value will be includable in the Policy Owner's
income to the extent
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 33
- --------------------------------------------------------------------------------
that the amount received exceeds the "investment in the contract." (If there is
any debt at the time of a total withdrawal, then such debt will be treated as an
amount distributed to the Policy Owner.) The "investment in the contract" is the
aggregate amount of premium payments and other consideration paid for the
contract, less the aggregate amount received under the contract previously to
the extent such amounts received were excludable from gross income. Whether
partial withdrawals (or such other amounts deemed to be distributed) from the
contract constitute income to the Policy Owner depends, in part, upon whether
the contract is considered a modified endowment contract for federal income tax
purposes.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. The seven-pay test provides that premiums cannot be paid at
a rate more rapidly than that allowed by the payment of seven annual premiums
using specified computational rules described in Section 7702A(c). A modified
endowment contract ("MEC") is a life insurance policy that either: (i) satisfies
the Section 7702 definition of life insurance, but fails the seven-pay test of
Section 7702A or (ii) is exchanged for a MEC. A policy fails the seven-pay test
if the accumulated amount paid into the Policy at any time during the first
seven Policy Years exceeds the sum of the net level premiums that would have
been paid up to that point if the Policy provided for paid-up future benefits
after the payment of seven level annual premiums. Computational rules for the
seven-pay test are described in Section 7702A(c).
If the Policy satisfies the seven-pay test at issuance, distributions and
loans made thereafter will not be subject to the MEC rules, unless the Policy is
changed materially. The seven-pay test will be applied anew at any time the
Policy undergoes a material change, which includes an increase in the Face
Amount. In addition, if there is a reduction in benefits under the Policy, the
seven-pay test is applied as if the Policy had initially been issued at the
reduced benefit level. Any reduction in benefits attributable to the nonpayment
of premiums will not be taken into account for purposes of the seven-pay test if
the benefits are reinstated within 90 days after the reduction.
A policy that is classified as a MEC is eligible for certain aspects of the
beneficial tax treatment accorded to life insurance. That is, the death benefit
is excluded from income and increments in value are not subject to current
taxation. However, if the Policy is classified as a MEC, then withdrawals from
the Policy will be considered first as withdrawals of income and then as a
recovery of premium payments. Thus, withdrawals will be includable in income to
the extent the contract value exceeds the investment in the contract. The amount
of any loan (including unpaid interest thereon) under the policy will be treated
as a withdrawal from the contract for tax purposes. In addition, if the Policy
Owner assigns or pledges any portion of the value of a contract (or agrees to
assign or pledge any portion), then such portion will be treated as a withdrawal
from the contract for tax purposes. Taxable withdrawals are subject to an
additional 10% tax, with certain exceptions. The Policy Owner's investment in
the contract is increased by the amount includable in income with respect to
such assignment, pledge, or loan, though it is not affected by any other aspect
of the assignment, pledge, or loan (including its release or repayment).
Generally, only distributions and loans made in the first year in which a
Policy becomes a MEC, and in subsequent years, are taxable. However,
distributions and loans made in the two years prior to a policy's failing the
seven-pay test are deemed to be in anticipation of failure and are subject to
tax.
Before assigning, pledging, or requesting a loan under a contract that is a
MEC, a Policy Owner should consult a qualified tax adviser.
All MEC policies that are issued within any calendar year to the same policy
owner by one company or its affiliates are treated as one MEC policy for the
purpose of determining the taxable portion of any loan or distribution.
Hartford has instituted procedures to monitor whether a Policy may become
classified as a MEC after issue.
ESTATE AND GENERATION SKIPPING TAXES
When the last surviving Insured dies, the Death Proceeds will generally be
includable in the Policy Owner's estate for purposes of federal estate tax if
the last surviving Insured owned the Policy. If the Policy Owner was not the
last surviving Insured, the fair market value of the Policy would be included in
the Policy Owner's estate upon the Policy Owner's death. The Policy would not be
includable in the last surviving Insured's estate if he or she neither retained
incidents of ownership at death nor had given up ownership within three years
before death.
The federal estate tax is integrated with the federal gift tax under a
unified rate schedule and unified credit which shelters up to $625,000 (1998)
from the estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises
the credit over the next eight years to $1,000,000. In addition, an unlimited
marital deduction may be available for federal estate and gift tax purposes. The
unlimited marital deduction permits the deferral of taxes until the death of the
surviving spouse.
If the Policy Owner (whether or not he or she is an Insured) transfers
ownership of the Policy to someone two or more generations younger, the transfer
may be subject to the generation skipping transfer tax, the taxable amount being
the value of the Policy. The generation-skipping
<PAGE>
34 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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transfer tax provisions generally apply to transfers which would be subject to
the gift and estate tax rules. Individuals are generally allowed an aggregate
generation skipping transfer exemption of $1 million. Because these rules are
complex, the Policy Owner should consult with a qualified tax adviser for
specific information if ownership is passing to younger generations.
LIFE INSURANCE PURCHASED FOR USE IN
SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner,
such amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective Policy
Owners which are not individuals should consult a qualified tax adviser to
determine the potential impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policy Owner or beneficiary. A qualified tax adviser
should be consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT
ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S., state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no pending material legal proceedings to which the Separate
Account is a party.
LEGAL MATTERS
Legal matters in connection with the issue and sale of the last survivor
flexible premium variable life insurance Policies described in this Prospectus
and the organization of Hartford, its authority to issue the Policies under
Connecticut law and the validity of the forms of the Policies under Connecticut
law and legal matters relating to the federal securities and income tax laws
have been passed on by Lynda Godkin, General Counsel of Hartford.
YEAR 2000
The Year 2000 issue relates to the ability or inability of computer systems
to properly process information and data containing or related to dates
beginning with the year 2000 and beyond. The Year 2000 issue exists because,
historically, many computer systems that are in use today were developed years
ago when a year was identified using a two-digit field rather than a four-digit
field. As information and data containing or related to the century date are
introduced to computer hardware, software and other systems, date sensitive
systems may recognize the year 2000 as 1900, or not at all, which may result in
computer systems processing information incorrectly. This, in turn, may
significantly and adversely affect the integrity and reliability of information
databases and may result in a wide variety of adverse consequences to a company.
In addition, Year 2000 problems that occur with third parties with which a
company does business, such as suppliers, computer vendors and others, may also
adversely affect any given company.
As an insurance and financial services company, Hartford has thousands of
individual and business customers that have purchased or invested in insurance
policies, annuities, mutual funds and other financial products. Nearly all of
these policies and products contain date sensitive data, such as policy
expiration dates, birth dates, premium payments dates and the like. In addition,
Hartford has business relationships with numerous third parties that affect
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 35
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virtually all aspects of its business, including, without limitation, suppliers,
computer hardware and software vendors, insurance agents and brokers, securities
broker-dealers and other distributors of financial products.
Beginning in 1990, Hartford began working on making its computer systems
Year 2000 ready, either by installing new programs or by replacing systems. In
January 1998, Hartford commenced a company-wide program to further identify,
assess and remediate the impact of Year 2000 problems in all of Hartford's
business segments. Hartford currently anticipates that this internal program
will be substantially completed by the end of 1998, and testing of computer
systems will continue through 1999.
In addition, as part of its Year 2000 program, Hartford is identifying third
parties with which it has significant business relations in order to attempt to
assess any potential impact on Hartford as a result of such third-party Year
2000 issues and remediation plans. Hartford currently anticipates that it will
substantially complete this evaluation by the end of 1998, and will conduct
systems testing with certain third parties through 1999. Hartford does not have
control over these third parties and, as a result, Hartford cannot currently
determine to what extent future operating results may be adversely affected by
the failure of these third parties to successfully address their Year 2000
issues. Hartford will continue to assess Year 2000 risk exposures related to its
own operations and its third-party relationships and is in the process of
developing contingency plans.
The costs of addressing the Year 2000 issue that have been incurred through
the six months ended June 30, 1998 have not been material to Hartford's
financial condition or results of operations. Hartford will continue to incur
costs related to its Year 2000 efforts and does not anticipate that the costs to
be incurred will be material to its financial condition or results of operations
EXPERTS
The audited financial statements included in this registration statement
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
Reference is made to the report on the statutory-basis financial statements of
Hartford Life and Annuity Insurance Company (formerly "ITT Hartford Life and
Annuity Insurance Company") which states the statutory-basis financial
statements are presented in accordance with statutory accounting practices
prescribed or permitted by the National Association of Insurance Commissioners
and the State of Connecticut Insurance Department, and are not presented in
accordance with generally accepted accounting principles. The principal business
address of Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut
06103.
The hypothetical Policy illustrations have been approved by Kenneth A.
McCullum, FSA, MAAA, Director of Individual Life Product Development of
Hartford, and are included in this Prospectus in reliance upon his opinion as to
their reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the SEC under the Securities
Act of 1933, as amended. This Prospectus does not contain all information set
forth in such registration statement, the amendments and exhibits thereto, to
all of which reference is made for further information concerning the Separate
Account, Hartford, and the Policies.
<PAGE>
36 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
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APPENDIX A
ILLUSTRATIONS OF DEATH BENEFIT AND ACCOUNT VALUES
The tables in Appendix A illustrate the way in which a Policy operates. The
illustrations show how the Death Benefit and Account Values could vary over an
extended period of time assuming hypothetical gross rates of return equal to
constant after tax annual rates of 0%, 6% and 12%. The illustrations assume the
following: (a) a male, preferred, age 55, and a female, preferred, age 50, with
$1,000,000 of Basic Face Amount and a premium of $15,500.00 paid in all years;
(b) a male, preferred, age 55, and a female, preferred, age 50, with $750,000 of
Basic Face Amount and $250,000 of Supplemental Face Amount and a premium of
$7,500.00 paid in all years; (c) a male, preferred, age 65, and a female,
preferred, age 65, with $1,000,000 of Basic Face Amount and a premium of
$27,000.00 paid in all years; and (d) a male, preferred, age 65, and a female,
preferred, age 65 with $750,000 of Basic Face Amount and $250,000 of
Supplemental Face Amount and a premium of $21,500.00 paid in all years.
The Death Benefit and Account Value for a Policy would be different from
those shown if the rates of return averaged 0%, 6% and 12% over a period of
years, but also fluctuated above or below those averages for individual Policy
Years. They would also differ if any Policy loan was made during the period of
time illustrated.
The illustrations reflect the deductions of current Policy charges and
guaranteed Policy charges for a single gross interest rate. The Death Benefits
and Account Values would change if current Cost of Insurance charges change.
The amounts shown for the Death Benefit and Account Values as of the end of
each Policy Year take into account an average daily charge equal to an annual
charge of 0.70% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment return
rates of 0%, 6% and 12% on the Fund's assets are equal to net annual investment
return rates (net of the 0.70% average daily charge) of -.70%, 5.30% and 11.30%,
respectively.
In addition, the Death Benefit and Account Values as of the end of each
Policy Year take into account the front-end sales load, premium processing
charge, federal tax charge, premium tax charge (assumed to be 2.0% in the
illustrations), Cost of Insurance charge, monthly administrative fee, issue
charge, and mortality and expense risk charge.
The hypothetical returns shown in the illustrations are without any tax
charges that may be allocable to the Separate Account in the future. In order to
produce after-tax returns of 0%, 6%, and 12%, the Separate Account would have to
earn a sufficient amount in excess of 0%, 6%, 12%, respectively, to cover any
tax charges (see "Detailed Description of Policy Benefits and Provisions --
Deductions and Charges From the Account Value -- Taxes").
The "Premiums Accumulated at 5% Interest Per Year" column of each
illustration shows the amount which would accumulate if the initial premium was
invested to earn interest, after taxes, of 5% per year, compounded annually.
Hartford will furnish, upon request, a comparable illustration reflecting
the proposed Insured's age and risk classification, a Policy's proposed Face
Amount or initial premium requested, and reflecting guaranteed Cost of Insurance
rates. Hartford will also furnish an additional similar illustration reflecting
current Cost of Insurance rates which may be less than, but never greater than,
the guaranteed Cost of Insurance rates.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 37
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FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE: 55 MALE PREFERRED/
ISSUE AGE: 50 FEMALE PREFERRED
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 16,275 6,640 1,000,000 6,355 1,000,000
2 33,364 19,876 1,000,000 19,276 1,000,000
3 51,307 34,386 1,000,000 33,438 1,000,000
4 70,147 50,280 1,000,000 48,948 1,000,000
5 89,930 67,680 1,000,000 65,923 1,000,000
6 110,701 88,459 1,000,000 86,232 1,000,000
7 132,511 111,199 1,000,000 108,453 1,000,000
8 155,412 136,078 1,000,000 132,757 1,000,000
9 179,457 163,290 1,000,000 159,332 1,000,000
10 204,705 193,046 1,00,0000 188,382 1,000,000
11 231,215 229,559 1,000,000 221,973 1,000,000
12 259,051 270,036 1,000,000 258,855 1,000,000
13 288,279 314,910 1,000,000 299,348 1,000,000
14 318,968 364,656 1,000,000 343,816 1,000,000
15 351,191 419,812 1,000,000 392,680 1,000,000
16 385,026 480,980 1,000,000 446,431 1,000,000
17 420,552 548,784 1,035,877 505,661 1,000,000
18 457,855 623,886 1,140,111 570,998 1,043,461
19 497,022 707,036 1,251,892 642,465 1,137,562
20 538,148 799,101 1,372,056 720,352 1,236,845
25 724,270 1,424,338 2,126,664 1,221,573 1,823,918
30 1,014,302 2,435,429 3,251,826 1,951,085 2,605,123
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $9,740.00 IN POLICY YEAR ONE AND $23,557.74 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
38 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE: 55 MALE PREFERRED/
ISSUE AGE: 50 FEMALE PREFERRED
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 16,275 6,255*** 1,000,000 5,978 1,000,000
2 33,364 18,372*** 1,000,000 17,806 1,000,000
3 51,307 30,928 1,000,000 30,060 1,000,000
4 70,147 43,921 1,000,000 42,738 1,000,000
5 89,930 57,346 1,000,000 55,832 1,000,000
6 110,701 72,865 1,000,000 71,006 1,000,000
7 132,511 88,870 1,000,000 86,650 1,000,000
8 155,412 105,353 1,000,000 102,754 1,000,000
9 179,457 122,298 1,000,000 119,302 1,000,000
10 204,705 139,682 1,000,000 136,269 1,000,000
11 231,215 161,092 1,000,000 155,138 1,000,000
12 259,051 183,507 1,000,000 174,499 1,000,000
13 288,279 206,971 1,00,0000 194,304 1,000,000
14 318,968 231,513 1,000,000 214,486 1,000,000
15 351,191 257,177 1,000,000 234,972 1,000,000
16 385,026 284,001 1,000,000 255,679 1,000,000
17 420,552 311,968 1,000,000 276,521 1,000,000
18 457,855 341,156 1,000,000 297,403 1,000,000
19 497,022 371,651 1,000,000 318,228 1,000,000
20 538,148 403,540 1,000,000 338,875 1,000,000
25 724,270 583,303 1,000,000 433,159 1,000,000
30 1,014,302 804,440 1,074,102 486,347 1,000,000
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $9,355.00 IN POLICY YEAR 1 AND $22,053.74 IN POLICY YEAR
2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 6%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 39
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE: 55 MALE PREFERRED/
ISSUE AGE: 50 FEMALE PREFERRED
$15,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 16,275 5,870*** 1,000,000 5,602 1,000,000
2 33,364 16,915*** 1,000,000 16,383 1,000,000
3 51,307 27,697 1,000,000 26,905 1,000,000
4 70,147 38,198 1,000,000 37,149 1,000,000
5 89,930 48,396 1,000,000 47,095 1,000,000
6 110,701 59,867 1,000,000 58,315 1,000,000
7 132,511 70,960 1,000,000 69,163 1,000,000
8 155,412 81,648 1,000,000 79,607 1,000,000
9 179,457 91,897 1,000,000 89,615 1,000,000
10 204,705 101,661 1,000,000 99,141 1,000,000
11 231,215 114,217 1,000,000 109,403 1,000,000
12 259,051 126,576 1,000,000 119,089 1,000,000
13 288,279 138,728 1,000,000 128,113 1,000,000
14 318,968 150,646 1,000,000 136,367 1,000,000
15 351,191 162,318 1,000,000 143,735 1,000,000
16 385,026 173,717 1,000,000 150,081 1,000,000
17 420,552 184,749 1,000,000 155,258 1,000,000
18 457,855 195,427 1,000,000 159,102 1,000,000
19 497,022 205,760 1,000,000 161,426 1,000,000
20 538,148 215,757 1,000,000 162,006 1,000,000
25 724,270 254,025 1,000,000 126,058 1,000,000
30 1,014,302 261,033 1,000,000 -- 1,000,000
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $8,970.00 IN POLICY YEAR 1 AND $20,596.74 IN POLICY YEAR
2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 0%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
40 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE: 55 MALE PREFERRED/
ISSUE AGE: 50 FEMALE PREFERRED
$7,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 7,875 3,573*** 1,000,000 3,209 1,000,000
2 16,144 9,606*** 1,000,000 8,839 1,000,000
3 24,826 16,159 1,000,000 14,948 1,000,000
4 33,942 23,263 1,000,000 21,561 1,000,000
5 43,514 30,948 1,000,000 28,703 1,000,000
6 53,565 40,441 1,000,000 37,596 1,000,000
7 64,118 50,696 1,000,000 47,187 1,000,000
8 75,199 61,757 1,000,000 57,513 1,000,000
9 86,834 73,665 1,000,000 68,608 1,000,000
10 99,051 86,455 1,000,000 80,495 1,000,000
11 111,878 102,890 1,000,000 93,739 1,000,000
12 125,347 121,037 1,000,000 107,884 1,000,000
13 139,490 141,092 1,000,000 122,975 1,000,000
14 154,339 163,237 1,000,000 139,008 1,000,000
15 169,931 187,692 1,000,000 155,974 1,000,000
16 186,303 214,688 1,000,000 173,851 1,000,000
17 203,493 244,419 1,000,000 192,620 1,000,000
18 221,543 277,214 1,000,000 212,251 1,000,000
19 240,495 313,440 1,000,000 232,717 1,000,000
20 260,394 353,506 1,000,000 253,970 1,000,000
25 350,453 623,999 1,000,000 368,547 1,000,000
30 490,791 1,068,158 1,426,222 482,460 1,000,000
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $4,210.50 IN POLICY YEAR 1 AND $9,606.00 IN POLICY YEAR
2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 41
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE: 55 MALE PREFERRED/
ISSUE AGE: 50 FEMALE PREFERRED
$7,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 7,875 3,353*** 1,000,000 3,000 1,000,000
2 16,144 8,828*** 1,000,000 8,105 1,000,000
3 24,826 14,443 1,000,000 13,334 1,000,000
4 33,942 20,181 1,000,000 18,669 1,000,000
5 43,514 26,019 1,000,000 24,084 1,000,000
6 53,565 33,084 1,000,000 30,709 1,000,000
7 64,118 40,242 1,000,000 37,405 1,000,000
8 75,199 47,458 1,000,000 44,137 1,000,000
9 86,834 54,690 1,000,000 50,862 1,000,000
10 99,051 61,881 1,000,000 57,520 1,000,000
11 111,878 71,654 1,000,000 64,553 1,000,000
12 125,347 81,778 1,000,000 71,387 1,000,000
13 139,490 92,254 1,000,000 77,907 1,000,000
14 154,339 103,074 1,000,000 83,972 1,000,000
15 169,931 114,290 1,000,000 89,420 1,000,000
16 186,303 125,893 1,000,000 94,061 1,000,000
17 203,493 137,796 1,000,000 97,682 1,000,000
18 221,543 150,025 1,000,000 100,045 1,000,000
19 240,495 162,605 1,000,000 100,864 1,000,000
20 260,394 175,563 1,000,000 99,788 1,000,000
25 350,453 238,152 1,000,000 46,648 1,000,000
30 490,791 283,875 1,000,000 -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $3,990.50 IN POLICY YEAR 1 AND $8,828.00 IN POLICY YEAR
2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 6%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
42 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE: 55 MALE PREFERRED/
ISSUE AGE: 50 FEMALE PREFERRED
$7,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 7,875 3,133*** 1,000,000 2,791 1,000,000
2 16,144 8,078*** 1,000,000 7,398 1,000,000
3 24,826 12,848 1,000,000 11,835 1,000,000
4 33,942 17,422 1,000,000 16,082 1,000,000
5 43,514 21,776 1,000,000 20,113 1,000,000
6 53,565 26,993 1,000,000 25,011 1,000,000
7 64,118 31,913 1,000,000 29,616 1,000,000
8 75,199 36,502 1,000,000 33,894 1,000,000
9 86,834 40,719 1,000,000 37,803 1,000,000
10 99,051 44,509 1,000,000 41,288 1,000,000
11 111,878 50,444 1,000,000 44,770 1,000,000
12 125,347 56,205 1,000,000 47,681 1,000,000
13 139,490 61,778 1,000,000 49,921 1,000,000
14 154,339 67,136 1,000,000 51,365 1,000,000
15 169,931 72,260 1,000,000 51,873 1,000,000
16 186,303 77,119 1,000,000 51,281 1,000,000
17 203,493 81,608 1,000,000 49,414 1,000,000
18 221,543 85,734 1,000,000 46,065 1,000,000
19 240,495 89,507 1,000,000 41,005 1,000,000
20 260,394 92,931 1,000,000 33,954 1,000,000
25 350,453 95,700 1,000,000 -- --
30 490,791 55,227 1,000,000 -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $3,770.50 IN POLICY YEAR 1 AND $8,078.00 IN POLICY YEAR
2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 0%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 43
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE: 65 MALE PREFERRED/
ISSUE AGE: 65 FEMALE PREFERRED
$27,000 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 28,350 12,929*** 1,000,000 12,643 1,000,000
2 58,118 36,326*** 1,000,000 35,725 1,000,000
3 89,373 61,279 1,000,000 60,329 1,000,000
4 122,192 87,821 1,000,000 86,483 1,000,000
5 156,652 115,976 1,000,000 114,207 1,000,000
6 192,834 148,056 1,000,000 145,804 1,000,000
7 230,826 181,978 1,000,000 179,186 1,000,000
8 270,717 225,670 1,000,000 214,301 1,000,000
9 312,603 273,714 1,000,000 251,078 1,000,000
10 356,583 326,531 1,000,000 289,476 1,000,000
11 402,762 388,547 1,000,000 332,772 1,000,000
12 451,251 457,159 1,000,000 378,477 1,000,000
13 502,163 533,085 1,000,000 427,000 1,000,000
14 555,621 617,128 1,000,000 478,929 1,000,000
15 611,752 710,397 1,000,000 535,056 1,000,000
16 670,690 813,544 1,094,278 596,446 1,000,000
17 732,574 926,834 1,220,014 664,590 1,000,000
18 797,553 1,051,293 1,356,091 741,634 1,000,000
19 865,781 1,188,074 1,503,895 829,591 1,050,118
20 937,420 1,338,460 1,664,945 924,255 1,149,704
25 1,261,632 2,336,059 2,710,973 1,504,229 1,745,643
30 1,766,849 3,916,137 4,291,618 2,332,386 2,556,016
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $17,601.04 IN POLICY YEAR 1 AND $40,379.99 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
44 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE: 65 MALE PREFERRED/
ISSUE AGE: 65 FEMALE PREFERRED
$27,000 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 28,350 12,197*** 1,000,000 11,920 1,000,000
2 58,118 33,549*** 1,000,000 32,983 1,000,000
3 89,373 54,992 1,000,000 54,123 1,000,000
4 122,192 76,395 1,000,000 75,206 1,000,000
5 156,652 97,597 1,000,000 96,074 1,000,000
6 192,834 120,602 1,000,000 118,723 1,000,000
7 230,826 143,053 1,000,000 140,797 1,000,000
8 270,717 172,784 1,000,000 161,952 1,000,000
9 312,603 203,617 1,000,000 181,771 1,000,000
10 356,583 235,548 1,000,000 199,788 1,000,000
11 402,762 271,759 1,000,000 218,186 1,000,000
12 451,251 309,412 1,000,000 234,026 1,000,000
13 502,163 348,475 1,000,000 246,774 1,000,000
14 555,621 388,842 1,000,000 255,798 1,000,000
15 611,752 430,594 1,000,000 260,268 1,000,000
16 670,690 473,134 1,000,000 259,047 1,000,000
17 732,574 516,297 1,000,000 250,589 1,000,000
18 797,553 560,462 1,000,000 232,792 1,000,000
19 865,781 606,045 1,000,000 202,903 1,000,000
20 937,420 653,511 1,000,000 157,330 1,000,000
25 1,261,632 930,954 1,080,363 -- --
30 1,766,849 1,273,986 1,396,136 -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $16,869.04 IN POLICY YEAR 1 AND $37,602.99 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 6%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 45
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 BASIC FACE AMOUNT
ISSUE AGE: 65 MALE PREFERRED/
ISSUE AGE: 65 FEMALE PREFERRED
$27,000 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 28,350 11,466*** 1,000,000 11,198 1,000,000
2 58,118 30,861*** 1,000,000 30,329 1,000,000
3 89,373 49,126 1,000,000 48,333 1,000,000
4 122,192 66,137 1,000,000 65,084 1,000,000
5 156,652 81,744 1,000,000 80,434 1,000,000
6 192,834 97,856 1,000,000 96,289 1,000,000
7 230,826 112,101 1,000,000 110,276 1,000,000
8 270,717 132,396 1,000,000 122,059 1,000,000
9 312,603 152,149 1,000,000 131,221 1,000,000
10 356,583 171,303 1,000,000 137,295 1,000,000
11 402,762 192,429 1,000,000 142,036 1,000,000
12 451,251 212,893 1,000,000 142,668 1,000,000
13 502,163 232,548 1,000,000 138,587 1,000,000
14 555,621 251,140 1,000,000 129,061 1,000,000
15 611,752 268,599 1,000,000 113,113 1,000,000
16 670,690 283,955 1,000,000 89,401 1,000,000
17 732,574 296,658 1,000,000 56,140 1,000,000
18 797,553 306,796 1,000,000 10,933 1,000,000
19 865,781 314,429 1,000,000 -- --
20 937,420 319,587 1,000,000 -- --
25 1,261,632 262,720 1,000,000 -- --
30 1,766,849 -- -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $16,138.04 IN POLICY YEAR 1 AND $34,914.99 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 0%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
46 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE: 65 MALE PREFERRED/
ISSUE AGE: 65 FEMALE PREFERRED
$21,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 22,575 12,091*** 1,000,000 11,727 1,000,000
2 46,279 30,919*** 1,000,000 30,151 1,000,000
3 71,168 50,812 1,000,000 49,598 1,000,000
4 97,301 71,737 1,000,000 70,028 1,000,000
5 124,741 93,643 1,000,000 91,383 1,000,000
6 153,553 118,222 1,000,000 115,345 1,000,000
7 183,806 143,737 1,000,000 140,170 1,000,000
8 215,571 178,412 1,000,000 165,644 1,000,000
9 248,925 216,474 1,000,000 191,489 1,000,000
10 283,946 258,229 1,000,000 217,393 1,000,000
11 320,718 306,799 1,000,000 245,176 1,000,000
12 359,329 360,386 1,000,000 272,793 1,000,000
13 399,871 419,485 1,000,000 300,025 1,000,000
14 442,439 484,607 1,000,000 326,642 1,000,000
15 487,136 556,543 1,000,000 352,340 1,000,000
16 534,068 635,594 1,000,000 376,689 1,000,000
17 583,346 722,891 1,000,000 399,100 1,000,000
18 635,089 819,948 1,057,673 418,793 1,000,000
19 689,418 926,790 1,173,156 434,828 1,000,000
20 746,464 1,044,229 1,298,943 446,094 1,000,000
25 1,004,633 1,822,499 2,114,992 357,400 1,000,000
30 1,406,935 3,053,019 3,345,743 -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $13,918.50 IN POLICY YEAR 1 AND $30,919.00 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 47
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE: 65 MALE PREFERRED/
ISSUE AGE: 65 FEMALE PREFERRED
$21,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 22,575 11,405*** 1,000,000 11,051 1,000,000
2 46,279 28,481*** 1,000,000 27,757 1,000,000
3 71,168 45,444 1,000,000 44,333 1,000,000
4 97,301 62,141 1,000,000 60,623 1,000,000
5 124,741 78,388 1,000,000 76,441 1,000,000
6 153,553 95,659 1,000,000 93,259 1,000,000
7 183,806 112,024 1,000,000 109,141 1,000,000
8 215,571 135,613 1,000,000 123,685 1,000,000
9 248,925 160,011 1,000,000 136,391 1,000,000
10 283,946 185,193 1,000,000 146,686 1,000,000
11 320,718 213,309 1,000,000 155,665 1,000,000
12 359,329 242,397 1,000,000 161,056 1,000,000
13 399,871 272,371 1,000,000 162,087 1,000,000
14 442,439 303,046 1,000,000 157,820 1,000,000
15 487,136 334,429 1,000,000 147,022 1,000,000
16 534,068 365,527 1,000,000 128,010 1,000,000
17 583,346 396,044 1,000,000 98,492 1,000,000
18 635,089 426,189 1,000,000 55,384 1,000,000
19 689,418 456,183 1,000,000 -- --
20 746,464 486,258 1,000,000 -- --
25 1,004,633 628,972 1,000,000 -- --
30 1,406,935 781,318 1,000,000 -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $13,232.50 IN POLICY YEAR 1 AND $28,481.00 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 6%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
48 HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
$250,000 SUPPLEMENTAL FACE AMOUNT
ISSUE AGE: 65 MALE PREFERRED/
ISSUE AGE: 65 FEMALE PREFERRED
$21,500 PLANNED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
END OF ACCUMULATED ------------------------- ------------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT
------- ---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1 22,575 10,719*** 1,000,000 10,377 1,000,000
2 46,279 26,126*** 1,000,000 25,446 1,000,000
3 71,168 40,451 1,000,000 39,437 1,000,000
4 97,301 53,558 1,000,000 52,213 1,000,000
5 124,741 65,286 1,000,000 63,612 1,000,000
6 153,553 77,062 1,000,000 75,059 1,000,000
7 183,806 86,959 1,000,000 84,627 1,000,000
8 215,571 103,147 1,000,000 91,949 1,000,000
9 248,925 118,841 1,000,000 96,569 1,000,000
10 283,946 133,976 1,000,000 97,966 1,000,000
11 320,718 150,242 1,000,000 97,002 1,000,000
12 359,329 165,851 1,000,000 91,627 1,000,000
13 399,871 180,638 1,000,000 81,146 1,000,000
14 442,439 194,317 1,000,000 64,731 1,000,000
15 487,136 206,797 1,000,000 41,283 1,000,000
16 534,068 216,795 1,000,000 9,279 1,000,000
17 583,346 223,785 1,000,000 -- --
18 635,089 226,911 1,000,000 -- --
19 689,418 226,650 1,000,000 -- --
20 746,464 223,137 1,000,000 -- --
25 1,004,633 113,345 1,000,000 -- --
30 1,406,935 -- -- -- --
</TABLE>
<TABLE>
<C> <S>
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST 2 POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $12,546.50 IN POLICY YEAR 1 AND $26,126.00 IN POLICY
YEAR 2 FOR THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT
AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A
POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT
ALLOCATIONS MADE TO THE SEPARATE ACCOUNTS AND THE RATES OF RETURN OF THE
SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED 0%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE SEPARATE
ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THIS HYPOTHETICAL RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY 49
- --------------------------------------------------------------------------------
[FINANCIAL STATEMENTS TO BE FILED BY AMENDMENT]
<PAGE>
PART II
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 71 pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of Hartford Life and Annuity
Insurance Company ("Hartford") authorizing the establishment of the
Separate Account.
(A2) Not Applicable.
(A3a) Principal Underwriting Agreement.(1)
(A3b) Forms of Selling Agreements.(1)
(A4) Not Applicable.
(A5) Form of Flexible Premium Variable Life Insurance Policy.(1)
(A6a) Certificate of Incorporation of Hartford.(2)
(A6b) Bylaws of Hartford.(1)
(A7) Not Applicable.
(A8) Not Applicable.
- -------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 1, to the
Registration Statement File No. 33-89988, dated May 1, 1996.
(2) Incorporated by reference to Post-Effective Amendment No. 4, to the
Registration Statement File No. 33-89988, dated August 3, 1998.
<PAGE>
(A9) Not Applicable.
(A10) Form of Application for Flexible Premium Variable Life Insurance
Policies.(1)
(A11) Memorandum describing transfer and redemption procedures.(1)
(2) Opinion and consent of Lynda Godkin, Senior Vice President, General
Counsel, and Corporate Secretary.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1 (b) or (c) of Part I.
(4) Not applicable.
(5) Opinion and Consent of Kenneth A. McCullum, FSA, MAAA to be filed by
Amendment.
(6) Consent of Arthur Andersen LLP, Independent Public Accountants to be
filed by Amendment.
(7) Copy of Power of Attorney.
(8) Not applicable.
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
Hartford Life and Annuity Insurance Company ("Hartford") hereby represents
that the aggregate fees and charges under the Policy are reasonable in
relation to the services rendered, the expenses expected to be incurred, and
the risks assumed by Hartford.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6e-3(T)
1. Separate Account VL II meets the definition of "Separate Account" under
Rule 6e-3(T).
2. Hartford undertakes to keep and make available to the Commission upon
request any documents used to support the any representation in as to the
reasonableness of fees.
UNDERTAKING ON INDEMNIFICATION
Under Section 33-772 of the Connecticut General Statutes, unless limited by its
certificate of incorporation, the Registrant must indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any proceeding
to which he was a party because he is or was a director of the corporation
against reasonable expenses incurred by him in connection with the proceeding.
The Registrant may indemnify an individual made a party to a proceeding because
he is or was a director against liability incurred in the proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Registrant, and, with respect to any criminal
proceeding, had no reason to believe his conduct was unlawful. Conn. Gen. Stat.
Section 33-771(a). Additionally, pursuant to Conn. Gen. Stat. Section 33-776,
the Registrant may indemnify officers and employees or agents for liability
incurred and for any expenses to which they becomes subject by reason of being
or having been an employees or officers of the Registrant. Connecticut law does
not prescribe standards for the indemnification of officers, employees and
agents and expressly states that their indemnification may be broader than the
right of indemnification granted to directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify only a director that was successful on the merits in a suit, under
Article VIII, Section 2 of the
<PAGE>
Registrant's bylaws, the Registrant must indemnify both directors and officers
of the Registrant who are parties or threatened to be parties to a legal
proceeding by reason of his being or having been a director or officer of the
Registrant for any expenses if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
company, and with respect to criminal proceedings, had no reason to believe his
conduct was unlawful. Unless otherwise mandated by a court, no indemnification
shall be made if such officer or director is adjudged to be liable for
negligence or misconduct in the performance of his duty to the Registrant.
Additionally, the directors and officers of Hartford and Hartford Equity Sales
Company, Inc. ("HESCO") are covered under a directors and officers liability
insurance policy issued to The Hartford Financial Services Group, Inc.
and its subsidiaries. Such policy will reimburse the Registrant for any
payments that it shall make to directors and officers pursuant to law and will,
subject to certain exclusions contained in the policy, further pay any other
costs, charges and expenses and settlements and judgments arising from any
proceeding involving any director or officer of the Registrant in his past or
present capacity as such, and for which he may be liable, except as to any
liabilities arising from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by
the undersigned thereunto duly authorized, and attested, all in the Town of
Simsbury, and State of Connecticut, on the 22nd day of January, 1999.
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY - SEPARATE ACCOUNT VL II
(Registrant)
By: /s/ Gregory A. Boyko
----------------------------------
Gregory A. Boyko, Senior Vice
President
HARTFORD LIFE AND ANNUITY INSURANCE
COMPANY (Depositor)
By: /s/ Gregory A. Boyko
----------------------------------
Gregory A. Boyko, Senior Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and on
the dates indicated.
Gregory A. Boyko, Senior Vice President,
Director *
Lynda Godkin, Senior Vice President
General Counsel and Corporate Secretary, *By: /s/ Marianne O'Doherty
Director * -----------------------
Thomas M. Marra, Executive Vice Marianne O'Doherty
President, Director * Attorney-in-Fact
Lowndes A. Smith, President,
Chief Executive Officer, Director * Dated: January 22, 1999
David M. Znamierowski, Senior Vice President,
Director *
<PAGE>
EXHIBIT INDEX
(2) Opinion and Consent of Lynda Godkin, General Counsel.
(7) Copy of Power of Attorney.
<PAGE>
EXHIBIT 2
[LOGO]
HARTFORD LIFE
January 22, 1999 Lynda Godkin
Senior Vice President,
General Counsel & Corporate
Secretary
Board of Directors
Hartford Life and Annuity Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT VL II
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
FILE NO. 33-89988
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life and Annuity Insurance Company
(the "Company"), a Connecticut insurance company, and Hartford Life and Annuity
Insurance Company Separate Account VL II (the "Account") in connection with the
registration of an indefinite amount of securities in the form of last survivor
flexible premium variable life insurance policies (the "Policies") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
I have examined such documents (including the Form S-6 Registration Statement)
and reviewed such questions of law as I considered necessary and appropriate,
and on the basis of such examination and review, it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a stock
life insurance company under the laws of the State of Connecticut and is
duly authorized by the Insurance Department of the State of Connecticut to
issue the Policies.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policies, that portion of the assets of
the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
<PAGE>
Board of Directors
Hartford Life and Annuity Insurance Company
January 22, 1999
Page 2
4. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations of
the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
EXHIBIT 7
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
POWER OF ATTORNEY
Gregory A. Boyko
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
David M. Znamierowski
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life and Annuity Insurance Company under the
Securities Act of 1933 and/or the Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for the
purpose herein set forth.
/s/ Gregory A. Boyko Dated as of March 16, 1998
- ------------------------------ --------------------------
Gregory A. Boyko
/s/ Lynda Godkin Dated as of March 16, 1998
- ------------------------------ --------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated as of March 16, 1998
- ------------------------------ --------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated as of March 16, 1998
- ------------------------------ --------------------------
Lowndes A. Smith
/s/ David M. Znamierowski Dated as of March 16, 1998
- ------------------------------ --------------------------
David M. Znamierowski
