-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ur2g5Fpdwq3h+n/3r4D8VRNf0Ea8KgmXtekPcy9I91Bc175O9Jw4ztg8w87SFKjY LCw1y5kQaEXAihvCoGZmRA== 0000904456-97-000207.txt : 19971219 0000904456-97-000207.hdr.sgml : 19971219 ACCESSION NUMBER: 0000904456-97-000207 CONFORMED SUBMISSION TYPE: S-6 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19971218 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN GENERAL LIFE INSURANCE CO SEPARATE ACCOUNT VL R CENTRAL INDEX KEY: 0001051485 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-6 SEC ACT: SEC FILE NUMBER: 333-42567 FILM NUMBER: 97740442 BUSINESS ADDRESS: STREET 1: 2727 A ALLEN PARKWAY CITY: HOUSTON STATE: TX ZIP: 77019-2191 BUSINESS PHONE: 7138313632 MAIL ADDRESS: STREET 1: 2727 A ALLEN PARKWAY CITY: HOUSTON STATE: TX ZIP: 77019-2191 S-6 1 Registration No. 333-______ As filed with the Securities and Exchange Commission on December 18, 1997 ------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-6 FOR REGISTRATION UNDER THE SECURIITES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 AMERICAN GENERAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT VL-R (Exact Name of Trust) AMERICAN GENERAL LIFE INSURANCE COMPANY (Exact Name of Depositor) 2727-A Allen Parkway Houston, Texas 77019-2191 (Complete Address of Depositor's Principal Executive Offices) Steven A, Glover, Esq. Associate General Counsel and Assistant Secretary American General Life Insurance Company 2727-A Allen Parkway Houston, Texas 77019-2191 (Name and Complete Address of Agent for Service) Please send copies of all communications to: Gary O. Cohen, Esq. and Thomas C. Lauerman, Esq. Freedman, Levy, Kroll & Simonds 1050 Connecticut Avenue, N.W., Suite 825 Washington, D.C. 20036 Title and Amount of Securities Being Registered: An Indefinite Amount of Units of Interest in American General Life Insurance Company Separate Account VL-R Under Variable Life Insurance Policies Amount of Filing Fee: None required. Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter 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 8(a), may determine. This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment Company Act of 1940. Registrant elects to be governed by Rule 6e-3(T)(b)(13)(I)(A) under the Investment Company Act of 1940, with respect to the Variable Life Insurance Policies described in the Prospectus. ii AMERICAN GENERAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT VL-R RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2 AND THE PROSPECTUS (PURSUANT TO INSTRUCTION 4 OF FORM S-6)
ITEMS OF FORM N-8B-2* CAPTIONS IN PROSPECTUS 1 Additional Information: Separate Account VL-R. 2 Additional Information: AGL. 3 Inapplicable. 4 Additional Information: Distribution of Policies. 5, 6 Additional Information: Separate Account VL-R. 7 Inapplicable.** 8 Inapplicable.** 9 Additional information: Legal Matters. 10(a) Additional Information: Your Beneficiary, Assigning Your Policy. 10(b) Basic Questions You May Have: How will the value of my investment in a Policy change over time? 10(c), 10(d) Basic Questions You May Have: How can I change my Policy's insurance coverage? How can I access my investment in a Policy? Can I choose the form in which AGL pays out any proceeds from my Policy?
ITEMS OF FORM N-8B-2 CAPTIONS IN PROSPECTUS 10(e) Basic Questions You May Have: Must I invest any minimum amount in a Policy? 10(f) Additional Information: Voting Privileges. 10(g)(1), 10(g)(4), Basic Questions You May Have: To what extent 10(h)(3), 10(h)(2) will AGL vary the terms and conditions of the Policies in particular cases? Additional Information: Voting Privileges; Additional Rights That We Have. iii 10(g)(3), 10(g)(4), Inapplicable.** 10(h)(3), 10(h)(4) 10(i) Additional information: Separate Account VL-R; Tax Effects. 11 Basic Questions You May Have: How will the value of my investments change over time? 12(a) Additional Information: Separate Account VL-R; Front Cover. 12(b) Inapplicable. 12(c), 12(d) Inapplicable.** 12(e) Inapplicable, because the Separate Account has not yet commenced operations. 13(a) Basic Questions You May Have: What charges will AGL deduct from my investment in a Policy? What charges and expenses will the mutual Funds deduct from the amount I invest through my Policy? Additional Information: More About Policy Charges. 13(b) Illustrations of Hypothetical Policy Benefits. 13(c) Inapplicable.** 13(d) Basic Questions You May Have: To what extent will AGL vary the terms and conditions of the Policies in particular cases? 13(e), 13(f) None. 14 Basic Questions You May Have: How can I invest money in a Policy? 15 Basic Questions You May Have: How can I invest money in a Policy? How do I communicate with AGL? 16 Basic Questions You May Have: How will the value of my investment in a Policy change over time? Additional Information: Separate Account VL-R. 17(a), 17(b) Captions referenced under Items 10(c), 10(d), and 10(e). iv 17(c) Inapplicable. 18(a) Captions referred to under Item 16. 18(b), 18(d) Inapplicable. 18(c) Additional Information: Separate Account VL-R. 19 Additional Information: Voting Privileges; Our Reports to Policy Owners. 20(a) Captions referenced under Items 10(g)(1), 10(g)(2), 10(h)(1), and 10(h)(2). 20(b), 20(c), 20(d), Inapplicable. 20(e), 20(f) 21(a), 21(b) Basic Questions You May Have: How can I access my investment in a Policy? Additional Information: Payment of Policy Proceeds. 21(c) Inapplicable.** 22 Additional Information: Payment of Policy Proceeds--Delay to Challenge Coverage. 23 Inapplicable.** 24 Basic Questions You May Have; Additional Information. 25 Additional Information: American General Life Insurance Company. 26 Inapplicable, because the Separate Account has not yet commenced operations. 27 Additional Information: American General Life Insurance Company. 28 Additional Information: AGL; AGL's Management. 29 Additional Information: AGL. v 30, 31, 32, 33, 34 Inapplicable, because the Separate Account has not yet commenced operations. 35 Inapplicable.** 36 Inapplicable.** 37 None. 38, 39 Additional Information: Distribution of the Policies. 40 Inapplicable, because the Separate Account has not yet commenced operations. 41(a) Additional Information: Distribution of the Policies. 41(b), 41(c) Inapplicable.** 42, 43 Inapplicable, because the Separate Account has not yet commenced operations or issued any securities. 44(a)(1), 44(a)(2), Basic Questions You May Have: How will the 44(a)(3) value of my investment in a Policy change over time? 44(a)(4) Additional Information: Tax Effects--Our Taxes. 44(a)(5), 44(a)(6) Basic Questions You May Have: What charges will AGL deduct from my investment in a Policy? 44(b) Inapplicable.** 44(c) Caption referenced in 13(d) above. 45 Inapplicable, because the Separate Account has not yet commenced operations. 46(a) Captions referenced in 44(a) above. 46(b) Inapplicable.** 47, 48, 49 None. 50 Additional Information: Separate Account VL-R. vi 51 Inapplicable. 52(a), 52(c) Basic Questions You May Have: To what extent will AGL vary the terms and conditions of the Policies in particular cases? Additional Information: Additional Rights That We Have 52(b), 52(d) None. 53(a) Additional Information: Tax Effects--Our Taxes. 53(b), 54 Inapplicable. 55 Illustrations of Hypothetical Policy Benefits. 56-59 Inapplicable.** * Registrant includes this Reconciliation and Tie in its Registration Statement in compliance with Instruction 4 as to the Prospectus as set out in Form S-6. Separate Account VL-R has, simultaneously herewith, filed a notice of registration as an investment company on Form N-8A under the Investment Company Act of 1940, and it intends to file a Form N-8B-2 Registration Statement within the next several weeks. Pursuant to Sections 8 and 30(b)(1) of the Investment Company Act of 1940, Rule 30a-1 under the Act, and Forms N-8B-2 and N-SAR under that Act, the Account will keep its Form N-8B-2 Registration Statement current through the filing of periodic reports required by the Securities and Exchange Commission. ** Not required pursuant to either Instruction 1(a) as to the Prospectus as set out in Form S-6 or the administrative practice of the Commission and its staff of adapting the disclosure requirements of the Commission's registration statement forms in recognition of the differences between variable life insurance policies and other periodic payment plan certificates issued by investment companies and between separate accounts organized as management companies and unit investment trusts.
vii PLATINUM INVESTOR I (SM) AND PLATINUM INVESTOR II (SM) FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES (THE "POLICIES") Issued by AMERICAN GENERAL LIFE INSURANCE COMPANY ("AGL") HOME OFFICE: (Express Delivery) (US Mail) 2727-A Allen Parkway Variable Universal Life Houston, Texas 77019-2191 Administration PHONE: 1-888-325-9315 P.O. Box 4880 or 1-713-831-3443 Houston, Texas 77210-4880 FAX: 1-713-620-3857 INVESTMENT OPTIONS. The AGL Declared Fixed Interest Account is the fixed investment option for these policies. You can also invest in the following variable investment options. You may change your selections from time to time: -------------------------------------------------------------------------------------------------------------------------------- AIM VARIABLE INSURANCE AMERICAN GENERAL SERIES DREYFUS VARIABLE MFS VARIABLE INSURANCE FUNDS, INC. PORTFOLIO COMPANY INVESTMENT FUND TRUST o AIM V.I. International o International Equities o Quality Bond Portfolio o MFS Emerging Growth Equity Fund Fund (1) o Small Cap Portfolio Series o AIM V.I. Value Fund o MidCap Index Fund (1,2) o Money Market Fund (1) o Stock Index Fund (1,2) (1) Variable Annuity Life Insurance Company * Massachusetts Financial AIM Advisors, Inc.* (2) Bankers Trust Company(+) The Dreyfus Corporation* Services Company* -------------------------------------------------------------------------------------------------------------------------------- MORGAN STANLEY PUTNAM VARIABLE TRUST SAFECO RESOURCE VAN KAMPEN AMERICAN UNIVERSAL FUNDS, INC. o Putnam VT Diversified SERIES TRUST CAPITAL LIFE INVESTMENT o Equity Growth Portfolio (1) Income Fund o Equity Portfolio TRUST o High Yield Portfolio (2) o Putnam VT Growth o Growth Portfolio o Strategic Stock Portfolio o Putnam VT Growth and Income Fund o Putnam VT International Growth and Income Fund (1) Morgan Stanley Asset Mgmt, Inc.* SAFECO Asset Management Van Kampen American Capital (2) Miller Anderson Sherrerd, LLP* Putnam Management, Inc.* Company* Asset Management, Inc.* -------------------------------------------------------------------------------------------------------------------------------- * The Investment Adviser of the investment option (+) The Investment Sub-Adviser of the investment option
SEPARATE PROSPECTUSES CONTAIN MORE INFORMATION ABOUT THE MUTUAL FUNDS ("FUNDS" OR "MUTUAL FUNDS") IN WHICH WE INVEST THE ACCUMULATION VALUE THAT YOU ALLOCATE TO ANY OF THE ABOVE-LISTED INVESTMENT OPTIONS (OTHER THAN OUR DECLARED FIXED INTEREST ACCOUNT OPTION). THE FORMAL NAME OF EACH SUCH FUND IS SET FORTH IN THE CHART THAT APPEARS ON PAGE 1, ABOVE. YOUR INVESTMENT RESULTS IN ANY SUCH OPTION WILL DEPEND ON THOSE OF THE RELATED FUND. THEREFORE, YOU SHOULD BE SURE YOU ALSO READ THE PROSPECTUS OF THE MUTUAL FUND FOR ANY SUCH INVESTMENT OPTION YOU MAY BE INTERESTED IN. YOU CAN REQUEST FREE COPIES OF ANY OR ALL OF THE MUTUAL FUND PROSPECTUSES FROM YOUR AGL REPRESENTATIVE OR FROM US AT OUR HOME OFFICE LISTED ABOVE. OTHER CHOICES YOU HAVE. During the insured person's lifetime, you can also (1) change the amount of insurance, (2) borrow or withdraw amounts you have invested, (3) choose, within limits, when and how much you invest, and (4) choose whether the amount you have invested under your Policy, upon the insured person's death, will be added to the insurance proceeds we otherwise will pay to the beneficiary. CHARGES AND EXPENSES. We deduct charges and expenses from the amounts you invest. These are described beginning on page 8, below. RIGHT TO RETURN. If for any reason you are not satisfied with your Policy, you may return it to us for a full refund. (In some states, we will adjust this amount for any investment performance you have earned.) To exercise your right to return your Policy, you must mail it directly to the Home Office address shown on the cover of this prospectus or return it to the AGL representative through whom you purchased the Policy within 10 days after you receive it. In a few states, this period may be longer. Because you have this right, we will invest your initial premium payment in the money market investment option from the date your investment performance begins until the first business day that is at least 15 days later. Then we will automatically allocate your investment among the above-listed investment options as you have chosen. Any additional premium we receive during the 15-day period will also be invested in the money market division and allocated to the investment options at the same time as your initial premium. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. THIS PROSPECTUS CONTAINS INFORMATION THAT YOU SHOULD KNOW BEFORE INVESTING IN A POLICY. THE POLICIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION ("SEC"). NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS BOOKLET IS CALLED A "PROSPECTUS." ITS DATE IS _____________, 1998 2 GUIDE TO THIS PROSPECTUS This booklet (which we call a prospectus) contains information that you should know before you purchase a Platinum InvestorSM variable life policy ("Policy") or exercise any of your rights or privileges under a Policy. This prospectus describes two versions of the Platinum Investor Policies: the Platinum Investor I and the Platinum Investor II Policies. Your AGL representative can advise you which version of the Policy he or she offers or whether he or she offers both. You cannot change to a different version once your coverage takes effect. The Platinum Investor I and Platinum Investor II Policies are identical, except for the differences that are discussed beginning on page 13, below. BASIC INFORMATION. Here are the page numbers in this prospectus where you may find answers to most of your questions:
PAGE TO SEE BASIC QUESTIONS YOU MAY HAVE IN THIS PROSPECTUS o What are the Policies?.............................................. Front Cover Page o How can I invest money in a Policy?................................. o How will the value of my investment in a Policy change over time?... o What is the basic amount of insurance ("death benefit") that AGL pays if the insured person dies?.................................... o What charges will AGL deduct from my investment in a Policy?........ o What charges and expenses will the Mutual Funds deduct from the amount I invest through my Policy?.................................. o Must I invest any minimum amount in a Policy?....................... o What are the differences between Platinum Investor I and Platinum Investor II?........................................................ o How can I change my Policy's investment options?.................... o How can I change my Policy's insurance coverage?.................... o What additional rider benefits might I select?...................... 3 o How can I access my investment in a Policy?......................... o Can I choose the form in which AGL pays out any proceeds from my Policy?............................................................. o To what extent will AGL vary the terms and conditions of the Policies in particular cases?....................................... o How will my Policy be treated for income tax purposes?.............. o How do I communicate with AGL?......................................
ILLUSTRATIONS OF A HYPOTHETICAL POLICY. Starting on page 22, below, we have included some illustrations of how the values of a hypothetical Policy would change over time, based on certain assumptions we have made. Because your circumstances may vary considerably from our assumptions, your AGL representative will also provide you with a similar hypothetical illustration that is more tailored to your own circumstances and wishes. ADDITIONAL INFORMATION. You may find the answers to any other questions you have under "Additional Information" beginning on page 24, below or in the forms of our Policy and riders. A table of contents for the "Additional Information" portion of this prospectus also appears on page 24, below. You can obtain copies of our Policy and rider forms from (and direct any other questions to) your AGL representative or our Home Office (shown on the cover of this Prospectus). AGL'S FINANCIAL STATEMENTS. We have included our financial statements in this prospectus. These begin on page 40, below. SPECIAL WORDS AND PHRASES. If you want more information about any words or phrases that you read in this prospectus, you may wish to refer to the Index of Words and Phrases that appears on the inside of the back cover of this prospectus. That index will tell you on what page you can read more about many of the words and phrases that we use. 4 BASIC QUESTIONS YOU MAY HAVE HOW CAN I INVEST MONEY IN A POLICY? PREMIUM PAYMENTS. We call the investments you make in a Policy "premiums" or "premium payments." The amount we require as your first premium varies depending on the specifics of your Policy and the insured person. We can refuse to accept a subsequent premium payment that is less than $50. (Policies issued in some states or automatic premium payment plans may have different minimums.) Otherwise, with a few exceptions mentioned below, you can make premium payments at any time and in any amount. LIMITS ON PREMIUM PAYMENTS. Federal tax law limits your ability to make certain very large amounts of premium payments (relative to the amount of your Policy's insurance coverage) and may impose penalties on amounts you take out of your Policy if you do not observe certain additional requirements. These tax law requirements are summarized further under "Tax Effects" beginning on page 25, below. We will monitor your premium payments, however, to be sure that you do not exceed permitted amounts or inadvertently incur any tax penalties. Also, in certain limited circumstances, we may refuse to accept an additional premium if the insured person does not provide us with adequate evidence that he/she continues to meet our requirements for issuing insurance. CHECKS AND MONEY ORDERS. Premiums must be by check or money order drawn on a U.S. bank in U.S. dollars and made payable to "American General Life Insurance Company," or "AGL." Premiums after the first premium must be sent directly to our Home Office at the appropriate address shown on the front cover of this prospectus. OTHER WAYS TO PAY PREMIUMS. We also accept premium payments by bank draft, wire, or by exchange from another insurance company. You may obtain further information about how to make premium payments by any of these methods from your AGL representative or from our Home Office shown on the front cover of this prospectus. Premium payments from salary deduction plans may be made only if we agree. DOLLAR COST AVERAGING. Dollar cost averaging is an investment strategy designed to reduce the risks that result from market fluctuations. The strategy spreads the allocation of your accumulation value over a period of time. This allows you to reduce the risk of investing most of your funds at a time when prices are high. The success of this strategy depends on market trends and is not guaranteed. Under dollar cost averaging, we automatically make transfers of your accumulation value from the money market investment option to one or more of the other investment options that you choose (but not to our declared fixed interest account option). You tell us whether you want these transfers to be made monthly, quarterly, semi-annually or annually; and we make the transfers as of the end of the valuation period that contains the day of the month that you select. You must have at least $5,000 of accumulation value to start dollar cost averaging and each transfer under the program must be at least 5 $100. You cannot participate in dollar cost averaging while also using automatic portfolio rebalancing (discussed below). Dollar cost averaging ceases upon your request, or if your accumulation value in the money market option becomes exhausted. AUTOMATIC PORTFOLIO REBALANCING. This feature automatically rebalances the proportion of your accumulation value in each investment option under your Policy (other than our declared fixed interest account option) to correspond to your then current premium allocation designation. You tell us whether you want us to do the rebalancing quarterly, semi-annually or annually; and we make transfers to rebalance your accumulation value on the first business day in the appropriate Policy months. You must have a total accumulation value of at least $5,000 to begin automatic rebalancing. You cannot participate in this program while also participating in dollar cost averaging (discussed above). Rebalancing terminates upon your request. HOW WILL THE VALUE OF MY INVESTMENT IN A POLICY CHANGE OVER TIME? YOUR ACCUMULATION VALUE. From each premium payment you make, we deduct the charges that we describe on page 8 below under "Deductions from each premium payment." We invest the rest in one or more of the investment options listed on the front cover of this prospectus. We call the amount that is at any time invested under your Policy your "accumulation value." YOUR INVESTMENT OPTIONS. We invest the accumulation value that you have allocated to any investment option (except our declared fixed interest account option) in shares of a mutual Fund that follows investment practices, policies and objectives that are appropriate to that option. Over time, your accumulation value in any investment option will increase or decrease by the same amount as if you had invested in the related Fund's shares directly (and reinvested all dividends and distributions from the Fund in additional Fund shares); EXCEPT that your accumulation value will be reduced by certain charges that we deduct. We describe these charges beginning on page 8 below under "What charges will AGL deduct from my investment in a Policy?" Other important information about the Mutual Funds that you can choose is included in the separate prospectuses for those Funds. This includes information about the investment performance that each Fund's investment manager has achieved. Additional free copies of these prospectuses are available from your AGL representative or from our Home Office shown on the front cover of this prospectus. We invest any accumulation value you have allocated to our declared fixed interest account option as part of our general assets. We credit a fixed rate of interest on that accumulation value, which we declare from time to time. We guarantee that this will be at an effective annual rate of at least 4%. Although this interest increases the amount of any accumulation value that you have in our declared fixed interest account option, such accumulation value will also be reduced by any charges that are allocated to this option under the procedures described under "Allocation of Charges" on page 10 below. 6 The "daily charge" described below on page 8 and the charges and expenses of the Mutual Funds discussed on pages 10-12 below do NOT apply to our declared fixed interest account option. POLICIES ARE "NON-PARTICIPATING." The Policies are NOT "participating." Therefore, you will not be entitled to any dividends from AGL. WHAT IS THE BASIC AMOUNT OF INSURANCE ("DEATH BENEFIT") THAT AGL PAYS WHEN THE INSURED PERSON DIES? YOUR SPECIFIED AMOUNT OF INSURANCE. In your application to buy a Platinum Investor Policy, you will tell us how much life insurance coverage you want on the life of the insured person. We call this the "specified amount" of insurance. YOUR DEATH BENEFIT. You also choose whether the basic death benefit we will pay is o Option 1 - The specified amount on the date of the insured person's death - or - o Option 2 - The specified amount plus the Policy's accumulation value on the date of death. Under Option 2, your death benefit will tend to be higher than under Option 1. However, the monthly insurance charge we deduct will also be higher to compensate us for our additional risk. Because of this, your accumulation value will tend to be higher under Option 1 than under Option 2. If higher than the basic Option 1 or Option 2 death benefit (whichever you have selected), we will automatically pay an alternative basic death benefit computed by multiplying your Policy's accumulation value on the insured person's date of death by the following percentages: TABLE OF ALTERNATIVE BASIC DEATH BENEFITS AS A PERCENTAGE MULTIPLE OF POLICY ACCUMULATION VALUE
INSURED PERSON'S 40 or AGE*: Under 45 50 55 60 65 70 75 to 95 100 %: 250% 215% 185% 150% 130% 120% 115% 105% 100% * Nearest birthday at the beginning of the Policy year in which the insured person dies. The percentages are interpolated for ages that are not shown here.
7 WHAT CHARGES WILL AGL DEDUCT FROM MY INVESTMENT IN A POLICY? DEDUCTIONS FROM EACH PREMIUM PAYMENT. We deduct from each premium a charge for the tax that is then applicable to us in your state or other jurisdiction. These taxes currently range from 2% to 3.5%. Please let us know if you move to another jurisdiction, so we can adjust this charge if required. You are not permitted to deduct the amount of these taxes on your income tax return. We also currently deduct an additional 2.5% from each after-tax premium payment. We have the right at any time to increase this additional charge to not more than 5% on all future premium payments. DAILY CHARGE. We make a daily deduction at an annual effective rate of .75% of your accumulation value that is then being invested in any of the investment options (other than our declared fixed interest option). After a Policy has been in effect for a certain number of years, we intend to reduce the rate of this charge by .25%. The number of years depends on whether you have version I or version II of the Policy and is discussed on page 13, below, under "What are the differences between the Platinum Investor I and Platinum Investor II Policies." Because the Policies were first offered in 1998, however, this decrease has not yet occurred for any outstanding Policy. Neither this decrease nor the current rate of .75% are guaranteed. Rather, we have the right at any time to raise this charge under your Policy to not more than .90%; except that in Texas and Oregon, until a Policy has been in effect for a certain number of years, this maximum is .25% higher. FLAT MONTHLY CHARGE. We will deduct $6 per month from your accumulation value. Also, we have the right to raise this charge at any time to not more than $12 per month. MONTHLY INSURANCE CHARGE. Every month we will deduct from your accumulation value a charge based on the cost of insurance rates applicable to your Policy on the date of the deduction and our "amount at risk" on that date. Our amount at risk is the difference between (a) the death benefit that would be payable if the insured person died on that date and (b) the then total accumulation value under the Policy. For otherwise identical Policies, a greater amount at risk results in a higher monthly insurance charge. The cost of insurance rates are generally lower under the Platinum Investor II Policy than under the Platinum Investor I Policy. For otherwise identical Policies, a higher cost of insurance rate also results in a higher monthly insurance charge. Our cost of insurance rates are guaranteed not to exceed those that will be specified in your Policy. Our current rates are lower, although we have the right at any time to raise them to not more than the guaranteed maximum. In general, our cost of insurance rates increase with the insured person's age. Therefore, the longer you own your Policy, the higher the cost of insurance rate will be. Also our cost of insurance rates will generally be lower (except in Montana) if the insured person is a female than if a male. 8 Similarly, our current cost of insurance rates are lower for non-smokers than smokers, and lower for persons that have other highly favorable health characteristics, as compared to those that do not. On the other hand, insured persons who present particular health, occupational or avocational risks may be charged higher cost of insurance rates and other additional charges based on the specified amount of insurance coverage under their Policy. Finally, our current cost of insurance rates are lower for Policies having a specified amount of at least $1,000,000 on the day the charge is deducted. This means that if your specified amount for any reason decreases from $1,000,000 or more to less than $1,000,000, your future cost of insurance rates will be higher under your Policy than they otherwise would be. The reverse is also true. Our cost of insurance rates also are generally higher under a Policy that has been in force for some period of time than they would be under an otherwise identical Policy purchased more recently on the same insured person. MONTHLY CHARGES FOR ADDITIONAL BENEFIT RIDERS. We will deduct charges monthly from your accumulation value, if you select certain additional benefit riders. These are described beginning on page 15, below, under "What additional rider benefits can I elect?" ADDITIONAL MONTHLY CHARGE FOR PLATINUM INVESTOR II POLICIES DURING THE FIRST TWO YEARS. This charge is described on page 13 below under "What are the differences between the Platinum Investor I and Platinum Investor II Policies?" SURRENDER CHARGE FOR PLATINUM INVESTOR I POLICIES. The Platinum Investor I Policies have a surrender charge that applies for the first 10 Policy years (and the first 10 years after any requested increase in the Policy's specified amount). The amount of the surrender charge depends on the age and other insurance characteristics of the insured person. The maximum amount of the surrender charge will be shown on pages [23 and 24] of the Policy. It may initially be as high as $________ per $1,000 of specified amount or as low as $__________ per $1,000 of specified amount (or increase therein). Any amount of surrender charge decreases automatically by a constant amount each year beginning in the fourth year of its 10 year period referred to above until, in the eleventh year, it is zero. We will deduct the entire amount of any then applicable surrender charge from the accumulation value at the time of a full surrender of a Platinum Investor I Policy. Upon a requested decrease in such a Policy's specified amount of coverage, we will deduct any remaining amount of the surrender charge that was associated with the specified amount that is cancelled. This includes any specified amount decrease that, as described under "Partial surrender" on page 17, below, results from any requested partial surrender. For this purpose, we deem the most recent increases of specified amount to have been cancelled first. TRANSACTION FEE. We will also charge a $25 transaction fee for each partial surrender you make. 9 CHARGE FOR TAXES. We can make a charge in the future for taxes we incur or reserves we set aside for taxes in connection with the Policies. This would reduce the investment experience of your accumulation value. ALLOCATION OF CHARGES. You may choose from which of your investment options we deduct all monthly charges. If you do not have enough accumulation value in any investment option to comply with your selection, we will deduct these charges proportionately to the amount of accumulation value you then have in each investment option. Any surrender charge upon a decrease in specified amount that is requested under a Platinum Investor I Policy will be allocated in the same manner as if it were a monthly deduction. WHAT CHARGES AND EXPENSES WILL THE MUTUAL FUNDS DEDUCT FROM AMOUNTS I INVEST THROUGH MY POLICY? Each Mutual Fund pays its investment management fees and other operating expenses. Because they reduce the investment return of a Fund, these fees and expenses also will reduce indirectly the return you will earn on any accumulation value that you have invested in that Fund. These charges and expenses currently are as follows: THE MUTUAL FUNDS' ANNUAL EXPENSES (1) (as a percentage of average net assets)
Other Fund Total Fund Management Operation Expenses Fund Fees After Expense After Expense Operating Name Of Fund Reimbursement(2) Reimbursement(2) Expenses(2) ------------ ------------------ ------------------ ----------- The following funds of AMERICAN GENERAL SERIES PORTFOLIO COMPANY ("AGSPC"): Money Market Fund International Equities Fund MidCap Index Fund Stock Index Fund The following funds of AIM VARIABLE INSURANCE FUNDS, INC.: V.I. International Equity Fund V.I. Value Fund The following funds of DREYFUS VARIABLE INVESTMENT FUND: Small Cap Portfolio Quality Bond Portfolio 10 The following series of MFS VARIABLE INSURANCE TRUST: MFS Emerging Growth Series The following portfolios of MORGAN STANLEY UNIVERSAL FUNDS, INC.: Equity Growth Portfolio High Yield Portfolio The following portfolios of PUTNAM VARIABLE TRUST: Putnam VT Growth and Income Fund Putnam VT Diversified Income Fund Putnam VT International Growth and Income Fund The following portfolios of SAFECO RESOURCES SERIES TRUST: Equity Portfolio Growth Portfolio The following portfolio of VAN KAMPEN AMERICAN CAPITAL LIFE INVESTMENT TRUST: Strategic Stock Portfolio (1) The annual expenses are estimated for the current fiscal year for the ______________, __________ and __________ Funds, because none of these Funds has financial statements covering a period of at least ten months. (2) If certain voluntary expense reimbursements from the investment adviser were terminated, management fees and other expenses would have been as set out in the following table. Information about annual expenses excluding voluntary expense reimbursements is not available for the other Funds since none of the other Funds has financial statements covering a period of at least ten months.
Total Other Fund Fund Fund Management Operating Operating Name Of Fund Fees Expenses Expenses ------------ --------------- ----------- --------- [copy to come]
11 MUST I INVEST ANY MINIMUM AMOUNT IN A POLICY? PLANNED PERIODIC PREMIUMS. Page 3 of your Policy will specify a "Planned Periodic Premium." This is the amount that you (within limits) choose to have us bill you. Our current practice is to bill quarterly, semi-annually or annually. Payment of these or any other specific amounts of premiums is not mandatory, however. Rather, you need only invest enough to ensure either that your Policy's cash surrender value stays above zero or that your 5 year no-lapse guarantee (discussed below) remains in effect. ("Cash surrender value" is explained under "Full surrender" on page 17, below.) The less you invest, the more likely it is that your Policy's cash surrender value could fall to zero, as a result of the deductions we periodically make from your accumulation value. POLICY LAPSE AND REINSTATEMENT. If your Policy's cash surrender value does fall to zero, we will notify you and give you a grace period to pay at least the amount we estimate is necessary to keep your Policy in force for a reasonable time. If we don't receive your payment by the end of the grace period, your Policy and all riders will terminate without value and all coverage under your Policy will cease. Although you can apply to have your Policy "reinstated," you must do this within 5 years (or, if earlier, before the Policy's maturity date), and you must present evidence that the insured person still meets our requirements for issuing coverage. Also, you would have to pay certain extra amounts that we require. In the Policy form itself, you will find additional information about the values and terms of a Policy after it is reinstated. MONTHLY GUARANTEE PREMIUMS UNDER THE PLATINUM INVESTOR I POLICIES. Page 3 of a Platinum Investor I Policy will specify a "Monthly Guarantee Premium." On the first day of each Policy month that the cash surrender value is not sufficient to pay the monthly deduction, we check to see if the cumulative amount of premiums paid under such a Policy is at least equal to the sum of the monthly guarantee premiums for all Policy months to date, including the Policy month then starting. (Policy months are measured from the "Date of Issue" that will also be shown on page 3 of the Policy.) So long as at least this amount of premium payments has been paid by the beginning of that Policy month, a Platinum Investor I Policy will not enter a grace period or terminate (I.E., lapse) because of insufficient cash surrender value during the first 5 Policy years. If this test is not met on the monthly deduction day at the beginning of any Policy month, the Policy enters the grace period. If a sufficient premium is not paid before the end of the grace period, the Policy and the 5-year no-lapse guarantee terminate. If the Policy is later reinstated, the 5-year no-lapse guarantee may also be reinstated if sufficient Premiums are paid, although the reinvested guarantee will in no case extend beyond the date that originally marked the end of the maximum 5-year duration. The amount of premiums that must be paid to maintain the 5 year no-lapse guarantee will be increased by the cumulative amount of any loans (including any loan increases to pay interest) and partial surrenders you have taken from your Policy. Such monthly guarantee premiums also will be higher following any requested increase in the specified amount of insurance coverage, or following a requested addition of (or increase in) certain rider benefits. On the other hand, the monthly guaranteed premium will be lower following any requested decrease in the specified amount of insurance coverage, or following a requested cancellation of (or decrease in) certain riders. If your Policy is 12 the Platinum Investor I version, we will send you an endorsement to your Policy that will tell you what your new monthly guarantee premium is. However, none of the above-mentioned changes extends the no-lapse period beyond 5 years or establishes a new no lapse guarantee. Although we will bill you for planned premiums, we will not send any specific bills for the amount of any monthly guarantee premium that is due. WHAT ARE THE DIFFERENCES BETWEEN THE PLATINUM INVESTOR I AND THE PLATINUM INVESTOR II POLICIES? Depending on your own financial circumstances and goals, and the uses to which you intend to put a Platinum Investor Policy, either version of the Policy may be appropriate for you. You should consult carefully with your AGL representative about this. Relevant factors may include how much accumulation value you intend to maintain in the Policy relative to the amount of the Policy's death benefit and how likely it is that you may choose to surrender your Policy or otherwise reduce your Policy's specified amount in the foreseeable future. The differences between the two versions of Platinum Investor are: Platinum Investor II is available only for specified amounts of $500,000 or more. You may not request a specified amount decrease (or a partial surrender) under a Platinum Investor II Policy that would reduce the specified amount to less than $500,000. o Platinum Investor II is not available for insured persons who are below age 18. o The Platinum Investor II version of the Policy DOES not have a surrender charge. o The Platinum Investor II version of the Policy DOES not have a 5 year no-lapse guarantee. o The planned reduction in the current daily charge by .25% per annum of separate account accumulation value is scheduled to occur after year 10 for Platinum Investor II and after year 20 for Platinum Investor I. These are also the same periods after which the guaranteed maximum daily charge under Policies sold in Texas and Oregon will decrease by .25% per annum. o The two versions of Platinum Investor have different current cost of insurance rates. Since this difference results in differing accumulation values, you should carefully review the Policy illustrations that are available to you. o The Platinum Investor II version of the Policy has a monthly expense charge during the first two Policy years (and the first two years after any requested increase in the Policy's specified 13 amount). The amount of this charge depends on the age and other insurance characteristics of the insured person. The amount of this charge will be shown on page __ of a Platinum Investor II Policy. It may initially be as much as $_______ per $1,000 of specified amount (or increase therein), or as low as $_______ per $1,000 of specified amount (or increase therein). (After the two-year periods mentioned above, this charge is zero.) This additional monthly charge does not apply to the Platinum Investor I version of the Policies. HOW CAN I CHANGE MY POLICY'S INVESTMENT OPTIONS? FUTURE PREMIUM PAYMENTS. You may at any time change the investment options in which future premiums you pay will be invested. Your allocation must, however, be in whole percentages that total 100%. TRANSFERS OF EXISTING ACCUMULATION VALUE. You may also transfer your existing accumulation value from one investment option under the Policy to another. Unless you are transferring the entire amount you have in an investment option, each transfer must be at least $500. See "Additional rights that we have," beginning on page 37, below. Also, you may not in any one Policy year make transfers out of our declared fixed interest account option that aggregate more than 25% of the accumulation value you had invested in that option at the beginning of that Policy year. You may make transfers at any time, except that transfers out of our declared fixed interest account option must be made within 60 days after a Policy anniversary. We will not honor any request received outside that period. MAXIMUM NUMBER OF INVESTMENT OPTIONS. We can at any time limit the number of investment options you may use. Our current rule is that you cannot use more than 18 different options over the life of your Policy. HOW CAN I CHANGE MY INSURANCE COVERAGE? INCREASE IN COVERAGE. You may at any time request an increase in the specified amount of coverage under your Policy. You must, however, provide us with satisfactory evidence that the insured person continues to meet our requirements for issuing insurance coverage. We treat an increase in specified amount in many respects as if it were the issuance of a new Policy. For example, the monthly insurance charge for the increase will be based on the age and risk class of the insured person at the time of the increase. Also, if you have the Platinum Investor I version of the Policy, a new amount of surrender charge and monthly guarantee premium apply to the specified amount increase; and these amounts are the same as they would be if we were instead issuing the same amount of additional coverage as a new Platinum Investor I Policy. On the other hand, if you have the Platinum Investor II version of the Policy, an additional monthly expense charge 14 applies for the first two years following the request for an increase in specified amount. This amount is also the same as it would be if we were instead issuing the same amount of additional coverage as a new Platinum Investor II Policy. DECREASE IN COVERAGE. After the first Policy year, you may request a reduction in the specified amount of coverage, but not below certain minimums. The minimum for a Platinum Investor I Policy is $100,000 (or, if greater, the minimum amount that the tax law requires relative to the amount of premium payments you have made). At the time of a decrease under such a Policy, we will deduct from the Policy's accumulation value an amount of any remaining surrender charge. We compute the amount we deduct in the manner described on page 32, below, "Decreases in the specified amount of a Platinum Investor I Policy." CHANGE OF DEATH BENEFIT OPTION. You may at any time request us to change your coverage from death benefit Option 1 to 2 or vice-versa. If you change from Option 1 to 2, we also automatically reduce your Policy's specified amount of insurance by the amount of your Policy's accumulation value (but not below zero) at the time of the change. If you change from Option 2 to 1, we also automatically increase your Policy's specified amount by the amount of your Policy's accumulation value. TAX CONSEQUENCES OF CHANGES IN INSURANCE COVERAGE. Please read "Tax Effects" starting on page 26 of this prospectus to learn about possible tax consequences of changing your insurance coverage under your Policy. WHAT ADDITIONAL RIDER BENEFITS MIGHT I SELECT? You can request that your Policy include the additional rider benefits described below. For most of the riders that you choose, a charge, which will be shown on page 3 of your Policy, will be deducted from your accumulation value on each monthly deduction date. Eligibility for and changes in these benefits are subject to our rules and procedures as in effect from time to time. More details are included in the form of each rider, which we suggest that you review if you choose any of these benefits. o ACCIDENTAL DEATH BENEFIT RIDER, which pays an additional death benefit if the insured person dies from certain accidental causes. o AUTOMATIC INCREASE RIDER, which provides for automatic increases in your Policy's specified amount of insurance at certain specified dates and based on a specified index. These increases do not require that evidence be provided to us about whether the insured person continues to meet our requirements for insurance coverage. These automatic increases are on the same terms (including additional charges) as any other specified amount increase you request (as described under "Increase in coverage" on page 14, above). There is no additional charge for the rider 15 itself, although the automatic increases in the specified amount will increase the monthly insurance charge deducted from your accumulation value, to compensate us for the additional coverage. o CHILDREN'S INSURANCE BENEFIT RIDER, which provides term life insurance coverage on the eligible children of the person insured under Policy. This rider is convertible into any other insurance (except for term coverage) available for conversions, under our published rules at the time of conversion. o MATURITY EXTENSION RIDER, which permits you to extend the Policy's maturity date beyond what it otherwise would be, has two versions from which to choose. One version provides for a death benefit after the original maturity date that is equal to the accumulation value on the date of death. With this version, all accumulation value that is in the separate account can remain there. There is no charge for this version. The other version provides for a death benefit after the original maturity date equal to the base policy death benefit on the original maturity date. With this version, if you elect to extend your maturity date, all accumulation value that is in the separate account will be automatically transferred to the declared fixed interest option. There is a monthly charge for this version of the rider during the first nine Policy years immediately preceding the Policy's original maturity date. Therefore, this rider may not be added to a Policy during that 9 year period. In both versions, any other riders associated with the base policy will expire at the original maturity date. No additional premium payments, new loans, monthly insurance charge, or changes in specified amount will be allowed after the original maturity date. There is a flat monthly charge of no more than $10 each month after the original maturity date. Extension of the maturity date beyond the insured person's age 100 may cause your Policy to cease to be taxed as a life insurance policy. You should consult a qualified tax adviser before making such an extension. o RETURN OF PREMIUM DEATH BENEFIT RIDER, which provides additional term life insurance coverage on the person insured under the Policy. The amount of additional insurance varies so that it always equals the cumulative amount of premiums paid under the Policy (subject to certain adjustments). o SPOUSE TERM RIDER, which provides term life insurance on the life of the spouse of the Policy's insured person. This rider is convertible into any other insurance (except for term coverage) available for conversions, under our published rules at the time of conversion. 16 o TERMINAL ILLNESS RIDER, which provides for a benefit to be requested if the Policy's insured person is diagnosed as having a terminal illness (as defined in the rider) and less than 12 months to live. This rider is not available in all states. The maximum amount you may receive under this rider prior to the insured person's death is 50% of the death benefit payable under the Policy (excluding any rider benefits) or, if less, $250,000. The amount of benefits paid under the rider, plus an administrative fee (not to exceed $250), plus interest on these amounts to the next Policy anniversary becomes a "lien" against all future Policy benefits. We will continue to charge interest in advance on the total amount of the lien and will add any unpaid interest to the total amount of the lien each year. Any time the total lien, plus any other Policy loans, exceed the Policy's then current death benefit, the Policy will terminate without further value. The cash surrender value of the Policy also will be reduced by the amount of the lien. o WAIVER OF MONTHLY DEDUCTION RIDER, under which we will waive all monthly charges under your Policy and riders that we otherwise would deduct from your accumulation value, so long as the insured person is totally disabled (as defined in the rider). While we are paying benefits under this rider we will not permit you to request any increase in the specified amount of your Policy's coverage. However, loan interest will not be paid for you under this rider, and the Policy could, under certain circumstances, lapse for nonpayment of loan interest. TAX CONSEQUENCES OF ADDITIONAL RIDER BENEFITS. Adding or deleting riders, or increasing or decreasing coverage under existing riders can have tax consequences. See "Tax Effects" starting on page 26, below. You should consult a qualified tax adviser. HOW CAN I ACCESS MY INVESTMENT IN A POLICY? FULL SURRENDER. You may at any time surrender your Policy in full. If you do, we will pay you the accumulation value, less any Policy loans, and, if you have the Platinum Investor I version of the Policy, less any surrender charge that then applies. We call this your "cash surrender value." Because of the surrender charge, it is unlikely that a Platinum Investor I Policy will have any cash surrender value during at least the first year unless you pay significantly more than the monthly guarantee premiums. PARTIAL SURRENDER. You may, at any time after the first Policy year, make a partial surrender of your Policy's cash surrender value. A partial surrender must be at least $500. If the Option 1 death benefit is then in effect, we will also automatically reduce your Policy's specified amount of insurance by the amount of your withdrawal and any related charges. If you have the Platinum Investor I version of the Policy, and we reduce your Policy's specified amount because you have requested a partial withdrawal while the Option 1 death benefit is in effect, we will deduct the same amount of surrender charge, if any, that would have applied if you had requested such 17 face amount decrease directly. See "Decrease in the specified amount of a Platinum Investor I Policy," on page 32, below. We will not permit a partial surrender if it would cause your Policy to fail to qualify as life insurance under the tax laws or if it would cause your specified amount to fall below the minimum allowed. You may choose the investment option or options from which money that you withdraw will be taken. Otherwise, we will allocate the withdrawal in the same proportions as then apply for deducting monthly charges under your Policy or, if that is not possible, proportionally to the amount of accumulation value you then have in each investment option. POLICY LOANS. You may at any time borrow from us an amount equal to your Policy's cash surrender value (less our estimate of three months' charges and less the interest that will be payable on your loan through your next Policy anniversary). The minimum amount of each loan is $500 or, if less, the entire remaining borrowable amount under your Policy. We remove from your investment options an amount equal to your loan and hold that amount as additional collateral for the loan. We will credit your Policy with interest on this collateral amount at an effective annual rate of 4% (rather than any amount you could otherwise earn in one of our investment options), and we will charge you interest on your loan at an effective annual rate of 4.75%. Loan interest is payable annually, on the Policy anniversary, in advance, at a rate of 4.51%. Any amount not paid by its due date will automatically be added to the loan balance as an additional loan. Interest you pay on Policy loans will not in most cases be deductible on your tax returns. You may choose which of your investment options the loan will be taken from. If you do not so specify, we will allocate the loan in the same way that charges under your Policy are being allocated. If this is not possible, we will make the loan pro-rata from each investment option that you then are using. You may repay all or part (but not less than $100) of your loan at any time. You must designate any loan repayment as such. Otherwise, we will treat it as a premium payment instead. Any loan repayments go first to repay all loans that were taken from our declared fixed interest account investment option. We will invest any additional loan repayments you make in the investment options you request. In the absence of such a request we will invest the repayment in the same proportion as you then have selected for premium payments that we receive from you. Any unpaid loan will be deducted from the proceeds we pay following the insured person's death. PREFERRED LOAN INTEREST RATE. We will credit a higher interest rate on an amount of the collateral securing Policy loans taken out after the first 10 Policy years. The maximum amount of new loans that will receive this preferred loan interest rate for any year is (a) 10% of your Policy's accumulation value (including any loan collateral we are holding for your Policy loans) at the beginning of the Policy year or (b) if less, your Policy's maximum remaining loan value at that anniversary. We intend to set the rate of interest we credit to your preferred collateral amount equal to the loan interest rate you 18 are paying, resulting in a zero net cost of borrowing for that amount. We have full discretion to vary the preferred rate, however, provided that it will always be greater than the rate we are then crediting in connection with regular Policy loans. Because we first offered the Policies in 1998, we have not yet applied the preferred loan interest rate to any Policy loan amounts. MATURITY OF YOUR POLICY. If the insured person is still living on the "Maturity Date" shown on page 3 of your Policy, we will automatically pay you the cash surrender value of the Policy, and the Policy will terminate. The maturity date is the Policy anniversary nearest the insured person's 95th birthday. CAN I CHOOSE THE FORM IN WHICH AGL PAYS OUT THE PROCEEDS FROM MY POLICY? CHOOSING A PAYMENT OPTION. You may choose to receive the full proceeds from the Policy (and any riders) as a single sum. This includes proceeds that become payable upon the death of the insured person, full surrender or the maturity date. Alternatively, you may elect that all or part of such proceeds be applied to one or more of the following payment options: o Option 1 - Equal monthly payments for a specified period of time. o Option 2 - Equal monthly payments of a specified amount until all amounts are paid out. o Option 3 - Equal monthly payments for the payee's life, but with payments guaranteed for a specified number of years. These payments are based on annuity rates that are set forth in the Policy or, at the payee's request, the annuity rates that we then are using. o Option 4 - Proceeds left to accumulate with interest. Additional payment options may also be available with our consent. We have the right to veto any payment option, if the payee is a corporation or other entity. You can read more about each of these options in our Policy form and in the separate form of payment contract that we issue when any such option takes effect. Within 60 days after the insured person's death, any payee entitled to receive proceeds as a single sum may elect one or more payment options. Interest rates that we credit under each option will be at least 3%. CHANGE OF PAYMENT OPTION. You may change any payment option you have elected at any time while the Policy is in force. 19 TAX IMPACT. If a payment option is chosen, you or your beneficiary may have tax consequences. You therefore should consult with a qualified tax adviser before deciding whether to elect one or more payment options. TO WHAT EXTENT CAN AGL VARY THE TERMS AND CONDITIONS OF THE POLICIES IN PARTICULAR CASES? Listed below are some variations we may make in the terms of a Policy. Any variations will be made only in accordance with uniform rules that we establish. POLICIES PURCHASED THROUGH "INTERNAL ROLLOVERS." We maintain published rules that describe the procedures necessary to replace the other life insurance we issue with one of the Policies. Not all types of other insurance we issue is eligible to be replaced with one of the Policies. Our published rules may be changed from time to time, but are evenly applied to all our customers. POLICIES PURCHASED THROUGH TERM LIFE CONVERSIONS. Also, we maintain rules about how to make a premium payment to a Policy by what is referred to as a term conversion. Term conversions are available to owners of term life insurance we have issued. Any right to a term conversion is stated in the term life insurance policy. Again, our published rules about term conversions may be changed from time to time, but are evenly applied to all our customers. STATE LAW REQUIREMENTS. AGL is subject to the insurance laws and regulations in every jurisdiction in which Platinum Investor is sold. As a result, various time periods and other terms and conditions described in this prospectus may vary depending on where you reside. These variations will be reflected in your Policy and riders, or related endorsements. VARIATIONS IN EXPENSES OR RISKS. AGL may vary the charges and other terms of the Policies where special circumstances result in sales or administrative expenses or mortality risks that are different from those normally associated with the Policies. HOW WILL MY POLICY BE TREATED FOR INCOME TAX PURPOSES? Generally, death benefits paid under a Policy are not subject to income tax, and earnings on your accumulation value are not subject to income tax as long as we do not pay them out to you. If we do pay any amount of your Policy's accumulation value upon surrender, partial surrender, or maturity of your Policy, all or part of that distribution may be treated as a return of the premiums you paid, and therefore not subject to income tax. Amounts you receive as Policy loans are not taxable to you, unless you have paid such a large amount of premiums that your Policy becomes what the tax law calls a "modified endowment contract." In that case, the loan will be taxed as if it were a partial surrender. Furthermore, loans, partial surrenders and other distributions from a modified endowment contract may require you to pay additional taxes and penalties that otherwise would not apply. 20 For further information about the tax consequences of owning a Policy, please read "Tax Effects" starting on page 26, below. HOW DO I COMMUNICATE WITH AGL? When we refer to "you," we mean the person who is duly authorized to take any contemplated action with respect to a Policy. Generally, this is the owner named in the Policy. Where a Policy has more than one owner, each owner generally must join in any requested action, except for transfers and changes in the allocation of future premiums or charges among the investment options. GENERAL. You should mail or express checks and money orders for premium payments and loan repayments directly to our Home Office at the appropriate address shown on the cover of this prospectus. The following requests must be made in writing signed and dated by you: transfer of accumulation value; loan; full surrender; partial surrender; change of beneficiary or contingent beneficiary; change of allocation percentages for premium payments, loan repayments or charges; change of death benefit option or manner of death benefit payment; increase or decrease in specified insurance amount; addition or cancellation of, or other action with respect to, any rider benefits; election of a payment option for Policy proceeds; tax withholding elections; and telephone transaction privileges. You should mail or express these requests to our Home Office at the appropriate address shown on the cover of this prospectus. You should also communicate notice of the insured person's death, and related documentation, to our Home Office. We have special forms which should be used for loans, assignments, partial and full surrenders, changes of owner or beneficiary, and all other contractual changes. A Service Request form covering many of these transactions is attached to the back of this prospectus. You will be asked to return your Policy when you request a full surrender. You may also obtain these forms from our Home Office or from your AGL representative. Each communication must include your name, Policy number and, if you are not the insured person, that person's name. We cannot process any requested action that does not include all required information. TELEPHONE TRANSACTIONS. If you have a completed telephone authorization form on file with us, you may make transfers, or change the allocation of future premium payments or deduction of charges, by telephone, subject to the terms of the form. We will honor telephone instructions from any person who provides the correct information, so there is a risk of possible loss to you if unauthorized persons use this service in your name. Our current procedure is that only the owner or your AGL representative may make a transfer request by phone. We are not liable for any acts or omissions based upon instructions that we reasonably believe to be genuine. Our procedures include verification of the Policy number, the identity of the caller, both the insured person's and owner's names, and a form of personal identification from the caller. We will mail you a prompt written confirmation of the transaction. If many people seek to make telephone requests at or about the same time, or if our recording equipment malfunctions, it may be impossible for you to make a telephone 21 request at the time you wish. If this occurs, you should submit a written request. Also, if, due to malfunction or other circumstances, the recording of your telephone request is incomplete or not fully comprehensible, we will not process the transaction. The phone number for telephone requests is 1-888-325-9315. The Policies are not designed for professional market timing organizations or other entities utilizing programmed and frequent transfers. We reserve the right at any time and without prior notice to any party to terminate, suspend, or modify our policies or procedures regarding telephone requests or to cease permitting telephone requests altogether. ILLUSTRATIONS OF HYPOTHETICAL POLICY BENEFITS To help clarify how our Policies work, we have prepared the following tables:
Page to see in this Prospectus ---------- Table Platinum Platinum ----- Investor I Investor II ---------- ----------- Death Benefit Option 1 - Current Charges................... Maximum Charges..................
The tables show how death benefits, accumulation values, and cash surrender values ("Policy benefits") under hypothetical Platinum Investor Policies would vary over time if the investment options had constant hypothetical gross annual investment returns of 0%, 6% or 12% over the years covered by each table. The tables are for a __ year-old male non-tobacco user and who is a better-than-average mortality risk in other respects as well. Planned premium payments of $_______ for an initial $_______ of specified amount coverage are assumed to be paid at the beginning of each Policy year. The illustrations assume no Policy loan has been taken. The differences between the accumulation values and the cash surrender values for the first 10 years in the tables for the Platinum Investor I version are that version's surrender charges. Although the tables below do not include illustrations of a Policy with an Option 2 death benefit, such a Policy would have higher death benefits, lower cash values, and a greater risk of lapse. Separate tables are included to illustrate both current and guaranteed maximum charges for both Platinum Investor I and Platinum Investor II. The charges assumed in the current charge tables include a daily charge at an annual rate of .75% for the first 20 Policy years (for Platinum Investor I) or 10 years (for Platinum Investor II), and .50% thereafter, and a flat monthly charge of $6. The guaranteed maximum charge tables assume that these charges will be .90% and $12, respectively, in all years. In Texas and Oregon, the guaranteed maximum daily charge is .25% per annum higher for certain periods of time than the daily charges assumed in the maximum charge tables below. 22 Therefore, an identical Policy sold in those states would have values less than those illustrated if we deducted the maximum charges. The charges assumed by both the current and guaranteed maximum charge tables also include __% for expenses of the Mutual Funds, which is the unweighted average of the advisory fees payable with respect to each Mutual Fund, after all reimbursements, as reflected on pages 11 and 12, above, plus the weighted average of all other operating expenses of each such Fund after all reimbursements, as reflected on pages 11 and 12, above. The total assumed tax charges for all of the tables are 2.5% of premiums. The second column of each table shows the effect of an amount equal to the premiums invested to earn interest, after taxes, of 5% compounded annually. INDIVIDUAL ILLUSTRATIONS. On request, we will furnish you with a comparable illustration based on your Policy's characteristics. If you request illustrations more than once in any Policy year, we may charge for the illustration. PLATINUM INVESTOR I POLICY ILLUSTRATION PLANNED PREMIUM $_________ INITIAL SPECIFIED AMOUNT $_______ DEATH BENEFIT OPTION 1 MALE AGE __ PREFERRED RISK NON-TOBACCO USER ASSUMING CURRENT CHARGES
DEATH BENEFIT ACCUMULATION VALUE CASH SURRENDER VALUE ASSUMING ASSUMING ASSUMING HYPOTHETICAL GROSS HYPOTHETICAL GROSS HYPOTHETICAL GROSS ANNUAL INVESTMENT ANNUAL INVESTMENT ANNUAL INVESTMENT RETURN OF RETURN OF RETURN OF END OF POLICY ACCUMULATED YEAR PREMIUMS 0% 6% 12% 0% 6% 12% 0% 6% 12% (1) 1 2 3 4 5 6 7 8 9 10 15 20 (1) Assumes net interest of 5% compounded annually.
THE VALUES WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES. THE MONTHLY GUARANTEE PREMIUM FOR THIS POLICY WOULD BE $________. THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. [Comparable tables for other configurations are to be inserted.] 23 ADDITIONAL INFORMATION A general overview of the Policies appears at pages 1 to 23, above. The additional information that follows gives more details, but generally does NOT repeat what is set forth above.
Contents of Additional Information Page to see in this Prospectus AGL................................................................................... Separate Account VL-R................................................................. Tax Effects........................................................................... Voting Privileges..................................................................... Your Beneficiary...................................................................... Assigning Your Policy................................................................. More About Policy Charges............................................................. Effective Date of Policy and Transactions Thereunder.................................. More About Our Declared Interest Option............................................... Distribution of the Policies.......................................................... Payment of Policy Proceeds............................................................ Adjustments to Death Benefit.......................................................... Additional Rights That We Have........................................................ Our Reports to Policy Owners.......................................................... AGL's Management...................................................................... Legal Matters......................................................................... Accounting and Actuarial Experts...................................................... Certain Potential Conflicts...........................................................
SPECIAL WORDS AND PHRASES. If you want more information about any words or phrases that you read in this prospectus, you may wish to refer to the Index of Words and Phrases that appears on the inside of the back cover of this prospectus. That index will tell you on what page you can read more about many of the words and phrases that we use. AGL We are American General Life Insurance Company ("AGL"). AGL is a stock life insurance company organized under the laws of Texas. AGL is a successor in interest to a company originally organized under the laws of Delaware in 1917. AGL is a indirect, wholly-owned subsidiary of American General Corporation (formerly American General Insurance Company), a diversified financial services holding company engaged primarily in the insurance business. The commitments under the Contracts are AGL's, and American General Corporation has no legal obligation to back those commitments. 24 SEPARATE ACCOUNT VL-R We hold the mutual Fund shares in which any of your accumulation value is invested in our Separate Account VL-R. Separate Account VL-R is a "separate account," as defined by the SEC and is registered as a unit investment trust with the SEC under the Investment Company Act of 1940. We created the separate account on May 6, 1997. For recordkeeping and financial reporting purposes, Separate Account VL-R is divided into 17 separate "divisions" each corresponding to one of the 17 available investment options (other than our declared fixed interest option). We hold the mutual Fund shares in which we invest your accumulation value for an investment option in the division that corresponds to that investment option. The assets in the separate account are our property. Nevertheless, the assets in the separate account would be available only to satisfy the claims of owners of the Policies, to the extent they have allocated their accumulation value to the separate account. Our other creditors could reach only those separate account assets (if any) that are in excess of the amount of our reserves and liabilities under the Policies with respect to the separate account. AGL also issues variable annuity contracts through its Separate Accounts A and D, which also are registered investment companies. TAX EFFECTS This discussion is based on current federal income tax law and interpretations. It assumes that the Policy owner is a natural person who is a U.S. citizen and resident. The tax effects on corporate taxpayers, non-U.S. residents or non-U.S. citizens, may be different. This discussion is general in nature, and should not be considered tax advice, for which you should consult a qualified tax adviser. GENERAL. A Platinum Investor Policy will be treated as "life insurance" for federal income tax purposes (a) if it meets the definition of life insurance under Section 7702 of the Internal Revenue Code of 1986 ("the Code") and (b) for as long as the investments made by the underlying Mutual Funds satisfy certain investment diversification requirements under Section 817(h) of the Code. We believe that the Policies will meet these requirements and that: o the death benefit received by the beneficiary under your Policy will not be subject to federal income tax; and o increases in your Policy's accumulation value as a result of interest or investment experience will not be subject to federal income tax unless and until there is a distribution from your Policy, such as a surrender or a partial surrender. 25 The federal income tax consequences of a distribution from your Policy can be affected by whether your Policy is determined to be a "modified endowment contract" (which is discussed below). In all cases, however, the character of all income that is described below as taxable to the payee will be ordinary income (as opposed to capital gain). TESTING FOR MODIFIED ENDOWMENT CONTRACT STATUS. Your Policy will be a "modified endowment contract" if, at any time during the first seven Policy years, you have paid a cumulative amount of premiums that exceeds the premiums that would have been paid by that time under a similar fixed-benefit insurance policy that was designed (based on certain assumptions mandated under the Code) to provide for paid-up future benefits after the payment of seven level annual premiums. This is called the "seven-pay" test. Whenever there is a "material change" under a Policy, the Policy will generally be (a) treated as a new contract for purposes of determining whether the Policy is a modified endowment contract and (b) subjected to a new seven-pay period and a new seven-pay limit. The new seven-pay limit would be determined taking into account, under a prescribed formula, the accumulation value of the Policy at the time of such change. A materially changed Policy would be considered a modified endowment if it failed to satisfy the new seven-pay limit. A material change for these purposes could occur as a result of a change in death benefit option, the selection of additional rider benefits, an increase in your Policy's specified amount of coverage, and certain other changes. If your Policy's benefits are reduced during the first seven Policy years (or within seven years after a material change), the calculated seven-pay premium limit will be redetermined based on the reduced level of benefits and applied retroactively for purposes of the seven-pay test. (Such a reduction in benefits could include, for example, a decrease in specified amount you request or, in some cases, a partial surrender or termination of additional benefits under a rider.) If the premiums previously paid are greater than the recalculated seven-payment premium level limit, the Policy will become a modified endowment contract. A life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. OTHER EFFECTS OF POLICY CHANGES. Changes made to your Policy (for example, a decrease in benefits or a lapse or reinstatement of your Policy) may also have other effects on your Policy. Such effects may include impacting the maximum amount of premiums that can be paid under your Policy, as well as the maximum amount of accumulation value that may be maintained under your Policy. TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT. As long as your Policy remains in force during the insured person's lifetime, as a non-modified endowment contract, a Policy loan will be treated as indebtedness, and no part of the loan proceeds will be subject to current federal income tax. Interest on the loan generally will not be tax deductible. 26 After the first 15 Policy years, the proceeds from a partial surrender will not be subject to federal income tax except to the extent such proceeds exceed your "basis" in your Policy. (Your basis generally will equal the premiums you have paid, less the amount of any previous distributions from your Policy that were not taxable.) During the first 15 Policy years, the proceeds from a partial surrender could be subject to federal income tax, under a complex formula, to the extent that your accumulation value exceeds your basis in your Policy. On the maturity date or upon full surrender, any excess in the amount of proceeds we pay (including amounts we use to discharge any Policy loan) over your basis in the Policy, will be subject to federal income tax. In addition, if a Policy terminates after a grace period while there is a policy Loan, the cancellation of such loan and accrued loan interest will be treated as a distribution and could be subject to tax under the above rules. Finally, if you make an assignment of rights or benefits under your Policy you may be deemed to have received a distribution from your Policy, all or part of which may be taxable. TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS A MODIFIED ENDOWMENT CONTRACT. If your Policy is a modified endowment contract, any distribution from your Policy during the insured person's lifetime will be taxed on an "income-first" basis. Distributions for this purpose include a loan (including any increase in the loan amount to pay interest on an existing loan or an assignment or a pledge to secure a loan) or partial surrender. Any such distributions will be considered taxable income to you to the extent your accumulation value exceeds your basis in the Policy. (For modified endowment contracts, your basis is similar to the basis described above for other Policies, except that it also would be increased by the amount of any prior loan under your Policy that was considered taxable income to you.) For purposes of determining the taxable portion of any distribution, all modified endowment contracts issued by the same insurer (or its affiliate) to the same owner (excluding certain qualified plans) during any calendar year are aggregated. The U.S. Treasury Department has authority to prescribe additional rules to prevent avoidance of "income-first" taxation on distributions from modified endowment contracts. A 10% penalty tax also will apply to the taxable portion of most distributions from a Policy that is a modified endowment contract. The penalty tax will not, however, apply to distributions (i) to taxpayers 59 1/2 years of age or older, (ii) in the case of a disability (as defined in the Code) or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his or her beneficiary. If your Policy terminates after a grace period while there is a Policy loan, the cancellation of such loan will be treated as a distribution to the extent not previously treated as such and could be subject to tax, including the 10% penalty tax, as described above. In addition, on the maturity date and upon a full surrender, any excess of the proceeds we pay (including any amounts we use to discharge any loan) over your basis in the Policy, will be subject to federal income tax and, unless an exception applies, the 10% penalty tax. Distributions that occur during a Policy year in which your Policy becomes a modified endowment contract, and during any subsequent Policy years, will be taxed as described in the two preceding paragraphs. In addition, 27 distributions from a Policy within two years before it becomes a modified endowment contract also will be subject to tax in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract. The Treasury Department has been authorized to prescribe rules which would treat similarly other distributions made in anticipation of a policy becoming a modified endowment contract. POLICY LAPSES AND REINSTATEMENTS. A Policy which has lapsed may have the tax consequences described above, even though you may be able to reinstate that Policy. For tax purposes, some reinstatements may be treated as the purchase of a new insurance contract. TERMINAL ILLNESS RIDER. Amounts received under an insurance policy on the life of an individual who is terminally ill, as defined by the tax law, are generally excludable from the payee's gross income. We believe that the benefits provided under our terminal illness rider meet the law's definition of terminally ill and can qualify for this income tax exclusion. This exclusion does not apply, however, to amounts paid to someone other than the insured person, if the payee has an insurable interest in the insured person's life because the insured is a director, officer or employee of the payee or by reason of the insured person being financially interested in any trade or business carried on by the payee. DIVERSIFICATION. Under Section 817(h) of the Code, the Treasury Department has issued regulations that implement investment diversification requirements. Failure by us to comply with these regulations would disqualify your Policy as a life insurance policy under Section 7702 of the Code. If this were to occur, you would be subject to federal income tax on the income under the Policy for the period of the disqualification and for subsequent periods. Our separate account, through the Mutual Funds, intends to comply with these requirements. In connection with the issuance of then temporary diversification regulations, the Treasury Department stated that it anticipated the issuance of guidelines prescribing the circumstances in which the ability of a policy owner to direct his or her investment to particular Mutual Funds within a separate account may cause the policy owner, rather than the insurance company, to be treated as the owner of the assets in the account. If you were considered the owner of the assets of the separate account, income and gains from the account would be included in your gross income for federal income tax purposes. Under current law, however, we believe that AGL, and not the owner of a Policy, would be considered the owner of the assets of our separate account. ESTATE AND GENERATION SKIPPING TAXES. If the insured person is the Policy's owner, the death benefit under a Platinum Investor Policy will generally be includable in the owner's estate for purposes of federal estate tax. If the owner is not the insured person, under certain conditions, only an amount approximately equal to the cash surrender value of the Policy would be includable. Federal estate tax is integrated with federal gift tax under a unified rate schedule. In general, estates less than $625,000 (or larger amounts specified in the Code to commence in certain future years) will not 28 incur a federal estate tax liability. In addition, an unlimited marital deduction may be available for federal estate tax purposes. As a general rule, if a "transfer" is made to a person two or more generations younger than the Policy's owner, a generation skipping tax may be payable at rates similar to the maximum estate tax rate in effect at the time. The generation skipping tax provisions generally apply to "transfers" that would be subject to the gift and estate tax rules. Individuals are generally allowed an aggregate generation skipping tax exemption of $1 million. Because these rules are complex, you should consult with a qualified tax adviser for specific information, especially where benefits are passing to younger generations. The particular situation of each Policy owner, insured person or beneficiary will determine how ownership or receipt of Policy proceeds will be treated for purposes of federal estate and generation skipping taxes, as well as state and local estate, inheritance and other taxes. PENSION AND PROFIT-SHARING PLANS. If Platinum Investor Policies are purchased by a trust or other entity that forms part of a pension or profit-sharing plan qualified under Section 401(a) of the Code for the benefit of participants covered under the plan, the federal income tax treatment of such Policies will be somewhat different from that described above. If purchased as part of a pension or profit-sharing plan, the reasonable net premium cost for such amount of insurance is required to be included annually in the plan participant's gross income. This cost (generally referred to as the "P.S. 58" cost) is reported to the participant annually. If the plan participant dies while covered by the plan and the Policy proceeds are paid to the participant's beneficiary, then the excess of the death benefit over the Policy's accumulation value will not be subject to federal income tax. However, the Policy's accumulation value will generally be taxable to the extent it exceeds the participant's cost basis in the Policy. The participant's cost basis will generally include the costs of insurance previously reported as income to the participant. Special rules may apply if the participant had borrowed from the Policy or was an owner-employee under the plan. There are limits on the amounts of life insurance that may be purchased on behalf of a participant in a pension or profit-sharing plan. Complex rules, in addition to those discussed above, apply whenever life insurance is purchased by a tax qualified plan. You should consult a qualified tax adviser. OTHER EMPLOYEE BENEFIT PROGRAMS. Complex rules may also apply when a Policy is held by an employer or a trust, or acquired by an employee, in connection with the provision of other employee benefits. These Policy owners must consider whether the Policy was applied for by or issued to a person having an insurable interest under applicable state law and with the insured person's consent. The lack of an insurable interest or consent may, among other things, affect the qualification of the Policy as life insurance for federal income tax purposes and the right of the beneficiary to receive a death benefit. 29 ERISA. Employers and employer-created trusts may be subject to reporting, disclosure and fiduciary obligations under the Employee Retirement Income Security Act of 1974. You should consult a qualified legal adviser. OUR TAXES. The operations of our Separate Account VL-R are reported in our federal income tax return, but we currently pay no income tax on the separate account's investment income and capital gains, because these items are, for tax purposes, reflected in our variable life insurance policy reserves. Therefore, no charge is currently being made to any separate account division for taxes. We reserve the right to make a charge in the future for taxes incurred; for example, a charge to the separate account for income taxes incurred by us that are allocable to the Policies. We may have to pay state, local or other taxes in addition to applicable taxes based on premiums. At present, these taxes are not substantial. If they increase, charges may be made for such taxes when they are attributable to our separate account or allocable to the Policies. Certain Mutual Funds in which your accumulation value is invested may elect to pass through to AGL taxes withheld by foreign taxing jurisdictions on foreign source income. Such an election will result in additional taxable income and income tax to AGL. The amount of additional income tax, however, may be more than offset by credits for the foreign taxes withheld which are also passed through. These credits may provide a benefit to AGL. WHEN WE WITHHOLD INCOME TAXES. Generally, unless you provide us with an election to the contrary before we make the distribution, we are required to withhold income tax from any proceeds we distribute as part of a taxable transaction under your Policy. In some cases, where generation skipping taxes may apply, we may also be required to withhold for such taxes unless we are provided satisfactory written notification that no such taxes are due. TAX CHANGES. The U.S. Congress frequently considers legislation that, if enacted, could change the tax treatment of life insurance policies. In addition, the Treasury Department may amend existing regulations, issue regulations on the qualification of life insurance and modified endowment contracts, or adopt new interpretations of existing law. State and local tax law or, if you are not a U.S. citizen and resident, foreign tax law, may also affect the tax consequences to you, the insured person or your beneficiary, and are subject to change. Any changes in federal, state, local or foreign tax law or interpretation could have a retroactive effect. We suggest you consult a qualified tax adviser. VOTING PRIVILEGES You will be entitled to instruct us how to vote mutual Fund shares held in the divisions of Separate Account VL-R and attributable to your Policy at meetings of shareholders of the Funds. The number of votes for which you may give directions will be determined as of the record date for the meeting. The number of votes you are entitled to direct with respect to a particular Mutual Fund is equal to (a) your accumulation value invested in that Fund divided by (b) the net asset value of one share of that Fund. Fractional votes will be 30 recognized. Separate Account VL-R will vote all shares of each Fund that it holds of record in the same proportions as those shares for which we have received instructions from owners participating in that Fund through the separate account. If you are entitled to give us voting instructions, we will send you proxy material and a form for providing such instructions. In certain cases, we may disregard instructions relating to changes in a Fund's investment manager or its investment policies. We will advise you if we do and detail the reasons in our next report to Policy owners. AGL reserves the right to modify these procedures in any manner consistent with applicable legal requirements and interpretations as in effect from time to time. YOUR BENEFICIARY You name your beneficiary when you apply for a Policy. The beneficiary is entitled to the insurance benefits of the Policy. You may change the beneficiary during the insured person's lifetime. We also require the consent of any irrevocably named beneficiary. A new beneficiary designation is effective as of the date you sign it, but will not affect any payments we may make before we receive it. If no beneficiary is living when the insured person dies, we will pay the insurance proceeds to the owner or the owner's estate. ASSIGNING YOUR POLICY You may assign (transfer) your rights in a Policy to someone else as collateral for a loan or for some other reason, if we agree. Two copies of the assignment must be forwarded to us. We are not responsible for any payment we make or any action taken before we receive due and complete notice of the assignment in good order. Nor are we responsible for the validity of the assignment. An absolute assignment is a change of ownership. All collateral assignees of record must consent to any full surrender, partial surrender, loan or payment from a Policy under a terminal illness rider. Because there may be unfavorable tax consequences, including recognition of taxable income and the loss of income tax-free treatment for any death benefit payable to the beneficiary, you should consult a qualified tax adviser prior to making an assignment. MORE ABOUT POLICY CHARGES PURPOSE OF OUR CHARGES. The charges under the Policies are designed to cover, in the aggregate, our direct and indirect costs of selling, administering and providing benefits under the Policies. They are also designed, in the aggregate, to compensate us for the risks we assume and services that we provide under the Policies. These include mortality risks (such as the risk that insured persons will, on average, die before we expect, thereby increasing the amount of claims we must pay); investment risks (such as the risk that adverse investment performance will make it more costly for us to provide the 5-year no-lapse guarantee under the Platinum Investor I 31 Policies or reduce the amount of our daily charge fee revenues below what we anticipate); sales risks (such as the risk that the number of Policies we sell and the premiums we receive (net of withdrawals) are less than we expect, thereby depriving us of expected economies of scale); regulatory risks (such as the risk that tax or other regulations may be changed in ways adverse to issuers of variable life insurance policies); and expense risks (such as the risk that the costs of administrative services that the Policies require us to provide will exceed what we currently project). If the charges that we collect from the Policies exceed our total costs in connection with the Policies, we will earn a profit. Otherwise we will incur a loss. CHANGE OF TOBACCO USE. If the person insured under your Policy is a tobacco user, you may apply to us for an improved risk class if the insured person meets our then applicable requirements for demonstrating that he or she has ceased tobacco use for a sufficient period. GENDER NEUTRAL POLICIES. Our cost of insurance charge rates in Montana will not be greater than the comparable male rates illustrated in this prospectus. Congress and the legislatures of various states have from time to time considered legislation that would require insurance rates to be the same for males and females of the same age, rating class and tobacco user status. In addition, employers and employee organizations should consider, in consultation with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase of Platinum Investor Policies in connection with an employment-related insurance or benefit plan. In a 1983 decision, the United States Supreme Court held that, under Title VII, optional annuity benefits under a deferred compensation plan could not vary on the basis of sex. COST OF INSURANCE RATES. Because of specified amount increases, different cost of insurance rates may apply to different increments of specified amount under your Policy. If so, we attribute your accumulation value first to the oldest increments of specified amount in order to compute our net amount at risk at each cost of insurance rate. See "Monthly Insurance Charge" beginning on page 8, above. DECREASES IN THE SPECIFIED AMOUNT OF A PLATINUM INVESTOR I POLICY. An amount of any remaining surrender charge will be deducted upon a decrease in specified amount under a Platinum Investor I Policy. If there have been no previous specified amount increases, the amount we deduct will bear the same proportion to the total surrender charge then applicable as the amount of the specified amount decrease bears to the Policy's total specified amount. The remaining amount of surrender charge that we could impose at a future time, however, will also be reduced proportionally. If there have been increases in specified amount, we decrease first those portions of specified amount that were most recently established. We also deduct any remaining amount of the surrender charge that was established with that portion of specified amount (which we pro-rate if less than that entire portion of specified amount is being cancelled). 32 EFFECTIVE DATE OF POLICY AND TRANSACTIONS THEREUNDER VALUATION DATES, TIMES, AND PERIODS. We generally compute values under Policies on each day that we are open for business except, with respect to any investment option, days on which the related mutual Fund does not value its shares. We call each such day a "valuation date." We compute policy values as of 3:00 p.m., Central time, on each valuation date. We call this our "close of business." We call the time from the close of business on one valuation date to the close of business of the next valuation date a "valuation period." DATE OF RECEIPT. Generally we consider that we have received a premium payment or another communication from you on the day we actually receive it in full and proper order at our Home Office (shown on the cover page of this prospectus). If we receive it after the close of business on any valuation date, however, we consider that we have received it on the day following that valuation date. COMMENCEMENT OF INSURANCE COVERAGE. After you apply for a Policy, it can sometimes take up to several weeks for us to gather and evaluate all the information we need to decide whether to issue a Policy to you and, if so, what the insured person's insurance rate class should be. We will not pay a death benefit under a Policy unless (a) it has been delivered to the owner and at least the minimum first premium has been paid, and (b) at the time of such delivery and payment, there have been no adverse developments in the insured person's health or risk of death. However, if you pay at least the minimum first premium payment with your application for a Policy, we will provide temporary coverage of up to $300,000 if the insured person meets certain medical and risk requirements. The terms and conditions of this coverage are described in our "Limited Temporary Life Insurance Agreement." You can obtain a copy from our Home Office by writing to the address shown on the cover of this prospectus or from your AGL representative. DATE OF ISSUE; POLICY MONTHS AND YEARS. After we approve an application for a Policy and assign an appropriate insurance rate class, we prepare the Policy. The day we begin to deduct charges will appear on page 3 of your Policy and is called the "date of issue." Policy months and years are measured from the date of issue. In order to preserve a younger age at issue for the insured person, we may assign a date of issue to a Policy that is up to 6 months earlier than otherwise would apply. MONTHLY DEDUCTION DAYS. Each charge that we deduct monthly is assessed against your accumulation value at the close of business on the date of issue and at the end of each subsequent valuation period that includes the first day of a Policy month. We call these "monthly deduction days." COMMENCEMENT OF INVESTMENT PERFORMANCE. We begin to credit an investment return to the accumulation value resulting from your initial premium payment on the later of (a) the date of issue, the date we receive your full minimum 33 first premium at our Home Office, or, (c) in the case of a back-dated policy, the date we approve the Policy for insurance. EFFECTIVE DATE OF OTHER PREMIUM PAYMENTS AND REQUESTS THAT YOU MAKE. Premium payments (after the first) and transactions implemented in response to requests and elections made by you are generally effected at the end of the valuation period in which we receive the payment, request or election and based on prices and values computed as of that same time. Exceptions to this general rule are as follows: o Increases or decreases you request in the specified amount of insurance, and reinstatements of Policies that have lapsed take effect on the Policy's monthly deduction day on or next following our approval of the transaction. o We may return premium payments if we determine that such premiums would cause your Policy to become a modified endowment contract or to cease to qualify as life insurance under federal income tax law. o If you exercise the right to return your Policy described on the cover of this prospectus, your coverage will end when you mail us your Policy or deliver it to your AGL representative. o If you pay a premium in connection with a request which requires our approval, your payment will be applied when received rather than following the effective date of the change requested so long as your coverage is in force and the amount paid will not cause you to exceed premium limitations under the Code. If we do not approve your request, no premium will be refunded to you except to the extent necessary to cure any violation of the maximum premium limitations under the Code. This procedure will not apply to premiums remitted in connection with reinstatement requests. MORE ABOUT OUR DECLARED FIXED INTEREST ACCOUNT OPTION OUR GENERAL ACCOUNT. Our general account assets are all of our assets that we do not hold in legally segregated separate accounts. Our general account supports our obligations to you under your Policy's declared fixed interest account investment option. Because of applicable exemptive provisions, no interest in this option has been registered under the Securities Act of 1933; nor is our general account or our declared fixed interest account an investment company under the Investment Company Act of 1940. We have been advised that the staff of the SEC has not reviewed the disclosures that are included in this prospectus for your information about our general account or our declared fixed interest account option. Those disclosures, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. 34 HOW WE DECLARE INTEREST. We can at any time change the rate of interest we are paying on any accumulation value allocated to our declared fixed interest account option, but it will always be at an effective annual rate of at least 4%. Under these procedures, it is likely that at any time different interest rates will apply to different portions of your accumulation value, depending on when each portion was allocated to our declared fixed interest account option. Any charges, partial surrenders, or loans that we take from any accumulation value that you have in our declared fixed interest account option will be taken from each portion in reverse chronological order based on the date that accumulation value was allocated to this option. DISTRIBUTION OF THE POLICIES American General Securities Incorporated ("AGSI") is the principal underwriter of the Policies. AGSI is a wholly-owned subsidiary of AGL, and its principal office is the same as AGL's Home Office. AGSI is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 (1934 Act) and is a member of the National Associated of Securities Dealers, Inc. ("NASD"). AGSI is also the principal underwriter for AGL's Separate Accounts A and D, and Separate Account E of American General Life Insurance Company of New York, which is a wholly-owned subsidiary of AGL. These separate accounts are registered investment companies. We sell our Policies through agents who are licensed by state insurance officials to sell our variable life policies. These agents are also registered representatives of AGSI or another firm that is registered with the SEC as a broker-dealer and is an NASD member. The agent who sells you this Policy receives sales commissions. We pay these commissions from our own resources and they do not result in any additional charge to you that is not described on pages 7-10, above. The commission we pay for selling the Platinum Investor I Policies is up to 95% of the premiums paid in the first Policy year up to a "target" amount, 4% of the premiums not in excess of the target amount paid in each of Policy years 2 through 10, 2.5% of all premiums in excess of the target amount received in any of Policy years 1 through 10, and .25% annually of the Policy's accumulation value in our investment options thereafter. (The target amount is an amount of level annual premium that would be necessary to support the benefits under your Policy, based on certain assumptions that we believe are reasonable.) The commission for the Platinum Investor II Policies is up to 25% of premiums paid in the first Policy year up to the target amount, 12% of the premiums not in excess of the target amount paid in each of Policy years 2 through 7, 2.5% on all premiums in excess of the target amount received in any of Policy years 1 through 7, and .25% of the Policy's accumulation value in our investment options thereafter. We pay a comparable amount of commissions with respect to any increase in the specified amount of coverage that you request. Commissions must be returned for any premium that we refund to you for any reason. 35 We pay the commissions directly to AGSI or any other selling broker-dealer firm. PAYMENT OF POLICY PROCEEDS GENERAL. We will pay any death benefit, maturity benefit, cash surrender value or loan proceeds within seven days after we receive the last required form or request (and any other documents that may be required for payment of death benefit). If we do not have information about the desired manner of payment within 60 days after the date of the insured person's death, we will pay the proceeds as a single sum, normally within seven days thereafter. DELAY OF DECLARED FIXED INTEREST ACCOUNT OPTION PROCEEDS. We have the right, however, to defer payment or transfers of amounts out of our declared fixed interest account option for up to six months. If we delay more than 30 days in paying you such amounts, we will pay interest of at least 3% a year from the date we receive all items we require to make the payment. DELAY FOR CHECK CLEARANCE. Also, we reserve the right to defer payment of that portion of your accumulation value that is attributable to a premium payment made by check for a reasonable period of time (not to exceed 15 days) to allow the check to clear the banking system. DELAY OF SEPARATE ACCOUNT PROCEEDS. Finally, we reserve the right to defer payment of any death benefit, loan or other distribution that is derived from that portion of your accumulation value that is allocated to Separate Account VL-R, if (a) the New York Stock Exchange is closed other than customary weekend and holiday closings, or trading on the New York Stock Exchange is restricted; (b) an emergency exists, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to fairly determine the accumulation value; or (c) the SEC by order permits the delay for the protection of owners. Transfers and allocations of accumulation value among the investment options may also be postponed under these circumstances. If we need to defer calculation of separate account values for any of the foregoing reasons, all delayed transactions will be processed at the next values that we do compute. DELAY TO CHALLENGE COVERAGE. We may challenge the validity of your insurance Policy based on any material misstatements in your application and any application for a change in coverage. However, o We cannot challenge the Policy after it has been in effect, during the insured person's lifetime, for two years from the date the Policy was issued or restored after termination. (Some states may require that we measure this time in some other way.) 36 o We cannot challenge any Policy change that requires evidence of insurability (such as an increase in specified amount) after the change has been in effect for two years during the insured person's lifetime. o We cannot challenge an additional benefit rider that provides benefits in the event that the insured person becomes totally disabled, after two years from the later of the Policy's date of issue or the date as of which the additional benefit rider becomes effective. ADJUSTMENTS TO DEATH BENEFIT SUICIDE. If the insured person commits suicide within two years after the date on which the Policy was issued, the death benefit will be limited to the total of all premiums that have been paid to the time of death minus any outstanding Policy loan and any partial surrenders. If the insured person commits suicide within two years after the effective date of an increase in specified amount that you requested, we will pay the death benefit based on the specified amount which was in effect before the increase, plus the monthly insurance deductions for the increase. Some states require that we compute differently these periods for non-contestability following a suicide. WRONG AGE OR SEX. If the age or gender of the insured person was misstated on your application for a Policy (or for any increase in benefits), we will adjust any death benefit to be what the monthly insurance charge deducted for the current month would have purchased based on the correct information. DEATH DURING GRACE PERIOD. If the insured person dies during the Policy's grace period, we will deduct any overdue monthly charges from the insurance proceeds. ADDITIONAL RIGHTS THAT WE HAVE We have the right at any time to o transfer the entire balance in an investment option in accordance with any transfer request you make that would reduce your accumulation value for that option to below $500; o transfer the entire balance proportionately to any other investment options you then are using, if the accumulation value in an investment option is below $500 for any other reason; o terminate the automatic rebalancing feature if your accumulation value falls below $5,000; 37 o change the underlying mutual Fund that any investment option uses; o add or delete investment options, combine two or more investment options, or withdraw assets relating to Platinum Investor from one investment option and put them into another; o operate Separate Account VL-R under the direction of a committee or discharge such a committee at any time; o operate the separate account, or one or more investment options, in any other form the law allows, including a form that allows us to make direct investments. Our separate account may be charged an advisory fee if its investments are made directly rather than through another investment company. In that case, we may make any legal investments we wish; o do any of the following, if in our judgment necessary or appropriate to ensure that the Policies continue to qualify for tax treatment as life insurance: decline to change death benefit options or the specified amount of insurance, refuse a partial surrender request, require you to pay additional premiums, make distributions from your Policy (which could require payment of taxes and penalties), or make any other changes in your Policy; or o make other changes in the Policies that do not reduce any cash surrender value, death benefit, accumulation value, or other accrued rights or benefits. If there are any material changes in the underlying investments of an investment option that you are using, you will be notified as required by law. We intend to comply with applicable law in making any changes and, if necessary, we will seek policy owner approval. OUR REPORTS TO POLICY OWNERS Shortly after the end of each Policy year, we will mail you a report that includes information about your Policy's current death benefit, accumulation value, cash surrender value and policy loans. Notices will be sent to you to confirm premium payments, transfers and certain other Policy transactions. We will mail to you at your last known address of record, these and any other reports and communications required by law. You should therefore give us prompt written notice of any address change. AGL'S MANAGEMENT The directors, executive officers, and (to the extent responsible for variable life operations) the other principal officers of AGL are listed below. 38
Name Positions and Offices with AGL ---- ------------------------------ Robert M. Devlin Chairman Jon P. Newton Vice Chairman Rodney O. Martin, Jr. Director, President & Chief Executive Officer David A. Fravel Director & Senior Vice President, Insurance Operations Robert F. Herbert, Jr. Director, Senior Vice President Chief Financial Officer, Treasurer & Controller Royce G. Imhoff, II Director, Senior Vice President & Chief Marketing Officer John V. LaGrasse Director, Senior Vice President & Chief Systems Officer Peter V. Tuters Director, Vice President & Chief Investment Officer Philip K. Polkinghorn Director Wayne A. Barnard Vice President & Chief Actuary
The principal business address of each person listed above is our Home Office; except that the street number for Messrs. Devlin, Newton, and Tuters is 2929 Allen Parkway. LEGAL MATTERS We are not involved in any legal proceedings that would be considered material with respect to a Policy owner's interest in Separate Account VL-R. Steven A. Glover, Esquire, Associate General Counsel of AGL, has opined as to the validity of the Policies. Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised AGL about certain federal securities and tax law matters in connection with the Policies. 39 ACCOUNTING AND ACTUARIAL EXPERTS The financial statements of AGL included in this prospectus have been audited by __________ LLP, as stated in their reports. The financial statements of AGL have been included in reliance on the reports of __________ LLP, independent accountants, given on the authority of such firm as experts in accounting and auditing. Actuarial matters in this prospectus have been examined by __________, __________, who is _______ of AGL. [His/Her] opinion on actuarial matters is filed as an exhibit to the registration statement we have filed with the SEC in connection with the Policies. CERTAIN POTENTIAL CONFLICTS The Mutual Funds sell shares to separate accounts of insurance companies, both affiliated and not affiliated with AGL. We currently do not foresee any disadvantages to you arising out of this. Nevertheless, differences in treatment under tax and other laws, as well as other considerations, could cause the interests of various owners to conflict. For example, violation of the federal tax laws by one separate account investing in the Funds could cause the contracts funded through another separate account to lose their tax-deferred status, unless remedial action were taken. However, each mutual Fund has advised us that its board of trustees (or directors) intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that a Fund's response to any such event insufficiently protects our Policy owners, we will see to it that appropriate action is taken to do so. If it becomes necessary for any separate account to replace shares of any mutual Fund in which it invests, that Fund may have to liquidate securities in its portfolio on a disadvantageous basis. FINANCIAL STATEMENTS The financial statements of AGL contained in this prospectus should be considered to bear only upon the ability of AGL to meet its obligations under Platinum Investor Policies. They should not be considered as bearing upon the investment experience of the separate account. No financial statements of Separate Account VL-R are included because, at the date of this prospectus, the separate account had not yet commenced operations and had no assets or liabilities.
Consolidated Financial Statements Of Page to see in American General Life Insurance Company this Prospectus --------------------------------------- --------------- Report of __________ LLP, Independent Auditors Consolidated Balance Sheets as of December 31, 1996 and 1995 40 Consolidated Statements of Income for the years ended December 31, 1996, 1995 and 1994 Consolidated Statements of Shareholders' Equity for the years ended December 31, 1996, 1995 and 1994 Consolidated Statements of Cash Flows for the years, ended December 31, 1996, 1995 and 1994 Notes to Consolidated Financial Statements [Financial Statements to be filed by pre-effective amendment]
41 [NOTE: The following information is to appear on the inside of the back cover of the prospectus.] INDEX OF WORDS AND PHRASES This index should help you to locate more information about some of the terms and phrases used in this prospectus.
PAGE TO SEE PAGE TO SEE DEFINED TERM IN DEFINED TERM IN THIS THIS PROSPECTUS PROSPECTUS accumulation value Option 1, 2 AGL our AGSPC owner amount at risk partial surrender automatic rebalancing payment option basis planned periodic premium beneficiary Platinum Accumulator cash surrender value Platinum Investor close of business Platinum Provider code Policy cost of insurance rate Policy anniversary daily charge Policy loan date of issue Policy month, year death benefit preferred loan interest declared interest option premiums division premium payments dollar cost averaging prospectus 5 year no-lapse guarantee reinstate, reinstatement Fund rider full surrender SEC grace period separate account guarantee premiums Separate Account VL-R insured person seven payment test investment option specified amount lapse surrender loan, loan interest surrender charge maturity, maturity date target telephone transfers modified endowment transfers monthly deduction day valuation date, period monthly guarantee premiums we monthly insurance charge you, your Mutual Fund
42 We have filed a registration statement relating to Separate Account VL-R and the Policies with the SEC. The registration statement, which is required by the Securities Act of 1933, includes additional information that is not required in this prospectus. If you would like the additional information, you may obtain it from the SEC's main office in Washington, D.C. You will have to pay a fee for the material. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS (OR ANY SALES LITERATURE APPROVED BY AGL) IN CONNECTION WITH THE OFFER OF THE POLICIES PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THE POLICIES ARE NOT AVAILABLE IN ALL JURISDICTIONS, AND THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY JURISDICTION TO ANY PERSON TO WHOM SUCH OFFER WOULD BE UNLAWFUL THEREIN. 43 PART II (INFORMATION NOT REQUIRED TO BE FILED IN A 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 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. UNDERTAKING PURSUANT TO RULE 484(b)(i) UNDER THE SECURITIES ACT OF 1933 Article VII, section 1, of the AGL's By-laws provides, in part, that AGL shall have power to indemnify any person who was or is a party or is threatened to be made a party to any proceeding (other than an action by or in the right of AGL) by reason of the fact that such person is or was serving at the request of AGL, against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in the best interest of AGL and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. Article VII, section 1 (in part), section 2 a, and section 3, provide that AGL shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action by or in the right of AGL to procure a judgment in its favor by reason of the fact that such person is or was acting in behalf of AGL, against expenses actually and reasonably incurred by such person in connection with the defense or settlement of such action if such person acted in good faith, in a manner such person believed to be in the best interests of AGL, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. No indemnification shall be made under section 1: (a) in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to AGL, unless and only to the extent that the court in which such action was brought shall determine upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for the expenses which such court shall determine; (b) of amounts paid in settling or otherwise disposing of a threatened or pending action with or without court approval; or (c) of expenses incurred in defending a threatened or pending action which is settled or otherwise disposed of without court approval. S-1 Article VII, section 3, provides that, with certain exceptions, any indemnification under Article VII shall be made by AGL only if authorized in the specific case, upon a determination that indemnification of the person is proper in the circumstances because the person has met the applicable standard of conduct set forth in section 1 of Article VII by (a) a majority vote of a quorum consisting of directors who are not parties to such proceeding; (b) approval of the shareholders, with the shares owned by the person to be indemnified not being entitled to vote thereon; or (c) the court in which such proceeding is or was pending upon application made by AGL or the indemnified person or the attorney or other persons rendering services in connection with the defense, whether or not such application by the attorney or indemnified person is opposed by AGL. Article VII, section 7, provides that for purposes of Article VII, those persons subject to indemnification include any person who is or was a director, officer, or employee of AGL, or is or was serving at the request of AGL as a director, officer, or employee of another foreign or domestic corporation which was a predecessor corporation of AGL or of another enterprise at the request of such predecessor corporation. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. REPRESENTATION REGARDING THE REASONABLENESS OF AGGREGATE FEES AND CHARGES DEDUCTED UNDER THE POLICIES PURSUANT TO SECTION 26(e)(2)(A) OF THE INVESTMENT COMPANY ACT OF 1940 AGL represents that the fees and charges deducted under the Policies, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by AGL under the Policies. AGL bases its representation on its assessment of all of the facts and circumstances, including such relevant factors, as: the nature and extent of such services, expenses and risks; the need for AGL to earn a profit; the degree to which the Policies include innovative features; and the regulatory standards for exemptive relief under the Investment Company Act of 1940 used S-2 prior to October 1996, including the range of industry practice. This representation applies to all Policies sold pursuant to this Registration Statement, including those sold on the terms specifically described in the prospectus contained herein, or any variations therein, based on supplements, endorsements, or riders to any Policies or prospectus, or otherwise. CONTENTS OF REGISTRATION STATEMENT This Registration Statement contains the following papers and documents: The facing sheet. Cross-Reference Table. Prospectus, consisting of _____ pages. Undertaking to file reports. Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933. Representation with respect to fees and charges. The signatures. Written Consents of the following persons: Steven A. Glover, Associate General Counsel and Assistant Security of AGL (see Exhibit 2(a)). (To be filed by pre-effective amendment.) AGL's actuary (see Exhibit 2(b)). (To be filed by pre-effective amendment.) Independent Auditors (see Exhibit 6). (To be filed by pre-effective amendment.) The following exhibits: 1. Exhibits required by Article IX, paragraph A of Form N-8B-2: (1)(a) Resolutions of Board of Directors of AGL authorizing the establishment of Separate Account VL-R. (Filed herewith.) (1)(b) Resolutions of Board of Directors of AGL authorizing the establishment of variable life insurance standards of suitability and conduct. (Filed herewith.) S-3 (2) Inapplicable. (3)(a) Form of Distribution Agreement. (To be filed by pre-effective amendment.) (3)(b) Form of Selling Group Agreement. (To be filed by pre-effective amendment.) (3)(c) Schedule of Commissions (included under the heading "Distribution of the Policies" in the prospectus that is filed as part of this Registration Statement). (4) Inapplicable. (5)(a)(i) Specimen form of the "Platinum Investor I" Variable Universal Life Insurance Policy (Policy Form No. 97600). (Filed herewith.) 5(a)(ii) Specimen form of the "Platinum Investor II" Variable Universal Life Insurance Policy (Policy Form No. 97610). (Filed herewith.) (5)(b)(i) Specimen form of application for life insurance issued by AGL. (Filed herewith.) (5)(b)(ii) Specimen form of supplemental application for variable life insurance issued by AGL on Policy Form No. 97600 and Policy Form No. 97610. (Filed herewith.) (6)(a) Amended and Restated Articles of Incorporation of American General Life Insurance Company, effective December 31, 1991. (1) (6)(b) Bylaws of American General Life Insurance Company, adopted January 22, 1992. (2) (7) Inapplicable. (8)(a) Form of Participation Agreement with Adviser for AIM Variable Insurance Funds, Inc. (To be filed by pre-effective amendment.) (8)(b) Form of Participation Agreement with Adviser for American General Series Portfolio Company. (To be filed by pre-effective amendment.) (8)(c) Form of Participation Agreement with Adviser for Dreyfus Variable Investment Fund. (To be filed by pre-effective amendment.) S-4 (8)(d) Form of Participation Agreement with Adviser for MFS Variable Insurance Trust. (To be filed by pre-effective amendment.) (8)(e) Amended Form of Participation Agreement with Adviser for Morgan Stanley Series Universal Funds., Inc. (To be filed by pre-effective amendment.) (8)(f) Form of Participation Agreement with Adviser for Putnam. (To be filed by pre-effective amendment.) (8)(g) Form of Participation Agreement with Adviser for Safeco Resources Series Trust. (To be filed by pre-effective amendment.) (8)(h) Amended Form of Participation Agreement with Adviser for Van Kampen American Capital Life Investment Trust. (To be filed by pre-effective amendment.) (10) Specimen Form of Application (filed herewith). Other Exhibits 2(a) Opinion and Consent of Steven A. Glover, Associate General Counsel and Assistant Secretary of AGL. (To be filed by pre-effective amendment.) 2(b) Opinion and Consent of AGL's actuary. (To be filed by pre-effective amendment.) 3 Inapplicable. 4 Inapplicable. 5 Financial Data Schedule. (See Exhibit 27 below.) 6 Consent of Independent Auditors. (To be filed by pre-effective amendment.) 7 Powers of Attorney. (Filed herewith.) S-5 27 Financial Data Schedule. (Inapplicable, because no financial statements of the Separate Account are being filed herewith) (1) Incorporated herein by reference to the initial filing of the Form N-4 Registration Statement (File No. 33-43390) of Separate Account D of AGL on October 16, 1991. (2) Incorporated herein by reference to the Post-Effective Amendment No. 1 of the Form N-4 Registration Statement (File No. 33-43390) of Separate Account D of AGL on April 30, 1992.
S-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, American General Life Insurance Company Separate Account VL-R, has duly caused this registration statement to be signed on its behalf by the undersigned thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Houston, and State of Texas, on the 12th day of December, 1997. AMERICAN GENERAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT VL-R (Registrant) BY: AMERICAN GENERAL LIFE INSURANCE COMPANY (On behalf of the Registrant and itself) /s/ROBERT F. HERBERT, JR. BY:---------------------------- Robert F. Herbert, Jr. Senior Vice President [SEAL] /s/STEVEN A. GLOVER ATTEST: ---------------------- Steven A. Glover Associate General Counsel and Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Name Title RODNEY O. MARTIN, JR.* -------------------------- Principal Executive Officer (Rodney O. Martin, Jr.) ROBERT F. HERBERT, JR.* -------------------------- Principal Financial and (Robert F. Herbert, Jr.) Accounting Officer Directors JOHN V. LaGRASSE* -------------------------- -------------------------- (Robert M. Devlin) (John V. LaGrasse) JAMES S. D'AGOSTINO, JR.* RODNEY O. MARTIN, JR.* -------------------------- -------------------------- (James S. D'Agostino, Jr.) (Rodney O. Martin, Jr.) DAVID A. FRAVEL* JON P. NEWTON* -------------------------- -------------------------- (David A. Fravel) (Jon P. Newton) ROBERT F. HERBERT, JR.* PHILIP K. POLKINGHORN* -------------------------- -------------------------- (Robert F. Herbert, Jr.) (Philip K. Polkinghorn) ROYCE G. IMHOFF, II* PETER V. TUTERS* -------------------------- -------------------------- (Royce G. Imhoff, II) (Peter V. Tuters) /s/ Steven A. Glover -------------------------- * By Steven A. Glover, Attorney-in-Fact December 12, 1997 EX-1.(1)(A) 2 EXHIBIT 1.(1)(a) RESOLUTIONS FOR THE ESTABLISHMENT OF A VARIABLE LIFE REGISTERED SEPARATE ACCOUNT May 6, 1997 WHEREAS, the management of the Company has determined that the Company shall take the necessary steps to (i) develop a variable life insurance marketing program, (ii) obtain variable life certificate of authority in every state in which the Company is authorized to transact business, and (iii) enable the Company to issue variable life contracts; NOW THEREFORE BE IT RESOLVED, that the Company, pursuant to the provisions of TEX. INS. CODE art. 3.75 (1996) and TEX. ADMIN. CODE tit. 28, ss. 3.806 (1996), hereby establishes a variable life registered separate account to be designated "American General Life Insurance Company Separate Account VL-R," (hereinafter "the Separate Account") for the following use and purposes, and subject to such conditions as hereinafter set forth; and BE IT FURTHER RESOLVED, that the Separate Account is established for the purpose of providing for the issuance by the Company of such variable life or such other contracts ("Contracts") as the Chief Executive Officer or his designated representative may designate for such purpose and shall constitute a Separate Account into which are allocated amounts paid to or held by the Company under such Contracts; and BE IT FURTHER RESOLVED, that pursuant to TEX. INS. CODE art. 3.75 ss. 1(c) (1996) and except as provided by the next paragraph, amounts allocated to the Separate Account and accumulations on those amounts may be invested and reinvested without regard to any requirements or limitations prescribed by the laws of the State of Texas governing the investments of life insurance companies, and the investments in the Separate Account will not be taken into account in applying the investment limitations otherwise applicable to the investments of the Company; and BE IT FURTHER RESOLVED, that pursuant to TEX. INS. CODE art. 3.75 ss. 1(d) (1996), reserves for benefits guaranteed as to dollar amount and duration and funds guaranteed as to principal amount or stated rate of interest will not be maintained in the Separate Account except with the approval of the Texas Commissioner of Insurance and under conditions for investments, and other matters, that recognize the guaranteed nature of the benefits provided and that are prescribed by the Texas State Board of Insurance; and BE IT FURTHER RESOLVED, that pursuant to TEX. INS. CODE art. 3.75 ss. 1(f) (1996) and to the extent provided under the Contracts, the portion of the assets of the Separate Account equal to the reserves and other Contract liabilities with respect to the Separate Account are not chargeable with liabilities arising out of any other business the Company may conduct; and BE IT FURTHER RESOLVED, that pursuant to TEX. ADMIN. CODE tit. 28, ss. 3.806(2) (1996), the Company shall maintain assets in the Separate Account with a value at least equal to the greater of the valuation reserves for the variable portion of the Contracts or the benefit base for such Contracts; and BE IT FURTHER RESOLVED, that the income, gains and losses, whether or not realized, from assets allocated to the Separate Account shall be credited to or charged against the Separate Account, in accordance with the Contracts, without regard to other income, gains, or losses of the Company; and BE IT FURTHER RESOLVED, that the fundamental investment policy of the Separate Account shall be to invest or reinvest the assets of the Separate Account in securities issued by investment companies registered under the Investment Company Act of 1940, as amended, as the Company designates pursuant to the provisions of the Contracts; and BE IT FURTHER RESOLVED, that multiple investment divisions be, and hereby are, established within the Separate Account to which net payments under the Contracts will be allocated in accordance with instructions received from contract holders, and that the Chief Executive Officer or his designated representative be, and hereby is, subject to applicable state insurance regulatory approval, authorized to increase or decrease the number of investment divisions in the Separate Account as deemed necessary or appropriate; and BE IT FURTHER RESOLVED, that each such investment division shall invest only in the shares of a single mutual fund or a single mutual fund portfolio of an investment Corporation organized as a series fund pursuant to the Investment Company Act of 1940; and BE IT FURTHER RESOLVED, that the Chief Executive Officer, President and Treasurer be, and they hereby are, authorized, subject to applicable state insurance regulatory approval, to deposit such amount in the Separate Account or in each investment division thereof as may be necessary or appropriate to facilitate the commencement of the Separate Account's operations; and BE IT FURTHER RESOLVED, that the Chief Executive Officer of the Company or his designated representative be, and hereby is, authorized to change the designation of the Separate Account to such other designation as the Chief Executive Offer may deem necessary or appropriate; and BE IT FURTHER RESOLVED, that the appropriate officers of the Company, with such assistance from the Company's auditors, legal counsel and independent consultants or others as they may require, be, and they hereby are, authorized and directed to take all action necessary to: (i) register the Separate Account as a unit investment trust under the Investment Company Act of 1940, as amended; (ii) register the Contracts in such amounts, which may be an indefinite amount, as the officers of the Company shall from time to time deem appropriate under the Securities Act of 1933; and (iii) take all other actions which are necessary in connection with the offering of said Contracts for sale and the operation of the Separate Account in order to comply with the Investment Company 2 Act of 1940, the Securities Exchange Act of 1934, the Securities Act of 1933, and other applicable federal laws, including the filings of any amendments to registration statements, any undertakings, and any applications for exemptions from the Investment Company Act of 1940 or other applicable federal laws as the officers of the Company shall deem necessary or appropriate; and BE IT FURTHER RESOLVED, that the appropriate officers of the Company be, and they hereby are, authorized on behalf of the Separate Account and on behalf of the Company to take any and all action that they may deem necessary or advisable in order to sell the Contracts, including any registrations, filings and qualifications of the Company, its officers, agents and employees, and the entering into contracts under the insurance and securities laws of any of the states of the United States of America or other jurisdictions, and in connection therewith, to prepare, execute, deliver and file all such applications, reports, covenants, resolutions, applications for exemptions, consents to service of process and other papers and instruments as may be required under such laws, and to take any and all further action which said officers or counsel of the Company may deem necessary or desirable (including entering into whatever agreements and contracts may be necessary) in order to maintain such registrations or qualifications for as long as said officers or counsel deem them to be in the best interests of the Separate Account and the Company; and BE IT FURTHER RESOLVED, that the Chief Executive Officer of the Company or his designated representative be, and hereby is, authorized to establish criteria by which the Company shall institute procedures to provide for a pass-through of voting rights to the owners of such Contracts as required by the applicable laws with respect to securities owned by the Separate Account; and BE IT FURTHER RESOLVED, that the General Counsel for the Company be, and hereby is, authorized in the names of and on behalf of the Separate Account and the Company to execute and file irrevocable written consents on the part of the Separate Account and of the Company to be used in such states wherein such consents to service of process may be requisite under the laws therein in connection with said Contracts and to appoint the appropriate state official, or such other person as may be allowed by said laws, agent of the Separate Account and of the Company for the purpose of receiving and accepting process; and BE IT FURTHER RESOLVED, that the Chief Executive Officer of the Company or his designated representative be, and hereby is, authorized, subject to applicable state insurance regulatory approval, to execute such agreement or agreements on such terms and subject to such modifications as deemed necessary or appropriate (i) with a qualified entity that will be appointed principal underwriter and distributor for the Contracts, and (ii) with one or more qualified banks or other qualified entities to provide administrative and/or custodial services in connection with the establishment and maintenance of the Separate Account and the design, issuance, and administration of the Contracts; and BE IT FURTHER RESOLVED, that the appropriate officers of the Company are hereby authorized to execute whatever agreement or agreements as may be necessary or appropriate to enable such investments on behalf of the Separate Account to be made; and 3 BE IT FURTHER RESOLVED, that the Chief Executive of the Company or his designated representative be, and hereby is, subject to applicable state insurance regulatory approval, authorized to establish and designate additional variable life registered separate accounts, in accordance with the provisions (statutory and otherwise) set forth in these resolutions, as the Chief Executive Officer of the Company or his designated representative may deem necessary or appropriate in order to accommodate and provide for alternative investment strategies and policies for variable life registered contracts that cannot be accommodated by or provided for through Separate Account VL-R; and BE IT FURTHER RESOLVED, that the appropriate officers of the Company, and each of them, are hereby authorized to execute and deliver all such documents and papers and to do or cause to be done all such acts and things as they may deem necessary or desirable to carry out the foregoing resolutions and the intent and purposes thereof. 4 EX-1.(1)(B) 3 EXHIBIT 1.(1)(b) RESOLUTIONS FOR THE ESTABLISHMENT OF VARIABLE LIFE STANDARDS OF SUITABILITY AND CONDUCT May 6, 1997 WHEREAS, the management of the Company has determined that the Company shall take the necessary steps to enable it to write variable life contracts; NOW THEREFORE BE IT RESOLVED, that pursuant to TEX. ADMIN. CODE tit. 28, ss. 3.803(3) (1996), the Company hereby adopts the standards of suitability with respect to the issuance of variable life insurance contracts as follows: No recommendation shall be made to an applicant to purchase a variable life contract and no variable life insurance policy shall be issued in the absence of reasonable grounds to believe that the purchase of such contract and issuance of such policy is not unsuitable for such applicant on the basis of information furnished after reasonable inquiry of such applicant concerning the applicant's insurance and investment objectives, financial situation and needs, and any other information known to the insurer or the agent making the recommendation; and BE IT FURTHER RESOLVED, That pursuant to TEX. ADMIN. CODE tit. 28, ss. 3.806(8) (1996), the Company hereby adopts standards of conduct which are applicable to the Company, its officers, directors, employees, and affiliates with respect to the purchase or sale of investments in separate accounts. Such standards of conduct shall satisfy the requirements set forth in 15 U.S.C.A. ss. 80a-17 (1997) (attached hereto as Exhibit "A") and applicable rules and regulations thereunder. EX-1.(5)(A)(I) 4 EXHIBIT 1.(5)(a)(i) AMERICAN GENERAL LIFE Insurance Company Home Office: Houston, Texas 2727-A Allen Parkway JOHN DOE American P.O. Box 1931 POLICY NUMBER: 000000000 General Houston, Texas 77251 [Graphic Omitted] A STOCK COMPANY (713) 522-1111 A Subsidiary of American General Corporation WE WILL PAY THE DEATH BENEFIT PROCEEDS to the Beneficiary if the Insured dies prior to the Maturity Date and while this policy is in force. Payment will be made after We receive due proof of the Insured's death, and will be subject to the terms of this policy. WE WILL PAY THE CASH SURRENDER VALUE of this policy to the Owner on the Maturity Date if the Insured is living on that date. THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROCEEDS AND THE CASH VALUES PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. The consideration for this contract is the application and payment of the first premium. The first premium must be paid on or before delivery of this policy. This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An adjustable Death Benefit is payable upon the Insured's death prior to the Maturity Date. Investment results are reflected in policy benefits. ACCUMULATION VALUES and CASH VALUES are flexible and will be based on the amount and frequency of premiums paid and the investment results of the Separate Account. NONPARTICIPATING-NOT ELIGIBLE FOR DIVIDENDS. Notice of Ten Day Right to Examine Policy YOU MAY RETURN THIS POLICY WITHIN 10 DAYS AFTER DELIVERY IF YOU ARE NOT SATISFIED WITH IT FOR ANY REASON. THE POLICY MAY BE RETURNED TO US OR TO THE REGISTERED REPRESENTATIVE THROUGH WHOM IT WAS PURCHASED. UPON SURRENDER OF THIS POLICY WITHIN THE 10 DAY PERIOD, IT WILL BE DEEMED VOID FROM THE DATE OF ISSUE, AND WE WILL REFUND ANY PREMIUMS PAID ADJUSTED TO REFLECT INVESTMENT EXPERIENCE. SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE. _____________ _____________ Secretary President FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY READ YOUR POLICY CAREFULLY 97600 INDEX
Allocation of Policy Deductions 4 Allocation of Net Premiums 4 Annual Report 19 Automatic Rebalancing 14 Beneficiary and Proceeds 16 Cash Surrender Value 10 Cash Value 10 Changing Your Insurance Policy 7 Change of Ownership or Beneficiary 16 Changing the Death Benefit Option 7 Changing the Specified Amount 7 Contract 5 Cost of Insurance Rate Table 21 Date of Issue 3,5 Death Benefit and Death Benefit Options 6 Dollar Cost Averaging 14 Expense Charges Monthly Administration Fee 3A,11 Premium Expense Charge 3A Premium Tax 3 General Account 9 General Provisions 18 Grace Period 12 Incontestability 18 Investment Advisor, Change of 9 Investments of the Separate Account 8 Maturity Date 3 Monthly Guarantee Premium 12 Owner 5 Payment Options 17 Changing the Specified Amount 7 Policy Loans 15 Policy Values 9 Premium Class 2 Premium Payments 5 Separate Account 7 Surrender, Full and Partial 12 Transfer Provision 13 Valuation of Assets 8 Valuation Dates 8 Valuation Units 8
COMPANY REFERENCE. We, Our, Us, or Company means American General Life Insurance Company. YOU, YOUR. The words You or Your mean the Owner of this policy. HOME OFFICE. Our office at 2727-A Allen Parkway, Houston, Texas 77019; Mailing Address P.O. Box 4880, Houston, Texas 77210-4880. WRITTEN, IN WRITING. A written request or notice in acceptable form and content, which is signed and dated, and received at Our Home Office. PREMIUM CLASS. The Premium Class of this policy is shown on Page 3 as one or a combination of the following terms: SELECT. The term "Select" means the Insured qualifies as a better than average mortality risk. PREFERRED. The term "Preferred" means the cost of insurance is based on the Insured being a nonuser of tobacco. STANDARD. The term "Standard" means the cost of insurance is based on the Insured being a tobacco user. JUVENILE. All policies issued to Insureds at issue age 17 or less are designated as "Juvenile". This means that cost of insurance rates stated in the policy for insurance ages 18 and above are Standard rates. (Rates are not classified on the basis of the Insured being a user or non-user of tobacco at ages 0 through 17.) SPECIAL. The term "Special" means an extra premium is being charged due to the Insured's health, occupation or avocation. RATES ON POLICY ANNIVERSARY NEAREST INSURED'S 18TH BIRTHDAY (FOR INSURED'S AGE 17 OR LESS ON DATE OF ISSUE). If the Insured's age, nearest birthday, is 17 or less on the Date of Issue of this policy, Standard rates will be used starting on the policy anniversary nearest the Insured's 18th birthday, except as follows. Prior to the anniversary nearest the Insured's 18th birthday, a written statement, signed by the Insured, may be submitted to the Company requesting that Preferred rates be made effective. The statement must include the date the Insured last used tobacco, or state that the Insured as never used tobacco, whichever applies. If the request is approved, Preferred rates will be made effective on the policy anniversary nearest the Insured's 18th birthday. Otherwise, Standard rates will apply. We will send a notice to the Owner at lest 30 days prior to the policy anniversary nearest the Insured's 18th birthday that an application for Preferred rates may be submitted. NOTICE This Policy Is A Legal Contract Between The Policy Owner And The Company. 97600 Page 2 POLICY SCHEDULE BASIC POLICY MONTHLY COST YEARS PAYABLE VARIABLE LIFE SEE PAGE 21 60 ADDITIONAL BENEFITS PROVIDED BY RIDERS NONE PREMIUM CLASS: SELECT PREFERRED INITIAL PREMIUM: $1,504.60 PLANNED PERIODIC PREMIUM: $1,504.60 PAYABLE ANNUALLY MONTHLY DEDUCTION DAY: 1ST DAY OF EACH MONTH MINIMUM DEATH BENEFIT AMOUNT (AFTER A DECREASE IN SPECIFIED AMOUNT) $100,000 MONTHLY GUARANTEE PREMIUM $ 37.00 MINIMUM PARTIAL SURRENDER $ 500.00 MINIMUM VALUE THAT MAY BE RETAINED IN A DIVISION AFTER A PARTIAL SURRENDER $ 500.00 COVERAGE MAY EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM, OR SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE. INSURED: JOHN DOE POLICY NUMBER: 0000000000 INSURANCE AGE: 35 DATE OF ISSUE: NOVEMBER 1, 1997 INITIAL SPECIFIED AMOUNT: $100,000 MATURITY DATE: NOVEMBER 1, 2057 DEATH BENEFIT OPTION: 1 THIS IS A (SEX DISTINCT) POLICY THIS IS A (STATE NAME) POLICY 97600 Page 3 POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000 CHARGES DEDUCTED FROM THE SEPARATE ACCOUNT MORTALITY AND EXPENSE CHARGE. DEDUCTIONS FROM THE SEPARATE ACCOUNT WILL BE MADE AT AN ANNUAL RATE NOT TO EXCEED .90%. AFTER THE 20TH POLICY YEAR, THE CURRENT MORTALITY AND EXPENSE CHARGES WILL BE REDUCED BY .25% IN EACH POLICY YEAR THAT THE CURRENT MORTALITY AND EXPENSE CHARGE ANNUAL RATE WITHOUT THE REDUCTION IS LESS THAN .90%. THE CURRENT RATE ON THE DATE OF ISSUE IS [.75%]. THE ACTUAL DEDUCTION WILL BE MADE ON A DAILY BASIS. THE CURRENT RATE ON A DAILY BASIS IS [.002055%]. EXPENSE CHARGES PREMIUM EXPENSE CHARGE: CURRENT GUARANTEED (ADJUSTABLE PREMIUM EXPENSE CHARGE PERCENTAGE) [2.5%] 5.0% PREMIUM TAX (IF APPLICABLE). DEPENDING ON THE LAWS OF THE JURISDICTION IN WHICH THIS POLICY WAS ISSUED, A PERCENTAGE OF EACH PREMIUM MAY BE DEDUCTED FOR PREMIUM TAX. THE PREMIUM TAX RATE FOR THIS POLICY IS [0%]. MONTHLY ADMINISTRATION FEE: CURRENT GUARANTEED [$6.00] $12.00 BASIC POLICY CHARGES AND FEES COST OF INSURANCE CHARGES. GUARANTEED MAXIMUM COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK ARE SHOWN ON PAGE 21. SURRENDER CHARGES. A SURRENDER CHARGE WILL BE SUBTRACTED FROM YOUR ACCUMULATION VALUE IF THE POLICY IS SURRENDERED OR THE INITIAL SPECIFIED AMOUNT IS REDUCED DURING THE FIRST TEN POLICY YEARS, OR DURING THE FIRST TEN YEARS FOLLOWING AN INCREASE IN SPECIFIED AMOUNT. THE TABLE OF SURRENDER CHARGES WILL BE FOUND ON PAGES 23 AND 24. TABLE OF MONTHLY GUARANTEE PREMIUM RATES PER $1,000 OF SPECIFIED AMOUNT AGE RATE AGE RATE 35 $0.37 38 $0.43 36 0.39 39 0.44 37 0.41 40 0.46 FOR A SPECIAL (RATED) PREMIUM CLASS, WE WILL ADJUST THE RATES TO REFLECT THE MORTALITY RISK. 97600 Page 3A POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000 INITIAL ALLOCATION OF NET PREMIUMS AND POLICY DEDUCTIONS
INVESTMENT OPTIONS INITIAL ALLOCATION INITIAL ALLOCATIONS OF NET PREMIUMS OF POLICY DEDUCTIONS GENERAL ACCOUNT: (125) AGL Declared Fixed Interest Account 100% 100% SEPARATE ACCOUNT: VL-R [(126) AIM V.I. International Equity Fund 0% 0% (127) AIM V.I. Value Fund 0% 0% (128) International Equities Fund 0% 0% (129) MidCap Index Fund 0% 0% (130) Money Market Fund 0% 0% (131) Stock Index Fund 0% 0% (132) Quality Bond Portfolio 0% 0% (133) Small Cap Portfolio 0% 0% (134) MFS Emerging Growth Series 0% 0% (135) Equity Growth Portfolio 0% 0% (136) High Yield Portfolio 0% 0% (137) Putnam VT Diversified Income Fund 0% 0% (138) Putnam VT Growth and Income Fund 0% 0% (139) Putnam VT International Growth and Income Fund 0% 0% (140) Equity Portfolio 0% 0% (141) Growth Portfolio 0% 0% (142) Strategic Stock Portfolio 0% 0%]
97600 Page 4 CONTRACT. Your policy is a legal contract that You have entered into with Us. You have paid the first premium and have submitted an application, a copy of which is attached. In return, We promise to provide the insurance coverage described in this policy. The entire contract consists of: 1. The basic policy; 2. The riders that add benefits to the basic policy, if any; 3. Endorsements, if any; and 4. The attached copy of Your application, and any amendments or supplemental applications. DATE OF ISSUE. The Date of Issue of this policy is the date on which the first premium is due. The Date of Issue is also the date from which all policy years, anniversaries, and monthly deduction dates are determined. OWNER. The Owner is as stated in the application unless later changed. During the Insured's lifetime, the Owner may exercise every right the policy confers or we allow (subject to the rights of any assignee of record, and to any endorsement on this policy limiting such rights). You can have Joint Owners of the policy. In that case, the authorization of both Joint Owners is required for all policy changes except for transfers, premium allocations and deduction allocations. We will accept the authorization of either Joint Owner for transfers and changes in premium and deduction allocations. The Owner and the Insured can be the same person but do not have to be. If the Owner dies while the policy is in force and the Insured is living, ownership rights pass on to a successor owner, if any, or to the estate of the Owner. PREMIUM PAYMENTS All premiums after the first are payable in advance. Premium payments are flexible. This means You may choose the amount and frequency of payments. The actual amount and frequency of premium payments will affect the Cash Values and the amount and duration of insurance. Please refer to the Policy Values Provision for a detailed explanation. PLANNED PERIODIC PREMIUMS. The amount and frequency of the Planned Periodic Premiums You selected are shown on page 3. You may request a change in the amount and frequency. We may limit the amount of any increase. (See Maximum Premium). UNSCHEDULED ADDITIONAL PREMIUMS. You may pay additional premiums at any time before the Maturity Date shown on page 3. We may limit the number and amount of additional premiums. (See Maximum Premium). MAXIMUM PREMIUM. The sum of the premiums paid under this policy may not exceed the guideline premium limitation as defined by Section 7702, Internal Revenue Code of 1986 (or as later amended). Any portion of any premium paid which is determined to be in excess of the limit will be refunded. PREMIUM EXPENSE CHARGE. The Premium Expense Charge is calculated by multiplying the premium paid (after the deduction of any state premium tax) by the Premium Expense Charge Percentage. The Premium Expense Charge Percentage is adjustable, but will never be more than the guaranteed Premium Expense Charge Percentage shown on the Policy Schedule. NET PREMIUM. The Net Premium is the premium paid, less any applicable state premium tax and the Premium Expense charge. ALLOCATION OF PREMIUMS. The initial allocation of Net Premiums is shown on the Policy Schedule and will remain in effect until changed by Written notice from the Owner. The percentage allocation for future Net Premiums may be changed at any time by Written notice. 97600 Page 5 The initial Net Premium will be allocated to the Money Market Division on the later of the following dates: 1. The Date of Issue; or 2. The date all requirements needed to place the policy in force have been satisfied, including underwriting approval and receipt in the Home Office of the necessary premium. The initial Net Premium will remain in the Money Market Division until the first Valuation Date following the 15th day after it was applied. Any additional Net Premiums received prior to the first Valuation date which follows the 15th day after the initial Net Premium was applied will be allocated to the Money Market Division until such Valuation Date. At that time, We will transfer the Accumulation Value to the selected Investment Option(s). Each premium received after such Valuation date will be reduced by any applicable state premium tax and the Premium Expense Charge and applied directly to the selected Investment Option(s) as of the Business Day received. Changes in the allocation will be effective on the date we receive the Owner's notice. The allocation may be 100% to any available Division or may be divided among these options in whole percentage points totaling 100%. We reserve the right to limit the number of Divisions which you may select. WHERE TO PAY. You may make your payments to Us at our Home Office or to an authorized agent. A receipt signed by an officer of the Company will be furnished upon request. DEATH BENEFIT AND DEATH BENEFIT OPTIONS DEATH BENEFIT PROCEEDS. If the Insured dies prior to the Maturity Date and while this policy is in force, We will pay the Death Benefit Proceeds to the Beneficiary. The Death Benefit Proceeds will be subject to: 1. The Death Benefit Option in effect on the date of death; and 2. Any increases or decreases made to the Specified Amount. The Initial Specified Amount is shown on page 3. Guidelines for changing the Death Benefit Option or the Specified Amount will be found in the section entitled "Changing Your Insurance Policy." The Death Benefit Proceeds will be the Death Benefit Amount reduced by any outstanding policy loan and will be subject to the other provisions of the "Beneficiary and Proceeds" section. DEATH BENEFIT OPTION. The Death Benefit Option which You have chosen is shown on page 3 as either Option 1 or Option 2. OPTION 1. If you have chosen Option 1 the Death Benefit Amount will be the greater of: 1. The Specified Amount on the date of death; or 2. The Accumulation Value on the date of death multiplied by the Death Benefit Percentage Factor for the Insured's age nearest birthday as shown in the table that follows. OPTION 2. If you have chosen Option 2, the Death Benefit Amount will be the greater of: 1. The Specified Amount plus the Accumulation Value on the date of death; or 2. The Accumulation Value on the date of death multiplied by the Death Benefit Percentage Factor for the Insured's age nearest birthday as shown in the table that follows. TABLE OF DEATH BENEFIT PERCENTAGE FACTORS
Att'd Percentage Att'd Percentage Att'd Percentage Att'd Percentage Age Factor Age Factor Age Factor Age Factor 0-40 250% 50 185% 60 130% 70 115% 41 243 51 178 61 128 71 113 42 236 52 171 62 126 72 111 43 229 53 164 63 124 73 109 44 222 54 157 64 122 74 107 45 215 55 150 65 120 75-90 105 46 209 56 146 66 119 91 104 47 203 57 142 67 118 92 103 48 197 58 138 68 117 93 102 49 191 59 134 69 116 94 101 95+ 100
97600 Page 6 CHANGING YOUR INSURANCE POLICY You may request a change in the Specified Amount or Death Benefit Option at any time except that a decrease in the Specified Amount may not become effective prior to the end of the first policy year. Your request must be submitted to Our Home Office in writing in a form acceptable to Us. INCREASING THE SPECIFIED AMOUNT. We will require a supplemental application and evidence of insurability satisfactory to Us for any increase in the Specified Amount. An increase will be effective on the monthly deduction day on or next following the date the application for increase is approved by Us. The effective date will appear in an endorsement to this policy. DECREASING THE SPECIFIED AMOUNT. Any decrease will go into effect on the monthly deduction day following the day We receive the request. The Death Benefit Amount remaining in effect after any decrease cannot be less than the greater of: 1. The Minimum Death Benefit Amount shown on page 3; or 2. Any Death Benefit Amount which, upon comparing such amount to the sum of premiums already paid, would result in an excess of premium payments. (See the "Maximum Premium" provision.) Any such decrease will be applied in the following order: 1. Against the Specified Amount provided by the most recent increase; 2. Against the next most recent increases successively; 3. Against the Specified Amount provided under the original application. Any reduction in Specified Amount will be subject to any applicable Surrender Charges on a pro-rata basis, and the remaining Surrender Charge will be reduced proportionately. Surrender Charges will apply to each $1,000 of decrease in Specified Amount. The Accumulation Value will be reduced by the amount of any Surrender Charge. However, if such charge would result in a negative Cash Value, the Specified Amount decrease will not be allowed. CHANGING THE DEATH BENEFIT OPTION. You may request a change in the Death Benefit Option you have chosen. 1. If You request a change from Option 1 to Option 2: The new Specified Amount will be the Specified Amount, prior to change, less the Accumulation Value as of the effective date of the change, but not less than zero. 2. If You request a change from Option 2 to Option 1: The new Specified Amount will be the Death Benefit Amount as of the effective date of the change. We will not require evidence of insurability for a change in the Death Benefit Option. The change will go into effect on the monthly deduction day following the date We receive Your request for change. CHANGING THE TERMS OF YOUR POLICY. Any change in Your policy must be approved by one of Our officers. No agent has the authority to make any changes or waive any of the terms of Your policy. SEPARATE ACCOUNT PROVISIONS SEPARATE ACCOUNT. Separate Account VL-R is a segregated investment account established by the Company under Texas law to separate the assets funding the variable benefits for the class of policies to which this policy belongs from the other assets of the Company. That portion of the assets of the Separate Account equal to the reserves and other policy liabilities with respect to the Separate Account shall not be chargeable with liabilities arising out of any other business We may conduct . Income, gains and losses, whether or not realized from assets allocable to the Separate Account, are credited to or charged against such Account without regard to Our other income, gains or losses. 97600 Page 7 INVESTMENTS OF THE SEPARATE ACCOUNT. The Separate Account is segmented into Divisions. Each Division invests in a single Investment Option. Net Premiums will be applied to the Separate Account and allocated to one or more Divisions. The assets of the Separate Account are invested in the Investment Options listed on the Policy Schedule Pages. From time to time, We may add additional Divisions to those shown on the Policy Schedule pages. We may also discontinue offering one or more Divisions. Any change in Divisions available or selected are shown on the Policy Schedule or on an amended Policy Schedule. Any change in investment selection shall be pursuant to a duly executed change form filed with Our Home Office. Transfers may be made to the additional Divisions subject to the rules stated in the Transfer Provision and any new rules or limitations tied to such additional Divisions. If shares of any of the Investment Options become unavailable for investment by the Separate Account, or the Company's Board of Directors deems further investment in these shares inappropriate, the Company may limit further investment in the shares or may substitute shares of another Investment Option for shares already purchased under this policy. VALUATION OF ASSETS. The assets of the Separate Account are valued as of each Valuation Date at their fair market value in accordance with Our established procedures. The Separate Account Value as of any Valuation Date prior to the Maturity Date is the sum of Your account values in each Division of the Separate Account as of that date. VALUATION UNITS. In order to determine policy values in the Divisions We use Valuation Units which are calculated separately for each Division. The Valuation Unit value for each Division will vary to reflect the investment experience of the applicable Investment Option. The Valuation Unit for a Division will be determined on each Valuation Date for the Division by multiplying the Valuation Unit value for the Division on the preceding Valuation Date by the Net Investment Factor for that Division for the current Valuation Date. The Net Investment Factor for each Division is determined by dividing (1) by (2) and subtracting (3), where: (1) is the net asset value per share of the applicable Investment Option as of the current Valuation Date (plus any per share amount of any dividend or capital gains distribution paid by the Investment Option since the last Valuation Date); and (2) is the net asset value per share of the shares held in the Division as determined at the end of the previous valuation period; and (3) is a factor representing the Mortality and Expense Charge. The net asset value of an investment company's shares held in each investment division shall be the value reported by Us by that investment company. VALUATION DATES. Valuation of the various Divisions will occur on each Business Day during each month. If the underlying Investment Option is unable to value or determine the Divisions investment in an Investment Option due to any of the reasons stated in the "Suspension and Deferral of Payments Provision", the Valuation Date for the Division with respect to the unvalued portion shall be the first Business Day that the assets can be valued or determined. BUSINESS DAY. A business day is each day that the New York Stock Exchange and the Company are open for business. A business day immediately preceded by one or more non-business calendar days will include those non-business days as part of that business day. For example, a business day which falls on a Monday will consist of a Monday and the immediately preceding Saturday and Sunday. MINIMUM BALANCE. If a partial surrender causes the balance in any Division to drop below $500, the Company reserves the right to transfer the remaining balance to the Money Market Division. If a transfer causes the balance in any Division to drop below $500, the Company reserves the right to transfer the remaining balance in proportion to the transfer request. 97600 Page 8 CHANGE OF INVESTMENT ADVISOR OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without Our consent. If required, approval of or change of any investment objective will be filed with the Insurance Department of the state where this policy is being is delivered. RIGHTS RESERVED BY US. Upon notice to You, this policy may be modified by Us, but only if such modification is necessary to: 1. Operate the Separate Account in any form permitted under the Investment Company Act of 1940 or in any other form permitted by law; 2. Transfer any assets in any Division to another Division, or to one or more other separate accounts; 3. Add, combine or remove Divisions in the Separate Account, or combine the Separate Account with another Separate Account; 4. Make any new Division available to You on a basis to be determined by Us; 5. Substitute for the shares held in any Division the shares of another Division or the shares of another investment company or any other investment permitted by law; 6. Make any changes as required by the Internal Revenue Code, or by any other applicable law, regulation or interpretation in order to continue treatment of this policy as life insurance; or 7. Make any changes required to comply with rules of any Division. When required by law, We will obtain Your approval of changes and We will gain approval from any appropriate regulatory authority. GENERAL ACCOUNT. The General Account is a Fixed Account within Our general assets which We have established for: 1. Any amounts transferred from the Divisions as a result of a loan; or 2. Any amounts allocated by the Owner to such Account. The General Account is credited with interest at an annual rate of not less than 4%, and is not based on the investment experience of any Division of the Separate Account. Interest applied to that portion of the General Account equal to a policy loan will be at an annual effective rate of not less than 4% nor more than 4.75%. POLICY VALUES PROVISION ACCUMULATION VALUE. The Accumulation Value of Your policy is the total of all values in the General Account and in the Divisions of the Separate Account. The Accumulation Value reflects: 1. Premiums paid; 2. Deductions for Expense Charges; 3. Monthly deductions; 4. The investment experience of the Divisions selected; 5. The value of amounts allocated to the General Account, including interest earned on amounts allocated to the General Account; 6. Deductions due to partial withdrawals; and 7. Deductions, if any, resulting from decreases in Specified Amount. Net Premiums are allocated, in accordance with your instructions, to the General Account or allocated to the selected Divisions of the Separate Account and converted to Valuation Units. On each Monthly Deduction day, a Monthly Deduction will be made by reducing the unloaned portion of the General Account or redeeming Valuation Units from each applicable Division in the same ratio as the Allocation of Policy Deductions in effect on the Monthly Deduction day. If the number of Valuation Units in any Division, or in the unloaned portion of the General Account is insufficient to make a Monthly Deduction in this manner, We will cancel Valuation Units from each applicable Division and reduce the unloaned portion of the General Account in the same ratio the Monthly Deduction bears to the 97600 Page 9 unloaned Accumulation Value of your policy. You must state In Writing in advance how Monthly Deductions should be made if other than this method is to be used. The Accumulation Value in any Division is determined by multiplying the value of a Valuation Unit by the number of Valuation Units held under the policy in that Division. The value of Valuation Units equal to the amount being borrowed from the Separate Account will be transferred to the General Account as of the Business Day that the loan request is received In Writing. Valuation Units are surrendered to reflect a partial surrender as of the Business Day that the request for partial surrender is received In Writing. ON THE DATE OF ISSUE. The Accumulation Value on the Date of Issue will be determined as follows: 1. The Net Premium received; less 2. The Monthly Deduction for the first policy month; (See "How We Calculate a Monthly Deduction.") The first deduction day is the Date of Issue. The Monthly Deduction day is shown on page 3. ON EACH DEDUCTION DAY. On each deduction day after the Date of Issue, we will determine the Accumulation Value as follows: 1. First, we will take the Accumulation Value as of the last deduction day; and 2. Add the interest earned for the month on the excess of the General Account value on the last deduction day over any withdrawals and transfers made from the General Account since the last deduction day; and 3. Add any investment gain (or subtract any investment loss) on the Divisions of the Separate Account since the last deduction day as measured by the change in the value of the Valuation Units; and 4. Add all Net Premiums received since the last deduction day; and 5. Subtract any partial surrender made since the last deduction day; and 6. Subtract the Monthly Deduction for the policy month following the monthly deduction day. (See "How We Calculate a Monthly Deduction.") ON ANY VALUATION DATE OTHER THAN A DEDUCTION DAY. The Accumulation Value on any Valuation Date other than a deduction day will be the sum of: 1. The value of the General Account as of the last deduction day; 2. Less any withdrawals since the last deduction day; 3. Plus all Net Premiums received since the last deduction day; 4. Plus the sum of the values of the Divisions of the Separate Account as of the last deduction day, plus the amount of any investment gain (or minus any investment loss) on the Divisions since the last deduction day as measured by the change in value of the Valuation Units. CASH VALUE. The Cash Value of this policy will be equal to the Accumulation Value less the Surrender Charge, if any. CASH SURRENDER VALUE. The Cash Surrender Value of this policy will be equal to the Cash Value less any indebtedness. MONTHLY DEDUCTIONS MAY BE MADE ONLY IF THERE IS SUFFICIENT CASH SURRENDER VALUE. (UNLESS POLICY IS BEING CONTINUED UNDER THE MONTHLY GUARANTEE PREMIUM PROVISION). Unless this policy is being continued in force under the Monthly Guarantee Premium provision, a monthly deduction from the Accumulation Value may be made only if the Cash Surrender Value is equal to or greater than the Monthly Deduction. The Accumulation Value will be reduced by the amount of each Monthly Deduction which will cause an equal reduction in the Cash Surrender Value. If the Cash Surrender Value on a deduction day is not sufficient to meet the Monthly Deduction for the current month, this policy will be subject to the "Grace Period" and "Monthly Guarantee Premium" provisions. 97600 Page 10 SURRENDER CHARGE. Surrender Charges for the Initial Specified Amount will apply if You surrender this policy or if the Initial Specified Amount is reduced during the first 10 policy years. Surrender Charges for any increases in Specified Amount will apply if such increases are surrendered or reduced during the first 10 years of each increase. The table on pages 23 and 24 lists the Surrender Charge rates per $1,000 of Specified Amount at all issue ages. You may make a request for surrender at any time during the Insured's lifetime before the Maturity Date. The amount being surrendered or reduced will terminate on the Valuation Date on or next following the date We receive the request for surrender or reduction. HOW WE CALCULATE A MONTHLY DEDUCTION. Each Monthly Deduction includes: 1. The cost of insurance provided by the basic policy; and 2. The cost of insurance for benefits provided by riders; and 3. The Monthly Administration Fee. HOW WE CALCULATE THE COST OF INSURANCE FOR THE BASIC POLICY. We calculate the cost of insurance at the beginning of each policy month on the deduction day. The cost of insurance is determined as follows: 1. Reduce the Death Benefit Amount by the amount of Accumulation Value on the deduction day before the cost of insurance deduction is taken, and after the Monthly Administration Fee and Cost of Insurance for riders are deducted; 2. Multiply the difference by the cost of insurance rate per $1,000 of net risk amount as provided in the Cost of Insurance Rate provision; and 3. Divide the result by 1000. If Option 1 is in effect, and there have been increases in the Specified Amount, the Accumulation Value will first be considered part of the Initial Specified Amount. If the Accumulation Value exceeds the Initial Specified Amount, the excess will be considered part of prior Specified Amount increases in the order of the increases. COST OF INSURANCE FOR BENEFITS PROVIDED BY RIDERS. The cost of insurance for benefits provided by riders will be as stated on the Policy Schedule or in an endorsement to this policy. MONTHLY ADMINISTRATION FEE. An administration fee will be deducted monthly. The amount of the monthly fee may be adjusted, but will never be greater than the guaranteed Monthly Administration Fee. COST OF INSURANCE RATE. The cost of insurance rate for the Initial Specified Amount, and for each Specified Amount increase, is based on the Insured's: 1. Sex (if issued on a Sex Distinct basis); 2. Age nearest birthday on each policy anniversary; and 3. Premium class shown on the Policy Schedule, associated with the Initial Specified Amount and each increase in the Specified Amount. The guaranteed monthly cost of insurance rates are shown in the table on page 21. We can use cost of insurance rates that are lower than the guaranteed rates. Any change in rates will apply to all policies in the same rate class as this policy. The rate class of this policy is determined on its Date of Issue according to: 1. The calendar year of issue and policy year; 2. The plan of insurance; 3. The amount of insurance; and 4. The age, sex and premium class of the Insured if issued on a Sex Distinct basis. The age and premium class if issued on a Unisex basis. CHANGES IN RATES, CHARGES AND FEES. This policy does not participate in Our profits or surplus. Any redetermination of the cost of insurance rates, interest rates, mortality and expense charges, percentage of premium charges or the Monthly Administration Fee will be based on Our expectations as to investment earnings, mortality, persistency and expenses. We will not change these charges in order to recoup any prior losses. 97600 Page 11 INTEREST RATE. The guaranteed interest rate used in calculating Accumulation Values of amounts allocated to the General Account is .3274% per month compounded monthly. This is equivalent to 4.0% per year, compounded annually. We can use interest rates greater than the guaranteed rates to calculate Accumulation Values. GRACE PERIOD. If the Cash Surrender Value on a deduction day is not enough to meet the Monthly Deduction for the current month, this policy will remain in force during the 61-day period that follows. If the Cash Surrender Value on a policy anniversary is not enough to pay any loan interest due, this policy will remain in force during the 61-day period that follows. Such 61-day period is referred to in this policy as the "Grace Period." There is no Grace Period for the initial Monthly Deduction. If the required premium is not paid by the end of the Grace Period, this policy will terminate without value. However, we will give you at least 31 days notice prior to termination that your policy is in the Grace Period and advise you of the amount of premium required to keep your policy in force. Such 31 days prior notice will be sent to you at your last known address, and to the assignee of record, if any. If death occurs during the Grace Period, Monthly Deductions through the policy month in which death occurred will be deducted from the proceeds. If a surrender request is received within 31 days after the Grace Period commences, the Cash Surrender Value payable will not be less than the Cash Surrender Value on the Monthly Deduction day the Grace Period commenced. The Monthly Deduction for the policy month following such Monthly Deduction day will not be subtracted in the calculation of such Cash Surrender Value. MONTHLY GUARANTEE PREMIUM. The Monthly Guarantee Premium for the Initial Specified Amount and any benefit riders in force on the Date of Issue is shown on page 3. This policy will not terminate within the 5 year period after the Date of Issue, if on each Monthly Deduction Day during that period, the sum of premiums paid equals or exceeds: 1. The sum of the Monthly Guarantee Premiums from the Date of Issue, including the current month; plus 2. Any partial surrenders and any increase in the loan amount since the start of the period. If the Specified Amount is increased, during the first 5 policy years, a new Monthly Guarantee Premium will be calculated as follows: We will use rates for the Insured's attained age for the amount of the increase, and add the Monthly Guarantee Premium (s) previously calculated for the Initial specified Amount and each prior increase, plus the cost of any benefit riders. If the Specified Amount is decreased, the Monthly Guarantee Premium will be decreased. If a benefit rider is added or increased, the Monthly Guarantee Premium will be increased. If a benefit rider is removed or decreased, the Monthly Guarantee Premium will be decreased. If a policy is reinstated with no change in the Specified Amount, Premium Class or benefit riders, the Monthly Guarantee Premium upon reinstatement will be the same as it was when the policy lapsed. The Monthly Guarantee Premium period ends on the fifth policy anniversary. It will not be extended or otherwise changed by changes in the Specified Amount, the addition, deletion or change in benefit riders, or by reinstatement of the policy. The policy value at the end of the 5 year period may be insufficient to keep the policy in force unless an additional payment is made at that time. FULL SURRENDER. Subject to the Beneficiary and Proceeds section, You may return Your policy to Us and request its Cash Surrender Value at any time during the Insured's lifetime before the Maturity Date. The Cash Surrender Value will be determined as of the Business Day the policy and the signed request for surrender are received In Writing in the Home Office. The Company may delay payment if the Suspension and Deferral of Payments Provision is in effect. PARTIAL SURRENDER. At any time after the first policy year, you may request withdrawal of a portion of the Cash Surrender Value of the policy. Your request must be made in writing prior to the Maturity Date during the Insured's lifetime. The minimum partial surrender is $500.00. 97600 Page 12 Valuation Units are surrendered to reflect a partial surrender as of the Business Day the request for partial surrender is received In Writing in the Home Office. A partial surrender will result in a reduction of the Accumulation Value, Cash Value and the Death Benefit Amount. The Accumulation and Cash Values will be reduced by the amount of partial surrender benefit. The reduced Death Benefit Amount will be determined in accordance with the Death Benefit Option provision. If your Death Benefit Option is Option 1, the Specified Amount will be reduced by the amount of the partial surrender. (The reduced amount will not be less than zero.) The Death Benefit Amount remaining after this reduction must be no less than the Minimum Death Benefit Amount shown on page 3. A partial surrender will result in the cancellation of Valuation Units from each applicable Division and reduction of the unloaned portion of the General Account in the same ratio as the Allocation of Policy Deductions in effect on the date of each partial surrender. If the number of Valuation Units in any Division or in the unloaned portion of the General Account is insufficient to make a partial surrender in this manner, We will cancel Valuation Units from each applicable Division and reduce the unloaned portion of the General Account in the ratio the partial surrender request bears to the unloaned Accumulation Value of your policy. You must state In Writing in advance how partial surrenders should be made if other than this method is to be used. There will be a $25.00 charge for each partial surrender in addition to the amounts shown in the Table of Surrender Charges. Any partial surrender that causes a reduction in Specified Amount will be subject to any applicable surrender charges on a pro-rata basis, and the remaining surrender charge will be reduced proportionately. The Company may delay payment if the Suspension and Deferral of Payments Provision is in effect. PERIOD OF INSURANCE COVERAGE IF AMOUNT OR FREQUENCY OF PREMIUM PAYMENTS IS REDUCED OR IF PREMIUM PAYMENTS ARE DISCONTINUED. If You reduce the amount or frequency of premium payments, or if You discontinue payment of premiums and do not surrender this policy, We will continue making Monthly Deductions (as long as there is sufficient Cash Surrender Value to make such deductions) until the Maturity Date. This policy will remain in force until the earlier of the following dates: 1. The Maturity Date (if there is sufficient Cash Surrender Value to make Monthly Deductions to that date); or 2. The end of the Grace Period. TRANSFER PROVISION TRANSFER OF ACCUMULATION VALUE. You may transfer all or part of Your interest in a Division of the Separate Account or the General Account subject to the following: 1. Transfers will be made as of the Business Day that the transfer request is received in good order. 2. The minimum which may be transferred is $500.00. 3. A transfer from the General Account to a Separate Account Division may only be made during the 60 day period that begins on a policy anniversary. The total amount transferred during the 60 day period is limited in any policy year to 25% of the unloaned portion of the General Account as of the policy anniversary. 4. We reserve the right to terminate, suspend or modify the transfer privilege described above. If You elect to use the transfer privilege, We will not be liable for a transfer made in accordance with Your instructions. Transfers between Separate Account Divisions result in the redemption of Valuation Units in one Division and the purchase of Valuation Units in the Division to which the transfer is made. 97600 Page 13 TRANSFER PROVISION (CONT'D) DOLLAR COST AVERAGING. Dollar Cost Averaging is an automatic transfer of funds made periodically prior to the Maturity Date in accordance with the Transfers provision, except as provided below, and instructions from the Owner. Dollar Cost Averaging (DCA) is subject to the following guidelines: 1. DCA transfers may be made: (a) On any day of the month except the 29th, 30th or 31st; (b) On a monthly, quarterly, semi-annual or annual basis; (c) From the Money Market Division to one or more of the other Separate Account Divisions. (The General Account is not eligible for DCA) 2. DCA may be elected only if the Accumulation Value at the time of election is $5,000, or more. 3. The minimum amount of each DCA transfer is $100, or the remaining amount in the Money Market Division, if less. 4. DCA may not begin prior to the first Valuation Date following the 15th day after the initial Net Premium is applied. 5. DCA will end when there is no longer any value in the Money Market Division, or when You request that DCA end. (You will be notified if the value of Your Money Market Division reaches zero). 6. Amounts applied to the Money Market Division while DCA is active will be available for future Dollar Cost Averaging in accordance with the current DCA request. 7. There is no charge for DCA. 8. DCA is not available if Automatic Rebalancing is active. AUTOMATIC REBALANCING. Automatic Rebalancing occurs when funds are transferred by the Company between the Separate Account Divisions so that the values in each Division match the premium allocation percentages then in effect. You may choose Automatic Rebalancing on a quarterly, semi-annual or annual basis if your Accumulation Value is $5,000 or more. The date Automatic Rebalancing occurs will be based on the Date of Issue of Your policy. For example, if Your policy is dated January 17, and You have requested Automatic Rebalancing on a quarterly basis, Automatic Rebalancing will start on April 17, and will occur quarterly thereafter. After Automatic Rebalancing is elected, it will continue until We are notified In Writing that it is to be discontinued. There is no charge for Automatic Rebalancing. Automatic Rebalancing is not available if Dollar Cost Averaging is active. SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION We may suspend the calculation and payment of the policy's Cash Surrender Value in the following circumstances: 1. If there is a failure in any of the means normally employed in ascertaining the prices or values of investments, properties or assets; or 2. If, for any reason the prices or values of investments, properties or assets in the Separate Account cannot be reasonably ascertained; or 3. If circumstances exist as a result of which it is not reasonably practicable to realize any of the Separate Account's investment or to determine fairly the net asset value of the Separate Account; or 4. If the remittance of funds involved in the realization of, or in the payment for investment or payment due under this policy cannot be carried out without undue delay and at normal rates of exchange; or 97600 Page 14 SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION (CONT'D) 5. The U.S. Securities and Exchange Commission (SEC) determines that a state of emergency exists; or 6. An order of the SEC permits a delay for the protection of policyholders. As to amounts allocated to the General Account, We may defer payment of any Cash Surrender Value withdrawal or loan amount for up to six months after We receive a request for it. Written notice of both the imposition and termination of any such suspension will be given to the Owners, assignees of record and any irrevocable Beneficiaries. Payments which were due to have been made and which were deferred following the suspension of the calculation of the Cash Surrender Value will be made within thirty (30) days of the lifting of the suspension, and will be calculated based on the Valuation Date which immediately follows termination of the suspension. POLICY LOANS You may borrow from Us at any time while this policy is in force, an amount which is equal to or less than the policy's loan value. The loan value will be the Cash Surrender Value less an amount equal to 3 Monthly Deductions, and less interest on the amount to be borrowed to the next policy anniversary. The value of Valuation Units equal to the amount being borrowed from the Separate Account will be transferred to the General Account as of the Business Day that the loan request is received in good order. LOAN INTEREST. Loan interest will accrue daily at an annual effective rate of 4.54% payable in advance. (This is equivalent to an annual effective rate of 4.75% paid in arrears.) On each policy anniversary, loan interest for the next year is due in advance. Unpaid loan interest will be deducted from the various accounts according to the deduction percentages then in effect, and added to the loaned portion of the General Account. If the number of Valuation Units in any Division, or in the unloaned portion of the General Account is insufficient to deduct unpaid loan interest in this manner, We will cancel Valuation Units from each applicable division and reduce the unloaned portion of the General Account in the same ratio the unpaid loan inteest bears to the unloaned Accumulation Value of your policy. You must state In Writing in advance how unpaid loan interst should be deducted if other than this method is to be used. HOW YOU MAY REPAY A POLICY LOAN. You may repay all or part of a policy loan at any time, except that: 1. Repayment may be made only while this policy is in force and prior to the death of the Insured; and, 2. A partial repayment must be at least $100.00. At any time Your policy loan exceeds the Cash Surrender Value, this policy will lapse. However, at least 31 days prior notice must be mailed by Us to Your last known address and to the assignee of record, if any. WE CAN DELAY PAYMENT. We can delay lending You money for up to 6 months, or the period allowed by law, whichever is less. However, We cannot delay lending You money if the amount is to be used to pay a premium to Us. OBTAINING A LOAN. You may obtain a policy loan by Written request and assignment of the policy as sole security for the loan. The Company may delay a loan if the Suspension and Deferral of Payments Provision is in effect. 97600 Page 15 EFFECT OF A LOAN. When a loan is made, an amount equal to the amount being borrowed from the Separate Account will be transferred to the General Account. A loan will result in the cancellation of Units from each applicable Division and reduction of the unloaned portion of the General Account in the ratio that the loan bears to the unloaned Accumulation Value of Your policy. You must state In Writing in advance which Division units are to be canceled if a different method is to be used. Repayment of a loan will first be allocated to the General Account until you have repaid any loaned amounts that were allocated to the General Account. You may tell Us how to allocate repayments above that amount. If you do not tell us, an amount equal to the loan repayment will be transferred from the General Account to the Divisions in the same ratio currently in effect for the allocation of Net Premiums. A loan, whether or not repaid, will have a permanent effect on the Cash Surrender values and on the death benefits. If not repaid, any indebtedness will reduce the amount of Death Benefit Proceeds and the amount available upon surrender of the policy. PREFERRED LOANS. A "Preferred Loan" is a policy loan that is made at a net cost to the Owner that is less than the net cost of other policy loans. Starting on the tenth policy anniversary, this policy will be eligible for "Preferred Loans" subject to the following guidelines: 1. The maximum amount eligible for Preferred Loans during a policy year is restricted to the lesser of the following values on the first day of such policy year: a. The policy loan value; or b. 10% of the Accumulation Value. 2. When a Preferred Loan is made, interest to the next policy anniversary will be charged at the rate shown in the Loan Interest provision. 3. Interest credited to the amount of the Accumulation Value offset by a Preferred Loan: a. Will be at an annual effective rate that is equal to or less than the Policy Loan annual effective interest rate; and b. Will be at a higher rate than the rate used to credit interest to values offset by any other policy loan. BENEFICIARY AND PROCEEDS BENEFICIARY. The Beneficiary as named in the application, or later changed by You, will receive the proceeds upon the death of the Insured. Unless You have stated otherwise, proceeds will be paid as follows: 1. If any Beneficiary dies before the Insured, that Beneficiary's interest will pass to any other Beneficiaries according to their respective interests. 2. If no Beneficiary survives the Insured, proceeds will be paid to You, as Owner, if You are then living; otherwise proceeds will be paid to Your estate. CHANGE OF OWNERSHIP OR BENEFICIARY. You may change the Owner or the Beneficiary at any time during the lifetime of the Insured unless the previous designation provides otherwise. To do so, send a Written request to Our Home Office in a form acceptable to Us. The change will go into effect when We have recorded the change. However, after the change is recorded, it will be deemed effective as of the date of Your Written request for change. The change will be subject to any payment made or action taken by Us before the request is recorded. COMMON DISASTER. If We cannot determine whether a Beneficiary or the Insured died first in a common disaster, We will assume that the Beneficiary died first. Proceeds will be paid on this basis unless an endorsement to this policy provides otherwise. PROCEEDS. Proceeds means the amount payable on: 1. The Maturity Date; 2. Exercise of the full surrender benefit; or 3. The Insured's death. The proceeds on the Maturity Date will be the Cash Surrender Value. The proceeds on the Insured's death will be the Death Benefit Amount less any outstanding policy loan. All proceeds and partial surrender benefits are subject to the provisions of the Payment Options section and the other provisions of this policy. 97600 Page 16 PAYMENT OPTIONS Instead of being paid in one sum, all or part of the proceeds may be applied under any of the Payment Options described below. In addition to these options, other methods of payment may be chosen with Our consent. PAYMENT CONTRACT. When proceeds become payable under a Payment Option, a Payment Contract will be issued to each payee. The Payment Contract will state the rights and benefits of the payee. It will also name those who are to receive any balance unpaid at the death of the payee. ELECTION OF OPTIONS. The Owner may elect or change any Payment Option while the Insured is living, subject to the provisions of this policy. This election or change must be In Writing. Within 60 days after the Insured's death, a payee entitled to proceeds in one sum may elect to receive proceeds under any option. OPTION 1. PAYMENTS FOR A SPECIFIED PERIOD: Equal monthly payments will be made for a specified period. The Option 1 Table in this policy shows the monthly income for each $1,000 of proceeds applied. OPTION 2. PAYMENTS OF A SPECIFIED AMOUNT: Equal monthly payments of a specified amount will be made. Each payment must be at least $60 a year for each $ 1,000 of proceeds applied. Payments will continue until the amount applied, with interest, has been paid in full. OPTION 3. MONTHLY PAYMENTS FOR LIFE: Equal monthly payments will be made for a specified period, and will continue after that period for as long as the payee lives. The specified period may be 10, 15 or 20 years. The Option 3 Table in this policy shows the monthly income for each $1,000 of proceeds applied. If issued on a Sex Distinct basis, tables are based on the 1983a Male or Female Mortality Tables adjusted by projection scale G for 9 years, interest at the rate of 3% per year, and a 2% load. If issued on a Unisex basis, tables are based on the 1983a Male or Female Tables, adjusted by projection scale G for 9 years, with unisex rates based on 60% female and 40% male, and interest at the rate of 3% per year, and a 2% load. At the time payments are to begin under this option, the payee may choose one of the following: 1. Monthly payments based on the Option 3 Table; or 2. Monthly payments equal to a monthly annuity based on our single premium immediate annuity rates then in use. OPTION 4. PROCEEDS LEFT AT INTEREST: Proceeds may be left on deposit with us for any period up to 30 years. Interest earned on the proceeds may be: 1. Left on deposit to accumulate at the rate of 3% compounded annually; or 2. Paid in installments at the rate for each $1,000 of proceeds of $30 annually, $14.89 semiannually, $7.42 quarterly or $2.47 monthly. Upon the death of the payee, or at the end of the specified period, any balance left on deposit will be paid in a lump sum or under Options 1, 2 or 3. INTEREST RATES. The guaranteed rate of interest for proceeds held under Payment Options 1, 2, 3 and 4 is 3% compounded annually. We may credit interest at a higher rate. The amount of any increase will be determined by Us. PAYMENTS. The first payment under Options 1, 2 and 3 will be made when the claim for settlement has been approved. Payments after the first will be made according to the manner of payment chosen. Interest under Option 4 will be credited from the date of death and paid or added to the proceeds as provided in the Payment Contract. AVAILABILITY OF OPTIONS. If the proposed payee is not a natural person, payment options may be chosen only with Our consent. If this policy is assigned, We will have the right to pay the assignee in one sum the amount to which the assignee is entitled. Any balance will be applied according to the option chosen. 97600 Page 17 The amount to be applied under any one option must be at least $2,000. The payment elected under any one option must be at least $25. EVIDENCE THAT PAYEE IS ALIVE. Before making any payment under a Payment Option, We may ask for proof that the payee is alive. If proof is requested, no payment will be made or considered due until We receive proof. DEATH OF A PAYEE. If a payee dies, any unpaid balance will be paid as stated in the Payment Contract. If there is no surviving payee named in the Payment Contract, We will pay the estate of the payee: 1. Under Options 1 and 3, the value as of the date of death of the remaining payments for the specified period, discounted at the rate of interest, compounded annually, that was used in determining the amount of the monthly payment; 2. Under Options 2 and 4, the balance of any proceeds remaining unpaid with accrued interest, if any. WITHDRAWAL OF PROCEEDS UNDER OPTIONS 1 OR 2. If provided in the Payment Contract, a payee will have the right to withdraw the entire unpaid balance under Options 1 or 2. Under Option 1, the amount will be the value of the remaining payments for the specified period discounted at the rate of interest used in determining monthly income. Under Option 2, the amount will be the entire unpaid balance. WITHDRAWAL OF PROCEEDS UNDER OPTION 4. A payee will have the right to withdraw proceeds left under Option 4 subject to the following rules: 1. The amount to be withdrawn must be $500 or more; 2. A partial withdrawal must leave a balance on deposit of $1,000 or more. WITHDRAWALS MAY BE DEFERRED. We may defer payment of any withdrawal for up to 6 months from the date We receive a withdrawal request. ASSIGNMENT. Payment Contracts may not be assigned. CHANGE IN PAYMENT. The right to make any change in payment is available only if it is provided in the Payment Contract. CLAIMS OF CREDITORS. To the extent permitted by law, proceeds will not be subject to any claims of a Beneficiary's creditors. GENERAL PROVISIONS ASSIGNING YOUR POLICY. During the lifetime of the Insured, You may assign this policy as security of an obligation. We will not be bound by an assignment unless it is received In Writing at Our Home Office. Two copies of the assignment must be submitted. We will retain one copy and return the other. We will not be responsible for the validity of any assignment. INCONTESTABILITY. We rely on the statements made in the application for the policy and applications for any reinstatements or increases in Specified Amount. These statements, in the absence of fraud, are considered representations and not warranties. No statement may be used in defense of a claim under the policy unless it is in such applications. Except as stated below, We cannot contest this policy after it has been in force during the Insured's lifetime for 2 years from the Date of Issue. 97600 Page 18 Exceptions: We cannot contest any claim related to an increase in Specified Amount after such increase has been in effect during the Insured's lifetime for 2 years. If this policy is reinstated, We cannot contest this policy after it has been in force during the Insured's lifetime for 2 years from the date of reinstatement. We can contest a reinstatement or an increase in Specified Amount only on the basis of the information furnished in the application for such reinstatement or increase. This 2-year limitation does not apply to any Disability or Accidental Death Benefit, or to the nonpayment of premium. SUICIDE EXCLUSION. If the Insured takes his or her own life, while sane or insane, within 2 years from the Date of Issue, We will limit the Death Benefit Proceeds to the premiums paid less any policy loans and less any partial cash surrenders paid. If there are any increases in the Specified Amount (See the section entitled "Changing Your Insurance Policy") a new 2 year period shall apply to each increase beginning on the date of each increase. The Death Benefit Proceeds will be the costs of insurance associated with each increase. When the laws of the state in which this policy is delivered require less than this 2 year period, the period will be as stated in such laws. AGE OR SEX INCORRECTLY STATED (AGE INCORRECTLY STATED IF ISSUED ON A UNISEX BASIS). If the (1) age or sex of the Insured (if this policy was issued on a Sex Distinct Basis) or (2) age of the Insured (if this policy was issued on a Unisex basis) has been misstated to Us, We will adjust the excess of the Death Benefit Amount over the Accumulation Value on the date of death to that which would have been purchased by the Monthly Deduction for the policy month of death at the correct cost of insurance rate. By age We mean age nearest birthday as of the Date of Issue. STATUTORY BASIS OF POLICY VALUES. The Cash Values of the policy are not less than the minimum values required by the law of the state where this policy is delivered. The calculation of the Cash Values includes a charge for the cost of insurance, as shown in the Table of Guaranteed Monthly Cost of Insurance Rates. Calculation of minimum Cash Values, nonforfeiture benefits and Guaranteed Cost of Insurance Rates are based on the Composite 1980 Commissioners Standard Ordinary Male/Female/Unisex (Table B) Mortality Table for the appropriate sex and age nearest birthday. A detailed statement of the method of computing values has been filed with the state insurance department where required. NO DIVIDENDS. This policy will not pay dividends. It will not participate in any of our surplus or earnings. ANNUAL REPORT. We will send You at least once a year an annual report which will show a summary of all transactions since the last report, including: 1. Premiums paid since the last report; 2. Transfers since the last report; 3. Expense charges deducted since the last report; 4. The cost of insurance deducted since the last report; 5. Partial surrender benefits paid to You since the last report; 6. The amount of any outstanding policy loan; 7. Separate Account Unit Values; 8. The current Cash Surrender and Accumulation Values; and 9. The Death Benefit Amount. 97600 Page 19 WHEN THIS POLICY TERMINATES. This policy will terminate if: 1. You request that this policy be terminated; 2. The Insured dies; 3. The policy matures; or 4. The Grace Period ends and there is not sufficient Cash Surrender Value to cover a Monthly Deduction. REINSTATEMENT. "Reinstating" means placing Your policy in force after it has terminated at the end of the Grace Period. We will reinstate this policy if We receive: 1. Your Written request within five years after the end of the Grace Period and before the Maturity Date; and 2. Evidence of insurability satisfactory to Us; and 3. Payment of enough premium to keep the policy in force for two months; and 4. Payment or reinstatement of any indebtedness. The reinstated policy will be in force from the Monthly Deduction day on or following the date We approve the reinstatement application. The original surrender charge schedule will apply to a reinstated policy. The Accumulation Value at the time of reinstatement will be: 1. The Surrender Charge deducted at the time of lapse (such charge not being greater than the Accumulation Value at the time of lapse before the Surrender Charge was applied); plus 2. The Net Premium allocated in accordance with the premium allocation percentages at time of lapse unless the reinstatement application provides otherwise, using Unit Values as of the date of reinstatement; plus 3. Any loan repaid or reinstated; less 4. The monthly deduction for one month. The dollar amount of any Surrender Charge reinstated will be the same as the dollar amount of Surrender Charge at the time of lapse, and will be reinstated into the funds from which they were deducted at the time of lapse using Unit Values as of the date of reinstatement. If a person other than the Insured is covered by a rider attached to this policy, coverage will be reinstated according to that rider. 97600 Page 20 TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE Nearest Birthday MALE Nearest Birthday MALE (On Each Policy (On Each Policy Anniversary) Anniversary) 0 0.35 50 0.56 1 0.09 51 0.61 2 0.08 52 0.67 3 0.08 53 0.73 4 0.08 54 0.80 5 0.08 55 0.88 6 0.07 56 0.96 7 0.07 57 1.05 8 0.06 58 1.14 9 0.06 59 1.24 10 0.06 60 1.35 11 0.06 61 1.48 12 0.07 62 1.62 13 0.08 63 1.78 14 0.10 64 1.95 15 0.11 65 2.15 16 0.13 66 2.36 17 0.14 67 2.58 18 0.15 68 2.82 19 0.16 69 3.07 20 0.16 70 3.36 21 0.16 71 3.70 22 0.16 72 4.08 23 0.16 73 4.52 24 0.15 74 5.01 25 0.15 75 5.54 26 0.14 76 6.11 27 0.14 77 6.71 28 0.14 78 7.33 29 0.14 79 7.99 30 0.14 80 8.71 31 0.15 81 9.52 32 0.15 82 10.45 33 0.16 83 11.50 34 0.17 84 12.67 35 0.18 85 13.93 36 0.19 86 15.25 37 0.20 87 16.63 38 0.22 88 18.06 39 0.23 89 19.55 40 0.25 90 21.11 41 0.27 91 22.80 42 0.30 92 24.66 43 0.32 93 26.82 44 0.35 94 29.67 45 0.38 46 0.41 47 0.44 48 0.48 49 0.52
The rates shown above represent the guaranteed (maximum) monthly cost of insurance for each $1,000 of net amount at risk. If this policy has been issued in a special (rated) premium class, the guaranteed monthly cost will be calculated as shown on page 3. 97600M Page 21 TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE INSTALLMENTS FOR A SPECIFIED PERIOD Number Amount of Number Amount of Number Amount of Number Amount of of Years Monthly of Years Monthly of Years Monthly of Years Monthly Payable Installments Payable Installments Payable Installments Payable Installments 5 $17.91 15 $6.87 25 $4.71 35 $3.82 6 15.14 16 6.53 26 4.59 36 3.76 7 13.16 17 6.23 27 4.47 37 3.70 8 11.68 18 5.96 28 4.37 38 3.65 9 10.53 19 5.73 29 4.27 39 3.60 10 9.61 20 5.51 30 4.18 40 3.55 11 8.86 21 5.32 31 4.10 12 8.24 22 5.15 32 4.02 13 7.71 23 4.99 33 3.95 14 7.26 24 4.84 34 3.88
OPTION 3 TABLE INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------] AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years Male 20* $2.95 $2.94 $2.94 50 $4.05 $4.00 $3.93 21 2.97 2.96 2.96 51 4.11 4.06 3.99 22 2.98 2.98 2.98 52 4.18 4.13 4.04 23 3.00 3.00 3.00 53 4.26 4.19 4.10 24 3.02 3.02 3.02 54 4.34 4.27 4.16 25 3.05 3.04 3.04 55 4.42 4.34 4.22 26 3.07 3.06 3.06 56 4.51 4.42 4.28 27 3.09 3.09 3.08 57 4.60 4.50 4.35 28 3.12 3.11 3.11 58 4.69 4.58 4.41 29 3.14 3.14 3.13 59 4.79 4.66 4.47 30 3.17 3.16 3.16 60 4.90 4.75 4.54 31 3.20 3.19 3.18 61 5.01 4.84 4.60 32 3.22 3.22 3.21 62 5.13 4.94 4.67 33 3.25 3.25 3.24 63 5.26 5.03 4.73 34 3.29 3.28 3.27 64 5.39 5.13 4.79 35 3.32 3.31 3.00 65 5.52 5.23 4.85 36 3.35 3.35 3.33 66 5.66 5.33 4.91 37 3.39 3.38 3.36 67 5.81 5.43 4.97 38 3.43 3.42 3.40 68 5.96 5.53 5.02 39 3.47 3.46 3.44 69 6.12 5.63 5.07 40 3.51 3.50 3.47 70 6.28 5.73 5.11 41 3.55 3.54 3.51 71 6.44 5.82 5.15 42 3.60 3.58 3.55 72 6.61 5.91 5.19 43 3.65 3.63 3.59 73 6.78 6.00 5.23 44 3.70 3.67 3.64 74 6.96 6.08 5.26 45 3.75 3.72 3.68 75 7.13 6.16 5.28 46 3.80 3.77 3.73 76 7.30 6.24 5.31 47 3.86 3.83 3.78 77 7.47 6.31 5.33 48 3.92 3.88 3.83 78 7.64 6.37 5.34 49 3.98 3.94 3.88 79 7.81 6.42 5.36 80** 7.97 6.48 5.37
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly installments for two or more specified periods for a given age are the same, the specified period of longer duration will apply. *Also applies to younger ages. **Also applies to older ages. 97600M Page 22 TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT The following charges apply to each $1,000 of Initial Specified Amount surrendered during the first 10 policy years. The charges also apply to each $1,000 of increase in Specified Amount surrendered during the first 10 years of such increase. The word "surrender" as used in this provision means Full Surrender, or a reduction in Specified Amount at the request of the Owner, or due to a Partial Surrender. The charge for the surrender of all or any portion of the Initial Specified Amount will be equal to the rate shown below for the age at issue and the year of surrender, multiplied by the number of thousands of Initial Specified Amount being surrendered. The charges for surrender of all or any portion of an increase in Specified Amount will be equal to the rates shown below for the age at issue of such increase and year of surrender, multiplied by the number of thousands of such increase being surrendered. In addition, there will be a charge not to exceed $25.00 for each partial surrender.
ISSUE AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR MALE 1 2 3 4 5 6 7 8 9 10 11 0 2.28 2.28 2.28 2.00 1.71 1.43 1.14 0.86 0.57 0.29 0.00 1 2.28 2.28 2.28 2.00 1.71 1.43 1.14 0.86 0.57 0.29 0.00 2 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00 3 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00 4 2.52 2.52 2.52 2.21 1.89 1.58 1.26 0.95 0.63 0.32 0.00 5 2.64 2.64 2.64 2.31 1.98 1.65 1.32 0.99 0.66 0.33 0.00 6 2.76 2.76 2.76 2.42 2.07 1.73 1.38 1.04 0.69 0.35 0.00 7 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00 8 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00 9 3.00 3.00 3.00 2.63 2.25 1.88 1.50 1.13 0.75 0.38 0.00 10 3.12 3.12 3.12 2.73 2.34 1.95 1.56 1.17 0.78 0.39 0.00 11 3.24 3.24 3.24 2.84 2.43 2.03 1.62 1.22 0.81 0.41 0.00 12 3.36 3.36 3.36 2.94 2.52 2.10 1.68 1.26 0.84 0.42 0.00 13 3.60 3.60 3.60 3.15 2.70 2.25 1.80 1.35 0.90 0.45 0.00 14 3.72 3.72 3.72 3.26 2.79 2.33 1.86 1.40 0.93 0.47 0.00 15 3.84 3.84 3.84 3.36 2.88 2.40 1.92 1.44 0.96 0.48 0.00 16 3.96 3.96 3.96 3.47 2.97 2.48 1.98 1.49 0.99 0.50 0.00 17 4.08 4.08 4.08 3.57 3.06 2.55 2.04 1.53 1.02 0.51 0.00 18 4.20 4.20 4.20 3.68 3.15 2.63 2.10 1.58 1.05 0.53 0.00 19 4.44 4.44 4.44 3.89 3.33 2.78 2.22 1.67 1.11 0.56 0.00 20 4.56 4.56 4.56 3.99 3.42 2.85 2.28 1.71 1.14 0.57 0.00 21 4.68 4.68 4.68 4.10 3.51 2.93 2.34 1.76 1.17 0.59 0.00 22 4.92 4.92 4.92 4.31 3.69 3.08 2.46 1.85 1.23 0.62 0.00 23 5.04 5.04 5.04 4.41 3.78 3.15 2.52 1.89 1.26 0.63 0.00 24 5.28 5.28 5.28 4.62 3.96 3.30 2.64 1.98 1.32 0.66 0.00 25 5.52 5.52 5.52 4.83 4.14 3.45 2.76 2.07 1.38 0.69 0.00 26 5.76 5.76 5.76 5.04 4.32 3.60 2.88 2.16 1.44 0.72 0.00 27 6.00 6.00 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0.00 28 6.24 6.24 6.24 5.46 4.68 3.90 3.12 2.34 1.56 0.78 0.00 29 6.48 6.48 6.48 5.67 4.86 4.05 3.24 2.43 1.62 0.81 0.00 30 6.72 6.72 6.72 5.88 5.04 4.20 3.36 2.52 1.68 0.84 0.00 31 7.20 7.20 7.20 6.30 5.40 4.50 3.60 2.70 1.80 0.90 0.00 32 7.44 7.44 7.44 6.51 5.58 4.65 3.72 2.79 1.86 0.93 0.00 33 7.80 7.80 7.80 6.83 5.85 4.88 3.90 2.93 1.95 0.98 0.00 34 8.16 8.16 8.16 7.14 6.12 5.10 4.08 3.06 2.04 1.02 0.00 35 8.52 8.52 8.52 7.46 6.39 5.33 4.26 3.20 2.13 1.07 0.00 36 8.88 8.88 8.88 7.77 6.66 5.55 4.44 3.33 2.22 1.11 0.00 37 9.36 9.36 9.36 8.19 7.02 5.85 4.68 3.51 2.34 1.17 0.00 38 9.72 9.72 9.72 8.51 7.29 6.08 4.86 3.65 2.43 1.22 0.00 39 10.20 10.20 10.20 8.93 7.65 6.38 5.10 3.83 2.55 1.28 0.00
97600M Page 23 TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT The following charges apply to each $1,000 of Initial Specified Amount surrendered during the first 10 policy years. The charges also apply to each $1,000 of increase in Specified Amount surrendered during the first 10 years of such increase. The word "surrender" as used in this provision means Full Surrender, or a reduction in Specified Amount at the request of the Owner, or due to a Partial Surrender. The charge for the surrender of all or any portion of the Initial Specified Amount will be equal to the rate shown below for the age at issue and the year of surrender, multiplied by the number of thousands of Initial Specified Amount being surrendered. The charges for surrender of all or any portion of an increase in Specified Amount will be equal to the rates shown below for the age at issue of such increase and year of surrender, multiplied by the number of thousands of such increase being surrendered. In addition, there will be a charge not to exceed $25.00 for each partial surrender.
ISSUE AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR MALE 1 2 3 4 5 6 7 8 9 10 11 40 10.68 10.68 10.68 9.35 8.01 6.68 5.34 4.01 2.67 1.34 0.00 41 11.28 11.28 11.28 9.87 8.46 7.05 5.64 4.23 2.82 1.41 0.00 42 11.88 11.88 11.88 10.40 8.91 7.43 5.94 4.46 2.97 1.49 0.00 43 12.36 12.36 12.36 10.82 9.27 7.73 6.18 4.64 3.09 1.55 0.00 44 13.08 13.08 13.08 11.45 9.81 8.18 6.54 4.91 3.27 1.64 0.00 45 13.68 13.68 13.68 11.97 10.26 8.55 6.84 5.13 3.42 1.71 0.00 46 14.40 14.40 14.40 12.60 10.80 9.00 7.20 5.40 3.60 1.80 0.00 47 15.12 15.12 15.12 13.23 11.34 9.45 7.56 5.67 3.78 1.89 0.00 48 15.84 15.84 15.84 13.86 11.88 9.90 7.92 5.94 3.96 1.98 0.00 49 16.68 16.68 16.68 14.60 12.51 10.43 8.34 6.26 4.17 2.09 0.00 50 17.52 17.52 17.52 15.33 13.14 10.95 8.76 6.57 4.38 2.19 0.00 51 18.48 18.48 18.48 16.17 13.86 11.55 9.24 6.93 4.62 2.31 0.00 52 19.44 19.44 19.44 17.01 14.58 12.15 9.72 7.29 4.86 2.43 0.00 53 20.40 20.40 20.40 17.85 15.30 12.75 10.20 7.65 5.10 2.55 0.00 54 21.48 21.48 21.48 18.80 16.11 13.43 10.74 8.06 5.37 2.69 0.00 55 22.68 22.68 22.68 19.85 17.01 14.18 11.34 8.51 5.67 2.84 0.00 56 23.88 23.88 23.88 20.90 17.91 14.93 11.94 8.96 5.97 2.99 0.00 57 25.20 25.20 25.20 22.05 18.90 15.75 12.60 9.45 6.30 3.15 0.00 58 26.64 26.64 26.64 23.31 19.98 16.65 13.32 9.99 6.66 3.33 0.00 59 27.96 27.96 27.96 24.47 20.97 17.48 13.98 10.49 6.99 3.50 0.00 60 29.64 29.64 29.64 25.94 22.23 18.53 14.82 11.12 7.41 3.71 0.00 61 31.32 31.32 31.32 27.41 23.49 19.58 15.66 11.75 7.83 3.92 0.00 62 33.12 33.12 33.12 28.98 24.84 20.70 16.56 12.42 8.28 4.14 0.00 63 34.92 34.92 34.92 30.56 26.19 21.83 17.46 13.10 8.73 4.37 0.00 64 36.96 36.96 36.96 32.34 27.72 23.10 18.48 13.86 9.24 4.62 0.00 65 39.12 39.12 39.12 34.23 29.34 24.45 19.56 14.67 9.78 4.89 0.00 66 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 67 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 68 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 69 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 70 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 71 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 72 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 73 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 74 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 75 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 76 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 77 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 78 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 79 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 80 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
97600M Page 24 TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE Nearest Birthday FEMALE Nearest Birthday FEMALE (On Each Policy (On Each Policy Anniversary) Anniversary) 0 0.24 50 0.41 1 0.07 51 0.44 2 0.07 52 0.48 3 0.07 53 0.51 4 0.06 54 0.55 5 0.06 55 0.59 6 0.06 56 0.63 7 0.06 57 0.67 8 0.06 58 0.71 9 0.06 59 0.75 10 0.06 60 0.79 11 0.06 61 0.85 12 0.06 62 0.92 13 0.06 63 1.01 14 0.07 64 1.11 15 0.07 65 1.23 16 0.08 66 1.35 17 0.08 67 1.47 18 0.08 68 1.59 19 0.09 69 1.72 20 0.09 70 1.86 21 0.09 71 2.05 22 0.09 72 2.27 23 0.09 73 2.55 24 0.10 74 2.88 25 0.10 75 3.25 26 0.10 76 3.67 27 0.10 77 4.11 28 0.11 78 4.59 29 0.11 79 5.11 30 0.11 80 5.71 31 0.12 81 6.39 32 0.12 82 7.19 33 0.13 83 8.12 34 0.13 84 9.18 35 0.14 85 10.34 36 0.15 86 11.60 37 0.16 87 12.97 38 0.17 88 14.45 39 0.19 89 16.05 40 0.20 90 17.79 41 0.22 91 19.72 42 0.24 92 21.89 43 0.26 93 24.44 44 0.28 94 27.67 45 0.30 46 0.32 47 0.34 48 0.36 49 0.39
The rates shown above represent the guaranteed (maximum) monthly cost of insurance for each $1,000 of net amount at risk. If this policy has been issued in a special (rated) premium class, the guaranteed monthly cost will be calculated as shown on page 3. 97600F Page 21 TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE INSTALLMENTS FOR A SPECIFIED PERIOD Number Amount of Number Amount of Number Amount of Number Amount of of Years Monthly of Years Monthly of Years Monthly of Years Monthly Payable Installments Payable Installments Payable Installments Payable Installments 5 $17.91 15 $6.87 25 $4.71 35 $3.82 6 15.14 16 6.53 26 4.59 36 3.76 7 13.16 17 6.23 27 4.47 37 3.70 8 11.68 18 5.96 28 4.37 38 3.65 9 10.53 19 5.73 29 4.27 39 3.60 10 9.61 20 5.51 30 4.18 40 3.55 11 8.86 21 5.32 31 4.10 12 8.24 22 5.15 32 4.02 13 7.71 23 4.99 33 3.95 14 7.26 24 4.84 34 3.88
OPTION 3 TABLE INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------] AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years Female 20* $2.85 $2.85 $2.85 50 $3.75 $3.73 $3.69 21 2.87 2.87 2.87 51 3.80 3.78 3.74 22 2.89 2.88 2.88 52 3.86 3.84 3.79 23 2.90 2.90 2.90 53 3.92 3.89 3.85 24 2.92 2.92 2.91 54 3.99 3.96 3.90 25 2.94 2.93 2.93 55 4.06 4.02 3.96 26 2.95 2.95 2.95 56 4.13 4.09 4.02 27 2.97 2.97 2.97 57 4.21 4.16 4.08 28 2.99 2.99 2.99 58 4.29 4.23 4.15 29 3.01 3.01 3.01 59 4.37 4.31 4.21 30 3.03 3.03 3.03 60 4.46 4.39 4.28 31 3.06 3.05 3.05 61 4.56 4.47 4.35 32 3.08 3.08 3.07 62 4.66 4.56 4.42 33 3.10 3.10 3.10 63 4.76 4.65 4.49 34 3.13 3.13 3.12 64 4.88 4.75 4.56 35 3.16 3.15 3.15 65 4.99 4.85 4.63 36 3.19 3.18 3.17 66 5.12 4.95 4.70 37 3.21 3.21 3.20 67 5.25 5.05 4.77 38 3.24 3.24 3.23 68 5.39 5.16 4.83 39 3.28 3.27 3.26 69 5.53 5.27 4.90 40 3.31 3.30 3.29 70 5.69 5.38 4.96 41 3.35 3.34 3.33 71 5.85 5.49 5.02 42 3.38 3.37 3.36 72 6.02 5.60 5.08 43 3.42 3.41 3.40 73 6.19 5.71 5.13 44 3.46 3.45 3.43 74 6.37 5.82 5.17 45 3.50 3.49 3.47 75 6.56 5.92 5.21 46 3.55 3.53 3.51 76 6.75 6.02 5.25 47 3.59 3.58 3.56 77 6.95 6.11 5.28 48 3.64 3.63 3.60 78 7.14 6.20 5.30 49 3.69 3.67 3.65 79 7.34 6.28 5.32 80** 7.54 6.35 5.34
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly installments for two or more specified periods for a given age are the same, the specified period of longer duration will apply. * Also applies to younger ages. ** Also applies to older ages. 97600F Page 22 TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT The following charges apply to each $1,000 of Initial Specified Amount surrendered during the first 10 policy years. The charges also apply to each $1,000 of increase in Specified Amount surrendered during the first 10 years of such increase. The word "surrender" as used in this provision means Full Surrender, or a reduction in Specified Amount at the request of the Owner, or due to a Partial Surrender. The charge for the surrender of all or any portion of the Initial Specified Amount will be equal to the rate shown below for the age at issue and the year of surrender, multiplied by the number of thousands of Initial Specified Amount being surrendered. The charges for surrender of all or any portion of an increase in Specified Amount will be equal to the rates shown below for the age at issue of such increase and year of surrender, multiplied by the number of thousands of such increase being surrendered. In addition, there will be a charge not to exceed $25.00 for each partial surrender.
ISSUE AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR FEMALE 1 2 3 4 5 6 7 8 9 10 11 0 1.80 1.80 1.80 1.58 1.35 1.13 0.90 0.68 0.45 0.23 0.00 1 1.92 1.92 1.92 1.68 1.44 1.20 0.96 0.72 0.48 0.24 0.00 2 1.92 1.92 1.92 1.68 1.44 1.20 0.96 0.72 0.48 0.24 0.00 3 1.92 1.92 1.92 1.68 1.44 1.20 0.96 0.72 0.48 0.24 0.00 4 2.04 2.04 2.04 1.79 1.53 1.28 1.02 0.77 0.51 0.26 0.00 5 2.04 2.04 2.04 1.79 1.53 1.28 1.02 0.77 0.51 0.26 0.00 6 2.16 2.16 2.16 1.89 1.62 1.35 1.08 0.81 0.54 0.27 0.00 7 2.28 2.28 2.28 2.00 1.71 1.43 1.14 0.86 0.57 0.29 0.00 8 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00 9 2.40 2.40 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 0.00 10 2.52 2.52 2.52 2.21 1.89 1.58 1.26 0.95 0.63 0.32 0.00 11 2.64 2.64 2.64 2.31 1.98 1.65 1.32 0.99 0.66 0.33 0.00 12 2.76 2.76 2.76 2.42 2.07 1.73 1.38 1.04 0.69 0.35 0.00 13 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00 14 2.88 2.88 2.88 2.52 2.16 1.80 1.44 1.08 0.72 0.36 0.00 15 3.00 3.00 3.00 2.63 2.25 1.88 1.50 1.13 0.75 0.38 0.00 16 3.24 3.24 3.24 2.84 2.43 2.03 1.62 1.22 0.81 0.41 0.00 17 3.24 3.24 3.24 2.84 2.43 2.03 1.62 1.22 0.81 0.41 0.00 18 3.36 3.36 3.36 2.94 2.52 2.10 1.68 1.26 0.84 0.42 0.00 19 3.60 3.60 3.60 3.15 2.70 2.25 1.80 1.35 0.90 0.45 0.00 20 3.72 3.72 3.72 3.26 2.79 2.33 1.86 1.40 0.93 0.47 0.00 21 3.84 3.84 3.84 3.36 2.88 2.40 1.92 1.44 0.96 0.48 0.00 22 3.96 3.96 3.96 3.47 2.97 2.48 1.98 1.49 0.99 0.50 0.00 23 4.08 4.08 4.08 3.57 3.06 2.55 2.04 1.53 1.02 0.51 0.00 24 4.32 4.32 4.32 3.78 3.24 2.70 2.16 1.62 1.08 0.54 0.00 25 4.56 4.56 4.56 3.99 3.42 2.85 2.28 1.71 1.14 0.57 0.00 26 4.68 4.68 4.68 4.10 3.51 2.93 2.34 1.76 1.17 0.59 0.00 27 4.92 4.92 4.92 4.31 3.69 3.08 2.46 1.85 1.23 0.62 0.00 28 5.04 5.04 5.04 4.41 3.78 3.15 2.52 1.89 1.26 0.63 0.00 29 5.28 5.28 5.28 4.62 3.96 3.30 2.64 1.98 1.32 0.66 0.00 30 5.52 5.52 5.52 4.83 4.14 3.45 2.76 2.07 1.38 0.69 0.00 31 5.88 5.88 5.88 5.15 4.41 3.68 2.94 2.21 1.47 0.74 0.00 32 6.00 6.00 6.00 5.25 4.50 3.75 3.00 2.25 1.50 0.75 0.00 33 6.24 6.24 6.24 5.46 4.68 3.90 3.12 2.34 1.56 0.78 0.00 34 6.60 6.60 6.60 5.78 4.95 4.13 3.30 2.48 1.65 0.83 0.00 35 6.84 6.84 6.84 5.99 5.13 4.28 3.42 2.57 1.71 0.86 0.00 36 7.20 7.20 7.20 6.30 5.40 4.50 3.60 2.70 1.80 0.90 0.00 37 7.56 7.56 7.56 6.62 5.67 4.73 3.78 2.84 1.89 0.95 0.00 38 7.92 7.92 7.92 6.93 5.94 4.95 3.96 2.97 1.98 0.99 0.00 39 8.28 8.28 8.28 7.25 6.21 5.18 4.14 3.11 2.07 1.04 0.00
97600F Page 23 TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT The following charges apply to each $1,000 of Initial Specified Amount surrendered during the first 10 policy years. The charges also apply to each $1,000 of increase in Specified Amount surrendered during the first 10 years of such increase. The word "surrender" as used in this provision means Full Surrender, or a reduction in Specified Amount at the request of the Owner, or due to a Partial Surrender. The charge for the surrender of all or any portion of the Initial Specified Amount will be equal to the rate shown below for the age at issue and the year of surrender, multiplied by the number of thousands of Initial Specified Amount being surrendered. The charges for surrender of all or any portion of an increase in Specified Amount will be equal to the rates shown below for the age at issue of such increase and year of surrender, multiplied by the number of thousands of such increase being surrendered. In addition, there will be a charge not to exceed $25.00 for each partial surrender.
ISSUE AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR FEMALE 1 2 3 4 5 6 7 8 9 10 11 40 8.64 8.64 8.64 7.56 6.48 5.40 4.32 3.24 2.16 1.08 0.00 41 9.00 9.00 9.00 7.88 6.75 5.63 4.50 3.38 2.25 1.13 0.00 42 9.36 9.36 9.36 8.19 7.02 5.85 4.68 3.51 2.34 1.17 0.00 43 9.84 9.84 9.84 8.61 7.38 6.15 4.92 3.69 2.46 1.23 0.00 44 10.32 10.32 10.32 9.03 7.74 6.45 5.16 3.87 2.58 1.29 0.00 45 10.80 10.80 10.80 9.45 8.10 6.75 5.40 4.05 2.70 1.35 0.00 46 11.28 11.28 11.28 9.87 8.46 7.05 5.64 4.23 2.82 1.41 0.00 47 11.88 11.88 11.88 10.40 8.91 7.43 5.94 4.46 2.97 1.49 0.00 48 12.36 12.36 12.36 10.82 9.27 7.73 6.18 4.64 3.09 1.55 0.00 49 12.96 12.96 12.96 11.34 9.72 8.10 6.48 4.86 3.24 1.62 0.00 50 13.68 13.68 13.68 11.97 10.26 8.55 6.84 5.13 3.42 1.71 0.00 51 14.28 14.28 14.28 12.50 10.71 8.93 7.14 5.36 3.57 1.79 0.00 52 15.00 15.00 15.00 13.13 11.25 9.38 7.50 5.63 3.75 1.88 0.00 53 15.72 15.72 15.72 13.76 11.79 9.83 7.86 5.90 3.93 1.97 0.00 54 16.56 16.56 16.56 14.49 12.42 10.35 8.28 6.21 4.14 2.07 0.00 55 17.28 17.28 17.28 15.12 12.96 10.80 8.64 6.48 4.32 2.16 0.00 56 18.24 18.24 18.24 15.96 13.68 11.40 9.12 6.84 4.56 2.28 0.00 57 19.20 19.20 19.20 16.80 14.40 12.00 9.60 7.20 4.80 2.40 0.00 58 20.16 20.16 20.16 17.64 15.12 12.60 10.08 7.56 5.04 2.52 0.00 59 21.24 21.24 21.24 18.59 15.93 13.28 10.62 7.97 5.31 2.66 0.00 60 22.32 22.32 22.32 19.53 16.74 13.95 11.16 8.37 5.58 2.79 0.00 61 23.64 23.64 23.64 20.69 17.73 14.78 11.82 8.87 5.91 2.96 0.00 62 24.96 24.96 24.96 21.84 18.72 15.60 12.48 9.36 6.24 3.12 0.00 63 26.52 26.52 26.52 23.21 19.89 16.58 13.26 9.95 6.63 3.32 0.00 64 27.96 27.96 27.96 24.47 20.97 17.48 13.98 10.49 6.99 3.50 0.00 65 29.64 29.64 29.64 25.94 22.23 18.53 14.82 11.12 7.41 3.71 0.00 66 30.72 30.72 30.72 26.88 23.04 19.20 15.36 11.52 7.68 3.84 0.00 67 31.92 31.92 31.92 27.93 23.94 19.95 15.96 11.97 7.98 3.99 0.00 68 33.24 33.24 33.24 29.09 24.93 20.78 16.62 12.47 8.31 4.16 0.00 69 34.56 34.56 34.56 30.24 25.92 21.60 17.28 12.96 8.64 4.32 0.00 70 36.00 36.00 36.00 31.50 27.00 22.50 18.00 13.50 9.00 4.50 0.00 71 37.56 37.56 37.56 32.87 28.17 23.48 18.78 14.09 9.39 4.70 0.00 72 38.00 38.00 38.00 33.25 28.50 23.75 19.00 14.25 9.50 4.75 0.00 73 38.50 38.50 38.50 33.69 28.88 24.06 19.25 14.44 9.63 4.81 0.00 74 39.00 39.00 39.00 34.13 29.25 24.38 19.50 14.63 9.75 4.88 0.00 75 39.50 39.50 39.50 34.56 29.63 24.69 19.75 14.81 9.88 4.94 0.00 76 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 77 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 78 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 79 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 80 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
97600F Page 24 TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE Nearest Birthday RATE Nearest Birthday RATE (On Each Policy (On Each Policy Anniversary) Anniversary) 0 0.33 50 0.53 1 0.09 51 0.58 2 0.08 52 0.63 3 0.08 53 0.69 4 0.08 54 0.75 5 0.07 55 0.82 6 0.07 56 0.89 7 0.07 57 0.97 8 0.06 58 1.05 9 0.06 59 1.14 10 0.06 60 1.24 11 0.06 61 1.35 12 0.07 62 1.47 13 0.08 63 1.61 14 0.09 64 1.77 15 0.10 65 1.95 16 0.12 66 2.14 17 0.13 67 2.34 18 0.14 68 2.54 19 0.14 69 2.77 20 0.15 70 3.02 21 0.15 71 3.32 22 0.14 72 3.66 23 0.14 73 4.05 24 0.14 74 4.49 25 0.14 75 4.98 26 0.14 76 5.50 27 0.13 77 6.04 28 0.13 78 6.60 29 0.14 79 7.21 30 0.14 80 7.87 31 0.14 81 8.63 32 0.15 82 9.49 33 0.15 83 10.49 34 0.16 84 11.59 35 0.17 85 12.78 36 0.18 86 14.05 37 0.19 87 15.39 38 0.21 88 16.80 39 0.22 89 18.30 40 0.24 90 19.89 41 0.26 91 21.63 42 0.29 92 23.60 43 0.31 93 25.88 44 0.33 94 28.87 45 0.36 46 0.39 47 0.42 48 0.46 49 0.49
The rates shown above represent the guaranteed (maximum) monthly cost of insurance for each $1,000 of net amount at risk. If this policy has been issued in a special (rated) premium class, the guaranteed monthly cost will be calculated as shown on page 3. 97600U Page 21 TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE INSTALLMENTS FOR A SPECIFIED PERIOD Number Amount of Number Amount of Number Amount of Number Amount of of Years Monthly of Years Monthly of Years Monthly of Years Monthly Payable Installments Payable Installments Payable Installments Payable Installments 5 $17.91 15 $6.87 25 $4.71 35 $3.82 6 15.14 16 6.53 26 4.59 36 3.76 7 13.16 17 6.23 27 4.47 37 3.70 8 11.68 18 5.96 28 4.37 38 3.65 9 10.53 19 5.73 29 4.27 39 3.60 10 9.61 20 5.51 30 4.18 40 3.55 11 8.86 21 5.32 31 4.10 12 8.24 22 5.15 32 4.02 13 7.71 23 4.99 33 3.95 14 7.26 24 4.84 34 3.88
OPTION 3 TABLE INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------] AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years 20* $2.89 $2.89 $2.89 50 $3.87 $3.84 $3.79 21 2.91 2.91 2.90 51 3.93 3.90 3.85 22 2.93 2.92 2.92 52 3.99 3.96 3.90 23 2.94 2.94 2.94 53 4.06 4.02 3.95 24 2.96 2.96 2.96 54 4.13 4.08 4.01 25 2.98 2.98 2.98 55 4.21 4.15 4.07 26 3.00 3.00 3.00 56 4.28 4.22 4.13 27 3.02 3.02 3.02 57 4.37 4.30 4.19 28 3.04 3.04 3.04 58 4.45 4.38 4.26 29 3.07 3.06 3.06 59 4.55 4.46 4.32 30 3.09 3.09 3.08 60 4.64 4.54 4.39 31 3.11 3.11 3.11 61 4.74 4.63 4.46 32 3.14 3.14 3.13 62 4.85 4.72 4.52 33 3.17 3.16 3.16 63 4.97 4.81 4.59 34 3.20 3.19 3.18 64 5.08 4.91 4.66 35 3.22 3.22 3.21 65 5.21 5.01 4.73 36 3.26 3.25 3.24 66 5.34 5.11 4.79 37 3.29 3.28 3.27 67 5.48 5.21 4.85 38 3.32 3.31 3.30 68 5.62 5.32 4.92 39 3.36 3.35 3.33 69 5.77 5.42 4.97 40 3.39 3.38 3.37 70 5.93 5.53 5.03 41 3.43 3.42 3.40 71 6.09 5.63 5.08 42 3.47 3.46 3.44 72 6.26 5.73 5.13 43 3.51 3.50 3.48 73 6.44 5.84 5.17 44 3.56 3.54 3.52 74 6.62 5.93 5.21 45 3.60 3.59 3.56 75 6.80 6.03 5.24 46 3.65 3.63 3.60 76 6.98 6.12 5.27 47 3.70 3.68 3.65 77 7.17 6.20 5.30 48 3.76 3.73 3.70 78 7.35 6.27 5.32 49 3.81 3.78 3.74 79 7.54 6.34 5.34 80** 7.72 6.41 5.35
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly installments for two or more specified periods for a given age are the same, the specified period of longer duration will apply. * Also applies to younger ages. ** Also applies to older ages. 97600U Page 22 TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT The following charges apply to each $1,000 of Initial Specified Amount surrendered during the first 10 policy years. The charges also apply to each $1,000 of increase in Specified Amount surrendered during the first 10 years of such increase. The word "surrender" as used in this provision means Full Surrender, or a reduction in Specified Amount at the request of the Owner, or due to a Partial Surrender. The charge for the surrender of all or any portion of the Initial Specified Amount will be equal to the rate shown below for the age at issue and the year of surrender, multiplied by the number of thousands of Initial Specified Amount being surrendered. The charges for surrender of all or any portion of an increase in Specified Amount will be equal to the rates shown below for the age at issue of such increase and year of surrender, multiplied by the number of thousands of such increase being surrendered. In addition, there will be a charge not to exceed $25.00 for each partial surrender.
ISSUE AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR 1 2 3 4 5 6 7 8 9 10 11 0 2.23 2.23 2.23 1.95 1.67 1.39 1.12 0.84 0.56 0.28 0.00 1 2.24 2.24 2.24 1.96 1.68 1.40 1.12 0.84 0.56 0.28 0.00 2 2.35 2.35 2.35 2.06 1.76 1.47 1.18 0.88 0.59 0.29 0.00 3 2.35 2.35 2.35 2.06 1.76 1.47 1.18 0.88 0.59 0.29 0.00 4 2.47 2.47 2.47 2.16 1.85 1.54 1.24 0.93 0.62 0.31 0.00 5 2.58 2.58 2.58 2.26 1.94 1.61 1.29 0.97 0.65 0.32 0.00 6 2.70 2.70 2.70 2.36 2.03 1.69 1.35 1.01 0.68 0.34 0.00 7 2.82 2.82 2.82 2.47 2.12 1.76 1.41 1.06 0.71 0.35 0.00 8 2.83 2.83 2.83 2.48 2.12 1.77 1.42 1.06 0.71 0.35 0.00 9 2.94 2.94 2.94 2.57 2.21 1.84 1.47 1.10 0.74 0.37 0.00 10 3.06 3.06 3.06 2.68 2.30 1.91 1.53 1.15 0.77 0.38 0.00 11 3.18 3.18 3.18 2.78 2.39 1.99 1.59 1.19 0.80 0.40 0.00 12 3.30 3.30 3.30 2.89 2.48 2.06 1.65 1.24 0.83 0.41 0.00 13 3.53 3.53 3.53 3.09 2.65 2.21 1.77 1.32 0.88 0.44 0.00 14 3.64 3.64 3.64 3.19 2.73 2.28 1.82 1.37 0.91 0.46 0.00 15 3.76 3.76 3.76 3.29 2.82 2.35 1.88 1.41 0.94 0.47 0.00 16 3.89 3.89 3.89 3.40 2.92 2.43 1.95 1.46 0.97 0.49 0.00 17 4.00 4.00 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 18 4.12 4.12 4.12 3.61 3.09 2.58 2.06 1.55 1.03 0.52 0.00 19 4.36 4.36 4.36 3.82 3.27 2.73 2.18 1.64 1.09 0.55 0.00 20 4.48 4.48 4.48 3.92 3.36 2.80 2.24 1.68 1.12 0.56 0.00 21 4.60 4.60 4.60 4.03 3.45 2.88 2.30 1.73 1.15 0.58 0.00 22 4.82 4.82 4.82 4.22 3.62 3.01 2.41 1.81 1.21 0.60 0.00 23 4.94 4.94 4.94 4.32 3.71 3.09 2.47 1.85 1.24 0.62 0.00 24 5.18 5.18 5.18 4.53 3.89 3.24 2.59 1.94 1.30 0.65 0.00 25 5.42 5.42 5.42 4.74 4.07 3.39 2.71 2.03 1.36 0.68 0.00 26 5.65 5.65 5.65 4.94 4.24 3.53 2.83 2.12 1.41 0.71 0.00 27 5.89 5.89 5.89 5.15 4.42 3.68 2.95 2.21 1.47 0.74 0.00 28 6.12 6.12 6.12 5.36 4.59 3.83 3.06 2.30 1.53 0.77 0.00 29 6.36 6.36 6.36 5.57 4.77 3.98 3.18 2.39 1.59 0.80 0.00 30 6.60 6.60 6.60 5.78 4.95 4.13 3.30 2.48 1.65 0.83 0.00 31 7.07 7.07 7.07 6.19 5.30 4.42 3.54 2.65 1.77 0.88 0.00 32 7.30 7.30 7.30 6.39 5.48 4.56 3.65 2.74 1.83 0.91 0.00 33 7.64 7.64 7.64 6.69 5.73 4.78 3.82 2.87 1.91 0.96 0.00 34 8.00 8.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 35 8.35 8.35 8.35 7.31 6.26 5.22 4.18 3.13 2.09 1.04 0.00 36 8.71 8.71 8.71 7.62 6.53 5.44 4.36 3.27 2.18 1.09 0.00 37 9.18 9.18 9.18 8.03 6.89 5.74 4.59 3.44 2.30 1.15 0.00 38 9.54 9.54 9.54 8.35 7.16 5.96 4.77 3.58 2.39 1.19 0.00 39 10.01 10.01 10.01 8.76 7.51 6.26 5.01 3.75 2.50 1.25 0.00
97600U Page 23 TABLE OF SURRENDER CHARGES PER $1,000 OF SPECIFIED AMOUNT The following charges apply to each $1,000 of Initial Specified Amount surrendered during the first 10 policy years. The charges also apply to each $1,000 of increase in Specified Amount surrendered during the first 10 years of such increase. The word "surrender" as used in this provision means Full Surrender, or a reduction in Specified Amount at the request of the Owner, or due to a Partial Surrender. The charge for the surrender of all or any portion of the Initial Specified Amount will be equal to the rate shown below for the age at issue and the year of surrender, multiplied by the number of thousands of Initial Specified Amount being surrendered. The charges for surrender of all or any portion of an increase in Specified Amount will be equal to the rates shown below for the age at issue of such increase and year of surrender, multiplied by the number of thousands of such increase being surrendered. In addition, there will be a charge not to exceed $25.00 for each partial surrender.
ISSUE AGE YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR 1 2 3 4 5 6 7 8 9 10 11 40 10.48 10.48 10.48 9.17 7.86 6.55 5.24 3.93 2.62 1.31 0.00 41 11.05 11.05 11.05 9.67 8.29 6.91 5.53 4.14 2.76 1.38 0.00 42 11.63 11.63 11.63 10.18 8.72 7.27 5.82 4.36 2.91 1.45 0.00 43 12.11 12.11 12.11 10.60 9.08 7.57 6.06 4.54 3.03 1.51 0.00 44 12.80 12.80 12.80 11.20 9.60 8.00 6.40 4.80 3.20 1.60 0.00 45 13.39 13.39 13.39 11.72 10.04 8.37 6.70 5.02 3.35 1.67 0.00 46 14.09 14.09 14.09 12.33 10.57 8.81 7.05 5.28 3.52 1.76 0.00 47 14.80 14.80 14.80 12.95 11.10 9.25 7.40 5.55 3.70 1.85 0.00 48 15.49 15.49 15.49 13.55 11.62 9.68 7.75 5.81 3.87 1.94 0.00 49 16.31 16.31 16.31 14.27 12.23 10.19 8.16 6.12 4.08 2.04 0.00 50 17.14 17.14 17.14 15.00 12.86 10.71 8.57 6.43 4.29 2.14 0.00 51 18.06 18.06 18.06 15.80 13.55 11.29 9.03 6.77 4.52 2.26 0.00 52 19.00 19.00 19.00 16.63 14.25 11.88 9.50 7.13 4.75 2.38 0.00 53 19.93 19.93 19.93 17.44 14.95 12.46 9.97 7.47 4.98 2.49 0.00 54 20.99 20.99 20.99 18.37 15.74 13.12 10.50 7.87 5.25 2.62 0.00 55 22.14 22.14 22.14 19.37 16.61 13.84 11.07 8.30 5.54 2.77 0.00 56 23.32 23.32 23.32 20.41 17.49 14.58 11.66 8.75 5.83 2.92 0.00 57 24.60 24.60 24.60 21.53 18.45 15.38 12.30 9.23 6.15 3.08 0.00 58 25.99 25.99 25.99 22.74 19.49 16.24 13.00 9.75 6.50 3.25 0.00 59 27.29 27.29 27.29 23.88 20.47 17.06 13.65 10.23 6.82 3.41 0.00 60 28.91 28.91 28.91 25.30 21.68 18.07 14.46 10.84 7.23 3.61 0.00 61 30.55 30.55 30.55 26.73 22.91 19.09 15.28 11.46 7.64 3.82 0.00 62 32.30 32.30 32.30 28.26 24.23 20.19 16.15 12.11 8.08 4.04 0.00 63 34.08 34.08 34.08 29.82 25.56 21.30 17.04 12.78 8.52 4.26 0.00 64 36.06 36.06 36.06 31.55 27.05 22.54 18.03 13.52 9.02 4.51 0.00 65 38.17 38.17 38.17 33.40 28.63 23.86 19.09 14.31 9.54 4.77 0.00 66 39.07 39.07 39.07 34.19 29.30 24.42 19.54 14.65 9.77 4.88 0.00 67 39.19 39.19 39.19 34.29 29.39 24.49 19.60 14.70 9.80 4.90 0.00 68 39.32 39.32 39.32 34.41 29.49 24.58 19.66 14.75 9.83 4.92 0.00 69 39.46 39.46 39.46 34.53 29.60 24.66 19.73 14.80 9.87 4.93 0.00 70 39.60 39.60 39.60 34.65 29.70 24.75 19.80 14.85 9.90 4.95 0.00 71 39.76 39.76 39.76 34.79 29.82 24.85 19.88 14.91 9.94 4.97 0.00 72 39.80 39.80 39.80 34.83 29.85 24.88 19.90 14.93 9.95 4.98 0.00 73 39.85 39.85 39.85 34.87 29.89 24.91 19.93 14.94 9.96 4.98 0.00 74 39.90 39.90 39.90 34.91 29.93 24.94 19.95 14.96 9.98 4.99 0.00 75 39.95 39.95 39.95 34.96 29.96 24.97 19.98 14.98 9.99 4.99 0.00 76 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 77 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 78 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 79 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 80 40.00 40.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00
97600U Page 24 AMERICAN GENERAL LIFE INSURANCE COMPANY This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An Adjustable Death Benefit is payable upon the Insured's death prior to the Maturity Date. Investment results are reflected in policy benefits. ACCUMULATION VALUES and CASH VALUES are flexible and will be based on the amount and frequency of premiums paid and the investment results of the Separate Account. NONPARTICIPATING - NOT ELIGIBLE FOR DIVIDENDS. For Information, Service or to make a Complaint Contact your Servicing Agent, or our VUL Administration 2727-A ALLEN PARKWAY P.O. BOX 4880 HOUSTON, TEXAS 77210-4880 1-888-325-9315 [AMERICAN GENERAL LOGO] A STOCK COMPANY A Subsidiary of American General Corporation 97600 EX-1.(5)(A)(II) 5 EXHIBIT 1.(5)(a)(ii) AMERICAN GENERAL LIFE Insurance Company Home Office: Houston, Texas 2727-A Allen Parkway JOHN DOE American P.O. Box 1931 POLICY NUMBER: 000000000 General Houston, Texas 77251 [Graphic Omitted] A STOCK COMPANY (713) 522-1111 A Subsidiary of American General Corporation WE WILL PAY THE DEATH BENEFIT PROCEEDS to the Beneficiary if the Insured dies prior to the Maturity Date and while this policy is in force. Payment will be made after We receive due proof of the Insured's death, and will be subject to the terms of this policy. WE WILL PAY THE CASH SURRENDER VALUE of this policy to the Owner on the Maturity Date if the Insured is living on that date. THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROCEEDS AND THE ACCUMULATION VALUES PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. The consideration for this contract is the application and payment of the first premium. The first premium must be paid on or before delivery of this policy. This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An adjustable Death Benefit is payable upon the Insured's death prior to the Maturity Date. Investment results are reflected in policy benefits. ACCUMULATION VALUES are flexible and will be based on the amount and frequency of premiums paid and the investment results of the Separate Account. NONPARTICIPATING-NOT ELIGIBLE FOR DIVIDENDS. NOTICE OF TEN DAY RIGHT TO EXAMINE POLICY YOU MAY RETURN THIS POLICY WITHIN 10 DAYS AFTER DELIVERY IF YOU ARE NOT SATISFIED WITH IT FOR ANY REASON. THE POLICY MAY BE RETURNED TO US OR TO THE REGISTERED REPRESENTATIVE THROUGH WHOM IT WAS PURCHASED. UPON SURRENDER OF THIS POLICY WITHIN THE 10 DAY PERIOD, IT WILL BE DEEMED VOID FROM THE DATE OF ISSUE, AND WE WILL REFUND ANY PREMIUMS PAID ADJUSTED TO REFLECT INVESTMENT EXPERIENCE. SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE. _____________ _____________ Secretary President FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY READ YOUR POLICY CAREFULLY 97610 INDEX
Allocation of Policy Deductions 4 Allocation of Net Premiums 4 Annual Report 19 Automatic Rebalancing 14 Beneficiary and Proceeds 16 Cash Surrender Value 10 Cash Value 10 Changing Your Insurance Policy 7 Change of Ownership or Beneficiary 16 Changing the Death Benefit Option 7 Changing the Specified Amount 7 Contract 5 Cost of Insurance Rate Table 21 Date of Issue 3,5 Death Benefit and Death Benefit Options 6 Dollar Cost Averaging 14 Expense Charges Monthly Administration Fee 3A,11 Premium Expense Charge 3A Premium Tax 3 General Account 9 General Provisions 18 Grace Period 12 Incontestability 18 Investment Advisor, Change of 9 Investments of the Separate Account 8 Maturity Date 3 Monthly Guarantee Premium 12 Owner 5 Payment Options 17 Policy Loans 15 Policy Values 9 Premium Class 2 Premium Payments 5 Separate Account 7 Surrender, Full and Partial 12 Transfer Provision 13 Valuation of Assets 8 Valuation Dates 8 Valuation Units 8
COMPANY REFERENCE. We, Our, Us, or Company means American General Life Insurance Company. YOU, YOUR. The words You or Your mean the Owner of this policy. HOME OFFICE. Our office at 2727-A Allen Parkway, Houston, Texas 77019; Mailing Address P.O. Box 4880, Houston, Texas 77210-4880. WRITTEN, IN WRITING. A written request or notice in acceptable form and content, which is signed and dated, and received at Our Home Office. PREMIUM CLASS. The Premium Class of this policy is shown on Page 3 as one or a combination of the following terms: SELECT. The term "Select" means the Insured qualifies as a better than average mortality risk. PREFERRED. The term "Preferred" means the cost of insurance is based on the Insured being a nonuser of tobacco. STANDARD. The term "Standard" means the cost of insurance is based on the Insured being a tobacco user. JUVENILE. All policies issued to Insureds at issue age 17 or less are designated as "Juvenile". This means that cost of insurance rates stated in the policy for insurance ages 18 and above are Standard rates. (Rates are not classified on the basis of the Insured being a user or non-user of tobacco at ages 0 through 17.) SPECIAL. The term "Special" means an extra premium is being charged due to the Insured's health, occupation or avocation. RATES ON POLICY ANNIVERSARY NEAREST INSURED'S 18TH BIRTHDAY (FOR INSURED'S AGE 17 OR LESS ON DATE OF ISSUE). If the Insured's age, nearest birthday, is 17 or less on the Date of Issue of this policy, Standard rates will be used starting on the policy anniversary nearest the Insured's 18th birthday, except as follows. Prior to the anniversary nearest the Insured's 18th birthday, a written statement, signed by the Insured, may be submitted to the Company requesting that Preferred rates be made effective. The statement must include the date the Insured last used tobacco, or state that the Insured as never used tobacco, whichever applies. If the request is approved, Preferred rates will be made effective on the policy anniversary nearest the Insured's 18th birthday. Otherwise, Standard rates will apply. We will send a notice to the Owner at lest 30 days prior to the policy anniversary nearest the Insured's 18th birthday that an application for Preferred rates may be submitted. NOTICE This Policy Is A Legal Contract Between The Policy Owner And The Company. 97610 Page 2 POLICY SCHEDULE BASIC POLICY MONTHLY COST YEARS PAYABLE VARIABLE LIFE SEE PAGE 21 60 ADDITIONAL BENEFITS PROVIDED BY RIDERS NONE PREMIUM CLASS: SELECT PREFERRED INITIAL PREMIUM: $1,528.90 PLANNED PERIODIC PREMIUM: $1,528.90 PAYABLE ANNUALLY MONTHLY DEDUCTION DAY: 1ST DAY OF EACH MONTH MINIMUM DEATH BENEFIT AMOUNT (AFTER A DECREASE IN SPECIFIED AMOUNT) $100,000 MINIMUM PARTIAL SURRENDER $ 500.00 MINIMUM VALUE THAT MAY BE RETAINED IN A DIVISION AFTER A PARTIAL SURRENDER $ 500.00 COVERAGE MAY EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM, OR SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE. INSURED: JOHN DOE POLICY NUMBER: 0000000000 INSURANCE AGE: 35 DATE OF ISSUE: NOVEMBER 1, 1997 INITIAL SPECIFIED AMOUNT: $100,000 MATURITY DATE: NOVEMBER 1, 2057 DEATH BENEFIT OPTION: 1 THIS IS A (SEX DISTINCT) POLICY THIS IS A (STATE NAME) POLICY 97610 Page 3 POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000 CHARGES DEDUCTED FROM THE SEPARATE ACCOUNT MORTALITY AND EXPENSE CHARGE. DEDUCTIONS FROM THE SEPARATE ACCOUNT WILL BE MADE AT AN ANNUAL RATE NOT TO EXCEED .90%. AFTER THE 10TH POLICY YEAR, THE CURRENT MORTALITY AND EXPENSE CHARGES WILL BE REDUCED BY .25% IN EACH POLICY YEAR THAT THE CURRENT MORTALITY AND EXPENSE CHARGE ANNUAL RATE WITHOUT THE REDUCTION IS LESS THAN .90%. THE CURRENT RATE ON THE DATE OF ISSUE IS [.75%]. THE ACTUAL DEDUCTION WILL BE MADE ON A DAILY BASIS. THE CURRENT RATE ON A DAILY BASIS IS [.002055%]. EXPENSE CHARGES PREMIUM EXPENSE CHARGE: CURRENT GUARANTEED (ADJUSTABLE PREMIUM EXPENSE CHARGE PERCENTAGE) [2.5%] 5.0% PREMIUM TAX (IF APPLICABLE). DEPENDING ON THE LAWS OF THE JURISDICTION IN WHICH THIS POLICY WAS ISSUED, A PERCENTAGE OF EACH PREMIUM MAY BE DEDUCTED FOR PREMIUM TAX. THE PREMIUM TAX RATE FOR THIS POLICY IS [0%]. MONTHLY EXPENSE CHARGE: MONTHLY EXPENSE CHARGE FOR FIRST TWO YEARS: $19.59 (SEE MONTHLY EXPENSE CHARGE TABLE FOR RATES APPLYING TO INCREASES IN SPECIFIED AMOUNT) MONTHLY ADMINISTRATION FEE: CURRENT GUARANTEED [$6.00] $12.00 BASIC POLICY CHARGES AND FEES COST OF INSURANCE CHARGES. GUARANTEED MAXIMUM COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK ARE SHOWN ON PAGE 21. 97610 Page 3A POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000 INITIAL ALLOCATION OF NET PREMIUMS AND POLICY DEDUCTIONS
INVESTMENT OPTIONS INITIAL ALLOCATION INITIAL ALLOCATIONS OF NET PREMIUMS OF POLICY DEDUCTIONS GENERAL ACCOUNT: (125) AGL Declared Fixed Interest Account 100% 100% SEPARATE ACCOUNT: VL-R [(126) AIM V.I. International Equity Fund 0% 0% (127) AIM V.I. Value Fund 0% 0% (128) International Equities Fund 0% 0% (129) MidCap Index Fund 0% 0% (130) Money Market Fund 0% 0% (131) Stock Index Fund 0% 0% (132) Quality Bond Portfolio 0% 0% (133) Small Cap Portfolio 0% 0% (134) MFS Emerging Growth Series 0% 0% (135) Equity Growth Portfolio 0% 0% (136) High Yield Portfolio 0% 0% (137) Putnam VT Diversified Income Fund 0% 0% (138) Putnam VT Growth and Income Fund 0% 0% (139) Putnam VT International Growth and Income Fund 0% 0% (140) Equity Portfolio 0% 0% (141) Growth Portfolio 0% 0% (142) Strategic Stock Portfolio 0% 0%]
97610 Page 3B TABLE OF MONTHLY EXPENSE CHARGES FOR THE FIRST TWO YEARS PER $1,000 OF SPECIFIED AMOUNT (Also applies to an increase in Specified Amount during first two years of the Increase) ISSUE ISSUE AGE AGE 35 0.1959 58 0.5084 36 0.2047 59 0.5363 37 0.2140 60 0.5662 38 0.2238 61 0.5982 39 0.2340 62 0.6323 40 0.2449 63 0.6688 41 0.2564 64 0.7078 42 0.2685 65 0.7495 43 0.2812 66 0.7800 44 0.2946 67 0.8200 45 0.2647 68 0.8600 46 0.2775 69 0.9000 47 0.2912 70 0.9500 48 0.3056 71 1.0000 49 0.3209 72 1.0600 50 0.3371 73 1.1100 51 0.3544 74 1.1700 52 0.3727 75 1.2400 53 0.3921 76 1.3000 54 0.4126 77 1.3700 55 0.4345 78 1.4500 56 0.4576 79 1.5300 57 0.4822 80 1.6100 The MONTHLY EXPENSE CHARGE FOR THE INITIAL SPECIFIED AMOUNT for the first two years is shown on page 3A of the policy. To determine the Monthly Expense Charge for an increase in Specified Amount, multiply the appropriate rate shown above by the number of thousands of increase in Specified Amount. The result will be deducted from the Accumulation Value monthly during the first two years of the increase. 97610 Page 4 CONTRACT. Your policy is a legal contract that You have entered into with Us. You have paid the first premium and have submitted an application, a copy of which is attached. In return, We promise to provide the insurance coverage described in this policy. The entire contract consists of: 1. The basic policy; 2. The riders that add benefits to the basic policy, if any; 3. Endorsements, if any; and 4. The attached copy of Your application, and any amendments or supplemental applications. DATE OF ISSUE. The Date of Issue of this policy is the date on which the first premium is due. The Date of Issue is also the date from which all policy years, anniversaries, and monthly deduction dates are determined. OWNER. The Owner is as stated in the application unless later changed. During the Insured's lifetime, the Owner may exercise every right the policy confers or we allow (subject to the rights of any assignee of record, and to any endorsement on this policy limiting such rights). You may have Joint Owners of the policy. In that case, the authorization of both Joint Owners is required for all policy changes except for transfers, premium allocations and deduction allocations. We will accept the authorization of either Joint Owner for transfers and changes in premium and deduction allocations. The Owner and the Insured may be the same person but do not have to be. If the Owner dies while the policy is in force and the Insured is living, ownership rights pass on to a successor owner, if any, or to the estate of the Owner. PREMIUM PAYMENTS All premiums after the first are payable in advance. Premium payments are flexible. This means You may choose the amount and frequency of payments. The actual amount and frequency of premium payments will affect the Accumulation Value and the amount and duration of insurance. Please refer to the Policy Values Provision for a detailed explanation. PLANNED PERIODIC PREMIUMS. The amount and frequency of the Planned Periodic Premiums You selected are shown on page 3. You may request a change in the amount and frequency. We may limit the amount of any increase. (See Maximum Premium). UNSCHEDULED ADDITIONAL PREMIUMS. You may pay additional premiums at any time before the Maturity Date shown on page 3. We may limit the number and amount of additional premiums. (See Maximum Premium). MAXIMUM PREMIUM. The sum of the premiums paid under this policy may not exceed the guideline premium limitation as defined by Section 7702, Internal Revenue Code of 1986 (or as later amended). Any portion of any premium paid which is determined to be in excess of the limit will be refunded. PREMIUM EXPENSE CHARGE. The Premium Expense Charge is calculated by multiplying the premium paid (after deduction of any state premium tax) by the Premium Expense Charge Percentage. The Premium Expense Charge Percentage is adjustable, but will never be more than the guaranteed Premium Expense Charge Percentage shown on the Policy Schedule. NET PREMIUM. The Net Premium is the premium paid, less any applicable state premium tax and the Premium Expense charge. ALLOCATION OF PREMIUMS. The initial allocation of Net Premiums is shown on the Policy Schedule and will remain in effect until changed by Written notice from the Owner. The percentage allocation for future Net Premiums may be changed at any time by Written notice. 97610 Page 5 The initial Net Premium will be allocated to the Money Market Division on the later of the following dates: 1. The Date of Issue; or 2. The date all requirements needed to place the policy in force have been satisfied, including underwriting approval and receipt in the Home Office of the necessary premium. The initial Net Premium will remain in the Money Market Division until the first Valuation Date following the 15th day after it was applied. Any additional Net Premiums received prior to the first Valuation date which follows the 15th day after the initial Net Premium was applied will be allocated to the Money Market Division until such Valuation Date. At that time, We will transfer the Accumulation Value to the selected Investment Option(s). Each premium received after such Valuation date will be reduced by any applicable state premium tax and the Premium Expense Charge and applied directly to the selected Investment Option(s) as of the Business Day received. Changes in the allocation will be effective on the date we receive the Owner's notice. The allocation may be 100% to any available Division or may be divided among these options in whole percentage points totaling 100%. We reserve the right to limit the number of Divisions which you may select. WHERE TO PAY. You may make your payments to Us at our Home Office or to an authorized agent. A receipt signed by an officer of the Company will be furnished upon request. DEATH BENEFIT AND DEATH BENEFIT OPTIONS DEATH BENEFIT PROCEEDS. If the Insured dies prior to the Maturity Date and while this policy is in force, We will pay the Death Benefit Proceeds to the Beneficiary. The Death Benefit Proceeds will be subject to: 1. The Death Benefit Option in effect on the date of death; and 2. Any increases or decreases made to the Specified Amount. The Initial Specified Amount is shown on page 3. Guidelines for changing the Death Benefit Option or the Specified Amount will be found in the section entitled "Changing Your Insurance Policy." The Death Benefit Proceeds will be the Death Benefit Amount reduced by any outstanding policy loan and will be subject to the other provisions of the "Beneficiary and Proceeds" section. DEATH BENEFIT OPTION. The Death Benefit Option which You have chosen is shown on page 3 as either Option 1 or Option 2. OPTION 1. If you have chosen Option 1 the Death Benefit Amount will be the greater of: 1. The Specified Amount on the date of death; or 2. The Accumulation Value on the date of death multiplied by the Death Benefit Percentage Factor for the Insured's age nearest birthday as shown in the table that follows. OPTION 2. If you have chosen Option 2, the Death Benefit Amount will be the greater of: 1. The Specified Amount plus the Accumulation Value on the date of death; or 2. The Accumulation Value on the date of death multiplied by the Death Benefit Percentage Factor for the Insured's age nearest birthday as shown in the table that follows. TABLE OF DEATH BENEFIT PERCENTAGE FACTORS
Att'd Percentage Att'd Percentage Att'd Percentage Att'd Percentage Age Factor Age Factor Age Factor Age Factor 0-40 250% 50 185% 60 130% 70 115% 41 243 51 178 61 128 71 113 42 236 52 171 62 126 72 111 43 229 53 164 63 124 73 109 44 222 54 157 64 122 74 107 45 215 55 150 65 120 75-90 105 46 209 56 146 66 119 91 104 47 203 57 142 67 118 92 103 48 197 58 138 68 117 93 102 49 191 59 134 69 116 94 101 95+ 100
97610 Page 6 CHANGING YOUR INSURANCE POLICY You may request a change in the Specified Amount or Death Benefit Option at any time except that a decrease in the Specified Amount may not become effective prior to the end of the first policy year. Your request must be submitted to Our Home Office in writing in a form acceptable to Us. INCREASING THE SPECIFIED AMOUNT. We will require a supplemental application and evidence of insurability satisfactory to Us for any increase in the Specified Amount. An increase will be effective on the monthly deduction day on or next following the date the application for increase is approved by Us. The effective date will appear in an endorsement to this policy. DECREASING THE SPECIFIED AMOUNT. Any decrease will go into effect on the monthly deduction day following the day We receive the request. The Death Benefit Amount remaining in effect after any decrease cannot be less than the greater of: 1. The Minimum Death Benefit Amount shown on page 3; or 2. Any Death Benefit Amount which, upon comparing such amount to the sum of premiums already paid, would result in an excess of premium payments. (See the "Maximum Premium" provision.) Any such decrease will be applied in the following order: 1. Against the Specified Amount provided by the most recent increase; 2. Against the next most recent increases successively; 3. Against the Specified Amount provided under the original application. CHANGING THE DEATH BENEFIT OPTION. You may request a change in the Death Benefit Option you have chosen. 1. If You request a change from Option 1 to Option 2: The new Specified Amount will be the Specified Amount, prior to change, less the Accumulation Value as of the effective date of the change, but not less than zero. 2. If You request a change from Option 2 to Option 1: The new Specified Amount will be the Death Benefit Amount as of the effective date of the change. We will not require evidence of insurability for a change in the Death Benefit Option. The change will go into effect on the monthly deduction day following the date We receive Your request for change. CHANGING THE TERMS OF YOUR POLICY. Any change in Your policy must be approved by one of Our officers. No agent has the authority to make any changes or waive any of the terms of Your policy. SEPARATE ACCOUNT PROVISIONS SEPARATE ACCOUNT. Separate Account VL-R is a segregated investment account established by the Company under Texas law to separate the assets funding the variable benefits for the class of policies to which this policy belongs from the other assets of the Company. That portion of the assets of the Separate Account equal to the reserves and other policy liabilities with respect to the Separate Account shall not be chargeable with liabilities arising out of any other business We may conduct . Income, gains and losses, whether or not realized from assets allocable to the Separate Account, are credited to or charged against such Account without regard to Our other income, gains or losses. 97610 Page 7 INVESTMENTS OF THE SEPARATE ACCOUNT. The Separate Account is segmented into Divisions. Each Division invests in a single Investment Option. Net Premiums will be applied to the Separate Account and allocated to one or more Divisions. The assets of the Separate Account are invested in the Investment Options listed on the Policy Schedule Pages. From time to time, We may add additional Divisions to those shown on the Policy Schedule pages. We may also discontinue offering one or more Divisions. Any change in Divisions available or selected are shown on the Policy Schedule or on an amended Policy Schedule. Any change in investment selection shall be pursuant to a duly executed change form filed with Our Home Office. Transfers may be made to the additional Divisions subject to the rules stated in the Transfer Provision and any new rules or limitations tied to such additional Divisions. If shares of any of the Investment Options become unavailable for investment by the Separate Account, or the Company's Board of Directors deems further investment in these shares inappropriate, the Company may limit further investment in the shares or may substitute shares of another Investment Option for shares already purchased under this policy. VALUATION OF ASSETS. The assets of the Separate Account are valued as of each Valuation Date at their fair market value in accordance with Our established procedures. The Separate Account Value as of any Valuation Date prior to the Maturity Date is the sum of Your account values in each Division of the Separate Account as of that date. VALUATION UNITS. In order to determine policy values in the Divisions We use Valuation Units which are calculated separately for each Division. The Valuation Unit value for each Division will vary to reflect the investment experience of the applicable Investment Option. The Valuation Unit for a Division will be determined on each Valuation Date for the Division by multiplying the Valuation Unit value for the Division on the preceding Valuation Date by the Net Investment Factor for that Division for the current Valuation Date. The Net Investment Factor for each Division is determined by dividing (1) by (2) and subtracting (3), where: (1) is the net asset value per share of the applicable Investment Option as of the current Valuation Date (plus any per share amount of any dividend or capital gains distribution paid by the Investment Option since the last Valuation Date); and (2) is the net asset value per share of the shares held in the Division as determined at the end of the previous valuation period; and (3) is a factor representing the Mortality and Expense Charge. The net asset value of an investment company's shares held in each investment division shall be the value reported by Us by that investment company. VALUATION DATES. Valuation of the various Divisions will occur on each Business Day during each month. If the underlying Investment Option is unable to value or determine the Division's investment in an Investment Option due to any of the reasons stated in the "Suspension and Deferral of Payments Provision", the Valuation Date for the Division with respect to the unvalued portion shall be the first Business Day that the assets can be valued or determined. BUSINESS DAY. A business day is each day that the New York Stock Exchange and the Company are open for business. A business day immediately preceded by one or more non-business calendar days will include those non-business days as part of that business day. For example, a business day which falls on a Monday will consist of a Monday and the immediately preceding Saturday and Sunday. MINIMUM BALANCE. If a partial surrender causes the balance in any Division to drop below $500, the Company reserves the right to transfer the remaining balance to the Money Market Division. If a transfer causes the balance in any Division to drop below $500, the Company reserves the right to transfer the remaining balance in proportion to the transfer request. 97610 Page 8 CHANGE OF INVESTMENT ADVISOR OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without Our consent. If required, approval of or change of any investment objective will be filed with the Insurance Department of the state where this policy is being is delivered. RIGHTS RESERVED BY US. Upon notice to You, this policy may be modified by Us, but only if such modification is necessary to: 1. Operate the Separate Account in any form permitted under the Investment Company Act of 1940 or in any other form permitted by law; 2. Transfer any assets in any Division to another Division, or to one or more other separate accounts; 3. Add, combine or remove Divisions in the Separate Account, or combine the Separate Account with another Separate Account; 4. Make any new Division available to You on a basis to be determined by Us; 5. Substitute for the shares held in any Division the shares of another Division or the shares of another investment company or any other investment permitted by law; 6. Make any changes as required by the Internal Revenue Code, or by any other applicable law, regulation or interpretation in order to continue treatment of this policy as life insurance; or 7. Make any changes required to comply with rules of any Division. When required by law, We will obtain Your approval of changes and We will gain approval from any appropriate regulatory authority. GENERAL ACCOUNT. The General Account is a Fixed Account within Our general assets which We have established for: 1. Any amounts transferred from the Divisions as a result of a loan; or 2. Any amounts allocated by the Owner to such Account. The General Account is credited with interest at an annual rate of not less than 4%, and is not based on the investment experience of any Division of the Separate Account. Interest applied to that portion of the General Account equal to a policy loan will be at an annual effective rate of not less than 4% nor more than 4.75%. POLICY VALUES PROVISION ACCUMULATION VALUE. The Accumulation Value of Your policy is the total of all values in the General Account and in the Divisions of the Separate Account. The Accumulation Value reflects: 1. Premiums paid; 2. Deductions for Expense Charges; 3. Monthly deductions; 4. The investment experience of the Divisions selected; 5. The value of amounts allocated to the General Account, including interest earned on amounts allocated to the General Account; 6. Deductions due to partial withdrawals; and 7. Deductions, if any, resulting from decreases in Specified Amount. Net Premiums are allocated, in accordance with your instructions, to the General Account or allocated to the selected Divisions of the Separate Account and converted to Valuation Units. 97610 Page 9 On each Monthly Deduction day, a Monthly Deduction will be made by reducing the unloaned portion of the General Account or redeeming Valuation Units from each applicable Division in the same ratio as the Allocation of Policy Deductions in effect on the Monthly Deduction day. If the number of Valuation Units in any Division, or in the unloaned portion of the General Account is insufficient to make a Monthly Deduction in this manner, We will cancel Valuation Units from each applicable Division and reduce the unloaned portion of the General Account in the same ratio the Monthly Deduction bears to the unloaned Accumulation Value of your policy. You must state In Writing in advance how Monthly Deductions should be made if other than this method is to be used. The Accumulation Value in any Division is determined by multiplying the value of a Valuation Unit by the number of Valuation Units held under the policy in that Division. The value of Valuation Units equal to the amount being borrowed from the Separate Account will be transferred to the General Account as of the Business Day that the loan request is received In Writing. Valuation Units are surrendered to reflect a partial surrender as of the Business Day that the request for partial surrender is received In Writing. ON THE DATE OF ISSUE. The Accumulation Value on the Date of Issue will be determined as follows: 1. The Net Premium received; less 2. The Monthly Deduction for the first policy month; (See "How We Calculate a Monthly Deduction.") The first deduction day is the Date of Issue. The Monthly Deduction day is shown on page 3. ON EACH DEDUCTION DAY. On each deduction day after the Date of Issue, we will determine the Accumulation Value as follows: 1. First, we will take the Accumulation Value as of the last deduction day; and 2. Add the interest earned for the month on the excess of the General Account value on the last deduction day over any withdrawals and transfers made from the General Account since the last deduction day; and 3. Add any investment gain (or subtract any investment loss) on the Divisions of the Separate Account since the last deduction day as measured by the change in the value of the Valuation Units; and 4. Add all Net Premiums received since the last deduction day; and 5. Subtract any partial surrender made since the last deduction day; and 6. Subtract the Monthly Deduction for the policy month following the monthly deduction day. (See "How We Calculate a Monthly Deduction.") ON ANY VALUATION DATE OTHER THAN A DEDUCTION DAY. The Accumulation Value on any Valuation Date other than a deduction day will be the sum of: 1. The value of the General Account as of the last deduction day; 2. Less any withdrawals since the last deduction day; 3. Plus all Net Premiums received since the last deduction day; 4. Plus the sum of the values of the Divisions of the Separate Account as of the last deduction day, plus the amount of any investment gain (or minus any investment loss) on the Divisions since the last deduction day as measured by the change in value of the Valuation Units. CASH SURRENDER VALUE. The Cash Surrender Value of this policy will be equal to the Accumulation Value less any indebtedness. 97610 Page 10 HOW WE CALCULATE A MONTHLY DEDUCTION. Each Monthly Deduction includes: 1. The cost of insurance provided by the basic policy; and 2. The cost of insurance for benefits provided by riders; and 3. The Monthly Administration Fee; and 4. During the first two policy years, a Monthly Expense Charge. (This charge also applies to the amount of any increase in Specified Amount during the first two years of such increase.) HOW WE CALCULATE THE COST OF INSURANCE FOR THE BASIC POLICY. We calculate the cost of insurance at the beginning of each policy month on the deduction day. The cost of insurance is determined as follows: 1. Reduce the Death Benefit Amount by the amount of Accumulation Value on the deduction day before the cost of insurance deduction is taken, and after the Monthly Expense Charge, if any, the Monthly Administration Fee and Cost of Insurance for riders are deducted; 2. Multiply the difference by the cost of insurance rate per $1,000 of net risk amount as provided in the Cost of Insurance Rate provision; and 3. Divide the result by 1000. If Option 1 is in effect, and there have been increases in the Specified Amount, the Accumulation Value will first be considered part of the Initial Specified Amount. If the Accumulation Value exceeds the Initial Specified Amount, the excess will be considered part of prior Specified Amount increases in the order of the increases. COST OF INSURANCE FOR BENEFITS PROVIDED BY RIDERS. The cost of insurance for benefits provided by riders will be as stated on the Policy Schedule or in an endorsement to this policy. MONTHLY ADMINISTRATION FEE. An administration fee will be deducted monthly. The amount of the monthly fee may be adjusted, but will never be greater than the guaranteed Monthly Administration Fee. FIRST TWO YEARS MONTHLY EXPENSE CHARGE. A Monthly Expense Charge will be deducted during the first two policy years, and during the first two years of any increase in Specified Amount. The Monthly Expense Charge for the first two years for the Initial Specified Amount is shown onpage 3. The Monthly Expense Charge for the first two years of any increase in Specified Amount will be calculated by multiplying the appropriate rate shown on page 4 by the number of thousands of such increase. COST OF INSURANCE RATE. The cost of insurance rate for the Initial Specified Amount, and for each Specified Amount increase, is based on the Insured's: 1. Sex (if issued on a Sex Distinct basis); 2. Age nearest birthday on each policy anniversary; and 3. Premium class shown on the Policy Schedule, associated with the Initial Specified Amount and each increase in the Specified Amount. The guaranteed monthly cost of insurance rates are shown in the table on page 21. We can use cost of insurance rates that are lower than the guaranteed rates. Any change in rates will apply to all policies in the same rate class as this policy. The rate class of this policy is determined on its Date of Issue according to: 1. The calendar year of issue and policy year; 2. The plan of insurance; 3. The amount of insurance; and 4. The age, sex and premium class of the Insured if issued on a Sex Distinct basis. The age and premium class if issued on a Unisex basis. CHANGES IN RATES, CHARGES AND FEES. This policy does not participate in Our profits or surplus. Any redetermination of the cost of insurance rates, interest rates, mortality and expense charges, percentage of premium charges or the Monthly Administration Fee will be based on Our expectations as to investment earnings, mortality, persistency and expenses. We will not change these charges in order to recoup any prior losses. 97610 Page 11 INTEREST RATE. The guaranteed interest rate used in calculating Accumulation Values of amounts allocated to the General Account is .3274% per month compounded monthly. This is equivalent to 4.0% per year, compounded annually. We can use interest rates greater than the guaranteed rates to calculate Accumulation Values. GRACE PERIOD. If the Cash Surrender Value on a deduction day is not enough to meet the Monthly Deduction for the current month, this policy will remain in force during the 61-day period that follows. If the Cash Surrender Value on a policy anniversary is not enough to pay any loan interest due, this policy will remain in force during the 61-day period that follows. Such 61-day period is referred to in this policy as the "Grace Period." There is no Grace Period for the initial Monthly Deduction. If the required premium is not paid by the end of the Grace Period, this policy will terminate without value. However, we will give you at least 31 days notice prior to termination that your policy is in the Grace Period and advise you of the amount of premium required to keep your policy in force. Such 31 days prior notice will be sent to you at your last known address, and to the assignee of record, if any. If death occurs during the Grace Period, Monthly Deductions through the policy month in which death occurred will be deducted from the proceeds. If a surrender request is received within 31 days after the Grace Period commences, the Cash Surrender Value payable will not be less than the Cash Surrender Value on the Monthly Deduction day the Grace Period commenced. The Monthly Deduction for the policy month following such Monthly Deduction day will not be subtracted in the calculation of such Cash Surrender Value. FULL SURRENDER. Subject to the Beneficiary and Proceeds section, You may return Your policy to Us and request its Cash Surrender Value at any time during the Insured's lifetime before the Maturity Date. The Cash Surrender Value will be determined as of the Business Day the policy and the signed request for surrender are received In Writing in the Home Office. The Company may delay payment if the Suspension and Deferral of Payments Provision is in effect. PARTIAL SURRENDER. At any time after the first policy year, you may request withdrawal of a portion of the Cash Surrender Value of the policy. Your request must be made in writing prior to the Maturity Date during the Insured's lifetime. The minimum partial surrender is $500.00. Valuation Units are surrendered to reflect a partial surrender as of the Business Day the request for partial surrender is received In Writing in the Home Office. A partial surrender will result in a reduction of the Accumulation Value and the Death Benefit Amount. The Accumulation Value will be reduced by the amount of partial surrender benefit. The reduced Death Benefit Amount will be determined in accordance with the Death Benefit Option provision. If your Death Benefit Option is Option 1, the Specified Amount will be reduced by the amount of the partial surrender. (The reduced amount will not be less than zero.) The Death Benefit Amount remaining after this reduction must be no less than the Minimum Death Benefit Amount shown on page 3. A partial surrender will result in the cancellation of Valuation Units from each applicable Division and reduction of the unloaned portion of the General Account in the same ratio as the Allocation of Policy Deductions in effect on the date of each partial surrender. If the number of Valuation Units in any Division or in the unloaned portion of the General Account is insufficient to make a partial surrender in this manner, We will cancel Valuation Units from each applicable Division and reduce the unloaned portion of the General Account in the ratio the partial surrender request bears to the unloaned Accumulation Value of your policy. You must state In Writing in advance how partial surrenders should be made if other than this method is to be used. There will be a $25.00 charge for each partial surrender. The Company may delay payment if the Suspension and Deferral of Payments Provision is in effect. 97610 Page 12 PERIOD OF INSURANCE COVERAGE IF AMOUNT OR FREQUENCY OF PREMIUM PAYMENTS IS REDUCED OR IF PREMIUM PAYMENTS ARE DISCONTINUED. If You reduce the amount or frequency of premium payments, or if You discontinue payment of premiums and do not surrender this policy, We will continue making Monthly Deductions (as long as there is sufficient Cash Surrender Value to make such deductions) until the Maturity Date. This policy will remain in force until the earlier of the following dates: 1. The Maturity Date (if there is sufficient Cash Surrender Value to make Monthly Deductions to that date); or 2. The end of the Grace Period. TRANSFER PROVISION TRANSFER OF ACCUMULATION VALUE. You may transfer all or part of Your interest in a Division of the Separate Account or the General Account subject to the following: 1. Transfers will be made as of the Business Day that the transfer request is received in good order. 2. The minimum which may be transferred is $500.00. 3. A transfer from the General Account to a Separate Account Division may only be made during the 60 day period that begins on a policy anniversary. The total amount transferred during the 60 day period is limited in any policy year to 25% of the unloaned portion of the General Account as of the policy anniversary. 4. We reserve the right to terminate, suspend or modify the transfer privilege described above. If You elect to use the transfer privilege, We will not be liable for a transfer made in accordance with Your instructions. Transfers between Separate Account Divisions result in the redemption of Valuation Units in one Division and the purchase of Valuation Units in the Division to which the transfer is made. DOLLAR COST AVERAGING. Dollar Cost Averaging is an automatic transfer of funds made periodically prior to the Maturity Date in accordance with the Transfers provision, except as provided below, and instructions from the Owner. Dollar Cost Averaging (DCA) is subject to the following guidelines: 1. DCA transfers may be made: (a) On any day of the month except the 29th, 30th or 31st; (b) On a monthly, quarterly, semi-annual or annual basis; (c) From the Money Market Division to one or more of the other Separate Account Divisions. (The General Account is not eligible for DCA) 97610 Page 13 TRANSFER PROVISION (CONT'D) 2. DCA may be elected only if the Accumulation Value at the time of election is $5,000, or more. 3. The minimum amount of each DCA transfer is $100, or the remaining amount in the Money Market Division, if less. 4. DCA may not begin prior to the first Valuation Date following the 15th day after the initial Net Premium is applied. 5. DCA will end when there is no longer any value in the Money Market Division, or when You request that DCA end. (You will be notified if the value of Your Money Market Division reaches zero). 6. Amounts applied to the Money Market Division while DCA is active will be available for future Dollar Cost Averaging in accordance with the current DCA request. 7. There is no charge for DCA. 8. DCA is not available if Automatic Rebalancing is active. AUTOMATIC REBALANCING. Automatic Rebalancing occurs when funds are transferred by the Company between the Separate Account Divisions so that the values in each Division match the premium allocation percentages then in effect. You may choose Automatic Rebalancing on a quarterly, semi-annual or annual basis if your Accumulation Value is $5,000 or more. The date Automatic Rebalancing occurs will be based on the Date of Issue of Your policy. For example, if Your policy is dated January 17, and You have requested Automatic Rebalancing on a quarterly basis, Automatic Rebalancing will start on April 17, and will occur quarterly thereafter. After Automatic Rebalancing is elected, it will continue until We are notified In Writing that it is to be discontinued. There is no charge for Automatic Rebalancing. Automatic Rebalancing is not available if Dollar Cost Averaging is active. SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION We may suspend the calculation and payment of the policy's Cash Surrender Value in the following circumstances: 1. If there is a failure in any of the means normally employed in ascertaining the prices or values of investments, properties or assets; or 2. If, for any reason the prices or values of investments, properties or assets in the Separate Account cannot be reasonably ascertained; or 3. If circumstances exist as a result of which it is not reasonably practicable to realize any of the Separate Account's investment or to determine fairly the net asset value of the Separate Account; or 4. If the remittance of funds involved in the realization of, or in the payment for investment or payment due under this policy cannot be carried out without undue delay and at normal rates of exchange; or 5. The U.S. Securities and Exchange Commission (SEC) determines that a state of emergency exists; or 6. An order of the SEC permits a delay for the protection of policyholders. 97610 Page 14 SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION (CONT'D) As to amounts allocated to the General Account, We may defer payment of any Cash Surrender Value withdrawal or loan amount for up to six months after We receive a request for it. Written notice of both the imposition and termination of any such suspension will be given to the Owners, assignees of record and any irrevocable Beneficiaries. Payments which were due to have been made and which were deferred following the suspension of the calculation of the Cash Surrender Value will be made within thirty (30) days of the lifting of the suspension, and will be calculated based on the Valuation Date which immediately follows termination of the suspension. POLICY LOANS You may borrow from Us at any time while this policy is in force, an amount which is equal to or less than the policy's loan value. The loan value will be the Cash Surrender Value less an amount equal to 3 Monthly Deductions, and less interest on the amount to be borrowed to the next policy anniversary. The value of Valuation Units equal to the amount being borrowed from the Separate Account will be transferred to the General Account as of the Business Day that the loan request is received in good order. LOAN INTEREST. Loan interest will accrue daily at an annual effective rate of 4.54% payable in advance. (This is equivalent to an annual effective rate of 4.75% paid in arrears.) On each policy anniversary, loan interest for the next year is due in advance. Unpaid loan interest will be deducted from the various accounts according to the deduction percentages then in effect, and added to the loaned portion of the General Account. If the number of Valuation Units in any Division, or in the unloaned portion of the General Account is insufficient to deduct unpaid loan interest in this manner, We will cancel Valuation Units from each applicable division and reduce the unloaned portion of the General Account in the same ratio the unpaid loan inteest bears to the unloaned Accumulation Value of your policy. You must state In Writing in advance how unpaid loan interst should be deducted if other than this method is to be used. HOW YOU MAY REPAY A POLICY LOAN. You may repay all or part of a policy loan at any time, except that: 1. Repayment may be made only while this policy is in force and prior to the death of the Insured; and, 2. A partial repayment must be at least $100.00. At any time Your policy loan exceeds the Cash Surrender Value, this policy will lapse. However, at least 31 days prior notice must be mailed by Us to Your last known address and to the assignee of record, if any. WE CAN DELAY PAYMENT. We can delay lending You money for up to 6 months, or the period allowed by law, whichever is less. However, We cannot delay lending You money if the amount is to be used to pay a premium to Us. OBTAINING A LOAN. You may obtain a policy loan by Written request and assignment of the policy as sole security for the loan. The Company may delay a loan if the Suspension and Deferral of Payments Provision is in effect. EFFECT OF A LOAN. When a loan is made, an amount equal to the amount being borrowed from the Separate Account will be transferred to the General Account. A loan will result in the cancellation of Units from each applicable Division and reduction of the unloaned portion of the General Account in the ratio that the loan bears to the unloaned Accumulation Value of Your policy. You must state In Writing in advance which Division units are to be canceled if a different method is to be used. 97610 Page 15 Repayment of a loan will first be allocated to the General Account until you have repaid any loaned amounts that were allocated to the General Account. You may tell Us how to allocate repayments above that amount. If you do not tell us, an amount equal to the loan repayment will be transferred from the General Account to the Divisions in the same ratio currently in effect for the allocation of Net Premiums. A loan, whether or not repaid, will have a permanent effect on the Cash Surrender values and on the death benefits. If not repaid, any indebtedness will reduce the amount of Death Benefit Proceeds and the amount available upon surrender of the policy. PREFERRED LOANS. A "Preferred Loan" is a policy loan that is made at a net cost to the Owner that is less than the net cost of other policy loans. Starting on the tenth policy anniversary, this policy will be eligible for "Preferred Loans" subject to the following guidelines: 1. The maximum amount eligible for Preferred Loans during a policy year is restricted to the lesser of the following values on the first day of such policy year: a. The policy loan value; or b. 10% of the Accumulation Value. 2. When a Preferred Loan is made, interest to the next policy anniversary will be charged at the rate shown in the Loan Interest provision. 3. Interest credited to the amount of the Accumulation Value offset by a Preferred Loan: a. Will be at an annual effective rate that is equal to or less than the Policy Loan annual effective interest rate; and b. Will be at a higher rate than the rate used to credit interest to values offset by any other policy loan. BENEFICIARY AND PROCEEDS BENEFICIARY. The Beneficiary as named in the application, or later changed by You, will receive the proceeds upon the death of the Insured. Unless You have stated otherwise, proceeds will be paid as follows: 1. If any Beneficiary dies before the Insured, that Beneficiary's interest will pass to any other Beneficiaries according to their respective interests. 2. If no Beneficiary survives the Insured, proceeds will be paid to You, as Owner, if You are then living; otherwise proceeds will be paid to Your estate. CHANGE OF OWNERSHIP OR BENEFICIARY. You may change the Owner or the Beneficiary at any time during the lifetime of the Insured unless the previous designation provides otherwise. To do so, send a Written request to Our Home Office in a form acceptable to Us. The change will go into effect when We have recorded the change. However, after the change is recorded, it will be deemed effective as of the date of Your Written request for change. The change will be subject to any payment made or action taken by Us before the request is recorded. COMMON DISASTER. If We cannot determine whether a Beneficiary or the Insured died first in a common disaster, We will assume that the Beneficiary died first. Proceeds will be paid on this basis unless an endorsement to this policy provides otherwise. PROCEEDS. Proceeds means the amount payable on: 1. The Maturity Date; 2. Exercise of the full surrender benefit; or 3. The Insured's death. The proceeds on the Maturity Date will be the Cash Surrender Value. The proceeds on the Insured's death will be the Death Benefit Amount less any outstanding policy loan. All proceeds and partial surrender benefits are subject to the provisions of the Payment Options section and the other provisions of this policy. 97610 Page 16 PAYMENT OPTIONS Instead of being paid in one sum, all or part of the proceeds may be applied under any of the Payment Options described below. In addition to these options, other methods of payment may be chosen with Our consent. PAYMENT CONTRACT. When proceeds become payable under a Payment Option, a Payment Contract will be issued to each payee. The Payment Contract will state the rights and benefits of the payee. It will also name those who are to receive any balance unpaid at the death of the payee. ELECTION OF OPTIONS. The Owner may elect or change any Payment Option while the Insured is living, subject to the provisions of this policy. This election or change must be In Writing. Within 60 days after the Insured's death, a payee entitled to proceeds in one sum may elect to receive proceeds under any option. OPTION 1. PAYMENTS FOR A SPECIFIED PERIOD: Equal monthly payments will be made for a specified period. The Option 1 Table in this policy shows the monthly income for each $1,000 of proceeds applied. OPTION 2. PAYMENTS OF A SPECIFIED AMOUNT: Equal monthly payments of a specified amount will be made. Each payment must be at least $60 a year for each $ 1,000 of proceeds applied. Payments will continue until the amount applied, with interest, has been paid in full. OPTION 3. MONTHLY PAYMENTS FOR LIFE: Equal monthly payments will be made for a specified period, and will continue after that period for as long as the payee lives. The specified period may be 10, 15 or 20 years. The Option 3 Table in this policy shows the monthly income for each $1,000 of proceeds applied. If issued on a Sex Distinct basis, tables are based on the 1983a Male or Female Mortality Tables adjusted by projection scale G for 9 years, interest at the rate of 3% per year, and a 2% load. If issued on a Unisex basis, tables are based on the 1983a Male or Female Tables, adjusted by projection scale G for 9 years, with unisex rates based on 60% female and 40% male, and interest at the rate of 3% per year, and a 2% load. At the time payments are to begin under this option, the payee may choose one of the following: 1. Monthly payments based on the Option 3 Table; or 2. Monthly payments equal to a monthly annuity based on our single premium immediate annuity rates then in use. OPTION 4. PROCEEDS LEFT AT INTEREST: Proceeds may be left on deposit with us for any period up to 30 years. Interest earned on the proceeds may be: 1. Left on deposit to accumulate at the rate of 3% compounded annually; or 2. Paid in installments at the rate for each $1,000 of proceeds of $30 annually, $14.89 semiannually, $7.42 quarterly or $2.47 monthly. Upon the death of the payee, or at the end of the specified period, any balance left on deposit will be paid in a lump sum or under Options 1, 2 or 3. INTEREST RATES. The guaranteed rate of interest for proceeds held under Payment Options 1, 2, 3 and 4 is 3% compounded annually. We may credit interest at a higher rate. The amount of any increase will be determined by Us. PAYMENTS. The first payment under Options 1, 2 and 3 will be made when the claim for settlement has been approved. Payments after the first will be made according to the manner of payment chosen. Interest under Option 4 will be credited from the date of death and paid or added to the proceeds as provided in the Payment Contract. AVAILABILITY OF OPTIONS. If the proposed payee is not a natural person, payment options may be chosen only with Our consent. If this policy is assigned, We will have the right to pay the assignee in one sum the amount to which the assignee is entitled. Any balance will be applied according to the option chosen. 97610 Page 17 The amount to be applied under any one option must be at least $2,000. The payment elected under any one option must be at least $25. EVIDENCE THAT PAYEE IS ALIVE. Before making any payment under a Payment Option, We may ask for proof that the payee is alive. If proof is requested, no payment will be made or considered due until We receive proof. DEATH OF A PAYEE. If a payee dies, any unpaid balance will be paid as stated in the Payment Contract. If there is no surviving payee named in the Payment Contract, We will pay the estate of the payee: 1. Under Options 1 and 3, the value as of the date of death of the remaining payments for the specified period, discounted at the rate of interest, compounded annually, that was used in determining the amount of the monthly payment; 2. Under Options 2 and 4, the balance of any proceeds remaining unpaid with accrued interest, if any. WITHDRAWAL OF PROCEEDS UNDER OPTIONS 1 OR 2. If provided in the Payment Contract, a payee will have the right to withdraw the entire unpaid balance under Options 1 or 2. Under Option 1, the amount will be the value of the remaining payments for the specified period discounted at the rate of interest used in determining monthly income. Under Option 2, the amount will be the entire unpaid balance. WITHDRAWAL OF PROCEEDS UNDER OPTION 4. A payee will have the right to withdraw proceeds left under Option 4 subject to the following rules: 1. The amount to be withdrawn must be $500 or more; 2. A partial withdrawal must leave a balance on deposit of $1,000 or more. WITHDRAWALS MAY BE DEFERRED. We may defer payment of any withdrawal for up to 6 months from the date We receive a withdrawal request. ASSIGNMENT. Payment Contracts may not be assigned. CHANGE IN PAYMENT. The right to make any change in payment is available only if it is provided in the Payment Contract. CLAIMS OF CREDITORS. To the extent permitted by law, proceeds will not be subject to any claims of a Beneficiary's creditors. GENERAL PROVISIONS ASSIGNING YOUR POLICY. During the lifetime of the Insured, You may assign this policy as security of an obligation. We will not be bound by an assignment unless it is received In Writing at Our Home Office. Two copies of the assignment must be submitted. We will retain one copy and return the other. We will not be responsible for the validity of any assignment. INCONTESTABILITY. We rely on the statements made in the application for the policy and applications for any reinstatements or increases in Specified Amount. These statements, in the absence of fraud, are considered representations and not warranties. No statement may be used in defense of a claim under the policy unless it is in such applications. Except as stated below, We cannot contest this policy after it has been in force during the Insured's lifetime for 2 years from the Date of Issue. 97610 Page 18 Exceptions: We cannot contest any claim related to an increase in Specified Amount after such increase has been in effect during the Insured's lifetime for 2 years. If this policy is reinstated, We cannot contest this policy after it has been in force during the Insured's lifetime for 2 years from the date of reinstatement. We can contest a reinstatement or an increase in Specified Amount only on the basis of the information furnished in the application for such reinstatement or increase. This 2-year limitation does not apply to any Disability or Accidental Death Benefit, or to the nonpayment of premium. SUICIDE EXCLUSION. If the Insured takes his or her own life, while sane or insane, within 2 years from the Date of Issue, We will limit the Death Benefit Proceeds to the premiums paid less any policy loans and less any partial cash surrenders paid. If there are any increases in the Specified Amount (See the section entitled "Changing Your Insurance Policy") a new 2 year period shall apply to each increase beginning on the date of each increase. The Death Benefit Proceeds will be the costs of insurance associated with each increase. When the laws of the state in which this policy is delivered require less than this 2 year period, the period will be as stated in such laws. AGE OR SEX INCORRECTLY STATED (AGE INCORRECTLY STATED IF ISSUED ON A UNISEX BASIS). If the (1) age or sex of the Insured (if this policy was issued on a Sex Distinct Basis) or (2) age of the Insured (if this policy was issued on a Unisex basis) has been misstated to Us, We will adjust the excess of the Death Benefit Amount over the Accumulation Value on the date of death to that which would have been purchased by the Monthly Deduction for the policy month of death at the correct cost of insurance rate. By age We mean age nearest birthday as of the Date of Issue. STATUTORY BASIS OF POLICY VALUES. The Accumulation Values of the policy are not less than the minimum values required by the law of the state where this policy is delivered. The calculation of the Accumulation Values includes a charge for the cost of insurance, as shown in the Table of Guaranteed Monthly Cost of Insurance Rates. Calculation of minimum Accumulation Values, nonforfeiture benefits and Guaranteed Cost of Insurance Rates are based on the Composite 1980 Commissioners Standard Ordinary Male/Female/Unisex (Table B) Mortality Table for the appropriate sex and age nearest birthday. A detailed statement of the method of computing values has been filed with the state insurance department where required. NO DIVIDENDS. This policy will not pay dividends. It will not participate in any of our surplus or earnings. ANNUAL REPORT. We will send You at least once a year an annual report which will show a summary of all transactions since the last report, including: 1. Premiums paid since the last report; 2. Transfers since the last report; 3. Expense charges deducted since the last report; 4. The cost of insurance deducted since the last report; 5. Partial surrender benefits paid to You since the last report; 6. The amount of any outstanding policy loan; 7. Separate Account Unit Values; 8. The current Cash Surrender and Accumulation Values; and 9. The Death Benefit Amount. 97610 Page 19 WHEN THIS POLICY TERMINATES. This policy will terminate if: 1. You request that this policy be terminated; 2. The Insured dies; 3. The policy matures; or 4. The Grace Period ends and there is not sufficient Cash Surrender Value to cover a Monthly Deduction. REINSTATEMENT. "Reinstating" means placing Your policy in force after it has terminated at the end of the Grace Period. We will reinstate this policy if We receive: 1. Your Written request within five years after the end of the Grace Period and before the Maturity Date; and 2. Evidence of insurability satisfactory to Us; and 3. Payment of enough premium to keep the policy in force for two months; and 4. Payment or reinstatement of any indebtedness. The reinstated policy will be in force from the Monthly Deduction day on or following the date We approve the reinstatement application. The Accumulation Value at the time of reinstatement will be: 1. The Net Premium allocated in accordance with the premium allocation percentages at time of lapse unless the reinstatement application provides otherwise, using Unit Values as of the date of reinstatement; plus 2. Any loan repaid or reinstated; less 3. The monthly deduction for one month. If a person other than the Insured is covered by a rider attached to this policy, coverage will be reinstated according to that rider. 97610 Page 20 TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE Nearest Birthday MALE Nearest Birthday MALE (On Each Policy (On Each Policy Anniversary) Anniversary) 0 0.35 50 0.56 1 0.09 51 0.61 2 0.08 52 0.67 3 0.08 53 0.73 4 0.08 54 0.80 5 0.08 55 0.88 6 0.07 56 0.96 7 0.07 57 1.05 8 0.06 58 1.14 9 0.06 59 1.24 10 0.06 60 1.35 11 0.06 61 1.48 12 0.07 62 1.62 13 0.08 63 1.78 14 0.10 64 1.95 15 0.11 65 2.15 16 0.13 66 2.36 17 0.14 67 2.58 18 0.15 68 2.82 19 0.16 69 3.07 20 0.16 70 3.36 21 0.16 71 3.70 22 0.16 72 4.08 23 0.16 73 4.52 24 0.15 74 5.01 25 0.15 75 5.54 26 0.14 76 6.11 27 0.14 77 6.71 28 0.14 78 7.33 29 0.14 79 7.99 30 0.14 80 8.71 31 0.15 81 9.52 32 0.15 82 10.45 33 0.16 83 11.50 34 0.17 84 12.67 35 0.18 85 13.93 36 0.19 86 15.25 37 0.20 87 16.63 38 0.22 88 18.06 39 0.23 89 19.55 40 0.25 90 21.11 41 0.27 91 22.80 42 0.30 92 24.66 43 0.32 93 26.82 44 0.35 94 29.67 45 0.38 46 0.41 47 0.44 48 0.48 49 0.52
The rates shown above represent the guaranteed (maximum) monthly cost of insurance for each $1,000 of net amount at risk. If this policy has been issued in a special (rated) premium class, the guaranteed monthly cost will be calculated as shown on page 3. 97610M Page 21 TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE INSTALLMENTS FOR A SPECIFIED PERIOD Number Amount of Number Amount of Number Amount of Number Amount of of Years Monthly of Years Monthly of Years Monthly of Years Monthly Payable Installments Payable Installments Payable Installments Payable Installments 5 $17.91 15 $6.87 25 $4.71 35 $3.82 6 15.14 16 6.53 26 4.59 36 3.76 7 13.16 17 6.23 27 4.47 37 3.70 8 11.68 18 5.96 28 4.37 38 3.65 9 10.53 19 5.73 29 4.27 39 3.60 10 9.61 20 5.51 30 4.18 40 3.55 11 8.86 21 5.32 31 4.10 12 8.24 22 5.15 32 4.02 13 7.71 23 4.99 33 3.95 14 7.26 24 4.84 34 3.88
OPTION 3 TABLE INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------] AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years Male 20* $2.95 $2.94 $2.94 50 $4.05 $4.00 $3.93 21 2.97 2.96 2.96 51 4.11 4.06 3.99 22 2.98 2.98 2.98 52 4.18 4.13 4.04 23 3.00 3.00 3.00 53 4.26 4.19 4.10 24 3.02 3.02 3.02 54 4.34 4.27 4.16 25 3.05 3.04 3.04 55 4.42 4.34 4.22 26 3.07 3.06 3.06 56 4.51 4.42 4.28 27 3.09 3.09 3.08 57 4.60 4.50 4.35 28 3.12 3.11 3.11 58 4.69 4.58 4.41 29 3.14 3.14 3.13 59 4.79 4.66 4.47 30 3.17 3.16 3.16 60 4.90 4.75 4.54 31 3.20 3.19 3.18 61 5.01 4.84 4.60 32 3.22 3.22 3.21 62 5.13 4.94 4.67 33 3.25 3.25 3.24 63 5.26 5.03 4.73 34 3.29 3.28 3.27 64 5.39 5.13 4.79 35 3.32 3.31 3.00 65 5.52 5.23 4.85 36 3.35 3.35 3.33 66 5.66 5.33 4.91 37 3.39 3.38 3.36 67 5.81 5.43 4.97 38 3.43 3.42 3.40 68 5.96 5.53 5.02 39 3.47 3.46 3.44 69 6.12 5.63 5.07 40 3.51 3.50 3.47 70 6.28 5.73 5.11 41 3.55 3.54 3.51 71 6.44 5.82 5.15 42 3.60 3.58 3.55 72 6.61 5.91 5.19 43 3.65 3.63 3.59 73 6.78 6.00 5.23 44 3.70 3.67 3.64 74 6.96 6.08 5.26 45 3.75 3.72 3.68 75 7.13 6.16 5.28 46 3.80 3.77 3.73 76 7.30 6.24 5.31 47 3.86 3.83 3.78 77 7.47 6.31 5.33 48 3.92 3.88 3.83 78 7.64 6.37 5.34 49 3.98 3.94 3.88 79 7.81 6.42 5.36 80** 7.97 6.48 5.37
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly installments for two or more specified periods for a given age are the same, the specified period of longer duration will apply. *Also applies to younger ages. **Also applies to older ages. 97610M Page 22 TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE Nearest Birthday FEMALE Nearest Birthday FEMALE (On Each Policy (On Each Policy Anniversary) Anniversary) 0 0.24 50 0.41 1 0.07 51 0.44 2 0.07 52 0.48 3 0.07 53 0.51 4 0.06 54 0.55 5 0.06 55 0.59 6 0.06 56 0.63 7 0.06 57 0.67 8 0.06 58 0.71 9 0.06 59 0.75 10 0.06 60 0.79 11 0.06 61 0.85 12 0.06 62 0.92 13 0.06 63 1.01 14 0.07 64 1.11 15 0.07 65 1.23 16 0.08 66 1.35 17 0.08 67 1.47 18 0.08 68 1.59 19 0.09 69 1.72 20 0.09 70 1.86 21 0.09 71 2.05 22 0.09 72 2.27 23 0.09 73 2.55 24 0.10 74 2.88 25 0.10 75 3.25 26 0.10 76 3.67 27 0.10 77 4.11 28 0.11 78 4.59 29 0.11 79 5.11 30 0.11 80 5.71 31 0.12 81 6.39 32 0.12 82 7.19 33 0.13 83 8.12 34 0.13 84 9.18 35 0.14 85 10.34 36 0.15 86 11.60 37 0.16 87 12.97 38 0.17 88 14.45 39 0.19 89 16.05 40 0.20 90 17.79 41 0.22 91 19.72 42 0.24 92 21.89 43 0.26 93 24.44 44 0.28 94 27.67 45 0.30 46 0.32 47 0.34 48 0.36 49 0.39
The rates shown above represent the guaranteed (maximum) monthly cost of insurance for each $1,000 of net amount at risk. If this policy has been issued in a special (rated) premium class, the guaranteed monthly cost will be calculated as shown on page 3. 97610F Page 21 TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE INSTALLMENTS FOR A SPECIFIED PERIOD Number Amount of Number Amount of Number Amount of Number Amount of of Years Monthly of Years Monthly of Years Monthly of Years Monthly Payable Installments Payable Installments Payable Installments Payable Installments 5 $17.91 15 $6.87 25 $4.71 35 $3.82 6 15.14 16 6.53 26 4.59 36 3.76 7 13.16 17 6.23 27 4.47 37 3.70 8 11.68 18 5.96 28 4.37 38 3.65 9 10.53 19 5.73 29 4.27 39 3.60 10 9.61 20 5.51 30 4.18 40 3.55 11 8.86 21 5.32 31 4.10 12 8.24 22 5.15 32 4.02 13 7.71 23 4.99 33 3.95 14 7.26 24 4.84 34 3.88
OPTION 3 TABLE INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------] AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years Female 20* $2.85 $2.85 $2.85 50 $3.75 $3.73 $3.69 21 2.87 2.87 2.87 51 3.80 3.78 3.74 22 2.89 2.88 2.88 52 3.86 3.84 3.79 23 2.90 2.90 2.90 53 3.92 3.89 3.85 24 2.92 2.92 2.91 54 3.99 3.96 3.90 25 2.94 2.93 2.93 55 4.06 4.02 3.96 26 2.95 2.95 2.95 56 4.13 4.09 4.02 27 2.97 2.97 2.97 57 4.21 4.16 4.08 28 2.99 2.99 2.99 58 4.29 4.23 4.15 29 3.01 3.01 3.01 59 4.37 4.31 4.21 30 3.03 3.03 3.03 60 4.46 4.39 4.28 31 3.06 3.05 3.05 61 4.56 4.47 4.35 32 3.08 3.08 3.07 62 4.66 4.56 4.42 33 3.10 3.10 3.10 63 4.76 4.65 4.49 34 3.13 3.13 3.12 64 4.88 4.75 4.56 35 3.16 3.15 3.15 65 4.99 4.85 4.63 36 3.19 3.18 3.17 66 5.12 4.95 4.70 37 3.21 3.21 3.20 67 5.25 5.05 4.77 38 3.24 3.24 3.23 68 5.39 5.16 4.83 39 3.28 3.27 3.26 69 5.53 5.27 4.90 40 3.31 3.30 3.29 70 5.69 5.38 4.96 41 3.35 3.34 3.33 71 5.85 5.49 5.02 42 3.38 3.37 3.36 72 6.02 5.60 5.08 43 3.42 3.41 3.40 73 6.19 5.71 5.13 44 3.46 3.45 3.43 74 6.37 5.82 5.17 45 3.50 3.49 3.47 75 6.56 5.92 5.21 46 3.55 3.53 3.51 76 6.75 6.02 5.25 47 3.59 3.58 3.56 77 6.95 6.11 5.28 48 3.64 3.63 3.60 78 7.14 6.20 5.30 49 3.69 3.67 3.65 79 7.34 6.28 5.32 80** 7.54 6.35 5.34
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly installments for two or more specified periods for a given age are the same, the specified period of longer duration will apply. * Also applies to younger ages. ** Also applies to older ages. 97610F Page 22 TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE Nearest Birthday RATE Nearest Birthday RATE (On Each Policy (On Each Policy Anniversary) Anniversary) 0 0.33 50 0.53 1 0.09 51 0.58 2 0.08 52 0.63 3 0.08 53 0.69 4 0.08 54 0.75 5 0.07 55 0.82 6 0.07 56 0.89 7 0.07 57 0.97 8 0.06 58 1.05 9 0.06 59 1.14 10 0.06 60 1.24 11 0.06 61 1.35 12 0.07 62 1.47 13 0.08 63 1.61 14 0.09 64 1.77 15 0.10 65 1.95 16 0.12 66 2.14 17 0.13 67 2.34 18 0.14 68 2.54 19 0.14 69 2.77 20 0.15 70 3.02 21 0.15 71 3.32 22 0.14 72 3.66 23 0.14 73 4.05 24 0.14 74 4.49 25 0.14 75 4.98 26 0.14 76 5.50 27 0.13 77 6.04 28 0.13 78 6.60 29 0.14 79 7.21 30 0.14 80 7.87 31 0.14 81 8.63 32 0.15 82 9.49 33 0.15 83 10.49 34 0.16 84 11.59 35 0.17 85 12.78 36 0.18 86 14.05 37 0.19 87 15.39 38 0.21 88 16.80 39 0.22 89 18.30 40 0.24 90 19.89 41 0.26 91 21.63 42 0.29 92 23.60 43 0.31 93 25.88 44 0.33 94 28.87 45 0.36 46 0.39 47 0.42 48 0.46 49 0.49
The rates shown above represent the guaranteed (maximum) monthly cost of insurance for each $1,000 of net amount at risk. If this policy has been issued in a special (rated) premium class, the guaranteed monthly cost will be calculated as shown on page 3. 97610U Page 21 TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE INSTALLMENTS FOR A SPECIFIED PERIOD Number Amount of Number Amount of Number Amount of Number Amount of of Years Monthly of Years Monthly of Years Monthly of Years Monthly Payable Installments Payable Installments Payable Installments Payable Installments 5 $17.91 15 $6.87 25 $4.71 35 $3.82 6 15.14 16 6.53 26 4.59 36 3.76 7 13.16 17 6.23 27 4.47 37 3.70 8 11.68 18 5.96 28 4.37 38 3.65 9 10.53 19 5.73 29 4.27 39 3.60 10 9.61 20 5.51 30 4.18 40 3.55 11 8.86 21 5.32 31 4.10 12 8.24 22 5.15 32 4.02 13 7.71 23 4.99 33 3.95 14 7.26 24 4.84 34 3.88
OPTION 3 TABLE INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------] AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years 20* $2.89 $2.89 $2.89 50 $3.87 $3.84 $3.79 21 2.91 2.91 2.90 51 3.93 3.90 3.85 22 2.93 2.92 2.92 52 3.99 3.96 3.90 23 2.94 2.94 2.94 53 4.06 4.02 3.95 24 2.96 2.96 2.96 54 4.13 4.08 4.01 25 2.98 2.98 2.98 55 4.21 4.15 4.07 26 3.00 3.00 3.00 56 4.28 4.22 4.13 27 3.02 3.02 3.02 57 4.37 4.30 4.19 28 3.04 3.04 3.04 58 4.45 4.38 4.26 29 3.07 3.06 3.06 59 4.55 4.46 4.32 30 3.09 3.09 3.08 60 4.64 4.54 4.39 31 3.11 3.11 3.11 61 4.74 4.63 4.46 32 3.14 3.14 3.13 62 4.85 4.72 4.52 33 3.17 3.16 3.16 63 4.97 4.81 4.59 34 3.20 3.19 3.18 64 5.08 4.91 4.66 35 3.22 3.22 3.21 65 5.21 5.01 4.73 36 3.26 3.25 3.24 66 5.34 5.11 4.79 37 3.29 3.28 3.27 67 5.48 5.21 4.85 38 3.32 3.31 3.30 68 5.62 5.32 4.92 39 3.36 3.35 3.33 69 5.77 5.42 4.97 40 3.39 3.38 3.37 70 5.93 5.53 5.03 41 3.43 3.42 3.40 71 6.09 5.63 5.08 42 3.47 3.46 3.44 72 6.26 5.73 5.13 43 3.51 3.50 3.48 73 6.44 5.84 5.17 44 3.56 3.54 3.52 74 6.62 5.93 5.21 45 3.60 3.59 3.56 75 6.80 6.03 5.24 46 3.65 3.63 3.60 76 6.98 6.12 5.27 47 3.70 3.68 3.65 77 7.17 6.20 5.30 48 3.76 3.73 3.70 78 7.35 6.27 5.32 49 3.81 3.78 3.74 79 7.54 6.34 5.34 80** 7.72 6.41 5.35
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly installments for two or more specified periods for a given age are the same, the specified period of longer duration will apply. * Also applies to younger ages. ** Also applies to older ages. 97610U Page 22 AMERICAN GENERAL LIFE INSURANCE COMPANY This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An Adjustable Death Benefit is payable upon the Insured's death prior to the Maturity Date. Investment results are reflected in policy benefits. ACCUMULATION VALUES are flexible and will be based on the amount and frequency of premiums paid and the investment results of the Separate Account. NONPARTICIPATING - NOT ELIGIBLE FOR DIVIDENDS. For Information, Service or to make a Complaint Contact your Servicing Agent, or our VUL Administration 2727-A ALLEN PARKWAY P.O. BOX 4880 HOUSTON, TEXAS 77210-4880 1-888-325-9315 [AMERICAN GENERAL LOGO] A STOCK COMPANY A Subsidiary of American General Corporation 97610 EX-1.(5)(B)(I) 6 EXHIBIT 1.(5)(b)(i) AMERICAN GENERAL LIFE INSURANCE COMPANY Home Office: Houston, Texas APPLICATION FOR LIFE INSURANCE 1. NAMES OF PERSONS PROPOSED FOR INSURANCE Sex Relationship Date of Birth Ins. Place of Height Weight First Middle Last Mo Day Yr Age Birth Ft In A. JOHN M DOE M Primary 1 - 1 - 62 35 TEXAS 5' 10" 175 Drivers Lic Num & State:____________________________ SS# ___________________ B. Drivers Lic Num & State:____________________________ SS# ___________________ C. D.
For child or family benefits, list only children who are natural or legally adopted children of the Primary Proposed Insured or Spouse and who actually reside at the address of the Primary Proposed Insured. ----------------------------------------------------------------------------- 2. PRESENT RESIDENCE OF PRIMARY PROPOSED INSURED Address 123 MAIN ST. City HOUSTON State TEXAS ZIP 77041 Telephone (713) 466-3800 No. of Yrs. 10 ----------------------------------------------------------------------------- 3. OCCUPATION Proposed Insured A Occupation BANKER Yrs. 10 Employer Name BANK ONE Address ________________________________ City____________________________________State______Zip_______ Telephone (___)________________ PROPOSED INSURED B Occupation ______________ Yrs. ___ Employer Name ____________________ Address ________________________________ City____________________________________State______Zip_______ Telephone (___)________________ ----------------------------------------------------------------------------- 4. HAS PROPOSED INSURED A OR B USED TOBACCO IN ANY FORM IN THE PAST 24 MONTHS? Proposed Insured A [ ] Yes [X] No Proposed Insured B [ ] Yes [ ] No ----------------------------------------------------------------------------- 5. PLAN OF BASIC INSURANCE: Amount UNIVERSAL LIFE $ 25,000 -------------- --------------- Planned Periodic Premium $______________ Lump Sum Payment $______________ Benefit Option: [ ] 1 - Level [ ] 2 - Increasing Are you requesting Select Rates? [ ] Yes [ ] No ----------------------------------------------------------------------------- 6. ADDITIONAL BENEFITS TO BE ADDED Amount [ ] Maturity Extension Rider - Death Benefit [ ] Maturity Extension Rider - Accumulation Value [ ] Terminal Illness Rider [ ] Waiver of Premium/Waiver of Monthly Deduction [ ] Waiver of Monthly Guarantee Premium [ ] Accidental Death Benefit $______________ [ ] Spouse/Other Insured Rider $______________ [ ] FIB __________ Units CIB___________ Units [ ] Additional Insurance Option $______________ [ ] Joint Insurance 4-Year Term $______________ [ ] First-to-die Term Rider $______________ [ ] Joint Term $______________ [ ] Joint ART A n B n $______________ [ ] Automatic Increase Rider _____________% [ ] Return of Premium Death Benefit Option [ ] Premium Assurance Rider [ ] Other __________________________________ $______________ ----------------------------------------------------------------------------- 7. PREMIUMS TO BE PAID [ ] Automatic Bank Check [ ] Direct [ ] List Bill or Government Allotment List Bill # ___________ Company __________________ [ ] Annually [ ] Semi-Annually [ ] Quarterly Amount paid with application $ _______________ or None ----------------------------------------------------------------------------- 8. BENEFICIARY DESIGNATION PROPOSED INSURED A ________________________________________________________________________ First Relationship ________________________________________________________________________ Second Relationship ________________________________________________________________________ Trust Name Date of Trust Proposed Insured B ________________________________________________________________________ First Relationship ________________________________________________________________________ Second Relationship ________________________________________________________________________ Trust Name Date of Trust ----------------------------------------------------------------------------- 9. PREMIUM PAYOR Name ___________________________________________________ Address _________________________________________________ City ______________________ State _________ ZIP _________ Relationship to Primary Proposed Insured ________________ SECONDARY PAYOR Name ___________________________________________________ Address _________________________________________________ City ______________________ State _________ ZIP _________ ----------------------------------------------------------------------------- 10. POLICYOWNER AND TAXPAYER IDENTIFICATION NUMBER (MUST BE COMPLETED) Policyowner Name ________________________________________ Address _________________________________________________ City ______________________ State _________ ZIP _________ Social Security or Tax ID Number ________________________ Policyowner Date of Birth _______________________________ [ ] Insured [ ] Other Relationship ____________ CONTINGENT OWNER DESIGNATION Contingent Policyowner Name _____________________________ Social Security or Tax ID Number ________________________ (Contingent Policyowner designation becomes effective upon the death of the Primary Owner) ----------------------------------------------------------------------------- 11. INCLUDE AUTOMATIC PREMIUM LOAN IF AVAILABLE? [ ] Yes [ ] No Home Office Endorsement Only. May not be used in any state where prohibited. ----------------------------------------------------------------------------- L 8754-95 REV 897 -1- 12. HAS ANY PERSON PROPOSED FOR INSURANCE DURING THE LAST 12 MONTHS a. had a heart attack, stroke, cancer, diabetes, or disorder of the immune system? [ ] YES [ ] NO b. been confined to a hospital or other health care facility and/or been advised to have any diagnostic test or surgery not yet performed? [ ] YES [ ] NO ----------------------------------------------------------------------------- Temporary insurance is not available if there are any "yes" answers to question number 1 ----------------------------------------------------------------------------- 13. REPLACEMENTS, EXCHANGES, CONVERSIONS If this is a replacement, required state replacement forms and disclosures must be used. If state does not require Policy Comparison Form, you must attach AGL Replacement Comparison Guide (L8726). a. List below all Life Insurance policies in force and applied for in all companies. (Use explanations section on pg. 3 if necessary.)
Proposed Proposed Is Beneficiary Insured Insured Year Coverage Amount Business or Replace A B Company Issued Life ADB Personal Yes No
Proposed Insured A B_D Yes No Yes No b. Is this insurance intended to be a 1035 tax-free exchange? [ ] [X] [ ] [ ] c. Is this insurance intended to be a term conversion? [ ] [X] [ ] [ ] d. Will this insurance replace, change, or use the cash value of any existing insurance policy or annuity? [ ] [X] [ ] [ ]
----------------------------------------------------------------------------- PART 2. UNDERWRITING INFORMATION IMPORTANT: (QUESTIONS 1 & 2 MUST BE ANSWERED EVEN IF A MEDICAL EXAM WILL BE PROVIDED) ----------------------------------------------------------------------------- PROVIDE DETAILS TO ANY YES ANSWERS UNDER EXPLANATIONS ON PAGE 3 1. HAS ANY PROPOSED INSURED: Proposed Insured A B_D Yes No Yes No a. in the past 2 years flown in any type of aircraft or plan to fly in the future, other than as a passenger? [ ] [X] [ ] [ ] (If "Yes" complete Military & Civilian Aviation Supplement.) b. in the past 2 years participated or expect to participate in any vehicle racing on land or water, bobsledding, scuba or skin diving, skydiving or parachuting, ultralight aviation, or mountaineering? [ ] [X] [ ] [ ] (If "Yes" complete Avocation Questionnaire.) c. during the past 90 days submitted an application for life insurance to any other company or is any contemplated? [ ] [X] [ ] [ ] d. ever had a life insurance application modified, rated, declined, postponed, withdrawn, canceled, or refused for renewal? [ ] [X] [ ] [ ] e. any intention of traveling or residing outside the United States or Canada within the next 24 months [ ] [X] [ ] [ ] f. during the past 3 years been refused a driver's license, had a moving violation, or been involved in 1 or more accidents? [ ] [X] [ ] [ ] (If "Yes" give license number, issue state & details.) g. ever used cocaine, barbiturates, heroin, or other narcotic drugs, except as legally prescribed by a physician? [ ] [X] [ ] [ ] h. ever sought, received advice, counseling or treatment for the use of alcohol, marijuana, barbiturates, or drugs including prescription drugs? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- 2. HAS ANY PROPOSED INSURED EVER BEEN DIAGNOSED OR TREATED BY ANY MEMBER OF THE MEDICAL PROFESSION FOR ACQUIRED IMMUNE DEFICIENCY SYNDROME (AIDS)? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- 3. HAS ANY PROPOSED INSURED IN THE PAST 3 YEARS EVER HAD: a. fainting spells, nervous disorder, convulsions or paralysis? [ ] [X] [ ] [ ] b. pain or discomfort in the chest, or shortness of breath? [ ] [X] [ ] [ ] c. disorder of the stomach, intestines, rectum or blood in the urine? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- 4. HAS ANY PROPOSED INSURED EVER CONSULTED A PHYSICIAN FOR OR BEEN DIAGNOSED OR TREATED FOR: Proposed Insured A B_D Yes No Yes No a. mental disorder, epilepsy or stroke? b. disease or disorder of the heart or blood vessels, heart attack, high blood pressure, or rheumatic fever? [ ] [X] [ ] [ ] c. elevated cholesterol? [ ] [X] [ ] [ ] d. disease or disorder of the lungs, asthma, emphysema, or tuberculosis? [ ] [X] [ ] [ ] e. disease or disorder of stomach, intestines, rectum, liver, or gall bladder? [ ] [X] [ ] [ ] f. disease or disorder of the kidney, bladder, or prostate gland? [ ] [X] [ ] [ ] g. sugar, albumin, blood, or pus in the urine? [ ] [X] [ ] [ ] h. cancer, tumor, syphilis, diabetes, gland or blood disorder, ulcer, rupture, or disease or disorder of the breast or reproductive organs? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- 5. HAS ANY PROPOSED INSURED DURING THE PAST 3 YEARS: a. received or claimed disability or hospital indemnity benefits or a pension for any injury, sickness, disability or impaired condition? [ ] [X] [ ] [ ] b. had any other impairment, sickness, laboratory tests, or diagnostic procedures? [ ] [X] [ ] [ ] c. been confined in a hospital or other health care facility, had a blood transfusion, or had surgery performed, advised, or contemplated? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- 6. Is any Proposed Insured now taking any medication or under any treatment? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- 7. Medical Exam Certificate (Complete when submitting a medical examination from another company.) a. Attached examination is on the life of: ____________________________________________________ b. Name of insurance company for which examination was made and date of the examination: ____________________________________________________ Company Date of Exam c. Has Proposed Insured A or B consulted a doctor or other practitioner or received medical or surgical advice since the date of the examination? [ ] [X] [ ] [ ] d. To the best of Proposed Insured A's or B's knowledge and belief, are any statements in the examination now inaccurate, as of today? [ ] [X] [ ] [ ] ----------------------------------------------------------------------------- L 8754-95 REV 897 -2- ----------------------------------------------------------------------------- 8. FAMILY HISTORY PROPOSED INSURED A
Family If living If not living, State of health or History current age(s) age at death cause & date of death Father Mother Brothers & Sisters
PROPOSED INSURED B
Family If living If not living, State of health or History current age(s) age at death cause & date of death Father Mother Brothers & Sisters
----------------------------------------------------------------------------- 9. PERSONAL PHYSICIAN INFORMATION Proposed Insured A Who is your personal physician? Name: ____________________________________________________________ Address: _________________________________________________________ City ____________________________ State ___________ Zip___________ Phone: __________________________________________________________ Date personal physician was last seen? ___________________________ Reason Seen? _____________________________________________________ Proposed Insured B Who is your personal physician? Name: ____________________________________________________________ Address: _________________________________________________________ City ____________________________ State ___________ Zip___________ Phone: __________________________________________________________ Date personal physician was last seen? ___________________________ Reason Seen? _____________________________________________________ ----------------------------------------------------------------------------- EXPLANATIONS: Details of any "Yes" answers to questions 1-7. Identify question number; circle applicable items; include diagnosis, treatment dates, duration, and names and addresses of all attending physicians and health care facilities. -----------------------------------------------------------------------------
QUES (Proposed) Insured A QUES (Proposed) Insureds B_D
----------------------------------------------------------------------------- PART 3. FINANCIAL INFORMATION FINANCIAL INFORMATION MUST BE COMPLETED (1) FOR BUSINESS INSURANCE OR (2) FOR A PROPOSED INSURED AGE 65 OR OVER OR (3) WHERE THE FACE AMOUNT EXCEEDS $250,000 FOR PROPOSED INSUREDS UNDER AGE 65. IF FACE AMOUNT APPLIED FOR IS $1 MILLION OR MORE, PROVIDE AN EXPANDED FINANCIAL STATEMENT. I BELIEVE THAT THIS PURCHASE OF LIFE INSURANCE IS SUITABLE FOR THIS APPLICANT/INSURED, BASED UPON THE APPLICANT'S NEEDS, FINANCIAL SITUATION AND INSURANCE OBJECTIVES. ----------------------------------------------------------------------------- 1. FOR PERSONAL INSURANCE: a. What is the purpose of the insurance? Check all that apply. [ ] Estate preservation [ ] Family protection [ ] Mortgage protection [ ] Charitable [ ] Other ____________________ b. What is the Proposed Insured(s) 1) Annual earned income $____________________ 2) Annual interest & other income $____________________ (include retained earnings) 3) Total assets $____________________ 4) Total liabilities $____________________ 2. FOR BUSINESS INSURANCE: a. What is the purpose of the insurance? Check all that apply. [ ] Key person [ ] Buy-Sell [ ] Split dollar [ ] Stock redemption [ ] Creditor [ ] Other b. Annual net profit before taxes: Last year $____________________ 2 years ago $____________________ net worth $____________________ c. If key person insurance: Retained earnings $ __________ Yes No 1) Are all partners or key people to be covered? [ ] [ ] 2) Does either Proposed Insured have an ownership interest in the business? [ ] [ ] If "Yes" what is Proposed Insured A's percent of ownership?__________% If "Yes" what is Proposed Insured B's percent of ownership?__________% ----------------------------------------------------------------------------- L 8754-95 REV 897 -3- ----------------------------------------------------------------------------- SPECIAL INSTRUCTIONS ----------------------------------------------------------------------------- AUTHORIZATION TO OBTAIN AND DISCLOSE INFORMATION I hereby give my consent to: (1) any physician or medical practitioner; (2) hospital, clinic, or other health care facility; (3) insurance or reinsurance company; (4) consumer reporting agency, insurance support organization; (5) my employer; or (6) the Medical Information Bureau, Inc., to give to American General Life Insurance Company (American General Life) all information it has pertaining to: (1) my medical consultations, treatments or surgeries; (2) hospital confinements which concern the physical and mental condition of myself, my spouse or my minor children; (3) my use of drugs or alcohol; or (4) any other non-health (non-medical) information. In turn, American General Life is free to disclose such information and any information developed during its evaluation of my application to: (1) its reinsurers; (2) the Medical Information Bureau, Inc.; (3) other insurance companies; (4) me; (5) any physician designated by me; or (6) any person or entity required to receive such information by law or as I may further consent. I, as well as any person authorized to act on my behalf, may, upon written request, obtain a copy of this consent from American General Life. This consent shall be valid for thirty (30) months from the date stated below. I agree that a photocopy of this consent shall be as valid as the original. I authorize American General Life to obtain an investigative consumer report on me. I understand that I may: (1) request to be interviewed in connection with the preparation of the investigative consumer report; and (2) receive, upon written request, a copy of such report if no personal interview is in fact conducted. DECLARATION. I have read the above statements or they have been read to me. I represent that the above statements are true and complete to the best of my knowledge and belief. I understand that any misrepresentation contained in this application and relied on by the Company may be used to reduce or deny a claim or void the policy if it is within its contestable period and if such misrepresentation materially affects the acceptance of the risk. Except as may be provided in a Limited Temporary Life Insurance Agreement for which all eligibility requirements are met, I understand and agree that no insurance shall be in effect pursuant to this application, or under any policy issued by the Company, until: (1) the policy has been delivered and accepted; (2) the full first mode premium for the issued policy has been paid; and, (3) between the date of the application and the delivery and acceptance of the policy, there has been no material change in the health of any person proposed for insurance. I understand and agree that no agent is authorized to: (1) accept risks or pass upon insurability; (2) make or modify contracts; or (3) waive any of the Company's rights or requirements. I have received a copy of the Fair Credit Reporting Act, Medical Information Bureau (MIB), Insurance Information Practices, and Telephone Interview Information notices. IF ELIGIBLE: I have received and accepted the Limited Temporary Life Insurance Agreement. Temporary insurance is available only if: (1) the full first mode premium is submitted with this application; and (2) only "No" answers have been given in Part 1, Question 12. Any person who includes any false or misleading information on an application for insurance policy is subject to criminal and civil penalties. ----------------------------------------------------------------------------- UNDER PENALTIES OF PERJURY, I CERTIFY: (1) THAT THE NUMBER SHOWN ON THIS APPLICATION IS MY CORRECT SOCIAL SECURITY (OR TAXPAYER IDENTIFICATION) NUMBER AND (2) THAT I AM NOT SUBJECT TO BACKUP WITHHOLDING UNDER SECTION 3406(a)(1)(C) OF THE INTERNAL REVENUE CODE. THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. ----------------------------------------------------------------------------- Signed at ____________________ _____________________ Date: ______________ CITY STATE _______________________________ SIGNATURE OF PROPOSED INSURED A (If below age 15, signature of parent or guardian.) _______________________________ SIGNATURE OF OWNER/TRUSTEE (If other than Primary Proposed Insured. Show officer's title if signing for firm.) _______________________________ SIGNATURE OF OWNER _______________________________ SIGNATURE OF PROPOSED INSURED B _______________________________ SIGNATURE OF OWNER _______________________________ SIGNATURE OF OWNER I certify that I have truthfully and accurately recorded on the application the information supplied by the Proposed Insured(s) and personally witnessed the signature(s) of the Proposed Insured(s). _______________________________ AGENT NAME (Please Print) _______________________________ __________ _________________ SIGNATURE OF AGENT AGENT NO. STATE LICENSE NO. ----------------------------------------------------------------------------- L 8754-95 REV 897 -4- ----------------------------------------------------------------------------- AGENT'S REPORT (MUST be completed to issue policy.) ----------------------------------------------------------------------------- 1. IF PRIMARY PROPOSED INSURED HAS LIVED AT PRESENT ADDRESS LESS THAN 5 YEARS, LIST PREVIOUS ADDRESSES FOR THE PAST 5 YEARS, WITH DATES. List address where correspondence should be sent, if different than the Primary Proposed Insured's or Owner's address shown in Part 1. ----------------------------------------------------------------------------- 2. CURRENT MARITAL STATUS [ ] Married [ ] Single [ ] Divorced [ ] Separated [ ] Widowed ----------------------------------------------------------------------------- 3. IF MARRIED, WHAT AMOUNT OF INSURANCE IS IN FORCE ON THE SPOUSE? $_________________ ----------------------------------------------------------------------------- 4. IF PRIMARY PROPOSED INSURED IS A CHILD, WHAT AMOUNT OF INSURANCE IS IN FORCE ON THE FATHER AND/OR MOTHER? $_________________ ----------------------------------------------------------------------------- 5. HOW LONG HAVE YOU KNOWN THE PROPOSED INSURED(S)? Insured A ______________ Insured B ______________ ----------------------------------------------------------------------------- 6. ARE YOU RELATED BY BLOOD OR MARRIAGE TO ANY PROPOSED INSURED? [ ] Yes [ ] No Relationship ______________ ----------------------------------------------------------------------------- 7. DID YOU PERSONALLY SEE ALL PROPOSED INSUREDS AND ASK EACH AND EVERY QUESTION AND ACCURATELY RECORD THEIR ANSWERS YOURSELF? [ ] Yes [ ] No If "No" give details in Remarks. ----------------------------------------------------------------------------- 8. WHICH OF THE FOLLOWING HAVE YOU SCHEDULED? Proposed Insured A B Blood Profile [ ] [ ] HOS [ ] [ ] Inspection [ ] [ ] Resting EKG [ ] [ ] Stress EKG [ ] [ ] Chest X-Ray [ ] [ ] Para Med ___________________________________________ NAME OF EXAMINER/SERVICE DATE Medical ___________________________________________ NAME OF EXAMINER/SERVICE DATE APS from ___________________________________________ DOCTOR DATE APS from ___________________________________________ DOCTOR DATE ----------------------------------------------------------------------------- 9. COMPLETE IF PART 3 NOT COMPLETED a. Purpose of insurance. Check all that apply. [ ] Estate preservation [ ] Family protection [ ] Charitable [ ] Mortgage protection [ ] Other _______________ b. Annual earned income of the Proposed Insured(s) or of the Payor, if other than the Primary Proposed Insured Proposed Insured A $________________ Proposed Insured B $________________ ----------------------------------------------------------------------------- 10. TELEPHONE INTERVIEW INFORMATION Best time to call Proposed Insured(s) at Business (___)____________ Home (___)_______________ Time______________________ Time______________________ ----------------------------------------------------------------------------- 11. AGENT(S) TO RECEIVE COMMISSION & VOLUME CREDIT
(Circle letter to indicate who Agency Agent Percent should receive correspondence.) Number Number of credit a. b. c.
----------------------------------------------------------------------------- 12. To the best of your knowledge, will the insurance applied for replace or change existing insurance or annuity in this or any other company? [ ] Yes [ ] No (If "Yes", complete requirement of the state of residence.) ----------------------------------------------------------------------------- REMARKS: ----------------------------------------------------------------------------- _______ __________________________________ ___________________________ Date Contact Person if other than Agent SIGNATURE OF AGENT __________________________________ ___________________________ Telephone No. of Agent PLEASE PRINT NAME __________________________________ ___________________________ Facsimile No. of Agent STREET ADDRESS (Please Print) ___________________________ CITY STATE ZIP ----------------------------------------------------------------------------- L 8754-95 REV 897 -5- ----------------------------------------------------------------------------- BANK DRAFT INFORMATION ----------------------------------------------------------------------------- The Automatic Bank Check plan, commonly known as ABC or Electronic Funds Transfer, is a preauthorized debit service which offers a convenient way to pay your insurance premiums. Under the ABC plan, your insurance premiums are collected from your bank account electronically. After each premium payment has been withdrawn from your bank account, a single-line entry in the amount of your premium payment will appear on your bank statement. That entry will be your receipt for payment of your premium. When paying with ABC, you no longer have to write additional checks or mail any premium payments. As long as you maintain a sufficient balance in your bank account, your insurance premiums are automatically paid from your account with no further effort on your part. PREAUTHORIZED DEBIT AGREEMENT I, the undersigned bank account owner, hereby authorize and request American General Life Insurance Company ("Company") to initiate electronic or other commercially accepted type debits against the indicated bank account in the depository institution named below ("Depository") for the payment of premiums and other indicated charges due on the insurance policy or policies listed below (hereafter referred to as "Policy", whether one or more), and to continue to initiate such debits in the event of a conversion, renewal or other change to any such policy. I hereby agree to indemnify and hold the Company harmless from any loss, claim or liability of any kind by reason or dishonor of any debit. I understand that this Authorization will not affect the terms of the Policy, other than the mode of payment, and that if premiums are not paid within the applicable grace period, the Policy will terminate, subject to any applicable nonforfeiture provision. I acknowledge that the debit appearing on my bank statement shall constitute my receipt of payment, but no payment is deemed made until the company receives actual payment in its Home Office. I understand that this Authorization will not result in any insurance becoming effective under any conditional receipt or temporary insurance unless all terms of such conditional receipt or temporary insurance have been met. I agree that this Authorization may be terminated by me or the Company at any time and for any reason by providing written notice of such termination to the non-terminating party and may be terminated by the Company immediately if any debt is not honored by the Depository named below for any reason. Policy No. Insured Premium Amount ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ ______________________ Bank Account Number ______________________ FREQUENCY: [ ] Monthly Transit Routing Number____________________ [ ] Quarterly Name of Depository _______________________ [ ] Semi-Annually Address of Depository ____________________ [ ] Annually Preferred withdrawal date _________________ [ ] Please initiate debits against my account for all outstanding premiums due. _______________________________ ________ Signature of Bank Account Owner Date PLEASE ATTACH VOIDED CHECK ----------------------------------------------------------------------------- L 8754-95 REV 897 -6- ----------------------------------------------------------------------------- AMERICAN GENERAL LIFE INSURANCE COMPANY Home Office: Houston, Texas LIMITED TEMPORARY LIFE INSURANCE AGREEMENT Received $_______________________ on this date from _______________________ . This amount was paid when, on this date, a life insurance application was signed in which is named as the Primary Proposed Insured. We agree to provide temporary life insurance coverage as described below, subject to the rules that follow: ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE COMPANY: DO NOT MAKE CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK. NOTE: AGENT DOES NOT HAVE THE AUTHORITY TO ACCEPT A PREMIUM (INCLUDING AUTOMATIC BANK DRAFT CHECK, SALARY SAVINGS OR GOVERNMENT ALLOTMENT) WITH THIS APPLICATION IF THE CONDITIONS IN THE DECLARATION CANNOT BE MET; IF ANY PART OF QUESTION 12 HAS BEEN ANSWERED "YES", ANSWERED FALSELY, OR LEFT BLANK, THIS AGREEMENT WILL BE VOID AND ANY PAYMENT SUBMITTED WILL BE REFUNDED. 1. The full first mode premium must be submitted with this application. (Any payment submitted must be honored on its first presentation for payment.) 2. The answer to all parts of question 12 must be "NO". 3. Upon receipt of due proof of the death of any person to be insured during the period covered by this agreement, the total amount we will pay under the policy, any riders, and this agreement, will be the lesser of: (a) the amount applied for on such person; or (b) $300,000 and the amount of any premium paid for coverage in excess of $300,000 on such person. 4. Such payment will be made in one sum to the beneficiary stated in the application. If death is due to suicide, payment will be limited to the return of the amount paid. Coverage under this agreement will be subject to the terms of the policy for which application is made. 5. Coverage will begin on the latest of the following dates: (a) the date of the application; (b) the date that all medical examinations have been taken; or (c) the date requested in the application. 6. Coverage under this agreement will cease on the earliest of the following dates: (a) the date we issue the policy as applied for; (b) the date a policy issued other than as applied for is offered to the applicant; (c) the date we decline the application; (d) the date we state that the application will not be considered on a prepaid basis; or (e) 60 days from the date coverage begins under this agreement. 7. Any payment submitted to and accepted by the Company will be: (a) applied to pay the first premium due if the policy is issued as applied for; (b) applied toward payment of the first premium if a policy is issued other than as applied for and is accepted by the applicant; (c) refunded if we decline the application or if the applicant refuses to accept a policy issued other than as applied for. No changes may be made in the terms and conditions of this form. No statement which claims to make such a change will bind the Company. I understand and agree that no agent is authorized to accept risks or pass upon insurability, to make or modify contracts, or to waive any of the company's rights or requirements. Signed at ____________________ _____________________ Date: ______________ CITY STATE _________________________ _____________________ SIGNATURE OF AGENT AGENT NUMBER ----------------------------------------------------------------------------- L 8754-95 REV 897 -7- DETACH THIS NOTICE & LEAVE IT WITH THE PROPOSED INSURED AMERICAN GENERAL LIFE INSURANCE COMPANY Home Office: Houston, Texas NOTICE TO PROPOSED INSURED ----------------------------------------------------------------------------- FAIR CREDIT REPORTING ACT In compliance with the Fair Credit Reporting Act, as amended, we advise you that we may, as a part of our normal procedure for processing your contract application, request that an investigative consumer report be prepared whereby information is obtained through personal interviews with your neighbors, friends, former employers, primary insurance company or others with whom you are acquainted. This inquiry includes information as to your character, general reputation, personal characteristics and mode of living. You have the right to make a written request to our home office within a reasonable period of time to receive additional, detailed information about the nature and scope of this investigation, if one is made. Please address your request to New Business, American General Life Insurance Company, P.O. Box 1931, Houston, Texas 77251-1931. These reports are obtained in your best interest. They assist us in determining that the Company's insureds meet certain standards, thus allowing us to continue offering coverage at the lowest possible cost to all who qualify. MEDICAL INFORMATION BUREAU Information regarding your insurability will be treated as confidential. American General Life Insurance Company or its reinsurers may, however, make a brief report thereon to the Medical Information Bureau, 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 such company with the information in its file. Upon receipt of a request from you, the Bureau will arrange disclosure of any information it may have in your file. 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 01112, telephone number (617) 426-3660. American General Life Insurance Company or its reinsurers may also release information in its 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. INSURANCE INFORMATION PRACTICES To issue an insurance policy, we need to obtain information about you and any other persons proposed for insurance. Some of that information will come from you and some will come from other sources. That information and any subsequent information collected by us may in certain circumstances be disclosed to third parties without your specific authorization. You have a right of access and correction with respect to the information collected about you except information which relates to a claim or civil or criminal proceeding. If you wish to have a more detailed explanation of our information practices, please contact: American General Life Insurance Company, New Business, P.O. Box 1931, Houston, Texas 77251-1931. TELEPHONE INTERVIEW INFORMATION (IF APPLICABLE) To help us process your application as rapidly as possible, American General Life may have one of its representatives contact you by telephone and at your convenience to secure additional underwriting information. You may be assured that all information developed in this interview will be kept in strictest confidence and used solely for insurance purposes. ----------------------------------------------------------------------------- L 8754-95 REV 897 -8- EX-1.(5)(B)(II) 7 EXHIBIT 1.(5)(b)(ii) AMERICAN GENERAL LIFE INSURANCE COMPANY ("AGL") Home Office: Houston, Texas Variable Universal Life Insurance Supplemental Application (This supplement must accompany the appropriate application for life insurance.) ----------------------------------------------------------------------------- PART 1. Applicant INFORMATION Supplement to the application on the life of _____________________, dated ____________________. ----------------------------------------------------------------------------- PART 2. Initial Allocation Percentages Investment Options: In the "Premium Allocation" column, indicate how each premium received is to be allocated. In the "Deduction Allocation" column, indicate which investment options are to be used for the deduction of monthly account charges. Total allocations in each column must equal 100%. Use whole percentages only.
Premium Deduction Allocation Allocation AGL Declared Fixed Interest Account (125) ____% ____% AIM VARIABLE INSURANCE FUNDS, INC. AIM V.I. International Equity Division (126) ____% ____% AIM V.I. Value Division (127) ____% ____% AMERICAN GENERAL SERIES PORTFOLIO COMPANY International Equities Division (128) ____% ____% MidCap Index Division (129) ____% ____% Money Market Division (130) ____% ____% Stock Index Division (131) ____% ____% DREYFUS VARIABLE INVESTMENT FUND Quality Bond Division (132) ____% ____% Small Cap Division (133) ____% ____% MFS VARIABLE INSURANCE TRUST MFS Emerging Growth Series (134) ____% ____% MORGAN STANLEY UNIVERSAL FUNDS, INC. Equity Growth Division (135) ____% ____% High Yield Division (136) ____% ____% PUTNAM VARIABLE TRUST Putnam VT Diversified Income Division (137) ____% ____% Putnam VT Growth and Income Division (138) ____% ____% Putnam VT Int'l Growth and Income Division (139) ____% ____% SAFECO RESOURCE SERIES TRUST Equity Division (140) ____% ____% Growth Division (141) ____% ____% VAN KAMPEN AMERICAN CAPITAL LIFE INVESTMENT TRUST Strategic Stock Division (142) ____% ____% Other: ________________________________ ____% ____% 100% 100%
----------------------------------------------------------------------------- PART 3. Dollar Cost Averaging Dollar Cost Averaging: ($5,000 minimum beginning accumulation value) An amount can be systematically transferred from the Money Market Division (130) and transferred to one or more of the investment options below. The AGL Declared Fixed Interest Account is not available for Dollar Cost Averaging. Please refer to the prospectus for more information on the Dollar Cost Averaging option. Day of the month for transfers: (Choose a day of the month between 1-28.) Frequency of transfers: [ ] Monthly [ ] Quarterly [ ]Semiannually [ ] Annually Transfer $________ ($100 minimum, whole dollars only) from the AGSPC Money Market Division to the following division(s): (126) AIM V.I. International Equity $___________ (127) AIM V.I. Value $___________ (128) International Equities $___________ (129) MidCap Index $___________ (131) Stock Index $___________ (132) Quality Bond $___________ (133) Small Cap $___________ (134) MFS Emerging Growth Series $___________ (135) Equity Growth $___________ (136) High Yield $___________ (137) Putnam VT Diversified Income $___________ (138) Putnam VT Growth and Income $___________ (139) Putnam VT Int'l Growth and Income $___________ (140) Equity $___________ (141) Growth $___________ (142) Strategic Stock $___________ Other: ________________________________ $___________
----------------------------------------------------------------------------- PART 4. Automatic Rebalancing Automatic Rebalancing: ($5,000 initial minimum beginning accumulation value) Variable division assets will be automatically rebalanced based on the premium percentages designated in Part 2. If the AGL Declared Fixed Interest Account has been designated for premium allocation in Part 2, the rebalancing will be based on the proportion allocated to the variable divisions. Please refer to the prospectus for more information on the Automatic Rebalancing option. [ ] Check here for Automatic Rebalancing. Frequency: [ ] Quarterly [ ] Semiannually [ ] Annually NOTE: Automatic Rebalancing is not available if the Dollar Cost Averaging option has been chosen. ----------------------------------------------------------------------------- L 8992-97 PAGE 1 OF 2 AMERICAN GENERAL LIFE INSURANCE COMPANY Home Office: Houston, Texas ----------------------------------------------------------------------------- PART 5. Telephone Authorization I (or we, if Joint Owners), hereby authorize American General Life Insurance Company ("AGL") to act on telephone instructions to transfer values among the variable divisions and the AGL Declared Fixed Interest Account and to change allocations for future purchase payments and monthly deductions given by: (Initial appropriate box below.) [ ] Policy Owner(s)_ if Joint Owners, either of us acting independently. [ ] Policy Owner(s) or the Agent/Registered Representative who is appointed to represent AGL and the firm authorized to service my policy. AGL and any person designated by this authorization will not be responsible for any claim, loss or expense based upon telephone instructions received and acted on in good faith, including losses due to telephone instruction communication errors. AGL's liability for erroneous transfers and allocations, unless clearly contrary to instructions received, will be limited to correction of the allocations on a current basis. If an error, objection or other claim arises due to a telephone transaction, I will notify AGL in writing within five working days from receipt of confirmation of the transaction from AGL. I understand that this authorization is subject to the terms and provisions of my variable universal life insurance policy and its related prospectus. This authorization will remain in effect until my written notice of its revocation is received by AGL at its home office. [ ] Initial here to decline the above telephone Authorization. ----------------------------------------------------------------------------- PART 6. Suitability (All questions must be answered.) YES NO 1. Have you, the Proposed Insured or Owner (if different), received the variable universal life insurance policy prospectus and the prospectuses describing the [ ] [ ] investment options? (If "yes," please furnish the Prospectus dates.) Variable Universal Life Insurance Policy Prospectus: _________________ Supplements (if any): _________________ 2. Do you understand that under the Policy applied for: a. The amount or duration of the death benefit may increase or decrease, depending on the investment experience of the Separate Account? [ ] [ ] b. The Policy values may increase or decrease, depending on the investment experience of the Separate Account, the AGL Declared Fixed Interest Account accumulation, and certain expense deductions? [ ] [ ] c. The Policy is designed to provide life insurance coverage and to allow for the accumulation of values in the Separate Account? [ ] [ ] 3. Do you believe the Policy you selected meets your insurance and investment objectives and your anticipated financial needs? [ ] [ ] ----------------------------------------------------------------------------- Signed at: ___________________________ Date: _____________________ City ________________________________________ Signature of Primary Proposed Insured ________________________________________ Signature of Owner (if different from Proposed Insured) ________________________________________ Signature of Joint Owner (if applicable) ________________________________________ Signature of Registered Representative ________________________________________ Print Name of Broker/Dealer ________________________________________ Signature of Broker/Dealer's Licensed Principal ----------------------------------------------------------------------------- L 8992-97 PAGE 2 OF 2 EX-7 8 EXHIBIT 7 LIMITED POWER OF ATTORNEY WHEREAS, American General Life Insurance Company, a Texas company (and its successors, if applicable) ("Company"), intends from time to time to file with the Securities and Exchange Commission ("Commission"), one or more Form S-6 Registration Statement(s) under the Securities Act of 1933 and one or more Form N-8B-2 Registration Statement(s) under the Investment Company Act of 1940, on behalf of the Company and the Separate Account(s) maintained or to be maintained by the Company, with such amendments thereto as may be necessary or appropriate, together with any and all exhibits and other documents related thereto; NOW, THEREFORE, the undersigned individual, in his capacity as a director or officer of the Company, hereby appoints Thomas B. Phillips and Steven A. Glover, and each of them, either of whom may act without the joinder of the other, his true and lawful attorney-in-fact and with full power of substitution and resubstitution, to execute in his name, place, and stead, in his capacity as a director or officer or both, as the case may be, of the Company, any and all Form S-6 and Form N-8B-2 Registration Statements and all amendments thereto; and any related Form N-8A notices of registration and applications for exemptions or amendments thereto, as each said attorney-in-fact shall deem necessary or appropriate, together with all instruments necessary or incidental in connection therewith, and to file the same or cause the same to be filed with the Commission. The above-named attorneys-in-fact shall each have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable in connection with any and all Form S-6 and Form N-8B-2 Registration Statements, and any and all amendments thereto, as fully and for all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts of each said attorney-in-fact. EXECUTED this 10th day of NOVEMBER, 1997. /s/ROYCE G. IMHOFF, II ---------------------- Royce G. Imhoff, II LIMITED POWER OF ATTORNEY WHEREAS, American General Life Insurance Company, a Texas company (and its successors, if applicable) ("Company"), intends from time to time to file with the Securities and Exchange Commission ("Commission"), one or more Form S-6 Registration Statement(s) under the Securities Act of 1933 and one or more Form N-8B-2 Registration Statement(s) under the Investment Company Act of 1940, on behalf of the Company and the Separate Account(s) maintained or to be maintained by the Company, with such amendments thereto as may be necessary or appropriate, together with any and all exhibits and other documents related thereto; NOW, THEREFORE, each of the undersigned individuals, in his capacity as a director or officer of the Company, hereby appoints Thomas B. Phillips and Steven A. Glover, and each of them, either of whom may act without the joinder of the other, his true and lawful attorney-in-fact and with full power of substitution and resubstitution, to execute in his name, place, and stead, in his capacity as a director or officer or both, as the case may be, of the Company, any and all Form S-6 and Form N-8B-2 Registration Statements and all amendments thereto; and any related Form N-8A notices of registration and applications for exemptions or amendments thereto, as each said attorney-in-fact shall deem necessary or appropriate, together with all instruments necessary or incidental in connection therewith, and to file the same or cause the same to be filed with the Commission. The above-named attorneys-in-fact shall each have full power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act whatsoever necessary or desirable in connection with any and all Form S-6 and Form N-8B-2 Registration Statements, and any and all amendments thereto, as fully and for all intents and purposes as the undersigned might or could do in person, the undersigned hereby ratifying and approving the acts of each said attorney-in-fact. EXECUTED this 3rd day of DECEMBER, 1997. /s/JOHN V. LAGRASSE -------------------------- -------------------------- (Robert M. Devlin) (John V. LaGrasse) (Not a Director as of the execution date.) /s/RODNEY O. MARTIN, JR. -------------------------- -------------------------- (Michael G. Atnip) Rodney O. Martin, Jr.) /s/JAMES D. D'AGOSTINO, JR. /s/JON P. NEWTON -------------------------- -------------------------- (James S. D' Agostino, Jr.) (Jon P. Newton) /s/DAVID A. FRAVEL /s/PHILIP K. POLKINGHORN -------------------------- -------------------------- (David A. Fravel) (Philip K. Polkinghorn) /s/ROBERT F. HERBERT, JR. /s/PETER V. TUTERS -------------------------- -------------------------- (Robert F. Herbert, Jr.) (Peter V. Tuters) -----END PRIVACY-ENHANCED MESSAGE-----