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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
as filed with the Commission on December 5, 1997
Registration No. _________
Form S-6
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 OF SECURITIES OF
UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
A. Exact name of Trust: C.M. Life Variable Life Separate Account I
B. Name of Depositor: C.M. Life Insurance Company
C. Complete address of 140 Garden Street
Depositor's principal Hartford, CT 06154
executive offices:
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as possible after the
effective date of this Registration Statement.
Pursuant to Rule 24-F-2 of the Investment Company Act of 1940, the Registrant
hereby declares that an indefinite amount of its securities is being registered
under the Securities Act of 1933.
Registrant hereby amends this Registration Statement on such date o r dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date as
the Commission, acting pursuant to said section, may determine.
- ----------------------------
STATEMENT PURSUANT TO RULE 24F-2
The Registrant registers an indefinite number or amount of its variable life
insurance contracts under the Securities Act of 1933 pursuant to Rule 24F-2
under the Investment Company Act of 1940. The Rule 24F-2 notice for Registrant's
fiscal year ending December 31, 1996 was filed on February 28, 1997.
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
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Item No. of
Form N-8B-2 Caption
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1 Cover Page; Definition of Terms; The Separate Account
2 Cover Page; C.M. Life and the Separate Account
3 Cover Page; C.M. Life and the Separate Account
4 Sales and Other Agreements
5 C.M. Life and the Separate Account
6 C.M. Life and the Separate Account
7 Not Applicable
8 Appendix F. Financial Statement
9 Legal Proceedings
10 Cover Page; Introduction; Detailed Information about the Policy;
Transfers; Surrender Charges; Withdrawals; Death Benefit; Voting
Rights; Free Look Provision
11 C.M. Life and the Separate Account
12 C.M. Life and the Separate Account; Sales and Other Agreements
13 C.M. Life and the Separate Account; Charges and Deductions
14 Introduction; C.M. Life and the Separate Account; Detailed
Information About the Policy; The Investment Advisors and Portfolio
Managers; C.M. Life and the Separate Account; Surrender Charges;
Other Charges; Sales and Other Agreements
15 Introduction; Detailed Information About the Policy; Exhibit 11
16 Introduction; C.M. Life and the Separate Account
17 Introduction; Account Value and Net Surrender Value; Withdrawal
Fee; Exhibit 11
18 C.M. Life and the Separate Account
19 Records and Reports
</TABLE>
2
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
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Item No. of
Form N-8B-2 Caption
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20 Not Applicable
21 Introduction; Policy Loan Privilege
22 Assignment
23 Bonding Arrangement
24 Detailed Information About the Policy; C.M. Life and the Separate
Account
25 C.M. Life and the Separate Account
26 C.M. Life and MassMutual; The Investment Advisers
27 Detailed Information About the Policy; C.M. Life and the Separate
Account
28 Appendix C; Directors and Executive Officers of C.M. Life
29 C.M. Life and the Separate Account
30 C.M. Life and MassMutual
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Detailed Information about the Policy; Sales and Other Agreements
36 Not Applicable
37 Not Applicable
38 Sales and Other Agreements
39 Sales and Other Agreements
40 Sales and Other Agreements
</TABLE>
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
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Item No. of
Form N-8B-2 Caption
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41 Sales and Other Agreements
42 Not Applicable
43 Sales and Other Agreements
44 Detailed Information About the Policy; C.M. Life and the Separate
Account; Charges for Federal Taxes;
45 Not Applicable
46 Account Values; C.M. Life and the Separate Account
47 C.M. Life and the Separate Account
48 C.M. Life and the Separate Account
49 Detailed Information About the Policy
50 C.M. Life and the Separate Account
51 Cover Page; Detailed Information About the Policy; Additional
Information
52 C.M. Life and the Separate Account; Reservation of Rights
53 Federal Income Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Appendix F (to be filed)
</TABLE>
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SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICIES*
ISSUED BY C.M. LIFE INSURANCE COMPANY
This Prospectus describes a survivorship flexible premium adjustable variable
life insurance policy (the "Policy") offered by C.M. Life Insurance Company
("C.M. Life"). The Policy, for as long as it remains in force, provides lifetime
insurance protection on the two Insureds named in the Policy, and pays a Death
Benefit at the death of the last surviving Insured (the "second death"). The
minimum Initial Face Amount which may be purchased is $500,000 currently. The
Policy is designed to provide flexibility of premium payments and Death
Benefits by permitting the Owner, subject to certain restrictions, to vary the
frequency and amount of Premium Payments and to increase or decrease the Death
Benefit payable under the Policy. This flexibility allows an Owner to provide
for changing insurance needs under a single insurance policy. A Policy also may
be surrendered for its Net Surrender Value.
The Owner may allocate Net Premiums and Account Value among the divisions (the
"Divisions") of the designated segment of C.M. Life Variable Life Separate
Account I (the "Separate Account") and a Guaranteed Principal Account (the
"GPA"). The assets of each Division will be used to purchase, at net asset
value, shares of a designated investment fund. Currently, the available funds
include the following funds of MML Series Investment Fund (the "MML Trust") and
Oppenheimer Variable Account Funds (the "Oppenheimer Trust"):
MML Trust: Oppenheimer Trust:
--------- -----------------
MML Equity Fund Oppenheimer Capital Appreciation Fund
MML Money Market Fund Oppenheimer Global Securities Fund
MML Managed Bond Fund Oppenheimer Growth Fund
MML Blend Fund Oppenheimer Strategic Bond Fund
MML Equity Index Fund
The Owner bears the investment risk of any Account Value allocated to the
Separate Account. The Death Benefit may, and the Net Surrender Value will, vary
depending on the investment performance of the Divisions. While there is no
guaranteed minimum Net Surrender Value for funds invested in the Separate
Account, a Policy's Death Benefit will never be less than the Face Amount less
any Policy Debt and any unpaid premiums. Furthermore, the Policy will not
terminate if there are sufficient funds available to pay the Monthly Charges or
if the Safety Test has been met during a Guarantee Period.
All Policies are serviced through C.M. Life's Administrative Office, located at
1295 State Street, Springfield, Massachusetts 01111-0001. The telephone number
is (413) 788-8411. C.M. Life's Home Office is located in Hartford, Connecticut.
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. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE
PROSPECTUSES FOR MML TRUST INVESTMENT FUND* AND OPPENHEIMER VARIABLE ACCOUNT
FUNDS.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FURTHER REFERENCE.
THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION.
WE DO NOT CLAIM THE POLICY IS IN ANY WAY SIMILAR TO OR COMPARABLE WITH A MUTUAL
FUND'S SYSTEMATIC INVESTMENT PLAN. REPLACING EXISTING INSURANCE WITH THE POLICY
DESCRIBED IN THIS PROSPECTUS MAY NOT BE TO YOUR ADVANTAGE.
SUBJECT TO COMPLETION DECEMBER 5, 1997
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALES OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY STATE.
This Prospectus does not constitute an offer or solicitation to acquire any
interest or participation in the survivorship flexible premium adjustable
variable life insurance policies offered by this Prospectus in any jurisdiction
to anyone to whom it is unlawful to make such an offer or solicitation in such
jurisdiction.
*Title may vary in some jurisdictions
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<TABLE>
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Table of Contents
<S> <C>
I. INTRODUCTION 3
II. DETAILED DESCRIPTION OF THE POLICY
Availability of Policy 4
Death Benefit 4
Premiums 5
Transfers 7
Policy Termination and Reinstatement 7
Charges and Deductions 7
Deductions from Premiums 8
Monthly Charges Against the Account Value 8
Daily Charges Against the Separate Account 9
Surrender Charges 9
Other Charges 9
Account Value and Net Surrender Value 9
Policy Loan Privilege 10
Free Look Provision 11
Policy Rewrite Provision 11
The Guaranteed Principal Account 11
When We Pay Proceeds 12
Federal Income Tax Considerations 12
Your Voting Rights 14
Reservation of Rights 15
Additional Benefits You Can Get by Rider 15
Payment Options 16
Beneficiary 16
Assignment 17
Limits on Our Right to Challenge the Policy 17
Error of Age or Sex 17
Suicide 17
Sales and Other Agreements 17
Commission Schedule 17
Service Agreement 18
Bonding Arrangement 18
Legal Proceedings 18
Experts 18
III. ADDITIONAL INFORMATION
C.M. Life and MassMutual 18
Records and Reports 19
The Separate Account 19
MML Trust and Oppenheimer Trust 19
The Investment Advisers 21
Appendix A
Definition of Terms 23
Appendix B
Examples of Death Benefit Option Changes 25
Appendix C
Rates of Return 26
Appendix D
Illustration of Death Benefits, Net Surrender Values, and Accumulated
Premiums 30
Appendix E
Directors of C.M. Life 43
Principals 43
Appendix F
Financials (to be filed) 44
</TABLE>
2
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I. INTRODUCTION
Note: Please refer to Appendix A, Glossary for definitions of the terms
contained in this Prospectus.
You should consult Your Policy for further understanding of its term and
conditions, and for any state-specific provisions and variances that may apply
to Your Policy.
The Policy is a life insurance contract providing a Death Benefit, an Account
Value, surrender rights, policy loan privileges, and other features
traditionally associated with life insurance. The Policy is a "survivorship"
policy because it provides life insurance on two insured lives and pays a death
benefit at the time of the second death.
The Policy is a "flexible premium" policy because there is no fixed schedule of
premium payments. Although the Owner may establish a schedule of premium
payments ("Planned Premium Payments"), failure to make a Planned Premium Payment
will not necessarily cause a Policy to terminate nor will making the Planned
Premium payments guarantee a Policy will remain in force. The flexibility of
premium payment timing and amount allows an Owner to match premium payments to
income flows or other financial decisions.
The Policy is "adjustable" because the Owner may choose to increase or decrease
the Death Benefit and to change the Death Benefit Option under the Policy. The
Policy is "variable" because the Death Benefit may, and the Net Surrender Value
will, vary in relation to the investment experience of the Divisions of the
Separate Account to which an Owner has allocated Net Premiums. Additionally,
the GPA's crediting interest rate may be adjusted periodically, although it will
not drop below 3%.
The following diagram summarizes the elements of this Policy, and how the Policy
works.
HOW THE POLICY WORKS
-----------------------------
Premium Payment
-----------------------------
Premium Loads are deducted from each Premium
Payment
(Graphic Arrow to "Net Premium")
-----------------------------
Net Premium
-----------------------------
Net Premium and Account Value are allocated
among the Divisions of the Separate Account and
the GPA
(Graphic Arrow to "Account Value")
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--------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Investment Earnings Account Value Account Value Charges
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment earnings of the Divisions of The Account Value is allocated among the Monthly deductions for administrative,
the Separate Account less fund following investment choices: Insurance, and rider expenses are
investment management fees and separate Guaranteed Principal Account deducted each month
account fees are credited/ debited daily MML Money Market Division
MML Managed Bond Division ---------------------------------------
Interest is credited on values in the Oppenheimer Strategic Bond Division Owner Access to Account Value
Guaranteed Principal Account ---------------------------------------
(Graphic Arrow to "Account Value") MML Blend Division You may access Account Values through
MML equity Index Division loans and withdrawals
MML Equity Division
Oppenheimer Growth Division
Oppenheimer Capital Appreciation Division
Oppenheimer Global Securities Division
--------------------------------------------
- -------------------------------------- (Graphics Arrows to "Death Benefit," ---------------------------------------
Death Benefit "Account Value Charges," "Owner Access to Policy Surrender
- -------------------------------------- Account Value," and "Policy Surrender.") ---------------------------------------
A choice of 3 Death Benefit Options is In the first 10 years of coverage a
available. The Option chosen may be surrender charge will be deducted from
changed at a later date the Account Value
</TABLE>
3
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II. DETAILED DESCRIPTION OF THE POLICY
Availability of the Policy
Individuals wishing to purchase a Policy must send a completed application to
C.M. Life's Administrative Office. Under our current rules, which can be
changed at our sole discretion, the minimum Initial Face Amount of a Policy is
$500,000. The Policy can be issued for two Insureds where the older Insured is
between the ages 18 and 90 inclusive, and the younger Insured is between the
ages 18 and 85 inclusive. Before issuing a Policy, C.M. Life will require
satisfactory evidence of insurability, which usually will include a medical
examination.
The Policy is available to individuals who are purchasing a Policy in connection
with employee benefit plans that qualify for tax benefits under the Internal
Revenue Code (the "qualified market") and to other individuals (the
"nonqualified market").
Unisex Policies issued in states requiring "unisex" policies (currently only
Montana) provide policy values which do not vary by the sexes of the Insureds.
In addition, Policies issued in conjunction with employee benefit plans provide
policy values that do not vary by sex. Thus, references in the Prospectus to
sex-distinct policy values that vary by sex are not applicable to Policies
issued in Montana or issued in conjunction with employee benefit plans.
Illustrations showing the effect of these unisex rates on premiums, Net
Surrender Values and Death Benefits are available from C.M. Life on request.
Death Benefit
As long as the Policy remains in force, C.M. Life will, upon due proof of the
deaths of both Insureds, pay the Death Benefit of the Policy to the named
Beneficiary. Although C.M. Life normally will pay the Death Benefit within
seven days of receiving satisfactory proof of the Insureds' deaths, the Company
may delay payments under certain circumstances. All or part of the Death
Benefit can be paid in cash or under one or more of the payment options set
forth in the Policy.
Minimum Death Benefit. In order to qualify as life insurance pursuant to I.R.C.
Section 7702, the Policy has a Minimum Death Benefit. The Minimum Death Benefit
is determined using one of two allowable Death Benefit Compliance Tests. The
applicable Test is chosen at the time of application and cannot be changed after
the Policy is issued. Under one of the tests, the Cash Value Test, the Minimum
Death Benefit is equal to an applicable percentage of the Account Value. The
applicable percentage depends on the sexes (male, female, unisex), tobacco
classifications, and Attained Ages of both Insureds. Under the other test, the
Guideline Premium Test, the Minimum Death Benefit also is equal to an applicable
percentage of the Account Value, but the percentage varies only by the Attained
Age of the younger Insured. The applicable percentages are set forth in the
Policy.
Death Benefit Options. The Death Benefit is the amount of the benefit provided
under the Death Benefit Option in effect on the date of the second death, less
any outstanding Policy Debt and less any unpaid premium. The Owner may choose
one of three Death Benefit Options: Option 1 (a level amount option) or Options
2 or 3 (variable amount options). The Death Benefit Option is chosen in the
application and subsequently may be changed subject to certain restrictions
described in Changes in the Death Benefit Option.
Options 1, 2 and 3 provide the following benefit.
Option 1 - Under Option 1, the benefit provided is the greater of: (a) the Face
Amount on the date of the second death; and (b) the Minimum Death Benefit on the
date of the second death.
Option 2 - Under Option 2, the benefit provided is the greater of: (a) the Face
Amount plus the Account Value on the date of the second death; and (b) the
Minimum Death Benefit on the date of the second death.
Option 3 - Under Option 3, the benefit provided is the greater of : (a) the Face
Amount plus the Premiums paid less any Premiums refunded (See Premium
Limitations) under the Policy to the date of the second death; and (b) the
Minimum Death Benefit on the date of the second death.
The following examples illustrate how changes in the Account Value and the
amount of premiums paid may affect the Death Benefits under Options 1, 2, and 3.
Example I
Under Option 1, the Death Benefit will remain at the Face Amount, in this
example $1,000,000, unless the Minimum Death Benefit exceeds the Face Amount.
Assume the Owner has selected Option 1 with a Face Amount of $1,000,000. The
Account Value is $50,000. The Death Benefit in this case is $1,000,000. The
Minimum Death Benefit is $219,000. If the Account Value increases to $80,000,
the Minimum Death Benefit increases to $350,400, but the Death Benefit remains
at $1,000,000. If the Account Value decreases to $30,000, the Minimum Death
Benefit decreases to $131,400, and the Death Benefit still remains at
$1,000,000.
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Example II
Under Option 2, the Death Benefit will be the Face Amount plus the Account Value
unless the Minimum Death Benefit exceeds the sum of the Face Amount plus the
Account Value.
Assume the Owner has selected Option 2 with a Face Amount of $1,000,000. The
Account Value is $50,000, and the Minimum Death Benefit is $219,000. The Death
Benefit in this case is $1,050,000 (Face Amount plus Account Value). If the
Account Value increases to $80,000, the Minimum Death Benefit will increase to
$350,400, and the Death Benefit will increase to $1,080,000. If the Account
Value decreases to $30,000, the Minimum Death Benefit will decrease to $131,400,
and the Death Benefit will decrease to $1,030,000.
Example III
Under Option 3, the Death Benefit will be the Face Amount plus the Premiums paid
under the Policy, less any Premium refunds, unless the Minimum Death Benefit
exceeds the sum of the Face Amount plus the Premiums paid.
Assume the Owner has selected Option 3 with a Face Amount of $1,000,000. The
Account Value is $50,000, the Minimum Death Benefit is $219,000 and Premiums
paid under the Policy to-date total $40,000. The Death Benefit in this case is
$1,040,000. If an additional $30,000 of Premium is paid into the Policy and the
Account Value increases to $80,000, the Minimum Death Benefit will increase to
$350,400, and the Death Benefit will increase to $1,070,000.
Changes in Death Benefit Option. After the first Policy Year, the Owner may
change the Death Benefit Option. Any changes of Death Benefit Option may require
a written application and satisfactory evidence of insurability. The effective
date of any change will be the Monthly Charge Date on or which next follows the
date C.M. Life approves the change. A change in the Death Benefit Option will
not in and of itself result in an immediate change in the amount of a Policy's
Death Benefit. The Policy Face Amount will be increased or decreased to give the
same Death Benefit under the new Death Benefit Option.
A change in Death Benefit Option will not be allowed if it would result in a
Face Amount of less than $500,000 after the change, if the older insured is
older than Attained Age 85, or if only one of the Insureds is alive.
An increase or decrease in Face Amount resulting from a change in the Death
Benefit Option will affect the Monthly Charges, as they depend in part on the
Face Amount. The charge for certain additional benefits also may be affected.
The Surrender Charge, however, will not be affected by an increase or decrease
in Face Amount resulting from a change in the Death Benefit Option.
For examples of Death Benefit Option changes and their impacts on the contract,
see Appendix B.
Changes in Face Amount. The Owner may request an increase or decrease in the
Face Amount subject to certain requirements. Any request for an increase or
decrease must be submitted in writing to C.M. Life's Administrative Office. It
will become effective on the Monthly Charge Date on or which next follows C.M.
Life's acceptance of the request.
Increases in Face Amount. For an increase in the Face Amount, C.M. Life requires
a written application and satisfactory evidence of insurability. An increase
may not be less than $50,000, and no increase will be permitted after the
younger Insured reaches Attained Age 85, or, if earlier, the older Insured
reaches Attained Age 90.
Decreases in Face Amount. Decreases in coverage are allowed after the first
Policy Year by written request. A decrease will not be permitted if the Face
Amount would fall below $500,000.
A decrease may result in the deduction of Surrender Charges from the Account
Value. (For a discussion of the Surrender Charges associated with a decrease,
see Surrender Charges.) Any Surrender Charges applicable to a decrease will be
deducted from the Division(s) of the Separate Account and from the GPA in
proportion to the non-loaned values in each.
A decrease will reduce the Face Amount in the following order: (a) the Face
Amount provided by the most recent increase; (b) the Face Amounts provided by
the next most recent increases successively; and finally (c) the Initial Face
Amount. As a result, a decrease in Face Amount will affect the Monthly Charges
deducted from the Account Value.
A decrease may result in the Policy becoming a "modified endowment contract".
(See Policy Proceeds, Premiums and Loans.)
Premiums
Subject to certain limitations, the Owner has flexibility in determining the
frequency and amount of premium payments.
Premium Flexibility. Unlike traditional insurance policies, this Policy frees
the Owner from required premium payments and a rigid premium schedule. Instead,
C.M. Life requires an Owner to pay only a minimum initial premium at the time of
application or at any time before delivery of the Policy. After the first
premium has been paid, subject to certain limitations, premiums may be paid in
any amount and at any interval.
5
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The minimum initial premium depends on the planned frequency of premium
payments, and the Issue Ages, sexes, and rating classes of the Insureds, as well
as the initial Death Benefit Option and Initial Face Amount of the Policy.
Planned Annual Premium. When applying for a Policy, the Owner will select a
planned annual premium and payment frequency (annual, semiannual, quarterly, or
monthly check service). The planned premium at the payment frequency chosen is
shown on the schedule page of the Policy. C.M. Life will send premium notices
for the planned premium according to the amount and frequency selected. The
Owner may change the amount and frequency of planned premiums at any time by
sending written notice to C.M. Life's Administrative Office.
An Owner may elect to pay premiums by means of a preauthorized check procedure.
Under this procedure, premium payments are deducted automatically on a monthly
basis from a designated bank account. An Owner does not receive a "bill" for
these payments, and confirmation of these payments is provided in the Policy's
quarterly statement.
There is no penalty if the planned premium is not paid, nor does payment of this
amount guarantee coverage for any period of time. Instead, the duration of the
Policy depends on maintaining a sufficient Account Value, or meeting the Safety
Test ( See Policy Termination section.). Even if planned premiums are paid, if
the Safety Test is not met, the Policy terminates when the Account Value becomes
insufficient to pay the Monthly Charges and the grace period expires without
sufficient payment.
Premium Limitations. After the first premium is paid, the minimum premium
payment is $20. If the Cash Value Test has been chosen as the Death Benefit
Compliance Test, the maximum premium that may be paid in any Policy Year without
evidence of insurability is the greatest of: (a) the premium that will not
increase the net amount at risk under the Policy; (b) twice the Policy's Expense
Premium plus $100; and (c) the annual premium paid in the preceding Policy year.
If the Guideline Premium Test has been chosen, the maximum premium is equal to
the lesser of the maximum premium as determined above and the Guideline Premium
Test premium limitation. We have the right to refund any premium amount that
exceeds these limitations. Premium payments should be sent either to C.M.
Life's Administrative Office or to the address indicated on the billing notice.
Allocation of Net Premium Payments. The Net Premium equals the premium paid
less the Premium Expense Charge. (See Deductions from Premiums.) At the time
of Application, the Owner indicates how Net Premiums are to be allocated among
the Divisions of the Separate Account and the GPA. The allocation percentages
must be in whole numbers and the sum of the allocation percentages must equal
100%.
The allocation percentages may be changed without charge at any time by
providing written notice to C.M. Life's Administrative Office. The maximum
number of different Divisions that may be used during the life of the Policy is
16.
Any Initial Net Premium received with an application will be deposited to C.M.
Life's General Account and earn interest at the rate set by C.M. Life from the
Policy Date to the date the Policy is issued. Once the Policy has been issued,
the Net Premium plus interest earnings, less any Monthly Charges will be
allocated either in accordance with the allocation percentages in the
Application, or to the Money Market Division of the Separate Account. If under
the Free Look Provision, the Owner receives. (i) any premium paid for this
Policy plus (ii) interest credited to this Policy under the Guaranteed Principal
Account, plus or minus (iii) an amount reflecting the investment experience of
the investment divisions of the Separate Account under this Policy to the date
the Policy is received by us, minus (iv) any amounts withdrawn and any Policy
Debt, this amount will be allocated to the GPA and the Divisions of the Separate
Account based on the allocation percentages in the Application. If under the
Free Look Provision, the Owner receives the total of all premiums paid for the
Policy, reduced by any amounts borrowed or withdrawn, this amount will be
allocated to the Money Market Division of the Separate Account.
If the Initial Net Premium plus interest earnings, less any Monthly Charges is
allocated to the Money Market Division of the Separate Account, Subsequent Net
Premiums received during the Free Look Period also will be allocated to the
Money Market Division of the Separate Account on the Valuation Date on or next
following the date We receive the Subsequent Net Premiums in good order at our
Administrative Office, or at the address indicated on the billing notice. At
the end of the Free Look Period, the Money Market account balance will be
transferred to the GPA and the Separate Accounts in accordance with the
allocation percentages in the Application.
If the Initial Net Premium plus interest earnings, less any Monthly Charges is
allocated in accordance with the allocation percentages in the Application,
Subsequent Net Premiums will be deposited on the Valuation Date on or next
following the date We receive the Subsequent Net Premiums in good order at our
Administrative Office, or at the address indicated on the billing notice.
Transfers from one Division to another will be credited on the Valuation Date
the Transfer Request is received in good order.
6
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Transfers
By written request, the Owner may transfer all or part of the Account Value of a
Division of the Separate Account to any other Division or to the GPA. Although
C.M. Life currently imposes no limitation on the right of the Owner to make
transfers, we reserve the right to limit transfers to no more than one every 90
days in connection with compliance with Section 404(c) of ERISA. Any limitation
would not apply to a transfer of all funds in the Separate Account to the GPA or
to automated transfers made in connection with any program C.M. Life has in
place.
Transfers of values from the GPA to the Separate Account are limited to one each
Policy Year. Any transfer from the GPA cannot exceed 25% of the Fixed Account
Value (less any Policy Debt) at the time of the transfer. If 25% of the Fixed
Account Value has been transferred from the GPA each year for three consecutive
Policy Years, and no value has been transferred into the GPA, nor premiums
allocated to the GPA, during this time, the remainder of the Fixed Account Value
(less any Policy Debt) may be transferred, in one transaction, out of the GPA in
the succeeding Policy Year.
Any transfer is effective on the Valuation Date on or next following the date we
receive a written request in good order at our Administrative Office. There
are no charges for transfers.
Policy Termination and Reinstatement
Policy Termination. This Policy will not terminate for failure to pay premiums
since premium payments, other than the Initial Premium Payment, are not
specifically required. Rather, if in the first three Policy Years the Account
Value less any Policy Debt is not enough to cover the Monthly Charges on a
Monthly Charge Date, or if in subsequent Policy Years the Net Surrender Value is
not enough to cover the Monthly Charges on a Monthly Charge Date, the Policy
will enter a 61-day grace period unless the Safety Test has been met.
At the beginning of the grace period, C.M. Life will mail a notice to the
Owner's last known address stating the amount of premium needed to cover the
shortfall. During the grace period, the Policy remains in force. If the
required premium is not paid within 61 days after the Monthly Charge Date (or,
if later, within 30 days after we mail the written notice), the Policy
terminates without value.
If the Account Value less Policy Debt in the first three Policy Years or the Net
Surrender Value in subsequent years is insufficient to pay the Monthly Charges
on a particular Monthly Charge Date and the Safety Test (as described below) has
been met on that date, the Monthly Charges for that Date will be reduced to an
amount equal to the Account Value less any Policy Debt.
The Safety Test can be met only during a Guarantee Period. There are two
Guarantee Periods. One Period is the lesser of 20 years or to the younger
Insured's age 90. The other is to the younger Insured's age 100. On any day
during a Guarantee Period, the Safety Test is met if the premiums paid less
amounts withdrawn accumulated with interest to that day, equals or exceeds the
Guarantee premium accumulated with interest to that date. The effective annual
rate of interest used to accumulate these amounts is 3%. The Guarantee Periods
available and the Safety Test may vary depending on the contract state of Your
Policy. Consult Your Policy for the Guarantee Periods available to You.
Reinstatement. For a period of five years after a Policy terminates, the Owner
can request that We reinstate the Policy provided neither Insured has died since
the Policy termination. However, the Policy cannot be reinstated if it has been
surrendered for its Net Surrender Value. Please note a termination or
reinstatement may cause the Policy to become a modified endowment contract. (See
Modified Endowment Contracts.)
Before We will reinstate the Policy, We must receive the following:
(a) Evidence of insurability satisfactory to C.M. Life;
(b) A premium payment sufficient to keep the policy in force for three months
following reinstatement;
(c) Where applicable, a signed acknowledgement the Policy has become a modified
endowment contract.
If We reinstate the Policy, the Face Amount for the reinstated Policy will be
the same as it would have been if the Policy had not terminated. The premium
payment will be allocated based on the allocation requested at the time of
reinstatement effective on the Monthly Charge Date on which the Policy is
reinstated. The Account Value at the time of reinstatement will be the net
amount of the premium paid at the time of reinstatement, less any Monthly
Charges taken at that time.
Charges and Deductions
Charges will be deducted in connection with the Policy to compensate C.M. Life
for: (a) providing the insurance benefits under the Policy (including any
riders); (b) administering the Policy; (c) assuming certain risks in connection
with the Policy (including any riders); and (d) expenses incurred in selling and
distributing the Policy. A summary of the charges is as follows.
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<TABLE>
<CAPTION>
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CURRENT RATE GUARANTEED RATE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Premium Load Coverage Years 1-10:13% of premium up to All Coverage Years: 13% of premium up to
Expense Premium; 3% of premium over Expense Expense Premium; 3% of premium over Expense
Premium Premium
Coverage Years 11+: 3% of all premium
Administrative Charge Policy Years 1-10: $12 per month per policy All Coverage Years: $12 per month per policy
Policy Years 11+: $6 per month per policy
Face Amount Charge Coverage Years 1-10: $0.13 per month per Coverage Years 1-10: $0.13 per month per
$1,000 of Face Amount $1,000 of Face Amount
Coverage Years 11+: $0.0 Coverage Years 11+: $0.0
Insurance Charges Based on C.M. Life's expectations as to For standard risks, rates are based on 1980
future mortality and expense experience Commissioners Standard Ordinary (CSO)
Mortality Tables.
Mortality and Expense Risk Charge All Policy Years: 0.25% on an annual basis All Policy Years: 0.90% on an annual basis
of daily net asset value of the Separate of daily net asset value of the Separate
Account Account
Loan Rate Expense Charge Policy Years 1-10: 0.50% of loaned amount All Policy Years: 2.0% of loaned amount
Policy Years 11+: 0.25% of loaned amount
Withdrawal Fee $25 $25
Surrender Charges See Surrender Charges section of this
Prospectus
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Deductions from Premiums
A premium load is deducted from each premium payment made prior to the
allocation of the payment to the Divisions of the Separate Account and the GPA.
The premium load distinguishes between premium payments up to Expense Premium,
and premium payments over Expense Premium. The Expense Premium is based on the
issue ages, sexes, and risk classifications of the Insureds, and the Death
Benefit Option in effect at the time of any premium payment.
Premiums are allocated to the Initial Face Amount and any subsequent increases
based on the ratio of the Expense Premium for each segment to the total of the
Expense Premiums for all segments
Monthly Charges Against the Account Value
Charges will be deducted from the Account Value on each Monthly Charge Date. The
Monthly Charges consist of: (a) an Administrative Charge; (b) a Face Amount
Charge; (c) an Insurance Charge; and (d) a rider charge for any additional
benefits provided by rider. The Monthly Charges will be deducted from the
Division(s) of the Separate Account and the GPA in proportion to the nonloaned
values of the Policy in the Division(s) and the GPA.
Administrative Charge and Face Amount Charge. The monthly Administrative Charge
and Face Amount Charge reimburse C.M. Life for expenses incurred in issuing and
administering the Policy, and for such activities as processing claims,
maintaining records and communicating with Owners.
<PAGE>
Insurance Charges. The monthly Insurance Charge for a Policy is equal to the
"amount at risk" under the Policy, multiplied by the monthly Insurance Charge
rate for that Policy month. The insurance amount is determined on the first day
of each Policy month and is the amount by which the Death Benefit (discounted at
the monthly equivalent of 3% per year) exceeds the Account Value.
Insurance rates will be based on the sexes, Issue Ages, and risk classes of the
Insureds, and the Year of Coverage. C.M. Life currently places Insureds into the
following three standard rate classes: Select-Preferred Nontobacco, Preferred
Nontobacco, and Preferred Tobacco; as well as substandard rate classes involving
higher mortality risks. In an otherwise identical Policy, the monthly insurance
rate is higher for tobacco users than for those who do not use tobacco and
higher for Preferred Nontobacco Insureds than for Select-Preferred Nontobacco
Insureds.
Rider Charge. The monthly rider charge will include charges for any additional
benefits provided by rider.
Daily Charges Against the Separate Account
Mortality and Expense Risk Charge. C.M. Life assesses a daily charge against
the net asset value of the Separate Account for mortality and expense risks.
This charge is not deducted from the assets in the GPA.
The mortality risk we assume is that the group of lives insured under our
Policies may, on average, live for shorter periods of time than we estimated.
The expense risk we assume is that our costs of issuing and administering
Policies may be more than we estimated.
If not all the money C.M. Life collects from this charge is needed to cover
death benefits and expenses, it will be our gain and will be used for any proper
purpose, including payment of sales commissions. Conversely, even if the money
we collect is insufficient, we will provide for all Death Benefits and expenses.
Investment Management Fee and Other Expenses. Because the Divisions of the
Separate Account purchase shares of either MML Trust or Oppenheimer Trust, the
value of Accumulation Units of the Divisions will reflect the investment
management fee and other expenses incurred by MML Trust and Oppenheimer Trust.
The Prospectuses of MML Trust and Oppenheimer Trust contain additional
information concerning such fees and expenses.
Surrender Charges
During the first 10 Years of Coverage under the Initial Face Amount, and during
the first 10 Years of Coverage under any increase in Face Amount, C.M. Life will
impose a Surrender Charge against the Account Value if the Owner surrenders the
Policy or decreases the Face Amount under the Policy. The Surrender Charge in
the first year of coverage is the lesser of 100% of the Expense Premium or $60
per thousand of Face Amount. The Surrender Charge is decreased by 10% of the
first year Surrender Charge in each of the next nine years of coverage, and is
zero in the eleventh year. Surrender Charges are calculated separately for the
Initial Face Amount and for each increase in the Face Amount.
Surrender Charge Upon Decrease in Selected Face Amount. Elected decreases in
Face Amount--that is, decreases resulting from other than a withdrawal or a
change in the Death Benefit Option-- result in canceling all or a part of
previously issued Face Amount segments. A partial Surrender Charge is assessed
and deducted from the Account Value. The partial Surrender Charge is equal to
the Surrender.Charge associated with each canceled Face Amount segment. If the
partial Surrender Charge for a decreased or cancelled Face Amount segment would
be greater than the Account Value of the policy, the partial Surrender Charge
for that decrease is set equal to the Account Value on the date of the
surrender.
The Surrender Charge after the decrease equals the Surrender Charge prior to the
decrease less the partial Surrender Charge taken.
Other Charges
Withdrawal Fee. For each Withdrawal, a charge of $25 will be deducted from the
amount withdrawn. This fee is guaranteed not to increase for the duration of
the Policy.
Loan Interest Rate Expense Charge. This charge reimburses C.M. Life for
expenses incurred in administering loans.
Account Value And Net Surrender Value
Account Value. The Account Value of the Policy is the sum of all Net Premium
payments adjusted by periodic charges and credits and by Withdrawals. Following
the Free Look Period, this amount is allocated among the Separate
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Account Divisions and the GPA according to the net premium allocation requested
at the time of Application (See Allocation of Net Premium Payments section for
more details.).
Investment Return. The investment return of a Policy is based on:
(a) The Account Value held for the Policy in each Division of the Separate
Account;
(b) The investment experience of each Division as measured by its actual net
rate or return; and
(c) The interest credited on Account Values held in the GPA.
The investment experience of a Division reflects increases and decreases in the
net asset value of the shares of the underlying Fund, any dividend or capital
gains distributions declared by the Fund, and any charges assessed against
assets of the Division. The investment experience is determined each day the
net asset value of the underlying Fund is determined -- that is, on each
Valuation Date. The actual net rate of return for a Division measures the net
investment experience from the end of one Valuation Date to the end of the next
Valuation Date.
Net Surrender Value. The Policy may be fully surrendered for its Net Surrender
Value at any time while at least one Insured is living. The Net Surrender Value
is equal to the Account Value less any applicable Surrender Charges and less any
Policy Debt.
An Owner may surrender the Policy by sending a written request together with the
Policy to C.M. Life's Administrative Office. The proceeds will be determined
as of the end of the Valuation Date on which the request for surrender is
received in good order.
Withdrawals. After the first Policy Year, the Owner may, subject to certain
restrictions, withdraw up to 75% of the Net Surrender Value. For each
Withdrawal, a fee of $25 is deducted from the amount withdrawn. The minimum
amount of a partial Withdrawal is $100 (before deducting the Withdrawal fee).
We reserve the right to prohibit Withdrawals that would result in a reduction of
the Face Amount to less than $500,000.
The Withdrawal amount will be made on a pro rata basis from the Divisions of the
Separate Account and the GPA based on the non-loaned Account Value of the
Divisions and the GPA on the date of the Withdrawal. The Withdrawal amount
attributable to a Division of the Separate Account or to the GPA may not exceed
the non-loaned Account Value of the Division or GPA. If Death Benefit Option 1
or 3 is in effect, C.M. Life will reduce the Face Amount by the amount of the
Withdrawal unless satisfactory evidence of insurability is provided. A
Surrender Charge is not assessed for a Withdrawal.
Policy Loan Privilege
General. After the first Policy Year, the Owner may obtain a loan from the
Policy as long as the Account Value exceeds the total of any Surrender Charges.
The Policy must be assigned to C.M. Life as collateral for the loan. The
maximum amount that can be borrowed at any time is 90% of the Policy's Account
Value less any Surrender Charge. This is reduced by any outstanding Policy
Debt, which includes accrued interest.
Source of Loan. The Policy loan amount requested is taken from Divisions of the
Separate Account and the GPA in proportion to the Account Value of each Division
and the GPA (excluding any outstanding loans) on the date of the loan. Loaned
amounts are taken from the Divisions by liquidating units and the resulting
dollar amounts are transferred to the loaned portion of the GPA. We may delay
the granting of any loan taken from the GPA for up to six months. We also may
delay the granting of any loan from the Divisions of the Separate Account during
any period that: (i) the New York Stock Exchange is closed (other than customary
weekend and holiday closings); (ii) trading is restricted; (iii) the SEC
determines a state of emergency exists; or (iv) the Securities and Exchange
Commission permits C.M. Life to delay payment for the protection of our Owners.
Whenever total Policy Debt (which includes accrued interest) equals or exceeds
the Account Value less Surrender Charges, C.M. Life will send a notice to the
Owner. This notice will state the amount necessary to bring the Policy Debt
back within the limit. If we do not receive payment of that amount plus a
premium payment sufficient to keep the policy in force for three months, within
31 days after the date we mailed the notice, and if Policy Debt exceeds the
Account Value less any Surrender Charges at the end of those 31 days, the Policy
terminates without value.
Loan Interest Charged. At time of Application, the Owner may select a loan
interest rate of 5% or (in all jurisdictions except Arkansas) an adjustable loan
rate. Each year C.M. Life will set the adjustable rate that will apply for the
next Policy Year. The maximum loan rate is based on the Monthly Average
Corporate yield on seasoned corporate bonds as published by Moody's Investors
Service, Inc., or, if it is no longer published, a substantially similar
average. The maximum rate is the published monthly average for the calendar
month ending two months before the Policy Year begins, or 4%, whichever is
higher. If the maximum limit is not at least 1/2% higher than the rate in
effect for the previous year, we will not increase the rate. If the maximum
limit is at least 1/2% lower than the rate in effect for the previous
year, we will decrease the rate.
10
<PAGE>
Interest on Policy loans accrues daily and becomes part of the Policy Debt as it
accrues. It is due on each Policy Anniversary. If not paid when due, the
interest will be added to the loan and, as part of the loan, will bear interest
at the same rate. Any interest capitalized on a Policy Anniversary will be
treated the same as a new loan and will be taken from the Divisions and the GPA
in proportion to the non-loaned Account Value in each.
Repayment. All or part of any Policy Debt may be repaid at any time while at
least one of the Insureds is living and while the Policy is in force. Any loan
repayment first will be allocated to the GPA until the Owner has repaid all loan
amounts that originated from the GPA. Any additional loan repayments will be
allocated according to the premium allocation factors in effect. Loan
repayments must be clearly identified as such; otherwise they will be considered
premium payments.
Any outstanding Policy Debt will be deducted from the proceeds payable at the
second death or the surrender of the Policy.
Interest on Loaned Value. Any loaned amount is held in the GPA and earns
interest at a rate determined by C.M. Life, equal to the greater of 3% and the
Policy loan rate less the Loan Interest Rate Expense Charge. This Charge is 2%
on a guaranteed basis and 0.50% in Policy Years one through 10 and 0.25% in
Policy Years 11 and later on a current basis.
Effect of Loan. A Policy loan affects the Policy since the Death Benefit and
Net Surrender Value under a Policy are reduced by the amount of the loan.
Repayment of the loan increases the Death Benefit and Net Surrender Value under
the Policy by the amount of the repayment. Taking a Policy loan could have tax
consequences. (See Policy Proceeds, Premiums and Loans.)
As long as a loan is outstanding, a portion of the Policy Account Value equal to
the loan is held in the GPA. This amount is not affected by the Separate
Account's investment performance. The Account Value may be impacted since the
portion of the Account Value equal to the Policy loan is credited with an
interest rate declared by C.M. Life rather than a rate of return reflecting the
investment performance of the Division(s) of the Separate Account from which the
loan was taken.
Free Look Provision
The Owner may cancel the Policy within 10 days after the Owner receives it, or
10 days after C.M. Life mails or delivers a written notice of withdrawal right
to the Owner, or within 45 days after the date of the Part 1 of Application for
the Policy, whichever is latest.
The Owner should mail or deliver the Policy and Policy delivery receipt either
to C.M. Life's Administrative Office or to the agent who sold the Policy or to
one of our agency offices. If the Policy is canceled in this fashion, a refund
will be made to the Owner. The refund may be equal to the sum of: (i) any
premium paid for this Policy plus (ii) interest credited to this Policy under
the Guaranteed Principal Account, plus or minus (iii) an amount reflecting the
investment experience of the investment divisions of the Separate Account under
this Policy to the date the Policy is received by us, minus (iv) any amounts
withdrawn and any Policy Debt. Or, the refund may be equal to the total of all
premiums paid for the Policy, reduced by any amounts borrowed or withdrawn.
Check Your contract to determine which refund is applicable under Your Policy.
Policy Rewrite Provision
Existing second-to-die policies issued by C.M. Life may be rewritten to a
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy within
the first six months after the Policy Issue Date of the existing policy,
provided the Survivorship Flexible Premium Adjustable Variable Life Insurance
Policy is available for sale in Your state (the state in which the original
contract is issued) by the end of this six month period. Rewrites are not
available in all states.
The new Policy must be issued in the same state in which the original policy was
issued. We will apply all premiums paid under the old contract toward the new
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy. We
will credit interest from the date of the original premium payment for the
original policy to the Issue Date of the rewrite based on the GPA rate during
this period of time.
The Policy Date of the Policy and Issue Ages of the Insureds will be the same as
those of the original policy. No new evidence of insurability will be required
for the rewrite of the base policy, provided the Death Benefit under the two
policies is identical and the Policy is issued with the same risk
classifications of the Insureds. Only riders available for attachment to the
Survivorship Flexible Premium Adjustable Variable Life Policy can be attached to
the new Policy. If the Owner wishes to add available riders to the new policy
that were not attached to the original policy, evidence of insurability may be
required. The Survivorship Flexible Premium Adjustable Variable Life Policy
must meet the minimum policy requirements in effect at the time of the rewrite.
The Guaranteed Principal Account
An Owner may allocate some or all of the Net Premiums and transfer some or all
of the Account Value in the Divisions of the Separate Account, to the Guaranteed
11
<PAGE>
Principal Account ("GPA"). Because of exemptive and exclusionary provisions,
interests in C.M. Life's General Account (which include interests in the
Guaranteed Principal Account) are not registered under the Securities Act of
1933 and the General Account is not registered as an investment company under
the Investment Company Act of 1940. Accordingly, neither the General Account
nor any interests therein are subject to the provisions of these Acts, and C.M.
Life has been advised that the staff of the Securities and Exchange Commission
has not reviewed the disclosures in the Prospectus relating to the General
Account. Disclosures regarding the General Account may, however, be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses.
Amounts allocated to the Guaranteed Principal Account become part of the General
Account of C.M. Life, which consists of all assets owned by C.M. Life other than
those in the Separate Account and other separate accounts of C.M. Life. Subject
to applicable law, C.M. Life has sole discretion over the investment of the
assets of its General Account.
C.M. Life guarantees those amounts allocated to the GPA in excess of any Policy
Debt (which includes accrued interest) will accrue interest daily at an
effective annual rate at least equal to 3%. For amounts in the GPA equal to any
Policy Debt, the guaranteed minimum interest rate is an effective annual rate of
3% or, if greater, the Policy loan rate less the Loan Interest Rate Expense
Charge. This charge will not be greater than 2% per year. Such interest will be
paid regardless of the actual investment experience of the GPA. Although C.M.
Life is not obligated to credit interest at a rate higher than the guaranteed
minimum, it may declare a higher rate applicable for such periods as it deems
appropriate.
When We Pay Proceeds
If the Policy has not terminated, payment of the Net Surrender Value is made
within 14 days, and payment of loan proceeds or the Death Benefit are made
within seven days after we receive all required documents in a form satisfactory
to us at our Administrative Office. But we can delay payment of the Net
Surrender Value or any Withdrawal from the Separate Account or any loan proceeds
attributable to the Separate Account during any period when: (i) it is not
reasonably practicable to determine the amount because the New York Stock
Exchange is closed (other than customary weekend and holiday closings), or (ii)
trading is restricted by the SEC, or (iii) the SEC declares an emergency exists;
or (iv) the SEC, by order, permits us to delay payment in order to protect our
Owners.
We may delay paying any Net Surrender Value, any Withdrawal, or any loan
proceeds based on the GPA for up to six months from the date the request is
received at our Administrative Office.
We can delay payment of the entire Death Benefit if payment is contested. We
investigate all death claims arising within the two-year contestable period.
Upon receiving the information from a completed investigation, we generally make
a determination within five days as to whether the claim should be authorized
for payment. Payments are made promptly after authorization.
If payment of a Net Surrender or Withdrawal is delayed for 30 days or more, we
add interest to the date of payment at the same rate it is paid under the
interest payment option. Interest is paid on the Death Benefit from the date of
death to the date of payment.
Federal Income Tax Considerations
Policy Proceeds, Premiums and Loans C.M. Life believes the Policy meets the
statutory definition of life insurance under Code Section 7702 and hence
receives the same tax treatment as that accorded to fixed benefit life
insurance. Thus, the Death Benefit under the Policy is generally excludible
from the gross income of the Beneficiary under Section 101(a)(1) of the Code.
As an exception to this general rule, where a Policy has been transferred for
value, only the portion of the Death Benefit which is equal to the total
consideration paid for the Policy may be excluded from gross income. The Owner
is not deemed to be in constructive receipt of the cash values, including
increments thereon, under the Policy until a full surrender or partial
withdrawal is made (unless the Policy is a "modified endowment contract," as
discussed below).
Decreases in Face Amount and Withdrawals may be taxable depending on the
circumstances. Code Section 7702(f)(7) provides that where a reduction of future
benefits occurs during the first 15 years after a Policy is issued and where
there is a cash distribution associated with that reduction, the Owner may be
taxed on all or a part of the amount distributed. Where the provisions of Code
Section 7702(f) do not cause a taxable event, a withdrawal is taxable only to
the extent it exceeds the Owner's unrecovered premiums. After 15 years, such
cash distributions are not subject to federal income tax, except to the extent
they exceed the total amount of premiums paid but not previously recovered.
C.M. Life suggests you consult with your tax adviser in advance of a proposed
decrease in Face Amount or Withdrawal as to the portion, if any, which would be
subject to federal income tax.
A change of the Owner or the Insured(s) or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances.
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<PAGE>
C.M. Life also believes that under current law any loan received under the
Policy will be treated as Policy Debt of an Owner, and that no part of any loan
under a Policy will constitute income to the Owner unless the Policy has become
a "modified endowment contract." If the Policy is a modified endowment contract
under Code Section 7702A, loans will be fully taxable to the extent of any
income in the Policy and could be subject to an additional 10 percent tax. In
general, income in the policy is defined as the excess of the Account Value
(both loaned and unloaned) over previously unrecovered premiums paid. See the
discussion on modified endowment contracts below. Under the "personal" interest
limitation provisions of the Tax Reform Act of 1986, interest on Policy loans
used for personal purposes, which otherwise meet the requirements of Code
Section 264, will no longer be tax deductible. However, other rules may apply to
allow all or part of the interest expense as a deduction if the loan proceeds
are used for "trade or business" or "investment" purposes. See your tax adviser
for further guidance.
If the Policy Owner is a business or corporation, the 1986 Act may impose
additional restrictions. The Act limits the interest deduction available for
loans against a business-owned Policy. It imposes an indirect tax on the gain
in corporate-owned life insurance policies by way of the corporate alternative
minimum tax for those corporations subject to the alternative minimum tax. The
corporate alternative minimum tax also could apply to a portion of the amount by
which Death Benefits received exceed the Policy's date-of-death Net Surrender
Value.
Federal estate and gift and state and local estate and other tax consequences of
ownership or receipt of Policy proceeds depend on the circumstances of each
Owner or Beneficiary.
C.M. Life cannot make any guarantee regarding the future tax treatment of any
Policy. For complete information on the impact of changes with respect to the
Policy and federal and state tax considerations, a qualified tax adviser should
be consulted.
The ultimate effect of federal income taxes on values under this Policy and on
the economic benefit to the Owner or Beneficiary depends on C.M. Life's tax
status and on the tax status of the individual concerned. The discussion
contained herein is general in nature and is not an exhaustive discussion of all
tax questions that might arise under the Policy, and is not intended as tax
advice. Moreover, no representation is made as to the likelihood of
continuation of current federal income tax laws and Treasury Regulations or of
the current interpretations of the Internal Revenue Service. C.M. Life reserves
the right to make changes in the Policy to assure that it continues to qualify
as life insurance for tax purposes. For complete information on federal and
state tax law considerations, You should consult a qualified tax adviser. No
attempt is made herein to consider any applicable state or other tax laws.
Charges for Federal Taxes. C.M. Life currently does not make any charge against
the Separate Account for federal income taxes. We may make such a charge
eventually in order to provide for the future federal income tax liability of
the Separate Account.
Upon a full surrender of a Policy for its Net Surrender Value, the Owner may
recognize ordinary income for federal income tax purposes. Ordinary income is
computed to be the amount by which the Account Value, unreduced by any
outstanding Policy Debt but less any Surrender Charges assessed, exceeds the
premiums paid but not previously recovered and any other consideration paid for
the Policy.
Modified Endowment Contracts. Contrary to the rules described above, loans,
collateral assignments, and other amounts distributed under a "modified
endowment contract" are taxable to the extent of any accumulated income in the
Policy. In general, the amount that may be subject to taxation is the excess of
the Account Value (both loaned and unloaned) over the previously unrecovered
premiums paid. Death benefits paid under a modified endowment contract,
however, are not taxed any differently than death benefits payable under other
life insurance contracts.
A Policy is a modified endowment contract if it satisfies the definition of life
insurance in the Internal Revenue Code but fails the additional "7-pay test." A
Policy fails this test if the accumulated amount paid under the contract at any
time during the first seven contract years exceeds the total premiums that would
have been payable under a policy providing guaranteed benefits upon the payment
of seven level annual premiums. Also, a Policy which would otherwise satisfy
the 7-pay test will be taxed as a modified endowment contract if it is received
in exchange for a modified endowment contract.
Certain changes will require a Policy to be retested to determine whether it has
become a modified endowment contract. For example, a reduction in death benefits
during the first seven contract years will cause the Policy to be re-tested as
if it originally had been issued with the reduced death benefit. If the
premiums actually paid into the Policy exceed the limits under the 7-pay test
for a policy with the reduced death benefit, the Policy will become a modified
endowment contract. This classification change is effective retroactively to the
Policy Year in which the actual premiums paid exceed the new 7-pay limits.
In addition, a "material change" occurring at any time while the Policy is in
force will require the Policy to be retested to determine whether it continues
to meet the 7-pay test. A material change starts a new 7-pay test period. The
term "material change" includes many increases in death benefits. A material
change does not include an increase in death benefit attributable to the payment
of premiums necessary to fund the lowest level of death benefit payable
13
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during the first seven contract years, or which is attributable to the crediting
of interest with respect to such premiums.
Since the Policy provides for flexible premium payments, the Company has
instituted procedures to monitor whether increases in death benefits or
additional premium payments cause either the start of a new seven-year test
period or the taxation of distributions and loans.
If any amount is taxable as a distribution of income under a modified endowment
contract, it also will be subject to a 10% penalty tax. Limited exceptions from
the additional penalty tax are available for individual Owners. The penalty tax
will not apply to distributions: (i) made on or after the date the taxpayer
attains age 59 1/2; or (ii) attributable to the taxpayer's becoming
disabled; or (iii) made as part of a series of substantially equal periodic
payments (made at least annually) made for the life or life expectancy of the
taxpayer. For complete information about modified endowment contract status, a
qualified tax adviser should be consulted.
Once a Policy fails the 7-pay test, loans and distributions occurring in the
year of failure and thereafter become subject to the rules for modified
endowment contracts. In addition, a recapture provision applies to loans and
distributions received in anticipation of failing the 7-pay test. Any
distribution or loan made within two years prior to failing the 7-pay test is
considered to have been made in anticipation of the failure.
Under certain circumstances, a loan, collateral assignment, or other
distribution under a modified endowment contract may be taxable even though it
exceeds the amount of income accumulated in the Policy. For purposes of
determining the amount of income received from a modified endowment contract,
the law requires the aggregation of all modified endowment contracts issued to
the same Owner by an insurer and its affiliates within the same calendar year.
Therefore, loans, collateral assignments, and distributions from any one such
Policy are taxable to the extent of the income accumulated in all the Policies
required to be aggregated.
Qualified Plans. The Policy may be used in conjunction with certain
tax-qualified employee benefit plans. Since the rules governing such use are
complex, a purchaser should not use the Policy in conjunction with any such
qualified plan until a competent tax adviser has been consulted. The Policy may
not be used in conjunction with an Individual Retirement Account (IRA).
Diversification Standards. To comply with final regulations under Code Section
817(h) ("Final Regulations"), each Fund of the Trusts is required to diversify
its investments. The Final Regulations generally require that on the last day
of each quarter of a calendar year no more than 55% of the value of a Fund's
assets 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. A "look-through"
rule applies to treat a pro rata portion of each asset of a Fund as an asset of
the Separate Account. All securities of the same issuer are treated as a single
investment. However, each government agency or instrumentality is treated as a
separate issuer.
With respect to variable life insurance contracts, the general diversification
requirements are modified if any of the assets of the Separate Account are
direct obligations of the United States Treasury. In this case, there is no
limit on the investment that may be made in United States Treasury securities;
and for purposes of determining whether assets other than United States Treasury
securities are adequately diversified, the generally applicable percentage
limitations are increased based on the value of the Separate Account's
investment in United States Treasury securities. Notwithstanding this
modification of the general diversification requirements, the Funds of the
Trusts will be structured to comply with the general diversification standards
because they serve as an investment vehicle for certain variable annuity
contracts which must comply with the general standards.
In connection with the issuance of the temporary regulations prior to the Final
Regulations, the Treasury announced that such temporary regulations did not
provide guidance concerning the extent to which Owners may direct their
investments to particular Divisions of a separate account. Regulations in this
regard were not issued in connection with the Final Regulations, however. It is
not clear, at this time, what future regulations might provide. It is possible,
if future regulations are issued, the Policy may need to be modified to comply
with such regulations. For these reasons, C.M. Life reserves the right to
modify the Policy, as necessary, to prevent the Owner from being considered the
owner of the assets of the Separate Account.
C. M. Life intends to comply with the Final Regulations to assure the Policy
continues to qualify as life insurance for federal income tax purposes.
Your Voting Rights
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, the Owner is entitled to give C.M.
Life instructions as to how shares of the Funds held in the Separate Account (or
other securities held in lieu of such shares) deemed attributable to the Policy
shall be voted at meetings of shareholders of the Funds of the Trusts. Those
persons entitled to give voting instructions are determined as of the record
date for the meeting.
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<PAGE>
The number of shares of the Funds held in the Separate Account deemed
attributable to the Policy during the lifetimes of the Insureds are determined
by dividing the Policy's Account Value held in each Division of the Separate
Account, if any, by $100. Fractional votes are counted.
Owners receive proxy material and a form on which Owner instructions may be
given. Shares of the Funds held by the Separate Account for which no effective
Owner instructions have been received are voted for or against any proposition
in the same proportion as the shares for which instructions have been received.
Reservation of Rights
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. These actions will be taken in
accordance with applicable laws (including obtaining any required approval of
the Securities and Exchange Commission). If necessary, we will seek approval by
Owners.
Specifically, we reserve the right to:
. Create new Divisions of the Separate Account;
. Create new Separate Accounts;
. Combine any two or more Separate Accounts;
. Make available additional Divisions of the Separate Account investing in
additional investment companies;
. Invest the assets of the Separate Account in securities other than shares
of the Funds as a substitute for such shares already purchased or as the
securities to be purchased in the future;
. Operate the Separate Account as a management investment company under the
Investment Company Act of 1940 or in any other form permitted by law; and
. De-register the Separate Account under the Investment Company Act of 1940
in the event such registration is no longer required;
. Substitute one or more Funds for other funds with similar investment
objectives;
. Delete Funds.
C.M. Life also reserves the right to change the name of the Separate Account.
We have reserved all rights to the name C.M. Life Insurance Company or any part
of it. We may allow the Separate Account and other entities to use our name or
part of it, but we also may withdraw this right.
Additional Benefits You Can Get by Rider
At the Owner's request, the Policy can include additional benefits we approve
based on our standards and limits for issuing insurance and classifying risks.
An additional benefit is provided by rider and is subject to the terms of both
the rider and the Policy. The cost of any rider is deducted as part of the
Monthly Charges. Subject to state availability, the following riders are
available.
Policy Split Option Rider. This rider allows the Owner, while both Insureds are
living, to exchange the Policy for two new fixed premium permanent life
policies, or for two flexible premium adjustable life, one on the life of each
Insured, without evidence of insurability. This right will be available for the
six-month period beginning on:.
. The date six months after the effective date of a final decree of divorce,
issued by a court of competent jurisdiction, ending the Insureds' marriage
to each other, if the decree first becomes effective at least one year
after the Policy Issue Date, and remains in effect during the entire six-
month period after it first becomes effective.
. The date Section 2056 of the Internal Revenue Code (I.R.C.) is nullified or
amended to eliminate or reduce by at least 50% the Insureds' federal estate
tax marital deduction; or the date the maximum federal estate tax rate
given in I.R.C. Section 2001 is reduced to half the rate in effect on the
Policy Issue Date of this Policy.
. If this Policy is owned by a corporation or partnership, the effective date
the corporation or partnership dissolves.
The new policies must meet the policy requirements in effect at the time of the
exchange. The face amount of each new policy will be one-half the face Amount
of this Policy at the time of the split. The policy date of each new policy will
be the date of exchange. The issue age of each Insured will be the age of each
Insured on the birthday nearest the policy date. This rider may be attached to
the Policy at the time of issue as long as at least one of the Insureds is
younger than age 80 and as long as the insurance risk class of neither Insured
is uninsurable.
Estate Protection Rider. This rider may be attached to the Policy at the time of
issue. It provides an additional Death Benefit during the first four Policy
Years if both Insureds die during this period. The Owner selects the Face
Amount of the rider subject to a minimum of $25,000 and a maximum of 125% of the
Policy's Initial Face Amount.
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<PAGE>
Payment Options
The Policy proceeds (the Death Benefit or the Net Surrender Value) can be paid
in cash, or if elected, all or part of these proceeds can be placed under one or
more of the following payment options. The minimum amount that can be applied
under a payment option is $2,000. If the periodic payment under any option is
less than $20, we reserve the right to make payments at less-frequent intervals.
None of these benefits depends on the performance of the Separate Account or the
GPA. For additional information concerning these options, see the Policy. The
following payment options are currently available.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Installments for a Equal monthly payments will be made for any period
Specified Period selected, up to 30 years. The amount of each
payment depends on the total amount applied, the
period selected, and the monthly income rates We
are using when the first payment is due.
- --------------------------------------------------------------------------------
Life Income Equal monthly payments will be based on the life
of a named person. Payments will continue for the
lifetime of that person. Income with or without a
minimum payment period may be elected.
- --------------------------------------------------------------------------------
Interest We will hold any amount applied under this option.
Interest on the amount will be paid at an
effective annual rate determined by us. This rate
will not be less than 3%.
- --------------------------------------------------------------------------------
Installments of Specified Each payment will be made for an agreed fixed
Amount amount. The total amount paid during the first
year must be at least 6% of the total amount
applied. Interest will be credited each month on
the unpaid balance and added to it. This interest
will be an effective annual rate determined by us,
but not less than 3%. Payments continue until the
balance we hold is reduced to less than the agreed
fixed amount. The last payment will be for the
balance only.
- --------------------------------------------------------------------------------
Life Income with Payments Equal monthly payments will be based on the life
Guaranteed for Amount of a named person. Payments will be made until
Applied the total amount paid equals the amount applied,
and as long thereafter as the named person lives.
- --------------------------------------------------------------------------------
Joint Lifetime Income with Monthly payments will be based on the lives of two
Reduced Payments to named persons. Payments at the initial level will
Survivor continue while both are living, or for 10 years if
longer. When one dies (but not before the 10
years has elapsed), payments are reduced by
one-third and will continue at that level for the
lifetime of the other. After the 10 years has
elapsed, payments stop when both named persons
have died.
- --------------------------------------------------------------------------------
</TABLE>
Withdrawal Rights Under Payment Options. If provided in the payment option
election, all or part of the unpaid balance under the Fixed Amount or Interest
Payment Option may be withdrawn or applied under any other option. No part of
the payments under the Fixed Time Payment Option or payments which are based on
a named person's life may not be withdrawn.
Beneficiary
A Beneficiary is any person named on our records to receive insurance proceeds
at the second death. The Beneficiary is named in the application for the
Policy. There may be different classes of beneficiaries, such as primary and
secondary. These classes set the order of payment. There may be more than one
Beneficiary in a class.
Any Beneficiary may be named an Irrevocable Beneficiary. An Irrevocable
Beneficiary is one whose consent is needed to change that Beneficiary. The
consent of any Irrevocable Beneficiary is needed to exercise any Policy right
except the rights to change the frequency of Planned Premiums and Reinstate the
Policy after termination.
The Owner may change the Beneficiary during either Insured's lifetime by writing
to our Administrative Office. Generally, the change will take effect as of the
date of the request. If no Beneficiary is living at the second death, unless
provided otherwise, the Death Benefit is paid to the Owner or, if deceased, to
the Owner's estate.
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<PAGE>
Assignment
The Policy may be assigned as collateral for a loan or other obligation. For
any assignment to be binding on C.M. Life, however, We must receive a signed
copy of it at our Administrative Office. We are not responsible for the
validity of any assignment.
Limits on Our Right to Challenge the Policy
Except for any policy change or reinstatement requiring evidence of
insurability, we cannot contest the validity of the policy:
. with respect to any material misrepresentation in the application
regarding the insurability of Insured No. 1, once the policy has been in force
during the lifetime of Insured No. 1 for two years after the its Issue Date; or
. with respect to any material misrepresentation in the application
regarding the insurability of Insured No. 2, once the policy has been in force
during the lifetime of Insured No. 2 for two years after the its Issue Date.
For any policy change or reinstatement requiring evidence of insurability, we
cannot contest the validity of the change or reinstatement with respect to each
Insured after the change has been in effect for two years during the lifetime of
that Insured.
Error of Age or Sex
If either Insured's age or sex is misstated in the Policy application, the Death
Benefit payable under the Policy will be adjusted based on what the Policy would
provide according to the most recent Monthly Charge for the correct date of
birth and correct sex.
Suicide
Suicide within two years of the Policy Date is not covered by the Policy. If
either Insured dies by suicide, while sane or insane, within two years from the
Issue Date or Reinstatement Date, the policy will terminate. We will refund the
amount of all premiums paid, less any Withdrawals and Policy Debt. If either
Insured, while sane or insane, dies by suicide within two years after the
effective date of any increase in the Face Amount, the increase will terminate
and We will refund the Monthly Charges for that increase. However, if a refund
was payable as the result of suicide during the first two years following the
Issue Date or the Reinstatement Date of the Policy, there is no additional
refund for any Face Amount increase.
Sales And Other Agreements
MML Distributors, LLC ("MML Distributors"), 1414 Main Street, Springfield, MA
01144-1013, is the principal underwriter of the Policy pursuant to an
Underwriting and Servicing Agreement to which MML Distributors, C.M. Life and
the Separate Account are parties. MML Investors Services, Inc. ("MMLISI"), also
located at 1414 Main Street, Springfield, MA 01144-1013, serves as the
co-underwriter of the Policy Both MML Distributors and MMLISI are registered
with the Securities and Exchange Commission (the "SEC") as broker-dealers under
the Securities Exchange Act of 1934 and are members of the National Association
of Securities Dealers, Inc. (the "NASD").
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the SEC and are members of the NASD ("selling
brokers"). C.M. Life sells the Policy through agents who are licensed by state
insurance officials to sell the Policy. These agents also are registered
representatives of selling brokers or of MMLISI. The Policy is offered in all
states where C.M. Life is authorized to sell variable life insurance.
When an application for the Policy is completed, it is submitted to C.M. Life.
Under a service agreement between C.M. Life and MassMutual (described below
under Service Agreement), MassMutual performs suitability and insurance
underwriting and determines whether to accept or reject the application for the
Policy and the Insureds' risk classifications. If the application is not
accepted, C.M. Life will refund any premium paid.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters of the
Policy.
MML Distributors does business under different variations of its name; including
the name MML Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma,
South Dakota and Washington; and the name MML Distributors, Limited Liability
Company in the states of Maine, Ohio and West Virginia.
Commission Schedule
Writing agents will receive commissions based on a commission schedule and
rules. Some commissions are paid as a percentage of the premium paid in each
Policy Year. Commissions also are paid as a percentage of the average
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<PAGE>
monthly Account Value in each Policy Year. The maximum commission percentages
are as follow:
Premium-based Commissions
<TABLE>
<S> <C>
- ------------------------------------------------------------
Policy Year 1 50% of premium paid up to the
Expense Premium
3% of premium paid over the Expense
Premium
Policy Years 2-10 3% of all premium paid
Policy Years 11 No premium-based commission paid
and beyond
- ------------------------------------------------------------
</TABLE>
Asset-based Commissions
<TABLE>
- ------------------------------------------------------------
<S> <C>
Policy Years 11 and 0.20% of the average
beyond monthly Account Value in
each Policy Year
- ------------------------------------------------------------
</TABLE>
Agents under financing agreements with a general agent of MassMutual may be
compensated differently. Agents who meet certain productivity and persistency
standards in selling C.M. Life and MassMutual policies are eligible for
additional compensation.
General agents and brokers receive commissions based on different schedules and
rules.
Service Agreement
In addition to acting as an investment manager for the funds underlying the
Divisions of the Separate Account, MassMutual performs certain investment and
administrative duties for C.M. Life. MassMutual does this according to a
written agreement. The agreement is renewed automatically each year, unless
either party terminates it. Under this agreement, C.M. Life pays MassMutual for
salary costs and other services and an amount for indirect costs incurred
through C.M. Life's use of MassMutual's personnel and facilities.
Bonding Arrangement
An insurance company blanket bond is maintained providing $50,000,000 coverage
for officers and employees of MassMutual and C.M. Life (subject to a $350,000
deductible) and $50,000,000 for MassMutual's general agents and agents (also
subject to a $350,000 deductible).
Legal Proceedings
We are not currently involved in any legal proceedings which would have a
material impact on the Policy.
Experts
The audited financial statements of C.M. Life included in this Prospectus have
been included herein in reliance on the reports of Coopers & Lybrand L.L.P.,
Springfield, Massachusetts 01101, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
Actuarial matters in the Prospectus have been examined by Craig Waddington, FSA,
MAAA. An opinion on actuarial matters is filed as an exhibit to the
registration statements We filed with the SEC.
III. ADDITIONAL INFORMATION
C.M. Life and MassMutual
C.M. Life is a stock life insurance company located at 140 Garden Street,
Hartford, CT 06154. It was chartered by a Special Act of the Connecticut
General Assembly on April 25, 1980. C.M. Life is engaged principally in the
sale of life insurance policies and annuity contracts, and is licensed to sell
such products in all states except New York. C.M. Life is a wholly owned
subsidiary of Massachusetts Mutual Life Insurance Company ("MassMutual"). As of
December 5, 1997, C.M. Life is licensed to transact variable life insurance
business in all jurisdictions in the United States, including Puerto Rico, other
than New York and California.
MassMutual is a mutual life insurance company chartered in 1851 under the laws
of Massachusetts. Its Home Office is located in Springfield, Massachusetts.
MassMutual is licensed to transact life, accident, and health business in all
fifty states of the United States, the District of Columbia, Puerto Rico, and
certain provinces of Canada. As of December 31, 1996, MassMutual had total
contingency reserves in excess of $2.6 billion and consolidated assets of $55.8
billion.
C.M. Life's Tax Status. C.M. Life is taxed as a life insurance company under
Subchapter L of the Internal Revenue Code of 1986 (the "Code"). The Segment and
the Separate Account are not separate entities from C.M. Life and its operations
form a part of C.M. Life.
Investment income and realized capital gains on the assets of the Segment are
reinvested and taken into account in
18
<PAGE>
determining Account Value. The investment income and realized capital gains are
applied automatically to increase book reserves associated with the Policy.
Under existing federal income tax law, the Segment's investment income,
including net capital gains, is not taxed to C.M. Life to the extent it is
applied to increase reserves associated with the Policy. The reserve items taken
into account at the close of the taxable year for purposes of determining net
increases and net decreases must be adjusted for tax purposes by subtracting any
amount attributable to appreciation in the value of assets and by adding any
amount attributable to depreciation. C.M. Life's basis in the Policy's share of
the assets underlying the Segment will be adjusted for appreciation or
depreciation, to the extent the reserves are adjusted. Thus, corporate level
capital gains and losses, and the tax effect thereof, are eliminated.
Due to C.M. Life's current tax status, no charge is made to the Segment for C.M.
Life's federal income taxes that may be attributable to the Segment.
Periodically, C.M. Life reviews the question of a charge to the Segment for C.M.
Life's federal income taxes. A charge may be made for any federal income taxes
incurred by C.M. Life and attributable to the Segment. Depending on the method
of calculating interest on Policy values allocated to the Guaranteed Principal
Account (see preceding section), a charge may be imposed for the Policy's share
of C.M. Life's federal income taxes attributable to that account.
Under current laws, C.M. Life may incur state or local taxes (in addition to
premium taxes) in several states. At present, these taxes are not significant.
If there is a material change in applicable state or local tax laws, C.M. Life
reserves the right to charge the Separate Account for taxes, if any,
attributable to the Separate Account.
Records and Reports
All records and accounts relating to the Separate Account and the GPA are
maintained by MassMutual or C.M. Life. Each year within the 30 days following
the Policy Anniversary, C.M. Life will mail You a report showing the Account
Value at the beginning of the previous Policy Year, all premiums paid since that
time, all additions to and deductions from the Account Value during the year,
and the Account Value, Death Benefit, Net Surrender Value and Policy Debt as of
the last Policy Anniversary. This report contains any additional information
required by any applicable law or regulation.
The Separate Account
The Separate Account was established on February 2, 1995, as a separate
investment account of C.M. Life by C.M. Life's Board of Directors in accordance
with the laws of the State of Connecticut. The Separate Account is registered
with the Securities and Exchange Commission as a unit investment trust pursuant
to the provisions of the Investment Company Act of 1940, and meets the
definition of a "separate account" in that statute. Registration does not
involve supervision of the management or investment practices of either the
Separate Account or of C.M. Life. A separate segment for the Policies (the
"Segment") was established on November 12, 1997 and was divided into nine
Divisions. Each Division invests in a corresponding series of shares of a
designated Fund of either MML Trust or Oppenheimer Trust. C.M. Life may
establish additional divisions within the Separate Account in the future, which
may invest in other investment funds, including those of MML Trust or
Oppenheimer Trust, or in any other investment fund C.M. Life deems to be
appropriate.
C.M. Life owns the assets in the Separate Account and is required to maintain
sufficient assets in the Separate Account to meet anticipated obligations of the
Policies funded by the Separate Account. The income, gains, or losses, realized
or unrealized, of the Separate Account are credited to or charged against the
assets held in the Separate Account without regard to the other income, gains,
or losses of C.M. Life. Assets in the Separate Account attributable to the
reserves and other liabilities under the Policies are not chargeable with
liabilities arising from any other business conducted by C.M. Life. C.M. Life
may transfer to its General Account, however, any assets which exceed
anticipated obligations of the Separate Account. All obligations arising under
the Policy are general corporate obligations of C.M. Life. C.M. Life may
accumulate in the Separate Account proceeds from various Policy charges and
investment results applicable to those assets.
MML Trust and Oppenheimer Trust
The MML Trust is a no-load, open-end, management investment company registered
under the Investment Company Act of 1940. The Oppenheimer Trust is an open-end,
diversified, management investment company registered under the Investment
Company Act of 1940.
Both the MML Trust and the Oppenheimer Trust provide an investment vehicle for
the separate investment accounts of variable life and variable annuity contracts
offered by companies such as MassMutual. Shares of the MML Trust and the
Oppenheimer Trust are not offered to the general public.
The assets of certain variable annuity separate accounts for which MassMutual or
an affiliate is the depositor are invested in shares of the MML Trust's and
Oppenheimer Trust's Funds. Because these separate accounts are invested in the
same underlying Funds, it is possible material irreconcilable conflicts could
arise between Policy Owners
19
<PAGE>
and owners of the variable annuity contracts. Possible conflicts could arise if:
(i) state insurance regulators should disapprove or require changes in
investment policies, investment advisers or principal underwriters or if C.M.
Life should be permitted to act contrary to actions approved by holders of the
Policies under rules of the Securities and Exchange Commission; (ii) adverse tax
treatment of the Policies or the variable annuity contracts would result from
utilizing the same underlying funds; (iii) different investment strategies would
be more suitable for the variable annuity contracts than for the Policies; or
(iv) state insurance laws or regulations or other applicable laws would prohibit
the funding of both the Separate Account and other investment accounts by the
same Funds. The Board of Trustees of each Trust will follow monitoring
procedures which have been developed to determine whether material conflicts
have arisen. If it is determined a conflict exists, the Trustees will notify
MassMutual, C.M. Life and Oppenheimer Funds and appropriate action will be taken
to eliminate such irreconcilable conflicts.
C.M. Life purchases the shares of each Fund for the corresponding Division at
net asset value. All dividends and capital gain distributions received from a
Fund are automatically reinvested in that Fund at net asset value, unless C.M.
Life, on behalf of the Separate Account, elects otherwise. Shares of the MML
Trust and the Oppenheimer Trust will be redeemed by C.M. Life at their net asset
values to the extent necessary to make payments under the Policies.
Following is a chart illustrating the risk profiles of the investment options
available, and a summary of the investment objectives of each Fund. Please note
there can be no assurance any Fund will achieve its objectives. More detailed
information concerning these investment objectives is contained in the
accompanying prospectuses of the MML Trust and Oppenheimer Trust, including
information on the risks associated with the investments, the investment
techniques of each of the Funds, and the deduction of expenses applicable to
each of the Funds.
INVESTMENT PREFERENCE CHART
- --------------------------------------------------------------------------------
Oppenheimer Global Securities Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Growth Fund
MML Equity Fund
MML Equity Index Fund
MML Blend Fund
Oppenheimer Strategic Bond Fund
MML Managed Bond Fund
MML Money Market Fund
Guaranteed Principal Account
- --------------------------------------------------------------------------------
Conservative Less Conservative Moderate Aggressive More Aggressive
Conservative: Investment goal is preservation of principal, while incurring
little or no risk.
Less Conservative: Investment goal is primarily preservation of principal, with
some desire for growth.
Moderate: Investment goal is growth, while seeking some preservation of
principal.
Aggressive: Investment goal is growth, with more tolerance for risk.
More Aggressive: Investment goal is significant growth over the long-term, with
short-term fluctuations in value expected.
20
<PAGE>
MML Money Market Fund
MML Money Market Fund seeks to achieve high current income, while preserving
capital, and liquidity. This Fund invests in short-term debt instruments,
including but not limited to commercial paper, certificates of deposit, bankers'
acceptances, and obligations of the United States government, its agencies and
instrumentalities.
MML Managed Bond Fund
MML Managed Bond Fund seeks to achieve as high a total rate of return on an
annual basis as is considered consistent with the preservation of capital
values. This Fund invests primarily in publicly issued, readily marketable,
fixed income securities of maturities MassMutual deems appropriate from time to
time in light of market conditions and prospects.
Oppenheimer Strategic Bond Fund
Oppenheimer Strategic Bond Fund seeks a high level of current income principally
derived from interest on debt securities; and seeks to enhance such income by
writing covered call options on debt securities. The Fund invests principally
in: (i) foreign government and corporate debt securities; (ii) U.S. Government
securities; and (iii) lower-rated, high-risk high-yield debt securities. This
Fund's investments may be considered speculative.
For information concerning the risks associated with this Fund's investments,
please refer to the accompanying prospectus for the Oppenheimer Trust.
MML Blend Fund
MML Blend Fund seeks to achieve as high a level of total rate of return over an
extended period of time as is considered consistent with prudent investment risk
and the preservation of capital values. This Fund invests in a portfolio of
common stocks and other equity-type securities, bonds and other debt securities
with maturities generally exceeding one year, and money market instruments and
other debt securities with maturities generally not exceeding one year.
MML Equity Index Fund
MML Equity Index Fund seeks to provide investment results that correspond to the
price and yield performance of the publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index. ("Standard & Poor's 500" and "S&P 500(R)" are trademarks of The McGraw-
Hill Companies, Inc. and have been licensed for use. The Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's or the McGraw-Hill Companies,
Inc.)
MML Equity Fund
MML Equity Fund seeks to achieve a superior total rate of return over an
extended period of time from both capital appreciation and current income. A
secondary objective is the preservation of capital when business and economic
conditions indicate investing for defensive purposes is appropriate. The assets
of this Fund are expected to be invested primarily in common stocks and other
equity-type securities.
Oppenheimer Growth Fund
Oppenheimer Growth Fund seeks to achieve capital appreciation by investing in
securities of well-known established companies. Such securities generally have a
history of earnings and dividends, and are issued by seasoned companies, namely
those having an operating history of at least five years, including
predecessors. The type of securities in which this Fund invests will be
primarily common stocks, as well as securities having the investment
characteristics of common stocks, such as convertible preferred stock and
convertible bonds.
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Appreciation Fund seeks capital appreciation. The type of
securities in which this Fund invests will be primarily common stocks, as well
as securities having the investment characteristics of common stocks, such as
convertible preferred stock and convertible bonds. In seeking this objective the
Fund will emphasize investment in securities of "growth-type" companies. Such
companies are believed to have relatively favorable long-term prospects for an
increased demand for the particular company's products or services.
Oppenheimer Global Securities Fund
Oppenheimer Global Securities Fund seeks long-term capital appreciation through
investing a substantial portion of its invested assets in securities of foreign
issuers, growth-type companies and special investment opportunities, such as
anticipated acquisitions, mergers or other unusual developments, which are
considered by OFI, in its capacity as investment manager of the Funds, to have
appreciation possibilities. The type of securities in which this Fund invests
will be primarily common stocks, as well as securities having the investment
characteristics of common stocks, such as convertible preferred stock,
convertible bonds and American Depository Receipts. Current income is not an
investment objective of the Oppenheimer Global Securities Fund.
The Investment Advisers
MassMutual serves as investment manager of each of the MML Funds pursuant to
investment management agreements. Concert Capital Management, Inc. ("Concert")
served as the investment sub-adviser to MML Equity Fund and the Equity Sector of
the MML Blend Fund from 1993-1996. Concert merged with and into David L. Babson
& Company, Inc. ("Babson") effective December 31, 1996. Both Concert and Babson
are wholly-owned subsidiaries of Babson Acquisition
21
<PAGE>
Corporation, which is a controlled subsidiary of MassMutual. Effective January
1, 1997, Babson became the investment sub-adviser to MML Equity Fund and the
Equity Sector of the MML Blend Fund. Both MassMutual and Babson are registered
investment advisers under the Investment Advisers Act of 1940.
MassMutual entered into a sub-advisory agreement with Mellon Equity whereby
Mellon Equity manages the investment and reinvestment of the assets of the MML
Equity Index Fund.
OppenheimerFunds, Inc. ("OFI") is an investment adviser organized under the laws
of Colorado as a corporation; it was originally organized in 1959. It (including
a subsidiary) currently advises U.S. investment companies with assets
aggregating over $62 billion as of December 31, 1996, with over three million
shareholder accounts. OFI is owned by Oppenheimer Acquisition Corporation, a
holding company owned in part by senior management of OFI and ultimately
controlled by MassMutual. OFI serves as investment adviser to the Oppenheimer
Trust. OFI is registered as an investment adviser under the Investment Advisers
Act of 1940. OFI serves as Investment Adviser to the Oppenheimer Funds.
Citibank N.A., with its home office located at 111 Wall Street, New York, NY,
10005, acts as custodian for the MML Trust. Bank of New York, with its home
office at One Wall Street, New York, NY 10015, acts as custodian for the
Oppenheimer Trust.
MassMutual is also the investment adviser to MassMutual Corporate Investors and
MassMutual Participation Investors, closed-end investment companies, certain
wholly-owned subsidiaries of MassMutual, and various employee benefit plans.
MassMutual is the investment sub-adviser to Oppenheimer Investment Grade Bond
Fund and Oppenheimer Value Stock Fund, open-end management investment companies.
22
<PAGE>
Appendix A
Definition of Terms
Account Value: The sum of the Variable Account Value and the Fixed Account Value
of the Policy.
Administrative Office: C.M. Life's Administrative Office is located at 1295
State Street, Springfield, Massachusetts 01111-0001.
Attained Age: The Issue Age of an Insured plus the number of completed Policy
Years.
Beneficiary(ies): The person or persons specified by the Owner to receive some
or all of the Death Benefit at the second death.
Death Benefit: The amount paid following receipt of due proof of the death of
both Insureds. The amount is equal to the benefit provided by the Death Benefit
Option in effect on the date of the second death less any Policy Debt
outstanding and any unpaid premium.
Death Benefit Option: The Policy offers three Death Benefit Options for
determination of the amount of the Death Benefit. The Death Benefit Option is
elected at time of application and, subject to certain requirements, may be
changed at a later date.
Expense Premium: The level of Premium Payment used to determine the Premium
Expense Charges, Surrender Charges, and Commission payments. The Expense Premium
is based on the Issue Ages, sexes, and risk classifications of the Insureds, and
the Death Benefit Option in effect at the time of any Premium payment or at the
time of Surrender of the Policy.
Fixed Account Value: The current Account Value which is allocated to the
Guaranteed Principal Account.
Free Look Period: The Period during which an Owner may return the Policy for
cancellation and refund.
Guaranteed Principal Account ("GPA"): Part of our General Account, the GPA is a
fixed account to and from which the Owner may make allocations and transfers.
Initial Face Amount: The amount of insurance coverage issued under the Policy.
Subject to certain limitations, the Owner may change the Face Amount after
issue.
Initial Net Premium: The Premium received before or at delivery of the Policy,
reduced by the Premium Expense Charge.
Insureds: The two persons whose lives this Policy insures.
Issue Age: The age of an Insured at his or her birthday nearest the Policy Date.
Issue Date: The date on which the suicide and contestability periods begin.
Minimum Death Benefit: The Death Benefit determined in accordance with the
applicable Death Benefit Compliance Test. The applicable Test is either the Cash
Value Test or the Guideline Premium Test, as chosen at the time of application.
Monthly Charge Date: The monthly date on which the Monthly Charges for the
Policy are deducted from the Account Value. The first Monthly Charge Date is the
Policy Date, and subsequent Monthly Charge Dates are on the same day of each
succeeding calendar month.
Monthly Charges: The charges assessed against the Policy Account Value on each
Monthly Charge Date.
Net Premium: The premium payment less the Premium Expense Charge we deduct.
Net Surrender Value: The amount payable to an Owner upon surrender of the
Policy. It is equal to the Account Value less any surrender charges that apply
and less any Policy Debt.
Owner: The person or entity that owns the Policy.
Policy: The survivorship flexible premium adjustable variable life insurance
policy offered by C.M. Life and described in this Prospectus.
Policy Anniversary Date: An anniversary of the Policy Date.
Policy Date: The date shown on the Policy that is the starting point for
determining Policy Anniversary Dates, Policy Years, and Monthly Charge Dates.
Policy Debt: All outstanding Policy loans plus accrued loan interest.
Policy Year: A twelve-month period commencing with the Policy Date or a Policy
Anniversary Date.
Safety Test: On any day during the Guarantee Periods as shown on the Policy
Specifications page of Your Policy, the Safety Test is met if the result of
premiums paid less amounts withdrawn, accumulated with interest to that day,
equals or exceeds the Guarantee Period premium requirement as shown on the
Policy Specification page of Your Policy accumulated with interest to that
date.
Second Death: The death of the surviving Insured.
Separate Account: The Policies' designated segment of the "C. M. Life Variable
Life Separate Account I" established by C. M. Life under the laws of Connecticut
and registered as
23
<PAGE>
a unit investment trust with the Securities and Exchange Commission pursuant to
the Investment Company Act of 1940, as amended ("1940 Act"). The Separate
Account is used to receive and invest Net Premiums for this Policy.
Subsequent Net Premium: Any premium received after the Policy is delivered,
reduced by the Premium Expense Charge
Valuation Date: A date on which the net asset value of the shares of each
Division of the Separate Account is determined. Generally, this will be any date
on which the New York Stock Exchange (or its successor) is open for trading
Valuation Period: The period, consisting of one or more days, from one Valuation
Date to the next succeeding Valuation Date.
Valuation Time: The time of the close of the New York Stock Exchange (currently
4:00 p.m. eastern time) on a Valuation Date. All actions which are to be
performed on a Valuation Date will be performed as of the Valuation Time.
Variable Account Value: The total of the values of the Accumulation Units
credited to the Policy in each Division of the Separate Account multiplied by
the Owner's number of units in that Division.
We: Refers to C.M. Life.
Year of Coverage: For the Initial Face Amount, each Policy Year is a Year of
Coverage. For any increase in the Face Amount, each Year of Coverage is measured
from the effective date of the increase.
You: Refers to the Owner
24
<PAGE>
Appendix B
Examples of Death Benefit Option Changes
Example I - Change from Option 2 to Option 1
For a change from Option 2 to Option 1, the Face Amount is increased by the
amount of the Account Value on the effective date of the change. For example, if
the Policy has a Face Amount $500,000 and an Account Value of $25,000, the Death
Benefit under Option 2 is equal to the Face Amount plus the Account Value, or
$525,00. If the Owner changes from Option 2 to Option 1, the Death Benefit under
Option 1 is equal to the Policy Face Amount. Since the Death Benefit under a
Policy does not change as the result of a Death Benefit Option change, the Face
Amount will be increased from $500,000 under Option 2 to $525,000 under Option
1.
Example II - Change from Option 3 to Option 1
For a change from Option 3 to Option 1, the Face Amount is increased by the
amount of the Premiums paid to the effective date of the change. For example, if
a Policy has a Face Amount of $500,000, and premium payments of $12,000 have
been made to-date, the Policy Death Benefit under Option 3 is equal to the Face
Amount plus the Premiums paid, or $512,000. If the Owner changes from Option 3
to Option 1, the death Benefit under Option 1 is equal to the Policy Face
Amount. Since the death Benefit under a Policy does not change as the result of
a Death Benefit Option change, the Face Amount will be increased from $500,000
under Option 3 to $512,000 under Option 1.
Example III- Change from Option 1 to Option 2
For a change from Option 1 to Option 2, the Face Amount will be decreased by the
amount of Account Value on the effective date of the change. For example, if the
policy has a Face Amount of $700,000 and an Account Value of $25,000, under
Option 1 the Death Benefit is equal to the Face Amount, or $700,000. If the
Owner changes from Option 1 to Option 2, the Death Benefit under Option 2 is
equal to the Face Amount plus the Account Value. Since the Death Benefit does
not change as the result of a Death Benefit Option change, the Face Amount will
be decreased by $25,000 to $675,000, and the Death Benefit under Option 2 after
the change will remain $700,000.
Example IV - Change from Option 1 to Option 3
For a change from Option 1 to Option 3, the Face Amount will be decreased by the
amount of the Premiums paid to the effective date of the change. For example, if
the Policy has a Face Amount of $700,000 and Premiums paid to-date are $30,000,
the Death Benefit under Option 1 is equal to the Face Amount, or $700,000. If
the Owner changes from Option 1 to Option 3, the Death Benefit under Option 3 is
equal to the Face Amount plus the premium paid to-date. Since the Death Benefit
under a Policy does not change as the result of a Death Benefit Option change,
the Face Amount will be decreased from $700,000 under Option 1 to $670,000 under
Option 3.
Example V - Change from Option 2 to Option 3, or from Option 3 to Option 2
For a change from Option 2 to Option 3 or from Option 3 to Option 2, the Face
Amount is changed (increased or decreased) by the difference between the Account
Value and the Premiums paid less any Premium refunds. For example, if the Policy
has a Face Amount of $1,000,000, and Account Value of $70,000, and Premiums paid
of $25,000, the Death Benefit under Option 2 is equal to the Account Value plus
the Face Amount, or $1,070,000. If the Owner changes from Option 2 to Option 3,
the Death Benefit under Option 3 is equal to the Face Amount plus the Premium
paid less any Premium refunds. Since the Death Benefit under a Policy does not
immediately change as the result of a Death Benefit Option change, the Face
Amount will be increased by the difference between the Account Value and the
Premiums paid, or $45,000, to $1,045,000 under Option 3, maintaining a Death
Benefit of $1,070,000.
A similar type of change would be made for a change from Option 3 to Option 2.
25
<PAGE>
Appendix C
Rates of Return
From time to time, the Company may report different types of historical
performance for the Divisions of the Separate Account available under the
Policy. The company may report the average annualized total returns of the Funds
over various time periods. Such returns will reflect an annual reduction for
investment management fees and fund expenses, but not deductions at the Separate
Account or policy level for mortality and expense risk charges and Policy
expenses, which, if included, would reduce performance.
The Company will accompany the returns of the Funds with at least one of the
following: (I) returns, for the same periods as shown for the Funds, which
include in addition to deduction of investment management fees and Fund expenses
deductions under the Separate Account for the mortality and expense risk charge,
but not other charges under the Policy; or (ii) an illustration of Account
Values and Net Surrender Values as of the performance reporting date for
hypothetical Insureds of given ages, sexes, risk classifications, premium level
and Initial Face Amount. Each illustration will assume 100% of each Net Premium
was allocated to the Division of the Separate Account illustrated. The Net
Surrender Value figures will assume all fund charges, the mortality and expense
risk charge, and all other policy charges are deducted. The Account Value
figures will assume all charges except the Surrender Charge are deducted.
We also may distribute sales literature comparing the percentage change in the
net asset values of the Funds or in the Accumulation Unit Values for any of the
Divisions of the Separate Account to established market indices, such as the
Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average. We also
may make comparisons to the percentage change in values of other mutual funds
with investment objectives similar to those of the Divisions of the Separate
Account being compared.
Table 1 following illustrates the performance information pertaining to a
hypothetical Policy. These figures reflect deductions from premiums for Premium
Load, Administrative Charges, and Mortality Charges, plus deductions from the
Separate Account of current mortality and expense risk charges and Fund
Operating Expenses
Tables 2 and 3 show the Effective Annual Rates of Return and One Year Total
Returns, respectively, of the Funds based on the actual investment performance
(after deduction of investment management fees and direct operating expenses)
underlying each Division of the Separate Account. Table 2 shows figures for
periods ended December 31, 1996, while Table 3 shows December 31 annualized
figures. These rates do not reflect the mortality and expense risk charges
assessed against the Separate Account. Tables 2 and 3 do not reflect deductions
from premiums or Monthly Charges assessed against the Account Value of the
Policies, nor do they reflect the Policy's Surrender Charges. (For a discussion
of these charges, please see Charges and Deductions.) Therefore, these rates are
not illustrative of how actual investment performance will affect the benefits
under the Policy (see, however, Performance Illustration). The rates of return
shown are not necessarily indicative of future performance. These rates of
return may be considered, however, in assessing the competence and performance
of the investment advisers.
26
<PAGE>
TABLE 1
POLICY PERFORMANCE
The chart below illustrates the Account Value, Net Surrender Value and
Death Benefit of a hypothetical Survivorship Flexible Premium Adjustable
Life Insurance Policy assuming the following:
. The Policy was owned for the period illustrated
. The Insureds are a male, select-preferred, age 45, and a female,
select-preferred, age 45
. A Face Amount of $1,000,000
. Death Benefit Option 1
. Cash Value Test
. An annual premium of $6,000 for 20 years
. 100% allocation to the respective Fund for the period illustrated
. Current expenses and mortality charges
. No loans or withdrawals are taken from the Policy
Historical Results* as of December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
MML MML MML MML Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Equity Blend Bond Money Global Capital Growth Strategic
Market Appreciation Bond
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
End of First Year
Cumulative Premium 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Account Value 4,427 4,151 3,685 3,761 4,320 4,423 4,644 4,069
Cash Surrender Value 0 0 0 0 0 0 0 0
Death Benefit 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
End of Fifth Year
Cumulative Premium 30,000 30,000 30,000 30,000 30,000 30,000 30,000 ---
Account Value 29,508 26,081 21,973 28,148 26,042 30,023 31,241 ---
Cash Surrender Value 26,173 22,746 18,638 16,813 22,707 26,688 27,907 ---
Death Benefit 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 ---
End of Tenth Year
Cumulative Premium 60,000 60,000 60,000 60,000 --- 60,000 60,000 ---
Account Value 82,360 71,143 55,872 46,019 --- 94,605 85,483 ---
Cash Surrender Value 81,804 70,588 55,264 45,463 --- 94,049 84,298 ---
Death Benefit 1,000,000 1,000,000 1,000,000 1,000,000 --- 1,000,000 1,000,000 ---
For a Policy Owned
Since Inception
Cumulative Premium 138,000 78,000 90,000 90,000 42,000 66,000 72,000 24,000
Account Value 700,359 124,176 126,644 94,914 38,789 112,102 123,344 17,404
Cash Surrender Value 700,359 124,176 126,644 94,914 36,566 112,102 123,344 13,514
Death Benefit 1,384,566 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
</TABLE>
* Historical investment results and current charges are used to determine
values; if guaranteed charges were used the results would be lower. The
Account Value reflects premiums paid, plus investment earnings, less all
charges. The Net Surrender Value is the Account Value minus surrender
charges.
27
<PAGE>
TABLE 2
EFFECTIVE ANNUAL RATES OF RETURN
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Fund Since 20 Years 15 Years 10 Years 5 Years 3 Years 1 Year
Inception
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MML Equity 14.22% 14.72% 16.01% 13.78% 14.71% 17.97% 20.25%
MML Blend 13.13% --- --- 11.89% 11.55% 12.90% 13.95%
MML Managed Bond 10.40% --- 10.54% 8.34% 7.27% 5.79% 3.25%
MML Money Market 6.84% --- 6.83% 5.76% 4.13% 4.82% 5.01%
Oppenheimer Global Securities 10.65% --- --- --- 12.38% 4.25% 17.80%
Oppenheimer Capital Appreciation 15.66% --- --- 16.50% 16.68% 13.74% 20.16%
Oppenheimer Growth 14.52% --- --- 14.32% 16.24% 19.99% 25.20%
Oppenheimer Strategic Bond 9.94% --- --- 8.81% 7.68% 6.33% 4.80%
</TABLE>
Dates of inception: MML Equity Fund - September 15, 1971 (performance
information prior to 1974 is unavailable); MML Blend Fund - February 3, 1984;
MML Managed Bond Funds - December 16, 1981; MML Money Market and Oppenheimer
Global Securities Fund - November 12, 1990; Oppenheimer Capital Appreciation
Fund - August 15, 1986; Oppenheimer Growth Fund - April 3, 1985; Oppenheimer
Strategic Bond Fund - May 3, 1993.
The MML Equity Index Fund did not commence operations until April 30, 1997,
therefore performance figures are unavailable at this time.
28
<PAGE>
TABLE 3
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Year MML Equity MML Money MML Bond MML Blend Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Ended Market Growth Strategic Capital Global
Bond Appreciation Securities
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1996 20.25% 5.01% 3.25% 13.95% 25.20% 12.07% 20.16% 17.80%
1995 31.13% 5.58% 19.14% 23.28% 36.65% 15.33% 32.52% 2.24%
1994 4.10% 3.84% (3.76%) 2.48% 0.98% (5.85%) (7.50%) (5.72%)
1993 9.52% 2.75% 11.81% 9.70% 7.25% 4.25%* 27.32% 70.32%
1992 10.48% 3.48% 7.31% 9.36% 14.53% --- 15.42% (7.11%)
1991 25.56% 6.01% 16.66% 24.00% 25.54% --- 54.72% 3.39%
1990 (0.51%) 8.12% 8.38% 2.37% (8.21%) --- (16.32%) 0.40%
1989 23.04% 9.16% 12.83% 19.96% 23.59% --- 27.39% ---
1988 16.68% 7.39% 7.13% 13.40% 22.09% --- 13.41% ---
1987 2.10% 6.49% 2.60% 3.12% 3.32% --- 14.34% ---
1986 20.15% 6.60% 14.46% 18.30% 17.76% --- (1.65%)* ---
1985 30.54% 8.03% 19.94% 24.88% 9.50%* --- --- ---
1984 5.40% 10.39% 11.69% 8.24%* --- --- --- ---
1983 22.85% 8.97% 7.26% --- --- --- --- ---
1982 25.67% 11.12%* 22.79%* --- --- --- --- ---
1981 6.67% --- --- --- --- --- --- ---
1980 27.62% --- --- --- --- --- --- ---
1979 19.54% --- --- --- --- --- --- ---
1978 3.71% --- --- --- --- --- --- ---
1977 (0.52%) --- --- --- --- --- --- ---
1976 24.77% --- --- --- --- --- --- ---
1975 32.85% --- --- --- --- --- --- ---
1974 (17.61%)* --- --- --- --- --- --- ---
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*since inception
The MML Equity Index Fund did not commence operations until April 30, 1997,
therefore performance figures are unavailable at this time.
29
<PAGE>
Appendix D
Illustration of Death Benefits, Net Surrender Values, and Accumulated Premiums
The following tables illustrate the way in which a Policy operates. They show
how the Death Benefit and Net Surrender Value could vary over an extended period
of time assuming the Funds experience hypothetical gross rates of investment
return (i.e., investment income and capital gains and losses, realized or
unrealized), equivalent to constant gross annual rates of 0%, 6%, and 12%. The
tables are based on annual premium payments of $5,000 for combination of a
Select-Preferred Male age 35 and a Select-Preferred Female age 35. Select-
Preferred is C.M. Life's best risk classification. Separate tables are shown for
the current and guaranteed schedules of charges. These tables will assist in the
comparison of Death Benefits and Net Surrender Values for the Policy with those
of other variable life policies.
The death Benefits and Net Surrender Values for a Policy would be different
format eh amounts shown if the rates of return averaged 0%, 6%, and 12% over a
period of years, but varied above and below that average in individual Policy
Years. They also would differ if any Policy loan were made during the period of
time illustrated. The also would be different depending on the allocation of
investment value to each Division. They would be different depending on the
allocation of investment value to each Division if the rates of return for all
Funds averaged 0%, 6%, and 12% but varied above or below that average for
particular Funds.
30
<PAGE>
Table 1
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- -----------------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Accumulated at
Year 5% Interest
Per Year 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 5,513 1,000,000 1,000,000 1,000,000 1,816 2,020 2,635
3 5,788 1,000,000 1,000,000 1,000,000 5,216 5,618 6,864
4 6,078 1,000,000 1,000,000 1,000,000 8,704 9,376 11,513
5 6,381 1,000,000 1,000,000 1,000,000 12,285 13,302 16,628
6 6,700 1,000,000 1,000,000 1,000,000 15,959 17,404 22,260
7 7,036 1,000,000 1,000,000 1,000,000 19,731 21,691 28,467
8 7,387 1,000,000 1,000,000 1,000,000 23,601 26,171 35,310
9 7,757 1,000,000 1,000,000 1,000,000 27,573 30,855 42,862
10 8,144 1,000,000 1,000,000 1,000,000 31,651 35,753 51,199
15 10,395 1,000,000 1,000,000 1,000,000 63,220 73,953 120,171
20 13,266 1,000,000 1,000,000 1,000,000 99,183 122,134 235,790
25 16,932 1,000,000 1,000,000 1,000,000 140,479 183,381 430,731
30 21,610 1,000,000 1,000,000 1,000,000 187,244 260,680 759,514
35 27,580 1,000,000 1,000,000 1,524,792 238,580 357,032 1,314,476
40 35,200 1,000,000 1,000,000 2,407,110 290,880 474,745 2,249,636
45 44,925 1,000,000 1,000,000 4,016,447 334,514 615,319 3,825,188
50 57,337 1,000,000 1,000,000 6,787,166 347,519 783,686 6,463,967
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<CAPTION>
-----------------------------------------------------------
End of Policy Year
0% 6% 12%
-----------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,871 3,081
2 5,683 5,887 6,502
3 8,653 9,056 10,302
4 11,713 12,384 14,521
5 14,863 15,880 19,207
6 18,108 19,552 24,409
7 21,449 23,410 30,186
8 24,890 27,460 36,600
9 28,433 31,715 43,721
10 32,081 36,183 51,628
15 63,220 73,953 120,171
-----------------------------------------------------------
</TABLE>
31
<PAGE>
Table 2
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- -------------------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,800 1,002,871 1,003,081 0 0 0
2 5,513 1,005,683 1,005,887 1,006,502 1,816 2,020 2,635
3 5,788 1,008,653 1,009,056 1,010,302 5,216 5,618 6,864
4 6,078 1,011,713 1,012,384 1,014,521 8,704 9,376 11,513
5 6,381 1,014,863 1,015,880 1,019,207 12,285 13,302 16,628
6 6,700 1,018,108 1,019,552 1,024,409 15,959 17,404 22,260
7 7,036 1,021,449 1,023,410 1,030,185 19,731 21,691 28,467
8 7,387 1,024,890 1,027,460 1,036,599 23,601 26,171 35,310
9 7,757 1,028,433 1,031,715 1,043,721 27,573 30,855 42,861
10 8,144 1,032,080 1,036,182 1,051,628 31,651 35,753 51,198
15 10,395 1,063,216 1,073,948 1,120,163 63,216 73,948 120,163
20 13,266 1,099,159 1,122,104 1,235,729 99,159 122,104 235,729
25 16,932 1,140,367 1,183,232 1,430,359 140,367 183,232 430,359
30 21,610 1,186,768 1,260,001 1,757,440 186,768 260,001 757,440
35 27,580 1,236,750 1,354,236 2,305,320 236,750 354,236 1,305,320
40 35,200 1,284,383 1,464,026 3,218,424 284,383 464,026 2,218,424
45 44,925 1,313,499 1,577,200 4,729,675 313,499 577,200 3,729,675
50 57,337 1,287,706 1,659,707 7,211,777 287,706 659,707 6,211,777
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<CAPTION>
----------------------------------------------------------------
End of Policy Year
0% 6% 12%
----------------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,871 3,081
2 5,683 5,887 6,502
3 8,653 9,056 10,302
4 11,713 12,384 14,521
5 14,863 15,880 19,207
6 18,108 19,552 24,409
7 21,449 23,410 30,185
8 24,890 27,460 36,599
9 28,433 31,715 43,721
10 32,080 36,182 51,628
15 63,216 73,948 120,163
---------------------------------------------------------------
</TABLE>
32
<PAGE>
Table 3
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- -----------------------------------------------------------------------------------------------------------------------
Premiums
Accumulated
End of at 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 5,513 1,010,000 1,010,000 1,010,000 1,816 2,020 2,635
3 5,788 1,015,000 1,015,000 1,015,000 5,216 5,618 6,864
4 6,078 1,020,000 1,020,000 1,020,000 8,704 9,376 11,513
5 6,381 1,025,000 1,025,000 1,025,000 12,285 13,302 16,628
6 6,700 1,030,000 1,030,000 1,030,000 15,959 17,404 22,260
7 7,036 1,035,000 1,035,000 1,035,000 19,730 21,691 28,467
8 7,387 1,040,000 1,040,000 1,040,000 23,601 26,171 35,310
9 7,757 1,045,000 1,045,000 1,045,000 27,573 30,855 42,861
10 8,144 1,050,000 1,050,000 1,050,000 31,650 35,752 51,198
15 10,395 1,075,000 1,075,000 1,075,000 63,215 73,947 120,165
20 13,266 1,100,000 1,100,000 1,100,000 99,156 122,106 235,755
25 16,932 1,125,000 1,125,000 1,125,000 140,369 183,262 430,579
30 21,610 1,150,000 1,150,000 1,150,000 186,824 260,224 758,912
35 27,580 1,175,000 1,175,000 1,523,256 237,110 355,421 1,313,152
40 35,200 1,200,000 1,200,000 2,404,722 286,023 469,389 2,247,403
45 44,925 1,225,000 1,225,000 4,012,496 319,309 598,423 3,821,425
50 57,337 1,250,000 1,250,000 6,780,523 302,320 732,906 6,457,641
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<CAPTION>
-----------------------------------------------------------------
End of Policy Year
0% 6% 12%
-----------------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,871 3,081
2 5,683 5,887 6,502
3 8,653 9,056 10,302
4 11,713 12,384 14,521
5 14,863 15,880 19,207
6 18,108 19,552 24,409
7 21,449 23,410 30,185
8 24,890 27,460 36,599
9 28,433 31,714 43,721
10 32,080 36,182 51,628
15 63,215 73,947 120,165
-----------------------------------------------------------------
</TABLE>
33
<PAGE>
Table 4
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Guideline Premium Test
and Current Fund Level Charges
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 5,513 1,000,000 1,000,000 1,000,000 1,816 1,955 2,567
3 5,788 1,000,000 1,000,000 1,000,000 5,214 5,488 6,723
4 6,078 1,000,000 1,000,000 1,000,000 8,701 9,156 11,265
5 6,381 1,000,000 1,000,000 1,000,000 12,277 12,965 16,232
6 6,700 1,000,000 1,000,000 1,000,000 15,944 16,920 21,669
7 7,036 1,000,000 1,000,000 1,000,000 19,707 21,027 27,624
8 7,387 1,000,000 1,000,000 1,000,000 23,566 25,293 34,150
9 7,757 1,000,000 1,000,000 1,000,000 27,523 29,723 41,306
10 8,144 1,000,000 1,000,000 1,000,000 31,581 34,323 49,154
15 10,395 1,000,000 1,000,000 1,000,000 60,212 67,193 110,080
20 13,266 1,000,000 1,000,000 1,000,000 92,486 107,000 208,861
25 16,932 1,000,000 1,000,000 1,000,000 128,814 155,285 369,929
30 21,610 1,000,000 1,000,000 1,000,000 168,231 212,540 632,657
35 27,580 1,000,000 1,000,000 1,233,464 207,595 277,620 1,063,331
40 35,200 1,000,000 1,000,000 1,891,218 238,671 345,553 1,767,494
45 44,925 1,000,000 1,000,000 3,063,515 241,040 402,957 2,917,633
50 57,337 1,000,000 1,000,000 5,017,235 170,883 423,854 4,778,319
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<CAPTION>
----------------------------------------------------------------
End of Policy Year
0% 6% 12%
----------------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,848 3,058
2 5,683 5,822 6,434
3 8,652 8,926 10,160
4 11,709 12,164 14,273
5 14,855 15,543 18,810
6 18,093 19,068 23,817
7 21,426 22,746 29,343
8 24,855 26,582 35,439
9 28,383 30,582 42,165
10 32,010 34,753 49,584
15 60,212 67,193 110,080
----------------------------------------------------------------
</TABLE>
34
<PAGE>
Table 5
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Guideline Premium Test
and Current Fund Level Charges
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
----------------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,800 1,002,848 1,003,058 0 0 0
2 5,513 1,005,683 1,005,822 1,006,434 1,816 1,955 2,567
3 5,788 1,008,652 1,008,926 1,010,160 5,214 5,488 6,723
4 6,078 1,011,709 1,012,164 1,014,273 8,701 9,156 11,265
5 6,381 1,014,855 1,015,543 1,018,810 12,276 12,965 16,232
6 6,700 1,018,093 1,019,068 1,023,817 15,944 16,919 21,669
7 7,036 1,021,425 1,022,746 1,029,342 19,707 21,027 27,623
8 7,387 1,024,854 1,026,581 1,035,438 23,565 25,292 34,149
9 7,757 1,028,381 1,030,581 1,042,163 27,522 29,721 41,303
10 8,144 1,032,008 1,034,750 1,049,581 31,578 34,321 49,151
15 10,395 1,060,196 1,067,175 1,110,049 60,196 67,175 110,049
20 13,266 1,092,409 1,106,909 1,208,672 92,409 106,909 208,672
25 16,932 1,128,498 1,154,896 1,368,945 128,498 154,896 368,945
30 21,610 1,167,061 1,211,038 1,627,959 167,061 211,038 627,959
35 27,580 1,203,670 1,272,318 2,043,246 203,670 272,318 1,043,246
40 35,200 1,226,625 1,328,238 2,701,524 226,625 328,238 1,701,524
45 44,925 1,207,839 1,350,771 3,727,931 207,839 350,771 2,727,931
50 57,337 1,096,363 1,286,146 5,306,228 96,363 286,146 4,306,228
----------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<CAPTION>
----------------------------------------------------------------
End of Policy Year
0% 6% 12%
----------------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,848 3,058
2 5,683 5,822 6,434
3 8,652 8,926 10,160
4 11,709 12,164 14,273
5 14,855 15,543 18,810
6 18,093 19,068 23,817
7 21,425 22,746 29,342
8 24,854 26,581 35,438
9 28,381 30,581 42,163
10 32,008 34,750 49,581
15 60,196 67,175 110,049
----------------------------------------------------------------
</TABLE>
35
<PAGE>
Table 6
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Guideline Premium Test
and Current Fund Level Charges
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- -----------------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 5,513 1,010,000 1,010,000 1,010,000 1,816 1,955 2,567
3 5,788 1,015,000 1,015,000 1,015,000 5,214 5,488 6,723
4 6,078 1,020,000 1,020,000 1,020,000 8,701 9,156 11,265
5 6,381 1,025,000 1,025,000 1,025,000 12,276 12,965 16,232
6 6,700 1,030,000 1,030,000 1,030,000 15,944 16,919 21,668
7 7,036 1,035,000 1,035,000 1,035,000 19,706 21,026 27,623
8 7,387 1,040,000 1,040,000 1,040,000 23,565 25,292 34,149
9 7,757 1,045,000 1,045,000 1,045,000 27,521 29,721 41,303
10 8,144 1,050,000 1,050,000 1,050,000 31,577 34,319 49,150
15 10,395 1,075,000 1,075,000 1,075,000 60,190 67,170 110,053
20 13,266 1,100,000 1,100,000 1,100,000 92,394 106,902 208,738
25 16,932 1,125,000 1,125,000 1,125,000 128,475 154,925 369,457
30 21,610 1,150,000 1,150,000 1,150,000 167,089 211,322 631,007
35 27,580 1,175,000 1,175,000 1,228,179 204,014 273,784 1,058,775
40 35,200 1,200,000 1,200,000 1,883,248 227,999 334,060 1,760,045
45 44,925 1,225,000 1,225,000 3,050,733 210,153 369,498 2,905,460
50 57,337 1,250,000 1,250,000 4,996,428 85,132 330,023 4,758,503
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<CAPTION>
-----------------------------------------------------------------
End of Policy Year
0% 6% 12%
-----------------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,848 3,058
2 5,683 5,822 6,434
3 8,652 8,926 10,160
4 11,709 12,164 14,273
5 14,855 15,543 18,810
6 18,093 19,068 23,817
7 21,425 22,745 29,342
8 24,854 26,581 35,438
9 28,381 30,580 42,162
10 32,007 34,749 49,580
15 60,190 67,170 110,053
-----------------------------------------------------------------
</TABLE>
36
<PAGE>
Table 7
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred
Death Benefit Option 1 $5,000 Annual Premium
Current Schedule of Charges $1 million Initial Face Amount
Cash Value Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ---------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Accumulated at
Year 5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 5,513 1,000,000 1,000,000 1,000,000 1,432 2,020 2,635
3 5,788 1,000,000 1,000,000 1,000,000 4,473 5,618 6,864
4 6,078 1,000,000 1,000,000 1,000,000 7,490 9,376 11,513
5 6,381 1,000,000 1,000,000 1,000,000 10,482 13,302 16,628
6 6,700 1,000,000 1,000,000 1,000,000 13,449 17,404 22,260
7 7,036 1,000,000 1,000,000 1,000,000 16,391 21,691 28,467
8 7,387 1,000,000 1,000,000 1,000,000 19,309 26,171 35,310
9 7,757 1,000,000 1,000,000 1,000,000 22,202 30,855 42,862
10 8,144 1,000,000 1,000,000 1,000,000 25,070 35,753 51,199
15 10,395 1,000,000 1,000,000 1,000,000 47,432 73,953 120,171
20 13,266 1,000,000 1,000,000 1,000,000 68,213 122,134 235,790
25 16,932 1,000,000 1,000,000 1,124,089 87,641 183,381 430,718
30 21,610 1,000,000 1,000,000 1,653,812 105,040 260,680 758,589
35 27,580 1,000,000 1,000,000 2,408,839 118,562 357,032 1,307,466
40 35,200 1,000,000 1,000,000 3,511,373 123,208 474,745 2,219,011
45 44,925 1,000,000 1,000,000 5,176,059 106,435 615,319 3,714,262
50 57,337 1,000,000 1,000,000 7,731,279 38,463 783,686 6,128,596
- --------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
<TABLE>
<CAPTION>
End of Policy Year
0% 6% 12%
----------------------------------------------------------
<S> <C> <C> <C>
1 2,662 2,871 3,081
2 5,299 5,887 6,502
3 7,911 9,056 10,302
4 10,498 12,384 14,521
5 13,060 15,880 19,207
6 15,597 19,552 24,409
7 18,110 23,410 30,186
8 20,598 27,460 36,600
9 23,061 31,715 43,721
10 25,499 36,183 51,628
15 47,432 73,953 120,171
----------------------------------------------------------
</TABLE>
37
<PAGE>
Table 8
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred
Death Benefit Option 2 $5,000 Annual Premium
Current Schedule of Charges $1 million Initial Face Amount
Cash Value Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ---------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Accumulated at
Year 5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,662 1,002,871 1,003,081 0 0 0
2 5,513 1,005,299 1,005,887 1,006,502 1,432 2,020 2,635
3 5,788 1,007,911 1,009,056 1,010,302 4,473 5,618 6,864
4 6,078 1,010,498 1,012,384 1,014,521 7,490 9,376 11,513
5 6,381 1,013,060 1,015,880 1,019,207 10,482 13,302 16,628
6 6,700 1,015,597 1,019,552 1,024,409 13,449 17,404 22,260
7 7,036 1,018,110 1,023,410 1,030,185 16,391 21,691 28,467
8 7,387 1,020,598 1,027,460 1,036,599 19,309 26,171 35,310
9 7,757 1,023,061 1,031,715 1,043,721 22,201 30,855 42,861
10 8,144 1,025,499 1,036,182 1,051,628 25,069 35,753 51,198
15 10,395 1,047,429 1,073,948 1,120,163 47,429 73,948 120,163
20 13,266 1,068,198 1,122,104 1,235,729 68,198 122,104 235,729
25 16,932 1,087,575 1,183,232 1,430,359 87,575 183,232 430,359
30 21,610 1,104,788 1,260,001 1,757,440 104,788 260,001 757,440
35 27,580 1,117,699 1,354,236 2,404,724 117,699 354,236 1,305,232
40 35,200 1,120,534 1,464,026 3,505,463 120,534 464,026 2,215,276
45 44,925 1,099,284 1,577,200 5,167,423 99,284 577,200 3,708,065
50 57,337 1,024,489 1,659,707 7,718,448 24,489 659,707 6,118,425
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
<TABLE>
<CAPTION>
End of Policy Year
0% 6% 12%
----------------------------------------------------------
<S> <C> <C> <C>
1 2,662 2,871 3,081
2 5,299 5,887 6,502
3 7,911 9,056 10,302
4 10,498 12,384 14,521
5 13,060 15,880 19,207
6 15,597 19,552 24,409
7 18,110 23,410 30,185
8 20,598 27,460 36,599
9 23,061 31,715 43,721
10 25,499 36,182 51,628
15 47,429 73,948 120,163
----------------------------------------------------------
</TABLE>
38
<PAGE>
Table 9
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred
Death Benefit Option 3 $5,000 Annual Premium
Current Schedule of Charges $1 million Initial Face Amount
Cash Value Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ---------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Accumulated at
Year 5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 5,513 1,010,000 1,010,000 1,010,000 1,432 2,020 2,635
3 5,788 1,015,000 1,015,000 1,015,000 4,473 5,618 6,864
4 6,078 1,020,000 1,020,000 1,020,000 7,490 9,376 11,513
5 6,381 1,025,000 1,025,000 1,025,000 10,482 13,302 16,628
6 6,700 1,030,000 1,030,000 1,030,000 13,449 17,404 22,260
7 7,036 1,035,000 1,035,000 1,035,000 16,391 21,691 28,467
8 7,387 1,040,000 1,040,000 1,040,000 19,309 26,171 35,310
9 7,757 1,045,000 1,045,000 1,045,000 22,201 30,855 42,861
10 8,144 1,050,000 1,050,000 1,050,000 25,069 35,752 51,198
15 10,395 1,075,000 1,075,000 1,075,000 47,427 73,947 120,165
20 13,266 1,100,000 1,100,000 1,100,000 68,190 122,106 235,755
25 16,932 1,125,000 1,125,000 1,125,000 87,546 183,262 430,579
30 21,610 1,150,000 1,150,000 1,653,293 104,680 260,224 758,351
35 27,580 1,175,000 1,175,000 2,408,103 117,313 355,421 1,307,066
40 35,200 1,200,000 1,200,000 3,510,316 119,122 469,389 2,218,342
45 44,925 1,225,000 1,225,000 5,174,514 93,794 598,423 3,713,153
50 57,337 1,250,000 1,250,000 7,728,983 1,559 732,906 6,126,776
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
<TABLE>
<CAPTION>
End of Policy Year
0% 6% 12%
----------------------------------------------------------
<S> <C> <C> <C>
1 2,662 2,871 3,081
2 5,299 5,887 6,502
3 7,911 9,056 10,302
4 10,498 12,384 14,521
5 13,060 15,880 19,207
6 15,597 19,552 24,409
7 18,110 23,410 30,185
8 20,598 27,460 36,599
9 23,061 31,714 43,721
10 25,499 36,182 51,628
15 47,427 73,947 120,165
----------------------------------------------------------
</TABLE>
39
<PAGE>
Table 10
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred
Death Benefit Option 1 $5,000 Annual Premium
Guaranteed Schedules of Mortality and Expense Charges $1 million Initial Face Amount
and Current Fund Charges Cash Value Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ---------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of at 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 5,513 1,000,000 1,000,000 1,000,000 1,816 1,955 2,567
3 5,788 1,000,000 1,000,000 1,000,000 5,214 5,488 6,723
4 6,078 1,000,000 1,000,000 1,000,000 8,701 9,156 11,265
5 6,381 1,000,000 1,000,000 1,000,000 12,277 12,965 16,232
6 6,700 1,000,000 1,000,000 1,000,000 15,944 16,920 21,669
7 7,036 1,000,000 1,000,000 1,000,000 19,707 21,027 27,624
8 7,387 1,000,000 1,000,000 1,000,000 23,566 25,293 34,150
9 7,757 1,000,000 1,000,000 1,000,000 27,523 29,723 41,306
10 8,144 1,000,000 1,000,000 1,000,000 31,581 34,323 49,154
15 10,395 1,000,000 1,000,000 1,000,000 60,212 67,193 110,080
20 13,266 1,000,000 1,000,000 1,000,000 92,486 107,000 208,861
25 16,932 1,000,000 1,000,000 1,000,000 128,814 155,285 369,929
30 21,610 1,000,000 1,000,000 1,377,134 168,231 212,540 631,679
35 27,580 1,000,000 1,000,000 1,939,280 207,595 277,620 1,052,599
40 35,200 1,000,000 1,000,000 2,722,063 238,671 345,553 1,720,207
45 44,925 1,000,000 1,000,000 3,843,661 241,040 402,957 2,758,153
50 57,337 1,000,000 1,000,000 5,478,609 170,883 423,854 4,342,902
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
<TABLE>
<CAPTION>
End of Policy Year
0% 6% 12%
----------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,848 3,058
2 5,683 5,822 6,434
3 8,652 8,926 10,160
4 11,709 12,164 14,273
5 14,855 15,543 18,810
6 18,093 19,068 23,817
7 21,426 22,746 29,343
8 24,855 26,582 35,439
9 28,383 30,582 42,165
10 32,010 34,753 49,584
15 60,212 67,193 110,080
- --------------------------------------------------------------------------
</TABLE>
40
<PAGE>
Table 11
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred
Death Benefit Option 2 $5,000 Annual Premium
Guaranteed Schedules of Mortality and Expense Charges $1 million Initial Face Amount
and Current Fund Charges Cash Value Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ---------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of at 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,800 1,002,848 1,003,058 0 0 0
2 5,513 1,005,683 1,005,822 1,006,434 1,816 1,955 2,567
3 5,788 1,008,652 1,008,926 1,010,160 5,214 5,488 6,723
4 6,078 1,011,709 1,012,164 1,014,273 8,701 9,156 11,265
5 6,381 1,014,855 1,015,543 1,018,810 12,276 12,965 16,232
6 6,700 1,018,093 1,019,068 1,023,817 15,944 16,919 21,669
7 7,036 1,021,425 1,022,746 1,029,342 19,707 21,027 27,623
8 7,387 1,024,854 1,026,581 1,035,438 23,565 25,292 34,149
9 7,757 1,028,381 1,030,581 1,042,163 27,522 29,721 41,303
10 8,144 1,032,008 1,034,750 1,049,581 31,578 34,321 49,151
15 10,395 1,060,196 1,067,175 1,110,049 60,196 67,175 110,049
20 13,266 1,092,409 1,106,909 1,208,672 92,409 106,909 208,672
25 16,932 1,128,498 1,154,896 1,368,945 128,498 154,896 368,945
30 21,610 1,167,061 1,211,038 1,627,959 167,061 211,038 627,959
35 27,580 1,203,670 1,272,318 2,043,246 203,670 272,318 1,043,246
40 35,200 1,226,625 1,328,238 2,701,524 226,625 328,238 1,701,524
45 44,925 1,207,839 1,350,771 3,800,131 207,839 350,771 2,726,917
50 57,337 1,096,363 1,286,146 5,416,925 96,363 286,146 4,294,004
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
<TABLE>
<CAPTION>
End of Policy Year
0% 6% 12%
----------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,848 3,058
2 5,683 5,822 6,434
3 8,652 8,926 10,160
4 11,709 12,164 14,273
5 14,855 15,543 18,810
6 18,093 19,068 23,817
7 21,425 22,746 29,342
8 24,854 26,581 35,438
9 28,381 30,581 42,163
10 32,008 34,750 49,581
15 60,196 67,175 110,049
----------------------------------------------------------
</TABLE>
41
<PAGE>
Table 12
<TABLE>
<CAPTION>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
Male and Female Each Issue Age 35, Select-Preferred
Death Benefit Option 3 $5,000 Annual Premium
Guaranteed Schedules of Mortality and Expense Charges $1 million Initial Face Amount
and Current Fund Charges Cash Value Test
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ---------------------------------------------------------------------------------------------------------------
Premiums
Accumulated at
End of at 5% Interest
Policy Per Year
Year 0% 6% 12% 0% 6% 12%
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 5,513 1,010,000 1,010,000 1,010,000 1,816 1,955 2,567
3 5,788 1,015,000 1,015,000 1,015,000 5,214 5,488 6,723
4 6,078 1,020,000 1,020,000 1,020,000 8,701 9,156 11,265
5 6,381 1,025,000 1,025,000 1,025,000 12,276 12,965 16,232
6 6,700 1,030,000 1,030,000 1,030,000 15,944 16,919 21,668
7 7,036 1,035,000 1,035,000 1,035,000 19,706 21,026 27,623
8 7,387 1,040,000 1,040,000 1,040,000 23,565 25,292 34,149
9 7,757 1,045,000 1,045,000 1,045,000 27,521 29,721 41,303
10 8,144 1,050,000 1,050,000 1,050,000 31,577 34,319 49,150
15 10,395 1,075,000 1,075,000 1,075,000 60,190 67,170 110,053
20 13,266 1,100,000 1,100,000 1,100,000 92,394 106,902 208,738
25 16,932 1,125,000 1,125,000 1,125,000 128,475 154,925 369,457
30 21,610 1,150,000 1,150,000 1,374,941 167,089 211,322 630,673
35 27,580 1,175,000 1,175,000 1,936,275 204,014 273,784 1,050,968
40 35,200 1,200,000 1,200,000 2,717,916 227,999 334,060 1,717,586
45 44,925 1,225,000 1,225,000 3,837,865 210,153 369,498 2,753,994
50 57,337 1,250,000 1,250,000 5,470,402 85,132 330,023 4,336,396
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
<TABLE>
<CAPTION>
End of Policy Year
0% 6% 12%
----------------------------------------------------------
<S> <C> <C> <C>
1 2,800 2,848 3,058
2 5,683 5,822 6,434
3 8,652 8,926 10,160
4 11,709 12,164 14,273
5 14,855 15,543 18,810
6 18,093 19,068 23,817
7 21,424 22,745 29,342
8 24,854 26,581 35,438
9 28,381 30,580 42,162
10 32,007 34,749 49,580
15 60,190 67,170 110,053
----------------------------------------------------------
</TABLE>
42
<PAGE>
Appendix E
Directors of C.M. Life
Lawrence V. Burkett, Jr., Director, President and Chief Executive Officer
Director, President and Chief Executive Officer, C.M. Life, since 1996;
Executive Vice President and General Counsel, MassMutual, since 1993; Senior
Vice President and Deputy General Counsel, MassMutual, 1992-1993.
John B. Davies, Director
Director, C.M. Life, since 1996; Executive Vice President, MassMutual since
1994; Associate Executive Vice President, 1994; General Agent, MassMutual,
1982-1993.
Daniel J. Fitzgerald, Director
President and CEO, MassMutual International, since 1997; Director, C.M. Life,
since 1996; Executive Vice President, Corporate Financial Operations,
MassMutual, 1994-1997; Senior Vice President, MassMutual, 1991-1994.
Stuart H. Reese, Director and Senior Vice President - Investments
Director and Senior Vice President-Investments, C.M. Life, since 1996; Senior
Vice President, MassMutual, since 1993; Investment Manager, Aetna Life and
Casualty and Affiliates, 1979-1993.
Principals (other than those who also are Directors):
Paul D. Adornato
Senior Vice President - Operations, C.M. Life since, 1996; Senior Vice
President, MassMutual, since 1986.
Anne Melissa Dowling
Senior Vice President - Large Corporate Marketing, C.M. Life, since 1996;
Senior Vice President, MassMutual, since 1996; Chief Investment Officer,
Connecticut Mutual Life Insurance Company, 1994-1996; Senior Vice President -
International, Travelers Insurance Co., 1987-1993.
Maureen R. Ford
Senior Vice President - Annuity Marketing, C.M. Life, since 1996; Senior Vice
President, MassMutual, since 1996; Marketing Officer, Connecticut Mutual Life
Insurance Company, 1989-1996.
Isadore Jermyn
Chief Actuary, MassMutual since 1997; Senior Vice President and Actuary, C.M.
Life, since 1996; Senior Vice President and Actuary, MassMutual 1995-1997; Vice
President and Actuary, MassMutual, 1980-1995.
Ann F. Lomeli
Secretary, C.M. Life, since 1988; Vice President, Associate Secretary and
Associate General Counsel, MassMutual, since 1996; Corporate Secretary and
Counsel, Connecticut Mutual Life Insurance Company, 1988-1996.
43
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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 (the "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.
RULE 484 UNDERTAKING
The Bylaws of C.M. Life provide for indemnification of directors and officers as
follows:
C.M. Life directors and officers are indemnified under its by-laws. No
indemnification is provided with respect to any liability to any entity which is
registered as an investment company under the Investment Company Act of 1940 or
to the security holders thereof, where the basis for such liability is willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of office.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of C.M.
Life pursuant to the foregoing provisions, or otherwise, C.M. Life has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933, and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by C.M. Life of
expenses incurred or paid by a director, officer or controlling person of C.M.
Life 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, C.M. Life 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 Securities Act of 1933 and will be
governed by the final adjudication of such issue.
REPRESENTATION UNDER SECTION 26(e)(2)(A) OF
THE INVESTMENT COMPANY ACT OF 1940
C.M. Life hereby represents that the fees and charges deducted under the
flexible premium adjustable variable life insurance policies described in this
Registration Statement in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by C.M. Life.
<PAGE>
CONTENTS OF FILING
This Registration Statement is comprised of the following documents:
The Facing Sheet.
Cross-Reference to items required by Form N-8B-2.
The Prospectus consisting of 43 pages.
The Undertaking to File Reports.
The Undertaking pursuant to Rule 484 under the Securities Act of
1933.
Representation under Section 26(e)(2)(a) of the Investment Company
Act of 1940.
The Signatures.
Written Consents of the Following Persons:
1. To be filed: Coopers & Lybrand, L.L.P., independent
accountants;
2. Counsel opining as to the legality of securities being
registered;
3. To be filed: Opinion and consent of Craig Waddington, FSA,
MAAA, opining as to actuarial matters contained in the
Registration Statement.
The following Exhibits:
99. The following Exhibits correspond to those required by Paragraph
A of the instructions as to Exhibits in Form N-8B-2:
(1) (a) Resolution of Board of Directors of C.M. Life
establishing the Separate Account.*
(b) Resolution of the Board of Directors establishing the
SVUL segment of the Separate Account.
(2) Not Applicable.
(3) Form of Distribution Agreements:
(a) Form of Distribution Servicing Agreement between MML
Distributors, LLC and C.M. Life.**
(b) Form of Co-Underwriting Agreement between MML
Investors Services, Inc. and C.M. Life.***
(4) To be filed: Servicing Agreement between C.M. Life
Insurance Company and Massachusetts Mutual Life Insurance
Company.
(5) Form of Survivorship Flexible Premium Adjustable
Variable Life Policy.
<PAGE>
(6) (a) Certificate of Incorporation of C.M. Life.*
(b) By-Laws of C.M. Life.*
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) To be filed: Form of Application for a Survivorship
Flexible Premium Adjustable Variable Life insurance policy.
(11) To be filed: Memorandum describing C.M. Life issuance,
transfer, and redemption procedures for the Policy.
99.2 Opinion and Consent of Counsel as to the legality of the
securities being registered.
3. No financial statement will be omitted from the Prospectus
pursuant to Instruction 1(b) or (c) of Part I.
4. Not Applicable.
99.C.1 To be filed: Consent of Coopers & Lybrand L.L.P.
99.C.6 Opinion and consent of Craig Waddington, FSA, MAAA, as to
actuarial matters pertaining to the securities being
registered.
27. Not Applicable
* Incorporated by reference to Initial Registration Statement No. 33-91072
dated April 10, 1995.
** Incorporated by reference to Pre-Effective Amendment No. 1 to
Registration Statement No. 33-91072 dated August 11, 1995.
*** Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement No. 33-91072 dated May 1, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
caused this Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, all in the city of Hartford and the state of
Connecticut, on the 5th day of December, 1997.
C.M. LIFE VARIABLE LIFE SEPARATE ACCOUNT I
C.M. LIFE LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
----------------------------------------------------
Lawrence V. Burkett, Jr.,
President and Chief Executive Officer
C.M. Life Insurance Company
/s/ Richard M. Howe On December 5, 1997, as Attorney-in-Fact pursuant to
- -------------------- powers of attorney filed herewith.
*Richard M. Howe
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Lawrence V. Burkett, Jr.* Director, President and Chief December 5, 1997
- ------------------------------- Executive Officer
Lawrence V. Burkett, Jr.
/s/ John Miller, Jr.* Second Vice President and Comptroller December 5, 1997
- ------------------------------- (Principal Accounting Officer)
John Miller, Jr.
/s/ John B. Davies* Director December 5, 1997
- -------------------------------
John B. Davies
/s/ Stuart H. Reese* Director December 5, 1997
- -------------------------------
Stuart H. Reese
/s/ Richard M. Howe On December 5, 1997, as Attorney-in-Fact pursuant to
- ------------------------------- powers of attorney filed herewith.
*Richard M. Howe
</TABLE>
<PAGE>
EXHIBIT LIST
<TABLE>
<C> <S>
99(1)(b) Resolution of Board of Directors of C.M. Life establishing the SVUL
Segment of the Separate Account.
99(5) Form of Survivorship Flexible Premium Adjustable Variable Life Policy.
99.2 Opinion and Consent of Richard M. Howe, Esq.
99.C.6 Form of Opinion and Consent of Craig Waddington, FSA, MAAA
</TABLE>
<PAGE>
EXHIBIT 99(1)(b)
CERTIFICATE
-----------
The undersigned hereby certifies that he is the Assistant Secretary of C.M. Life
Insurance Company (the "Company"); that the following vote was adopted by means
of an instrument of unanimous written consent of the Board of Directors of the
Company dated November 24, 1997; and that the said vote has been neither
rescinded nor modified, but remains in full force and effect:
VOTED:
That in connection with the development of a new survivorship variable
universal life insurance product (the "SVUL Policy"), the Company establish
a segment of C.M. Life Variable Life Separate Account I (the "Separate
Account") in order to invest contributions received under the SVUL Policy;
that the appropriate officers of the Company be, and each acting singly
hereby is, authorized to execute all documents or take any other action
which said officer deems necessary or advisable in order to permit the sale
of the SVUL Policy, including the filing of registration statements or
amendments thereto with the United States Securities and Exchange
Commission or other appropriate regulatory authorities; and that the chief
executive officer or the chief operating officer of the Company be, and
each acting singly hereby is, authorized to establish additional segments
of the Separate Account or further divide any segment of the Separate
Account into additional divisions, as such officer in his discretion deems
necessary or appropriate.
IN WITNESS WHEREOF, I have hereunto affixed my hand and the seal of the Company
this 24th day of November, 1997.
/s/ Thomas J. Finnegan, Jr.
------------------------------
Assistant Secretary
<PAGE>
C.M. Life Insurance Company C.M. Life Insurance Company
Home Office: Hartford, Connecticut
A Stock Company Administrative Office: Springfield, Massachusetts
EXHIBIT 99.(5)
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
- --------------------------------------------------------------------------------
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998 INITIAL FACE AMOUNT $500,000
- --------------------------------------------------------------------------------
Dear Policy Owner:
READ YOUR POLICY CAREFULLY. It has been written in readable language to help
you understand its terms. We have used examples to explain some of its
provisions. These examples do not reflect the actual amounts or status of this
policy. As you read through the policy, remember the words "we," "us," and
"our" refer to C.M. Life Insurance Company.
We will, subject to the terms of this policy, pay the death benefit to the
Beneficiary when due proof of the death of both Insureds has been received at
our Administrative Office. However, due proof of the first death must be
furnished when it occurs.
The terms of this policy are contained on this and the following pages. For
service and information on this policy, contact the agent who sold the policy,
any of our agency offices, or our Administrative Office.
YOU HAVE THE RIGHT TO RETURN THIS POLICY. If you decide not to keep this
policy, return it within 10 days after you receive it, or within 10 days after
you receive the notice of right to withdraw, or within 45 days after the date of
the Part 1 of the application for this policy, whichever is latest. It may be
returned by delivering or mailing it to our Administrative Office, to any of our
agency offices, or to the agent who sold the policy. Then, the policy will be
as though it had never been issued. We will promptly refund (a) any premium
paid for this policy, plus (b) interest credited to this policy under the
Guaranteed Principal Account, plus or minus (c) an amount that reflects the
investment experience of the investment divisions of the Separate Account under
this policy to the date the policy is received by us, minus (d) any amounts
withdrawn and any policy debt.
Signed for C.M. Life Insurance Company.
Sincerely yours,
/s/ Lawrence V. Burkett, Jr. /s/ Ann F. Lomeli
PRESIDENT SECRETARY
This Policy provides that: A death benefit is payable when both Insureds have
died.
Within specified limits, flexible premiums may be
paid while either Insured is living.
No dividends will be paid.
The amount of death benefit and the duration of insurance coverage may be fixed
or variable as described in Parts 3 and 5.
The variable account value of the policy may increase or decrease in accordance
with the experience of the Separate Account. There are no minimum guarantees as
to the variable account value.
The fixed account value of the policy earns interest at a rate not less than the
minimum described in the Interest On Fixed Account Value provision.
<PAGE>
Policy Summary
This Summary briefly describes some of the major policy provisions. Since it
does not go into detail, the actual provisions will prevail. See the provisions
for full information and any limits that may apply. The "Table Of Contents"
shows where the provisions may be found.
This is a variable universal life insurance policy on the lives of two Insureds.
We will pay a death benefit if both Insureds die while the policy is in force.
"In force" means that the insurance has not terminated. "Variable" means that
values depend on the investment performance of the Separate Account shown in the
Policy Specifications and are not guaranteed as to dollar amount. "Universal
life" means that, subject to the limits and conditions stated in the policy, the
amount of insurance may be adjusted and flexible premium payments may be made.
Premiums for this policy are flexible. After the first premium has been paid,
there is no requirement that any specific amount of premium be paid on any date.
Instead, within the limits stated in the policy, any amount may be paid on any
date during the lifetime of either Insured.
Premiums are applied to increase the value of this policy. Monthly charges are
deducted from the value of this policy each month. If the value cannot cover
the monthly charges for a month and premiums paid do not meet certain
requirements, the policy may terminate at the end of 62 days. There is,
however, a right to reinstate the policy.
Other rights available while either Insured is living include the rights to:
. Change the Owner or any Beneficiary;
. Assign this policy;
. Change the Face Amount;
. Change the Death Benefit Option;
. Make loans;
. Make withdrawals;
. Surrender this policy;
. Allocate net premiums among the Guaranteed Principal Account
and the divisions of the Separate Account; and
. Transfer values between the Guaranteed Principal Account and
the divisions of the Separate Account.
This policy also includes a number of Payment Options. They provide alternate
ways for us to pay the death benefit or the amount payable upon surrender of the
policy.
<PAGE>
TABLE OF CONTENTS
Policy Specifications
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part 1. - The Basics Of This Policy............... 1
The Parties Involved - Owner, Insureds,
Beneficiary, Irrevocable Beneficiary......... 1
Dates - Policy Date, Policy Anniversary
Date, Policy Year, Monthly Charge Date,
Issue Date, Valuation Date, Valuation
Period, Valuation Time, Register Date........ 1
Policy A Legal Contract....................... 2
Policy Is Not Participating................... 2
Representations And Contestability............ 2
Misstatement Of Age Or Gender................. 3
Death By Suicide.............................. 3
Meaning Of In Force........................... 3
Meaning Of Second Death....................... 4
Simultaneous Deaths........................... 4
Face Amount................................... 4
Year Of Coverage.............................. 4
Ages - Issue Age, Attained Age................ 4
Written Request............................... 4
Currency...................................... 4
Administrative Office......................... 4
Part 2. - Premium Payments........................ 4
The First Premium............................. 4
Planned Premiums.............................. 4
Premium Flexibility And Premium Notices....... 5
Where To Pay Premiums......................... 5
Right To Refund Premiums...................... 5
Net Premium................................... 5
Allocation Of Net Premiums.................... 6
Part 3. - Accounts, Values, And Charges........... 6
The Separate Account And The Guaranteed
Principal Account............................. 6
The Separate Account.......................... 6
Changes In The Separate Account............... 7
Accumulation Units............................ 7
Purchase And Sale Of Accumulation Units....... 7
The Guaranteed Principal Account.............. 7
Values Of This Policy......................... 8
Account Value Of Policy....................... 8
Variable Account Value Of Policy.............. 8
Fixed Account Value Of Policy................. 8
Interest On Fixed Account Value............... 8
Monthly Policy Charges........................ 9
Monthly Charges............................... 9
Administrative Charge......................... 9
Face Amount Charge............................ 9
Insurance Charge.............................. 9
Rider Charge.................................. 10
Grace Period And Termination.................. 11
Safety Test................................... 11
Part 4. - Life Benefits........................... 12
Policy Ownership.............................. 12
Rights Of Owner............................... 12
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Changing The Owner Or Beneficiary............. 12
Transfers Of Values........................... 12
Assigning This Policy......................... 13
Right To Change The Face Amount............... 13
Increases In The Face Amount.................. 13
Decreases In The Face Amount.................. 14
Evidence Of Changes........................... 14
Borrowing Against This Policy................. 14
Right To Make Loans........................... 14
Effect Of Loan................................ 14
Maximum Loan Available........................ 15
Interest On Loans............................. 15
Policy Debt Limit............................. 16
Repayment Of Policy Debt...................... 16
Other Borrowing Rules......................... 16
Surrendering This Policy And
Making Withdrawals............................ 16
Right To Surrender............................ 16
Net Surrender Value........................... 17
Making Withdrawals............................ 17
How We Pay.................................... 17
Reinstating This Policy....................... 18
When Reinstatement Can Be Made................ 18
Requirements To Reinstate..................... 18
Policy After Reinstatement.................... 18
Reports To Owner.............................. 19
Annual Report................................. 19
Part 5. - The Death Benefit....................... 19
Amount Of Death Benefit....................... 19
Death Benefit Options......................... 19
Minimum Death Benefit......................... 19
Changes In The Death Benefit Option........... 20
When We Pay................................... 20
Interest On Death Benefit..................... 20
Part 6. - Payment Options......................... 21
Availability Of Options....................... 21
Minimum Amounts............................... 21
Description Of Options........................ 21
Options 1, 2, 3, 4, 5, 6...................... 21
Alternate Life Income......................... 22
Electing A Payment Option..................... 22
Effective Date And Payment Dates.............. 22
Withdrawals And Changes....................... 22
Income Protection............................. 22
Other Payment Option Rules.................... 23
Part 7. - Notes On Our Computations........... 23
Net Investment Factor......................... 23
Accumulation Unit Value....................... 24
Adjustment Of Units And Values................ 24
Basis Of Computation.......................... 24
Method Of Computing Values.................... 24
Payment Option Rates Tables................... 25-31
</TABLE>
<PAGE>
TABLE OF CONTENTS (continued)
Any riders and endorsements, and a copy of the application for the policy,
follow page 31.
- --------------------------------------------------------------------------------
For additional important terms used in this policy, see the following
provisions:
<TABLE>
<CAPTION>
Term Provision Page No.
- ---- --------- --------
<S> <C> <C>
Death Benefit Factor Minimum Death Benefit 19
Expense Premium Net Premium 5
Guarantee Periods Safety Test 11
Guarantee Premiums Safety Test 11
Insurance Risk Insurance Charge 9
Loan Interest Rate Expense Charge Interest On The Fixed Account Value 8
Minimum Annual Interest Rate For The Interest On The Fixed Account Value 8
Guaranteed Principal Account
Policy Debt Right To Make Loans 14
Premium Expense Charge Net Premium 5
Separate Account Charge for Mortality And Net Investment Factor 23
Expense Risk
Surrender Charges Net Surrender Value 17
Withdrawal Fee Making Withdrawals 17
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
<TABLE>
<CAPTION>
ISSUE AGE GENDER
<S> <C> <C> <C>
INSURED NO. 1 JANE C. DOE 35 FEMALE
INSURED NO. 2 JOHN A. DOE 35 MALE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998 INITIAL FACE AMOUNT $500,000
</TABLE>
RISK CLASSES SEE THE TABLE(S) OF MAXIMUM MONTHLY INSURANCE CHARGES
- --------------------------------------------------------------------------------
Subject to the terms of this policy, the Face Amount is adjustable. If the Face
Amount is adjusted, then revised or additional Policy Specifications will be
sent.
<TABLE>
<S> <C>
DEATH BENEFIT OPTION (See Part 5 of this policy.) 1
MONTHLY CHARGE DATES 1st day of each month
FIRST PREMIUM $5,000.00
PLANNED PREMIUM $5,000.00
PLANNED PREMIUM FREQUENCY Annual
FIRST GUARANTEE PERIOD First 20 Policy Years
FIRST GUARANTEE PREMIUM $1,574.00
SECOND GUARANTEE PERIOD First 65 Policy Years
SECOND GUARANTEE PREMIUM $3,868.00
POLICY CHARGES AND FEES:
MAXIMUM PREMIUM EXPENSE CHARGE 13% of premium payments up to Expense
DURING EACH YEAR OF COVERAGE (See Net Premium; 3% of excess premium
Premium provision in Part 2.) payments
MAXIMUM MONTHLY ADMINISTRATIVE CHARGE* $12.00
MAXIMUM MONTHLY FACE AMOUNT CHARGE*
BY YEAR OF COVERAGE
Years 1 - 10 $0.13
Years 11 and later $0.00
MAXIMUM MONTHLY INSURANCE CHARGE* See the Table(s) Of Maximum Monthly
Insurance Charges
RIDER CHARGES* See the Policy Specifications for the
Rider(s), if any
MAXIMUM LOAN INTEREST RATE EXPENSE CHARGE 2.00%
MAXIMUM WITHDRAWAL FEE $25.00 per withdrawal
SURRENDER CHARGE See the Table(s) Of Surrender Charges
MAXIMUM SEPARATE ACCOUNT CHARGE FOR Daily equivalent of 0.90% effective
MORTALITY AND EXPENSE RISK** annual rate
</TABLE>
* For more information, see the "Monthly Policy Charges" section in Part 3
of this policy.
** For more information, see the Net Investment Factor provision in Part 7 of
this policy.
NOTE: Timely payment of planned premiums does not guarantee that this policy
will stay in force until both Insureds have died.
POLICY SPECIFICATIONS PAGE 1 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
LIMIT ON PREMIUM PAYMENTS IN ANY POLICY YEAR:
- --------------------------------------------
The maximum limit for premium payments in any Policy Year is the largest premium
that would not exceed the LIMIT ON TOTAL PREMIUM PAYMENTS stated below or, if
less, the greatest of:
. $4,400.00;
. The amount of premiums paid in the preceding Policy Year; and
. The largest premium that would not increase the Insurance Risk.
LIMIT ON TOTAL PREMIUM PAYMENTS:
- -------------------------------
As of any date, the maximum limit on the sum of the premiums paid under this
policy is the greater of items A and B below. This limit may be revised if the
policy is changed. These changes include, but are not limited to, withdrawals,
changing the Face Amount or Death Benefit Option, and adding or deleting benefit
riders. If the limit is revised, new Policy Specifications will be sent.
A. $ 40,032.00;
B. $ 3,868.00 multiplied by the result of one (1) plus the number of full
Policy Years elapsed.
LIMITATION ON NET PREMIUM ALLOCATIONS AND TRANSFERS:
- ----------------------------------------------------
While this policy is in force, the cumulative limit on the number of distinct
Separate Account divisions to which net premiums are allocated and transfers are
made is 16.
ADDITIONAL LIMITATIONS ON TRANSFERS (See Transfers Of Values provision in Part
- -----------------------------------
4.)
Transfers must be in whole-number percentages or in dollar-and-cent amounts.
Transfers of values from the Guaranteed Principal Account to the Separate
Account (excluding any transfer on the day after the Issue Date) are limited to
one each Policy Year. After that day, any transfer from the Guaranteed
Principal Account cannot exceed 25% of the fixed account value of this policy
(less any policy debt) on the date of transfer.
As needed to comply with Section 404(c) of ERISA, we reserve the right to limit
transfers such that no transfers may be made for at least 90 days after the
preceding transfer. Any such limitation would not apply to a transfer of all
funds in the Separate Account to the Guaranteed Principal Account, to transfers
resulting from a policy loan, or to automated transfers in connection with any
program the Company has in place.
POLICY SPECIFICATIONS PAGE 2 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT INFORMATION (See The Separate Account provision in Part 3.)
- ----------------------------
The Separate Account referred to in this policy is C.M. Life Variable Life
Separate Account I.
The divisions of the Separate Account are:
MML Equity Oppenheimer Capital Appreciation
MML Money Market Oppenheimer Growth
MML Managed Bond Oppenheimer Global Securities
MML Blend Oppenheimer Strategic Bond
MML Equity Index
The types of investments and the objectives for each division are given in the
Prospectus.
MINIMUM ANNUAL INTEREST RATE FOR THE 3.00%
GUARANTEED PRINCIPAL ACCOUNT
LOAN INTEREST RATE (See Interest On Loans in Part 4.) [Variable or 5.0%]
MINIMUM FACE AMOUNT $500,000
MINIMUM FACE AMOUNT INCREASE $50,000
RIDER(S) ATTACHED TO THIS POLICY:
- ---------------------------------
None
POLICY SPECIFICATIONS PAGE 3 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
EXPENSE PREMIUM: $2,152.00
TABLE OF MAXIMUM MONTHLY INSURANCE CHARGES
RATES PER THOUSAND OF INSURANCE RISK
RISK CLASSES: INSURED NO. 1: PREFERRED NON-TOBACCO
INSURED NO. 2: PREFERRED NON-TOBACCO
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE OF THE AGE OF THE AGE OF THE
YOUNGER MONTHLY YOUNGER MONTHLY YOUNGER MONTHLY
INSURED RATE INSURED RATE INSURED RATE
------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C>
35 0.00002 57 0.00964 79 0.63554
36 0.00006 58 0.01144 80 0.76934
37 0.00010 59 0.01358 81 0.93261
38 0.00016 60 0.01616 82 1.13343
39 0.00022 61 0.01928 83 1.38047
40 0.00030 62 0.02316 84 1.67843
41 0.00040 63 0.02804 85 2.03303
42 0.00052 64 0.03412 86 2.44749
43 0.00066 65 0.04148 87 2.92813
44 0.00082 66 0.05031 88 3.47679
45 0.00102 67 0.06074 89 4.10303
46 0.00124 68 0.07295 90 4.81445
47 0.00151 69 0.08746 91 5.62502
48 0.00183 70 0.10516 92 6.55747
49 0.00220 71 0.12818 93 7.64951
50 0.00265 72 0.15490 94 9.00787
51 0.00318 73 0.19006 95 10.85216
52 0.00384 74 0.23416 96 13.65662
53 0.00463 75 0.28828 97 18.46654
54 0.00558 76 0.35383 98 27.61923
55 0.00672 77 0.43218 99 46.54633
56 0.00807 78 0.52494
</TABLE>
The above rates are based on the following mortality tables:
INSURED NO. 1 - Commissioners 1980 Standard Ordinary Nonsmoker Mortality
Table - Female
INSURED NO. 2 - Commissioners 1980 Standard Ordinary Nonsmoker Mortality
Table - Male
Rates for Attained Ages above 99 equal the rate for Attained Age 99.
POLICY SPECIFICATIONS PAGE 4 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
TABLE OF SURRENDER CHARGES
<TABLE>
<CAPTION>
IF SURRENDER OCCURS IN
POLICY YEAR SURRENDER CHARGE
----------- ----------------
<S> <C>
1 $2,152.00
2 $1,937.00
3 $1,721.00
4 $1,506.00
5 $1,291.00
6 $1,076.00
7 $861.00
8 $646.00
9 $430.00
10 $215.00
11 and later $0.00
</TABLE>
POLICY SPECIFICATIONS PAGE 5 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
DEATH BENEFIT FACTORS
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE OF THE AGE OF THE AGE OF THE
YOUNGER YOUNGER YOUNGER
INSURED FACTOR INSURED FACTOR INSURED FACTOR
------- ------ ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
35 2.50 57 1.42 79 1.05
36 2.50 58 1.38 80 1.05
37 2.50 59 1.34 81 1.05
38 2.50 60 1.30 82 1.05
39 2.50 61 1.28 83 1.05
40 2.50 62 1.26 84 1.05
41 2.43 63 1.24 85 1.05
42 2.36 64 1.22 86 1.05
43 2.29 65 1.20 87 1.05
44 2.22 66 1.19 88 1.05
45 2.15 67 1.18 89 1.05
46 2.09 68 1.17 90 1.05
47 2.03 69 1.16 91 1.04
48 1.97 70 1.15 92 1.03
49 1.91 71 1.13 93 1.02
50 1.85 72 1.11 94 1.01
51 1.78 73 1.09 95 1.00
52 1.71 74 1.07 96 1.00
53 1.64 75 1.05 97 1.00
54 1.57 76 1.05 98 1.00
55 1.50 77 1.05 99 1.00
56 1.46 78 1.05
</TABLE>
These Death Benefit Factors are used to determine the amount of the minimum
death benefit. Death Benefit Factors for Attained Ages above 99 equal the Factor
for Attained Age 99. For more information, see Part 5 of this policy.
POLICY SPECIFICATIONS 6 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
OWNER INFORMATION
OWNER
- -----
THE INSUREDS JOINTLY OR THE SURVIVING INSURED
POLICY SPECIFICATIONS PAGE 7 OF 8
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
SURVIVORSHIP FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
INSURED NO. 1 JANE C. DOE
INSURED NO. 2 JOHN A. DOE
POLICY DATE JULY 1, 1998 POLICY NUMBER 123456789
ISSUE DATE JULY 1, 1998
- --------------------------------------------------------------------------------
BENEFICIARY INFORMATION
BENEFICIARY
- -----------
JAMES B. DOE, SON OF THE INSUREDS
POLICY SPECIFICATIONS PAGE 8 OF 8
<PAGE>
Part 1. The Basics Of This Policy
In this Part, we discuss some definitions and insurance concepts necessary to
understand this policy. The words "we," "us," and "our" refer to C.M. Life
Insurance Company.
The Parties The Owner is the person who owns this policy, as shown in
Involved - our records. The Owner has the right to exercise rights
Owner, Insureds, and privileges and to receive benefits under the terms of
Beneficiary, this policy during the lifetime of either Insured. If the
Irrevocable Owner designated under the terms of this policy is not
Beneficiary living and if the policy does not provide otherwise, the
Owner will be the estate of the last Owner to die.
For more information about the rights and benefits
available to the Owner, see the "Policy Ownership" section
in Part 4.
The Insureds are the two persons whose lives this policy
insures. An Insured may be the Owner of this policy, or
someone else may be the Owner.
Example: You buy a policy insuring your own life and your
spouse's life, and naming yourself as Owner. In
this case, you are both an Insured and the
Owner. If you buy a policy insuring two other
lives and naming yourself as the Owner, then the
Owner is not an Insured.
A Beneficiary is any person named in our records to
receive the death benefit after both Insureds have died.
There may be different classes of Beneficiaries, such as
primary and secondary. These classes set the order of
payment. There may be more than one Beneficiary in a
class.
Example: Elizabeth is named as primary (first)
Beneficiary. Rachel and David are named as
Beneficiaries in the secondary class. If
Elizabeth is alive when the second death occurs,
she receives the death benefit. If Elizabeth is
not alive but Rachel and David are alive when
the second death occurs, Rachel and David
receive the death benefit.
Any Beneficiary may be named an Irrevocable Beneficiary.
An Irrevocable Beneficiary is one whose consent is needed
to change that Beneficiary. Also, this Beneficiary must
consent to the exercise of certain other policy rights.
If no Beneficiary designated under this policy survives
both Insureds, the Beneficiary will be the Owner unless
the policy states otherwise. The interest of any
Beneficiary will be subject to any assignment of this
policy that is binding on us and to any payment option in
effect at the time of the second death.
See the "Policy Ownership" section in Part 4, and see
"Part 6. - Payment Options."
Dates - Policy Date, The Policy Date is shown in the Policy Specifications. It
Policy Anniversary is the starting point for determining Policy Anniversary
Date, Policy Year, Dates, Policy Years, and Monthly Charge Dates. The first
Monthly Charge Policy Anniversary Date is one year after the Policy Date.
Date, Issue Date, The period from the Policy Date to the first Policy
Valuation Date, Anniversary Date, or from one Policy Anniversary Date to
Valuation Period, the next, is called a Policy Year.
Valuation Time,
Register Date The Monthly Charge Dates are the dates on which we deduct
monthly charges for this policy. The first Monthly Charge
Date is the Policy Date. Subsequent Monthly Charge Dates
are the same day of each month thereafter.
Page 1
<PAGE>
Example: The Policy Date is June 10, 19X7. The first
Policy Anniversary Date is one year later, June
10, 19X8. The period from June 10, 19X7, through
June 9, 19X8, is a Policy Year. The first
Monthly Charge Date is June 10, 19X7. The next
Monthly Charge Date is one month later, July 10,
19X7.
The Issue Date is also shown in the Policy Specifications.
The Issue Date starts the contestability and suicide
periods. We discuss contestability and suicide later in
this Part.
A Valuation Date is any date on which the New York Stock
Exchange (or its successor) is open for trading. A
Valuation Period is the period of time from the end of one
Valuation Date to the end of the next Valuation Date. A
Valuation Time is the time the New York Stock Exchange (or
its successor) closes on a Valuation Date. All actions
that are to be performed on a Valuation Date will be
performed as of the Valuation Time.
The Register Date is the date on which we first allocate
net premium payments for this policy among the Guaranteed
Principal Account and the divisions of the Separate
Account. It is the Valuation Date that is on, or next
follows, the later of:
. The day after the Issue Date; and
. The day we receive the first premium for this policy at
our Administrative Office.
Policy A Legal This policy is a legal contract between the Owner and us.
Contract The entire contract consists of the policy, which includes
the application and any rider(s) and endorsement(s) the
policy has. We have issued this policy in return for the
application and the payment of the first premium. Any
changes or waiver of its terms must be in writing and
signed by our Secretary or an Assistant Secretary to be
valid.
A copy of the initial application is attached to and made
a part of this policy. Any subsequent applications
requesting changes in the policy also will become part of
the contract; copies of any such applications will be sent
to the Owner for attachment to the policy.
Policy Is Not This policy is "not participating," which means that no
Participating dividends are payable on this policy.
Representations We rely on all statements made by or for either or both
And Insureds in the application(s). Legally, those statements
Contestability are considered to be representations and not warranties.
We can bring legal action to contest the validity of this
policy, or any policy change requiring evidence of
insurability, for any material misrepresentation of a
fact. To do so, however, the misrepresentation must have
been in the initial application or in a subsequent
application, and a copy of that application must have been
attached to (or sent to the Owner for attachment to) and
made a part of this policy. The initial Policy
Specifications are attached to this policy when issued. If
a policy change is made, we will send to the Owner any
revised or additional Policy Specifications for attachment
to the policy.
Except for any policy change or reinstatement requiring
evidence of insurability, we cannot contest the validity
of this policy:
Page 2
<PAGE>
. With respect to any material misrepresentation in
the application regarding the insurability of
Insured No. 1, once the policy has been in force
during the lifetime of Insured No. 1 for 2 years
after its Issue Date; or
. With respect to any material misrepresentation in
the application regarding the insurability of
Insured No. 2, once the policy has been in force
during the lifetime of Insured No. 2 for 2 years
after its Issue Date.
For any policy change requiring evidence of
insurability, we cannot contest the validity of the
change with respect to each Insured after the change
has been in effect for 2 years during the lifetime of
that Insured.
If evidence of insurability is required to reinstate
this policy (see "Reinstating This Policy" in Part 4),
our right to contest the validity of this policy begins
again on the date of reinstatement. For each Insured
living on that date, we cannot contest once the
reinstated policy has been in force during the lifetime
of that Insured for 2 years after that reinstatement
date.
Misstatement Of If the date of birth or gender of either Insured as
Age Or Gender given in the application is not correct, the Face
Amount (discussed in this Part) will be adjusted. The
adjustment will reflect the amount provided by the most
recent monthly insurance charges using the correct ages
and genders. In addition, if the adjustment is made
while either Insured is living, monthly charges after
the adjustment will be based on the correct ages and
genders.
Death By Suicide If either Insured commits suicide, while sane or
insane, within 2 years after the Issue Date of this
policy and while the policy is in force, this policy
will terminate. In this case, we will refund the amount
of premiums paid for this policy, less any amounts
withdrawn and less any policy debt.
If either Insured commits suicide, while sane or
insane, within 2 years after this policy is reinstated
and while the policy is in force, this policy will
terminate. In this case, we will refund any amount paid
to reinstate this policy and any premiums paid
thereafter, less any amounts withdrawn and less any
policy debt.
If either Insured commits suicide, while sane or
insane, within 2 years after the effective date of any
increase in the Face Amount, the increase will
terminate. In this case, we will refund the monthly
charges made for that increase. However, if a refund as
described in either of the two preceding paragraphs is
payable, there will be no additional refund for the
increase.
Monthly charges are discussed in Part 3. Withdrawals,
policy debt, and reinstatement are discussed in Part 4.
Meaning Of "In force" means that the insurance provided by this
In Force policy is in effect and has not terminated. This policy
will be in force from its Issue Date or, if later, the
date the first premium is paid.
This policy will continue in force to the second death
unless:
. Either Insured commits suicide within 2 years after
the Issue Date or the date the policy is reinstated;
. The policy terminates under the terms of the Grace
Period And Termination provision in Part 3;
. The policy terminates because the policy debt limit
is reached; or
. The policy is surrendered.
Page 3
<PAGE>
Policy debt and surrender are discussed in Part 4.
Meaning Of The "second death" under this policy means the death of
Second Death the survivor of the Insureds.
Simultaneous The insureds may die at the same time, with no
Deaths reasonable way to determine who died first. In this
case, we will assume that Insured No. 2 died before
Insured No. 1 unless we are provided information
otherwise by the Owner.
Face Amount The Face Amount is the amount of insurance coverage
this policy provides while the policy is in force. The
Initial Face Amount is the Face Amount on the Policy
Date.
Year Of Coverage For the Initial Face Amount, each Policy Year is a year
of coverage. If the Face Amount of this policy has been
increased (as discussed in Part 4), years of coverage
for each increase will be measured from the effective
date of the increase.
Ages - Issue Age, The Issue Age for each Insured (shown in the Policy
Attained Age Specifications) is the age of that Insured on the
birthday nearest the Policy Date.
Example: Elizabeth's 32nd birthday was May 12th. The
Policy Date is today, December 1. Since
December 1 is closer to her 33rd birthday,
her Issue Age will be 33.
The Attained Age of an Insured is the Insured's Issue
Age increased by the number of full Policy Years
elapsed.
Written Request A "written request" is a request in writing, in a form
satisfactory to us, received by us at our Principal
Administrative Office.
Currency All payments made to us and by us will be in the lawful
currency of the United States of America. All monetary
amounts shown in this policy are in U.S. dollars.
Administrative Our Administrative Office is in Springfield,
Office Massachusetts. The address is C.M. Life Insurance
Company, 1295 State Street, Springfield, Massachusetts
01111-0001.
Part 2. Premium Payments
Premiums are the payments that may be paid to us to increase the account value
of this policy; they also may be needed to keep this policy in force. Premiums
for this policy are discussed in this Part.
The First Premium The first premium for this policy is shown in the
Policy Specifications. It is due on the Policy Date.
This policy will not be in force until the first
premium has been paid.
Planned Premiums The planned premium for this policy is shown in the
Policy Specifications. The frequency of planned
premiums for this policy is as elected in the
application. The frequency and amount of the planned
premium may be changed by written request; the
frequency may be quarterly, semiannually, or annually.
We also provide a pre-authorized payment plan. This
plan, and any other alternate premium plans we provide,
are governed by the rules we set.
Page 4
<PAGE>
If continued payment of the planned premium during a
Policy Year would exceed the Limit On Premium Payments
for the Year shown in the Policy Specifications, we may
decrease the planned premium to an amount that would
not exceed that limit.
If premium payments are discontinued, we will continue
to deduct monthly charges from the account value and
the policy will stay in force subject to the Grace
Period And Termination provision in Part 3.
Premium Flexibility After the first premium has been paid, there is no
And Premium requirement that any amount of premium be paid on any
Notices date. Subject to the Limit On Premium Payments shown in
the Policy Specifications and while this policy is in
force, any amount of premium may be paid at any time
while either Insured is living. However, each premium
paid must be at least $20 or, if greater, the amount
needed to prevent termination, as discussed in the
Grace Period And Termination provision.
We will send premium notices for the planned premium
based on the amount and frequency in effect. We will
stop sending notices for the planned premium upon
receipt of the Owner's written request to do so.
Where To Pay All premiums after the first premium are payable to us
Premiums at our Administrative Office or at the place shown for
payment on the premium notice. Upon request, a receipt
signed by our Secretary or an Assistant Secretary will
be given for any premium payment.
Right To Refund We have the right to promptly refund any amount of
Premiums premium paid if application of that premium to the
account value would increase the insurance risk. This
right is limited to premiums paid in a Policy Year that
exceed the Limit On Premium Payments for the Year shown
in the Policy Specifications.
Insurance risk is discussed in the Insurance Charge
provision in Part 3.
Net Premium A net premium is a premium payment we receive for this
policy less the premium expense charge we deduct at
that time. The Maximum Premium Expense Charge we can
deduct from each premium payment is shown in the Policy
Specifications.
We credit each net premium to the account value of this
policy on the date we receive the premium payment.
However, for any premium payment received before the
Policy Date, the net premium will be credited to the
account value as of the Policy Date.
If the Face Amount of this policy has been increased
(as discussed in Part 4), premium payments received
once an increase becomes effective will be allocated to
each segment of the Face Amount. (The Initial Face
Amount is one "segment"; each increase in the Face
Amount is a separate "segment.") This may affect the
premium expense charge deducted from premium payments.
The premium allocation will be made on a pro rata basis
using the Expense Premium for each segment. The Expense
Premium for each segment of the Face Amount is shown
with its Table Of Maximum Monthly Insurance Charges in
the Policy Specifications.
Example: The Initial Face Amount of your policy is
$500,000; the Expense Premium for it is
$4,000. You later increase the Face Amount by
$700,000, to $1,200,000; the Expense Premium
for that increase is $6,000. The sum of the
Expense Premiums is $10,000. Thereafter while
the Face Amount remains at $1,200,000, each
premium payment
Page 5
<PAGE>
will be allocated 40% (4,000 divided by
10,000) to the Initial Face Amount and 60%
(6,000 divided by 10,000) to the increase.
Allocation Of Net Each net premium we receive on or before the Issue Date
Premiums will be allocated to the Guaranteed Principal Account.
On the Register Date, any fixed value of this policy
will be allocated among the Guaranteed Principal
Account and the divisions of the Separate Account,
according to the net premium allocation in effect on
the Register Date. Fixed account value is discussed in
Part 3.
Each net premium we receive after the Issue Date will
be allocated according to the net premium allocation in
effect on the date of receipt.
The net premium allocation is specified at the time of
application for this policy. Changes in the net premium
allocation are subject to any limitations stated in the
Policy Specifications. Subject to those limitations,
the allocation may be changed by any later election
satisfactory to us and received at our Administrative
Office.
The amount of each net premium we receive for this
policy for allocation to a division of the Separate
Account will be applied to purchase accumulation units
for this policy in that division. See the Purchase And
Sale Of Accumulation Units provision in Part 3.
Part 3. Accounts, Values, And Charges
This policy provides that certain values (referred to as the variable account
values) are based on the investment performance of the Separate Account and are
not guaranteed as to dollar amount. This policy also provides that other values
(referred to as the fixed account values) are based on the interest credited to
the Guaranteed Principal Account. The account value of this policy is the
variable account value plus the fixed account value. This Part gives information
about the Separate Account, the Guaranteed Principal Account, and the values and
monthly charges connected with them.
The Separate Account And The Guaranteed Principal
Account
The Separate The Separate Account shown in the Policy Specifications
Account is a designated segment of the separate investment
account we have established under Connecticut law. It
is also subject to the laws of the state in which this
policy was delivered.
The Separate Account has a number of divisions. Each
division invests in shares of an investment Fund. The
divisions are shown in the Policy Specifications.
The values of the assets in the divisions are variable
and are not guaranteed. They depend on the investment
results of the Separate Account shown in the Policy
Specifications.
We own the assets of the Separate Account. Those assets
will be used only to support variable life insurance
policies. That portion of the assets equal to the
reserves and other liabilities of the Separate Account
will not be charged with liabilities that arise from
any other business we may conduct. However, we may
transfer to our general account any assets exceeding
the reserves and other liabilities of the Separate
Account. The income and the realized and unrealized
capital gains and losses from each division of the
Separate Account are credited to or charged against
that division without regard to any of our other
income, capital gains, or capital losses. The assets of
the Separate Account are protected from the claims of
our creditors.
Page 6
<PAGE>
Changes In The We have the right to establish additional divisions of
Separate Account the Separate Account from time to time. Amounts
credited to any additional divisions established would
be invested in shares of other Funds. For any division,
we have the right to substitute new Funds. We also have
the right to close any division to new investments.
Subject to applicable provisions of federal securities
laws, we have the right to change the investment policy
of any division of the Separate Account.
We have the right to operate the Separate Account as a
unit investment trust under the Investment Company Act
of 1940 or in any other form permitted by law.
Accumulation Units Accumulation units are used to measure the variable
account value of this policy. The value of a unit is
determined as of the Valuation Time on each Valuation
Date for valuation of the Separate Account. The value
of any unit can vary from Valuation Date to Valuation
Date. That value reflects the investment performance of
the division of the Separate Account applicable to that
unit. The value of accumulation units is discussed
further in Part 7.
Purchase And Sale Amounts are credited to and taken from divisions of the
Of Accumulation Separate Account by purchasing and selling accumulation
Units units. Accumulation units will be purchased and sold at
the unit value as of the Valuation Time on the
Valuation Date of purchase or sale. The number of units
purchased or sold will be the amount of money for
purchase or sale divided by that unit value.
Example: The amount applied is $550. The date of
purchase is June 10, 19X6. The accumulation
unit value on that date is $10. The number of
units purchased would be 55 ($550 divided by
$10 = 55). If, instead, the unit value was
$11, then the amount applied would purchase
50 units ($550 divided by $11 = 50).
If we receive a premium or a written request that
causes us to purchase or sell accumulation units, and
we receive that premium or request before the Valuation
Time on a Valuation Date, accumulation units will be
purchased or sold as of that Valuation Date. Otherwise,
accumulation units will be purchased or sold as of the
next following Valuation Date.
At the Owner's request, we will purchase or sell
accumulation units as of a later Valuation Date.
In no case will accumulation units be purchased or sold
before the Register Date.
The Guaranteed The Guaranteed Principal Account is part of our general
Principal Account account. It has no connection with, and does not depend
on, the investment performance of the Separate Account.
We have a right to establish additional guaranteed
accounts from time to time.
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Values Of This Policy
Account Value Of The account value of this policy on any date is the variable
Policy account value of this policy plus the fixed account value of
this policy, both determined as of that date.
Variable Account The variable account value of this policy reflects:
Value Of Policy
. The net premiums for this policy allocated to the Separate
Account;
. Any amounts for this policy transferred into the Separate
Account from the Guaranteed Principal Account;
. Any amounts transferred or withdrawn from the Separate
Account for this policy;
. Any surrender charges for this policy deducted from the
Separate Account due to any decreases in the Face Amount;
. Any monthly charges for this policy deducted from the
Separate Account; and
. The net investment experience of the Separate Account.
Net premiums, transfers, withdrawals, surrender charges, and
monthly charges are all reflected in the variable account
value through the purchase or sale of accumulation units. The
net investment experience is reflected in the value of the
accumulation units. Net premiums are discussed in Part 2, and
monthly charges are discussed in this Part. Transfers,
withdrawals, and surrender charges are discussed in Part 4.
The value of the accumulation units credited to this policy in
a division of the Separate Account is equal to the
accumulation unit value in that division on the date the value
is determined, multiplied by the number of those units in that
division.
The variable account value of this policy on any date is the
total of the values of the accumulation units credited to this
policy in each division of the Separate Account.
Fixed Account The fixed account value of this policy is the accumulation at
Value of Policy interest of:
. The net premiums for this policy allocated to the
Guaranteed Principal Account; plus
. Any amounts for this policy transferred into the
Guaranteed Principal Account from the Separate Account;
less
. Any amounts for this policy transferred or withdrawn from
the Guaranteed Principal Account; less
. Any surrender charges for this policy deducted from the
Guaranteed Principal Account due to any decreases in the
Face Amount; and less
. Any monthly charges for this policy deducted from the
Guaranteed Principal Account.
Interest On Fixed The fixed account value of this policy earns interest at an
Account Value effective annual rate defined in this provision. Interest is
credited daily through the date the fixed account value is
computed.
For any fixed account value equal to the amount of any policy
loan, the interest rate we use will be the daily equivalent of
the greater of:
. The annual loan interest rate in effect during the current
Policy Year less the loan interest rate expense charge;
and
. The Minimum Annual Interest Rate For The Guaranteed
Principal Account.
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The loan interest rate is discussed in the Interest On Loans
provision in Part 4. The Maximum Loan Interest Rate Expense
Charge and the Minimum Annual Interest Rate For The Guaranteed
Principal Account are shown in the Policy Specifications.
For any fixed account value in excess of the amount of any
policy loan, the interest rate we use will be the daily
equivalent of the greater of:
. The Minimum Annual Interest Rate For The Guaranteed
Principal Account; and
. An alternate annual rate established by us. The alternate
annual rate of interest will reflect our expectations for
future investment results, profits, and expenses. This
rate will be declared for each calendar month in advance;
once declared for a month, it cannot be changed.
Monthly Policy Charges
Monthly Charges Charges will be deducted monthly from the account value of
this policy. Monthly charges are due on each Monthly Charge
Date.
Monthly charges for this policy will be taken from the
divisions of the Separate Account and from the Guaranteed
Principal Account in proportion to the values of this policy
in each of those divisions and in the Guaranteed Principal
Account (excluding outstanding policy loans). Deductions will
be made, and values will be determined, on the Valuation Date
that is on, or next follows, the latest of:
. The Register Date;
. The date the charges are due; and
. The date we receive the amount of premium needed to
prevent termination, as discussed in the Grace Period And
Termination provision in this Part.
We assess four types of monthly charges: an administrative
charge, a face amount charge, an insurance charge, and a rider
charge; each is discussed in this section.
Administrative The amount of the monthly administrative charge will be
Charge determined by us. However, it will not exceed the Maximum
Monthly Administrative Charge shown in the Policy
Specifications.
Face Amount The amount of the monthly face amount charge will be
Charge determined by us. However, it will not exceed the result of:
. The Face Amount divided by 1,000; then multiplied by
. The Maximum Monthly Face Amount Charge for the year of
coverage. These maximum charges are shown in the Policy
Specifications.
If the Face Amount of the policy has been increased (as
discussed in Part 4), the face amount charge for each month
will be the sum of the charges determined separately for each
segment of the Face Amount.
Insurance Charge The maximum monthly insurance charge rates per $1,000 of
insurance risk are shown in the Table(s) Of Maximum Monthly
Insurance Charges of the Policy Specifications. Maximum
monthly insurance charge rates for the Initial Face Amount and
for each Face Amount increase will be shown in a separate
table.
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The insurance risk is computed as of the date the charge is
due. All amounts are calculated as of that date. The insurance
risk is determined by the following steps.
(a) We compute the account value of this policy after all
additions and deductions other than the deduction of the
insurance charge and the rider charge for any disability
benefit rider.
(b) We determine the amount of benefit under the Death Benefit
Option in effect (as discussed in Part 5). The minimum
death benefit (discussed in Part 5) used here is based on
the account value computed in (a).
(c) We divide the amount of benefit determined in (b) by 1
plus the monthly equivalent (expressed as a decimal
fraction) of the Minimum Annual Interest Rate For The
Guaranteed Principal Account shown in the Policy
Specifications.
(d) We subtract the account value, as computed in (a), from
the amount determined in (c). The result is the insurance
risk.
If there is more than one table of maximum monthly insurance
charges, the pro rata insurance risk allocated to each table
will be based on the proportionate amount of Face Amount for
the table to the total Face Amount. If the insurance risk is
increased due to the minimum death benefit (discussed in Part
5), the table that applies to the most recent increase
requiring evidence of insurability will be used for such
increase.
Example: The Initial Face Amount of your policy is $500,000.
You later increase the Face Amount by $250,000. The
Death Benefit Option is 1, and the benefit under
Death Benefit Option 1 is $750,000. The pro rata
portion of insurance risk to be allocated to the
table for the Initial Face Amount is $500,000
divided by $750,000, or two-thirds. The pro rata
portion to be allocated to the table for the
increase is $250,000 divided by $750,000, or one-
third.
The insurance risk is computed as $600,000. The
maximum monthly insurance charge per $1,000 of
insurance risk will be based on the charge for an
amount equal to two-thirds of $600,000, or $400,000,
from the Initial Face Amount and an amount equal to
one-third of $600,000, or $200,000, from the
increase.
Suppose instead that the benefit under Death Benefit
Option 1 is $810,000 due to the minimum death
benefit and that the insurance risk is $660,000.
Then the maximum monthly insurance charge per $1,000
of insurance risk will be based on the charge for an
amount equal to $400,000 from the Initial Face
Amount and an amount equal to $260,000 from the
increase ($200,000 plus the $60,000 due to the
minimum death benefit).
We may charge less than the maximum monthly insurance charges
shown in the table(s). In this case, the monthly insurance
charge rates will be based on our expectations for future
mortality, investment, persistency and expense results, and
future profits. The expense component of these rates is used
to offset sales and issue expenses, which decrease over time.
For each Insured, any change in these charges will apply to
all individuals in the same class.
Rider Charge The monthly rider charge is the sum of the monthly charges for
any riders in effect on the Monthly Charge Date. The monthly
charges for any rider are shown in the Policy Specifications
for the rider.
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Grace Period This policy may terminate without value if its "policy value"
And Termination on a Monthly Charge Date cannot cover the monthly charges due
and the safety test is not met on that Date. However, we allow
a grace period for payment of the amount of premium (not less
than $20) needed to avoid termination. "Policy value" is
defined later in this provision; the safety test is discussed
in the next provision.
The grace period begins on the date the monthly charges are
due. It ends 61 days after that date or, if later, 31 days
after we mail a written notice to the Owner and to any
assignee shown in our records at their last known addresses.
This notice will state the amount of premium needed to avoid
termination.
During the grace period, the policy will stay in force. If the
second death occurs during the grace period, any unpaid
premium amount needed to avoid termination will be deducted
from the death benefit (see the Amount Of Death Benefit
provision in Part 5). The policy will terminate without value
if we do not receive payment of the required amount by the end
of the grace period.
While there is a loan outstanding on this policy, our right to
terminate this policy under the terms of the Policy Debt Limit
provision (see Part 4) applies in addition to our right under
this provision.
As used in this provision, the "policy value" of this policy
on a Monthly Charge Date is equal to:
. On any Monthly Charge Date during the first 3 Policy
Years, the account value on that Date (just before the
deduction of monthly charges) less any outstanding policy
debt; and
. On any Monthly Charge Date after the first 3 Policy Years,
the net surrender value on that Date (just before the
deduction).
Policy debt and net surrender value are discussed in Part 4.
If the "policy value" on a Monthly Charge Date (as defined
above in this provision) cannot cover the monthly charges due,
but the safety test is met on that Date, then the monthly
charges for that Date will be reduced to an amount equal to
the account value on that Date (just before the deduction)
less any outstanding debt.
Safety Test The safety test can be met only during the First and Second
Guarantee Periods; each Guarantee Period is associated with a
Guarantee Premium. The First and Second Guarantee Periods and
the First and Second Guarantee Premiums are shown in the
Policy Specifications.
For any day during the First Guarantee Period, the safety test
is met if the result of premiums paid less any amounts
withdrawn, accumulated with interest to that day, equals or
exceeds the result of payments of the First Guarantee Premium
from the Policy Date to that day, accumulated with interest.
For any day after the First Guarantee Period but during the
Second Guarantee Period, the safety test is met if premiums
paid less any amounts withdrawn, accumulated with interest to
that day, equals or exceeds the result of payments of the
Second Guarantee Premium from the Policy Date to that day,
accumulated with interest.
In the safety test, interest is accumulated at an effective
annual rate equal to the Minimum Annual Interest Rate For The
Guaranteed Principal Account, which is shown
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<PAGE>
in the Policy Specifications. In accumulating premiums paid,
we exclude any premium amounts refunded under the Right To
Refund Premiums provision in Part 2. Also, we assume in this
test that Guarantee Premiums are paid on each Monthly Charge
Date.
Example: On the 6th Monthly Charge Date, the monthly charges
are $100, but the "policy value" (during the first 3
Policy Years, the account value before the deduction
for monthly charges, less any outstanding policy
debt) is only $95. There is no policy debt. The
policy is in the First Guarantee Period, and the
First Guarantee Premium is $25. Premium payments of
$35 were made on each Monthly Charge Date including
the current one. There were no withdrawals. In this
case, the safety test is met. So the monthly charges
for that 6th Monthly Charge Date are reduced to $95,
and the account value is reduced to zero.
On the first Monthly Charge Date in the 21st Policy
Year, the monthly charges are $250, but the "policy
value" (here, the net surrender value before the
deduction for monthly charges) is only $220. There
are no surrender charges and no policy debt. The
policy is in the Second Guarantee Period, and the
Second Guarantee Premium is $60. Premium payments of
$75 were made on each Monthly Charge Date from the
Policy Date through the current Monthly Charge Date.
There were no withdrawals. In this case, the safety
test is met also. So the monthly charges for that
Monthly Charge Date are reduced to $220, and the
account value is reduced to zero.
Part 4. Life Benefits
This life insurance policy provides a death benefit if both Insureds die while
the policy is in force. Rights and benefits are also available while at least
one Insured is living. These "Life Benefits" are discussed in this Part.
Policy Ownership
Rights Of Owner While either Insured is living, the Owner may exercise all
rights given by this policy or allowed by us. These rights
include changing Beneficiaries, changing ownership, assigning
this policy, enjoying all policy benefits, and exercising all
policy options.
The consent of any Irrevocable Beneficiary is needed to
exercise any policy right except the rights to:
. Change the frequency of planned premiums;
. Change the premium payment plan; and
. Reinstate this policy after termination.
Changing The While either Insured is living, the Owner or any Beneficiary
Owner Or may be changed by written request. We do not limit the number
Beneficiary of changes that may be made. The change will take effect as of
the date the request is signed, even if the second death
occurs before we receive it. Each change will be subject to
any payment we made or other action we took before receiving
the written request.
Transfers Of Transfers of values are subject to the limitations stated in
Values the Policy Specifications. Subject to those limitations,
transfers of values may be made upon direction, satisfactory
to us, received at our Administrative Office. These transfers
are:
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<PAGE>
. Transfers of values between divisions of the Separate
Account. These transfers will be made by selling all
or part of the accumulation units in a division and
applying the value of the sold units to purchase
units in any other division.
. Transfers of values from one or more divisions of the
Separate Account to the Guaranteed Principal Account.
These transfers will be made by selling all or part
of the accumulation units in a division and applying
the value of the sold units to the Guaranteed
Principal Account.
. Transfers of values from the Guaranteed Principal
Account to one or more divisions of the Separate
Account. These transfers will be made by applying all
or part of the value in the Guaranteed Principal
Account (excluding any outstanding policy loans) to
purchase accumulation units in one or more divisions
of the Separate Account.
Transfers will be made as of the Valuation Date
specified in the Purchase And Sale Of Accumulation Units
provision in Part 3. All transfers made on the Valuation
Date will be considered one transfer.
Assigning This This policy may be assigned. However, for any assignment
Policy to be binding on us, we must receive a signed copy of it
at our Administrative Office. We will not be responsible
for the validity of any assignment. Any assignment made
after the second death will be valid only with our
consent.
Once we receive a signed copy of an assignment, the
rights of the Owner and the interest of any Beneficiary
or any other person will be subject to the assignment.
An assignment is subject to any policy debt. Policy debt
is discussed in the Right To Make Loans provisions in
this Part.
Right To Change The Face Amount
While this policy is in force, the Face Amount may be
changed. Any change in the Face Amount will be effective
on a Monthly Charge Date. We may limit the number and
the size of the changes in a Policy year.
Increases In The While both Insureds are living, the Face Amount of this
Face Amount policy may be increased upon written application.
Evidence of insurability, satisfactory to us, is
required for each increase. The amount of each increase
must be for at least the Minimum Face Amount Increase
shown in the Policy Specifications.
If the net surrender value is insufficient to continue
the changed policy in force for 3 months at the new
monthly charges and interest, we may require a payment
sufficient to increase the net surrender value to such
amount. Net surrender value is discussed in the
"Surrendering This Policy And Making Withdrawals"
section of this Part.
Any increase elected under any insurability protection
type of rider will be effective as directed in that
rider. Any other increase in the Face Amount will be
effective on the Monthly Charge Date that is on, or next
follows, the date we approve the application.
Insurance charges for each increase elected are
determined and deducted from the account value of this
policy as described in the Monthly Charges provision in
Part 3. These charges will be deducted from the account
value beginning on the effective date of the increase.
Additional surrender charges (discussed later in the Net
Surrender Value provision in this Part) will apply for
each increase elected.
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No increase in the Face Amount will be permitted after
the Policy Anniversary Date nearest the younger
Insured's 85th birthday or, if earlier, the Policy
Anniversary Date nearest the older Insured's 90th
birthday.
Decreases In The After the first Policy Year, the Face Amount may be
Face Amount decreased by the Owner's written request while either
Insured is living. However, the decrease must not reduce
the Face Amount to an amount less than the Minimum Face
Amount shown in the Policy Specifications. No decrease
is permitted within one year following the effective
date of any increase.
Any decrease is effective on the Monthly Charge Date
that is on, or next follows, the date we receive the
written request. If a decrease follows one or more
increases, the decrease is taken from the most recent
increase(s).
Any surrender charge due upon a decrease in the Face
Amount is deducted from the account value on the
effective date of the decrease. The charge is deducted
from each division of the Separate Account and from the
Guaranteed Principal Account in proportion to the values
of this policy in each of those divisions and in the
Guaranteed Principal Account (excluding any outstanding
policy loans) on that date. Surrender charges are
discussed in the Net Surrender Value provision in this
Part.
Evidence Of If the Face Amount is changed, we will send the Owner
Changes any revised or additional Policy Specifications for
attachment to this policy. If the Face Amount is
increased, we will also send a copy of the application
for the increase. However, we have the right to require
that the policy be sent to us to make the change.
Borrowing Against This Policy
Right To Make Once the account value exceeds any surrender charges
Loans that apply, the Owner may borrow against this policy
after the first Policy Year, while either Insured is
living. However, the policy must be properly assigned to
us before the loan is made. No other collateral is
needed. We refer to all outstanding loans plus accrued
interest as "policy debt."
Effect Of Loan A loan is attributed to each division of the Separate
Account and to the Guaranteed Principal Account in
proportion to the values of this policy in each of those
divisions and in the Guaranteed Principal Account
(excluding any outstanding policy loans) at the time of
the loan. The amount of the loan attributed to each
division of the Separate Account will be transferred to
the Guaranteed Principal Account. Any such transfer is
made by selling accumulation units in the division and
applying the value of those units to the Guaranteed
Principal Account on the date the loan is made. Any
interest added to the loan will be treated as a new loan
under this provision.
The amount equal to any outstanding policy loans will be
held in the Guaranteed Principal Account and will earn
interest as described in the Interest On Fixed Account
Value provision in Part 3.
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Maximum Loan The maximum amount that can be borrowed on any date is
Available determined as follows.
(1) We subtract from the account value any surrender
charges that would apply if the policy were
surrendered on that date.
(2) We calculate 90% of the amount determined in (1)
above.
(3) We subtract any policy debt from the amount
determined in (2) above. The result is the maximum
amount that can be borrowed.
Interest On Loans Interest on loans is not due in advance. This interest
accrues (builds up) each day and becomes part of the
policy debt as it accrues.
Interest is due on each Policy Anniversary Date. If
interest is not paid when due, it will be added to the
loan and will bear interest at the rate payable on the
loan.
Example: You have a loan of $1,000. The interest due on
the next Policy Anniversary Date is $50. If it
is not paid on that date, we will add it to
the existing loan. From then on, the loan will
be $1,050 and interest will be charged on this
new amount.
The type of interest rate on any policy loan is elected
at the time of application for this policy and cannot be
changed; the type elected for this policy is shown in
the Policy Specifications. The two types of interest
rates available are:
(1) A fixed loan rate of 5% per year; and
(2) A variable loan rate. Such loan rate is an annual
rate set by us. This rate may change from year to
year. Each year we will set the rate that will apply
for the next Policy Year. The rate will apply to all
policy debt under this policy.
Each year there is a maximum limit on the variable
loan interest rate we can set. That limit is based
on a Published Monthly Average. That Average will
be:
. The Monthly Average Corporates yield shown in
Moody's Corporate Bond Yield Averages, as
published by Moody's Investors Service, Inc.,or
any successor to that service; or
. If that Monthly Average is no longer published, a
substantially similar average, established by the
insurance supervisory official of the state where
this policy was delivered.
The maximum limit is the published Monthly Average
for the calendar month ending 2 months before the
month in which the Policy Year begins or, if higher,
the Minimum Annual Interest Rate For The Guaranteed
Principal Account plus 1%.
Example: A Policy Year begins on June 10, 19X6. The
calendar month ending 2 months before June
is March. The loan interest rate for the
Policy Year beginning June 10, 19X6, will
not be greater than the Published Monthly
Average for March, 19X6. However, if the
Minimum Annual Interest Rate For The
Guaranteed Principal Account (plus 1%) is
higher than the Average, then the Minimum
Annual Interest Rate For The Guaranteed
Principal Account (plus 1%) will be the
maximum loan interest rate for that Policy
Year.
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<PAGE>
If the maximum limit for a Policy Year is at least
1/2% higher than the loan interest rate in effect
for the previous year, we may increase the rate to a
rate not higher than that limit.
If the maximum limit for a Policy Year is at least
1/2% lower than the loan interest rate in effect for
the previous year, we must decrease the rate to a
rate not exceeding that limit.
Policy Debt Limit Policy debt (which includes accrued interest) may not
equal or exceed the account value less any surrender
charges that apply. If this limit is reached, we can
terminate this policy. To terminate for this reason, we
must mail written notice to the Owner and any assignee
shown in our records at their last known addresses. This
notice will state the amount needed to bring the policy
debt back within the limit. If we do not receive payment
within 31 days after the date we mail the notice, the
account value will be reduced by any surrender charges
that apply and this policy will terminate without value
at the end of those 31 days.
Our right to terminate this policy under the terms of
this provision applies in addition to our right under
the Grace Period And Termination provision in Part 3.
Repayment Of All or part of any policy debt may be repaid at any time
Policy Debt while either Insured is living. However, policy debt can
be repaid only while this policy is in force. Loan
repayments will be credited on the date we receive them
at our Administrative Office.
Any repayment of policy debt will be allocated first to
the Guaranteed Principal Account up to the amount of the
policy loan that was attributed to the Guaranteed
Principal Account. (For this purpose, no amount of
policy loan resulting from unpaid loan interest will be
considered to be attributed to the Guaranteed Principal
Account.) Any repayment in excess of that amount will be
allocated among the Guaranteed Principal Account and the
divisions of the Separate Account according to the net
premium allocation then in effect.
Loan repayments must be clearly identified as such;
otherwise, they will be considered premium payments.
Other Borrowing We may delay the granting of any loan attributable to
Roles the Guaranteed Principal Account for up to six months.
We may delay the granting of any loan attributable to
the Separate Account during any period that:
. The New York Stock Exchange (or its successor) is
closed, except for normal weekend or holiday closing,
or trading is restricted; or
. The Securities and Exchange Commission (or its
successor) determines that a state of emergency
exists; or
. The Securities and Exchange Commission (or its
successor) permits us to delay payment for the
protection of our policy owners.
Surrendering This Policy And Making Withdrawals
Right To Surrender This policy may be surrendered for its net surrender
value (see next provision) at any time while the policy
is in force and either Insured is living. The surrender
will be effective on the date we receive this policy at
our Administrative Office, along with a written request
to surrender. This policy will terminate as of the date
of surrender.
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<PAGE>
Net Surrender The net surrender value of this policy is equal to the
Value account value less any surrender charges that apply and
less any policy debt. The surrender charge for this
policy is the sum of the surrender charges for the
Initial Face Amount and all Face Amount increases. These
charges are shown in the Table(s) Of Surrender Charges
of the Policy Specifications. In no event will the net
surrender value be less than zero .
Making After the first Policy Year, withdrawals may be made by
Withdrawals written request at any time while the policy is in force
and either Insured is living. The request for a
withdrawal must state the Account (or Accounts) from
which the withdrawal will be made. For any withdrawal
from the Separate Account, the request must also state
the division (or divisions) from which the withdrawal
will be made. A withdrawal will be effective on the
Monthly Charge Date that is on, or next follows, the
date we receive the written request.
On the date of a withdrawal, the account value of this
policy is reduced by the amount of the withdrawal. The
withdrawal amount includes the withdrawal fee. The
Maximum Withdrawal Fee that can be taken with each
withdrawal is shown in the Policy Specifications.
The withdrawal from the Guaranteed Principal Account
will be made by reducing the value in that Account to
provide the amount of the withdrawal. A withdrawal from
a division of the Separate Account will be made by
selling a sufficient number of accumulation units to
provide the amount of the withdrawal.
The Face Amount will be decreased by the amount of the
withdrawal if:
. Death Benefit Option 1 or Death Benefit Option 3 is
in effect, as described in the Death Benefit Options
provision in Part 5; and
. We have not received evidence of insurability
satisfactory to us.
In this case, if a decrease follows one or more Face
Amount increases, the decrease is taken from the most
recent increase(s).
Withdrawals will be subject to the following limits:
. The minimum amount of a withdrawal (including the
withdrawal fee) is $100;
. The maximum amount of a withdrawal on any date is 75%
of the net surrender value of this policy on that
date; and
. The Face Amount after a withdrawal must not be less
than the Minimum Face Amount shown in the Policy
Specifications.
Example: Death Benefit Option 1 is in effect and you
make a withdrawal without furnishing us
satisfactory evidence of insurability. Prior
to your withdrawal, your policy has a Face
Amount of $600,000 and an account value of
$120,000. If you make a withdrawal of $30,000,
the account value will be reduced to $90,000,
the Face Amount will be reduced to $570,000,
and $29,975 will be paid to you.
If the Face Amount is reduced due to a withdrawal, we
will send the Owner any revised or additional Policy
Specifications for attachment to this policy. However,
we have the right to require that the policy be sent to
us to make the changes.
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<PAGE>
How We Pay Any withdrawal made will be paid in one sum. If the
policy is surrendered, the net surrender value may be
paid in one sum or it may be applied under any payment
option elected. See Part 6.
We may delay paying any surrender or withdrawal from the
Guaranteed Principal Account for up to 6 months from the
date we receive the written request.
We may delay paying any surrender or withdrawal from the
Separate Account during any period that:
. The New York Stock Exchange (or its successor) is
closed, except for normal weekend or holiday closing,
or trading is restricted; or
. The Securities and Exchange Commission (or its
successor) determines that a state of emergency
exists; or
. The Securities and Exchange Commission (or its
successor) permits us to delay payment for the
protection of our policy owners.
If we delay paying any surrender or withdrawal, interest
will be added. The amount of interest will be the same
as would be paid for the same period of time under
Option 3 of the payment options or, if greater, the
amount using the minimum interest rate for this purpose
required by the laws of the state where this policy was
delivered. See Part 6 for a description of Option 3.
Reinstating This Policy
When After this policy has terminated, it may be
Reinstatement reinstated -- that is, put back in force. However, the
Can Be Made policy cannot be reinstated if:
. It has been surrendered for its net surrender value;
or
. Five years have passed since the date of termination;
or
. An Insured has died since the date of termination.
Requirements To A written application and evidence of insurability
Reinstate satisfactory to us is required to reinstate. Also, a
premium is required as a cost to reinstate. This cost is
the amount of premium needed to keep the policy in force
for 3 months after reinstatement. This amount will be
quoted on request.
Policy After The policy will be reinstated on the Monthly Charge Date
Reinstatement on or next following the date we approve the
application. The Face Amount on the date of
reinstatement will be the Face Amount on the termination
date. The account value on the date of reinstatement
will be the reinstatement premium paid, less any premium
expense charge and less any monthly charges due on that
date.
Upon reinstatement of this policy, the Table(s) Of
Surrender Charges (shown in the Policy Specifications)
will apply as though the policy had not terminated.
However, if the surrender charge was taken when this
policy terminated, then the applicable surrender charges
will not be reinstated.
Our rights to contest the validity of, and terminate,
this policy begin again on the date of reinstatement.
See the Representations And Contestability and Death By
Suicide provisions in Part 1.
Page 18
<PAGE>
Reports To Owner
Annual Report Each year after the Policy Anniversary Date, we will mail an
annual report to the Owner. There will be no charge for this
report. This report will show the account value at the
beginning of the previous Policy Year and all premiums paid
since that time. It also will show the additions to, and
deductions from, the account value during that Year, and the
account value, death benefit, net surrender value, and policy
debt as of the current Policy Anniversary Date.
This report also will include any additional information
required by applicable law or regulation.
Part 5. The Death Benefit
The death benefit is the amount of money we will pay when we receive due proof
at our Administrative Office that both Insureds died while the policy was in
force. We discuss the death benefit in this Part.
When the first death occurs, we will not pay a death benefit. However, due
proof of each Insured's death must be furnished to us at our Administrative
Office when it occurs.
Amount Of Death If both Insureds die while this policy is in force, the death
Benefit benefit will be the amount of benefit provided by the Death
Benefit Option in effect on the date of the second death,
reduced by any policy debt outstanding on that date of death
and any unpaid premium amount needed to avoid termination
under the Grace Period And Termination provision in Part 3.
Death Benefit Three Death Benefit Options, described here, are available
Options under this policy. The Death Benefit Option and the Face
Amount in effect for this policy are shown in the Policy
Specifications. The minimum death benefit is discussed in the
next provision.
Death Benefit Option 1 - Under this Option, the amount of
benefit is the greater of:
. The Face Amount in effect on the date of the second death;
and
. The minimum death benefit in effect on the date of the
second death.
Death Benefit Option 2 - Under this Option, the amount of
benefit is the greater of:
. The Face Amount in effect on the date of the second death
plus the account value on that date; and
. The minimum death benefit in effect on the date of the
second death.
Death Benefit Option 3 - Under this Option, the amount of
benefit is the greater of:
. The Face Amount in effect on the date of the second death
plus the sum of all premiums paid (and not refunded under
the Right To Refund Premiums provision in Part 2) to that
date; and
. The minimum death benefit in effect on the date of the
second death.
Minimum Death The minimum death benefit on any date is equal to the account
Benefit value on that date multiplied by the Death Benefit Factor for
the younger Insured's Attained Age on that date. The Death
Benefit Factor for each Attained Age is shown in the Policy
Specifications.
Page 19
<PAGE>
Changes In The After the first Policy Year, the Death Benefit Option may be
Death Benefit changed upon written request while both Insureds are living.
Option However, the Attained Age of each Insured at the time of the
change must be less than 85.
A change in the Death Benefit Option will be effective on the
Monthly Charge Date that is on, or next follows, the date we
approve the change, unless a later date is requested.
When the Death Benefit Option is changed, the Face Amount of
this policy also changes on the effective date of the change
as follows (all amounts are as of the date of change):
. Option 1 to Option 2: Decreased by an amount equal to the
account value;
. Option 1 to Option 3: Decreased by an amount equal to the
sum of all premiums paid (and not refunded);
. Option 2 to Option 1: Increased by an amount equal to the
account value;
. Option 2 to Option 3: Increased by an amount equal to the
sum of all premiums paid (and not refunded), and then
decreased by an amount equal to the account value;
. Option 3 to Option 1: Increased by an amount equal to the
sum of all premiums paid (and not refunded);
. Option 3 to Option 2: Decreased by an amount equal to the
sum of all premiums paid (and not refunded), and then
increased by an amount equal to the account value.
A change in the Death Benefit Option may follow one or more
increases in the Face Amount of this policy. In this case, the
change will:
. If the Face Amount increases, increase the most recent
increase, and
. If the Face Amount decreases, decrease the most recent
increase(s).
No change in Death Benefit Option will be allowed if the Face
Amount after the change would be less than the minimum face
amount shown in the Policy Specifications.
We may require a written application and evidence of
insurability satisfactory to us for any Death Benefit Option
change. We also may limit the number of Death Benefit Option
changes in any Policy Year.
If the Death Benefit Option or the Face Amount is changed, we
will send the Owner any revised or additional Policy
Specifications for attachment to this policy.
When We Pay The death benefit will be paid within 30 days after the date
we receive due proof that both Insureds died, and any other
requirements necessary for us to make payment, at our
Administrative Office.
Interest On If the death benefit is paid in one sum, we will add interest
Death Benefit from the date of death to the date of payment. The amount of
interest will be computed using an effective annual rate not
less than 3% or, if greater, the annual rate required by law.
If the death benefit is applied under a payment option
(described in Part 6), interest will be paid from the date of
death to the effective date of that option. It will be paid in
one sum to the Beneficiary living on that effective date. The
amount of interest will be computed using an effective annual
rate not less than 3% or, if greater, the annual rate required
by law.
Page 20
<PAGE>
Part 6. Payment Options
These are optional methods of settlement. These methods provide alternate ways
in which payment can be made by us.
Availability Of All or part of the death benefit or net surrender value may be
Options applied under any payment option. If this policy is assigned,
any amount due to the assignee will be paid in one sum. The
balance, if any, may be applied under any payment option.
Minimum Amounts If the amount to be applied under any option for any one
person is less than $5,000, we may pay the amount in one sum
instead. If the payments under any option come to less than
$50 each, we have the right to make payments at less-frequent
intervals.
Description Of Our regular payment options are Options 1 through 6. They are
Options described in terms of monthly payments. Annual, semiannual, or
quarterly payments may be requested instead. The Payment
Option Rates tables are shown after Part 7.
Option 1 Installments For A Specified Period. Equal monthly payments
will be made for any period selected, up to 30 years. The
amount of each payment depends on the total amount applied,
the period selected, and the monthly income rates we are using
when the first payment is due. See the Option 1. Installments
For A Specified Period table for the minimum monthly income
rates.
Option 2 Life Income. Equal monthly payments will be based on the life
of a named person. Payments will continue for the lifetime of
that person. Income with or without a minimum payment period
may be elected. This benefit may be increased by the Alternate
Life Income provision (in this Part). Proof of the named
person's age, satisfactory to us, will be required. See the
Option 2. Life Income tables for the minimum monthly income
rates.
Option 3 Interest. We will hold any amount applied under this option.
Interest on the amount will be paid at an effective annual
rate determined by us. This rate will not be less than 3%.
Option 4 Installments Of Specified Amount. Each payment will be made
for an agreed fixed amount. The total amount paid during the
first year must be at least 6% of the total amount applied.
Interest will be credited each month on the unpaid balance and
added to it. This interest will be at an effective annual rate
determined by us, but not less than 3%. Payments continue
until the balance we hold is reduced to an amount less than
the agreed fixed amount. The last payment will be for the
balance only.
Option 5 Life Income With Payments Guaranteed For Amount Applied. Equal
monthly payments will be based on the life of a named person.
Payments will be made until the total amount paid equals the
amount applied, and as long thereafter as the named person
lives. This benefit may be increased by the Alternate Life
Income provision (in this Part). Proof of the named person's
age, satisfactory to us, will be required. See the Option 5.
Life Income With Payments Guaranteed For Amount Applied tables
for the minimum monthly income rates.
Page 21
<PAGE>
Option 6 Joint Life Income With Reduced Payments To Survivor. Monthly
payments will be based on the lives of 2 named persons.
Payments at the initial level will continue while both are
living or for 10 years if longer. When one dies (but not
before the 10 years has elapsed), payments are reduced by one-
third and will continue at that level for the lifetime of the
other. After the 10 years has elapsed, payments stop when both
named persons have died. This benefit may be increased by the
Alternate Life Income provision (in this Part). Proof of the
named persons' ages, satisfactory to us, will be required. See
the Option 6. Joint Life Income With Reduced Payments To
Survivor tables for the minimum monthly income rates.
Alternate Life If Option 2, 5, or 6 is elected, the named person(s) can elect
Income to receive an alternate life income instead of receiving
income based on the rates shown in the Payment Option Rates
tables. The election must be made at the time the income is to
begin. The monthly alternate life income will be at least
equal to the monthly income provided by a new single premium
immediate annuity (first payment immediate), based on our
published rates then in use when the payment option is
elected. The alternate life income will not be available if we
are not offering new single premium immediate annuities at the
time of election.
Electing A To elect any payment option, we require a written request. The
Payment Option Owner may elect an option during either Insured's lifetime. If
the death benefit is payable in one sum when the second death
occurs, the Beneficiary may elect an option with our consent.
Effective Date The effective date of a payment option is the date the amount
And Payment is applied under that option. For a death benefit, this is the
Dates date that due proof of the deaths of both Insureds has been
received at our Administrative Office. For the net surrender
value, it is the effective date of surrender.
The first payment is due on the effective date, except the
first payment under Option 3 is due one month later. A later
date for the first payment may be requested in the payment
option election. All payment dates will fall on the same day
of the month as the first one. No payment will become due
until a payment date. No part payment will be made for any
period shorter than the time between payment dates.
Example: Monthly payments of $100 are being made to your son
on the 1st of each month. He dies on the 10th. No
part payment is due your son or his estate for the
period between the 1st and the 10th.
Withdrawals And If provided in the payment option election, all or part of the
Changes unpaid balance under Option 3 or 4 may be withdrawn or applied
under any other option.
If the net surrender value is applied under Option 3 or 4, we
may delay payment of any withdrawal for up to 6 months. In
this case, interest at the rate in effect for Option 3 during
this period will be paid on the amount withdrawn.
Income Protection To the extent permitted by law, each option payment and any
withdrawal shall be free from legal process and the claim of
any creditor of the person entitled to them. No option payment
and no amount held under an option can be taken or assigned in
advance of its payment date, unless the Owner's written
consent is given before either Insured dies. This consent must
be received at our Administrative Office.
Page 22
<PAGE>
Other Payment Options for any amount payable to an association, corporation,
Option Rules partnership, or fiduciary are available only with our consent.
However, a corporation or partnership may apply any amount
payable to it under Option 2, 5, or 6 if the option payments
are based on the life or lives of an Insured, an Insured's
spouse, any child of an Insured, or any other person agreed to
by us.
If a minimum payment period is elected under Options 1, 2, 5,
and 6, the effective annual interest rate will not be less
than 3%. This does not apply when an alternate life income is
elected.
If a minimum payment period is elected, after the first
payment is made we may increase the payments to reflect any
additional interest earnings determined by us. This does not
apply when an alternate life income is elected.
If the income that would be payable under a given payment
option is the same for 2 or more periods of time at a given
age, we automatically will pay income for the longest period.
Example: You choose Option 2. You are 50 years old. The
Payment Option Rate (for Option 2) is $3.64 for 5
years. The Payment Option Rate for 10 years is also
$3.64. We will pay income for at least 10 years,
which is the longest period.
Part 7. Notes On Our Computations
This Part covers some technical points about this policy.
Net Investment For each division of the Separate Account, the Net Investment
Factor Factor for any Valuation Period is the gross investment rate
for that period plus 1.00000000 and minus a Separate Account
charge for mortality and expense risk. This Separate Account
charge will not exceed .00002455 for each day of a Valuation
Period. The Net Investment Factor may be greater or less than
1.00000000.
For each division of the Separate Account, the gross
investment rate for any Valuation Period is equal to:
. The net earnings of that division during the Valuation
Period, divided by
. The value of the total assets of that division at the
beginning of the Valuation Period.
The net earnings of each division are equal to the accrued
investment income and capital gains and losses (realized and
unrealized) of that division reduced by any investment
management fees and any other expenses, and by any amount
charged against that division for taxes paid or reserved by
us.
The gross investment rate will be determined by us in
accordance with generally accepted accounting principles and
applicable laws, rules and regulations. This determination
shall be conclusive upon the Owner, the Insured, any
Beneficiary, any assignee, and any other person under this
policy.
Page 23
<PAGE>
Accumulation The value of an accumulation unit in each division was set at
Unit Value $1.000000 on the first Valuation Date selected by us. The
value on any date thereafter is equal to the product of the
Net Investment Factor for that division for the Valuation
Period that includes that date and the accumulation unit value
on the preceding Valuation Date.
Adjustment Of We have the right to split or consolidate the number of
Units And Values accumulation units credited to the policy, with a
corresponding increase or decrease in the unit values. We may
exercise this right whenever we consider an adjustment of
units to be desirable. However, strict equity will be
preserved in making any adjustment. No adjustment will have
any material effect on the benefits, provisions, or investment
return of this policy, or on the Owner, an Insured, any
Beneficiary, any assignee or other person, or on us.
Basis Of The basis of computation consists of the mortality rates and
Computation interest rates we use to determine:
. The minimum net surrender values;
. The maximum monthly insurance charges;
. The minimum rate used to credit interest on the fixed
account value of the policy; and
. The minimum payments under payment Options 2, 5, and 6.
The mortality rates for the minimum net surrender values and
for the maximum monthly insurance charges are shown in each
Table Of Maximum Monthly Insurance Charges. The Minimum Annual
Interest Rate For The Guaranteed Principal Account used to
credit interest on the fixed account value of the policy is
shown in the Policy Specifications. The mortality tables
specified apply to amounts in a standard risk classification.
Appropriate modifications are made to these tables for any
amount that is not in a standard risk classification.
In computing the minimum payments under payment Options 2, 5,
and 6, we use mortality rates from the 1983 Table "a" with
Projection G for 32 years. The interest rate used is an annual
rate of 3%.
Method Of When required by the state where this policy was delivered, we
Computing Values filed a detailed statement of the method we use to compute the
policy benefits and values. These benefits and values are not
less than those required by the laws of that state.
Page 24
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------
OPTION 1. INSTALLMENTS FOR
A SPECIFIED PERIOD -
PAYMENT OPTION RATES
--------------------------------------------
MONTHLY INCOME PER
$1,000 OF AMOUNT APPLIED
--------------------------------------------
Years Monthly Income
<S> <C>
1 $84.47
2 42.86
3 28.99
4 22.06
5 17.91
6 15.14
7 13.16
8 11.68
9 10.53
10 9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
21 5.32
22 5.15
23 4.99
24 4.84
25 4.71
26 4.59
27 4.47
28 4.37
29 4.27
30 4.18
--------------------------------------------
The first income payment is payable
on the effective date of this Option.
--------------------------------------------
</TABLE>
Page 25
<PAGE>
- --------------------------------------------------------------------------------
OPTION 2. LIFE INCOME - PAYMENT OPTION RATES
OPTION 5. LIFE INCOME WITH PAYMENTS GUARANTEED FOR AMOUNT
APPLIED - PAYMENT OPTION RATES
- --------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 OF AMOUNT APPLIED
MALE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
5 YEARS 10 YEARS 20 YEARS AMOUNT
AGE* LIFE ONLY MINIMUM MINIMUM MINIMUM APPLIED
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $ 3.94 $ 3.93 $3.91 $3.84 $3.82
51 4.00 3.99 3.97 3.89 3.87
52 4.07 4.06 4.04 3.94 3.93
53 4.14 4.13 4.10 4.00 3.98
54 4.21 4.20 4.17 4.06 4.05
55 4.29 4.28 4.25 4.11 4.11
56 4.37 4.36 4.32 4.17 4.17
57 4.45 4.44 4.40 4.23 4.24
58 4.54 4.53 4.49 4.30 4.32
59 4.64 4.63 4.58 4.36 4.39
60 4.75 4.73 4.67 4.42 4.47
61 4.86 4.84 4.77 4.49 4.55
62 4.97 4.95 4.88 4.56 4.64
63 5.10 5.07 4.99 4.62 4.73
64 5.23 5.20 5.11 4.69 4.83
65 5.38 5.34 5.23 4.75 4.93
66 5.53 5.49 5.36 4.82 5.04
67 5.69 5.64 5.49 4.88 5.15
68 5.87 5.81 5.63 4.94 5.27
69 6.05 5.98 5.77 5.00 5.39
70 6.25 6.17 5.92 5.06 5.52
71 6.46 6.36 6.07 5.11 5.66
72 6.68 6.56 6.23 5.16 5.80
73 6.91 6.78 6.39 5.21 5.95
74 7.16 7.00 6.56 5.25 6.10
75 7.43 7.24 6.73 5.29 6.27
76 7.71 7.50 6.90 5.33 6.44
77 8.02 7.76 7.07 5.36 6.63
78 8.35 8.04 7.25 5.39 6.82
79 8.70 8.33 7.42 5.41 7.02
80 9.07 8.64 7.60 5.43 7.23
81 9.47 8.96 7.77 5.45 7.46
82 9.89 9.29 7.94 5.46 7.69
83 10.35 9.64 8.10 5.48 7.93
84 10.83 10.00 8.26 5.48 8.19
85 11.35 10.37 8.41 5.49 8.46
</TABLE>
- --------------------------------------------------------------------------------
Rates for other ages are available upon request.
*Age on birthday nearest the due date of the first payment.
The first income payment is payable on the effective date of this Option.
- --------------------------------------------------------------------------------
Page 26
<PAGE>
- --------------------------------------------------------------------------------
OPTION 2. LIFE INCOME - PAYMENT OPTION RATES
OPTION 5. LIFE INCOME WITH PAYMENTS GUARANTEED FOR AMOUNT
APPLIED - PAYMENT OPTION RATES
- --------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 OF AMOUNT APPLIED
FEMALE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
5 YEARS 10 YEARS 20 YEARS AMOUNT
AGE* LIFE ONLY MINIMUM MINIMUM MINIMUM APPLIED
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
50 $3.64 $3.64 $3.63 $3.60 $3.58
51 3.69 3.69 3.68 3.63 3.63
52 3.74 3.74 3.73 3.69 3.67
53 3.80 3.80 3.79 3.74 3.72
54 3.86 3.85 3.84 3.79 3.77
55 3.92 3.91 3.90 3.84 3.83
56 3.98 3.98 3.96 3.90 3.88
57 4.05 4.04 4.03 3.95 3.94
58 4.12 4.12 4.10 4.01 4.00
59 4.20 4.19 4.17 4.07 4.07
60 4.28 4.27 4.25 4.14 4.13
61 4.36 4.36 4.33 4.20 4.20
62 4.45 4.45 4.42 4.27 4.28
63 4.55 4.54 4.51 4.34 4.36
64 4.65 4.64 4.60 4.41 4.44
65 4.76 4.75 4.70 4.48 4.53
66 4.88 4.86 4.81 4.55 4.62
67 5.00 4.99 4.92 4.62 4.71
68 5.14 5.12 5.04 4.69 4.82
69 5.28 5.26 5.17 4.76 4.92
70 5.44 5.41 5.30 4.83 5.04
71 5.60 5.57 5.45 4.90 5.16
72 5.78 5.74 5.59 4.97 5.28
73 5.97 5.92 5.75 5.03 5.42
74 6.18 6.12 5.91 5.09 5.56
75 6.40 6.33 6.08 5.15 5.71
76 6.64 6.55 6.26 5.20 5.87
77 6.90 6.79 6.44 5.25 6.04
78 7.18 7.04 6.63 5.29 6.21
79 7.48 7.31 6.82 5.33 6.40
80 7.80 7.60 7.01 5.36 6.59
81 8.14 7.90 7.21 5.39 6.80
82 8.52 8.22 7.40 5.41 7.01
83 8.92 8.56 7.60 5.43 7.24
84 9.36 8.92 7.78 5.45 7.48
85 9.83 9.29 7.96 5.47 7.73
</TABLE>
- --------------------------------------------------------------------------------
Rates for other ages are available upon request.
*Age on birthday nearest the due date of the first payment.
The first income payment is payable on the effective date of this Option.
- --------------------------------------------------------------------------------
Page 27
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
OPTION 6. JOINT LIFE INCOME WITH REDUCED PAYMENTS
TO SURVIVOR - PAYMENT OPTION RATES
- --------------------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 OF AMOUNT APPLIED
MALE & FEMALE
- --------------------------------------------------------------------------------------------
FEMALE IS YOUNGER THAN MALE BY:
MALE --------------------------------------------------------------------------------
AGE* 10 Yrs. 9 Yrs. 8 Yrs. 7 Yrs. 6 Yrs. 5 Yrs. 4 Yrs. 3 Yrs. 2 Yrs. 1 Yr.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
55 $3.63 $3.65 $3.68 $3.70 $3.73 $3.76 $3.79 $3.82 $3.85 $3.88
56 3.67 3.70 3.73 3.75 3.78 3.81 3.84 3.87 3.90 3.94
57 3.72 3.75 3.78 3.81 3.84 3.87 3.90 3.93 3.97 4.00
58 3.77 3.80 3.83 3.86 3.89 3.93 3.96 4.00 4.03 4.07
59 3.83 3.86 3.89 3.92 3.96 3.99 4.03 4.06 4.10 4.14
60 3.88 3.92 3.95 3.98 4.02 4.06 4.09 4.13 4.17 4.21
61 3.94 3.98 4.01 4.05 4.09 4.13 4.16 4.21 4.25 4.29
62 4.01 4.04 4.08 4.12 4.16 4.20 4.24 4.28 4.33 4.37
63 4.07 4.11 4.15 4.19 4.23 4.28 4.32 4.37 4.41 4.46
64 4.14 4.18 4.22 4.27 4.31 4.36 4.40 4.45 4.50 4.55
65 4.21 4.26 4.30 4.35 4.39 4.44 4.49 4.54 4.60 4.65
66 4.29 4.33 4.38 4.43 4.48 4.53 4.58 4.64 4.69 4.75
67 4.37 4.42 4.47 4.52 4.57 4.63 4.68 4.74 4.80 4.86
68 4.45 4.50 4.56 4.61 4.67 4.73 4.79 4.85 4.91 4.97
69 4.54 4.59 4.65 4.71 4.77 4.83 4.89 4.96 5.03 5.09
70 4.63 4.69 4.75 4.81 4.87 4.94 5.01 5.08 5.15 5.22
71 4.73 4.79 4.85 4.92 4.99 5.06 5.13 5.20 5.28 5.35
72 4.83 4.89 4.96 5.03 5.10 5.18 5.25 5.33 5.41 5.49
73 4.93 5.00 5.07 5.15 5.23 5.30 5.38 5.47 5.55 5.64
74 5.04 5.12 5.19 5.27 5.35 5.44 5.52 5.61 5.70 5.79
75 5.16 5.24 5.32 5.40 5.49 5.58 5.67 5.76 5.85 5.95
76 5.28 5.36 5.45 5.54 5.63 5.72 5.82 5.92 6.02 6.12
77 5.41 5.50 5.59 5.68 5.78 5.88 5.98 6.08 6.18 6.29
78 5.54 5.63 5.73 5.83 5.93 6.04 6.14 6.25 6.36 6.46
79 5.68 5.78 5.88 5.98 6.09 6.20 6.31 6.42 6.53 6.65
80 5.82 5.93 6.04 6.15 6.26 6.37 6.49 6.60 6.72 6.83
81 5.97 6.08 6.20 6.31 6.43 6.55 6.67 6.79 6.90 7.02
82 6.13 6.25 6.36 6.48 6.61 6.73 6.85 6.97 7.09 7.21
83 6.29 6.41 6.53 6.66 6.79 6.91 7.04 7.16 7.28 7.40
84 6.46 6.58 6.71 6.84 6.97 7.10 7.23 7.35 7.47 7.59
85 6.63 6.76 6.89 7.02 7.15 7.29 7.41 7.54 7.66 7.78
- --------------------------------------------------------------------------------------------
Rates for other ages are available upon request.
*Age on birthday nearest the due date of the first payment.
The first income payment is payable on the effective date of this Option.
- --------------------------------------------------------------------------------------------
</TABLE>
Page 28
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
OPTION 6. JOINT LIFE INCOME WITH REDUCED PAYMENTS
TO SURVIVOR - PAYMENT OPTION RATES
- ----------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 OF AMOUNT APPLIED
MALE & FEMALE
- ----------------------------------------------------------------------------------
FEMALE IS OLDER THAN MALE BY:
MALE ------------------------------------------------------------------
AGE* SAME AGE 1 YEAR 2 YEARS 3 YEARS 4 YEARS 5 YEARS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
55 $3.91 $3.94 $3.97 $4.01 $4.04 $4.08
56 3.97 4.00 4.04 4.07 4.11 4.15
57 4.04 4.07 4.11 4.15 4.18 4.22
58 4.10 4.14 4.18 4.22 4.26 4.30
59 4.18 4.22 4.26 4.30 4.34 4.39
60 4.25 4.30 4.34 4.38 4.43 4.47
61 4.33 4.38 4.42 4.47 4.52 4.57
62 4.42 4.47 4.52 4.57 4.62 4.67
63 4.51 4.56 4.61 4.66 4.72 4.77
64 4.60 4.66 4.71 4.77 4.83 4.88
65 4.71 4.76 4.82 4.88 4.94 5.00
66 4.81 4.87 4.93 4.99 5.06 5.12
67 4.92 4.99 5.05 5.12 5.18 5.25
68 5.04 5.11 5.18 5.25 5.32 5.39
69 5.16 5.24 5.31 5.38 5.46 5.53
70 5.29 5.37 5.45 5.52 5.60 5.68
71 5.43 5.51 5.59 5.67 5.76 5.84
72 5.58 5.66 5.74 5.83 5.91 6.00
73 5.73 5.81 5.90 5.99 6.08 6.17
74 5.88 5.97 6.07 6.16 6.25 6.34
75 6.05 6.14 6.24 6.33 6.43 6.52
76 6.21 6.31 6.41 6.51 6.61 6.70
77 6.39 6.49 6.59 6.69 6.79 6.89
78 6.57 6.68 6.78 6.88 6.98 7.07
79 6.76 6.86 6.97 7.07 7.17 7.26
80 6.94 7.05 7.16 7.26 7.36 7.45
81 7.13 7.25 7.35 7.45 7.55 7.63
82 7.33 7.44 7.54 7.64 7.73 7.82
83 7.52 7.62 7.73 7.82 7.91 7.99
84 7.70 7.81 7.91 8.00 8.08 8.16
85 7.88 7.99 8.08 8.17 8.25 8.32
- ----------------------------------------------------------------------------------
Rates for other ages are available upon request.
*Age on birthday nearest the due date of the first payment.
The first income payment is payable on the effective date of this Option.
- ----------------------------------------------------------------------------------
</TABLE>
Page 28
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
OPTION 6. JOINT LIFE INCOME WITH REDUCED PAYMENTS
TO SURVIVOR - PAYMENT OPTION RATES
- ------------------------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 OF AMOUNT APPLIED
MALE1 & MALE2
- ------------------------------------------------------------------------------------------------
MALE2 IS YOUNGER THAN MALE1 BY:
MALE1 ---------------------------------------------------------------------------------
AGE* 10 Yrs. 9 Yrs. 8 Yrs. 7 Yrs. 6 Yrs. 5 Yrs. 4 Yrs. 3 Yrs. 2 Yrs. 1 Yr.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 $4.06 $4.09 $4.13 $4.17 $4.20 $4.24 $4.28 $4.33 $4.37 $4.41
61 4.12 4.16 4.20 4.24 4.28 4.32 4.36 4.41 4.45 4.50
62 4.20 4.24 4.28 4.32 4.36 4.41 4.45 4.50 4.54 4.59
63 4.27 4.31 4.36 4.40 4.45 4.49 4.54 4.59 4.64 4.69
64 4.35 4.39 4.44 4.49 4.53 4.58 4.63 4.69 4.74 4.79
65 4.43 4.48 4.53 4.58 4.63 4.68 4.73 4.79 4.84 4.90
66 4.52 4.57 4.62 4.67 4.73 4.78 4.84 4.90 4.95 5.01
67 4.61 4.66 4.72 4.77 4.83 4.89 4.95 5.01 5.07 5.13
68 4.71 4.76 4.82 4.88 4.94 5.00 5.06 5.13 5.19 5.26
69 4.81 4.87 4.93 4.99 5.05 5.12 5.19 5.25 5.32 5.39
70 4.91 4.98 5.04 5.11 5.17 5.24 5.31 5.38 5.46 5.53
71 5.02 5.09 5.16 5.23 5.30 5.37 5.45 5.52 5.59 5.67
72 5.14 5.21 5.28 5.36 5.43 5.51 5.58 5.66 5.74 5.82
73 5.26 5.33 5.41 5.49 5.57 5.65 5.73 5.81 5.89 5.97
74 5.39 5.47 5.55 5.63 5.71 5.79 5.88 5.96 6.04 6.13
75 5.52 5.60 5.69 5.77 5.86 5.95 6.03 6.12 6.21 6.29
================================================================================================
<CAPTION>
MALE2 IS OLDER THAN MALE1 BY:
MALE1 ---------------------------------------------------------------------------------
AGE* SAME AGE 1 Yr. 2 Yrs. 3 Yrs. 4 Yrs. 5 Yrs.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
60 $4.45 $4.50 $4.54 $4.59 $4.63 $4.68
61 4.54 4.59 4.64 4.69 4.73 4.78
62 4.64 4.69 4.74 4.79 4.84 4.89
63 4.74 4.79 4.84 4.90 4.95 5.00
64 4.85 4.90 4.95 5.01 5.06 5.12
65 4.96 5.01 5.07 5.13 5.19 5.24
66 5.07 5.13 5.19 5.25 5.31 5.37
67 5.20 5.26 5.32 5.38 5.45 5.51
68 5.32 5.39 5.46 5.52 5.58 5.65
69 5.46 5.53 5.59 5.66 5.73 5.79
70 5.60 5.67 5.74 5.81 5.88 5.95
71 5.74 5.82 5.89 5.96 6.03 6.10
72 5.89 5.97 6.04 6.12 6.19 6.26
73 6.05 6.13 6.21 6.28 6.36 6.43
74 6.21 6.29 6.37 6.45 6.53 6.60
75 6.38 6.46 6.54 6.62 6.70 6.77
- ------------------------------------------------------------------------------------------------
Rates for other ages are available upon request.
*Age on birthday nearest the due date of the first payment.
The first income payment is payable on the effective date of this Option.
- ------------------------------------------------------------------------------------------------
</TABLE>
Page 30
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
OPTION 6. JOINT LIFE INCOME WITH REDUCED PAYMENTS
TO SURVIVOR - PAYMENT OPTION RATES
- ------------------------------------------------------------------------------------------------
MONTHLY LIFE INCOME PER $1,000 OF AMOUNT APPLIED
FEMALE1 & FEMALE2
- ------------------------------------------------------------------------------------------------
FEMALE2 IS YOUNGER THAN FEMALE1 BY:
FEMALE1 ---------------------------------------------------------------------------------
AGE* 10 Yrs. 9 Yrs. 8 Yrs. 7 Yrs. 6 Yrs. 5 Yrs. 4 Yrs. 3 Yrs. 2 Yrs. 1 Yr.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
60 $3.76 $3.79 $3.82 $3.85 $3.88 $3.91 $3.95 $3.98 $4.01 $4.05
61 3.82 3.85 3.88 3.91 3.94 3.98 4.01 4.05 4.08 4.12
62 3.88 3.91 3.94 3.98 4.01 4.05 4.08 4.12 4.16 4.20
63 3.94 3.97 4.01 4.04 4.08 4.12 4.16 4.19 4.23 4.28
64 4.00 4.04 4.07 4.11 4.15 4.19 4.23 4.27 4.32 4.36
65 4.07 4.11 4.15 4.19 4.23 4.27 4.31 4.36 4.40 4.45
66 4.14 4.18 4.22 4.27 4.31 4.35 4.40 4.45 4.50 4.54
67 4.22 4.26 4.30 4.35 4.40 4.44 4.49 4.54 4.59 4.64
68 4.30 4.34 4.39 4.44 4.49 4.54 4.59 4.64 4.70 4.75
69 4.38 4.43 4.48 4.53 4.58 4.64 4.69 4.75 4.80 4.86
70 4.47 4.52 4.57 4.63 4.68 4.74 4.80 4.86 4.92 4.98
71 4.56 4.62 4.67 4.73 4.79 4.85 4.91 4.98 5.04 5.11
72 4.66 4.72 4.78 4.84 4.91 4.97 5.04 5.10 5.17 5.24
73 4.77 4.83 4.89 4.96 5.03 5.09 5.16 5.24 5.31 5.38
74 4.88 4.94 5.01 5.08 5.15 5.23 5.30 5.38 5.45 5.53
75 4.99 5.06 5.14 5.21 5.29 5.36 5.44 5.52 5.60 5.69
================================================================================================
<CAPTION>
FEMALE2 IS OLDER THAN FEMALE1 BY:
FEMALE1 ---------------------------------------------------------------------------------
AGE* SAME AGE 1 Yr. 2 Yrs. 3 Yrs. 4 Yrs. 5 Yrs.
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
60 $4.08 $4.12 $4.16 $4.19 $4.23 $4.27
61 4.16 4.20 4.23 4.27 4.31 4.35
62 4.24 4.28 4.32 4.36 4.40 4.44
63 4.32 4.36 4.40 4.45 4.49 4.54
64 4.40 4.45 4.50 4.54 4.59 4.64
65 4.50 4.54 4.59 4.64 4.69 4.74
66 4.59 4.64 4.70 4.75 4.80 4.85
67 4.70 4.75 4.80 4.86 4.91 4.97
68 4.81 4.86 4.92 4.98 5.04 5.09
69 4.92 4.98 5.04 5.10 5.16 5.23
70 5.04 5.11 5.17 5.24 5.30 5.36
71 5.17 5.24 5.31 5.38 5.44 5.51
72 5.31 5.38 5.45 5.52 5.59 5.66
73 5.46 5.53 5.60 5.68 5.75 5.82
74 5.61 5.69 5.76 5.84 5.92 5.99
75 5.77 5.58 5.93 6.01 6.09 6.16
- ------------------------------------------------------------------------------------------------
Rates for other ages are available upon request.
*Age on birthday nearest the due date of the first payment.
The first income payment is payable on the effective date of this Option.
- ------------------------------------------------------------------------------------------------
</TABLE>
Page 31
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
C.M. Life Insurance Company C.M. Life Insurance Company
A STOCK COMPANY Home Office: Hartford, Connecticut
Administrative Office: Springfield, Massachusetts
</TABLE>
Survivorship Flexible Premium Adjustable Variable Life Insurance Policy
- --------------------------------------------------------------------------------
This Policy provides that:
A death benefit is payable when both Insureds have died.
Within specified limits, flexible premiums may be paid while either Insured is
living.
No dividends will be paid.
<PAGE>
[BLANK PAGE APPEARS HERE]
<PAGE>
- --------------------------------------------------------------------------------
POLICY SPECIFICATIONS
ESTATE PROTECTION RIDER
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
POLICY NUMBER: 123456789
INSURED NO. 1: JANE C. DOE
RIDER ISSUE AGE AND GENDER: 35 FEMALE
RISK CLASS: PREFERRED NON-TOBACCO
INSURED NO. 2: JOHN A. DOE
RIDER ISSUE AGE AND GENDER: 35 MALE
RISK CLASS: PREFERRED NON-TOBACCO
RIDER DATE: JULY 1, 1998
RIDER ISSUE DATE: JULY 1, 1998
RIDER EXPIRATION DATE: JULY 1, 2002
INITIAL RIDER FACE AMOUNT: $ 100,000
</TABLE>
TABLE OF MAXIMUM MONTHLY RIDER CHARGE RATES
PER THOUSAND OF RIDER DEATH BENEFIT
<TABLE>
<CAPTION>
ATTAINED AGE OF
THE YOUNGER INSURED MONTHLY RATE
------------------- ------------
<S> <C>
35 0.000200
36 0.000700
37 0.001300
38 0.002000
</TABLE>
<PAGE>
Estate Preservation Rider
This rider provides a level amount of survivorship term life insurance on the
lives of the Insureds. We discuss this rider, and the rules that apply to it,
in the provisions that follow.
Rider Part Of This rider is made a part of this policy as of its Rider
Policy Issue Date, in return for the application and the
payment of monthly rider charges. The Rider Issue Date
is shown in the Policy Specifications for this rider.
Monthly rider charges are discussed later in this rider.
This rider is in force from the Rider Issue Date or, if
later, the date the first premium under this policy is
paid. All the provisions of this policy apply to this
rider, except for those that are inconsistent with this
rider.
Rider Benefit This rider provides a death benefit equal to the rider
death benefit. If both Insureds die while this rider is
in force and before the Rider Expiration Date, we will
add the rider death benefit to the death benefit
provided by this policy. The Rider Expiration Date is
shown in the Policy Specifications for this rider.
Rider Death On the Rider Issue Date, the rider death benefit is
Benefit equal to the Initial Rider Face Amount shown in the
Policy Specifications for this rider. So long as the
Face Amount of this policy is not decreased for any
reason to an amount less than the policy Initial Face
Amount, the rider death benefit will not change.
However, if the policy Face Amount decreases to an
amount less than the Initial Face Amount, the rider
death benefit will automatically be decreased to an
amount equal to the Initial Rider Face Amount multiplied
by the result of (a) divided by (b), where:
(a) Is the policy Face Amount after the decrease; and
(b) Is the policy Initial Face Amount.
A decrease in the rider death benefit will be effective
on the same date as the decrease in the policy Face
Amount.
The rider death benefit cannot be increased.
Rider Charges Each month while this rider is in force, the maximum
rider charge equals the rider death benefit, divided by
1,000, then multiplied by the Maximum Monthly Rider
Charge Rate for the Attained Age of the younger Insured.
These rates are shown in the Policy Specifications for
this rider.
In determining the monthly rider charges, we may use
rates lower than the Maximum Monthly Rider Charge Rates.
Such lower rates will apply to all individuals in the
same class as the Insureds.
Misstatement Of If the date of birth or gender of either Insured as
Age Or Gender given in the application for this rider is not correct,
the rider death benefit will be adjusted. The adjustment
will reflect the amount provided by the most recent
monthly rider charge using the correct ages and genders.
In addition, if the adjustment is made before the second
death, monthly rider charges after the adjustment will
be based on the correct ages and genders.
Page 1
<PAGE>
Termination Of While monthly charges for this rider are being deducted
This Rider from the account value of this policy, this rider will
continue in force to, but not including, the Rider
Expiration Date shown in the Policy Specifications for
this rider. However, this rider will end automatically
before that Date at the time either of the following
occurs:
. Change of this policy to a different policy under
which this rider is not available; or
. Termination of this policy for any other reason.
Once this rider terminates, it may not be reinstated.
Cancellation Of This rider may be cancelled by the Owner's written
This Rider request. Such cancellation will take effect on the
policy Monthly Charge Date that is on, or next follows,
the date we receive the written request. Insurance under
this rider will continue to, but not including, the
effective date of cancellation.
C. M. LIFE INSURANCE COMPANY
/s/ Lawrence V. Burkett, Jr. /s/ Ann F. Lomeli
PRESIDENT SECRETARY
Page 2
<PAGE>
Policy Split Option Rider
This rider provides the right to exchange this policy for two new policies, one
on the life of each Insured, if certain conditions are met. We discuss this
rider, and the rules that apply to it, in the provisions that follow.
Rider Part Of This rider is made a part of this policy. The rider is in force
Policy from the Issue Date of the policy or, if later, the date the
first premium under this policy is paid. All the provisions of
this policy apply to this rider, except for those that are
inconsistent with this rider.
Rider Benefit Subject to the provisions of this rider, this policy may be
exchanged for two new life insurance policies, one on the life
of each Insured. This right to exchange will be available for
the six-month period beginning on:
1. The date six months after the effective date of a final
decree of divorce, issued by a court of competent
jurisdiction, ending the Insureds' marriage to each other,
if the decree:
. First becomes effective at least one year after the
policy Issue Date; and
. Remains in effect during the entire six-month period
after it first becomes effective; or
2. The date that either:
. Section 2056 of the Internal Revenue Code (I.R.C.) is
nullified or amended to eliminate or reduce the
Insureds' federal estate tax marital deduction; or
. The maximum federal estate tax rate given in I.R.C.
Section 2001 is reduced to a rate no more than one-half
the rate in effect on the Issue Date of this policy; or
3. If this policy is owned by a corporation or partnership,
the effective date that the corporation or partnership
dissolves.
For the I.R.C. changes discussed in item 2 above, the six-month
period will begin on the effective date of the change or, if
later, the date the change is signed into law.
Policy Split The face amount of each new policy will be one-half the Face
Method Amount of this policy at the time of the split.
The policy date of each new policy will be the Date of Exchange
(discussed later in this rider). The issue age for each will be
the age of the policy Insured on the birthday nearest that
policy date. For each new policy, the risk class will be the
one we deem comparable to the highest risk class for that
Insured under this policy. Each new policy may include benefit
riders comparable to any included with this policy only with
our consent.
The policy split option is allowed under either of two plans,
described below in this provision. Each new policy may be
issued under either plan.
Plan 1 - Fixed Premium Permanent Life Policy. The new
policy will be a fixed premium permanent life insurance
policy offered for the Insured on the Date of Exchange by
us or one of our affiliates. All premiums, rates, and other
values will be based on the policy date of the new policy
and the life and risk class of the policy Insured.
Page 1
<PAGE>
Plan 2 - Flexible Premium Adjustable Life Policy. The new
policy will be a flexible premium adjustable life insurance
policy offered for the Insured on the Date of Exchange by
us or one of our affiliates. The death benefit option will
be the same as for this policy. All premiums, monthly
charges, and surrender charges will be based on the policy
date of the new policy and the life and risk class of the
policy Insured. A new policy under Plan 2 will not be
available for an Insured if that Insured's issue age under
the new policy would exceed 80.
Payment of the first premium for each new policy is required
before the exchange can be completed. If this policy has any
net surrender value, it will be applied to reduce the premiums
for the first year under the new policies. Any net surrender
value not needed for this purpose will be paid in cash when the
exchange is complete.
Date Of The Date of Exchange will be the Monthly Charge Date that is
Exchange on, or next follows, the later of:
. The date we approve both applications for exchange; and
. The date we have received, at our Administrative Office,
the first premiums due under both new policies.
Example: The Monthly Charge Date is the 10th of each month.
We approve the applications for exchange on May 5,
19X8. The first premiums for the new policies are
paid on May 15, 19X8. The Date of Exchange will be
June 10, 19X8.
This policy will continue in force to, but not including, the
Date of Exchange.
Requirements To make an exchange, all of the following conditions must be
For Exchange met as of the Date of Exchange:
1. This policy and rider are in force; and
2. Both Insureds are living; and
3. For each new policy, the Owner of that policy must have an
insurable interest in the life of the Insured; and
4. The Attained Age of each Insured is lower than 85; and
5. The face amount and premium for each new policy must meet
our published minimum limits; and
6. The highest risk class under this policy for each Insured
must not be higher than the highest risk class available
under the new policy for that Insured. If we determine
that the highest risk class of any coverage under this
policy for either Insured is higher than the highest risk
class available under the new policy for that Insured,
exchange under this rider will not be allowed.
Before the exchange can become effective, we require:
1. For each new policy, a written application for exchange,
received by us at our Administrative Office; and
2. Evidence, satisfactory to us, that both Insureds are living
and that the Owner of each new policy has an insurable
interest in the life of the Insured under the policy; and
3. Evidence, satisfactory to us, of:
. Divorce of the Insureds, if that is the reason for the
exchange; or
. Dissolution of the corporation or partnership owning
this policy, if that is the reason for the exchange; and
4. Payment to us of the first premium due under both new
policies.
No other evidence of insurability will be required.
Page 2
<PAGE>
The New Insurance under each new policy will be effective as of the
Policies Date of Exchange.
After exchange, each new policy will be considered to have been
issued as of its policy date. However, it will be modified to
show that the contestable and suicide periods will be measured
from the date(s) applicable under this policy. Each new policy
for an Insured will be subject to any limitations of risk with
respect to that Insured under this policy and subject to any
assignments outstanding against this policy.
Termination Of This rider will continue in force until the time any of the
This Rider following occurs:
. The Policy Anniversary Date on which the Attained Age of
the older Insured becomes 85; or
. Death of the first Insured to die; or
. Exchange of this policy for two new policies under the
terms of this rider; or
. Change of this policy to a different policy under which
this rider is not available; or
. Termination of this policy for any other reason.
C. M. LIFE INSURANCE COMPANY
/s/ Lawrence V. Burkett, Jr. /s/ Ann F. Lomeli
PRESIDENT SECRETARY
Page 3
<PAGE>
EXHIBIT 99.2
(C.M. LIFE LETTERHEAD)
December 5, 1997
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
RE: Registration Statement
filed on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Registration
Statement under the Securities Act of 1933 for C.M. Life Insurance Company's
("C.M. Life") Survivorship Flexible Premium Adjustable Variable Life Insurance
Policies (the "Policies"). C.M. Life Variable Life Separate Account I issues the
Policies.
As 2nd Vice President & Associate General Counsel for C.M. Life, I provide legal
advice to C.M. Life in connection with the operation of its variable products.
In such role I am familiar with the filing for the Policies. In so acting, I
have made such examination of the law and examined such records and documents as
in my judgment are necessary or appropriate to enable me to render the opinion
expressed below. I am of the following opinion:
1. C.M. Life is a valid and subsisting corporation, organized and operated under
the laws of the state of Connecticut and is subject to regulation by the
Connecticut Commissioner of Insurance.
2. C.M. Life Variable Life Separate Account I is a separate account validly
established and maintained by C.M. Life in accordance with Connecticut law.
3. All of the prescribed corporate procedures for the issuance of the Policies
have been followed, and all applicable state laws have been complied with.
I hereby consent to the use of this opinion as an exhibit to this filing.
Very truly yours,
/s/ Richard M. Howe
- ------------------------
Richard M. Howe
2nd Vice President & Associate General Counsel
<PAGE>
EXHIBIT 99.C.6
(C.M. LIFE LETTERHEAD)
December 5, 1997
C.M. Life Insurance Company
140 Garden Street
Hartford, CT 06154
Ladies and Gentlemen:
This opinion is furnished in connection with Registration Statement for C.M.
Life Insurance Company's Survivorship Flexible Premium Adjustable Variable Life
Insurance Policies (the "Policies") under the Securities Act of 1933. The
prospectus included in the filing describes the Policies. I am familiar with the
forms of the Policies and the prospectus.
In my opinion, the illustrations of benefits under the Policies included in the
section entitled "Illustrations" in Appendix A of the prospectus, based on the
assumptions stated in the illustrations, are consistent with the provisions of
the respective forms of the Policies. The age selected in the illustrations is
representative of the manner in which the Policies operate.
I hereby consent to the use of this opinion as an exhibit to Registration
Statement filing and to the reference of my name under the heading "Experts" in
the prospectus.
Sincerely,
/s/ Craig Waddington
- -------------------------
Craig Waddington, FSA, MAAA
Vice President and Actuary
