<PAGE>
As filed with the Securities and Exchange Commission February 20, 1998
File No. 33-89990
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 3
TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON
FORM N-8B-2
A. Exact name of trust: 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:
Leslie T. Soler, Esq.
Hartford Life
P.O. Box 2999
Hartford, 06104-2999
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on May 1, 1998 pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
_X_ on May 1, 1998 pursuant to paragraph (a)(1) of Rule 485
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title and amount of securities being registered: Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant has registered an
indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the securities
being registered: Not yet determined.
G. Amount of filing fee: Not applicable.
H. Approximate date of proposed public offering: As soon as practicable after
the effective date of this registration statement.
<PAGE>
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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1. Cover page
2. Cover page
3. Not applicable
4. Hartford; Distribution of the Policies
5. Summary - Separate Account VL II; Separate Account VL II -
General
6. Separate Account VL II - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; Separate Account VL II - Funds; Detailed
Description of Policy Benefits and Provisions -
Application for a Policy; 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 VL II's Assets
24. Other Matters - Assignment
25. Hartford
26. Not applicable
27. Hartford
28. Hartford; Management
29. Hartford
30. Not applicable
31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
35. Distribution of the Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
<PAGE>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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39. Hartford; Distribution of the Policies
40. Not applicable
41. Hartford; Distribution of the Policies
42. Not applicable
43. Not applicable
44. Detailed Description of Policy Benefits and
Provisions - Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Policy Benefits and Provision -
Cash Value
47. Separate Account VL II - Funds
48. Cover page; Hartford
49. Not applicable
50. Separate Account VL II - General
51. Summary; Hartford; Detailed Description of
Policy Benefits and Provisions; Other Matters -
Beneficiary
52. Separate Account VL II - Funds, Investment Advisers
53. Federal Tax Considerations
54. Not applicable
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
<PAGE>
PART I
<PAGE>
STAG LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICIES
HARTFORD LIFE INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CT 06104-2999
[LOGO] TELEPHONE: (800) 231-5453
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This Prospectus describes Stag Variable Life Last Survivor, last survivor
flexible premium variable life insurance policies (the "Policies," and each a
"Policy") offered by Hartford Life Insurance Company ("Hartford") to applicants
where both Insureds will be generally between ages 20 and 80. For a given amount
of Death Benefit chosen, the Policy Owner 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. A 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 Face Amount is generally $100,000.
Payments for the Policies will be held in a series of Separate Account VL II or
in the Fixed Account of Hartford. The following Sub-Accounts are available under
the Contracts. Opposite each Sub-Account is the name of the underlying
investment for that Sub-Account. The Hartford Funds, Putnam Funds and Fidelity
are collectively referred to in this Prospectus as the "Funds."
<TABLE>
<S> <C><C>
Hartford Advisers Fund Sub-Account -- shares of Class IA of Hartford Advisers Fund, Inc. ("Hartford Advisers Fund")
Hartford Bond Fund Sub-Account -- shares of Class IA of Hartford Bond Fund, Inc. ("Hartford Bond Fund")
Hartford Capital Appreciation Fund -- shares of Class IA of Hartford Capital Appreciation Fund, Inc. ("Hartford Capital
Sub-Account Appreciation")
Hartford Dividend and Growth Fund -- shares of Class IA of Hartford Dividend and Growth Fund, Inc. ("Hartford Dividend
Sub-Account and Growth Fund")
Hartford Index Fund Sub-Account -- shares of Class IA of Hartford Index Fund, Inc. ("Hartford Index Fund")
Hartford International Opportunities Fund -- shares of Class IA of Hartford International Opportunities Fund, Inc. ("Hartford
Sub-Account International Opportunities Fund")
Hartford Mortgage Securities Fund -- shares of Class IA of Hartford Mortgage Securities Fund, Inc. ("Hartford Mortgage
Sub-Account Securities Fund")
Hartford Stock Fund Sub-Account -- shares of Class IA of Hartford Stock Fund, Inc. ("Hartford Stock Fund")
HVA Money Market Fund Sub-Account -- shares of Class IA of HVA Money Market Fund, Inc. ("HVA Money Market Fund")
Putnam VT Diversified Income Fund -- shares of Putnam VT Diversified Income Fund of the Putnam Variable Trust ("Putnam
Sub-Account VT Diversified Income Fund")
Putnam VT Global Asset Allocation Fund -- shares of Putnam VT Global Asset Allocation Fund of the Putnam Variable Trust
Sub-Account ("Putnam VT Global Asset Allocation Fund")
Putnam VT Global Growth Fund Sub-Account -- shares of Putnam VT Global Growth Fund of the Putnam Variable Trust ("Putnam VT
Global Growth Fund")
Putnam VT Growth and Income Fund -- shares of Putnam VT Growth and Income Fund of the Putnam Variable Trust ("Putnam
Sub-Account VT Growth and Income Fund")
Putnam VT High Yield Fund Sub-Account -- shares of Putnam VT High Yield Fund of the Putnam Variable Trust ("Putnam VT High
Yield Fund")
Putnam VT Money Market Fund Sub-Account -- shares of Putnam VT Money Market Fund of the Putnam Variable Trust ("Putnam VT
Money Market Fund")
Putnam VT New Opportunities Fund -- shares of the Putnam VT New Opportunities Fund of the Putnam Variable Trust
Sub-Account ("Putnam VT New Opportunities Fund")
Putnam VT U.S. Government and High -- shares of Putnam VT Government and High Quality Bond Fund of the Putnam Variable
Quality Bond Sub-Account Trust ("Putnam VT Government and High Quality Bond Fund")
Putnam VT Utilities Growth and Income -- shares of Putnam VT Utilities Growth and Income Fund of the Putnam Variable Trust
Fund Sub-Account ("Putnam VT Utilities Growth and Income Fund")
Putnam VT Voyager Fund Sub-Account -- shares of Putnam VT Voyager Fund of the Putnam Variable Trust ("Putnam VT Voyager
Fund")
Fidelity VIP Equity-Income Portfolio -- shares of Fidelity VIP Equity-Income Portfolio of the Variable Insurance Products
Sub-Account Fund ("Fidelity VIP Equity-Income Portfolio")
Fidelity VIP Overseas Portfolio -- shares of Fidelity VIP Overseas Portfolio of the Variable Insurance Products Fund
Sub-Account ("Fidelity VIP Overseas Portfolio")
Fidelity VIP II Asset Manager Portfolio -- shares of Fidelity VIP II Asset Manager Portfolio of the Variable Insurance
Sub-Account Products Fund II ("Fidelity VIP II Asset Manager Portfolio")
</TABLE>
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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 , 1998.
<PAGE>
2 HARTFORD LIFE INSURANCE COMPANY
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
SPECIAL TERMS......................................................... 4
SUMMARY............................................................... 6
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS................ 9
General............................................................. 9
Premiums............................................................ 9
Premium Payment Flexibility....................................... 9
Allocation of Premium Payments.................................... 9
Accumulation Units................................................ 10
Accumulation Unit Values.......................................... 10
Premium Limitation................................................ 10
Account Values.................................................... 10
Amount Payable on Surrender of the Policy......................... 10
Load Refund....................................................... 10
Partial Withdrawals............................................... 11
Transfers of Account Value.......................................... 11
Amount and Frequency of Transfers................................. 11
Transfers of Account Values to or from Sub-Accounts............... 11
Transfers from the Fixed Account.................................. 11
Dollar Cost Averaging Option...................................... 11
Policy Loans........................................................ 12
Loan Interest..................................................... 12
Credited Interest................................................. 12
Preferred Loan.................................................... 12
Loan Repayments................................................... 12
Termination Due to Excessive Indebtedness......................... 12
Effect of Loans on Account Value.................................. 12
Death Benefit....................................................... 12
Death Benefit Options............................................. 13
Option Change..................................................... 13
Death Benefit Guarantee........................................... 13
Minimum Death Benefit............................................. 13
Unscheduled Increases and Decreases in Face Amount................ 13
Benefits at Maturity................................................ 14
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 a Policy........................... 14
Surrender........................................................... 15
Valuation of Payments and Transfers................................. 15
Application for a Policy............................................ 15
Reduced Charges for Eligible Groups................................. 15
Deductions from the Premium......................................... 15
Premium Processing Charge......................................... 15
Premium Tax Charge and Federal Tax Charge......................... 15
Front-End Sales Load.............................................. 15
Deductions and Charges from the Account Value....................... 16
Monthly Deduction Amounts......................................... 16
Charges Against the Funds......................................... 17
Taxes............................................................. 17
HARTFORD.............................................................. 17
SEPARATE ACCOUNT VL II................................................ 17
General............................................................. 17
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 3
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<TABLE>
<CAPTION>
PAGE
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Funds............................................................... 17
<S> <C>
Hartford Funds.................................................... 18
Putnam Funds...................................................... 18
Fidelity VIP Funds................................................ 19
Investment Adviser.................................................. 20
Hartford Funds.................................................... 20
Putnam Funds...................................................... 20
Fidelity VIP Funds................................................ 20
THE FIXED ACCOUNT..................................................... 21
OTHER MATTERS......................................................... 21
Voting Rights....................................................... 21
Statements to Policy Owners......................................... 22
Limit on Right to Contest........................................... 22
Misstatement as to Age.............................................. 22
Payment Options..................................................... 22
Beneficiary......................................................... 22
Assignment.......................................................... 23
Dividends........................................................... 23
SUPPLEMENTAL BENEFITS................................................. 23
Last Survivor Exchange Option Rider................................. 23
Estate Protection Rider............................................. 23
Maturity Date Extension Rider....................................... 23
Yearly Renewable Term Life Insurance Rider.......................... 23
EXECUTIVE OFFICERS AND DIRECTORS...................................... 23
DISTRIBUTION OF THE POLICIES.......................................... 27
SAFEKEEPING OF SEPARATE ACCOUNT VL II'S ASSETS........................ 27
FEDERAL TAX CONSIDERATIONS............................................ 27
General............................................................. 27
Taxation of Hartford and the Separate Account....................... 27
Income Taxation of Policy Benefits -- Generally..................... 28
Diversification Requirements........................................ 29
Ownership of the Assets in the Separate Account..................... 29
Tax Deferral During Accumulation Period............................. 29
Modified Endowment Contracts........................................ 30
Estate and Generation Skipping Taxes................................ 30
Life Insurance Purchased for Use in Split Dollar Arrangements....... 31
Federal Income Tax Withholding...................................... 31
Non-Individual Ownership of Policies................................ 31
Other............................................................... 31
Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations....................................................... 31
LEGAL PROCEEDINGS..................................................... 31
LEGAL MATTERS......................................................... 31
EXPERTS............................................................... 31
REGISTRATION STATEMENT................................................ 31
APPENDIX A -- ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH
SURRENDER VALUES.................................................... 32
</TABLE>
THE POLICIES MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
<PAGE>
4 HARTFORD LIFE INSURANCE COMPANY
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The value used to determine certain Policy benefits and charges.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL DEATH BENEFIT GUARANTEE PREMIUM: An annual amount of premium shown in a
Policy's specifications page required to keep the Death Benefit guarantee in
effect and used to calculate the Cumulative Death Benefit Guarantee Premium.
CASH SURRENDER VALUE: The Account Value less all Indebtedness.
CODE: The Internal Revenue Code of 1986, as amended.
COMMISSION: U.S. Securities and Exchange Commission.
COST OF INSURANCE: An amount deducted as part of the Monthly Deduction Amount to
help cover Hartford's anticipated mortality costs and other expenses.
CUMULATIVE DEATH BENEFIT GUARANTEE PREMIUM: The sum of the number of completed
Policy Years plus the completed portion of the current Policy Year (expressed as
the number of completed months divided by 12), multiplied by the Annual Death
Benefit Guarantee Premium.
DATE OF ISSUE: The date from which the Policy's suicide and incontestability
provisions are measured.
DEATH BENEFIT: On the Policy Date, the Death Benefit equals the Face Amount.
Thereafter, it may change in accordance with the terms of the Policy.
DEATH BENEFIT OPTION: The Death Benefit Option in effect determines how the
Death Benefit is calculated. For a description of the three Death Benefit
Options provided, see "Detailed Description of Policy Benefits and Provisions --
Death Benefit," page 12.
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: On the Policy Date, the Face Amount equals the initial face amount
of a Policy. Thereafter, the Face Amount may be increased or decreased, in
accordance with the terms of the Policy.
FIXED ACCOUNT: The portion of the Account Value invested in the General Account.
FUNDS: The registered open-end management investment companies in which assets
of the Separate Account may be invested.
GENERAL ACCOUNT: All assets of Hartford other than those allocated to its
separate accounts, including the Separate Account.
GUIDELINE ANNUAL PREMIUM: The level annual premium payment necessary to provide
the future benefits under a Policy through maturity, based on certain
assumptions specified under federal securities laws. These assumptions include
mortality charges based on the 1980 Commissioners' Standard Ordinary Mortality
Smoker or Nonsmoker Table, age last birthday, an assumed annual net rate of
return of 5% per year, and deduction of the guaranteed fees and charges
specified in a Policy. For purposes of the Policy, the Guideline Annual Premium
is used only in limiting front-end sales loads.
HARTFORD (ALSO "WE," "US," "OUR"): Hartford Life Insurance Company.
IN WRITING: In a written form satisfactory to Us.
INDEBTEDNESS: The outstanding loan on a Policy, including any interest due or
accrued.
INSUREDS: The two persons on whose lives a Policy is issued.
ISSUE AGE: As of the Policy Date, the age of each Insured on his/her last
birthday.
LOAN ACCOUNT: An account established for any amounts transferred from the Fixed
Account and the Sub-Accounts as a result of Policy loans. Amounts are held as
collateral and are credited with interest. Amounts held in the Loan Account are
not subject to the investment experience of the Separate Account.
MATURITY DATE: The date on which a Policy matures.
MONTHLY ACTIVITY DATE: The Policy Date and the same date in each succeeding
month as the Policy Date, except that 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 each premium actually allocated to the Account Value,
after a deduction, as a percentage of premium, is made for the premium
processing charge, premium tax and federal tax charges and front-end sales load
attributable to a Policy.
PLANNED PREMIUMS: The amount of premiums that You intend to pay, as indicated on
your Policy application and shown on the Policy's specifications page.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 5
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POLICY: A last survivor flexible premium variable life insurance contract issued
by Hartford and described in this Prospectus.
POLICY ANNIVERSARY: An anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
determined.
POLICY OWNER (ALSO "YOU," "YOUR"): The person having rights to benefits under a
Policy during the lifetime of the two Insureds. A Policy Owner may or may not be
one of the Insureds.
POLICY YEAR: An annual period computed from the Policy Date.
PRO RATA BASIS: An allocation method based on the proportion of the Account
Value in the Fixed Account and in each Sub-Account.
SEPARATE ACCOUNT (ALSO "SEPARATE ACCOUNT VL II"): An account established by
Hartford to separate the assets funding the Policies from other assets of
Hartford.
SUB-ACCOUNT: A subdivision of the Separate Account.
TARGET PREMIUM: The amount of level premium required to support a whole life
insurance policy with a net interest rate of 5% and a Face Amount equal to the
initial 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 (generally, 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
<PAGE>
6 HARTFORD LIFE INSURANCE COMPANY
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SUMMARY
THE POLICY
This Prospectus has been designed to provide You with the necessary
information to make a decision on purchasing the last survivor flexible premium
variable life insurance Policy. The Policy is primarily life insurance policies
with death benefits, cash values, and other features traditionally associated
with life insurance. The Policy is called "last survivor" because the Death
Proceeds are paid on the death of the last surviving Insured. The Policy is
called "flexible premium" because, once the desired level and pattern of death
benefits have been determined, a Policy Owner has considerable flexibility in
choosing the timing and amount of premium to be paid. The Policy is 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 Net
Premium(s) has been allocated.
The Policy is funded by a Fixed Account and Separate Account VL II. Separate
Account VL II is presently comprised of 22 Sub-Accounts, each of which invests
exclusively in one of the underlying Funds. If an initial premium is submitted
with an application for a Policy, the Net Premium will be allocated to the HVA
Money Market Sub-Account. At a later date, the values in the HVA Money Market
Sub-Account will be allocated to one or more of the Sub-Accounts or to the Fixed
Account, as specified in the Policy Owner's application. This later date is the
latest of (1) 45 days after the application is signed, (2) ten days after We
mail or personally deliver a Notice of Withdrawal Right, (3) ten days after We
receive the initial premium and (4) the date on which We receive the final
requirement to put the Policy in force. The Policy is credited with Accumulation
Units in each selected Sub-Account, the assets of which are invested in the
applicable Fund. A Policy Owner may transfer the assets among the Sub-Accounts
and the Fixed Account, subject to a transfer charge. See "Detailed Description
of Policy Benefits and Provisions -- Transfers of Account Value," page 11.
POLICY OPTIONS
Available Policy options are structured to give a prospective Policy Owner
and his or her sales agent the ability to select a Policy tailored to the
prospective Policy Owner's specific life insurance needs.
The Policy options fall into three major categories:
1. Death Benefit Options -- The Policy Owner is able to select various
levels and patterns of Death Benefits.
2. Investment Options -- Currently, the Policy Owner has the choice of
allocating the Account Value among a maximum of nine of the Policy's 22
available Sub-Accounts or a maximum of eight of the Policy's 22 Sub-Accounts and
the Fixed Account.
3. Premium Options -- The Policy Owner 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: (1) a level Death
Benefit equal to the Face Amount ("Option A"); (2) the Face Amount plus Return
of Account Value Death Benefit ("Option B"); or (3) the Face Amount plus Return
of Premium Death Benefit ("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 and less any due and unpaid
Monthly Deduction Amount occurring during a grace period. Scheduled and
unscheduled increases in Face Amount may be requested. See "Detailed Description
of Policy Benefits and Provisions -- Death Benefit," page 12.
SEPARATE ACCOUNT VL II
Separate Account VL II is a separate account established by Hartford
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, as
amended (the "1940 Act"). Separate Account VL II meets the definition of
"separate account" under federal securities law. Separate Account VL II
currently is comprised of 22 Sub-Accounts, each of which invests exclusively in
shares of one of the Funds.
Currently, the Funds are Hartford Advisers Fund, Hartford Bond Fund,
Hartford Capital Appreciation Fund, Hartford Dividend and Growth Fund, Hartford
Index Fund, Hartford International Opportunities Fund, Hartford Mortgage
Securities Fund, Hartford Stock Fund, and HVA Money Market Fund; Putnam VT
Diversified Income Fund, Putnam VT Global Asset Allocation Fund, Putnam VT
Global Growth Fund, Putnam VT Growth and Income Fund, Putnam VT High Yield Fund,
Putnam VT Money Market Fund, Putnam VT New Opportunities Fund, Putnam VT U.S.
Government and High Quality Bond Fund, Putnam VT Utilities Growth and Income
Fund and Putnam VT Voyager Fund; and Fidelity VIP Equity-Income Portfolio,
Fidelity VIP Overseas Portfolio and Fidelity VIP II Asset Manager Portfolio.
Prospective purchasers should read the prospectuses for the Funds accompanying
this Prospectus in connection with the purchase of a Policy. For a discussion of
the investment objectives of each of the Funds, see "Separate Account VL II,"
page 17.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 7
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The investment adviser for the Hartford Funds is HL Investment Advisors,
Inc. ("HL Advisors"), a wholly-owned subsidiary of Hartford. HL Advisors retains
Wellington Investment Management, L.L.P. ("Wellington Management") and Hartford
Investment Management Company, Inc. ("HIMCO") as investment sub-advisers with
respect to the Hartford Funds. The Putnam Funds are advised by Putnam Investment
Management, Inc., a subsidiary of Putnam Investments, Inc. The Fidelity VIP
Funds are managed by Fidelity Management & Research Company. For more details,
see "Separate Account VL II -- Investment Adviser," page 20.
FIXED ACCOUNT
Premium payments and Account Values may be allocated to the Fixed Account.
Amounts allocated to the Fixed Account become part of the general assets of
Hartford. Hartford invests the assets of the General Account in accordance with
applicable laws governing the investments of insurance company general accounts.
ACCOUNT VALUE
As with many other types of insurance policies, each Policy will have an
Account Value. The Account Value will increase or decrease to reflect the
interest credited to the Fixed Account and the Loan Account, the 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 Policy Benefits and
Provisions -- Premiums -- Account Values," page 10.
PREMIUM
You have considerable flexibility as to when and in what amounts You pay
premiums.
Prior to Policy issue, You can choose a Planned Premium, within a range
determined by Hartford based on the Face Amount and each Insured's sex (except
where unisex rates apply), Issue Age and risk classification.
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 "Detailed Description of Policy Benefits and Provisions -- Lapse and
Reinstatement," page 14.
The minimum premium subsequent to the initial premium is $50. We reserve the
right to refund any excess premium that would cause a Policy not to meet the tax
qualification guidelines for life insurance under the Code.
There are circumstances (usually if a Policy Owner wants to prefund future
benefits in seven years or less) when a Policy may become a Modified Endowment
Contract under federal tax law. If these circumstances were to occur, loans and
other predeath 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 a
Policy becomes a Modified Endowment Contract. See "Federal Tax Considerations --
Modified Endowment Contracts," page 30, for a discussion of the "seven-pay
test."
DEDUCTIONS FROM THE PREMIUM
Before the premium is allocated 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 (after
such deductions) 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 processing costs with respect to a Policy.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE
We deduct, as a percentage of each premium, a premium tax charge to cover
premium-based taxes assessed against Hartford by a state or other governmental
entity. Such percentage will vary by jurisdiction, depending on the tax rates in
effect when a Policy is issued. The range for such premium taxes generally is
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 paid 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 paid 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%.
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
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Front-end sales loads, which cover expenses relating to the sale and
distribution of the Policies, may be reduced for certain sales of Policies under
circumstances which may result in savings of such sales and distribution
expenses.
DEDUCTIONS AND CHARGES
FROM THE ACCOUNT VALUE
We will subtract amounts from Your Account Value to provide for the Monthly
Deduction Amount. Such deductions will be taken on a Pro Rata Basis from the
Fixed Account and the Sub-Accounts on each Monthly Activity Date.
The Monthly Deduction Amount equals the sum of:
(a) the Cost of Insurance;
(b) the charges for additional benefits provided by rider, if any;
(c) the charges for "special" insurance class rating, if any;
(d) the monthly administrative fee and issue charge;
(e) the mortality and expense risk charge, and
(f) any Face Amount increase fee.
Hartford may also set up a provision for income taxes against the assets of
Separate Account VL II. See "Detailed Description of Policy Benefits and
Provisions -- Deductions and Charges from the Account Value," page 16, and
"Federal Tax Considerations," page 27.
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.
Charges Against the Funds
Separate Account VL II purchases shares of the Funds at net asset value. The
net asset value of Fund shares reflects investment advisory fees and
administrative and other expenses already deducted from the assets of the Funds.
See "Detailed Description of Policy Benefits and Provisions -- Deductions and
Charges From the Account Value -- Charges Against the Funds," page 17.
The following table shows annual Fund operating expenses for the year ended
December 31, 1996:
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
OTHER
MANAGEMENT EXPENSES
FEES (ABSENT ANY TOTAL FUND
(ABSENT ANY EXPENSE OPERATING
FUND NAME FEE WAIVERS) REIMBURSEMENTS) EXPENSES
- --------------------------------------------- ------------ ---------------- -----------
<S> <C> <C> <C>
Hartford Advisers Fund....................... 0.615% 0.017% 0.632%
Hartford Bond Fund........................... 0.490% 0.030% 0.520%
Hartford Capital Appreciation Fund........... 0.629% 0.017% 0.646%
Hartford Dividend and Growth Fund............ 0.709% 0.017% 0.726%
Hartford Index Fund.......................... 0.374% 0.019% 0.393%
Hartford International Opportunities Fund.... 0.691% 0.095% 0.786%
Hartford Mortgage Securities Fund............ 0.424% 0.029% 0.453%
Hartford Stock Fund.......................... 0.441% 0.016% 0.457%
HVA Money Market Fund........................ 0.423% 0.021% 0.444%
Putnam VT Diversified Income Fund............ 0.700% 0.130% 0.830%
Putnam VT Global Asset Allocation Fund....... 0.680% 0.150% 0.830%
Putnam VT Global Growth Fund................. 0.600% 0.160% 0.760%
Putnam VT Growth and Income Fund............. 0.490% 0.050% 0.540%
Putnam VT High Yield Fund.................... 0.680% 0.080% 0.760%
Putnam VT Money Market Fund (1).............. 0.450% 0.100% 0.550%
Putnam VT New Opportunities Fund............. 0.630% 0.090% 0.720%
Putnam VT US Government and High Quality Bond
Fund........................................ 0.620% 0.070% 0.690%
Putnam VT Utilities Growth and Income Fund
(2)......................................... 0.690% 0.090% 0.780%
Putnam VT Voyager Fund....................... 0.570% 0.060% 0.630%
Fidelity VIP Equity-Income Portfolio (3)..... 0.510% 0.070% 0.580%
Fidelity VIP Overseas Portfolio (3).......... 0.760% 0.170% 0.930%
Fidelity VIP II Asset Manager Portfolio
(3)......................................... 0.640% 0.100% 0.740%
</TABLE>
- ------------
(1) Other expenses for Putnam VT Money Market Fund have been restated to reflect
the cost of certain insurance purchased by such Fund. See "Putnam VT Money
Market Fund -- Insurance" in the Fund's prospectus accompanying this
Prospectus. Actual other expenses and total Fund operating expenses were
0.080% and 0.530%, respectively.
(2) On July 11, 1996, shareholders approved an increase in the fees payable to
Putnam Management under the management contract for Putnam VT Utilities
Growth and Income Fund. The management fees and total expenses shown in the
table have been restated to reflect the increase. Actual management fees and
total expenses were 0.640% and 0.730%, respectively.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
(3) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest earned
on uninvested cash balances was used to reduce custodian and transfer agent
expenses. Absent these reductions, the total operating expenses presented in
the table would have been 0.560% for Fidelity VIP Equity-Income Portfolio,
0.920% for Fidelity VIP Overseas Portfolio and 0.730% for Fidelity VIP II
Asset Manager Portfolio.
POLICY LOANS
A Policy Owner may obtain a cash loan from Hartford. The loan is secured by
the Policy. At the time such loan is requested, Indebtedness may not exceed 90%
of the Account Value. See "Detailed Description of Policy Benefits and
Provisions -- Policy Loans," page 12.
SURRENDER
At any time prior to the Maturity Date, You may surrender Your Policy,
provided Your Policy has a Cash Surrender Value. See "Detailed Description of
Policy Benefits and Provisions -- Surrender," page 15.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
Any person purchasing a Policy has a limited right to return such Policy for
cancellation. If a purchaser returns a Policy (a) within ten days after
receiving such Policy, (b) ten days after We mail or personally deliver a Notice
of Withdrawal Right or (c) within 45 days after completion of the application
for the Policy, whichever is latest (subject to applicable state regulation),
Hartford, within seven business days thereafter, will return to such Policy
Owner the greater of (a) the premium paid minus any Indebtedness, or (b) the sum
of (1) the Account Value, minus any Indebtedness, on the date the returned
Policy is received by Hartford or by its agent, and (2) any deductions under
such Policy or by the Funds for taxes, charges or fees.
Additionally, once a Policy is in effect and during the first 24 months
after its Date of Issue, a Policy may be exchanged, without submitting proof of
insurability, for a non-variable last survivor life insurance policy offered by
Us on the life of the Insureds.
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS
GENERAL
This Prospectus describes a last survivor flexible premium variable life
insurance Policy that offers a Policy Owner 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 under Your Policy.
Prior to Policy issue, You can choose a Planned Premium, within a range
determined by Hartford, based on the Face Amount and each Insured's sex (except
where unisex rates apply), Issue Age and risk classification. We will send You
premium notices for Planned Premiums. Such notices may be sent on an annual,
semi-annual or quarterly basis. You may also have premiums automatically
deducted monthly from Your checking account. The Planned Premiums and payment
mode You select are shown on Your Policy's specifications page. You may change
the Planned Premiums, subject to Our minimum amount rules then in effect.
A Policy will not lapse as long as the Cash Surrender Value is sufficient to
cover the Monthly Deduction Amounts or the Death Benefit guarantee is in effect.
For more details, see, "Lapse and Reinstatement," page 14.
ALLOCATION OF PREMIUM PAYMENTS
The initial Net Premium will be allocated to the HVA Money Market
Sub-Account on the later of the Policy Date or the date We receive Your initial
premium payment.
The Account Value in the HVA Money Market Sub-Account will then be allocated
to the Fixed Account and the Sub-Accounts according to the premium allocation
specified in the Your Policy application on the latest of: (1) 45 days after the
Policy application is signed, (2) ten days after We receive the premium payment,
(3) ten days after We mail or personally deliver a Notice of Withdrawal Right to
You, and (4) the date We receive the final requirement to put Your Policy in
force.
Any additional Net Premiums received by Us prior to such date will be
allocated to the HVA Money Market Sub-Account. The minimum premium subsequent to
the initial premium payment is $50.
You may change Your premium allocation upon request In Writing. Portions of
the premium allocated to the Fixed Account and the Sub-Accounts must be whole
percentages of 10% or more of the total premium. Subsequent Net Premiums will be
allocated to the Fixed Account and the Sub-Accounts according to Your most
recent written instructions; provided that, currently, Your Account Value may be
allocated to a maximum of nine Sub-Accounts or eight Sub-Accounts and the Fixed
Account. (Hartford
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
reserves the right to increase the number of allocable investment options to
more than nine in the future.) If We receive a premium payment and Your most
recent premium allocation instructions would violate the foregoing allocation
limitation, We will allocate the Net Premium to the Fixed Account and the
Sub-Accounts on a Pro Rata Basis.
A Policy Owner receives several different types of notifications as to what
his or her current premium allocation is. The initial allocation chosen by a
Policy Owner is shown in his or her Policy. Each transaction confirmation
received after a premium payment is received by Hartford will show how a Net
Premium has been allocated. Additionally, each quarterly statement summarizes
the current premium allocation in effect for such Policy.
ACCUMULATION UNITS
Net Premiums allocated to the Sub-Accounts are used to credit Accumulation
Units to such Sub-Accounts.
The number of Accumulation Units in each Sub-Account to be credited to a
Policy (including the initial allocation to the HVA Money Market Sub-Account)
and the amount to be credited to the Fixed Account will be determined, first, by
multiplying the Net Premium by the appropriate allocation percentage in order to
determine the portion of Net Premiums or transferred Account Value to be
invested in the Fixed Account or the Sub-Account. Each portion of the Net
Premium or transferred Account Value to be invested in a Sub-Account is then
divided by the value of the Accumulation Units in that particular Sub-Account
next computed following receipt of such premium payment. The resulting figure is
the number of Accumulation Units to be credited to each Sub-Account.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by the Net Investment Factor for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividend or capital gain distributions paid by that Fund in the Valuation
Period then ended) divided by 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 at the National Service Center, provided such date is a Valuation Day;
otherwise such determination will be made on the next succeeding date which is a
Valuation Day.
PREMIUM LIMITATION
If premiums are received which would cause a Policy to fail to meet the
definition of a life insurance policy in accordance with the Code, We reserve
the right to refund the excess premium payments and any interest thereon within
60 days after the end of a Policy Year.
A premium payment that results in an increase in the Death Benefit greater
than the amount of the premium will be accepted only after We approve evidence
of insurability.
ACCOUNT VALUES
As with traditional life insurance, each Policy will have an Account Value.
There is no minimum guaranteed Account Value.
The Account Value of a Policy changes on a daily basis and will be computed
on each Valuation Day. The Account Value will vary to reflect the investment
experience of the Sub-Accounts, the interest credited to the Fixed Account and
the Loan Account, and the Monthly Deduction Amounts.
A Policy's Account Value is related to the net asset value of the Funds
associated with the Sub-Accounts, if any, to which Net Premiums on the Policy
have been allocated. The Account Value in the Sub-Accounts on any Valuation Day
is calculated by, first, multiplying the number of Accumulation Units in each
Sub-Account as of the Valuation Day by the then current value of the
Accumulation Units in that Sub-Account and then totaling the result for all of
the Sub-Accounts. A Policy's Account Value equals the Account Value with respect
to the Policy in all of the Sub-Accounts plus the value of the Fixed Account and
the Loan Account. A Policy's Cash Surrender Value, which is the net amount
available upon surrender of the Policy, is the Account Value less any
Indebtedness. See "-- Accumulation Unit Values," above.
AMOUNT PAYABLE ON SURRENDER OF A 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 later of (a) the date
Hartford receives the Policy Owner's request In Writing or (b) the date
requested by the Policy Owner. The Policy will terminate on the later of (a) the
date of receipt by Hartford of the request In Writing and (b) the date the
Policy Owner requests, In Writing, the surrender to be effective.
LOAD REFUND
If a Policy is surrendered during the first two Policy Years, the Policy
Owner may be entitled to payment of a
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
refund in addition to the Cash Surrender Value. The refund will be equal to the
excess, if any, of the sum of the actual front-end sales load charged to date,
divided by the sum of:
1. 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
One partial withdrawal is allowed per month (i.e., between any successive
Monthly Activity Dates). The minimum partial withdrawal allowed is $500. The
maximum partial withdrawal is the Cash Surrender Value, minus $1,000. If the
Death Benefit Option then in effect is Option A or Option C (see "-- Death
Benefit -- Death Benefit Options," page 12), the Face Amount is reduced by the
amount of any partial withdrawal. The minimum Face Amount required after a
partial withdrawal is subject to Our rules then in effect. Unless specified
otherwise, the partial withdrawal will be deducted on a Pro Rata Basis from the
Fixed Account and the Sub-Accounts. Currently, Hartford does not impose a
partial withdrawal charge. However, Hartford reserves the right to impose in the
future a partial withdrawal charge of up to $50.
TRANSFERS OF ACCOUNT VALUE
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as Your Policy is in effect, You may transfer
amounts among the Fixed Account and the Sub-Accounts. Transfers may be made by
request In Writing or by calling Our National Service Center at 1-800-231-5453.
Transfers by telephone may be made by the agent of record or by the
attorney-in-fact pursuant to a power of attorney. Telephone transfers may not be
permitted in some states. The policy of Hartford and its agents and affiliates
is that they will not be responsible for losses resulting from acting upon
telephone requests reasonably believed to be genuine. We will employ reasonable
procedures to confirm that instructions communicated by telephone are genuine;
otherwise, We may be liable for any losses due to unauthorized or fraudulent
instructions. The procedures We follow for transactions initiated by telephone
include requiring callers to provide certain identifying information for
themselves (if such callers are not Policy Owners) and the Policy Owner. All
transfer instructions communicated to Us 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 is no charge for the first transfer in any calendar month.
Each subsequent transfer is subject to a transfer charge of up to $25.
We reserve the right to limit at a future date the size of transfers and
remaining balances and to limit the number and frequency of transfers of Account
Value.
TRANSFERS OF ACCOUNT VALUE TO OR FROM SUB-ACCOUNTS
In the event of a transfer of Account Value from a Sub-Account, the number
of Accumulation Units credited to such will be reduced. The reduction will be
determined by dividing (1) the amount transferred; by (2) the value of the
Accumulation Units in that Sub-Account determined as of the next Valuation Day
after We receive Your transfer request 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. Such increase will equal the
result of dividing (1) the amount transferred, by (2) value of the Accumulation
Units in the 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 set forth above, transfers from the Fixed
Account are subject to the following:
(a) the transfer must occur during the 30-day period following each Policy
Anniversary; and;
(b) if Your accumulated value in the Fixed Account exceeds $1,000, the amount
transferred from the Fixed Account in any Policy Year may not exceed 25% of
the accumulated value in the Fixed Account on the transfer date.
DOLLAR COST AVERAGING OPTION
You may elect to allocate Your Net Premiums among the Sub-Accounts and the
Fixed Account pursuant to the dollar cost averaging (DCA) option. If You choose
the DCA option, Your Net Premiums will be deposited into the HVA Money Market
Sub-Account. Amounts will be withdrawn monthly from the HVA Money Market
Sub-Account and will be allocated to the other investment options, in accordance
with Your premium allocation instructions. The transfer date will be the monthly
anniversary of the first transfer under Your initial DCA election. The first
transfer will commence within five business days after Hartford receives Your
initial election, made either In Writing or by telephone, subject to the
telephone transfer procedures described above. The dollar amount will be
allocated to the investment options that You specify, in the proportions that
You specify. If, on any transfer date, Your Cash Value allocated to the HVA
Money Market Account is less than the amount You have elected to transfer, Your
DCA program will terminate.
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
You may cancel Your DCA election by notice In Writing to Hartford or by
calling Our National Service Center at 1-800-231-5453.
The main objective of a DCA program is to minimize the impact of short-term
price fluctuations. The DCA program allows Policy Owners to take advantage of
market fluctuations. Since the same dollar amount is transferred to other
investment options at set intervals, the DCA program allows You to purchase more
Accumulation Units when prices are low and fewer Accumulation Units when prices
are high. Therefore, a lower average cost per Accumulation Unit may be achieved
over the long term. However, it is important to understand that the DCA program
does not assure a profit or protect against loss in a declining market. Policy
Owners who choose the DCA option should have the financial ability to continue
making investments through periods of low price levels.
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. 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
A Loan Account, other than a Loan Account established pursuant to a
Preferred Loan as described in the subsection entitled "Policy Loans --
Preferred Loan," will be credited with interest in the following manner: During
the first ten Policy Years, any amounts in the Loan Accounts will be credited
with interest at the rate of 2% (in most states). For Policy Years 11 and
beyond, a Loan Account will be credited with interest at the rate of 3% (in most
states).
PREFERRED LOAN
If, at any time after the tenth Policy Anniversary, the Account Value
exceeds the total of all premiums paid since issue, a Preferred Loan is
available. The amount available for a Preferred Loan is the amount by which the
Account Value exceeds total premiums paid. The amount of the Loan Account which
equals a Preferred Loan will be credited with interest at a rate equal to 4% (in
most states). The amount of Indebtedness that qualifies as a Preferred Loan is
determined on each Monthly Activity Date.
LOAN REPAYMENTS
You can repay any part of or the entire Indebtedness at any time while Your
Policy is in force and either of the Insureds is alive. The amount of the Policy
loan repayment will be deducted from the Loan Account and will be allocated
among the Fixed Account and the Sub-Accounts in the same percentage as premiums
are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds Account Value, Your Policy will
terminate 61 days after We have mailed notice to Your last known address and to
the last known address of any assignees of record. If sufficient loan repayment
is not made by the end of such 61 day period, Your Policy will terminate without
value.
EFFECT OF LOANS ON ACCOUNT VALUE
A Policy loan, whether or not repaid, will have a permanent effect on Your
Account Value because the investment results of each Sub-Account will apply only
to the amount remaining in such Sub-Accounts. In addition, the rate of interest
credited to the Fixed Account will usually be different than the rate credited
to the Loan Account. The longer a Policy loan is outstanding, the greater the
effect on Your Account Value likely to be. Such effect could be favorable or
unfavorable. If the Fixed Account and the Sub-Accounts earn more than the annual
interest rate for funds held in the Loan Account, a Policy Owner's Account Value
will not increase as rapidly as it would have had no Policy loan been made. If
the Fixed Account and the Sub-Accounts earn less than the Loan Account, the
Policy Owner's Account Value will be greater than it would have been had no
Policy loan been made. Additionally, if not repaid, the aggregate amount of the
outstanding Indebtedness will reduce the Death Proceeds and the Cash Surrender
Value otherwise payable.
DEATH BENEFIT
Each Policy provides for the payment of the Death Proceeds to the named
beneficiary upon the death of the last surviving Insured. The Death Proceeds
payable to the beneficiary equal the Death Benefit less any Indebtedness and
less any due and unpaid Monthly Deduction Amount occurring during a grace
period. The Death Benefit depends on the Death Benefit Option You select, the
minimum Death Benefit provision, and whether or not the Death Benefit guarantee
is in effect.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
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 Benefit under each option is as
follows:
1. Under Option A, the Face Amount.
2. Under Option B, the Face Amount plus the Account Value.
3. Under Option C, the Face Amount plus the sum of the premiums paid.
OPTION CHANGE
You may change Your Death Benefit Option to Option A or Option B without
evidence of insurability. If a change to Option A is elected, the Face Amount
will become that amount available as a Death Benefit immediately prior to the
option change. If a change to Option B is elected, the Face Amount will become
that amount available as a Death Benefit immediately prior to the option change,
reduced by the then-current Account Value. Changing Your Death Benefit Option
does not result in any fees or charges against Your Policy. However, you should
consult a competent tax adviser regarding the possible adverse tax consequences
resulting from a change in Your Death Benefit Option.
DEATH BENEFIT GUARANTEE
The Death Benefit guarantee is a Policy feature that is attached to every
Policy at issue. If the premiums paid during Policy Year 1 are less than the
Annual Death Benefit Guarantee Premium shown in the Policy, then the Death
Benefit guarantee will be removed the Policy.
After Policy Year 1 and through Policy Year 5, the Death Benefit guarantee
will be in effect as long as the cumulative premiums paid into the Policy, less
any withdrawals from the Policy, equal or exceed the Cumulative Death Benefit
Guarantee Premium. The Death Benefit guarantee period will expire at the end of
Policy Year 5.
If the Death Benefit guarantee is in effect, payment of the Face Amount upon
the death of the last surviving Insured will be guaranteed regardless of a
Policy's investment performance. The Death Benefit guarantee is in effect if:
(a) the Death Benefit guarantee period has not expired; and
(b) on each Monthly Activity Date, the cumulative premiums paid into a Policy,
less withdrawals from such Policy, equal or exceed the Cumulative Death
Benefit Guarantee Premium.
MINIMUM DEATH BENEFIT
Notwithstanding the above, Your Policy has a minimum Death Benefit equal to
the Account Value multiplied by a percentage specified in Your Policy. This
percentage varies according to the Policy Year and each Insured's Issue Age, sex
(where unisex rates are not used) and insurance class, but may be increased by
You in Your Policy application.
EXAMPLES OF MINIMUM DEATH BENEFIT:
<TABLE>
<CAPTION>
A B
---------- ----------
<S> <C> <C>
Face Amount............................ $ 100,000 $ 100,000
Account Value on Date of Death......... 46,500 34,000
Specified Percentage................... 250% 250%
Death Benefit Option................... Level Level
</TABLE>
In Example A, the minimum Death Benefit equals $116,250, i.e., the greater
of $100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified percentage of 250%). This amount,
less any outstanding Indebtedness, constitutes the Death Proceeds payable to the
beneficiary.
In Example B, the minimum Death Benefit is $100,000, i.e., the greater of
$100,000 (the Face Amount) or $85,000 (the Account Value of $34,000, multiplied
by the specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
"Payment Option." See "Other Matters -- Payment Options," page 22.
UNSCHEDULED INCREASES AND DECREASES IN FACE AMOUNT
At any time after the first Policy Year, You may request In Writing a change
in the Face Amount.
The minimum amount by which the Face Amount can be increased or decreased is
based on Our rules then in effect.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by Your Policy. All requests will be subject to
evidence of insurability satisfactory to Us. Any increase approved by Us will be
effective on the date shown on the new Policy specifications page, provided that
the deduction for the Cost of Insurance for the first month is made.
Each unscheduled increase in Face Amount is subject to an increase fee of
$.05 per $1,000 of each increase per month for the first five Policy Years from
the effective date of each increase.
An unscheduled decrease in the Face Amount will be effective on the Monthly
Activity Date following the date We receive the request In Writing. The
remaining Face Amount must not be less than that specified in Our minimum rules
then in effect.
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
We reserve the right to limit the number of increases or decreases made
under a Policy to no more than one in any 12 month period.
BENEFITS AT MATURITY
If either Insured is living on the Maturity Date, on surrender of Your
Policy to Hartford, Hartford will pay to You the Cash Surrender Value. On the
Maturity Date, Your Policy will terminate and Hartford will have no further
obligations under such Policy.
LAPSE AND REINSTATEMENT
POLICY LAPSE AND GRACE PERIOD
A Policy will be in default on any Monthly Activity Date on which its Cash
Surrender Value is not sufficient to cover the Monthly Deduction Amount. A
61-day period, called the "grace period," will begin from the date of default.
Hartford will mail the Policy Owner and any assignee written notice of the
amount of premium that will be required to continue the defaulting Policy in
force at least 30 days before the end of the grace period. The premiums required
will be no greater than the amount required to pay three Monthly Deduction
Amounts as of the day the grace period began. Unless the Death Benefit Guarantee
is in effect, such Policy will terminate without value if the required premium
is not paid by 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 Face Amount and any riders will no
longer be in force. If the last surviving Insured dies during the grace period,
We will pay the Death Proceeds.
DEATH BENEFIT GUARANTEE DEFAULT AND GRACE PERIOD
If the cumulative premiums, less withdrawals, are not sufficient to maintain
the Death Benefit guarantee in effect, the lapse and grace period provisions for
the Death Benefit guarantee will apply as follows:
On every Monthly Activity Date during the Death Benefit guarantee period, We
will compare the cumulative premiums received, less withdrawals, to the
Cumulative Death Benefit Guarantee Premium for the Death Benefit guarantee
period in effect.
If the cumulative premiums received, less withdrawals, are less than the
Cumulative Death Benefit Guarantee Premium, the Death Benefit guarantee will be
deemed to be in default as of that Monthly Activity Date. A grace period of 61
days from the date of default will begin. We will mail to You and any assignee
written notice of the amount of premium required to continue the Death Benefit
guarantee.
At the end of the grace period under a five 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.
REINSTATEMENT
Unless the Policy has been surrendered, the Policy may be reinstated prior
to the Maturity Date, provided:
(a) the Insureds alive at the end of the grace period are also alive on the date
of reinstatement;
(b) You make Your request In Writing within five years from the date the Policy
lapsed;
(c) You submit to Us satisfactory evidence of insurability;
(d) any Policy Indebtedness is repaid or carried over to the reinstated Policy;
and
(e) You pay sufficient premium to (1) cover all Monthly Deduction Amounts that
are due and unpaid during the Grace Period and (2) keep Your Policy in force
for three months after the date of reinstatement.
The Account Value on the reinstatement date will reflect:
(a) the Account Value at the time of termination; plus
(b) Net Premiums derived from premiums paid at the time of reinstatement.
THE RIGHT TO EXAMINE OR EXCHANGE A POLICY
A Policy Owner has a limited right to return a Policy for cancellation. If a
Policy is returned, by mail or personal delivery to Hartford or to the agent who
sold such Policy, (a) to be canceled within ten calendar days after receipt of
the Policy by the Policy Owner, (b) within ten days of Hartford's mailing or
personal delivery of a Notice of Right to Withdraw, or (c) within 45 days of
completion of the Policy application (whichever is later, and subject to
applicable state regulation), Hartford will return to such Policy Owner, 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 or its agent and (2) any deductions
under such Policy or by the Funds for taxes, charges or fees.
Once a Policy is in effect, it may be exchanged during the first 24 months
after its issuance for a non-variable last survivor life insurance policy
offered by Us or an affiliate on the life of the Insureds. No evidence of
insurability will be required. The new policy will have an amount at risk which
equals or is less than the amount at risk in effect on the date of exchange.
Premiums under the new policy will be based on the same risk classifications as
the Policy for which the policy was exchanged. An exchange of a Policy under
these circumstances should be a tax-free transaction under Section 1035 of the
Code.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
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SURRENDER
At any time prior to the Maturity Date, provided Your Policy has a Cash
Surrender Value, You may surrender Your 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 for surrender.
VALUATION OF PAYMENTS AND TRANSFERS
We value the Policy on every Valuation Day.
We will pay Death Proceeds, Cash Surrender Values, Partial Withdrawals, and
loan amounts allocable to the Sub-Accounts within seven days after We receive
all the information needed to process the payment, unless the New York Stock
Exchange is closed for other than a regular holiday or weekend, trading is
restricted by the Commission or the Commission declares that an emergency
exists.
Hartford may defer payment of any amounts not allocable to the Sub-Accounts
for up to six months from the date on which We receive the request In Writing.
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford. Within limits, an applicant may choose the initial Face Amount.
Policies generally will be issued only on the lives of Insureds between the ages
of 20 and 80 who supply evidence of insurability satisfactory to Hartford.
(Hartford may extend the age 80 limit to higher ages for the older Insured, in
which case certain age and risk classification restrictions on the younger
Insured will apply.) Acceptance is subject to Hartford's underwriting rules and
Hartford reserves the right to reject 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.
A Policy will be effective on the Policy Date only after Hartford has
received all outstanding delivery requirements and the initial premium payment.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date and Policy Years.
REDUCED CHARGES FOR ELIGIBLE GROUPS
Certain of the charges and deductions described below may be reduced for
Policies issued in connection with a specific plan, in accordance with Our rules
in effect as of the date the application for a Policy is approved. To qualify
for such a reduction, a plan must satisfy certain criteria, e.g., as to 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 of the
plan's members. The amount of reduction and the criteria for qualification will
be reflected in the reduced sales effort and administrative costs resulting
from, and the different mortality experience expected as a result of, sales to
qualifying plans. We may modify, from time to time on a uniform basis, 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 invested in Separate Account VL II.
DEDUCTIONS FROM THE PREMIUM
Before the allocation of the premium to the Account Value, a deduction as a
percentage of premium is made for the premium processing charge, 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 a percentage of each premium as a premium tax charge to cover
premium-based taxes assessed against Us by a state or other governmental entity.
This percentage will vary by locale, depending on the tax rates in effect when
the Policy is issued. The range of such charge generally is between 0% and 4%.
We also deduct as a percentage of each premium a 1.25% charge to cover the
estimated costs to Us of the federal income tax treatment of the Policies'
deferred acquisition costs under Section 848 of the Code. We have determined
that this charge is reasonable in relation to Our increased federal income tax
burden resulting from the receipt of premiums.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium based on the
amount of premium paid in relation to the Target Premium and the Policy Year in
which the premium is paid. For a definition of "Target Premium," see "Special
Terms," page 4.
Both the current and maximum front-end sales loads for premiums paid up to
the Target Premium is 50% in the first Policy Year, 15% in Policy Years 2
through 5, 10% in Policy Years 6 through 10, and 2% in Policy Years 11 through
20. Thereafter, the current front-end sales load is 0%, with a maximum of 2%.
Both the current and maximum front-end sales loads for premiums paid in
excess of the Target Premium is 9% in
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Policy Year 1, 4% in Policy Years 2 through 10 and 2% in Policy Years 11 through
20. Thereafter, the current front-end sales load is 0%, with a maximum of 2%.
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.
EXAMPLE OF FRONT-END SALES LOADS/IMPACT OF REFUND OF LOAD
An example of the actual front-end sales loads and the impact of the load
refund, if any (see "Detailed Description of Policy Benefits and Provisions --
Premiums -- Load Refund," page 10), 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 31 of this Prospectus.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $1,000,000
Issue Ages/Sex/Class: 65/Male/Preferred
65/Female/Preferred
Guideline Annual Premium: $36,042
Annual Planned Premium: $27,000
</TABLE>
IMPACT OF FRONT-END SALES LOAD/REFUND OF LOADS
<TABLE>
<CAPTION>
CUMULATIVE CUMULATIVE CUMULATIVE AMOUNT OF
POLICY PREMIUM FRONT-END NON-REFUNDABLE REFUND UPON
YEAR PAID SALES LOAD SALES LOAD SURRENDER
- --------- ------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
1 $ 27,000.00 $ 12,771.00 $ 8,098.96 $ 4,672.04
2 54,000.00 16,602.30 12,548.31 4,053.99
</TABLE>
DEDUCTIONS AND CHARGES FROM
THE ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS
On the Policy Date and on each subsequent Monthly Activity Date, Hartford
will deduct the Monthly Deduction Amount from the Account Value to cover certain
charges and expenses incurred in connection with a Policy. Each Monthly
Deduction Amount will be deducted on a Pro Rata Basis from the Fixed Account and
each of the Sub-Accounts. The Monthly Deduction Amount will vary from month to
month.
The Monthly Deduction Amount equals the sum of:
(a) the charge for the Cost of Insurance;
(b) the charges for additional benefits provided by rider, if any;
(c) the charges for "special" insurance class rating, if any;
(d) the monthly administrative fee and issue charge;
(e) the mortality and expense risk charge; and
(f) any Face Amount increase fee.
(A) Cost of Insurance Charge
The charge for the Cost of Insurance is equal to:
(i) 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 covers Hartford's anticipated mortality costs. For
standard risks, the Cost of Insurance rate will not exceed those based on
the 1980 Commissioners' Standard Ordinary Mortality Smoker or Nonsmoker
Table, age last birthday. A table of guaranteed Cost of Insurance rates per
$1,000 will be included in each Policy; however, Hartford reserves the right
to use rates less than those shown in the table. Substandard risks will be
charged a higher Cost of Insurance rate that will not exceed rates based on
a multiple of the 1980 Commissioners' Standard Ordinary Mortality Smoker or
Nonsmoker Table, age last birthday. The multiple will be based on the
Insureds' risk classes. Hartford will determine the Cost of Insurance rate
at the start of each Policy Year. Any changes in the Cost of Insurance rate
will be made uniformly for all Insureds of the same issue ages, sexes and
risk classes and whose coverage has been in force for the same length of
time. No change in insurance class or cost will occur on account of
deterioration of the Insureds' health.
Because a Policy Owner's Account Value and Death Benefit may vary from
month to month, the Cost of Insurance may also vary on each Monthly Activity
Date.
(B) Rider Charge
If a Policy includes riders, a charge applicable to the riders is made
from the Account Value on each Monthly Activity Date.
The charge applicable to these riders is to compensate Hartford for the
anticipated cost of providing these benefits and is specified on the
applicable rider.
For a description of the riders available, see "Supplemental Benefits,"
page 23.
(C) Special Insurance Class Charge
A charge for a special insurance class rating of an Insured may be made
against the Account Value, if applicable. This charge is to compensate
Hartford for the additional mortality risk associated with individuals in
these classes.
(D) Monthly Administrative Fee and Issue Charge
Hartford will assess a current monthly administrative fee to compensate
Hartford for administrative costs in connection with the Policies. The
current monthly administrative fee is the sum of $7.50 per month, plus $0.01
per month per $1,000 of Face Amount at issue, paid in Policy Years 1 through
10. The charge for all Policy Years is guaranteed never to exceed the sum of
$10.00 per month, plus $0.03 per month per $1,000 of Face Amount at issue.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 17
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Additionally, in the first five Policy Years, We assess a monthly issue
charge to compensate Hartford for the up-front costs to underwrite and
issue a Policy. The issue charge is the sum of $20.00 per month for the
first five Policy Years plus $.05 per $1,000 of Face Amount at Issue Date
or unscheduled Face Amount increase per month for the first five Policy
Years from the Issue Date or the date of increase.
The sum of the premium processing charges, the monthly administrative fee
and the issue charge will not exceed the cost Hartford incurs in providing
administrative services under the Policies.
(E) Mortality and Expense Risk Charge
A current charge is made for mortality and expense risks assumed by
Hartford. This charge is allocated to the General Account. Hartford may
profit from this charge. See also "Detailed Description of Policy Benefits
and Provisions -- Premiums -- Account Values," page 10.
The current mortality and expense risk charge for any Monthly Activity
Date is equal to:
(i) the current mortality and expense risk rate; multiplied by
(ii) the portion of the Account Value allocated to the Sub-Accounts on the
Monthly Activity Date prior to assessing the Monthly Deduction Amount.
The current and guaranteed mortality and expense risk rate for the first
ten Policy Years is 0.80%. For Policy Years 11 through 20, the current rate
is 0.50%. Thereafter, the current rate is 0.25%. After the tenth Policy
Year, the maximum rate is 0.50%.
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 a Policy.
Hartford 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 performance of each Fund reflects the management fee that the
Fund pays to its investment manager as well as other operating expenses that the
Fund incurs. Investment management fees are generally daily fees computed as a
percentage of a Fund's average daily net assets as an annual rate. Please read
the prospectus for each Fund for complete details.
TAXES
Currently, no charge is made to the Separate Account for federal, state and
local taxes that may be allocable to the Separate Account. A change in the
applicable federal, state or local tax laws which impose tax on Hartford and/or
the Separate Account may result in a charge against the Policy in the future.
Charges for other taxes, if any, allocable to the Separate Account may also be
made.
HARTFORD
Hartford Life Insurance Company ("Hartford") 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. Hartford was originally incorporated under the laws of Massachusetts
on June 5, 1902, and was subsequently redomiciled to Connecticut. Its offices
are located in Simsbury, Connecticut; however, its mailing address is P.O. Box
2999, Hartford, CT 06104-2999. Hartford is a subsidiary of Hartford Fire
Insurance Company, one of the largest multiple lines insurance carriers in the
United States. Hartford is ultimately owned by The Hartford Financial Services
Group, Inc., a Delaware corporation.
Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis
of its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's and AA+ by Duff and Phelps, on the basis of its claims paying
ability. These ratings do not apply to the investment performance of the
Sub-Accounts. The ratings apply to Hartford's ability to meet its insurance
obligations, including those described in this Prospectus.
SEPARATE ACCOUNT VL II
GENERAL
Separate Account VL II is a separate account of Hartford 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 Commission under
the 1940 Act. The Separate Account meets the definition of "separate account"
under federal securities law. Under Connecticut law, the assets of the Separate
Account are held exclusively for the benefit of Policy Owners and persons
entitled to payments under the Policies. The assets of the Separate Account are
not chargeable with liabilities arising out of any other business which Hartford
may conduct.
FUNDS
The assets of each Sub-Account are invested exclusively in one of the Funds.
Each Hartford Fund is organized as a
<PAGE>
18 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
corporation under the laws of the State of Maryland and is a diversified
open-end management investment company registered under the 1940 Act. The Putnam
Funds are portfolios of Putnam Variable Trust (formerly, Putnam Capital Manager
Trust), a Massachusetts business trust organized on September 24, 1987 as an
open-end, series investment company with multiple portfolios or funds registered
under the 1940 Act. The Fidelity VIP Funds are portfolios of VIP and VIP-II, two
diversified open-end management investment companies, each organized as a
Massachusetts business trust with multiple portfolios. The VIP Equity-Income
Portfolio and VIP Overseas Portfolio are portfolios of the Variable Insurance
Products Fund, organized on November 13, 1981. The VIP II Asset Manager
Portfolio is a portfolio of the Variable Insurance Products Fund II, organized
on March 21, 1988. Registration under the 1940 Act does not involve supervision
of the Funds' 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 or its affiliates, which separate accounts fund
similar annuity or life insurance products. 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 the Funds accompanying this Prospectus for more detailed information.
HARTFORD FUNDS
HARTFORD ADVISERS FUND, INC.
Seeks 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.
HARTFORD BOND FUND, INC.
Seeks maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities. Up to 20% of the total assets of
this Fund may be invested in debt securities rated in the highest category below
investment grade ("Ba" by Moody's Investor Services, Inc. or "BB" by Standard &
Poor's*) or, if unrated, are determined to be of comparable quality by the
Fund's investment adviser. Securities rated below investment grade are commonly
referred to as "high yield-high risk securities" or "junk bonds." For more
information concerning the risks associated with investing in such securities,
please refer to the section entitled "Hartford Bond Fund, Inc.-- Investment
Policies" in the prospectus for the Hartford Funds accompanying this Prospectus.
HARTFORD CAPITAL APPRECIATION FUND, INC.
Seeks growth of capital by investing in securities selected solely on the
basis of potential for capital appreciation; income, if any, is an incidental
consideration.
HARTFORD DIVIDEND AND GROWTH FUND, INC.
Seeks a high level of current income consistent with growth of capital and
reasonable investment risk.
HARTFORD INDEX FUND, INC.
Seeks 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.*
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
Seeks long-term total rate of return consistent with prudent investment risk
through investment primarily in equity securities issued by non-U.S. companies.
HARTFORD MORTGAGE SECURITIES FUND, INC.
Seeks maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related securities,
including securities issued by the Government National Mortgage Association.
HARTFORD STOCK FUND, INC.
Seeks long-term capital growth primarily through capital appreciation, with
income a secondary consideration, by investing primarily in equity securities.
HVA MONEY MARKET FUND, INC.
Seeks maximum current income consistent with liquidity and preservation of
capital.
PUTNAM FUNDS
PUTNAM VT DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing
in the following three sections of the fixed income securities markets: a U.S.
Government Sector, a High Yield Sector (which invests primarily in securities
commonly known as "junk bonds"), and an International Sector. See the special
considerations for investments in high-yield securities described in the Fund
prospectus.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities and international fixed income securities.
* "STANDARD & POOR'S-REGISTERED TRADEMARK-," "S&P-REGISTERED TRADEMARK-," "S&P
500-REGISTERED TRADEMARK-," "STANDARD & POOR'S 500," AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD
LIFE INSURANCE COMPANY. THE HARTFORD INDEX FUND, INC. ("INDEX FUND") IS NOT
SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND STANDARD &
POOR'S MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING IN THE
INDEX FUND.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
PUTNAM VT GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified portfolio of
common stocks.
PUTNAM VT GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common
stocks that offer potential for capital growth, current income, or both.
PUTNAM VT HIGH YIELD FUND
Seeks high current income and, when consistent with this objective, a
secondary objective of capital growth, by investing primarily in high-yielding,
lower-rated fixed income securities, constituting a portfolio which Putnam
Management believes does not involve undue risk to income or principal. See the
special considerations for investments in high-yield securities described in the
Fund prospectus.
PUTNAM VT MONEY MARKET FUND
Seeks as high a rate of current income as Putnam Management believes is
consistent with preservation of capital and maintenance of liquidity by
investing in high-quality money market instruments.
PUTNAM VT NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Management believes
possess above-average long-term growth potential.
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by investing
primarily in U.S. Government securities and in other debt obligations rated at
least A by a nationally recognized securities rating agency such as Standard &
Poor's or Moody's Investor Services, Inc. or, if not rated, determined by Putnam
Management to be of comparable quality.
PUTNAM VT UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments in
debt and equity securities issued by companies in the public utilities
industries.
PUTNAM VT VOYAGER FUND
Seeks capital appreciation by investing primarily in common stocks of
companies that Putnam Management believes have potential for capital
appreciation that is significantly greater than that of market averages.
FIDELITY VIP FUNDS
FIDELITY VIP EQUITY-INCOME PORTFOLIO
Seeks reasonable income by investing primarily in income-producing equity
securities. In choosing these securities, the Portfolio 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.
In addition, the Portfolio may invest in high-yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
FIDELITY VIP OVERSEAS PORTFOLIO
Seeks long-term growth of capital primarily through investments in foreign
securities and provides a means for aggressive investors to diversify their own
portfolios by participating in companies and economies outside of the United
States.
In addition, the Portfolio may invest in high-yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
FIDELITY VIP II ASSET MANAGER PORTFOLIO
Seeks high total return with reduced risk over the long-term by allocating
its assets among stocks, bonds and short-term fixed-income instruments.
In addition, the Portfolio may invest in high-yield, lower-rated securities
(commonly referred to as "junk bonds") which are subject to greater risk than
investments in higher-rated securities. For a further discussion of lower-rated
securities, see "Risks of Lower-Rated Debt Securities" in the Fidelity
prospectus for this Portfolio.
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 1940 Act. The Putnam Funds are portfolios of the Putnam Variable
Trust, which is organized as a business trust under the laws of Massachusetts
and is an open-end series investment company under the 1940 Act. The Fidelity
VIP Funds are a series of two diversified open-end management investment
companies, each with multiple portfolios and organized as a Massachusetts
business trust. The VIP Equity-Income Portfolio and VIP Overseas Portfolio are
portfolios of the Variable Insurance Products Fund. The VIP II 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 such Fund. Such shares are offered to separate
accounts, including Separate Account VL II, established by Hartford or one of
its affiliated companies specifically to fund the Policies and
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
other policies issued by Hartford or its affiliates, as permitted by the 1940
Act.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Hartford nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or to variable annuity Policy Owners, the Board of Directors for
the Hartford Funds, the Board of Trustees for the Putnam Funds and the Board of
Trustees for the Fidelity VIP Funds (collectively, the "Boards") intend to
monitor events in order to identify any material conflicts between the 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 annuity and variable life insurance separate accounts,
Hartford will bear the attendant expenses.
All investment income of and other distributions to each Sub-Account arising
from the applicable Fund are reinvested in shares of that Fund at net asset
value. The income and realized gains and/or losses on the assets of each
Sub-Account are therefore separate and are credited to or charged against the
Sub-Account without regard to income, gains or losses from any other Sub-Account
or from any other business of Hartford. Hartford 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 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's management, further investment in shares of any Fund should become
inappropriate in view of the purposes of the Policies, Hartford may substitute
shares of another Fund for shares already purchased, or to be purchased in the
future, under the Policies. No substitution of securities will take place
without notice to and consent of Policy Owners and without prior approval of the
Commission to the extent required by the 1940 Act. Subject to Policy Owner
approval, if required, Hartford also reserves the right to end the registration
under the 1940 Act of Separate Account VL II or any other separate accounts of
which it is the depositor and which may fund the Policies.
Each Fund is subject to certain investment restrictions which may not be
changed without the approval of a majority of the shareholders of the Fund. See
the prospectus for each of the Funds accompanying this Prospectus.
INVESTMENT ADVISER
HARTFORD FUNDS
The investment adviser for the Hartford Funds is HL Investment Advisors,
Inc. ("HL Advisors"), Hartford Plaza, Hartford, CT 06115. HL Advisors provides
investment advice pursuant to an Investment Advisory Agreement entered into with
each of the Hartford Funds and, in general, supervises the management and
investment program of the Hartford Funds, for which HL Advisors receives a fee.
Hartford Investment Management Company, Inc. ("HIMCO"), an affiliate of
Hartford organized under Connecticut law, is the investment sub-adviser to
Hartford Bond Fund, Hartford Index Fund, Hartford Mortgage Securities Fund and
HVA Money Market Fund.
Wellington Investment Management, L.L.P. ("Wellington Management") serves as
the investment sub-adviser to Hartford Advisers Fund, Hartford Capital
Appreciation Fund, Hartford Dividend and Growth Fund, Hartford International
Opportunities Fund and Hartford Stock Fund. 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 prospectus
for the Hartford Funds accompanying this Prospectus for a more complete
description of HL Advisors, HIMCO and Wellington Management and their respective
fees.
PUTNAM FUNDS
Putnam Management, One Post Office Square, Boston, MA 02109, serves as the
investment manager for the Putnam Funds. An affiliate, Putnam Advisory Company,
Inc., manages domestic and foreign institutional accounts and mutual funds.
Another affiliate, Putnam Fiduciary Trust Company, provides investment advice to
institutional clients under its banking and fiduciary policies. Putnam
Management and its affiliates are wholly-owned subsidiaries of Marsh & McLennan
Companies, Inc., a publicly owned holding company whose principal businesses are
international insurance brokerage and employee benefit consulting.
FIDELITY VIP FUNDS
The Fidelity VIP Funds are managed by Fidelity Management & Research Company
("Fidelity Management"), whose principal business address is 82 Devonshire
Street, Boston, Massachusetts 02109. Fidelity Management is one of America's
largest investment management organizations. It is composed of a number of
different companies,
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
which provide a variety of financial services and products. Fidelity Management,
founded in 1946, is the original Fidelity company. It provides investment
research and portfolio management services to a number of mutual funds and other
clients. Various Fidelity companies perform certain activities required to
operate VIP and VIP II.
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT") AND THE FIXED ACCOUNT
IS NOT REGISTERED AS AN INVESTMENT COMPANY UNDER THE 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. Hartford invests the assets of the
General Account in accordance with applicable law governing the investments of
insurance company general accounts.
The Fixed Account minimum credited rate is shown in the Contract. Currently,
Hartford guarantees that it will credit interest at a rate of not less than 4%
per year, compounded annually, to amounts allocated to the Fixed Account under
the Policies. Hartford may credit interest at a rate in excess of the Fixed
Account minimum credited rate; however, Hartford is not obligated to credit any
interest in excess of the Fixed Account minimum credited rate. There is no
specific formula for the determination of excess interest credits. Some of the
factors that Hartford may consider in determining whether to credit excess
interest to amounts allocated to the Fixed Account and the amount thereof, are
general economic trends, rates of return currently available and anticipated on
Hartford's investments, regulatory and tax requirements and competitive factors.
ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF THE
FIXED ACCOUNT MINIMUM CREDITED RATE WILL BE DETERMINED IN THE SOLE DISCRETION OF
HARTFORD. THE POLICY OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO FIXED
ACCOUNT ALLOCATIONS MAY NOT EXCEED THE FIXED ACCOUNT MINIMUM CREDITED RATE.
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford will vote
the shares of the Funds at regular and special meetings of the shareholders of
the Funds in accordance with instructions from Policy Owners (or the assignee of
a Policy, as the case may be) having a voting interest in Separate Account VL
II. The number of shares held in the Separate Account which are allocable to
each Policy Owner is determined by dividing the Policy Owner's interest in each
Sub-Account by the net asset value of the applicable shares of the Funds.
Hartford will vote shares for which no instructions have been given and shares
which are not allocable to Policy Owners (i.e., shares owned by Hartford) in the
same proportion as it votes shares for which it has received instructions.
However, if the 1940 Act or any rule promulgated thereunder should be amended or
if Hartford's present interpretation of the law should change and, as a result,
Hartford determines it is permitted to vote the shares of the Funds in its own
right, it may elect to do so.
The voting interests of a Policy Owner (or the assignee) in the Funds will
be determined as follows: A Policy Owner may cast one vote for each full or
fractional Accumulation Unit owned under a Policy and allocated to a
Sub-Account, the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by a Policy, amounts transferred from the
Sub-Account(s) to the Loan Account(s) in connection with the loan (see "Detailed
Description of Policy Benefits and Provisions -- Policy Loans," page 12) will
not be considered in determining the voting interests of such Policy Owner.
Policy Owners should review the prospectuses for the Funds which accompany this
Prospectus to determine matters on which shareholders may vote.
Hartford may disregard voting instructions when required by state insurance
regulatory authorities if 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 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 reasonably disapproves of such changes. A
change would be disapproved only if the proposed change is contrary to state law
or prohibited by state regulatory authorities. In the event Hartford does
disregard voting instructions, a summary of that action and the reasons for such
action will be included in the next periodic report to Policy Owners.
<PAGE>
22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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 any Policy loans since the
last such statement;
(c) the amount of any Indebtedness;
(d) any notifications required by the provisions of Your Policy; and
(e) any other information required by the Insurance Department of the state
where Your Policy was delivered.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of a Policy after it has been in
effect during the lifetime of the Insureds for two years from the Issue Date. If
a Policy is reinstated, the two year period is measured from the date of
reinstatement. Any increase in the Face Amount for which evidence of
insurability was obtained is contestable during the lifetime of the Insureds for
two years from its effective date. In addition, if either Insured commits
suicide in the two year period, or such period as specified in state law, the
benefit payable will be limited to the premiums paid less any Indebtedness and
partial withdrawals.
MISSTATEMENT AS TO AGE
If the age of an Insured is incorrectly stated, the amount of Death Benefit
will be appropriately adjusted as specified in Your Policy.
PAYMENT OPTIONS
Proceeds under the Policies may be paid in a lump sum or may be applied to
one of Hartford's payment options. The minimum amount that may be placed under a
payment option is $5,000 (unless Hartford consents to a lesser amount), subject
to the then-current rules of Hartford. Once payments under the Second Option,
the Third Option or the Fourth Option commence, no surrender of a Policy may be
made for the purpose of receiving a lump sum settlement in lieu of the life
insurance payments. The following payment options are available under the
Policies.
FIRST OPTION -- Interest Income
Payments of interest at the rate We declare (but not less than 3 1/2% per
year) on the amount applied under this option.
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option (with interest of not less than 3 1/2% per year) is exhausted. The final
payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected, which may be
from one to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- An annuity payable monthly during the lifetime of the
annuitant and terminating with the last monthly payment due preceding the
death of the annuitant.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- An annuity providing
monthly income to the annuitant for a fixed period of 120 months and for as
long thereafter as the annuitant shall live.
The Policies provide for guaranteed dollar amounts of monthly payments for
each $1,000 applied under the four payment options. Under the Fourth Option, the
amount of each payment will depend upon the age of the Annuitant at the time the
first payment is due. If any periodic payment due any payee is less than $200,
Hartford may make payments less often.
The table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table, set back one year and with a net investment rate of 3.5% per
annum. The tables for the First, Second and Third Options are based on a net
investment rate of 3.5% per annum. Hartford 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 will make any other arrangements for income payments as Hartford
and the Policy Owner may be agree on.
BENEFICIARY
A prospective purchaser of a Policy names the beneficiary in the application
for the Policy. A Policy Owner may change the beneficiary (unless irrevocably
named) during the lifetime of the Insureds by request In Writing to Hartford. If
no beneficiary is living when the last surviving Insured dies, the Death
Proceeds will be paid to the Policy Owner if living; or, otherwise, to the
Policy Owner's estate.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
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ASSIGNMENT
A Policy may be assigned as collateral for a loan or other obligation.
Hartford is not responsible for any payment made or action taken before receipt
of a notice In Writing of such assignment. Proof of interest must be filed with
any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
SUPPLEMENTAL BENEFITS
The following supplemental benefits are among the options that may be
included in a Policy by rider, subject to the restrictions and limitations set
forth therein.
LAST SURVIVOR EXCHANGE OPTION RIDER
We will exchange Your Policy for two individual policies on the life of each
Insured, subject to the conditions stated in the rider.
ESTATE PROTECTION RIDER
We will pay a term insurance benefit upon receipt of due proof of the last
surviving Insured's death while Your Policy and rider are in force, subject to
the conditions stated in the rider.
MATURITY DATE EXTENSION RIDER
Subject to certain Death Benefit and premium restrictions, We will extend
the Maturity Date to the date of the death of the second Insured to die,
regardless of the age of either Insured. See "Federal Tax Considerations --
Income Taxation of Policy Benefits -- Generally," page 28.
YEARLY RENEWABLE TERM LIFE INSURANCE RIDER
While a Policy and any rider thereto are in force, We will pay the term life
insurance amount upon receipt of due proof of death of the designated Insured,
subject to the conditions stated in the rider.
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Ahn, Doug H., 37 Vice President, 1998 Vice President (1998-Present), Hartford Life and Accident
Insurance Company.
Bossen, Wendell J., 64 Vice President, 1992** Vice President (1992-Present), Hartford Life and Accident
Insurance Company; President (1992-Present),
International Corporate Marketing Group, Inc.; Executive
Vice President (1984-1992), Mutual Benefit.
Boyko, Gregory A., 46 Senior Vice President, Vice President and Controller (1995-1997), Hartford;
Chief Financial Officer & Director (1997-Present); Senior Vice President, Chief
Treasurer, 1997 Financial Officer & Treasurer (1997-Present); Vice
Director, 1997 President & Controller (1995-1997), Hartford Life and
Accident Insurance Company; Senior Vice President, Chief
Financial Officer & Treasurer (1997-Present), Hartford
Life, Inc.; Chief Financial Officer (1994-1995), IMG
American Life; Senior Vice President (1992-1994),
Connecticut Mutual Life Insurance Company.
Cummins, Peter W., 60 Senior Vice President, 1997 Vice President (1989-1997); Director of Broker Dealer
Sales-ILAD (1989-1992), Hartford; Senior Vice President
(1997-Present); Vice President (1989-1997); Director of
Broker Dealer Sales-ILAD (1989-1991), Hartford Life and
Accident Insurance Company.
</TABLE>
<PAGE>
24 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
deRaismes, Ann M., 47 Senior Vice President, 1997 Vice President (1994-1997); Assistant Vice President
Director of Human Resources, (1992-1994); Hartford; Senior Vice President
1991 (1997-Present); Director of Human Resources
(1991-Present); Vice President (1994-1997); Assistant
Vice President (1992-1994); Hartford Life and Accident
Insurance Company; Vice President, Human Resources
(1997-Present), Hartford Life, Inc.
Fitch, Timothy M., 45 Vice President, 1995 Assistant Vice President (1992-1995), Hartford; Vice
Actuary, 1994 President (1995-Present); Actuary (1994-Present);
Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company.
Foy, David T., 31 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Vice
President (1998-Present), Hartford Life and Acccident
Insurance Company.
Gardner, Bruce D., 47 Vice President, 1995 Director (1994-1997); General Counsel & Corporate
Secretary (1991-1995), Hartford; Vice President
(1995-1997); Director (1995-1997); General Counsel &
Corporate Secretary (1991-1995), Hartford Life and
Accident Insurance Company.
Garrett, J. Richard, 53 Assistant Treasurer, 1997 Treasurer (1986-1997), Hartford; Vice President
Vice President, 1993 (1993-Present); Assistant Treasurer (1997-Present);
Treasurer (1983-1997); Hartford Life and Accident
Insurance Company; Treasurer (1977), The Hartford
Financial Services Group.
Ginnetti, John P., 52 Executive Vice President and Senior Vice President - Individual Life and Annuity
Director, Asset Management Division (1988-1994), Hartford; Director (1988-Present);
Services, 1994 Director (1988-Present); Executive Vice President &
Director, 1988 Director, Asset Management Services (1994-Present);
Senior Vice President - Individual Life and Annuity
Division (1988-1994), Hartford Life and Accident
Insurance Company; Executive Vice President, Asset
Management, Hartford Life, Inc. (1997-Present).
Godfrey III, William A., 41 Senior Vice President, 1997 Senior Vice President (1997-Present), Hartford; Senior
Vice President (1997-Present), Hartford Life and
Accident Insurance Company; Vice President Information
Technology (1997-Present), Hartford Life, Inc.
Godkin, Lynda, 44 Senior Vice President, 1997 Associate General Counsel (1995-1996); Assistant General
General Counsel, 1996 Counsel and Secretary (1994-1995); Counsel (1990-1994),
Corporate Secretary, 1995 Hartford; Director (1997-Present); Senior Vice President
Director, 1997 (1997-Present); General Counsel (1996-Present);
Corporate Secretary (1995-Present); Associate General
Counsel (1995-1996); Assistant General Counsel and
Secretary (1994-1995); Counsel (1990-1994), Hartford
Life and Accident Company; Vice President and General
Counsel (1997-Present), Hartford Life, Inc.
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Grady, Lois W., 53 Senior Vice President, 1998 Vice President (1993-1998); Assistant Vice President
Vice President, 1993 (1987-1993), Hartford; Senior Vice President (1998);
Vice President (1993-1997); Assistant Vice President
(1987-1993), Hartford Life and Accident Insurance
Company.
Graham, Christopher, 47 Vice President, 1997
Hunt, Mark E., 37 Vice President, 1998 Assistant Vice President (1997-1998), Hartford; Vice
President (1998), Assistant Vice President (1997-1998),
Hartford Life and Accident Insurance Company.
Joyce, Stephen T., 39 Vice President, 1997 Assistant Vice President (1994-1997), Hartford; Assistant
Vice President (1994-1997), Hartford Life and Accident
Insurance Company.
Keeler, Michael D., 37 Vice President, 1998 Vice President (1998-Present), Hartford Life and Accident
Insurance Company.
Kerzner, Robert A., 46 Senior Vice President, 1998 Vice President, (1995-1998); Regional Vice President
Vice President, 1995 (1991-1994), Hartford; Vice President (1994-1997),
Hartford Life and Accident Insurance Company.
Levenson, David N., 31 Vice President, 1998 Assistant Vice President (1995-Present), Hartford.
Maher, Steven M., 43 Vice President, 1992 Assistant Vice President (1987-1992), Hartford; Vice
Actuary, 1987 President (1993-Present); Actuary (1987-Present);
Assistant Vice President (1987-1993), Hartford Life and
Accident Insurance Company.
Malchodi, Jr., William B., 50 Vice President, 1994 Director of Taxes, Hartford (1991-1998); Director of Taxes
(1992-1997), Hartford Life
and Accident Insurance Company.
Marra, Raymond J., 37 Vice President, 1998 Assistant Vice President (1997-Present), Hartford; Vice
President (1998-President), Assistant Vice President
(1994-1997), Hartford Life and Accident Insurance
Company.
Marra, Thomas M., 39 Executive Vice President (1995) Senior Vice President (1994-1995); Vice President
Director, Individual Life (1989-1994); Actuary (1987-1995), Hartford; Director
and Annuity Division, 1994 (1994-Present); Executive Vice President (1995-Present);
Director, 1994* Senior Vice President (1994-1995); Director, Individual
Life and Annuity Division (1994-Present); Actuary
(1987-1997), Hartford Life and Accident Insurance
Company; Executive Vice President, Individual Life and
Annuities (1997-Present), Hartford Life, Inc.
Nolan, Robert F., 43 Senior Vice President, 1997 Vice President (1995-1997); Assistant Vice President
(1992-1995), Hartford; Vice President (1995-1997);
Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President, Corporate
Relations (1997-Present), Hartford Life, Inc.; Manager,
Public Relations (1986), Aetna Life and Casualty
Insurance Company.
Noto, Joseph J., 46 Vice President, 1989 Executive Vice President & Chief Operating Officer
(1997-Present); Director (1994-Present); President
(1994-1997), American Maturity Life Insurance Company;
Vice President (1989-1997), Hartford Life and Accident
Insurance Company.
</TABLE>
<PAGE>
26 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
O'Halloran, C. Michael, 51 Vice President, 1994 Senior Associate General Counsel (1988-1997), Hartford;
Vice President (1994-Present); Senior Associate General
Counsel (1988-1997), Hartford Life and Accident
Insurance Company; Corporate Secretary (1997-Present),
Hartford Life, Inc.; Vice President (1994-Present);
Senior Associate General Counsel (1988-Present);
Director of Corporate Law (1994-Present), The Hartford
Financial Services Group.
O'Rourke, Lawrence M., 44 Vice President, 1998 Vice President, (1998-Present), Hartford Life and Accident
Insurance Company.
O'Sullivan, Daniel E., 43 Vice President, 1998 Vice President (1998-Present), Hartford Life and Accident
Insurance Company.
Raymond, Craig D., 37 Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
Chief Actuary, 1994 (1992-1993); Actuary (1990-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present);
Vice President (1993-1997); Actuary (1990-1995),
Hartford Life and Accident Insurance Company; Vice
President and Chief Actuary (1997-Present), Hartford
Life, Inc.
Robinson, Mary P., 38 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Assistant
Vice President (1995-1998), Hartford Life and Accident
Insurance Company.
Salama, Donald A., 50 Vice President, 1997 Vice President (1997-Present), Hartford Life and
Accident Insurance Company.
Schiltz, Timothy P., 37 Vice President, 1997 Assistant Vice President (1994-1997), Hartford; Vice
President (1997-Present); Assistant Vice President
(1994-1997), Hartford Life and Accident Insurance
Company; Consulting Actuary (1992-1993), Milliman &
Robertson, Inc.; Consulting Actuary (1988-1992), Chalke
Incorporated.
Smith, Lowndes A., 58 Chief Executive Officer, 1997 Chief Operating Officer (1989-1997), Hartford; Director
President, 1989 (1981-Present); President (1989-Present); Chief
Director, 1981* Executive Officer (1997-Present); Chief Operating
Officer (1989-1997), Hartford Life and Accident
Insurance Company; Chief Executive Officer and President
and Director (1997-Present), Hartford Life, Inc.
Stevenson, Keith A., 44 Vice President, 1998
Sweeney, Edward A., 51 Vice President, 1993 Chicago Regional Manager (1985-1993), Hartford;
Vice President (1993-Present),
Hartford Life and Accident Insurance Company.
Tilbor, Judith V., 46 Vice President, 1998 Assistant Vice President (1994-1998), Hartford; Vice
President (1998-Present), Assistant Vice President
(1994-1998), Hartford Life and Accident Insurance
Company.
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD; OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
- -------------------------------- ------------------------------------- ----------------------------------------------------------
<S> <C> <C>
Welnicki, Raymond P., 49 Senior Vice President & Vice President (1993-1994), Hartford; Director
Director, Employee (1994-Present); Senior Vice President (1995-Present);
Benefit Division, 1994 Director, Director, Employee Benefit Division (1997-Present); Vice
1994* President (1993-1995), Hartford Life and Accident
Insurance Company; Senior Vice President, Employee
Benefits (1997-Present), Hartford Life, Inc.; Board of
Directors, Ethix Corp.
Welsh, Walter C., 51 Senior Vice President, 1997 Vice President (1995-1997); Assistant Vice President
(1992-1995), Hartford; Senior Vice President
(1997-Present); Vice President (1995-1997); Assistant
Vice President (1992-1995), Hartford Life and Accident
Insurance Company; Vice President, Government Affairs
(1997-Present), Hartford Life, Inc.
Zlatkus, Lizabeth H., 39 Senior Vice President, 1997 Vice President (1994-1997); Assistant Vice President
Director, 1994* (1992-1994), Hartford; Director (1994-Present); Senior
Vice President (1997-Present); Vice President
(1994-1997); Assistant Vice President (1992-1994),
Hartford Life and Accident Insurance Company; Vice
President, Group Life and Disability (1997-Present),
Hartford Life, Inc.
Znamierowski, David, 38 Senior Vice President, 1997 Vice President (1997), Hartford; Senior Vice President
Director, Risk Management (1998-Present), Hartford Life and Accident Insurance
Strategy, 1996 Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President,
Investment Strategy & Policy, Aetna Life and Casualty.
- ---------
* Denotes year of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford,
CT 06104-2999.
DISTRIBUTION OF THE POLICIES
Hartford intends to sell the Policies in all jurisdictions where it is
licensed to do business. The Policies will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc. ("HESCO"), 200 Hopmeadow Street, Simsbury,
Connecticut 06089, or certain other registered broker-dealers. Any sales
representative or employee selling the Policies will have been qualified to sell
variable life insurance policies under applicable federal and state laws. Each
broker-dealer selling the Policies is registered with the Commission under the
Securities Exchange Act of 1934 and all such broker-dealers are members of the
National Association of Securities Dealers, Inc. HESCO is the principal
underwriter for the Policies. During the first Policy Year, the maximum sales
commission payable to Hartford agents, independent registered insurance brokers,
and other registered broker-dealers is 45% of the premiums paid up to a Target
Premium and 5% of any excess. In Policy Years 2 through 10, sales commissions
will not exceed 5.5% of premiums paid. For Policy Years 11 and later, sales
commissions will not exceed 2% of premiums paid. Additionally, expense
allowances may be paid. A sales representative may be required to return all or
a portion of the commissions paid if a Policy sold by such sales representative
terminates prior to the Policy's second Policy Anniversary.
SAFEKEEPING OF SEPARATE
ACCOUNT VL II'S ASSETS
The assets of the Separate Account are held by Hartford and are kept
physically segregated and held separate and apart from the General Account.
Hartford maintains records of all purchases and redemptions of shares of the
<PAGE>
28 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Funds. Additional protection for the assets of the Separate Account is afforded
by Hartford's blanket fidelity bond issued by Aetna Casualty and Surety Company,
in the aggregate amount of $50 million, covering all of the officers and
employees of Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED AND THE TYPE OF PLAN UNDER
WHICH THE POLICY IS PURCHASED, LEGAL AND TAX ADVICE MAY BE NEEDED BY A PERSON,
TRUSTEE, OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A POLICY DESCRIBED
HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these Policies cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. This discussion of federal tax
considerations is based upon Hartford's understanding of existing federal income
tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Funds) are reinvested and are taken into account in determining the value of the
Accumulation Units. (See "Detailed Description of Policy Benefits and Provisions
- -- Accumulation Unit Values," page 10). As a result, such investment income and
realized capital gains are automatically applied to increase reserves under the
Policy.
Hartford does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF POLICY
BENEFITS -- GENERALLY
For federal income tax purposes, the Policies should be treated as life
insurance policies under Section 7702 of the Code. The death benefit under a
life insurance policy is generally excluded from the gross income of the
Beneficiary. Also, a life insurance policy owner is generally not taxed on
increments in the policy value until the policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a policy that is treated as life insurance. Hartford intends to monitor premium
levels to assure compliance with the Section 7702 requirements.
Although Hartford believes that the Last Survivor Policies are in compliance
with Section 7702 of the Code, the manner in which Section 7702 should be
applied to certain features of a joint survivorship life insurance contract is
not directly addressed by Section 7702. In the absence of final regulations or
other guidance issued under Section 7702, there is necessarily some uncertainty
whether a last survivor life insurance policy will meet the Section 7702
definition of a life insurance contract.
Hartford also believes that any loan received under a Policy will be treated
as Indebtedness of the Policy Owner, and that no part of any loan under a Policy
will constitute income to the Policy Owner. A surrender or assignment of the
Policy may have tax consequences depending upon the circumstances. Policy Owners
should consult a qualified tax adviser concerning the effect of such changes.
During the first fifteen Policy Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Policy.
The Last Survivor Exchange Option Rider permits, under limited
circumstances, a Policy to be split into two individual policies on the life of
each of the Insureds. A Policy split may have adverse tax consequences. It is
not clear whether a Policy split will be treated as a nontaxable exchange or
transfer under the Code. Unless a Policy split is so treated, among other
things, the split or transfer will result in the recognition of taxable income
on the gain in the Policy. In addition, it is not clear whether, in all
circumstances, the individual policies that result from a Policy split would be
treated as life insurance policies under Section 7702 of the Code or would be
classified as modified endowment contracts. The Policy Owner should consult a
qualified tax adviser regarding the possible adverse tax consequences of a
Policy split.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the death of the last surviving insured. If the
Maturity Date of the Policy is extended by rider, Hartford believes the Policy
will continue to be treated as a life insurance contract for Federal income tax
purposes after the scheduled Maturity Date. However, due to the lack of specific
guidance on this issue, the result is not certain. If the Policy is not treated
as a life insurance contract for federal income tax purposes after the scheduled
Maturity Date, among other things, the Death Proceeds may be taxable to the
recipient. The Policy Owner should consult a qualified tax adviser regarding the
possible adverse tax consequences resulting from an extension of the scheduled
Maturity Date.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
contract for any period during which the investments made by the separate
account or underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Policy is not treated as
a life insurance contract, the Policy Owner will be subject to income tax on the
annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, 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 monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford intends
to administer all contracts subject to the diversification requirements in a
manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN
THE SEPARATE ACCOUNT
In certain circumstances, variable life insurance contract owners may be
considered the owners, for federal income tax purposes, of the assets of a
segregated asset account, such as the Separate Account, used to support their
contracts. In those circumstances, income and gains from the segregated asset
account would be includible in the contract owners' gross income. The Internal
Revenue Service (the "IRS") has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses certain incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. In addition,
the Treasury Department announced, in connection with the issuance of
regulations concerning investment diversification, that those regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular sub-accounts [of a segregated asset account] without
being treated as owners of the underlying assets." As of the date of this
Prospectus, no such guidance has been issued.
The ownership rights under the contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of the assets of a segregated
asset account. For example, an Owner of this Policy has the choice of more
investment options to which to allocate premium payments and Separate Account
values, and may be able to transfer among investment options more frequently,
than in such rulings. These differences could result in the Owner being treated
as the owner of a portion of the assets of the Separate Account. In addition,
Hartford does not know what standards will be set forth in the regulations or
rulings that the Treasury Department has stated it expects to issue. Hartford
therefore reserves the right to modify the contract as necessary to attempt to
prevent Owners from being considered the owners of the assets of the Separate
Account. However, there is no assurance that such efforts would be successful.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any
increase in an Owner's contract value is generally not taxable to the Owner
unless amounts are received (or are deemed to be received) under the contract
prior to the Insured's death. If there is a total withdrawal from the contract,
then the surrender value will be includible in the Owner's income to the extent
that the amount
<PAGE>
30 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
received exceeds the "investment in the contract." (If there is any debt at the
time of a total withdrawal, then such debt will be treated as an amount
distributed to the Owner.) The "investment in the contract" is the aggregate
amount of premium payments and other consideration paid for the contract, less
the aggregate amount received under the contract previously to the extent such
amounts received were excludable from gross income. Whether partial withdrawals
(or such other amounts deemed to be distributed) from the contract constitute
income to the Owner depends, in part, upon whether the contract is considered a
modified endowment contract for federal income tax purposes.
MODIFIED ENDOWMENT CONTRACTS
Code Section 7702A applies an additional test, the "seven-pay" test, to life
insurance contracts. The seven-pay test provides that premiums cannot be paid at
a rate more rapidly than that allowed by the payment of seven annual premiums
using specified computational rules described in Section 7702A(c). A modified
endowment contract ("MEC") is a life insurance policy that either: (i) satisfies
the Section 7702 definition of life insurance, but fails the seven-pay test of
Section 7702A or (ii) is exchanged for a MEC. A policy fails the seven-pay test
if the accumulated amount paid into the Policy at any time during the first
seven Policy Years exceeds the sum of the net level premiums that would have
been paid up to that point if the Policy provided for paid-up future benefits
after the payment of seven level annual premiums. Computational rules for the
seven-pay test are described in Section 7702A(c).
If the Policy satisfies the seven-pay test at issuance, distributions and
loans made thereafter will not be subject to the MEC rules, unless the Policy is
changed materially. The seven-pay test will be applied anew at any time the
Policy undergoes a material change, which includes an increase in the Face
Amount. In addition, if there is a reduction in benefits under the Policy within
the first seven years, the seven-pay test is applied as if the Policy had
initially been issued at the reduced benefit level. Any reduction in benefits
attributable to the nonpayment of premiums will not be taken into account for
purposes of the seven-pay test if the benefits are reinstated within 90 days
after the reduction.
A policy that is classified as a MEC is eligible for certain aspects of the
beneficial tax treatment accorded to life insurance. That is, the death benefit
is excluded from income and increments in value are not subject to current
taxation. However, if the contract is classified as a MEC, then withdrawals from
the contract will be considered first as withdrawals of income and then as a
recovery of premium payments. Thus, withdrawals will be includible in income to
the extent the contract value exceeds the investment in the contract. The amount
of any loan (including unpaid interest thereon) under the contract will be
treated as a withdrawal from the contract for tax purposes. In addition, if the
Owner assigns or pledges any portion of the value of a contract (or agrees to
assign or pledge any portion), then such portion will be treated as a withdrawal
from the contract for tax purposes. Taxable withdrawals are subject to an
additional 10% tax, with certain exceptions. The Owner's investment in the
contract is increased by the amount includible in income with respect to such
assignment, pledge, or loan, though it is not affected by any other aspect of
the assignment, pledge, or loan (including its release or repayment).
Generally, only distributions and loans made in the first year in which a
policy becomes a MEC, and in subsequent years, are taxable. However,
distributions and loans made in the two years prior to a policy's failing the
seven-pay test are deemed to be in anticipation of failure and are subject to
tax.
Before assigning, pledging, or requesting a loan under a contract that is a
MEC, an Owner should consult a qualified tax adviser.
All MEC policies that are issued within any calendar year to the same policy
owner by one company or its affiliates are treated as one MEC policy for the
purpose of determining the taxable portion of any loan or distribution.
Hartford has instituted procedures to monitor whether a Policy may become
classified as a MEC after issue.
ESTATE AND GENERATION SKIPPING TAXES
When the last surviving Insured dies, the Death Proceeds will generally be
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.
The federal estate tax is integrated with the federal gift tax under a
unified rate schedule and unified credit which shelters up to $625,000 (1998)
from the estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises
the credit over the next eight years to $1,000,000. In addition, an unlimited
marital deduction may be available for federal estate and gift tax purposes. The
unlimited marital deduction permits the deferral of taxes until the death of the
surviving spouse.
If the Policy Owner (whether or not he or she is an Insured) transfers
ownership of the Policy to someone two or more generations younger, the transfer
may be subject to the generation skipping transfer tax, the taxable amount being
the value of the Policy. The generation-skipping transfer tax provisions
generally apply to transfers which
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 31
- --------------------------------------------------------------------------------
would be subject to the gift and estate tax rules. Individuals are generally
allowed an aggregate generation skipping transfer exemption of $1 million.
Because these rules are complex, the Policy Owner should consult with a
qualified tax adviser for specific information if ownership is passing to
younger generations.
LIFE INSURANCE PURCHASED FOR USE IN
SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM") on
the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner,
such amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective Policy
Owners which are not individuals should consult a qualified tax adviser to
determine the potential impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policy Owner or beneficiary. A qualified tax adviser
should be consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT
ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S., state and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no pending material legal proceedings to which the Separate
Account is a party.
LEGAL MATTERS
Legal matters in connection with the issue and sale of the last survivor
flexible premium variable life insurance Policies described in this Prospectus
and the organization of Hartford, its authority to issue the Policies under
Connecticut law and the validity of the forms of the Policies under Connecticut
law and legal matters relating to the federal securities and income tax laws
have been passed on by Lynda Godkin, General Counsel of Hartford.
EXPERTS
The audited consolidated financial statements and financial statement
schedules included in this Prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports. The principal business address of Arthur Andersen LLP is One
Financial Plaza, Hartford, Connecticut 06103.
The hypothetical Policy illustrations have been approved by Kenneth A.
McCullum, FSA, MAAA, Director of Individual Life Product Development, and are
included in this Prospectus in reliance upon his opinion as to their
reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the Commission under the 1933
Act. 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 the Separate Account, Hartford, and
the Policies.
<PAGE>
32 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
APPENDIX A
ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES
AND CASH SURRENDER VALUES
The tables in Appendix A illustrate the way in which a Policy operates. The
illustrations 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) A male, preferred, age 55, and a female, preferred, age 50, with
$1,000,000 of Face Amount and a premium of $15,500 paid in all years; and (b) a
male, preferred, age 65, and a female, preferred, age 65, with $1,000,000 of
Face Amount and a premium of $27,000 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 Policy loan was made during the period of
time illustrated.
The illustrations reflect the deductions of guaranteed Policy charges for a
single gross interest rate. The amounts shown for the Death Benefit and
surrender values as of the end of each Policy Year take into account an average
daily charge equal to an annual charge of 0.70% of the average daily net assets
of the Funds for investment advisory and administrative services fees. The gross
annual investment return rates of 0%, 6% and 12% on the Fund's assets are equal
to net annual investment return rates (net of the 0.70% average daily charge) of
- -.70%, 5.30% and 11.30%, respectively.
In addition, the Death Benefit and Policy surrender values as of the end of
each Policy Year take into account the front-end sales load, premium processing
charge, federal tax charge, premium tax charge (assumed to be 2.0% in these
illustrations), Cost of Insurance charge, monthly administrative fee, issue
charge, and mortality and expense risk charge.
The hypothetical returns shown in the illustrations are without any tax
charges that may be allocable to the Separate Account in the future. In order to
produce after-tax returns of 0%, 6%, and 12%, the Separate Account would have to
earn a sufficient amount in excess of 0%, 6%, and 12%, respectively, to cover
any tax charges (see "Detailed Description of Policy Benefits and Provisions --
Deductions and Charges From the Account Value -- Taxes," page 16).
The "Premiums Accumulated at 5% Interest Per Year" column of each
illustration shows the amount which would accumulate if the initial premium was
invested to earn interest, after taxes, of 5% per year, compounded annually.
Hartford will furnish, upon request, a comparable illustration reflecting
the proposed Insured's age and risk classification, a Policy's proposed Face
Amount or the initial premium requested, and reflecting guaranteed Cost of
Insurance rates. Hartford will also furnish an additional similar illustration
reflecting current Cost of Insurance rates which may be less than, but never
greater than, the guaranteed Cost of Insurance rates.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 33
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 FACE AMOUNT
ISSUE AGE 55 MALE PREFERRED
ISSUE AGE 50 FEMALE PREFERRED
$15,500 PLANNED PREMIUM
ASSUMING THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURNS SHOWN
AND GUARANTEED CHARGES*
<TABLE>
<CAPTION>
PREMIUMS 12% (11.30% NET) 6% (5.30% NET) 0% (-0.70% NET)
END OF ACCUMULATED -------------------- ------------------ ------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ -------------- --------- --------- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 16,275 6,398** 1,000,000 6,018 ** 1,000,000 5,640 ** 1,000,000
2 33,364 19,366** 1,000,000 17,889 ** 1,000,000 16,459 ** 1,000,000
3 51,307 33,580 1,000,000 30,187 1,000,000 27,018 1,000,000
4 70,147 49,148 1,000,000 42,911 1,000,000 37,298 1,000,000
5 89,930 66,186 1,000,000 56,053 1,000,000 47,280 1,000,000
6 110,701 86,566 1,000,000 71,277 1,000,000 58,536 1,000,000
7 132,511 108,864 1,000,000 86,974 1,000,000 69,418 1,000,000
8 155,412 133,254 1,000,000 103,134 1,000,000 79,898 1,000,000
9 179,457 159,925 1,000,000 119,740 1,000,000 89,940 1,000,000
10 204,705 189,081 1,000,000 136,768 1,000,000 99,499 1,000,000
11 231,215 222,992 1,000,000 155,956 1,000,000 110,083 1,000,000
12 259,051 260,192 1,000,000 175,635 1,000,000 120,078 1,000,000
13 288,279 301,000 1,000,000 195,753 1,000,000 129,400 1,000,000
14 318,968 345,773 1,000,000 216,246 1,000,000 137,942 1,000,000
15 351,191 394,930 1,000,000 237,040 1,000,000 145,590 1,000,000
16 385,026 448,957 1,000,000 258,052 1,000,000 152,208 1,000,000
17 420,552 508,438 1,000,000 279,199 1,000,000 157,655 1,000,000
18 457,855 573,971 1,048,895 300,387 1,000,000 161,766 1,000,000
19 497,022 645,550 1,143,025 321,518 1,000,000 164,359 1,000,000
20 538,148 723,478 1,242,212 342,477 1,000,000 165,212 1,000,000
25 724,270 1,224,882 1,828,859 440,045 1,000,000 132,178 1,000,000
30 1,014,302 1,950,809 2,604,753 498,849 1,000,000 -- --
</TABLE>
<TABLE>
<C> <S>
* 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 ACCOUNT VALUES SHOWN. THE REFUND WOULD
BE $3,100.00 IN YEAR ONE AND $3,691.28 IN YEAR TWO.
THE DEATH BENEFIT MAY AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED THE RATE SHOWN OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT
VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE
INVESTMENT ALLOCATIONS MADE TO THE SEPARATE ACCOUNT AND THE RATES OF RETURN OF
THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED THE RATE SHOWN, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE
SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
34 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$1,000,000 FACE AMOUNT
ISSUE AGE 65 MALE PREFERRED
ISSUE AGE 65 FEMALE PREFERRED
$27,000 PLANNED PREMIUM
ASSUMING THE HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURNS SHOWN
AND GUARANTEED CHARGES*
<TABLE>
<CAPTION>
PREMIUMS 12% (11.30% NET) 6% (5.30% NET) 0% (-0.70% NET)
END OF ACCUMULATED -------------------- ------------------ ------------------
POLICY AT 5% INTEREST ACCOUNT DEATH ACCOUNT DEATH ACCOUNT DEATH
YEAR PER YEAR VALUE BENEFIT VALUE BENEFIT VALUE BENEFIT
- ------ -------------- --------- --------- ------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 28,350 12,718** 1,000,000 11,991 ** 1,000,000 11,264 ** 1,000,000
2 58,118 35,882** 1,000,000 33,127 ** 1,000,000 30,460 ** 1,000,000
3 89,373 60,577 1,000,000 54,344 1,000,000 48,529 1,000,000
4 122,192 86,832 1,000,000 75,509 1,000,000 65,345 1,000,000
5 156,652 114,669 1,000,000 96,462 1,000,000 80,759 1,000,000
6 192,834 146,392 1,000,000 119,202 1,000,000 96,678 1,000,000
7 230,826 179,915 1,000,000 141,372 1,000,000 110,729 1,000,000
8 270,717 215,190 1,000,000 162,630 1,000,000 122,576 1,000,000
9 312,603 252,148 1,000,000 182,560 1,000,000 131,805 1,000,000
10 356,583 290,753 1,000,000 200,698 1,000,000 137,948 1,000,000
11 402,762 334,375 1,000,000 219,416 1,000,000 143,011 1,000,000
12 451,251 380,412 1,000,000 235,589 1,000,000 143,971 1,000,000
13 502,163 429,274 1,000,000 248,689 1,000,000 140,232 1,000,000
14 555,621 481,553 1,000,000 258,097 1,000,000 131,072 1,000,000
15 611,752 538,047 1,000,000 262,995 1,000,000 115,530 1,000,000
16 670,690 599,827 1,000,000 262,267 1,000,000 92,275 1,000,000
17 732,574 668,391 1,000,000 254,392 1,000,000 59,493 1,000,000
18 797,553 745,900 1,000,000 237,304 1,000,000 14,721 1,000,000
19 865,781 834,068 1,055,786 208,304 1,000,000 -- --
20 937,420 928,660 1,155,184 163,866 1,000,000 -- --
25 1,261,632 1,507,773 1,749,756 -- -- -- --
30 1,766,849 2,330,481 2,553,928 -- -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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 ACCOUNT VALUES SHOWN. THE REFUND WOULD
BE $4,672.24 IN YEAR ONE AND $4075.30 IN YEAR TWO.
THE DEATH BENEFIT MAY AND THE ACCOUNT VALUES WILL DIFFER IF PREMIUMS ARE
PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT AND ACCOUNT VALUE FOR A POLICY WOULD BE
DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN APPLICABLE TO THE POLICY
AVERAGED THE RATE SHOWN OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR
BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND ACCOUNT
VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE
INVESTMENT ALLOCATIONS MADE TO THE SEPARATE ACCOUNT AND THE RATES OF RETURN OF
THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE
POLICY AVERAGED THE RATE SHOWN, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR THE
SEPARATE ACCOUNT.NO REPRESENTATION CAN BE MADE THAT THESE HYPOTHETICAL RATES OF
RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
PART II
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 70 pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signatures.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of Hartford Life Insurance
Company ("Hartford") authorizing the establishment of the
Separate Account.(1)
(A2) Not applicable.
(A3a) Principal Underwriting Agreement.(1)
(A3b) Forms of Selling Agreements.(1)
(A4) Not applicable.
(A5) Form of Flexible Premium Variable Life Insurance Policy.
(A6a) Certificate of Incorporation of Hartford.(2)
(A6b) Bylaws of Hartford.(1)
(A7) Not applicable.
- ---------------------------------
(1) Incorporated by reference to Post-Effective Amendment No. 1, to the
Registration Statement File No. 33-89990, dated May 1, 1996.
(2) Incorporated by reference to Post-Effective Amendment No. 2, to the
Registration Statement File No. 33-89990, filed April 16, 1997.
1
<PAGE>
(A8) Not applicable.
(A9) Not applicable.
(A10) Form of Application for Flexible Premium Variable Life Insurance
Policies.(1)
(A11) Memorandum describing transfer and redemption procedures.(1)
(2) Opinion and consent of Lynda Godkin, Senior Vice President, General
Counsel and Corporate Secretary.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1 (b) or (c) of Part I.
(4) Not applicable.
(5) Opinion and Consent of Ken A. McCullum, FSA, MAAA.
(6) Financial statements to be filed by amendment.
(7) Power of Attorney.
(8) Not Applicable
2
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
----------------------------------------
Hartford Life Insurance Company ("Hartford") hereby represents that the
aggregate fees and charges under the Policy are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Hartford.
UNDERTAKING TO FILE REPORTS
---------------------------
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6e-3(T)
------------------------------------------------------------
1. Separate Account VL II meets the definition of "Separate Account" under
Rule 6e-3(T).
2. Hartford undertakes to keep and make available to the Commission upon
request any documents used to support any representation as to the
reasonableness of fees.
UNDERTAKING ON INDEMNIFICATION
------------------------------
Under Section 33-772 of the Connecticut General Statutes, unless limited by its
certificate of incorporation, the Registrant must indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any proceeding
to which he was a party because he is or was a director of the corporation
against reasonable expenses incurred by him in connection with the proceeding.
The Registrant may indemnify an individual made a party to a proceeding because
he is or was a director against liability incurred in the proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Registrant, and, with respect to any criminal
proceeding, had no reason to believe his conduct was unlawful. Conn. Gen. Stat.
Section 33-771(a). Additionally, pursuant to Conn. Gen. Stat. Section 33-776,
the Registrant may indemnify officers and employees or agents for liability
incurred and for any expenses to which they becomes subject by reason of being
or having been an employees or officers of the Registrant. Connecticut law does
not prescribe standards for the indemnification of officers, employees and
agents and expressly states that their indemnification may be broader than the
right of indemnification granted to directors.
The foregoing statements are specifically made subject to the detailed
provisions of Section 33-770 et seq.
Notwithstanding the fact that Connecticut law obligates the Registrant to
indemnify a only a director
3
<PAGE>
that was successful on the merits in a suit, under Article VIII, Section 1 of
the Registrant's bylaws, the Registrant must indemnify both directors and
officers of the Registrant for (1) any claims and liabilities to which they
become subject by reason of being or having been a directors or officers of
the company and legal and (2) other expenses incurred in defending against
such claims, in each case, to the extent such is consistent with statutory
provisions.
Additionally, the directors and officers of Hartford and Hartford Securities
Distribution Company, Inc. ("HSD") are covered under a directors and officers
liability insurance policy issued to The Hartford Financial Services Group, Inc.
and its subsidiaries. Such policy will reimburse the Registrant for any
payments that it shall make to directors and officers pursuant to law and will,
subject to certain exclusions contained in the policy, further pay any other
costs, charges and expenses and settlements and judgments arising from any
proceeding involving any director or officer of the Registrant in his past or
present capacity as such, and for which he may be liable, except as to any
liabilities arising from acts that are deemed to be uninsurable.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 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.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, and attested, all in the
Town of Simsbury, and State of Connecticut, on the 17th day of February, 1998.
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL II
(Registrant)
By: /s/ Thomas M. Marra
----------------------------------------
Thomas M. Marra, Executive Vice
President & Director
HARTFORD LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Thomas M. Marra
----------------------------------------
Thomas M. Marra, Executive Vice
President & Director
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.
Bruce D. Gardner, Vice President
Director *
John P. Ginnetti, Executive Vice
President, Director *
Thomas M. Marra, Executive Vice
President, Director *
Lynda Godkin, Senior Vice President, *By: /s/ Lynda Godkin
General Counsel and Corporate ------------------------
Secretary, Director* Lynda Godkin
Lowndes A. Smith, President, Attorney-In-Fact
Chief Operating Officer,
Director * Dated: February 17, 1998
Raymond P. Welnicki, Senior Vice ------------------------
President, Director *
Lizabeth H. Zlatkus, Vice President
Director *
5
<PAGE>
EXHIBIT INDEX
(1)(A5) Form of Flexible Premium Variable Life Insurance Policy.
(2) Opinion and Consent of Lynda Godkin, Senior Vice President,
General Counsel and Corporate Secretary.
(5) Opinion and Consent of Ken M. McCullum, FSA, MAAA.
(7) Power of Attorney.
<PAGE>
Exhibit (1)(A5)
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
HOME OFFICE ADDRESS:
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
(A stock insurance company)
ADMINISTRATIVE OFFICE ADDRESS:
NATIONAL SERVICE CENTER
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/ Lynda Godkin /s/ Lowndes A. Smith
Lynda Godkin, 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 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 FACE AMOUNT IS A GUARANTEED DEATH
BENEFIT DURING THE FIRST FIVE POLICY YEARS SUBJECT TO THE CONDITIONS
DESCRIBED ON PAGE 10.
LAST SURVIVOR FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
[LOGO]
HL-14623NY Printed in U.S.A.
<PAGE>
TABLE OF CONTENTS
Page
Policy Specifications 3
Definitions 5
Death Benefit 7
Increases and Decreases in Face Amount 8
Premiums 8
Lapse and Grace Period 9
Valuation Provisions 11
Account Value and Cash
Surrender Value 12
Monthly Deduction Amount 12
Transfers 13
Termination and Maturity Date 14
Reinstatement 14
Policy Loans 14
Withdrawals 15
Surrenders 16
Payments By Us 16
Taxation 16
The Contract 16
Ownership and Beneficiary 18
Exchange Option 18
Income Settlement Options 19
Any Riders follow page 20
Page 2
HL-14623(NY) Printed in U.S.A.
<PAGE>
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 FACE AMOUNT $750,000
TARGET PREMIUM $5,280.75 DEATH BENEFIT OPTION OPTION A
ANNUAL DEATH BENEFIT POLICY NUMBER VL0000001
GUARANTEE PREMIUM $2,467.69 MINIMUM INCREASE/DECREASE
DEATH BENEFIT JANUARY 1, 1995 - IN FACE AMOUNT $25,000
GUARANTEE PERIOD DECEMBER 31, 1999 MINIMUM FACE AMOUNT
AFTER DECREASE $100,000
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 $75.00 01/01/2060
ESTATE PROTECTION $228.80 01/01/99
TERM INSURANCE BENEFIT: $916,666.67
RIDER DATE: 1/1/95
TERMINATION DATE: 12/31/98
* IT IS POSSIBLE THAT COVERAGE FOR THIS POLICY AND/OR ANY ATTACHED RIDERS
WILL EXPIRE PRIOR TO THE MATURITY DATE AND/OR THE TERMINATION DATE SHOWN WHERE
PREMIUMS AND INVESTMENT EXPERIENCE ARE INSUFFICIENT TO CONTINUE COVERAGE TO
SUCH DATES. COVERAGE MAY ALSO BE AFFECTED BY CHANGES IN THE MONTHLY DEDUCTION
AMOUNT, POLICY LOANS, THE COST OF ANY ADDITIONAL BENEFIT RIDERS AND THE DEATH
BENEFIT OPTION.
Page 3
14623(3)NY Printed in U.S.A.
<PAGE>
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: 01/01/30
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 3A (continued)
14623(3 cont'd)NY Printed in U.S.A.
<PAGE>
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 SCHEDULED INCREASES
2-10 $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
Page 3A (continued)
14623(3 cont'd)NY Printed in U.S.A.
<PAGE>
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 3B
14623(3B)NY Printed in U.S.A.
<PAGE>
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:
PERCENT OF PREMIUM PERCENT OF PREMIUM
POLICY YEARS PAID UP TO $6,995.00 IN EXCESS OF $6,995.00
1 50% 9%
2-5 15% 4%
6-10 10% 4%
11+ 2% 2%
DAC TAX CHARGE 1.25% OF ALL PREMIUMS PAID
PREMIUM TAX CHARGE 1.75% OF ALL PREMIUMS PAID
PREMIUM PROCESSING CHARGE 1.25% OF ALL PREMIUMS PAID
DEDUCTIONS FROM ACCOUNT VALUE
MONTHLY ADMINISTRATIVE FEE
ALL POLICY YEARS $10.00 PER MONTH
PLUS $.03 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 MORTALITY AND EXPENSE RISK RATE,
MULTIPLIED BY THE SUM OF THE ACCUMULATED
VALUES IN THE SUB-ACCOUNTS
MORTALITY AND EXPENSE RISK RATE
POLICY YEARS 1-10: .80%
POLICY YEARS 11 & LATER: .50%
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 12 IN ANY POLICY YEAR
$25.00 PER TRANSFER IN EXCESS OF 12 IN ANY
POLICY YEAR
Page 3C
14623(3C)NY Printed in U.S.A.
<PAGE>
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
MINIMUM MAXIMUM COST MINIMUM MAXIMUM COST
POLICY DEATH BENEFIT OF INSURANCE POLICY DEATH BENEFIT OF INSURANCE
YEAR PERCENTAGES RATE YEAR PERCENTAGES RATE
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
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 4
14623(4)NY Printed in U.S.A.
<PAGE>
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)
POLICY MAXIMUM POLICY MAXIMUM
YEAR RATE YEAR RATE
1 0.1442 24 0.9117
2 0.1517 25 1.0042
3 0.1617 26 1.1075
4 0.1725 27 1.2225
5 0.1842 28 1.3550
6 0.1983 29 1.5050
7 0.2133 30 1.6717
8 0.2292 31 1.8542
9 0.2467 32 2.0517
10 0.2658 33 2.2633
11 0.2875 34 2.4933
12 0.3108 35 2.7483
13 0.3358 36 3.0367
14 0.3633 37 3.3658
15 0.3933 38 3.7458
16 0.4275 39 4.1758
17 0.4667 40 4.6483
18 0.5117 41 5.1533
19 0.5633 42 5.6867
20 0.6208 43 6.2442
21 0.6850 44 6.8292
22 0.7550 45 7.4600
23 0.8292
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 4A
14623(4A)NY Printed in U.S.A.
<PAGE>
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)
POLICY MAXIMUM
YEAR RATE
1 0.1258
2 0.1342
3 0.1442
4 0.1550
5 0.1667
6 0.1808
7 0.1958
8 0.2108
9 0.2238
10 0.2408
11 0.2575
12 0.2750
13 0.2942
14 0.3142
15 0.3367
16 0.3617
17 0.3892
18 0.4208
19 0.4558
20 0.4917
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 4A (continued)
14623(3A cont'd)NY Printed in U.S.A.
<PAGE>
DEFINITIONS The definitions in this section apply to the following words
and phrases whenever and wherever they appear in this policy.
ACCOUNT VALUE: an amount 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.
FACE AMOUNT: on the Policy Date, the Face Amount equals the
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 provision.
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.
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.
ISSUE AGE: as of the Policy Date, an Insured's age on
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.
Page 5
HL-14623(6/6)(NY) Printed in U.S.A.
<PAGE>
DEFINITIONS Monthly Activity Date: the Policy Date and the
(Continued) 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.
After the 20th Policy Year, We can use sales loads that are
lower than the sales loads shown on Page 3C. Sales loads for
policies which have been in-force for more than 20 Policy
Years will be determined on each Policy Anniversary based on
future expectations for such factors as mortality, expenses,
interest, persistency and taxes. Sales loads will be
reviewed no more often than once a year, nor less than every
five years. 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 sales loads will occur on
account of deterioration of the Insured's health.
Any change in sales loads after the 20th Policy Year will be
determined in accordance with the procedures and standards on
file with the Insurance Department where this policy is
delivered.
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.
TARGET PREMIUM: the amount shown on Page 3. It is used to
determine deductions from premium payments.
VALUATION DAY: the date on which a Sub-Account is valued.
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.
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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. 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.
DEATH PROCEEDS
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.
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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 shown on Page 3.
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 the
minimum Face Amount on Page 3.
UNSCHEDULED INCREASES
All requests to increase the Face Amount must be applied for
on a new application and accompanied by this policy. All
requests will be subject to evidence of insurability on each
Insured 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 automatically increase the Face Amount 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 Face Amount are not subject to the
Face Amount Increase Fee.
PREMIUMS GENERAL
Premium is due on the Policy Date. No insurance is effective
until the first premium is paid, subject to the terms of the
application's conditional receipt. 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.
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PREMIUMS PLANNED PREMIUM PAYMENTS
(Continued) 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.
We will accept any premium required to keep this policy in
force.
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.
Any additional Net Premiums received by Us prior to such 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 if the total Indebtedness equals or exceeds the
Account Value or if 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 money that will be required
to continue this policy in force. This notice will be sent
at least 30 days, but no more than 45 days, before the end of
the Police Grace Period.
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LAPSE AND If this policy is in default because total Indebtedness
GRACE PERIOD equals or exceeds the Account Value, We will advise You
(Continued) of the amount required to repay or reinstate such Indebtedness.
If such payment is not made by the end of the Policy Grace
Period, this policy will terminate without value, whether or
not the Death Benefit Guarantee is in effect.
If this policy is in default because the Cash Surrender Value
is not sufficient to cover the Monthly Deduction Amount, the
amount of premium that will be required to continue this
policy in force 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 this policy is in default at the end of the Death Benefit
Guarantee Period, a new Policy Grace Period will begin from
the date the Death Benefit Guarantee Period expired.
Notification of the amount of premium required to continue
this Policy in force will be mailed at least 30 days, but no
more than 45 days before the end of the Policy Grace Period.
If the Last Surviving Insured dies during the Policy Grace
Period, We will pay the Death Proceeds, less the Monthly
Deduction Amount required to keep this policy in force
through the end of the month in which the Last Surviving
Insured dies.
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; and
(b) 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.
The Death Benefit Guarantee Period will be 5 years from the
Policy Date and is shown on Page 3. The Annual Death Benefit
Guarantee Premium required for this period is shown on Page 3.
DEATH BENEFIT GUARANTEE GRACE PERIOD
If the cumulative premiums, less withdrawals, are not
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.
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, 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.
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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
VALUATION EMERGENCY PROCEDURE
PROVISIONS If a national stock exchange is closed (except
for holidays or weekends) or trading is restricted due to
an existing emergency as declared 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. Rates will be determined from time to time based on
Our expectations as to interest, mortality, expenses,
persistency and taxes.
ACCOUNT VALUE ACCOUNT VALUE
AND CASH Your Account Value on the Policy Date equals the initial
SURRENDER Net Premium less the Monthly Deduction Amount for the first
VALUE 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.
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<PAGE>
ACCOUNT VALUE ACCUMULATED VALUE - SUB-ACCOUNTS
AND CASH Your Accumulated Value in any Sub-Account equals:
SURRENDER (a) the number of Your Accumulation Units in that
VALUE Sub-Account on the Valuation Day; multiplied by
(Continued) (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.
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. Part of the Cost of Insurance Rates are taken to
reimburse the Company for administrative expenses associated
with the issue of Your policy. This part may be greater in
the early Policy Years.
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. Rates on in-force policies
will be reviewed no more often than once a year, nor less
than once every five years. 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.
Any change in policy cost factors will be determined in
accordance with the procedures and standards on file with the
Insurance Department.
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<PAGE>
MONTHLY MONTHLY ADMINISTRATIVE FEE
DEDUCTION The Monthly Administrative Fee will not exceed the amounts
AMOUNT shown on Page 3C.
(continued)
Fees will be determined on each Policy Anniversary based upon
changes in future expectations as to mortality, expenses,
interest, persistency and taxes. Fees on in-force policies
will be reviewed no more often than once a year, nor less
often than once every five years. 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.
Any change in the Monthly Administrative Fee will be
determined in accordance with the procedures and standards on
file with the Insurance Department.
MONTHLY ISSUE CHARGE
The Monthly Issue Charge will be the amount shown on Page 3C.
MORTALITY AND EXPENSE RISK CHARGE
The Mortality and Expense Risk Charge for any Monthly Activity
Date is equal to:
(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.
Monthly and Expense Risk Charges will be determined on each
Policy Anniversary based on changes in future expectations as
to mortality, expenses, interest persistency and taxes.
Monthly and Expense Risk Charges on in-force policies will be
reviewed no more than once a year, nor less than once every
five years. 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.
Any change in Monthly and Expense Risk Charges will be
determined in accordance with the procedures and standards on
file with the Insurance Department where this policy is
delivered.
FACE AMOUNT INCREASE FEE
The Face Amount Increase Fee will be the amount 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.
However, in no event will there be less than 12 free
transfers. 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.
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TRANSFERS TRANSFERS TO OR FROM THE FIXED ACCOUNT
(Continued) 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.
As long as this policy is in effect, You may transfer all
amounts in the Sub-Accounts to the Fixed Account and apply
the Cash Surrender Value to purchase a non-variable Paid-Up
Life Insurance Policy. The amount of the non-variable
Paid-Up Life Insurance is determined by the Account Value on
the Maturity Date using a 4% interest rate and guaranteed
assumptions. Subsequent Cash Values of the non-variable
Paid-Up Life Insurance Policy are based on the present value
of future benefits using the Monthly Maximum Cost of
Insurance Rates and the Fixed Account Minimum Credited Rate.
Such values are not subject to the Monthly Administrative
Fee.
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.
TERMINATION TERMINATION
AND This policy will terminate upon the earliest of the
MATURITY DATE 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.
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<PAGE>
POLICY LOANS LOAN AMOUNTS
(Continued) 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.
This policy will be in default if total Indebtedness equals or
exceeds the Account Value on any Monthly Activity Date. A
61-day period will begin from the date of default. We will
mail the Owner and any assignee of record written notice of
the amount required to repay or reinstate such Indebtedness at
least 30 days but not more than 45 days prior to the end of
that period. If such payment is not made by the end of that
period, this policy will end without value. See the Policy
Grace Period Provision.
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 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.
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<PAGE>
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.
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.
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 10 days, We will
pay interest at the rate We declare under Settlement Option 1
- Interest Income.
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, subject to approval by the
Insurance Commissioner of the state where this policy is
issued for delivery.
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 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 16
14623(15/16)(NY) Printed in U.S.A.
<PAGE>
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, 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 Face Amount for which evidence of insurability was
obtained, either of the Insureds dies by suicide, Our
liability with respect to such increase, will be limited to
the Cost of Insurance for the increase and any applicable
charges.
If an Insured survives after the suicide of one of the
Insureds, We will make available, without evidence of
insurability, a new policy on a single life basis on the life
of that surviving Insured. The Face Amount, Policy Date, and
the Insured's Age, sex, and insurance class will be the same
as this policy's. The Suicide and Incontestability
provisions of the new policy will be measured from the Date
of Issue of this policy. The first planned premium for the
new policy must be paid within 31 days after We notify You of
its availability. Otherwise, the new policy will not be in
force.
INCONTESTABILITY
Except for non-payment of premiums, We will not contest this
policy after it has been in force during the lifetime of at
least one of the Insureds for two years from the Date of
Issue.
Any increase in the 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.
If there is a material change in the investment policy of a
Separate Account, and You object to such change, You may
exchange this policy to a general account life insurance
policy being offered by Us. This exchange may be made
without evidence of insurability and will be subject to Our
exchange rules then in effect. A notice will be sent to You
of the options available and the option to exchange is
exercisable within 60 days after: 1) the effective date of
such change in the investment policy; or 2) the receipt of
notice of the options available, whichever is later.
Page 17
14623(17/18)(NY) Printed in U.S.A.
<PAGE>
THE CONTRACT ANNUAL REPORT
(Continued) 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.
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 If this policy is in effect, You may exchange it:
OPTION 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 18
14623(17/18)(NY) Printed in U.S.A.
<PAGE>
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. The rate will always be at least the rate of
interest payable under Option 1 - Interest Income. 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 19
14623(19/20)(NY) Printed in U.S.A.
<PAGE>
INCOME OPTION 3 - INCOME FOR FIXED PERIOD
SETTLEMENT Payments, determined from the table below, are guaranteed for
OPTIONS the number of years chosen. The first payment will be due on
(Continued) the date proceeds are applied under this option.
MONTHLY PAYMENTS MONTHLY PAYMENTS
NUMBER PER $1,000 OF NUMBER PER $1,000 OF
OF YEARS PROCEEDS OF YEARS PROCEEDS
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
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.
MONTHLY PAYMENTS PER $1,000 OF PROCEEDS
<TABLE>
<CAPTION>
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> <C> <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 20
14623(19/20)(NY) Printed in U.S.A.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
HOME OFFICE ADDRESS:
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
(A stock insurance company)
ADMINISTRATIVE OFFICE ADDRESS:
NATIONAL SERVICE CENTER
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 FACE AMOUNT IS A GUARANTEED DEATH
BENEFIT DURING THE FIRST FIVE POLICY YEARS SUBJECT TO THE CONDITIONS
DESCRIBED ON PAGE 10.
[LOGO]
LAST SURVIVOR FLEXIBLE PREMIUM
VARIABLE LIFE INSURANCE POLICY
HL-14623(NY) Printed in U.S.A.
<PAGE>
EXHIBIT 2
[LOGO]
HARTFORD LIFE
February 20, 1998 Lynda Godkin
Senior Vice President,
General Counsel & Corporate
Secretary Law Department
Board of Directors
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, CT 06089
RE: SEPARATE ACCOUNT VL II
HARTFORD LIFE INSURANCE COMPANY
FILE NO. 33-89990
Dear Sir/Madam:
I have acted as General Counsel to Hartford Life Insurance Company (the
"Company"), a Connecticut insurance company, and Hartford Life Insurance
Company Separate Account VL II (the "Account") in connection with the
registration of an indefinite amount of securities in the form of last
survivor flexible premium variable life insurance policies (the "Policies")
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended. I have examined such documents (including the Form S-6
Registration Statement) and reviewed such questions of law as I considered
necessary and appropriate, and on the basis of such examination and review,
it is my opinion that:
1. The Company is a corporation duly organized and validly existing as a stock
life insurance company under the laws of the State of Connecticut and is
duly authorized by the Insurance Department of the State of Connecticut to
issue the Policies.
2. The Account is a duly authorized and validly existing separate account
established pursuant to the provisions of Section 38a-433 of the
Connecticut Statutes.
3. To the extent so provided under the Policies, that portion of the assets of
the Account equal to the reserves and other contract liabilities with
respect to the Account will not be chargeable with liabilities arising out
of any other business that the Company may conduct.
<PAGE>
Board of Directors
Hartford Life Insurance Company
February 20, 1998
Page 2
4. The Policies, when issued as contemplated by the Form S-6 Registration
Statement, will constitute legal, validly issued and binding obligations of
the Company.
I hereby consent to the filing of this opinion as an exhibit to the Form S-6
Registration Statement for the Policies and the Account.
Sincerely,
/s/ Lynda Godkin
Lynda Godkin
<PAGE>
EXHIBIT 5
[LOGO]
HARTFORD LIFE
KEN A. MCCULLUM, FSA, MAAA
Assistant Vice President
Individual Life Product Development
February 20, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir:
This opinion is furnished in connection with the Form S-6 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 Form S-6
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 Form S-6
Registration Statement and to the reference to my name under the heading
"Experts" in the Prospectus included as a part of such Form S-6 Registration
Statement.
Very truly yours,
/s/ Ken A. McCullum
Ken A. McCullum, FSA, MAAA
Director Individual Life
Product Development
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
AND
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY
POWER OF ATTORNEY
-----------------
Gregory A. Boyko
John P. Ginnetti
Lynda Godkin
Thomas M. Marra
Lowndes A. Smith
Raymond P. Welnicki
Lizabeth H. Zlatkus
do hereby jointly and severally authorize Lynda Godkin, Marianne O'Doherty,
and Leslie T. Soler to sign as their agent, any Registration Statement,
pre-effective amendment, post-effective amendment and any application for
exemptive relief of the Hartford Life Insurance Company and Hartford Life and
Accident Insurance Company under the Securities Act of 1933 and/or the
Investment Company Act of 1940.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney for
the purpose herein set forth.
/s/ Gregory A. Boyko Dated: October 9, 1997
- --------------------------------------- -------------------------
Gregory A. Boyko
/s/ John P. Ginnetti Dated: October 9, 1997
- --------------------------------------- -------------------------
John P. Ginnetti
/s/ Lynda Godkin Dated: October 9, 1997
- --------------------------------------- -------------------------
Lynda Godkin
/s/ Thomas M. Marra Dated: October 9, 1997
- --------------------------------------- -------------------------
Thomas M. Marra
/s/ Lowndes A. Smith Dated: October 9, 1997
- --------------------------------------- -------------------------
Lowndes A. Smith
/s/ Raymond P. Welnicki Dated: October 9, 1997
- --------------------------------------- -------------------------
Raymond P. Welnicki
/s/ Lizabeth H. Zlatkus Dated: October 9, 1997
- --------------------------------------- -------------------------
Lizabeth H. Zlatkus
