<PAGE>
File No. 33-89990
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
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 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:
Scott K. Richardson, Esq.
ITT Hartford Life Insurance Companies
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
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X on May 1, 1996 pursuant to paragraph (b) of Rule 485
-------
60 days after filing pursuant to paragraph (a)(1) of Rule 485
-------
on May 1, 1996 pursuant to paragraph (a)(1) of Rule 485
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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. The Rule
24f-2 Notice for the Registrant's most recent fiscal year was filed on
or about February 29, 1996.
<PAGE>
-2-
F. Proposed maximum aggregate offering price to the public of the securities
being registered:
Not yet determined.
G. Amount of filing fee: Paid
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this registration
statement.
The registrant hereby represents that it is relying on Section (13)(i)(B) of
Rule 6e-3(T).
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
<TABLE>
<CAPTION>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
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<S> <C>
1. Cover page
2. Cover page
3. Not applicable
4. The Company; 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; Detailed Description of
Policy Benefits and Provisions; 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
16. Separate Account VL II - Funds; Detailed
Description of Policy Benefits and Provisions -
Allocation of Premium Payments
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
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17. Summary; Detailed Description of Policy Benefits
and Provisions - Cash Value and Amount Payable on
Surrender of the Policy, Right to Examine or
Exchange the Policy and Surrender
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 Assets
24. Other Matters - Assignment
25. The Company
26. Not applicable
27. The Company
28. The Company; Management
29. The Company
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
<PAGE>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
35. Distribution of the Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
39. The Company; Distribution of the Policies
40. Not applicable
41. The Company; 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
Provision - Cash Value
47. Separate Account VL II - Funds
48. Cover page; The Company
49. Not applicable
50. Separate Account VL II - General
51. Summary; The Company; 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>
Item No. of
Form N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
</TABLE>
<PAGE>
HARTFORD
LIFE INSURANCE COMPANY
P.O. Box 2999
Hartford, CT 06104-2999
Telephone (800) 231-5453
STAG LAST SURVIVOR
Flexible Premium
Variable Life Insurance Policies
[LOGO]
This Prospectus describes last survivor flexible premium variable life
insurance policies (the "Policies", and each individually a "Policy") offered
by Hartford Life Insurance Company ("Hartford Life") to applicants generally
between ages 20 and 80 respecting both Insureds. For a given amount of Death
Benefit chosen, the Purchaser of the Policy has considerable flexibility in
selecting the timing and amount of premium payments.
The Policies provide for a Death Benefit payable at the death of the last
surviving Insured. The Policy Owner may select one of three Death Benefit
Options; a level amount equal to the Face Amount ("Option A"), a variable
amount equal to the Face Amount plus the Account Value ("Option B"), or a
variable amount equal to the Face Amount plus a return of premiums ("Option
C"). The required minimum initial (Basic) Face Amount is generally $100,000.
Under all three options, the Policies have Account Values which increase
with the payment of each premium and which decrease to reflect fees and
charges made by Hartford Life. These fees and charges vary depending on such
factors as the Face Amount, the ages of the Insureds and the level of the
premiums paid. The Account Value of a Policy will also vary up or down to
reflect the investment experience of the Funds to which the premium payment(s)
has been allocated, and the Policy Owner bears the investment risk for all
amounts so allocated.
If a Policy is surrendered during the first two Policy Years, the Policy
Owner may be entitled to a refund of loads in addition to the Cash Surrender
Value.
There is no guaranteed minimum Account Value for a Policy. If the Death
Benefit guarantee is in effect (see "Death Benefit" on page 12), the Policy
will not lapse due to poor investment performance.
The initial premium will be allocated to Hartford Money Market Sub-Account
and after the Right to Examine Period has expired, to one or more of the
Sub-Accounts or to the Fixed Account as specified in the Policy Owner's
application. The Funds underlying the Sub-Accounts presently are: Hartford
Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford Capital Appreciation
Fund, Inc., Hartford Dividend and Growth Fund, Inc., Hartford Index Fund,
Inc., Hartford International Opportunities Fund, Inc., Hartford Mortgage
Securities Fund, Inc., Hartford Stock Fund, Inc., and HVA Money Market Fund,
Inc. managed by Hartford Investment Management Company (the "Hartford Life
Funds"); PCM Diversified Income Fund, PCM Global Asset Allocation Fund, PCM
Global Growth Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money
Market Fund, PCM New Opportunities Fund, PCM U.S. Government and High Quality
Bond Fund, PCM Utilities Growth and Income Fund, and PCM Voyager Fund managed
by Putnam Investment Management, Inc. (the "Putnam Funds"); and the
Equity-Income Portfolio, Overseas Portfolio and Asset Manager Portfolio (the
"Fidelity Funds") managed by Fidelity Management & Research Company.
These Policies are subject to a Front-End Sales Load which is set forth in
the section entitled "Deductions from the Premium" on page 16.
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IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY
OWN A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
------------------------------------------------------------------------------
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THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE APPLICABLE ELIGIBLE FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS.
ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
------------------------------------------------------------------------------
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
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The date of this Prospectus is May 1, 1996.
<PAGE>
SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: 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 the
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 each bear, respectively, to the initial Face Amount.
For example, if 60% of Your initial Face Amount represented Basic Face Amount
and 40% represented 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 initial
Basic Face Amount. Thereafter it may change in accordance with the terms of the
Policy.
CASH SURRENDER VALUE: 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 Life'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 twelve), multiplied by the Annual
Death Benefit Guarantee Premium.
DATE OF ISSUE: The date from which the 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. The three Death Benefit Options provided are
described in the Death Benefit section of this Prospectus.
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: Portion of Account Value invested in the General Account of
Hartford Life.
FUNDS: The registered open-end management investment companies in which assets
of the Separate Account may be invested.
GENERAL ACCOUNT: All assets of Hartford Life other than those allocated to its
separate accounts.
GUIDELINE ANNUAL PREMIUM: The level annual premium payment necessary to provide
the future benefits under the Policy through maturity, based on certain
assumptions specified under the 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 the Policy. For purposes of the Policy, the Guideline Annual
Premium is used only in limiting front-end sales loads.
HARTFORD LIFE: Hartford Life Insurance Company.
IN WRITING: In a written form satisfying to Us.
INDEBTEDNESS: The outstanding loan on the Policy, including any interest due or
accrued.
INSUREDS: The two persons on whose lives the 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 Sub-Accounts as a result of loans. The account is credited with
interest and is not based on the investment experience of the Separate Account.
MATURITY DATE: The date on which the Policy will mature.
<PAGE>
MONTHLY ACTIVITY DATE: The Policy Date and the same date in each succeeding
month as the Policy Date except that whenever the Monthly Activity Date falls on
a date other than a Valuation 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: Located in Minneapolis, Minnesota.
NET PREMIUM: The amount of premium actually credited to the Account Value.
PLANNED PREMIUMS: The amount of premiums that You intend to pay as indicated on
the application and shown on the Policy's specifications page.
POLICY: A last survivor flexible premium variable life insurance contract issued
by Hartford Life, as 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 LOAN RATE: The interest rate charged on Policy loans, as shown in the
Policy.
POLICY OWNER: The person having rights to benefits under the Policy during the
lifetime of the two Insureds; the Policy Owner may or may not be one of the
Insureds.
POLICY YEARS: Annual periods computed from the Policy Date.
PRO RATA BASIS: An allocation method based on the proportion of the Account
Value in the Fixed Account and each Sub-Account.
SEPARATE ACCOUNT: An account established by Hartford Life to separate the assets
funding the Policies from other assets of Hartford Life; in this case, "Separate
Account VL II."
SUB-ACCOUNT: The subdivisions of the Separate Account.
SUPPLEMENTAL FACE AMOUNT: On the Policy Date, the Supplemental Face Amount is
shown on the 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 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 (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
YOU, YOUR: The Owner of the Policy.
WE, US, OUR: Hartford Life Insurance Company.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SUMMARY................................................................. 4
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS.................. 8
General............................................................... 8
Premiums.............................................................. 8
Premium Payment Flexibility......................................... 8
Allocation of Premium Payments...................................... 8
Accumulation Units.................................................. 8
Accumulation Unit Values............................................ 9
Premium Limitation.................................................. 9
Account Values...................................................... 9
Amount Payable on Surrender of the Policy........................... 9
Load Refund......................................................... 9
Partial Withdrawals................................................. 10
Transfers of Account Value............................................ 10
Amount and Frequency of Transfers................................... 10
Transfers to or from Sub-Accounts................................... 10
Transfers from the Fixed Account.................................... 11
Policy Loans.......................................................... 11
Loan Interest....................................................... 11
Credited Interest................................................... 11
Preferred Loan...................................................... 11
Loan Repayments..................................................... 11
Termination Due to Excessive Indebtedness........................... 11
Effect of Loans on Account Value.................................... 11
Death Benefit......................................................... 12
Death Benefit Options............................................... 12
Option Change....................................................... 12
Death Benefit Guarantee............................................. 12
Minimum Death Benefit............................................... 13
Supplemental Face Amount............................................ 13
Unscheduled Increases and Decreases in Face Amount.................. 13
Benefits at Maturity.................................................. 13
Lapse and Reinstatement............................................... 14
Policy Lapse and Grace Period....................................... 14
Death Benefit Guarantee Default and Grace Period.................... 14
Reinstatement....................................................... 14
The Right to Examine or Exchange the Policy........................... 15
Surrender............................................................. 15
Valuation of Payments and Transfers................................... 15
Application for a Policy.............................................. 15
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
Examples of Front End Sales Loads/Impact of Refund of Load.......... 17
Deductions and Charges From the Account Value......................... 17
Monthly Deduction Amounts........................................... 17
Charges Against the Funds........................................... 19
Taxes............................................................... 20
THE COMPANY............................................................. 20
SEPARATE ACCOUNT VL II.................................................. 21
General............................................................. 21
Funds............................................................... 21
Hartford Funds........................................................ 21
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PAGE
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Putnam Funds.......................................................... 22
<S> <C>
Fidelity Funds........................................................ 23
Investment Adviser.................................................... 24
Hartford Funds...................................................... 24
Putnam Funds........................................................ 25
Fidelity Funds...................................................... 25
THE FIXED ACCOUNT....................................................... 25
OTHER MATTERS........................................................... 25
Voting Rights......................................................... 25
Statements to Policy Owners........................................... 26
Limit on Right to Contest............................................. 26
Misstatement as to Age................................................ 26
Payment Options....................................................... 26
Beneficiary........................................................... 27
Assignment............................................................ 27
Dividends............................................................. 27
SUPPLEMENTAL BENEFITS................................................... 27
Last Survivor Exchange Option Rider................................... 27
Estate Protection Rider............................................... 28
Maturity Date Extension Rider......................................... 28
Yearly Renewable Term Life Insurance Rider............................ 28
EXECUTIVE OFFICERS AND DIRECTORS........................................ 29
DISTRIBUTION OF THE POLICIES............................................ 32
SAFEKEEPING OF SEPARATE ACCOUNT VL II'S ASSETS.......................... 32
FEDERAL TAX CONSIDERATIONS.............................................. 32
General............................................................... 32
Taxation of Hartford Life and the Separate Account.................... 32
Income Taxation of Policy Benefits.................................... 33
Modified Endowment Contracts.......................................... 33
Estate and Generation Skipping Taxes.................................. 34
Diversification Requirements.......................................... 34
Ownership of the Assets in the Separate Account....................... 34
Life Insurance Purchased for Use in Split Dollar Arrangements......... 35
Federal Income Tax Withholding........................................ 35
Non-Individual Ownership of Policies.................................. 35
Other................................................................. 35
Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations......................................................... 35
LEGAL PROCEEDINGS....................................................... 36
LEGAL MATTERS........................................................... 36
EXPERTS................................................................. 36
REGISTRATION STATEMENT.................................................. 36
APPENDIX A -- ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES AND CASH
SURRENDER VALUES..................................................... 37
FINANCIAL STATEMENTS.................................................... 38
</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.
3
<PAGE>
SUMMARY
THE POLICY
The last survivor flexible premium variable life insurance Policies offered
by this Prospectus are funded by a Fixed Account and Separate Account VL II, a
separate account established by Hartford Life pursuant to Connecticut insurance
law and organized as a unit investment trust registered under the Investment
Company Act of 1940. Separate Account VL II is presently comprised of twenty-two
sub-accounts (the "Sub-Accounts" and each individually a "Sub-Account"), each of
which invests exclusively in one of the underlying Funds. If an initial premium
is submitted with an application for a Policy, it will be allocated, to the
Hartford Money Market Sub-Account. At a later date, the values in the Hartford
Money Market Sub-Account will be allocated to one or more of the Sub-Accounts or
the Fixed Account as specified in the Policy Owner's application. This later
date is the latest of 45 days after the application is signed, ten days after We
mail or personally delivery a Notice of Withdrawal Right, ten days after We
receive the premium and the date We receive the final requirement to put the
Policy in force. The Policies are credited with units ("Accumulation Units") in
each selected Sub-Account, the assets of which are invested in the applicable
Fund. A Policy Owner may transfer the funds among the Sub-Accounts and the Fixed
Account subject to a transfer charge. See "Transfers of Account Value" of
Detailed Description of Policy Benefits and Provisions, page 10.
The Policies are first and foremost life insurance policies with death
benefits, cash values, and other features traditionally associated with life
insurance. The Policies are called "last survivor" because the Death Proceeds
are paid on the death of the last surviving Insured. The Policies are called
"flexible premium" because, once the desired level and pattern of death benefits
have been determined, a Purchaser has considerable flexibility in choosing the
timing and amount of premium to be paid. The Policies are called "variable"
because, unlike the fixed benefits of an ordinary whole life insurance policy,
the Account Value will, and the Death Benefit may, increase or decrease
depending on the investment experience of the Funds to which the premium
payment(s) has been allocated.
POLICY DESIGN OPTIONS
The options in the Policy are structured to give a Purchaser and his sales
agent the ability to select a Policy tailor-made for the Purchaser's specific
life insurance needs.
The Policy options which give the Purchaser such flexibility fall into three
major categories:
1. Death Benefit Options -- These allow the Purchaser to select various
levels and patterns of Death Benefits.
2. Investment Options -- Currently, the Purchaser has the choice of
allocating the Policy's Account Value among up to nine of the Policy's
twenty-two investment options. (Hartford Life reserves the right to
increase the number of allocable investment options to more than nine.)
These include the twenty-two variable Sub-Accounts and the Fixed Account.
3. Premium Options -- The Purchaser has the flexibility to choose, within
limits, the amount of the initial premium and the amount and frequency of
subsequent premiums.
DEATH BENEFIT
The Policies provide for three Death Benefit Options. These can be level and
equal to the Face Amount ("Option A"), the Face Amount plus Return of Account
Value ("Option B") or the Face Amount plus Return of Premium ("Option C"). At
the death of the last surviving Insured, We will pay the Death Proceeds to the
Beneficiary. The Death Proceeds equal the Death Benefit less any Indebtedness
under the Policy and less any due and unpaid Monthly Deduction Amount occurring
during a Grace Period. You may also select Supplemental Face Amount coverage in
the application. Scheduled and unscheduled increases in Face Amount may be
requested. See "Detailed Description of Policy Benefits and Provision -- Death
Benefit," page 12.
PREMIUM
You have considerable flexibility as to when and in what amounts You pay
premiums.
Prior to issue, You can choose a Planned Premium, within a range determined
by Hartford Life based on the Face Amount and each Insured's sex (except where
unisex rates apply), Issue Age and risk classification.
4
<PAGE>
The 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.
The minimum subsequent premium is $50. We reserve the right to refund the
excess premium payments that would cause the Policy not to meet the tax
qualification guidelines for life insurance under the Internal Revenue Code of
1986, as amended.
There are circumstances, usually if a Policy Owner wants to prefund future
benefits in seven years or less, when the Policy may become a Modified Endowment
Contract under federal tax law. If it does, 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 the Policy Owner attains
age 59 1/2. Prospective Purchasers and Policy Owners are advised to consult a
qualified tax adviser before taking steps that may affect whether the Policy
becomes a Modified Endowment Contract. See "Federal Tax Considerations, Modified
Endowment Contract" for a discussion of the "seven pay test", page 33.
SEPARATE ACCOUNT VL II
Separate Account VL II is a separate account established by Hartford Life
pursuant to the insurance laws of the State of Connecticut and organized as a
registered unit investment trust under the Investment Company Act of 1940.
Separate Account VL II meets the definition of "separate account" under federal
securities law. Separate Account VL II is comprised of Sub-Accounts, each of
which invests exclusively in one of the Funds. Each Hartford Fund is organized
as a corporation under the laws of the State of Maryland and is a diversified
open-end management investment company registered under the Investment Company
Act of 1940. The Putnam Funds are organized as Putnam Capital Manager Trust, a
Massachusetts business trust organized on September 24, 1987, and is a open-end,
series investment company with multiple portfolios or funds registered under the
Investment Company Act of 1940. The Fidelity Funds involve two diversified
open-end management investment companies, each with multiple portfolios and
organized as a Massachusetts business trust. The Equity-Income Portfolio and
Overseas Portfolio are portfolios of the Variable Insurance Products Fund,
organized on November 13, 1981. The Asset Manager Portfolio is a portfolio of
the Variable Insurance Products Fund II, organized on March 21, 1988.
Registration under the Investment Company Act of 1940 does not involve
supervision of the management or investment practices or policies by the
Commission. The shares of the Funds are sold to Separate Account VL II and to
other separate accounts of Hartford Life or its affiliates which fund similar
annuity or life insurance products.
Currently, the Funds are Hartford Advisers Fund, Inc., Hartford Bond Fund,
Inc., Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth
Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities
Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford Stock Fund, Inc.,
and HVA Money Market Fund, Inc.; PCM Diversified Income Fund, PCM Global Asset
Allocation Fund, PCM Global Growth Fund, PCM Growth and Income Fund, PCM High
Yield Fund, PCM Money Market Fund, PCM New Opportunities Fund, PCM U.S.
Government and High Quality Bond Fund, PCM Utilities Growth and Income Fund, and
PCM Voyager Fund; and the Equity-Income Portfolio, Overseas Portfolio and Asset
Manager Portfolio. Applicants should read the prospectuses for each of the Funds
accompanying this Prospectus in connection with the purchase of a Policy. The
investment objectives of each of the Funds are as set forth in "Separate Account
VL II," page 21.
Total fund operating expenses in 1995, including management fees, were .65%
for Hartford Advisers Fund; .68% for Hartford Capital Appreciation Fund; .53%
for Hartford Bond Fund; .77% for Hartford Dividend and Growth Fund; .39% for
Hartford Index Fund; .86% for Hartford International Opportunities Fund; .47%
for Hartford Mortgage Securities Fund; .48% for Hartford Stock Fund; .45% for
HVA Money Market Fund; .85% for PCM Diversified Income Fund; .84% for PCM Global
Asset Allocation Fund; .75% for PCM Global Growth Fund; .57% for PCM Growth and
Income Fund; .79% for PCM High Yield Fund; .57% for PCM Money Market Fund; .84%
for PCM New Opportunities Fund; .70% for PCM U.S. Government and High Quality
Bond Fund; .78% for PCM Utilities Growth and Income Fund; .68% for PCM Voyager
Fund; .61% for Equity-Income Portfolio; .91% for Overseas Portfolio; and .81%
for Asset Manager Portfolio.
The investment adviser for the Hartford Funds is The Hartford Investment
Management Company, a wholly-owned subsidiary of Hartford Life. The Hartford
Investment Management Company, retains a sub-investment adviser with respect to
some of the Funds. The Putnam Funds are advised by Putnam Investment Management,
Inc., a subsidiary of Putnam Investments, Inc. The Fidelity Funds are managed by
Fidelity Management & Research Company. See "Separate Account VL II," page 21.
5
<PAGE>
FIXED ACCOUNT
Premium payments and Account Values allocated to the Fixed Account become
part of the general assets of Hartford Life. Hartford Life invests the assets of
the General Account in accordance with applicable law governing the investments
of insurance company general accounts.
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, premium tax and
federal tax charge and front-end sales load. The amount of each premium
allocated to the Account Value 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 as a premium tax charge a percentage of each premium to cover
premium-based taxes assessed against Hartford Life. This percentage will vary by
locale depending on the tax rates in effect there and is based on the actual tax
imposed. The range is generally between 0% and 4%.
We also deduct a current charge of 1.25% of each premium for federal taxes
imposed under Section 848 of the Code.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium. The current
and maximum front-end sales load 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. After Policy Year 20, the current front-end sales load is 0%, with a
maximum of 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. After Policy
Year 20, the current front-end sales load is 0%, with a maximum of 2%.
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%.
Front-end sales loads which cover expenses relating to the sale and
distribution of the Policies may be reduced for certain sales of the Policies
under circumstances which may result in savings of such sales and distribution
expenses.
DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE
We will subtract amounts from Your Account Value to provide for the Monthly
Deduction Amount. These will be taken on a Pro Rata Basis from the Fixed Account
and Sub-Accounts on each Monthly Activity Date.
The Monthly Deduction Amount equals:
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<PAGE>
(A) THE COST OF INSURANCE; PLUS
(B) THE CHARGES FOR ADDITIONAL BENEFITS PROVIDED BY RIDER, IF ANY; PLUS
(C) THE CHARGES FOR "SPECIAL" INSURANCE CLASS RATING, IF ANY; PLUS
(D) THE MONTHLY ADMINISTRATIVE FEE AND ISSUE CHARGE; PLUS
(E) THE MORTALITY AND EXPENSE RISK CHARGE, PLUS
(F) ANY FACE AMOUNT INCREASE FEE.
Hartford Life may also set up a provision for income taxes against the
assets of Separate Account VL II. See "Deductions and Charges from the Account
Value," page 17 and "Federal Tax Considerations," page 32.
Applicants should review the prospectuses for the Funds which accompany this
Prospectus for a description of the charges assessed against the assets of each
of the Funds.
ACCOUNT VALUE
As with many other types of insurance policies, each Policy will have a cash
value ("Account Value"). The Account Value of the Policy will increase or
decrease to reflect the interest credited to the Fixed Account and Loan Account,
investment experience of the Sub-Accounts applicable to the Policy and
deductions for the Monthly Deduction Amount. There is no minimum guaranteed
Account Value and the Policy Owner bears the risk of the 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 the
Policy Benefits and Provisions -- Account Values," page 9.
POLICY LOAN
A Policy Owner may obtain a cash loan from Hartford Life. The loan is
secured by the Policy. At the time a loan is requested, the Indebtedness
(including the currently applied for loan) may not exceed 90% of the Account
Value. See "Detailed Description of Policy Benefits and Provisions -- Policy
Loans," page 11.
CHARGES AGAINST THE FUNDS
Separate Account VL II purchases shares of the Funds at net asset value. The
net asset value of the Fund shares reflects investment advisory fees and
administrative and other expenses already deducted from the assets of the Funds.
These charges are described herein. See Charges Against the Funds, page 19.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
An applicant has a limited right to return his or her Policy for
cancellation. If the applicant returns the Policy within ten days after delivery
of the Policy, ten days after We mail or personally deliver a Notice of
Withdrawal Right, or within 45 days after completion of the application,
whichever is latest (subject to applicable state regulation), Hartford Life will
return to the applicant, within seven days thereafter, the greater of the
premium paid, less any Indebtedness, or the sum of (1) the Account Value, less
any Indebtedness, on the date the returned Policy is received by Hartford Life
or its agent and (2) any deductions under Policy or by the Funds for taxes,
charges or fees.
In addition, once the Policy is in effect it may be exchanged during the
first 24 months after its Date of Issue for a non-variable last survivor life
insurance policy offered by Us on the life of the Insureds without submitting
proof of insurability.
SURRENDER
At any time prior to the Maturity Date, provided the Policy has a Cash
Surrender Value, You may surrender the Policy. See "Detailed Description of
Policy Benefits and Provisions," and "Surrender", pages 15.
TAX CONSEQUENCES
The current federal tax law generally excludes all death benefit payments
from the gross income of the Policy Beneficiary. See "Federal Tax
Considerations," page 32.
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DETAILED DESCRIPTION OF POLICY
BENEFITS AND PROVISIONS
GENERAL
This Prospectus describes a last survivor flexible premium variable life
insurance policy where the Purchaser of the Policy has 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 issue, You can choose a Planned Premium, within a range determined
by Hartford Life 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. The notices may be sent at 12, 6, or 3 month
intervals. You may also have premiums automatically deducted monthly from Your
checking account. The Planned Premiums and payment mode You selected are shown
on the Policy's specifications page. You may change the Planned Premiums,
subject to Our minimum amount rules then in effect.
The 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.
See also "Lapse and Reinstatement" on page 14 for more details.
ALLOCATION OF PREMIUM PAYMENTS
The initial Net Premium will be allocated to the Hartford Money Market
Sub-Account on the later of the Policy Date or the date We receive the premium.
The value in this Hartford Money Market Sub-Account will then be allocated
to the Fixed Account and Sub-Accounts according to the premium allocation
specified in the application on the latest of 45 days after the application is
signed, ten days after We receive the premium, ten days after We mail or
personally deliver a Notice of Withdrawal Right and 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.
Upon written request, You may change the premium allocation. Portions
allocated to the Fixed Account and Sub-Accounts must be whole percentages of 10%
or more. Subsequent Net Premiums will be allocated to the Fixed Account and
Sub-Accounts according to Your most recent instructions, subject to the
following. Currently, the Account Value may be allocated to no more than nine
Sub-Accounts. (Hartford Life reserves the right to increase the number of
allocable investment options beyond nine.) If We receive a premium and Your most
recent allocation instructions would violate this requirement, We will allocate
the Net Premium to the Fixed Account and Sub-Accounts on a Pro Rata Basis.
The Policy Owner receives several different types of notification as to what
his current premium allocation is. The initial allocation chosen by the Policy
Owner is shown in the Policy. And, each transactional confirmation received
after a premium payment will show how that premium has been allocated. In
addition, each quarterly statement summarizes the current premium allocation in
effect for that Policy.
ACCUMULATION UNITS
Net Premiums allocated to the Sub-Accounts are used to credit Accumulation
Units to those Sub-Accounts.
The number of Accumulation Units in each Sub-Account to be credited to a
Policy (including the initial allocation to Hartford Money Market Sub-Account)
and the amount credited to the Fixed Account will be determined first by
multiplying the Net Premium by the appropriate allocation percentage to
determine the
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<PAGE>
portion to be invested in the Fixed Account or Sub-Account. Each portion to be
invested in a Sub-Account is then divided by the Accumulation Unit Value of that
particular Sub-Account next computed following receipt of the payment.
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 a 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 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 payment is received by
Hartford Life at the National Service Center if 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 the Policy to fail to meet the
definition of a life insurance policy in accordance with the Internal Revenue
Code, We reserve the right to refund the excess premium payments. We will refund
such premium payments and 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, and the interest credited to the Fixed and Loan
Accounts as well as the Monthly Deduction Amounts.
The Account Value of a particular Policy is related to the net asset value
of the Funds associated with the Sub-Accounts, if any, to which premium payments
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 Accumulation Unit Value
of that Sub-Account and then summing the result for all the Sub-Accounts. The
Account Value equals the Account Value in the Sub-Accounts plus the value of the
Fixed and Loan Accounts. The Cash Surrender Value, which is the net amount
available upon surrender of the Policy, is the Account Value less any
Indebtedness. See "The Policy -- Accumulation Unit Values," page 9.
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
As long as the Policy is in effect, a Policy Owner may elect, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), to fully surrender the Policy. Upon surrender, the Policy Owner
will receive the Cash Surrender Value determined as of the day Hartford Life
receives the Policy Owner's written request or the date requested by the Policy
Owner, whichever is later. The Cash Surrender Value equals the Account Value
less any Indebtedness. The Policy will terminate on the date of receipt of the
written request, or the date the Policy Owner requests the surrender to be
effective, whichever is later.
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.
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The refund will be equal to the excess, if any, of the sum of the actual
front-end sales load charged to date over:
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;
AND
2. 9% OF EACH PAYMENT MADE IN EXCESS OF TWO GUIDELINE ANNUAL PREMIUMS.
PARTIAL WITHDRAWALS
A maximum of twelve (12) partial withdrawals are allowed each Policy Year;
however, only one (1) partial withdrawal is allowed 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 Life
does not impose a partial withdrawal charge. However, Hartford Life reserves the
right to impose a partial withdrawal charge of up to $50.
TRANSFERS OF ACCOUNT VALUE
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Policy is in effect, You may transfer
amounts among the Fixed Account and Sub-Accounts. Transfers may be made by
written request or by calling toll free 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 Life 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 requirements that callers
provide certain identifying information for themselves (if not the Policy Owner)
and the Policy Owner. All transfer instructions by telephone are tape recorded.
The amounts which may be transferred and the number of transfers will be
limited by Our rules then in effect.
Currently there are no restrictions on transfers other than those described
below. There is no charge currently for the first four (4) transfers in any
Policy Year. Each subsequent transfer is subject to a Transfer Charge of up to
$25.
We reserve the right at a future date to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers.
TRANSFERS TO OR FROM SUB-ACCOUNTS
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 made will be
reduced. The reduction will be determined by dividing:
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1. THE AMOUNT TRANSFERRED BY,
2. THE ACCUMULATION UNIT VALUE FOR THAT SUB-ACCOUNT DETERMINED AS OF THE NEXT
VALUATION DAY AFTER WE RECEIVE YOUR REQUEST FOR TRANSFER IN WRITING.
In the event of a transfer to a Sub-Account, We will increase the number of
Accumulation Units credited to the Sub-Account. The increase will equal:
1. THE AMOUNT TRANSFERRED DIVIDED BY,
2. THE ACCUMULATION UNIT VALUE FOR THAT SUB-ACCOUNT DETERMINED AS OF THE NEXT
VALUATION DAY AFTER WE RECEIVE YOUR REQUEST FOR TRANSFER IN WRITING.
TRANSFERS FROM THE FIXED ACCOUNT
In addition to the conditions 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 THE ACCUMULATED VALUE IN YOUR FIXED ACCOUNT EXCEEDS $1,000, THE AMOUNT
TRANSFERRED IN ANY POLICY YEAR MAY BE NO LARGER THAN 25% OF THE ACCUMULATED
VALUE IN THE FIXED ACCOUNT ON THE DATE OF TRANSFER.
POLICY LOANS
As long as the Policy is in effect, a Policy Owner may obtain, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), a cash loan from Hartford Life. The total Indebtedness at the time
of the new loan (including the accrued interest on prior loans plus the
currently applied for 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 the Indebtedness at the Policy Loan Rate,
which is the interest rate as shown in the Policy. 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 Sub-Accounts to the Loan Account on each
Monthly Activity Date.
CREDITED INTEREST
During the first ten Policy Years, any amounts in the Loan Account will be
credited with interest at a rate equal to the Policy Loan Rate, minus 2%. For
Policy Years 11 and beyond, except for Preferred Loans described below, the Loan
Account will be credited with interest at a rate equal to the Policy Loan Rate
applicable to that Indebtedness, minus 1%.
PREFERRED LOAN
If, 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 equal to the Policy Loan
Rate. 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 loan at any time while Your Policy
is in force and either of the Insureds is alive. The amount of loan repayment
will be deducted from the Loan Account and will be allocated among the Fixed
Account and Sub-Accounts in the same percentage as premiums are allocated.
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<PAGE>
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Account Value, the Policy will
terminate 61 days after We have mailed notice to Your last known address and
that of any assignees of record. If sufficient loan repayment is not made by the
end of this 61 day period, the Policy will end without value.
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the 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 loan is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the Fixed Account
and 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 loan been made. If the Fixed Account and Sub-Accounts earn
less than the Loan Account, the Policy Owner's Account Value will be greater
than it would have been had no loan been made. Also, if not repaid, the
aggregate amount of the outstanding loan (i.e., the Indebtedness) will reduce
the Death Proceeds and Cash Surrender Value otherwise payable.
DEATH BENEFIT
The Policies provide for the payment of the Death Proceeds to the named
Beneficiary when the last surviving Insured under the Policy dies. 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
selected by You, the minimum Death Benefit provision, and whether or not the
Death Benefit guarantee is in effect. All or part of the Death Proceeds may be
paid in cash or applied under a "Payment Option." See "Other Matters -- Payment
Options," page 26.
DEATH BENEFIT OPTIONS
There are three Death Benefit Options: the Level Death Benefit Option
("Option A"), the Return of Account Value Death Benefit Option ("Option B") and
the Return of Premium Death Benefit Option ("Option C"). Subject to the minimum
Death Benefit described below, the Death Benefits under each option are:
1. UNDER OPTION A, THE DEATH BENEFIT IS THE FACE AMOUNT.
2. UNDER OPTION B, THE DEATH BENEFIT IS THE FACE AMOUNT PLUS THE ACCOUNT VALUE.
3. UNDER OPTION C, THE DEATH BENEFIT IS 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 Policy fees or charges. 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
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 the Policy's investment performance. The Death Benefit guarantee
is in effect if:
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(A) THE DEATH BENEFIT GUARANTEE PERIOD HAS NOT EXPIRED;
(B) THE SUPPLEMENTAL FACE AMOUNT HAS NEVER EXCEEDED NOR IS SCHEDULED TO EXCEED
THE BASIC FACE AMOUNT;
(C) ON EACH MONTHLY ACTIVITY DATE, THE CUMULATIVE PREMIUMS PAID INTO THE POLICY,
LESS 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) the first
ten Policy Years, 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 the
Policy.
MINIMUM DEATH BENEFIT
Notwithstanding the above, there is a minimum Death Benefit equal to the
Account Value multiplied by a percentage specified in Your Policy. This
percentage varies according to each Insured's Issue Age, the Policy Year, sex
(where unisex rates are not used) and insurance class, but may be increased by
You in the 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 loans constitutes the Death Proceeds which We would pay 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%).
SUPPLEMENTAL FACE AMOUNT
If You selected Supplemental Face Amount coverage on Your application, the
amount is shown on the Policy's specifications page, subject to any scheduled
changes You instructed in application and any unscheduled changes, as described
below. You may discontinue a scheduled increase by written request. A decrease
in Face Amount, other than as a result of a partial withdrawal, will affect Your
scheduled increases.
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT
At any time after the first Policy Year, You may request a change in the
Face Amount by writing to Us.
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 the 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 thousand dollars of each increase per month for the first five Policy
Years from the date of each increase.
A decrease in the Face Amount will be effective on the Monthly Activity Date
following the date We receive the request. The remaining Face Amount must not be
less than 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 or decreases made
under the Policy to no more than one in any 12 month period.
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BENEFITS AT MATURITY
If either Insured is living on the Maturity Date, on surrender of the Policy
to Hartford Life, Hartford Life will pay to the Policy Owner the Cash Surrender
Value. On the Maturity Date, the Policy will terminate and Hartford Life will
have no further obligations under the Policy.
LAPSE AND REINSTATEMENT
POLICY LAPSE AND GRACE PERIOD
The Policy will be in default on any Monthly Activity Date on which the 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 Life will mail the Owner and any assignee written notice of the amount
of premium that will be required to continue the 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,
the Policy will terminate without value if the required premium is not paid by
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 the Policy Owner 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 the Policy if
We have not received the amount of the required premium, subject to the
following exception: If the 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:
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<PAGE>
(A) THE INSUREDS ALIVE AT THE END OF THE GRACE PERIOD ARE ALSO ALIVE ON THE DATE
OF REINSTATEMENT;
(B) YOU MAKE YOUR REQUEST WITHIN FIVE YEARS;
(C) SATISFACTORY EVIDENCE OF INSURABILITY IS SUBMITTED;
(D) ANY POLICY LOAN IS REPAID OR REINSTATED; 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 THE 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.
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<PAGE>
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 THE POLICY
An applicant has a limited right to return a Policy for cancellation. If the
Policy is returned, by mail or personal delivery to Hartford Life or to the
agent who sold the Policy, to be canceled within ten days after delivery of the
Policy to the Policy Owner, within 10 days of Hartford Life's mailing or
personal delivery of a Notice of Right to Withdraw, or within 45 days of
completion of the Policy application (whichever is later, and subject to
applicable state regulation), Hartford Life will return to the applicant, within
seven days thereafter, the greater of the premium paid, less any Indebtedness,
or the sum of (1) the Account Value, less any Indebtedness, on the date the
returned Policy is received by Hartford Life or its agent and (2) any deductions
under the Policy or by the Funds for taxes, charges or fees.
Once the 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
this Policy. An exchange of the Policy under these circumstances should be a
tax-free transaction under Section 1035 of the Code.
SURRENDER
At any time prior to the Maturity Date, provided the Policy has a Cash
Surrender Value, You may surrender the Policy to Us. We will pay You the Cash
Surrender Value. Our liability under the Policy will cease as of the date of
Your request.
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 (7) days after We
receive all the information needed to process the payment unless the New York
Stock Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the Securities and Exchange Commission ("SEC") or that the SEC
declares that an emergency exists.
Hartford Life 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.
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford Life. Within limits, an applicant may choose the initial Face Amount. A
Policy 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 Life.
(Hartford Life 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 Life's underwriting rules
and Hartford Life reserves the right to reject an application for any reason. No
change in the terms or conditions of a Policy will be made without the consent
of the Policy Owner.
The Policy will be effective on the Policy Date only after Hartford Life has
received all outstanding delivery requirements and received the initial premium.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years.
15
<PAGE>
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 an application for a Policy is approved. To qualify for
such a reduction, a plan must satisfy certain criteria as to, for example, size
of the plan, expected number of participants and 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
for the plan's members. The amount of reduction and the criteria for
qualification will reflect 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
both 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 funded by 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, premium tax and
federal tax charge and front-end sales load. The amount of each premium
allocated to the Account Value 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 as a premium tax charge a percentage of each premium to cover
premium-based taxes assessed against Hartford Life. This percentage will vary by
locale depending on the tax rates in effect there and is based on the actual tax
imposed. The range is generally 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 under the Code resulting from the receipt of premiums.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium based on the
(1) amount of premium paid in relation to the Target Premium, (2) Policy Year in
which the premium is paid, and (3) amount of the premium Attributable to the
Basic Face Amount and to the Supplemental Face Amount. See "Special Terms" for a
discussion of "Target Premium".
The current and maximum front-end sales load 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. After Policy Year 20, the current front-end sales
load is 0%, with a maximum of 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. After Policy
Year 20, the current front-end sales load is 0%, with a maximum of 2%.
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%.
Front-end sales loads which cover expenses reduced for certain sales of the
Policies under circumstances which may result in savings of such sales and
distribution expenses.
16
<PAGE>
EXAMPLES OF FRONT-END SALES LOADS/IMPACT OF REFUND OF LOAD
An example of the actual Front-End Sales Loads and the impact of the refund
of the load, if any (see "Refund of Loads," page 17), for a Policy is shown
below. This example uses the same specific information (i.e., Issue Age, Face
Amount, premium level, etc.) as the illustration on page of the 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: $36,042.00
Annual Planned Premium: $27,000.00
</TABLE>
<TABLE>
<CAPTION>
IMPACT OF FRONT-END SALES LOAD/REFUND OF LOADS
- -----------------------------------------------------------------------------
CUMULATIVE CUMULATIVE
POLICY CUMULATIVE FRONT-END NON-REFUNDABLE AMOUNT OF REFUND
YEAR PREMIUM PAID SALES LOADS SALES LOADS UPON 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
Life will deduct an amount (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:
(A) THE CHARGE FOR THE COST OF INSURANCE; PLUS
(B) THE CHARGES FOR ADDITIONAL BENEFITS PROVIDED BY RIDER, IF ANY; PLUS
(C) THE CHARGES FOR "SPECIAL" INSURANCE CLASS RATING, IF ANY; PLUS
(D) THE MONTHLY ADMINISTRATIVE FEE AND ISSUE CHARGE; PLUS
(E) THE MORTALITY AND EXPENSE RISK CHARGE; PLUS
(F) ANY FACE AMOUNT INCREASE FEE.
(A)
COST OF INSURANCE CHARGE
The charge for the Cost of Insurance is equal to:
(i) the Cost of Insurance rate per $1,000; multiplied by
(ii) the 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 Life'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 Life 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 Life will
determine the Cost of Insurance rate at the start of each Policy Year. Any
changes in the
17
<PAGE>
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 inforce for
the same length of time. No change in insurance class or cost will occur on
account of deterioration of the Insureds' health.
Because the Account Value and the Death Benefit under a Policy may vary
from month to month, the Cost of Insurance charge may also vary on each
Monthly Activity Date.
On each Monthly Activity Date during the last 25 Policy Years before the
Maturity Date, Hartford Life will apply a discount to the Cost of Insurance
rate if You qualify for this discount. The discount is 10% times the ratio
of the Basic Face Amount at issue to the Face Amount at issue as shown on
the Policy specification 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 at least equal
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 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.
(b)
Rider Charge
If the Policy includes riders, a charge is made applicable to the riders
from the Account Value on each Monthly Activity Date.
The charge applicable to these riders is to compensate Hartford Life for
anticipated cost of providing these benefits and are specified on the
applicable rider.
The riders available are described on page 27 under "Supplemental
Benefits" section.
(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 Life for the additional mortality risk associated with individuals
in these classes.
(d)
Monthly Administrative Fee and Issue Charge
Hartford Life will assess a current Monthly Administrative Fee to
compensate Hartford Life 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 thousand of Face Amount at issue, paid in
Policy Years 1 through 10. On a blended-rate basis, the charge is guaranteed
never to exceed for all Policy Years the sum of $10.00 per month plus $0.03
per month per thousand of Basic Face Amount at issue and $15.00 per month
plus $0.05 per month per thousand of Supplemental Face Amount at issue. This
guaranteed charge is a blended rate based on the ratio of the initial Basic
Face Amount and the 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 times $10 plus .20 times $15) and $.034 per thousand of Face
Amount (.80 times $.03 plus .20 times $.05).
In addition, in the first five Policy Years, there is a monthly Issue
Charge to compensate Hartford Life for the up-front costs to underwrite and
issue a Policy. The Issue Charge is the sum of $20 per month for the first
five Policy Years plus $.05 per $1000 of Face Amount at Issue Date or
unscheduled Supplemental Face Amount increase per month for the first five
years from Date of Issue or increase.
The sum of the Premium Processing Charges, the Monthly Administrative
Fee and the Issue Charge will not exceed the cost Hartford Life incurs in
providing administrative services under the Policies.
(e)
Mortality and Expense Risk Charge
A current charge is made for mortality and expense risks assumed by
Hartford Life. This charge is allocated to Hartford Life's General Account.
Hartford Life may profit from this charge. See also, "Policy Benefits and
Rights -- Account Values," page 9.
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
18
<PAGE>
(ii) the portion of the Account Value allocated to the Sub-Account on
the Monthly Activity Date prior to assessing the Monthly Deduction Amount.
The current and guaranteed Mortality and Expense Risk Rate for the first
ten Policy Years is 0.80%. After the tenth Policy Year, the current and
maximum Rate is 0.80% on the first $100,000 of Account Value as determined
just prior to the Monthly Deduction. On the remaining Account Value, the
current 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 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 the Policy.
Hartford Life may profit from the mortality and expense risk charge and may
use any 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 advisers charge the Funds an investment management fee on a
daily basis as compensation for services. The following Table shows the fee
charged for each Fund available for investment by Policy Owners.
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT FEE
AS A PERCENTAGE OF AVERAGE
HARTFORD FUNDS DAILY NET ASSETS
- ------------------------------------------------ --------------------------------------------------
<S> <C>
Hartford Capital Appreciation Fund, Inc.,
Hartford Advisers Fund, Inc.,
Hartford International Opportunities Fund,
Inc.,
Hartford Dividend and Growth Fund, Inc........ .575% of the first $250 million of average net
assets
.525% of the next $250 million of average net
assets
.475% of the next $250 million of average net
assets
.425% of any amount over $1.0 billion
Hartford Bond Fund, Inc.,
Hartford Stock Fund, Inc...................... .325% of the first $250 million of average net
assets
.300% of the next $250 million of average net
assets
.275% of the next $250 million of average net
assets
.250% of any amount over 1.0 billion
Hartford Index Fund, Inc........................ .20%
Hartford Mortgage Securities Fund, Inc.,
HVA Money Market Fund, Inc.................... .25%
<CAPTION>
PUTNAM FUNDS
- ------------------------------------------------
<S> <C>
PCM Diversified Income Fund,
PCM Global Asset Allocation Fund,
PCM High Yield Fund,
PCM New Opportunities Fund,
and PCM Voyager Fund.......................... .70% of the first $500 million of average net
assets
.60% of the next $500 million of average net
assets
.55% of the next $500 million of average net
assets
.50% of any amount over $1.5 billion
PCM Growth and Income Fund...................... .65% of the first $500 million of average net
assets
.55% of the next $500 million of average net
assets
.50% of the next $500 million of average net
assets
.45% of any amount over $1.5 billion
PCM Money Market Fund........................... .45% of the first $500 million of average net
assets
.35% of the next $500 million of average net
assets
.30% of the next $500 million of average net
assets
.25% of any amount over $1.5 billion
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT FEE
AS A PERCENTAGE OF AVERAGE
PUTNAM FUNDS DAILY NET ASSETS
- ------------------------------------------------ --------------------------------------------------
<S> <C>
PCM U.S. Government and High Quality Bond
Fund.......................................... .65% of the first $500 million of average net
assets
.55% of the first $500 million of average net
assets
.50% of the next $500 million of average net
assets
.45% of the next $5 billion of average net assets
.425% of the first $5 billion of average net
assets
.405% of the first $5 billion of average net
assets
.39% of the next $5 billion of average net assets
.38% of any excess thereafter
PCM Global Growth Fund and
PCM Utilities Growth and Income Fund.......... .60%
<CAPTION>
FIDELITY FUNDS
- ------------------------------------------------
<S> <C>
Equity-Income Portfolio......................... .52%
Overseas Portfolio.............................. .77%
Asset Manager Portfolio......................... .72%
</TABLE>
TAXES
Currently, no charge is made to Separate Account VL II for federal, state,
and local taxes that may be allocable to Separate Account VL II. A change in the
applicable federal, state or local tax laws which impose tax on Hartford Life
and/or Separate Account VL II may result in a charge against the Policy in the
future. Charges for other taxes, if any, allocable to Separate Account VL II may
also be made.
THE COMPANY
Hartford Life Insurance Company ("Hartford Life") was originally
incorporated under the laws of Massachusetts on June 5, 1902. It was
subsequently redomiciled to Connecticut. It is a stock life insurance company
engaged in the business of writing health and life insurance, both individual
and group, in all states of the United States and the District of Columbia. The
offices of Hartford Life are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06102-2999.
Hartford Life is ultimately 100% owned by Hartford Fire Insurance Company,
one of the largest multiple lines insurance carriers in the United States. On
December 20, 1995, Hartford Fire Insurance Company became an independent,
publicly traded corporation.
Hartford Life is rated A+ (superior) by A.M. Best and Company, Inc. on the
basis of its financial soundness and operating performance. Hartford Life is
rated AA+ by both Standard & Poor's and Duff and Phelps on the basis of its
claims paying ability.
These ratings do not apply to the performance of the Separate Account.
However, the contractual obligations under this variable life insurance policy
are the general corporate obligations of Hartford Life. These ratings do apply
to Hartford Life's ability to meet its insurance obligations under the Policy.
Hartford Life is subject to Connecticut law governing insurance companies
and is regulated and supervised by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with the Commissioner on or
before March 1st in each year covering the operations of Hartford Life for the
preceding year and its financial condition on December 31st of such year.
Its books and assets are subject to review or examination by the
Commissioner or his agents at all times, and a full examination of its
operations is conducted by the National Association of Insurance Commissioners
at least once in every four years. In addition, Hartford Life is subject to the
insurance laws and regulations of any jurisdiction in which it sells its
insurance policies. Hartford Life is also subject to various federal and state
securities laws and regulations.
20
<PAGE>
SEPARATE ACCOUNT VL II
GENERAL
Separate Account VL II is a separate account of Hartford Life 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 Securities and
Exchange Commission under the Investment Company Act of 1940. Separate Account
VL II meets the definition of "separate account" under federal securities law.
Under Connecticut law, the assets of Separate Account VL II are held exclusively
for the benefit of Policy Owners and persons entitled to payments under the
Policies. The assets for Separate Account VL II are not chargeable with
liabilities arising out of any other business which Hartford Life may conduct.
FUNDS
The assets of each Sub-Account of Separate Account VL II are invested
exclusively in 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 each of the Funds in connection
with that allocation. There is no assurance that any of the Funds will achieve
its stated objectives. Policy Owners are also advised to read the prospectuses
for each of the Funds accompanying this prospectus for more detailed
information.
HARTFORD FUNDS
HARTFORD ADVISERS FUND, INC.
To achieve maximum long term total rate of return consistent with
prudent investment risk by investing in common stock and other equity
securities, bonds and other debt securities, and money market instruments.
The investment adviser will vary the investments of the Fund among equity
and debt securities and money market instruments depending upon its analysis
of market trends. Total rate of return consists of current income, including
dividends, interest and discount accruals and capital appreciation.
HARTFORD BOND FUND, INC.
To achieve maximum current income consistent with preservation of
capital by investing primarily in bonds.
HARTFORD CAPITAL APPRECIATION FUND, INC.
To achieve growth of capital by investing in equity securities and
securities convertible into equity securities selected solely on the basis
of potential for capital appreciation; income, if any, is an incidental
consideration.
HARTFORD DIVIDEND AND GROWTH FUND, INC.
To achieve a high level of current income consistent with growth of
capital and reasonable investment risk by investing primarily in equity
securities and securities convertible into equity securities.
HARTFORD INDEX FUND, INC.
To provide investment results which 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.*
*"STANDARD & POOR'S", "S &P", "S&P 500", "STANDARD & POOR'S 500", AND "500" ARE
TRADEMARKS OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY
HARTFORD LIFE INSURANCE COMPANY. THE HARTFORD INDEX FUND, INC. ("INDEX FUND")
IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S ("S&P") AND
S&P MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING IN THE
INDEX FUND.
21
<PAGE>
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
To achieve long-term total return consistent with prudent investment
risk through investment primarily in equity securities issued by foreign
companies.
HARTFORD MORTGAGE SECURITIES FUND, INC.
To achieve 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 ("GNMA").
HARTFORD STOCK FUND, INC.
To achieve long-term capital growth primarily through capital
appreciation, with income a secondary consideration, by investing in
equity-type securities.
HVA MONEY MARKET FUND, INC.
To achieve maximum current income consistent with liquidity and
preservation of capital by investing in money market securities.
PUTNAM FUNDS
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by
investing in the following three sections of the fixed income securities
markets: U.S. Government Sector, High Yield Sector (which invests primarily
in what are commonly referred to as "junk bonds"), and International Sector.
See the Special Considerations for investments in high yield securities
described in the Fund prospectus.
PCM 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.
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
PCM 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.
PCM HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding,
lower-rated fixed income securities (commonly referred to as "junk bonds"),
constituting a diversified portfolio which Putnam Investment Management,
Inc. ("Putnam Management") believes does not involve undue risk to income or
principal. Capital growth is a secondary objective when consistent with high
current income. See the special considerations for investments in high yield
securities described in the Fund prospectus.
PCM MONEY MARKET FUND
Seeks to achieve as high a level 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.
22
<PAGE>
PCM 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.
PCM 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 Standard & Poor's or Moody's
or, if not rated, determined by Putnam Management to be of comparable
quality.
PCM UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments
in securities issued by companies in the public utilities industries.
PCM VOYAGER FUND
Aggressively seeks capital appreciation primarily from a portfolio of
common stocks which Putnam Management believes have potential for capital
appreciation which is significantly greater than that of market averages.
FIDELITY FUNDS
EQUITY-INCOME PORTFOLIO
To seek reasonable income by investing primarily in income-producing
equity securities. In choosing these securities, the Portfolio 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 Daily Stock Price Index of 500 Common
Stocks. The Portfolio may invest in high yielding, 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, please see "Risks of Lower-Rated Debt Securities" in
the Fidelity prospectus for this Portfolio.
OVERSEAS PORTFOLIO
To seek long-term growth of capital primarily through investments in
foreign securities and provide a means for aggressive investors to diversify
their own portfolios by participating in companies and economies outside of
the United States.
ASSET MANAGER PORTFOLIO
To seek high total return with reduced risk over the long-term by
allocating its assets among stocks, bonds and short-term fixed-income
instruments.
The Hartford Funds are organized as corporations under the laws of the State
of Maryland and are registered as diversified open-end management companies
under the Investment Company Act of 1940. The Putnam Funds are portfolios of the
Putnam Capital Manager Trust, which is organized as a business trust under the
laws of Massachusetts as a open-end series investment company under the
Investment Company Act of 1940. The Fidelity Funds involve two diversified
open-end management investment companies, each with multiple portfolios and
organized as a Massachusetts business trust. The Equity-Income Portfolio and
Overseas Portfolio are portfolios of the Variable Insurance Products Fund. The
Asset Manager Portfolio is a portfolio of the Variable Insurance Products Fund
II.
Each Fund continually issues an unlimited number of full and fractional
shares of beneficial interest in the Fund. Such shares are offered to separate
accounts, including Separate Account VL II, established by Hartford Life or one
of its affiliated companies specifically to fund the Policies and other policies
issued by Hartford Life or its affiliates as permitted by the Investment Company
Act of 1940.
23
<PAGE>
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 Life nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or to variable annuity Policy Owners, the Board of Directors
intend for the Hartford Funds and the Board of Trustees for the Putnam Funds and
the Fidelity Funds (collectively the "Board") to monitor events in order to
identify any material conflicts between such Policy 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 life and
variable life insurance separate accounts, Hartford Life will bear the attendant
expenses.
All investment income of and other distributions to each Sub-Account of
Separate Account VL II arising from the applicable Fund are reinvested in shares
of that Fund at net asset value. The income and both realized gains or losses on
the assets of each Sub-Account of Separate Account VL II are therefore separate
and are credited to or charged against the Sub-Account without regard to income,
gains or losses from any other Sub-Account or from any other business of
Hartford Life. Hartford Life will purchase shares in the Funds 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 Life reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for Separate
Account VL II and its 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 Life's management, further investment in shares of any Fund should
become inappropriate in view of the purposes of the Policies, Hartford Life 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 Securities and Exchange Commission to the extent required by the
Investment Company Act of 1940. Subject to Policy Owner approval, if required,
Hartford Life also reserves the right to end the registration under the
Investment Company Act of 1940 of Separate Account VL II or any other separate
accounts of which it is the depositor 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. See
the accompanying prospectuses for each of the Funds.
INVESTMENT ADVISER
HARTFORD FUNDS
The investment adviser for each of the Hartford Funds is The Hartford
Investment Management Company, ("HIMCO"), a wholly-owned subsidiary of Hartford
Life. HIMCO was organized under the laws of the State of Connecticut in October
of 1981.
HIMCO also serves as investment adviser to several other Hartford Life
sponsored funds which are also registered with the Securities and Exchange
Commission. HIMCO is registered as an investment adviser under the Investment
Advisers Act of 1940. HIMCO provides investment advice and, in general,
supervises the management and investment program of Hartford Bond Fund, Inc.,
Hartford Index Fund, Inc., Hartford Mortgage Securities Fund, Inc., and HVA
Money Market Fund, Inc., pursuant to an Investment Advisory Agreement entered
into with each of these Funds for which HIMCO receives a fee. HIMCO also
supervises the investment programs of Hartford Advisers Fund, Inc., Hartford
Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc.,
Hartford International Opportunities Fund, Inc., and Hartford Stock Fund, Inc.
pursuant to an Investment Management Agreement for which HIMCO receives a fee.
In addition, with respect to these five Funds, HIMCO has a Sub-Investment
Advisory Agreement with Wellington Management Company ("Wellington Management")
to provide an investment program to HIMCO for utilization by HIMCO in rendering
services to these funds. Wellington Management is a professional investment
counseling firm which provides investment services to investment companies,
other institutions and individuals. Wellington Management is organized as a
private Massachusetts partnership and its predecessor organizations have
provided investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. See the accompanying prospectuses for
each of the Funds for a more complete description of HIMCO and Wellington
Management and their respective fees.
24
<PAGE>
PUTNAM FUNDS
Putnam Management, One Post Office Square, Boston, Massachusetts, 02109,
serves as the investment manager for the Funds. An affiliate, The 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 FUNDS
The Fidelity Funds are managed by Fidelity Management & Research Company
("Fidelity Management"), whose principal business address is 82 Devonshire
Street, Boston, Massachusetts. Fidelity Management is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products. Fidelity
Management is the original Fidelity company, founded in 1946. It provides a
number of mutual funds and other clients with investment research and portfolio
management services. Various Fidelity companies perform certain activities
required to operate Variable Insurance Products Fund and Variable Insurance
Products Fund II.
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY 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 SECURITIES AND EXCHANGE COMMISSION. 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 Life. Hartford Life 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 Life guarantees that it will credit interest at a rate of not less than
4% per year, compounded annually, to amounts allocated to the Fixed Account
under the Policies. Hartford Life may credit interest at a rate in excess of the
Fixed Account Minimum Credited Rate, however, Hartford Life 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 Life 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 Life'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 LIFE. THE POLICY OWNER ASSUMES THE RISK THAT
INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE FIXED ACCOUNT
MINIMUM CREDITED RATE.
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford Life 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 the Policy, as the case may be) having a voting interest in Separate Account
VL II. The number of shares held in the Separate Account which are allocable to
each Policy Owner is determined
25
<PAGE>
by dividing the Policy Owner's interest in each Sub-Account by the net asset
value of the applicable shares of the Funds. Hartford Life 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 Life) in the same proportion as it
votes shares for which it has received instructions. If the Investment Company
Act of 1940 or any rule promulgated thereunder should be amended, however, or if
Hartford Life's present interpretation should change and, as a result, Hartford
Life 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 the Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the 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 the Policy, amounts transferred from the
Sub-Account(s) to the Loan Account(s) in connection with the loan (see "Policy
Benefits and Rights -- Policy Loans," page ) will not be considered in
determining the voting interests of the Policy Owner. Policy Owners should
review the prospectuses for the Funds which accompany this Prospectus to
determine matters on which shareholders may vote.
Hartford Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the 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 Life itself may disregard voting
instructions in favor of changes initiated by a Policy Owner in the investment
policy or the investment adviser of the Funds if Hartford Life 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 Life does disregard voting instructions, a summary of 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 LOANS SINCE THE LAST
REPORT;
(C) THE AMOUNT OF ANY INDEBTEDNESS;
(D) NOTIFICATIONS REQUIRED BY THE PROVISIONS OF THE POLICY; AND
(E) ANY OTHER INFORMATION REQUIRED BY THE INSURANCE DEPARTMENT OF THE STATE
WHERE THE POLICY WAS DELIVERED.
LIMIT ON RIGHT TO CONTEST
Hartford Life may not contest the validity of the Policy after it has been
in effect during the lifetime of the Insureds for two years from the Issue Date.
If the 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 the Policy.
PAYMENT OPTIONS
Proceeds under the Policies may be paid in a lump sum or may be applied to
one of Hartford Life's payment options. The minimum amount that may be placed
under a payment option is subject to the then current rules of Hartford Life.
Once payments under Options 2, 3 or 4 commence, no surrender of the Policy may
be made for the purpose of receiving a lump sum settlement in lieu of the life
insurance payments. The following options are available under the Policies.
FIRST OPTION -- Interest Income
26
<PAGE>
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 1 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 Policy 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 Life may make payments less often.
The Table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table set back one year and 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. Hartford Life may, however, 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 Life will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the Beneficiary in the application for the Policy. The
Policy Owner may change the Beneficiary (unless irrevocably named) during the
lifetime of the Insureds by written request to Hartford Life. If no Beneficiary
is living when the last surviving Insured dies, the Death Proceeds will be paid
to the Policy Owner if living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Hartford Life is not responsible for any payment made or action taken before
receipt of written notice 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, which are subject to the restrictions
and limitations set forth therein, are among the options that may be included in
a Policy by rider:
LAST SURVIVOR EXCHANGE OPTION RIDER
We will exchange this Policy for two individual policies on the life of each
of the Insured, subject to the conditions stated in this rider.
27
<PAGE>
ESTATE PROTECTION RIDER
We will pay a term insurance benefit upon receipt of due proof of the last
surviving Insured's death while this Policy and rider were in force, subject to
the conditions stated in this rider.
MATURITY DATE EXTENSION RIDER
We will extend the Maturity Date (the date on which the Policy will mature)
to the date of the death of the second Insured to die, regardless of the age of
either Insured. Certain Death Benefit and premium restrictions apply. See
"Income Taxation of Policy Benefits."
YEARLY RENEWABLE TERM LIFE INSURANCE RIDER
While this Policy and rider 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 this rider.
28
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH HARTFORD LIFE, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Louis J. Abdou 53 Vice President, 1987 Vice President (1987-Present), Hartford
Life.
Wendell J. Bossen 62 Vice President, 1992** President (1992-Present), International
Corporate Marketing Group, Inc.;
Executive Vice President (1984-1992),
Mutual Benefit.
Gregory A. Boyko 44 Vice President, 1995 Vice President and Controller
(1995-Present), Hartford Life; Chief
Financial Officer (1994-1995), IMG
American Life; Senior Vice President
(1992-1994), Connecticut Mutual Life
Insurance Company.
Peter W. Cummins 59 Vice President, 1989 Vice President, Individual Annuity
Operations (1989-Present), Hartford
Life.
Ann M. deRaismes 45 Vice President, 1994 Vice President (1994-Present); Assistant
Vice President (1992); Director of
Human Resources (1991-Present),
Hartford Life.
Timothy M. Fitch 43 Vice President, 1995 Vice President (1995-Present); Assistant
Vice President (1993); Director (1991),
Hartford Life.
Donald R. Frahm 64 Chairman and Chief Chairman and Chief Executive Officer of
Executive Officer, 1988 the Hartford Insurance Group
Director, 1988* (1988-Present).
Bruce D. Gardner 45 Vice President, 1996 Vice President (1996-Present); General
Counsel and Director, 1994* Corporate
Secretary (1991-1996), Hartford Life.
Joseph H. Gareau 49 Executive Vice President and Executive Vice President and Chief
Chief Investment Officer, 1993 Investment Officer, (1993-Present),
Director, 1993* Hartford Life; Senior Vice President
and Chief Investment Officer (1992),
ITT Hartford's Property-Casualty
Companies.
J. Richard Garrett 51 Treasurer, 1994 Treasurer (1994-Present); Vice President
Vice President, 1993 (1993- Present) Hartford Life;
Treasurer (1977), Hartford Insurance
Group.
John P. Ginnetti 50 Executive Vice President, 1994 Executive Vice President and Director
Asset Management Services
(1994-Present); Senior Vice President,
(1988), Hartford Life.
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH HARTFORD LIFE, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Lynda Godkin 42 Assoc. General Counsel, Associate General Counsel and Corporate
Corporate Secretary, 1995 Secretary (1995-Present); Assistant
General Counsel and Secretary (1994);
Counsel (1990), Hartford Life.
Lois W. Grady 51 Vice President, 1993 Vice President (1993-Present); Assistant
Vice President (1988), Hartford Life.
David A. Hall 42 Senior Vice President and Senior Vice President and Actuary
Actuary, 1992 (1992-Present), Hartford Life.
Joseph Kanarek 48 Vice President, 1991 Vice President (1991-Present), Hartford
Life.
Robert A. Kerzner 44 Vice President, 1994 Vice President (1994-Present); Regional
Vice President (1991); Life Sales
Manager (1990), Hartford Life.
Kevin J. Kirk 44 Vice President, 1992 Vice President (1992-Present); Assistant
Vice President; Assistant Director,
Asset Management Services (1985);
Hartford Life.
Andrew W. Kohnke 47 Vice President, 1992 Vice President (1992-Present); Assistant
Vice President (1989), Hartford Life.
Steven M. Maher 41 Vice President and Actuary, 1993 Vice President and Actuary
(1993-Present); Assistant Vice
President (1987), Hartford Life.
William B. Malchodi, Jr. 45 Vice President, 1994 Vice President (1994-Present); Director
Director or Taxes, 1992 of Taxes (1992-Present); Assistant
General Counsel and Assistant Director
of Taxes (1986), Hartford Insurance
Company.
Thomas M. Marra 37 Executive Vice President, 1996 Executive Vice President and Director
Director, 1994* Individual Life and Annuity Division
(1996-Present); Senior Vice President
and Director, Individual Life and
Annuity Division (1993-1996); Director
of Individual Annuities (1991),
Hartford Life.
Robert F. Nolan 41 Vice President, 1995 Vice President (1995-Present), Assistant
Vice President Hartford Life; Manager
Public Relations (1986), Aetna Life and
Casualty Insurance Company.
Joseph J. Noto 44 Vice President, 1989 Vice President (1989-Present), Hartford
Life.
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH HARTFORD LIFE, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- ---------------------------------- -------------------------------------- -----------------------------------------
<S> <C> <C>
Leonard E. Odell, Jr. 51 Senior Vice President, 1994 Senior Vice President (1994-Present);
Director, 1994* Vice President and Chief Actuary
(1982), Hartford Life.
Michael C. O'Halloran 49 Vice President, 1994 Vice President (1994-Present); Senior
Associate General Counsel, 1988 Associate General Counsel and Director
(1988-Present), Law Department,
Hartford Fire Insurance Company.
Craig D. Raymond 35 Vice President, 1993 Vice President and Chief Actuary
Chief Actuary, 1994 (1994-Present); Vice President (1993);
Assistant Vice President (1992);
Actuary (1989-1994), Hartford Life.
Lowndes A. Smith 56 President and Chief President and Chief Operating Officer
Operating Officer, 1989 (1989-Present), Hartford Life; Senior
Director, 1981* Vice President and Group Controller
(1987), Hartford Insurance Group.
Edward J. Sweeney 39 Vice President, 1993 Vice President (1993-Present); Chicago
Regional Manager (1985-1993), Hartford
Life.
James E. Trimble 39 Vice President and Actuary, 1990 Vice President (1990-Present); Assistant
Vice President (1987-1990), Hartford
Life.
Raymond P. Welnicki 47 Senior Vice President, 1993 Senior Vice President (1994-Present);
Director, 1994* Vice President (1993), Hartford Life;
Board of Directors, Ethix Corp.,
formerly employed by Aetna Life &
Casualty.
Walter C. Welsh 49 Vice President, 1995 Vice President (1995-Present); Assistant
Vice President (1993), Hartford Life.
James J. Westervelt 49 Senior Vice President, Senior Vice President and Group
Group Controller, 1994 Controller (1994-Present); Vice
President and Group Controller (1989),
Hartford Insurance Group.
Lizabeth H. Zlatkus 37 Vice President, 1994 Vice President (1994-Present); Assistant
Director, 1994* Vice President (1992); Hartford Life;
formerly Director, Hartford Insurance
Group.
</TABLE>
- ------------------------
* Denotes date of election to Board of Directors.
** ITT Hartford Affiliated Company.
31
<PAGE>
DISTRIBUTION OF THE POLICIES
Hartford Life 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 Life and who are registered
representatives of Hartford Equity Sales Company, Inc. ("HESCO"), or certain
other registered Broker-Dealers. Any sales representative or employee will have
been qualified to sell variable life insurance policies under applicable federal
and state laws. Each Broker-Dealer is registered with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 and all 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 Life 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,
agent commissions will not exceed 5.5% of premiums paid. For Policy Years 11 and
later, the agent commissions will not exceed 2% of the premiums paid. Agent
commissions may be less for premiums Attributable to Supplemental Face Amount.
In addition, expense allowances may be paid. The sales representative may be
required to return all or a portion of the commissions paid if the Policy
terminates prior to the second Policy Anniversary.
SAFEKEEPING OF
SEPARATE ACCOUNT VL II'S ASSETS
The assets of the Separate Account are held by Hartford Life. The assets of
the Separate Account are kept physically segregated and held separate and apart
from the General Account of Hartford Life. Hartford Life maintains records of
all purchases and redemptions of shares of the Fund. Additional protection for
the assets of the Separate Account is afforded by Hartford Life'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
Life.
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 Life's understanding of current Federal
income tax laws as they are currently interpreted.
TAXATION OF HARTFORD LIFE AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford Life which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code ("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. As a result, such investment income and realized capital
gains are automatically applied to increase reserves under the Policy. (See
"Detailed Description of Policy Benefits and Provisions -- Accumulation Unit
Values", page 9).
Hartford Life 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
32
<PAGE>
Separate Account for Federal income taxes. If Hartford Life 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
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 Life intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
Although Hartford Life 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 Life 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 Life believes the
Policy will continue to be treated as a life insurance contract for 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.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. A modified endowment contract is a life insurance policy
which satisfies the Section 7702 definition of life insurance but fails the
seven-pay test of Section 7702A. 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 provided in Section
7702A(c).
A policy that is classified as a modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is generally excluded from income and increments in value are
not subject to current taxation. However, a loans, distributions or other
amounts received from a modified endowment contract are treated first as income,
then as a recovery of basis. Taxable withdrawals are subject to a 10% additional
tax, with certain exceptions. Generally, only distributions and loans made in
the first year in which a policy becomes a modified endowment contract, 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.
33
<PAGE>
If the Policy satisfies the seven-pay test for seven years, distributions
and loans made thereafter will not be subject to the modified endowment contract
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 death benefit.
All modified endowment contracts that are issued within any calendar year to
the same Policy Owner by one company or its affiliates shall be treated as one
modified endowment contract for the purpose of determining the taxable portion
of any loan or distribution.
ESTATE AND GENERATION SKIPPING TAXES
When the last surviving Insured dies, the Death Proceeds will generally be
includible 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
includible 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.
Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $600,000 will not incur a federal estate
tax liability. 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 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.
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, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford Life monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford Life
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 order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and
34
<PAGE>
not by the variable contract owner. The Internal Revenue Service ("IRS") has
issued several rulings which discuss investor control. The IRS has ruled that
incidents of ownership by the contract owner, such as the ability to select and
control investments in a separate account, will cause the contract owner to be
treated as the owner of the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary 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." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
provided in regulations or revenue rulings under section 817(d), relating to the
definition of variable contract." The final regulations issued under Section 817
did not provide guidance regarding investor control, and as of the date of this
Prospectus, no other such guidance has been issued. Further, Hartford Life does
not know if or in what form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of specific
guidance regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Policy Owner could be considered the owner of
the assets for tax purposes. Hartford Life reserves the right to modify the
Policies, as necessary, to prevent Policy Owners from being considered the
owners of the assets in the separate accounts.
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
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance contracts.
Prospective Policy Owners which are not individuals should consult a qualified
tax adviser to determine the status of this proposed legislation and its
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 advisor
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
35
<PAGE>
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Policies,
Separate Account VL II or any of the Funds.
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 Life, 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, Associate General Counsel of Hartford Life.
EXPERTS
The financial statements and schedules included in this Prospectus and
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report herein, and are included herein
in reliance upon the authority of said firm as experts in accounting and
auditing in giving said report. Reference is made to said report of Hartford
Life Insurance Company (the depositor), which includes an explanatory paragraph
with respect to the adoption of new accounting standards changing the methods of
accounting for debt and equity securities. The principal business address of
Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut 06103.
The hypothetical Policy illustrations included in this Prospectus and
Registration Statement have been approved by Ken A. McCullum, FSA, and MAAA,
Director of Individual Life Product Development, and are included in reliance
upon his opinion as to their reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does not
contain all information set forth in the registration statement, its amendments
and exhibits, to all of which reference is made for further information
concerning Separate Account VL II, Hartford Life, and the Policies.
36
<PAGE>
APPENDIX A
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT
VALUES AND CASH SURRENDER VALUES
The tables in Appendix A illustrate the way in which a Policy operates. They
show how the death benefit and surrender value 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 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; 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; 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 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 surrender 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 contract loan were made during the period
of time illustrated.
The tables reflect the deductions of current Policy charges and guaranteed
Policy charges for a single gross interest rate. The death benefits and
surrender values would change if the current Cost of Insurance charges change.
The amounts shown for the death benefit and surrender value 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 surrender value 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 these
illustrations), Cost of Insurance Charge, Monthly Administrative Fee, Issue
Charge, and Mortality and Expense Risk Charge.
The hypothetical returns shown in the tables 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% or 6% or 12% to cover any tax charges (see
"Deductions and Charges -- Charges Against the Separate Account -- Taxes," page
19).
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
Hartford Life will furnish upon request, a comparable illustration
reflecting the proposed insureds age, risk classification, Face Amount or
initial premium requested, and reflecting guaranteed Cost of Insurance rates.
Hartford Life 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.
37
<PAGE>
HARTFORD LIFE
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 SCHEDULED 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 1,000,000 505,661 1,000,000
18 457,855 623,886 1,000,000 570,998 1,000,000
19 497,022 707,036 1,000,000 642,465 1,000,000
20 538,148 799,101 1,000,000 720,352 1,000,000
25 724,270 1,424,338 1,000,000 1,221,573 1,000,000
35 1,014,302 2,435,429 1,000,000 1,951,085 1,000,000
</TABLE>
* 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 TWO 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 YEAR ONE AND $23,557.74 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
38
<PAGE>
HARTFORD LIFE
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 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* CHARGES**
END OF ACCUMULATED AT ----------------------- -------------------
POLICY 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
35 1,014,302 804,440 1,000,000 486,347 1,000,000
</TABLE>
* 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 TWO 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 YEAR ONE AND $22,053.74 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
39
<PAGE>
HARTFORD LIFE
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 0% (-0.70% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* 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 25,4025 1,000,000 126,058 1,000,000
35 1,014,302 26,1033 1,000,000 0 1,000,000
</TABLE>
* 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 TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $8970.00 IN YEAR ONE AND $20,596.74 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
40
<PAGE>
HARTFORD LIFE
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 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
GUARANTEED
PREMIUMS CURRENT CHARGES* 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
35 490,791 1,068,158 1,426,222 482,460 1,000,000
</TABLE>
* 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 TWO 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 YEAR ONE AND $9,606.00 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
41
<PAGE>
HARTFORD LIFE
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 SCHEDULED 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
35 490,791 283,875 1,000,000 0 0
</TABLE>
* 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 TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $399050 IN YEAR ONE AND $8,828.00 IN YEAR TWO FOR THE
CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
42
<PAGE>
HARTFORD LIFE
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 SCHEDULED 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 0 0
35 490,791 55,227 1,000,000 0 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $8,078.00 IN YEAR TWO FOR THE
CURRENT CHARGES .
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
43
<PAGE>
HARTFORD LIFE
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 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
ACCUMULATED AT ----------------------- --------------------
END OF POLICY 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 1,000,000 596,446 1,000,000
17 732,574 926,834 1,000,000 664,590 1,000,000
18 797,553 1,051,293 1,000,000 741,634 1,000,000
19 865,781 1,188,074 1,000,000 829,591 0
20 937,420 1,338,460 1,000,000 924,255 0
25 1,261,632 2,336,059 1,000,000 1,504,229 0
35 1,766,849 3,916,137 1,426,222 2,332,386 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $34,914.99 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
44
<PAGE>
HARTFORD LIFE
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 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
PREMIUMS CURRENT CHARGES* GUARANTEED CHARGES**
ACCUMULATED AT ----------------------- --------------------
END OF POLICY 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 0
20 937,420 653,511 1,000,000 157,330 0
25 1,261,632 930,954 1,000,000 0 0
35 1,766,849 1,273,986 1,426,222 0 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $37,602.99 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
45
<PAGE>
HARTFORD LIFE
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 SCHEDULED 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 0 0
20 937,420 319,587 1,000,000 0 0
25 1,261,632 262,720 1,000,000 0 0
35 1,766,849 0 1,426,222 0 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $34,914.99 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
46
<PAGE>
HARTFORD LIFE
INSURANCE COMPANY
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$750,000 BASIC FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED/
ISSUE AGE 65 FEMALE PREFERRED
$21,500 SCHEDULED 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
35 1,406,935 3,053,019 3,345,743 0 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $30,919.00 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
47
<PAGE>
HARTFORD LIFE
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 SCHEDULED 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 0 0
20 746,464 486,258 1,000,000 0 0
25 1,004,633 628,972 1,000,000 0 0
35 1,406,935 781,318 1,000,000 0 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $28,481.00 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
48
<PAGE>
HARTFORD LIFE
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 SCHEDULED 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 0 0
18 635,089 226,911 1,000,000 0 0
19 689,418 226,650 1,000,000 0 0
20 746,464 223,137 1,000,000 0 0
25 1,004,633 113,345 1,000,000 0 0
35 1,406,935 0 0 0 0
</TABLE>
* 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 TWO 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 YEAR ONE AND $26,126.00 IN YEAR TWO FOR
THE CURRENT CHARGES.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH SURRENDER VALUES WILL
DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
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, ACCOUNT VALUE AND CASH SURRENDER 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,
ACCOUNT VALUE AND CASH SURRENDER 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.
49
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company Separate Account Variable Life Two
and to the Owners of Units of Interest therein:
We have audited the accompanying statement of assets & liabilities of
Hartford Life Insurance Company Separate Account Variable Life Two (the Account)
as of December 31, 1995, and the related statements of operations and changes in
net assets for the period from inception August 14, 1995 to December 31, 1995.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Hartford Life Insurance
Company Separate Account Variable Life Two as of December 31, 1995, and the
results of its operations and changes in net assets for the period from
inception August 14, 1995 to December 31, 1995, in conformity with generally
accepted accounting principles.
Arthur Andersen LLP
Hartford, Connecticut
May 1, 1996
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE TWO
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
HARTFORD
CAPITAL
HARTFORD HVA MONEY APPRECIATION HARTFORD
STOCK FUND MARKET FUND FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Hartford Stock Fund, Inc.
Shares 6,143
Cost $ 21,652
Market Value................... $ 21,666 -- -- --
HVA Money Market Fund, Inc.
Shares 931,515
Cost $931,515
Market Value................... -- $ 931,515 -- --
Hartford Capital Appreciation
Fund, Inc.
Shares 35,127
Cost $122,583
Market Value................... -- -- $122,583 --
Hartford Index Fund, Inc.
Shares 23,633
Cost $ 47,920
Market Value................... -- -- -- $ 47,926
Hartford International
Opportunities Fund, Inc.
Shares 107,296
Cost $140,095
Market Value................... -- -- -- --
PCM Voyager Fund
Shares 1,286
Cost $ 39,157
Market Value................... -- -- -- --
PCM Global Growth Fund
Shares 9,806
Cost $148,850
Market Value................... -- -- -- --
PCM Global Asset Allocation Fund
Shares 1,084
Cost $ 17,512
Market Value................... -- -- -- --
PCM U.S. Government and High
Quality Bond Fund
Shares 20,392
Cost $280,189
Market Value................... -- -- -- --
PCM Money Market Fund
Shares 2,398
Cost $ 2,398
Market Value...................
Fidelity VIP Equity Income Fund
Shares 216
Cost $ 4,133
Market Value...................
Receivable from fund shares
sold............................ 0 0 0 0
Receivable from Hartford Life
Insurance Co.................... 21,666 931,515 122,583 47,920
------------- ------------ ----------- -----------
Total Assets..................... 43,332 1,863,030 245,166 95,852
------------- ------------ ----------- -----------
LIABILITIES:
Payable to Hartford Life
Insurance Co.................... 0 0 0 0
Payable for fund shares
purchased....................... 21,666 931,515 122,583 47,926
------------- ------------ ----------- -----------
Total Liabilities................ 21,666 931,515 122,583 47,926
------------- ------------ ----------- -----------
Net Assets (variable life
contract liabilities)........... $ 21,666 $ 931,515 $122,583 $ 47,926
------------- ------------ ----------- -----------
------------- ------------ ----------- -----------
Units Outstanding.................. 15,057 833,048 84,744 33,392
Accumulation Unit Value at end of
period........................... $1.438906 $ 1.118201 $1.446511 $ 1.435240
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
50
<PAGE>
<TABLE>
<CAPTION>
PCM
U.S.
GOVERNMENT
HARTFORD PCM AND
INTERNATIONAL PCM PCM GLOBAL ASSET HIGH
OPPORTUNITIES VOYAGER GLOBAL ALLOCATION QUALITY PCM
FUND FUND GROWTH FUND FUND BOND FUND MONEY MARKET FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- --------------- ------------ ------------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Hartford Stock Fund, Inc.
Shares 6,143
Cost $ 21,652
Market Value................... -- -- -- -- -- --
HVA Money Market Fund, Inc.
Shares 931,515
Cost $931,515
Market Value................... -- -- -- -- -- --
Hartford Capital Appreciation
Fund, Inc.
Shares 35,127
Cost $122,583
Market Value................... -- -- -- -- -- --
Hartford Index Fund, Inc.
Shares 23,633
Cost $ 47,920
Market Value................... -- -- -- -- -- --
Hartford International
Opportunities Fund, Inc.
Shares 107,296
Cost $140,095
Market Value................... $ 140,095 -- -- -- -- --
PCM Voyager Fund
Shares 1,286
Cost $ 39,157
Market Value................... -- $ 39,217 -- -- -- --
PCM Global Growth Fund
Shares 9,806
Cost $148,850
Market Value................... -- -- $ 148,850 -- -- --
PCM Global Asset Allocation Fund
Shares 1,084
Cost $ 17,512
Market Value................... -- -- -- $ 17,512 -- --
PCM U.S. Government and High
Quality Bond Fund
Shares 20,392
Cost $280,189
Market Value................... -- -- -- -- $280,189 --
PCM Money Market Fund
Shares 2,398
Cost $ 2,398
Market Value................... $ 2,398
Fidelity VIP Equity Income Fund
Shares 216
Cost $ 4,133
Market Value...................
Receivable from fund shares
sold............................ 0 0 0 0 0 0
Receivable from Hartford Life
Insurance Co.................... 140,095 39,157 148,850 17,512 280,189 2,398
----------- --------------- ------------ ------------- ----------- ------------------
Total Assets..................... 280,190 78,434 297,700 35,024 560,378 4,796
----------- --------------- ------------ ------------- ----------- ------------------
LIABILITIES:
Payable to Hartford Life
Insurance Co.................... 0 0 0 0 0 0
Payable for fund shares
purchased....................... 140,095 39,217 148,850 17,512 280,189 2,398
----------- --------------- ------------ ------------- ----------- ------------------
Total Liabilities................ 140,095 39,217 148,850 17,512 280,189 2,398
----------- --------------- ------------ ------------- ----------- ------------------
Net Assets (variable life
contract liabilities)........... $ 140,095 $ 39,217 $ 148,850 $ 17,512 $280,189 $ 2,398
----------- --------------- ------------ ------------- ----------- ------------------
----------- --------------- ------------ ------------- ----------- ------------------
Units Outstanding.................. 105,721 2,417 10,974 1,323 22,947 2,154
Accumulation Unit Value at end of
period........................... $1.325138 $16.223126 $ 13.563797 $ 13.234414 $12.210050 $ 1.113543
<CAPTION>
FIDELITY VIP
EQUITY INCOME
FUND
SUB-ACCOUNT
---------------
<S> <C>
ASSETS:
Hartford Stock Fund, Inc.
Shares 6,143
Cost $ 21,652
Market Value................... --
HVA Money Market Fund, Inc.
Shares 931,515
Cost $931,515
Market Value...................
Hartford Capital Appreciation
Fund, Inc.
Shares 35,127
Cost $122,583
Market Value................... --
Hartford Index Fund, Inc.
Shares 23,633
Cost $ 47,920
Market Value................... --
Hartford International
Opportunities Fund, Inc.
Shares 107,296
Cost $140,095
Market Value................... --
PCM Voyager Fund
Shares 1,286
Cost $ 39,157
Market Value................... --
PCM Global Growth Fund
Shares 9,806
Cost $148,850
Market Value................... --
PCM Global Asset Allocation Fund
Shares 1,084
Cost $ 17,512
Market Value................... --
PCM U.S. Government and High
Quality Bond Fund
Shares 20,392
Cost $280,189
Market Value................... --
PCM Money Market Fund
Shares 2,398
Cost $ 2,398
Market Value................... --
Fidelity VIP Equity Income Fund
Shares 216
Cost $ 4,133
Market Value................... $ 4,170
Receivable from fund shares
sold............................ 0
Receivable from Hartford Life
Insurance Co.................... 4,170
---------------
Total Assets..................... 8,340
---------------
LIABILITIES:
Payable to Hartford Life
Insurance Co.................... 0
Payable for fund shares
purchased....................... 4,170
---------------
Total Liabilities................ 4,170
---------------
Net Assets (variable life
contract liabilities)........... $ 4,170
---------------
---------------
Units Outstanding.................. 3,469
Accumulation Unit Value at end of
period........................... $ 1.201923
</TABLE>
51
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE TWO
STATEMENT OF OPERATIONS
FOR THE PERIOD AUGUST 14, 1995 TO DECEMBER 31, 1995
<TABLE>
<CAPTION>
HARTFORD
CAPITAL
HARTFORD HVA MONEY APPRECIATION HARTFORD
STOCK FUND MARKET FUND FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........................ $ 7 $ 7,711 $ 0 $ 7
EXPENSES:
Mortality and expense
undertakings.................... 0 0 0 0
----------- ----------- --------------- -----------
Net investment income (loss)..... 7 7,711 0 7
----------- ----------- --------------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
security transactions........... 0 0 0 0
Net unrealized appreciation of
investments during the period... 14 0 0 60
----------- ----------- --------------- -----------
Net gains on investments......... 14 0 0 60
----------- ----------- --------------- -----------
Net increase in net assets
resulting from operations....... $ 21 $ 7,711 $ 0 $ 13
----------- ----------- --------------- -----------
----------- ----------- --------------- -----------
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE TWO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD AUGUST 14, 1995 TO DECEMBER 31, 1995
<CAPTION>
HARTFORD
CAPITAL
HARTFORD HVA MONEY APPRECIATION HARTFORD
STOCK FUND MARKET FUND FUND INDEX FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- --------------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)..... $ 7 $ 7,711 $ 0 $ 7
Net realized gain (loss) on
security transactions........... 0 0 0 0
Net unrealized appreciation of
investments during the period... 14 0 0 6
----------- ----------- --------------- -----------
Net increase in net assets
resulting from operations........ 21 7,711 0 13
----------- ----------- --------------- -----------
UNIT TRANSACTIONS:
Purchases........................ 0 1,795,344 0 0
Net transfers.................... 21,645 (824,475) 122,583 47,913
Cost of insurance and other
charges......................... 0 (47,065) 0 0
----------- ----------- --------------- -----------
Net increase in net assets
resulting from unit
transactions.................... 21,645 923,804 122,583 47,913
----------- ----------- --------------- -----------
Total increase in net assets..... 21,666 931,515 122,583 47,926
NET ASSETS:
Beginning of Period.............. 0 0 0 0
----------- ----------- --------------- -----------
End of Period.................... $ 21,666 $ 931,515 $ 122,583 $ 47,926
----------- ----------- --------------- -----------
----------- ----------- --------------- -----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
52
<PAGE>
<TABLE>
<CAPTION>
PCM PCM
HARTFORD GLOBAL U.S. GOVERNMENT
INTERNATIONAL PCM PCM ASSET AND PCM FIDELITY VIP
OPPORTUNITIES VOYAGER GLOBAL ALLOCATION HIGH QUALITY BOND MONEY MARKET EQUITY INCOME
FUND FUND GROWTH FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends........... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
EXPENSES:
Mortality and
expense
undertakings....... 0 0 0 0 0 0 0
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
Net investment
income (loss)...... 0 0 0 0 0 0 0
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
NET REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized gain
(loss) on security
transactions....... 0 0 0 0 0 0 0
Net unrealized
appreciation of
investments during
the period......... 0 60 0 0 0 0 37
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
Net gains on
investments........ 0 60 0 0 0 0 37
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
Net increase in net
assets resulting
from operations.... $ 0 $ 60 $ 0 $ 0 $ 0 $ 0 $ 37
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE TWO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD AUGUST 14, 1995 TO DECEMBER 31, 1995
<CAPTION>
PCM PCM
HARTFORD GLOBAL U.S. GOVERNMENT
INTERNATIONAL PCM PCM ASSET AND PCM FIDELITY VIP
OPPORTUNITIES VOYAGER GLOBAL ALLOCATION HIGH QUALITY BOND MONEY MARKET EQUITY INCOME
FUND FUND GROWTH FUND FUND FUND FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income (loss)...... $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Net realized gain
(loss) on security
transactions....... 0 0 0 0 0 0 0
Net unrealized
appreciation of
investments during
the period......... 0 60 0 0 0 0 37
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
Net increase in net
assets resulting
from operations..... 0 60 0 0 0 0 37
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
UNIT TRANSACTIONS:
Purchases........... 0 0 0 0 0 0 0
Net transfers....... 140,095 39,157 148,850 17,512 280,189 2,398 4,133
Cost of insurance
and other
charges............ 0 0 0 0 0 0 0
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
Net increase in net
assets resulting
from unit
transactions....... 140,095 39,157 148,850 17,512 280,189 2,398 4,133
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
Total increase in
net assets......... 140,095 39,217 148,850 17,512 280,189 2,398 4,170
NET ASSETS:
Beginning of
Period............. 0 0 0 0 0 0 0
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
End of Period....... $ 140,095 $ 39,217 $ 148,850 $ 17,512 $ 280,189 $ 2,398 $ 4,170
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
--------------- ----------- ------------ ----------- ----------------- ------------- -------------
</TABLE>
53
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE TWO
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. ORGANIZATION:
Separate Account Variable Life Two (the Account) is a separate investment
account within Hartford Life Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. The
Account consists of twenty-two sub-accounts which invest in the Hartford,
Putnam Capital Manager Trust and Fidelity Mutual Funds (the Funds). The
Account commenced operations on August 14, 1995 and as of December 31, 1995,
only eleven sub-accounts had contractholder activity. Both the Company and
the Account are subject to supervision and regulation by the Department of
Insurance of the State of Connecticut and the SEC. The Account invests
deposits by variable life contractholders of the Company in various mutual
funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date.
b) SECURITY VALUATION--The investment in shares of the Hartford, Putnam
Capital Manager Trust and Fidelity mutual funds are valued at the closing
net asset value per share as determined by the appropriate Fund as of
December 31, 1995.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
d) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
54
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1995. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1995 and
1994, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
As discussed in Note 1 in Notes to Consolidated Financial Statements, Hartford
Life Insurance Company adopted new accounting standards promulgated by the
Financial Accounting Standards Board, changing its methods of accounting, as of
January 1, 1994, for debt and equity securities.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in
the Index to Consolidated Financial Statements and Schedules are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not a required part of the basic consolidated financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our opinion, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic consolidated financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 24, 1996
F-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
REVENUES
Premiums and other considerations $1,487 $1,100 $747
Net investment income 1,328 1,292 1,051
Net realized (losses) gains (11) 7 16
------ ------ -----
TOTAL REVENUES 2,804 2,399 1,814
------ ------ -----
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim
adjustment expenses 1,422 1,405 1,046
Dividends to policyholders 675 419 227
Amortization of deferred policy
acquisition costs 199 145 113
Other insurance expense 317 227 210
------ ------ -----
TOTAL BENEFITS, CLAIMS AND EXPENSES 2,613 2,196 1,596
------ ------ -----
INCOME BEFORE INCOME TAX EXPENSE 191 203 218
Income tax expense 62 65 75
------ ------ -----
NET INCOME $129 $138 $143
------ ------ -----
------ ------ -----
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AS OF DECEMBER 31,
------------------
1995 1994
------- --------
ASSETS
<S> <C> <C>
Investments
Fixed maturities
available for sale, at market value
(amortized cost of $14,440 and $14,464) $14,400 $13,429
Equity securities, at market value
(cost of $61 and $76) 63 68
Mortgage loans, at outstanding balance 265 316
Policy loans, at outstanding balance 3,381 2,614
Other investments, at cost 156 107
------- -------
TOTAL INVESTMENTS 18,265 16,534
Cash 46 20
Premiums and amounts receivable 165 160
Reinsurance recoverable 6,221 5,466
Accrued investment income 394 378
Deferred policy acquisition costs 2,188 1,809
Deferred income tax 420 590
Other assets 234 83
Separate account assets 36,264 22,809
------- -------
TOTAL ASSETS $64,197 $47,849
------- -------
------- -------
LIABILITIES
Future policy benefits $2,373 $1,890
Other policyholder funds 22,598 21,328
Other liabilities 1,233 1,000
Separate account liabilities 36,264 22,809
------- -------
TOTAL LIABILITIES 62,468 47,027
------- -------
Commitments and contingencies (Note 9)
STOCKHOLDER'S EQUITY
Common stock
Authorized 1,000 shares, $5,690 par value
Issued and outstanding 1,000 shares 6 6
Additional paid-in capital 1,007 826
Retained earnings 773 644
Unrealized loss on investments, net of tax (57) (654)
------- -------
TOTAL STOCKHOLDER'S EQUITY 1,729 822
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $64,197 $47,849
------- -------
------- -------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
UNREALIZED LOSS TOTAL
COMMON ADDITIONAL RETAINED ON INVESTMENTS, STOCKHOLDER'S
STOCK PAID-IN-CAPITAL EARNINGS NET OF TAX EQUITY
------ --------------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 $6 $498 $373 $0 $877
Net income - - 143 - 143
Capital contribution - 180 - - 180
Excess of assets over liabilities
on reinsurance assumed from affiliate - (2) - - (2)
Change in unrealized loss on investments, net of tax - - - (5) (5)
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1993 6 676 516 (5) 1,193
------ --------------- -------- --------------- -------------
Net income - - 138 - 138
Capital contribution - 150 - - 150
Dividend paid - - (10) - (10)
Change in unrealized loss on investments, net of tax* - - - (649) (649)
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1994 6 826 644 (654) 822
------ --------------- -------- --------------- -------------
Net income - - 129 - 129
Capital contribution - 181 - - 181
Change in unrealized loss on investments, net of tax - - - 597 597
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1995 $6 $1,007 $773 ($57) $1,729
------ --------------- -------- --------------- -------------
------ --------------- -------- --------------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(*) The 1994 change in unrealized loss on investments, net of tax, included an
unrealized gain of $91 due to adoption of SFAS No. 115 as discussed in Note 1(b)
of Notes to Consolidated Financial Statements.
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-4
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $129 $138 $143
Adjustments to net income:
Net realized (losses) gains 11 (7) (16)
(Decrease) increase in liability to policyholders for realized gains (3) 5 (15)
Net amortization of premium on fixed maturities 21 41 2
Provision for deferred income taxes (172) (128) (121)
Increase in deferred policy acquisition costs (379) (441) (292)
(Increase) decrease in premiums and amounts receivable (81) 10 (28)
Increase in accrued investment income (16) (106) (4)
(Increase) decrease in other assets (177) 101 (36)
(Increase) decrease in reinsurance recoverable (35) 75 (121)
Increase in liability for future policy benefits 483 224 360
Increase in other liabilities 281 191 176
------------- -------------- -------------
CASH PROVIDED BY OPERATING ACTIVITIES 62 103 48
------------- -------------- -------------
INVESTING ACTIVITIES
Purchases of fixed maturities investments (6,228) (9,127) (12,406)
Proceeds from sales of fixed maturities investments 4,848 5,708 8,813
Maturities and principal paydowns of fixed maturities investments 1,741 1,931 2,596
Net purchases of other investments (871) (1,338) (206)
Net (purchases)/sales of short-term investments (24) 135 (564)
------------- -------------- -------------
CASH USED FOR INVESTING ACTIVITIES (534) (2,691) (1,767)
------------- -------------- -------------
FINANCING ACTIVITIES
Net receipts from investment and UL-type contracts credited to
policyholder account balances 498 2,467 1,513
Capital contribution 0 150 180
Dividends paid 0 (10) 0
------------- -------------- -------------
CASH PROVIDED BY FINANCING ACTIVITIES 498 2,607 1,693
------------- -------------- -------------
NET INCREASE (DECREASE) IN CASH 26 19 (26)
Cash at beginning of year 20 1 27
------------- -------------- -------------
CASH AT END OF YEAR $46 $20 $1
------------- -------------- -------------
------------- -------------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-5
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)
1. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
These consolidated financial statements include Hartford Life Insurance Company
and its wholly-owned subsidiaries ("Hartford Life" or the "Company"), ITT
Hartford Life and Annuity Insurance Company ("ILA") and ITT Hartford
International Life Reassurance Corporation ("HLRe"), formerly American Skandia
Life Reinsurance Corporation. Hartford Life is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company ("HLA"). Hartford Life is
ultimately owned by Hartford Fire Insurance Company ("Hartford Fire"), which is
ultimately owned by ITT Hartford Group, Inc. ("ITT Hartford"), formerly a
subsidiary of ITT Corporation ("ITT"). On December 19, 1995, ITT Corporation
distributed all of the outstanding shares of ITT Hartford Group to ITT
Corporation Shareholders of record in an action known herein as the
"Distribution". As a result of the Distribution, ITT Hartford became an
independent publicly traded company.
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
Company offers life, annuity, pension, and disability insurance products.
These products are distributed and marketed by multiple distribution channels
which include broker-dealers, agents and banks, as well as a captive sales
force. Hartford Life conducts business primarily in the United States and is
licensed to write business in all 50 states. The Company is headquartered in
Simsbury, Connecticut and has 3,045 direct employees.
The consolidated financial statements are prepared in conformity with generally
accepted accounting principles which differ in certain material respects from
the accounting practices prescribed or permitted by various insurance
regulatory authorities.
(B) CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1994, Hartford Life adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". The new standard requires, among other things,
that securities be classified as "held-to-maturity", "available-for-sale" or
"trading" based on Hartford Life's intentions with respect to the ultimate
disposition of the security and its ability to effect those intentions. The
classification determines the appropriate accounting carrying value (cost basis
or fair value) and, in the case of fair value, whether the adjustment impacts
Stockholder's Equity directly or is reflected in the Consolidated Statements of
Income. Investments in equity securities had previously been and continue to
be recorded at fair value with the corresponding impact included in
Stockholder's Equity. Under SFAS No. 115, Hartford Life's fixed maturities
are classified as "available-for-sale" and accordingly, these investments are
reflected at fair value with the corresponding impact included as a component
of Stockholder's Equity designated as "Unrealized loss on investments, net of
tax." As with the underlying investment security, unrealized gains and losses
on derivative financial instruments are considered in determining the fair
value of the portfolios. The impact of adoption was an increase to
Stockholder's Equity of $91. Hartford Life's cash flows were not impacted by
this change in accounting principle.
(C) REVENUE RECOGNITION
Revenues for universal life policies and investment products consist of policy
charges for the cost of insurance, policy administration and surrender charges
assessed to policy account balances. Premiums for traditional life insurance
policies are recognized as revenues when they are due from policyholders.
Deferred acquisition costs are amortized using the retrospective deposit method
for universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit and the
prospective deposit method is used where investment margins are the primary
source of profit.
F-6
<PAGE>
(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS
Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal,
mortality and morbidity assumptions which vary by plan, year of issue and
policy durations and include a provision for adverse deviation. Other
policyholder funds which represent liabilities for universal life insurance and
investment products reflect policy account balances before applicable surrender
charges.
(E) POLICYHOLDER REALIZED GAINS AND LOSSES
Realized gains and losses on security transactions associated with Hartford
Life's immediate participation guaranteed contracts are excluded from
revenues, since under the terms of the contracts the realized gains and losses
will be credited to policyholders in future years as they are entitled to
receive them.
(F) DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs, including commissions and certain underwriting
expenses associated with acquiring traditional life insurance products, are
deferred and amortized over the lesser of the estimated or actual contract
life. For universal life insurance and investment products, acquisition costs
are being amortized generally in proportion to the present value of expected
gross profits from surrender charges, investment, mortality and expense
margins.
(G) INVESTMENTS
Hartford Life's investments in fixed maturities include bonds, redeemable
preferred stock and commercial paper which are classified as "available-for-
sale" and accordingly are carried at market value with the after-tax difference
from cost reflected as a component of Stockholder's Equity designated
"Unrealized loss on investments, net of tax". Equity securities, which include
common and non-redeemable preferred stocks, are carried at market value with
the after-tax difference from cost reflected in Stockholder's Equity. Realized
investment gains and losses, after deducting life and pension policyholders'
share, are reported as a component of revenue and are determined on a specific
identification basis.
(H) DERIVATIVE FINANCIAL INSTRUMENTS
Hartford Life uses a variety of derivative financial instruments including,
swaps, caps, floors, options, forwards and exchange traded financial futures as
part of an overall risk management strategy. These instruments, are used as a
means of hedging exposure to price, foreign currency and/or interest rate risk
on planned investment purchases or existing assets and liabilities. Hartford
Life does not hold or issue derivative financial instruments for trading
purposes. Hartford Life's accounting for derivative financial instruments used
to manage risk is in accordance with the concepts established in SFAS No. 80,
"Accounting for Futures Contracts," SFAS No. 52 , "Foreign Currency
Translation", American Institute of Certified Public Accountants Statement of
Position 86-2, "Accounting for Options" and various Emerging Issues Task Force
pronouncements. Written options are in all cases used in conjunction with other
assets and derivatives as part of an overall risk management strategy.
Derivative instruments are carried at values consistent with the asset or
liability being hedged. Derivatives used to hedge fixed maturities or equities
are carried at fair value with the after-tax difference from cost reflected in
Stockholder's Equity. Derivatives used to hedge other invested assets or
liabilities are carried at cost.
Derivatives, used as part of a risk management strategy, must be designated at
inception as a hedge and measured for effectiveness both at inception and on an
ongoing basis. Hartford Life's minimum correlation threshold for hedge
designation is 80%. If correlation, which is assessed monthly and measured
based on a rolling three month average, falls below 80%, hedge accounting will
be terminated. Derivatives used to create a synthetic asset must meet synthetic
accounting criteria including designation at inception and consistency of terms
between the synthetic and the instrument being replicated. Synthetic
instrument accounting, consistent with industry practice, provides that the
synthetic asset is accounted for like the financial instrument it is intended
to replicate. Derivatives which fail to meet risk management criteria are
marked to market with the impact reflected in the Consolidated Statements
of Income.
Gains or losses on financial futures contracts entered into in anticipation
of the future receipt of product cash flows are deferred and, at the time of
the ultimate purchase, reflected as a basis adjustment to the purchased
asset. Gains or losses on futures used in invested asset risk management are
deferred and adjusted into the basis of the hedged asset when the contract
futures are closed, except for futures used in duration hedging which are
deferred and basis adjusted on a quarterly basis. The basis adjustments are
amortized into investment income over the remaining asset life.
F-7
<PAGE>
Open forward commitment contracts are marked to market through Stockholder's
Equity. Such contracts are recorded at settlement by recording the purchase of
the specified securities at the previously committed price. Gains or losses
resulting from the termination of the forward commitment contracts before the
delivery of the securities are recognized immediately in the Consolidated
Statements of Income as a component of net investment income.
The cost of options entered into as part of a risk management strategy are
basis adjusted to the underlying asset or liability and amortized over the
remaining life of the hedge. Gains or losses on expiration or termination are
adjusted into the basis of the underlying asset or liability and amortized over
the remaining asset life.
Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an
adjustment to income. Should the swap be terminated, the gain or loss is
adjusted into the basis of the asset or liability and amortized over the
remaining life. Should the hedged asset be sold or liability terminated without
terminating the swap position, any swap gains or losses are immediately
recognized in earnings. Interest rate swaps purchased in anticipation of an
asset purchase ("anticipatory transaction") are recognized consistent with the
underlying asset components such that the settlement component is recognized in
the Consolidated Statements of Income while the change in market value is
recognized as an unrealized gain or loss.
Premiums paid on purchased floor or cap agreements and the premium received on
issued floor or cap agreements (used for risk management), are adjusted into
the basis of the applicable asset and amortized over the asset life. Gains or
losses on termination of such positions are adjusted into the basis of the
asset or liability and amortized over the remaining asset life. Net payments
are recognized as an adjustment to income or basis adjusted and amortized
depending on the specific hedge strategy.
Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52.
(I) RELATED PARTY TRANSACTIONS
Transactions of Hartford Life with its parent and affiliates relate principally
to tax settlements, insurance coverage, rental and service fees and payment of
dividends and capital contributions. In addition, certain affiliated insurance
companies purchased group annuity contracts from Hartford Life to fund pension
costs and claim annuities to settle casualty claims.
On June 30, 1995, the assets of Lyndon Insurance Company ("Lyndon") were
contributed to ILA. As a result, ILA received approximately $365 in fixed
maturities, equity securities and cash, $26 in receivables, $187 of current
tax liability, $20 in deferred tax liability, and $3 of other liabilities.
The excess of assets over liabilities of $181 were recorded as an increase to
paid-in capital.
Substantially all general insurance expenses related to Hartford Life,
including rent expenses, are initially paid by Hartford Fire. Direct expenses
are allocated to Hartford Life using specific identification and indirect
expenses are allocated using other applicable methods.
The rent paid to Hartford Fire for the space occupied by Hartford Life was $3
in 1995, 1994, and 1993 respectively. Hartford Life expects to pay rent of $3
in 1996, 1997, 1998, 1999, and 2000, respectively and $57 thereafter, over the
contract life of the lease.
(J) DIVIDEND TO POLICYHOLDERS
Dividends to policyholders primarily represent those amounts paid to corporate
owned life insurance ("COLI") policyholders. These dividend liabilities, which
appear as other policyholder funds on the Consolidated Balance Sheets, are
recorded when approved by the board of directors.
See Note (4) for the related party coinsurance agreements.
F-8
<PAGE>
2. INVESTMENTS
(a) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
<S> <C> <C> <C>
1995 1994 1993
------ ------ ------
Interest income $1,338 $1,247 $1,007
Income from other investments 1 54 53
------ ------ ------
GROSS INVESTMENT INCOME 1,339 1,301 1,060
Less: Investment expenses 11 9 9
------ ------ ------
NET INVESTMENT INCOME $1,328 $1,292 $1,051
------ ------ ------
------ ------ ------
(b) UNREALIZED GAINS/(LOSSES) ON EQUITY SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $4 $2 $3
Gross unrealized losses (2) (11) (11)
Deferred income tax expenses/(benefit) 1 (3) (3)
------ ------ ------
NET UNREALIZED GAINS (LOSSES) AFTER TAX 1 (6) (5)
Balance at the beginning of the year (6) (5) (0)
------ ------ ------
CHANGE IN NET UNREALIZED GAINS (LOSSES) ON EQUITY SECURITIES $7 ($1) ($5)
------ ------ ------
------ ------ ------
(c) UNREALIZED GAINS/(LOSSES) IN FIXED SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $529 $150 $538
Gross unrealized losses (569) (1,185) (290)
Unrealized (losses)/gains credited to policyholder (52) 37 0
Deferred income tax (benefit)/expense (34) (350) 87
------ ------ ------
NET UNREALIZED (LOSSES) GAINS AFTER TAX (58) (648) 161
Balance at the beginning of the year (648) 161 144
------ ------ ------
CHANGE IN NET UNREALIZED GAINS(LOSES)
ON FIXED MATURITIES $590 ($809) $17
------ ------ ------
------ ------ ------
(d) COMPONENTS OF NET REALIZED GAINS/(LOSSES)
Year ended December 31,
--------------------------
1995 1994 1993
------ ------ ------
Fixed maturities $23 ($34) ($12)
Equity securities (6) (11) 0
Real estate and other (25) 47 43
Less: (decrease)/increase in liability to policyholders
for realized gains (3) 5 (15)
------ ------ ------
NET REALIZED (LOSSES) GAINS ($11) $7 $16
------ ------ ------
------ ------ ------
</TABLE>
F-9
<PAGE>
(e) DERIVATIVE INVESTMENTS
A summary of investments, segregated by major category along with the types of
derivatives and their respective notional amounts, are as follows as of
December 31, 1995 :
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(CARRYING AMOUNT)
Caps, Floors & Options Foreign
Carrying ----------------------- Currency
Value Non-Derivative Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- ----------- -------- ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-backed securities $5,764 $5,752 ($1) $30 $0 ($17) $0
Inverse floaters(a) 711 794 (30) 16 0 (69) 0
Anticipatory(e) 0 0 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL ASSET-BACKED SECURITIES 6,475 6,546 (31) 46 0 (86) 0
Other bonds and notes 7,118 7,165 (1) 0 0 (22) (24)
Short-term investments 807 807 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL FIXED MATURITIES 14,400 14,518 (32) 46 0 (108) (24)
Other investments 3,865 3,865 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL INVESTMENTS $18,265 $18,383 ($32) $46 $0 ($108) ($24)
-------- ----------- -------- ----------- --------- -------- -------
-------- ----------- -------- ----------- --------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(NOTIONAL AMOUNT)
(EXCLUDING LIABILITY HEDGES)
Caps, Floors & Options Foreign
Notional ---------------------- Currency
Amount Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Asset-backed securities $3,863 $118 $3,133 $322 $290 $0
Inverse floaters(a) 1,601 560 354 6 681 0
Anticipatory(e) 238 0 0 213 25 0
-------- --------- --------- ---------- --------- ---------
TOTAL ASSET-BACKED SECURITIES 5,702 678 3,487 541 996 0
Other bonds and notes 1,365 33 66 322 757 187
Short-term investments 0 0 0 0 0 0
-------- --------- --------- ---------- --------- ---------
TOTAL FIXED MATURITIES 7,067 711 3,553 863 1,753 187
Other investments 18 0 0 0 18 0
-------- --------- --------- ---------- --------- ---------
TOTAL INVESTMENTS $7,085 $711 $3,553 $863 $1,771 $187
-------- --------- --------- ---------- --------- ---------
-------- --------- --------- ---------- --------- ---------
</TABLE>
(a) Inverse floaters are variations of CMO's for which the coupon rates
move inversely with an index rate (e.g. LIBOR). The risk to principal is
considered negligible as the underlying collateral for the securities is
guaranteed or sponsored by government agencies. To address the volatility
risk created by the coupon variability, Hartford Life uses a variety of
derivative instruments, primarily interest rate swaps and issued floors.
(b) Includes issued caps $475 with a weighted average strike rate of 8.5%
(ranging from 7.0% to 10.4%) and over 85% mature in 2000 through 2004. Issued
floors totaled $236, have a weighted average strike rate of 8.1% (ranging
from 5.3% to 10.9%) and mature through 2007 with 76% maturing by 2004.
(c) Comprised of purchased floors of $1.8 billion and purchased caps of $1.7
billion. The floors have a weighted average strike price of 5.8% (ranging from
3.7% to 6.8%) and over 85% mature in 1997 through 1999. The caps have a
weighted average strike price of 7.5% (ranging from 4.5% and 10.1%) and over
82% mature in 1997 through 1999.
(d) Over 95% of futures contracts expire before December 31, 1996.
(e) Deferred gains and losses on anticipatory transactions are included in the
carrying value of bond investments in the consolidated balance sheets. At the
time of the ultimate purchase, they are reflected as a basis adjustment to the
purchased asset. At December 31, 1995, there were $5.3 in net deferred losses
for futures, interest rate swaps and purchased options.
(f) The following table summarizes the maturities by notional value of interest
rate swaps outstanding at December 31, 1995 and the related weighted average
interest pay rate or receive rate assuming current market conditions:
F-10
<PAGE>
<TABLE>
<CAPTION>
MATURITY OF SWAPS ON INVESTMENTS
AS OF DECEMBER 31, 1995
LAST
1996 1997 1998 1999 2000 THEREAFTER TOTAL MATURITY
---- ---- ---- ---- ---- ---------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST RATE SWAPS
PAY FIXED/RECEIVE VARIABLE
Notional Value $15 $50 $0 $453 $31 $229 $778 2004
Weighted Average Pay Rate 5.0% 7.2% 0.0% 8.1% 7.1% 7.8% 7.8%
Weighted Average Receive Rate 5.8% 5.9% 0.0% 5.8% 5.7% 5.9% 5.9%
PAY VARIABLE/RECEIVE FIXED
Notional Value $100 $68 $25 $25 $35 $190 $443 2007
Weighted Average Pay Rate 5.9% 8.6% 5.9% 0.0% 5.9% 5.4% 5.4%
Weighted Average Receive Rate 2.4% 7.9% 4.0% 0.0% 6.5% 6.9% 6.9%
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $50 $18 $36 $12 $200 $234 $550 2004
Weighted Average Pay Rate 5.8% 0.0% 3.7% 3.5% 4.5% 16.3% 5.7%
Weighted Average Receive Rate 5.4% 0.0% 5.6% 5.2% 6.8% 5.9% 6.4%
TOTAL INTEREST RATE SWAPS $165 $136 $61 $490 $266 $653 $1,771 2007
WEIGHTED AVERAGE PAY RATE 5.8% 7.8% 4.6% 7.6% 5.0% 7.3% 6.9%
WEIGHTED AVERAGE RECEIVE RATE 3.6% 7.2% 4.9% 5.4% 6.6% 6.3% 5.8%
</TABLE>
(g) The following table reconciles the derivative notional amounts by derivative
type and by strategy:
<TABLE>
<CAPTION>
BY DERIVATIVE TYPE
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
Caps $1,861 $2,666 $2,343 $2,184
Floors 2,131 237 188 2,180
Swaps/Collars/Forwards/Options 4,374 1,355 2,163 3,566
Futures 253 6,125 5,515 863
--------------- --------- ------------ ---------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- --------- ------------ ---------------
--------------- --------- ------------ ---------------
BY STRATEGY
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- ---------- ------------ ---------------
Liability $1,725 $729 $746 $1,708
Anticipatory 626 1,564 1,952 238
Asset 3,048 3,153 3,217 2,984
Portfolio 3,220 4,937 4,294 3,863
--------------- ---------- ------------ --------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- ---------- ------------ --------------
--------------- ---------- ------------ --------------
</TABLE>
In addition to risk management through derivative financial instruments
pertaining to the investment portfolio, interest rate sensitivity related to
certain Company liabilities was altered primarily through interest rate swap
agreements. The notional
F-11
<PAGE>
amount of the liability agreements in which Hartford Life generally pays one
variable rate in exchange for another, was $1.7 billion at December 31, 1995 and
1994 respectively. The weighted average pay rate is 5.9%; the weighted average
receive rate is 6.0% , and these agreements mature at various times through
2001.
(F) CONCENTRATION OF CREDIT RISK
Hartford Life has a reinsurance recoverable of $5.6 billion from Mutual Benefit
Life Assurance Corporation (Mutual Benefit). The risk of Mutual Benefit
becoming insolvent is mitigated by the reinsurance agreement's requirement that
the assets be kept in a security trust with Hartford Life as sole beneficiary.
Excluding investments in U.S. government and agencies, Hartford Life has no
other significant concentrations of credit risk.
Included in fixed maturity investments at December 31, 1995 were $39 of
Orange County, California Pension Obligation Bonds, $17 of which were carried
in the general account and $22 which were included in Hartford Life's
guaranteed separate accounts. During 1995 all interest payments due were
received. While Orange County is currently operating under Protection of
Chapter 9 of the Federal Bankruptcy Laws, Hartford Life believes the bonds
are not impaired other than on a temporary basis.
(G) FIXED MATURITIES
The schedule below details the amortized cost and fair values of Hartford Life's
fixed maturities by component, along with the gross unrealized gains and losses:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,1995
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
<S> <C> <C> <C> <C>
U.S. Government and government agencies and
authorities;
Guaranteed and sponsored $502 $4 ($9) $497
Guaranteed and sponsored-asset backed 3,568 210 (387) 3,391
State, municipalities and political subdivisions 201 4 (3) 202
International governments 291 19 (4) 306
Public utilities 949 29 (2) 976
All other corporate-asset backed 3,065 76 (55) 3,086
All other corporate 5,056 187 (109) 5,134
Short-term investments 808 0 0 808
---------- ------- ----- -----
TOTAL INVESTMENTS $14,440 $529 ($569) $14,440
---------- ------- ----- -----
---------- ------- ----- -----
AS OF DECEMBER 31,1994
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
U.S. Government and government agencies
and authorities;
Guaranteed and sponsored $1,516 $1 ($87) $1,430
Guaranteed and sponsored-asset backed 4,256 78 (571) 3,763
State, municipalities and political subdivisions 148 1 (12) 137
International governments 189 1 (14) 176
Public utilities 531 1 (32) 500
All other corporate-asset backed 2,442 30 (121) 2,351
All other corporate 3,717 38 (297) 3,458
Short-term investments 1,665 0 (51) 1,614
--------- ------- -------- -------
TOTAL INVESTMENTS $14,464 $150 ($1,185) $13,429
--------- ------- -------- -------
--------- ------- -------- -------
</TABLE>
F-12
<PAGE>
The amortized cost and estimated fair value of fixed maturities at December 31,
1995, by maturity, are shown below. Asset backed securities are distributed to
maturity year based on estimates of the rate of future prepayments of principal
over the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting the borrowers' rights to call or prepay their
obligations.
<TABLE>
<CAPTION>
AMORTIZED MARKET
COST VALUE
---------- ---------
<S> <C> <C>
Due in one year or less $3,146 $3,133
Due after one year through five years 6,373 6,316
Due after five years through ten years 3,609 3,644
Due after ten years 1,312 1,307
---------- ---------
TOTAL $14,440 $14,400
---------- ---------
---------- ---------
</TABLE>
Sales of fixed maturities excluding short-term fixed maturities for the years
ended December 31, 1995, 1994, and 1993 resulted in proceeds of $4,848, $5,708,
and $8,813, respectively, resulting in gross realized gains of $91, $71, and
$192, respectively, and gross realized losses of $72, $100, and $219,
respectively, not including policyholder gains and losses. Sales of equity
securities and other investments for the years ended December 31, 1995, 1994,
and 1993 resulted in proceeds of $64, $159, and $127, respectively, resulting in
gross realized gains of $28, $3, and $0, respectively, and gross realized losses
of $59, $14, $0, respectively, not including policyholder gains and losses.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995 AS OF DECEMBER 31, 1994
----------------------- -----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities $14,400 $14,400 $13,429 $13,429
Equity securities 63 63 68 68
Policy loans 3,381 3,381 2,614 2,614
Mortgage loans 265 265 316 316
Investments in partnerships and trusts 94 97 36 42
Miscellaneous 62 62 67 67
LIABILITIES
Other policy claims and benefits $12,727 $12,767 $13,001 $12,374
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instrument: fair value for fixed maturities and equity
securities approximate those quotations published by applicable stock exchanges
or are received from other reliable sources; policy and mortgage loan carrying
amounts approximate fair value; investments in partnerships and trusts are based
on external market valuations from partnership and trust management; and other
policy claims and benefits payable are determined by estimating future cash
flows discounted at the current market rate.
3. INCOME TAX
Hartford Life is included in ITT Hartford Group's consolidated U.S. Federal
income tax return and remits to (receives from) ITT Hartford Group, Inc. a
current income tax provision (benefit) computed in accordance with the tax
sharing arrangements between its insurance subsidiaries. The effective tax
rate was 32% in 1995 and 1994, and approximates the U.S. statutory tax rate
of 35% in 1993.
F-13
<PAGE>
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
INCOME TAX EXPENSES
Current $211 $185 $190
Deferred (149) (120) (115)
------- ------- -------
TOTAL $62 $65 $75
------- ------- -------
------- ------- -------
INCOME TAX PROVISION
Tax provision at U.S. statutory rate $67 $71 $76
Tax-exempt income (3) (3) 0
Foreign tax credit (4) (1) 0
Other 2 (2) (1)
------- ------- -------
PROVISION FOR INCOME TAX $62 $65 $75
------- ------- -------
------- ------- -------
</TABLE>
Income taxes paid were $162, $244, and $301 in 1995, 1994, and 1993
respectively. The current taxes due from Hartford Fire were $8 and $46 in 1995
and 1994, respectively.
Deferred tax assets(liabilities) include the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Tax deferred acquisition costs $410 $284
Book deferred acquisition costs and reserves 138 (134)
Employee benefits 8 7
Unrealized net loss on investments 32 353
Investments and other (168) 80
--------- ---------
TOTAL DEFERRED TAX ASSET $420 $590
--------- ---------
--------- ---------
</TABLE>
Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax Act
of 1959 permitted the deferral from taxation of a portion of statutory income
under certain circumstances. In these situations, the deferred income was
accumulated in a "Policyholders' Surplus Account" and will be taxable in the
future only under conditions which management considers to be remote; therefore,
no Federal income taxes have been provided on this deferred income. The balance
for tax return purposes of the Policyholders' Surplus Account as of December 31,
1995 was $37.
4. REINSURANCE
Hartford Life cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve Hartford Life of its primary
liability. Hartford Life also assumes insurance from other insurers. Group
life and accident and health insurance business is substantially reinsured to
affiliated companies.
Life insurance net retained premiums were comprised of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Gross premiums $1,545 $1,316 $1,135
Insurance assumed 591 299 93
Insurance ceded 649 515 481
------- ------- -------
NET RETAINED PREMIUMS $1,487 $1,100 $747
------- ------- -------
------- ------- -------
</TABLE>
F-14
<PAGE>
Life reinsurance recoveries, which reduced death and other benefits, for the
years ended December 31, 1995, 1994 and 1993 approximated $220, $164, and $149,
respectively.
In December 1994, Hartford Life assumed from a third party approximately $500
of corporate owned life insurance reserves on a coinsurance basis. In
December 1995, this block of business was reinsured to HLRe utilizing
modified coinsurance, with the assets and policy liabilities placed in a
separate account. In October 1994, HLRe recaptured approximately $500 of
corporate owned life insurance from a third party reinsurer. Subsequent to
this transaction, Hartford Life and HLRe restructured their coinsurance
agreement from coinsurance to modified coinsurance, with the assets and
policy liabilities placed in the separate account. These transactions did not
have a material impact on consolidated net income.
Also in December 1994, ILA ceded to a third party $1.0 billion in individual
fixed and variable annuities on a modified coinsurance basis. In December 1995,
Hartford Life ceded approximately $1.2 billion in individual variable annuities
on a modified coinsurance basis to a third party. These transactions did not
have a material impact on consolidated net income.
In May 1994, Hartford Life assumed the life insurance policies and the
individual annuities of Pacific Standard with reserves and account values of
approximately $400. Hartford Life received cash and investment grade assets
to support the life insurance and individual annuity contract obligations
assumed.
In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and liabilities
of Hartford Life increased approximately $1 billion. The excess of
liabilities assumed over assets received, of $2, was recorded as a decrease
to capital surplus. The remaining $41 in assets and liabilities were
transferred in October 1995. The impact on consolidated net income was not
significant.
In August 1993, Hartford Life received assets of $300 for assuming the group
COLI contract obligations of Mutual Benefit Life Insurance Company, through
an assumption reinsurance transaction. Under the terms of the agreement,
Hartford Life coinsured back 75% of the liabilities to Mutual Benefit Life
Insurance Company. All assets supporting Mutual Benefit's reinsurance
liability to Hartford Life are placed in a "security trust", with Hartford
Life as the sole beneficiary. The impact on 1993 consolidated net income was
not significant.
5. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
Hartford Life's employees are included in Hartford Fire's noncontributory
defined benefit pension plans. These plans provide pension benefits that are
based on years of service and the employee's compensation during the last ten
years of employment. Hartford Life's funding policy is to contribute annually
an amount between the minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974 and the maximum amount that can be
deducted for Federal income tax purposes. Generally, pension costs are funded
through the purchase of Hartford Life's group pension contracts. The cost to
Hartford Life was approximately $2, $2, and $3 in 1995, 1994 and 1993,
respectively.
Hartford Life provides certain health care and life insurance benefits for
eligible retired employees. A substantial portion of Hartford Life's employees
may become eligible for these benefits upon retirement. Hartford Life's
contribution for health care benefits will depend on the retiree's date of
retirement and years of service. In addition, the plan has a defined dollar cap
which limits average company contributions. Hartford Life has prefunded a
portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.
Postretirement health care and life insurance benefits expense, allocated by
Hartford Fire were immaterial for 1995, 1994, and 1993 respectively.
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 10.1% for 1995, decreasing ratably to 6.0% in the
year 2001. Increasing the health care trend rates by one percent per year would
have an immaterial impact on the accumulated postretirement benefit obligation
and the annual expense. To the extent that the actual experience differs from
the inherent assumptions, the effect will be amortized over the average future
service of the covered employees.
F-15
<PAGE>
6. BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
REVENUES
Individual Life and Annuity $797 $691 $595
Asset Management Services 734 789 794
Specialty Insurance Operations 1,273 919 425
------ ------ ------
TOTAL REVENUES $2,804 $2,399 $1,814
------ ------- ------
------ ------- ------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------
1995 1994 1993
------ ------- -----
INCOME BEFORE INCOME TAX EXPENSE
Individual Life and Annuity $236 $139 $129
Asset Management Services (79) 38 71
Specialty Insurance Operations 34 26 18
------ ------ ------
TOTAL INCOME BEFORE INCOME
TAX EXPENSE $191 $203 $218
------ ------ ------
------ ------ ------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31
---------------------------
1995 1994 1993
------- ------- -------
IDENTIFIABLE ASSETS
Individual Life and Annuity $36,741 $26,668 $19,147
Asset Management Services 13,962 13,334 12,416
Specialty Insurance Operations 13,494 7,847 6,723
------- ------- -------
TOTAL IDENTIFIABLE ASSETS $64,197 $47,849 $38,286
------- ------- -------
------- ------- -------
</TABLE>
7. STATUTORY NET INCOME AND SURPLUS
Substantially all of the statutory surplus is permanently reinvested or is
subject to dividend restrictions relating to various state regulations which
limit the payment of dividends without prior approval. Statutory net income
and surplus as of December 31 were:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- --------
<S> <C> <C> <C>
Statutory net income $112 $58 $63
Statutory surplus $1,125 $941 $812
</TABLE>
8. SEPARATE ACCOUNTS
Hartford Life maintains separate account assets and liabilities totaling $36.3
billion and $22.8 billion at December 31, 1995 and 1994, respectively which
are reported at fair value. Separate account assets are segregated from other
investments and investment income and gains and losses accrue directly to the
policyholder. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $25.9 billion and $14.8 billion at
December 31, 1995 and 1994, respectively, wherein the policyholder assumes the
investment risk, and guaranteed separate account assets totaling $10.4 billion
and $8.0 billion at December 31, 1995 and 1994, respectively, wherein Hartford
Life contractually guarantees either a minimum return or account value to the
policyholder. Included in the non-guaranteed category are policy loans
totaling $1.7 billion and $0.5 billion at December 31, 1995 and 1994,
respectively. Investment income (including investment gains and losses) and
interest credited to policyholders on separate account assets are not
reflected in the Consolidated Statements of Income. Separate account
management fees, net of minimum guarantees, were $387, $256, and $189, in
1995, 1994, and 1993, respectively.
F-16
<PAGE>
The guaranteed separate accounts include modified guaranteed individual
annuity, and modified guaranteed life insurance. The average credit interest
rate on these contracts is 6.62%. The assets that support these liabilities
were comprised of $10.4 billion in bonds at December 31, 1995. The portfolios
are segregated from other investments and are managed so as to minimize
liquidity and interest rate risk. In order to minimize the risk of
disintermediation associated with early withdrawals, individual annuity and
modified guaranteed life insurance contracts carry a graded surrender charge
as well as a market value adjustment. Additional investment risk is hedged
using a variety of derivatives which totaled $133 million in carrying value
and $2.7 billion in notional amounts at December 31, 1995.
9. COMMITMENTS AND CONTINGENCIES
In August 1994, Hartford Life renewed a two year note purchase facility
agreement which in certain instances obligates Hartford Life to purchase up to
$100 million in collateralized notes from a third party. Hartford Life is
receiving fees for this commitment. At December 31, 1995, Hartford Life had
not purchased any notes under this agreement.
Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on
Hartford Life under these laws cannot be reasonably estimated. Most of these
laws do provide, however, that an assessment may be excused or deferred if it
would threaten an insurer's own financial strength. Additionally, guaranty
fund assessments are used to reduce state premium taxes paid by the Company in
certain states. Hartford Life paid guaranty fund assessments of approximately
$10, $8 and $6 in 1995, 1994, and 1993, respectively.
Hartford Life is involved in various legal actions, some of which involve
claims for substantial amounts. In the opinion of management the ultimate
liability with respect to such lawsuits, as well as other contingencies, is
not considered material in relation to the consolidated financial position of
Hartford Life.
F-17
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I - SUMMARY OF INVESTMENTS (OTHER THAN INVESTMENTS IN AFFILIATES)
AS OF DECEMBER 31, 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
FAIR REPORTED ON
COST VALUE BALANCE SHEET
-------------- ------------- -----------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds
U.S. Government and government agencies and authorities
Guaranteed and sponsored $502 $497 $497
Guaranteed and sponsored - asset backed 3,568 3,391 $3,391
States, municipalities and political subdivisions 201 202 $202
International governments 291 306 $306
Public utilities 949 976 $976
All other corporate 5,056 5,134 $5,134
All other corporate - asset backed 3,065 3,086 $3,086
Short-term investments 808 808 $808
---------- --------- ---------
TOTAL FIXED MATURITIES $14,440 $14,400 $14,400
EQUITY SECURITIES
Common stocks - industrial, miscellaneous and all other 61 63 63
TOTAL FIXED MATURITIES AND EQUITY SECURITIES $14,501 $14,463 $14,463
POLICY LOANS 3,381 3,381 3,381
MORTGAGE LOANS 265 265 265
OTHER INVESTMENTS 156 159 156
--------- -------- -------
TOTAL INVESTMENTS $18,303 $18,268 $18,265
--------- -------- -------
--------- -------- -------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Fair value for stocks and bonds approximate those quotations published by
applicable stock exchanges or are received from other reliable sources. The
fair value for short-term investments approximates cost.
Policy and mortgage loans carrying amounts approximate fair value.
S-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTAL INSURANCE INFORMATION
(in millions)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Amort. of
Deferred Future Other Premiums and Net Benefits, Claims Deferred Other
Policy Policy Policyholder Other Investment and Claim Adj. Policy Insurance
Acq. Costs Benefits Funds Considerations Income Expenses Acq. Costs Expenses
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1995 Year ended December 31, 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Individual Life and Annuity $2,088 $706 $4,371 $514 $283 $277 $176 $108
Asset Management Services 87 1,169 8,942 51 683 722 23 68
Specialty Insurance
Operations 13 498 9,285 922 351 423 0 816
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $2,188 $2,373 $22,598 $1,487 $1,317 $1,422 $199 $992
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1994 Year ended December 31, 1994
Individual Life and
Annuity $1,708 $582 $4,257 $492 $199 $334 $137 $80
Asset Management Services 101 845 10,160 39 750 695 8 48
Specialty Insurance
Operations 0 463 6,911 569 350 376 0 518
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $1,809 $1,890 $21,328 $1,100 $1,299 $1,405 $145 $646
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1993 Year ended December 31, 1993
Individual life and Annuity $1,237 $428 $3,535 $423 $172 $249 $97 $120
Asset Management Services 97 703 9,026 35 759 662 16 45
Specialty Insurance
Operations 0 528 5,673 289 136 135 0 272
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $1,334 $1,659 $18,234 $747 $1,067 $1,046 $113 $437
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Investment income is allocated to the reportable division based on each
division's share of investable funds or on a direct basis, where applicable,
including realized capital gains and losses.
Benefits, claims and claims adjustment expenses include the increase in
liability for future policy benefits and death, disability and other contract
benefits payments.
Other insurance expenses are allocated to the division based upon specific
identification, where possible.
S-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV - REINSURANCE
(in millions)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Percentage of
Gross Ceded to Assumed from Net Amount Assumed
Amount Other Companies Other Companies Amount to Net Amount
-------- ----------------- ----------------- -------- ----------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
LIFE INSURANCE IN FORCE $182,716 $112,774 $26,996 $96,938 27.8%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $549 $163 $122 $508 24.0%
Asset Management Services 51 0 0 51 0.0%
Specialty Insurance Operations 632 162 452 922 49.0%
313 324 17 6 283.3%
-------- ----------------- ----------------- --------
TOTAL $1,545 $649 $591 $1,487 39.7%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
YEAR ENDED DECEMBER 31, 1994
LIFE INSURANCE IN FORCE $136,929 $87,553 $35,016 $84,392 41.5%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $448 $71 $106 $483 21.9%
Asset Management Services 39 0 0 39 0.0%
Specialty Insurance Operations 521 140 188 569 33.0%
Accident and Health 308 304 5 9 55.6%
-------- ----------------- ----------------- --------
TOTAL $1,316 $515 $299 $1,100 27.2%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
YEAR ENDED DECEMBER 31, 1993
LIFE INSURANCE IN FORCE $93,099 $71,415 $27,067 $48,751 55.5%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $417 $85 $91 $423 21.5%
Asset Management Services 25 0 0 25 0.0%
Specialty Insurance Operations 386 97 0 289 0.0%
Accident and Health 307 299 2 10 20.0%
-------- ----------------- ----------------- --------
TOTAL $1,135 $481 $93 $747 12.4%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
</TABLE>
S-3
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of _______ 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 the Company is incorporated
herein.
(A2) Not applicable.
(A3a) Principal Underwriting Agreement is incorporated herein.
(A3b) Forms of Selling Agreements is incorporate herein.
(A4) Not applicable.
(A5) Form of Flexible Premium Variable Life Insurance Policy is
incorporated herein.
(A6a) Certificate of Incorporation of Hartford Life Insurance Company
is incorporated herein.
(A6b) Bylaws of Hartford Life Insurance Company is incorporated herein.
(A7) Not applicable.
(A8) Not applicable.
(A9) Not applicable.
(A10) Form of Application for Flexible Premium Variable Life Insurance
Policies is incorporated herein.
(A11) Memorandum describing transfer and redemption procedures is
incorporated herein.
<PAGE>
(2) Opinion and consent of Lynda Godkin, Associate General Counsel is
incorporated herein.
(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 Ken A.McCullum, FSA, MAAA is incorporated herein.
(6) Consent of Arthur Andersen LLP, Independent Certified Public Accountants is
incorporated herein.
(7) Opinion and consent of Counsel is incorporated by reference as Exhibit 2.
(8) Opinion and consent of Actuary is incorporated by reference as Exhibit 5.
(9) Power of Attorney is incorporated herein.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
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. The Registrant represents that:
(a) it relies on Rule 6e-3(T)(b)(13)(ii)(F) to offer the Contracts;
(b) the level of mortality and expense risk charge is within the range of
industry practice for comparable flexible contracts.
(c) The Company has conducted a survey of similar policies and insurers
and determined that the charge is within the range of industry
practice;
(d) the Company undertakes to keep and make available to the Commission
upon request the documents we used to support the representation in
(b); and
(e) The Company further represents that the account will invest only in
management investment companies which have undertaken to have a Board
of Directors, a majority of whom are not interested persons of the
company, formulate and approve a plan under Rule 12b-1 to finance
distribution expenses.
(f) The Company has concluded that there is a reasonable likelihood that
the distribution financing arrangement of the separate account
benefits the Separate Account and Policy Owners and will keep and make
available to the Commission on request a memorandum setting for the
basis for this representation.
UNDERTAKING ON INDEMNIFICATION
Article VIII of the Bylaws of Hartford Life Insurance Company, a Connecticut
corporation, provides for indemnification of its officers, directors and
employees to the extent consistent with statutory requirements.
<PAGE>
Connecticut General Laws Section 33-320a provides for indemnification of
officers, directors and employees of a corporation as follows:
(b) Except as otherwise provided in this section, a corporation shall
indemnify any person made a party to any proceeding, other than an
action by or in the right of the corporation, by reason of the fact
that he, or the person whose legal representative he is, is or was a
shareholder, director, officer, employee or agent of the corporation,
or an eligible outside party, against judgments, fines, penalties,
amounts paid in settlement and reasonable expenses actually incurred
by him, and the person whose legal representative he is, in connection
with such proceeding. The corporation shall not so indemnify any such
person unless (1) such person, and the person whose legal
representative he is, was successful on the merits in the defense of
any proceeding referred to in this subsection, or (2) it shall be
concluded as provided in subsection (d) of this section that such
person, and the person whose legal representative he is, acted in good
faith and in a manner he reasonably believed to be in the best
interests of the corporation or, in the case of a person serving as a
fiduciary of an employee benefit plan or trust, either in the best
interests of the corporation or in the best interests of the
participants and beneficiaries of such employee benefit plan or trust
and consistent with the provisions of such employee benefit plan or
trust and, with respect to any criminal action or proceeding, that he
had no reasonable cause to believe his conduct was unlawful, or (3)
the court, on application as provided in subsection (e) of this
section, shall have determined that in view of all the circumstances
such person is fairly and reasonably entitled to be indemnified, and
then for such amount as the court shall determine; except that, in
connection with an alleged claim based upon his purchase or sale of
securities of the corporation or of another enterprise, which he
serves or served at the request of the corporation, the corporation
shall only indemnify such person after the court shall have
determined, on application as provided in subsection (e) of this
section, that in view of all the circumstances such person is fairly
and reasonably entitled to be indemnified, and then for such amount as
the court shall determine. The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith or in a manner
which he did not reasonably believe to be in the best interests of the
corporation or of the participants and beneficiaries of such employee
benefit plan or trust and consistent with the provisions of such
employee benefit plan or trust, or, with respect to any criminal
action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
(c) Except as otherwise provided in this section, a corporation shall
indemnify any person made a party to any proceeding, by or in the
right of the corporation, to procure a judgment in its favor by reason
of the fact that he, or the person whose legal representative he is,
is or was a shareholder, director, officer, employee or agent of the
corporation, or an eligible outside party, against reasonable expenses
actually incurred by him in connection with such proceeding in
relation to matters as to which such person, or the person whose legal
representative he is, is finally adjudged not to have breached his
duty to the corporation, or where the court, on application as
provided in subsection (e) of this section, shall have determined that
in view of all the circumstances such person is fairly and reasonably
entitled to be indemnified, and then for such amount as the court
shall determine. The corporation shall
<PAGE>
not so indemnify any such person for amounts paid to the corporation,
to a plaintiff or to counsel for a plaintiff in settling or otherwise
disposing of a proceeding, with or without court approval; or for
expenses incurred in defending a proceeding which is settled or
otherwise disposed of without court approval.
(d) The conclusion provided for in subsection (b) of this section may be
reached by any one of the following: (1) The board of directors of
the corporation by a consent in writing signed by a majority of those
directors who were not parties to such proceeding; (2) independent
legal counsel selected by a consent in writing signed by a majority of
those directors who were not parties to such proceeding; (3) in the
case of any employee or agent who is not an officer or director of the
corporation, the corporation's general counsel; or (4) the
shareholders of the corporation by the affirmative vote of at least a
majority of the voting power of shares not owned by parties to such
proceeding, represented at an annual or special meeting of
shareholders, duly called with notice of such purpose stated. Such
person shall also be entitled to apply to a court for such conclusion,
upon application as provided in subsection (e), even though the
conclusion reached by any of the foregoing shall have been adverse to
him or to the person whose legal representative he is.
(e) Where an application for indemnification or for a conclusion as
provided in this section is made to a court, it shall be made to the
court in which the proceeding is pending or to the superior court for
the judicial district where the principal office of the corporation is
located. The application shall be made in such manner and form as may
be required by the applicable rules of the court or, in the absence
thereof, by direction of the court. The court may also direct the
notice be given in such manner as it may require at the expense of the
corporation to the shareholders of the corporation and to such other
persons as the court may designate. In the case of an application to a
court in which a proceeding is pending in which the person seeking
indemnification is a party by reason of the fact that he, or the
person whose legal representative he is, is or was serving at the
request of the corporation as a director, partner, trustee, officer,
employee or agent of another enterprise, or as a fiduciary of an
employee benefit plan or trust maintained for the benefit of employees
of any other enterprise, timely notice of such application shall be
given by such person to the corporation.
(f) Expenses which may be indemnifiable under this section incurred in
defending a proceeding may be paid by the corporation in advance of
the final disposition of such proceeding as authorized by the board of
directors upon agreement by or on behalf of the shareholder, director,
officer, employee, agent or eligible outside party, or his legal
representative, to repay such amount if he is later found not entitled
to be indemnified by the corporation as authorized in this section.
(g) A corporation shall not indemnify any shareholder, director, officer,
employee, agent or eligible outside party, other than a shareholder,
director, officer, employee, agent or eligible outside party who is or
was serving at the request of the corporation as a director, officer,
partner, trustee, employee or agent of another enterprise, against
judgments, fines, penalties, amounts paid in settlement and expenses
to an extent either greater or less than that authorized in this
section. No provision made a part of the incorporation, the bylaws, a
resolution or
<PAGE>
shareholders or directors, an agreement, or otherwise on or after
October 1, 1982, shall be valid unless consistent with this section.
Notwithstanding the foregoing, the corporation may procure insurance
providing greater indemnification and may share the premium cost with
any shareholder, director, officer, employee, agent or eligible
outside party on such basis as may be agreed upon. The rights and
remedies provided in this section shall be exclusive."
The registrant hereby undertakes that insofar as indemnification for liability
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, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned thereunto duly authorized, and its
seal to be herewith affixed and attested, all in the city of Simsbury, and the
State of Connecticut on the 15 day of April, 1996.
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL II
(Registrant)
By: /s/ Gregory A. Boyko
----------------------------------------------
Gregory A. Boyko, Vice President & Controller
HARTFORD LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Gregory A. Boyko
----------------------------------------------
Gregory A. Boyko, Vice President & Controller
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.
Donald R. Frahm, Chairman and
Chief Executive Officer, Director *
Bruce D. Gardner, Vice President
Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
John P. Ginnetti, Executive Vice
President, Director *
Thomas M. Marra, Executive Vice *By: /s/ Lynda Godkin
President, Director * -----------------
Leonard E. Odell, Jr., Senior Lynda Godkin
Vice President, Director * Attorney-In-Fact
Lowndes A. Smith, President,
Chief Operating Officer, Dated: April 15, 1996
Director * --------------
Raymond P. Welnicki, Senior Vice
President, Director *
Lizabeth H. Zlatkus, Vice President
Director *
<PAGE>
[Exhibit 1A1]
HARTFORD LIFE INSURANCE COMPANY
CONSENT OF DIRECTORS
The undersigned, being all of the Directors of Hartford Life Insurance Company,
hereby consent to the following action, such action to have the same force and
effect as if taken at a meeting duly called and held for such purpose.
ESTABLISHMENT OF SEPARATE ACCOUNTS
RESOLVED, that the Company is hereby authorized to establish a new separate
account designated Separate Account VL II, herein referred to as the "Account."
RESOLVED, that the Officers of the Company are hereby authorized and directed to
take all actions necessary to:
1. Designate or redesignate the Account as such Officers deem appropriate;
2. Comply with applicable state and federal laws and regulations applicable to
the establishment and operation of the Account; including filing all
necessary registrations and application for exemptive relief under the
federal securities law.
3. Establish, from time to time, the terms and conditions pursuant to which
interests in the Account will be sold to contract owners;
4. Establish all procedures, standards and arrangements necessary or
appropriate for the operation of the Account.
/s/ Donald R. Frahm /s/ Leonard E. Odell, Jr.
--------------------- --------------------------
Donald R. Frahm Leonard E. Odell, Jr.
/s/ Bruce D. Gardner /s/ Lowndes A. Smith
--------------------- --------------------------
Bruce D. Gardner Lowndes A. Smith
/s/ Joseph H. Gareau /s/ Raymond P. Welnicki
--------------------- --------------------------
Joseph H. Gareau Raymond P. Welnicki
/s/ John P. Ginnetti /s/ Lizabeth H. Zlatkus
--------------------- --------------------------
John P. Ginnetti Lizabeth H. Zlatkus
/s/ Thomas M. Marra /s/ Donald J. Znamierowski
--------------------- --------------------------
Thomas M. Marra Donald J. Znamierowski
Dated: September 30, 1994
------------------
<PAGE>
[Exhibit 1A3a]
PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT, dated as of the June 26, 1995, made by and between HARTFORD LIFE
INSURANCE COMPANY ("HLIC" or the "Sponsor"), a corporation organized and
existing under the laws of the State of Connecticut, and HARTFORD EQUITY SALES
COMPANY, INC. ("HESCO"), a corporation organized and existing under the laws of
the State of Connecticut,
WITNESSETH:
WHEREAS, the Board of Directors of HLIC has made provision for the establishment
of a separate account within HLIC in accordance with the laws of the State of
Connecticut, which separate account was organized and is established and
registered as a unit investment trust type investment company with the
Securities and Exchange Commission under the Investment Company Act of 1940
("1940 Act"), as amended, and which is designated Hartford Life Insurance
Company Separate Account VL II (referred to as the "UIT"); and
WHEREAS, HESCO offers to the public a certain Last Survivor Flexible Premium
Variable Life Insurance Policy (the "Policy") issued by HLIC with respect to the
UIT units of interest thereunder which are registered under the Securities Act
of 1933 ("1933 Act"), as amended; and
WHEREAS, HESCO has previously agreed to act as distributor in connection with
offers and sales of the Policy under the terms and conditions set forth in this
Principal Underwriter Agreement.
NOW THEREFORE, in consideration of the mutual agreements made herein, HLIC and
HESCO agree as follows:
I.
HESCO'S DUTIES
1. HESCO, as principal underwriter for the Policy, will use its best efforts
to effect offers and sales of the Policy through broker-dealers that are
members of the National Association of Securities Dealers, Inc. and whose
registered representatives are duly licensed as insurance agents of HLIC.
HESCO is responsible for compliance with all applicable requirements of the
1933 Act, as amended, the Securities Exchange Act of 1934 ("1934 Act"), as
amended, and the 1940 Act, as amended, and the rules and regulations
relating to the sales and distribution of the Policy, the need for which
arises out of its duties as principal underwriter of said Policy and
relating to the creation of the UIT.
<PAGE>
2. HESCO agrees that it will not use any prospectus, sales literature, or any
other printed matter or material or offer for sale or sell the Policy if
any of the foregoing in any way represent the duties, obligations, or
liabilities of HLIC as being greater than, or different from, such duties,
obligations and liabilities as are set forth in this Agreement, as it may
be amended from time to time.
3. HESCO agrees that it will utilize the then currently effective prospectus
relating to the UIT's Policies in connection with its selling efforts.
As to the other types of sales materials, HESCO agrees that it will use
only sales materials which conform to the requirements of federal and state
insurance laws and regulations and which have been filed, where necessary,
with the appropriate regulatory authorities.
4. HESCO agrees that it or its duly designated agent shall maintain records of
the name and address of, and the securities issued by the UIT and held by,
every holder of any security issued pursuant to this Agreement, as required
by the Section 26(a)(4) of the 1940 Act, as amended.
5. HESCO's services pursuant to this Agreement shall not be deemed to be
exclusive, and it may render similar services and act as an underwriter,
distributor, or dealer for other investment companies in the offering of
their shares.
6. In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations and duties hereunder on the part of
HESCO, HESCO shall not be subject to liability under a Policy for any act
or omission in the course, or connected with, rendering services hereunder.
II.
1. The UIT reserves the right at any time to suspend or limit the public
offering of the Policies upon 30 days' written notice to HESCO, except
where the notice period may be shortened because of legal action taken by
any regulatory agency.
2. The UIT agrees to advice HESCO immediately:
(a) Of any request by the Securities and Exchange Commission for amendment
of its 1933 Act registration statement or for additional information;
(b) Of the issuance by the Securities and Exchange Commission of any stop
order suspending the effectiveness of the 1933 Act registration
statement relating to units of interest issued with respect to the UIT
or of the initiation of any proceedings for that purpose;
<PAGE>
(c) Of the happening of any material event, if known, which makes untrue
any statement in said 1933 Act registration statement or which
requires a change therein in order to make any statement therein not
misleading.
HLIC will furnish to HESCO such information with respect to the UIT
and the Policies in such form and signed by such of its officers and
directors and HESCO may reasonably request and will warrant that the
statements therein contained when so signed will be true and correct.
HLIC will also furnish, from time to time, such additional information
regarding the UIT's financial condition as HESCO may reasonably
request.
III.
COMPENSATION
In accordance with an Expense Reimbursement Agreement between HLIC and HESCO,
HESCO is entitled to receive: (1) compensation equal to a pro rata portion of
$10,000 per year for all services provided on behalf of HLIC and the UIT; plus
(2) reimbursement for the actual expenses incurred by HESCO in excess of $10,000
for all operating costs associated with the services provided on behalf of HLIC
and the UIT under this Principal Underwriter Agreement. No additional
compensation is payable in excess of that required under the Expense
Reimbursement Agreement. The Expense Reimbursement Agreement provides for an
aggregate payment of $10,000 for all services performed by HESCO on behalf of
HLIC and its affiliated companies and any unit investment trusts sponsored by
HLIC and its affiliated companies.
IV.
RESIGNATION AND REMOVAL OF PRINCIPAL UNDERWRITER
HESCO may resign as a Principal Underwriter hereunder, upon 120 days' prior
written notice to HLIC. However, such resignation shall not become effective
until either the UIT has been completely liquidated and the proceeds of the
liquidation distributed through HLIC to the Policy owners or a successor
Principal Underwriter has been designated and has accepted its duties.
V.
MISCELLANEOUS
1. This Agreement may not be assigned by any of the parties hereto without the
written consent of the other party.
<PAGE>
2. All notices and other communications provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage
prepaid, addressed as follows:
(a) If to HLIC - Hartford Life Insurance Company, Inc. P.O. Box 2999,
Hartford, Connecticut 06104.
(b) If to HESCO - Hartford Equity Sales Company, Inc., P.O. Box 2999,
Hartford, Connecticut 06104.
or to such other address as HESCO or HLIC shall designate by written notice
to the other.
3. This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall be deemed one
instrument, and an executed copy of this Agreement and all amendments
hereto shall be kept on file by the Sponsor and shall be open to inspection
any time during the business hours of the Sponsor.
4. This Agreement shall inure to the benefit of and be binding upon the
successor of the parties hereto.
5. This Agreement shall be construed and governed by and according to the laws
of the State of Connecticut.
6. This Agreement may be amended from time to time by the mutual agreement and
consent of the parties hereto.
7. (a) This Agreement shall become effective June 26, 1995 and shall continue
in effect for a period of two years from that date and, unless sooner
terminated in accordance with 7(b) below, shall continue in effect
from year to year thereafter provided that its continuance is
specifically approved at least annually by a majority of the members
of the Board of Directors of HLIC.
(b) This Agreement (1) may be terminated at any time, without the payment
of any penalty, either by a vote of a majority of the members of the
Board of Directors of HLIC on 60 days' prior written notice to HESCO;
(2) shall immediately terminate in the event of its assignment and (3)
may be terminated by HESCO on 60 days' prior written notice to HLIC,
but such termination will not be effective until HLIC shall have an
agreement with one or more persons to act as successor principal
underwriter of the Policies. HESCO hereby agrees that it will
continue to act as successor principal underwriter until its successor
or successors assume such undertaking.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
(Seal) HARTFORD LIFE INSURANCE COMPANY
BY: /s/ Thomas M. Marra
-----------------------
Thomas M. Marra
Senior Vice President
Attest: HARTFORD EQUITY SALES COMPANY, INC.
/s/ Lynda Godkin BY: /s/ George Jay
- ----------------- -----------------------
Lynda Godkin George Jay
Secretary Controller
<PAGE>
BROKER-DEALER SALES AND
SUPERVISION AGREEMENT
This Broker-Dealer Sales and Supervision Agreement ("Agreement")
dated ____________________ is made by and between Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (referred to
collectively as "Companies"), Hartford Securities Distribution Company, Inc.
("Distributor"), a broker-dealer registered with the Securities and Exchange
Commission ("SEC") under the Securities and Exchange Act of 1934 ("1934 Act")
and a member of the National Association of Securities Dealers, Inc. ("NASD")
and __________________________________, who is also a broker-dealer registered
with the SEC under the 1934 Act and a member of the NASD ("Broker-Dealer"), and
any and all undersigned insurance agency affiliates ("Affiliates") of Broker-
Dealer.
WHEREAS, Companies offer certain variable life insurance policies and variable
and modified guaranteed annuity contracts which are deemed to be securities
under the Securities Act of 1933 (the "Registered Products"); and
WHEREAS, Companies wish to appoint the Broker-Dealer and Affiliates as agents of
the Companies for the solicitation and procurement of applications for
Registered Products; and
WHEREAS, Distributor is the principal underwriter of the Registered Products;
and
WHEREAS, Distributor anticipates having registered representatives who are
associated with Broker-Dealer ("Registered Representatives"), who are NASD
registered and are duly licensed under applicable state insurance law and
appointed as life insurance agents of Companies solicit and sell the Registered
Products; and
WHEREAS, Distributor acknowledges that the Broker-Dealer will provide certain
supervisory and administrative services to Registered Representatives who are
associated with the Broker-Dealer in connection with the solicitation, service
and sale of the Registered Products; and
WHEREAS, Broker-Dealer agrees to provide the aforementioned supervisory services
to its Registered Representatives who have been appointed by the Companies to
sell the Registered Products.
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, the parties agree to the following:
I. APPOINTMENT OF THE BROKER-DEALER
The Companies hereby appoint Broker-Dealer as an agent of the Companies for
the solicitation and procurement of applications for the Registered Products
offered by the Companies, as outlined in Exhibit A attached herein, in all
states in which the Companies are authorized to do business and in which
Broker-Dealer or any Affiliates are properly licensed. Distributor hereby
authorizes Broker-Dealer under the securities laws to supervise Registered
Representatives in connection with the solicitation, service and sale of the
Registered Products.
II. AUTHORITY OF THE BROKER-DEALER
<PAGE>
Broker-Dealer has the authority to represent Distributor and Companies only
to the extent expressly granted in this Agreement. Broker-Dealer and any
Registered Representatives shall not hold themselves out to be employees of
Companies or Distributor in any dealings with the public. Broker-Dealer and
any Registered Representatives shall be independent contractors as to
Distributor or Companies. Nothing contained herein is intended to create a
relationship of employer and employee between Broker-Dealer and Distributor
or Companies or between Registered Representatives and Distributor or
Companies.
III. BROKER-DEALER REPRESENTATION
Broker-Dealer represents that it is a registered broker-dealer under the
1934 Act, a member in good standing of the NASD, and is registered as a
broker-dealer under state law to the extent necessary to perform the duties
described in this Agreement. Broker-Dealer represents that its Registered
Representatives, who will be soliciting applications for the Registered
Products, will be duly registered representatives associated with Broker-
Dealer and that they will be representatives in good standing with
accreditation as required by the NASD to sell the Registered Products.
Broker-Dealer agrees to abide by all rules and regulations of the NASD,
including its Rules of Fair Practice, and to comply with all applicable
state and federal laws and the rules and regulations of authorized
regulatory agencies affecting the sale of the Registered Products.
IV. BROKER-DEALER OBLIGATIONS
(a) TRAINING AND SUPERVISION
Broker-Dealer has full responsibility for the training and
supervision of all Registered Representatives associated with
Broker-Dealer and any other persons who are engaged directly or
indirectly in the offer or sale of the Registered Products. Broker-
Dealer shall, during the term of this Agreement, establish and
implement reasonable procedures for periodic inspection and
supervision of sales practices of its Registered Representatives.
If a Registered Representative ceases to be a Registered
Representative of Broker-Dealer, is disqualified for continued
registration or has their registration suspended by the NASD or
otherwise fails to meet the rules and standards imposed by Broker-
Dealer, Broker-Dealer shall immediately notify such Registered
Representative that he or she is no longer authorized to solicit
applications, on behalf of the Companies, for the sale of Registered
Products. Broker-Dealer shall immediately notify Distributor of
such termination or suspension.
(b) SOLICITATION
Broker-Dealer agrees to supervise its Registered Representatives so
that they will only solicit applications in states where the
Registered Products are approved for sale in accordance with
applicable state and federal laws. Broker-Dealer shall be notified
by Companies or Distributor of the availability of the Registered
Products in each state.
(c) NO CHURNING
Broker-Dealer and any Registered Representatives shall not make any
misrepresentation or incomplete comparison of products for the
purpose of inducing a policyholder to lapse, forfeit or surrender
its insurance in favor of purchasing a Registered Product.
(d) PROSPECTUS DELIVERY AND SUITABILITY REQUIREMENTS
Broker-Dealer shall ensure that its Registered Representatives
comply with the prospectus delivery requirements under the
Securities Act of 1933. In addition, Broker-Dealer shall ensure
that its Registered Representatives shall not make recommendations
to an applicant to purchase a Registered Product in the absence of
reasonable grounds to believe that the
2
<PAGE>
purchase is suitable for such applicant, as outlined in the
suitability requirements of the 1934 Act and the NASD Rules of Fair
Practice. Broker-Dealer shall ensure that each application
obtained by its Registered Representatives shall bear evidence of
approval by one of its principals indicating that the application
has been reviewed for suitability.
(e) PROMOTIONAL MATERIAL
Broker-Dealer and its Registered Representatives are not authorized
to provide any information or make any representation in connection
with this Agreement or the solicitation of the Registered Products
other than those contained in the prospectus or other promotional
material produced or authorized by Companies or Distributor.
Broker-Dealer agrees that if it develops any promotional material
for sales, training, explanatory or other purposes in connection
with the solicitation of applications for Registered Products,
including generic advertising and/or training materials which may be
used in connection with the sale of Registered Products, it will
obtain the prior written consent of Distributor, and where
appropriate, approval of Companies, such approval not to be
unreasonably withheld.
(f) RECORD KEEPING
Broker-Dealer is responsible for maintaining the records of its
Registered Representatives. Broker-Dealer shall maintain such other
records as are required of it by applicable laws and regulations.
The books, accounts and records maintained by Broker-Dealer that
relate to the sale of the Registered Products, or dealings with the
Companies, Distributor and/or Broker-Dealer shall be maintained so
as to clearly and accurately disclose the nature and details of each
transaction.
Broker-Dealer acknowledges that all the records maintained by
Broker-Dealer relating to the solicitation, service or sale of the
Registered Products subject to this Agreement, including but not
limited to applications, authorization cards, complaint files and
suitability reviews, shall be available to Companies and Distributor
upon request during normal business hours. Companies and
Distributor may retain copies of any such records which Companies
and Distributor, in their discretion, deems necessary or desirable
to keep.
(g) REFUND OF COMPENSATION
Broker-Dealer agrees to repay Companies the total amount of any
compensation which may have been paid to it within thirty (30)
business days of notice of the request for such refund should
Companies for any reason return any premium on a Registered Product
which was solicited by a Registered Representative of Broker-Dealer.
(h) PREMIUM COLLECTION
Broker-Dealer only has the authority to collect initial premiums
unless specifically set forth in the applicable commission schedule.
Unless previously authorized by Distributor, neither Broker-Dealer
nor any of its Registered Representatives shall have any right to
withhold or deduct any part of any premium it shall receive for
purposes of payment of commission or otherwise.
V. COMPANIES AND/OR DISTRIBUTOR OBLIGATIONS
(a) PROSPECTUS/PROMOTIONAL MATERIAL
Companies and/or Distributor will provide Broker-Dealer with
reasonable quantities of the currently effective prospectus for the
Registered Products and appropriate sales promotional
3
<PAGE>
material which has been filed with the NASD, and applicable state
insurance departments.
(b) COMPENSATION
Distributor will pay Broker-Dealer as full compensation for all
services rendered by Broker-Dealer under this Agreement, commissions
and/or service fees in the amounts, in the manner and for the period
of time as set forth in the Commission Schedules attached to this
Agreement or subsequently made a part hereof, and which are in
effect at the time such Registered Products are sold. The manner of
commission payments (I.E. fronted or trail) is not subject to change
after the effective date of a contract for which the compensation is
payable.
Distributor or Companies may change the Commission Schedules
attached to this Agreement at any time. Such change shall become
effective only when Distributor or Companies provide the Broker-
Dealer with written notice of the change. No such change shall
affect any contracts issued upon applications received by Companies
at Companies' Home Office prior to the effective date of such
change.
Distributor agrees to identify to Broker-Dealer for each such
payment, the name of the Registered Representative of Broker-Dealer
who solicited each contract covered by the payment. Distributor
will not compensate Broker-Dealer for any Registered Product which
is tendered for redemption after acceptance of the application. Any
chargebacks will be assessed against the Broker-Dealer of record at
the time of the redemption.
Distributor will only compensate Broker-Dealer or Affiliates, as
outlined below, for those applications accepted by Companies, and
only after receipt by Companies at Companies' Home Office or at such
other location as Companies may designate from time to time for its
various lines of business, of the required premium and compliance by
Broker-Dealer with any outstanding contract and prospectus delivery
requirements.
In the event that this Agreement terminates for fraudulent
activities or due to a material breach by the Broker-Dealer,
Distributor will only pay to Broker-Dealer or Affiliate commissions
or other compensation earned prior to discovery of events requiring
termination. No further commissions or other compensation shall
thereafter be payable.
(c) COMPENSATION PAYABLE TO AFFILIATES
If Broker-Dealer is unable to comply with state licensing
requirements because of a legal impediment which prohibits a non-
domiciliary corporation from becoming a licensed insurance agency or
prohibits non-resident ownership of a licensed insurance agency,
Distributor agrees to pay compensation to Broker-Dealer's
contractually affiliated insurance agency, a wholly-owned life
agency affiliate of Broker-Dealer, or a Registered Representative or
principal of Broker-Dealer who is properly state licensed. As
appropriate, any reference in this Agreement to Broker-Dealer shall
apply equally to such Affiliate. Distributor agrees to pay
compensation to an Affiliate subject to Affiliates agreement to
comply with the requirements of Exhibit B, attached hereto.
VI. TERMINATION
(a) This Agreement may be terminated by any party by giving thirty (30)
days' notice in writing to the other party.
(b) Such notice of termination shall be mailed to the last known address
of Broker-Dealer appearing on Companies' records, or in the event of
termination by Broker-Dealer, to the Home Office of Companies at
P.O. Box 2999, Hartford, Connecticut 06104-2999.
4
<PAGE>
(c) Such notice shall be an effective notice of termination of this
Agreement as of the time the notice is deposited in the United
States mail or the time of actual receipt of such notice if
delivered by means other than mail.
(d) This Agreement shall automatically terminate without notice upon the
occurrence of any of the events set forth below:
(1) Upon the bankruptcy or dissolution of Broker-Dealer.
(2) When and if Broker-Dealer commits fraud or gross negligence in the
performance of any duties imposed upon Broker-Dealer by this
Agreement or wrongfully withholds or misappropriates, for Broker-
Dealer's own use, funds of Companies, its policyholders or
applicants.
(3) When and if Broker-Dealer materially breaches this Agreement or
materially violates state insurance or Federal securities laws and
administrative regulations of a state in which Broker-Dealer
transacts business.
(4) When and if Broker-Dealer fails to obtain renewal of a necessary
license in any jurisdiction, but only as to that jurisdiction.
(e) The parties agree that on termination of this Agreement, any
outstanding indebtedness to Companies shall become immediately due
and payable.
VII. GENERAL PROVISIONS
(a) COMPLAINTS AND INVESTIGATIONS
Broker-Dealer shall cooperate with Distributor and Companies in the
investigation and settlement of all complaints or claims against
Broker-Dealer and/or Distributor or Companies relating to the
solicitation or sale of the Registered Products under this
Agreement. Broker-Dealer, Distributor and Companies each shall
promptly forward to the other any complaint, notice of claim or
other relevant information which may come into either one's
possession. Broker-Dealer, Distributor and Companies agree to
cooperate fully in any investigation or proceeding in order to
ascertain whether Broker-Dealer's, Distributor's or Companies'
procedures with respect to solicitation or servicing is consistent
with any applicable law or regulation.
In the event any legal process or notice is served on Broker-Dealer
in a suit or proceeding against Distributor or Companies, Broker-
Dealer shall forward forthwith such process or notice to Companies
at its Home Office in Hartford, Connecticut, by certified mail.
(b) WAIVER
The failure of Distributor or Companies to enforce any provisions of
this Agreement shall not constitute a waiver of any such provision.
The past waiver of a provision by Distributor or Companies shall not
constitute a course of conduct or a waiver in the future of that
same provision.
(c) INDEMNIFICATION
Broker-Dealer shall indemnify and hold Distributor and Companies
harmless from any liability, loss or expense sustained by Companies
or the Distributor (including reasonable attorney fees) on account
of any acts or omissions by Broker-Dealer or persons employed or
appointed by Broker-Dealer, except to the extent Companies' or
Distributor's acts or omissions caused such
5
<PAGE>
liability.
Indemnification by Broker-Dealer is subject to the conditions that
Distributor or Companies promptly notify Broker-Dealer of any claim
or suit made against Distributor or Companies, and that Distributor
or Companies allow Broker-Dealer to make such investigation,
settlement, or defense thereof as Broker-Dealer deems prudent.
Broker-Dealer expressly authorizes Companies to charge against all
compensation due or to become due to Broker-Dealer under this
Agreement any monies paid or liabilities incurred by Companies under
this Indemnification provision.
Distributor and Companies shall indemnify and hold Broker-Dealer
harmless from any liability, loss or expense sustained by the
Broker-Dealer (including reasonable attorney fees) on account of any
acts or omissions by Distributor or Companies, except to the extent
Broker-Dealer's acts or omissions caused such liability.
Indemnification by Distributor or Companies is subject to the
condition that Broker-Dealer promptly notify Distributor or
Companies of any claim or suit made against Broker-Dealer, and that
Broker-Dealer allow Distributor or Companies to make such
investigation, settlement, or defense thereof as Distributor or
Companies deems prudent.
(d) ASSIGNMENT
No assignment of this Agreement, or commissions payable hereunder,
shall be valid unless authorized in writing by Distributor. Every
assignment shall be subject to any indebtedness and obligation of
Broker-Dealer that may be due or become due to Companies and any
applicable state insurance regulations pertaining to such
assignments.
(e) OFFSET
Companies may at any time deduct, from any monies due under this
Agreement, every indebtedness or obligation of Broker-Dealer to
Companies or to any of its affiliates.
(f) CONFIDENTIALITY
Companies, Distributor and Broker-Dealer agree that all facts or
information received by any party related to a contract owner shall
remain confidential, unless such facts or information is required to
be disclosed by any regulatory authority or court of competent
jurisdiction.
(g) PRIOR AGREEMENTS
This Agreement terminates all previous agreements, if any, between
Companies, Distributor and Broker-Dealer. However, the execution of
this Agreement shall not affect any obligations which have already
accrued under any prior agreement.
(h) CHOICE OF LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut.
By executing this Broker-Dealer Sales and Supervision Agreement Specifications
Page, Broker-Dealer acknowledges that it has read this Agreement in its entirety
and is in agreement with the terms and conditions outlining the rights of
Distributor, Companies and Broker-Dealer and Affiliates under this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be
effective as set forth above, upon the later of the execution date below or
approval of Distributor's registration by all appropriate state securities
commissions.
6
<PAGE>
BROKER-DEALER HARTFORD SECURITIES DISTRIBUTION
COMPANY INC.
By: By:
Title: Title:
Date: Date:
AFFILIATE (IF APPLICABLE) HARTFORD LIFE INSURANCE COMPANY
By: By:
Title: Title:
Date: Date:
ITT HARTFORD LIFE AND ANNUITY
INSURANCE COMPANY
By:
Title:
Date:
7
<PAGE>
EXHIBIT B
In accordance with Section V.(c) of the Broker-Dealer-Dealer Sales and
Supervision Agreement, no compensation is payable unless Broker-Dealer and
Registered Representative have first complied with all applicable state
insurance laws, rules and regulations. Distributor must ensure that any Broker-
Dealer with whom Distributor intends to enter into an Agreement and any
Registered Representatives meet the licensing and registration requirements of
the state(s) Broker-Dealer operates in and the NASD.
Companies are required by the Insurance Department in all 50 states to pay
compensation only to individuals and entities that are properly insurance
licensed and appointed. For registered products, Distributor must also comply
with NASD regulations that require Distributor to pay compensation to an NASD
registered Broker-Dealer. Distributor must comply with both state and NASD
requirements.
Distributor requires confirmation that Broker-Dealer holds current state
insurance licenses or markets insurance products through a contractual affiliate
or wholly owned life agency, which is properly insurance licensed. If Broker-
Dealer is properly state licensed then compensation may be paid to Broker-Dealer
in compliance with both state and NASD requirements.
If Broker-Dealer is not state insurance licensed and relies on the licensing of
a contractual affiliate or wholly owned life agency, the SEC has issued a number
of letters indicating that, under specific limited circumstances, it will take
"no action" against insurers (Distributor) paying compensation on registered
products to Broker-Dealer's contractual affiliate or wholly owned life agency.
At the request of Broker-Dealer, Distributor will provide copies of several of
these letters as well as a summary of their requirements.
If Broker-Dealer intends to rely on one of these "no-action" letters, legal
counsel for Broker-Dealer must confirm to Distributor in writing that all of the
circumstances of any one of the SEC no-action letters are applicable. Broker-
Dealer's counsel must summarize each point upon which the no-action relief was
granted and represent that Broker-Dealer's method of operation is identical or
meets the same criteria. Broker-Dealer's counsel must also confirm that, to the
best of counsel's knowledge, the SEC has not rescinded or modified its no-action
position since the letter was released.
The Broker-Dealer Sales and Supervision Agreement will not be finalized and no
new applications for registered products will be accepted or no new compensation
will be payable unless the appropriate proof of state licensing or no-action
relief is confirmed. In addition to a letter from Broker-Dealer's counsel,
copies of the following documentation is required:
-- life insurance licenses for all states in which Broker-Dealer holds
these licenses and intends to operate and/or;
-- life insurance licenses for any contractual affiliate or wholly owned
life agency; and
-- the SEC No-Action Letter that will be relied upon.
If you have any questions regarding these matters, please contact your Life
Licensing and Contracting representative.
8
<PAGE>
Exhibit 1A5
HARTFORD LIFE INSURANCE COMPANY
HARTFORD, CONNECTICUT 06104-2999
(A stock insurance company)
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MINNESOTA 55459
Will pay the Death Proceeds to the Beneficiary upon receipt at Our National
Service Center in Minneapolis, Minnesota of due proof of the Last Surviving
Insured's death while this policy was in force. You must notify Us In Writing
and give Us due proof of the first death of the Insureds as soon as possible
after the death.
Signed for the Company
/s/Bruce D. Gardner /s/Lowndes A. Smith
BRUCE D. GARDNER, SECRETARY LOWNDES A. SMITH, PRESIDENT
READ YOUR POLICY CAREFULLY
This is a legal contract between You and Us
RIGHT TO EXAMINE POLICY
WE WANT YOU TO BE SATISFIED WITH THIS POLICY YOU HAVE PURCHASED. WE URGE YOU TO
EXAMINE IT CLOSELY. IF, FOR ANY REASON YOU ARE NOT SATISFIED, YOU MAY DELIVER
OR MAIL THIS POLICY TO US OR TO THE AGENT FROM WHOM IT WAS PURCHASED WITHIN TEN
DAYS AFTER YOU RECEIVE IT OR WITHIN 45 DAYS AFTER YOU SIGN THE APPLICATION OR
WITHIN TEN DAYS AFTER WE MAIL YOU THE NOTICE OF WITHDRAWAL RIGHT, WHICHEVER IS
LATEST. IN SUCH AN EVENT, THIS POLICY WILL BE RESCINDED AND WE WILL PAY AN
AMOUNT EQUAL TO THE GREATER OF THE PREMIUMS PAID FOR THIS POLICY LESS ANY
INDEBTEDNESS OR THE SUM OF: i) THE ACCOUNT VALUE LESS ANY INDEBTEDNESS, ON THE
DATE THE RETURNED POLICY IS RECEIVED BY US OR TO THE AGENT FROM WHOM IT WAS
PURCHASED; AND, ii) ANY DEDUCTIONS UNDER THE POLICY OR CHARGES ASSOCIATED WITH
THE SEPARATE ACCOUNT.
CASH SURRENDER VALUE PAYABLE ON MATURITY DATE
DEATH PROCEEDS PAYABLE AT DEATH OF THE LAST SURVIVING INSURED
ADJUSTABLE DEATH BENEFIT
PREMIUMS PAYABLE AS SHOWN ON PAGE 3
NON-PARTICIPATING
THE PORTIONS OF THE ACCOUNT VALUES PROVIDED BY THIS CONTRACT THAT ARE IN THE
SUB-ACCOUNTS ARE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT. THEY
ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE AMOUNT OF THE
DEATH BENEFIT MAY BE FIXED OR VARIABLE DEPENDING ON THE INVESTMENT EXPERIENCE OF
THAT SEPARATE ACCOUNT. THE BASIC FACE AMOUNT IS A GUARANTEED DEATH BENEFIT
DURING THE FIRST TEN POLICY YEARS (OR LONGER, IF APPLIED FOR) SUBJECT TO THE
CONDITIONS DESCRIBED ON PAGE 7.
LAST SURVIVOR
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Policy Specifications 3
Definitions 5
Death Benefit 7
Increases and Decreases in Face Amount 8
Premiums 9
Lapse and Grace Period 10
Valuation Provisions 11
Account Value and Cash
Surrender Value 12
Monthly Deduction Amount 13
Transfers 14
Termination and Maturity Date 15
Reinstatement 15
Policy Loans 15
Withdrawals 16
Surrenders 16
Payments By Us 17
Taxation 17
The Contract 17
Ownership and Beneficiary 19
Exchange Option 19
Income Settlement Options 20
Any Riders follow page 21
</TABLE>
<PAGE>
Page 2
POLICY SPECIFICATIONS
DATE OF ISSUE JANUARY 1, 1995 FIRST INSURED JOHN S. DOE
POLICY DATE JANUARY 1, 1995 ISSUE AGE/SEX 35 MALE
MATURITY DATE JANUARY 1, 2060* INSURANCE CLASS PREFERRED
OWNER JOHN DOE SECOND INSURED MARY DOE
BENEFICIARY JANE DOE ISSUE AGE/SEX 35 FEMALE
PREMIUM MODE ANNUAL INSURANCE CLASS PREFERRED
FIRST PLANNED PREMIUM $10,000.00 BASIC FACE AMOUNT $750,000
TARGET PREMIUM $6,995.00 INITIAL SUPPLEMENTAL
ANNUAL DEATH BENEFIT FACE AMOUNT $250,000
GUARANTEE PREMIUM $1,281.51 DEATH BENEFIT OPTION OPTION A
DEATH BENEFIT POLICY NUMBER VL0000001
GUARANTEE PERIOD JANUARY 1, 1995 - DISCOUNT RATE [7.50%]**
DECEMBER 31, 2004
DESCRIPTION OF BENEFIT
FIRST YEAR YEARS PAYABLE
ANNUAL PLANNED
PREMIUM
LAST SURVIVOR FLEXIBLE PREMIUM $10,000.00 1-65
VARIABLE LIFE INSURANCE POLICY
ANNUAL CHARGES FOR ADDITIONAL
BENEFITS AND RIDERS
FIRST YEAR COVERAGE TO
ANNUAL COST
LAST SURVIVOR EXCHANGE OPTION RIDER $0.00 01/01/2060
ESTATE PROTECTION $309.24 01/01/99
TERM INSURANCE BENEFIT: $1,222,222.22
RIDER RATE: 1/1/95
TERMINATION DATE: 12/31/98
MATURITY DATE EXTENSION RIDER $0.00
* IT IS POSSIBLE THAT COVERAGE WILL EXPIRE PRIOR TO THE MATURITY DATE SHOWN
WHERE PREMIUMS AND INVESTMENT EXPERIENCE ARE INSUFFICIENT TO CONTINUE
COVERAGE TO SUCH DATE. COVERAGE MAY ALSO BE AFFECTED BY CHANGES IN THE
MONTHLY DEDUCTION AMOUNT.
** THIS DISCOUNT RATE IS SUBJECT TO THE ELIGIBILITY REQUIREMENTS DESCRIBED IN
THE MONTHLY DEDUCTION AMOUNT PROVISION.
<PAGE>
Page 3
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
ANNUAL CHARGES FOR ADDITIONAL
BENEFITS AND RIDERS (CONTINUED)
FIRST YEAR COVERAGE TO
ANNUAL COST
SINGLE LIFE YEARLY RENEWABLE TERM $21.36 01/01/2060
DESIGNATED INSURED: JOHN DOE
DEATH BENEFIT OPTION: LEVEL
RIDER FACE AMOUNT: $50,000
RIDER EFFECTIVE DATE: 1/1/95
TERMINATION DATE: 01/01/60
SINGLE LIFE YEARLY RENEWABLE TERM $2.76 01/01/2015
DESIGNATED INSURED: MARY DOE
DEATH BENEFIT OPTION: RETURN OF POLICY PREMIUM
RIDER FACE AMOUNT: $0.00
RIDER EFFECTIVE DATE: 1/1/95
TERMINATION DATE: 01/01/15
<PAGE>
Page 3 (continued)
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
POLICY YEARS SUPPLEMENTAL FACE AMOUNT *
1-65 $250,000
* THE SUPPLEMENTAL FACE AMOUNT MAY CHANGE IN ACCORDANCE WITH THE PROVISIONS OF
THIS POLICY. SEE THE DEFINITION OF SUPPLEMENTAL FACE AMOUNT.
<PAGE>
Page 3A
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
POLICY YEARS SUPPLEMENTAL FACE AMOUNT *
1-10 $50,000
11 55,000
12 60,000
13 65,000
14 70,000
15 75,000
16 80,000
17 85,000
18 90,000
19 95,000
20 100,000
21 + THEREAFTER 100,000
* THE SUPPLEMENTAL FACE AMOUNT MAY CHANGE IN ACCORDANCE WITH THE PROVISIONS OF
THIS POLICY. SEE THE DEFINITION OF SUPPLEMENTAL FACE AMOUNT.
<PAGE>
Page 3A (continued)
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
LIST OF SUB-ACCOUNTS AND FUNDS
LISTED BELOW ARE THE SUB-ACCOUNTS OF THE HARTFORD LIFE INSURANCE COMPANY
SEPARATE [ACCOUNT VL II] AND THE FUNDS THEY INVEST IN.
SUB-ACCOUNT FUND
[HARTFORD BOND SECURITIES HARTFORD BOND FUND, INC.
HARTFORD STOCK HARTFORD STOCK FUND, INC.
HARTFORD MONEY MARKET HVA MONEY MARKET FUND, INC.
HARTFORD ADVISERS HARTFORD ADVISERS FUND, INC.
HARTFORD AGGRESSIVE GROWTH HARTFORD AGGRESSIVE GROWTH FUND, INC.
HARTFORD MORTGAGE SECURITIES HARTFORD MORTGAGE SECURITIES FUND, INC.
HARTFORD INDEX HARTFORD INDEX FUND, INC.
HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL
OPPORTUNITIES OPPORTUNITIES FUND, INC.
PUTNAM GLOBAL GROWTH PCM GLOBAL GROWTH FUND
PUTNAM GROWTH AND INCOME PCM GROWTH AND INCOME FUND
PUTNAM HIGH YIELD PCM HIGH YIELD FUND
PUTNAM MONEY MARKET PCM MONEY MARKET FUND
PUTNAM GLOBAL ASSET ALLOCATION PCM GLOBAL ASSET ALLOCATION FUND
PUTNAM U.S. GOVERNMENT AND PCM U.S. GOVERNMENT AND
HIGH QUALITY BOND HIGH QUALITY FUND
PUTNAM VOYAGER PCM VOYAGER FUND
PUTNAM UTILITIES GROWTH AND INCOME PCM UTILITIES GROWTH AND INCOME FUND
FIDELITY ASSET MANAGER ASSET MANAGER PORTFOLIO OF VARIABLE
INSURANCE PRODUCTS FUND II
FIDELITY OVERSEAS OVERSEAS PORTFOLIO OF VARIABLE
INSURANCE PRODUCTS FUND
FIDELITY EQUITY INCOME EQUITY-INCOME PORTFOLIO OF VARIABLE
INSURANCE PRODUCTS FUND]
AND OTHER SUB-ACCOUNTS AND FUNDS AS MAY BE MADE AVAILABLE FROM TIME TO TIME.
INITIAL ALLOCATION
OF NET PREMIUMS: HARTFORD MONEY MARKET SUB-ACCOUNT 100%
<PAGE>
Page 3B
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
FIXED ACCOUNT MINIMUM CREDITED RATE: 4.00%
POLICY LOAN RATE: 6.00%
GUARANTEED MAXIMUM POLICY CHARGES
DEDUCTIONS FROM PREMIUM PAYMENTS
SALES CHARGES:
<TABLE>
<CAPTION>
PERCENT OF PREMIUM PERCENT OF PREMIUM
POLICY YEARS PAID UP TO $6,995.00 IN EXCESS OF $6,995.00
<S> <C> <C>
1 [38.5%] [7.75%]
2-5 [12.25%] 4%
6-10 [8.5%] 4%
11+ 2% 2%
</TABLE>
DAC TAX CHARGE 1.25% OF ALL PREMIUMS PAID
PREMIUM TAX CHARGE 2.35% OF ALL PREMIUMS PAID
PREMIUM PROCESSING CHARGE 1.25% OF ALL PREMIUMS PAID
DEDUCTIONS FROM ACCOUNT VALUE
MONTHLY ADMINISTRATIVE FEE
ALL POLICY YEARS [$11.25] PER MONTH
PLUS [$.035] PER $1,000 OF FACE AMOUNT AT ISSUE
PER MONTH
MONTHLY ISSUE CHARGE
POLICY YEARS 1-5: $20.00 PER MONTH
PLUS $.05 PER $1,000 OF FACE AMOUNT AT ISSUE PER
MONTH
MORTALITY AND EXPENSE RISK CHARGE
POLICY YEARS 1-10: .80% OF THE ACCOUNT VALUE
POLICY YEARS 11 & LATER: .80% OF THE FIRST $100,000 OF ACCOUNT VALUE
[.425%] OF THE REMAINING ACCOUNT VALUE
FACE AMOUNT INCREASE FEE $.05 PER $1,000 OF UNSCHEDULED FACE AMOUNT
INCREASE PER MONTH FOR THE FIRST 5 POLICY
YEARS FROM DATE OF INCREASE
TRANSFER CHARGE $0.00 FOR FIRST 4 IN ANY POLICY YEAR
$25.00 PER TRANSFER IN EXCESS OF 4 IN ANY
POLICY YEAR
<PAGE>
Page 3C
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
POLICY SPECIFICATIONS
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
AND MONTHLY MAXIMUM COST OF INSURANCE RATES PER $1,000
<TABLE>
<CAPTION>
MINIMUM MAXIMUM COST MINIMUM MAXIMUM COST
POLICY DEATH BENEFIT OF INSURANCE POLICY DEATH BENEFIT OF INSURANCE
YEAR PERCENTAGES RATE YEAR PERCENTAGES RATE
<S> <C> <C> <C> <C> <C>
1 250.00 0.0003 34 117.00 0.7182
2 250.00 0.0007 35 116.00 0.8414
3 250.00 0.0013 36 115.00 0.9879
4 250.00 0.0020 37 113.00 1.1653
5 250.00 0.0028 38 111.00 1.3822
6 250.00 0.0038 39 109.00 1.6447
7 243.00 0.0051 40 107.00 1.9553
8 236.00 0.0066 41 105.00 2.3140
9 229.00 0.0083 42 105.00 2.7198
10 222.00 0.0103 43 105.00 3.1724
11 215.00 0.0127 44 105.00 3.6760
12 209.00 0.0155 45 105.00 4.2428
13 203.00 0.0188 46 105.00 4.8903
14 197.00 0.0226 47 105.00 5.6355
15 191.00 0.0271 48 105.00 6.4950
16 185.00 0.0324 49 105.00 7.4696
17 178.00 0.0388 50 105.00 8.5493
18 171.00 0.0466 51 105.00 9.7187
19 164.00 0.0559 52 105.00 10.9650
20 157.00 0.0669 53 105.00 12.2768
21 150.00 0.0799 54 105.00 13.6477
22 146.00 0.0949 55 105.00 15.0844
23 142.00 0.1120 56 105.00 16.5963
24 138.00 0.1316 57 104.00 18.2119
25 134.00 0.1548 58 103.00 19.9859
26 130.00 0.1823 59 102.00 22.0472
27 128.00 0.2156 60 101.00 24.6880
28 126.00 0.2565 61 100.00 28.4789
29 124.00 0.3068 62 100.00 34.5196
30 122.00 0.3671 63 100.00 44.7758
31 120.00 0.4378 64 100.00 61.9954
32 119.00 0.5194 65 100.00 83.3333
33 118.00 0.6123
</TABLE>
THE MINIMUM DEATH BENEFIT PERCENTAGES ARE DETERMINED TO COMPLY WITH SECTION 7702
OF THE INTERNAL REVENUE CODE, OR YOUR REQUESTED PERCENTAGES, IF GREATER. THE
MAXIMUM COST OF INSURANCE RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED
ON THE 1980 COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER MORTALITY TABLE,
AGE LAST BIRTHDAY.
<PAGE>
Page 4
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
DESIGNATED INSURED: JOHN DOE
SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER SPECIFICATIONS
TABLE OF SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER
MONTHLY MAXIMUM RATES
(PER $1,000 OF RIDER BENEFIT)
<TABLE>
<CAPTION>
POLICY MAXIMUM POLICY MAXIMUM
YEAR RATE YEAR RATE
<S> <C> <C> <C>
1 0.1442 34 2.4933
2 0.1517 35 2.7483
3 0.1617 36 3.0367
4 0.1725 37 3.3658
5 0.1842 38 3.7458
6 0.1983 39 4.1758
7 0.2133 40 4.6483
8 0.2292 41 5.1533
9 0.2467 42 5.6867
10 0.2658 43 6.2442
11 0.2875 44 6.8292
12 0.3108 45 7.4600
13 0.3358 46 8.1567
14 0.3633 47 8.9375
15 0.3933 48 9.8183
16 0.4275 49 10.7950
17 0.4667 50 11.8483
18 0.5117 51 12.9542
19 0.5633 52 14.0983
20 0.6208 53 15.2633
21 0.6850 54 16.4442
22 0.7550 55 17.6575
23 0.8292 56 18.9208
24 0.9117 57 20.2633
25 1.0042 58 21.7350
26 1.1075 59 23.4792
27 1.2225 60 25.8192
28 1.3550 61 29.3217
29 1.5050 62 35.0825
30 1.6717 63 45.0833
31 1.8542 64 62.0958
32 2.0517 65 83.3333
33 2.2633
</TABLE>
THE MAXIMUM RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED ON THE 1980
COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER MORTALITY TABLE, AGE LAST
BIRTHDAY.
<PAGE>
Page 4A
POLICY NUMBER: VL0000001
NAME OF FIRST INSURED: JOHN S. DOE NAME OF SECOND INSURED: MARY DOE
ISSUE AGE/SEX: 35/MALE ISSUE AGE/SEX: 35/FEMALE
DESIGNATED INSURED: MARY DOE
SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER SPECIFICATIONS
TABLE OF SINGLE LIFE YEARLY RENEWABLE TERM LIFE RIDER
MONTHLY MAXIMUM RATES
(PER $1,000 OF RIDER BENEFIT)
<TABLE>
<CAPTION>
POLICY MAXIMUM
YEAR RATE
<S> <C>
1 0.0201
2 0.0241
3 0.0294
4 0.0370
5 0.0450
6 0.0535
7 0.0619
8 0.0695
9 0.0771
10 0.0847
11 0.0967
12 0.1052
13 0.1141
14 0.1257
15 0.1359
16 0.1471
17 0.1591
18 0.1729
19 0.1881
20 0.2050
</TABLE>
THE MAXIMUM RATES DO NOT EXCEED THE COST OF INSURANCE RATES BASED ON THE 1980
COMMISSIONERS STANDARD ORDINARY SMOKER OR NONSMOKER MORTALITY TABLE, AGE LAST
BIRTHDAY.
<PAGE>
Page 4A (continued)
DEFINITIONS The definitions in this section apply to the following words
and phrases whenever and wherever they appear in this
policy.
ACCOUNT VALUE: an account We use to determine certain policy
benefits and charges. See the Account Value and Cash
Surrender Value provisions for a more detailed explanation.
ACCUMULATION UNIT: an accounting unit used to calculate the
value of a Sub-Account.
BASIC FACE AMOUNT: on the Policy Date, the Basic Face Amount
equals the Basic Face Amount shown on Page 3. Thereafter,
it may change in accordance with the terms of the Increases
and Decreases in Face Amount provision and the Surrenders
provisions.
CASH SURRENDER VALUE: the Account Value less all
Indebtedness.
CUMULATIVE DEATH BENEFIT GUARANTEE PREMIUM: the number of
fully completed Policy Years, plus the completed portion of
the current Policy Year, multiplied by the Annual Death
Benefit Guarantee Premium shown on Page 3.
DATE OF ISSUE: the date shown on Page 3 from which Suicide
and Incontestability provisions are measured. The Date may
be different from the Policy Date.
DEATH BENEFIT: on the Policy Date, the Death Benefit equals
the Face Amount. Thereafter, it may change in accordance
with the terms of the Death Benefit Option provision, the
Minimum Death Benefit provision, the Death Benefit Guarantee
provision and the Surrenders provision.
DEATH BENEFIT OPTION: the Death Benefit Option in effect
determines how the Death Benefit is calculated. The three
Death Benefit Options provided are described in the Death
Benefit section.
DEATH PROCEEDS: the amount which We will pay on the death
of the Last Surviving Insured.
FACE AMOUNT: the sum of the Basic Face Amount, plus the
Supplemental Face Amount.
FIXED ACCOUNT: part of the Company's General Account to
which all or a portion of the Account Value may be
allocated.
FUNDS: the registered open end management investment
companies in which the assets of its Separate Account may be
invested.
GENERAL ACCOUNT: all assets of the Hartford Life Insurance
Company other than those allocated to the Separate Accounts.
INDEBTEDNESS: all outstanding loans on this policy,
including any interest due or accrued.
IN WRITING: in a written form satisfactory to Us.
<PAGE>
Page 5
DEFINITIONS ISSUE AGE: as of the Policy Date, an Insured's age on
(continued) his/her last birthday.
LAST SURVIVING INSURED: the Insured who survives after the
death of one of the Insureds shown on Page 3. If both
Insureds die simultaneously, the Last Surviving Insured will
be the First Insured shown on Page 3.
LOAN ACCOUNT: an account established for any amounts
transferred from the Fixed Account and Sub-Accounts as a
result of loans. The account is credited with interest and
is not based on the experience of any Separate Account.
MATURITY DATE: the date, shown on Page 3, on which this
policy will mature.
MONTHLY ACTIVITY DATE: the Policy Date and the same date in
each succeeding month as the Policy Date except that
whenever the Monthly Activity Date falls on a date other
than a Valuation Day, the Monthly Activity Date will be
deemed the next Valuation Day.
NET PREMIUM: the amount of premium actually credited to the
Account Value. It is the premium paid minus the deductions
from premium shown on Page 3C.
PLANNED PREMIUM: the amount that the Owner intends to pay.
The First Planned Premium is shown on Page 3.
POLICY ANNIVERSARY: an anniversary of the Policy Date.
POLICY DATE: the date shown on Page 3 from which Policy
Anniversaries and Policy Years are determined.
POLICY LOAN RATE: the interest rate charged on policy
loans.
POLICY YEARS: years as measured from the Policy Date.
PRO-RATA BASIS: an allocation method based on the
proportion of the Account Value in the Fixed Account and
each Sub-Account.
SEPARATE ACCOUNT: an account entitled Separate Account VL
II which has been established by the Hartford Life Insurance
Company to separate the assets funding the variable benefits
for the class of contracts to which this policy belongs from
the other assets of the Hartford Life Insurance Company.
Separate Account VL II will have the Funds listed on Page 3B
as its underlying investments.
SUB-ACCOUNTS: the subdivisions of the Separate Account.
These are shown on Page 3B.
SUPPLEMENTAL FACE AMOUNT: on the Policy Date, the
Supplemental Face Amount equals the Supplemental Face Amount
shown on Page 3. The Supplemental Face Amounts after Policy
Year 1 are shown on Page 3A. The Supplemental Face Amount
may also change in accordance with the Option Change
provision, the Minimum Death Benefit provision, the
Increases and Decreases in Face Amount provision and the
Surrenders provision.
TARGET PREMIUM: the amount shown on Page 3. It is used to
determine deductions from premium payments.
<PAGE>
Page 6
DEFINITIONS VALUATION DAY: the date on which a Sub-Account is valued.
(continued) This occurs every day. We are open and the New York Stock
Exchange is open for trading.
VALUATION PERIOD: the period of time between the close of
business on successive Valuation Days.
YOU, YOUR: the Owner of this policy.
WE, US, OUR, THE COMPANY: Hartford Life Insurance Company.
DEATH BENEFIT GENERAL
The Death Benefit depends upon:
(a) the Death Benefit Option in effect, as shown on Page 3;
and
(b) the Minimum Death Benefit described below.
DEATH BENEFIT OPTION
You have three Death Benefit Options.
1. Under Option A (Level Option), the Death Benefit is the
Face Amount on the date We receive due proof of the Last
Surviving Insured's death.
2. Under Option B (Return of Account Value Option), the
Death Benefit is the Face Amount, plus the Account
Value on the date We receive due proof of the Last
Surviving Insured's death.
3. Under Option C (Return of Premium Option), the Death
Benefit is the Face Amount on the date of the Last
Surviving Insured's death, plus the sum of all the
premiums paid up to the date We receive due proof of
the Last Surviving Insured's death.
OPTION CHANGE
You may change Option C (Return of Premium Option) or Option
B (Return of Account Value Option) to Option A (Level
Option). If You do, the Face Amount will become that amount
available as a Death Benefit immediately prior to the option
change. Any increase in the Face Amount will be deemed an
increase in the Supplemental Face Amount. You may change
Option A (Level Option) or Option C (Return of Premium
Option) to Option B (Return of Account Value Option). If
You do, 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. You must notify
Us In Writing of the change. Such change will be effective
on the Monthly Activity Date following the date We receive
the request.
MINIMUM DEATH BENEFIT
We will automatically increase the Death Benefit so that it
will never be less than the Account Value multiplied by the
Minimum Death Benefit Percentage for the then current Policy
Year. The Table of Minimum Death Benefit Percentages is
shown on Page 4. This is to ensure that:
(a) this policy continues to qualify as life insurance
under the Internal Revenue Code; or
(b) this policy maintains the relationship between the
Account Value and the Death Benefit You selected on
Your application, if greater.
<PAGE>
Page 7
DEATH BENEFIT DEATH PROCEEDS
(continued) The Death Proceeds are the amount which We will pay on the
death of the Last Surviving Insured. This equals the Death
Benefit less any Indebtedness and less any due and unpaid
Monthly Deduction Amounts occurring during a Grace Period.
If the Last Surviving Insured dies after We receive a
written request from You to surrender this policy, the Cash
Surrender Value will be paid in lieu of the Death Proceeds.
NOTIFICATION OF FIRST DEATH OF THE INSUREDS
You must notify Us In Writing and give Us due proof of the
first death of the Insureds as soon as possible after the
death.
INCREASES AND At any time after the first Policy Year, You may request a
DECREASES IN change in the Face Amount by writing to Us.
FACE AMOUNT
The minimum amount by which the Face Amount can be increased
or decreased is based on Our rules then in effect.
We reserve the right to limit the number of increases or
decreases made under this policy to not more than one in any
12 month period.
DECREASES
A decrease in the Face Amount will be effective on the
Monthly Activity Date following the date We receive the
request. The remaining Face Amount must not be less than
Our minimum rules then in effect. Decreases will be applied
first to the Supplemental Face Amount and then to the Basic
Face Amount.
UNSCHEDULED INCREASES
Any unscheduled increases in the Face Amount will be deemed
an increase in the Supplemental Face Amount. All requests
to increase the Supplemental Face Amount must be applied for
on a new application and accompanied by this 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. The Monthly Deduction Amount
on the first Monthly Activity Date on or after the effective
date of the increase will reflect the Face Amount Increase
Fee.
SCHEDULED INCREASES
We will increase the Supplemental Face Amount automatically
as shown on Page 3A. These scheduled increases will continue
as applied for as long as You did not request to discontinue
such increases or request to decrease the Face Amount of
Your policy other than as a result of a withdrawal.
Scheduled increases in the Supplemental Face Amount are not
subject to the Face Amount Increase Fee.
<PAGE>
Page 8
PREMIUMS GENERAL
Premium is due on the Policy Date. No insurance is
effective until the first premium is paid. After the first
premium has been paid, subsequent premiums can be paid at
any time.
Premiums are payable either:
(a) to Us at the address shown on the premium notice; or
(b) to Our authorized agent in exchange for a receipt
signed by Our President or Secretary and countersigned
by such agent.
Checks should be made payable to the Company.
We will apply any amount received under this policy as a
premium unless it is clearly marked otherwise. The premium
will be applied on the date We receive it at the address
shown on the premium notice.
FLEXIBLE PREMIUMS
After the first premium has been paid, subsequent premium
payments are flexible. The actual amount and frequency of
payment will affect the Account Value and could affect the
amount and duration of insurance provided by this policy.
PLANNED PREMIUM PAYMENTS
We will send You a premium notice for the Planned Premium
payment. The notices may be sent at 12, 6, or 3 month
intervals. The First Year Planned Premium payment and
premium mode You selected are shown on Page 3. You may
change the Planned Premium payment shown on the premium
notices provided Our minimum amount rules then in effect are
followed.
PREMIUM LIMITATION
You may pay premiums at any time prior to the Maturity Date
subject to the following limitations:
(a) If premiums are received which would cause this policy
to fail to meet the definition of a life insurance
contract in accordance with the Internal Revenue Code,
We reserve the right to refund the excess premium
payments. Such refunds and interest thereon will be
made within 60 days after the end of a Policy Year.
(b) We reserve the right to require evidence of
insurability for any premium payment that results in an
increase in the Death Benefit greater than the amount
of the premium.
PREMIUM ALLOCATION
The initial Net Premium will be allocated to the Hartford
Money Market Sub-Account on the later of:
(a) the Policy Date; and
(b) the date We receive the premium.
The Accumulated Value in the Hartford Money Market Sub-
Account will then be allocated to the Fixed Account and Sub-
Accounts according to the premium allocation You specified
in the application on the latest of:
(a) 45 days after the application is signed;
(b) 10 days after We receive the premium;
(c) 10 days after We mail You the Notice of Withdrawal
Right; and
(d) the date We receive the final requirement to put this
policy in force.
<PAGE>
Page 9
PREMIUMS Any additional Net Premiums received by Us prior to such
(continued) date will be allocated to the Hartford Money Market Sub-
Account.
CHANGING PREMIUM ALLOCATIONS
Upon written request, You may change the premium allocation.
Subsequent Net Premiums will be allocated to the Fixed
Account and Sub-Accounts according to Your most recent
instructions, subject to the following. The number of Sub-
Accounts that the Account Value may be allocated to will be
subject to Our rules then in effect. However, it will be
guaranteed to be no fewer than 5. If We receive a premium
and Your most recent allocation instructions would violate
this requirement, We will allocate the Net Premium to the
Fixed Account and Sub-Accounts on a Pro Rata basis.
LAPSE AND POLICY GRACE PERIOD
GRACE PERIOD This policy will be in default on any Monthly Activity Date
on which the Cash Surrender Value is not sufficient to cover
the Monthly Deduction Amount. A 61-day period called the
Policy Grace Period will begin from the date of default. We
will mail the Owner and any assignee written notice of the
amount of premium that will be required to continue this
policy in force at least 30 days before the end of the
Policy Grace Period. The premiums required will be no
greater than the amount required to pay three Monthly
Deduction Amounts as of the day the Policy Grace Period
began. Unless the Death Benefit Guarantee is in effect,
this policy will terminate without value if the required
premium is not paid by the end of the Policy Grace Period.
If the Death Benefit Guarantee is in effect and sufficient
premium has not been paid by the end of the Policy Grace
Period, the Death Benefit will become the Basic Face Amount
and any riders will no longer be in force.
If the Last Surviving Insured dies during the Policy Grace
Period, We will pay the Death Proceeds.
DEATH BENEFIT GUARANTEE
If the Death Benefit Guarantee is in effect, the policy will
remain in force regardless of this 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 shown on Page 3A has never
exceeded nor is scheduled to exceed the Basic Face
Amount of this policy; and
(c) on each Monthly Activity Date, the cumulative premiums
paid into this policy, less withdrawals from this
policy, equal or exceed the Cumulative Death Benefit
Guarantee Premium on that date.
Unless otherwise elected, the Death Benefit Guarantee Period
will be 10 years from the Policy Date. You can also choose
to extend this period to the Last Survivor Life Expectancy
of the Insureds at the time of application. The Last
Survivor Life Expectancy of the Insureds will be calculated
using the 1980 Commissioners Standard Ordinary Mortality
Smoker or Non-Smoker Table, age last birthday and the same
Issue Ages, sexes and risk classifications as this policy.
The Death Benefit Guarantee period is shown on Page 3. The
Annual Death Benefit Guarantee Premium required for this
period is shown on Page 3.
<PAGE>
Page 10
LAPSE AND DEATH BENEFIT GUARANTEE GRACE PERIOD
GRACE PERIOD If the cumulative premiums, less withdrawals, are not
(continued) sufficient to maintain the Death Benefit Guarantee in
effect, the Lapse and the Grace Period provision 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 Death Benefit Guarantee
Grace Period of 61 days from the date of default will begin.
We will mail the Owner and any assignee written notice of
the amount of premium required to continue the Death Benefit
Guarantee.
At the end of the Death Benefit Guarantee Grace Period under
a ten-year guarantee period, the Death Benefit Guarantee
will be removed from this 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 Death Benefit Guarantee Grace Period under
the Last Survivor Life Expectancy Guarantee Period, the
Death Benefit Guarantee will be removed from this policy if
We have not received the amount of the required premium,
subject to the following exception: if this 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 written 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.
VALUATION SUB-ACCOUNT ACCUMULATION UNITS
PROVISIONS Amounts allocated to Sub-Accounts are applied to provide
Accumulation Units in each Sub-Account. The number of
Accumulation Units credited to each Sub-Account is
determined by dividing the amount allocated to a Sub-Account
by the dollar value of one Accumulation Unit for such Sub-
Account. The number of Your Accumulation Units will not be
affected by any subsequent change in the value of the units.
The Accumulation Unit Values in each Sub-Account may
increase or decrease daily as described below.
SUB-ACCOUNT ACCUMULATION UNIT VALUE
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 a 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 the
net asset value per share of the corresponding Fund at the
beginning of the Valuation Period.
<PAGE>
Page 11
VALUATION EMERGENCY PROCEDURE
PROVISIONS If a national stock exchange is closed (except for holidays
(continued) or weekends) or trading is restricted due to an existing
emergency as defined by the Securities and Exchange
Commission so that We cannot value the Sub-Accounts, We may
postpone all procedures which require valuation of the Sub-
Accounts until valuation is possible. Any provision of this
policy which specifies a Valuation Day will be superseded by
the emergency procedure.
FIXED ACCOUNT
We will credit interest to amounts in the Fixed Account at
rates We determine. The Fixed Account Minimum Credited Rate
is shown on Page 3C. The interest credited will reflect the
timing of amounts added to or withdrawn from the Fixed
Account.
ACCOUNT VALUE ACCOUNT VALUE
AND CASH Your Account Value on the Policy Date equals the initial Net
SURRENDER VALUE Premium less the Monthly Deduction Amount for the first
policy month.
On each subsequent Monthly Activity Date, Your Account Value
equals:
(a) the sum of Your Accumulated Values in the Fixed Account
and Sub-Accounts; plus
(b) the value of Your Loan Account, if any; minus,
(c) the appropriate Monthly Deduction Amount.
On each Valuation Day (other than a Monthly Activity Date),
Your Account Value equals:
(a) the sum of Your Accumulated Values in the Fixed Account
and Sub-Accounts; plus
(b) the value of Your Loan Account, if any.
ACCUMULATED VALUE - FIXED ACCOUNT
Your Accumulated Value in the Fixed Account equals:
(a) the Net Premiums allocated to it; plus
(b) amounts transferred to it from the Sub-Accounts; plus
(c) interest credited to it; minus
(d) amounts transferred out of it to the Sub-Accounts or
the Loan Account; minus
(e) any applicable transfer charges; minus
(f) the Monthly Deduction Amounts taken from it; minus
(g) amounts withdrawn from it for withdrawals.
ACCUMULATED VALUE - SUB-ACCOUNTS
Your Accumulated Value in any Sub-Account equals:
(a) the number of Your Accumulation Units in that Sub-
Account on the Valuation Day; multiplied by
(b) that Sub-Account's Accumulation Unit Value on the
Valuation Day.
CASH SURRENDER VALUE
Your Cash Surrender Value is equal to Your Account Value
minus the Indebtedness, if any.
<PAGE>
Page 12
MONTHLY GENERAL
DEDUCTION The Monthly Deduction Amount equals:
AMOUNT (a) the Cost of Insurance; plus
(b) the charges for additional benefits provided by rider,
if any; plus
(c) the charges for "special" insurance class rating, if
any; plus
(d) the Monthly Administrative Fee; plus
(e) the Monthly Issue Charge; plus
(f) the Mortality and Expense Risk Charge; plus
(g) the Face Amount Increase Fee, if any.
The Monthly Deduction Amount will be taken on a Pro-Rata
Basis from the Fixed Account and Sub-Accounts on each
Monthly Activity Date.
COST OF INSURANCE
The Cost of Insurance for any Monthly Activity Date is equal
to:
(a) the Cost of Insurance Rate per $1,000; multiplied by
(b) the amount at risk; divided by
(c) $1,000.
On any Monthly Activity Date the amount at risk equals the
Death Benefit less the Account Value on that date prior to
assessing the Monthly Deduction Amount.
COST OF INSURANCE RATE
The Cost of Insurance Rate is based on the Policy Year,
sexes, Issue Ages and insurance classes of the Insureds.
The Cost of Insurance Rates will not exceed those in the
Table of Monthly Maximum Cost of Insurance Rates shown on
Page 4.
We can use Cost of Insurance Rates that are lower than the
Maximum Cost of Insurance Rates shown on Page 4. Rates will
be determined on each Policy Anniversary based on future
expectations for such factors as mortality, expenses,
interest, persistency and taxes. Any change We make will be
on a uniform basis for Insureds of the same Issue Ages,
sexes and insurance 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.
On each Monthly Activity Date during the last 25 Policy
Years before the Maturity Date, We intend to apply a
discount to the Cost of Insurance Rate, provided:
(a) this policy has been in force for at least 15 Policy
Years; and
(b) the ratio of your current Account Value to your current
Death Benefit equals or exceeds the qualifying ratio.
The qualifying ratio is 0% with 25 Policy Years remaining
until the Maturity Date and increases by three percentage
points each Policy Year thereafter.
The discount rate is shown on Page 3. However, we reserve
the right to charge the Maximum Cost of Insurance Rates.
MONTHLY ADMINISTRATIVE FEE
The Monthly Administrative Fee will not exceed the amounts
shown on Page 3C.
MONTHLY ISSUE CHARGE
The Monthly Issue Charge will not exceed the amount shown on
Page 3C.
<PAGE>
Page 13
MONTHLY MORTALITY AND EXPENSE RISK CHARGE
DEDUCTION The Mortality and Expense Risk Charge for any Monthly
AMOUNT Activity Date is equal to:
(continued) (a) the Mortality and Expense Risk Rate; multiplied by
(b) the sum of Your Accumulated Values in the Sub-Accounts
on the Monthly Activity Date, prior to assessing the
Monthly Deduction Amount.
The Mortality and Expense Risk Rate will not exceed that
shown on Page 3C.
FACE AMOUNT INCREASE FEE
The Face Amount Increase Fee will not exceed that shown on
Page 3C. This fee is assessed each month for the first five
policy years following each unscheduled increase in the Face
Amount.
TRANSFERS AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as this policy is in effect, You
may transfer amounts among the Fixed Account and Sub-
Accounts.
The amount which may be transferred and the number of
transfers will be limited by Our rules then in effect.
We reserve the right at a future date to limit the size of
transfers and remaining balances, and to limit the number
and frequency of transfers.
TRANSFERS TO OR FROM SUB-ACCOUNTS
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 made will be reduced. The reduction will be
determined by dividing:
1. the amount transferred; by
2. the Accumulation Unit Value for that Sub-Account as of
the next Valuation Day after We receive Your request
for transfer In Writing.
In the event of a transfer to a Sub-Account, We will
increase the number of Accumulation Units credited to that
Sub-Account. The increase will equal:
1. the amount transferred; divided by
2. the Accumulation Unit Value for that Sub-Account as of
the next Valuation Day after We receive Your request
for transfer In Writing.
TRANSFERS FROM THE FIXED ACCOUNT
In addition to the conditions 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 the Accumulated Value in Your Fixed Account exceeds
$1,000, the amount transferred in any Policy Year may
be no larger than 25% of the Accumulated Value in the
Fixed Account on the date of transfer.
TRANSFER CHARGE
After a transfer has occurred, the Transfer Charge, as
specified on Page 3C, if any, will be deducted on a Pro-Rata
Basis from the Fixed Account and Sub-Accounts.
<PAGE>
Page 14
TERMINATION AND TERMINATION
MATURITY DATE This policy will terminate upon the earliest of the
following events:
(a) Maturity Date of this policy unless extended by rider;
or
(b) surrender of this policy; or
(c) 61 days following the date on which Indebtedness equals
or exceeds the Account Value, unless the Account Value
subsequently exceeds the Indebtedness; or
(d) the end of the Policy Grace Period during which
premiums sufficient for the required deductions are not
paid, provided the Death Benefit Guarantee is not in
effect; or
(e) the death of the Last Surviving Insured.
MATURITY DATE
Unless extended by rider, this policy will terminate on the
Maturity Date and it is the last date to which You may elect
to pay premium. Any Cash Surrender Value as of the Maturity
Date will be paid to You unless extended by rider.
REINSTATEMENT Unless this policy has been surrendered for its Cash
Surrender Value, this 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 within five years from the
Termination Date;
(c) satisfactory evidence of insurability is submitted;
(d) any policy loan is repaid or reinstated; and
(e) You pay sufficient premium to:
(i) cover all Monthly Deduction Amounts that are due
and unpaid during the Grace Period; and
(ii) keep this policy in force for 3 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 attributable to premiums paid at the time
of reinstatement.
POLICY LOANS GENERAL
At any time while this policy is in force, You may borrow
against this policy by assigning it to Us as sole security.
We may defer granting a loan, except to pay premiums to Us,
for the period permitted by law but not more than six
months.
LOAN AMOUNTS
Any new loan taken together with any existing Indebtedness
may not exceed 90% of the Account Value on the date We grant
a loan. Loan amounts will be subject to Our minimum rules
then in effect. Before advancing the loan amount, We may
withhold an amount sufficient to pay interest on total
Indebtedness to the end of the Policy Year and any Monthly
Deduction Amounts due on or before the next Policy
Anniversary. All loan amounts will be transferred from the
Fixed Account and the Sub-Accounts to the Loan Account.
Unless You specify otherwise, the amounts will be
transferred on a Pro-Rata Basis.
If total Indebtedness equals or exceeds the Account Value,
this policy will terminate 61 days after We have mailed
notice to Your last known address and that of any assignee
of record. If sufficient loan repayment is not made by the
end of the Policy Grace Period, this policy will end without
value.
<PAGE>
Page 15
POLICY LOANS CREDITED INTEREST
(continued) During the first ten Policy Years, any amounts in the Loan
Account will be credited with interest at a rate equal to
the Policy Loan Rate, minus 2%. For Policy Years 11 and
beyond, except for Preferred Loans described below, the Loan
Account will be credited with interest at a rate equal to
the Policy Loan Rate applicable to that Indebtedness, minus
1%.
PREFERRED LOAN
If, any time after the 10th 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 equal to the Policy Loan Rate. The amount of
Indebtedness that qualifies as a Preferred Loan is
determined on each Monthly Activity Date.
LOAN REPAYMENTS
All or part of a loan may be repaid at any time that:
(a) this policy is in force; and
(b) either of the Insureds is alive.
However, each payment must be at least $50.
The amount of a loan repayment will be deducted from the
Loan Account and will be allocated among the Fixed Account
and Sub-Accounts in the same percentage as premiums are
allocated.
LOAN INTEREST
Loan interest will accrue daily at the Policy Loan Rate
shown on Page 3C. 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 Sub-Accounts to
the Loan Account on each Monthly Activity Date.
WITHDRAWALS You may request a withdrawal by applying for it In Writing.
The minimum withdrawal allowed is $500. The maximum
withdrawal allowed is the Cash Surrender Value, less $1,000.
A withdrawal charge of up to $50 may be charged. One
withdrawal is allowed in each Policy Year. Unless specified
otherwise, the withdrawal will be deducted on a Pro-Rata
basis from the Sub-Accounts.
If the Death Benefit Option then in effect is Option A
(Level Option) or Option C (Return of Premium Option), the
Face Amount will be reduced by the amount of the withdrawal.
SURRENDERS GENERAL
While this policy is in force, You may surrender this policy
to Us. This policy, and additional benefits provided by
rider, are then cancelled as of the day We receive Your
request or the date You request, whichever is later. We
will then pay You the Cash Surrender Value, as of that date.
<PAGE>
Page 16
PAYMENTS GENERAL
BY US We will pay Death Proceeds, Cash Surrender Values,
withdrawals and loan amounts attributable to the Sub-
Accounts within 7 days after We receive all the information
needed to process the payment unless:
(a) the New York Stock Exchange is closed on other than
customary weekend and holiday closings or trading on
the New York Stock Exchange is restricted as determined
by the Securities and Exchange Commission (SEC); or
(b) an emergency exists, as determined by the SEC, as a
result of which disposal of securities is not
reasonably practicable to determine the value of the
Sub-Accounts; or
(c) the SEC, by order, permits postponement for the
protection of policy owners.
DEFERRAL OF PAYMENTS FROM THE FIXED ACCOUNT
We may defer payment of any amounts which are not
attributable to the Sub-Accounts for up to six months from
the date of the request. If We defer payment for more than
30 days, We will pay interest at the Fixed Account Minimum
Credited Rate.
TAXATION We do not expect to incur any federal, state or local income
tax on the earnings or realized capital gains attributable
to the Separate Account. Based upon these expectations, no
charge is currently being made to the Separate Account for
federal, state or local income taxes. If We incur income
taxes attributable to the Separate Account or determine that
such taxes will be incurred, We may assess a charge for
taxes against this policy in the future.
THE CONTRACT ENTIRE CONTRACT
The entire contract consists of this policy and the
application(s), (a) copy(ies) of which is (are) attached and
any new applications for additional amounts of insurance.
The contract is made in consideration of the application and
the payment of the initial premium. We will not use any
statement to void this policy or to defend a claim under it,
unless that statement is contained in an attached written
application(s). All statements in the application(s) will,
in the absence of fraud, be deemed representations and not
warranties.
MODIFICATION
The only way this contract may be modified is by a written
agreement signed by Our President, or one of Our Vice
Presidents, Secretaries or Assistant Secretaries.
NON-PARTICIPATION
This policy is non-participating. It does not share in Our
surplus earnings, so You will receive no dividends under it.
MISSTATEMENT OF AGE AND/OR SEX
If on the date of death of the Last Surviving Insured:
(a) the Issue Age of an Insured is understated; or
(b) the sex of an Insured is incorrectly stated such that
it resulted in lower Costs of Insurance,
the Death Benefit will be reduced to the Death Benefit that
would have been provided by the last Cost of Insurance
charge at the correct Issue Ages and/or sexes.
<PAGE>
Page 17
THE CONTRACT If on the date of death of the Last Surviving Insured:
(continued) (a) the Issue Age of an Insured is overstated; or
(b) the sex of an Insured is incorrectly stated such that
it resulted in higher Costs of Insurance,
the Death Benefit will be adjusted by the return of all
excess Costs of Insurance prior to the date of the Last
Surviving Insured's death.
SUICIDE
If, within 2 years from the Date of Issue, either of the
Insureds dies by suicide, while sane or insane, Our
liability will be limited to the premiums paid less
Indebtedness and less any withdrawals and applicable
charges.
If, within 2 years from the effective date of any increase
in the Supplemental Face Amount for which evidence of
insurability was obtained, either of the Insureds dies by
suicide, while sane or insane, Our liability with respect to
such increase, will be limited to the Cost of Insurance for
the increase and any applicable charges.
INCONTESTABILITY
With regard to the life of each Insured, We cannot contest
this policy after it has been in force, during the Insured's
lifetime, for 2 years from its Date of Issue, except for:
(a) non-payment of premium; and
(b) any rider providing disability or accidental death
benefits.
Any increase in the Supplemental Face Amount for which
evidence of insurability was obtained, will be incontestable
only after the increase has been in force, during the
Insured's lifetime, for 2 years from the effective date of
the increase.
SEPARATE ACCOUNTS
We will have exclusive and absolute ownership and control of
the assets of Our Separate Accounts. The assets of a Fund
will be available to cover the liabilities of Our General
Account only to the extent that those assets exceed the
liabilities of that Separate Account. The assets of a Fund
will be valued at least as often as any contract benefits
vary, but at least monthly. Our determination at the value
of an Accumulation Unit by the method described in this
policy will be conclusive. The investment policy of the
Separate Account will not be changed without the approval of
the Insurance Commissioner of the state where this policy is
issued for delivery.
ANNUAL REPORT
We will send You a report 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 loans
since the last report;
(c) the amount of any Indebtedness;
(d) notifications required by the provisions of this
policy; and
(e) any other information required by the Insurance
Department of the state where this policy was
delivered.
<PAGE>
Page 18
OWNERSHIP AND CHANGE OF OWNER OR BENEFICIARY
BENEFICIARY The Owner and Beneficiary will be those named in the
application until You change them. To change the Owner or
Beneficiary, notify Us In Writing while either of the
Insureds is alive. After We receive written notice, the
change will be effective as of the date You signed such
notice, whether or not either of the Insureds is living when
We receive it. However, the change will be subject to any
payment We made or actions We may have taken before We
received the request.
ASSIGNMENT
You may assign this policy. Until You notify Us In Writing,
no assignment will be effective against Us. We are not
responsible for the validity of any assignment.
OWNER'S RIGHTS
While either of the Insureds is alive and no Beneficiary is
irrevocably named, You may:
(a) exercise all the rights and options that this policy
provides or that We permit;
(b) assign this policy; and
(c) agree with Us to any change to this policy.
NO NAMED BENEFICIARY
If no named Beneficiary survives the Last Surviving Insured,
then, unless this policy provides otherwise:
(a) You will be the Beneficiary; or
(b) if You are the Last Surviving Insured, Your estate will
be the Beneficiary.
EXCHANGE OPTION If this policy is in effect, You may exchange it:
1. any time during the 24 months following its Date of
Issue;
2. for a non-variable last survivor life insurance
contract offered by Us on the life of the Insureds;
3. without evidence of insurability.
The new policy will be issued by Us:
1. with an amount at risk which equals or is less than the
amount at risk in effect on the Exchange Date;
2. with premiums based on the same Date of Issue, Issue
Ages and risk classifications as this policy.
This exchange is subject to adjustments in payments and
Account Values to reflect variances, if any, in the payments
and Account Values under this policy and the new policy.
<PAGE>
Page 19
INCOME AVAILABILITY
SETTLEMENT All or parts of the proceeds of this policy may, instead of
OPTIONS being paid in one sum, be left with Us under any one or a
combination of the following options, subject to Our minimum
amount requirements on the date of election.
We will pay interest of at least 3 1/2% per year on the
Death Proceeds from the date of the Last Surviving Insured's
death to the date payment is made or an Income Settlement
Option is elected. These proceeds are then no longer
subject to the investment experience of a Separate Account.
If any payee is a corporation, partnership, association,
assignee, or fiduciary, an option may be chosen only with
Our consent. Option 4 is not available to any payee whose
age exceeds 90.
DESCRIPTION OF TABLES
The options shown below and on the next page are based on
interest at a guaranteed rate of 3 1/2% per year. Payments
under Option 4 are based on mortality for each sex according
to the 1983a Individual Annuity Mortality Table, with ages
set back one year.
EXCESS INTEREST
We may pay or credit excess interest of such amount and in
such manner as We determine.
DEATH OF PAYEE
If the payee dies while receiving payments under one of the
options below, We will pay the following:
(a) Any principal and accrued interest remaining unpaid
under Option 1 or 2.
(b) The value of remaining unpaid guaranteed payments, if
any, under Option 3 or 4, commuted using interest of
3 1/2% per year.
Any such amount will be paid in one sum to the payee's
estate.
OTHER OPTIONS
To convert the monthly payments shown in the tables for
Options 3 and 4 to quarterly, semi-annual or annual
payments, multiply by the following factors:
PAYMENT INTERVAL FACTOR
Quarterly 2.99
Semi-annual 5.96
Annual 11.81
Other options may be arranged with Our consent.
OPTION 1 - INTEREST INCOME
Payments of interest at the rate We declare, but not less
than 3 1/2% per year, on the amount left under this option.
OPTION 2 - INCOME OF FIXED AMOUNT
Equal payments of the amount chosen until the amount left
under this option, with interest of not less than 3 1/2% per
year, is exhausted. The final payment will be for the
balance only.
<PAGE>
Page 20
INCOME OPTION 3 - INCOME FOR FIXED PERIOD
SETTLEMENT Payments, determined from the table below, are guaranteed
OPTIONS for the number of years chosen. The first payment will be
(continued) due on the date proceeds are applied under this
option.
<TABLE>
<CAPTION>
Monthly Payments Monthly Payments
Number per $1,000 of Number per $1,000 of
of Years Proceeds of Years Proceeds
<S> <C> <C> <C>
1 $84.65 10 $9.83
2 43.05 15 7.10
3 29.19 20 5.75
4 22.27 25 4.96
5 18.12 30 4.45
</TABLE>
OPTION 4 - LIFE INCOME
Payments, determined from the table shown below for the
option elected, are based on the payee's sex and age nearest
birthday on the day the first payment becomes due. The
first payment will be due on the date proceeds are applied
under this option. The Life Income available are:
(A) Payments only while the payee is alive.
(B) Payment guaranteed for 10 years; then continuing while
the payee is alive.
<TABLE>
<CAPTION>
MONTHLY PAYMENTS PER $1,000 OF PROCEEDS
Option 4A Option 4B Option 4A Option 4B
Payee's Life Only 10 Yrs. Certain Payee's Life Only 10 Yrs. Certain
Age Male Female Male Female Age Male Female Male Female
<S> <C> <C> <C> <C> <S> <C> <C> <C> <C>
20 $3.34 $3.23 $3.34 $3.23 68 $6.79 $5.79 $6.38 $5.63
25 3.44 3.31 3.43 3.30 69 7.02 5.95 6.54 5.77
30 3.56 3.40 3.56 3.40 70 7.26 6.13 6.71 5.91
35 3.71 3.51 3.71 3.51 71 7.52 6.32 6.87 6.07
40 3.91 3.66 3.90 3.65 72 7.80 6.53 7.05 6.23
45 4.17 3.84 4.14 3.84 73 8.09 6.75 7.22 6.40
50 4.49 4.08 4.44 4.07 74 8.41 6.99 7.40 6.58
51 4.56 4.14 4.51 4.12 75 8.75 7.26 7.57 6.76
52 4.64 4.20 4.58 4.18 76 9.12 7.54 7.75 6.95
53 4.72 4.26 4.66 4.24 77 9.51 7.85 7.92 7.14
54 4.80 4.32 4.74 4.30 78 9.92 8.18 8.09 7.34
55 4.89 4.39 4.82 4.36 79 10.37 8.54 8.26 7.54
56 4.99 4.46 4.91 4.43 80 10.85 8.94 8.42 7.74
57 5.09 4.54 5.00 4.51 81 11.37 9.36 8.57 7.94
58 5.20 4.62 5.10 4.58 82 11.92 9.82 8.71 8.13
59 5.32 4.71 5.20 4.66 83 12.50 10.32 8.85 8.32
60 5.44 4.80 5.31 4.75 84 13.12 10.87 8.97 8.50
61 5.57 4.90 5.42 4.84 85 13.78 11.46 9.09 8.67
62 5.71 5.00 5.54 4.93 86 14.47 12.09 9.20 8.83
63 5.86 5.11 5.67 5.03 87 15.20 12.78 9.29 8.97
64 6.02 5.23 5.80 5.14 88 15.98 13.52 9.38 9.10
65 6.20 5.36 5.94 5.25 89 16.79 14.31 9.46 9.22
66 6.38 5.49 6.08 5.37 90 17.66 15.16 9.53 9.32
67 6.58 5.64 6.23 5.50
</TABLE>
<PAGE>
Page 21
HARTFORD LIFE INSURANCE COMPANY
HARTFORD, CONNECTICUT 06104-2999
(A STOCK INSURANCE COMPANY)
NATIONAL SERVICE CENTER ADDRESS:
P.O. BOX 59179
MINNEAPOLIS, MINNESOTA 55459
CASH SURRENDER VALUE PAYABLE ON MATURITY DATE
DEATH PROCEEDS PAYABLE AT DEATH OF THE LAST SURVIVING INSURED
ADJUSTABLE DEATH BENEFIT
PREMIUMS PAYABLE AS SHOWN ON PAGE 3
NON-PARTICIPATING
THE PORTIONS OF THE ACCOUNT VALUES PROVIDED BY THIS CONTRACT THAT ARE IN THE
SUB-ACCOUNTS ARE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT. THEY
ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THE AMOUNT OF THE
DEATH BENEFIT MAY BE FIXED OR VARIABLE DEPENDING ON THE INVESTMENT EXPERIENCE OF
THAT SEPARATE ACCOUNT. THE BASIC FACE AMOUNT IS A GUARANTEED DEATH BENEFIT
DURING THE FIRST TEN POLICY YEARS (OR LONGER, IF APPLIED FOR) SUBJECT TO THE
CONDITIONS DESCRIBED ON PAGE 7.
<PAGE>
[LOGO]
LAST SURVIVOR
FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
<PAGE>
Exhibit 1A6a
CERTIFICATE
PENDING OR RESTATING CERTIFICATE
OF INCORPORATION BY ACTION OF / / INCORPORATORS / / BOARD OF /X/
BOARD OF DIRECTORS / / BOARD OF DIRECTORS
DIRECTORS AND SHAREHOLDERS AND
MEMBERS
(Stock Corporation) (Nonstock Corporation)
_________________________
For office use only
_________________________
STATE OF CONNECTICUT ACCOUNT NO
SECRETARY OF THE STATE
_________________________
INITIALS
_________________________
- --------------------------------------------------------------------------------
- ---------------
- --------------------------------------------------------------------------------
- ---------------
1. NAME OF CORPORATION DATE
Hartford Life Insurance Company August 2, 1984
- --------------------------------------------------------------------------------
- ---------------
B. AMENDED
2. The Certificate of incorporation is /X/ A. AMENDED ONLY / / AND RESTATED
/ / C. RESTATED ONLY by the following resolution
RESOLVED, That Section 3 of the Corporation's Restated Certificate
of Incorporation be amended to read as follows:
"Section 3. The capital with which the Corporation shall
commence business shall be an amount not less than one
thousand dollars ($1,000). The authorized capital shall be
five million six hundred and ninety thousand dollars
($5,690,000) divided into one thousand (1,000) shares of
common capital stock with a par value of five thousand six
hundred and ninety dollars ($5,690) each."
3. (Omit if 2.A is checked.)
(a) The above resolution merely restates and does not change the provisions
of the original Certificate of Incorporation as supplemented and amended
to date, except as follows:
(Indicate amendments made, if any, if none, so indicate)
(b) Other than as indicated in Par. 3(a), there is no discrepancy between the
provisions of the original Certificate of Incorporation as supplemented to
date, and the provisions of this Certificate Restating the Certificate of
Incorporation.
- --------------------------------------------------------------------------------
- ---------------
- --------------------------------------------------------------------------------
- ---------------
BY ACTION
OF
INCORPORATORS
/ / 4. The above resolution was adopted by vote of at least two-thirds of the
incorporators before the
organization meeting of the corporation, and approved in writing by all
subscribers (if any) for
shares of the corporation, (or if nonstock corporation, by all
applicants for membership entitled
to vote, if any.)
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement that
the statements made in the foregoing certificate are true.
- --------------------------------------------------------------------------------
- ---------------
SIGNED SIGNED SIGNED
- --------------------------------------------------------------------------------
- ----------------
APPROVED
(All subscribers, or, if nonstock corporation, all applicants for membership
entitled to vote, if none, so indicate)
- --------------------------------------------------------------------------------
- ---------------
SIGNED SIGNED SIGNED
<PAGE>
77
(Continued)
- --------------------------------------------------------------------------------
- ---------------
/ / 4. (Omit if 2C is checked.) The above resolution was adopted by the board
of directors acting alone,
/ / there being no shareholders or subscribers. / / the board of
directors being so authorized
pursuant to Section 33-341, Conn. G.S. as amended
/ / the corporation being a nonstock corporation and having no members
and no applicants for membership entitled to vote on such resolution.
- --------------------------------------------------------------------------------
- ---------------
5. The number of affirmative votes 6. The number of directors' votes
required to adopt such resolution is: in favor of the resolution was:
- --------------------------------------------------------------------------------
- ---------------
We hereby declare, under the penalties of false statement that the statements
made in the foregoing certificate are true.
- --------------------------------------------------------------------------------
- ---------------
NAME OF PRESIDENT OR VICE PRESIDENT (Print or Type) NAME OF SECRETARY
OR ASSISTANT SECRETARY (Print or Type)
- --------------------------------------------------------------------------------
- ---------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant
Secretary)
- --------------------------------------------------------------------------------
- ---------------
/X/ 4. The above resolution was adopted by the board of directors and by
shareholders.
5. Vote of shareholders:
(a) (Use if no shares are required to be voted as a class.)
- --------------------------------------------------------------------------------
- -------------------------------------------------
NUMBER OF SHARES ENTITLED TO VOTE TOTAL VOTING POWER VOTE
REQUIRED FOR ADOPTION VOTE FAVORING ADOPTION
400 440 400 267 294 400
- --------------------------------------------------------------------------------
- ---------------
(b) (If the shares of any class are entitled to vote as a class, indicate
the designation and number of outstanding shares of
each such class, the voting power thereof, and the vote of each such
class for the amendment resolution.)
We hereby declare, under the penalties of false statement that the statements
made in the foregoing certificate are true.
- --------------------------------------------------------------------------------
- ---------------
NAME OF PRESIDENT OR VICE PRESIDENT (Print or Type)
Howard N. Bennett (Sr. Vice President)
NAME OF SECRETARY OR ASSISTANT SECRETARY (Print or Type)
Robert C. Fischer (Secretary)
- --------------------------------------------------------------------------------
- ---------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant
Secretary)
/s/ Howard N. Bennett /s/ Robert C. Fischer
- --------------------------------------------------------------------------------
- ---------------
/ / 4. The above resolution was adopted by the board of directors and by
members.
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
- --------------------------------------------------------------------------------
- ---------------
NUMBER OF MEMBERS VOTING TOTAL VOTING POWER VOTE REQUIRED
FOR ADOPTION VOTE FAVORING ADOPTION
- --------------------------------------------------------------------------------
- ---------------
(b) (If the members of any class are entitled to vote as a class indicate the
designator and number of members of each such
class, the voting power thereof, and the vote of each such class for the
amendment resolution.)
We hereby declare, under the penalties of false statement that the statements
made in the foregoing certificate are true
- --------------------------------------------------------------------------------
- ---------------
NAME OF PRESIDENT OR VICE PRESIDENT (Print or Type) NAME OF
SECRETARY OR ASSISTANT SECRETARY (Print or Type)
- --------------------------------------------------------------------------------
- ---------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant
Secretary)
- --------------------------------------------------------------------------------
- ---------------
- --------------------------------------------------------------------------------
- ---------------
FILING FEE CERTIFICATION FEE
TOTAL FEES
$30- $27- $57-
- -------------------------------------------------------------------------
FILED SIGNED (For Secretary of the State)
STATE OF CONNECTICUT
- -------------------------------------------------------------------------
AUG - 3 1984 CERTIFIED COPY SENT ON (Date)
INITIALS
8/6/84
- -------------------------------------------------------------------------
SECRETARY OF THE STATE TO
- -------------------------------------------------------------------------
By Time 3:00 P.M. CARD LIST PROOF
------ ---------
<PAGE>
Exhibit 1 (a)(6)(b)
By-Laws
of the
HARTFORD LIFE INSURANCE COMPANY
As passed and effective
February 13, 1978
and amended on
July 13, 1978
January 5, 1979
and
February 19, 1984
<PAGE>
ARTICLE I
Name - Home Office
Section 1. This corporation shall be named HARTFORD LIFE INSURANCE
COMPANY.
Section 2. The principal place of business and Home Office shall be
in the City of Hartford, Connecticut.
ARTICLE II
Stockholders' Meetings - Notice - Quorum - Right to Vote
Section 1. All meetings of the Stockholders shall be held at the
principal business office of the Company unless the Directors shall otherwise
provide and direct.
Section 2. The annual meeting of the Stockholders shall be held on
such day and at such hour as the Board of Directors may decide. For cause the
Board of Directors may postpone or adjourn such annual meeting to any other time
during the year.
Section 3. Special meetings of the Stockholders may be called by the
Board of Directors, the Executive Committee, the Chairman of the Board, the
President or any Vice President.
Section 4. Notice of Stockholders' meetings shall be mailed to each
Stockholder, at his address as it appears on the records of the Company, at
least seven days prior to the meeting. The notice shall state the place, date
and time of the meeting and shall specify all matters proposed to be acted upon
at the meeting.
Section 5. At each annual meeting the Stockholders choose Directors
as hereinafter provided.
Section 6. Each Stockholder shall be entitled to one vote for each
share of stock held by him at all meetings of the Company. Proxies may be
authorized by written power of attorney.
Section 7. Holders of one-half of the whole amount of the stock
issued and outstanding shall constitute a quorum.
<PAGE>
- 2 -
Section 8. Each Stockholder shall be entitled to a certificate of
stock which shall be signed by the President or a Vice President, and either the
Treasurer or an Assistant Treasurer of the Company, and shall bear the seal of
the Company, but such signatures and seal may be facsimile if permitted by the
laws of the State of Connecticut.
ARTICLE III
Directors - Meetings - Quorum
Section 1. The property, business and affairs of the Company shall be
managed by a board of not less than three nor more than twenty Directors, who
shall be chosen by ballot at each annual meeting. Vacancies occurring between
annual meetings may be filled by the Board of Directors by election. Each
Director shall hold office until the next annual meeting of Stockholders and
until his successor is chosen and qualified.
Section 2. Meetings of the Board of Directors may be called by the
direction of the Chairman of the Board, the President, or any three Directors.
Section 3. Three days' notice of meetings of the Board of Directors
shall be given to each Director, either personally or by mail or telegraph, at
his residence or usual place of business, but notice may be waived, at any time,
in writing.
Section 4. One third of the number of existing directorships, but not
less than two Directors, shall constitute a quorum.
ARTICLE IV
Election of Officers - Duties of Board of
Directors and Executive Committee
Section 1. The President shall be elected by the Board of Directors.
The Board of Directors may also elect one of its members to serve as Chairman of
the Board of Directors. The Chairman of the Board, or an individual appointed
by him, shall have authority to appoint all other officers, except as stated
herein, including one or more Vice Presidents and Assistant Vice Presidents, the
Treasurer
<PAGE>
and one or more Associate or Assistant Treasurers, one or more Secretaries and
Assistant Secretaries and such other Officers as the Chairman of the Board may
from time to time designate. All Officers of the Company shall hold office
during the pleasure of the Board of Directors. The Directors may require any
Officer of the Company to give security for the faithful performance of his
duties.
Section 2. The Directors may fill any vacancy among the officers by
election for the unexpired term.
Section 3. The Board of Directors may appoint from its own number an
Executive Committee of not less than five Directors. The Executive Committee
may exercise all powers vested in and conferred upon the Board of Directors at
any time when the Board is not in session. A majority of the members of said
Committee shall constitute a quorum.
Section 4. Meetings of the Executive Committee shall be called
whenever the Chairman of the Board, the President or a majority of its members
shall request. Forty-eight hours' notice shall be given of meetings but notice
may be waived, at any time, in writing.
Section 5. The Board of Directors shall annually appoint from its own
number a Finance Committee of not less than three Directors, whose duties shall
be as hereinafter provided.
Section 6. The Board of Directors may, at any time, appoint such
other Committees, not necessarily from its own number, as it may deem necessary
for the proper conduct of the business of the Company, which Committees shall
have only such powers and duties as are specifically assigned to them by the
Board of Directors or the Executive Committee.
Section 7. The Board of Directors may make contributions, in such
amounts as it determines to be reasonable, for public welfare or for charitable,
scientific or educational purposes, subject to the limits and restrictions
imposed by law and to such rules and regulations consistent with law as it
makes.
ARTICLE V
Officers
Chairman of the Board
Section 1. The Chairman of the Board shall preside at the meetings of
the Board of Directors and the Executive Committee and, in the absence of the
Chairman of the Finance Committee, at the meetings of the Finance Committee. In
the absence or inability of the Chairman of the Board to so preside, the
President shall preside in his place.
<PAGE>
President
Section 2. The President, under the supervision and control of the
Chairman of the Board, shall have general charge and oversight of the business
and affairs of the Company. The President shall preside at the meetings of the
Stockholders. He shall be a member of and shall preside at all meetings of all
Committees not referred to in Section 1 of this ARTICLE except that he may
designate a Chairman for each such other Committee.
Section 3. In the absence or inability of the President to perform
his duties, the Chairman of the Board may designate a Vice President to exercise
the powers and perform the duties of the President during such absence or
inability.
Secretary
Section 4. The Secretary of the Corporation shall keep a record of
all the meetings of the Company, of the Board of Directors and of the Executive
Committee, and he shall discharge all other duties specifically required of the
Secretary by law. The other Secretaries and Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors or by their
senior officers and any Secretary or Assistant Secretary may affix the seal of
the Company and attest it and the signature of any officer to any and all
instruments.
Treasurer
Section 5. The Treasurer shall keep, or cause to be kept, full and
accurate accounts of the Company. He shall see that the funds of the Company
are disbursed as may be ordered by the Board of Directors or the Finance
Committee. He shall have charge of all moneys paid to the Company and on
deposit to the credit of the Company or in any other properly authorized name,
in such banks or depositories as may be designated in a manner provided by these
by-laws. He shall also discharge all other duties that may be required of him
by law.
Other Officers
Section 6. The other officers shall perform such duties as may be
assigned to them by the President or the Board of Directors.
<PAGE>
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ARTICLE VI
Finance Committee
Section 1. If a Finance Committee is established it shall be the duty
of that committee to supervise the investment of the funds of the Company in
securities in which insurance companies are permitted by law to invest, and all
other matters connected with the management of investments. If no Finance
Committee is established this duty shall be performed by the Board of Directors.
Section 2. All loans or purchases for the investment and reinvestment
of the funds of the Company shall be submitted for approval to the Finance
Committee, if not specifically approved by the Board of Directors.
Section 3. Sale or transfer of any stocks or bonds shall be made upon
authorization of the Finance Committee unless specifically authorized by the
Board of Directors.
Section 4. Transfers of stock and registered bonds, deeds, leases,
releases, sales, mortgages chattle or real, assignments or partial releases of
mortgages chattel or real, and in general all instruments of defeasance of
property and all agreements or contracts affecting the same, except discharges
of mortgages and entries to foreclose the same as hereinafter provided, shall be
authorized by the Finance Committee or the Board of Directors, and be executed
jointly for the Company by two persons, to wit: The Chairman of the Board, the
President or a Vice President, and a Secretary, the Treasurer or an Assistant
Treasurer, but may be acknowledged and delivered by either one of those
executing the instrument; provided, however, that either a Secretary, the
Treasurer, or an Assistant Treasurer alone, when authorized as aforesaid, or any
person specially authorized by the Finance Committee as attorney for the
Company, may make entry to foreclose any mortgage, and a Secretary, the
Treasurer or an Assistant Treasurer alone is authorized, without the necessity
of further authority, to discharge by deed or otherwise any mortgage on payment
to the Company of the principal, interest and all charges due.
Section 5. The Finance Committee may fix times and places for regular
meetings. No notice of regular meetings shall be necessary. Reasonable notice
shall be given of special meetings but the action of a majority of the Finance
Committee at any meeting shall be valid notwithstanding any defect in the notice
of such meeting.
<PAGE>
- 6 -
Section 6. In the absence of specific authorization from the Board of
Directors or the Finance Committee, the Chairman of the Board, the President, a
Vice President or the Treasurer shall have the power to vote or execute proxies
for voting any shares held by the Company.
ARTICLE VII
Funds
Section 1. All monies belonging to the Company shall be deposited to
the credit of the Company, or in such other name as the Finance Committee, the
Chairman of the Finance Committee or such executive officers as are designated
by the Board of Directors shall direct, in such bank or banks as may be
designated from time to time by the Finance Committee, the Chairman of the
Finance Committee, or by such executive officers as are designated by the Board
of Directors. Such monies shall be drawn only on checks or drafts signed by any
two executive officers of the Company, provided that the Board of Directors may
authorize the withdrawal of such monies by check or draft signed with the
facsimile signature of any one or more executive officers, and provided further,
that the Finance Committee may authorize such alternative methods of withdrawals
as it deems proper.
The Board of Directors, the President, the Chairman of the Finance
Committee, a Vice President, or such executive officers as are designated by the
Board of Directors may authorize withdrawal of funds by checks or drafts drawn
at offices of the Company to be signed by Managers, General Agents or employees
of the Company, provided that all such checks or drafts shall be signed by two
such authorized persons, except checks or drafts used for the payment of
claims or losses which need be signed by only one such authorized person, and
provided further that the Board of Directors of the Company or executive
officers designated by the Board of Directors may impose such limitations or
restrictions upon the withdrawal of such funds as it deems proper.
<PAGE>
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ARTICLE VIII
Indemnity of Directors and Officers
Section 1. The Company shall indemnify and hold harmless each
Director and officer now or hereafter serving the Company, whether or not then
in office, from and against any and all claims and liabilities to which he may
be or become subject by reason of his being or having been a Director or officer
of the Company, or of any other company which he serves as a Director or officer
at the request of the Company, to the extent such is consistent with the
statutory provisions pertaining to indemnification, and shall provide such
further indemnification for legal and/or all other expenses reasonably incurred
in connection with defending against such claims and liabilities as is
consistent with statutory requirements.
ARTICLE IX
Amendment of ByLaws
Section 1. The Directors shall have power to adopt, amend and repeal
such bylaws as may be deemed necessary or appropriate for the management of the
property and affairs of the Company.
Section 2. The Stockholders at any annual or special meeting may
amend or repeal these bylaws or adopt new ones if the notice of such meeting
contains a statement of the proposed alteration, amendment, repeal or adoption,
or the substance thereof.
<PAGE>
EXHIBIT A.11
HARTFORD LIFE INSURANCE COMPANY
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
DESCRIPTION OF TRANSFER AND REDEMPTION PROCEDURES AND
METHOD OF COMPUTING ADJUSTMENTS IN PAYMENTS AND
ACCOUNT VALUES UPON CONVERSION TO
FIXED BENEFIT POLICIES
This document sets forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (collectively
"Hartford") in connection with the issuance of its last survivor flexible
premium variable life insurance policy (the "Policy"), the transfer of assets
held thereunder, and the redemption by Policy Owners of their interests in said
Policies. The document also describes the method that Hartford will use in
adjusting the payments and cash values when a Policy is exchanged for a fixed
benefit insurance policy pursuant to Rule 6e-3(T)(b)(13)(v)(B).
TRANSFER AND REDEMPTION PROCEDURES
I. PURCHASE AND RELATED TRANSACTIONS
A. PREMIUMS AND UNDERWRITING STANDARDS
This Policy is a last survivor flexible premium variable life policy. The
Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws, which prohibit
unfair discrimination among Policy Owners, but recognize that premiums must
be based upon factors such as age, health or occupation.
B. APPLICATION AND INITIAL PREMIUM PROCESSING
Upon receipt of a completed application, Hartford will follow certain
insurance underwriting (i.e., evaluation of risks) procedures designed to
determine whether the applicant is insurable. This process may involve
such verification procedures as medical examinations and may require that
further information be provided by the proposed Insured before a
determination can be made. A Policy will not be issued and consequently a
Policy Issue Date established, until this underwriting procedure has been
completed.
If a premium is submitted with the Policy application, insurance coverage
will begin immediately if the proposed Insured is insurable at a standard
rate under a conditional receipt agreement. Otherwise, insurance coverage
will not begin until the Policy's Issue Date. In either case, the Policy
when issued will be effective from the date Hartford receives the initial
premium at its National Service Center.
<PAGE>
If a premium is not paid with the application, insurance coverage will
begin and the Policy will be effective on the later of the date the
underwriting determination is made or on the date the premium is received.
C. PREMIUM ALLOCATION
In the application for a Policy, the Policy Owner can allocate the initial
premium among the Fixed Account and various Sub-Accounts. Hartford will
allocate the entire premium to the Hartford Money Market Sub-Account. At a
later date, the value of the Policy Owner's interest in the Hartford Money
Market Sub-Account will be allocated among the Fixed Account and the
Sub-Accounts of Separate Account VL II in accordance with the Policy
Owner's instructions in the application for insurance. The Policy Owner
may select up to five (5) Funds to allocate your premium. An allocation to
any one Fund must be for 10% or more, in whole percentages.
D. POLICY LOANS
A Policy Owner may obtain a cash loan from Hartford, which is secured by
the Policy. The total Indebtedness at the time of the new loan (including
the accrued interest on prior loans plus the currently applied for loan)
may not exceed 90% of the Account Value.
The amount of each loan will be transferred on a Pro Rata Basis from 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 policy values.
LOAN INTEREST
Interest will accrue daily on the Indebtedness at the Policy Loan Interest
Rate indicated in the Policy. The difference between the value of the Loan
Account and the Indebtedness will be transferred on a pro rata basis from
the Sub-Accounts to the Loan Account on each Monthly Activity Date.
CREDITED INTEREST
During the first ten Policy Years, any amounts in the Loan Account will be
credited with interest at a rate equal to the Policy Loan Rate, minus 2%.
For Policy Years 11 and beyond, except for Preferred Loans described below,
the Loan Account will be credited with interest at a rate equal to the
policy Loan Rate applicable to that Indebtedness, minus 1%.
PREFERRED LOAN
If, 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
<PAGE>
amount of the Loan Account which equals a Preferred Loan will be credited
with interest at a rate equal to the Policy Loan Rate. The amount of
Indebtedness that qualified as a Preferred Loan is determined on each
Monthly Activity Date.
LOAN REPAYMENTS
You can repay the any part of or the entire loan at any time.
The amount of loan repayment will be deducted from the Loan Account and
will be allocated among the Fixed Account and Sub-Accounts in the same
percentage as premiums are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Account Value, the Policy will
terminate 61 days after we have mailed notice to your last known address
and that of any assignees of record. If sufficient loan repayment if not
made by the end of the Grace Period, the policy will end without value.
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the 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 loan is outstanding, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Fixed Account and 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 loan
been made. If the Fixed Account and Sub-Accounts earn less than the Loan
Account, the Policy Owners Account Value will be greater than it would have
been had no loan been made. Also, if not repaid, the aggregate amount of
the outstanding loan (i.e., the Indebtedness) will reduce the Death
Proceeds and Cash Surrender Value otherwise payable.
II. TRANSFER AMONG INVESTMENT DIVISIONS
The Separate Account currently has twenty-two Sub-Accounts, each of which
invests in shares of an open-end diversified management investment company
registered with the Commission and a Fixed Account. At any time, the Policy
Owner may transfer value among the Funds or the Fixed Account. We reserve the
right at a future date to limit the size of transfers and remaining balances and
to limit the number and frequency of transfers.
A transfer will take effect on the date the written request (or telephone
request) is received at Hartford unless a later date is designated in the
request for transfer. A transfer between the Loan Accounts and the Separate
Account incident to the repayment or making of a loan under the Policy will not
be considered a transfer. A transfer from the Money Market Fund at the end of
<PAGE>
the Right to Cancel Period or a transfer arising because of a substitution of
securities by Hartford will also not be considered a transfer.
III. "REDEMPTION" PROCEDURES: SURRENDER AND RELATED TRANSACTIONS
A. SURRENDER FOR ACCOUNT VALUE
At any time before the death of the Insured and while the Policy is in
force, the Policy Owner may completely surrender the Policy by written
request. The surrender payment from the Sub-Accounts will be made within
seven days after Hartford receives the written request, unless payment is
postponed pursuant to the relevant provision of the Investment Company Act
of 1940. The surrender payment from the Fixed Account may be postponed up
to six months under state law. The surrender payment will equal the Policy
Owner's Cash Surrender Value.
B. BENEFIT CLAIMS
As long as the Policy remains in force, Hartford will usually pay the Death
Proceeds to the named Beneficiary within seven days after receipt of due
proof of death of the Insured unless the Policy is contested. Payment of
the Death Proceeds may be postponed as permitted pursuant to the relevant
provisions of the Investment Company Act of 1940 and up to six months if
the Account Values were in the Fixed Account.
The Death Proceeds equal the Death Benefit under the Policy less all
outstanding loans. The Death Benefit will be determined on the date
Hartford receives written notice of death and is a function of the Death
Benefit Option chosen by the Policy Owner.
In lieu of payment of the death proceeds in a single sum, an election may
be made to apply all or a portion of the proceeds under one of the fixed
benefit settlement options described in the Policy or a combination of
options. The election may be made by the Policy Owner during the Insured's
lifetime. The Beneficiary may make or change an election within 90 days of
the death of the Insured, unless the Policy Owner has made an irrevocable
election. The fixed benefit settlement options are subject to the
restrictions and limitations set forth in the Policy.
C. POLICY LAPSE
The Policy will terminate 61 days after a Monthly Activity Date on which
the Cash Surrender Value is not sufficient to cover the Monthly Deduction
Amount. The 61-day period is the Grace Period. If sufficient premium is
not paid by the end of the Grace Period, the Policy will terminate without
value. The Company will mail the Owner and any assignee written notice of
the amount of premium that will be required to continue the policy in force
at least 61 days before the end of the Grace Period. The premiums required
will be no greater than the amount required to pay three (3) Monthly
Deduction Amounts as of the day the Grace Period began. If that premium is
not paid by the end of the Grace Period, the policy will terminate.
<PAGE>
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 the
Policy Owner 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. The Policy Owner 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 the
Policy if We have not received the amount of the required premium, subject
to the following exception: If the 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 the Policy Owner 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.
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) the Policy Owner makes the request within five years;
(c) satisfactory evidence of insurability is submitted;
(d) any Policy loan is repaid or reinstated; and
(e) The Policy Owner pays sufficient premium to (1) cover all Monthly
Deduction Amounts that are due and unpaid during the Grace Period and
(2) keep the Policy in
<PAGE>
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.
D. POLICY LOANS
See "Purchase and Related Transactions," Section I. D. on page 2 of this
Exhibit.
CASH ADJUSTMENT UPON EXCHANGE OF POLICY
Once the 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
this Policy.
<PAGE>
[Exhibit 2]
March 15, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Separate Account VL II ("Separate Account")
Hartford Life Insurance Company ("Company")
File No. 33-89990
-------------------------------------------
Dear Sir/Madam:
In my capacity as Associate General Counsel of the Company, I have supervised
the establishment of the Separate Account by the Board of Directors of the
Company as a separate account for assets applicable to Policies offered by the
Company pursuant to Connecticut law. I have participated in the preparation of
the registration statement for the Separate Account on Form S-6 under the
Securities Act of 1933 and the Investment Company Act of 1940 with respect to
the Policies.
I am of the following opinion:
1. The Separate Account is a separate account of the Company validly existing
pursuant to Connecticut law and the regulations issued thereunder.
2. The assets held in the Separate Account are not chargeable with liabilities
arising out of any other business the Company may conduct.
3. The Policies are legally issued and represent binding obligations of the
Company.
In arriving at the foregoing opinion, I have made such examination of the law
and examined such records and other documents as in my opinion as are necessary
or appropriate.
I hereby consent to the filing of this opinion as an exhibit to the registration
statement under the Securities Act of 1933.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
Associate General Counsel & Secretary
<PAGE>
[Exhibit 5]
March 1, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs;
This opinion is furnished in connection with the registration statement under
the Securities Act of 1933 as amended ("Securities Act"), of a certain last
survivor flexible premium variable life insurance policy (the "Policy") that
will be offered and sold by Hartford Life Insurance Company and certain units of
interest to be issued in connection with the Policy.
The hypothetical illustrations of the Policy used in this Registration Statement
accurately reflect reasonable estimates of projected performance of the Policy
under the stipulated rates of investment return, the contractual expense
deductions and guaranteed cost-of-insurance rates, and utilizing a reasonable
estimation for expected fund operating expenses.
I hereby consent to the use of this opinion as an exhibit to the Securities Act
Registration Statement on Form S-6 and to the reference to my name under the
heading "Experts" in the Prospectus included in the Securities Act Registration
Statement.
Very truly yours,
/s/ Ken A. McCullum
Ken A. McCullum, FSA, MAAA
Director Individual Life
Product Development
<PAGE>
[Exhibit 6]
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 33-89990 for Hartford Life Insurance
Company Separate Account VL II on Form S-6.
/s/ Arthur Andersen LLP
Hartford, Connecticut
May 1, 1996
<PAGE>
Exhibit 9
HARTFORD LIFE INSURANCE COMPANY, INC.
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, INC.
POWER OF ATTORNEY
Donald R. Frahm
Bruce D. Gardner
Joseph H. Gareau
John P. Ginnetti
Thomas M. Marra
Leonard E. Odell, Jr.
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
do hereby jointly and severally authorize Lynda Godkin and/or Scott K.
Richardson to sign as their agent, any Registration Statement, pre-effective
amendment, post-effective amendment and any application for exemptive relief of
the Hartford Life Insurance Company, Inc. and Hartford Life and Accident
Insurance Company, Inc. 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/ Donald R. Frahm Dated: 10/19/95
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Donald R. Frahm
/s/ Bruce D. Gardner Dated: 10/19/95
- ----------------------------------- ---------------------
Bruce D. Gardner
/s/ Joseph H. Gareau Dated: 10/19/95
- ----------------------------------- ---------------------
Joseph H. Gareau
/s/ John P. Ginnetti Dated: 10/26/95
- ----------------------------------- ---------------------
John P. Ginnetti
/s/ Thomas M. Marra Dated: 10/19/95
- ----------------------------------- ---------------------
Thomas M. Marra
/s/ Leonard E. Odell, Jr. Dated: 10/20/95
- ----------------------------------- ---------------------
Leonard E. Odell, Jr.
/s/ Lowndes A. Smith Dated: 10/19/95
- ----------------------------------- ---------------------
Lowndes A. Smith
<PAGE>
/s/ Raymond P. Welnicki Dated: 10/24/95
- ----------------------------------- ---------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated: 10/20/95
- ----------------------------------- ---------------------
Lizabeth H. Zlatkus
