-----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, T70/Gm0qyCwiVfLFIyoO3EmLmnR8dobHrgDMmbj8G8hljBaBoB+KVideds1XfRD3 BgsBpVoh8SRQ60jFOJPlGw== /in/edgar/work/20000921/0001001980-00-500004/0001001980-00-500004.txt : 20000924 0001001980-00-500004.hdr.sgml : 20000924 ACCESSION NUMBER: 0001001980-00-500004 CONFORMED SUBMISSION TYPE: S-6 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20000921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHLAND SEPARATE ACCOUNT L1 CENTRAL INDEX KEY: 0001001980 STANDARD INDUSTRIAL CLASSIFICATION: [0000 ] IRS NUMBER: 750572420 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-6 SEC ACT: SEC FILE NUMBER: 333-46294 FILM NUMBER: 726425 BUSINESS ADDRESS: STREET 1: 5780 POWERS FERRY ROAD N W CITY: ATLANTA STATE: GA ZIP: 30327 BUSINESS PHONE: 8008727542 MAIL ADDRESS: STREET 1: C/O SOUTHLAND LIFE INSURANCE CO STREET 2: 5780 POWERS FERRY RD CITY: ATLANTA STATE: GA ZIP: 30327 EX-1.A.5(A)(III) 1 policy.txt SURVIVOR DIMENSIONS POLICY Exhibit 1.A.5(a)(iii) SOUTHLAND LIFE INSURANCE COMPANY (A TEXAS CORPORATION) 5780 POWERS FERRY ROAD, N.W. ATLANTA, GEORGIA 30327-4390 MAILING ADDRESS P.O. BOX 105006 ATLANTA, GEORGIA 30348-5006 A STOCK COMPANY - ESTABLISHED 1908 JOHN Q. DOE AND MARY J. DOE 08 0002 3435 AGREEMENT BY SOUTHLAND LIFE INSURANCE COMPANY Southland Life Insurance Company will pay the benefits described in this policy in accordance with the terms of this policy. No benefit is payable under this policy on the death of the first insured, except as provided by rider, if attached. However, you should give us notice of the first death at the time it occurs. PLEASE READ YOUR POLICY CAREFULLY This policy is a legal contract between you as owner of the policy and the company. RIGHT TO EXAMINE THIS POLICY You have the right to examine and return this policy. You may return it by mail or other delivery to the agent who sold it to you or to our Home Office within 10 days after you receive it. It will then be void from the beginning. Upon return of the policy, we will refund all premiums paid. If this policy is a replacement policy as defined by state law where this policy is delivered, you have the right to examine and return this policy within 10 days. This policy is signed for Southland Life Insurance Company by THIS POLICY IS A LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. THIS POLICY INCLUDES PERSISTENCY BONUS. THIS IS A NON-PARTICIPATING POLICY. Death benefits and other values provided by this contract, when based on the investment experience of a separate account, are variable. These values may increase or decrease, based on investment experience and are not guaranteed as to a fixed dollar amount. Death benefits are payable by us upon the second death of the two insureds. There is no maturity date. Flexible premiums are payable by you during the lifetime of either insured until the policy anniversary nearest the younger insured's 100th birthday. Policy Form 15287-00 TABLE OF CONTENTS SCHEDULE.......................................................................4 DEFINITIONS ...................................................................5 INSURANCE COVERAGE PROVISIONS..................................................6 EFFECTIVE DATE..........................................................6 BASE DEATH BENEFIT......................................................6 CHANGE IN REQUESTED INSURANCE COVERAGE..................................6 Requested Increases in Coverage..................................6 Requested Decreases in Coverage..................................7 Death Benefit Option Changes.....................................7 CONTINUATION OF COVERAGE BEYOND AGE 100.................................7 PAYOUT OF PROCEEDS......................................................8 PREMIUM PROVISIONS.............................................................9 PLANNED PREMIUMS........................................................9 UNPLANNED PREMIUMS......................................................9 PREMIUM LIMITATION .....................................................9 FAILURE TO PAY PREMIUM .................................................9 INITIAL PREMIUM ALLOCATION..............................................9 SUBSEQUENT PREMIUM ALLOCATIONS..........................................9 CHANGES TO PREMIUM ALLOCATIONS..........................................9 SEPARATE ACCOUNT PROVISIONS ..................................................10 THE SEPARATE ACCOUNT...................................................10 SEPARATE ACCOUNT DIVISIONS ............................................10 CHANGES WITHIN THE SEPARATE ACCOUNT....................................10 GENERAL ACCOUNT PROVISIONS....................................................11 THE GENERAL ACCOUNT....................................................11 GUARANTEED INTEREST ACCOUNT............................................11 LOAN DIVISION..........................................................11 TRANSFER PROVISIONS...........................................................11 ACCOUNT VALUE PROVISIONS......................................................12 ACCOUNT VALUES ON THE INVESTMENT DATE..................................12 ACCUMULATION UNIT VALUE................................................12 ACCUMULATION EXPERIENCE FACTOR.........................................12 ACCOUNT VALUE OF THE DIVISIONS OF THE SEPARATE ACCOUNT.................13 ACCOUNT VALUE OF THE GUARANTEED INTEREST ACCOUNT.......................13 ACCOUNT VALUE OF THE LOAN DIVISION.....................................13 MONTHLY DEDUCTION AND REFUND..................................................14 MONTHLY DEDUCTION .....................................................14 COST OF INSURANCE .....................................................14 PERSISTENCY REFUND.....................................................15 Form 15287-00 2 LOAN PROVISIONS ..............................................................15 POLICY LOANS ..........................................................15 Preferred Policy Loans.............................................15 LOAN INTEREST .........................................................16 LOAN DIVISION .........................................................16 PARTIAL WITHDRAWAL PROVISIONS ................................................16 SURRENDER PROVISIONS..........................................................17 SURRENDER VALUE........................................................17 SURRENDER CHARGES......................................................17 BASIS OF COMPUTATIONS..................................................18 FULL SURRENDERS........................................................18 GRACE PERIOD, TERMINATION AND REINSTATEMENT PROVISIONS........................18 GRACE PERIOD...........................................................18 SPECIAL CONTINUATION PERIOD............................................19 GUARANTEE PERIOD.......................................................19 TERMINATION............................................................20 REINSTATEMENT..........................................................20 DEFERRAL OF PAYMENT....................................................20 GENERAL POLICY PROVISIONS.....................................................21 THE POLICY.............................................................21 CONTRACT CHANGES.......................................................21 PROCEDURES.............................................................21 OWNERSHIP..............................................................21 BENEFICIARIES..........................................................22 EXCHANGE RIGHT.........................................................22 POLICY SPLIT...........................................................22 COLLATERAL ASSIGNMENT..................................................23 INCONTESTABILITY.......................................................23 MISSTATEMENT OF AGE OR GENDER..........................................24 SUICIDE EXCLUSION......................................................24 PERIODIC REPORTS.......................................................24 ILLUSTRATION OF BENEFITS AND VALUES....................................24 NONPARTICIPATING.......................................................24 CUSTOMER SERVICE CENTER................................................24 PAYOUTS OTHER THAN AS ONE SUM.................................................25 ELECTION...............................................................25 PAYOUT OPTIONS.........................................................25 CHANGE AND WITHDRAWAL..................................................25 EXCESS INTEREST........................................................26 MINIMUM AMOUNTS........................................................26 SUPPLEMENTARY POLICY...................................................26 INCOME PROTECTION......................................................26 DEATH OF PRIMARY PAYEE.................................................26 PAYMENTS OTHER THAN MONTHLY............................................26 SETTLEMENT OPTION TABLES......................................................27 Any supplementary amendments or endorsements, and a copy of the application follow the final policy provisions and are to be considered part of the Policy. Policy Form 15287-00 3 SCHEDULE (Schedule Effective Date: November 1, 2000) POLICY NUMBER 08 0002 3435 POLICY DATE NOVEMBER 1, 2000 INSURED (1) JOHN Q. DOE AGE/GENDER 35 MALE PREMIUM CLASS: STANDARD NONTOBACCO RATING FACTOR: 1.00 EXTRA PREMIUM FOR PREMIUM CLASS $XX.XX PER MONTH FOR X MONTHS INSURED (2) MARY J. DOE AGE/GENDER 35 FEMALE PREMIUM CLASS: STANDARD NONTOBACCO RATING FACTOR: 1.00 EXTRA PREMIUM FOR PREMIUM CLASS $XX.XX PER MONTH FOR X MONTHS JOINT EQUIVALENT AGE 35 INITIAL STATED DEATH BENEFIT $100,000 ADJUSTABLE TERM INSURANCE $150,000* DEATH BENEFIT TARGET DEATH BENEFIT $250,000** ADDITIONAL BENEFITS: SINGLE LIFE TERM INSURANCE RIDER INS#1 $100,000*** SINGLE LIFE TERM INSURANCE RIDER INS#2 $100,000*** DEATH BENEFIT OPTION A MONTHLY PROCESSING DATE 1ST PREMIUM PAYMENT FREQUENCY AT ISSUE ANNUAL SCHEDULED PERIODIC PREMIUM $2000.00 MINIMUM ANNUAL PREMIUM $717.00 [GUARANTEE PERIOD ANNUAL PREMIUM] [$xxx.xx] DEFINITION OF LIFE INSURANCE TEST GUIDELINE PREMIUM TEST Coverage will expire if premiums are insufficient to continue coverage. Coverage will also be affected by partial withdrawals, policy loans, changes in the current cost of insurance rates and the investment experience of the funds of the Separate Account. *This amount is the amount of adjustable term death benefit on the policy date. This death benefit will vary from time to time, and may depend on your account value. See the rider and policy for details. **This amount is the target death benefit on the policy date. It may change at the beginning of each policy year. See the Schedule and rider for details. ***This is the amount of single life term death benefit on the policy date. This death benefit may change at the beginning of each policy year. See the rider and Schedule for details. CUSTOMER SERVICE CENTER: P.O. Box 173789, Denver, Colorado 80217-3789 Toll Free Number 1-800-224-3035 Policy Form 15287-00 4 SCHEDULE (CONTINUED) SEGMENT BENEFIT PROFILE SCHEDULE EFFECTIVE DATE: [NOVEMBER 1,2000] DESCRIPTION SEGMENT STATED SEGMENT SEGMENT SEGMENT DEATH BENEFIT EFFECTIVE TARGET PREMIUM AMOUNT DATE PREMIUM CLASS Segment #1 $100,000 11/1/00 $410.06 Ins(1) M, NT Ins(2) F, NT ADDITIONAL BENEFITS Adjustable Term Insurance Rider premium class or rating is the same as Segment #1 Single Life Term Rider for Insured #1 premium class or rating is Single Life Term Rider for Insured #2 premium class or rating is A segment is a block of death benefit coverage. The stated death benefit shown on the schedule page at issue is Segment #1. Additional segments may be added to the policy after issue to increase the death benefit. Each individual segment added to the policy has its own cost of insurance charges as shown in the Schedule. This is further defined in the Definition of Terms section of your policy. Form 15287-00 4A SCHEDULE (Continued) EXPENSE CHARGES PREMIUM EXPENSE CHARGES Premium Tax 2.5% of each Premium Federal Deferred Acquisition Costs 1.5% of each Premium We reserve the right to increase or decrease the premium expense charge for taxes due to any change in tax law. We further reserve the right to increase or decrease the premium expense charge for the federal income tax treatment of deferred acquisition costs due to any change in the cost to us. Guaranteed Maximum Sales Charge Segment Premium Paid Segment Premium Paid Up to Segment Target in Excess of Segment Premium Target Premium Segment Years 1-10 4.0% 2.0% Segment Years 11 and beyond 2.0% 2.0% GUARANTEED MAXIMUM MONTHLY ADMINISTRATIVE EXPENSE CHARGES Per Policy Charge: $15 per month for the first 120 policy months $9 per policy month thereafter Monthly Administrative Charge: $0.085 per unit for the first 120 policy months $0.015 per unit for policy months 121 through 240. Unit is the greater of stated death benefit or target death benefit then in force for the policy, divided by 1000. ANNUAL MORTALITY AND EXPENSE RISK CHARGE ANNUAL MORTALITY AND EXPENSE RISK CHARGE: 0.90% (0.002466% per day) Policy Form 15287-00 4B SCHEDULE (Continued) POLICYHOLDER TRANSACTION CHARGES Policy Illustrations $25 for each illustration after the 1st in a policy year. Partial Withdrawal Service Fee See below. POLICY LOANS Policy Loan Interest Rate 6.00% Preferred Loan Interest Rate 4.00% Guaranteed Interest Rate Credited to 4.00% Loan Division Minimum Loan Amount $100 Maximum Loan Amount See Loan Provisions section PARTIAL WITHDRAWALS Minimum Partial Withdrawal Amount $100 Maximum Partial Withdrawal Amount Amount which will leave $500 as the net cash surrender value Partial Withdrawal Service Fee Lesser of $25 or 2% of the withdrawal amount for each withdrawal in a policy year Limit on Partial Withdrawals Twelve (12) in a policy year. GUARANTEED INTEREST DIVISION Guaranteed Interest Rate for Guaranteed Interest Division 3.00% PERSISTENCY REFUND FACTOR Persistency Refund Factor: .000375 monthly Policy Form 15287-00 4C SCHEDULE (Continued) SURRENDER CHARGES TOTAL SURRENDER CHARGE TABLE The surrender charges pertaining to the insurance coverage shown in the Schedule are shown in the following table. This table may change upon any increase or decrease in the policy's stated death benefit. - ------------------------------- ----------------------------- Surrender During the Segment #1 Policy Year Ending Total Surrender Charge - ------------------------------- ----------------------------- 2001 $630.96 - ------------------------------- ----------------------------- 2002 $630.96 - ------------------------------- ----------------------------- 2003 $630.96 - ------------------------------- ----------------------------- 2004 $630.96 - ------------------------------- ----------------------------- 2005 $630.96 - ------------------------------- ----------------------------- 2006 $577.86 - ------------------------------- ----------------------------- 2007 $524.77 - ------------------------------- ----------------------------- 2008 $471.67 - ------------------------------- ----------------------------- 2009 $418.58 - ------------------------------- ----------------------------- 2010 $365.48 - ------------------------------- ----------------------------- 2011 $312.38 - ------------------------------- ----------------------------- 2012 $259.29 - ------------------------------- ----------------------------- 2013 $206.19 - ------------------------------- ----------------------------- 2014 $143.10 - ------------------------------- ----------------------------- 2015 $0.00 - ------------------------------- ----------------------------- Surrender charges for each coverage segment reach zero at the beginning of the fifteenth policy year. Surrender charges shall not exceed the applicable amount shown in this table. Policy Form 15287-00 4D SCHEDULE ( CONTINUED) The policy's base death benefit at any time will be at least equal to the account value times the appropriate factor from this table. DEFINITION OF LIFE INSURANCE GUIDELINE PREMIUM TEST/CASH VALUE CORRIDOR TEST DEATH BENEFIT FACTORS - ----------------------- ------------- -------------------- ------------- Younger Factor Younger Factor Insured's Insured's Attained Age Attained Age - ----------------------- ------------- -------------------- ------------- 0-40 2.50 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- 41 2.43 71 1.13 - ----------------------- ------------- -------------------- ------------- 42 2.36 72 1.11 - ----------------------- ------------- -------------------- ------------- 43 2.29 73 1.09 - ----------------------- ------------- -------------------- ------------- 44 2.22 74 1.07 - ----------------------- ------------- -------------------- ------------- 45 2.15 75 1.05 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- 46 2.09 76 1.05 - ----------------------- ------------- -------------------- ------------- 47 2.03 77 1.05 - ----------------------- ------------- -------------------- ------------- 48 1.97 78 1.05 - ----------------------- ------------- -------------------- ------------- 49 1.91 79 1.05 - ----------------------- ------------- -------------------- ------------- 50 1.85 80 1.05 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- 51 1.78 81 1.05 - ----------------------- ------------- -------------------- ------------- 52 1.71 82 1.05 - ----------------------- ------------- -------------------- ------------- 53 1.64 83 1.05 - ----------------------- ------------- -------------------- ------------- 54 1.57 84 1.05 - ----------------------- ------------- -------------------- ------------- 55 1.50 85 1.05 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- 56 1.46 86 1.05 - ----------------------- ------------- -------------------- ------------- 57 1.42 87 1.05 - ----------------------- ------------- -------------------- ------------- 58 1.38 88 1.05 - ----------------------- ------------- -------------------- ------------- 59 1.34 89 1.05 - ----------------------- ------------- -------------------- ------------- 60 1.30 90 1.05 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- 61 1.28 91 1.04 - ----------------------- ------------- -------------------- ------------- 62 1.26 92 1.03 - ----------------------- ------------- -------------------- ------------- 63 1.24 93 1.02 - ----------------------- ------------- -------------------- ------------- 64 1.22 94 1.01 - ----------------------- ------------- -------------------- ------------- 65 1.20 95 1.00 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- 66 1.19 96 1.00 - ----------------------- ------------- -------------------- ------------- 67 1.18 97 1.00 - ----------------------- ------------- -------------------- ------------- 68 1.17 98 1.00 - ----------------------- ------------- -------------------- ------------- 69 1.16 99 1.00 - ----------------------- ------------- -------------------- ------------- 70 1.15 100 and older 1.00 - ----------------------- ------------- -------------------- ------------- - ----------------------- ------------- -------------------- ------------- Form 15287-00 4E SCHEDULE ( CONTINUED) TABLE OF GUARANTEED RATES-SEGMENT #1 Guaranteed Maximum Cost of Insurance Rates Per $1000 of Net Amount at Risk (These rates apply to the Base Policy.)
- ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- Segment Year Monthly Cost of Segment Year Monthly Cost of Segment Year Monthly Cost of Insurance Rate Insurance Rate Insurance Rate - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 0 0.00029 29 0.44922 58 21.07894 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 1 0.00094 30 0.52778 59 23.37773 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 2 0.00174 31 0.61724 60 26.51949 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 3 0.00270 32 0.71747 61 31.35742 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 4 0.00390 33 0.82806 62 39.59830 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 5 0.00537 34 0.95316 63 54.65492 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 6 0.00720 35 1.09872 64 83.33333 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 7 0.00937 36 1.27190 65 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 8 0.01195 37 1.48191 66 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 9 0.01498 38 1.73698 67 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 10 0.01858 39 2.04020 68 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 11 0.02272 40 2.39109 69 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 12 0.02754 41 2.78822 70 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 13 0.03315 42 3.22853 71 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 14 0.03974 43 3.71109 72 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 15 0.04741 44 4.24541 73 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 16 0.05649 45 4.84859 74 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 17 0.06725 46 5.53770 75 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 18 0.08016 47 6.33237 76 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 19 0.09527 48 7.24554 77 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 20 0.11272 49 8.26516 78 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 21 0.13268 50 9.37750 79 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 22 0.15492 51 10.56782 80 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 23 0.17972 52 11.82596 81 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 24 0.20783 53 13.14547 82 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 25 0.24032 54 14.52703 83 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 26 0.27881 55 15.97964 84 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 27 0.32514 56 17.52244 85 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 28 0.38176 57 19.19650 86 - ---------------- ----------------------- ------------- ------------------------ ------------- -----------------------
The above Table of Guaranteed Rates is based on the 1980 U.S. Commissioner's Standard Ordinary Sex Distinct Mortality Table. These rates include substandard rates, if applicable. Form 15287-00 4G SCHEDULE ( CONTINUED) TABLE OF GUARANTEED RATES-SEGMENT #1 Guaranteed Maximum Cost of Insurance Rates Per $1000 of ATR Net Amount at Risk (These rates apply to the ATR.)
- ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- Segment Year Monthly Cost of Segment Year Monthly Cost of Segment Year Monthly Cost of Insurance Rate Insurance Rate Insurance Rate - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 0 0.00045 29 0.66277 58 26.52708 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 1 0.00147 30 0.77552 59 29.36692 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 2 0.00271 31 0.90279 60 33.26593 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 3 0.00422 32 1.04461 61 39.29025 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 4 0.00609 33 1.19968 62 49.56750 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 5 0.00838 34 1.37382 63 68.35812 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 6 0.01119 35 1.57540 64 83.33333 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 7 0.01456 36 1.81377 65 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 8 0.01854 37 2.10117 66 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 9 0.02323 38 2.44842 67 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 10 0.02877 39 2.85820 68 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 11 0.03512 40 3.32872 69 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 12 0.04249 41 3.85608 70 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 13 0.05109 42 4.43540 71 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 14 0.06113 43 5.06385 72 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 15 0.07280 44 5.75364 73 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 16 0.08662 45 6.52663 74 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 17 0.10289 46 7.40396 75 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 18 0.12238 47 8.40993 76 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 19 0.14506 48 9.55930 77 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 20 0.17122 49 10.83359 78 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 21 0.20104 50 12.21454 79 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 22 0.23408 51 13.68128 80 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 23 0.27080 52 15.22354 81 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 24 0.31217 53 16.83418 82 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 25 0.35980 54 18.51615 83 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 26 0.41600 55 20.28398 84 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 27 0.48342 56 22.16496 85 - ---------------- ----------------------- ------------- ------------------------ ------------- ----------------------- 28 0.56560 57 24.21246 86 - ---------------- ----------------------- ------------- ------------------------ ------------- -----------------------
The above Table of Guaranteed Rates is based on 125% of the 1980 U.S. Commissioner's Standard Ordinary Sex Distinct Mortality Table. These rates include substandard rates, if applicable. Form 15287-00 DEFINITIONS ACCOUNT VALUE: The sum of the amounts allocated to the portfolios of the Separate Account and to the Guaranteed Interest Division, as well as any amount set aside in the Policy Loan Division AGE/JOINT EQUIVALENT ISSUE AGE/YOUNGER INSURED'S BIRTH DATE: AGE - The policy is issued at the ages shown in the Schedule. Each issue age is the age nearest birthday on the policy date. JOINT EQUIVALENT ISSUE AGE - This age is determined on the policy date. The attained joint equivalent age is the joint equivalent issue age on the policy date increased by the number of completed policy years. YOUNGER INSURED'S BIRTH DATE - The younger insured's 100th birth date is the date on which the younger of the two insured's reaches attained age 100 or the date the younger insured would have reached attained age 100 if that insured dies before actually reaching that date. Any other birth date of the younger insured is determined in the same manner. The younger insured's attained age is the issue age of the younger of the two insureds as shown in the Schedule, increased by the number of completed policy years. BASE DEATH BENEFIT: The base death benefit depends on the death benefit option you choose. This is defined in the Base Death Benefit provision of the policy. CASH SURRENDER VALUE: Cash surrender value on any valuation date is the account value minus surrender charges, if any. CUSTOMER SERVICE CENTER: The Southland Customer Service Center is the company's offices at P.O. Box 173789, Denver, CO 80217-3789. For overnight delivery, the address is 1290 Broadway, Denver, CO 80203. FIRST DEATH: The first death is the death of the first to die of the two insureds. GENERAL ACCOUNT: The account which contains all of our assets other than those held in a separate account. GUARANTEED INTEREST DIVISION: Part of our General Account to which a portion of the account value may be allocated and which provides guarantees of principal and interest. INITIAL PERIOD: The initial period ends on the earlier of: (a) the date this policy was delivered to you plus the Right to Examine Period, so long as we receive notice of the delivery date at our Customer Service Center before the date defined in (b), or (b) the date this policy is mailed from our Customer Service Center plus 5 days plus the Right to Examine Period. INVESTMENT DATE: The first date we apply your net premium payment to your policy. We will allocate the initial net premium to your policy at the end of the valuation period during which the latest of the following requirements is satisfied: 1) we receive the amount of premium required for coverage to begin under the policy; 2) we have approved the policy for issue, and 3) all issue requirements have been met and received in our Customer Service Center. LOAN DIVISION: Part of our General Account in which funds are set aside to secure any outstanding policy loan and accrued loan interest when due. Policy Form 15287-00 5 MONTHLY PROCESSING DATE: The date each month on which the monthly deductions from the account value are due. The first monthly processing date will be the policy date or the date on which the initial net premium is allocated to your policy, if later. Subsequent monthly processing dates will be the same date as the policy date each month thereafter. If that date is not a valuation date, monthly processing will use the next calculated accumulation unit value. NET ACCOUNT VALUE: The amount of the account value minus any policy loan and accrued loan interest. NET PREMIUM: The premium amount paid minus the premium expense charges shown in the Schedule. These charges are deducted from each premium before the premium is applied to your account value. PARTIAL WITHDRAWAL: The withdrawal of a portion of your cash surrender value from the policy. The partial withdrawal may reduce the amount of base death benefit in force, which in turn may cause a surrender charge to be incurred. POLICY LOAN: The sum of amounts you have borrowed from your policy, increased by any policy loan interest capitalized when due, and reduced by any policy loan repayments. PORTFOLIOS OF THE SEPARATE ACCOUNT: The investment options available, each of which invests in shares of one of the portfolios. RIGHT TO EXAMINE PERIOD: The number of days after delivery during which you have the right to examine your policy. See the cover page of your policy for a description of your right to examine period. SCHEDULED PREMIUM: The premium amount that you specify on the application as the amount you intend to pay at fixed intervals over a specified period of time. Premiums may be paid monthly, quarterly, semiannual, or annually, as you determine. You need not pay the scheduled premium and you may change it at any time. Also, within limits, you may pay less or more than the scheduled premium. SECOND DEATH: The second death is the death of the second to die of the two insureds. SEGMENT: The stated death benefit shown on the Segment Benefit Profile of the Schedule is the initial segment, or Segment #1. Each increase in the stated death benefit (other than due to an option change) is a new segment. Each new segment will be shown separately on the Segment Benefit Profile of the Schedule. The first year for a segment begins on the effective date of the segment and ends one year later. Each new segment may be subject to a new minimum annual premium, new sales charge, new surrender charges, new cost of insurance charges and new incontestability and suicide exclusion periods. STATED DEATH BENEFIT: The sum of the segments under the policy. The stated death benefit changes when there is an increase or a decrease or when a transaction on the policy causes it to change (for example, a partial withdrawal under an Option A base death benefit may cause the stated death benefit to change). SURRENDER CHARGE: The charge made against your account value in the event of surrender, policy lapse, requested reductions in the stated death benefit, or certain partial withdrawals. Policy Form 15287-00 5A TARGET DEATH BENEFIT: The target death benefit for your policy is defined in the Adjustable Term Insurance Rider, if any, attached to the policy. VALUATION DATE: Each date as of which the net asset value of the shares of the portfolio and unit values of the divisions are determined. Except for days that a division's corresponding portfolio does not value its shares, a valuation date is any day: (a) The New York Stock Exchange (NYSE) is open for trading and on which Southland Life's Customer Service Center is open for business; or (b) as may be required by law. VALUATION PERIOD: The period which begins at 4:00 p.m. Eastern Time on a valuation day and ends at 4:00 p.m. Eastern Time on the next succeeding valuation date. Form 15287-00 5B INSURANCE COVERAGE PROVISIONS POLICY DATE The policy date shown in the Schedule is the effective date for all coverage provided in the original application. The policy date is the date from which we measure policy years and determine the monthly processing date. The first monthly processing date is the investment date. Future monthly processing dates are the same calendar day of each month as the policy date unless this is not a valuation date in which case the monthly processing date occurs on the next valuation date. A policy anniversary occurs each year on the same month and day as the policy date unless this is not a valuation date in which case the policy anniversary occurs on the next valuation date. The effective date for new segments and additional benefits is shown in the Schedule. BASE DEATH BENEFIT The base death benefit will be determined, at any time, as follows: Option 1: Under Option A, the base death benefit is the greater of: (a) The stated death benefit; or (b) The account value multiplied by the appropriate factor from the Death Benefit Factors shown in the Schedule Option 2: Under Option B, the based death benefit is the greater of: (a) The stated death benefit plus the account value; or (b) The account value multiplied by the appropriate factor from the Death Benefit Factors shown in the Schedule The stated death benefit and the death benefit type are shown in the Schedule. This policy is designed to qualify as a life insurance contract under the Internal Revenue Code. All terms and provisions of the policy shall be construed in a manner consistent with that design. The base death benefit in force at any time shall not be less than the amount of insurance necessary to achieve such qualification under the applicable provisions of the Internal Revenue Code in existence at the time the policy is issued. We reserve the right to amend the policy or adjust the amount of insurance when required. We will send you a copy of any policy amendment. CHANGE IN REQUESTED INSURANCE COVERAGE You may request that the insurance coverage be increased or decreased. Decreases are not allowed before the first policy anniversary. The change in coverage may not be for an amount less than $1,000. The effective date of the change will be the monthly processing date immediately following the date your written application is approved by us. After any change to the stated death benefit, you will receive an amended Schedule reflecting the change, the benefit under any riders, if applicable, the guaranteed cost of insurance rates, the new target premium and the new surrender charge. REQUESTED INCREASES IN COVERAGE Subject to our limits, you may request an increase in the stated death benefit through attained joint equivalent age 85. An increase will become effective as of the monthly processing date immediately following the date your written application is approved by us. You must provide evidence satisfactory to us that the insureds are insurable according to our normal rules of underwriting for the applicable premium class for this type of policy. This evidence will include an application and may include required medical information. An increase will consist of a new segment of stated death benefit. Each new Form 15287-00 6 segment will result in a new sales charge which will be deducted from the premium allocated to the new segment. The new segment may also be subject to a new minimum annual premium, new surrender charges, new per thousand of stated death benefit charges, new cost of insurance charges and new incontestability and suicide exclusion periods. REQUESTED DECREASES IN COVERAGE After the first policy anniversary, you may request a decrease in the stated death benefit. We will limit the decrease such that, immediately after the requested decrease: a) The stated death benefit is at least $250,000 if there is no adjustable term insurance on the policy. b) If there is adjustable term insurance on the policy, the stated death benefit is at least $100,000 and the target death benefit is at least $250,000. A decrease will be effective as of the monthly processing date immediately following the date your written application is approved by us. A decrease will first reduce Adjustable Term Insurance Rider coverage, if attached to your policy, and will then reduce each of the stated death benefit segments in the same proportion as the stated death benefit is reduced. A surrender charge will apply if the stated death benefit is decreased and the decrease occurs during the 14 years following the policy date or the date of the prior increase. If a surrender charge applies, it will be deducted from your account value and future surrender charges will be reduced. DEATH BENEFIT OPTION CHANGES Beginning with the first monthly processing date and ending with the policy anniversary nearest the younger insured's 100th birth date, you may request to change the death benefit option. This change will be effective as of the next monthly processing date following approval. A death benefit option change applies to the entire stated death benefit. We may not allow any change if it would reduce the stated death benefit below the minimum we require to issue this policy at the time of reduction. After the effective date of the change, the stated death benefit will be changed according to the following table: OPTION CHANGE FROM TO STATED DEATH BENEFIT FOLLOWING THE OPTION CHANGE EQUALS: Opt A Opt B Stated death benefit prior to such change minus your account value as of the effective date of the change. Opt B Opt A Stated death benefit prior to such change plus your account value as of the effective date of the change. To determine the segment stated death benefit after an option change, your account value will be allocated to each segment in the same proportion that segment bears to the stated death benefit as of the effective date of the change. CONTINUATION OF COVERAGE BEYOND AGE 100 If the policy is in force on the policy anniversary nearest the younger insured's 100th birth date, the policy will continue pursuant to the terms of the policy. On this date, the following will occur: (a) If there is no Adjustable Term Insurance Rider on the policy, the stated death benefit for the policy remains unchanged as of the policy anniversary nearest the younger insured's 100th birthday. If there is an Adjustable Term Insurance Rider attached to the policy, the stated Form 15287-00 7 death benefit for the policy will equal the target death benefit on the policy anniversary nearest the younger insured's 100th birthday. Any Adjustable Term Insurance Rider will then terminate. (b) All other riders attached to the policy also will terminate. (c) The portion of your account value invested in the portfolios of the Separate Account will be transferred into the Guaranteed Interest Division and no further investment in the divisions of the Separate Account will be allowed. (d) If the death benefit option in force on the policy is Option B, the policy will be converted to death benefit Option A in accordance with the procedures outlined in the Death Benefit Option Changes provision of the policy. No further changes will be allowed to the death benefit option After the policy anniversary nearest the younger insured's 100th birth date, no further premiums will be accepted and no monthly deductions will be made. We will continue to credit interest to the account value in the Guaranteed Interest Division. Policy loans and withdrawals continue to be available. Any existing policy loan will continue. Policy loan interest will continue to accrue and if not paid, may cause your policy to lapse. Payments on policy loans and policy loan interest will be accepted. The policy will enter the 61-day grace period if the net cash surrender value is zero or less. If you do not want coverage to continue past the policy anniversary nearest the younger insured's 100th birth date, the policy may be surrendered at that time, or earlier. PAYOUT OF PROCEEDS Proceeds refer to the amount we will pay: a) Upon surrender of the policy; or b) Upon the second death of the two insureds. The proceeds upon surrender of this policy will be the net cash surrender value. The amount of proceeds payable upon the second death will be the base death benefit in effect on the date of the second death, plus any amounts payable from any additional benefits provided by rider, minus any outstanding policy loan including accrued but unpaid interest, minus any unpaid monthly deductions incurred prior to the date of the second death. The calculation of the death proceeds will be computed as of the date of the second death. The second death is the death of the second to die of the two insureds. We will determine the amount of proceeds payable upon the second death when we have received due proof of both deaths and any other information which is necessary to process the claim. Any proceeds we pay are subject to adjustments as provided in the Misstatement of Age or Gender, Suicide Exclusion and Incontestability provisions. We will pay proceeds in one sum unless you request an alternate form of payment. There are many possible methods of payment. The available payout options are described in the Payouts Other Than As One Sum provision. Contact us or your registered representative for additional information. Interest will be paid on the one sum death proceeds from the date of the second death to the date of payment, or until a payout option is selected. Interest will be at the rate we declare, or at any higher rate required by law. Form 15287-00 8 PREMIUM PROVISIONS SCHEDULED PREMIUMS The scheduled premium as shown in the Schedule may be paid while this policy is in force prior to the policy anniversary nearest the younger insured's 100th birth date. You may increase or decrease the amount of the scheduled premium, subject to limits we may set and provisions in the Premium Limitation section. Under conditions provided in the Grace Period provision and the Guarantee Period provision you may be required to make premium payments to keep the policy in force. You may pay premiums on a monthly basis through an automated payment facility. UNSCHEDULED PREMIUMS You may make unplanned premium payments at any time the policy is in force prior to the policy anniversary nearest the younger insured's 100th birth date, subject to the Premium Limitation section. Unless you tell us otherwise, these premium payments will first be applied to reduce or pay off any existing policy loan and, as such, premium expense charges will not be deducted. PREMIUM LIMITATION We will refund any premium that causes your policy not to qualify as a life insurance policy under the Internal Revenue Code. No premium may be paid after the second death. No premium may be paid after the policy anniversary nearest the younger insured's 100th birth date. FAILURE TO PAY PREMIUM If you stop paying premiums prior to the policy anniversary nearest the younger insured's 100th birth date, your coverage may lapse. See your Grace Period provision for details. INITIAL PREMIUM ALLOCATION If the initial period has not ended on the investment date, net premium amounts designated for allocation to portfolios of the Separate Account will be allocated on the investment date to the GCG Liquid Asset Portfolio and any net premium amount designated for allocation to the Guaranteed Interest Division will be allocated to that account. Any additional net premium amounts received after the investment date and before the end of the initial period will be allocated in the same manner as the initial net premium, at the end of the valuation period during which we receive the premium at our Customer Service Center. On the valuation date immediately following the end of the initial period, the balance of the amount in the GCG Liquid Asset Portfolio will be transferred to other portfolios of the Separate Account according to your allocation instructions. The amounts allocated to the Guaranteed Interest Division will remain in that division. If the initial period has ended on the investment date, initial net premium amounts will be allocated on the investment date to portfolios of the Separate Account and/or to the Guaranteed Interest Division in accordance with your allocation instructions. SUBSEQUENT PREMIUM ALLOCATIONS After the initial premium allocation, all future scheduled and unscheduled premiums will be allocated to the portfolios of the Separate Account in accordance with your allocation instructions. This allocation will occur at the end of the valuation period during which we receive the premium at our Customer Service Center. CHANGES TO PREMIUM ALLOCATIONS You may change your premium allocation in accordance with instructions included in your annual policy prospectus. Form 15287-00 9 SEPARATE ACCOUNT PROVISIONS THE SEPARATE ACCOUNT The Separate Account is an account established by us, pursuant to the laws of the State of Texas, to separate the assets funding the benefits for the class of policies to which this policy belongs from the other assets of Southland Life Insurance Company. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940. All income, gains and losses, whether or not realized, from assets allocated to the Separate Account are credited to or charged against the Separate Account without regard to income, gains or losses of our General Account. The assets of the Separate Account are our property but are separate from our General Account and our other Separate Accounts. That portion of the assets of the Separate Account which is equal to the reserves and other policy liabilities with respect to the Separate Account is not chargeable with liabilities arising out of any other business we may conduct or subject to creditor claims against us. SEPARATE ACCOUNT DIVISIONS The Separate Account is divided into divisions, each of which invests in a fund portfolio designed to meet the objectives of the division. The current eligible divisions are shown in your annual policy prospectus. We may, from time to time, add additional divisions. If we do, you may be permitted to select from these other divisions subject to the terms and conditions we may impose on those allocations. We reserve the right to limit the number of divisions in which you may invest over the life of the policy. This limit, if any, will be listed in the updated policy prospectus provided to you each year. CHANGES WITHIN THE SEPARATE ACCOUNT When permitted by law, and subject to any required notice to you and acceptance of the Securities and Exchange Commission ("SEC"), and approval by state regulatory authorities or policy owners, we may from time to time make the following changes to the Separate Account: o Make additional divisions available. These divisions will invest in investment portfolios we find suitable for the policy. o Eliminate divisions from the Separate Account or combine 2 or more divisions. o Substitute a new portfolio for the portfolio in which a division invests. A substitution may become necessary if, in our judgment, a portfolio no longer suits the purposes of the policy. This may happen due to a change in laws or regulations, or a change in a portfolio's investment objectives or restrictions. This may also happen if the portfolio is no longer available for investment, or for some other reason, such as a declining asset base. o Transfer assets of the Separate Account, which we determine to be associated with the class of policies to which your policy belongs, to another Separate Account. o Withdraw the Separate Account from registration under the Investment Company Act of 1940. o Operate the Separate Account as a management investment company under the Investment Company Act of 1940. Form 15287-00 10 o Invest one or more divisions in a mutual fund other than, or in addition to, the portfolios. o Discontinue the sale of policies. o Terminate any employer or plan trustee agreement with us pursuant to its terms. o Restrict or eliminate any voting rights as to the Separate Account. o Make any changes required by the Investment Company Act of 1940 or the rules or regulations thereunder. GENERAL ACCOUNT PROVISIONS THE GENERAL ACCOUNT The General Account holds all of our assets other than those held in the Separate Account or our other separate accounts. The Guaranteed Interest Division is a part of our General Account. GUARANTEED INTEREST DIVISION The Guaranteed Interest Division or Account is another division to which you may allocate premiums or make transfers. The account value of the Guaranteed Interest Division is equal to amounts allocated to this division plus any earned interest minus deductions taken from this division. Interest is credited at the guaranteed rate shown in the schedule or may be credited at a higher rate. Any higher rate is guaranteed to be in effect for at least a 12-month period. LOAN DIVISION The Loan Division is the account that is set aside to secure the policy loan, if any. See the Loan Provisions section for information. TRANSFER PROVISIONS After the initial premium allocation and until the policy anniversary nearest the younger insured's 100th birth date, your account value in each division may be transferred to any other Division of the Separate Account or to the Guaranteed Interest Division upon your request. One transfer from the Guaranteed Interest Division into the separate account divisions may be made during the first 30 days of each policy year. Additional limitations and requirements will be listed in and governed by your annual policy prospectus in effect at the time of the transfer. We reserve the right to modify these limitations and requirements from time to time. On the policy anniversary nearest the younger insured's 100th birth date, your account value in each division of the Separate Account will be transferred into the Guaranteed Interest Division and no further transfers will be allowed. Form 15287-00 11 ACCOUNT VALUE PROVISIONS The account value is the sum of the current amounts allocated to the portfolios of the Separate Account and to the Guaranteed Interest Division plus your balance in the Loan Division. The account value is based on premiums paid, policy and rider charges assessed, loans and withdrawals taken, monthly deductions, premium expense charges, transaction charges, any surrender charges, and the investment experience or credited interest of the division to which your account value is allocated. Your net account value is equal to your account value minus any policy loan and accrued but unpaid loan interest. ACCOUNT VALUES ON THE INVESTMENT DATE The account value of each division of the Separate Account and the Guaranteed Interest Division as of the investment date is equal to: a) The allocation to that division of the first net premium paid; minus b) The portion of any monthly deductions due on the investment date allocated to that division. ACCUMULATION UNIT VALUE The investment experience of a division of the Separate Account is determined as of each valuation date. We use an accumulation unit value to measure the experience of each of the Separate Account divisions during a valuation period. We generally set the accumulation unit value at $10 when each division is opened. The accumulation unit value for a valuation date equals the accumulation unit value for the preceding valuation date multiplied by the accumulation experience factor defined below for the valuation period ending on the valuation date. The number of units for a given transaction related to a division of the Separate Account as of a valuation date is determined by dividing the dollar value of that transaction by that division's accumulation unit value for that date. ACCUMULATION EXPERIENCE FACTOR For each portfolio of the Separate Account, the accumulation experience factor reflects the investment experience of the portfolio in which that division invests and the charges assessed against that division for a valuation period. The accumulation experience factor is calculated as follows: a) The net asset value of the portfolio in which that division invests as of the end of the current valuation period; plus b) The amount of any dividend or capital gains distribution declared and reinvested in the portfolio in which that division invests during the current valuation period; minus c) A charge for taxes, if any. d) The result of (a), (b) and (c) is then divided by the net asset value of the portfolio in which that division invests as of the end of the preceding valuation period. e) The daily equivalent of the annual mortality and expense risk charge shown in the Schedule for each day in the current valuation period is then subtracted from the result obtained in (d). Form 15287-00 12 ACCOUNT VALUE OF THE DIVISIONS OF THE SEPARATE ACCOUNT On subsequent valuation dates after the investment date, your account value of each portfolio of the Separate Account is calculated as follows: a) The number of accumulation units in that division as of the beginning of the current valuation period multiplied by that division's accumulation unit value for the current valuation period; plus b) Any additional net premiums allocated to that division during the current valuation period; plus c) Any account value transferred to or minus any account value transferred from the Separate Account during the current valuation; minus d) Any partial withdrawals allocated to that division and any applicable withdrawal service fees which are allocated to the divisions of the Separate Account during the current valuation period; plus e) Any amounts released from the Loan Division as a result of a loan or loan interest payment, or minus amounts transferred to the Loan Division as a result of any loans which are allocated to the Separate Account during the current valuation period; minus f) The portion of any surrender charge resulting from a decrease in stated death benefit allocated to the division; minus g) The portion of the monthly deduction allocated to the Separate Account, if a monthly processing date occurs during the current valuation period. ACCOUNT VALUE OF THE GUARANTEED INTEREST DIVISION On valuation dates after the investment date, your account value of the Guaranteed Interest Division is calculated as follows: a) The account value of the Guaranteed Interest Division at the end of the preceding valuation period plus interest at the declared rate credited during the current valuation period; plus b) Any additional net premiums allocated to the Guaranteed Interest Division plus interest credited to these premiums during the current valuation period; plus c) Any account value transferred to or minus any account value transferred from the Guaranteed Interest Division during the current valuation period; minus d) Any partial withdrawals taken and any applicable withdrawal service fees which are allocated to the Guaranteed Interest Division during the current valuation period; plus e) Any amounts released from the Loan Division as a result of a loan or loan interest payment, or minus amounts transferred to the Loan Division as a result of any loans which are allocated to the Guaranteed Interest Division during the current valuation period; minus f) The portion of any surrender charge resulting from a decrease in stated death benefit allocated to the Guaranteed Interest Division; minus g) The portion of the monthly deduction allocated to the Guaranteed Interest Division, if a monthly processing date occurs during the current valuation period. ACCOUNT VALUE OF THE LOAN DIVISION On valuation dates after the investment date, your account value of the Loan Division is equal to: a) The account value of the Loan Division on the prior valuation date; plus b) Any interest credited to the Loan Division during the valuation period; plus c) An amount equal to any additional loans since the prior valuation date; minus d) Any loan repayments, including payment of loan interest; plus Form 15287-00 13 e) The amount of accrued loan interest if the valuation date is a policy anniversary; minus f) The amount of interest credited to the Loan Division during the year if the valuation date is a policy anniversary. On policy anniversaries, any amount of interest credited to the Loan Division during the year is transferred from the Loan Division to the Separate Account and Guaranteed Interest Division according to your premium allocation then in effect. MONTHLY DEDUCTION AND REFUND MONTHLY DEDUCTION The monthly deduction is equal to: a) The cost of insurance charges for this policy; plus b) The monthly charges for any other additional benefits provided by riders in force under the policy; plus c) The monthly expense charges shown in the Schedule; plus d) The charge for the Guaranteed Minimum Death Benefit option, if elected; plus e) The policyholder transaction charges as described in the Schedule as applicable. The monthly deductions are allocated to the divisions of the Separate Account and Guaranteed Interest Division as described in the prospectus in effect at the time of the transaction. This deduction is taken from your account value as of the monthly processing date. These deductions will display in periodic reports that we send you at least once per policy year. After the policy anniversary nearest the younger insured's 100th birth date no further monthly deductions will be made, except policy transaction charges incurred after this date. Policyholder transaction charges, as described in the Schedule, are deducted at the time of the applicable transaction. COST OF INSURANCE The cost of insurance for the policy is the sum of the cost of insurance for all segments. A segment's cost of insurance is the cost of insurance rate for the premium class for the segment multiplied by the net amount at risk allocated to the segment. It is determined on a monthly basis. The net amount at risk is (a) minus (b) where: a) Is the base death benefit for all segments as of the monthly processing date after the monthly deductions (other than cost of insurance charges for the base death benefit, any Adjustable Term Insurance Rider and any Single Life Term Insurance Rider), divided by the result of 1 plus the monthly equivalent of the guaranteed interest rate for the Guaranteed Interest Division as shown in the Schedule; and b) Is your account value as of the monthly processing date after the monthly deductions (other than the cost of insurance charges for the base death benefit, any Adjustable Term Insurance Rider and any Single Life Term Insurance Rider). The net amount at risk will be allocated to a segment in the same proportion as that segment's stated death benefit bears to the sum of the stated death benefits for all segments. Form 15287-00 14 The cost of insurance rate for each segment will be determined by us from time to time. Different rates will apply to each segment. They will be based on the gender and age of each of the insureds, as of the effective date of segment coverage, the duration since the coverage began, the amount of target death benefit and the segment premium classes. Any change in rates will apply to all individuals of the same premium class and whose policies have been in effect for the same length of time. The rates will never exceed those rates shown in the Table of Guaranteed Rates for the segment. These tables are in the Schedule. PERSISTENCY REFUND We will calculate a monthly persistency refund by multiplying the monthly persistency refund factor times the account value allocated to the Loan Division and portfolios of the Separate Account. The persistency refund factor is shown in the Schedule. We may also increase this persistency refund based on the amount in the Guaranteed Interest Division. Each month after the policy is in force for 120 months, we will credit the net account value held in the portfolios of the Separate Account and the Loan Division with a persistency refund. We may also credit the net account value held in the Guaranteed Interest Division with a persistency refund. The monthly persistency refund will be allocated to the divisions of the Separate Account and the Guaranteed Interest Division in the same proportion that your account value in each division bears to your net account value as of the monthly processing date. LOAN PROVISIONS POLICY LOANS You may obtain a policy loan on or after the first monthly processing date. The maximum amount you may borrow at any time equals the net cash surrender value on the date of the loan request less all monthly deductions to the next policy anniversary, or 13 monthly deductions if you take a loan within the 30-day period before your next policy anniversary. The policy loan is a first lien on your policy. The minimum amount you may borrow is shown in the Schedule. The outstanding policy loan amount is equal to the loan amount as of the beginning of the policy year plus new loans and minus loan repayments, plus accrued interest. PREFERRED POLICY LOANS Preferred loan eligibility begins after the tenth (10th) policy anniversary. The first loan requested during each year of preferred loan eligibility will be a preferred loan. The amount of the preferred loan cannot exceed 10% of the net account value. The preferred loan interest rate is shown in the Schedule. Only one preferred loan may be requested in an eligible policy year. If the preferred loan amount in any eligible policy year is less than the maximum allowed, the balance may not be carried over to increase the eligible preferred loan amount in a subsequent policy year. Beginning with the 21st policy year, all loan balances will be preferred loan amounts. Policy Form 15287-00 15 LOAN INTEREST The annual policy loan interest rates are shown in the Schedule. If a loan is made, interest is due and payable at the end of the policy year. Thereafter, interest on the loan amount is due annually at the end of each policy year until the loan is repaid. If interest is not paid when due, it is added to the policy loan. If the policy loan amount and any accrued interest equals or exceeds the cash surrender value, a premium sufficient to keep this policy in force must be paid as provided in the Grace Period provision. LOAN DIVISION When a policy loan is taken or when interest is not paid in cash when due, an amount equal to the loan or unpaid loan interest respectively, is transferred from the portfolios of the Separate Account and the Guaranteed Interest Division to the Loan Division to secure the loan. This amount will be deducted from the portfolios of the Separate Account and the Guaranteed Interest Division in the same proportion that your account value in each division bears to your net account value as of the date the transfer is effective unless otherwise specified in your instructions to us. Your account value in the Loan Division will be credited with interest at the interest rate for the Loan Division shown in the Schedule. When a loan repayment is made, an amount equal to the repayment is transferred from the Loan Division to the Guaranteed Interest Division and the portfolios of the Separate Account in the same proportion as your current premium allocation unless you request a different allocation in writing. PARTIAL WITHDRAWAL PROVISIONS You may apply for a partial withdrawal from your account value on any monthly processing date after the first policy anniversary by writing to us at our Customer Service Center. The minimum and maximum partial withdrawal amounts are shown in the Schedule. When we process a partial withdrawal, the amount of the withdrawal plus a service fee is deducted from your account value. The amount of the service fee is shown in the Schedule. If a surrender charge is applicable, we will deduct it from your account value. We limit the number of partial withdrawals in a policy year. This number is shown in the Schedule. The stated death benefit is reduced by the amount of the partial withdrawal unless one of the following exceptions applies. The stated death benefit is not reduced by a partial withdrawal taken when the base death benefit has been increased to qualify your policy as life insurance under the Internal Revenue Code and the amount withdrawn is not greater than that which reduces your account value to the level which no longer requires the base death benefit to be increased for Internal Revenue Code purposes. For a policy under an Option A death benefit, the stated death benefit is not reduced by a partial withdrawal: a) If no more than 15 years have elapsed since the policy date; b) If the joint equivalent age is not yet age 81; and c) If the partial withdrawal taken is less than either the greater of 10% of your account value or 5% of the stated death benefit, calculated immediately before the partial withdrawal. Any additional amount withdrawn reduces your stated death benefit by that additional amount. Form 15287-00 16 For a policy under an Option B death benefit, a partial withdrawal does not reduce your stated death benefit. If the stated death benefit is reduced by a partial withdrawal during the first 14 years following the policy date or following an increase in the stated death benefit, a surrender charge will be deducted from your account value. (See your Surrender Charges provision.) Any reduction in death benefit or account value will occur as of the date the partial withdrawal occurs. We will limit the amount of the partial withdrawal such that, immediately after the requested withdrawal: a) The stated death benefit is at least $250,000 if there is no adjustable term insurance on the policy. b) If there is adjustable term insurance on the policy, the stated death benefit is at least $100,000 and the target death benefit is at least $250,000. You may specify how much of the withdrawal you wish taken from each division of the Separate Account or from the Guaranteed Interest Division. You may not withdraw from the Guaranteed Interest Division more than the total withdrawal times the ratio of your account value in the Guaranteed Interest Division to your net account value immediately prior to the withdrawal. Unless you indicate otherwise, we will make the withdrawal from the amounts in the Guaranteed Interest Division and the portfolios of the Separate Account in the same proportion that your account value in each division bears to your net account value immediately prior to the withdrawal. The withdrawal service fee and any surrender charge deducted from your account value are deducted from each division of the Separate Account and the Guaranteed Interest Division as described in the prospectus in effect at the time of the transaction. We may send you a new Schedule to reflect the effect of the withdrawal if there is any change to the stated death benefit and surrender charges. We may ask you to return your policy to our Customer Service Center to make this change. The withdrawal and the reductions in death benefits will be effective as of the valuation date after we receive your request. SURRENDER PROVISIONS SURRENDER VALUE The cash surrender value on any date will be your account value minus any applicable surrender charge and minus any policy loan including accrued but unpaid loan interest. SURRENDER CHARGES A separate surrender charge may apply to each stated death benefit segment for each policy year. The surrender charge for this policy is the sum of the surrender charge for each segment of stated death benefit. The surrender charge is shown in the Schedule. Upon a decrease in the stated death benefit, a portion of the surrender charge will be deducted from your account value, unless the stated death benefit is decreased because the death benefit option is changed. Form 15287-00 17 The amount we deduct will equal the applicable surrender charge for the policy year of the decrease times the percentage reduction in the stated death benefit. The surrender charges after the decrease will equal the surrender charges shown in the Schedule less the amount deducted from your account value. If the amount deducted from your account value causes your net cash surrender value to become zero or less, you may enter the grace period. (See Grace Period provision.) We will send you a new Schedule to reflect the effect of any transaction that changes the stated death benefit or the surrender charges. BASIS OF COMPUTATIONS The cash surrender value under the policy is not less than the minimums required as of the policy date by the state in which your policy was delivered. A detailed statement of the method of computation of policy values under the policy has been filed with the insurance department of the state in which the policy was delivered, if required. FULL SURRENDERS You may surrender your policy after the Right to Examine Period or at any time before the second death and receive the net cash surrender value. We will compute the net cash surrender value as of the next valuation date after we receive both your request and the policy at our Customer Service Center. This policy will be canceled as of the date we receive your request, and there will be no further benefits under this policy. Once you surrender this policy, it cannot be reinstated. GRACE PERIOD, TERMINATION AND REINSTATEMENT PROVISIONS GRACE PERIOD If the following three conditions occur on a monthly processing date, the policy will enter into a 61-day grace period: a) The net cash surrender value is zero or less; and b) The special continuation period described below has expired or the required premium for the special continuation period has not been paid; and c) The guarantee period described below was not elected, has expired or been terminated. We will give you a 61-day grace period from this monthly processing date to make the required premium payment. The required premium payment then due must be paid to keep the policy in force. If this amount is not received in full by the end of the grace period, the policy will lapse without value. The required premium payment will be equal to past due charges plus an amount we expect to be sufficient to keep the policy and any riders in force for 2 months following receipt of the required premium payment. If we receive at least the required premium payment during the grace period, we will apply the net premium payment to the policy and make deductions for the past due amounts. Notice of the amount of the required premium payment will be mailed to you or any assignee at the last known address at least 30 days before the end of the grace period. If the second death occurs during the grace period, we will deduct any overdue monthly charges from the death proceeds of the policy. Form 15287-00 18 SPECIAL CONTINUATION PERIOD During the first 5 policy years your policy will remain in force regardless of the net cash surrender value if, on a monthly processing date, the sum of your premiums paid minus the sum of your partial withdrawals, policy loans and accrued but unpaid policy loan interest is not less than the sum of the applicable minimum monthly premiums for each policy month starting with the first policy month to and including the policy month which begins on the current monthly processing date. Each minimum monthly premium equals 1/12 of the minimum annual premium. The minimum annual premium is shown in the Schedule. We use this premium for each policy month until the effective date of a change in the stated death benefit. If there is a change, the new Schedule will show the applicable minimum annual premium that applies to subsequent policy months during the remainder of the 5-year period. If the policy is kept in force under this provision, the charges are not permanently waived. Instead, the charges continue to be deducted. This could result in a negative net cash surrender balance unless sufficient premium is received. This negative balance is your unpaid monthly deductions. At the end of the special continuation period, sufficient premium to bring your net cash surrender balance to zero will be due. GUARANTEE PERIOD If you elect the Guaranteed Minimum Death Benefit option, the policy will not terminate during the guarantee period even if the net account value is zero except as provided below. When your policy is kept in force under this option, all riders will terminate. Each monthly guarantee period premium equals 1/12 of the guarantee period annual premium. The guarantee period annual premium is shown in the Schedule. We use this premium for each policy year until the effective date of a change in the stated death benefit. If there is a change, a new Schedule will show the applicable minimum guarantee period annual premium that applies to subsequent policy months. The guarantee period will expire on the policy anniversary nearest the younger insured's 100th birth date. The guarantee period will terminate prior to the guarantee period expiration date if, on any monthly processing date, the actual premiums paid (minus the amount of any partial withdrawals and any policy loan including accrued but unpaid interest) are less than the sum of the guarantee monthly premiums for each policy month starting with the first policy month to, and including, the policy month that begins on the current monthly processing date. The guarantee period will also terminate if your account value, on any monthly processing date, is not diversified. Diversification requires that no more than 35% of your net account value is invested in any one division, and that your net account value is invested in at least 5 divisions. You will satisfy these diversification requirements if: (i) you are participating in the automatic rebalancing feature defined in and governed by the policy prospectus in effect on the policy effective date and your automatic rebalancing allocations comply with the diversifications specified above; or (ii) you elect dollar cost averaging and direct the resulting transfers into at least four other divisions with no more than 35% of any transfer going to any one division. If, at the end of the guarantee period, the net account value of your policy is negative, your policy will terminate without value. The charge for this option is shown in the Schedule. Once the guarantee period has terminated, it cannot be reinstated. Form 15287-00 19 TERMINATION All coverage provided by this policy will end as of the earliest of: a) The date the policy is surrendered; b) The date of the second death; or c) The date the grace period ends without payment of the required premium. REINSTATEMENT The policy and its riders may be reinstated within five years after the beginning of the grace period. The reinstatement will be effective as of the monthly processing date on or next following the date we approve your written application. We will reinstate the policy and any riders if the following conditions are met: a) You have not surrendered the policy for its net cash surrender value; b) You submit evidence satisfactory to us that the insureds and those insured under any riders are still insurable according to our normal rules of underwriting for the applicable underwriting class for this type of policy; and c) We receive payment of the amount of premium sufficient to keep the policy and any riders in force from the beginning of the grace period to the end of the expired grace period and for 2 months after the date of reinstatement. We will let you know, at the time you request reinstatement, the amount of premium needed for this purpose. The surrender charge as of the date of reinstatement will equal the surrender charge as of the beginning of the grace period. We will reinstate any policy loan, with accrued loan interest to the end of the grace period, which existed when coverage ended. Upon reinstatement, the net premium received minus past due amounts will be allocated to the portfolios of the Separate Account and the Guaranteed Interest Division according to the premium allocation percentages in effect at the start of the grace period or as directed by you in writing at the time of reinstatement. DEFERRAL OF PAYMENT Requests for transfers, withdrawals, policy loans or payment of proceeds for a full surrender will be mailed within 7 days of receipt of the request in a form acceptable to us. However, we may postpone the processing of any such Separate Account transactions for any of the following reasons: a) The New York Stock Exchange (NYSE) is closed, other than customary weekend and holiday closings. b) Trading on the NYSE is restricted by the Securities and Exchange Commission (SEC). c) The SEC declares that an emergency exists as a result of which disposal of securities in the Separate Account is not reasonably practicable to determine your account value in the divisions. d) A governmental body having jurisdiction over the Separate Account by order permits such suspension. Rules and regulations of the SEC, if any, are applicable and will govern as to whether conditions described in (b), (c), or (d) exist. Form 15287-00 20 Death proceeds will be paid within 7 days of determination of the proceeds and are not subject to deferment. We may defer for up to 6 months payment of any surrender proceeds, withdrawal or loan amounts from the Guaranteed Interest Division. GENERAL POLICY PROVISIONS THE POLICY The policy, including the original application and applications for any increases, decreases, riders, endorsements, any Schedule pages, and any reinstatement applications make up the entire contract between you and us. A copy of the original application will be attached to the policy at issue or at delivery. A copy of any application as well as a new Schedule will be attached or furnished to you for attachment to the policy at the time of any change in coverage. In the absence of fraud, all statements made in any application will be considered representations and not warranties. No statement will be used to deny a claim unless it is in an application. CONTRACT CHANGES All changes made by us must be signed by our president or an officer and by our secretary or assistant secretary. No other persons can change any of this policy's terms and conditions. PROCEDURES We must receive any election, designation, assignment or any other change request you make in writing, except those specified on the application. It must be in a form acceptable to us. We may require a return of the policy for any change or for a full surrender. We are not liable for any action we take before we receive and record the written request at our Customer Service Center. In the event of the death of an insured, please let us or our agent know as soon as possible. This includes the first and second death. Upon notification to us or our agent, instructions will be sent to you or the beneficiary immediately. We may require proof of age and a certified copy of the death certificate. We may require the beneficiary and next of kin to sign authorizations as part of due proof. These authorization forms allow us to obtain information about the decedent, including, but not limited to, medical records of physicians and hospitals used by the decedent. Settlement will be made upon receipt of due proof of death. OWNERSHIP The original owner is the person or entity named as the owner in the application. You, as the owner, can exercise all rights and receive the benefits until the second death. This includes the right to change the owner, beneficiaries, and methods for the payment of proceeds. All rights of the owner are subject to the rights of any assignee and any irrevocable beneficiary. You may name a new owner by sending written notice to us. The effective date of the change to the new owner will be the date you sign the notice. The change will not affect any payment made or action taken by us before recording the change at our Customer Service Center. Form 15287-00 21 BENEFICIARIES The primary beneficiary surviving the second death will receive any death proceeds which become payable. Surviving contingent beneficiaries are paid death proceeds only if no primary beneficiary has survived the second death. If more than one beneficiary in a class survives the second death, they will share the death proceeds equally, unless your designation provides otherwise. If there is no designated beneficiary surviving, you or your estate will be paid the death proceeds. The beneficiary designation will be on file with us or at a location designated by us. Until the second death, you may name a new beneficiary. The effective date of the change will be the date the request was signed. We will pay proceeds to the most recent beneficiary designation on file. We will not be subject to multiple payments. EXCHANGE RIGHT If, for any reason within the first 2 policy years you want to exchange this policy for a policy in which values do not vary with the investment experience of the Separate Account, we will exchange this policy. The exchange will be implemented by transferring your account value in all the portfolios of the Separate Account to the Guaranteed Interest Division and by removing your future right to choose to allocate funds to the portfolios of the Separate Account. This transfer will not be subject to the excess transfer charge. We will require a return of this policy before this change will be processed. POLICY SPLIT This benefit is available unless any segment rating on either insured is higher than 3.0 times the standard premium class. Any rating is shown on the Schedule. If this benefit is available, you may exchange this policy for two individual policies, upon the occurrence of at least one of the contingent events listed below. The exchange must be to two single whole life or flexible premium universal life policies of the kind made available by us for exchange. One policy will be on Insured #1 and the other policy will be on Insured #2. No evidence of insurability will be required. On the effective date of the exchange, you must split the available death benefit provided by this policy between the two single life policies. The maximum you may allocate to each single life policy is 50% of the available death benefit. The sum of the face amounts of two single life policies cannot exceed the available death benefit; however, there is no requirement that the maximum available amount on each life be used. The available death benefit is the amount of base death benefit plus any term insurance provided by the Adjustable Term Insurance Rider on the effective date of the exchange. The policy split may be exercised upon the occurrence of any of the following contingent events: a) Three months following the effective date of a final divorce decree with respect to the marriage of the two insureds. b) The effective date of a change to Federal Estate Tax Law which results in either: 1) Removal of the unlimited marital deduction provision; or 2) A reduction in the current maximum Federal Estate Tax of at least 50% after the policy effective date. c) The effective date of a dissolution of any business which is being conducted or owned by the two insureds covered under this policy at the time this policy is issued. You must send us written notice of your election to split the policy within 180 days following the occurrence of any contingent event. Your notice must provide satisfactory evidence to us that the Form 15287-00 22 contingent event has occurred. The insurance under the two individual policies will start on the effective date of the exchange only if both insureds are alive on the effective date of the exchange. The new policies will not provide any insurance until such time. If either insured is not alive on that date, the exchange shall be void. The effective date of the exchange will be the first monthly processing date after we have approved the exchange. The premiums under each new policy will be based on each insured's attained age, gender and premium class at the time of the split. Premiums will be due for each new policy in accordance with the terms of the new policy as of the effective date of the exchange. The surrender value of the old policy will be allocated to the new policies in the same proportion that the face amount was divided between the two policies unless we agree to a different allocation. Such allocation will be made to each new policy on the effective date of the exchange. If such allocation would cause an increase in the face amount of the new policy, we reserve the right to limit the amount of surrender value that may be applied to the new policies. Any remaining surrender value will be paid to you in cash. Any loan on the policy will be divided and transferred to each new policy in the same proportion as the cash value is apportioned. Any remaining outstanding loan balance must be paid in cash prior to the effective date of the exchange. Any assignee must agree to the exchange. Any assignment of the policy will apply to each new policy. If there is a Single Life Term Insurance Rider on the original policy on the date of the exchange, you may have a term insurance rider insuring that life on the new policy if such a rider is available on the new policy. The amount of the insurance cannot be more than the amount under the Single Life Term Insurance Rider on that life under the original policy. Any other riders on the new policies are subject to availability and satisfactory evidence of insurability. This policy provision ends on the earliest of: a) The policy anniversary nearest the younger insured's 100th birth date; or b) The death of the first of the two insureds; or c) The expiration of the grace period of the policy; or d) The termination or surrender of the policy. COLLATERAL ASSIGNMENT You may assign this policy as collateral security by written notice to us. Once it is recorded with us, the rights of the owner and beneficiary are subject to the assignment. It is your responsibility to make sure the assignment is valid. INCONTESTABILITY After this policy has been in force while both insureds are alive for 2 years from the policy date, we will not contest the statements in the application attached at issue. After this policy has been in force while both insureds are alive for 2 years from the effective date of any new segment or from the effective date of an increase in any other benefit, we will not contest the statements in the application for the new segment or other increase. After this policy has been in force while both insureds are alive for 2 years from the effective date of any reinstatement, we will not contest the statements in the application for such reinstatement. Form 15287-00 23 MISSTATEMENT OF AGE OR GENDER If either insured's age or gender has been misstated, the death benefit will be adjusted. The death benefit will be that which the cost of insurance, which was deducted from your account value on the last monthly processing date prior to the second death of the two insureds, would have purchased for the insured's correct age and gender. If the death benefit adjustment is made prior to the second death, the adjusted benefit will be to an equitable amount determined by us. This adjustment will reflect the death benefit for the correct age or gender. SUICIDE EXCLUSION If either insured commits suicide, while sane or insane, within 2 years of the policy date, we will make a limited payment to the beneficiary. We will pay in one sum the amount of all premiums paid to us during that time, minus any outstanding policy loan (including accrued but unpaid interest) and partial withdrawals. Coverage under the policy and all riders will then terminate. If either insured commits suicide, while sane or insane, within 2 years of the effective date of a new segment or of an increase in any other benefit, we will make a limited payment to the beneficiary for the new segment or other increase. This payment will equal the cost of insurance and any applicable monthly expense charges deducted for such increase. Coverage under that segment will then terminate. PERIODIC REPORTS We will send you, without charge, at least once each year a report that shows the current account value, net cash surrender value and premiums paid since the last report. The report will also show the allocation of your account value as of the date of the report and the amounts added to or deducted from your account value of each division since the last report. The report will include any other information that may be currently required by the insurance supervisory official of the jurisdiction in which this policy is delivered. ILLUSTRATION OF BENEFITS AND VALUES We will send you, upon written request, a hypothetical illustration of future death benefits and account values. This illustration will include the information as required by the laws or regulations where this policy is delivered. If you request more than one illustration during a policy year, we reserve the right to charge a reasonable fee for each additional illustration. The maximum amount of this fee is shown in the Schedule. NONPARTICIPATING The policy does not participate in our surplus earnings. CUSTOMER SERVICE CENTER Our Customer Service Center is at the address shown in the Schedule. Unless you are otherwise notified: a) All requests and payments should be sent to us at our Customer Service Center; and b) All transactions are effective as of the valuation date the required information is received at our Customer Service Center. Form 15287-00 24 PAYOUTS OTHER THAN AS ONE SUM ELECTION Before the second death, you may elect to have the beneficiary receive the proceeds other than in one sum. If you have not made an election, the beneficiary may do so within 60 days after we receive due proof satisfactory to us of the second death. You may also elect to take the net cash surrender value of the policy upon its surrender other than in one sum. Satisfactory written request must be received at our Customer Service Center before payment can be made. A payee that is not a natural person may not be named without our consent. The various methods of settlement are described in the following Payout Options section. PAYOUT OPTIONS OPTION I. PAYOUTS FOR A DESIGNATED PERIOD. Payouts will be made in annual, semi-annual, quarterly or monthly installments per year as elected for a designated period, which may be 5 to 30 years. The installment dollar amounts will be equal except for any excess interest as described below. The amount of the first monthly payout for each $1,000 of account value applied is shown in Settlement Option Table I. OPTION II. LIFE INCOME WITH PAYOUTS FOR A DESIGNATED PERIOD. Payouts will be made in annual, semi-annual, quarterly or monthly installments per year throughout the payee's lifetime, or if longer, for a period of 5, 10, 15 or 20 years as elected. The installment dollar amounts will be equal except for any excess interest as described below. The amount of the first monthly payout for each $1,000 of account value applied is shown in Settlement Option Table II. This option is available only for ages shown in the table. Payouts for Payout Option II will be determined by using the 1983 Individual Annuity Mortality Table for the appropriate Gender at 3 1/2% interest. OPTION III. HOLD AT INTEREST. Amounts may be left on deposit with us to be paid upon the death of the payee or at any earlier date elected. Interest on any unpaid balance will be at the rate declared by us or at any higher rate required by law. Interest may be accumulated or paid in 1, 2, 4, or 12 installments per year, as elected. Money may not be left on deposit for more than 30 years. OPTION IV. PAYOUTS OF A DESIGNATED AMOUNT. Payouts will be made until proceeds, together with interest which will be at the rate declared by us or at any higher rate required by law, are exhausted. Payouts will be made in annual, semi-annual, quarterly or monthly equal installments per year, as elected. OPTION V. OTHER. Settlement may be made in any other manner as agreed upon in writing between you (or the beneficiary) and us. CHANGE AND WITHDRAWAL You may change an election at any time before the second death. If you have given the beneficiary the right to make changes or withdrawals, or if the beneficiary has elected the option, the beneficiary (as primary payee) may take the actions below. a) Changes may be made from Payout Options I, III, and IV to another option. b) Full withdrawals may be made under Payout Option III or IV. Partial withdrawals of not less than $300 may be made under Payout Option III. Form 15287-00 25 c) Remaining installments under Payout Option I may be commuted at 3 1/2% interest and received in one sum. d) Changes in any contingent payee designation may be made. A written request must be sent to our Customer Service Center in writing to make a change or withdrawal. We also may require that you send in the supplementary policy. We may defer payment of commuted and withdrawable amounts for a period up to 6 months. EXCESS INTEREST If we declare that Payout Options are to be credited with an interest rate above that guaranteed, it will apply to Payout Options I, II, III, and IV. The crediting of excess interest for one period does not guarantee the higher rate for other periods. Any declared interest rate will be in effect for at least 12 months. MINIMUM AMOUNTS The minimum amount which may be applied under any option is $2,000. If the payments to the payee are ever less than $20, we may change the frequency of payments so as to result in payments of at least that amount. SUPPLEMENTARY POLICY When a payout option becomes effective, the policy will be surrendered in exchange for a supplementary policy. It will provide for the manner of settlement and rights of the payees. The supplementary policy's effective date will be the date of the second death or the date of other settlement. The first payment under Options I, II, and IV will be payable as of the effective date. The first interest payment under Option III will be made as of the end of the interest payment period elected. Subsequent payments will be made in accordance with the frequency of payment elected. The supplementary policy may not be assigned or payments made to another without our consent. INCOME PROTECTION Unless otherwise provided in the election, a payee does not have the right to commute, transfer or encumber amounts held or installments to become payable. To the extent provided by law, the proceeds, amount retained, and installments are not subject to any payee's debts, policies, or engagements. DEATH OF PRIMARY PAYEE Upon the primary payee's death, any payments certain under Option I or II, interest payments under Option III, or payments under Option IV will be continued to the contingent payee; or, amounts may be released in one sum if permitted by the policy. The final payee will be the estate of the last to die of the primary payee and any contingent payee. PAYMENTS OTHER THAN MONTHLY The tables that follow show monthly installments for Options I and II. To arrive at annual, semiannual, or quarterly payments, multiply the appropriate figures by 11.813, 5.957 or 2.991 respectively. Factors for other periods certain or for other options that may be provided by mutual agreement will be provided upon reasonable request. Form 15287-00 26 THIS IS A NON-PARTICIPATING POLICY THIS POLICY IS A LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY THIS POLICY INCLUDES PERSISTENCY BONUS. DEATH BENEFITS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE. THESE VALUES MAY INCREASE OR DECREASE BASED ON INVESTMENT EXPERIENCE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. DEATH BENEFITS ARE PAYABLE BY US UPON THE SECOND DEATH OF THE TWO INSUREDS. THERE IS NO MATURITY DATE. FLEXIBLE PREMIUMS ARE PAYABLE BY YOU DURING THE LIFETIME OF EITHER INSURED UNTIL THE POLICY ANNIVERSARY NEAREST THE YOUNGER INSURED'S 100TH BIRTH DATE. TO OBTAIN INFORMATION OR MAKE A COMPLAINT, CONTACT SOUTHLAND LIFE INSURANCE COMPANY Customer Service Center P. O. Box 173789 Denver, Colorado 80217-3789 Toll Free Number: 1(800)224-3035 SOUTHLAND LIFE INSURANCE COMPANY A Stock Company Form 15287-00 EX-1.A.5(M) 2 sltir1.txt SINGLE LIFE TERM RIDER #1 Exhibit 1.A.5(m) SINGLE LIFE TERM INSURANCE RIDER (THIS RIDER COVERS THE LIFE OF INSURED #1 ONLY.) This rider is a part of the policy to which it is attached if the rider is shown in the Schedule. This rider must be read with all policy provisions. This rider does not participate in our surplus earnings. The insured under this rider is Insured #1 listed in the Schedule. This rider has no loan value. There is no surrender charge applicable to this rider. The rider effective date is the policy date or, if added later, the monthly processing date on or next following the date your application for this rider is approved by us. The owner of this policy is the owner of this rider. THE DEATH BENEFIT. Subject to this rider's terms, we will pay the term death benefit in force on the date of Insured #1's death. We will pay the proceeds to the beneficiary. The term death benefit amount for this rider is shown in the Schedule attached to the policy. The term death benefit may change at the beginning of each policy year. COST OF INSURANCE. The cost of insurance for this rider is determined on a monthly basis. The cost is added to the policy's monthly deduction from the account value as of each monthly processing date until this rider terminates. The cost of insurance rates will be determined by us from time to time. They will be based on the issue age, gender and premium class of the insured as well as the duration since the rider effective date. The cost of insurance for this rider is calculated as the monthly cost of insurance rate multiplied by the death benefit (in thousands) for this rider. The monthly guaranteed maximum cost of insurance rates per $1,000 for this rider are shown in the Schedule on the applicable table of guaranteed rates attached to your policy. INCONTESTABILITY. After this rider has been in force while the insured is alive for two years from the policy date, we will not contest the statements in the application for this rider attached at the time this rider is issued. After this rider has been in force while the insured is alive for two years from the effective date of any increase in the amount of insurance, we will not contest the statements in the application for such increase. After this rider has been in force while the insured is alive for two years from the effective date of any reinstatement of this rider, we will not contest the statements in the application for such reinstatement of this rider. SUICIDE EXCLUSION. If the policy terminates for suicide, this rider will then terminate without value. If the insured commits suicide, while sane or insane, within two years of the rider effective date and the policy is not terminated due to this suicide, we will terminate this rider and make a limited payment to the beneficiary. We will pay in one sum the amount of the cost of insurance for this rider which was deducted from the policy value. This rider will then terminate. If the insured commits suicide within 2 years of the effective date of an increase and the policy is not terminated due to this suicide, we will terminate the increase and pay the cost of insurance associated with the increase. MISSTATEMENT OF AGE OR GENDER. If the insured's age or gender has been misstated, any amount payable by us will be adjusted. The death benefit will be that which the cost of insurance that was deducted from the policy value on the last monthly processing date prior to the death of Insured #1 would have purchased for the insured's correct age or gender. If the death benefit adjustment is made prior to the death of Insured #1, the adjusted death benefit will be to an equitable amount determined by us. The adjustment will reflect the death benefit for the correct age or gender. 152XX-00 CHANGE IN AMOUNT OF COVERAGE. On any policy anniversary after the first rider anniversary, the insurance coverage under this rider may be changed. The coverage may be increased or decreased by sending a written request to our Customer Service Center. You may increase or decrease the coverage only once each policy year. Any change in coverage may not be for an amount less than $1,000. Such change is subject to the following conditions: a) Any requested decrease in the rider death benefit is subject to our approval. Our approval may be conditioned on eliminating any future scheduled increases to the rider death benefit. b) The amount of coverage under this rider in effect after any requested decrease may not be less than $1,000. c) Any request for an increase must be applied for on a supplemental application. The increase is subject to evidence satisfactory to us that the insured is still insurable according to our normal rules of underwriting for the applicable premium class for this type of policy. An increase will be subject to the existence of sufficient net cash surrender value to cover the monthly deduction for the next two months. d) For any increase or addition to coverage, the effective date will be the monthly processing date that falls on or next follows the date the supplemental application is approved by us. For any decrease in coverage, the effective date will be the monthly processing date that falls on or next follows receipt of the written request to reduce coverage. For any change in coverage, a supplemental Schedule page will be issued. DECREASE IN STATED DEATH BENEFIT. Any requested decrease in the stated death benefit in the policy shall eliminate any future scheduled increases in the rider death benefit. We may choose not to eliminate these increases upon submission of evidence satisfactory to us that the insured is still insurable according to our normal rules of underwriting for the applicable premium class for this rider. TERMINATION. This rider will terminate on the earliest of the following dates: a) Expiration of the grace period of the policy. b) Termination or surrender of the policy. c) Receipt by us of a written request from you to cancel this rider on any monthly processing date. d) Policy anniversary nearest the insured's 100th birth date. e) When your policy is kept in force under the Guaranteed Minimum Death Benefit option. Any deduction for the cost of insurance after termination of this rider will not be considered a reinstatement of this rider nor a waiver by us of the termination. Any such deduction will be credited to the policy value of the policy as of the date of the deduction. REINSTATEMENT. If you reinstate your policy under the reinstatement provision of the policy, this rider will be reinstated. Signed for the company at Denver, Colorado SOUTHLAND LIFE INSURANCE COMPANY /s/ Gary W. Waggoner SECRETARY 152XX-00 Page 2 EX-1.A.5(N) 3 sltir2.txt SINGLE LIFE TERM RIDER #2 Exhibit 1.A.5(n) SINGLE LIFE TERM INSURANCE RIDER (THIS RIDER COVERS THE LIFE OF INSURED #2 ONLY.) This rider is a part of the policy to which it is attached if the rider is shown in the Schedule. This rider must be read with all policy provisions. This rider does not participate in our surplus earnings. The insured under this rider is Insured #2 listed in the Schedule. This rider has no loan value. There is no surrender charge applicable to this rider. The rider effective date is the policy date or, if added later, the monthly processing date on or next following the date your application for this rider is approved by us. The owner of this policy is the owner of this rider. THE DEATH BENEFIT. Subject to this rider's terms, we will pay the term death benefit in force on the date of Insured #2's death. We will pay the proceeds to the beneficiary. The term death benefit amount for this rider is shown in the Schedule attached to the policy. The term death benefit may change at the beginning of each policy year. COST OF INSURANCE. The cost of insurance for this rider is determined on a monthly basis. The cost is added to the policy's monthly deduction from the account value as of each monthly processing date until this rider terminates. The cost of insurance rates will be determined by us from time to time. They will be based on the issue age, gender and premium class of the insured as well as the duration since the rider effective date. The cost of insurance for this rider is calculated as the monthly cost of insurance rate multiplied by the death benefit (in thousands) for this rider. The monthly guaranteed maximum cost of insurance rates per $1,000 for this rider are shown in the Schedule on the applicable table of guaranteed rates attached to your policy. INCONTESTABILITY. After this rider has been in force while the insured is alive for two years from the policy date, we will not contest the statements in the application for this rider attached at the time this rider is issued. After this rider has been in force while the insured is alive for two years from the effective date of any increase in the amount of insurance, we will not contest the statements in the application for such increase. After this rider has been in force while the insured is alive for two years from the effective date of any reinstatement of this rider, we will not contest the statements in the application for such reinstatement of this rider. SUICIDE EXCLUSION. If the policy terminates for suicide, this rider will then terminate without value. If the insured commits suicide, while sane or insane, within two years of the rider effective date and the policy is not terminated due to this suicide, we will terminate this rider and make a limited payment to the beneficiary. We will pay in one sum the amount of the cost of insurance for this rider which was deducted from the policy value. This rider will then terminate. If the insured commits suicide within 2 years of the effective date of an increase and the policy is not terminated due to this suicide, we will terminate the increase and pay the cost of insurance associated with the increase. MISSTATEMENT OF AGE OR GENDER. If the insured's age or gender has been misstated, any amount payable by us will be adjusted. The death benefit will be that which the cost of insurance that was deducted from the policy value on the last monthly processing date prior to the death of Insured #2 would have purchased for the insured's correct age or gender. If the death benefit adjustment is made prior to the death of Insured #2, the adjusted death benefit will be to an equitable amount determined by us. The adjustment will reflect the death benefit for the correct age or gender. 152XX-00 CHANGE IN AMOUNT OF COVERAGE. On any policy anniversary after the first rider anniversary, the insurance coverage under this rider may be changed. The coverage may be increased or decreased by sending a written request to our Customer Service Center. You may increase or decrease the coverage only once each policy year. Any change in coverage may not be for an amount less than $1,000. Such change is subject to the following conditions: a) Any requested decrease in the rider death benefit is subject to our approval. Our approval may be conditioned on eliminating any future scheduled increases to the rider death benefit. b) The amount of coverage under this rider in effect after any requested decrease may not be less than $1,000. c) Any request for an increase must be applied for on a supplemental application. The increase is subject to evidence satisfactory to us that the insured is still insurable according to our normal rules of underwriting for the applicable premium class for this type of policy. An increase will be subject to the existence of sufficient net cash surrender value to cover the monthly deduction for the next two months. d) For any increase or addition to coverage, the effective date will be the monthly processing date that falls on or next follows the date the supplemental application is approved by us. For any decrease in coverage, the effective date will be the monthly processing date that falls on or next follows receipt of the written request to reduce coverage. For any change in coverage, a supplemental Schedule page will be issued. DECREASE IN STATED DEATH BENEFIT. Any requested decrease in the stated death benefit in the policy shall eliminate any future scheduled increases in the rider death benefit. We may choose not to eliminate these increases upon submission of evidence satisfactory to us that the insured is still insurable according to our normal rules of underwriting for the applicable premium class for this rider. TERMINATION. This rider will terminate on the earliest of the following dates: a) Expiration of the grace period of the policy. b) Termination or surrender of the policy. c) Receipt by us of a written request from you to cancel this rider on any monthly processing date. d) Policy anniversary nearest the insured's 100th birth date. e) When your policy is kept in force under the Guaranteed Minimum Death Benefit option. Any deduction for the cost of insurance after termination of this rider will not be considered a reinstatement of this rider nor a waiver by us of the termination. Any such deduction will be credited to the policy value of the policy as of the date of the deduction. REINSTATEMENT. If you reinstate your policy under the reinstatement provision of the policy, this rider will be reinstated. Signed for the company at Denver, Colorado SOUTHLAND LIFE INSURANCE COMPANY /s/ Gary W. Waggoner SECRETARY 152XX-00 Page 2 152XX-00 Page 3 EX-1.A.5(O) 4 atr.txt ADJUSTABLE TERM INSURANCE RIDER Exhibit 1.A.5(o) ADJUSTABLE TERM INSURANCE RIDER This rider is a part of the policy to which it is attached if this rider is shown in the Schedule. This rider must be read with all policy provisions. This rider does not participate in our surplus earnings. The insureds under this rider are Insured #1 and Insured #2 listed in the Schedule. This rider has no loan value. There is no surrender charge applicable to this rider. The rider effective date is the policy date or, if added later, the monthly processing date on or next following the date your application for this rider is approved by us. The owner of the policy is the owner of this rider. THE DEATH BENEFIT. Subject to this rider's terms, we will pay the term death benefit in force on the date of the second death of the two insureds. This benefit is payable to the beneficiary. The amount of term death benefit is the difference between the total death benefit and the base death benefit provided by the policy. Total death benefit depends on which death benefit option is in effect. Option 1: If option 1 is in effect, the total death benefit is the greater of a) The target death benefit; or b) The account value multiplied by the appropriate factor from the Death Benefit Factors shown in the Schedule. Option 2: If option 2 is in effect, the total death benefit is the greater of: a) The target death benefit plus the account value; or b) The account value multiplied by the appropriate factor from the Death Benefit Factors shown in the Schedule. In no event will the term death benefit be less than zero. It is also not increased or decreased by policy loan activity. In your application for this rider you may request a pattern of increasing or decreasing target death benefits. The actual target death benefit is subject to our approval. The target death benefit is shown in the Schedule attached to your policy. It may be a constant amount or it may change at the beginning of a policy year. The target death benefit may be reduced if there is a partial withdrawal. If a partial withdrawal reduces the stated death benefit, the target death benefit for the current year and all future years will be reduced by an amount equal to the reduction in the stated death benefit. You will receive a new Schedule reflecting the new target death benefit. See your policy for details. The stated death benefit is defined in your policy. Any requested decrease in the stated death benefit in the policy will eliminate any future scheduled increases in the target death benefit. We may choose not to eliminate these increases upon submission of evidence satisfactory to us that the insureds are still insurable according to our normal rules of underwriting for their current premium classes. COST OF INSURANCE. The cost of insurance for this rider is determined on a monthly basis. The cost is added to the policy's monthly deduction from the account value as of each monthly processing date until this rider terminates. The cost of insurance rates will be determined by us from time to time. They will be based on the issue ages, genders and premium classes of the insureds as well as the duration since the rider effective date. The cost of insurance for this rider is calculated as the monthly cost of insurance rate multiplied by the death benefit (in thousands) for this rider. The monthly guaranteed maximum cost of insurance rates per $1,000 for this rider are shown in the Schedule on the applicable table of guaranteed rates attached to your policy. 152XX-00 INCONTESTABILITY. After this rider has been in force while both insureds are alive for two years from the rider effective date, we will not contest the statements in the application for this rider attached at the time the rider is issued. After this rider has been in force while both insureds are alive for two years from the effective date of any increase in the amount of insurance, we will not contest the statements in the application for the increase. After this rider has been in force while both insureds are alive for two years from the effective date of any reinstatement of this rider, we will not contest the statements in the application for such reinstatement of this rider. SUICIDE EXCLUSION. If the policy terminates for suicide, this rider will then terminate without value. If either insured commits suicide, while sane or insane, within two years of the rider effective date and the policy is not terminated due to this suicide, we will terminate this rider and make a limited payment to the beneficiary for the rider. We will pay in one sum the amount of the cost of insurance for this rider which was deducted from the policy. If either insured commits suicide, while sane or insane, within two years of the effective date of an increase and the policy is not terminated due to this suicide, we will terminate the increase and pay the cost of insurance associated with the increase. MISSTATEMENT OF AGE OR GENDER. If either insured's age or gender has been misstated, the death benefit will be adjusted. The death benefit will be that which the cost of insurance which was deducted from the policy value on the last monthly processing date prior to the second death would have purchased for the insured's correct age or gender. If the death benefit adjustment is made prior to the second death, the adjusted benefit will be to an equitable amount determined by us. The adjustment will reflect the death benefit for the correct age or gender. CHANGE IN AMOUNT OF COVERAGE. On any policy anniversary after the first rider anniversary, the target death benefit under this rider may be changed. The target death benefit may be increased or decreased by sending a written request to our Customer Service Center. Any request for increased death benefits will automatically be an increase to the stated death benefit as well as to the target death benefit unless you specifically request an increase only to the target death benefit. You may increase or decrease the target death benefit only once each policy year. You may not increase insurance coverage provided by this rider after attained joint equivalent age 85. Any change in coverage may not be for an amount less than $1,000. Such change is subject to the following conditions: a) Any requested decrease in target death benefit is subject to our approval. Our approval may be conditioned on eliminating any future increases to the target death benefit that are shown in the Schedule. b) Any request for an increase must be applied for on a supplemental application. The increase is subject to evidence satisfactory to us that the insureds are still insurable according to our normal rules of underwriting for their current premium classes for this type of rider. If there is no change in premium class, the increase will be processed. c) For any increase or addition to coverage, the effective date will be the monthly processing date that falls on or next follows the date the supplemental application is approved by us. For any decrease in coverage, the effective date will be the monthly processing date that falls on or next follows receipt of the written request to reduce coverage. 152xx-00 Page 2 d) Any decrease in the total death benefit will first reduce adjustable term insurance before stated death benefit is reduced. For any change in coverage, a supplemental Schedule will be issued. TERMINATION. This rider will terminate on the earliest of the following dates: a) Expiration of the grace period of the policy. b) Termination or surrender of the policy. c) Receipt by us of a written request from you to cancel this rider on any monthly processing date. d) Policy anniversary nearest the younger insured's 100th birth date. e) When your policy is kept in force under the Guaranteed Minimum Death Benefit option. Any deduction for the cost of insurance after termination of this rider will not be considered a reinstatement of this rider nor a waiver by us of the termination. Any such deduction will be credited to the account value of the policy as of the date of the deduction. REINSTATEMENT. If you reinstate your policy under the Reinstatement provision in the policy, this rider will be reinstated. Signed for the company at Denver, Colorado SOUTHLAND LIFE INSURANCE COMPANY /s/ Gary W. Waggoner SECRETARY 152xx-00 Page 3 EX-1.A.8(H) 5 alger.txt ALGER SERVICE AGREEMENT Exhibit 1.A.(8)(h) SERVICE AGREEMENT This Agreement is made as of the 1st day of September, 2000 by and between Southland Life Insurance Company ("Southland") and Fred Alger Management, Inc., a New York corporation ("Adviser") (collectively, the "Parties"). W I T N E S S E T H: WHEREAS, the Adviser serves as the investment adviser of The Alger American Fund, a Massachusetts business trust (the "Fund"), which currently consists of six separate series (each, a "Portfolio"); and WHEREAS, Southland has entered into an agreement, dated August 22, 1995, with the Fund and Adviser (the "Participation Agreement") pursuant to which the Fund will make shares of each Portfolio listed on Schedule A thereto available to certain variable life insurance and variable annuity contracts offered by Southland through certain separate accounts (the "Separate Accounts") at net asset value and with no sales charges, subject to the terms of the Participation Agreement; and WHEREAS, the Participation Agreement provides that the Fund will bear the costs of preparing, filing with the Securities and Exchange Commission, printing or duplicating and mailing the Fund's prospectus, statement of additional information and any amendments or supplements thereto, periodic reports to shareholders, Fund proxy material and other shareholder communications (collectively, the "Fund Materials") required by law to be sent to owners of Contracts ("Contract owners") who have allocated any Contract value to a Portfolio; and WHEREAS, the Participation Agreement provides that the Adviser, at its expense, will provide Southland with camera ready copies or copies suitable for duplication of all Fund Materials with respect to prospective Variable Contract owners of Southland; and WHEREAS, the Participation Agreement makes no provision for which party shall incur various administrative expenses in connection with the servicing of Contract owners who have allocated Contract value to a portfolio, including, but not limited to, responding to various Contract owner inquiries regarding a Portfolio; and WHEREAS, the Parties hereto wish to allocate the expenses in a manner that is fair and equitable, and consistent with the best interests of Contract owners; and WHEREAS, the Parties hereto wish to establish a means for allocating the expenses that does not entail the expense and inconvenience of separately identifying and accounting for each item of Fund expense; 1 NOW THEREFORE, in consideration of the mutual benefits and promises contained herein, the Parties hereto agree as follows: I. SERVICES PROVIDED: Southland agrees to provide services to the Adviser including the following: a) responding to inquiries from Southland Contract owners using one or more of the Portfolios as an investment vehicle regarding the services performed by Southland as they relate to the Fund or its Portfolios; b) providing information to the Adviser and to Contract owners with respect to shares attributable to Contract owner accounts; c) printing and mailing of shareholder communications from the Fund as may be required pursuant to Paragraph 4 of the Participation Agreement; d) communication directly with Contract owners concerning the Fund's operations; e) providing such similar services as Adviser may reasonably request to the extent permitted or required under applicable statutes, rules and regulations. II. EXPENSE ALLOCATIONS: Subject to Section III hereof, Southland or its affiliates shall initially bear the costs of the following: a) printing and distributing all Fund Materials to be distributed to prospective Contract owners; b) printing and distributing all sales literature or promotional material developed by Southland or its affiliates and relating to the Contracts; c) servicing Contract owners who have allocated Contract value to a Portfolio, which servicing shall include, but is not limited to, the items listed in Paragraph I of this Agreement. 2 III. PAYMENT OF EXPENSES: a) The Adviser shall pay to Southland a quarterly fee equal to a percentage of the average daily net assets of the Portfolio attributable to Contracts, at the annual rate of .10% (hereinafter, the "Quarterly Fee"), in connection with the expenses incurred by Southland under Section II hereof. The payment of the Quarterly Fee shall commence at the end of the first calendar quarter in which Contract value has been allocated to a Portfolio. 2 b) From time to time, the Parties hereto shall review the Quarterly Fee to determine whether it reasonably approximates the incurred and anticipated costs, over time, of Southland in connection with its duties hereunder. The Parties agree to negotiate in good faith any change to the Quarterly Fee proposed by a Party in good faith. c) This Agreement shall not modify any of the provisions of Paragraph 4 of the Participation Agreement, but shall supplement those provisions. IV. TERM OF AGREEMENT: Any Party may terminate this Agreement, without penalty, on 60 days' written notice to the other Parties. Unless so terminated, this Agreement shall continue in effect for so long as the Adviser or its successor(s) in interest, or any affiliate thereof, continues to perform in a similar capacity for the Fund, and for so long as any Contract value or any monies attributable to Southland is allocated to a Portfolio. V. INDEMNIFICATION: a) Southland agrees to indemnify and hold harmless the Adviser and its officers and directors, from any and all loss, liability and expense resulting from the gross negligence or willful wrongful act of Southland under this Agreement, except to the extent such loss, liability or expense is the result of the willful misfeasance, bad faith or gross negligence of the Adviser in the performance of its duties, or by reason of the reckless disregard of its obligations and duties under this Agreement. b) Adviser agrees to indemnify and hold harmless Southland and its officers and directors from any and all loss, liability and expense resulting from the gross negligence or willful wrongful act of Adviser under this Agreement, except to the extent such loss, liability or expense is the result of the willful misfeasance, bad faith or gross negligence of Southland in the performance of its duties, or by reason of the reckless disregard of its obligations and duties under this Agreement VI. NOTICES: Notices and communications required or permitted hereby will be given to the following persons at the following addresses and facsimile numbers, or such other persons, addresses or facsimile numbers as the Party receiving such notices or communications may subsequently direct in writing: Fred Alger Management, Inc. 75 Maiden Lane New York, N.Y. 10038 Attn: Gregory S. Duch FAX: (201) 434-1459 3 Southland Life Insurance Company 1290 Broadway Denver, Colorado 80203-5699 Attn: Variable Attorney, Legal Department FAX: (303) 860-2134 VII. APPLICABLE LAW: Except insofar as the Investment Company Act of 1940 or other federal laws and regulations may be controlling, this Agreement will be construed and the provisions hereof interpreted under and in accordance with New York law, without regard for that state's principles of conflict of laws. VIII. EXECUTION IN COUNTERPARTS: This Agreement may be executed simultaneously in two or more counterparts, each of which taken together will constitute one and the same instrument. IX. SEVERABILITY: If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby. X. RIGHTS CUMULATIVE: The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, that the Parties are entitled to under federal and state laws. XI. HEADINGS: The headings used in this Agreement are for purposes of reference only and shall not limit or define the meaning of the provisions of this Agreement. 4 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers signing below. FRED ALGER MANAGEMENT, INC. SOUTHLAND INSURANCE COMPANY By: /s/ Gregory S. Duch By: /s/ James L. Livingston, Jr. --------------------------------- ------------------------------- Name: Gregory S. Duch Name: James L. Livingston, Jr. --------------------------------- ------------------------------- Title: Executive Vice President Title: Executive Vice President --------------------------------- ------------------------------- 5 EX-1.A.10(A) 6 applicat.txt SURVIVOR DIMENSIONS APPLICATION Exhibit 1.A.(10)(a) Variable Universal Life Insurance Application [photograph] [logo of Southland Life] 20-784 (4-00) INSTRUCTIONS: The fastest way to have new business issued is for you, as the Agent, to fill out the application completely and legibly. Follow the instructions below carefully. FOR ALL APPLICATIONS: o Use black ink. o Do not use dashes, ditto marks, or the initials NA. o Have the proposed insured initial all changes. Do not use correction fluid for corrections. o Obtain and attach special state forms such as replacement, disclosure, or other compliance forms before the policy is issued. o Detach and leave the Notice under the Fair Credit Reporting Act, Notice Regarding the Medical Information Bureau, and Notice of Insurance Information Practices with the applicant. o Complete the Conditional Receipt only when money is accepted with the application. o Southland Life Insurance Company will not accept an agent or agency's personal check, cashiers check or money order as premium payments. SIGNATURES REQUIRED: PAGE 8 AND 10 o Your signature is required on both pages 8 and 10. o The signature of the proper owner/applicant is required. o The signature of the parent or legal guardian is required if proposed insured is under age 15. o Have all applications signed in your presence. * ALL SIGNATURES MUST BE ON APPLICATION WHEN SUBMITTED APPLICATION - PART ONE SECTIONS A AND E: INSURED INFORMATION o The names of the proposed insureds will appear in the policy as shown in these sections. o Carefully specify Jr., Sr., or I, II, III etc. as required. o The age of the applicant always refers to the AGE NEAREST BIRTHDAY. SECTIONS C AND F: BENEFICIARY INFORMATION o The full name and relationship of the beneficiary to the insured is required. o USE REMARKS-SECTION 0 to explain the interest of the beneficiary if other than the spouse or a close family member. o If the beneficiary is a trust, include the name of the trustee, name of the trust, and the date of the trust. APPLICATION - PART TWO HEALTH STATEMENT: o Complete on ALL applications for ALL proposed insureds (include family members if application is for Children's Rider) even in cases where medically examined. o Give an explanation for all "Yes" answers. Include complete details such as the nature of the condition, date of onset, treatment and medication recommended, and the attending physician's full name, address, and zip code. o Always include medical number for Kaiser, VA, etc. o Clearly identify the proposed insured to whom the medical information pertains. o Indicate if the physician requires prepayment before release of medical records. o If medical examination is required, provide the proposed insured a medical examination form and indicate in item 5 of the AGENT'S CERTIFICATION the medical tests or requirements ordered. AGENT'S CERTIFICATION: o Indicate request for back-dating, etc. in the SPECIAL REQUEST SECTION. Policies are dated from the 1st to the 28th of the month. Policies may be back-dated one month prior to the date of the application if allowed by state regulation. o Properly complete the AGENT PRODUCTION INFORMATION SECTION. 20-784 (4-00) PART ONE OF VARIABLE LIFE APPLICATION SOUTHLAND LIFE INSURANCE COMPANY Customer Service Center P. 0. Box 173789 Denver, CO 80217-3789 1-800-224-3035 SECTION A - PRIMARY INSURED Name:______________________________________________________ SSN:___-__-____ Last Full First Middle Address: _______________________________________________________________________ Street City County State Zip Code Years at Address: ______ (If less than two years, Home Phone: (___)_________ show former address in SECTION O) |_| Male |_| Married Date of Birth: ____/____/____ Age:______ (Age nearest birthday) |_| Female |_| Single Driver's License Number and State:____________________ Place of Birth: ________________________________________________________________ Employer's Name:________________________________________________________________ Employer's Address: ____________________________________________________________ Street City County State Zip Code Years Employed: _____ (If less than two years, Business Phone:(___)________ show former occupation in REMARKS) All Occupations and Duties:_____________________________________________________ Primary Insured's Income: $_________ Primary Insured's Net Worth: $___________ ADDITIONAL INFORMATION FOR JUVENILE - COMPLETE THE FOLLOWING IF PRIMARY INSURED IS UNDER AGE 15. Father - In force $ __________ Applied for $ ___________ Mother - In force $ __________ Applied for $ ___________ - -------------------------------------------------------------------------------- SECTION B - POLICY AND RIDER BENEFITS Risk Class: |_| Preferred |_| Non-Tobacco |_| Standard Plan of Insurance:__________________ Stated Death Benefit $__________________ Death Benefit Type: |_| A (Level Death Benefit) |_| B (Increasing Death Benefit) |_| Check here if insurance is for PENSION or similar tax-qualified ERISA plan Riders |_| Adjustable Term Rider $____________ |_| Other (Specify)__________________ (Attach Schedule of |_| Children's Rider - Target Death Benefits) Number of Units ________________ |_| Waiver of Cost Insurance |_| Additional Insured |_| Waiver of Specified Premium $______ Rider: $________________________ |_| Accidental Death $_________________ Risk Class: |_| Guaranteed Insurability |_| Preferred Option $__________________________ |_| Non-Tobacco |_| Guaranteed Minimum Death Benefit: |_| Standard |_| Later of 10 Years or Age 65 |_| Lifetime |_| Change of Insured Option Complete "Additional Adult Insured or Payor" Section E for each additional adult insured. - -------------------------------------------------------------------------------- SECTION C - BENEFICIARY-- SHOW RELATIONSHIP OF EACH BENEFICIARY TO PRIMARY INSURED. IF BENEFICIARY IS A TRUST, PLEASE GIVE NAME AND DATE OF TRUST. Primary: ____________________ Relationship to Primary Insured:________________ ____________________ Contingent:__________________ Relationship to Primary Insured:________________ - -------------------------------------------------------------------------------- SECTION D - OWNER/APPLICANT |_| SSN Name _________________________________________________ |_| Tax I.D.:___________ Last Full First Middle Address: _______________________________________________________________________ Street City County State Zip Code Date of Birth: ____/____/____ Age: __________ |_| Male |_| Female Relationship to Primary Insured: __________________ Home Phone: (___)________ FLORIDA RESIDENTS ONLY: This section is to be completed only if the owner wishes to designate a second person to receive any lapse notice sent after the owner reaches age 64. (May be left blank.) Name:______________________________________________________ SSN:___-__-____ Address: _______________________________________________________________________ Street City County State Zip Code Date of Birth: ____/____/____ |_| Male |_| Female Relationship to Owner: _______________ Home Phone: (___)______________________ 20-784 (4-00) 1 SECTION E - ADDITIONAL ADULT INSURED OR PAYOR -- Complete this section for each Additional Adult Insured. If more than one Additional Adult Insured, attach separate application. Complete the HEALTH STATEMENT, in all cases, on each Additional Adult Insured. Name:______________________________________________________ SSN:___-__-____ Last Full First Middle Address: _______________________________________________________________________ Street City County State Zip Code Years at Address: ______ (If less than two years, Home Phone: (___)_________ show former address in Section O) Relationship to Primary Insured: _______________________________________________ |_| Male |_| Married Date of Birth: ____/____/____ Age:______ (Age nearest birthday) |_| Female |_| Single Driver's License Number and State:____________________ Place of Birth: ________________________________________________________________ Employer's Name:________________________________________________________________ Employer's Address: ____________________________________________________________ Street City County State Zip Code Years Employed: _____ (If less than two years, Business Phone:(___)________ show former occupation in Section O) All Occupations and Duties:_____________________________________________________ - -------------------------------------------------------------------------------- SECTION F - ADDITIONAL INSURED BENEFICIARY -- Show beneficiary for additional insured: Primary: ____________________ Relationship to Additional Insured:_____________ ____________________ ________________________________________________ Contingent:__________________ Relationship to Additional Insured:_____________ __________________ ________________________________________________ - -------------------------------------------------------------------------------- SECTION G - PREMIUM PAYMENTS $ _____________ Cash With Application $ _____________ Collect On Delivery PREMIUM PAYMENT METHOD AND FREQUENCY (Check one box only) FOR FLEXIBLE PREMIUM PLANS, indicate: $ __________ Planned Periodic Premium (write "none", if no future billing is desired.) -----------------Frequency------------- Method Annual Semi-Annual Quarterly Monthly - ----------- ------ ----------- --------- ------- Direct Bill |_| |_| |_| N/A PAC |_| |_| |_| |_| INITIAL PREMIUM ALLOCATION. Your Initial Premium will be allocated to the Guaranteed Interest Account and/or among the Variable Account Subaccounts as specified below. Please use whole number percentages. Variable Account allocations are limited to 18 Subaccounts. The total must equal 100%. GUARANTEED INTEREST ACCOUNT __________%
VARIABLE ACCOUNT SUBACCOUNTS ALGER AMERICAN FIDELITY VARIABLE INSURANCE PRODUCTS FUND (VIP) INVESCO VARIABLE INVESTMENT FUND (VIF) ___% Growth Portfolio ___% VIP Equity-Income Portfolio ___% VIF Equity Income Fund ___% Leveraged AllCap Portfolio ___% VIP Growth Portfolio ___% VIF Utilities Fund ___% MidCap Growth Portfolio ___% VIP High Income Portfolio JANUS ASPEN SERIES ___% Small Capitalization Portfolio ___% VIP Money Market Portfolio ___% Aggressive Growth Portfolio ___% VIP Overseas Portfolio ___% Balanced Portfolio FIDELITY VARIABLE INSURANCE PRODUCTS FUND II (VIP II) ___% Growth Portfolio ___% VIP II Asset Manager Portfolio ___% International Growth Portfolio ___% VIP II Contrafund Portfolio ___% Worldwide Growth Portfolio ___% VIP II Index 500 Portfolio ___% VIP II Investment Grade Bond Portfolio
20-784 (4-00) 2 SECTION H - SPECIAL PROGRAMS -- CHECK EACH OPTION YOU WISH TO SELECT H1 |_| Dollar Cost Averaging. (Complete Sections 2A and 7 of the Variable Life Service Request Form attached to this application.) H2 |_| Automatic Rebalancing (Complete Sections 2A and 5 of the Variable Life Service Request Form.) H3 |_| Telephone Authorization (Complete Sections 2A and 4 of the Variable Life Service Request Form.) 20-784 (4-00) 3 SECTION I - EXISTING INSURANCE -- List all life insurance in force on all persons proposed for insurance (including Business Insurance). Use REMARKS or attach additional pages if additional space is needed. If NONE, write "NONE" on the first line below. Life Accidental Year Insured Company Replacement Amount Death Issued ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ REGARDING ALL PERSONS PROPOSED FOR INSURANCE - If any Question is "Yes," please explain and give complete details. Use SECTION 0 or attach additional pages if additional space is needed. 1. Is the Policy applied for to replace or change any existing insurance or annuities in this or any other Company? (If "yes," check which policy in the above chart is to be replaced or changed and follow the replacement procedures for your state.) |_| Yes |_| No 2. Is the replacement to be handled as an IRC Section 1035 exchange? |_| Yes |_| No 3. Has any person proposed for insurance had an application(s) pending with another Company(ies) within the past 90 days? |_| Yes |_| No (If "Yes," give Company(ies) and Amount(s). _________________________________ 4. (THE FOLLOWING QUESTION IS NOT APPLICABLE IN THE STATE OF MO. DO NOT ANSWER IF YOU RESIDE IN MO.) Has any person proposed for life insurance ever applied for Life or Health insurance which was rated, declined, postponed, withdrawn or modified in any way? (If "Yes," state Person, Company, Dates and Details.) |_| Yes |_| No _____________________________________________________________________________ - -------------------------------------------------------------------------------- SECTION J - BUSINESS INSURANCE -- If application is for Business Insurance, please complete: 1. Approximate net 2. Approximate net annual worth of business? $____________ income of business? $____________ 3. Percentage of business 4. Amount of Business owned or controlled by Insurance in force on Primary Insured? _______________% Primary Insured? $_______________ 5. Purpose of Business Insurance on Primary Insured (Keyman, Buy-Sell, etc.)?____________________________________ 6. Information about Business Insurance carried by other Owners, Officers, Partners, or Key Men: (Use SECTION 0 or attach additional page if additional space is needed.) Percentage of Insurance in Force Insurance Applied For Full Name Ownership Amount Company Amount Company ________________________________________________________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- SECTION K - SPECIAL ACTIVITIES -- Has any person proposed for insurance: 1. Ever had a traffic citation for driving while intoxicated, or driving under the influence of intoxicants or drugs, or any moving violation within the past three years? (If "Yes," give details in SECTION 0.) |_| Yes |_| No 2. Made in the past two years or contemplate making in the future aerial flights of any kind other than as a passenger on any regular scheduled airline? (If "Yes," complete and submit the Aviation Section of an AVOCATION QUESTIONNAIRE for each person answering "Yes.") |_| Yes |_| No 3. Engaged in the last two years or contemplate engaging in the future in scuba/skin diving, sky diving, hang gliding, hot air ballooning, rodeo activities, or any other organized sport, avocation, hobby, or activity? (If "Yes," submit an AVOCATION QUESTIONNAIRE for each person answering "Yes." Complete each applicable section of each questionnaire submitted for which the questions in such section(s) relate to an activity for which the answer to question 3. is "Yes.") |_| Yes |_| No 4. Planned to travel or reside outside the United States or Canada within the next year? (If "Yes," give details in SECTION 0.) |_| Yes |_| No - -------------------------------------------------------------------------------- SECTION L - TOBACCO USAGE -- Has any person proposed for insurance in the last twelve months: 1. Smoked or used any of the following: cigarettes, cigars, pipe, chewing tobacco, nicotine chewing gum or patch, snuff, or any other tobacco product? |_| Yes |_| No For "Yes" answers, specify in SECTION 0 name of person, product smoked or used, frequency and duration of use, and date of last use. 20-784 (4-00) 4 SECTION M - Has any person proposed for insurance: 1. (Do not answer this question if you reside in FL or NV.) been diagnosed by or treated by a licensed member of the medical profession for Acquired Immune Deficiency Syndrome?. |_| Yes |_| No 2 (Answer this question ONLY if you reside in NV.) been diagnosed by or treated by a licensed member of the medical profession for any immune system disorder?.................. |_| Yes |_| No 3. (Do not answer this question if you reside in CA, CT, FL, ME, MN, ND, NJ, NV, or WV.) tested **positive for antibodies to the AIDS Virus (Human T-Cell Lymphotrophic Virus Type III, HTLV-III) or Lymphadenopathy Virus (LAV)?.............. |_| Yes |_| No 4. (Answer this question only if you reside in WV.) tested positive for antibodies to the AIDS Virus?.................. |_| Yes |_| No 5. (Answer this question only if you reside in FL.) tested positive for exposure to the HIV infection or been diagnosed as having ARC or AIDS caused by the HIV infection?.......... |_| Yes |_| No **In Michigan such tests are limited to the ELISA-ELISA Western Blot Series. (Give details to any "Yes" answers in the Section O. If there is not enough room in the space provided, please attach additional pages.) - -------------------------------------------------------------------------------- SECTION N - SUITABILITY A. Have you, the Proposed Insured and the Owner, if other than the Proposed Insured, received a current Prospectus, dated__________________, for the policy applied for and for each designated fund? |_| Yes |_| No B. Do you understand that under the policy applied for the amount or duration of the death benefit may vary under specified conditions; policy values may increase or decrease in accordance with actual future investment experience of our Separate Account and the interest credited in the Guaranteed Interest Account; and the amount payable on maturity is not guaranteed but is dependent on the amount then in the Policy?......................................... |_| Yes |_| No C. Do you understand that any personalized illustrations received are based on hypothetical interest assumptions which may not be indicative of actual future investment experience of our Separate Account or of actual interest credited in our Guaranteed Interest Account?................ |_| Yes |_| No D. With this in mind, is the policy in accord with your insurance objectives and your anticipated financial needs?.. |_| Yes |_| No - -------------------------------------------------------------------------------- SECTION 0 - REMARKS -- (If there is not enough room in the space provided, please attach additional pages.) - -------------------------------------------------------------------------------- SECTION P - HOME OFFICE AMENDMENTS (Not applicable in WV.) 20-784 (4-00) 5 PART TWO OF APPLICATION SOUTHLAND LIFE INSURANCE COMPANY FOR INSURANCE TO Customer Service Center P. 0. Box 173789, Denver, CO 80217-3789 HEALTH STATEMENT This HEALTH STATEMENT must be completed by the Agent on ALL applications for ALL persons proposed for insurance. (Include family members if Children's Rider is applied for.) In addition, if a medical examination is required for any person proposed for insurance, please provide such persons a Southland Life Insurance Company medical examination form. Even in those cases where a medical examination is required, please complete the Health Statement in order to expedite the underwriting process.
Weight Change in Date of Birth Height Past Year Relationship to Full Names of all to be Insured Month Day Yr. Ft. In. Weight Gain Loss Primary Insured 1. Primary Insured X X X X X X X X X X --------------- __________ _______ ____ ____ ---------------------------- 2. Additional Adult Insured X X X X __________ _______ ____ ____ X X X X X X --------------- ---------------------------- All children to be insured under Child rider 3. _______________________________ ______________ __________ _______ ____ ____ ____________________________ 4. _______________________________ ______________ __________ _______ ____ ____ ____________________________ 5. _______________________________ ______________ __________ _______ ____ ____ ____________________________ 6. _______________________________ ______________ __________ _______ ____ ____ ____________________________
- -------------------------------------------------------------------------------- 1. To the best of your knowledge (for MO and OR residents, in the last 10 years), has any person (Owner/Proposed Insured) proposed for insurance had or been told by a licensed member of the medical profession that he or she had: (For each "Yes" answer, give details in the space provided to the right of each question. If there is not enough room in the space provided, please attach additional pages.)
Record Question Number; Person; Condition; Diagnosis and Dates/Duration of condition or treatment; Name and Address of all doctors and hospitals; and medical number for Yes No Kaiser, VA, etc. a. Convulsions, epilepsy, paralysis, mental or nervous disorders?................................................ |_| |_| b. Chest pain, pulse irregularity, high "blood pressure, rheumatic fever, heart murmur, heart attack, stroke, or other disorder of the heart, or circulatory system, anemia or leukemia?............................................. |_| |_| c. Asthma, emphysema, tuberculosis, pneumonia, or chronic respiratory disease?..................................... |_| |_| d. Jaundice, intestinal bleeding, ulcer, colitis, diverticulitis, or other disorder of the stomach, intestines, liver or gall bladder?....................... |_| |_| e. Kidney stone or other disease of kidney; disorder of the bladder, prostate, reproductive organs, or breasts; sugar, albumin, blood, or pus in the urine?..................... |_| |_| f. Arthritis, gout, or disorder of the muscles, bones, or joints, including the spine; deformity, or amputation; blindness or deafness?................................... |_| |_| g. Diabetes or disorder of the thyroid?..................... |_| |_| h. Cancer or tumor, collagen disease or any other disorder not listed above?............................................ |_| |_| i. In the past 10 years, a disorder of the-blood*, diarrhea, disorder of the skin, chronic cough, disorder of lymph glands, chronic fatigue or significant weight loss?...... |_| |_| *For residents of North Carolina, disorder of the blood includes all conditions of the blood presently recognized as disorders, both primary disorders of the blood (e.g. anemia, polycythemia, leukopenia, teukocytosis, clotting disorders, platelet disorders, immune disorders whether congenital or acquired, disorders or gammaglobulin) and disorders that reflect other disease processes (e.g. infections, malignancies, sources of blood loss, biliary tract disease).
20-784 (4-00) 6 HEALTH STATEMENT (Continued) 2. To the best of your (Owner/Proposed Insured) knowledge, has any person proposed for insurance: (For each "Yes" answer, give details in the space provided to the right of each question. If there is not enough room in the space provided, please attach additional pages.)
Record Question Number; Person; Condition; Diagnosis and Dates/Duration of condition or treatment; Name and Address of all doctors and hospitals; and medical number for Yes No Kaiser, VA, etc. a. Other than above, had examination, treatment, or consultation with a physician during the past 5 years?... |_| |_| b. Been on, or are now on, any medication or prescribed diet? |_| |_| c. Except as prescribed by a Doctor, ever used heroin, morphine, cocaine, or other narcotic drug?............... |_| |_| d. Within the past two years used: 1) Barbiturates, stimulants, tranquilizers, or sedatives except as prescribed by a physician?.................. |_| |_| 2) LSD, marijuana, PCP, or any other hallucinogenic substance?............................................ |_| |_| e. (DO NOT ANSWER THIS QUESTION IF YOU RESIDE IN NE.) Ever received treatment, medical advice, joined an organization or been arrested or convicted because of use or possession of alcohol or drugs?....................... |_| |_| (ANSWER THIS QUESTION ONLY IF YOU RESIDE IN NE.) Ever received treatment, medical advice or been arrested or convicted because of use or possession of alcohol or drugs? |_| |_| f. Been rejected, discharged, or retired by an employer or the military for medical or physical disability reason?...... |_| |_| g. Been advised to have any diagnostic test, hospitalization or surgery which has not been completed?.................... |_| |_|
- -----------------------------------------------------------------------------------------------------------------| FAMILY RECORD OF PRIMARY INSURED | | FAMILY RECORD OF SPOUSE | | | (If Proposed for Insurance) | - --------------------------------------------------- --------------------------------------------------| If Living | If Deceased | | If Living | If Deceased | - --------------------------------------------------- --------------------------------------------------| Age State of | Age At Cause of | | Age State of | Age At Cause of | Health | Death Death | | Health | Death Death | - -----------------------------------------------------------------------------------------------------------------| | | Father | | | - -----------------------------------------------------------------------------------------------------------------| | | Mother | | | - -----------------------------------------------------------------------------------------------------------------| | | Brother(s) | | | | | | | | | | | | | | | | | | - -----------------------------------------------------------------------------------------------------------------| | Sister(s) | | | | | | | | | | | | | | | | | | | | | | | - -----------------------------------------------------------------------------------------------------------------|
20-784 (4-00) 7 DECLARATIONS All statements and answers made in all parts of this application, consisting of pages 1, 2, 3, 4, 5, 6 and 7, are full, complete and true to the best of my knowledge and belief. It is understood and agreed that: (a) all such statements and answers are offered to Southland Life Insurance Company as a consideration for and shall be the basis of any insurance issued; (b) all such statements and answers, including the smoking status, are considered material to the accurate assessment of the insurability of any person proposed for insurance; (c) a misstatement on any of the questions could result in policy rescission and return of premiums paid; For South Carolina residents, a misstatement on any of the questions could result in policy rescission and return of premiums paid, subject to the incontestability provision and legal proceedings; (d) all information given to the Agent is contained in this application; (e) no agent or medical examiner has the authority to make, alter, or discharge any contract, accept risks, or waive Southland Life Insurance Company's rights or requirements; (f) acceptance of any policy issued pursuant hereto shall constitute ratification of the manner in which it is written and of any corrections, additions, or changes made by Southland Life Insurance Company and entered in the HOME OFFICE AMENDMENTS. In those states where it is required (Connecticut, Illinois, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Nebraska, Oregon, Pennsylvania, West Virginia and other states as appropriate), changes as to plan, amount, age at issue, classification, or benefits will be made only with the Owner's written consent. In West Virginia, no change will be made without the owner's written consent; (g) The insurance applied for in this application shall not take effect until: 1 this application has been approved by Southland Life Insurance Company, and 2 the policy has been delivered to and accepted by the Owner, and 3 the full first premium, according to the rates stated in the policy, has been paid while all persons proposed for insurance are alive and while the health and insurability of such persons has not changed from that as described in this application. AUTHORIZATION TO OBTAIN AND DISCLOSE INFORMATION I hereby authorize the following to give to Southland Life Insurance Company or its reinsurer(s) any information concerning me or my health: any licensed physician or medical practitioner; any hospital, clinic, or other medical facility; any insurance company or reinsurance company; employer; consumer reporting agency; or the Medical Information Bureau, Inc. (MIB, Inc.). I hereby authorize Southland Life Insurance Company to obtain an investigative consumer report on me. I understand that I may request to be interviewed in connection with such report. It is understood that I may request in writing and receive a copy of such report. I understand that this information will be used to determine my eligibility for insurance and to evaluate any claim under this application. I agree that a photocopy of this Authorization shall be as valid as the original. I agree that this authorization will be valid for two years from the date below, if used to determine eligibility, or for the duration of the claim, if used to evaluate any claim under this application. ACKNOWLEDGMENT I acknowledge that I have received and read a copy of the "Notice Regarding MIB," the "Notice Under the Fair Credit Reporting Act," and the "Notice of Insurance Information Practices," and that I or my representative may request and receive a copy of this Authorization. Signed at_________________________________________ this___________ day of 20___. City State _______________________________________ ______________________________________ Signature of Proposed Insured Signature of Spouse/Additional Insured (or Parent/Guardian if Minor) _______________________________________ ______________________________________ *Signature of Applicant/Owner SIGNATURE OF AGENT AS WITNESS/AGENT'S (if other than Proposed Insured) LICENSE NUMBER ______________________________________ Agent's Name (Please Print) *If Owner is Corporation, Partnership or Trust, a Corporate Officer, Partner or the Trustee must sign and state title. See next page for applicable Fraud Warning. 20-784 (4-00) 8 FRAUD WARNING Any person who with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement of material fact may be guilty of insurance fraud (not applicable to Arizona, Oregon or Virginia residents). FOR COLORADO RESIDENTS, THE LAW REQUIRES THE FOLLOWING WARNING: It is unlawful to knowingly provide false, incomplete, or misleading facts or information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may include imprisonment, fines, denial of insurance, and civil damages. Any insurance company or agent of an insurance company who knowingly provides false, incomplete or misleading facts or information to a policyholder or claimant for the purpose of defrauding or attempting to defraud the policyholder or claimant with regard to a settlement or award payable from insurance proceeds shall be reported to the Colorado Division of Insurance within the Department of Regulatory Agencies. FOR CONNECTICUT RESIDENTS, THE LAW REQUIRES THE FOLLOWING WARNING: Any person who with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement of material fact may be guilty of insurance fraud as determined by a court of competent jurisdiction. FOR FLORIDA RESIDENTS, THE LAW REQUIRES THE FOLLOWING WARNING: Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing any false, incomplete or misleading information is guilty of a felony of the third degree. FOR NEW JERSEY RESIDENTS, THE LAW REQUIRES THE FOLLOWING WARNING: Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties. 20-784 (4-00) 9 SOUTHLAND LIFE INSURANCE COMPANY P. 0. Box 173789, Denver, CO 80217-3789 AGENT'S CERTIFICATION Name of Primary Insured_________________________________________________________ (Print) 1. Did you personally interview Primary Insured and complete application in his or her presence? |_|Yes |_|No 2. Have you issued the "Notice of lnsurance Information Practices"? (It must be detached and given to Primary insured.) |_|Yes |_|No 3. Will the policy applied for replace or change any existing insurance or annuity? |_|Yes |_|No 4. If replacement or change of existing insurance is involved,have you complied with all relevant state requirements, including any "Notice, Disclosure and/or Comparisons"? |_|Yes |_|No If no, please explain.______________________________________ ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ 5. Please check the medical requirements ordered: |_| MD Exam |_| Stress EKG |_| HOS |_| EKG |_| Blood Profile |_| Paramedical |_| Inspection |_| Paramedical Company________________________ 6. Is the Primary Insured a United States citizen? |_|Yes |_|No If "no", give Visa Number:______________________________ and type of Visa:_______________________________________ 7. To the best of your knowledge, are the responses to the tobacco usage section correct? |_|Yes |_|No 8. How long have you known the Primary Insured? ________________ How well? _______________________________ Are you related to any person proposed for insurance in this application? |_|Yes |_|No If "Yes," give relationship.________________________________ 9. Is this policy to be issued under a qualified pension, profit sharing, or 401(k) plan? |_|Yes |_|No 10. What was the PRIMARY purpose of the insurance? |_| Estate/Death Taxes |_| Gift |_| Private Pension/Retirement |_| Family Income |_| Mortgage Protection |_| Savings |_| College Funding |_| Other____________________________________________________ - -------------------------------------------------------------------------------- Special Requests: - -------------------------------------------------------------------------------- I hereby certify that I have no knowledge of anything affecting the insurability of any person proposed for insurance which is not fully set forth in these papers. __________________________ ______________________________ ____________________ Signature of Agent City & State Date __________________________ ______________________________ Agent's Name (Please print) Agent's Telephone Number AGENT PRODUCTION INFORMATION - -------------------------------------------------------------------------------- TO BE COMPLETED BY AGENT (Please Print) Agent's Code:_______ Agent's Name:____________________________________________ Last Full First Middle Broker/Dealer's Name:___________________________________________________________ - -------------------------------------------------------------------------------- Volume & Commission to be Shared With: Agent's Code:_______ Agent's Name:______________________________ Percent:____ Last Full First Middle 20-784 (4-00) 10 Do Not Write Above This Line Bank Copy AUTHORIZATION TO HONOR CHECKS, DRAFTS AND OTHER INSTRUMENTS DRAWN BY THE SOUTHLAND LIFE INSURANCE COMPANY, P 0. BOX 173789, DENVER, CO 80217-3789 As a convenience to me, I hereby request and authorize you to charge to my account checks, drafts and other instruments drawn on my account by and payable to the order of the Southland Life insurance Company, I agree that your rights in respect to each such check, draft or other instrument shall be the same as if it were drawn on you and signed personally by me. This authority is to remain in effect until revoked by me in writing, and until you actually receive such notice I agree that you shall be fully protected in honoring any such check, draft or other instrument. I further agree that if any such check, draft or other instrument be dishonored, whether with or without cause and whether intentionally or inadvertently, you shall be under no liability whatsoever even though such dishonor results in the forfeiture of insurance. To: Financial Institution ____________________________________________ (Branch if any) Street Address or PO. Box_____________________________________________ City, State and Zip Code______________________________________________ Policyowner___________________________ Billing No.____________________ _____________________________________X________________________________ Date Account No. Signature EXACTLY as it appears on Account Records PLEASE NOTE: The size of this form is adjustable from a 4 x 6 to a 3 x 5 card for your filing convenience. There is an indemnification Agreement on the reverse side. - -------------------------------------------------------------------------------- PRE-AUTHORIZED CHECK AUTHORITY - HOME OFFICE RECORD - DO NOT DETACH Subject to the conditions on the reverse side, to which I hereby agree, Southland Life Insurance Company is hereby authorized to draw a check, draft or other instrument on (date)___________________________________________________ for the purpose of paying premiums and/or other payments indicated hereon against the account of ________________________________________________________________________________ Print Name EXACTLY as It appears on Account Records Account Number with____________________________________________________________________________ Name of Financial Institution with Branch Name Transit Number and Number, if any ________________________________________________________________________________ Address of Institution or Branch Routing Symbol POLICY NUMBER AMOUNT PURPOSE POLICY NUMBER AMOUNT PURPOSE _____________ ______ _______ _____________ ______ _______ _____________ ______ _______ _____________ ______ _______ _____________ ______ _______ _____________ ______ _______ _____________ ______ _______ _____________ ______ _______ X_________________________________________________ ______________ ___________ Signature EXACTLY as It appears on Account Records BILLING NUMBER DATE Customer/Home Office Copy A VOIDED BLANK CHECK OR DRAFT ON THE ACCOUNT TO BE DRAWN AGAINST MUST ACCOMPANY THIS AGREEMENT - -------------------------------------------------------------------------------- NOTICE OF INSURANCE INFORMATION PRACTICES As a part of our normal procedure for processing an initial application for insurance or an application for reinstatement or for a change in insurance coverage, we may obtain personal information about an insured or a proposed insured from persons other than the insured or proposed insured. This personal information generally relates to health, occupation, hobbies, general reputation, credit, mode of living (except as may be related directly or in-directly to your sexual orientation) and other personal characteristics. In some circumstances, this personal information and other information may be disclosed to third parties without the specific authorization of the person to whom the information relates. A right of access and correction exists with respect to personal information in our files. A detailed explanation of our insurance information practices and the right to access and correction will be furnished to you if you make written request to: Underwriting Department, Southland Life Insurance Company, Customer Service Center, P 0. Box 173789, Denver, CO 80217-3789. THIS NOTIFICATION MUST BE DETACHED AND DELIVERED TO THE APPLICANT See Reverse Side for Notice Regarding MIB and Fair Credit Reporting Act. 11 TO: THE INSTITUTION NAMED ON THE REVERSE SIDE In consideration of your participating in a plan which the Southland Life Insurance Company (hereinafter known as the "Company") has put into effect by which amounts due on policies of insurance are collected by checks, drafts or other instruments drawn by the Company on the accounts of persons who are responsible for these payments, the Company does hereby agree that: (1) It will indemnify and hold you harmless from any liability to any person arising out of the payment by you of any check, draft or order, whether or not genuine, drawn by the Company in the regular course of business for the purpose of payment or arising out of the dishonor by you, whether with or without cause, or intentionally or inadvertently, of any such check, draft or order, whether or not such claim or liability asserted against you be based upon the forfeiture or alleged forfeiture of a policy of insurance the premium on which is sought to be collected by the Company by any such check, draft, or order, and (2) It will defend at its cost and expense any action which may be brought by any depositor or any other person because of any action taken pursuant to or in any manner arising out of your participation in the pre-authorized check plan of premium collection, and (3) Without limitation on the foregoing indemnities, it will refund to you any amount erroneously paid by you on any such check, draft, or order, if claim for the amount of such erroneous payment is made by you within twelve months from the date of the check, draft or order on which such erroneous payment was made, and (4) Your participation in the plan or that of the depositor or member may be terminated by written notice from either party to the other. Likewise, your participation and that of Southland Life Insurance Company may be terminated by thirty days written notice from either party to the other. Southland Life Insurance Company /s/ David Pendergrass Treasurer Authorized in a resolution adopted by the Board of Directors of Southland Life Insurance Company on August 21, 1980. - -------------------------------------------------------------------------------- Subject to the following conditions: 1. I understand that such checks, drafts or other instruments shall constitute notice of premium due and, upon being charged to my account, by the bank or other financial institution, shall be my receipt for payment of the premiums. 2. Should any check, draft or other instrument not be honored by said bank or other financial institution upon presentation, then it is understood that such premium(s) is/are to be paid to you within the time stipulated in the policy for payment, and in default thereof, the policy(ies) shall become null and void except as otherwise provided therein. 3. The payment of premiums under this Plan may be discontinued by the Company or the undersigned upon 30 days written notice. 4. This agreement may be extended by mutual consent to cover additional premium payments to the Company. - -------------------------------------------------------------------------------- Southland Life Insurance Company o Customer Service Center o P.O. Box 173789 o Denver, Colorado 80217-3789 NOTICE UNDER THE FAIR CREDIT REPORTING ACT As a part of our normal procedure for processing your initial insurance application, an investigative consumer report may be prepared whereby information is obtained through personal interviews with your neighbors, friends, or others with whom you are acquainted. This inquiry includes information as to your character, general reputation, personal characteristics and mode of living (except as may be related directly or indirectly to your sexual orientation). You have the right to make a written request within a reasonable amount of time to the Southland Life Insurance Company at the above address for additional, detailed information about the nature and scope of this investigation. NOTICE REGARDING M I B Southland Life Insurance Company or its reinsurer(s) may release information in its file, including the information in your application, 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. Information you provide will be treated as confidential except that the Southland Life Insurance Company or its reinsurer(s) 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. Upon request by another member insurance company to which you have applied for life or health insurance coverage or to which claim is submitted, the Bureau will supply such company with the information it may have in its files. Upon receipt of a request from you, the Bureau will arrange disclosure of any information it may have in your file. If you question the accuracy of information in the Bureau's file, you may contact the Bureau and seek a correction in accordance with the procedures set forth in the Federal Fair Credit Reporting Act. The address of the Bureau's information office is Post Office Box 105, Essex Station, Boston Massachusetts 02112, telephone number (617) 426-3660. SOUTHLAND LIFE INSURANCE COMPANY Customer Service Center P 0. Box 173789, Denver, CO 80217-3789 CONDITIONAL RECEIPT IT IS HEREBY UNDERSTOOD AND AGREED THAT UNLESS EACH AND EVERY CONDITION SPECIFIED IN THIS RECEIPT IS FULFILLED EXACTLY, NO INSURANCE WILL BECOME EFFECTIVE PRIOR TO POLICY DELIVERY. NEITHER THE AGENT WHOSE SIGNATURE APPEARS BELOW, NOR ANY OTHER AGENT OF THE COMPANY OR BROKER IS AUTHORIZED TO ALTER OR WAIVE ANY SUCH CONDITION. IT IS ALSO AGREED THAT NO PREMIUM PAYMENT IS MADE WITH RESPECT TO ANY PERSON PROPOSED FOR COVERAGE WHO HAS, WITHIN THE PAST 12 MONTHS, BEEN TREATED FOR OR HAD HEART DISEASE, STROKE OR CANCER. ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO SOUTHLAND LIFE INSURANCE COMPANY (THE "COMPANY"). DO NOT MAKE CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK. THIS RECEIPT MUST BE COMPLETED WHEN (AND ONLY WHEN) MONEY IS ACCEPTED WITH THE APPLICATION. Received from ________________________ the conditional deposit of $ ____________ and an application bearing the same date as this Receipt wherein_____________________________________________ is the Primary Insured proposed for insurance in such application. TERMS AND CONDITIONS NO LIFE INSURANCE MAY TAKE EFFECT EARLIER THAN THE POLICY DELIVERY DATE UNLESS EACH CONDITION BELOW IS MET: (1) On the latest of this application date, the last medical examination required on any Proposed Insured, or a later date specified in the application: All Proposed Insureds must each be insurable and eligible under our rules and standards for the plan, the amount, and the premium rate exactly as requested in the application; (2) Any Medical examination (at Company expense), test, x-rays and electrocardiograms required by Company rules must be completed within 60 days from the application date; and (3) The conditional deposit above must equal at least one month's premium for the coverage as applied for. IF EACH CONDITION IS MET, part or all of the Life insurance applied for in this application on any one life will take effect on the latest date in (1) specified above. If the amount of all Life insurance applied for on the same life (under this and any other Conditional Receipts issued by this Company): -- Is $500,000 or less, the amount of Life insurance applied for on that life will take effect; -- Is over $500,000, a lesser amount which is a pro rata share of the $500,000 maximum will take effect. This share will be based on the total Life insurance applied for on that life in all applications for which the Conditional Receipts are given. The remainder of any Life insurance applied for will not take effect unless and until the policy is delivered. IF ANY CONDITION IS NOT MET, the Company has no liability except to return the conditional deposit upon surrender of this Receipt. I have received a copy of and have read this Receipt. I understand and agree to all of its terms. Signed at______________________________ this______day of _________________,20___ CITY STATE ______________________________________ _______________________________________ PRIMARY INSURED (OR PARENT OR GUARDIAN SPOUSE (IF PROPOSED FOR INSURANCE) OF MINOR PRIMARY INSURED) ______________________________________ _______________________________________ *APPLICANT/OWNER WITNESSED BY AGENT *Signature and address if other than Primary Insured or other than Premium Payor. If Owner is a Corporation, Partnership, or Trust, a Corporate Officer, Partner, or Trustee must sign and state title. 20-784 (4-00) 12 Home Office Copy [Blank Page] 20-784 (4-00) SOUTHLAND LIFE INSURANCE COMPANY Customer Service Center P 0. Box 173789, Denver, CO 802173789 CONDITIONAL RECEIPT IT IS HEREBY UNDERSTOOD AND AGREED THAT UNLESS EACH AND EVERY CONDITION SPECIFIED IN THIS RECEIPT IS FULFILLED EXACTLY, NO INSURANCE WILL BECOME EFFECTIVE PRIOR TO POLICY DELIVERY. NEITHER THE AGENT WHOSE SIGNATURE APPEARS BELOW, NOR ANY OTHER AGENT OF THE COMPANY OR BROKER IS AUTHORIZED TO ALTER OR WAIVE ANY SUCH CONDITION. IT IS ALSO AGREED THAT NO PREMIUM PAYMENT IS MADE WITH RESPECT TO ANY PERSON PROPOSED FOR COVERAGE WHO HAS, WITHIN THE PAST 12 MONTHS, BEEN TREATED FOR OR HAD HEART DISEASE, STROKE OR CANCER. ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO SOUTHLAND LIFE INSURANCE COMPANY (THE "COMPANY"). DO NOT MAKE CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK. THIS RECEIPT MUST BE COMPLETED WHEN (AND ONLY WHEN) MONEY IS ACCEPTED WITH THE APPLICATION. Received from ________________________ the conditional deposit of $ ____________ and an application bearing the same date as this Receipt wherein_____________________________________________ is the Primary Insured proposed for insurance in such application. TERMS AND CONDITIONS NO LIFE INSURANCE MAY TAKE EFFECT EARLIER THAN THE POLICY DELIVERY DATE UNLESS EACH CONDITION BELOW IS MET: (1) On the latest of this application date, the last medical examination required on any Proposed Insured, or a later date specified in the application: All Proposed Insureds must each be insurable and eligible under our rules and standards for the plan, the amount, and the premium rate exactly as requested in the application; (2) Any Medical examination (at Company expense), test, x-rays and electrocardiograms required by Company rules must be completed within 60 days from the application date; and (3) The conditional deposit above must equal at least one month's premium for the coverage as applied for. IF EACH CONDITION IS MET, part or all of the Life insurance applied for in this application on any one life will take effect on the latest date in (1) specified above. If the amount of all Life insurance applied for on the same life (under this and any other Conditional Receipts issued by this Company): -- Is $500,000 or less, the amount of Life insurance applied for on that life will take effect; -- Is over $500,000, a lesser amount which is a pro rata share of the $500,000 maximum will take effect. This share will be based on the total Life insurance applied for on that life in all applications for which the Conditional Receipts are given. The remainder of any Life insurance applied for will not take effect unless and until the policy is delivered. IF ANY CONDITION IS NOT MET, the Company has no liability except to return the conditional deposit upon surrender of this Receipt. I have received a copy of and have read this Receipt. I understand and agree to all of its terms. Signed at______________________________ this______day of _________________,20___ CITY STATE ______________________________________ _______________________________________ PRIMARY INSURED (OR PARENT OR GUARDIAN SPOUSE (IF PROPOSED FOR INSURANCE) OF MINOR PRIMARY INSURED) ______________________________________ _______________________________________ *APPLICANT/OWNER WITNESSED BY AGENT *Signature and address if other than Primary Insured or other than Premium Payor. If Owner is a Corporation, Partnership, or Trust, a Corporate Officer, Partner, or Trustee must sign and state title. 20-784 (4-00) 13 Applicant Copy [Blank Page] 20-784 (4-00) VARIABLE LIFE SERVICE REQUESTS ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ 20-784 (4-00) INSTRUCTIONS FOR COMPLETING VARIABLE LIFE SERVICE REQUESTS FORM SECTION 1 -- SECTIONS TO BE COMPLETED - -------------------------------------------------------------------------------- A Complete each of the sections indicated for each option. A Obtain signatures and date in Section 9. SECTION 2-- POLICY INFORMATION: - -------------------------------------------------------------------------------- A NEW POLICIES. If the service request is in connection with a new policy application please enter the name of the proposed insured, the proposed policyowner, the policy face amount and the date the application was signed in Section 2A. A EXISTING POLICIES. If the service request is for an existing policy, please enter the policy number in Section 2B. SECTION 3-- PREMIUM PAYMENT ALLOCATION CHANGE REQUEST* - -------------------------------------------------------------------------------- o Enter your future premium allocation. o Premium allocations must be made only in whole percentages. o The sum of all premium allocations must equal 100%. SECTION 4-- TELEPHONE PRIVILEGE AUTHORIZATION OR REVOCATION: - -------------------------------------------------------------------------------- A You may give each policyowner and your Registered Representative the authority to transfer policy values among the divisions or to request a partial withdrawal by telephone. If you elect telephone privileges, you must also have a PIN number. If you wish to use a specific PIN number, please indicate that number on the request form in Section 6. o Mark the boxes indicating the individuals for whom telephone authority is granted. o To revoke telephone privileges for a specific individual, mark the box next to the persons for whom privileges are to be revoked. o If you are revoking telephone privileges for your registered representative, the PIN number will be changed. SECTION 5-- AUTOMATIC REBALANCING OPTION:* - -------------------------------------------------------------------------------- A GENERAL o The total of all automatic rebalancing allocations must equal 100%. o Automatic rebalancing may be done at the same time as dollar cost averaging. If you do these simultaneously, exclude the Money Market Subaccount from your Automatic Rebalancing Program. o Automatic rebalancing percentages may be different from the premium allocation percentages. A TO INITIATE AUTOMATIC REBALANCING OPTION: o Enter the percentage for each investment option you wish to include in automatic rebalancing. The total of all percentages must equal 100%. [IMPORTANT REMINDER: If you also have elected the Guaranteed Minimum Death Benefit, you must invest your funds in at least 5 investment options with no more than 35% in any one investment option.] o Indicate the frequency and date with which you wish automatic rebalancing to occur. A TO CHANGE YOUR AUTOMATIC REBALANCING PERCENTAGES OR FREQUENCY: o Enter the percentage for each subaccount you wish to include in automatic rebalancing. The total of all percentages must equal 100%. o Indicate the frequency and date with which you wish automatic rebalancing to occur. SECTION 6 -- PIN NUMBER CHANGE: - -------------------------------------------------------------------------------- o You must have a PIN number if you elect the telephone privilege option. o If you wish to use a specific PIN number, please indicate that number in this section. SECTION 7-- DOLLAR COST AVERAGING OPTION:* - -------------------------------------------------------------------------------- A TO INITIATE OR CHANGE DOLLAR COST AVERAGING: o To initiate Dollar Cost Averaging, your Money Market Subaccount allocation must be at least $10,000. o Changes to Dollar Cost Averaging allocations are allowed once each policy year. o Enter the total percentage/dollar amount you wish to have transferred from the Money Market Subaccount. o Enter the percentage/dollar amount you wish to have transferred into each selected subaccount of the Variable Account. [IMPORTANT NOTE: When transferring funds from one subaccount to another, you may: -- transfer dollar amounts to dollar amounts -- transfer dollar amounts to percentages -- transfer percentages to percentages You may not transfer percentages to dollar amounts.] o Percentages must add up to 100%. o Dollar amounts must add up to the total dollar amount to be transferred. o Indicate the frequency and date with which you wish dollar cost averaging to occur. o You may specify a date for Dollar Cost Averaging to terminate. You may also specify a dollar amount so that when the Accumulation value reaches this dollar amount, Dollar Cost Averaging will terminate. SECTION 8-- TRANSFER REQUEST:* - -------------------------------------------------------------------------------- A TRANSFERS AMONG INVESTMENT OPTIONS o Enter the dollar/percentage you wish to transfer in the "Transfer From" column. Enter the dollar/percentage you wish to transfer into an investment option in the "Transfer To" column. [IMPORTANT NOTE: When transferring funds from one investment option to another, you may: -- transfer dollar amounts to dollar amounts -- transfer dollar amounts to percentages -- transfer percentages to percentages You may not transfer percentages to dollar amounts.] o A minimum of $100 must be transferred. This minimum need not come from any one investment option or be transferred to any one investment option as long as the total amount requested to be transferred equals at least $100. o The total dollar amount shown in the "Transfer To" column must equal the total dollar amount shown in the "Transfer From" column. o The total percentages shown in the "Transfer To" column must equal 100%. o Transfers to or from the Guaranteed Interest Account have specific time and amount limitations. Please refer to your policy or prospectus for additional information. *You may not invest in more than 18 investment options over the life of the policy VARIABLE LIFE SERVICE REQUESTS FORM FOR NEW AND EXISTING VARIABLE LIFE POLICIES SOUTHLAND LIFE INSURANCE COMPANY Variable Life Customer Service Center P. O. Box 173888, Denver, CO 80217-3888 1-800-224-3035 SECTION 1: SECTIONS TO BE COMPLETED For Automatic Rebalancing Option -- Complete Sections 2, 5 & 9 For Dollar Cost Averaging Option -- Complete Sections 2, 7 & 9 For Premium Allocation Change Requests -- Complete Sections 2, 3 & 9 For Transfer Requests -- Complete Sections 2, 8 & 9 For Telephone Transfer Authorization/Revocation - Complete Sections 2, 4 & 9 For PIN Number Changes -- Complete Sections 2, 6 & 9 SECTION 2: POLICY INFORMATION A. |_| FOR NEW POLICIES: Proposed Policyowner Name:________________________________ Proposed Insured's Name:__________________________________ Policy Face Amount:_______________________________________ Policy Application Date:__________________________________ B. |_| FOR EXISTING POLICIES: Policyowner Name:_________________________________________ Policy No.:_______________________________________________ SECTION 3: PREMIUM ALLOCATION CHANGE REQUEST ALGER AMERICAN FIDELITY VIP& VIP II ____% Growth ____% Asset Manager ____% Leveraged AllCap ____% Contrafund ____% MidCap Growth ____% Growth ____% Small Capitalization ____% Equity-Income ____% High Income INVESCO VIF ____% Index 500 ____% Equity Income ____% Investment Grade Bond ____% Utilities ____% Money Market ____% Overseas JANUS ASPEN ____% Aggressive Growth ____% Balanced ____% Growth ____% International Growth ____% Worldwide Growth ____% GUARANTEED INTEREST ACCOUNT SECTION 4: TELEPHONE PRIVILEGE AUTHORIZATION OR REVOCATION |_| TELEPHONE PRIVILEGE AUTHORIZATION: I/We authorize Southland Life Insurance Company to accept telephone instructions from the Owners/Registered Representative of the policy listed above. |_| Owners Only |_| Owner and Registered Representative |_| REVOCATION OF TELEPHONE PRIVILEGE AUTHORIZATION: I/We revoke all telephone privilege authorization in place on the policy listed above for the following persons: |_| Owners and Registered Representative |_| Other_____________ |_| Registered Representative Only By signing this form, I/We agree to hold harmless and indemnify Southland Life Insurance Company for any losses arising from such authorization/ revocation instructions. We further authorize Southland Life Insurance Company to record telephone conversations with any person utilizing telephone privileges on the policy listed in Section 2. I/We understand that Southland Life Insurance Company reserves the right to discontinue the telephone privilege at any time. SECTION 5: AUTOMATIC REBALANCING OPTION |_| Initiate Automatic Rebalancing (complete below) |_| Change Automatic Rebalancing (complete below) AUTOMATIC REBALANCING ALLOCATION ALGER AMERICAN FIDELITY VIP& VIP II ____% Growth ____% Asset Manager ____% Leveraged AllCap ____% Contrafund ____% MidCap Growth ____% Growth ____% Small Capitalization ____% Equity-Income ____% High Income INVESCO VIF ____% Index 500 ____% Equity Income ____% Investment Grade Bond ____% Utilities ____% Money Market ____% Overseas JANUS ASPEN ____% Aggressive Growth ____% Balanced ____% Growth ____% International Growth ____% Worldwide Growth ____% GUARANTEED INTEREST ACCOUNT FREQUENCY AND DATE OF AUTOMATIC REBALANCING: (If no options are marked, frequency will be quarterly and/or date will be last valuation date of calendar period.) Frequency: |_| Monthly |_| Quarterly |_| Semi-annually |_| Annually Date: |_| Policy Processing Date - Date on which processing will occur based on frequency selected beginning _____________________________________________ (Month/Date) |_| Last Valuation Date of Calendar Period |_| Specific Date each Period beginning _______________________________________ (Specify Date) SECTION 6: PIN NUMBER CHANGE |_| Please issue a new Personal Identification Number (PIN #) for the policy listed above. |_| Use the following specific number__________________________ CAN BE ONLY 4 DIGITS I/We understand that only individuals with telephone privilege authority will be notified of the PIN Number change. - -------------------------------------------------------------------------------- For Home Office use only. - -------------------------------------------------------------------------------- SECTION 7: DOLLAR COST AVERAGING OPTION |_| INITIATE DOLLAR COST AVERAGING (complete below) |_| CHANGE DOLLAR COST AVERAGING (complete below) Please transfer $_________ or _________% from: (check one only) |_| From Money Market Subaccount |_| into the Variable Account Subaccount(s) selected below. DOLLAR COST AVERAGING ALLOCATION ALGER AMERICAN $________or________% Growth $________or________% Leveraged AllCap $________or________% Midcap Growth $________or________% Small Capitalization INVESCO VIF $________or________% Equity Income $________or________% Utilities JANUS ASPEN $________or________% Aggressive Growth $________or________% Balanced $________or________% Growth $________or________% International Growth $________or________% Worldwide Growth Fidelity VIP & VIP II $________or________% Asset Manager $________or________% Contrafund $________or________% Growth $________or________% Equity-Income $________or________% High Income $________or________% Index 500 $________or________% Investment Grade Bond $________or________% Overseas FREQUENCY AND DATE OF DOLLAR COST AVERAGING: (If no options are marked, frequency will be monthly and/or date will be policy processing date.) FREQUENCY: |_| Monthly |_| Quarterly |_| Semi-annually |_| Annually DATE: |_| Policy Processing Date - Date on which processing will occur based on frequency selected beginning _____________________________________________ (Month/Date) |_| Specific Date each Period beginning________________________________________ (Specify Date) TERMINATE: |_| Terminate Dollar Cost Averaging on (date)_________________________________ |_| Terminate Dollar Cost Averaging when account value in Money Market Subaccount reaches $______________________ SECTION 8: TRANSFER REQUEST |_| CHANGE PREMIUM PAYMENT ALLOCATION |_| TRANSFER BETWEEN DIVISIONS TRANSFER FROM INVESTMENT OPTION TRANSFER TO ALGER AMERICAN $_______or_______% Growth $_______or_______% $_______or_______% Leveraged AllCap $_______or_______% $_______or_______% Midcap Growth $_______or_______% $_______or_______% Small Capitalization $_______or_______% INVESCO VIF $_______or_______% Equity Income $_______or_______% $_______or_______% Utilities $_______or_______% FIDELITY VIP & VIP II $_______or_______% Asset Manager $_______or_______% $_______or_______% Contrafund $_______or_______% $_______or_______% Growth $_______or_______% $_______or_______% Equity-Income $_______or_______% $_______or_______% High Income $_______or_______% $_______or_______% Index 500 $_______or_______% $_______or_______% Investment Grade Bond $_______or_______% $_______or_______% Money Market $_______or_______% $_______or_______% Overseas $_______or_______% JANUS ASPEN $_______or_______% Aggressive Growth $_______or_______% $_______or_______% Balanced $_______or_______% $_______or_______% Growth $_______or_______% $_______or_______% International Growth $_______or_______% $_______or_______% Worldwide Growth $_______or_______% $_______or_______% GUARANTEED INTEREST $_______or_______% ACCOUNT SECTION 9: SIGNATURES I/We acknowledge that we have read and understand: 1. the terms and conditions listed in the instructions to this form, the Prospectus and the Policy for each of the options or changes requested. 2. I/we can cancel or change any elections requested in Sections 5 and 7 above by sending written notice to the Customer Service Center at least 5 days before the next transfer date. 3. that dollar cost averaging and automatic rebalancing will begin on the date specified only if Southland Life Insurance Company has received this signed form at least 5 days before the date specified. Signature of Owner(s): ______________________________________________ Date__________________________ ______________________________________________ Date__________________________ ______________________________________________ Date__________________________ Daytime Phone Number:___________________________________________ EX-2 7 waggoner.txt WAGGONER CONSENT Exhibit 2. September 20, 2000 Southland Life Insurance Company 1290 Broadway Denver, Colorado 80203-5699 Dear Sirs: This opinion is furnished in connection with the Form S-6 Registration Statement being filed by Southland Life Insurance Company ("Southland") under the Securities Act of 1933, as amended (the "Act"), for the offering of interests ("Interests") in Southland Separate Account L1 ("Separate Account L1") under the Flexible Premium Variable Life Insurance Policies ("Policies") to be issued by Southland. The securities being registered under the Act are to be offered in the manner described in the Registration Statement. I have examined or supervised the examination of all such corporate records of Southland and such other documents and such laws as I consider appropriate as a basis for the opinion hereinafter expressed. On the basis of such examination, it is my opinion that: 1. Southland is a corporation duly organized and validly existing under the laws of the State of Texas. 2. Separate Account L1 was duly created as a separate investment account of Southland pursuant to the laws of the State of Texas. 3. The assets of Separate Account L1 will be owned by Southland. Under Colorado law and the provisions of the Policies, the income, gains and losses, whether or not realized, from assets allocated to Separate Account L1 must be credited to or charged against such Account, without regard to the other income, gains or losses of Southland. 4. The Policies provide that the assets of Separate Account L1 may not be charged with liabilities arising out of any other business Southland may conduct, except to the extent that assets of Separate Account L1 exceed its liabilities arising under the Policies. September 20, 2000 Page 2 5. The Policies and the Interests in Separate Account L1 to be issued under the Policies have been duly authorized by Southland; and the Policies, including the Interests therein, when issued and delivered, will constitute validly issued and binding obligations of Southland in accordance with their terms. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of my name under the caption "Legal Matters" in the Prospectus contained in the Registration Statement. Very truly yours, /s/ Gary W. Waggoner Gary W. Waggoner Chief Counsel S-6 8 sd.txt SURVIVOR DIMENSIONS PROSPECTUS As filed with the Securities and Exchange Commission on September 21, 2000 Registration No. ___-_____ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM S-6 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 Initial Registration ----------------- SOUTHLAND LIFE SEPARATE ACCOUNT L1 (Exact Name of Trust) SOUTHLAND LIFE INSURANCE COMPANY (Name of Depositor) 5780 Powers Ferry Road, N.W. Atlanta, GA 30340 (Address of Depositor's Principal Executive Offices) Copy to: GARY W. WAGGONER, ESQ. KIMBERLY J. SMITH, ESQ. Southland Life Insurance Company Sutherland Asbill & Brennan LLP 1290 Broadway 1275 Pennsylvania Avenue, NW Denver, Colorado 80203-5699 Washington, D.C. 20004-2415 (202) 383-0314 (Name and Address of Agent for Service) ---------------------------- Title of securities being registered: Survivor Dimensions variable life insurance policies. 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 the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. SOUTHLAND LIFE SEPARATE ACCOUNT L1 (File No. ___-_____) Cross-Reference Table Form N-8B-2 Item No. Caption in Prospectus 1, 2 Cover; Southland Life Insurance Company; Southland Life Separate Account L1 3 Inapplicable 4 Southland Life Insurance Company 5, 6 Southland Life Separate Account L1 7 Inapplicable 8 Financial Statements 9 Inapplicable 10(a), (b), (c), (d), (e) Policy Summary; Policy Values; Determining Values in the Variable Division; Charges, Deductions and Refunds; Surrender; Partial Withdrawals; Guaranteed Interest Division; Transfers of Account Value; Right to Exchange Policy; Lapse; Reinstatement; Premiums 10(f) Voting Privileges; Right to Change Operations 10(g), (h) Right to Change Operations 10(i) Tax Considerations; Detailed Information about the Policy; General Policy Provisions; Guaranteed Interest Division 11, 12 Southland Life Separate Account L1 13 Policy Summary; Charges, Deductions and Refunds; Group or Sponsored Arrangements, or Corporate Purchasers ii Form N-8B-2 Item No. Caption in Prospectus - -------------------- --------------------- 14, 15 Policy Summary; Free Look Period; General Policy Provisions; Applying for a Policy 16 Premiums; Allocation of Net Premiums; How We Calculate Accumulation Unit Values 17 Premium Payments Affect Your Coverage; Surrender; Partial Withdrawals 18 Policy Summary; Tax Considerations; Detailed Information about the Policy; Southland Life Separate Account L1; Persistency Refund 19 Reports to Owners; Notification and Claims Procedures; Performance Information (Appendix B) 20 See 10(g) & 10(a) 21 Policy Loans 22 Policy Summary; Premiums; Grace Period; Southland Life Separate Account L1; Detailed Information about the Policy 23 Inapplicable 24 Inapplicable 25 Southland Life Insurance Company 26 Inapplicable 27, 28, 29, 30 Southland Life Insurance Company 31, 32, 33, 34 Inapplicable 35 Inapplicable 36 Inapplicable iii Form N-8B-2 Item No. Caption in Prospectus - -------------------- --------------------- 37 Inapplicable 38, 39, 40, 41(a) General Policy Provisions; Distribution of the Policies; Southland Life Insurance Company 41(b), 41(c), 42, 43 Inapplicable 44 Determining Values in the Variable Division; How We Calculate Accumulation Unit Values 45 Inapplicable 46 Partial Withdrawals; Detailed Information about the Policy 47, 48, 49, 50 Inapplicable 51 Detailed Information about the Policy 52 Determining Values in the Variable Division; Right to Change Operations 53(a) Tax Considerations 53(b), 54, 55 Inapplicable 56, 57, 58 Inapplicable 59 Financial Statements iv This information is subject to completion or change. An amended registration statement for these securities has been filed with the Securities and Exchange Commission. These securities may not be sold and offers to buy may not be accepted prior to the amended registration statement becoming effective. This prospectus is not an offer to sell and is not a solicitation of an offer to buy. There will be no sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the laws of the state. Prospectus SURVIVOR DIMENSIONS UNIVERSAL LIFE A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY issued by SOUTHLAND LIFE INSURANCE COMPANY AND SOUTHLAND LIFE SEPARATE ACCOUNT L1 Consider carefully the policy charges, deductions, and refunds beginning on page 45 in this prospectus. You should read this prospectus and keep it for future reference. A prospectus for each underlying investment portfolio must accompany and should be read together with this prospectus. This policy is not available in all jurisdictions. This policy is not offered in any jurisdiction where this type of offering is not legal. Depending on the state where it is issued, policy features may vary. You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different. We offer other products to insure the lives of two people which may or may not better match your needs and interests. Replacing your existing life insurance policy(ies) with this policy may not be beneficial to you. YOUR POLICY o is a flexible premium variable joint and survivor universal life insurance policy; o is issued on two lives on whom insurance coverage may continue, in whole or in part, until both have died; o is issued by Southland Life Insurance Company; o is guaranteed not to lapse during the first five policy years if you meet certain requirements; and o is returnable by you during the free look period if you are not satisfied. YOUR PREMIUM PAYMENTS o are flexible, so the premium amount and frequency may vary; o are allocated to variable investment options and the guaranteed interest division, based on your instructions; o are invested in shares of the underlying investment portfolios under each variable investment option; and o can be invested in as many as eighteen investment options over the policy's lifetime. YOUR ACCOUNT VALUE o is the sum of your holdings in the variable division, the guaranteed interest division and the loan division; o has no guaranteed minimum value under the variable division. The value varies with the value of the underlying investment portfolio; o has a minimum guaranteed rate of return for amounts in the guaranteed interest division; and o is subject to specified expenses and charges, including possible surrender charges. DEATH PROCEEDS o are paid if the policy is in force at the death of the second of the two insured people; o are equal to the death benefit minus an outstanding policy loan, accrued loan interest and unpaid charges incurred before the second insured person dies; o are calculated under your choice of options; * Option A- a fixed minimum death benefit; * Option B- a stated death benefit plus your account value; and o are generally not federally income taxed if your policy continues to meet the federal income tax definition of life insurance. NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS LIFE INSURANCE POLICY IS NOT A BANK DEPOSIT OR OBLIGATION, FEDERALLY INSURED OR BACKED BY ANY BANK OR GOVERNMENT AGENCY. DATE OF PROSPECTUS _________ ___, _____ Survivor Dimensions Preliminary Prospectus Number ______ ISSUED BY: Southland Life UNDERWRITTEN BY: ING America Equities, Inc. Insurance Company P.O. Box 173789 P.O. Box 173789 Denver, CO 80217-3789 Denver, CO 80217-3789 THROUGH ITS: Southland Separate Account L1 ADMINISTERED BY: Southland Customer Service Center P.O. Box 173789 Denver, CO 80217-3789 (800) 224-3035 FOR OVERNIGHT DELIVERY: 1290 Broadway Denver, CO 80203 - -------------------------------------------------------------------------------- Survivor Dimensions 2 TABLE OF CONTENTS POLICY SUMMARY.................................................................4 Your Policy..............................................................4 Free Look Period.........................................................4 Premium Payments.........................................................4 Charges and Deductions...................................................4 Variable Division........................................................6 Fees and Expenses of the Investment Portfolios...........................6 Guaranteed Interest Division.............................................8 Policy Values............................................................8 Transfers of Account Value...............................................8 Special Policy Features..................................................8 Policy Modification, Termination and Continuation Features...............9 Death Benefits..........................................................10 Tax Considerations......................................................10 SOUTHLAND LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT OPTIONS..............................................12 Southland Life Insurance Company........................................12 Southland Life Separate Account L1......................................12 Investment Portfolio Objectives.........................................13 Guaranteed Interest Division............................................18 Maximum Number of Investment Options....................................18 DETAILED INFORMATION ABOUT THE POLICY..................................................................19 Applying for a Policy...................................................19 Temporary Insurance.....................................................19 Policy Issuance.........................................................20 Premiums................................................................20 Premium Payments Affect Your Coverage...................................22 Death Benefits..........................................................22 Riders..................................................................28 Special Features........................................................30 Policy Values...........................................................32 Transfers of Account Value..............................................33 Dollar Cost Averaging...................................................34 Automatic Rebalancing...................................................35 Policy Loans............................................................35 Partial Withdrawals.....................................................37 Lapse...................................................................38 Reinstatement...........................................................39 Surrender...............................................................39 General Policy Provisions...............................................40 Free Look Period...................................................40 Your Policy........................................................40 Age ..............................................................40 Ownership..........................................................40 Beneficiary(ies)...................................................41 Collateral Assignment..............................................41 Incontestability...................................................41 Misstatements of Age or Gender.....................................41 Suicide............................................................41 Transaction Processing.............................................41 Notification and Claims Procedures.................................42 Telephone Privileges...............................................42 Non-participation..................................................42 Distribution of the Policies.......................................42 Advertising Practices and Sales Literature.........................43 Settlement Provisions..............................................43 Administrative Information About the Policy.............................44 CHARGES, DEDUCTIONS AND REFUNDS...............................................45 Deductions from Premiums................................................46 Daily Deductions from the Separate Account..............................46 Monthly Deductions from Account Value...................................47 Policy Transaction Fees.................................................48 Persistency Refund......................................................48 Surrender Charge........................................................49 Group or Sponsored Arrangements, or Corporate Purchasers................52 TAX CONSIDERATIONS............................................................53 Tax Status of the Policy................................................53 Diversification Requirements............................................53 Tax Treatment of Policy Death Benefits..................................54 Modified Endowment Contracts............................................54 Multiple Policies.......................................................54 Distributions Other than Death Benefits from Modified Endowment Contracts.......................................54 Distributions Other than Death Benefits from Policies That Are Not Modified Endowment Contracts.................55 Investment in the Policy................................................55 Policy Loans............................................................55 Section 1035 Exchanges..................................................55 Tax-exempt Policy Owners................................................55 Possible Tax Law Changes................................................55 Changes to Comply with the Law..........................................55 Other...................................................................56 ILLUSTRATIONS.................................................................57 ADDITIONAL INFORMATION........................................................61 Directors and Officers..................................................61 Regulation..............................................................62 Legal Matters...........................................................62 Legal Proceedings.......................................................62 Experts.................................................................62 Registration Statement..................................................62 INDEX OF SPECIAL TERMS........................................................63 FINANCIAL STATEMENTS..........................................................64 APPENDIX A....................................................................67 APPENDIX B....................................................................68 - -------------------------------------------------------------------------------- Survivor Dimensions 3 POLICY SUMMARY YOUR POLICY Your policy provides life insurance protection on the lives of two insured people and insurance coverage may continue until both have died. The policy includes the basic policy, applications and riders or endorsements. As long as the policy remains in force, we pay a death benefit after the death of the second of the insured people. While your policy is in force, you may access a portion of your policy value by taking loans or partial withdrawals. You may surrender your policy for its net cash surrender value. At the policy anniversary nearest the younger insured person's 100th birthday you may surrender the policy or continue it under the continuation of coverage option. SEE CONTINUATION OF COVERAGE, PAGE 31. Life insurance is not a short-term investment. You should evaluate your need for life insurance coverage and this policy's long-term investment potential and risks before purchasing a policy. FREE LOOK PERIOD Within limits as specified by law, you have the right to examine your policy and return it for a refund of all premium payments we have received or the account value, if you are not satisfied for any reason. The policy is then void. SEE FREE LOOK PERIOD, PAGE 40. PREMIUM PAYMENTS The policy is a flexible premium policy because the amount and frequency of the premium payments you make may vary within limits. You must make premium payments: o for us to issue your policy; o sufficient to keep your policy in force; and o as necessary to continue certain benefits. Depending on the amount of premium you choose to pay, it may not be enough to keep your policy or certain riders in force. SEE PREMIUMS, PAGE 20. ALLOCATION OF NET PREMIUMS This policy has premium-based charges which are subtracted from your payments. We add the balance, or net premium, to your policy based on your investment instructions. You may allocate the net premium among one or more variable investment options and the guaranteed interest division. SEE ALLOCATION OF NET PREMIUMS, PAGE 21. CHARGES AND DEDUCTIONS All charges presented here are current unless stated otherwise. - -------- This summary highlights some of the important points about your policy. The policy is more fully described in the attached, complete prospectus. Please read it carefully. "We," "us," "our," and the "company" refer to Southland Life Insurance Company. "You" and "your" refer to the policy owner. The owner is the individual, entity, partnership, representative or party who may exercise all rights over the policy and receive the policy benefits during the insured people's lifetimes. State variations are covered in a special policy form used in that state. This prospectus provides a general description of the policy. Your actual policy and any riders are the controlling documents. If you would like to review a copy of the policy and riders, contact our customer service center or your agent/registered representative. - -------------------------------------------------------------------------------- Survivor Dimensions 4 CHARGES Other Than Investment Portfolio Annual Expenses (SEE CHARGES, DEDUCTIONS AND REFUNDS, PAGE 45)
- ---------------------------------- --------------------------------------- ----------------------------------------- CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED - ---------------------------------- --------------------------------------- ----------------------------------------- Tax Charges Each premium payment received 2.5% for state and local taxes; 1.5% for estimated federal income tax treatment of deferred acquisition costs. - ---------------------------------- --------------------------------------- ----------------------------------------- Sales Charge Each premium payment received Percentage of policy or segment premium up to target premium and above target premium: year 1-10 up to target 4.0%, above target 2%; year 11+, 2% of all premium received. - ---------------------------------- --------------------------------------- ----------------------------------------- Surrender Charge First fourteen policy or segment A dollar amount per $1,000 stated death years from account value benefit and a percentage of surrender charge target premium. Maximum of 100% in first 5 years. - ---------------------------------- --------------------------------------- ----------------------------------------- Mortality & Expense Risk Charge Daily, included in unit value 0.002466% daily (0.90% annually) - ---------------------------------- --------------------------------------- ----------------------------------------- Policy Charge Monthly from account value $15 per month for first ten policy years and $9 per month thereafter. - ---------------------------------- --------------------------------------- ----------------------------------------- Monthly Administrative Charge Monthly from account value $0.085 per $1,000 death benefit for the first ten policy years. $0.015 per $1,000 death benefit for policy years eleven through twenty. Applies to first $2,500,000 of death benefit. These maximum rates are guaranteed. - ---------------------------------- --------------------------------------- ----------------------------------------- Cost of Insurance Charge Monthly from account value Varies based on current cost of insurance rates and net amount at risk. - ---------------------------------- --------------------------------------- ----------------------------------------- Guaranteed Minimum Death Benefit Monthly from account value $0.005 per $1,000 of stated death Charge benefit per month. Guaranteed maximum. - ---------------------------------- --------------------------------------- ----------------------------------------- Rider Charges Monthly from account value Varies depending on the rider benefits you choose. - ---------------------------------- --------------------------------------- ----------------------------------------- Partial Withdrawal Fee Transaction date from account value Up to $25. - ---------------------------------- --------------------------------------- ----------------------------------------- Illustration Fee Transaction date from account value One free illustration per policy year, then a $25 fee may apply. - ---------------------------------- --------------------------------------- -----------------------------------------
- -------------------------------------------------------------------------------- Survivor Dimensions 5 VARIABLE DIVISION If you invest in the variable investment options, you may make or lose money depending on market conditions. The variable investment options are described in the prospectuses for the underlying investment portfolios. Each investment portfolio has its own investment objective. SEE INVESTMENT PORTFOLIO OBJECTIVES, PAGE 13. FEES AND EXPENSES OF THE INVESTMENT PORTFOLIOS The separate account purchases shares of the underlying investment portfolios, at net asset value. This price reflects investment management fees, 12b-1 fees, and other direct expenses deducted from the portfolio assets. This table describes these fees and expenses in gross amounts and net amounts after waiver or reimbursement of fees or expenses by the investment portfolio advisers. Waivers or reimbursements are voluntary and subject to change. The portfolio expense information was provided to us by the portfolios and we have not independently verified this information. These expenses are not direct charges against variable division assets or reductions from contract values; rather these expenses are included in computing each underlying portfolio's net asset value, which is the share price used to calculate the unit values of the variable investment options. For a more complete description of the portfolios' costs and expenses, see the prospectuses for the portfolios. - -------------------------------------------------------------------------------- Survivor Dimensions 6 INVESTMENT PORTFOLIO ANNUAL EXPENSES (AS A PERCENTAGE OF PORTFOLIO AVERAGE NET ASSETS)
Fees and Investment Total Expenses Total Net Management 12b-1 Other Portfolio Waived or Portfolio Portfolio Fees Fees Expenses Expenses Reimbursed Expenses --------- ---- ---- -------- -------- ---------- -------- THE ALGER AMERICAN FUND Alger American Growth Service Class/1/ Alger American Leveraged AllCap/1/ Alger American MidCap Growth/1/ Alger American SmallCap Service Class/1/ FIDELITY VARIABLE INSURANCE PRODUCTS FUND VIP Equity - Income Service Class/2/ VIP Growth Service Class/2/ VIP High Income Service Class/2/ VIP Overseas Service Class/2/ FIDELITY VARIABLE INSURANCE PRODUCTS FUND II VIP II Asset Manager Service [to be filed by amendment] Class VIP II Contrafund Service Class/2/ VIP II Index 500 VIP II Investment Grade Bond GCG TRUST/3/ Liquid Asset Portfolio Mid-Cap Growth Portfolio Research Portfolio Total Return Portfolio INVESCO VARIABLE INVESTMENT FUNDS, INC. INVESCO VIF - Equity Income/4/ INVESCO VIF - Utilities/5/ JANUS ASPEN SERIES/6/ Janus Aspen Aggressive Growth Service Class/6/ Janus Aspen Balanced Service Class /6/ Janus Aspen Growth Service Class/6/ Janus Aspen International Growth Service Class/6/ Janus Aspen Worldwide Growth Service Class/6/ - ----------------------------
/11 Included in Alger American Leveraged AllCap portfolios "Other Expenses" is 0.01% of interest expense. /2/ Each Fidelity Service class fund currently pays .10% of its average net assets as a 12b-1 fee. This fee could vary; but cannot exceed .25%. The total Net Portfolio Expenses presented are before Fidelity absorbed a portion of the portfolio and custodian expenses for some portfolios with brokerage commissions and uninvested cash balances. After the fee absorption, the total net portfolio expenses would be 0.75% for the VIP Growth Portfolio and 0.98 % for the VIP Overseas Portfolio. - -------------------------------------------------------------------------------- Survivor Dimensions 7 /3/ The GCG Trust pays Directed Services, Inc. ("DSI") for its services a monthly management fee based on the annual rates of the average daily net assets of the investment portfolios. DSI (and not the GCG Trust) in turn pays each portfolio manager a monthly fee for managing the assets of the portfolios. /4/ INVESCO absorbed a portion of VIF-Equity Income Fund's "Other Expenses" and "Total Portfolio Expenses." After this absorption, these expenses are 0.42% and 1.17% respectively. /5/ INVESCO absorbed a portion of VIF-Utilities Fund's "Other Expenses" and "Total Portfolio Expenses." After this absorption, these expenses are 0.61% and 1.21%, respectively. /6/ Janus' expenses are based upon expenses for the fiscal year ended December 31, 1999, restated to reflect a reduction in the management fee for these portfolios. Janus Aspen Service Class has a distribution plan or "Rule 12b-1 plan" which is described in the Funds' prospectuses. GUARANTEED INTEREST DIVISION The guaranteed interest division guarantees principal and is part of our general account. Any amount you direct into the guaranteed interest division is credited with interest at a fixed rate. SEE GUARANTEED INTEREST DIVISION, PAGE 18. POLICY VALUES Your policy account value is the amount you have in the guaranteed interest division, plus the amount you have in each variable investment option. If you have an outstanding policy loan, your account value includes the amount in the loan division. SEE POLICY VALUES, PAGE 32 AND PARTIAL WITHDRAWALS, PAGE 37. YOUR ACCOUNT VALUE IN THE VARIABLE DIVISION Accumulation units are the way we measure value in the variable division. Accumulation unit value is the value of one unit of a variable investment option on a valuation date. Each variable investment option has a different accumulation unit value. SEE DETERMINING VALUES IN THE VARIABLE DIVISION, PAGE 32. The accumulation unit value for each variable investment option reflects the investment performance of the underlying investment portfolio during the valuation period. Each accumulation unit value reflects asset-based charges under the policy and the expenses of the investment portfolios. SEE DETERMINING VALUES IN THE VARIABLE DIVISION, PAGE 32 AND HOW WE CALCULATE ACCUMULATION UNIT VALUES, PAGE 33. TRANSFERS OF ACCOUNT VALUE With some limitations, you may make transfers among the variable investment options or to the guaranteed interest division each policy year. There are restrictions on transfers from the guaranteed interest division. SEE TRANSFERS OF ACCOUNT VALUE, PAGE 33. SPECIAL POLICY FEATURES DESIGNATED DEDUCTION INVESTMENT OPTION You may designate one investment option from which we will deduct all of your monthly deductions. SEE DESIGNATED DEDUCTION INVESTMENT OPTION, PAGE 30. RIDERS You may attach additional benefits to your policy by rider. In most cases, we deduct a monthly charge from your account value for these benefits. SEE RIDERS, PAGE 28. DOLLAR COST AVERAGING Dollar cost averaging is a systematic plan of transferring account values to selected investment options. It is intended to protect your policy's value from short-term price fluctuations. However, dollar cost averaging does not assure a profit, nor does it protect against a loss in a declining market. Dollar cost averaging is free. SEE DOLLAR COST AVERAGING, PAGE 34. AUTOMATIC REBALANCING - -------------------------------------------------------------------------------- Survivor Dimensions 8 Automatic rebalancing periodically reallocates your net account value among your selected investment options to maintain your specified distribution of account value among those investment options. Automatic rebalancing is free. SEE AUTOMATIC REBALANCING, PAGE 35. LOANS You may take loans against your policy's net cash surrender value. We charge a maximum annual loan interest rate of 4% for preferred loans and 6% for other loans. We credit an annual interest rate of 4% on amounts held in the loan account as collateral for your loan. SEE POLICY LOANS, PAGE 33. Loans may have tax consequences. SEE TAX CONSIDERATIONS, PAGE 53. PARTIAL WITHDRAWALS You may withdraw part of your net cash surrender value any time after your first policy anniversary. You may make up to twelve partial withdrawals per policy year. Partial withdrawals may reduce your policy's death benefit and will reduce your account value. SEE PARTIAL WITHDRAWALS, PAGE 37. Partial withdrawals may have tax consequences. SEE TAX CONSIDERATIONS, PAGE 53. PERSISTENCY REFUND After your tenth policy anniversary, where permitted by law, we add a persistency refund to your account value. SEE PERSISTENCY REFUND, PAGE 48. POLICY MODIFICATION, TERMINATION AND CONTINUATION FEATURES RIGHT TO EXCHANGE POLICY For 24 months after the policy date you may exchange your policy for a guaranteed policy, unless law requires differently. There is no charge for this exchange. SEE RIGHT TO EXCHANGE POLICY, PAGE 31. POLICY SPLIT OPTION Under certain circumstances, you may split your policy into two separate life insurance policies each insuring the life of one insured person. This split may occur upon divorce between the two insured people, business dissolution, or a possible adverse future change in the tax law, unless law requires otherwise. The policy split option is free. SEE POLICY SPLIT OPTION, PAGE 30. SURRENDER You may surrender your policy for its net cash surrender value at any time before the death of the second of the insured people. All insurance coverage ends on the date we receive your request. SEE SURRENDER, PAGE 39. LAPSE In general, insurance coverage continues as long as your net cash surrender value is enough to pay the monthly deductions. However, your policy and its riders are guaranteed not to lapse during the first five years of your policy if the conditions of the special continuation period have been met. SEE LAPSE, PAGE 38 AND SPECIAL CONTINUATION PERIOD, PAGE 21. REINSTATEMENT You may reinstate your policy and its riders within five years of its lapse if you still own the policy and the insured people are still living and meet our underwriting requirements. You will need to give proof of insurability. You will also need to pay required reinstatement premiums. If the guaranteed minimum death benefit lapses and you do not correct it, this feature terminates. Once it terminates, you cannot reinstate this feature. If you had a policy loan existing when coverage ended, we will reinstate it with accrued loan interest to the date of the lapse. SEE REINSTATEMENT, PAGE 39. POLICY MATURITY If at least one of the insured people is still living on the maturity date or the policy anniversary nearest the younger insured person's 100th birthday and you do not choose to let the continuation of coverage feature become effective, you must surrender your policy. We will pay the net account value. Your policy then ends. SEE POLICY MATURITY, PAGE 31. CONTINUATION OF COVERAGE At the policy anniversary nearest the younger insured person's 100th birthday, you may choose to let the - -------------------------------------------------------------------------------- Survivor Dimensions 9 continuation of coverage feature become effective. SEE CONTINUATION OF COVERAGE, PAGE 31. DEATH BENEFITS After the death of the second of the two insured people, we pay death proceeds to the beneficiary(ies) if your policy is still in force. Based on the death benefit option you have chosen, the base death benefit varies. We generally require a minimum total death benefit of $250,000 to issue your policy. If you have an adjustable term insurance rider, the minimum stated death benefit to issue a policy is $100,000, as long as your total death benefit is at least $250,000. You may change your death benefit amount while your policy is in force, subject to certain restrictions. SEE CHANGES IN DEATH BENEFIT AMOUNTS, PAGE 26. TAX CONSIDERATIONS Under current federal income tax law, death benefits of life insurance policies generally are not subject to income tax. In order for this treatment to apply, the policy must qualify as a life insurance contract. We believe it is reasonable to conclude that the policy will qualify as a life insurance contract. SEE TAX STATUS OF THE POLICY, PAGE 53. Assuming the policy qualifies as a life insurance contract under current federal income tax law, your account value earnings are generally not subject to income tax as long as they remain within your policy. However depending on circumstances, the following events may cause taxable consequences for you: o partial withdrawals; o surrender; or o lapse. In addition, if your policy is a modified endowment contract, a loan against or secured by the policy may cause income taxation. A penalty tax may be imposed on a distribution from a modified endowment contract as well. SEE MODIFIED ENDOWMENT CONTRACTS, PAGE 54. In recent years, Congress has adopted new rules relating to life insurance owned by businesses. Any business contemplating the purchase of a new policy or a change in an existing policy should consult a tax adviser. You should consult a qualified legal or tax adviser before you purchase your policy. - -------------------------------------------------------------------------------- Survivor Dimensions 10 How the Policy Works YOUR PREMIUM Premium Deductions You make a premium ----------------------------> payment o sales charge o tax charges / \---------------------------- NET PREMIUM We allocate the net premium to the investment options you choose | | ----------------------------------------- | | \/ \/ GUARANTEED VARIABLE INVESTMENT INVESTMENT PORTFOLIOS The investment INTEREST DIVISION OPTIONS / The variable investment manager deducts Amounts you allocate Amounts you allocate are \-- options invest in investment are held in our general account held in our separate account --> investment portfolios ------> management fees, | | 12b-1 fees, and ----------------------------------------- other portfolio | expenses | | Refunds | o persistency refund ------------>| Monthly Deductions o policy charge | ---------------------> o cost of insurance | | charge | | o monthly administrative \/ | charge ACCUMULATED VALUE | o rider charges The total value of your --| o guaranteed minimum policy | death benefit charge | | Separate Account | | Deductions | |---------------------> o mortality and expense \/ | risk charge LOAN DIVISION | Amount set aside to | secure a policy loan | | | Transaction Fees o partial withdrawal fee ---------------------> o illustration fee o surrender charge
- -------------------------------------------------------------------------------- Survivor Dimensions 11 SOUTHLAND LIFE, THE SEPARATE ACCOUNT AND THE INVESTMENT OPTIONS SOUTHLAND LIFE INSURANCE COMPANY Southland Life Insurance Company is a stock life insurance company organized under the laws of the State of Texas in 1908. Our headquarters are located at 5780 Powers Ferry Road, NW, Atlanta, Georgia 30327-4390. We are admitted to do business in the District of Columbia and all states except New York. Our total assets exceeded $2.5 billion, and our shareholder's equity exceeded $351 million on a generally accepted accounting principles basis as of December 31, 1999. (See Financial Statements.) We have a complete line of life insurance products, including: o annuities; o individual life; o group life; and o pension products. Southland is a wholly owned indirect subsidiary of ING Groep, N.V. ("ING"). ING is one of the world's three largest diversified financial services organizations. ING is headquartered in Amsterdam, The Netherlands. It has consolidated assets over $495 billion on a Dutch (modified U.S.) generally accepted accounting principles basis, as of December 31, 1999. The principal underwriter and distributor for our policies is ING America Equities, Inc. ING America Equities is an affiliate of Southland and is a registered broker-dealer with the SEC and the NASD. ING America Equities is a stock corporation organized under the laws of the State of Colorado in 1993, and is located at 1290 Broadway, Denver, Colorado 80203-5699. SOUTHLAND LIFE SEPARATE ACCOUNT L1 SEPARATE ACCOUNT STRUCTURE We established Southland Separate Account L1 (the "separate account") on February 25, 1994, under Texas insurance law. It is a unit investment trust, registered with the SEC under the Investment Company Act of 1940. The SEC does not supervise our management of the separate account or Southland. The separate account is used to support our variable life insurance policies and for other purposes allowed by law and regulation. We keep the separate account assets separate from our general account and other separate accounts. We may offer other variable life insurance contracts with different benefits and charges that invest in the separate account. We do not discuss these contracts in this prospectus. The separate account may invest in other securities not available for the policy described in this prospectus. The company owns all the assets in the separate account. We credit gains to or charge losses against the separate account without regard to performance of other investment accounts. ORDER OF SEPARATE ACCOUNT LIABILITIES Law provides that we may not charge general account liabilities against separate account assets equal to its reserves and other liabilities. This means that if we ever become insolvent, the separate account assets will be used first to pay separate account policy claims. Only if separate account assets remain after these claims have been satisfied can these assets be used to pay other policy owners and creditors. The separate account may have liabilities from assets credited to other variable life policies offered by the separate account. If the assets of the separate account are greater than required reserves and policy liabilities, we may transfer the excess to our general account. INVESTMENT OPTIONS Investment options include the variable and the guaranteed interest divisions, but not the loan division. The separate account has several variable investment options which invest in shares of underlying investment portfolios. This means that the investment performance of a policy depends on the performance of the investment portfolios you choose. Each investment portfolio has its own investment objective. These investment portfolios are not available directly to individual investors. They are available only as underlying investments for variable annuity and variable life insurance contracts and certain pension accounts. - -------------------------------------------------------------------------------- Survivor Dimensions 12 INVESTMENT PORTFOLIOS Each of the investment portfolios is a separate series of an open-end management investment company. The investment company receives investment advice from a registered investment adviser. The investment portfolios sell shares to separate accounts of insurance companies. These insurance companies may or may not be affiliated with us. This is known as "shared funding." Investment portfolios may sell shares as the underlying investment for both variable annuity and variable life insurance contracts. This process is known as "mixed funding." The investment portfolios may sell shares to certain qualified pension and retirement plans that qualify under Section 401 of the Internal Revenue Code ("IRC"). As a result, a material conflict of interest may arise between insurance companies, owners of different types of contracts and retirement plans or their participants. If there is a material conflict, we will consider what should be done, including removing the investment portfolio from the separate account. There are certain risks with mixed and shared funding, and with selling shares to qualified pension and retirement plans. See the investment portfolios' prospectuses. INVESTMENT PORTFOLIO OBJECTIVES Each investment portfolio has a different investment objective that it tries to achieve by following its own investment strategy. The objectives and policies of each investment portfolio affect its return and its risks. With this prospectus, you must receive the current prospectus for each investment portfolio. We summarize the investment objectives for each investment portfolio here. You should read each investment portfolio prospectus. Certain investment portfolios offered under this policy have investment objectives and policies similar to other funds managed by the portfolio's investment adviser. The investment results of a portfolio may be higher or lower than those of other funds managed by the same adviser. There is no assurance and no representation is made that the investment results of any investment portfolio will be comparable to those of another fund managed by the same investment adviser. Some investment portfolio advisers and distributors (or their affiliates) may pay us compensation for servicing, distribution, administration or other expenses. We may receive 12b-1 fees from the investment portfolios. The amount of compensation is usually based on the aggregate assets of the investment portfolio from contracts that we issue or administer. Some advisers and distributors may pay us more or less than others and our affiliates may pay us significantly more. - -------------------------------------------------------------------------------- Survivor Dimensions 13
- ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT PORTFOLIO OBJECTIVES - ------------------------------------ ------------------------------ -------------------------------------------------------- VARIABLE INVESTMENT OPTION INVESTMENT COMPANY/ ADVISER/ INVESTMENT OBJECTIVE MANAGER/ SUB-ADVISER - ------------------------------------ ------------------------------ -------------------------------------------------------- Alger American Investment Company: Seeks long term capital appreciation by focusing on Growth Portfolio The Alger American Fund growing companies that generally have broad product Investment Adviser: lines, markets, financial resources and depth of Fred Alger Management, Inc. management. Under normal circumstances, the portfolio invests primarily in the equity securities of large companies. The portfolio considers a large company to have a market capitalization of $1 billion or greater. - ------------------------------------ ------------------------------ -------------------------------------------------------- Alger American Leveraged AllCap Investment Company: Seeks long term-capital appreciation by investing, Portfolio The Alger American Fund under normal circumstances, in the equity securities Investment Adviser: of companies of any size which demonstrate promising Fred Alger Management, Inc. growth potential. The portfolio can leverage, that is, borrow money, up to one-third of its total assets to buy additional securities. By borrowing money, the portfolio has the potential to increase its returns if the increase in the value of the securities purchased exceeds the cost of borrowing, including interest paid on the money borrowed. - ------------------------------------ ------------------------------ -------------------------------------------------------- Alger American MidCap Growth Investment Company: Seeks long-term capital appreciation by focusing on Portfolio The Alger American Fund midsize companies with promising growth potential. Investment Adviser: Under normal circumstances, the portfolio invests Fred Alger Management, Inc. primarily in the equity securities of companies having a market capitalization within the range of companies in the S&P MidCap 400 Index. - ------------------------------------ ------------------------------ -------------------------------------------------------- Alger American Small Investment Company: Seeks long-term capital appreciation by focusing on Capitalization Portfolio The Alger American Fund small, fast-growing companies that offer innovative Investment Adviser: products, services or technologies to a rapidly Fred Alger Management, Inc. expanding marketplace. Under normal circumstances, the portfolio invests primarily in the equity securities of small capitalization companies. A small capitalization company is one that has a market capitalization within the range of the Russell 2000 Growth Index or the S&P SmallCap 600 Index. - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP Equity-Income Portfolio Investment Company: Fidelity Seeks reasonable income and potential for capital Variable Insurance Products appreciation. With a yield which exceeds the Fund composite yield on the securities comprising the Investment Manager: S&P(R)500. Invests in domestic and foreign issuers. Fidelity Management & Invests at least 65% of total assets in Research Company income-producing equity securities, which tend to lead to investments in large cap "value" stocks. Potentially invests in other types of equity securities and debt securities, including lower-quality debt securities. Uses fundamental analysis of each issuer's financial condition and industry position and market and economic conditions to select investments. - ------------------------------------ ------------------------------ --------------------------------------------------------
- -------------------------------------------------------------------------------- Survivor Dimensions 14
- ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT PORTFOLIO OBJECTIVES - ------------------------------------ ------------------------------ -------------------------------------------------------- VARIABLE INVESTMENT OPTION INVESTMENT COMPANY/ ADVISER/ INVESTMENT OBJECTIVE MANAGER/ SUB-ADVISER - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP Growth Portfolio Investment Company: Fidelity Seeks capital appreciation by investing in common Variable Insurance stocks of companies that it believes have Products Fund above-average growth potential, either domestic or Investment Manager: foreign issuers. Fidelity Management & Research Company - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP High Income Portfolio Investment Company: Fidelity Seeks a high level of current income while also Variable Insurance Products considering growth of capital by investing in domestic Fund and foreign issuers and companies in troubled or Investment Manager: uncertain financial condition. Invests at least 65% Fidelity Management & of total assets in income-producing debt securities, Research Company preferred stocks and convertible securities with an emphasis on lower-quality debt securities. Potentially invests in non-income producing debt securities, including defaulted securities and common stocks. Uses fundamental analysis of each issuer's financial condition, industry position, market and economic conditions to select investments. - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP Overseas Portfolio Investment Company: Fidelity Seeks long-term growth of capital by investing at Variable Insurance Products least 65% of total assets in foreign securities. Fund Investment Manager: Fidelity Management & Research Company - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP II Asset Manager Portfolio Investment Company: Fidelity Seeks high total return with reduced risk over the Variable Insurance Products long term by allocating its assets among stocks, Fund II bonds, and short-term instruments. Investment Manager: Fidelity Management & Research Company - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP II Contrafund Portfolio Investment Company: Fidelity Seeks long-term capital appreciation by investing Variable Insurance Products primarily in common "growth" stocks or "value" stocks Fund II or both of domestic and foreign issuers. Invests in Investment Manager: securities of companies whose value it believes is not Fidelity Management & fully recognized by the public. Uses fundamental Research Company analysis of each issuer's financial condition, industry position, market and economic conditions to select investments. - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP II Index 500 Portfolio Investment Company: Fidelity Seeks investment results that correspond to the total Variable Insurance Products return of common stocks publicly traded in the United Fund II States as represented by the S&P(R) 500. Investment Manager: Fidelity Management & Research Company Sub-Advisor: Bankers Trust Company - ------------------------------------ ------------------------------ --------------------------------------------------------
- -------------------------------------------------------------------------------- Survivor Dimensions 15
- ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT PORTFOLIO OBJECTIVES - ------------------------------------ ------------------------------ -------------------------------------------------------- VARIABLE INVESTMENT OPTION INVESTMENT COMPANY/ ADVISER/ INVESTMENT OBJECTIVE MANAGER/ SUB-ADVISER - ------------------------------------ ------------------------------ -------------------------------------------------------- VIP II Investment Grade Bond Investment Company: Fidelity Seeks as high level of current income as is consistent Portfolio Variable Insurance Products with the preservation of capital by investing in U.S. Fund II dollar-denominated investment grade bonds. Allocates Investment Manager: assets across different market sectors and Fidelity Management & maturities. Analyzes a security's structural Research Company features, current pricing and trading opportunities, and the credit quality of its issuer in selecting investments. Manages the portfolio to have similar overall interest rate risk to Lehman Brothers Aggregate Bond Index(R). - ------------------------------------ ------------------------------ -------------------------------------------------------- Liquid Asset Portfolio Investment Company: Seeks high level of current income consistent with the GCG Trust preservation of capital and liquidity. An investment Investment Manager: in the Fund is not insured or guaranteed by the Directed Services, Inc. Federal Deposit Insurance Corporation or any other Portfolio Manager: government agency. Although the Fund seeks to ING Investment Management, preserve the value of your investment at $1.00 per LLC share, it is possible to lose money by investing in (an affiliate) the Fund. - ------------------------------------ ------------------------------ -------------------------------------------------------- Mid-Cap Growth Portfolio Investment Company: Seeks long-term growth of capital. Invests primarily GCG Trust in equity securities of companies with medium market Investment Manager: capitalization which the portfolio manager believes Directed Services, Inc. have above-average growth potential. Portfolio Manager: Massachusetts Financial Services Company - ------------------------------------ ------------------------------ -------------------------------------------------------- Research Portfolio Investment Company: Seeks long-term growth of capital and future income. GCG Trust Invests 80% in common stocks or securities convertible Investment Manager: into common stocks of companies believed to have Directed Services, Inc. better than average prospects for long-term growth, Portfolio Manager: expected earnings or cash flow. Massachusetts Financial Services Company - ------------------------------------ ------------------------------ -------------------------------------------------------- Total Return Portfolio Investment Company: Seeks above-average income (compared to a portfolio GCG Trust entirely invested in equity securities) consistent Investment Manager: with the prudent employment of capital. Invests Directed Services, Inc. primarily in a combination of equity and fixed income Portfolio Manager: securities. Massachusetts Financial Services Company - ------------------------------------ ------------------------------ --------------------------------------------------------
- -------------------------------------------------------------------------------- Survivor Dimensions 16
- ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT PORTFOLIO OBJECTIVES - ------------------------------------ ------------------------------ -------------------------------------------------------- VARIABLE INVESTMENT OPTION INVESTMENT COMPANY/ ADVISER/ INVESTMENT OBJECTIVE MANAGER/ SUB-ADVISER - ------------------------------------ ------------------------------ -------------------------------------------------------- VIF-Equity Income Fund Investment Company: INVESCO Seeks high current income, with growth of capital as a Variable Investment Funds, secondary objective by investing at least 65% of its Inc. assets in dividend-paying common and preferred Investment Adviser: stocks. The rest of the fund's assets are invested in INVESCO Funds Group, Inc. debt securities, and lower-grade debt securities. Sub-Advisor: INVESCO Capital Management, Inc. - ------------------------------------ ------------------------------ -------------------------------------------------------- VIF-Utilities Fund Investment Company: INVESCO Seeks capital appreciation and income by investing at Variable Investment Funds, least 80% of its assets in companies doing business in Inc. the utilities economic sector. The remainder of the Investment Adviser: fund's assets are not required to be invested in the INVESCO Funds Group, Inc. utilities economic sector. Sub-Advisor: INVESCO Capital Management, Inc. - ------------------------------------ ------------------------------ -------------------------------------------------------- Aspen Aggressive Growth Portfolio Investment Company: Janus Seeks long-term growth of capital by investing Aspen Series primarily in common stocks selected for their growth Investment Adviser: potential and normally investing at least 50% of its Janus Capital equity assets in medium-sized companies which fall within the range of companies in the S&P(R) MidCap 400 Index. - ------------------------------------ ------------------------------ -------------------------------------------------------- Aspen Balanced Portfolio Investment Company: Janus Seeks long-term growth of capital, consistent with Aspen Series preservation of capital and balanced by current income Investment Adviser: by normally investing 40-60% of its assets in Janus Capital securities selected primarily for their growth potential and 40-60% of its assets in securities selected primarily for their income potential. The portfolio normally invests at least 25% of its assets in fixed-income securities. - ------------------------------------ ------------------------------ -------------------------------------------------------- Aspen Growth Portfolio Investment Company: Janus Seeks long-term growth of capital in a manner Aspen Series consistent with preservation of capital by investing Investment Adviser: primarily in common stocks selected for their growth Janus Capital potential. Although the portfolio can invest in companies of any size, it generally invests in larger, more established companies. - ------------------------------------ ------------------------------ --------------------------------------------------------
- -------------------------------------------------------------------------------- Survivor Dimensions 17
- ---------------------------------------------------------------------------------------------------------------------------- INVESTMENT PORTFOLIO OBJECTIVES - ------------------------------------ ------------------------------ -------------------------------------------------------- VARIABLE INVESTMENT OPTION INVESTMENT COMPANY/ ADVISER/ INVESTMENT OBJECTIVE MANAGER/ SUB-ADVISER - ------------------------------------ ------------------------------ -------------------------------------------------------- Aspen International Investment Company: Janus Seeks long-term growth of capital by investing at Growth Portfolio Aspen Series least 65% of its total assets in securities of issuers Investment Adviser: from at least five different countries, excluding the Janus Capital United States. Although the portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and it may at times invest all of its assets in fewer than five countries or even a single country. - ------------------------------------ ------------------------------ -------------------------------------------------------- Aspen Worldwide Investment Company: Janus Seeks long-term growth of capital in a manner Growth Portfolio Aspen Series consistent with preservation of capital by investing Investment Adviser: primarily in common stocks of companies of any size Janus Capital throughout the world. The portfolio normally invests in issuers from at least five different countries, including the United States. The portfolio may at times invest in fewer than five countries or even in a single country. - ------------------------------------ ------------------------------ --------------------------------------------------------
GUARANTEED INTEREST DIVISION You may allocate all or a part of your net premium and transfer your net account value into the guaranteed interest division. The guaranteed interest division guarantees principal and is part of our general account. It pays interest at a fixed rate that we declare. The general account contains all of our assets other than those held in the separate account (variable investment options) or other separate accounts. The general account supports our non-variable insurance and annuity obligations. We have not registered interests in the guaranteed interest division under the Securities Act of 1933. Also, we have not registered the guaranteed interest division or the general account as an investment company under the Investment Company Act of 1940 (because of exemptive and exclusionary provisions). This means that the general account, the guaranteed interest division and its interests are generally not subject to regulation under these Acts. The SEC staff has not reviewed the disclosures in this prospectus relating to the general account and the guaranteed interest division. These disclosures, however, may be subject to certain requirements of the federal securities law regarding accuracy and completeness of statements made. The amount you have in the guaranteed interest division is all of the net premium you allocate to that division, plus transfers you make to the guaranteed interest division plus interest earned. Amounts you transfer out of or withdraw from the guaranteed interest division reduce this amount. It is also reduced by deductions for charges from your account value allocated to the guaranteed interest division. We declare the interest rate that applies to all amounts in the guaranteed interest division. This interest rate is never less than the minimum guaranteed interest rate of 3% and will be in effect for at least twelve months. Interest compounds daily at an effective annual rate that equals the declared rate. We credit interest to the guaranteed interest division on a daily basis. We pay interest regardless of the actual investment performance of our account. We bear all of the investment risk for the guaranteed interest division. MAXIMUM NUMBER OF INVESTMENT OPTIONS There are three divisions: the variable division, the - -------------------------------------------------------------------------------- Survivor Dimensions 18 guaranteed interest division and the loan division. Under the variable division, there are numerous variable investment options. SEE SOUTHLAND LIFE SEPARATE ACCOUNT L1, PAGE 12 AND INVESTMENT PORTFOLIO OBJECTIVES, PAGE 13. You may invest in a total of eighteen investment options over the life of your policy. Investment options include the variable and the guaranteed interest divisions, but not the loan division. As an example, if you have had funds in seventeen variable investment options and the guaranteed interest division, these are the only investment options to which you may later add or transfer funds. However, you could still take a policy loan and access the loan division. You may want to use fewer investment options in the early years of your policy, so that you can invest in others in the future. If you invest in eighteen variable investment options, you will not be able to invest in the guaranteed interest division. DETAILED INFORMATION ABOUT THE POLICY This prospectus describes our standard Survivor Dimensions Universal Life insurance policy. There may be differences in the policy because of state requirements where we issue your policy. We will describe any such differences in your policy. The illustrations beginning on page 58 show how the policies work. APPLYING FOR A POLICY You purchase this variable universal life policy by submitting an application to us. On the policy date, the joint equivalent age of the two insured people must be no less than 15 and no more than age 85. The individual age of each insured person must be no more than 90 years of age on the policy date. There is no maximum age difference between the two insured people. The insured people are the two people on whose lives we issue the policy. The insured people share some relationship and commonly include, among others: husband and wife; business partners; parent and child; grandparent and grandchild; and siblings. Upon the death of the second of the insured people we pay the death proceeds. SEE AGE, PAGE 40. You may request that we back-date the policy up to six months to allow either or both of the insured people to give proof of a younger age for the purposes of your policy. We may reduce the minimum death benefit for group or sponsored arrangements, or corporate purchasers. Our underwriting and reinsurance procedures in effect at the time you apply limit the maximum death benefit. TEMPORARY INSURANCE If you apply and qualify, we may issue temporary insurance in an amount equal to the face amount of the permanent insurance for which you applied. The maximum amount of temporary insurance for binding limited life insurance coverage is $3 million, which includes any other in-force coverage you have with us. Temporary coverage begins when: 1. you have completed and signed our binding limited life insurance coverage form; 2. we receive and accept a premium payment of at least your scheduled premium (selected on your application); and 3. part I of the application is complete. Temporary life insurance coverage ends on the earliest of: o the date we return your premium payments; o five days after we mail notice of termination to the address on your application; o the date your policy coverage starts; o the date we refuse to issue a policy based on your application; or o 90 days after you sign our binding limited life insurance coverage form. There is no death benefit under the temporary insurance agreement if: o there is a material misrepresentation in your answers on the binding limited life insurance coverage form; o there is a material misrepresentation in statements on your application; o the person or persons intended to be the - -------------------------------------------------------------------------------- Survivor Dimensions 19 insured people die by suicide or self-inflicted injury; or o the bank does not honor your premium check. POLICY ISSUANCE Before we issue a policy, we require satisfactory evidence of insurability of both insured people and payment of your initial premium. This evidence may include a medical examination and completion of all underwriting and issue requirements. The policy date shown on your policy schedule determines: o monthly processing dates; o policy months; o policy years; and o policy anniversaries. The policy date is not affected by when you receive the policy. We charge monthly deductions from the policy date unless your policy specifies otherwise. The policy date is determined one of three ways: 1. the date you designate on your application, subject to our approval; 2. the back-date of the policy to save age, subject to our approval and law; or 3. if there is no designated date or back-date, the policy date is: o the date all underwriting and administrative requirements have been met if we receive your initial premium before we issue your policy; or o the date we receive your initial premium if it is after we approve your policy for issue. DEFINITION OF LIFE INSURANCE We apply a test to make sure that your policy meets the federal income tax definition of life insurance. The guideline premium/cash value corridor test applies to your policy. We may limit premium payments relative to your policy death benefit under this test. SEE TAX STATUS OF THE POLICY, PAGE 53. PREMIUMS You may choose the amount and frequency of premium payments, within limits. You cannot make premium payments after the death of the second of the insured people or after the continuation of coverage period begins. SEE CONTINUATION OF COVERAGE, PAGE 31. We consider payments we receive to be premium payments if you do not have an outstanding loan and your policy is not in the continuation of coverage period. After we deduct certain charges from your payment, we add the remaining net premium to your policy. SCHEDULED PREMIUMS Your premiums are flexible. You may select your scheduled premium (within our limits) when you apply for your policy. The scheduled premium, shown in your policy and schedule, is the amount you choose to pay over a stated time period. THIS AMOUNT MAY OR MAY NOT BE ENOUGH TO KEEP YOUR POLICY IN FORCE. You may receive premium reminder notices for the scheduled premium on a quarterly, semi-annual or annual basis. You are not required to pay the scheduled premium. You may choose to pay your premium by electronic funds transfer each month. This option is not available for your initial premium. The financial institution that makes your electronic funds transfer may charge for this service. You can change the amount of your scheduled premium within our minimum and maximum limits at any time. If you fail to pay your scheduled premium or if you change the amount of your scheduled premium, your policy performance will be affected. During the special continuation period, your scheduled premium should not be less than the minimum annual premium shown in your policy. If you want the guaranteed minimum death benefit, your scheduled premium should not be less than the guarantee period annual premium shown in your policy. SEE GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. UNSCHEDULED PREMIUM PAYMENTS Generally speaking, you may make unscheduled premium payments at any time, however: 1. We may limit the amount of your - -------------------------------------------------------------------------------- Survivor Dimensions 20 unscheduled premium payments that would result in an increase in the base death benefit amount required by the federal income tax law definition of life insurance. We may require satisfactory evidence that the insured people are insurable at the time that you make the unscheduled premium payment if the death benefit is increased due to your unscheduled premium payments; 2. We may require proof that at least one insured person is insurable if your unscheduled premium payment will cause the net amount at risk to increase; and 3. We will return premium payments which are greater than the "seven-pay" limit for your policy if your payment would cause your policy to become a modified endowment contract, unless you have acknowledged in writing the new modified endowment contract status for your policy. SEE MODIFIED ENDOWMENT CONTRACTS, PAGE 54 AND CHANGES TO COMPLY WITH THE LAW, PAGE 55. If you have an outstanding policy loan and you make an unscheduled payment, we will consider it a loan repayment, unless you tell us otherwise. If your payment is a loan repayment, we do not take tax or sales charges which apply to premium payments. TARGET PREMIUM Target premium is not based on your scheduled premium. Target premium is actuarially determined based on the age, gender and premium class of the insured persons. The target premium is used in determining your initial sales charge, deferred sales charge and the sales compensation we pay. It may or may not be enough to keep your policy in force. You are not required to pay the target premium and there is no penalty for paying more or less. The target premium for your policy and each additional segment is listed in your policy schedule. SEE PREMIUMS, PAGE 20. MINIMUM ANNUAL PREMIUM To qualify for the special continuation period, you must pay a minimum annual premium during each of your first five policy years. Your minimum annual premium is based on: o each insured person's age, gender and premium class; o the stated death benefit of your policy; and o riders on your policy. Your minimum annual premium is shown in the schedule pages of your policy. We may reduce the minimum annual premium for group or sponsored arrangements, or for corporate purchasers. SPECIAL CONTINUATION PERIOD The special continuation period is the first five policy years. Under the special continuation period, we guarantee that your policy will not lapse, regardless of its net cash surrender value, if on a monthly processing date: o the sum of all premiums you have paid, minus partial withdrawals that you have taken, minus policy loans that you have taken, including accrued loan interest is greater than or equal to; o the minimum monthly premiums for each policy month from the first month of your policy through the current policy monthly processing date. The minimum monthly premium is one-twelfth of the minimum annual premium. During the first five years of your policy if there is not enough net cash surrender value to pay the monthly deductions and you have satisfied our requirements, we do not allow your policy to lapse. We do not permanently waive policy charges. Instead, we continue to deduct these charges which may result in a negative net cash surrender value, unless you pay enough premium to prevent this. The negative balance is your unpaid monthly deductions owing. At the end of the special continuation period to avoid lapse of your policy you must pay enough premium to bring the net cash surrender value to zero plus the amount that covers your estimated monthly deductions for the following two months. SEE LAPSE, PAGE 38. INVESTMENT DATE AND ALLOCATION OF NET PREMIUMS The net premium is the balance remaining after we deduct tax and sales charges from your premium payment. Insurance coverage does not begin until we receive your initial premium. It must be at least equal to the sum of the scheduled premiums due from your policy - -------------------------------------------------------------------------------- Survivor Dimensions 21 date through your investment date. The investment date is the first date we apply the net premium we have received to your policy. We apply the initial net premium to your policy after: a) we receive the required amount of premium; and b) all issue requirements have been received by our customer service center; and c) we have approved your policy for issue. Amounts you designate for the guaranteed interest division will be allocated to that division on the investment date. If your state requires the return of your premium during the free look period, we initially invest amounts you have designated for the variable division in the GCG Liquid Asset Portfolio. We later transfer these amounts from the GCG Liquid Asset Portfolio to your selected variable investment options, based on your most recent premium allocation instructions, at the earlier of the following dates: o five days after we mailed your policy plus your state free look period has ended; or o we have received your delivery receipt plus your state free look period has ended. If your state provides for return of account value during the free look period or no free look period, we invest amounts you designated for the variable division directly into your selected variable investment options. We allocate all later premium payments to your policy on the valuation date of receipt. We use your most recent premium allocation instructions specified in whole numbers totaling 100% and using up to eighteen investment options over the life of your policy. SEE MAXIMUM NUMBER OF INVESTMENT OPTIONS, PAGE 18. PREMIUM PAYMENTS AFFECT YOUR COVERAGE Unless you have the guaranteed minimum death benefit feature or your policy is in the special continuation period, your coverage lasts only as long as your net cash surrender value is enough to pay the monthly charges and your cash surrender value is more than your outstanding policy loan plus accrued loan interest. If you do not meet these conditions, your policy will enter the 61-day grace period and you must make a premium payment to avoid lapse. SEE LAPSE, PAGE 38 AND GRACE PERIOD, PAGE 38. If you pay your minimum premium each year during the first five policy years and take no policy loan or withdrawals, we guarantee your policy and riders will not lapse during the special continuation period, regardless of your net cash surrender value. SEE SPECIAL CONTINUATION PERIOD, PAGE 21. Under the guaranteed minimum death benefit, the base death benefit portion of your policy remains effective until the end of the guarantee period. The guaranteed minimum death benefit feature does not apply to riders which can lapse and terminate during the guarantee period. You must meet all conditions of the guarantee. SEE GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. MODIFIED ENDOWMENT CONTRACTS There are special federal income tax rules for distributions from life insurance policies which are modified endowment contracts. These rules apply to policy loans, surrenders and partial withdrawals. Whether or not these rules apply depends upon whether or not the premiums we receive are greater than the "seven-pay" limit. If we find that your scheduled premium causes your policy to be a modified endowment contract on your policy date, we will require you to acknowledge that you know the policy is a modified endowment contract. We will issue your policy based on the scheduled premium you selected. If you do not want your policy to be issued as a modified endowment contract, you may reduce your scheduled premium to a level which does not cause your policy to be a modified endowment contract. We will then issue your policy based on the revised scheduled premium. SEE MODIFIED ENDOWMENT CONTRACTS, PAGE 54. DEATH BENEFITS As a joint and survivor universal life insurance policy, your policy has a joint nature to the death benefit. We do not pay death proceeds until the death of the second of the insured people. Your death benefit is calculated as of the date of death of the second of the insured people. You can decide the amount of insurance you need, now and in the future. You can combine the long-term advantages of permanent life insurance (base - -------------------------------------------------------------------------------- Survivor Dimensions 22 coverage) with the flexibility and short-term advantages of term life insurance. Both permanent and term life insurance are available with your one policy. The stated death benefit is the permanent element of your policy. The adjustable term insurance rider is the term insurance element of your policy. SEE ADJUSTABLE TERM INSURANCE RIDER, PAGE 28. Generally we require a minimum total death benefit of $250,000 to issue a policy. If you have an adjustable term insurance rider, the minimum stated death benefit to issue a policy is $100,000, as long as your total death benefit is at least $250,000. It may be to your economic advantage to include part of your insurance coverage under the adjustable term insurance rider. Both the cost of insurance under the adjustable term insurance rider and the cost of insurance for the base death benefit are deducted monthly from your account value and generally increase with the age of the insured people. Use of the adjustable term insurance rider may reduce the distribution allowance, but may increase the monthly cost of insurance. SEE ADJUSTABLE TERM INSURANCE RIDER, PAGE 28. - -------------------------------------------------------------------------------- Survivor Dimensions 23 DEATH BENEFIT SUMMARY THIS CHART ASSUMES NO DEATH BENEFIT OPTION CHANGES AND NO REQUESTED OR SCHEDULED INCREASES OR DECREASES IN STATED OR TARGET DEATH BENEFIT AND THAT PARTIAL WITHDRAWALS ARE LESS THAN THE PREMIUM WE RECEIVE.
OPTION A OPTION B ========================= ==================================================== =================================================== STATED DEATH The amount of policy death benefit at The amount of policy death benefit at issue, BENEFIT issue, not including rider coverage. This not including rider coverage. This amount amount stays level throughout the life of stays level throughout the life of the policy. the policy. BASE DEATH The greater of the stated death benefit or The greater of the stated death benefit plus the BENEFIT the account value multiplied by the account value or the account value multiplied appropriate factor from the definition of by the appropriate factor from the definition life insurance factors. of life insurance factors. TARGET DEATH Stated death benefit plus adjustable term Stated death benefit plus adjustable term BENEFIT insurance rider benefit. This amount insurance rider benefit. This amount remains remains level throughout the life of level throughout the life of the policy. the policy. TOTAL DEATH It is the greater of the target death benefit It is the greater of the target death benefit plus BENEFIT or the base death benefit. the account value or the base death benefit. ADJUSTABLE The adjustable term insurance rider benefit The adjustable term insurance rider benefit is TERM is the total death benefit minus base death the total death benefit minus the base death INSURANCE benefit, but it will not be less than zero. If benefit, but it will not be less than zero. If the RIDER BENEFIT the account value multiplied by the death account value multiplied by the death benefit benefit corridor factor is greater than the corridor factor is greater than the stated death stated death benefit, the adjustable term benefit plus the account value, the adjustable insurance benefit will be decreased. It will term insurance rider benefit will be decreased. be decreased so that the sum of the base It will be decreased so that the sum of the death benefit and the adjustable term base death benefit and the adjustable term insurance rider benefit is not greater than insurance rider benefit is not greater than the the target death benefit. If the base death target death benefit plus the account value. If benefit becomes greater than the target the base death benefit becomes greater than death benefit, then the adjustable term the target death benefit plus the account insurance rider benefit is zero. value, then the adjustable term insurance rider benefit is zero.
BASE DEATH BENEFIT Your base death benefit can be different from your stated death benefit as a result of: o your choice of death benefit option; o your choice of the enhanced death benefit corridor option; o increases or decreases in the stated death benefit; or o a change in your death benefit option. Federal income tax law requires that your death benefit be at least as much as your account value multiplied by a factor defined by law. This factor is based on: o the insured people's joint equivalent age; o the insured people's gender; o the guideline premium/cash value corridor test for the federal income tax law definition of life insurance. SEE APPENDIX A, PAGE 68. As long as your policy is in force, we will pay the death proceeds to your beneficiary(ies) calculated at the date of death of the second of the insured people. The beneficiary(ies) is(are) the person (people) you name to receive the death proceeds from your policy. The death proceeds are: o your base death benefit; plus - -------------------------------------------------------------------------------- Survivor Dimensions 24 o rider benefits; minus o your outstanding policy loan with accrued loan interest; minus o outstanding policy charges incurred before the death of the second of the insured people. There could be outstanding policy charges if the date of death of the second of the insured people happens while your policy is in the grace period or in the five-year special continuation period. DEATH BENEFIT OPTIONS You have a choice of two death benefit options: option A or option B (described below). Your choice may result in your base death benefit being greater than your stated death benefit. If you choose death benefit option A, your base death benefit is the greater of: 1. your stated death benefit on the date of death of the second of the insured people; or 2. your account value on the date of death of the second of the insured people multiplied by the appropriate factor from the definition of life insurance factors shown in Appendix A or B. With option A, positive investment performance generally reduces your net amount at risk, which lowers your policy's cost of insurance charge. Option A offers insurance coverage that is a set amount with potentially lower cost of insurance charges over time. Under death benefit option B, your base death benefit is the greater of: 1. your stated death benefit plus your account value on the date of death of the second of the insured people; or 2. your account value on the date of death of the second of the insured people multiplied by the appropriate factor from the definition of life insurance factors shown in Appendix A or B. With option B, investment performance is reflected in your insurance coverage. Death benefit option B is not available during the continuation of coverage period. If you select option B on your policy, it automatically converts to death benefit option A when the continuation of coverage period begins. SEE CONTINUATION OF COVERAGE, PAGE 31. CHANGES IN DEATH BENEFIT OPTIONS You may request a change in your death benefit option at any time on or after your first monthly processing date and before the continuation of coverage period begins. A death benefit option change applies to your entire stated or base death benefit. Changing your death benefit option may reduce or increase your target death benefit, as well as your stated death benefit. You may change from death benefit option A to option B or from option B to option A. For you to change from death benefit option A to option B, we may require proof that the insured people are insurable under our normal rules of underwriting. Your death benefit option change is effective on your next monthly processing date after we approve it, so long as at least one day remains before your monthly processing date. If less than one day remains before your monthly processing date, the change will be effective on your second following monthly processing date. After we approve your request, we send a new policy schedule page to you. You should attach it to your policy. We may ask you to return your policy to our customer service center so that we can make this change for you. We may not approve a death benefit option change if it reduces the target death benefit below the minimum we require to issue your policy. On the effective date of your option change, your stated death benefit changes as follows: - -------------------------------------------------------------------------------- Survivor Dimensions 25 Change Change Stated Death Benefit From To Following Change: ---- -- ---------------- Option A Option B your stated death benefit before the change minus your account value as of the effective date of the change. Option B Option A your stated death benefit before the change plus your account value as of the effective date of the change. We increase or decrease your stated death benefit to keep the net amount at risk the same on the date of your death benefit option change. There is no change to the amount of coverage under your adjustable term insurance rider. SEE COST OF INSURANCE CHARGE, PAGE 47. If you change your death benefit option, we adjust the stated death benefit for each of your segments by allocating your account value to each benefit segment. For example, if you change from death benefit option A to option B, your stated death benefit is decreased by the amount of your account value allocation to that segment. If you change from death benefit option B to option A, your stated death benefit is increased by the amount allocated to that segment. We do not impose a surrender charge for any decrease in your stated death benefit because you change your death benefit option. CHANGES IN DEATH BENEFIT AMOUNTS Contact your agent/registered representative or our customer service center to request a change in your policy's death benefit. The change is effective as of the next monthly processing date after we approve your request. Your requested change must be for at least $1,000. After we make your requested change, we will send you a new schedule page. Keep it with your policy. Or we may ask you to send your policy to us so that we can make the change for you. You may change the target death benefit once in a policy year. We may not approve a requested change if it will disqualify your policy as life insurance under federal income tax law. If we disapprove a change for any reason, we provide you with a notice of our decision. SEE TAX CONSIDERATIONS, PAGE 53. You may request a decrease in the stated death benefit only after your first policy anniversary. If you decrease your death benefit, you may not decrease your target death benefit below the minimum we require to issue your policy. Requested reductions in the death benefit amount will first decrease the target death benefit. We decrease your stated death benefit only after your adjustable term insurance rider coverage is reduced to zero. If you have more than one segment, we divide decreases in stated death benefit among your benefit segments pro rata unless law requires differently. You may increase your target or stated death benefit on or after your first monthly processing date and before the policy anniversary when the joint equivalent age of the insured people is 85. You must provide satisfactory evidence that the insured person is still insurable to increase your death benefit. Unless you tell us differently, we assume your request for an increase in your target death benefit is also a request for an increase to your stated death benefit. Thus, the amount of your adjustable term insurance rider will not change. The initial death benefit segment, or first segment, is the stated death benefit on your policy's effective date. A requested increase in stated death benefit will cause a new segment to be created. Once created, it is permanent unless law requires differently. The segment year runs from the segments effective date to its anniversary. Each new segment may have: o a new initial sales charge; o a new deferred sales charge; o new cost of insurance charges, guaranteed and current; o a new incontestability period; o a new suicide exclusion period; and o a new target premium. We allocate the net amount at risk among segments in the same proportion that each segment bears to the total stated death benefit. Premiums we receive after an increase are applied to your policy segments in the - -------------------------------------------------------------------------------- Survivor Dimensions 26 same proportion as the target premium for each segment bears to the total target premium for all segments. For each coverage segment, your schedule shows your target premium which is used to determine your initial sales charge and deferred sales charge. There may be tax consequences as a result of a change in your death benefit amount. Consult your tax adviser before making a change. SEE TAX STATUS OF THE POLICY, PAGE 53 AND MODIFIED ENDOWMENT CONTRACTS, PAGE 54. GUARANTEED MINIMUM DEATH BENEFIT Usually, your coverage lasts only as long as your net cash surrender value is enough to pay the monthly charges and your cash surrender value is more than your outstanding policy loan plus accrued loan interest. Your account value depends on: 1. timing and amount of any premium payments; 2. the investment performance of the variable investment options; 3. the interest you earn in the guaranteed interest division; 4. the amount of your monthly charges; 5. partial withdrawals you take; and 6. loan activity you may have. The guaranteed minimum death benefit may be put in force only at policy issue. This option extends the period that your policy's stated death benefit remains in effect even if the variable investment options perform poorly. It has a guarantee period that lasts until the continuation of coverage period begins, so long as you meet all requirements. The guaranteed minimum death benefit coverage does not apply to riders, including the adjustable term insurance rider. Therefore, if your net cash surrender value is not enough to pay the deductions as they come due on your policy and if your policy is no longer in the special continuation period, only the stated death benefit portion of your coverage is guaranteed to stay in force. Charges for your guaranteed minimum death benefit and base coverage are deducted each month to the extent that there is sufficient net account value to pay these charges. If there is not sufficient net account value to pay a charge, it is not permanently waived. Deduction of charges will resume once there is sufficient net account value. The guaranteed minimum death benefit feature is not available in some states. REQUIREMENTS TO MAINTAIN THE GUARANTEE PERIOD To qualify for the guaranteed minimum death benefit you must pay an annual premium higher than the minimum annual premium. This higher premium is called the guarantee period annual premium. The guarantee period monthly premium is one-twelfth of the guarantee period annual premium. Your net account value must meet certain diversification requirements. Your guarantee period annual premium is based on a percentage of the guideline level premium calculated under the federal tax laws. Your guideline level annual premium depends on: o your policy's target death benefit; o each insured person's age, gender, premium class and underwriting characteristics; o the death benefit option you chose; o additional rider coverage on your policy; and o other additional benefits on your policy. At each monthly processing date we test to see if you have paid enough premium to keep your guarantee in place. We calculate: o actual premiums we receive; minus o the amount of any partial withdrawals you make; minus o policy loan amounts you take with accrued loan interest. This amount must equal or exceed; o the sum of the guarantee period monthly premium payments for each policy month starting with your first policy month through the end of the policy month that begins on the current monthly processing date. You must continually meet the requirements of the guarantee period for this feature to remain in effect. We show the guarantee period annual premium on your policy schedule. If your policy benefits increase, the guarantee period annual premium increases. In addition, the guarantee period ends if your net - -------------------------------------------------------------------------------- Survivor Dimensions 27 account value on any monthly processing date is notdiversified as follows: 1. your net account value is invested in at least five investment options; and 2. no more than 35% of your net account value is in any one investment option. Your policy will continue to meet the diversification requirements if: 1. you have automatic rebalancing and you meet the two diversification tests listed above; or 2. you have dollar cost averaging which results in transfers into at least four investment options with no more than 35% of any transfer directed to any one investment option. SEE DOLLAR COST AVERAGING, PAGE 34 AND AUTOMATIC REBALANCING, PAGE 35. If you choose the guaranteed minimum death benefit, you must make sure your policy satisfies the premium test and diversification test. If you fail to satisfy either test and you do not correct it, this feature terminates. Once it terminates, you cannot reinstate the guaranteed minimum death benefit feature. The guarantee period annual premium then no longer applies to your policy. RIDERS Your policy may include benefits, attached by rider. A rider may have an additional cost. You may cancel riders at any time. Periodically we may offer other riders not listed here. Contact your agent/registered representative for a complete list of riders available. Riders may have tax consequences. SEE MODIFIED ENDOWMENT CONTRACTS, PAGE 54. ADJUSTABLE TERM INSURANCE RIDER You may increase your death proceeds by adding an adjustable term insurance rider. This rider allows you to schedule the pattern of death benefits appropriate for anticipated needs. As the name suggests, the adjustable term insurance rider adjusts over time to maintain your desired level of coverage. You specify a target death benefit when you apply for this rider. The target death benefit can be level for the life of your policy or can be scheduled to change at the beginning of a selected policy year(s). SEE DEATH BENEFITS, PAGE 22. We generally require a minimum target death benefit of $250,000 to issue a policy. If you have an adjustable term insurance rider, the minimum stated death benefit to issue a policy is $100,000, as long as your target death benefit is at least $250,000. We generally restrict your target death benefit to an amount not more than ten times your stated death benefit at issue. Under certain circumstances, we will be willing to allow you to specify a target death benefit of up to twenty-two times your stated death benefit during the first four policy years. After this four-year period, the normal target death benefit maximum would apply. The adjustable term insurance rider death benefit is the difference between your target death benefit and your base death benefit, but not less than zero. The rider's death benefit automatically adjusts daily as your base death benefit changes. Your death benefit depends on which death benefit option is in effect: OPTION A: If option A is in effect, the total death benefit is the greater of: a. the target death benefit; or b. the account value multiplied by the appropriate factor from the death benefit corridor factors in the policy. OPTION B: If option B is in effect, the total death benefit is the greater of: a. the target death benefit plus the account value; or b. the account value multiplied by the appropriate factor from the death benefit corridor factors in the policy. For example, under option A, assume your base death benefit changes as a result of changes in your account value. The adjustable term insurance rider adjusts to provide death benefits equal to your target death benefit in each year: - -------------------------------------------------------------------------------- Survivor Dimensions 28 Base Death Target Death Adjustable Term Benefit Benefit Insurance Rider Amount ------- ------- ---------------------- $201,500 $250,000 $48,500 202,500 250,000 47,500 202,250 250,000 47,750 It is possible that the amount of your adjustable term insurance may be zero if your base death benefit increases enough. Using the same example, if the base death benefit under your policy grew to $250,000 or more, the adjustable term insurance coverage would be zero. Even when the adjustable term insurance is reduced to zero, your rider remains in effect until you remove it from your policy. Therefore, if later the base death benefit drops below your target death benefit, the adjustable term insurance rider coverage reappears to maintain your target death benefit. You may change the target death benefit schedule after it is issued, based on our rules. SEE CHANGES IN DEATH BENEFIT AMOUNTS, PAGE 26. We may deny future, scheduled increases to your target death benefit if you cancel a scheduled change or if you ask for an unscheduled decrease in your target death benefit. Partial withdrawals, changes from death benefit option A to option B and base decreases may reduce your target death benefit. SEE PARTIAL WITHDRAWALS, PAGE 37 AND CHANGES IN DEATH BENEFIT OPTIONS, PAGE 25. There is no defined premium for a given amount of adjustable term insurance coverage. Instead, we deduct a separate monthly cost of insurance charge from your account value. The cost of insurance for this rider is calculated as the monthly cost of insurance rate for the rider coverage multiplied by the adjustable term death benefit in effect at the monthly processing date. The cost of insurance rates are determined by us from time to time. They are based on the issue ages, genders and premium classes of the insured people, as well as the length of time since your policy date. The monthly guaranteed maximum cost of insurance rates for this rider will be in your policy. SEE COST OF INSURANCE CHARGE, PAGE 47. If the target death benefit is increased by you after the rider is issued, we use the same cost of insurance rate schedule for the entire coverage for this rider. These rates are based on the original premium classes even though new evidence of insurability is required for the increased schedule. Not all policy features apply to the adjustable term insurance rider. The rider does not contribute to the policy account value nor to surrender value. It does not affect investment performance and cannot be used for a policy loan. The adjustable term insurance rider provides benefits only at the death of the second of the insured people. SINGLE LIFE TERM INSURANCE RIDER This rider provides a benefit upon the death of one of the primary insured people under your policy. You may choose to add a single life term insurance rider for just one insured person. Alternatively, you may add two single life term insurance riders: one for each insured person. You may add this rider to your policy at any time if both insured people are alive and insurable according to our rules. We will issue the single life term insurance rider on an insured person who is between the ages of 15 and 85. Coverage may continue until the earlier of when: o the insured person covered by this rider reaches age 100; o the continuation of coverage provision becomes effective; o use of the guaranteed minimum death benefit terminates this rider; o the insured person covered by this rider dies; o the grace period expires; or o the policy is surrendered. SEE CONTINUATION OF COVERAGE, PAGE 31 AND GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. The minimum amount of coverage for a single life term insurance rider is $1,000. The maximum coverage under this rider is subject to our underwriting determinations. At issue, you may schedule the rider's death benefit to increase or decrease. Your request for an increase or decrease in rider coverage is effective on the next monthly processing date after we approve your request. There may be underwriting or other requirements which must be met before we approve your request. A requested change in your coverage must be for at least $1,000. If you schedule or request an increase after issue, the person insured under this rider will be subject again to our underwriting requirements. - -------------------------------------------------------------------------------- Survivor Dimensions 29 The charge for this rider is based on the age, gender, premium class and underwriting characteristics of the insured person. The charge for this rider is deducted on each monthly processing date as a cost per each $1,000 of the net amount at risk under the rider. See the policy schedule pages for information on your actual cost. There are no surrender charges for decreases in the amount of coverage under the single life term rider. SPECIAL FEATURES DESIGNATED DEDUCTION INVESTMENT OPTION You may designate an investment option from which we will deduct your monthly charges. You may make this designation at any time. You may not use the loan division as your designated deduction option. If you do not choose a designated deduction investment option or if the amount in your designated deduction investment option is not enough to cover the deductions and charges, the charges will be taken from the variable and guaranteed interest divisions in the same proportion that your account value in each has to your total net account value on the monthly processing date. If you change your designated deduction investment option, we consider it a premium allocation change for which there may be a charge. SEE POLICY TRANSACTION FEES, PAGE 48. POLICY SPLIT OPTION Under certain circumstances, you may exchange your policy for two single life insurance policies: one on each of the two insured people. The policy split option has its own insurability requirements which may be met at or before the time your policy is split. Evidence of insurability is required for a new single life policy where coverage is greater than 50% of your original policy death benefit or for an insured person who is subject to certain underwriting ratings. On the effective date of the policy split, the available death benefit under your policy will be divided between the two new single life insurance policies. You may take less than the maximum death benefit amount available. Unless law requires otherwise, you may use the policy split option if: a) three months following the effective date of a final divorce decree regarding the marriage of the two insured people; b) there is a change to the federal estate tax law which results in either: i) removal of the unlimited marital deduction provision; or ii) a reduction in the current maximum federal estate tax of at least 50% after your policy date; or c) there is a dissolution of business conducted or owned by the two insured people. You must send us written notice of your election to use the policy split option within 180 days of the occurrence of an eligible event. You must provide satisfactory evidence that the event has occurred. The effective date of the policy split is the first monthly processing date after we approve it. The insurance coverage under the two individual life insurance policies will start on the effective date of the policy split only if both insured people are alive on that date. If either insured person is not alive on that date, your exchange is void. All terms and conditions of the new policies apply once your policy is split and they may differ from those of this policy. Consult your new single life insurance policies. The premiums for each new policy will be based on each insured person's age, gender and premium class at the time of the split of your policy. Premiums will be due for each new policy under the terms of the new policy. The cash surrender value of the old policy will be allocated to the new policies on the effective date in the same proportion that the face amount was divided between the two single life insurance policies, unless we agree to a different allocation. If this allocation causes an increase in the face amount of either of the new single life policies, we may limit the cash surrender value you may apply to each new policy. Any remaining cash surrender value will be paid to you in cash and may be taxable. If you have an outstanding policy loan it will be divided and transferred to each new single life insurance policy in the same proportion as your cash surrender value is allocated. Any remaining loan balance must be paid before the effective date of the policy split. Any person or entity to which you have assigned your policy must agree to the policy split. An assignment of your policy generally will apply to each new single life insurance policy. - -------------------------------------------------------------------------------- Survivor Dimensions 30 If you have a single life term insurance rider on your policy at the date of the policy split, you may have a term insurance rider insuring the same insured person if that rider is available on the new policy. Other riders may or may not be available on the new policies and may be subject to new proof of insurability. Exercising the policy split option may be treated as a taxable transaction. Moreover, the two single life insurance policies could be treated as modified endowment contracts. SEE TAX CONSIDERATIONS, PAGE 53. You may not split your policy into two single life insurance policies if any of the following has happened: a) the continuation of coverage period has begun; b) one of the insured people has died; c) your policy grace period has ended; or d) your policy has been terminated or surrendered. You should consult a tax adviser before exercising the policy split option. RIGHT TO EXCHANGE POLICY During the first 24 months after your policy date, you have the right to exchange your policy for a guaranteed policy, unless law requires differently. We transfer the amount you have in the variable division to the guaranteed interest division. We allocate all future net premiums only to the guaranteed interest division. We do not allow future payments or transfers to the variable division after you exercise this right. We will not charge you for this exchange. SEE GUARANTEED INTEREST DIVISION, PAGE 18. POLICY MATURITY You may surrender your policy at any time. At the policy anniversary nearest the younger insured person's 100th birthday if you do not want the continuation of coverage feature become effective. You may surrender the policy for the net account value and end coverage. Part of this payment may be taxable. You should consult your tax adviser. CONTINUATION OF COVERAGE The continuation of coverage feature allows your insurance coverage to continue beyond policy maturity. If on the policy anniversary nearest the younger insured person's 100th birthday you allow the continuation of coverage feature to become effective, we: o convert target death benefit to stated death benefit; o convert death benefit option B to death benefit option A, if applicable; o terminate all riders; o transfer your net account value (excluding the amount in the loan division) into the guaranteed interest division; and o terminate dollar cost averaging and automatic rebalancing. Your insurance coverage continues until the death of the second of the insured people, unless the policy lapses or is surrendered. However: o we accept no further premium payments; o we deduct no further charges; o your monthly deductions cease; and o you may not make transfers into the variable division. During the continuation of coverage period, you may take policy loans or partial withdrawals from your policy. If we pay a persistency refund on the guaranteed interest division, it will be credited to your policy. SEE PERSISTENCY REFUND, PAGE 48. If you have an outstanding policy loan, interest continues to accrue. If you fail to make sufficient loan or loan interest payments, it is possible that the loan balance plus accrued interest may become greater than your account value and cause your policy to lapse. To avoid this lapse, you may make loan and loan interest payments during the continuation of coverage period. If you wish to stop coverage during the continuation of coverage period, you may surrender your policy and receive the net account value. There is no surrender charge during the continuation of coverage period . All normal consequences of surrender apply. SEE SURRENDER, PAGE 39 AND SURRENDER CHARGE, PAGE 49. The continuation of coverage feature may not be available in all states. If a state has approved this feature, it is an automatic feature and you do not need to take any action to activate it. The tax consequences of coverage continuing beyond the younger insured's person's 100th birthday are - -------------------------------------------------------------------------------- Survivor Dimensions 31 uncertain. You should consult a tax adviser as to those consequences. POLICY VALUES ACCOUNT VALUE Your account value is the total amount you have in the guaranteed interest division, the variable division and the loan division. Your account value reflects: o net premiums applied; o charges deducted; o partial withdrawals taken; o investment performance of the variable investment options; o interest earned on the guaranteed interest division; and o interest earned on the loan division. NET ACCOUNT VALUE Your policy's net account value is your account value minus the amount of your outstanding policy loan and accrued loan interest, if any. CASH SURRENDER VALUE Your cash surrender value is your account value minus any surrender charge due. NET CASH SURRENDER VALUE Your net cash surrender value is your cash surrender value minus the amount of your outstanding policy loan and accrued loan interest, if any. DETERMINING VALUES IN THE VARIABLE DIVISION The amounts in the variable division are measured by accumulation units and accumulation unit values. The value of a variable investment option is the accumulation unit value for that option multiplied by the number of accumulation units you own in that option. Each variable investment option has a different accumulation unit value. The accumulation unit value is the value of one accumulation unit determined on each valuation date. The accumulation unit value of each variable investment option varies with the investment performance of the underlying portfolio. It reflects: o investment income; o realized and unrealized gains and losses; o investment portfolio expenses; and o daily mortality and expense risk charges we take from the separate account. SEE HOW WE CALCULATE ACCUMULATION UNIT VALUES, PAGE 33. You purchase accumulation units when you allocate premium or make transfers to a variable investment option, including transfers from the loan division. We redeem accumulation units: o when amounts are transferred from a variable investment option (including transfers to the loan division); o for your policy's monthly deductions from your account value; o for policy transaction charges; o when you take a partial withdrawal; o when you surrender your policy; and o to pay the death proceeds. We calculate the number of accumulation units purchased or sold by: 1. dividing the dollar amount of your transaction by: 2. the accumulation unit value for that variable investment option calculated at the close of business on the valuation date of the transaction. A valuation date is one on which the net asset value of the investment portfolio shares and unit values of the variable investment options are determined. Valuation dates are each day the New York Stock Exchange and the company's customer service center are open for business, except for days on which a corresponding investment portfolio does not value its shares, or any other day as required by law. Each valuation date ends at 4 p.m. Eastern Time. Our customer service center may not be open for business on: New Year's Day, Martin Luther King, Jr.'s birthday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after Thanksgiving, Christmas Day and the day before or after Christmas. The date of a transaction is the date we receive your premium or transaction request at our customer service center, so long as the date of receipt is a valuation date. We use the accumulation unit value which is next calculated after we receive your premium or transaction request and we use the number of accumulation units attributable to your policy on the date of receipt. - -------------------------------------------------------------------------------- Survivor Dimensions 32 We take monthly deductions from your account value on the monthly processing date. If your monthly processing date is not a valuation date, the monthly deduction is processed on the next valuation date. The value of amounts allocated to the variable investment options goes up or down depending on investment performance of the underlying investment portfolio. FOR AMOUNTS IN THE VARIABLE INVESTMENT OPTIONS, THERE IS NO GUARANTEED MINIMUM VALUE. HOW WE CALCULATE ACCUMULATION UNIT VALUES We determine accumulation unit values on each valuation date. We generally set the accumulation unit value for a variable investment option at $10 when the investment option is first opened. After that first date, the accumulation unit value on any valuation date is: 1. the accumulation unit value for the preceding valuation date multiplied by 2. the variable investment option's accumulation experience factor for the valuation period. Every valuation period begins at 4:00 p.m. Eastern time on a valuation date and ends at 4:00 p.m. Eastern time on the next valuation date. We calculate an accumulation experience factor for each variable investment option every valuation date as follows: 1. We take the share value of the underlying portfolio shares as reported to us by the investment portfolio managers as of the close of business on that valuation date. 2. We add dividends or capital gain distributions declared per share and reinvested by the investment portfolio on the date that the share value is affected. If applicable, we subtract a charge for taxes. 3. We divide the resulting amount by the value of the shares in the underlying investment portfolio at the close of business on the previous valuation date. 4. We then subtract the mortality and expense risk charge under your policy. The daily charge is .002466% (.90% annually) of the accumulation unit value. If the previous day was not a valuation date, the charge is multiplied by the number of days since the last valuation date. TRANSFERS OF ACCOUNT VALUE You may make transfers among the variable investment options or the guaranteed interest division in each policy year. If your state requires a refund of premium during the free look period, you may not make transfers until after your free look period ends. We do not limit the number of transfers you may make. You may not make transfers during the continuation of coverage period. You may make transfer requests in writing, or by telephone if you have telephone privileges, to our customer service center. Your transfer takes effect on the valuation date we receive your request. The minimum amount you may transfer is $100. This minimum does not need to come from one investment option or be transferred to one investment option as long as the total amount you transfer is at least $100. However, if the amount remaining in an investment option is less than $100 and you make a transfer request from that investment option, we transfer the entire amount. EXCESSIVE TRADING Excessive trading activity can disrupt investment portfolio management strategies and increase portfolio expenses through: o increased trading and transaction costs; o forced and unplanned portfolio turnover; o lost opportunity costs; and o large asset swings that decrease the investment portfolio's ability to provide maximum investment return to all policyowners. In response to excessive trading, we may place restrictions or refuse transfers made by third-party agents acting on behalf of owners such as market timing services. We will refuse or place restrictions on transfers when we determine, in our sole discretion, that transfers are harmful to the investment portfolios or to policyowners as a whole. GUARANTEED INTEREST DIVISION TRANSFERS - -------------------------------------------------------------------------------- Survivor Dimensions 33 Transfers into the guaranteed interest division are not restricted. You may transfer amounts from the guaranteed interest division only in the first 30 days of each policy year. Transfer requests received within 30 days before your policy anniversary will be processed on your policy anniversary. A request received by us within 30 days after your policy anniversary is effective on the valuation date we receive it. Transfer requests made at any other time will not be processed. Transfers from the guaranteed interest division in each policy year are limited to the largest of: o 25% of your guaranteed interest division balance at the time of your first transfer or withdrawal out of it in that policy year; o the sum of the amounts you have transferred and withdrawn from the guaranteed interest division in the prior policy year; or o $100. DOLLAR COST AVERAGING If your policy has at least $10,000 invested in either qualifying source investment portfolio, you may elect dollar cost averaging. The qualifying source investment portfolio is the GCG Liquid Asset Portfolio. The main goal of dollar cost averaging is to protect your policy values from short-term price changes. DOLLAR COST AVERAGING DOES NOT ASSURE A PROFIT NOR DOES IT PROTECT YOU AGAINST A LOSS IN A DECLINING MARKET. This systematic plan of transferring account values is intended to reduce the risk of investing too much when the price of an investment portfolio's shares is high. It is intended to reduce the risk of investing too little when the price of an investment portfolio's shares is low. Since you transfer the same dollar amount to other investment options each period, you purchase more units in an investment option when the unit value is low and you purchase fewer units if the unit value is high. There is no charge for this feature. You may add dollar cost averaging to your policy at any time. The first dollar cost averaging date must be at least one day after we receive your dollar cost averaging request. If your state requires refund of all premiums we receive during the free look period, dollar cost averaging cannot begin until your free look period has ended. With dollar cost averaging, you designate either a dollar amount or a percentage of your account value for automatic transfer from a qualifying source investment portfolio. Each period we automatically transfer the amount you select from your chosen source investment portfolio to one or more other variable investment options. You may not use the guaranteed interest division or the loan division in dollar cost averaging. The minimum percentage you may transfer to any one investment option is 1% of the total amount you transfer. You must transfer at least $100 on each dollar cost averaging transfer date. Dollar cost averaging may occur on the same day of the month on a monthly, quarterly, semi-annual or annual basis. Unless you tell us otherwise, dollar cost averaging automatically takes place monthly on the monthly processing date. You may have both dollar cost averaging and automatic rebalancing at the same time. However, the dollar cost averaging source investment portfolio cannot be included in your automatic rebalancing program. CHANGING DOLLAR COST AVERAGING You may change your dollar cost averaging program one time per policy year. If you have telephone privileges, you may change the program by telephoning our customer service center. SEE TELEPHONE PRIVILEGES, PAGE 42. TERMINATING DOLLAR COST AVERAGING You may cancel dollar cost averaging by sending satisfactory notice to our customer service center. We must receive it at least one day before the next dollar cost averaging date. Dollar cost averaging will terminate if on the date: 1. you specify; or 2. your balance in the source investment portfolio reaches a dollar amount you set; or 3. the amount in the source investment portfolio is equal to or less than the amount - -------------------------------------------------------------------------------- Survivor Dimensions 34 to be transferred on a dollar cost averaging date. We will transfer the remaining amount and dollar cost averaging ends. AUTOMATIC REBALANCING Automatic rebalancing is a method of maintaining a consistent approach to investing account values over time and simplifying the process of asset allocation among your chosen investment options. There is no charge for this feature. If you choose this feature, on each rebalancing date we transfer amounts among the investment options to match your pre-set automatic rebalancing allocation. After the transfer, the ratio of your account value in each investment option to your total account value for all investment options included in automatic rebalancing matches the automatic rebalancing allocation percentage you set for that investment option. This action rebalances the amounts in the investment options that do not match your set allocation. This mismatch can happen if an investment option outperforms the other investment options for that time period. You may choose the automatic rebalancing feature on your application or later by completing our customer service form. Automatic rebalancing may occur on the same day of the month on a monthly, quarterly, semi-annual or annual basis. If you do not specify a frequency, automatic rebalancing will occur quarterly. The first transfer occurs on the date you select (after your free look period ends if your state requires return of premium during the free look period). If you do not request a date, processing is on the last valuation date of the calendar quarter we receive your request. When you choose automatic rebalancing allocations, you may choose up to eighteen total investment options. SEE MAXIMUM NUMBER OF INVESTMENT OPTIONS, PAGE 18. You may have both automatic rebalancing and dollar cost averaging at the same time. However, the source investment portfolio for your dollar cost averaging cannot be included in your automatic rebalancing program. You may not include the loan division in your automatic rebalancing program. CHANGING AUTOMATIC REBALANCING You may change your allocation percentages for automatic rebalancing at any time. Your allocation change is effective on the valuation date that we receive it at our customer service center. If you reduce the amount allocated to the guaranteed interest division, it is considered a transfer from that division. You must meet the requirements for the maximum transfer amount and time limitations on transfers from the guaranteed interest division. SEE TRANSFERS OF ACCOUNT VALUE, PAGE 33. If you have automatic rebalancing and the guaranteed minimum death benefit and you ask for an allocation which does not meet the guaranteed minimum death benefit diversification requirements, we will notify you that the allocation needs to be changed and ask you for revised instructions. SEE GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. TERMINATING AUTOMATIC REBALANCING You may terminate automatic rebalancing at any time, as long as we receive your notice of termination at least one day before the next automatic rebalancing date. If you have the guaranteed minimum death benefit and you terminate the automatic rebalancing feature, you still must meet the diversification requirements of your net account value for the guarantee period to continue. SEE GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. POLICY LOANS The loan division is part of our general account specifically designed to hold money used as collateral for loans and loan interest. You may borrow from your policy at any time after the first monthly processing date, by using your policy as security for a loan, or as otherwise required by law. The amount you borrow is called a policy loan. Your policy loan is: 1. the total amount you borrow from your policy; plus 2. policy loan interest that is capitalized when due; minus 3. policy loan or interest repayments you - -------------------------------------------------------------------------------- Survivor Dimensions 35 make. Unless law requires differently, a new policy loan must be at least $100. The maximum amount you may borrow on any valuation date, unless required differently by law, is your net cash surrender value minus the monthly deductions to your next policy anniversary or 13 monthly deductions if you take a loan within thirty days before your next policy anniversary. Your request for a policy loan must be directed to our customer service center. If you have telephone privileges, you may request a policy loan of less than $25,000 by telephoning our customer service center. SEE TELEPHONE PRIVILEGES, PAGE 42. When you request a loan you may specify one investment option from which the loan will be taken. If you do not specify one, the loan will be taken proportionately from each active investment option you have, including the guaranteed interest division. Loan interest charges on your policy loan accrue daily at an annual interest rate of 6%. Interest is due in arrears on each policy anniversary. If you do not pay your interest when it is due, we add it to your policy loan balance. When you take a policy loan, we transfer an amount equal to your policy loan to the loan division. We follow this same process for loan interest due at your policy anniversary. We credit the loan division with interest at an annual rate of 4%. If you request an additional loan, we add the new loan amount to your existing policy loan. This way, there is only one loan outstanding on your policy at any time. LOAN REPAYMENT You may repay your policy loan at any time while your policy is in force. We assume that payments you make, other than scheduled premiums, are policy loan repayments. You must tell us if you want payments to be premium payments. When you make a loan repayment, we transfer an amount equal to your payment from the loan division to the variable investment options and the guaranteed interest division in the same proportion as your current premium allocation, unless you tell us otherwise. PREFERRED LOANS A preferred loan amount is an amount taken after the tenth policy anniversary. Loan interest charges on your preferred loan amount accrue daily at a maximum annual interest rate of 4%. For each policy year in which your policy qualifies for preferred loan eligibility, the first loan amount you take during that year will be considered a preferred loan amount up to a maximum of 10% of the net account value. Any amount loaned later in that policy year will not be considered a preferred loan amount. Beginning in the 21st policy year and thereafter, we will consider all loan balances to be preferred loan amounts. If the preferred loan amount you take during any policy year is less than the maximum allowed, you may not carry over the balance to increase the eligible preferred loan amount in any following policy year. EFFECTS OF A POLICY LOAN ON YOUR POLICY Taking a loan decreases the amount you have in the investment options. Accruing loan interest will change your net account value as compared to what it would have been if you did not take a loan. Even if you repay your loan, it has a permanent effect on your account value. The benefits under your policy may be affected. The loan is a first lien on your policy. If you do not repay your policy loan, we deduct your outstanding policy loan and accrued loan interest from the death proceeds payable or the cash surrender value payable on surrender. Failure to repay your loan may affect the guaranteed minimum death benefit feature and the length of time your policy remains in force. If you use the continuation of coverage feature and you have a policy loan, loan interest continues to accrue. POLICY LOANS MAY CAUSE YOUR POLICY TO LAPSE IF YOUR NET CASH SURRENDER VALUE IS NOT ENOUGH TO PAY YOUR DEDUCTIONS EACH MONTH. SEE LAPSE, PAGE 38. Policy loans may have tax consequences. If your policy lapses with a loan outstanding, you may have further tax consequences. SEE DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS, PAGE 54, AND DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED - -------------------------------------------------------------------------------- Survivor Dimensions 36 ENDOWMENT CONTRACTS, PAGE 55. PARTIAL WITHDRAWALS You may request a partial withdrawal to be processed on any valuation date after your first policy anniversary by contacting our customer service center. You make a partial withdrawal when you withdraw part of your net cash surrender value. If your request is by telephone, it must be for less than $25,000 and may not cause a decrease in your death benefit. Otherwise, your request must be in writing. SEE TELEPHONE PRIVILEGES, PAGE 42. You may take up to twelve partial withdrawals per policy year. The minimum partial withdrawal you may take is $100. The maximum partial withdrawal you may take is the amount which leaves $500 as your net cash surrender value. If you request a withdrawal of more than this maximum, we require you to surrender your policy or reduce the withdrawal. When you take a partial withdrawal, we deduct your withdrawal amount plus a service fee from your account value. If applicable, we deduct a surrender charge from your account value if your partial withdrawal causes a reduction in your stated death benefit. SEE CHARGES, DEDUCTIONS AND REFUNDS, PAGE 45. Unless you tell us otherwise, we will make a partial withdrawal from the guaranteed interest division and the variable investment options in the same proportion that each has to your net account value immediately before your withdrawal. You may select one investment option from which your partial withdrawal will be taken. If you select the guaranteed interest division, however, the amount withdrawn from it may not be for more than your total withdrawal multiplied by the ratio of your account value in the guaranteed interest division to your total net account value immediately before the partial withdrawal transaction. Partial withdrawals may have adverse tax consequences. SEE DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS, PAGE 54, AND DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS, PAGE 55. PARTIAL WITHDRAWALS UNDER DEATH BENEFIT OPTION A If you selected death benefit option A, it is your first partial withdrawal of the policy year, no more than fifteen years have passed since your policy date and the joint equivalent age of the insured people is not yet age 81, you may make a partial withdrawal of up to the greater of 10% of your account value, or 5% of your stated death benefit without decreasing your stated death benefit. Otherwise, amounts you withdraw will reduce your stated death benefit by the amount of the withdrawal unless your policy death benefit has been increased due to the federal income tax definition of life insurance. If your policy death benefit has been increased due to the federal income tax definition of life insurance at the time of the partial withdrawal, then at least part of your partial withdrawal may be made without reducing your stated death benefit. PARTIAL WITHDRAWALS UNDER DEATH BENEFIT OPTION B If you have selected death benefit option B, a partial withdrawal does not reduce your stated or target death benefit. However because your account value is reduced, we reduce the total death benefit by at least the partial withdrawal amount. STATED DEATH BENEFIT AND TARGET DEATH BENEFIT REDUCTIONS Regardless of your chosen death benefit option, partial withdrawals do not reduce your stated death benefit if: o your base death benefit has been increased to qualify your policy as life insurance under the federal income tax laws; and o you withdraw an amount that is no greater than the amount that reduces your account value to a level which no longer requires your base death benefit to be increased to qualify as life insurance for federal income tax law purposes. SEE TAX STATUS OF THE POLICY, PAGE 53. We require a minimum stated death benefit and a minimum target death benefit to issue your policy. You may not take a partial withdrawal if it reduces your stated death benefit or target death benefit below this minimum. SEE POLICY ISSUANCE, PAGE 20. We will send a new policy schedule page for your policy showing the effect of your withdrawal if there is any change to your stated death benefit or your target death benefit. - -------------------------------------------------------------------------------- Survivor Dimensions 37 In order to make this change, we may ask that you return the policy to our customer service center. Your withdrawal and any reductions in the death benefits are effective as of the valuation date on which we receive your request. SEE DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS, PAGE 54, AND DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS, PAGE 55. LAPSE Your insurance coverage continues as long as your net cash surrender value is enough to pay your deductions each month. Lapse does not apply if either the guaranteed minimum death benefit or the special continuation period is in effect and you have met all requirements. SEE SPECIAL CONTINUATION PERIOD, PAGE 21 AND GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. If the continuation of coverage feature is active, your policy could still lapse if there is an outstanding policy loan even though there are no further monthly deductions. GRACE PERIOD Your policy enters a 61-day lapse grace period if, on a monthly processing date: 1. your net cash surrender value is zero (or less); 2. the five-year special continuation period has expired, or you have not paid the required special continuation period premium; and 3. you do not have the guaranteed minimum death benefit or it has expired or terminated. We notify you that your policy is in a grace period at least 30 days before it ends. We send this notice to you (or a person to whom you have assigned your policy) at your last known address in our records. We notify you of the premium payment necessary to prevent your policy from lapsing. This amount is generally the past due charges, plus your estimated monthly policy and rider deductions for the next two months. If the death of the second of the insured people occurs during the grace period we do pay death proceeds to your beneficiary(ies), but with reductions for your policy loan balance, accrued loan interest and monthly deductions owed. We will send you a lapse notice if the guaranteed minimum death benefit is going to lapse. If we receive payment of the required amount before the end of the grace period, we apply it to your account value in the same manner as your other premium payments, then we deduct the overdue amounts from your account balance. If you do not pay the full amount within the 61-day grace period, your policy and its riders lapse without value. We withdraw your remaining account balance from the variable and guaranteed interest divisions. We deduct amounts you owe us including surrender charges and inform you that your policy coverage has ended. IF YOU HAVE THE GUARANTEED MINIMUM DEATH BENEFIT IN EFFECT After the special continuation period has ended and if the guaranteed minimum death benefit is in effect, your policy's stated death benefit will not lapse during the guarantee period. This is true even if your net cash surrender value is not enough to cover all of the deductions from your account value on any monthly processing date. SEE GUARANTEED MINIMUM DEATH BENEFIT, PAGE 27. LAPSE SUMMARY
SPECIAL CONTINUATION PERIOD GUARANTEED MINIMUM DEATH BENEFIT ===================================================================== ============================================================= IF YOU MEET THE IF YOU DO NOT MEET THE IF YOU MEET THE IF YOU DO NOT MEET THE REQUIREMENTS REQUIREMENTS OR IT IS NO REQUIREMENTS REQUIREMENTS OR IT IS NO LONGER IN EFFECT LONGER IN EFFECT
- -------------------------------------------------------------------------------- Survivor Dimensions 38 Your policy does not Your policy enters the Your policy does not Your policy enters the lapse if you do not have grace period if your net lapse if you do not have grace period if your net enough net cash surrender cash surrender value is enough net cash surrender cash surrender value is value to pay the monthly not enough to pay the value to pay the monthly not enough to pay the charges. The charges are monthly charges, or if charges. However, if you monthly charges, or if deducted and may cause a your loan plus accrued have any riders, they your loan plus accrued negative account value loan interest is more than lapse after the grace loan interest is more than until the earlier of: 1) the your cash surrender period and only your base your cash surrender date you have enough net value. If you do not pay coverage remains in value. If you do not pay account value, or 2) until enough premium to cover force. Charges for your enough premium to cover the end of the special the past due monthly base coverage are then the past due monthly continuation period. charges and interest due deducted each month to charges and interest due plus the monthly charges the extent that there is plus the monthly charges and interest due through sufficient net account and interest due through the end of the grace value to pay these the end of the grace period, your policy charges. If there is not period, your policy lapses. sufficient net account lapses. value to pay a charge, it is permanently waived.
REINSTATEMENT If you do not pay enough premium before the end of the grace period, your policy lapses. You may still reinstate your policy and its riders (other than the guaranteed minimum death benefit) within five years of the end of the grace period if you still own the policy and both of the insured people are still living and meet our underwriting requirements. Unless law requires differently, we will reinstate your policy and riders if: 1. you have not surrendered your policy; 2. you provide satisfactory evidence to us that both insured people are alive and that each is still insurable according to our normal rules of underwriting; and 3. we receive enough premium from you to keep your policy and its riders in force from the beginning to the end of the grace period and for two months after the reinstatement date. When your policy lapses, we will not reinstate your policy if one insured person has died or become uninsurable since your policy date. If one insured person was uninsurable at the issue of your policy and remains uninsurable, we will review the underwriting requirements applicable to each insured person at the time you request reinstatement to determine whether or not your policy may be reinstated. Reinstatement is effective on the monthly processing date following our approval of your reinstatement application. When we reinstate your policy, we also reinstate the surrender charges for the amount and time remaining when your policy lapsed. If you had a policy loan when coverage ended, we reinstate it with accrued loan interest to the date of lapse. The cost of insurance charges at the time of reinstatement are adjusted to reflect the time since the lapse. We apply net premiums received after reinstatement according to your most recent instructions which may be the premium allocation instructions in effect at the start of the grace period. SURRENDER You may surrender your policy for its net cash surrender value any time before the death of the second of the insured people. You may take your net cash surrender value in other than one payment. We compute your net cash surrender value as of the valuation date we receive your written surrender request and policy at our customer service center. All insurance coverage ends on the date we receive your surrender request and policy. SEE POLICY VALUES, PAGE 32 AND SETTLEMENT PROVISIONS, PAGE 43. We do not pro-rate or add back charges or expenses - -------------------------------------------------------------------------------- Survivor Dimensions 39 which we deducted before your surrender to your account value. If you surrender your policy during the first fourteen policy or segment years, we deduct a surrender charge from your net account value. If you surrender your policy during the early years, you may have little or no net cash surrender value. SEE SURRENDER CHARGE, PAGE 49. A surrender of your policy may have adverse tax consequences. SEE DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS, PAGE 54, AND DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS, PAGE 55. GENERAL POLICY PROVISIONS FREE LOOK PERIOD You have the right to examine your policy. The right to examine your policy, often called the free look period, starts on the date you receive your policy and is a length of time specified by law. If for any reason you do not want it, you may return your policy to us or your agent/registered representative within the period shown on the policy's face page. If you return your policy to us within that time period, we will consider it canceled as of your policy date. If you cancel your policy during this free look period, you will receive a refund as determined under law. Generally, there are two types of free look refunds: o some states require a return of all premiums we receive; o other states require payment of account value plus a refund of all charges deducted. Your policy will specify what type of free look refund applies in your state. The type of free look refund in your state will affect when the net premium we receive before the end of the free look period is invested into the variable investment options. SEE ALLOCATION OF NET PREMIUMS, PAGE 21. YOUR POLICY The entire contract between you and us is the combination of: o your policy; o a copy of your original application and any applications for benefit increases or decreases; o all of your riders; o endorsements; o policy schedule pages; and o reinstatement applications. If you make a change to your coverage, we give you a copy of your changed application and new policy schedules. If you send your policy to us, we attach these items to your policy and return it to you. Otherwise, you need to attach them to your policy. Unless there is fraud, we consider all statements made in an application to be representations and not guarantees. We use no statement to deny a claim, unless it is in an application. A president or an officer of our company and our secretary or assistant secretary must sign all changes or amendments we make to your policy. No other person may change the terms or conditions of your policy. AGE The age stated in your policy schedule is the joint equivalent age of the insured people we use to issue your policy. The insured people must each be no more than 90 years of age at policy issue. The minimum joint equivalent age must be no less than 15. The maximum joint equivalent age must be no more than 85. There is no limit on the difference in the insured people's ages. Age is measured as the age of the insured person on the birthday nearest the policy anniversary. The younger insured person's 100th birthday is the 100th anniversary of the younger insured person's birth regardless if he/she has survived. The policy anniversary nearest to this date is the date used for policy maturity and continuation of coverage. OWNERSHIP The original owner is the person named as the owner in the policy application. The owner can exercise all rights and receive the benefits until the death of the second of the insured people while the policy is still in force. This includes the right to change the owner, beneficiary(ies) or the method designated to pay death proceeds. As a matter of law, all rights of ownership are limited - -------------------------------------------------------------------------------- Survivor Dimensions 40 by the rights of any person who has been assigned rights under the policy and any irrevocable beneficiary(ies). You may name a new owner by giving us written notice. The effective date of the change to the new owner is the date the prior owner signs the notice. However, we will not be liable for any action we take before a change is recorded at our customer service center. A change in ownership may cause the prior owner to recognize taxable income on gain under the policy. BENEFICIARY(IES) You, as owner, name the beneficiary(ies) when you apply for your policy. The primary beneficiary(ies) who survives both of the insured people receives the death proceeds. Other surviving beneficiary(ies) receive death proceeds only if there is no surviving primary beneficiary(ies). If more than one beneficiary(ies) survives both insured people, they share the death proceeds equally, unless you have told us otherwise. If none of your policy beneficiaries has survived both insured people, we pay the death proceeds to you or to your estate, as owner. Once you tell us who the beneficiary(ies) is/are, we keep this information on file. You may name a new beneficiary(ies) any time before the death of the second of the insured people. We pay the death proceeds to the beneficiary(ies) whom you have most recently named according to our records. We do not make payments to multiple sets of beneficiaries. COLLATERAL ASSIGNMENT You may assign your policy by sending written notice to us. After we record the assignment, your rights as owner and the beneficiary's(ies') rights (unless the beneficiary(ies) was made an irrevocable beneficiary(ies) under an earlier assignment) are subject to the assignment. It is your responsibility to make sure the assignment is valid. INCONTESTABILITY If your policy has been in force and both insured people are alive for two years from your policy date, we will not question the validity of the statements in your application. If your policy has been in force and both insured people are alive for two years from the effective date of a new segment or from the effective date of an increase in any other benefit, with respect to the insured people (such as an increase in stated death benefit) we will not contest the statements in your application for the new segment or other increase. If this policy has been in force and both insured people are alive for two years from the effective date of reinstatement, we will not contest the statements in your application for reinstatement. MISSTATEMENTS OF AGE OR GENDER If an insured person's age or gender has been misstated, we adjust the death benefit to the amount which would have been purchased for each insured person's correct age and gender. We base the adjusted death benefit on the cost of insurance charges deducted from your account value on the last monthly processing date before the death of the second of the insured people, or as otherwise required by law. If unisex cost of insurance rates apply, we do not make any adjustments for a misstatement of gender. SUICIDE If either insured person commits suicide (while that insured person is sane or insane) within two years of your policy date, unless otherwise required by law, we limit death proceeds payable in one sum to: 1. the total of all premiums we receive to the time of death; minus 2. outstanding policy loan amounts and accrued loan interest; minus 3. partial withdrawals you have taken. We make a limited payment to the beneficiary(ies) for a new segment or other increase if the death of the second of the insured people is due to suicide (while that insured person is sane or insane), within two years of the effective date of a new segment or within two years of an increase in any other benefit, unless otherwise required by law. The limited payment we make is equal to the cost of insurance and monthly expense charges which were deducted for such increase. TRANSACTION PROCESSING Generally, within seven days of when we receive all information required to process a payment, we pay: - -------------------------------------------------------------------------------- Survivor Dimensions 41 o death proceeds; o net cash surrender value upon surrender; o partial withdrawals; and o loan proceeds. We may delay processing these transactions if: o the NYSE is closed for trading; o trading on the NYSE is restricted by the SEC; o there is an emergency so that it is not reasonably possible to sell securities in the variable investment options or to determine the value of a variable investment option's assets; or o a governmental body with jurisdiction over the separate account allows suspension by its order. SEC rules and regulations determine whether or not these conditions exist. We execute transfers among the variable investment options as of the valuation date of our receipt of your request at our customer service center. We determine the death benefit as of the date of death of the second of the insured people. The death proceeds are not affected by changes in the value of the variable investment options after that date. We may delay payment from our guaranteed interest division for up to six months, unless law requires otherwise, of surrender proceeds, withdrawal amounts or loan amounts. If we delay payment more than 30 days, we pay interest at our declared rate (or at a higher rate if required by law) from the date we receive your complete request. NOTIFICATION AND CLAIMS PROCEDURES Except for certain authorized telephone requests, we must receive in writing any election, designation, change, assignment or request made by the owner. You must use a form acceptable to us. We are not liable for actions taken before we receive and record the written notice. We may require you to return your policy for policy changes and at the time of surrender. If an insured person dies while your policy is in force, please let us or your agent/registered representative know as soon as possible. We will immediately send you instructions on how to make a claim at the death of the second of the insured people or at either insured person's death if you have a single life term insurance rider. As proof of the insured person's death, we may require you to provide proof of the deceased insured person's age and a certified copy of the death certificate. The beneficiary(ies) and the deceased insured person's next of kin may need to sign authorization forms. These forms allow us to get information about the deceased insured person. This information may include medical records of doctors and hospitals used by the deceased insured person. TELEPHONE PRIVILEGES Telephone privileges are automatically provided to you and your agent/registered representative, unless you decline it on the application or contact our customer service center. Telephone privileges allow you or your agent/registered representative, if applicable, to call our customer service center to: o make transfers; o change premium allocations; o change features in your dollar cost averaging and automatic rebalancing programs; o request partial withdrawals; or o request a policy loan. Our customer service center uses reasonable procedures to make sure that instructions received by telephone are genuine. These procedures may include: 1. requiring some form of personal identification; 2. providing written confirmation of any transactions; and 3. tape recording telephone calls. By accepting automatic telephone privileges, you authorize us to record your telephone calls with us. If we use reasonable procedures to confirm instructions, we are not liable for losses due to unauthorized or fraudulent instructions. We may discontinue this privilege at any time. NON-PARTICIPATION Your policy does not participate in the surplus earnings of Southland Life. DISTRIBUTION OF THE POLICIES - -------------------------------------------------------------------------------- Survivor Dimensions 42 The principal underwriter (distributor) for our policies is ING America Equities, Inc., ING America Equities, Inc. is an affiliate of Southland Life. It is registered as a broker-dealer with the SEC and the NASD. We pay ING America Equities, Inc. for acting as the principal underwriter under a distribution agreement. We sell our policies through licensed insurance agents who are registered representatives of other broker-dealers including, but not limited to: 1. VESTAX Securities Corporation, an indirect affiliate of Southland Life Insurance Company; 2. Locust Street Securities, Inc., an indirect affiliate of Southland Life Insurance Company; 3. Multi-Financial Securities, Corp., an indirect affiliate of Southland Life Insurance Company; and 4. IFG Network Securities, Inc., an indirect affiliate of Southland Life Insurance Company. All broker-dealers who sell this policy have entered into selling agreements with us. Under these agreements, we pay a distribution allowance to the broker-dealers, who pay commissions to their agents/registered representatives who sell this policy. The distribution allowance paid to the broker/dealer is 112% of the first target premium that we receive. For premiums we receive over the first target premium, the distribution allowance is 4% in policy years one through ten. Some broker-dealers receive a slightly lower distribution allowance because we provide them with greater marketing and administrative support. In addition, we make annual renewal payments (trails) to the broker-dealer based on a percentage of each policy's net account value. These annual payments are 0.20% starting in policy year six. We may pay wholesaler fees or marketing and training allowances. We pay all distribution and other allowances from our resources which include sales charges deducted from premiums. ADVERTISING PRACTICES AND SALES LITERATURE We may use advertisements and sales literature to promote this product, including: o articles on variable life insurance and other information published in business or financial publications; o indices or rankings of investment securities; and o comparisons with other investment vehicles, including tax considerations. We may use information regarding the past performance of the variable investment options. However, past performance is not indicative of future performance of the investment options or the policies and is not reflective of the actual investment experience of policyowners. We may feature certain investment options and their managers, as well as describe asset levels and sales volumes. We may refer to past, current, or prospective economic trends and investment performance or other information we believe may be of interest to our customers. SETTLEMENT PROVISIONS You may elect to have the beneficiary(ies) receive the death proceeds other than in one payment. If you make this election, you must do so before the death of the second of the insured people. If you have not made this election, the beneficiary(ies) may do so within 60 days after we receive proof of death of the second of the insured people. You may take your net cash surrender value in other than one payment. The investment performance of the variable investment options does not affect payments under these settlement options. Instead, interest accrues at a fixed rate based on the option you choose. Payment options are subject to our rules at the time you make your selection. Currently, a periodic payment must be at least $20 and the total proceeds must be $2,000 or more. OPTION I: PAYOUTS FOR A DESIGNATED PERIOD OPTION II: LIFE INCOME WITH PAYOUTS GUARANTEED FOR A DESIGNATED PERIOD OPTION III: HOLD AT INTEREST - -------------------------------------------------------------------------------- Survivor Dimensions 43 OPTION IV: PAYOUTS OF A DESIGNATED AMOUNT OPTION V: OTHER OPTIONS WE OFFER AT THE TIME WE PAY THE BENEFIT ADMINISTRATIVE INFORMATION ABOUT THE POLICY VOTING PRIVILEGES We invest the variable investment options' assets in shares of investment portfolios. We are the legal owner of the shares held in the separate account and we have the right to vote on certain issues. Among other things, we may vote on issues described in the fund's current prospectus or issues requiring a vote by shareholders under the Investment Company Act of 1940. Even though we own the shares, we give you the opportunity to tell us how to vote the number of shares attributable to your account value. We count fractional shares. If you have a voting interest, we send you proxy material and a form on which to give us your voting instructions. Each investment portfolio share has the right to one vote. The votes of all investment portfolio shares are cast together on a collective basis, except on issues for which the interests of the portfolios differ. In these cases, voting is done on a portfolio-by-portfolio basis. Examples of issues that require a portfolio-by-portfolio vote are: 1. changes in the fundamental investment policy of a particular investment portfolio; or 2. approval of an investment advisory agreement. We vote the shares in accordance with your instructions at meetings of investment portfolio shareholders. We vote any investment portfolio shares that are not attributable to policies and any investment portfolio shares for which the owner does not give us instructions, the same way we vote as if we did receive owner instructions. We reserve the right to vote investment portfolio shares without getting instructions from policy owners if the federal securities laws, regulations or their interpretations change to allow this. You may instruct us only on matters relating to the investment portfolios corresponding to variable investment options in which you have invested assets as of the record date set by the investment portfolio's board for the portfolio's shareholders meeting. We determine the number of investment portfolio shares in each variable investment option that we attribute to your policy by dividing your account value allocated to that variable investment option by the net asset value of one share of the matching investment portfolio. MATERIAL CONFLICTS We are required to track events to identify any material conflicts arising from using investment portfolios for both variable life and variable annuity separate accounts. The boards of the investment portfolios, Southland Life and other insurance companies participating in the investment portfolios, have this same duty. There may be a material conflict if: o state insurance law or federal income tax law changes; o investment management of an investment portfolio changes; or o voting instructions given by owners of variable life insurance policies and variable annuity contracts differ. The investment portfolios may sell shares to certain qualified pension and retirement plans qualifying under Code Section 401. These include cash or deferred arrangements under Code Section 401(k). Therefore, there is a possibility that a material conflict may arise between the interests of owners in general or between certain classes of owners; and these retirement plans or participants in these retirement plans. If there is a material conflict, we have the duty to determine appropriate action including removing the portfolios involved from our variable investment options. We may take other action to protect policy owners. This could mean delays or interruptions of the variable operations. When state insurance regulatory authorities require it, we may ignore voting instructions relating to changes in an investment portfolio's adviser or its investment policies. If we do ignore voting instructions, we give - -------------------------------------------------------------------------------- Survivor Dimensions 44 you a summary of our actions in our next semi-annual report to owners. Under the Investment Company Act of 1940, we must get your approval for certain actions involving our separate account. In this case, you have one vote for every $100 of value you have in the variable investment options. We cast votes credited to amounts in the variable investment options, but not credited to policies in the same proportion as votes cast by owners. RIGHT TO CHANGE OPERATIONS Subject to state limitations, we may from time to time make any of the following changes to our separate account: 1. Change the investment objective. 2. Offer additional variable investment options which will invest in portfolios we find appropriate for policies we issue. 3. Eliminate variable investment options. 4. Combine two or more variable investment options. 5. Substitute a new investment portfolio for a portfolio in which the division currently invests. A substitution may become necessary if, in our judgment: o a portfolio no longer suits the purposes of your policy; o there is a change in laws or regulations; o there is a change in a portfolio's investment objectives or restrictions; o the portfolio is no longer available for investment; or o another reason we deem a substitution is appropriate. 6. Transfer assets related to your policy class to another separate account. 7. Withdraw the separate account from registration under the 1940 Act. 8. Operate the separate account as a management investment company under the 1940 Act. 9. Cause one or more variable investment options to invest in a mutual fund other than, or in addition to, the investment portfolios. 10. Stop selling these policies. 11. End any employer or plan trustee agreement with us under the agreement's terms. 12. Limit or eliminate any voting rights for the separate account. 13. Make any changes required by the 1940 Act or its rules or regulations. We will not make a change until it is effective with the SEC and approved by the appropriate state insurance departments, if necessary. We will notify you of changes. If you wish to transfer the amount you have in the affected investment option to another variable investment option or to the guaranteed interest division, you may do so free of charge. Just notify us at our customer service center. REPORTS TO OWNERS At the end of each policy year we send a report to you that shows: o your total net policy death benefit (your stated death benefit plus adjustable term insurance rider death benefit, if any); o your account value; o your policy loan, if any, plus accrued interest; o your net cash surrender value; o information about the variable investment options; and o your account transactions during the policy year showing net premiums, transfers, deductions, loan amounts and withdrawals. We also send semi-annual reports with financial information on the investment portfolios, including a list of the investment holdings of each portfolio to you. We send confirmation notices to you throughout the year for certain policy transactions. CHARGES, DEDUCTIONS AND REFUNDS The amount of a charge may not correspond to the - -------------------------------------------------------------------------------- Survivor Dimensions 45 cost incurred by us to provide the service or benefit. For example, the sales charges may not cover all of our sales and distribution expenses. Some proceeds from other charges, including the mortality and expense risk charge or cost of insurance charges, may be used to cover such expenses. DEDUCTIONS FROM PREMIUMS We treat payments we receive as premium payments if the insured person is not yet age 100 and you do not have an outstanding policy loan. After we deduct certain charges from your payment, we add the remaining net premium to your policy. SALES CHARGE We deduct a percentage from each premium payment to compensate us for the costs we incur in selling the policies. The sales charge helps cover the costs of distribution, preparing our sales literature, promotional expenses and other direct and indirect expenses. We base the percentage on the time expired since your policy date, or addition of a segment and on your premium payments up to and above a target premium. The sales charge deducted from your premium payments after an increase in stated death benefit is based on each segment's target premium and the length of time that the segment has been in effect. Your policy schedule page shows the target premium for your policy. Sales Charge Percentage ----------------------- Up to Policy Above Policy Policy or or Segment or Segment Segment Target Target Year Premium Premium ---- ------- ------- 1 - 10 4.0% 2% 11 + 2% 2% For example, if this policy is issued to insure a male, age 85 who is uninsurable, and a female, age 85 who is insurable but in a substandard underwriting rating class, the target premium for sales charge purposes is $137 for each $1,000 of stated death benefit. We believe this amount represents the maximum target premium and that most policies will have a much lower target premium. SEE TARGET PREMIUM, PAGE 21 AND ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES, SURRENDER VALUES AND ACCUMULATED PREMIUMS, PAGE 58. We may reduce or waive the sales charge for certain group or sponsored arrangements, or for corporate purchasers. SEE GROUP OR SPONSORED ARRANGEMENTS, OR CORPORATE PURCHASERS, PAGE 52. TAX CHARGES We pay state and local taxes in almost all states. These taxes vary in amount from state to state and may vary from jurisdiction to jurisdiction within a state. Currently, state and local taxes range from 0.5% to 5% with some states not imposing these types of taxes. We deduct 2.5% of each premium payment to cover these taxes. This rate approximates the average tax rate we expect to pay in all states. We also deduct 1.5% of each premium payment to cover our estimated costs for the federal income tax treatment of deferred acquisition costs. This cost is determined solely by the amount of life insurance premiums we receive. We reserve the right to increase or decrease your premium expense charge for taxes as a result of changes in the tax law, within limits set by law. We also reserve the right to increase or decrease your premium expense charge for the federal income tax treatment of deferred acquisition costs based on any change in that cost to us. DAILY DEDUCTIONS FROM THE SEPARATE ACCOUNT MORTALITY AND EXPENSE RISK CHARGE We deduct 0.002466% per day (0.90% annually) of the amount you have in the variable investment options for the mortality and expense risks we assume. This charge is deducted as part of the calculation of the daily unit values for the variable investment options and does not appear as a separate charge on your statement or confirmation. The mortality risk is that insured people, as a group, may live less time than we estimated. The expense risk is that the costs of issuing and administering the policies and in operating the variable division are greater than the amount we estimated. - -------------------------------------------------------------------------------- Survivor Dimensions 46 The mortality and expense risk charge does not apply to your account value in the guaranteed interest division or the loan division. MONTHLY DEDUCTIONS FROM ACCOUNT VALUE We deduct charges from your account value on each monthly processing date until the maturity date or when the continuation of coverage period begins. POLICY CHARGE The initial policy charge is $15 per month for the first ten years of your policy. After the first ten years of your policy, the policy charge is $9 per month. This charge compensates us for such costs as: o application processing; o medical examinations; o establishment of policy records; and o insurance underwriting costs. MONTHLY ADMINISTRATIVE CHARGE We charge a per month administrative charge of $0.085 per $1,000 for the first ten policy years for the greater of the stated death benefit. We charge $0.015 per $1,000 for policy years eleven through twenty for the greater of target or stated death benefit. We limit the per $1,000 charge, based on the insured people's joint equivalent age, to $212.50 per month for the first ten policy years. This charge is limited to $37.50 monthly for policy years eleven through twenty. This charge applies to the first $2,500,000 of death benefit. This charge is designed to compensate us for ongoing costs such as: o premium billing and collections; o claim processing; o policy transactions; o record keeping; o reporting and communications with policy owners; and o other expenses and overhead. COST OF INSURANCE CHARGE The cost of insurance charge compensates us for the ongoing costs of providing insurance coverage under the policy, including the expected cost of paying death proceeds that may be more than your account value at the death of the second of the insured people. The cost of insurance charge is equal to our current monthly cost of insurance rate multiplied by the net amount at risk for each portion of your death benefit. We calculate the net amount at risk monthly, at the beginning of each policy month. For the base death benefit, the net amount at risk is calculated using the difference between the current base death benefit and your account value. We determine your account value after we deduct your policy and rider charges due on that date other than cost of insurance charges for the base death benefit and adjustable term insurance rider. If your base death benefit at the beginning of a month increases (due to requirements of the federal income tax law definition of life insurance), the net amount at risk for your base death benefit for that month also increases. Similarly, the net amount at risk for your adjustable term insurance rider decreases. This means that your cost of insurance charge varies from month to month with changes in your net amount at risk, changes in the death benefit and with the increasing age of the insured people. We allocate the net amount at risk to segments in the same proportion that each segment has to the total stated death benefit for all coverage segments as of the monthly processing date. We base your current cost of insurance rates on the insured people's ages, genders, face value and premium classes on the policy and each segment date. We apply unisex rates where appropriate under the law. This currently includes the state of Montana and policies purchased by employers and employee organizations in connection with employment-related insurance or benefit programs. Separate cost of insurance rates apply to: o each segment of the base death benefit; o your adjustable term insurance rider; and o single life term insurance riders. We may make changes in the cost of insurance or rider charges for a class of insured persons. We base the new charge on changes in expectations about: o investment earnings; o mortality; o the time policies remain in effect; o expenses; and o taxes. - -------------------------------------------------------------------------------- Survivor Dimensions 47 These rates are never more than the guaranteed maximum rates shown in your policy. The guaranteed maximum rates are based on the 1980 Commissioner's Standard Ordinary Sex Distinct Mortality Table. The maximum rates for the initial and each new segment will be printed in your schedule pages. GUARANTEED MINIMUM DEATH BENEFIT CHARGE If you choose the guaranteed minimum death benefit feature, we charge $0.005 per $1,000 of stated death benefit each month during the guarantee period. We guarantee the charge not to exceed this rate. RIDER CHARGES On each monthly processing date, we deduct the cost of benefits under your riders including the single life term insurance rider. Rider charges do not include the adjustable term insurance rider. SEE RIDERS, PAGE 28. POLICY TRANSACTION FEES We charge fees for certain transactions under your policy. We deduct these fees from the variable and guaranteed interest divisions pro rata to the account value in each. PARTIAL WITHDRAWALS We deduct the lesser of a $25 service fee or 2% of the requested partial withdrawal from your account value for each partial withdrawal you take to cover our costs. We may also deduct a surrender charge from your account value. SEE PARTIAL WITHDRAWALS, PAGE 37. ILLUSTRATIONS The first policy illustration you request in a policy year is free. After that, we charge a fee of up to $25 for each additional policy illustration. WE DEDUCT CHARGES, LOANS AND PARTIAL WITHDRAWALS
MONTHLY CHARGES: COST OF LOANS AND INSURANCE CHARGES, RIDER CHARGES, TRANSACTION FEES PARTIAL WITHDRAWALS ADMINISTRATIVE FEES - ----------------- ----------------------------------------------- ------------------------------ --------------------------------- Choice May choose a designated deduction Proportionally among May choose any investment investment option, including guaranteed variable and guaranteed option or combination of interest division interest divisions investment options Default Proportionally among variable and Proportionally among Proportionally among guaranteed interest divisions variable and guaranteed variable and guaranteed interest divisions interest divisions - ----------------- ----------------------------------------------- ------------------------------ ---------------------------------
PERSISTENCY REFUND Where law allows us, we pay long-term policy owners a persistency refund. Each month your policy remains in force after your tenth policy anniversary, we credit your account value with a refund of 0.0375% of the net account value. This refund is 0.45% of your account value on an annual basis. We do not guarantee that we will pay a persistency refund on the guaranteed interest division. If we pay a persistency refund on the guaranteed interest division, we will pay it even if your policy is in the continuation of coverage period. If applicable, we add the persistency refund to the variable and guaranteed interest divisions, but not the loan division, in the same proportion that your account value in each investment option has to your net account value as of the monthly processing date. Here are two examples of how the persistency refund - -------------------------------------------------------------------------------- Survivor Dimensions 48 may affect your account value: EXAMPLE 1: YOUR POLICY HAS NO LOAN: o account value = $10,000 (all in the variable division) o monthly persistency refund rate = .000375 o persistency refund = 10,000 x .000375 = $3.75 Value Before Value After Persistency Persistency Refund Refund ------ ------ Variable Division $10,000.00 $10,003.75 EXAMPLE 2: YOUR POLICY DOES HAVE A LOAN: o account value = $10,000 o account value in the variable division = $6,000 o account value in the loan division = $4,000 o monthly persistency refund rate = .000375 o persistency refund = 6,000 x .000375 = $2.25 Value Before Value After Persistency Persistency Refund Refund ------ ------ Variable Division $6,000.00 $6,002.25 Loan $4,000.00 $4,000.00 SURRENDER CHARGE We may deduct a surrender charge from your account value during the first fourteen years of your policy or coverage segment if you: o surrender your policy; o reduce your stated death benefit; o allow your policy to lapse; or o take a partial withdrawal which decreases your stated death benefit. The surrender charge compensates us for issuing and distributing policies. We deduct surrender charges pro rata based on your account value in each investment option. The surrender charge is made up of two parts: 1. an administrative surrender charge and 2. a sales surrender charge. If you change your death benefit option, this may decrease your stated death benefit. Under these circumstances, we do not deduct a surrender charge and we do not reduce future surrender charges. A change to your death benefit option may increase the stated death benefit. We do not increase your surrender charge in this case. However, all other increases in your stated death benefit create a new segment which will be subject to its own fourteen year surrender charge period. If your surrender charge changes, we send you a new schedule showing the change. ADMINISTRATIVE SURRENDER CHARGE The administrative surrender charge is a dollar amount for each $1,000 of the stated death benefit. We base this amount on the joint equivalent age of the insured people on your policy date or on the date you add a new stated death benefit coverage segment to your policy. ADMINISTRATIVE SURRENDER CHARGE PER $1,000 OF STATED DEATH BENEFIT Joint Equivalent Age Year 15 - 84 85 - -------------------- ---------------------- ------------------ 1 $2.00 $2.00 2 $2.00 $2.00 3 $2.00 $2.00 4 $2.00 $2.00 5 $2.00 $2.00 6 $1.90 $1.90 7 $1.80 $1.80 8 $1.70 $1.70 9 $1.60 $1.60 10 $1.50 $1.50 11 $1.40 $1.40 12 $1.30 $1.30 13 $1.20 $1.20 14 $1.00 $0.00 15 $0.00 $0.00 For example, if the stated death benefit is $100,000 and the insured person is age 40 on your policy date, your administrative surrender charge is $200. - -------------------------------------------------------------------------------- Survivor Dimensions 49 During the first fourteen years of your policy your administrative surrender charge may decrease. This happens if you request a decrease in your stated death benefit or you take a partial withdrawal which causes your stated death benefit to decrease. Your administrative surrender charge decreases in the same proportion that your stated death benefit decreases. Under these circumstances we then deduct from your account value the amount by which your administrative surrender charge decreased. We designed your administrative surrender charge to cover part of our administrative expenses for your policy, such as: o application processing; o establishing your policy records; o insurance underwriting; and o costs associated with developing and operating our systems to administer the policies. SALES SURRENDER CHARGE We calculate the sales surrender charge for each segment by applying the premiums you paid to each segment in the same proportion that the guideline annual premium for each segment (as defined by the federal income tax laws) has to the sum of the guideline annual premiums for all segments. The sales surrender charge is a percentage of the surrender target premium for each segment without any substandard ratings (this is known as the base standard surrender target premium). The percentage is based on the joint equivalent age of the insured people. We do not determine target premiums on your scheduled premium. We determine target premiums actuarially, based on the age and gender of the insured people. Your policy schedule shows the initial target premium for your policy and the target premium for any added segments. The schedule also shows the maximum sales surrender charge for your stated death benefit. If your stated death benefit decreases, we reduce your target premium for each segment in the same proportion that we reduce your stated death benefit. We do not do this if the reduction is a result of a death benefit option change. In that case, we will provide you a new schedule page. If your new target premium for each segment is greater than or equal to the premiums we receive for that segment, then we reduce your future maximum sales surrender charge and we do not deduct a sales surrender charge from your account value. If your new target premium for each segment is less than the sum of the premiums we receive for that segment, we reduce the future maximum sales surrender charge and we deduct a sales surrender charge from your account value equal to the difference between your sales surrender charge before the decrease and your sales surrender charge after the decrease. We recalculate your new sales surrender charge as if your new target premium was always in effect for that segment. We reduce your future maximum sales surrender charge in the same proportion that we reduce your stated death benefit if: 1. you make a decrease to your stated death benefit more than seven years after your policy date; or 2. you make a partial withdrawal from your policy which reduces the stated death benefit and you make your request more than seven years after the date you added the additional segment. SALES SURRENDER CHARGE AS A PERCENTAGE OF SURRENDER CHARGE TARGET PREMIUM
JOINT EQUIVALENT AGE YEAR | 0-77 78 79 80 81 82 83 84 85 1 | 100% 100% 100% 100% 100% 100% 99% 92% 85% 2 | 100% 100% 100% 100% 100% 95% 88% 81% 74% 3 | 100% 100% 100% 100% 92% 85% 78% 71% 65%
- -------------------------------------------------------------------------------- Survivor Dimensions 50 4 100% 100% 98% 90% 83% 76% 70% 64% 58% 5 100% 97% 89% 82% 75% 69% 63% 57% 51% 6 90% 89% 81% 75% 68% 62% 57% 51% 46% 7 80% 80% 74% 68% 62% 57% 51% 46% 41% 8 70% 70% 68% 62% 57% 51% 46% 41% 36% 9 60% 60% 60% 57% 52% 46% 41% 36% 31% 10 50% 50% 50% 50% 47% 42% 37% 31% 26% 11 40% 40% 40% 40% 40% 37% 32% 26% 21% 12 30% 30% 30% 30% 30% 30% 27% 21% 16% 13 20% 20% 20% 20% 20% 20% 20% 16% 12% 14 10% 10% 10% 10% 10% 10% 10% 10% 0% 15 0% 0% 0% 0% 0% 0% 0% 0% 0%
CALCULATION OF SURRENDER CHARGE EXAMPLES EXAMPLE 1: Assume the stated death benefit on your policy is $100,000 and both insured persons are age 45 when we issue your policy. The surrender target premium on your policy is $1,500. The actual surrender charge, assuming that we receive a $1,000 premium each policy year, is: Administrative Sales Actual Policy Year Surrender Charge Surrender Charge Surrender Charge - ----------- ---------------- ---------------- ---------------- 1 200 1500 1700 2 200 1500 1700 3 200 1500 1700 4 200 1500 1700 5 200 1500 1700 6 190 1350 1540 7 180 1200 1380 8 170 1050 1220 9 160 900 1060 10 150 750 900 11 140 600 740 12 130 450 580 13 120 300 420 14 100 150 250 15 0 0 0 EXAMPLE 2: If you reduce your stated death benefit on your third policy anniversary to $90,000, we reduce your surrender target premium proportionately and it now equals $1,350 (90% of $1,500). There is a sales surrender charge of $150 when you reduce your stated death benefit. This is the difference between your sales surrender charge immediately before the decrease and your sales surrender - -------------------------------------------------------------------------------- Survivor Dimensions 51 charge calculated assuming your new target premium was always in effect for your policy. There is an administrative surrender charge of $20. This is the difference between your original administrative surrender charge and your new administrative surrender charge. Using the figures in the example here, this calculation is: $200 - $180. We deduct both the sales surrender charge and the administrative surrender charge from the account value. The resulting actual surrender charge for each policy year is: Administrative Sales Actual Policy Year Surrender Charge Surrender Charge Surrender Charge - ----------- ---------------- ---------------- ---------------- 1 200 1500 1700 2 200 1500 1700 3 180 1350 1530 4 180 1350 1530 5 180 1350 1530 6 171 1215 1386 7 162 1080 1242 8 153 945 1098 9 144 810 954 10 135 675 810 11 126 540 666 12 117 405 522 13 108 270 378 14 90 135 225 15 0 0 0 OTHER CHARGES Under current law, we pay no tax on investment income and capital gains included in variable life insurance policy reserves. This means that no charge is currently made to any variable investment option for our federal income taxes. If the tax law changes and we have federal income tax chargeable to the variable investment options, we may make such a charge in the future. GROUP OR SPONSORED ARRANGEMENTS, OR CORPORATE PURCHASERS Individuals, corporations or other institutions may purchase this policy. For group or sponsored arrangements (including employees and certain family members of employees of Southland Life, its affiliates and appointed sales agents), corporate purchasers or special exchange programs which we may offer from time to time, we may reduce or waive the: o surrender charge, including the surrender charge on partial withdrawals; o length of time a surrender charge applies; o administrative charge; o minimum stated death benefit; o minimum target death benefit; o minimum annual premium; o target premium; o sales charges; o cost of insurance charges; or o other charges normally assessed. We can reduce or waive these items based on expected economies. Group arrangements include those in which there is a trustee, an employer or an association. The group may purchase multiple policies covering a group of individuals. Sponsored arrangements include those in which an employer or association allows us to offer policies to its employees or members on an individual basis. Our sales, administration and mortality costs generally vary with the size and stability of the group, among other factors. We take all these factors into account when we reduce charges. A group or sponsored arrangement must meet certain requirements to qualify for reduced charges. We make reductions to charges based on our rules in effect when we approve a policy application. We may change these rules from time to time. - -------------------------------------------------------------------------------- Survivor Dimensions 52 Each sponsored arrangement or corporation may have different group premium payments and premium requirements. We will not be unfairly discriminatory in any variation in the surrender charge, administrative charge, or other charges, fees and privileges. These variations are based on differences in costs or services. TAX CONSIDERATIONS The following summary provides a general description of the federal income tax considerations associated with the policy and does not purport to be complete or to cover all tax situations. This discussion is not intended as tax advice. Counsel or other competent tax advisers should be consulted for more complete information. This discussion is based upon our understanding of the present federal income tax laws. No representation is made as to the likelihood of continuation of the present federal income tax laws or as to how they may be interpreted by the Internal Revenue Service. TAX STATUS OF THE POLICY This policy is designed to qualify as a life insurance contract under the Internal Revenue Code. All terms and provisions of the policy shall be construed in a manner which is consistent with that design. In order to qualify as a life insurance contract for federal income tax purposes and to receive the tax treatment normally accorded life insurance contracts under federal tax law, a policy must satisfy certain requirements which are set forth in the Internal Revenue Code. Specifically, the policy must meet the requirements of the "guideline premium/cash value corridor test," as specified in Code section 7702. The guideline premium/cash value corridor test provides for a maximum premium in relation to the death benefit, and a minimum "corridor" of death benefit in relation to account value. SEE APPENDIX A, PAGE 68 FOR A TABLE OF THE GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST FACTORS. There is very little guidance with respect to policies issued on a last survivor basis as to how these requirements are applied. Nevertheless, we believe it is reasonable to conclude that our policies satisfy the applicable requirements. If it is subsequently determined that a policy does not satisfy the applicable requirements, we will take appropriate and reasonable steps to bring the policy into compliance with such requirements and we reserve the right to restrict policy transactions or modify your policy in order to do so. DIVERSIFICATION REQUIREMENTS In addition to meeting the Code Section 7702 guideline premium/cash corridor test, Code Section 817(h) requires separate account investments, such as our separate account, to be adequately diversified. The Treasury has issued regulations which set the standards for measuring the adequacy of any diversification. To be adequately diversified, each variable investment option must meet certain tests. If your variable life policy is not adequately diversified under these regulations, it is not treated as life insurance under Code Section 7702. You would then be subject to federal income tax on your policy income as you earn it. Our variable investment options' investment portfolios have promised they will meet the diversification standards that apply to your policy. In certain circumstances, you, as owner of a variable life insurance contract, may be considered the owner for federal income tax purposes of the separate account assets used to support your contract. Any income and gains from the separate account assets are includable in the gross income from your policy under these circumstances. The IRS has stated in published rulings that a variable contract owner is considered the owner of separate account assets if the contract owner has "indicia of ownership" in those assets. "Indicia of ownership" includes the ability to exercise investment control over the assets. Your ownership rights under your policy are similar to, but different in some ways from those described by the IRS in rulings in which it determined that policy owners are not owners of separate account assets. For example, you have flexibility in allocating your premium payments and in your policy values. These differences could result in the IRS treating you as the owner of a pro rata share of the separate account assets. We do not know what standards will be set forth in the future, if any, in Treasury regulations or rulings. We reserve the right to modify your policy, as necessary, to try to prevent you from being considered the owner of a pro rata share of the separate account assets, or to otherwise - -------------------------------------------------------------------------------- Survivor Dimensions 53 qualify your policy for favorable tax treatment. We will at all times assure that the policy meets the statutory definition which qualifies the policy as life insurance for federal income tax purposes. In addition, as long as the policy remains in force, increases in account 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 the policy, such as a partial withdrawal or loan. SEE TAX TREATMENT OF POLICY DEATH BENEFITS, PAGE 54. The following discussion assumes that the policy will qualify as a life insurance contract for federal income tax purposes. TAX TREATMENT OF POLICY DEATH BENEFITS We believe that the death benefit under a policy is generally excludable from the gross income of the beneficiary(ies) under section 101(a)(1) of the Code. However, there are exceptions to this general rule. Additionally, federal and local transfer, estate inheritance and other tax consequences of ownership or receipt of policy proceeds depend on the circumstances of each policy owner or beneficiary(ies). A tax adviser should be consulted about these consequences. Generally, the policy owner will not be taxed on any of the policy account value until there is a distribution. When distributions from a policy occur, or when loan amounts are taken from or secured by a policy, the tax consequences depend on whether or not the policy is a "modified endowment contract." Special rules also apply if you are subject to the alternative minimum tax. You should consult a tax adviser if you are subject to the alternative minimum tax. MODIFIED ENDOWMENT CONTRACTS Under the Internal Revenue Code, certain life insurance contracts are classified as "modified endowment contracts" and are given less favorable tax treatment than other life insurance contracts. Due to the flexibility of the policies as to premiums and benefits, the individual circumstances of each policy will determine whether or not it is classified as a modified endowment contract. The rules are too complex to be summarized here, but generally depend on the amount of premiums we receive during the first seven policy years. Certain changes in a policy after it is issued could also cause it to be classified as a modified endowment contract. A current or prospective policy owner should consult with a competent adviser to determine whether or not a policy transaction will cause the policy to be classified as a modified endowment contract. If a policy becomes a modified endowment contract, distributions that occur during the policy year will be taxed as distributions from a modified endowment contract. In addition, distributions for a policy within two years before it becomes a modified endowment contract will be taxed 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. MULTIPLE POLICIES All modified endowment contracts that are issued by us (or our affiliates) to the same policy owner during any calendar year are treated as one modified endowment contract for purposes of determining the amount includable in the policy owner's income when a taxable distribution occurs. DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS Once a policy is classified as a modified endowment contract, the following tax rules apply both prospectively and to any distributions made in the prior two years: 1. All distributions other than death benefits, including distributions upon surrender and withdrawals, from a modified endowment contact will be treated first as distributions of gain taxable as ordinary income and as tax-free recovery of the policy owner's investment in the policy only after all gain has been distributed. 2. Loan amounts taken from or secured by a policy classified as a modified endowment - -------------------------------------------------------------------------------- Survivor Dimensions 54 contract are treated as distributions and taxed first as distributions of gain taxable as ordinary income and as tax-free recovery of the policy owner's investment in the policy only after all gain has been distributed. 3. A 10% additional income tax penalty may be imposed on the distribution amount subject to income tax. Consult a tax adviser to determine whether or not you may be subject to this penalty tax. DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS Distributions other than death benefits from a policy that is not classified as a modified endowment contract are generally treated first as a recovery of the policy owner's investment in the policy. Only after the recovery of all investment in the policy, is there taxable income. However, certain distributions which must be made in order to enable the policy to continue to qualify as a life insurance contract for federal income tax purposes, if policy benefits are reduced during the first fifteen policy years, may be treated in whole or in part as ordinary income subject to tax. Loan amounts from or secured by a policy that is not a modified endowment contract are generally not treated as distributions. Finally, neither distributions from, nor loan amounts from or secured by, a policy that is not a modified endowment contract are subject to the 10% additional income tax. INVESTMENT IN THE POLICY Your investment in the policy is generally the total of your aggregate premiums. When a distribution is taken from the policy, your investment in the policy is reduced by the amount of the distribution that is tax free. POLICY LOANS In general, interest on a policy loan will not be deductible. Moreover, the tax consequences associated with a low-cost loan such as the loan available in the policy are uncertain. Before taking out a policy loan, you should consult a tax adviser as to the tax consequences. If a loan from a policy is outstanding when the policy is canceled or lapses, then the amount of the outstanding indebtedness will be added to the amount treated as a distribution from the policy and will be taxed accordingly. SECTION 1035 EXCHANGES Code Section 1035 generally provides that no gain or loss shall be recognized on the exchange of one life insurance policy for another life insurance policy or for an endowment or annuity contract. We accept 1035 exchanges with outstanding loans. Special rules and procedures apply to Section 1035 exchanges. If you wish to take advantage of Section 1035, you should consult your tax adviser. TAX-EXEMPT POLICY OWNERS Special rules may apply to a policy that is owned by a tax-exempt entity. Tax-exempt entities should consult their tax adviser regarding the consequences of purchasing and owning a policy. These consequences could include an effect on the tax-exempt status of the entity and the possibility of the unrelated business income tax. POSSIBLE TAX LAW CHANGES Although the likelihood of legislative action is uncertain, there is always the possibility that the tax treatment of the policy could be changed by legislation or otherwise. You should consult a tax adviser with respect to legislative developments and their effect on the policy. CHANGES TO COMPLY WITH THE LAW So that your policy continues to qualify as life insurance under the Code, we reserve the right to refuse to accept all or part of your premium payments or to change your death benefit. We may refuse to allow you to make partial withdrawals that would cause your policy to fail to qualify as life insurance. We also may: o make changes to your policy or its riders; or o take distributions from your policy to the - -------------------------------------------------------------------------------- Survivor Dimensions 55 degree that we deem necessary to qualify your policy as life insurance for tax purposes. If we make any change of this type, it applies the same way to all affected policies. The tax law limits the amount we can charge for mortality costs and other expenses used to calculate whether your policy qualifies as life insurance for federal income tax purposes. We must base these calculations on reasonable mortality charges and as permitted, other charges reasonably expected to be paid. The Treasury issued proposed regulations on what it considers reasonable mortality charges. We believe that the charges used for your policy should meet the Treasury's current requirement for "reasonableness." We reserve the right to make changes to the mortality charges if future regulations have standards which make changes necessary in order to continue to qualify your policy as life insurance for federal income tax purposes. Additionally, assuming that you do not want your policy to be or to become a modified endowment contract, we include a policy endorsement under which we have the right to amend your policy, including riders. We do this to attempt to enable your policy to continue to meet the seven-pay test for federal income tax purposes. If the policy premium you pay is more than the seven-pay limit, we have the right to remove any excess premium or to make any appropriate adjustments to your policy's account value and death benefit. It is not clear, however, whether we can take effective action pursuant to this endorsement under all possible circumstances to prevent a policy that has exceeded the premium limitation from being classified as a modified endowment contract. Any increase in your death benefit will cause an increase in your cost of insurance charges. OTHER Policy owners may use our policies in various arrangements, including: o qualified plans; o non-qualified deferred compensation or salary continuance plans; o split dollar insurance plans; o executive bonus plans; o retiree medical benefit plans; and o other plans. The tax consequences of these plans may vary depending on the particular facts and circumstances of each arrangement. If you want to use any of your policies in this type of arrangement, you should consult a qualified tax adviser regarding the tax issues of your particular arrangement. In recent years, Congress has adopted new rules relating to life insurance owned by businesses. Any business contemplating the purchase of a new policy or a change in an existing policy should consult a tax adviser. The IRS requires us to withhold income taxes from any portion of the amounts individuals receive in a taxable transaction. We do not withhold income taxes if you elect in writing not to have withholding apply. If the amount withheld for you is insufficient to cover income taxes, you may have to pay income taxes and possibly penalties later. The transfer of the policy or designation of a beneficiary may have federal, state and/or local transfer and inheritance tax consequences, including the imposition of gift, estate and generation-skipping transfer taxes. For example the transfer of the policy to, or the designation as a beneficiary of, or the payment of proceeds to a person who is assigned to a generation which is two or more generations below the generation assignment of the policy owner may have generation skipping transfer tax consequences under federal tax law. The individual situation of each policy owner or beneficiary will determine the extent, if any, to which federal, state and local transfer and inheritance taxes may be imposed and how ownership or receipt of policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation skipping and other taxes. YOU SHOULD CONSULT QUALIFIED LEGAL OR TAX ADVISERS FOR COMPLETE INFORMATION ON FEDERAL, STATE, LOCAL AND OTHER TAX CONSIDERATIONS. - -------------------------------------------------------------------------------- Survivor Dimensions 56 ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES, CASH SURRENDER VALUES AND ACCUMULATED PREMIUMS The following tables are intended to show how the policy works, including how benefits and values can vary over time. Each table compares these values with total premiums we receive with interest. The policy illustrated uses the following assumptions:
Definition Death of Life Stated Target Smoker* Benefit Insurance Death Death Gender Age Status Option Test Benefit Premium Benefit - ------ --- ------ ------ ---- ------- ------- ------- Male 50 Nonsmoker 1 GP Preferred Female 50 Nonsmoker Preferred
- ------------------- * "Smoker" includes the use of cigarettes, cigars, pipes, chewing tobacco, nicotine chewing gum or patch, snuff or any other tobacco or nicotine-based product. The target premium for the illustrated policy is $X,XXX.XX (approximately $X per $X,XXX of stated death benefit). For surrender charge purposes, the target premium for the illustrated policy is $X,XXX.XX (approximately $X per $1,000 of stated death benefit). The tables show how death benefits, account values and net cash surrender values of a hypothetical policy could vary over an extended period of time, assuming the variable division had constant hypothetical gross annual investment returns of 0%, 12%, or 6% over the periods indicated in each table. Values would differ from those shown in the tables if the annual investment returns were not constant. The amounts shown would differ if we had used two females or two males. These illustrations assume there is no policy loan. We illustrate premium payments as if they were made at the beginning of the year. The third column of each table shows what would happen if an amount equal to the assumed premiums earned interest, after taxes, of 5% compounded annually. The difference between the account value and the cash surrender value in the first nine years of the policy shows the effect of the surrender charge. The net investment return on your policy is lower than the gross investment return on the variable investment options as a result of the mortality and expense risk charge, the portfolio management fees and portfolio expenses. We show the effect of the net investment return in the amounts for death benefits, account values and cash surrender values. The tables reflect annual investment management fees of 0.___% of the portfolios' aggregate average daily net assets. This hypothetical rate is a simple average of the investment advisory fees applying to the investment portfolios for the year ending December 31, 1999. We assume other portfolio expenses at the rate of 0.___% of the portfolios' average daily net assets. This is an average of all the portfolios' other expenses for the year ending - -------------------------------------------------------------------------------- Survivor Dimensions 57 December 31, 1999 after any expense reimbursements or waivers by investment portfolio managers has been made. The average of all portfolios' total expenses is __.___%. Actual fees vary by portfolio. The portfolio fees and expenses used in the illustrations are the net amounts shown after absorption of fees and expenses by the portfolio's investment manager. Absent such expense reimbursements or waivers, the total average investment management fees, average other portfolio expenses and the average of all portfolios' total expenses used in the illustrations would have been higher (__.___%, __.___% and __.___%, respectively). The tables assume that the current expense reimbursement arrangements will continue. However, they may not continue through 2000. The effect of these portfolio charges and expenses, and mortality and expense risk charges result in a net rate of return of: o (__.___)% on a 0% gross rate of return; o ___.___% on a 12% gross rate of return; and o __.___% on a 6% gross rate of return. The tables assume that charges have been deducted including deductions for premiums, cost of insurance rider charges, monthly deductions, mortality and expense risk charge, administrative and sales charges. The tables show charges at our current rates which includes a persistency refund. The tables also show charges at the maximum rates we guarantee in our policies. SEE MONTHLY DEDUCTIONS FROM YOUR ACCOUNT VALUE, PAGE 47. The tables reflect that we do not currently charge against the separate account for state or federal taxes. If we charge for the taxes in the future, it will take a higher gross rate of return than the rates shown to produce the same death benefits and account values. This Survivor Dimensions policy is issued only to groups. For this policy, we generally deliver an illustration which shows a single life scheduled premium and risk class representative of the particular group covered by this policy. We base these hypothetical future benefits on both guaranteed and current cost factor assumptions and actual account value. However, if we are asked to do so, we will provide personal illustrations based on: o the insured people's ages and genders; o standard premium class assumptions; o initial stated death benefit; o the chosen death benefit option; o scheduled premiums consistent with the policy form; and o special features elected on each policy. At issue, we deliver an individualized illustration showing the scheduled premium you chose and the insured people's actual risk classes. After we issue the policy, if you ask us to, we will give you an illustration of future policy benefits. We base these hypothetical future benefits on both guaranteed and current cost factor assumptions and actual account value. - -------------------------------------------------------------------------------- Survivor Dimensions 58 [TO BE FILED BY AMENDMENT] PROSPECT: INSURED PERSON NO. 1'S NAME MALE 50 NONSMOKER PREFERRED PRESENTED BY: INSURED PERSON NO. 2'S NAME FEMALE 50 NONSMOKER PREFERRED SOUTHLAND LIFE SURVIVOR DIMENSIONS UNIVERSAL LIFE STATED DEATH BENEFIT: $1,000,000 DEATH BENEFIT OPTION A ANNUAL PREMIUM: $_________ GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST SUMMARY PAGE ASSUMING GUARANTEED CHARGES Assuming Hypothetical Gross Investment Return of:
-----------0.00%-------- ---------12.00%--------- -----------6.00%---------- PREMIUM CASH CASH CASH ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 2 3 4 5 6 7 8 9 10 15 20 25 30 AGE 65
The expense charges and cost of insurance rates will never be greater than those which were used to calculate the above values. The hypothetical gross rates of return shown are illustrative only and are not a representation of past or future investment results. Actual investment results may be different from those shown and will depend on a number of factors, including selected investment allocations and investment experience. No representation is made that these hypothetical gross investment returns can be achieved or sustained over any period of time. The death benefit, account value and cash surrender value for a policy would be different from those shown if the actual gross annual rates of return averaged 0.00%, 12.00% and 6.00% over a period of years but varied above or below that average during the period. They would also be different if premiums were paid in a different frequency than shown. - -------------------------------------------------------------------------------- Survivor Dimensions 59 PROSPECT: INSURED PERSON NO. 1'S NAME MALE 50 NONSMOKER PREFERRED PRESENTED BY: INSURED PERSON NO. 2'S NAME FEMALE 50 NONSMOKER PREFERRED SOUTHLAND LIFE SURVIVOR DIMENSIONS UNIVERSAL LIFE STATED DEATH BENEFIT: $1,000,000 DEATH BENEFIT OPTION A ANNUAL PREMIUM: $13,000.00 GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST SUMMARY PAGE ASSUMING CURRENT CHARGES Assuming Hypothetical Gross Investment Return of:
-----------0.00%-------- ---------12.00%--------- -----------6.00%---------- PREMIUM CASH CASH CASH ACCUMULATED ACCOUNT SURR DEATH ACCOUNT SURR DEATH ACCOUNT SURR DEATH YEAR PREMIUMS AT 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT 1 13000 2 13000 3 13000 4 13000 5 13000 6 13000 7 13000 8 13000 9 13000 10 13000 15 13000 20 13000 25 13000 30 13000 AGE 65 13000
The current cost of insurance rates are subject to change. Account values will vary from those illustrated if actual rates differ from those assumed. Current mortality charge rates are based on current mortality experience and are not dependent upon future improvements in underlying mortality. The hypothetical gross rates of return shown are illustrative only and are not a representation of past or future investment results. Actual investment results and policy charges may be different from those shown and will depend on a number of factors, including the investment allocations and investment experience. No representation is made that these hypothetical gross investment returns can be achieved or sustained over any period of time. The death benefit, account value and cash surrender value for a policy would be different from those shown if the actual gross annual rates of return averaged 0.00%, 12.00% and 6.00% over a period of years but varied above or below that average during the period. They would also be different if premiums were paid in a different frequency than shown. - -------------------------------------------------------------------------------- Survivor Dimensions 60 ADDITIONAL INFORMATION DIRECTORS AND OFFICERS Set forth below is information regarding the directors and principal officers of Southland Life Insurance Company. Southland's address, and the business address of each person named, except as noted with one asterisk (*) is ING North America Insurance Corporation, 5780 Powers Ferry Road, Atlanta, Georgia 30327-4390. The business address of each person denoted with one asterisk (*) is Security Life Center, 1290 Broadway, Denver, Colorado 80203-5699. Name Position and Offices with Southland Life - ---- ---------------------------------------- Stephen M. Christopher* Chairman, President and Chief Executive Officer Jerome J. Cwiok Director, Executive Vice President and Chief Operating Officer B. Scott Burton Director P. Randall Lowery Director James D. Thompson Director Michael W. Cunningham Director Mark A. Tullis Director James L. Livingston, Jr.* Executive Vice President, CFO and Chief Actuary John R. Barmeyer Senior Vice President - Legal Services Terry L. Morrison* Senior Vice President, New Business Operations Derek J. Reynolds Senior Vice President and Chief Information Officer Mark A. Smith* Senior Vice President, Insurance Services Gretta Ytterbo Senior Vice President - ING US Legal Services Lawrence D. Taylor Senior Vice President - Product Management Group Gary W. Waggoner* Vice President, Secretary ING US Legal Services - -------------------------------------------------------------------------------- Survivor Dimensions 61 REGULATION We are regulated and supervised by the Division of Insurance of the Department of Regulatory Agencies of the State of Colorado which periodically examines our financial condition and operations. In addition, we are subject to the insurance laws and regulations in every jurisdiction in which we do business. As a result, the provisions of this policy may vary somewhat from jurisdiction to jurisdiction. We are required to submit annual statements, including financial statements, of our operations and finances to the insurance departments of the various jurisdictions in which we do business to determine solvency and compliance with state insurance laws and regulations. We are also subject to various federal securities laws and regulations. LEGAL MATTERS The legal matters in connection with the policy described in this prospectus have been passed on by the General Counsel of Southland Life. Sutherland Asbill & Brennan LLP has provided advice on certain matters relating to the federal securities laws. LEGAL PROCEEDINGS Southland Life, as an insurance company, is ordinarily involved in litigation. We do not believe that any current litigation is material to Southland Life's ability to meet its obligations under the policy or to the separate account, and we do not expect to incur significant losses from such actions. ING America Equities, Inc., the principal underwriter and distributor of the policy, is not engaged in any litigation of any material nature. EXPERTS Actuarial matters in this prospectus have been examined by James L. Livingston, Jr., F.S.A., M.A.A.A., who is Executive Vice President, CFO and Chief Actuary of Southland Life. His opinion on actuarial matters is filed as an exhibit to the Registration Statement we filed with the SEC. [To be filed by amendment]. REGISTRATION STATEMENT We have filed a Registration Statement relating to the separate account and the variable life insurance policy described in this prospectus 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 under the rules and regulations of the SEC. The additional information may be obtained from the SEC's principal office in Washington, DC. There is a charge for this material. - -------------------------------------------------------------------------------- Survivor Dimensions 62 INDEX OF SPECIAL TERMS The following special terms are used in this prospectus. We explain each term on the page(s) listed in the body of this prospectus and in the summary, if applicable: Account value................................................8 Accumulation unit...........................................32 Accumulation unit value......................................8 Adjustable term insurance rider.............................23 Base death benefit..........................................24 Beneficiary(ies)............................................24 Cash surrender value........................................32 Continuation of coverage....................................31 Death proceeds..............................................24 Divisions...................................................18 Free look period............................................40 General account.............................................18 Guarantee period............................................27 Guarantee period annual premium.............................27 Guaranteed interest division................................18 Guaranteed minimum death benefit............................27 Initial premium.............................................21 Investment date.............................................22 Investment options..........................................19 Joint equivalent age........................................19 Loan division...............................................36 Minimum annual premium......................................21 Net account value...........................................32 Net amount at risk..........................................47 Net cash surrender value....................................32 Net premium.................................................21 Partial withdrawal..........................................21 Policy.......................................................4 Policy date.................................................20 Policy loan.................................................35 Portfolios..................................................12 Scheduled premium...........................................20 Segment.....................................................26 Separate account L1.........................................12 Special continuation period.................................21 Stated death benefit........................................19 Surrender target premium....................................50 Target death benefit........................................28 Target premium..............................................21 Total death benefit.........................................28 Transaction date............................................32 Valuation date..............................................32 Valuation period............................................33 Variable division...........................................18 Variable investment option..................................12 Younger insured person's 100th birthday.....................40 - -------------------------------------------------------------------------------- Survivor Dimensions 63 FINANCIAL STATEMENTS [TO BE FILED BY AMENDMENT] - -------------------------------------------------------------------------------- Survivor Dimensions 64 Consolidated Financial Statements Southland Life Insurance Company and Subsidiaries Years ended December 31, 1999, 1998 and 1997 with Report of Independent Auditors - -------------------------------------------------------------------------------- Survivor Dimensions 65 Financial Statements Southland Life Separate Account L1 of Southland Life Insurance Company Years ended December 31, 1999, 1998 and 1997 with Report of Independent Auditors - -------------------------------------------------------------------------------- Survivor Dimensions 66 APPENDIX A FACTORS FOR THE GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST FOR A LIFE INSURANCE POLICY
Attained Attained Attained Attained Age of Age of Age of Age of Younger Younger Younger Younger Insured Factor Insured Factor Insured Factor Insured Factor 0 2.50 25 2.50 50 1.85 75 1.05 1 2.50 26 2.50 51 1.78 76 1.05 2 2.50 27 2.50 52 1.71 77 1.05 3 2.50 28 2.50 53 1.64 78 1.05 4 2.50 29 2.50 54 1.57 79 1.05 5 2.50 30 2.50 55 1.50 80 1.05 6 2.50 31 2.50 56 1.46 81 1.05 7 2.50 32 2.50 57 1.42 82 1.05 8 2.50 33 2.50 58 1.38 83 1.05 9 2.50 34 2.50 59 1.34 84 1.05 10 2.50 35 2.50 60 1.30 85 1.05 11 2.50 36 2.50 61 1.28 86 1.05 12 2.50 37 2.50 62 1.26 87 1.05 13 2.50 38 2.50 63 1.24 88 1.05 14 2.50 39 2.50 64 1.22 89 1.05 15 2.50 40 2.50 65 1.20 90 1.05 16 2.50 41 2.43 66 1.19 91 1.04 17 2.50 42 2.36 67 1.18 92 1.03 18 2.50 43 2.29 68 1.17 93 1.02 19 2.50 44 2.22 69 1.16 94 1.01 20 2.50 45 2.15 70 1.15 95 1.00 21 2.50 46 2.09 71 1.13 96 1.00 22 2.50 47 2.03 72 1.11 97 1.00 23 2.50 48 1.97 73 1.09 98 1.00 24 2.50 49 1.91 74 1.07 99 1.00
THE POLICY'S BASE DEATH BENEFIT AT ANY TIME WILL BE AT LEAST EQUAL TO THE ACCOUNT VALUE TIMES THE APPROPRIATE FACTOR FROM THIS TABLE. - -------------------------------------------------------------------------------- Survivor Dimensions 67 APPENDIX B PERFORMANCE INFORMATION POLICY PERFORMANCE The following hypothetical illustrations demonstrate how the actual investment experience of each variable investment option of the separate account affects the cash surrender value, account value and death benefit of a policy. These hypothetical illustrations are based on the actual historical return of each portfolio as if a policy had been issued on the date indicated. Each portfolio's annual total return is based on the total return calculated for each fiscal year. These annual total return figures reflect the net portfolio's management fees after any voluntary waiver and other operating expenses but do not reflect the policy level or separate account asset-based charges and deductions, which if reflected, would result in lower total return figures than those shown. The illustrations are based on the payment of a $_______ annual premium, received at the beginning of each year, for a hypothetical policy with a $________ stated death benefit, the guideline premium test, death benefit option A, issued to a preferred, nonsmoker male, age ___ and a preferred, nonsmoker female, age ___. It is assumed that all premiums are allocated to the variable investment option illustrated for the period shown. The benefits are calculated for a specific date. The amount and timing of premium payments and the use of other policy features, such as policy loans, would affect individual policy benefits. The amounts shown for the cash surrender values, account values and death benefits take into account the charges against premiums, current cost of insurance and monthly deductions, the daily charge against the separate account for mortality and expense risks, and each portfolio's charges and expenses. SEE CHARGES, DEDUCTIONS AND REFUNDS, PAGE 45. This prospectus also contains illustrations based on assumed rates of return. SEE ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES, CASH SURRENDER VALUES AND ACCUMULATED PREMIUMS, PAGE 58. Past performance is not an indication of future results. Actual investment results may be more or less than those shown in the hypothetical illustrations. - -------------------------------------------------------------------------------- Survivor Dimensions 68 Part II 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. RULE 484 UNDERTAKING Insofar as indemnification for liability arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Texas Business Corporations Act Article 2.02-1 is a comprehensive provision that defines the power of Texas corporations to provide for the indemnification of its directors, officers, employees and agents. This Article also grants to corporations the power to purchase director and officer insurance. Article XXVIII of the Southland Life Insurance Company Bylaws provides as follows: ARTICLE XXVIII INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS SECTION 1. Authorization for indemnification of Directors and officers in actions by or in the right of a company to procure a judgment in its favor. (a) Any person made party to an action by or in the right of the Company to procure a judgment in its favor by reason of the fact that he, his testator or intestate, is or was a Director or officer of the Company, shall be indemnified against the reasonable expenses, including attorneys' fees, actually and necessarily incurred by him in connection with the defense of such action, or in connection with an appeal therein, except in relation to matters as to which such Director or officer is adjudged to have breached his duty to the Company. (b) The indemnification authorized under paragraph (a) shall in no case include: (1) Amounts paid in settling or otherwise disposing of a threatened or a pending action with or without court approval; or - -------------------------------------------------------------------------------- Survivor Dimensions II - 1 (2) Expenses incurred in defending a threatened action or a pending action which is settled or otherwise disposed of without court approval. SECTION 2. Authorization for indemnification of Directors and officers in actions or proceedings other than by or in the right of a company to procure a judgment in its favor. (a) Any person made, or threatened to be made, a party in an action or proceeding other than one by or in the right of the company to procure a judgment in its favor, whether civil, criminal or administrative, including an action by or in the right of any other company of any type or kind, domestic or foreign, which any Director or officer of the Company, served in any capacity at the request of the Company, by reason of the fact that he, his testator or intestate, was a Director or officer of the Company, or served such other company in any capacity, shall be indemnified against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such Director or officer acted, in good faith, for a purpose which he reasonably believed to be in the best interests of the Company and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful. (b) The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such Director or officer did not act in good faith for a purpose which he reasonably believed to be in the best interests of the Company or that he had reasonable cause to believe that this conduct was unlawful. SECTION 3. Payment of indemnification other than by court award. (a) A person who has been wholly successful, on the merits or otherwise, in the defense of a civil, criminal, or administrative action or proceeding of the character described in Section 1 or Section 2 above shall be entitled to indemnification as authorized in such Section 1 or Section 2. (b) Except as provided in Paragraph (a) of this Section 3, any indemnification under Section 1 or Section 2 above, unless ordered by a court, shall be made by the Company only if authorized in the specific case: (1) By the Board of Directors acting by a quorum consisting of Directors who are not parties to such action or proceeding upon a finding that the Director or officer has met the standard of conduct set forth in Section 1 or Section 2, as the case may be; or (2) If a quorum of the Board of Directors is not obtainable with due diligence: (A) By the Board of Directors upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the applicable standard of conduct set forth in Section 1 or Section 2 above has been met by such Director or officer, or (B) By the stockholder (excluding the director or officer) upon a finding that the Director or officer has met the applicable standard of conduct set forth in Section 1 or Section 2 above. - -------------------------------------------------------------------------------- Survivor Dimensions II - 2 (c) Reasonable expenses incurred in defending a civil, criminal or administrative action or proceeding may be paid by the Company in advance of the final disposition of such action or proceeding if authorized under paragraph (b) of this Section 3 and if the Director or officer submits a written affirmation that he meets the standards necessary for indemnification and if the facts known to those making the determination would not preclude indemnification, but subject to a written undertaking of repayment if ultimately found not to be entitled to indemnification under the provisions hereof. SECTION 4. General The foregoing provisions of this Article XXVIII shall be deemed to be a contract between the Company and each Director and officer who serves in such capacity at any time while this bylaw is in effect, and any repeal or modification thereof shall not affect any rights or obligations then existing with respect to any state of facts then or therefore existing or any action, suit or proceeding theretofore or thereafter brought based in whole or in part upon any such state of facts. The foregoing rights of indemnification shall not be deemed exclusive of any other rights to which any Director or officer may be entitled apart from the provisions of this Article XXVIII. The Board of Directors in its discretion shall have the power on behalf of the Company to indemnify any person, other than a Director or officer, made a party to any action, suit or proceeding by reason of the fact that he, his testator or intestate, is or was an employee of the company. Such indemnification shall be to the same extent and subject to the same standards as indemnification for a director or officer. SECTION 5. Liability Insurance The company and/or the Board of Directors may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the company or who is or was serving at the request of the company as a director, officer, partner, venturer, proprietor, trustee, employee, agent, or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, other enterprise or employee benefit plan, against any and all liability asserted against him and/or incurred by him in such capacity or arising out of his status as such a person, whether or not such person would be subject to or eligible for indemnification under the other provisions of this Article XXVIII. REPRESENTATIONS PURSUANT TO SECTION 26(E)(2)(A) Southland Life Insurance Company hereby represents that the fees and charges deducted under the Policy, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Southland Life Insurance Company. CONTENTS OF REGISTRATION STATEMENT This Registration Statement comprises the following papers and documents: The facing sheet. - -------------------------------------------------------------------------------- Survivor Dimensions II - 3 The prospectus. Undertaking to file reports. Rule 484 undertaking. Representations pursuant to Section 26(e)(2)(A). The signatures. Written consents of the following persons: James L. Livingston, Jr. (See Exhibit 6A). [to be filed by amendment] Ernst & Young LLP (See Exhibit 7(a)). [to be filed by amendment] Sutherland Asbill & Brennan LLP (See Exhibit 7(b)). [to be filed by amendment] The following exhibits, corresponding to those required by paragraph A of the instructions as to exhibits in Form N-8B-2: 1. A. (1) Resolution of the Board of Directors of Southland Life Insurance Company establishing Southland Separate Account L1 /1/ (2) Not Applicable (3) (a) Form of Underwriting Agreement between Southland Life Insurance Company and ING America Equities, Inc. /2/ (b) Form of Distribution Agreement /3/ (i) Amendment to Southland Life Insurance Company Distribution Agreement /9/ (c) Schedule of Sales Commissions /4/ (d) Form of Wholesaling Agreement /9/ (e) Form of IIG Master Sales and Supervisory Agreement /9/ (f) Form of Broker-Dealer Supervisory and Selling Agreement for Variable Contracts /9/ (4) Not applicable (5) (a) Specimen Flexible Premium Adjustable Combination Fixed and Variable Life Insurance Policy /5/ (i) Specimen Form of Montana Flexible Premium Adjustable Combination Fixed and Variable Life Insurance Policy /7/ (ii) Specimen Form of Texas Flexible Premium Adjustable Combination Fixed and Variable Life Insurance Policy /7/ (iii) Specimen Survivor Dimensions Universal Life Insurance Policy (Form No. 15287-00) (b) Adjustable Term Insurance Rider /4/ (c) Accidental Death Benefit Rider /4/ (d) Additional Insured Rider /4/ (e) Children's Insurance Rider /4/ (f) Exchange of Insured Rider /4/ (g) Guaranteed Insurability Rider /4/ (h) Waiver of the Cost of Insurance Rider /4/ (i) Waiver of Specified Premium Rider /4/ (j) Guaranteed Minimum Death Benefit Rider /6/ (k) Fail Safe Endorsement /8/ (l) Continuation of Coverage After Age 100 Endorsement /9/ (m) Single Life Term Insurance Rider (Insured #1)(Form No. 152XX-00) (n) Single Life Term Insurance Rider (Insured #2)(Form No. 152XX-00) (o) Adjustable Term Insurance Rider (Form No. 152XX-00) (6) (a) Amended and restated Articles of Incorporation of Southland Life Insurance Company /3/ (b) By-laws of Southland Life Insurance Company /2/ (7) Not applicable (8) (a) Form of participation/distribution agreement between The Alger American Fund and the Company /3/ (b) Form of participation/distribution agreement between Fidelity Variable Insurance Products Fund and the Company /3/ (c) Form of participation/distribution agreement between Fidelity Variable Insurance Products Fund II and the Company /3/ - -------------------------------------------------------------------------------- Survivor Dimensions II - 4 (d) Form of participation/distribution agreement between INVESCO Variable Investment Funds, Inc. and the Company /3/ (e) Form of participation/distribution agreement between Janus Aspen Series and the Company /3/ (f) Form of administrative services agreement between Security Life of Denver Insurance Company and Southland Life Insurance Company /9/ (g) Form of administrative services agreement between INVESCO Funds Group, Inc. and Southland Life Insurance Company /9/ (h) Form of Service Agreement between Southland Life Insurance Company and Fred Alger Management, Inc. (9) Not applicable (10) Application form (a) Southland Life Variable Universal Life Insurance Application (11) Issuance, transfer and redemption procedures memorandum B. Not applicable C. Not applicable 2. Opinion and Consent of Gary W. Waggoner 3. Not applicable 4. Not applicable 5. Not applicable 6.A. Opinion and consent of James L. Livingston, Jr. [to be filed by amendment] 7.(a) Consent of Ernst & Young LLP [to be filed by amendment] (b) Consent of Sutherland Asbill & Brennan LLP [to be filed by amendment] - ------------------- /1/ Incorporated by reference to the Registration Statement on Form S-6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on October 6, 1995. /2/ Incorporated by reference to the Registration Statement on Form N-4 for Southland Separate Account A1 (File No. 33-89574) filed with the Commission on February 17, 1995. /3/ Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N- 4 for Southland Separate Account A1 (File No. 33-89574) filed with the Commission on September 29, 1995. /4/ Incorporated by reference to Pre-Effective Amendment No. 2 to the Registration Statement on Form S- 6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on May 10, 1996. /5/ Incorporated by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form S-6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on July 30, 1996. /6/ Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement on Form S-6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on October 25, 1996. /7/ Incorporated by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form S-6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on April 30, 1997. /8/ Incorporated by reference to Post-Effective Amendment No. 5 to the Registration Statement on Form S-6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on April 29, 1999. /9/ Incorporated by reference to Post-Effective Amendment No. 6 to the Registration Statement on Form S-6 for Southland Separate Account L1 (File No. 33-97852) filed with the Commission on May 1, 2000. - -------------------------------------------------------------------------------- Survivor Dimensions II - 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Southland Life Insurance Company and the Registrant, Southland Life Separate Account L1, have duly caused this Registration Statement to be signed on their behalf by the undersigned, hereunto duly authorized, and their seal to be hereunto fixed and attested, all in the City and County of Denver and the State of Colorado on the 20th day of September, 2000. SOUTHLAND LIFE INSURANCE COMPANY (Depositor) BY: /s/ Stephen M. Christopher -------------------------- Stephen M. Christopher President (Seal) ATTEST: /s/ Gary W. Waggoner - -------------------- Gary W. Waggoner SOUTHLAND SEPARATE ACCOUNT L1 (Registrant) BY: SOUTHLAND LIFE INSURANCE COMPANY (Depositor) BY: /s/ Stephen M. Christopher -------------------------- Stephen M. Christopher President (Seal) ATTEST: /s/ Gary W. Waggoner - -------------------- Gary W. Waggoner - -------------------------------------------------------------------------------- Survivor Dimensions II - 6 Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities with Southland Life Insurance Company and on the date indicated. PRINCIPAL EXECUTIVE OFFICERS: /s/ Stephen M. Christopher - ---------------------------------- Stephen M. Christopher President and Chairman /s/ James L. Livingston, Jr. - ---------------------------------- James L. Livingston, Jr. Executive Vice President, CFO and Chief Actuary PRINCIPAL ACCOUNTING OFFICER: /s/ Shari A. Enger - ---------------------------------- Shari A. Enger Controller DIRECTORS: /s/ P. Randall Lowery - ---------------------------------- P. Randall Lowery /s/ Michael W. Cunningham - ---------------------------------- Michael W. Cunningham /s/ B. Scott Burton - ---------------------------------- B. Scott Burton /s/ Mark A. Tullis - ---------------------------------- Mark A. Tullis - -------------------------------------------------------------------------------- Survivor Dimensions II - 7 Exhibit Index 1.A.5(a)(iii) Specimen Survivor Dimensions Universal Life Insurance Policy 1.A.5(m) Single Life Term Insurance Rider (Insured #1) 1.A.5(n) Single Life Term Insurance Rider (Insured #2) 1.A.5(o) Adjustable Term Insurance Rider 1.A.(8)(h) Form of Service Agreement between Southland Life Insurance Company and Fred Alger Management, Inc. 1.A.(10)(a) Southland Life Variable Universal Life Insurance Application 2. Opinion and consent of Gary W. Waggoner - -------------------------------------------------------------------------------- Survivor Dimensions II - 8 -----END PRIVACY-ENHANCED MESSAGE-----