<PAGE>
Pre-effective Amendment No. 1 to
Registration Statement No. 333-41667
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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.
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
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
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
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
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
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)
<PAGE>
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 six funds of MML Series Investment Fund (the "MML Trust"), four funds of
Oppenheimer Variable Account Funds (the "Oppenheimer Trust"), one fund of the
Variable Insurance Products Fund II (VIP Fund II, managed by Fidelity Management
& Research Company), one fund of the T. Rowe Price Equity Series, Inc, and one
fund of American Century Variable Portfolios, Inc. The individual funds are as
follow.
<TABLE>
<CAPTION>
MML Trust Oppenheimer Trust Variable Insurance Products Fund II
- --------- ----------------- -----------------------------------
<S> <C> <C>
MML Equity Fund Oppenheimer Aggressive Growth Fund VIP II Contrafund
MML Money Market Fund Oppenheimer Global Securities Fund
MML Managed Bond Fund Oppenheimer Growth Fund T. Rowe Price Equity Series, Inc
MML Blend Fund Oppenheimer Strategic Bond Fund --------------------------------
MML Equity Index Fund T. Rowe Price Mid-Cap Growth Portfolio
MML Small Cap Value Equity Fund
American Century Variable Portfolios, Inc
-----------------------------------------
American Century VP Income & Growth
</TABLE>
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 the Policy Value is sufficient 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
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
I. INTRODUCTION 3
II. DETAILED DESCRIPTION OF THE POLICY
Availability of Policy 4
Death Benefit 4
Premiums 6
Transfers 7
Policy Termination and Reinstatement 7
Charges and Deductions 8
Deductions from Premiums 9
Monthly Charges Against the Account Value 9
Daily Charges Against the Separate Account 9
Surrender Charges 9
Other Charges 10
Account Value and Net Surrender Value 10
Policy Loan Privilege 10
Free Look 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 16
Limits on Our Right to Challenge the Policy 17
Error of Age or Sex 17
Suicide 17
Sales and Other Agreements 17
Compensation 18
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 20
Variable Insurance Product Fund II 20
T. Rowe Price Equity Series, Inc. 20
American Century Variable Portfolios 20
The Investment Advisers 22
Appendix A
Definition of Terms 24
Appendix B
Examples of Death Benefit Option Changes 26
Appendix C
Rates of Return 27
Appendix D
Illustration of Death Benefits, Net Surrender Values, and Accumulated Premiums 31
Appendix E
Directors of C.M. Life 44
Principals 44
Appendix F
Financials (to be filed) 45
</TABLE>
2
<PAGE>
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
A Premium Expense Charge is 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")
Investment Earnings
Investment earnings of the Divisions
of the Separate Account less fund
investment management fees and separate
account fees are credited/ debited daily
Interest is credited on values in the
Guaranteed Principal Account
(graphic arrow to "Account Value")
-------------------------------------------
Account Value
The Account Value is allocated among
the available investment options.
(graphic arrow to "Account Value Charges")
-------------------------------------------
(graphic arrows to "Death Benefit", "Account Value Charge",
"Owner Access to Account Value" and "Policy Surrender")
Account Value Charges
Monthly deductions for administrative,
Insurance, and rider expenses are
deducted each month
Owner Access to Account Value
You may access Account Values through
loans and withdrawals
Death Benefit
A choice of 3 Death Benefit Options is available.
The Option chosen may be changed at a later date
Policy Surrender
In the first 10 years of coverage,
if coverage is surrendered, a surrender
charge will be deducted from the
surrender proceeds
3
<PAGE>
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 that 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 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.
The choice of the Guideline Premium Test or the Cash Value Test will depend on
how You intend to pay premiums. In general, if You intend to pay premiums in
early policy years only, the Cash Value Test may be more appropriate. If You
intend to pay level premiums over a long period of years, the Guideline Premium
Test may be more appropriate. It is important You see policy illustrations of
both approaches to determine how the policy works under each approach, and which
is best for You.
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 needed to avoid policy
termination under the grace period provision. (See Policy Termination and
Reinstatement) 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
<PAGE>
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.
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 that is on or precedes 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 that is on or precedes 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 the older Insured reaches Attained Age 90.
An increase in Face Amount will affect the Monthly Charges. The Face Amount
Charge and the Insurance charges will increase.
Decreases in Face Amount. Decreases in coverage are allowed after the first
Policy Year or one year after a Face Amount increase 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.)
5
<PAGE>
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.
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 pre-authorized 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.
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 Policy Value, or meeting the Safety
Test ( See Policy Termination section.). The Policy Value is equal to the
Account Value less any outstanding Policy Debt during the first three Policy
Years. It is equal to the Net surrender Value in years four and later. Even if
planned premiums are paid, if the Safety Test is not met, the Policy terminates
when the Policy 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 Target
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 on the next
business day following the Issue Date. 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 at the price next determined after receipt
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
6
<PAGE>
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.
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 at the price next determined
after receipt of the 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. Each Guarantee
Period has a Guarantee premium associated with it. These premiums vary depending
on the issue ages, sexes, and issue classifications of the Insureds and the
Death Benefit Option in effect. The Guarantee premiums for Your Policy are shown
in the Policy. 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,
equal or exceed the Guarantee premium accumulated with interest to that date.
The effective annual rate of interest used to accumulate these amounts is 3%.
The Guarantee Period in effect is determined by the Guarantee premium paid. 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
7
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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. Additionally, certain expenses are deducted from the
underlying funds. For more information about these expenses, see the individual
fund prospectuses. A summary of the product and separate account charges is as
follows.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
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 A per thousand rate multiplied by For standard risks, the guaranteed cost of
the amount at risk each month. The insurance rates are based on 1980
rate varies by the sexes, issue ages, Commissioners Standard Ordinary (CSO)
and risk classifications of the Insureds, Mortality Tables.
and the Year of Coverage.
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 First coverage year: the lesser of 100% of First coverage year: the lesser of 100% of
the Target Premium or $60 per thousand of the Target Premium or $60 per thousand of
Face Amount. Face Amount.
Coverage years 2-10: the prior year Coverage years 2-10: the prior year
Surrender Charge reduced by 10% of the Surrender Charge reduced by 10% of the
first year Surrender Charge first year Surrender Charge
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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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.
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 non-loaned
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.
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 MML Trust, Oppenheimer Trust, (Fidelity)
Variable Insurance Products Fund II, T. Rowe Price Equity Series, Inc., or
American Century Variable Portfolios, Inc., the value of Accumulation Units of
the Divisions will reflect the investment management fee and other expenses
incurred by these entities. The Prospectuses for these funds 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 Target Premium or $60
per thousand of Face Amount. The Target Premium is used to determine the maximum
premium limitation, Surrender Charges and agent commissions. The Target Premium
is based on the issue ages, sexes, and risk classifications of the Insureds. 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
<PAGE>
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
canceled 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 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 of 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 as of the date the Company receives the request to surrender in good
order. The surrender will be processed within 14 days.
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 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 at the price next determined after receipt in good order
of the Withdrawal request, and will be processed within seven days. 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 the 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
10
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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 the 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.
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 made within 30 days of the Policy Anniversary date pays policy loan
interest due. Any other loan repayment first will be allocated to the GPA until
the Owner has repaid all loan amounts that originated from the GPA. 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
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
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.
11
<PAGE>
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
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 practical to determine the amount because the New York Stock Exchange
is closed (other than customary week-end 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. We
may investigate death claims arising beyond 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 that 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
12
<PAGE>
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.
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 that 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.
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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 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 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 that 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
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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.
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 policies, one on the life of each
Insured, without evidence of insurability. Each new policy may be a fixed
premium permanent life policy or a flexible premium adjustable life policy. 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 the younger Insured is younger than
age 80, the older insured is younger than age 85, and the insurance risk class
of neither Insured is uninsurable.
There is no charge for this rider.
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.
A charge equal to the policy Insurance Charge multiplied by the Face Amount of
the rider divided $1,000.
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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>
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<S> <C>
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.
- ----------------------------------------------------------------------------------------------------------------------------------
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.
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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 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 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.
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Life Income with Payments Guaranteed Equal monthly payments will be based on the life of a named person. Payments will be
for Amount Applied made until the total amount paid equals the amount applied, and as long thereafter as
the named person lives.
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Joint Lifetime Income with Reduced Monthly payments will be based on the lives of two named persons. Payments at the
Payments to Survivor 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.
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</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 that 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.
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
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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
that 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.
The Company also may contract with independent third party broker-dealers who
may act as wholesalers by assisting the company in finding Broker-dealers to
offer and sell the Policies. These parties also may provide training, marketing
and other sales related functions for the Company and other broker-dealers and
may provide certain administrative services to the Company in connection with
the Policies. The Company may pay such parties compensation based on premium
payments for the Policies purchased through broker-dealers selected by the
wholesaler. In addition, some sales personnel may receive various types of
non-cash compensation as special sales incentives, including trips and
educational and/ or business seminars.
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.
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Compensation
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. These commissions distinguish between premiums up to the Target
Premium and premiums paid in excess of the Target Premium. The Target Premium is
based on the issue ages, sexes, and risk classifications of the Insureds.
Commissions also are paid as a percentage of the average monthly Account Value
in each Policy Year. The maximum commission percentages are as follow:
Premium-based Commissions
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Coverage Year 1 50% of premium paid up to the
Target Premium
3% of premium paid over the
Target Premium
Coverage Years 2-5 5% of premium paid up to the
Target Premium
3% of premium paid over the
Target Premium
Coverage Years 6-10 3% of all premium paid
Coverage Years 11 1% of all premium paid
and beyond
- -----------------------------------------------------------
Asset-based Commissions
- -------------------------------------------------------------
Policy Years 2 and beyond 0.15% of the average monthly
Account Value in each Policy
Year
- -------------------------------------------------------------
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 district managers who are registered
representatives of MMLISI also may receive commission overrides, allowances and
other compensation.
While the compensation payable to broker/dealers for sales of Policies may vary
with the sales agreement and level of production, they generally are expected to
be comparable to the aggregate compensation paid to Company agents and general
agents.
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 that 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
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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 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 has been divided into 13
Divisions. Each Division invests in a corresponding series of shares of a
designated Fund of MML Trust, Oppenheimer Trust, Variable Insurance Products
Fund II (managed by Fidelity Management & Research Company), T. Rowe Price
Equity Series, Inc., or American Century Variable Portfolios, Inc. 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, Oppenheimer
Trust, (Fidelity) Variable Insurance Products Fund II, T. Rowe Price Equity
Series, Inc., or American Century Variable Portfolios, Inc., 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
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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 that
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 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 that 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 OppenheimerFunds 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.
Variable Insurance Product Fund II
Variable Insurance Product Fund II ("Fidelity VIP II"), managed by Fidelity
Management & Research, is an open-end diversified management investment company
organized as a Massachusetts business trust on March 21, 1988 and is registered
with the SEC under the 1940 Act. One of its investment portfolios, the
Contrafund Portfolio, is available under this Policy.
T. Rowe Price Equity Series, Inc.
The T. Rowe Price Equity Series, Inc. (the "Corporation") was incorporated in
Maryland in 1994, and is a diversified, open-end investment company, or mutual
fund. Currently, the corporation consists of four series, each representing a
separate class of shares having different objectives and investment policies.
One of series, the Mid-Cap Growth Portfolio, is available under this Policy.
American Century Variable Portfolios, Inc.
American Century Variable Portfolios, Inc. is part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. Variable Portfolios offers its
shares only to insurance companies to fund the benefits of variable annuity or
variable life insurance contracts. One of the funds, VP Income and Growth, is
offered under this Policy.
Following is a chart illustrating the risk profiles of the investment options
available under this Policy, 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, 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.
20
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INVESTMENT PREFERENCE CHART
<TABLE>
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<S> <C> <C> <C>
Oppenheimer Global Securities Fund
Contrafund Portfolio
Oppenheimer Capital Appreciation Fund
MML Small Cap Equity Value Fund
T. Rowe Price Mid-Cap Growth Portfolio
Oppenheimer Growth Fund
American CenturyVP Income & Growth
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
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Conservative Less Conservative Moderate Aggressive More Aggressive
</TABLE>
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.
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.
21
<PAGE>
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.
American Century VP Income & Growth
The investment objective of VP Income & Growth is dividend growth, current
income and capital appreciation. The fund will seek to achieve its investment
objective by investing in common stocks.
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.
T. Rowe Price Mid-Cap Growth Portfolio
The Mid-Cap Growth Portfolio seeks to provide long-term capital appreciation by
investing primarily in common stocks of medium-sized (mid-cap) growth companies.
The fund focuses on companies with superior earnings growth potential that are
no longer considered new or emerging, but may still be in the dynamic phase of
their life cycles.
MML Small Cap Value Equity Fund
This fund seeks to earn a high rate of return over an extended period. The fund
invests primarily in stocks of smaller capitalization companies with some unique
product, market position, or operating characteristic which, in the portfolio
manager's opinion distinguishes them and will result in above-average returns.
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.
Contrafund Portfolio
This fund seeks capital appreciation by investing in companies believed to be
undervalued due to an overly pessimistic appraisal by the public. This fund may
be appropriate for policyowners who are willing to ride out stock market
fluctuations in pursuit of potentially high long-term returns. The fund is
designed for those who are looking for an investment approach that follows a
contrarian philosophy.
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 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. Babson also is the sub-advisor to the MML Small Cap Equity Value
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
22
<PAGE>
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.
Fidelity Management & Research Company (FMR) is the investment adviser to the
Contrafund Portfolio. FMR is the management arm of Fidelity Investments, which
was established in 1946. Fidelity Investments has its principal business address
at 82 Devonshire Street, Boston, Massachusetts. FMR handles the Contrafund
business affairs and, with the assistance of affiliates, chooses the fund's
investments. Fidelity Management & Research (U.K.) Inc, in London, England, and
Fidelity Management & Research (Far East) Inc, serve as sub-advisers for the
Contrafund.
T. Rowe Price Associates, Inc (T. Rowe Price) is the investment adviser to the
T. Rowe Price Mid-Cap Growth Portfolio. T. Rowe Price was founded in 1937. The
T. Rowe Price Equity Series, Inc. (the Corporation) was incorporated in Maryland
in 1994, and is a diversified, open-end investment company. The Corporation is
governed by a Board of Directors that meets regularly to review the fund's
investments, performance, expenses, and other business affairs. The policy of
the Corporation is that a majority of Board members will be independent of T.
Rowe Price.
American Century Investment Management, Inc. is the investment adviser to the
American Century VP Income & Growth Fund. Under the laws of the state of
Maryland, the Board of Directors is responsible for managing the business and
affairs of the fund. Acting pursuant to an investment management agreement
entered into with the fund, American Century Investment Management, Inc. serves
as the manager of the fund. Its principal place of business is American Century
Tower, 4500 Main Street, Kansas City, Missouri. The manager has been providing
investment advisory services to investment companies and institutional investors
since it was founded in 1958.
23
<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. The Expense Premium is based on the Issue Ages, sexes, and risk
classifications of the Insureds in effect at the time of any Premium payment.
Fixed Account Value: The current Account Value that 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 Value: The Account value less any outstanding Policy Debt during the
first three Policy Years. It is equal to the Net Surrender Value in years four
and later.
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
24
<PAGE>
by C. M. Life under the laws of Connecticut and registered as 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
Target Premium: The level of premium payments used to determine commission
payments and surrender charges. The Target Premium is based on the Issue Ages,
sexes, and risk classifications of the Insureds.
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
25
<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.
26
<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 annual 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.
Tables 1 and 2 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 1 shows figures for
periods ended December 31, 1996, while Table 2 shows December 31 annualized
figures. These rates do not reflect the mortality and expense risk charges
assessed against the Separate Account. Tables 1and 2 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.
27
<PAGE>
TABLE 1
EFFECTIVE ANNUAL RATES OF RETURN
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Fund Since 15 10 Years 5 Years 1 Year
Inception Years
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MML Equity 14.78% 16.19% 16.44% 18.25% 28.59
MML Blend 13.67% --- 13.68% 13.81% 20.89%
MML Managed Bond 10.37% 9.73% 9.08% 7.79% 9.91%
MML Money Market 6.73% 6.44% 5.63% 4.47% 5.18%
MML Small Cap Value Equity
MML Equity Index --- --- ---
Oppenheimer Global Securities 12.26% --- --- 18.81% 22.42
Oppenheimer Capital 15.31% --- 16.23% 15.92% 11.67%
Appreciation
Oppenheimer Growth 15.43% --- 16.67% 18.61% 26.68%
Oppenheimer Strategic Bond 7.64% --- --- --- 8.71%
VIP II Contrafund
Mid-Cap Growth Portfolio
VP Income & Growth 7.8% --- --- 21.8% 7.8%*
</TABLE>
The figures show in this Table do not reflect any charges at the Separate
Account or the Policy level.
<TABLE>
<S> <C>
*since inception.
Dates of inception:
MML Equity Fund-9/15/71 MML Blend Fund-2/3/84
Managed Bond Fund- 12/16/81 MML Small Cap Value Equity-6/X/98
MML Money Market Fund-11/12/90 MML Equity Index Fund -4/30/97
Oppenheimer Global Securities-11/12/90 Oppenheimer Capital Appreciation Fund -8/15/86
Oppenheimer Growth Fund - 4/3/85 Oppenheimer Strategic Bond Fund - 5/3/93
VIP II Contrafund - January 3, 1995 Mid-Cap Growth Portfolio - XXX
VP Income & Growth - 10/30/97
</TABLE>
Performance for MML Small Cap Value Equity Fund for years prior to 1998 are
returns of a substantially identical fund which commenced operations x/x/xx.
Performance of VP Income & Growth for years prior to 1997 are the returns of AC
Income & Growth fund, a substantially identical fund which commenced
operations 12/17/90
28
<PAGE>
TABLE 2
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Year MML Equity MML Money MML Bond MML Blend MML Small Oppenheimer
Ended Market Cap Value Growth
Equity
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 28.59% 5.18% 9.91% 20.89% 26.68%
1996 20.25% 5.01% 3.25% 13.95% 25.20%
1995 31.13% 5.58% 19.14% 23.28% 36.65%
1994 4.10% 3.84% (3.76%) 2.48% 0.98%
1993 9.52% 2.75% 11.81% 9.70% 7.25%
1992 10.48% 3.48% 7.31% 9.36% 14.53%
1991 25.56% 6.01% 16.66% 24.00% 25.54%
1990 (0.51%) 8.12% 8.38% 2.37% (8.21%)
1989 23.04% 9.16% 12.83% 19.96% 23.59%
1988 16.68% 7.39% 7.13% 13.40% 22.09%
1987 2.10% 6.49% 2.60% 3.12% 3.32%
1986 20.15% 6.60% 14.46% 18.30% 17.76%
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>
The figures show in this Table do not reflect any charges at the Separate
Account or the Policy level.
<TABLE>
<S> <C>
*since inception.
Dates of inception:
MML Equity Fund-9/15/71 MML Blend Fund-2/3/84
Managed Bond Fund- 12/16/81 MML Small Cap Value Equity-6/X/98
MML Money Market Fund-11/12/90 MML Equity Index Fund -4/30/97
Oppenheimer Global Securities-11/12/90 Oppenheimer Capital Appreciation Fund -8/15/86
Oppenheimer Growth Fund - 4/3/85 Oppenheimer Strategic Bond Fund - 5/3/93
VIP II Contrafund - January 3, 1995 Mid-Cap Growth Portfolio - XXX
VP Income & Growth - 10/30/97
</TABLE>
Performance for MML Small Cap Value Equity Fund for years prior to 1998 are
returns of a substantially identical fund which commenced operations x/x/xx.
Performance of VP Income & Growth for years prior to 1997 are the returns of AC
Income & Growth fund, a substantially identical fund which commenced
operations 12/17/90
29
<PAGE>
TABLE 2
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
Year Oppenheimer Oppenheimer Oppenheimer VIP II Mid Cap VP Income
Ended Strategic Capital Global Contra Growth & Growth
Bond Appreciation Securities -fund Portfolio
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 8.71% 11.67% 22.42%
1996 12.07% 20.16% 17.80%
1995 15.33% 32.52% 2.24%
1994 (5.85%) (7.50%) (5.72%)
1993 4.25%* 27.32% 70.32%
1992 --- 15.42% (7.11%)
1991 --- 54.72% 3.39%
1990 --- (16.32%) 0.40%
1989 --- 27.39% ---
1988 --- 13.41% ---
1987 --- 14.34% ---
1986 --- (1.65%)* ---
1985 --- --- ---
1984 --- --- ---
1983 --- --- ---
1982 --- --- ---
1981 --- --- ---
1980 --- --- ---
1979 --- --- ---
1978 --- --- ---
1977 --- --- ---
1976 --- --- ---
1975 --- --- ---
1974 --- --- ---
</TABLE>
The figures show in this Table do not reflect any charges at the Separate
Account or the Policy level.
<TABLE>
<S> <C>
*since inception.
Dates of inception:
MML Equity Fund-9/15/71 MML Blend Fund-2/3/84
Managed Bond Fund- 12/16/81 MML Small Cap Value Equity-6/X/98
MML Money Market Fund-11/12/90 MML Equity Index Fund -4/30/97
Oppenheimer Global Securities-11/12/90 Oppenheimer Capital Appreciation Fund -8/15/86
Oppenheimer Growth Fund - 4/3/85 Oppenheimer Strategic Bond Fund - 5/3/93
VIP II Contrafund - January 3, 1995 Mid-Cap Growth Portfolio - XXX
VP Income & Growth - 10/30/97
</TABLE>
Performance for MML Small Cap Value Equity Fund for years prior to 1998 are
returns of a substantially identical fund which commenced operations x/x/xx.
Performance of VP Income & Growth for years prior to 1997 are the returns of AC
Income & Growth fund, a substantially identical fund which commenced
operations 12/17/90
30
<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 a 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 from
the 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. They 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.
The Death Benefits and Net Surrender Values shown in Tables 1,2,3, 7,8, and 9
reflect the following current charges:
. Administrative Charges of $12 per month per policy in Policy Years 1-10, and
$6 per month in Policy Years 11 and beyond.
. Face Amount Charges of $0.13 per month per $1,000 of Face Amount in Policy
Years 1-10.
. Insurance Charges based on the current rates being charged by the Company
for Select-Preferred, fully underwritten risks.
. Mortality and Expense Risk Charges of 0.25% on an annual basis of the daily
net asset value of the Separate Account in all Policy Years.
. Fund level expenses of 0.66% on an annual basis of the net asset value of
the Separate Account. These expenses represent the unweighted average of all
fund expenses.
The Death Benefits and Net Surrender Values shown in Tables 4,5,6,10,11, and 12
reflect the following guaranteed maximum charges as wee as the current fund
level expenses.
. Administrative Charges equal to $12 per month per policy in all years.
. Face Amount Charge of $0.13 per month per $1,000 of Face Amount in Policy
Years 1010.
. Insurance Charges based on the 1980 CSO Mortality Table.
. Mortality and Expense Risk Charges equal to 0.90% on an annual basis of the
daily net asset value of the Separate Account in all years.
Net Surrender Values shown in the Tables reflect the deduction of Surrender
Charges in the first 10 Policy Years. The Surrender Charge in the first year is
the Target Premium or $60 per $1,000 of Face Amount if less. In each of Years
two through 10, the Surrender Charge is equal to the Surrender Charge in the
prior year reduced by 10% of the Surrender Charge in the first year.
Taking the current Mortality and Expense Risk Charge and the Fund level expenses
into account, the gross rates of 0%, 6%, and 12% are -0.91%, 5.09%, and 11.09%
respectively on a net basis.
31
<PAGE>
Table 1
<TABLE>
<S> <C>
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
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- -----------------------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Accumulated
Year at 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 1,000,000 334 538 743
2 10,763 1,000,000 1,000,000 1,000,000 3,150 3,723 4,323
3 16,551 1,000,000 1,000,000 1,000,000 5,940 7,055 8,270
4 22,628 1,000,000 1,000,000 1,000,000 8,704 10,542 12,622
5 29,010 1,000,000 1,000,000 1,000,000 11,443 14,189 17,425
6 35,710 1,000,000 1,000,000 1,000,000 14,157 18,007 22,728
7 42,746 1,000,000 1,000,000 1,000,000 16,848 22,005 28,588
8 50,133 1,000,000 1,000,000 1,000,000 19,514 26,191 35,063
9 57,889 1,000,000 1,000,000 1,000,000 22,157 30,576 42,226
10 66,034 1,000,000 1,000,000 1,000,000 24,779 35,170 50,150
15 113,287 1,000,000 1,000,000 1,000,000 47,009 72,878 117,711
20 173,596 1,000,000 1,000,000 1,000,000 67,862 120,623 230,920
25 250,567 1,000,000 1,000,000 1,000,000 87,352 181,233 421,210
30 348,804 1,000,000 1,000,000 1,000,000 104,787 257,624 741,206
35 474,182 1,000,000 1,000,000 1,484,488 117,746 352,205 1,279,731
40 634,199 1,000,000 1,000,000 2,337,618 122,088 467,775 2,184,690
45 838,426 1,000,000 1,000,000 3,890,699 106,292 606,183 3,705,428
50 1,099,077 1,000,000 1,000,000 6,558,856 42,156 771,911 6,246,530
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
--------------------------------------------------------------------
End of Policy Year
0% 6% 12%
--------------------------------------------------------------------
<S> <C> <C> <C>
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,764 8,879 10,094
4 10,300 12,138 14,218
5 12,811 15,557 18,793
6 15,297 19,147 23,868
7 17,760 22,917 29,500
8 20,198 26,875 35,747
9 22,613 31,032 42,682
10 25,007 35,398 50,378
15 47,009 72,878 117,711
--------------------------------------------------------------------
</TABLE>
32
<PAGE>
Table 2
<TABLE>
<S> <C>
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
<CAPTION>
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 Year Per Year 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,025,207 1,026,766 1,028,327 22,927 24,486 26,047
2 10,763 1,050,183 1,054,880 1,059,764 48,131 52,828 57,712
3 16,551 1,074,931 1,084,407 1,094,652 73,107 82,583 92,828
4 22,628 1,099,452 1,115,421 1,133,370 97,856 113,825 131,774
5 29,010 1,123,749 1,147,995 1,176,340 122,381 146,627 174,972
6 35,710 1,147,823 1,182,208 1,224,027 146,683 181,068 222,887
7 42,746 1,171,679 1,218,145 1,276,953 170,767 217,233 276,041
8 50,133 1,195,315 1,255,891 1,335,690 194,631 255,207 335,006
9 57,889 1,218,738 1,295,539 1,400,881 218,282 295,083 400,425
10 66,034 1,241,949 1,337,185 1,473,234 241,721 336,957 473,006
15 113,287 1,366,570 1,592,801 1,989,232 366,570 592,801 989,232
20 173,596 1,485,466 1,919,454 2,916,967 485,466 919,454 1,857,941
25 250,567 1,598,595 2,336,611 4,449,072 598,595 1,336,611 3,320,203
30 348,804 1,705,361 2,868,533 7,052,392 705,361 1,868,533 5,780,649
35 474,182 1,803,169 3,543,951 11,502,713 803,169 2,543,951 9,916,132
40 634,199 1,887,417 4,397,231 18,045,368 887,417 3,397,231 16,864,830
45 838,426 1,945,472 5,463,132 29,967,618 945,472 4,463,132 28,540,589
50 1,099,077 1,949,525 6,768,468 50,453,846 949,525 5,768,468 48,051,282
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
--------------------------------------------------------------------
End of Policy Year
0% 6% 12%
--------------------------------------------------------------------
<S> <C> <C> <C>
1 25,207 26,766 28,327
2 50,183 54,880 59,764
3 74,931 84,407 94,652
4 99,452 115,421 133,370
5 123,749 147,995 176,340
6 147,823 182,208 224,027
7 171,679 218,145 276,953
8 195,315 255,891 335,690
9 218,738 295,539 400,881
10 241,949 337,185 473,234
15 366,570 592,801 989,232
--------------------------------------------------------------------
</TABLE>
33
<PAGE>
Table 3
<TABLE>
<S> <C>
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
<CAPTION>
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 Year 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 1,005,000 334 538 743
2 10,763 1,010,000 1,010,000 1,010,000 3,150 3,723 4,323
3 16,551 1,015,000 1,015,000 1,015,000 5,939 7,055 8,269
4 22,628 1,020,000 1,020,000 1,020,000 8,704 10,541 12,622
5 29,010 1,025,000 1,025,000 1,025,000 11,443 14,189 17,424
6 35,710 1,030,000 1,030,000 1,030,000 14,156 18,006 22,727
7 42,746 1,035,000 1,035,000 1,035,000 16,846 22,004 28,586
8 50,133 1,040,000 1,040,000 1,040,000 19,511 26,188 35,061
9 57,889 1,045,000 1,045,000 1,045,000 22,155 30,572 42,222
10 66,034 1,050,000 1,050,000 1,050,000 24,776 35,166 50,145
15 113,287 1,075,000 1,075,000 1,075,000 46,996 72,862 117,691
20 173,596 1,100,000 1,100,000 1,100,000 67,820 120,568 230,847
25 250,567 1,125,000 1,125,000 1,125,000 87,217 181,057 420,967
30 348,804 1,150,000 1,150,000 1,150,000 104,354 257,054 740,405
35 474,182 1,175,000 1,175,000 1,675,412 116,263 350,261 1,277,941
40 634,199 1,200,000 1,200,000 2,534,397 117,630 461,822 2,181,680
45 838,426 1,225,000 1,225,000 4,110,386 93,436 588,687 3,700,368
50 1,099,077 1,250,000 1,250,000 6,799,947 6,016 721,521 6,238,045
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
-------------------------------------------------------------------
End of Policy Year
0% 6% 12%
-------------------------------------------------------------------
<S> <C> <C> <C>
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,763 8,897 10,093
4 10,300 12,137 14,218
5 12,811 15,557 18,792
6 15,296 19,146 23,867
7 17,758 22,916 29,498
8 20,195 26,872 35,745
9 22,611 31,028 42,678
10 25,004 35,394 50,373
15 46,996 72,862 117,691
-------------------------------------------------------------------
</TABLE>
34
<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
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 10,763 1,000,000 1,000,000 1,000,000 1,093 1,666 2,266
3 16,551 1,000,000 1,000,000 1,000,000 4,103 5,218 6,431
4 22,628 1,000,000 1,000,000 1,000,000 7,082 8,918 10,996
5 29,010 1,000,000 1,000,000 1,000,000 10,030 12,772 16,003
6 35,710 1,000,000 1,000,000 1,000,000 12,944 16,786 21,498
7 42,746 1,000,000 1,000,000 1,000,000 15,822 20,966 27,533
8 50,133 1,000,000 1,000,000 1,000,000 18,663 25,317 34,164
9 57,889 1,000,000 1,000,000 1,000,000 21,463 29,845 41,454
10 66,034 1,000,000 1,000,000 1,000,000 24,220 34,557 49,473
15 113,287 1,000,000 1,000,000 1,000,000 43,028 68,091 111,942
20 173,596 1,000,000 1,000,000 1,000,000 59,112 108,823 214,797
25 250,567 1,000,000 1,000,000 1,000,000 71,149 157,479 385,159
30 348,804 1,000,000 1,000,000 1,000,000 75,246 212,620 668,893
35 474,182 1,000,000 1,000,000 1,330,487 60,952 267,213 1,146,972
40 634,199 1,000,000 1,000,000 2,081,623 4,635 304,180 1,945,442
45 838,426 0 1,000,000 3,441,960 0 273,274 3,278,057
50 1,099,077 0 1,000,000 5,728,265 0 34,778 5,455,490
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
--------------------------------------------------------------------
End of Policy Year
0% 6% 12%
--------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,751 8,866 10,079
4 10,274 12,110 14,188
5 12,766 15,508 18,739
6 15,224 19,066 23,778
7 17,646 22,790 29,357
8 20,031 26,685 35,532
9 22,375 30,757 42,366
10 24,676 35,013 49,929
15 43,028 68,091 111,942
--------------------------------------------------------------------
</TABLE>
35
<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
<CAPTION>
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 1,002,613 1,002,817 1,003,022 0 0 0
2 10,763 1,005,197 1,005,770 1,006,370 1,093 1,666 2,266
3 16,551 1,007,750 1,008,865 1,010,079 4,102 5,217 6,431
4 22,628 1,010,274 1,012,109 1,014,187 7,082 8,917 10,995
5 29,010 1,012,765 1,015,507 1,018,737 10,029 12,771 16,001
6 35,710 1,015,223 1,019,064 1,023,776 12,943 16,784 21,496
7 42,746 1,017,644 1,022,787 1,029,352 15,820 20,963 27,528
8 50,133 1,020,026 1,026,679 1,035,524 18,658 25,311 34,156
9 57,889 1,022,369 1,030,749 1,042,353 21,457 29,837 41,441
10 66,034 1,024,667 1,035,000 1,049,909 24,211 34,544 49,453
15 113,287 1,042,980 1,068,008 1,111,797 42,980 68,008 111,797
20 173,596 1,058,923 1,108,445 1,214,001 58,923 108,445 214,001
25 250,567 1,070,542 1,156,025 1,381,409 70,542 156,025 381,409
30 348,804 1,073,567 1,207,675 1,652,888 73,567 207,675 652,888
35 474,182 1,056,923 1,251,441 2,084,731 56,923 251,441 1,084,731
40 634,199 0 1,258,378 2,756,462 0 258,378 1,756,462
45 838,426 0 1,154,806 3,760,494 0 154,806 2,760,494
50 1,099,077 0 0 5,211,472 0 0 4,211,472
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
--------------------------------------------------------------------
End of Policy Year
0% 6% 12%
--------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,765 15,507 18,737
6 15,223 19,064 23,776
7 17,644 22,787 29,352
8 20,026 26,679 35,524
9 22,369 30,749 42,353
10 24,667 35,000 49,909
15 42,980 68,008 111,797
--------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Table 6
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
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 10,763 1,010,000 1,010,000 1,010,000 1,093 1,666 2,266
3 16,551 1,015,000 1,015,000 1,015,000 4,102 5,217 6,431
4 22,628 1,020,000 1,020,000 1,020,000 7,082 8,917 10,995
5 29,010 1,025,000 1,025,000 1,025,000 10,028 12,770 16,001
6 35,710 1,030,000 1,030,000 1,030,000 12,941 16,783 21,495
7 42,746 1,035,000 1,035,000 1,035,000 15,818 20,961 27,527
8 50,133 1,040,000 1,040,000 1,040,000 18,655 25,308 34,154
9 57,889 1,045,000 1,045,000 1,045,000 21,451 29,832 41,439
10 66,034 1,050,000 1,050,000 1,050,000 24,203 34,537 49,450
15 113,287 1,075,000 1,075,000 1,075,000 42,941 67,986 111,814
20 173,596 1,100,000 1,100,000 1,100,000 58,789 108,417 214,275
25 250,567 1,125,000 1,125,000 1,125,000 70,109 156,130 383,334
30 348,804 1,150,000 1,150,000 1,150,000 72,195 208,550 663,145
35 474,182 1,175,000 1,175,000 1,489,323 52,198 255,299 1,133,037
40 634,199 0 1,200,000 2,256,710 0 270,255 1,922,159
45 838,426 0 1,225,000 3,626,131 0 173,984 3,239,172
50 1,099,077 0 0 5,910,674 0 0 5,391,118
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
--------------------------------------------------------------
End of Policy Year
0% 6% 12%
--------------------------------------------------------------
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,764 15,506 18,737
6 15,221 19,063 23,775
7 17,642 22,785 29,351
8 20,023 26,676 35,522
9 22,363 30,744 42,351
10 24,659 34,993 49,906
15 42,941 67,986 111,814
--------------------------------------------------------------
37
<PAGE>
<TABLE>
<CAPTION>
Table 7
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 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
Year at 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 10,763 1,000,000 1,000,000 1,000,000 1,098 1,671 2,271
3 16,551 1,000,000 1,000,000 1,000,000 4,116 5,231 6,446
4 22,628 1,000,000 1,000,000 1,000,000 7,108 8,946 11,026
5 29,010 1,000,000 1,000,000 1,000,000 10,075 12,821 16,057
6 35,710 1,000,000 1,000,000 1,000,000 13,017 16,867 21,588
7 42,746 1,000,000 1,000,000 1,000,000 15,936 21,093 27,676
8 50,133 1,000,000 1,000,000 1,000,000 18,830 25,507 34,379
9 57,889 1,000,000 1,000,000 1,000,000 21,701 30,120 41,770
10 66,034 1,000,000 1,000,000 1,000,000 24,551 34,942 49,922
15 113,287 1,000,000 1,000,000 1,000,000 47,009 72,878 117,711
20 173,596 1,000,000 1,000,000 1,000,000 67,862 120,623 230,920
25 250,567 1,000,000 1,000,000 1,099,249 87,352 181,233 421,200
30 348,804 1,000,000 1,000,000 1,613,848 104,787 257,624 740,258
35 474,182 1,000,000 1,000,000 2,343,307 117,746 352,205 1,271,896
40 634,199 1,000,000 1,000,000 3,405,858 122,088 467,775 2,152,330
45 838,426 1,000,000 1,000,000 5,009,398 106,292 606,183 3,594,668
50 1,099,077 1,000,000 1,000,000 7,471,496 42,156 771,911 5,922,666
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
-------------------------------------------------------------
End of Policy Year
0% 6% 12%
-------------------------------------------------------------
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,764 8,879 10,094
4 10,300 12,138 14,218
5 12,811 15,557 18,793
6 15,297 19,147 23,868
7 17,760 22,917 29,500
8 20,198 26,875 35,747
9 22,613 31,032 42,682
10 25,007 35,398 50,378
15 47,009 72,878 117,711
-------------------------------------------------------------
38
<PAGE>
<TABLE>
<CAPTION>
Table 8
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 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
Year at 5% Interest
Per Year 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,614 1,002,818 1,003,023 0 0 0
2 10,763 1,005,202 1,005,775 1,006,375 1,098 1,671 2,271
3 16,551 1,007,763 1,008,879 1,010,093 4,115 5,231 6,445
4 22,628 1,010,300 1,012,137 1,014,218 7,108 8,945 11,026
5 29,010 1,012,811 1,015,557 1,018,792 10,075 12,821 16,056
6 35,710 1,015,297 1,019,147 1,023,867 13,017 16,867 21,587
7 42,746 1,017,759 1,022,916 1,029,498 15,935 21,092 27,674
8 50,133 1,020,196 1,026,873 1,035,745 18,828 25,505 34,377
9 57,889 1,022,612 1,031,029 1,042,679 21,700 30,117 41,767
10 66,034 1,025,005 1,035,395 1,050,374 24,549 34,939 49,918
15 113,287 1,047,002 1,072,865 1,117,689 47,002 72,865 117,689
20 173,596 1,067,835 1,120,569 1,230,808 67,835 120,569 230,808
25 250,567 1,087,260 1,181,022 1,420,684 87,260 181,022 420,684
30 348,804 1,104,485 1,256,808 1,738,719 104,485 256,808 738,719
35 474,182 1,116,723 1,348,914 2,337,610 116,723 348,914 1,268,804
40 634,199 1,119,178 1,456,178 3,397,704 119,178 456,178 2,147,178
45 838,426 1,099,003 1,567,747 4,997,514 99,003 567,747 3,586,141
50 1,099,077 1,028,123 1,651,595 7,453,869 28,123 651,595 5,908,693
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
------------------------------------------------------------
End of Policy Year
0% 6% 12%
------------------------------------------------------------
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,763 8,879 10,093
4 10,300 12,137 14,218
5 12,811 15,557 18,792
6 15,297 19,147 23,867
7 17,759 22,916 29,498
8 20,196 26,873 35,745
9 22,612 31,029 42,679
10 25,005 35,395 50,374
15 47,002 72,865 117,689
------------------------------------------------------------
39
<PAGE>
<TABLE>
<CAPTION>
Table 9
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 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
Year at 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 10,763 1,010,000 1,010,000 1,010,000 1,098 1,671 2,271
3 16,551 1,015,000 1,015,000 1,015,000 4,115 5,231 6,445
4 22,628 1,020,000 1,020,000 1,020,000 7,108 8,945 11,026
5 29,010 1,025,000 1,025,000 1,025,000 10,075 12,821 16,056
6 35,710 1,030,000 1,030,000 1,030,000 13,016 16,866 21,587
7 42,746 1,035,000 1,035,000 1,035,000 15,934 21,092 27,674
8 50,133 1,040,000 1,040,000 1,040,000 18,827 25,504 34,377
9 57,889 1,045,000 1,045,000 1,045,000 21,699 30,116 41,766
10 66,034 1,050,000 1,050,000 1,050,000 24,548 34,938 49,917
15 113,287 1,075,000 1,075,000 1,075,000 46,996 72,862 117,691
20 173,596 1,100,000 1,100,000 1,100,000 67,820 120,568 230,847
25 250,567 1,125,000 1,125,000 1,223,640 87,217 181,057 420,967
30 348,804 1,150,000 1,150,000 1,762,975 104,354 257,054 739,858
35 474,182 1,175,000 1,175,000 2,517,072 116,263 350,261 1,271,226
40 634,199 1,200,000 1,200,000 3,604,091 117,630 461,822 2,151,214
45 838,426 1,225,000 1,225,000 5,231,822 93,436 588,687 3,592,820
50 1,099,077 1,250,000 1,250,000 7,717,676 6,016 721,521 5,919,637
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
-------------------------------------------------------------
End of Policy Year
0% 6% 12%
-------------------------------------------------------------
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,763 8,879 10,093
4 10,300 12,137 14,218
5 12,811 15,557 18,792
6 15,296 19,146 23,867
7 17,758 22,916 29,498
8 20,195 26,872 35,745
9 22,611 31,028 42,678
10 25,004 35,394 50,373
15 46,996 72,862 117,691
-------------------------------------------------------------
40
<PAGE>
<TABLE>
<CAPTION>
Table 10
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 Cash Value 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
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 10,763 1,000,000 1,000,000 1,000,000 1,093 1,666 2,266
3 16,551 1,000,000 1,000,000 1,000,000 4,103 5,218 6,431
4 22,628 1,000,000 1,000,000 1,000,000 7,082 8,918 10,996
5 29,010 1,000,000 1,000,000 1,000,000 10,030 12,772 16,003
6 35,710 1,000,000 1,000,000 1,000,000 12,944 16,786 21,498
7 42,746 1,000,000 1,000,000 1,000,000 15,822 20,966 27,533
8 50,133 1,000,000 1,000,000 1,000,000 18,663 25,317 34,164
9 57,889 1,000,000 1,000,000 1,000,000 21,463 29,845 41,454
10 66,034 1,000,000 1,000,000 1,000,000 24,220 34,557 49,473
15 113,287 1,000,000 1,000,000 1,000,000 43,028 68,091 111,942
20 173,596 1,000,000 1,000,000 1,000,000 59,112 108,823 214,797
25 250,567 1,000,000 1,000,000 1,005,187 71,149 157,479 385,159
30 348,804 1,000,000 1,000,000 1,449,851 75,246 212,620 665,034
35 474,182 1,000,000 1,000,000 2,049,471 60,952 267,213 1,112,408
40 634,199 1,000,000 1,000,000 2,859,131 4,635 304,180 1,806,827
45 838,426 0 1,000,000 3,951,080 0 273,274 2,835,236
50 1,099,077 0 1,000,000 5,426,570 0 34,778 4,301,650
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
------------------------------------------------------------
End of Policy Year
0% 6% 12%
------------------------------------------------------------
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,751 8,866 10,079
4 10,274 12,110 14,188
5 12,766 15,508 18,739
6 15,224 19,066 23,778
7 17,646 22,790 29,357
8 20,031 26,685 35,532
9 22,375 30,757 42,366
10 24,676 35,013 49,929
15 43,028 68,091 111,942
------------------------------------------------------------
41
<PAGE>
<TABLE>
<CAPTION>
Table 11
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 Cash Value 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
End of at 5%
Policy Year Interest Per
Year 0% 6% 12% 0% 6% 12%
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,613 1,002,817 1,003,022 0 0 0
2 10,763 1,005,197 1,005,770 1,006,370 1,093 1,666 2,266
3 16,551 1,007,750 1,008,865 1,010,079 4,102 5,217 6,431
4 22,628 1,010,274 1,012,109 1,014,187 7,082 8,917 10,995
5 29,010 1,012,765 1,015,507 1,018,737 10,029 12,771 16,001
6 35,710 1,015,223 1,019,064 1,023,776 12,943 16,784 21,496
7 42,746 1,017,644 1,022,787 1,029,352 15,820 20,963 27,528
8 50,133 1,020,026 1,026,679 1,035,524 18,658 25,311 34,156
9 57,889 1,022,369 1,030,749 1,042,353 21,457 29,837 41,441
10 66,034 1,024,667 1,035,000 1,049,909 24,211 34,544 49,453
15 113,287 1,042,980 1,068,008 1,111,797 42,980 68,008 111,797
20 173,596 1,058,923 1,108,445 1,214,001 58,923 108,445 214,001
25 250,567 1,070,542 1,156,025 1,381,409 70,542 156,025 381,409
30 348,804 1,073,567, 1,207,675 1,652,888 73,567 207,675 652,888
35 474,182 1,056,923 1,251,441 2,084,731 56,923 251,441 1,084,731
40 634,199 0 1,258,378 2,779,369 0 258,378 1,756,421
45 838,426 0 1,154,806 3,840,057 0 154,806 2,755,567
50 1,099,077 0 0 5,275,045 0 0 4,181,536
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
----------------------------------------------------------
End of Policy Year
0% 6% 12%
----------------------------------------------------------
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,765 15,507 18,737
6 15,223 19,064 23,776
7 17,644 22,787 29,352
8 20,026 26,679 35,524
9 22,369 30,749 42,353
10 24,667 35,000 49,909
15 42,980 68,008 111,797
----------------------------------------------------------
42
<PAGE>
<TABLE>
<CAPTION>
Table 12
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 Cash Value 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
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 10,763 1,010,000 1,010,000 1,010,000 1,093 1,666 2,266
3 16,551 1,015,000 1,015,000 1,015,000 4,102 5,217 6,431
4 22,628 1,020,000 1,020,000 1,020,000 7,082 8,917 10,995
5 29,010 1,025,000 1,025,000 1,025,000 10,028 12,770 16,001
6 35,710 1,030,000 1,030,000 1,030,000 12,941 16,783 21,495
7 42,746 1,035,000 1,035,000 1,035,000 15,818 20,961 27,527
8 50,133 1,040,000 1,040,000 1,040,000 18,655 25,308 34,154
9 57,889 1,045,000 1,045,000 1,045,000 21,451 29,832 41,439
10 66,034 1,050,000 1,050,000 1,050,000 24,203 34,537 49,450
15 113,287 1,075,000 1,075,000 1,075,000 42,941 67,986 111,814
20 173,596 1,100,000 1,100,000 1,100,000 58,789 108,417 214,275
25 250,567 1,125,000 1,125,000 1,125,426 70,109 156,130 383,334
30 348,804 1,150,000 1,150,000 1,592,259 72,195 208,550 661,552
35 474,182 1,175,000 1,175,000 2,214,013 52,198 255,299 1,106,732
40 634,199 0 1,200,000 3,044,769 0 270,255 1,797,751
45 838,426 0 1,225,000 4,156,426 0 173,984 2,821,133
50 1,099,077 0 0 5,649,746 0 0 4,280,386
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
-------------------------------------------------------------
End of Policy Year
0% 6% 12%
-------------------------------------------------------------
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,764 15,506 18,737
6 15,221 19,063 23,775
7 17,642 22,785 29,351
8 20,023 26,676 35,522
9 22,363 30,744 42,351
10 24,659 34,993 49,906
15 42,941 67,986 111,814
-------------------------------------------------------------
43
<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.
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, 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.
Edward M. Kline
Treasurer, C.M. Life since 1997, Vice President since 1989 and Treasurer
since 1997, MassMutual.
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.
44
<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 44 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) Copy of 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) Not Applicable.
(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) Form of Application for a Survivorship Flexible Premium
Adjustable Variable Life insurance policy.
(11) 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.**
99.5 Powers of Attorney***
27. Not Applicable
.
* Incorporated by reference to Initial Registration Statement No. 33-91072
dated April 10, 1995.
** Incorporated by reference to this Initial Registration Statement filed
with the Commission as an exhibit on December 5, 1997.
*** 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 pre-effective Amendment No. 1 to Registration Statement 333-41667 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 17th day of March, 1998.
C.M. LIFE VARIABLE LIFE SEPARATE ACCOUNT I
C.M. LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Lawrence V. Burkett, Jr.*
----------------------------------------------------
Lawrence V. Burkett, Jr.,
Director, President and Chief Executive Officer
C.M. Life Insurance Company
/s/ Richard M. Howe On March 17, 1998, 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.
Signature Title Date
--------- ----- ----
/s/ Lawrence V. Burkett, Jr.* Director, President and Chief March 17, 1998
- ------------------------------- Executive Officer
Lawrence V. Burkett, Jr.
/s/ Edward M. Kline* Treasurer (Principal March 17, 1998
- ------------------------------- Financial Officer)
Edward M. Kline
/s/ John Miller, Jr.* Second Vice President and March 17, 1998
- -------------------------------- Comptroller (Principal
John Miller, Jr. Accounting Officer)
/s/ John B. Davies* Director March 17, 1998
- --------------------------------
John B. Davies
/s/ Stuart H. Reese* Director March 17, 1998
- --------------------------------
Stuart H. Reese
/s/ Richard M. Howe On March 17, 1998, as Attorney-in-Fact
- --------------------------------- pursuant to powers of attorney filed
*Richard M. Howe herewith.
<PAGE>
EXHIBIT LIST
99(10) Form of Application for a Survivorship Flexible Premium Adjustable
Variable Life insurance policy.
99(11) Memorandum describing C.M. Life issuance, transfer, and redemption
procedures for the Policy.
<PAGE>
Exhibit 99(10)
[LOGO OF MASSMUTUAL APPEARS HERE] Survivorship
Whole Life
Part - 1 (A3020)
Application Package
This application may be used to apply for the following individual product:
. Survivorship Whole Life Insurance
================================================================================
Contents
This package includes:
. Part 1 of Application
. Agent's Statement
. Conditional Receipt
. MIB and Fair Credit Reporting Notice (At bottom of Conditional Receipt)
. Triple M Form
- --------------------------------------------------------------------------------
See additional information on reverse side
Massachusetts Mutual Life Insurance Company and Subsidiaries
Springfield MA 01111-0001
<PAGE>
Notes On Using This Application Package
================================================================================
The Agent's Guide Pamphlet provides specific and detailed information for
completing the application.
. Please do not remove the stub at the top of this application. Any
pages which do not require completion may be removed from the
package.
. Change Application (A3010) is to be used for reinstatement.
. Fully complete the Agent's Statement to enable timely processing of
the application. Do not omit item 6 (Telephone Numbers).
. "Remarks" sections are included throughout the application if more
space is needed in answering questions.
Checklist
================================================================================
[_] For Prepaid Case:
[_] Give Conditional Receipt to client
[_] Complete the appropriate forms if using monies from another policy to
pay the initial premium.
[_] Give Client:
[_] MIB and Fair Credit Notice (on bottom of Conditional Receipt) if
evidence of insurability is required
[_] Buyer's Guide (if applicable)
[_] Complete Required Supplemental Forms:
[_] Aviation or Avocation (A3310 or A3320)
[_] Other Medical, New Business, or Service Related Supplements
[_] Conversion, Exchange, or Option Exercise:
[_] The Owner and Assignee of the original policy must sign in the
appropriate area
[_] Each Proposed Insured must sign if new insurance for either Insured is
being applied for
<PAGE>
APPLICATION (PART 1)
APPLICATION NO.
FOR: SURVIVORSHIP WHOLE LIFE
TO: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
SPRINGFIELD, MASSACHUSETTS 01111
[_] New Life Insurance [_] Conversion of Term Insurance [_] New Policy Under
an IPR Option
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Client Data
- ----------------------------------------------------------------------------------------------------------------------------
<C> <S>
1. Proposed Insured 1 first name middle name
Name [_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_][_][_][_][_][_][_][_]
(hereinafter referred last name suffix
to as Insured 1) [_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_]
2. Current Address: street & no. city state zip (e.g. Jr., III)
__________________________________________________________________[_][_][_][_][_]-[_][_][_][_]
3. Prior Address: street & no. city state zip
(if within 5 years) __________________________________________________________________[_][_][_][_][_]-[_][_][_][_]
employer name
4. Business Address: ______________________________________________________________________________________________
street & no. city state zip
__________________________________________________________________[_][_][_][_][_]-[_][_][_][_]
mo. day yr.
5. Soc. Sec. No.: [_][_][_]-[_][_]-[_][_][_][_] 6. [_] Male [_] Female 7.Date of Birth: __________________
Type of Visa
8. Birthplace: ____________________________________ 9. Citizenship, if not USA: ________________ [_] Perm. [_] Temp.
- ----------------------------------------------------------------------------------------------------------------------------
10. Proposed Insured 2 first name middle name
Name [_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_][_][_][_][_][_][_][_]
(hereinafter referred last name suffix
to as Insured 2) [_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_]
11. Current Address: street & no. city state zip (e.g. Jr., III)
__________________________________________________________________[_][_][_][_][_]-[_][_][_][_]
12. Prior Address: street & no. city state zip
(if within 5 years) __________________________________________________________________[_][_][_][_][_]-[_][_][_][_]
employer name
13. Business Address: ______________________________________________________________________________________________
(if different from street & no. city state zip
Insured 1) __________________________________________________________________[_][_][_][_][_]-[_][_][_][_]
mo. day yr.
14. Soc. Sec. No.: [_][_][_]-[_][_]-[_][_][_][_] 15. [_] Male [_] Female 16. Date of Birth: __________________
Type of Visa
17. Birthplace: ____________________________________ 18. Citizenship, if not USA: ________________ [_] Perm. [_] Temp.
- ----------------------------------------------------------------------------------------------------------------------------
19. Applicant: _____________________________________________________________________________________________________________
(if other than either insured) (relationship to Insured 1) (relationship to Insured 2)
- ----------------------------------------------------------------------------------------------------------------------------
Plan Data
- ----------------------------------------------------------------------------------------------------------------------------
20. Plan: [_] SWL [_]__________________________________ 23. Dividend Option:
21. Amount of Insurance: (a or b) (If SWL Term applied for, dividends will be applied to
(a) Face Amount: $______________________________ buy Suppl. Insurance.)
(b) Face amount purchased by a premium of [_] Paid-Up Additions [_] Accumulate at Interest
$_______ at premium frequency elected. [_] Reduce Premiums [_] Cash
[_] This premium includes all riders. [_] _________________
22. Riders: 24. Automatic Premium Loan: [_] Yes [_] No
[_] Waiver of Premium [_] Insured 1 [_] Insured 2 25. Loan Interest Rate(where elective):
[_] Suppl. Ins. Purch. (SWL Term) $ _________________ [_] Adjustable [_] 8% [_]____%
[_] _________________________________________________ 26. Age for Issue of Policy_________ for: [_] Insured 1
(to save age only) [_] Insured 2
27. Policy Date: (optional)_______________________________
- ----------------------------------------------------------------------------------------------------------------------------
28. Remarks
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPLICATION NO. Page 2
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <S>
29. (a) Will the insurance now being applied for replace or change, or is it intended to replace or change, any insurance or
annuity, in whole or in part, issued by this or any other company?
Insured 1: [_] Yes [_] No If "Yes", give company name, amount of life insurance,
Insured 2: [_] Yes [_] No policy number and plan in 32.
(b) Are all or part of the surrender proceeds of any policy listed in 32 being used to purchase the applied for policy?
Insured 1: [_] Yes [_] No
Insured 2: [_] Yes [_] No
30. Amount of Insurance currently applied for, or now in force, on either Insured in other Companies. If none, check here: [_]
Insd.
1 or 2 Company Name Amt. of Life Ins. Amt. of ADB Waiver Year(s) Issued or Curr. App.
- ------------------------------------------------------------------------------------------------------------------------------------
_________________________$___________________$___________________[_] Yes___[_] No ___________________________[_]__________
_________________________$___________________$___________________[_] Yes___[_] No ___________________________[_]__________
_________________________$___________________$___________________[_] Yes___[_] No ___________________________[_]__________
_________________________$___________________$___________________[_] Yes___[_] No ___________________________[_]__________
31. What is the total amount of insurance to be placed in all companies? Insured 1$ _______________________________
Insured 2$ _______________________________
32. Remarks
______________________________________________________________________________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
Owner and Beneficiary Data
- -----------------------------------------------------------------------------------------------------------------------------------
33. Insured assumed to have died first if simultaneous deaths occur: [_] Insured 1 [_] Insured 2
34. Owner:
(a) [_] The Insureds, jointly, or the survivor of them.
(b) [_] Insured No. ___________, if living, otherwise Insured No. _______ , if living.
(c) [_] Trustee, ____________________________________________________________________________________under the Trust Agreement
dated: ___________________________(Copy of signed Trust Agreement required).
(d) [_] Other: ________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
(Print full name and relationship to Insureds)
If all Owners are dead and an Insured is living, the Owner shall be the estate of the last Owner to die, unless otherwise
requested.
35. Owner's (if other than an Insured) Soc. Sec. No. or Taxpayer ID No.:___________________________________________________________
36. Owner's (if other than an Insured) Address:
street & no. city state zip
__________________________________________________________________________________________________________|_|_|_|_|_|-|_|_|_|_|
37. Beneficiary:
(a) [_] Estate of Insured who dies last
(b) [_] See Memo attached
(c) [_] Trustee, __________________________________________________under the Trust Agreement dated: ___________________________
(d) [_] Other: ________________________________________________________________________________________________________________
________________________________________________________________________________________________________________
(Print full name and relationship to Insureds)
Payment shall be made in one sum, unless otherwise requested.
If two or more persons are the beneficiaries in any class, payment shall be made to them equally or to the survivor(s), unless
otherwise requested.
If there is no beneficiary entitled to payment when both the Insureds die and one of the Insureds was the last Owner, payment
shall be made to the estate of the Owner. But if an Insured is not the Owner, payment shall be made to the Owner.
- ----------------------------------------------------------------------------------------------------------------------------------
Payment Data
- ----------------------------------------------------------------------------------------------------------------------------------
38. Who will pay the premiums on this insurance?
[_] Insured 1 [_] Insured 2 [_] Owner [_] Other____________________________________________
39. Premium and Other Notices are to be sent to:
[_] Insured 1: [_] Home [_] Business [_] Owner
[_] Insured 2: [_] Home [_] Business [_] Other If "Other," print name and address below.
40. Premium Payments:
[_] Annual [_] Semiannual [_] Quarterly [_] Triple M [_] Government Allotment
[_] Invoice at ________________ frequency [_] One month with balance of: [_] Annual [_] Semiannual [_] Quarterly
41. Has the first premium been paid? [_] Yes If "Yes," amount paid is: $_________________________ [_] No
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPLICATION NO. Page 3
- --------------------------------------------------------------------------------
Conversion and Option Data
- --------------------------------------------------------------------------------
Conversion
- --------------------------------------------------------------------------------
42. (a) Conversion of [_] Insured 1 under policy number(s)___________________
term insurance: [_] Insured 2 under policy number(s)___________________
Date of New Policy:(required) _______________.
[_] Not all of the term insurance is to be converted; identify the portion
to be converted: Any balance not converted:
<TABLE>
<CAPTION>
Policy No. If term rider(s), give name(s) of rider(s) Amount Terminate Continue (within Co. limits)
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
$ [_] [_]
Insured 1 ---------------------------------------------------------------------------------------------------------------------
$ [_] [_]
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
$ [_] [_]
Insured 2 ---------------------------------------------------------------------------------------------------------------------
$ [_] [_]
---------------------------------------------------------------------------------------------------------------------
</TABLE>
Any applied for amounts not being converted on either life and any riders
which do not carry over automatically, require evidence of insurability.
(b) If the Term Insurance provides that Waiver of Premium is to be
included in the new policy, the rider will be automatically included
unless otherwise requested here: [_] Do not include Waiver of
Premium.
(c) [_] The Face Amount applied for in 21 is greater than the amount
available for the conversion from the policy(ies) given above in
(a). This additional amount is: $_______________ (requires evidence
of insurability).
Note: Signatures - unless the entire amount applied for represents
conversion for both insureds, they must sign as "Proposed
Insured 1" and "Proposed Insured 2". Signatures of the owner
and assignee are required also.
- --------------------------------------------------------------------------------
Insurability Protection Option
- --------------------------------------------------------------------------------
43. (a) Option [_] Insured 1 under policy no(s).__________________________
[_] Insured 2 under policy no(s).__________________________
Any applied for amounts on either life not the result of exercising an
option, and any riders which do not carry over automatically, require
evidence of insurability.
(b) Insured 1 [_] Regular Option Date
[_] Substitute Option Date for: [_] marriage
[_] birth of child(ren)
[_] adoption of child(ren)
Date of applicable event:________________________
Insured 2 [_] Regular Option Date
[_] Substitute Option Date for: [_] marriage
[_] birth of child(ren)
[_] adoption of child(ren)
Date of applicable event:________________________
(c) [_]Rider(s) is being applied for which was not in the original policy on
the life of: [_] Insured 1 [_] Insured 2
(d) [_]The Face Amount applied for in 21 is greater than the amount
available under the option from the policy(ies) given above in (a). This
additional amount is: $____________ (requires evidence of insurability).
(e) [_]Insured 1-Two options are being combined. The amount being exercised
from each is: policy no. ____$____
[_] One is a Substitute Option for policy no.______ policy no. ____$____
[_]Insured 2-Two options are being combined. The amount being exercised
from each is: policy no. ____$____
[_] One is a Substitute Option for policy no.______ policy no. ____$____
- --------------------------------------------------------------------------------
Personal Data Regarding the Insureds
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Insured 1 Insured 2
44. Has he/she smoked cigarettes in the past 12 months? [_]Yes [_]No [_]Yes [_]No
</TABLE>
- --------------------------------------------------------------------------------
Complete the following only if Evidence of Insurability is required.
Explain "Yes" answers in 51 on the next page.
- --------------------------------------------------------------------------------
45. (a)What are the Occupations and Exact Duties of each of the Insureds?
Occupation(s) Exact Duties
Insured 1
......................................................................
Insured 2
<TABLE>
<S> <C> <C> <C> <C>
(b)Is he/she self-employed? [_]Yes [_]No [_]Yes [_]No
46. During the last 5 years, has he/she had any occupation(s) other than the one(s) given above? [_]Yes [_]No [_]Yes [_]No
47. Does he/she now contemplate any foreign travel or change of occupation? [_]Yes [_]No [_]Yes [_]No
48. Within the last 3 years has he/she been, or does he/she now expect to become, a pilot,
student pilot or crew member of any type of aircraft? If "Yes," complete Aviation Supplement A3310.[_]Yes [_]No [_]Yes [_]No
49. Within the last 3 years has he/she taken part in, or does he/she now expect to take part in,
underwater diving, hang gliding, para sailing, para kiting, parachuting, skydiving, mountain
climbing or organized racing by automobile, motorcycle, motorboat or snowmobile? [_]Yes [_]No [_]Yes [_]No
If "Yes," complete Avocation Supplement A3320.
50. Within the last 2 years has he/she been in a motor vehicle accident, been convicted
of a moving violation or received a driver's license restriction or revocation? [_]Yes [_]No [_]Yes [_]No
If "Yes," give details and driver's license no. in 51.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPLICATION NO. Page 4
- --------------------------------------------------------------------------------
51.Remarks
- --------------------------------------------------------------------------------
Agreement and Signatures
- --------------------------------------------------------------------------------
The persons signing below agree that:
- --------------------------------------------------------------------------------
The Application - This is Part 1 of an application for Life Insurance. The
application also includes any Part 2 that may be required and any amendments or
supplements to either Part. To the best of the knowledge and belief of the
persons signing below, all statements in this Part 1 are complete and true and
were correctly recorded. Each person signing below adopts all of the statements
made in the application and agrees to be bound by them.
- --------------------------------------------------------------------------------
Liability of Company - The insurance applied for will not take effect unless
each of the applicable conditions is met:
1. For all cases - The first premium has been paid during the lifetime of all
-------------
persons to be insured by the policy and the application has been approved
by the Company at its Home Office.
2. For insurance purchased on an Option Date under an insurability protection
-----------------------------------------
rider or agreement, the first premium must be paid within 60 days prior to,
or on, the Option Date. If the applicable conditions are met, the insurance
purchased under such rider or agreement becomes effective on that Option
Date.
3. For conversion, the policy which provides the insurance being converted
--------------
must be received by the Company at its Home Office. The first premium may
be reduced by any conversion allowances permitted. If the applicable
conditions are met, the insurance purchased under a conversion becomes
effective on the Issue Date of the policy applied for.
4. For insurance not provided for in (2) or (3) above: The first premium may
--------------------------------------------------
be paid to the agent in exchange for a Conditional Receipt signed by that
agent. If this is done, the Company shall be liable only as set forth in
that Receipt. If not, (i) the policy must be delivered to the person named
as Owner therein; and (ii) at the time of payment and delivery, all
statements in the application which relate to the insurability of the
Insured are complete and true as though they were made at that time.
- --------------------------------------------------------------------------------
Authority of Agents - No agent can change the terms of this application or any
policy issued by the Company. No agent can waive any of the Company's rights or
requirements, or extend the time for any payment.
- --------------------------------------------------------------------------------
Changes and Corrections - Any change or correction of the application will be
shown on an Amendment of Application attached to the policy. Acceptance of any
policy issued shall be acceptance of any change or correction of the application
made by the Company. However, any correction or change of amount,
classification, plan of insurance or riders, must be agreed to in writing.
- --------------------------------------------------------------------------------
Taxpayer Identification - The Owner of the policy applied for herein certifies,
under penalties of perjury, that: (i) the number referred to in 5, 14 or 35 of
this application is his/her correct Taxpayer Identification Number (or he/she is
waiting for a number to be issued); and (ii) he/she is not subject to backup
withholding either because he/she has not been notified by the Internal Revenue
Service (IRS) that he/she is subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified him/her
that he/she is no longer subject to backup withholding. If the IRS has notified
said Owner that he/she is subject to backup withholding and he/she has not
received notice from the IRS that backup withholding has terminated, he/she
should strike out the language above in (ii) that he/she is not subject to
backup withholding due to notified payee underreporting.
- --------------------------------------------------------------------------------
Authorization To Obtain And Disclose Information (For Each Insured And/Or
Applicant) - I have received the Notice about the Medical Information Bureau,
Inc. (MIB). I have also received the Notice about the Fair Credit Reporting Act.
I understand and authorize an investigative report to be made. This report may
include information about my character, general reputation, personal
characteristics and mode of living. I hereby authorize certain parties that have
any records or knowledge of me and my health to make such information available
to the Company or its reinsurers. These parties include: any licensed physician,
medical practitioner, hospital, clinic, other medical or medically related
facility, insurance company, the MIB, or other organization.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Proposed Insured 1
New Insurance/Options: Signed at on
-------------------------------- ---------------------- ------------
(Proposed Insured) city state date
Conversion/Options: Signed at on
-------------------------------- ---------------------- ------------
(Owner of Original Policy) city state date
Conversion/Options: --------------------------------
(Assignee of Original Policy)
- ----------------------------------------------------------------------------------------------------------------------------
Proposed Insured 2
New Insurance/Options: Signed at on
-------------------------------- ---------------------- ------------
(Proposed Insured) city state date
Conversion/Options: Signed at on
-------------------------------- ---------------------- ------------
(Owner of Original Policy) city state date
Conversion/Options: --------------------------------
(Assignee of Original Policy)
- ----------------------------------------------------------------------------------------------------------------------------
All Cases:
-------------------------------- ---------------------------------------
Applicant (as given in 19) Owner (if other than a Proposed Insured)
- ----------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------- ----------------------------------------------------------
General Agent Submitting Application Signature of Agent who actually solicited this application
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
and Affiliated Insurance Companies
CONDITIONAL RECEIPT INFORMATION
- --------------------------------------------------------------------------------
Amount Rec'd
------------
Yes No
[_] [_] Life $ _____________
[_] [_] Disability Income $ _____________
[_] [_] Bus. Overhead Expense $ _____________
[_] [_] Annuity with Waiver $ _____________
Total Payment $ _____________
I have received and read (or had read to me) the Conditional Receipt, detached
from this form, for the amount(s) indicated to the left. The agent has reviewed
the receipt with me. I understand and agree to its terms and conditions.
- ----------------------------------------- ----------------
signature of premium payer date
R3600-8900 (Company Part)
- --------------------------------------------------------------------------------
CONDITIONAL RECEIPT
Amount Rec'd
------------
Yes No
[_] [_] Life $ _____________
[_] [_] Disability Income $ _____________
[_] [_] Bus. Overhead Expense $ _____________
[_] [_] Annuity with Waiver $ _____________
Total Payment $ _____________
Life Insurance Company
- ----------------------
Variable Life Plus -- MML Bay State Life Insurance Company
Other Life Policies
Disability Income
Bus. Overhead Expense Massachusetts Mutual Life Insurance Company
Annuity with Waiver
Total payment received by ______________________________ for insurance on
agent signature
_______________________________________
person(s) proposed for insurance (print)
Signed at ________________________________________________________________
city state
______________________________
date
In this receipt "we" and "our" refer to the life insurance company indicated
above.
IMPORTANT: THIS RECEIPT DOES NOT CREATE ANY TEMPORARY OR INTERIM INSURANCE. IT
SETS THE DATE WHEN THE INSURANCE UNDER THE POLICY (OR REINSTATEMENT) APPLIED FOR
WILL BECOME EFFECTIVE IF ALL REQUIRED CONDITIONS ARE MET.
BEFORE ANY INSURANCE BECOMES EFFECTIVE, ALL OF THE FOLLOWING CONDITIONS MUST BE
MET:
1.All required parts of the application and all medical examinations and tests
we require are completed within 60 days of the date of this receipt.
2.Each person proposed for insurance is an acceptable risk under our limits,
rules and standards for the basic policy plan and amount of insurance
applied for (or to be reinstated) and for any rider or agreement applied for
(or to be reinstated).
3.The payment made is the correct first premium (or cost to reinstate) for the
insurance on the basis applied for, including any extra premium required for
a substandard risk.
4.On the date of this receipt, all answers and statements in any part of the
application having an earlier date are complete and true as though given on
the date of this receipt.
If any of these conditions is not met, the insurance shall not become
effective. Then, this receipt will terminate and our only liability will be to
return the payment made.
R3600-8900 (Premium Payer Part) (Continued on Reverse Side)
- --------------------------------------------------------------------------------
Notice To Insured And/Or Applicant For Insurance
Thank you for applying for insurance with us. We will give your application
prompt consideration and will notify you of our action as soon as possible.
In addition to your answers on the application, we must also consider
information from other sources. These sources may include results of a physical
examination, an investigative consumer report, and reports from doctors who have
attended you or from hospitals where you have been treated.
MEDICAL INFORMATION BUREAU NOTICE - Information regarding your insurability will
be treated as confidential. We or our reinsurers may, however, make a brief
report thereon to the Medical Information Bureau, Inc., a non-profit membership
organization of life insurance companies, which operates an information exchange
on behalf of its members. If you apply to another Bureau member company for life
or health insurance coverage, or a claim for benefits is submitted to such a
company, the Bureau, upon request, will supply that company with the information
it may have in its files.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. Unless the Medical Director feels that it
is in your best interest to disclose this information to your physician, it will
be disclosed directly to you. If you question the accuracy of information in the
Bureau's file, you may contact the Bureau and seek a correction in accordance
with the procedures set forth in the federal Fair Credit Reporting Act. The
address of the Bureau's information office is Post Office Box 105, Essex
Station, Boston, Massachusetts 02112, telephone number (617) 426-3660. We or our
reinsurers may also release information in our file to other life insurance
companies to whom you may apply for life or health insurance, or to whom a claim
for benefits may be submitted.
N148-9000 (Continued on Reverse Side)
- --------------------------------------------------------------------------------
<PAGE>
The purpose of the Bureau is to protect its member companies and their
policyholders from the costs created by people who try to hide facts about their
insurability. Information furnished by the Bureau cannot be used as a basis for
evaluating risks. However, it may be used to alert us to the possible need for
further investigation. THE BUREAU DOES NOT HAVE MEDICAL REPORTS FROM HOSPITALS
AND DOCTORS. THE INFORMATION IN ITS FILES DOES NOT SHOW WHETHER AN INSURANCE
APPLICATION WAS ACCEPTED, PLACED IN AN INCREASED PREMIUM CLASS OR DECLINED.
(This Notice is only valid where permitted by law.)
FAIR CREDIT REPORTING ACT NOTICE - As previously noted, an investigative
consumer report may be made on you. It will cover information about your
insurability, including information regarding your character, general
reputation, personal characteristics and mode of living. The information may be
obtained through personal interviews with you, an adult family member, friends,
neighbors and associates. You may send us a written request for a complete and
accurate disclosure of the nature and scope of any report that is made.
If requested, we will be happy to let you know whether or not we asked for an
investigative consumer report to be made. If we did, we will also tell you the
name and address of the consumer reporting agency that furnished the report. By
contacting that agency, you may inspect and receive a copy of the report.
OUR PURPOSE - Part of our basic Company purpose is to provide insurance at the
lowest possible cost. The underwriting process is necessary both to assure this
low cost and to make sure that each policyholder contributes his or her fair
share of the cost. The procedures described above benefit you as a policyholder,
because they assist us in providing your insurance at the lowest possible cost.
N148-9000
- --------------------------------------------------------------------------------
DATE USED TO DETERMINE INSURABILITY
We will determine insurability of each person proposed for insurance as of the
latest of the dates of all required parts of the application,
initially-required tests and any initially-required medical examination (or
second medical examination if required because of age or amount of insurance).
WHEN THE INSURANCE WILL BECOME EFFECTIVE
If all the required conditions are met, then the insurance under the terms of
the policy (or reinstatement) applied for (subject to the limits contained in
this receipt) will become effective on the date used to determine insurability.
However, if a later Policy Date is requested in the application, the insurance
will become effective on that later date.
LIMITS OF OUR LIABILITY UNDER THIS RECEIPT (LIFE INSURANCE ONLY)
Our liability under this receipt, plus any other Conditional Receipts we have
outstanding on each person proposed for insurance, cannot exceed the limits
shown below.
Age* Limit Age* Limit
under 56 $500,000 66-70 $175,000
56-60 400,000 71-75 60,000
61-65 300,000 over 75 5,000
*Age means age, on birthday nearest date of Conditional
Receipt, of each person proposed for insurance. These limits include amounts
under any accidental death benefit agreement or rider applied for. If the amount
of insurance applied for exceeds these limits, our only liability for the excess
will be to return the amount paid for it.
AUTHORITY OF AGENT
No agent can change the terms of this receipt, or the application, or any
policy we issue. No agent can waive any conditions or extend the time
requirements to meet them.
R3600-8900 (Premium Payer Part)
- --------------------------------------------------------------------------------
Home Office Copy of Conditional Receipt Information
Return With Application
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
and Affiliated Insurance Companies, Springfield, Massachusetts 01111
TO: CLIENT SERVICES
TRIPLE M STATEMENT AND RULES OF PARTICIPATION
- --------------------------------------------------------------------------------
AGENCY AGENT DATE
------------------------------ ----------------------- -----------
Massachusetts Mutual Life Insurance Company ("MassMutual") and/or affiliated
insurance companies (the insurer issuing a listed policy or contract shall be
referred to as the "Company") of Springfield, Massachusetts is requested to
debit the account of the undersigned depositor in the bank named under the
Company's Triple M Plan (The Plan) for the purpose of making payments
(hereinafter "premiums") on the policies or contracts (hereinafter "policies")
shown below, and any policy issued by converting term coverage, or any policy by
exercising the IPA/IPR option, under the policies shown below, or any new
insurance issued when the depositor has elected the Plan in the application,
subject to the following conditions:
1. Premiums shall be payable monthly, and the Company shall not be required to
give notice of premiums becoming due. One debit shall be made each month for
the total of all premiums due during the month under the Plan. Any past-due
premiums will be drafted from your account on the next available draft date
regardless of the deposit day selected.
2. The policies may be removed from The Plan if any request for payment is not
honored upon second presentation; or by written notice of termination by the
Depositor or by the Company by providing the other party 30 days notice of
such termination.
Additional conditions for MassMutual policies:
3. For variable annuities, the payments shall not be less than $25.00.
4. Any election for the Automatic Premium Loan provisions shall be inoperative
while premiums are payable under The Plan.
5. For Life Insurance, Annuities, And 9000 Series And Later Disability Income
Insurance- The Reduction of Premium dividend option is not available while
premiums are payable under The Plan. If the option is Reduction of Premium at
the time The Plan is elected, the option will be changed to the automatic
dividend option provided in the policy.
In the event a policy is removed from The Plan for any reason, no change will
be made in the dividend option unless requested by the policyowner.
6. For Pre 9000 Series Disability Income Insurance - The Reduction of Premium
dividend option is available while premiums are payable under The Plan.
Please complete both the Triple M Form and Form P4052-8900 on the reverse
side to elect this option.
-------------------------------------------------- ----------------------
SIGNATURE OF DEPOSITOR DATE
IMPORTANT: A VOIDED BLANK CHECK OR PHOTOCOPY IS REQUIRED
- --------------------------------------------------------------------------------
POLICY NUMBERS TO BE ADDED TO TM
- --------------------------------------------------------------------------------
(POLICY NUMBERS) (ON THE LIFE OF)
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
- -------------------------------------- --------------------------------------
- --------------------------------------------------------------------------------
REQUEST BANK
CHANGE EFFECTIVE
- --------------------------------------------------------------------------------
PROVIDE ONE POLICY NO.
ON EXISTING ACCOUNT IF ALL
POLICIES ARE TO BE CHANGED
--------------------------------------
--------------------------------------
DEPOSIT DAY
(REQUEST DEBIT BE MADE ON)
[_] 5th [_] 20th
- -----------------------------------
SEND
VOID BANK
NEW TM ACCT. (TMNA) CHECK AUTH
- -------------------
[_] NEW POLICY X X
- -----------------------------------
[_] EXISTING POLICY X X
- -----------------------------------
ACCT. CHANGE (TMAC)
- -------------------
[_] BANK CHANGE X X
- -----------------------------------
[_] CHECKING ACCT NO.
- -----------------------------------
[_] DEPOSITOR NAME X
- -----------------------------------
[_] DEPOSITOR ADDRESS
- -----------------------------------
[_] REPAY (THE ABOVE
CHANGE ALSO
AFFECTS) -
MassMutual ONLY
- -----------------------------------
POLICY ADDITION TO
EXISTING ACCT. (TMPA)
- ---------------------
[_] NEW POLICY
- -----------------------------------
[_] EXISTING POLICY
- -----------------------------------
- --------------------------------------------------------------------------------
TRIPLE M PLAN AUTHORIZATION
MASSACHUSETTS MUTUAL LIFE INS. CO. AND AFFILIATED INSURANCE COMPANIES
NAME AGENCY
-------------------------------------------------- -------------------
(print your name as it appears on bank records)
POLICY NO. (ONE POLICY NUMBER FROM ACCOUNT)
-----------------------
Having reviewed the Rules of Participation and having obtained the consent of
each owner of any policy not owned by me (us), I (we) hereby authorize
Massachusetts Mutual Life Insurance Company ("MassMutual") and/or affiliated
insurance companies to draw checks or other instruments to its own order or to
direct by any means the transfer of funds to pay premiums on the policies I (we)
have designated. Such payments shall be made by debiting my (our) account at the
financial institution ("Financial Institution") set forth below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14
ACCOUNT NUMBER [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
</TABLE>
FINANCIAL INSTITUTION:
NAME
------------------------------------------------------------------------
ADDRESS
---------------------------------------------------------------------
CITY/STATE/ZIP
--------------------------------------------------------------
I (we) further authorize Financial Institution to pay and charge to my account
any checks or instruments, or any fund transfers, drawn or directed to
MassMutual and/or affiliated insurance companies to its own order. Until
Financial Institution receives my (our) written cancellation of this
authorization, it shall be fully protected when it honors any of those orders.
Financial Institution's treatment and its rights regarding those orders shall be
the same as if I (we) signed or initiated them. If any of those orders are not
honored, for cause or not, Financial Institution shall have no liability, even
if insurance is forfeited as a result.
SIGNATURE OF DEPOSITOR AS DATE
IT APPEARS ON FINANCIAL -------------------------------- ---------------
INSTITUTION'S RECORD DATE
-------------------------------- ---------------
Company Indemnification Agreement shown on reverse side.
R905-9300
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
INDEMNIFICATION AGREEMENT
The following resolution has been authorized by the Boards of Directors of the
insurers listed below. The term "we" refers to the insurer to which payment has
been made.
To: The Financial Organization named on the reverse side of this form.
(1) We will indemnify and hold you harmless from any liability to a person
who has an account with you, because you honored a check or other
instrument, or a fund transfer we drew or directed to our order on
that person's account. Similarly, we will assume any liability you may
have to that person, or to the owner or beneficiary of a policy issued
by the insurance company, if you do not honor such an order when there
are sufficient funds in the account to pay the order when it is
presented.
(2) We will refund to you any amount you have paid to us in error upon
receipt of a claim which you may submit at any time up to twelve
months after the date of that payment.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
MML BAY STATE LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 99.(11)
Purchase, Redemption and Transfer Procedures and Method
of Computing Adjustments on Payments and Account Value
Massachusetts Mutual Life Insurance Company &
C.M. Life Insurance Company
This document sets forth, as required by Rule 6e-3 (T) (b) (12) (ii) adopted
pursuant to the Investment Company Act of 1940, as amended, the administrative
procedures that will be followed by Massachusetts Mutual Life Insurance Company
("MassMutual") and C.M. Life Insurance Company ("CML") (collectively and
individually MassMutual and CML are referred to as the "Company") in connection
with the issuance of the Survivorship Variable Universal Life Policy described
in this Registration Statement ("SVUL" or the "Policy"), the transfer of assets
held thereunder, and the redemption by Policyowners of their interests in the
Policy. Set forth below is a summary of the principal Policy provisions and
administrative procedures which might be deemed to constitute, either directly
or indirectly, purchase, transfer or redemption transactions. The summary shows
that, because of the insurance nature of the Policy, the procedures involved
necessarily differ in certain significant respects from the purchase procedures
for mutual funds and other contractual plans.
A. Availability and Underwriting--Upon receipt of a completed application, the
Company will follow certain insurance underwriting (i.e., evaluation of risks)
procedures designed to determine whether the applicant is insurable. This
process may involve verification procedures, such as medical examinations, and
may require that further information be provided by the proposed Insured before
an underwriting determination can be made. The rating classifications assigned
will impact the mortality and risk charges assessed against a Policy. The
minimum Face Amount is $500,000.
B. Death Benefit--SVUL insures two lives and pays a death benefit at the second
death. As long as the Policy remains in force, the Company will pay a Death
Benefit to the named Beneficiary(ies) in accordance with the designated
settlement option, generally within seven days after the Company receives due
proof of death of the second Insured to die and verifies the validity of the
claim. Payment of Death Benefits may, however, be postponed under certain
circumstances. Additionally, during the first two Policy Years, during the
first two years after an increase in Selected Face Amount, and in any other
circumstances in which the Company may have a basis for contesting the claim,
there can be a delay beyond the seven day period. 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.
We will investigate most death claims arising within the two-year contestable
period. Upon receiving the information from a completed investigation, we will
generally make a determination within five days as to whether the claim should
be authorized for payment. Payments will be made promptly after authorization.
The amount of the death benefit is determined as of the date of the insured's
death. The Company pays interest from the date of the insured's death at the
Option D rate or, if greater, at a state mandated rate.
<PAGE>
SVUL provides a choice of three death benefit options:
1. Under Death Benefit Option 1 ("DBO 1") the death benefit is the greater of:
(a) The Face Amount ("FA") in effect on the date of the second death; and (b)
The Minimum Death Benefit in effect on the date of the second death.
2. Under Death Benefit 2 ("DBO 2"), the death benefit is the greater of: (a)
The FA in effect on the date of the second death plus the account value on that
date; and (b) The Minimum Death Benefit in effect on the date of the second
death.
3. Under Death Benefit Option 3 ("DBO 3"), the death benefit is the greater of:
(a) The FA in effect on the date of the second death plus the sum of all
premiums paid (and not refunded) to that date; and (b) The Minimum Death Benefit
in effect on the date of the second death.
4. The Minimum Death Benefit is equal to the account value multiplied by the
Death Benefit Factor for the younger insured's attained age. The Death Benefit
Factor depends on the IRC 7702 test chosen at issue by the Owner (Cash Value or
Guideline Premium test). Refer to Section II for the formulas to calculate
these factors.
5. The Death Benefit, as determined earlier, is adjusted as follows: (a) We
deduct any policy debt outstanding on the date of the second death (including
any accrued loan interest); (b) We deduct any unpaid premium amount needed to
avoid termination during the policy grace period to the date of the second
death.
6. Over Age 99 of Younger Insured--The policy provides coverage for as long as
it remains in force. The policy does not provide for an endowment in any year
except where a state requires a maturity date. While the policy is in force, we
will maintain all policy features (i.e. we will accept premium payments, take
monthly deductions, honor all policy provisions, etc.). All rates applicable at
attained age 99 will apply for attained ages 99+.
7. Interest on Death Benefit--We will add interest from the date of the second
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. We currently use 3%.
8. Changes in DBO--After the first policy year, the Owner may change the death
benefit option of his/her policy, upon written request, while both insureds are
living and the older insured is younger than attained age 86. A DBO change will
be effective on the Monthly Charge Date ("MCD") which is on, or precedes, the
date we approve the change, unless a later date is requested. A change in the
DBO may follow one or more increases in the FA of the policy. In this case, the
change will increase (decrease) the most recent increase(s) if the FA increases
(decreases). No change in DBO will be allowed if the FA after the change would
be less than $500,000. If the DBO is changed, we will send the Owner any
revised or additional Policy Specifications for attachment to the policy.
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C. Increases in Face Amounts ("FA")
1. While both insureds are living, the FA may be increased by written
request. Any increases in FA is subject to the following conditions: (a)
Submission of a written application for increase; (b) Satisfactory evidence
of insurability must be provided for both insureds; (c) No increase may be
made 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; (d) The minimum amount of any increase is $50,000.
2. A FA increase is effective on the MCD that is on, or precedes, the date
we approve the application. A FA increase is accomplished by issuing an
additional insurance coverage segment. Each such segment has distinct issue
ages, risk classes, target premiums, monthly charges, premium expense
charges, surrender charges and commissions. The insuring ages for the
increase segment are determined as of the policy anniversary on or just
preceding the MCD on which the increase becomes effective. It is possible
for risk classes of prior segments to change in order to match the risk
class of the new segment. This will happen only if the underwriter indicates
that it should. The general rule is that if the new segment has a risk class
worse than prior segments, then the prior segments will not change.
Conversely, if the new segment has a risk class better than prior segments,
then the prior segments will change. The monthly charges that apply to each
elected FA increase are the FA charge and the insurance charge. The
administrative charge applies once to the policy as a whole. The premium
expense charge also applies to each elected FA increase. The charges
associated with the increase will be deducted from the account value
beginning on the effective date of the increase.
3. Premium payments received once an increase becomes effective will be
allocated to each segment of the FA. The premium allocation will be made on
a pro rata basis using the expense premium for each segment. If the net
surrender value is insufficient to continue the changed policy in force for
three months at the new monthly charges, we may require a payment sufficient
to increase the net surrender value to such amount. The contestable and
suicide periods begin again on the date of the FA increase for the increase
in FA. If the FA is changed, we will send the Owner any revised or
additional Policy Specifications for attachment to the policy.
D. Decreases in FA
1. After the first policy year, the FA may be decreased by the Owner's
written request while either insured is living. No decrease is permitted
within one year following the effective date of any increase. Any decrease
will be effective on the MCD that is on, or precedes, the date we receive
the written request. The FA remaining after any decrease (both elected and
non-elected) must be at least $500,000.
2. Elected decreases in FA (i.e., decreases resulting from other than a
withdrawal or a change in the DBO) are taken on a last-in-first-out basis.
In other words, the decrease is taken from the most recent increase. For a
discussion of surrender charges as to elected decreases in FA, see K(3)
herein. Any canceled segments remain active in the administrative system
with a zero FA.
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3. Non-elected decreases in FA (i.e., decreases resulting from a withdrawal
or a change in the DBO) are accompanied by canceling previously issued
segments on a last-in-first-out basis. No surrender charge is assessed when
the FA is reduced as the result of a non-elected decrease. If the FA is
changed, we will send the Owner any revised or additional Policy
Specifications for attachment to the policy.
E. Death by Suicide--If either insured commits suicide within 2 years after the
issue date of the policy and while the policy is in force, the policy will
terminate. In this case, we will refund the amount of premiums paid for the
policy, less any amounts withdrawn and less any policy debt. If either insured
commits suicide within 2 years after the policy is reinstated and while the
policy is in force, the policy will terminate. In this case, we will refund any
amount paid to reinstate the policy and any premiums paid thereafter, less any
amounts withdrawn and less any policy debt. If either insured commits suicide
within 2 years after the effective date of any increase in the FA, 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.
F. Contestability--The Company cannot contest the Policy with respect to any
material misrepresentation in the application regarding the insurability of
insured 1, once the policy has been in force during the lifetime of insured
number 1 for 2 years after its issue date; or with respect to any material
misrepresentation in the application regarding the insurability of insured
number 2, once the policy has been in force during the lifetime of insured
number 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 the policy, our right to contest the validity of the 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. If the date of birth
or gender of either insured as given in the application is not correct, the FA
will be adjusted. The administrative system will initially handle misstatements
as follows. If the misstatement is discovered after the second death, the
adjustment will reflect the amount provided by the most recent monthly insurance
charges using the correct ages and genders. If the misstatement is found before
the second death, the policy will be reissued to reflect the correct ages and
genders. This reissue leads to gains and losses if any units of a SA need to be
sold. The Company reserves the right to not reissue the policy.
G. Premium Payments
1. Premium payments are flexible as to both timing and amount. Any amount
of premium may be paid at any time while either insured is living, subject
to the minimums and maximums stated below. If the premium payment effective
date is prior to the issue date of the policy, then the premium payment is
considered "cash with app" and it is placed in a general account fixed fund.
Interest is credited as of the date the premium payment is received at the
Administrative Office designated by the Company. Deductions will come out of
this fund if a
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MCD occurs before the premium is moved out of the fund. Money remains in this
fund until one day after the Register Date.
The amount refunded under the policy's "free-look" provision will vary by
contract state. The refund will generally be: (a) any premium (either gross or
net) paid for the policy, plus (b) interest credited to the policy under the
GPA, plus or minus (c) an amount that reflects the investment experience of the
investment divisions of the SA under the policy to the date the policy is
received by us. Each premium payment, less a premium expense charge, is added
to the account value and allocated to the investment funds as elected in the
application. The allocation of premiums must be specified as whole percentages.
After the policy is issued and during the free look period in a state that
requires the return of gross premiums paid, the cash with app will be placed in
a money market account for the number of free look days plus an additional six
days, then transferred to the GPA and divisions of the SA as elected in the
application. Deductions are taken from the money market account if a MCD occurs
before the money is moved out of the fund.
2. Except as noted above, initial net premiums are allocated to the GPA and the
Divisions as of the Register Date plus one, provided such funds and application
are in good order and are received on a given business day by the time the New
York Stock Exchange closes, normally 4:00 PM EST. If receipt is after such
time, the allocation will occur on the next business day following the Register
Date. "Good order" requires that Part 1 of the Application is completed, a
suitability review and approval has occurred, all licensing issues are resolved,
all owner and insured information is furnished, and all signatures are obtained.
Subsequent premium payments received in good order on a given business day by
the time the New York Stock Exchange closes, normally 4:00 PM EST, will be
processed on a "same day" basis. If receipt, however, is after such time, the
subsequent premium payment will be credited on the next business day. Allocation
instructions can be changed prospectively, but allocations must be in whole
percentage points.
3. Planned Premiums--The planned premium is the premium the Owner plans to pay.
It is chosen by the Owner at issue. The frequency of planned premiums for the
policy is as elected in the application. The frequency and amount of the
planned premium may be changed by written request. The Owner does not have to
pay the planned premium. Timely payment of the planned premium does not
guarantee that the policy will stay in force until both insureds have died.
4. Maximum Premium Payments in any Policy Year--For the Cash Value Test, the
maximum premium which may be paid during any policy year is the greatest of:
(1) The largest premium which will not increase the insurance risk; (2) $100
plus 2 times the annual target premium; and (3). The amount of premiums paid in
the preceding policy year. For the Guideline Premium Test, the maximum premium
which may be paid during any policy year is the lesser of the maximum premium
calculated for the Cash Value Test and the guideline premium limitation for the
Guideline Premium Test.
5. Minimum Premium Payments in any Policy Year--The initial premium paid must
be at least $20 or, if greater, the amount needed to prevent termination before
the next billing date. Each
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premium paid must be at least $20 or, if greater, the amount needed to
prevent termination. Refer to section on Lapse Logic for termination rules.
6. Secondary Guarantee Premiums--The policy offers a safety test in the
form of two no-lapse guarantees. Each has a corresponding Guarantee Period
and Guarantee Premium. The two Guarantee Periods are: (1) The earlier of 20
years or to age 90 of the younger insured, and (2) To age 100 of the younger
insured. The First Guaranteed Premium will be table driven, utilizing a
joint equal age. The Second Guaranteed Premium will be equal to the
Guideline Level Premium. The Guaranteed Premiums will vary by issue age,
gender, underwriting class and death benefit option.
7. Billing--The billed premium is equal to the planned premium. Premium
notices will be sent for the planned premium based on the amount and
frequency in effect. The frequency or amount of the planned premium may be
changed by written request. We will stop sending notices for the planned
premium upon receipt of the Owner's written request to do so. Available
premium frequencies and billing types are: (1) Regular - Annual, Semiannual,
and Quarterly; (2) Triple M - Monthly Check Service; and (3) Pension, Plan C
and Invoice - Annual, Semiannual, Quarterly and Monthly. If payment of the
planned premium exceeds the maximum premium limit, the planned premium (and,
hence, the billed premium) for the policy will be changed to the maximum
premium. Government Allotment and Federal Employee payment plans are not
available. Money-purchase is also not available. There is no frequency
loading, i.e., the modal planned premium is the annual amount divided by the
frequency factor (i.e., 2 for semiannual, 4 for quarterly, or 12 for
monthly).
8. Target Premiums--Each policy has an annual target premium. At any time,
a policy's target is equal to the sum of the target for each insurance
coverage segment in force on that date. For each segment, the target is the
segment's FA (in thousands) multiplied by the unit target at the issue age
for that segment. The target premium will be table driven, utilizing a joint
equal age. The target premium will vary by issue age, gender, underwriting
class and death benefit option. Unisex targets equal the male targets.
H Charges
1. Monthly Charges--The policy is assessed monthly charges based on current
rates. These may be changed periodically to reflect expectations for future
mortality, investment, persistency and expense results; however, the current
rates may not exceed the maximum guaranteed rates. Monthly charges will be
deducted from the account value on each MCD. Monthly charges will be taken
from the divisions of the SA and from the GPA in proportion to the values of
the policy in each of those divisions and in the GPA (excluding any
outstanding loans). Deductions will be made and values will be determined on
the Valuation Date that is on, or next follows, the latest of: (i) The
Register Date; (ii) The date the charges are due; and (iii) The date we
receive the amount of premium needed to prevent termination. SVUL has four
types of monthly charges:
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a. Administrative Charge - An Administrative Charge of $12 per policy will
be deducted monthly from the account value on each MDC during the first ten
policy years. A lower Administrative Charge of $6 per policy will be
deducted monthly from the account value on each MDC after the tenth policy
year. The Maximum Monthly Administrative Charge is $12 per policy.
b. Face Amount Charge - The Face Amount Charge is the FA multiplied by a
rate per $1,000. The charge resulting from the year 1-10 rate of $0.13 per
$1,000 will be deducted monthly from the account value on each MDC during
the first through tenth policy years. The charge resulting from the year 11+
rate of $0.00 per $1,000 will be deducted monthly from the account value on
each MDC after the tenth policy year. The Maximum Monthly Face Amount Charge
is $0.13 per $1,000 in policy years 1-10 and $0.00 per $1,000 in policy
years 11+. If the FA has been increased, the Face Amount Charge for each
month will be the sum of the charges determined separately for each segment
of the FA.
c. Insurance Charge - The Insurance Charge is the monthly insurance charge
rate per $1,000 of insurance risk multiplied by the insurance risk. There is
a separate monthly insurance charge rate per $1,000 of insurance risk for
each FA segment. The insurance risk is computed as of the date the charge is
due. If the insurance risk is increased due to the minimum death benefit,
the table that applies to the most recent increase requiring evidence of
insurability will be used for such increase.
d. Rider Charge - The monthly rider charge is the sum of the monthly
charges for any riders in effect on the MCD.
2. Premium Expense Charge--The policy is assessed a premium expense charge
based on current rates. These may be changed periodically to reflect
expectations for future mortality, investment, persistency and expense results;
however, the current rates may not exceed the maximum guaranteed rates. The
expense premium will be table driven, utilizing a joint equal age. The expense
premium will vary by issue age, gender and underwriting class.
The current and maximum premium expense charges are as follows:
Current Maximum
------- -------
Years 1-10 Up to expense premium 13% 13%
Above expense premium 3% 3%
Years 11+ Up to expense premium 3% 13%
Above expense premium 3% 3%
3. Surrender Charges--A surrender charge is imposed if the policy is
surrendered at any time before the 10th policy year. The first year surrender
charge will equal 100% of the target premium not to exceed a flat dollar amount
(somewhat less than $60) per thousand (a lower number, somewhat less than $50,
in NY). The surrender charge will grade down by 10% of the first year surrender
charge per year over 10 years. There will be a surrender charge calculated for
each FA segment. Each FA segment will have its own ten year surrender
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charge, the first year of which is based on the target premium for the attained
age at the time the additional FA segment is added. Elected decreases in FA
(i.e. decreases resulting from other than a withdrawal or a change in the DBO)
result in canceling previously issued segments. This is last-in-first-out
processing. Under such a decrease, a partial surrender charge is assessed and
deducted from the account value. It is equal to the surrender charge as of the
date of the decrease for that portion of any segment which is canceled under the
decrease. Whenever a partial surrender charge is assessed, the ongoing surrender
charges for each segment which is canceled (in full or in part) are reduced in
proportion to the amount of the reduction in FA for that segment. No surrender
charge is assessed when the FA is reduced as the result of a withdrawal or a
change in the DBO. If the partial surrender charge for a decrease is greater
than the account value of the policy, then the partial surrender charge for that
decrease is 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. If the full surrender charge
cannot be taken from one segment, it will be taken from prior segments. Any
segment that "goes away" as a result of a FA decrease remains active with zero
units and the surrender charge remains active on that segment. The surrender
charge on such a segment will only be recovered in the event of a full
surrender.
I. Separate Accounts (SA) Divisions--The cumulative limit on the number of
distinct SA divisions to which net premiums are allocated and transfers are made
is currently 16, with plans to increase this number in coming years. Accounting
for the allocation of the account value within the divisions of the SA is done
by holding units within each, much the same as under our variable annuities.
All charges and credits to that part of the account value which is allocated to
a division of the SA are made by selling or purchasing units in that division at
the current unit value.
J. Policy Values/Investment Funds--Date the date on which the first premium
payment for the policy is allocated to the SA or the GPA. It is the Valuation
Date that is on, or next follows, the later of: (1) The day after the issue
date; and (2) The day we receive the first premium for the policy.
1. Account Value--The account value is the sum of all premium payments
adjusted by periodic charges and credits and partial withdrawals. The policy
value is equal to the account value less any surrender charge. The policy's
net surrender value is equal to the policy value less any policy debt. The
policy's account value will be allocated among the various investment funds
available. Investment performance from each of the divisions of the SA is
reflected through the value of the units held in each division. Each unit
within a division has the same value. Unit values will be the same
regardless of which company issues the policy (C.M. Life or MassMutual).
Unit values are determined on each valuation date based on the investment
performance of the underlying funds, such as MML Series Investment Fund or
the Oppenheimer Variable Account Funds. Valuation Date is any date on which
the New York Stock Exchange is open for trading. The unit values will
reflect a mortality and expense risk charge (M&E). On an annual basis, the
"current" M&E is 0.25% for all policy years. It is guaranteed not to exceed
0.90%. The amount of any account value allocated to any division of the SA
is not guaranteed. This means the amount of this portion of the account
value may
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increase or decrease by any amount depending upon the investment performance
of the underlying investment fund.
2. Account Valuation--A policy's account value is equal to: (a) the sum of
all premiums paid less the premium expense charge; (b) less the monthly
charges, which consist of an administrative charge, a face amount charge, an
insurance charge and a rider charge; (c) less any withdrawals (including any
withdrawal fees); (d) less surrender charges assessed under an elected
decrease in FA; (e) plus any interest earned on the account value held in
the GPA; (f) plus or minus investment experience on the account value held
in the divisions of the SA. The items in the list above are not in
processing order. They appear here so one can see what additions and
deductions apply to the account value. The account value is allocated
between the GPA and each division of the SA and the value within each fund
is maintained separately. The account value for the policy is the sum of its
account value held in the GPA (fixed account value) and its account value
held in each division of the SA (variable account value).
3. GPA Value--The fixed account value is accounted for in dollars and
cents. Its value at any time is the sum of all charges and credits plus
earned interest. The decrease in the GPA resulting from a withdrawal is
equal to the dollar amount withdrawn from the GPA as specified in the
withdrawal request.
4. The Variable Account Value--Each division of the SA is accounted for
through holding units within each division. Charges and credits are
accomplished by increasing (purchasing) or decreasing (selling) the number
of units of each division held under the policy. Investment experience on
the variable account value is reflected through the change in the value of
each unit. Therefore, the policy's variable account value in any division is
the total number of units for that division held under the policy multiplied
by the value of each unit on the date of the valuation.
K. Guaranteed Principal Account (GPA)--Amounts allocated to this fund will be
invested within the Company's General Account. For MassMutual policies, these
funds will be part of the non-traditional segment of the MassMutual General
Account. For C.M. Life policies, these funds will be part of C.M. Life's
General Account. Amounts allocated to the GPA will be accounted for in dollars
and cents. Interest is earned and credited on a daily basis on the portion of
the account value which is allocated to the GPA, including any loaned values.
The portion of the account value equal to the loan balance earns interest at the
policy loan rate less a company declared charge for expenses and taxes
(currently 0.5% in the first 10 policy years and 0.25% thereafter, and
guaranteed not to exceed 2%), or, if greater, 3% per annum. The account value
allocated to the GPA in excess of any loan balance earns interest at a company
declared rate. This rate is guaranteed to be not less than 3% per annum. The
declared rate will be the portfolio earnings rate of the GPA less a spread. The
declared rate will reflect our expectations for future investment results,
profits and expenses. The rate will be declared monthly in advance. Once
declared for a calendar month, it cannot be changed.
L. Changes in Current Rates--Current rates are expected to be revised
periodically at the discretion of the company as follows:
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1. Insurance Charge Rates, monthly Policy Loan Expense Charge (PLEC),
Premium Expense Charge (PEC), Face Amount Charge (FAC), and Monthly
Administrative Charge (MAC) are (1) Revised annually; (2) Approved and
announced on or about November 1, and (3) Effective from the MCD on or next
following January 1 for all new issues and all in force policies.
2. Adjustable Policy Loan Rates--The same as ALR rate for Whole Life.
3. Interest is (1) Revised monthly; (2) Approved and announced 1 to 2 weeks
prior to the beginning of each calendar month; and, (3) Effective from the
first day of a month through the last day of that month or until the date of
an earlier special revision.
4. SA Unit Values--Are valued on each valuation date for each division.
Changes described above will affect only "current" rates, not guaranteed rates.
We reserve the right to change any non-guaranteed rate more frequently than
indicated above, but such changes are not anticipated.
M. Transfers--The transfer of account value between or among investment funds
is allowed without charge subject to the following restrictions: (1) Transfer
requests must be in writing, and (2) Only one transfer will be permitted from
the GPA in each policy year. Each such transfer may not exceed 25% of the
account value, less any policy debt, in the GPA at the time of transfer. There
is an extra contractual (by company practice; not in contract, but in the
prospectus) exception to this rule. We will allow a 100% transfer from the GPA
following three consecutive years of 25% transfers from the GPA, provided no
value has been transferred into the GPA and no premiums have been allocated to
the GPA during this period. The following types of transfers can be made: (1)
Transfers of values between the divisions of the SA. 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; (2)
Transfers of values from one or more divisions of the SA to the GPA. 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 GPA; (3) Transfers of
values from the GPA to one or more divisions of the SA. These transfers will be
made by applying all or part of the value in the GPA (excluding any outstanding
policy loans) to purchase accumulation units in one or more divisions of the SA.
There is currently no limit to the number of transfers in a policy year other
than from the GPA; however, we will reserve the right to limit transfers to not
more than one every 90 days, with one exception. There are no restrictions on a
transfer of all funds in the SA to the GPA. There is no minimum transfer amount
nor minimum value which must be maintained within an investment fund except as
noted earlier. Transfers must be in whole-number percentages or in dollar-and-
cent amounts. Transfers will be made as of the Valuation Date, provided the
request is received in good order. All transfers made on the Valuation Date
will be considered one transfer. Transfer requests received in good order for
transfers between divisions generally will be done on a "same day" basis.
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N. Withdrawals & Surrenders--After the first policy year, partial withdrawals
may be made by written request at any time the policy is in force and either
insured is living. The request for a withdrawal must state the account(s) from
which the withdrawal will be made. From any withdrawal from the SA, the request
must also state the division(s) from which the withdrawal will be made. A
withdrawal will be effective on the date we receive the written request in good
order. On the effective date of the withdrawal, the non-loaned account value is
reduced by the amount of the withdrawal. The withdrawal amount includes the
withdrawal fee. The maximum withdrawal fee is $25. There is no plan at this
time to charge less than the maximum. The withdrawal from the GPA will be made
by reducing the non-loaned account value in that account to provide the amount
of the withdrawal. A withdrawal from a division of the SA will be made by
selling a sufficient number of accumulation units to provide the amount of the
withdrawal. There is no surrender charge levied when a partial withdrawal is
taken. Full surrenders will generally be processed within fourteen days of
receipt of the written request in good order, and partial withdrawals within
seven days of receipt in good order of the written request./1/
The FA will be decreased by the amount of the withdrawal if: (a) DBO 1 or DBO 3
is in effect. FA decreases of this type are considered as "non-elected" and do
not cancel or reduce previously issued coverage segments for purposes of ongoing
targets or surrender charges, and (b) We have not received evidence of
insurability satisfactory to us. Under DBO 2, there is no reduction in the FA.
If a decrease follows one or more FA increases, the decrease is taken from the
most recent increase(s). The last-in-first-out rule applies. Withdrawals will
be subject to the following limits: (1) The minimum amount of a withdrawal
(including the withdrawal fee) is $100; (2) The maximum amount of a withdrawal
on any date is 75% of the net surrender value on that date; (3) The FA after a
withdrawal must not be less than $500,000; and (4) The withdrawal from each fund
cannot exceed the non-loaned account value allocated to that fund as of the date
of the withdrawal. If the FA is reduced due to a withdrawal, we will send the
Owner any revised or additional Policy Specifications for attachment to the
policy.
O. Policy Loans--After the first policy year, while either insured is living,
loans can be made at any time. The maximum amount which can be borrowed on any
date is: (1) 90% of the policy value (i.e., account value less surrender
charge), less (2) any outstanding policy debt (including accrued policy loan
interest).
1. All or part of any policy debt may be repaid at any time while the policy
is in force and either insured is living. Loan repayments will be credited
on the date we receive them. In the event that there are several loans
against a policy, the oldest loan is repaid first. A loan is attributed to
each division of the SA and to the GPA in proportion to the values of the
policy
- -----------------------------------
/1/ Payment from the Separate Account may be postponed whenever: (i) the New
York Stock Exchange is closed for other than for customary week-end and holiday
closings, or trading on the New York Stock Exchange is restricted as determined
by the SEC; (ii) the SEC by order permits postponement for the protection of
Policyowners; or (iii) an emergency exists, as determined by the SEC, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to determine the value of the Separate Account's net
assets. Payments from the portion of the Account Value held in the GPA may be
postponed for up to six months. Payments under the Policy of any amount paid to
the Company by check may be postponed until such time as the check has cleared
the Policyowner's bank.
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in each of those divisions and in the GPA (excluding any outstanding policy
loans) at the time of the loan. Any loan repayment received by us within 30
days of the policy anniversary date will be used first to pay off any loan
interest due and then applied to principal. Any loan repayment received by
us on a date other than within 30 days of the policy anniversary date will
be allocated first to the GPA until the Owner has repaid any loan amounts,
excluding loan interest (both outstanding and previously capitalized), that
originated from the GPA. In other words, only the original principal
borrowed from the GPA will be paid back to the GPA first. Any additional
loan repayments, including loan interest, will be allocated to the GPA and
the divisions of the SA according to the premium allocation factors then in
effect.
2. Loan repayments must be clearly identified as such; otherwise, they will
be considered premium payments. The amount equal to any outstanding policy
loans will be held in the GPA and will earn interest as described herein.
The above amounts are determined as of the effective date of the new loan.
Policy loan interest is charged in arrears at a rate determined by the
policy loan rate provision, which may be either (1) the variable policy loan
rate, or (2) the 5% fixed loan rate. The choice of loan rate provision will
be elective at the time of application, except in those states requiring the
fixed rate provision. Once elected, this choice cannot be changed. The
variable loan rate is an annual rate set by the company. 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 the
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 Corporate yield shown in Moody's
Corporate Bond Yield Averages, as published by Moody's Investors Service,
Inc. 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 GPA plus 1%.
3. 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.
Any policy loan, either elected or for capitalizing loan interest,
automatically will result in a transfer of part of the account value from
the divisions of the SA to the GPA. The amount transferred from each
division of the SA will be in proportion to the non-loaned value in each of
the funds as of the effective date of the loan. Any such transfer is made by
selling accumulation units in the division of the SA and applying the value
of those units to the GPA on the date the loan is made. Any interest added
to the loan will be treated as a new loan. However, no part of this new loan
will be treated as a loan from the GPA when it comes time to repaying the
loans taken against the GPA before loans taken against the SA. SVUL does not
provide automatic premium loans.
P. Riders--The following riders will be available: (a) Policy Split Option
Rider ("PSO"),and (b) Estate Protection Rider. The PSO allows the insureds,
while the SVUL policy is in force and both are living, to exchange their SVUL
policy for two policies, one on the life of each insured, without evidence of
insurability, in the event of divorce, business dissolution or certain changes
in
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estate tax law. The split must be 50%/50%. The date of exchange will be the
MCD that is on, or precedes, the later of the date we approve both applications
for exchange and the date we have received the first premiums due under both
policies. The SVUL policy will continue in force to, but not including, the
date of exchange. The FA and account value less policy loans and accrued loan
interest will be divided evenly between the two new policies. Any net surrender
value will be applied to reduce the premiums for the first year under the new
policies. For an exchange to a fixed premium policy, any net surrender value not
needed for this purpose will be paid in cash when the exchange is complete. The
cost of this rider is included in the monthly insurance charge rates, so there
will be no explicit charge for the rider except in New York. The Estate
Protection Rider may be attached at-issue to any SVUL policy at an extra charge.
After-issue attachments will not be allowed. This rider provides an additional
death benefit during the first four policy years if both insureds die during the
period.
Q. Lapse Logic--Policy debt (which includes accrued interest) may not equal or
exceed the policy value. If this limit is reached, the policy will terminate
after the following happens: (1) We mail written notice to the Owner. This
notice will state the amount needed to bring the policy debt back within the
limit; (2) 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.
During the first 3 policy years, if the account value less any outstanding debt
is not enough to cover the monthly charges due on a MCD and the safety test is
not met on that date, the policy may terminate without value. After the first 3
policy years, if the net surrender value is not enough to cover the monthly
charges due on a MCD and the safety test is not met on that date, the policy may
terminate without value. However, we allow a grace period for payment of the
amount of premium (not less than $20) needed to avoid termination. During the
first 3 policy years, if the account value cannot cover the monthly charges due
on a MCD 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 less any
policy debt. After the first 3 policy years, if the net surrender value cannot
cover the monthly charges due on a MCD but the safety test is 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.
Safety Test: The safety test can be met only during the First and Second
Guarantee Periods. Each Guarantee Period is paired with a Guarantee Premium.
The First Guarantee Period is the earlier of 20 years or to age 90 of the
younger insured. The Second Guarantee Period is to age 100 of the younger
insured. The Guarantee Periods may be different in Texas, New York, New Jersey
and Massachusetts. These states may only have one Guarantee Period and the
Guarantee Period(s) may be of different length. For any day during the First
Guarantee Period, the safety test is met if the result of premiums paid less
amounts withdrawn, accumulated with interest to that day, equals or exceeds the
result of payments of the First Guarantee Premium accumulated with interest from
the policy date to that day. For any day after the First Guarantee Period but
during the Second Guarantee Period, the safety test is met if the result of
premiums paid less amounts withdrawn, accumulated with interest to that day,
equals or exceeds the result of payments of the Second Guarantee Premium
accumulated with interest from the policy date to that day. In the safety test,
interest is accumulated at an effective annual rate equal to the
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minimum annual interest rate for the GPA. Also, we assume in this test that
Guarantee Premiums are paid on each MCD.
R. Reinstatement--A policy may be reinstated within five years as long as the
policy was not surrendered for its net surrender value and neither insured has
died since the policy terminated. Reinstatement requires a written
application, evidence of insurability on both insureds and payment of a cost.
This cost is an amount of premium necessary to keep the policy in force for 3
months from the date of reinstatement. This amount will be quoted upon request.
Reinstatement will not be allowed if an insured has died since the date of
termination. The policy will be reinstated on the MCD on or next following the
date we approve the application. Upon reinstatement, the cost is applied as a
premium and the premium expense charge is deducted. The following changes apply
to the policy upon reinstatement.
1. Monthly deductions begin as of the MCD on or next following the
effective date of reinstatement.
2. Surrender charges are the same as those had the policy not terminated.
However, if the surrender charge was taken when the policy terminated, the
applicable surrender charges will not be reinstated.
3. Any account value or policy debt as of the date of termination is not
reinstated, i.e., there is no loan and the account value is based solely on
the payment of the cost of reinstatement.
4. The PSO will be reinstated. However, the EPR will not be reinstated.
5. The contestability and suicide periods begin again on the date of
reinstatement.
S. Dividends--The C.M. Life policy is non-participating. The MassMutual policy
is participating, but no dividends will be payable.
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