-----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, QXbfFLPeRGThwcDnBg8oEJH3jRoSENvDKV3B1CzpDRUetOSAp/CvpcZojLuEXo7p hJqS/ofsyAf01ll9lWrCjw== 0000950123-98-008572.txt : 19980929 0000950123-98-008572.hdr.sgml : 19980929 ACCESSION NUMBER: 0000950123-98-008572 CONFORMED SUBMISSION TYPE: S-6 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980928 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONY AMERICA VARIABLE ACCOUNT L CENTRAL INDEX KEY: 0000763862 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-6 SEC ACT: SEC FILE NUMBER: 333-64417 FILM NUMBER: 98716195 BUSINESS ADDRESS: STREET 1: 1740 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-708-2000 MAIL ADDRESS: STREET 1: 1740 BROADWAY CITY: NEW YORK STATE: NY ZIP: 10019 S-6 1 MONY AMERICA VARIABLE ACCOUNT L 1 REGISTRATION NO. 333- REGISTRATION NO. 811-4235 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-6 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 PRE-EFFECTIVE AMENDMENT NO.[ ] POST-EFFECTIVE AMENDMENT NO. [ ] MONY AMERICA VARIABLE ACCOUNT L (Exact Name of Trust) MONY LIFE INSURANCE COMPANY OF AMERICA (Name of Depositor) 1740 BROADWAY NEW YORK, NEW YORK 10019 (Address of Principal Executive Office) EDWARD P. BANK, ESQ. VICE PRESIDENT AND DEPUTY GENERAL COUNSEL THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK 1740 BROADWAY NEW YORK, NEW YORK 10019 (Name and Address of Agent for Service) APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as possible after the effective date of this Registration Statement. Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the Registrant hereby declares that an indefinite amount of its securities is being registered under the Securities Act of 1933. Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this Registration Statement shall become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - --------------- STATEMENT PURSUANT TO RULE 24f-2 The Registrant registers an indefinite number or amount of its variable life insurance contracts under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940. The Rule 24f-2 notice for Registrant's fiscal year ending December 31, 1997 was filed on March 31, 1998. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-8B-2
ITEM NO. OF FORM N-8B-2 CAPTION IN PROSPECTUS - ----------- --------------------- 1.......................................... Cover Page 2.......................................... Cover Page 3.......................................... Not Applicable 4.......................................... DISTRIBUTION OF THE POLICY 5.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 6.......................................... MONY America Variable Account L 7.......................................... Not required 8.......................................... Not required 9.......................................... Legal Proceedings 10.......................................... THE POLICY; INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; CHARGES AND DEDUCTIONS; OTHER INFORMATION; VOTING OF FUND SHARES; MORE ABOUT THE POLICY 11.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE FUNDS; PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT 12.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE FUNDS; PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT 13.......................................... THE POLICY; CHARGES AND DEDUCTIONS; THE FUNDS 14.......................................... THE POLICY 15.......................................... THE POLICY 16.......................................... THE FUNDS; THE POLICY; INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 17.......................................... THE POLICY 18.......................................... THE FUNDS; THE POLICY; INFORMATION ABOUT COMPANY AND THE VARIABLE ACCOUNT 19.......................................... VOTING OF FUND SHARES; MORE ABOUT THE POLICY 20.......................................... Not applicable 21.......................................... THE POLICY 22.......................................... Not applicable 23.......................................... Not applicable 24.......................................... IMPORTANT TERMS; MORE ABOUT THE POLICY 25.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 26.......................................... Not applicable
3
ITEM NO. OF FORM N-8B-2 CAPTION IN PROSPECTUS - ----------- --------------------- 27.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 28.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 29.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 30.......................................... Not applicable 31.......................................... Not applicable 32.......................................... Not applicable 33.......................................... Not applicable 34.......................................... Not applicable 35.......................................... MORE ABOUT THE POLICY 36.......................................... Not applicable 37.......................................... Not applicable 38.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; MORE ABOUT THE POLICY 39.......................................... MORE ABOUT THE POLICY 40.......................................... Not applicable 41.......................................... MORE ABOUT THE POLICY 42.......................................... Not applicable 43.......................................... Not applicable 44.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY; MORE ABOUT THE POLICY 45.......................................... Not applicable 46.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY; MORE ABOUT THE POLICY 47.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY; MORE ABOUT THE POLICY 48.......................................... Not applicable 49.......................................... Not applicable 50.......................................... INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT 51.......................................... Cover Page; INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE POLICY; MORE ABOUT THE POLICY 52.......................................... OTHER INFORMATION 53.......................................... OTHER INFORMATION 54.......................................... Not applicable 55.......................................... Not applicable 56.......................................... Not required 57.......................................... Not required 58.......................................... Not required 59.......................................... FINANCIAL STATEMENTS
2 4 PROSPECTUS DATED OCTOBER 15, 1998 LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY ISSUED BY MONY LIFE INSURANCE COMPANY OF AMERICA MONY AMERICA VARIABLE ACCOUNT L This prospectus describes a flexible premium joint survivorship variable universal life insurance policy (individually, the "Policy," and collectively, the "Policies") offered by MONY Life Insurance Company of America (the "Company"), a wholly-owned subsidiary of The Mutual Life Insurance Company of New York. The Policy, for so long as it remains in force, provides insurance protection on the two Insureds named in the Policy through the Maturity Date. The Policy is designed to provide maximum flexibility in connection with premium payments and death benefits by permitting, subject to certain restrictions, the frequency and amount of premium payments to vary and the death benefit payable under the Policy to increase or decrease. A Policy may also be surrendered for its Cash Value. The Company will pay the death proceeds to the Beneficiary when the last surviving Insured dies if the Policy is still in force. The death proceeds will equal the Death Benefit, plus any amount provided under the Four Year Term Insurance Rider, less any Outstanding Debt, and by any charges due during the Grace Period. The Policy will remain in force as long as the Cash Value remains greater than zero. If at all times during the first three Policy years, the sum of premiums paid less Partial Surrenders taken (excluding their fees) and any Outstanding Debt is greater than or equal to the Minimum Monthly Premium times the number of completed months this Policy has been in force or the Cash Value is greater than zero, the Policy and all Rider coverages will not lapse. If the Guaranteed Death Benefit Rider is purchased, the Specified Amount of the Policy and certain Rider coverages will remain in force for the Guarantee Period if the required premiums less Partial Surrenders taken (and their fees) less any Outstanding Debt have been paid. The Guaranteed Death Benefit Rider is not available in all states. The Policy permits the choice of two death benefit Options: under Option 1, the Death Benefit remains fixed at the Specified Amount chosen; under Option 2, the Death Benefit equals the Specified Amount plus Fund Value (under certain circumstances, the Death Benefit may be greater). Under Option 2, the Death Benefit will vary daily with the investment performance of the Subaccounts for any Policy Owner who has allocated net premiums to the Variable Account. Under either Option, for so long as the Policy remains in force, the Death Benefit will never be less than the current Specified Amount. The Policy also permits an owner of the Policy to obtain loans from the Company in amounts up to 90% of the Cash Value of the Policy, and it permits an Owner to surrender a part of the Policy and receive a part of the Cash Value of the Policy. Net premiums may be allocated at the Policy Owner's discretion to one or more of the Subaccounts that comprise a separate account of the Company called the MONY America Variable Account L (the "Variable Account"), or to the Guaranteed Interest Account of the Company. Any portion of a net premium allocated to one or more of the Subaccounts is used to purchase shares of the corresponding Portfolios of the MONY Series Fund, Inc. (the "MONY Series Fund") or the Enterprise Accumulation Trust (the "Accumulation Trust"). The available Portfolios of the MONY Series Fund currently are: the Money Market Portfolio, the Government Securities Portfolio, the Intermediate Term Bond Portfolio, and the Long Term Bond Portfolio. The available Portfolios of the Accumulation Trust are: the Equity Portfolio, the Small Company Value Portfolio, the Managed Portfolio, the International Growth Portfolio, the High Yield Bond Portfolio, the Small Company Growth Portfolio, The Equity Income Portfolio, the Capital Appreciation Portfolio, the Growth and Income Portfolio, and the Growth Portfolio. The Loan Account represents amounts set aside as collateral for any Policy Debt. To the extent that all or a portion of net premiums are allocated to the Variable Account, the Fund Value under the Policy will vary based upon the investment performance of the Subaccounts to which the Fund Value is allocated. Net premiums allocated to the Guaranteed Interest Account are assets of the General Account of the Company. The Fund Value in the Guaranteed Interest Account will accrue interest at an interest rate that is guaranteed by the Company. No minimum amount of Fund Value is guaranteed, except to the extent premiums are allocated to the Guaranteed Interest Account. A Policy may be returned during the Right to Return Policy Period (see "Right to Examine a Policy -- Right to Return Policy Period," page ), during which time net premium payments earn an interest rate guaranteed by the Company. It may not be advantageous to replace existing insurance with the Policy. This prospectus generally describes only the portion of the Policy involving the Variable Account. For a brief summary of the Guaranteed Interest Account, see "The Guaranteed Interest Account," page . In pursuing its investment objective, the High Yield Bond Subaccount purchases shares of the High Yield Bond Portfolio which may invest significantly in lower rated bonds, commonly referred to as "Junk Bonds". Bonds of this type are considered to be speculative with regard to the payment of interest and return of principal. Investment in these types of securities have special risks and, therefore, may not be suitable for all investors. Investors should carefully assess the risks associated with allocating premium payments to this subaccount. --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS IS ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR THE MONY SERIES FUND, INC. AND THE ENTERPRISE ACCUMULATION TRUST. THESE PROSPECTUSES SHOULD BE READ CAREFULLY AND RETAINED FOR FUTURE REFERENCE. --------------------- MONY LIFE INSURANCE COMPANY OF AMERICA 1740 BROADWAY NEW YORK, NEW YORK 10019 1-800-487-6669 5 TABLE OF CONTENTS
PAGE ---- TABLE OF CONTENTS..................... i IMPORTANT TERMS....................... 1 SUMMARY OF THE POLICY................. 3 Purpose of the Policy............... 3 Policy Values....................... 3 The Death Benefit................... 4 Premium Features.................... 4 Allocation Options.................. 5 Transfer of Fund Value.............. 5 Policy Loans........................ 5 Full Surrender...................... 5 Partial Surrender................... 5 Right to Return Policy Period....... 6 Grace Period and Lapse.............. 6 Charges and Deductions.............. 6 Deductions from Premiums......... 6 Daily Deduction from the Variable Account........................ 7 Deductions from Fund Value....... 7 Surrender Charge................. 7 Transaction and Other Charges.... 7 Tax Treatment of Increases in Fund Value............................ 7 Tax Treatment of Death Benefit...... 8 The Guaranteed Interest Account..... 8 Contacting the Company.............. 8 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT.................... 8 MONY Life Insurance Company of America.......................... 8 Year 2000 Issue..................... 9 MONY America Variable Account L..... 9 The Funds........................... 10 Purchase of Portfolio Shares by the Variable Account................. 11 The Money Market Portfolio....... 12 The Government Securities Portfolio...................... 12 The Intermediate Term Bond Portfolio...................... 12 The Long Term Bond Portfolio..... 12 The Equity Income Portfolio...... 12 The Growth and Income Portfolio...................... 12 The Growth Portfolio............. 13 The Equity Portfolio............. 13 The Capital Appreciation Portfolio...................... 13 The Managed Portfolio............ 13 The Small Company Growth Portfolio...................... 13 The Small Company Value Portfolio...................... 13 The International Growth Portfolio...................... 13 The High Yield Bond Portfolio.... 13
PAGE ---- THE POLICY............................ 13 Application for a Policy............ 14 Temporary Insurance Coverage..... 14 Initial Premium Payment.......... 15 Policy Date...................... 15 Risk Classifications............. 15 Right to Examine a Policy -- Right to Return Policy Period.......... 16 Premiums............................ 16 Premium Flexibility.............. 16 Scheduled Premium Payments (Planned Premium Payments)..... 16 Choice of Tests for Compliance with IRS Definition of Life Insurance...................... 17 Guaranteed Death Benefit Rider... 17 Modified Endowment Contracts..... 17 Unscheduled Premium Payments..... 17 Premium Payments Affect the Continuation of the Policy..... 18 Allocation of Net Premiums.......... 18 Death Benefits Under the Policy..... 19 Death Benefit Options............... 19 Option 1......................... 19 Option 2......................... 19 Examples of Options 1 and 2...... 19 Changes in Death Benefit Option......................... 20 Changes in Specified Amount......... 20 Increases........................ 21 Decreases........................ 21 Guaranteed Death Benefit............ 21 Other Optional Insurance Benefits... 22 Waiver of Monthly Deductions Rider.......................... 21 Waiver of Specified Premium Rider.......................... 21 Four Year Term Insurance Rider... 23 Option to Split Policy Benefit... 23 Benefits at Maturity............. 23 Policy Values....................... 23 Fund Value....................... 23 Cash Value....................... 23 Determination of Fund Value......... 24 Calculating Unit Values for Each Subaccount....................... 24 Transfer of Fund Value.............. 25 Right to Exchange Policy............ 25 Policy Loans........................ 25 Full Surrender...................... 26 Partial Surrender................... 27 Grace Period and Lapse.............. 27 Special Rule for First Three Policy Years................... 28
i 6
PAGE ---- If Guaranteed Death Benefit Rider Is Not in Effect............... 28 If Guaranteed Death Benefit Rider Is in Effect................... 28 Reinstatement.................... 29 CHARGES AND DEDUCTIONS................ 29 Deductions from Premiums............ 29 Sales Charge..................... 29 Tax Charges...................... 30 Daily Deductions from the Variable Account.......................... 30 Mortality and Expense Risk Charge......................... 30 Monthly Deductions from Fund Value............................ 30 Cost of Insurance................ 30 Administrative Charge............ 31 Per $1,000 Specified Amount Charge......................... 31 Guaranteed Death Benefit Charge......................... 31 Other Optional Insurance Benefits Charges........................ 31 Surrender Charge................. 31 Effect of Changes in Specified Amount on Charges................ Corporate Purchasers................ 32 Transaction and Other Charges....... 32 Fees and Expenses of The Fund....... 32 Guarantee of Certain Charges........ 33 OTHER INFORMATION..................... 34 Federal Income Tax Considerations... 34 Definition of Life Insurance..... 34 Diversification Requirements..... 34 Tax Treatment of Policies........ 35 Conventional Life Insurance Policies....................... 35 Modified Endowment Contracts..... 36 Reasonableness Requirement for Charges........................ 36 Riders, Policy Changes, and Transfers...................... 37 Pension and Profit-Sharing Plans.......................... 37 Other Employee Benefit Programs....................... 37 Other............................ 37 Charge for Company Income Taxes..... 37 Voting of Fund Shares............... 38
PAGE ---- Disregard of Voting Instructions.... 38 Report to Policy Owners............. 38 Substitution of Investments and Right to Change Operations....... 39 Changes to Comply with Law.......... 39 PERFORMANCE INFORMATION............... 39 THE GUARANTEED INTEREST ACCOUNT....... 40 General Description................. 40 Death Benefit....................... 41 Policy Charges...................... 41 Transfers........................... 41 Surrenders and Policy Loans......... 42 MORE ABOUT THE POLICY................. 42 Ownership........................... 42 Joint Owners..................... 42 Beneficiary......................... 42 The Policy.......................... 42 Notification and Claims Procedures....................... 42 Payments............................ 43 Payment Plan/Settlement Provisions....................... 43 Payment in Case of Suicide.......... 43 Assignment.......................... 43 Errors on The Application........... 43 Incontestability.................... 44 Policy Illustrations................ 44 Distribution of The Policy.......... 44 MORE ABOUT THE COMPANY................ 45 Management.......................... 45 State Regulation.................... 45 Telephone Transfer Privileges....... 45 Legal Proceedings................... 46 Legal Matters....................... 46 Registration Statement.............. 46 Independent Accountants............. 46 Financial Statements................ 46 Index to Financial Statements......... F-1 Appendix A............................ A-1 Appendix B............................ B-1 Appendix C............................ C-1 Appendix D............................ D-1
ii 7 IMPORTANT TERMS Administrative Office -- The Company's administrative office at 1740 Broadway, New York, New York, 10019. "Administrative Office" also includes the Company's Syracuse Operations Center at 1 MONY Plaza, Syracuse, N.Y. 13202. Age -- Each Insured's age as of his or her last birthday on the Policy Date, increased by the number of complete Policy Years elapsed. Beneficiary -- The person or persons named by the Policy Owner in the application or by proper later designation to receive the death proceeds upon the death of the last surviving Insured. Business Day -- Each date on which the Variable Account is valued, which currently includes each day that the New York Stock Exchange (or International Exchange) is open for trading or any other day on which there is sufficient trading in the securities of a Portfolio of the Funds to affect materially the unit value of the corresponding Subaccount of the Variable Account. Cash Value -- The Fund Value for the Policy less Surrender Charge and less any Outstanding Debt. Company, the -- MONY Life Insurance Company of America. Death Benefit -- Initially, this is the Specified Amount for Policies under death benefit Option 1, or the Specified Amount plus the Fund Value for Policies under death benefit Option 2. The Death Benefit may subsequently change depending on the death benefit Option chosen and the Federal income tax law definition of life insurance. Funds -- The MONY Series Fund, Inc. and the Enterprise Accumulation Trust. Fund Value -- The sum of the amounts under the Policy held in each Subaccount of the Variable Account and the Guaranteed Interest Account, as well as any amount set aside in the Company's Loan Account, and any interest thereon, to secure Outstanding Debt. General Account -- All assets of the Company other than those allocated to the Variable Account or to any other segregated separate account of the Company. Guaranteed Interest Account -- An account that is part of Company's General Account to which all or a portion of net premium payments may be allocated for accumulation at a fixed rate of interest (which may not be less than 4.5%) declared by Company. Guarantee Period -- The period during which the Specified Amount is guaranteed under the Guaranteed Death Benefit Rider. The Guaranteed Death Benefit Rider is not available in all states. See "Guaranteed Death Benefits", page . Insured(s) -- The persons upon whose lives the Policy is issued, and upon whose deaths is the contingency upon which the Death Benefit proceeds are payable. Loan Account -- An account to which amounts are transferred from the Subaccounts and the Guaranteed Interest Account as collateral for any Outstanding Debt. The Loan Account is part of the Company's General Account, and it accumulates interest at a rate not less than 4.5%. Maturity Date -- The Policy Anniversary on which the younger Insured is (or would have been) Age 100. Minimum Monthly Premium -- The amount determined by the Company which is necessary to keep the Policy in force for the first three Policy Years. Monthly Anniversary Day -- The day each month on which the monthly deduction is due against the Fund Value. The first Monthly Anniversary Day is the Policy Date. Monthly Guarantee Premium -- The premium amount stated in the Policy as the amount required to maintain the Guaranteed Death Benefit Rider. The Monthly Guarantee Premium changes whenever the Specified Amount changes. Outstanding Debt -- The unpaid loan balance including accrued loan interest due and unpaid. Partial Surrender -- The surrender of a portion of the Policy. At least $500 of Cash Value must remain after a Partial Surrender, or a full surrender of the Policy will be required. 1 8 Planned Premium Payments -- The premium amount specified on the application as the amount the Policy Owner intends to pay at selected intervals over a specified period of time. Within specified limits, premiums in excess of Planned Premium Payments may be paid. Planned Premium Payments may be changed at any time. For policies offered or issued for delivery outside the Commonwealth of Massachusetts, see the term "Scheduled Premium Payments". Policy Date -- The date set forth on page 1 of the Policy that is used to determine the Monthly Anniversary Day, Policy months, and Policy years. Policy monthly, quarterly, semiannual and annual anniversaries are measured from the Policy Date. Each Policy month starts on the same date in each calendar month as that specified as the Policy Date. Where the Policy Date is the 29th, 30th, or 31st of a month, and there is no such date in a calendar month, the Policy month for such month will start on the last day of that calendar month. Policy Owner or Owner -- The person or persons who own(s) the Policy. If the Policy has been absolutely assigned, the assignee becomes the Policy Owner. A collateral assignee is not the Owner. Portfolio(s) -- The separate investment portfolios of the Funds. Rider -- The addendum to a Policy which adds an optional insurance benefit to the Policy. Right to Return Policy Period -- The Period which follows the application for the Policy and its issuance to the Policy Owner. During the Right to Return Policy Period which follows the issuance of the Policy, the Policy Owner may cancel the Policy and receive a refund. Scheduled Premium Payments -- The premium amount specified on the application as the amount the Policy Owner intends to pay at fixed intervals over a specified period of time. Within specified limits, premiums in excess of the Scheduled Premium Payments may be paid. Scheduled Premium Payments may be changed at any time. For policies offered or issued for delivery in the Commonwealth of Massachusetts, see the term "Planned Premium Payments". Specified Amount -- The minimum Death Benefit for so long as the Policy remains in force. The Specified Amount may be increased or decreased under certain circumstances. Subaccounts -- The subdivisions of the Variable Account. Each Subaccount invests exclusively in the shares of a corresponding Portfolio of one of the Funds. Surrender Charge -- The contingent deferred charge determined for the initial Specified Amount of the Policy and for each increase in Specified Amount. Target Premium -- The maximum amount of premiums paid against which the sales charge may be applied. Transaction Date -- The date the Company receives a premium or acceptable written or telephone request at the Administrative Office. If the premium or request reaches the Administrative Office on a day which is not a Business Day or after the close of business on a Business Day (i.e., after 4:00 p.m. Eastern Time), the Transaction Date will be the next Business Day. Unit -- The bookkeeping measure used to value the amounts allocated to the Subaccounts of the Variable Account. Unit Value -- The value of the Units of each Subaccount of the Variable Account. Unit Values are calculated for each Subaccount on each Business Day. Valuation Period -- The period that starts at the close of a Business Day and ends at the close of the next succeeding Business Day. Variable Account -- The Company's Variable Account L, a separate investment account established by the Company to receive and invest the net premiums paid under the Policy. 2 9 SUMMARY OF THE POLICY This summary is intended to provide a brief overview of the more significant aspects of the Policy. Further detail is provided in this prospectus and in the Policy. Unless the context indicates otherwise, the discussion in this summary and the remainder of the prospectus relates to the portion of the Policy involving the Variable Account. The Guaranteed Interest Account is briefly described under "The Guaranteed Interest Account," on page and in the Policy. PURPOSE OF THE POLICY The Policy offers a Policy Owner insurance protection on the lives of the Insureds through the Maturity Date for so long as the Policy is in force. The Death Benefit is payable upon the death of the last surviving Insured while the Policy is in force. A maturity benefit will be paid in lieu of a death benefit when the Policy reaches the Maturity Date during the lifetime of either or both the Insureds. Like traditional fixed life insurance, the Policy provides for a death benefit equal to its Death Benefit plus any amount payable by Rider, accumulation of Cash Value, and surrender and loan privileges. Unlike traditional fixed life insurance, the Policy offers a choice of investment alternatives and an opportunity for the Policy's Fund Value and its death benefit, to grow based on investment results. The Policy is a flexible premium policy, so that, unlike many other insurance policies, a Policy Owner may choose the amount and frequency of premium payments, within certain limits. POLICY VALUES A Policy Owner may allocate net premium payments among the various Subaccounts that comprise the Variable Account and that invest in corresponding Portfolios of the MONY Series Fund and the Accumulation Trust. A Policy Owner may also allocate net premium payments to the Guaranteed Interest Account. The Loan Account represents amounts set aside in the General Account of the Company as collateral for Outstanding Debt. The Fund Value of the Policy is the sum of amounts allocated to the Subaccounts of the Variable Account, the Guaranteed Interest Account and the Loan Account. The Cash Value of the Policy is the Fund Value less the Surrender Charge and less any Outstanding Debt. Depending on the investment experience of the selected Subaccounts, the Fund Value may increase or decrease on any day. The Death Benefit may increase or decrease depending upon several factors, including the death benefit Option selected by the Policy Owner, although the death benefit will never decrease below the Specified Amount provided the Policy is in force. There is no guarantee that the Policy's Fund Value and death benefit will increase. The Policy Owner bears the investment risk on that portion of the net premiums and Fund Value allocated to the Variable Account. The Policy will remain in force until the earliest of the Maturity Date, the death of the last surviving Insured, or a full surrender of the Policy, unless, before any of these events, the Policy lapses and a Grace Period expires without sufficient additional premium payment or repayment of Outstanding Debt by the Policy Owner. Generally, the Policy will remain in force only as long as the Cash Value is sufficient to pay all the monthly deductions. However, if the premiums paid meet the Minimum Monthly Premium requirement during the first three Policy years, the Policy and all Rider coverages will remain in force even if the Cash Value of the Policy is less than zero. If an increase in Specified Amount occurs during the first three Policy years, the Minimum Monthly Premium requirement is increased following the effective date of the increase. If the Guaranteed Death Benefit Rider is purchased, the Specified Amount of the Policy and certain Rider coverages will remain in force for the Guarantee Period if the required premiums have been paid. The amount by which the Death Benefit may exceed the Specified Amount is not guaranteed by the Guaranteed Death Benefit Rider. The Guaranteed Death Benefit Rider is not available in all states. 3 10 THE DEATH BENEFIT The minimum Specified Amount at issue for a Policy is $100,000. The Policy Owner may elect one of two death benefit Options and may choose which of the two tests for compliance with the Federal income tax law definition of life insurance will be used to calculate the amount of Death Benefit payable under the Policy. The Death Benefit under Option 1 will be equal to the Specified Amount of the Policy on the date of death of the last surviving Insured or, if greater, the Fund Value on the date of death of the last surviving Insured multiplied by a death benefit percentage required by the Federal income tax law definition of life insurance. Under Option 2, the Death Benefit will be equal to the Specified Amount of the Policy on the date of death of the last surviving Insured plus the Fund Value on the date of death of the last surviving Insured or, if greater, the Fund Value on the date of death of the last surviving Insured multiplied by a death benefit percentage required by the Federal income tax law definition of life insurance. Policy Owners seeking to have favorable investment performance reflected in increasing Fund Value should choose Option 1; Policy Owners seeking to have favorable investment performance reflected in increasing insurance coverage should choose Option 2. A Policy Owner may change the death benefit Option, and increase or decrease the Specified Amount, subject to certain conditions. See "Death Benefits Under the Policy," page . The Policy Owner may, at time of application, choose to purchase the Guaranteed Death Benefit Rider. This Rider provides a guarantee that the Specified Amount and certain Rider coverages will remain in force for the Guarantee Period regardless of the amount of the Policy's Cash Value, if the required premiums (less Partial Surrenders taken and their related fees) have been paid. The Rider provides a Guarantee period to the younger Insured's Age 70 or ten years from the Policy Date, whichever is later. The Minimum Monthly Premium will be higher if the Rider is chosen. An extra charge will also be deducted from the Fund Value each month the Rider is in effect. See "Guaranteed Death Benefits," page . The Guaranteed Death Benefit Rider is not available in all states. PREMIUM FEATURES The Company requires a Policy Owner to pay an initial premium equal to at least the Minimum Monthly Premium that is defined by the Company. Thereafter, subject to certain limitations, a Policy Owner may choose the amount and frequency of premium payments. The Policy, therefore, provides the Policy Owner with the flexibility to vary premium payments to reflect varying financial conditions. When applying for a Policy, a Policy Owner will determine a Scheduled Premium Payment that provides for the payment of level premiums in regular intervals over a specified period of time. Each Policy Owner will receive a premium reminder notice for the Scheduled Premium Payment on either an annual, semiannual, or quarterly basis, at the option of the Policy Owner; however, the Policy Owner may not be required to pay Scheduled Premium Payments. Premiums may be paid monthly under the Electronic Funds Transfer plan where the Owner authorizes the Company to withdraw Scheduled Premium Payments from the Owner's checking account each month. (For Policies offered or issued for delivery in the Commonwealth of Massachusetts, the Policy Owner will be asked to indicate on the application the amount the Policy Owner intends to pay at selected intervals. For those Policy Owners, the term "Scheduled Premium Payment" used in this Prospectus, refers to Planned Premium Payments.) The amount, frequency, and period of time over which a Policy Owner pays premiums may affect whether or not the Policy will be classified as a modified endowment contract, which is a type of life insurance contract subject to different tax treatment for certain pre-death distributions. For more information on the tax treatment of life insurance contracts, including those classified as modified endowment contracts, see "Federal Income Tax Considerations," page . Payment of the Scheduled Premiums will not guarantee that a Policy will remain in force. See "Grace Period and Lapse," page . The Company also may reject or otherwise limit any unscheduled premium payment that would result in an immediate increase in the net amount at risk under the Policy. 4 11 ALLOCATION OPTIONS Premium payments and Cash Values may be allocated by the Policy Owner among the various Subaccounts. Each of the Subaccounts uses premium payments and Fund Value to purchase shares of a designated portfolio (a "Portfolio") of the MONY Series Fund, Inc. (the "MONY Series Fund") or the Enterprise Accumulation Trust (the "Accumulation Trust") (collectively the "Funds"). The available Portfolios of the Funds, each of which has a different investment objective, are the Money Market Portfolio, the Government Securities Portfolio, the Intermediate Term Bond Portfolio, the Long Term Bond Portfolio, the Equity Portfolio, the Small Company Value Portfolio, the Managed Portfolio, the International Growth Portfolio, the High Yield Bond Portfolio, the Small Company Growth Portfolio, the Equity Income Portfolio, the Capital Appreciation Portfolio, the Growth and Income Portfolio, and the Growth Portfolio. See "The Funds," page . The Company is the investment manager of the MONY Series Fund. Enterprise Capital Management, Inc., a subsidiary of The Mutual Life Insurance Company of New York ("MONY"), is the investment manager of the Accumulation Trust. OpCap Advisors, a subsidiary of Oppenheimer Capital, is the sub-investment adviser of the Equity and Managed Portfolios; Brinson Partners, Inc. is the sub-investment adviser of the International Growth Portfolio; Caywood-Scholl Capital Corporation is the sub-investment adviser of the High Yield Bond Portfolio; William D. Witter, Inc. is the sub-investment adviser of the Small Company Growth Portfolio; 1740 Advisors, Inc., an affiliate of MONY, is the sub-investment adviser of the Equity Income Portfolio; Provident Investment Counsel, Inc. is the sub-investment adviser of the Capital Appreciation Portfolio; Retirement System Investors, Inc. is the sub-investment adviser of the Growth and Income Portfolio; Montag & Caldwell, Inc. is the sub-investment adviser of the Growth Portfolio; and Gabelli Asset Management, Inc. is the sub-investment advisor of the Small Company Value Portfolio. The Policy Owner may choose to allocate net premium payments to any or all of the available Subaccounts constituting the Variable Account, and to the Guaranteed Interest Account. TRANSFER OF FUND VALUE The Policy Owner may transfer Fund Value among the Subaccounts, and, subject to certain other limitations, between the Subaccounts and the Guaranteed Interest Account. Transfers may be made by telephone if an authorization for telephone transfer form has been properly completed and signed and filed at the Company's Syracuse Operations Center. See "Transfer of Fund Value," page . POLICY LOANS The Policy Owner may borrow from the Company an amount up to 90% of the Policy's Cash Value. The Policy will be the only security required for a loan. See "Policy Loans," page . The amount of any Outstanding Debt is subtracted from the Death Benefit upon the death of the last surviving Insured or from the Fund Value upon surrender. See "Full Surrender," page . Outstanding Debt may also impact the continuation of the Policy. See "Grace Period and Lapse," page . FULL SURRENDER The Owner can surrender the Policy during the life of either or both of the Insureds and receive its Cash Value, which is equal to the Fund Value less the Surrender Charge and less any Outstanding Debt. See "Full Surrender", page . PARTIAL SURRENDER Partial Surrenders are available under the Policy so long as the Cash Value remaining after giving effect to the requested surrender and any fees which may be assessed as a result of the Partial Surrender exceeds any minimum requirements. If a Partial Surrender is for an amount which exceeds the amount available, it will be rejected and the request will be returned to the Policy Owner. A Partial Surrender will decrease the Specified Amount of a Policy if the Owner has elected death benefit Option 1, and it will decrease the Death Benefit if 5 12 the Death Benefit is greater than the Specified Amount under either Option 1 or 2. See "Partial Surrender," at page . Among other restrictions, Partial Surrenders must be for at least $500, the Policy's Cash Value after the surrender must be at least $500, and the Specified Amount after the surrender must be no less than $100,000. A Partial Surrender Fee of $10 will be assessed against the remaining Fund Value. No Surrender Charge is assessed upon a Partial Surrender. RIGHT TO RETURN POLICY PERIOD A Policy Owner may obtain a full refund of the premium paid if the Policy is returned within 10 days (or longer in certain states) after the Owner receives it. During the Right to Return Policy Period, net premiums will be retained in the Company's General Account and will earn interest at an annual rate of 4.5%. See "Right to Examine a Policy -- Right to Return Policy Period", page . GRACE PERIOD AND LAPSE Payment of Scheduled Premium Payments will not guarantee that a Policy will remain in force. Instead, unless the Guaranteed Death Benefit Rider has been elected and all requirements have been met, the duration of the Policy depends upon the Policy's Cash Value. However, during the first three Policy years, if on each Monthly Anniversary Day the sum of premiums paid, less the sum of Partial Surrenders (excluding any fees relating thereto) and any Outstanding Debt is greater than or equal to the Minimum Monthly Premium times the number of completed Policy months or the Policy's Cash Value is greater than zero, the Policy is guaranteed not to lapse. If an increase in Specified Amount occurs during the first three Policy years, the Minimum Monthly Premium requirement will be increased following the date the increase took effect and will apply until the end of the first three Policy Years. Even if Scheduled Premium Payments are made, if either of these two provisions do not apply, the Policy will lapse any time the Cash Value is insufficient to pay the current monthly deduction and a Grace Period expires without sufficient payment. While the Guaranteed Death Benefit Rider is in force, if on any Monthly Anniversary the total premiums received less any Partial Surrenders and their fees, less Outstanding Debt do not exceed the premiums required under the Guaranteed Death Benefit Rider (See "Guaranteed Death Benefits", page ), a notice will be sent which will give the Policy Owner 61 days from the date thereof to make additional payments needed to maintain the Rider. See "Grace Period and Lapse", page . The Guaranteed Death Benefit Rider is not available on Policies offered or issued for delivery to residents of certain states, and, therefore, in any such states, Grace Period and Lapse will be treated as if the Guaranteed Death Benefit Rider is not in effect. See "Grace Period and Lapse", page . CHARGES AND DEDUCTIONS Deductions from Premiums Certain charges are deducted from each premium payment under a Policy prior to applying the net premium to the Fund Value. These charges consist of the following items: Sales Charge -- A charge in each of the first ten Policy years equal to 6% of the premiums paid up to the Target Premium in each year and 3% of premium paid in excess of the Target Premium in each year. The Sales Charge is equal to 3% of all premiums after the tenth Policy year. Tax Charge -- A state and local premium tax charge, currently equal to 2.25% of each premium, and a charge related to the federal tax treatment of deferred acquisition costs currently equal to 1.50% of each premium will be deducted to compensate the Company for these taxes. Actual state and local premium taxes vary, ranging from 0% to 4%. The Company does not expect to make a profit from this charge. (See "Tax Charges", page .) 6 13 Daily Deduction from the Variable Account A charge is deducted from the Variable Account each day for the Mortality and Expense Risk Charge as described below. Mortality and Expense Risk Charge -- A charge is deducted daily from each Subaccount of the Variable Account for mortality and expense risks assumed by the Company. This daily charge is equal to .000959% of the amount in the Subaccount, which is equivalent to an annual rate of .35% of Subaccount value. Deductions from Fund Value A charge called the Monthly Deduction is deducted from the Fund Value on each Monthly Anniversary Day. The Monthly Deduction consists of the following items: Cost of Insurance -- This monthly charge compensates the Company for providing life insurance coverage for the Insureds. The amount of the charge is equal to a current cost of insurance rate for each Insured multiplied by the net amount at risk under the Policy at the beginning of each Policy Month. Administrative Charge -- An administrative charge is deducted each month based on the Specified Amount of the Policy. This charge is $7.50 per month for all years. Per $1,000 Specified Amount Charge -- The Company will deduct a per $1,000 Specified Amount charge from the Fund Value each month for the first 10 Policy years following issue or an increase in Specified Amount. The charge varies based on the issue age, underwriting class and smoking status of the younger Insured. See Appendix A. Guaranteed Death Benefit Charge -- If the Guaranteed Death Benefit Rider has been elected, a charge of $0.01 per thousand of Policy Specified Amount and certain Rider amounts per month will be charged during the Guarantee Period. The Guaranteed Death Benefit Rider is not available on Policies offered or issued for delivery to residents of the Commonwealth of Massachusetts or the States of New Jersey and Texas. Optional Insurance Benefits Charges -- The Monthly Deduction will include charges for any other optional insurance benefits added to the Policy by Rider. Surrender Charge The Company will assess a Surrender Charge against Fund Value upon full surrender of a Policy. The Surrender Charge is based on a factor per $1,000 of initial Specified Amount. Starting on the first anniversary, the charge decreases from its maximum by 10% per year until it reaches zero at the end of the 10th policy year. The Surrender Charge targets at issue vary by Specified Amount, issue age, gender and underwriting class. The grading percentages vary based on issue age and number of full years since the Policy was issued. See "Surrender Charge", page . Transaction and Other Charges A Partial Surrender Fee of $10 will be assessed against the remaining Fund Value for any Partial Surrender. In addition, the Company reserves the right to charge a fee of $25 for each transfer of Fund Value. The operating expenses of the Variable Account are paid by the Company and certain charges, deductions, and fees are made or imposed to compensate the Company for these expenses and for the risk that the charges, deductions, and fees may not be sufficient to compensate the Company. Investment advisory fees and operating expenses of the Fund are paid by the Fund. For a description of these charges, see "Charges and Deductions," page . TAX TREATMENT OF INCREASES IN FUND VALUE The Fund Value under the Policy is currently subject to the same federal income tax treatment as the cash value under fixed life insurance. Therefore, generally the Policy Owner will not be deemed to be in constructive receipt of the Fund Value unless and until the Policy Owner is deemed to be in receipt of a 7 14 distribution from the Policy. For information on the tax treatment of the Policy and on the tax treatment of a Full Surrender, a Partial Surrender, or a Policy loan, see "Federal Income Tax Considerations," page . TAX TREATMENT OF DEATH BENEFIT The Death Benefit under the Policy is currently subject to federal income tax treatment consistent with that of fixed life insurance. Therefore, generally the Death Benefit will be fully excludable from the gross income of the Beneficiary under the Internal Revenue Code. See "Federal Income Tax Considerations," page . THE GUARANTEED INTEREST ACCOUNT The Policy Owner may allocate all or a portion of net premium payments and transfer Fund Value to the Guaranteed Interest Account, within specified limits. Amounts allocated to the Guaranteed Interest Account are held in the Company's General Account. The Company guarantees that the Fund Value allocated to the Guaranteed Interest Account will be credited interest daily at a rate equivalent to an effective annual rate of 4.5%. In addition, the Company may in its sole discretion pay interest in excess of the guaranteed amount. See "The Guaranteed Interest Account," page . CONTACTING THE COMPANY All written requests, notices, and forms required by the Policies, and any questions or inquiries should be directed to the Company's Operations Center at 1 MONY Plaza, Syracuse, New York 13202. INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT MONY LIFE INSURANCE COMPANY OF AMERICA MONY Life Insurance Company of America (the "Company") is a stock life insurance company organized in the State of Arizona. The Company is currently licensed to sell life insurance and annuities in 49 states (not including New York), the District of Columbia, the U.S. Virgin Islands, and Puerto Rico. The Company is the corporate successor of Vico Credit Life Insurance Company, incorporated in Arizona on March 6, 1969. The Company is a wholly owned subsidiary of The Mutual Life Insurance Company of New York, a mutual life insurance company organized under the laws of the state of New York in 1842. The principal office of MONY is located at 1740 Broadway, New York, New York 10019. In September 1997, MONY announced that it had begun the process of converting to a stock life insurance company in a process called demutualization. If completed, it is not expected that demutualization will have any material effect on the Company, the MONY America Variable Account L, or the Policies. At September 1, 1998, the rating assigned to the Company by A. M. Best Company, Inc., an independent insurance company rating organization, was A- (Excellent) based upon an analysis of financial condition and operating performance through the end of 1997. At the same date, MONY was rated A- (Excellent) on the same basis. The A. M. Best rating of the Company should be considered only as bearing on the ability of the Company to meet its obligations under the Policies. The Company has a service agreement with MONY whereby MONY provides the Company with such personnel, facilities, etc., as are reasonably necessary for the conduct of the Company's business. These services are provided on a cost reimbursement basis. The Company intends to administer the Policies itself, utilizing the services provided by MONY to meet its obligations under the Policies. MONY Securities Corp., a wholly owned subsidiary of MONY, is the principal underwriter for the Policies. 8 15 YEAR 2000 ISSUE The Year 2000 issue is the result of widespread use of computer programs which use two digits (rather than four) to define the applicable year. Such programming was a common industry practice designed to avoid the significant costs associated with additional mainframe computer capacity which would have been necessary to accommodate a four digit year field. As a result, any of the Company's computer systems that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a major system failure or in miscalculations. The Company has conducted a comprehensive review of its computer systems to identify the systems that could be affected by the "Year 2000" issue and has developed and implemented a plan to resolve the issue. The Company currently believes that, with modifications to existing software and converting to new software, the Year 2000 problem will not pose significant operational problems for the Company's computer systems. However, if such modifications and conversions are not completed on a timely basis, the Year 2000 problem may have a material impact on the operations of the Company. Further, even if the Company completes such modifications and conversions, there can be no assurance that the failure by vendors or other third parties to solve the Year 2000 problem will not have a material impact on the operations of the Company. MONY Series Fund and the Accumulation Trust have reviewed with their respective investment advisers and other suppliers of services the status of their Year 2000 issue. MONY Series Fund and the Accumulation Trust prospectuses, which are included in the Prospectus Portfolio, contain the results of those status reviews. See MONY Series Fund prospectus at page 20; Accumulation Trust prospectus at page . MONY AMERICA VARIABLE ACCOUNT L The MONY America Variable Account L (the "Variable Account") is a separate investment account of the Company and at present is used only to support flexible premium variable life insurance policies. The assets in the Variable Account are kept separate from the General Account assets and other separate accounts of the Company. The Company owns the assets in the Variable Account and is required to maintain sufficient assets in the Variable Account with a total market value equal to the Policy liabilities funded by the Variable Account. The Variable Account is divided into subdivisions called Subaccounts. The income, gains, or losses, realized or unrealized, of the Variable Account are credited to or charged against the assets held in the Variable Account without regard to the other income, gains, or losses of the Company. Assets in the Variable Account attributable to the reserves and other liabilities under the Policies are not chargeable with liabilities arising from any other business that the Company conducts. Assets held in the Company's General Account, including Fund Values of the Policy during the Right to Return Period and Fund Values allocated by the Policy Owner to the Guaranteed Interest Account, are subject to liabilities arising from the business the Company conducts. However, the Company may transfer to its General Account any assets which exceed anticipated obligations of the Variable Account. All obligations arising under the Policy are general corporate obligations of the Company. The Company may accumulate in the Variable Account proceeds from various Policy charges and investment results applicable to those assets. The Variable Account was established on March 27, 1987 under Arizona law under the authority of the Board of Directors of Company. The Variable Account is registered as a unit investment trust with the SEC. Such registration does not involve any supervision by the SEC of the administration or investment practices or policies of the Account. There are currently fourteen Subaccounts within the Variable Account available to the Policyholder. Each Subaccount invests exclusively in shares of a designated Portfolio of the Funds. For example, the Long Term Bond Subaccount invests solely in shares of the MONY Series Fund, Inc. Long Term Bond Portfolio. These Portfolios are available to serve only as the underlying investment for variable annuity and variable life insurance contracts issued through separate accounts of the Company as well as other life insurance companies, and may be available to certain pension accounts. They are not available directly to individual investors. The Company may in the future establish additional Subaccounts within the Variable Account, 9 16 which may invest in other Portfolios of the Funds or in other securities. Not all Subaccounts are available to the Policy Owner. THE FUNDS Each Subaccount of the Variable Account currently invests only in shares of a corresponding Portfolio of the MONY Series Fund, Inc. (the "MONY Series Fund") or the Enterprise Accumulation Trust (the "Accumulation Trust") (the MONY Series Fund and the Accumulation Trust are collectively called the "Funds"). The Funds are diversified, open end management investment companies of the series type. The Funds are registered with the SEC under the Investment Company Act of 1940. Such registration does not involve supervision by the SEC of the investments or investment policy of the Funds. Of the seven separate Portfolios of the MONY Series Fund, currently only four portfolios ("Portfolios"), each of which pursues different investment objectives and policies, are available for purchase by corresponding Subaccounts of the Variable Account available to the Policy Owner. The Company acts as the investment manager of the MONY Series Fund. The Company is a registered investment adviser under the Investment Advisers Act of 1940. As investment adviser to the MONY Series Fund, the Company receives a daily investment advisory fee equivalent to an annual rate of 0.50 percent of the first $400 million, 0.35 percent of the next $400 million, and 0.30 percent in excess of $800 million of the aggregate average daily net assets of the Government Securities, Long Term Bond, and Intermediate Term Bond Portfolios of the MONY Series Fund, and 0.40 percent of the first $400 million, 0.35 percent of the next $400 million, and 0.30 percent of assets in excess of $800 million of the aggregate average daily net assets of the Money Market Portfolio of the MONY Series Fund, as described in the accompanying current prospectus for the MONY Series Fund. The Company, as investment adviser, has agreed to bear all expenses associated with organizing the Fund, the initial registration of its securities, and the compensation of the Fund's directors, officers and employees who are interested persons of the Company. All other expenses will be borne by the Fund itself, including, without limitation, the calculation of the net asset value of the Portfolios. The Company has entered into a Services Agreement with MONY for the provision of personnel, equipment, facilities and other services, in order to carry out its duties as investment adviser to the Fund. Of the ten separate Portfolios of the Accumulation Trust, currently all separate Portfolios, each of which pursues different investment objectives and policies, are available for purchase by corresponding Subaccounts of the Variable Account. Enterprise Capital Management, Inc., a wholly-owned subsidiary of MONY, ("Enterprise Capital") acts as the investment manager of the Accumulation Trust. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust monthly compensation with respect to the Equity and Managed Portfolios that it advises at an annual rate of 0.80 percent of the first $400 million of the aggregate average daily net assets of those portfolios, 0.75 percent of the next $400 million of the aggregate average daily net assets of those portfolios, and 0.70 percent of the aggregate average daily net assets of those portfolios which exceed $800 million. OpCap Advisors, a subsidiary of Oppenheimer Capital, as the sub-investment adviser to the Equity and Managed Portfolios of the Accumulation Trust, will receive, from Enterprise Capital and not the Accumulation Trust, 0.40 percent (0.30 percent of assets in excess of $1 billion) of the aggregate average daily net assets of the Equity Portfolio and 0.40 percent (0.30 percent of the next $1 billion of assets, and 0.25% of assets in excess of $2 billion) of the average daily net assets of the Managed Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust, .75 percent of the aggregate average daily net assets of the Equity Income Portfolio, and 1740 Advisers, Inc. will receive from Enterprise Capital and not the Accumulation Trust 0.30 percent (0.25 percent of the next $100 million of assets, and 0.20 percent of assets in excess of $200 million) of the aggregate average daily net assets of the Equity Income Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust, .75 percent of the aggregate average daily net assets of the Growth and Income Portfolio, and Retirement System Investors, Inc. will receive from Enterprise Capital and not the Accumulation Trust 0.30 percent (0.25 percent of the next $100 million of assets, and 0.20 percent of assets in excess of $200 million) of the aggregate average daily net assets of the Growth and Income Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust, .75 percent of the aggregate average daily net assets of the 10 17 Growth Portfolio, and Montag & Caldwell, Inc. will received from Enterprise Capital and not the Accumulation Trust 0.30 percent (0.20 percent of assets in excess of $1 billion) of the aggregate average daily net assets of the Growth Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust, .75 percent of the aggregate average daily net assets of the Capital Appreciation Portfolio, and Provident Investment Counsel, Inc. will receive from Enterprise Capital and not the Accumulation Trust 0.50 percent of the first $100 million (0.45 percent of the next $100 million of assets, 0.35 percent of next $100 million of assets, and 0.30 percent of assets in excess of $300 million) of the aggregate average daily net assets of the Capital Appreciation Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust, 1.00 percent of the aggregate average daily net assets of the Small Company Growth Portfolio, and William D. Witter, Inc will receive from Enterprise Capital and not the Accumulation Trust 0.65 percent (0.55 percent of the next $50 million of assets, and 0.45 percent of assets in excess of $100 million) of the aggregate average daily net assets of the Small Company Growth Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust monthly compensation with respect to the Small Company Value Portfolio that it advises at an annual rate of 0.75 percent of the aggregate average daily net assets of the Small Company Value Portfolio. Gabelli Asset Management, as sub-investment adviser to the Small Company Value Portfolio of the Accumulation Trust, will receive from Enterprise Capital and not the Accumulation Trust, 0.40 percent (0.30 percent of assets in excess of $1 billion) of the aggregate average daily net assets of the Small Company Value Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust monthly compensation with respect to the International Growth Portfolio that it advises at an annual rate of 0.85 percent of the aggregate average daily net assets of the International Growth Portfolio, and Brinson Partners, Inc., as the sub-investment adviser to the International Growth Portfolio, will receive from Enterprise Capital and not the Accumulation Trust, 0.45 percent (53% of the fee received by Enterprise Capital, the fee paid to Brinson Partners declines as assets exceed $100 million) of the aggregate average daily net assets of the International Growth Portfolio. Enterprise Capital, as investment adviser to the Accumulation Trust, will receive from the Accumulation Trust monthly compensation with respect to the High Yield Bond Portfolio that it advises at an annual rate of 0.60 percent of the aggregate average daily net assets of the High Yield Bond Portfolio, and Caywood-Scholl Capital Corporation, as sub-investment adviser to the High Yield Bond Portfolio, will receive from Enterprise Capital and not the Accumulation Trust, 0.30 percent (0.25 percent for assets in excess of $100 million) of the aggregate average daily net assets of the High Yield Bond Portfolio. The investment objectives of each Portfolio are fundamental and may not be changed without the approval of the holders of a majority of the outstanding shares of the Portfolio affected (which, for each of the Funds, means the lesser of (1) 67 percent of the Portfolio shares represented at a meeting at which more than 50 percent of the outstanding Portfolio shares are represented or (2) more than 50 percent of the outstanding Portfolio shares). PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT The shares of each Portfolio are purchased by the Company for the corresponding Subaccount at net asset value, i.e., without sales load. All dividends and capital gains distributions received from a Portfolio are automatically reinvested in such Portfolio at net asset value, unless the Company, on behalf of the Variable Account, elects otherwise. Fund shares will be redeemed by the Company at their net asset value to the extent necessary to make payments under the Policies. Shares of the Funds are offered only for purchase by separate accounts of insurance companies, which may or may not be affiliated with the Company, or with each other. This is called "shared funding." They may also sell shares to separate accounts to serve as an investment medium for variable life insurance policies and for variable annuity contracts. Thus, the Funds serve as an investment medium for both variable life insurance policies and variable annuity contracts. This is called "mixed funding." The Company currently does not foresee any disadvantages to Policy Owners arising from either mixed or shared funding; however, due to differences in tax treatment or other considerations, it is theoretically possible that the interests of owners of various contracts for which the Funds serve as an investment medium might at some time be in conflict. 11 18 However, the Company's and the MONY Series Fund's Boards of Directors, the Accumulation Trust's Board of Trustees, and any other insurance companies that participate in the Funds are required to monitor events in order to identify any material conflicts that arise from the use of the Funds for mixed and/or shared funding. The Funds' Boards are required to determine what action, if any, should be taken in the event of such a conflict. If such a conflict were to occur, the Company might be required to withdraw the investment of one or more of its separate accounts from the Funds. This might force the Funds to sell securities at disadvantageous prices. A summary of the investment objective of each of the Portfolios of the Funds is described below. There can be no assurance that any Portfolio will achieve its objective. More detailed information is contained in the accompanying prospectus of each Fund, including information on the risks associated with the investment and investment techniques of each of the Portfolios. THE FUNDS' PROSPECTUSES ACCOMPANY THIS PROSPECTUS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. The Money Market Portfolio The investment objective of the Money Market Portfolio is to seek maximum current income consistent with preservation of capital and maintenance of liquidity. The Money Market Portfolio attempts to achieve this objective by investing in money market instruments. MONY Series Fund offers this Portfolio. The Government Securities Portfolio The investment objective of the Government Securities Portfolio is the maximum current income over the intermediate term consistent with the preservation of capital, through investment in highly-rated debt securities, U.S. Government obligations, and money market instruments, with a dollar weighted average life of up to ten years at the time of purchase. MONY Series Fund offers this Portfolio. The Intermediate Term Bond Portfolio The investment objective of the Intermediate Term Bond Portfolio is to maximize income over the intermediate term consistent with the preservation of capital. The Portfolio seeks to achieve this objective by investing in highly rated debt securities, U.S. Government obligations, and money market instruments, together having a dollar-weighted average life of between 4 and 8 years. MONY Series Fund offers this Portfolio. The Long Term Bond Portfolio The investment objective of the Long Term Bond Portfolio is to maximize income over the longer term consistent with preservation of capital. The Portfolio seeks to achieve its objective by investing in highly-rated debt securities, U.S. Government obligations, and money market instruments, together having a dollar-weighted average life of more than 8 years. MONY Series Fund offers this Portfolio. The Equity Income Portfolio The Equity Income Portfolio invests in a combination of growth and income to achieve an above average and consistent total return, primarily from investments in dividend-paying common stocks. The Accumulation Trust offers this Portfolio. The Growth and Income Portfolio The Growth and Income Portfolio seeks total return in excess of the total return of the Lipper Growth and Income Mutual Funds Average measured over a new period of three to five years, by investing in a broadly diversified group of large capitalization stocks. The Accumulation Trust offers this Portfolio. 12 19 The Growth Portfolio The investment objective of the Growth Portfolio is capital appreciation, primarily from investments in common stocks. The Accumulation Trust offers this Portfolio. The Equity Portfolio The investment objective of the Equity Portfolio is long-term capital appreciation. The Portfolio seeks to achieve this investment objective by investing in a diversified portfolio of primarily equity securities selected on the basis of a value-oriented approach to investing. The Accumulation Trust offers this Portfolio. The Capital Appreciation Portfolio The investment objective of the Capital Appreciation Portfolio is maximum capital appreciation, primarily through investment in common stock of companies that demonstrate accelerating earnings momentum and consistently strong financial characteristics. The Accumulation Trust offers this Portfolio. The Managed Portfolio The investment objective of the Managed Portfolio is to provide growth of capital over time. The Portfolio seeks to achieve this investment objective by investing in a portfolio consisting of common stocks, bonds and cash equivalents, the percentage of which will vary over time based on the investment manager's assessment of the relative investment values. The Accumulation Trust offers this Portfolio. The Small Company Growth Portfolio The investment objective of the Small Company Growth Portfolio is capital appreciation by investing primarily in common stocks of small capitalization companies believed by the Portfolio Manager to have an outlook for strong earnings growth and potential for significant capital appreciation. The Accumulation Trust offers this Portfolio. The Small Company Value Portfolio The Small Company Value Portfolio seeks capital appreciation. The Portfolio pursues its investment objective by investing in a diversified portfolio of primarily equity securities of companies with market capitalization of under $1 billion. The Accumulation Trust offers this Portfolio. The International Growth Portfolio The investment objective of the International Growth Portfolio is to provide capital appreciation, primarily through a diversified portfolio of non-United States equity securities. The Accumulation Trust offers this portfolio. The High Yield Bond Portfolio The investment objective of the High Yield Bond Portfolio is to provide maximum current income, primarily from debt securities that are rated Ba or lower by Moody's Investors Service, Inc. or BB or lower by Standard & Poor's Corporation. The Accumulation Trust offers this portfolio. THE POLICY The variable life insurance benefits of the Policies are funded through the Policy Owner's Fund Value in the Variable Account and the Guaranteed Interest Account. The information included below describes the benefits, features, charges, and other major provisions of the Policies. 13 20 APPLICATION FOR A POLICY The Policy is designed to meet the insurance needs of individuals by providing life insurance coverage on two Insureds, with a death benefit payable when the last surviving Insured dies while the Policy is in effect. Applicants wishing to purchase the Policy must complete an application and personally deliver it to a licensed agent of the Company, who is also a registered representative of MONY Securities Corp. ("MSC"). The licensed agent will then submit the completed application to the Company. The Policy may also be sold through other broker-dealers authorized by MSC and applicable law to do so. A Policy can be issued on the lives of two Insureds, each of which is no older than Age 85 with evidence of insurability satisfactory to the Company. Each Insured's Age is calculated as of the Insured's last birthday prior to the Policy Date. Acceptance is subject to the Company's underwriting rules, and the Company reserves the right to request additional information and to reject an application. The minimum Specified Amount which may be applied for is $100,000. Subsequent to issue, the minimum Specified Amount is also $100,000. However, the Company also reserves the right to revise its rules from time to time to specify a different minimum Specified Amount at issue or thereafter for subsequent issued Policies. Each Policy is issued with a Policy Date, which is the date used to determine the Monthly Anniversary Day, Policy Months, Policy years, and Policy monthly, quarterly, semiannual and annual anniversaries. The Policy Date will be stated on Page 1 of the Policy. The Policy Date will normally be the later of the date that delivery of the Policy is authorized by the Company (the "Policy Release Date") or the Policy Date requested in the application. Except as provided under the temporary insurance procedures defined below, no premiums may be paid with the application. Temporary Insurance Coverage If an applicant desires interim last survivor insurance coverage on the lives of the proposed Insureds prior to the Policy Release Date, a Temporary Insurance Agreement is available. At the time an application is accepted by a licensed agent of the Company, the applicant must satisfactorily complete and sign the Temporary Insurance Agreement Form and submit payment for at least one Minimum Monthly Premium for the Policy as applied for. Coverage commences under the Temporary Insurance Agreement on the date the Temporary Insurance Agreement Form is signed and the required premium amount has been paid, or if later, the requested Policy Date. See "Premium Flexibility," page . Once the coverage under the Temporary Insurance Agreement commences, it generally will run until the Policy Release Date, but in no event for more than 90 days from the date the Temporary Insurance Agreement Form is signed. In addition, this temporary insurance coverage will also cease on the earliest of (a) the 45th day after the Temporary Insurance Agreement Form is signed if the last of the medical exams and tests initially required under the Company's published underwriting rules have not been completed by the Insureds, (b) 5 days after the Company sends notice to the applicant that it declines to issue any Policy, (c) the date the applicant informs the Company that the Policy will be refused, (d) the Policy Release Date, if the Policy is issued as applied for, or (e) where the Policy is issued other than as applied for, the earlier of the 15th day after the Policy Release Date or the date the Policy takes effect. If the deaths of both Insureds occur during the period of temporary coverage, the Death Benefit will be (i) the lesser of $500,000 or the insurance coverage applied for on the lives of the Insureds (including any optional Riders), less (ii) the Deductions from Premium and the Monthly Deduction due prior to the date of death of the last surviving Insured. During the period before the Policy Release Date, premiums paid with the application pursuant to the Temporary Insurance Agreement will be held in the Company's General Account. Except as provided below, interest will be credited on the premium (less any deductions from premiums) held in the Company's General Account. The interest rate will be set by the Company, but will not be less than 4.5 percent per year. If the 14 21 Policy is issued and accepted, these amounts will be applied to the Policy. These premiums will be returned (without interest) to the applicant within 5 days after: (1) the date the applicant informs the Company at or before the Policy Release Date (or where the Policy is authorized for delivery other than as applied for, on or before the 15th day after the Policy Release Date) that the Policy will be refused; or (2) the date which is 30 days after the application is signed, if any medical exams or tests required by the Company have not yet been completed; or (3) the Company sends notice to the applicant declining to issue any Policy on the Insureds. Initial Premium Payment If the application is approved and the Policy is subsequently issued, the balance due (if any) of the first Scheduled Premium Payment, as specified in the Policy, is payable upon delivery of the Policy. The Policy will take effect on the date the Policy is accepted by the applicant and the initial Scheduled Premium Payment has been paid, or the Policy Date requested in the application, if later. If a specific Policy Date has not been requested or if the Policy Date requested is prior to the Policy Release Date, upon receipt of the balance due (if any), the amount attributable to the Policy (including any premiums held in the General Account under the Temporary Insurance Agreement plus any interest credited in the General Account, less the applicable deductions from premiums) will earn interest at a rate set by the Company, but not less than 4.5% per year from the Policy Release Date pending expiration of the applicable Right to Return Policy Period. These amounts will be held in the Company's General Account. The Monthly Deduction due prior to or on the Policy Release Date will be made. Upon expiration of the Right to Return Policy Period, amounts to be allocated to the Subaccounts of the Variable Account will be allocated to those Subaccounts and amounts to be allocated to the Guaranteed Interest Account will be allocated to that Account. (See "Right to Examine A Policy -- Right to Return Policy Period," page .) Policy Date If a specific Policy Date has been requested which is later than the Policy Release Date, the amount attributable to the Policy will be initially held in the General Account until the Policy Date. On the Policy Date, the amount attributable to the Policy less any deductions from premiums for the period commencing with the Policy Date will be held in the Company's General Account and will earn interest at a rate set by the Company, but not less than 4.5% per year pending expiration of the applicable Right to Return Policy Period. Upon the expiration of the applicable Right to Return Policy Period, amounts allocated to the Subaccounts of the Variable Account will be allocated to those Subaccounts and amounts allocated to the Guaranteed Interest Account will be allocated to that Account. See "Right to Examine A Policy -- Right to Return Policy Period," page . Subject to the Company's approval, a Policy may be backdated, but the Policy Date may not be more than six months (a shorter period is required in certain states) prior to the date of the application. Backdating can be advantageous if either of the Insured's lower issue Age results in lower cost of insurance rates. If the Policy is backdated, the initial Scheduled Premium Payment will include sufficient premium to cover additional charges incurred for the backdating period, since monthly deductions are made for the period the Policy Date is backdated. Risk Classifications Each Insured is assigned to an underwriting (risk) class that is used in calculating the cost of insurance and certain Rider charges. In assigning Insureds to underwriting classes, the Company will normally use the medical or paramedical underwriting method, which may require a medical examination of each proposed Insured, although other forms of underwriting may be used when deemed appropriate by the Company. 15 22 RIGHT TO EXAMINE A POLICY -- RIGHT TO RETURN POLICY PERIOD The Right to Return Policy Period follows the application for the Policy and its issuance to the Policy Owner. The period runs to 10 days (or longer in certain states) after the Policy Owner receives the Policy. During the Right to Return Policy Period which follows the issuance of the Policy, the Policy Owner may cancel the Policy and receive a refund of the full amount of the premium paid. During the Right to Return Policy Period, net premiums will be held in the Company's General Account and will earn interest at a rate set by the Company, but not less than 4.5% per year. See "Allocation of Net Premiums," page . PREMIUMS The Policy is a flexible premium policy, and it provides considerable flexibility, subject to the limitations described below, to pay premiums at the Policy Owner's discretion. Premium Flexibility The Company requires a Policy Owner to pay an amount equal to at least the Minimum Monthly Premium to place the Policy in force. If the premiums are to be paid less often than monthly, the premium required to place the Policy in force is equal to the Minimum Monthly Premium multiplied by 12 divided by the frequency of Scheduled Premium Payments. This Minimum Monthly Premium will be based upon the Policy's Specified Amount and the Age, smoking status, gender (unless unisex cost of insurance rates apply, see "Cost of Insurance," page ), and underwriting class of each of the Insureds, and any Riders added to the Policy. The Minimum Monthly Premium will be shown in the Policy. Thereafter, subject to the limitations described below, a Policy Owner may choose the amount and frequency of premium payments. The Policy, therefore, provides the Policy Owner with the flexibility to vary premium payments to reflect varying financial conditions. If on each Monthly Anniversary Day during the first three Policy years, the sum of all premiums paid, less any Outstanding Debt and less any Partial Surrenders (and their fees), is greater than or equal to the Minimum Monthly Premium times the number of completed Policy months or the Policy's Cash Value is greater than zero, the Policy is guaranteed not to lapse. If an increase in Specified Amount occurs during the first three Policy years, the minimum Monthly Premium requirement is increased following the effective date of the increase and applies until the end of the first three Policy years. See "Grace Period and Lapse", page . Scheduled Premium Payments (Planned Premium Payments) When applying for a Policy, a Policy Owner will determine a Scheduled Premium Payment that provides for the payment of level premiums at fixed intervals over a specified period of time. Each Policy Owner will receive a premium reminder notice for the Scheduled Premium Payment amount on an annual, semiannual, or quarterly basis, at the option of the Policy Owner. The minimum Scheduled Premium Payment is equal to the Minimum Monthly Premium multiplied by 12 divided by the Scheduled Premium Payment frequency. Although reminder notices will be sent, the Policy Owner may not be required to pay Scheduled Premium Payments. (For Policies offered or issued for delivery in the Commonwealth of Massachusetts, the Policy Owner will determine a Planned Premium Payment that provides for the payment of level premiums at selected intervals over a specified period of time. For those Policy Owners, the term "Scheduled Premium Payments" used in this Prospectus, refers to Planned Premium Payments.) Premiums, other than the first, may also be paid monthly under the Electronic Funds Transfer plan where the Policy Owner authorizes the Company to withdraw premiums from the Owner's checking account each month. Based on the Policy Date, up to two Minimum Monthly Premiums may be required to be paid in cash before the Electronic Funds Transfer plan will be accepted by the Company. Payment of the Scheduled Premium Payments will not guarantee that a Policy will remain in force. Instead, unless the Guaranteed Death Benefit Rider has been elected and all requirements have been met, the duration of the Policy depends upon the Policy's Cash Value. However, in addition during the first three Policy years, if on each Monthly Anniversary Day the sum of premiums paid, less the sum of Partial Surrenders (and any fees relating thereto) 16 23 and any Outstanding Debt is greater than or equal to the Minimum Monthly Premium times the number of completed Policy Months or the Policy's Cash Value is greater than zero, the Policy is guaranteed not to lapse. If an increase in Specified Amount occurs during the first three Policy years, the Minimum Monthly Premium requirement is increased following the date the increase took effect and applies until the end of the first three Policy years. Even if the Scheduled Premium Payments are made, if either of these two provisions do not apply, the Policy will lapse any time the Cash Value is insufficient to pay the current monthly deduction and a Grace Period expires without sufficient payment. Choice of Tests for Compliance with IRS Definition of Life Insurance When applying for a Policy, the applicant will irrevocably choose which of the two tests for compliance with the Federal income tax law definition of life insurance will apply to the Policy. These tests are the Cash Value Accumulation Test and the Guideline Premium/Cash Value Corridor Test. See "Federal Income Tax Considerations -- Definition of Life Insurance," page . If the Guideline Premium/Cash Value Corridor Test is chosen, the premium payments that may be made relative to the Policy may be limited. Guaranteed Death Benefit Rider When application for the Policy is made, the applicant will also have the opportunity to choose the Guaranteed Death Benefit Rider, which may extend the period that the Specified Amount of the Policy and certain Rider coverages will remain in effect. The Guarantee Period continues to the younger Insured's Age 70 or ten years from the Policy Date, whichever is later (the "Guarantee Period"). An extra charge will be deducted from the Fund Value each month during the Guarantee Period. See "Guaranteed Death Benefits," page . In the event that on any Monthly Anniversary Day the Cash Value is less than zero, the Guaranteed Death Benefit Rider will keep the Policy in force provided that the cumulative Monthly Guarantee Premium due to date has been paid. This amount depends on the Specified Amount of the Policy, the Insureds' age, gender, smoking status and underwriting class, and any additional insurance benefits added by Rider. Adding other optional insurance benefits by Rider to the Policy will increase the Monthly Guarantee Premium indicated above. It is important to consider the Guaranteed Death Benefit Rider premium requirements when setting the amount of the Scheduled Premium Payments for the Policy. (See Appendix .) The Guaranteed Death Benefit Rider is not available in all states. Modified Endowment Contracts The amount, frequency and period of time over which a Policy Owner pays premiums may affect whether the Policy will be classified as a modified endowment contract, which is a type of life insurance contract subject to different tax treatment for certain pre-death distributions than conventional life insurance contracts. See "Federal Income Tax Considerations -- Modified Endowment Contracts," page . Unscheduled Premium Payments Generally, the Policy Owner can make unscheduled premium payments at any time and in any amount. The Company may reject or limit any unscheduled premium payment that would result in an immediate increase in the Death Benefit. A premium payment would result in an immediate increase if the Death Benefit under a Policy is equal to a Policy Owner's Fund Value multiplied by a death benefit percentage as a result of the Federal income tax law definition of life insurance. See "Death Benefits under the Policy," page and "Federal Income Tax Considerations -- Definition of Life Insurance," page . In addition, all or a portion of a premium payment will be rejected and returned to the Policy Owner if it would exceed the maximum premium limitations prescribed by the Federal income tax law definition of life insurance. Unscheduled premium payments will be treated as premium payments, and not as a repayment of Outstanding Debt, unless a Policy Owner requests otherwise. If the Policy Owner does request that the 17 24 payment be treated as a repayment of Outstanding Debt, any portion of a payment that exceeds the amount of Outstanding Debt will be applied to the Fund Value. Applicable taxes and sales charges are not deducted from payments used as a repayment of Outstanding Debt, but are deducted from any payment which constitutes a premium payment. Premium Payments Affect the Continuation of the Policy If premium payments are stopped, temporarily or permanently, the Policy will continue in effect until the Cash Value can no longer cover the Monthly Deductions from the Fund Value for the Policy and any optional insurance benefits added by Rider. At that point, the Policy will lapse. See "Grace Period and Lapse," page . If the Minimum Monthly Premium requirements are satisfied during the first three Policy years or if the Cash Value is greater than zero, the Policy is guaranteed not to lapse during this three year period. If an increase in Specified Amounts occurs during the first three Policy years, if the Minimum Monthly Premium requirements are satisfied during the first three Policy years or if the Cash Value is greater than zero, the Policy is guaranteed not to lapse during that period. See "Premiums -- Premium Flexibility," page . If the Guaranteed Death Benefit Rider is in effect, the Specified Amount of the Policy and certain Rider coverages will remain in force until the end of the Guarantee Period if premium payments required by the Rider have been made. The Guaranteed Death Benefit is not available in all states. See "Guaranteed Death Benefits," page . Certain charges will be deducted from each premium payment. See "Charges and Deductions," page . The remainder of the premium, referred to as the "net premium", will be allocated as described below under "Allocation of Net Premiums." ALLOCATION OF NET PREMIUMS In the application for the Policy, the Policy Owner selects the Subaccounts of the Variable Account or the Guaranteed Interest Account to which net premium payments will be allocated. During the Right to Return Policy Period, net premiums will be held in the Company's General Account and will earn interest at a rate set by the Company, but not less than 4.5% per year. The Fund Value will be automatically allocated according to the Policy Owner's instructions contained in the application at the end of the Right to Return Policy Period. Net premiums received after the Right to Return Policy Period will be allocated upon receipt among the Subaccounts of the Variable Account and the Guaranteed Interest Account according to the Policy Owner's most recent instructions. Net premiums may be allocated in whole percentages to any number of Subaccounts and to the Guaranteed Interest Account, provided that no allocation may be for less than 10% of a net premium. Allocation percentages must sum to 100%. Available allocation alternatives include the fourteen Subaccounts and the Guaranteed Interest Account. A Policy Owner may change the allocation of net premiums at any time by submitting a proper written request to the Company's Administrative Office. In addition, changes in net premium allocation instructions may be made by telephone if an authorization for telephone transfer form has been properly completed, signed and filed at the Company's Syracuse Operations Center. The Company reserves the right to discontinue telephone net premium allocation instructions. See "Telephone Transfer Privileges", page . The revised allocation percentages will be applied within seven days from receipt of notification. Unscheduled premium payments may be allocated either by percentage or by dollar amount. If the allocation is expressed in dollar amounts, the 10% limit on allocation percentages does not apply. DEATH BENEFITS UNDER THE POLICY When the Policy is issued, the Company will determine the initial amount of insurance based on the instructions provided in the application. That amount will be shown on the specification page of the Policy and is called the "Specified Amount". The minimum Specified Amount at issue is $100,000. The Specified Amount is level until the Maturity Date unless increased or decreased by the Policy Owner. 18 25 For so long as the Policy remains in force, the Company will, upon proof of the death of both Insureds, pay death benefit proceeds to a named Beneficiary. Death benefit proceeds will consist of the Death Benefit under the Policy, plus any insurance proceeds provided by Rider, less any Outstanding Debt (and, if in the Grace Period, further reduced by any overdue charges). DEATH BENEFIT OPTIONS Each Policy Owner may select one of two death benefit Options: Option 1 or Option 2. Generally the applicant designates the death benefit Option in the application. If no Option is designated, Option 2 will be assumed by the Company to have been selected. Subject to certain restrictions, the Policy Owner can change the death benefit Option selected. So long as the Policy remains in force, the Death Benefit under either Option will never be less than the Specified Amount of the Policy. Option 1 Under Option 1, the Death Benefit will be equal to the Specified Amount of the Policy on the date of death of the last surviving Insured or, if greater, the Fund Value on the date of death of the last surviving Insured multiplied by the death benefit percentage. The death benefit percentages vary according to the Ages of the Insureds and will be equal to the percentage defined in the Internal Revenue Code, which addresses the definition of a life insurance policy for tax purposes. See "Federal Income Tax Considerations -- Definition of Life Insurance," page . Policy Owners who are seeking to have favorable investment performance reflected in increasing Fund Value, and not in increasing insurance coverage, should choose Option 1. Option 2 Under Option 2, the Death Benefit will be equal to the Specified Amount of the Policy on the date of death of the last surviving Insured plus the Fund Value on the date of death of the last surviving Insured or, if greater, the Fund Value on the date of death of the last surviving Insured multiplied by the death benefit percentage. The death benefit percentage is the same as that used in connection with Option 1. The Death Benefit under Option 2 will always vary as Fund Value varies. Therefore, Policy Owners who seek to have favorable investment performance reflected in increased insurance coverage should choose Option 2. Under either Option 1 or Option 2, the death benefit percentages will depend on the test for compliance with the Federal income tax law definition of life insurance chosen at issue. The death benefit percentages under the Cash Value Accumulation Test vary according to each Insured's Age, gender, premium class. The death benefit percentages under the Guideline Premium/Cash Value Corridor Test vary according to the Age of the younger Insured at the beginning of the Policy Year of the last surviving Insured's death (whether or not the younger Insured is the last surviving Insured). These percentages are specified in the Policy. Examples of Options 1 and 2 The following examples demonstrate the determination of Death Benefits under Options 1 and 2. The examples show six Policies with the same Specified Amount, but Fund Values that vary as shown, and which assume both Insureds are age 35, standard class, non-smokers at issue, the last surviving Insured (also the youngest Insured) is Age 70 at the time of death and that there is no Outstanding Debt. The date of death is also assumed to be on a Monthly Anniversary Day.
CASH VALUE ACCUMULATION TEST POLICY 1 POLICY 2 POLICY 3 ---------------------------- -------- -------- -------- Specified Amount............................................ $100,000 $100,000 $100,000 Fund Value on Date of Last Surviving Insured's Death........ $ 35,000 $ 60,000 $ 90,000 Death Benefit Percentage.................................... 183.6% 183.6% 183.6% Death Benefit under Option 1................................ $100,000 $110,160 $165,240 Death Benefit under Option 2................................ $135,000 $160,000 $190,000
19 26
GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST POLICY 4 POLICY 5 POLICY 6 ------------------------------------------ -------- -------- -------- Specified Amount............................................ $100,000 $100,000 $100,000 Fund Value on Date of Last Surviving Insured's Death........ $ 35,000 $ 60,000 $ 90,000 Death Benefit Percentage.................................... 115% 115% 115% Death Benefit under Option 1................................ $100,000 $100,000 $103,500 Death Benefit under Option 2................................ $135,000 $160,000 $190,000
Death Benefit proceeds may be paid to a Beneficiary in a lump sum or under a payment plan offered under the Policy. The Policy should be consulted for details. Changes in Death Benefit Option A Policy Owner may request that the death benefit Option under the Policy be changed from Option 1 to Option 2, or from Option 2 to Option 1. Changes in the death benefit Option may be made on any Monthly Anniversary Day and should be made in writing to the Company's Administrative Office. A change from Option 2 to Option 1 may be made without evidence of insurability; a change from Option 1 to Option 2 will require evidence of insurability satisfactory to the Company. The effective date of any such change requested between Monthly anniversaries will be the next Monthly Anniversary Day after the change is accepted. A change in the death benefit Option from Option 1 to Option 2 is accomplished by reducing the Specified Amount of the Policy by the amount of the Policy's Fund Value at the date of the change. This maintains the Death Benefit payable under Option 2 at the amount that would have been payable under Option 1 immediately prior to the change. Although there is no immediate change in the total Death Benefit, the change to Option 2 will affect the determination of the Death Benefit from that point on since the Fund Value will then be added to the new Specified Amount, and the Death Benefit will then vary with Fund Value. This change will not be permitted if it would result in a new Specified Amount of less than $100,000. A change in the death benefit Option from Option 2 to Option 1 is accomplished by increasing the Specified Amount of the Policy by the amount of the Policy's Fund Value at the date of the change. This maintains the Death Benefit payable under Option 1 at the amount that would have been payable under Option 2 immediately prior to the change. Although there is no immediate change in total Death Benefit, the change to Option 1 will affect the determination of Death Benefit from that point on, the Death Benefit will equal the Specified Amount (or, if higher, the Fund Value times the applicable death benefit percentage, as required by the federal income tax law definition of life insurance). The change to Option 1 will generally reduce the Death Benefit payable in the future. A change in death benefit Option may affect the monthly cost of insurance charge since this charge varies with the net amount at risk, which generally is the amount by which the Death Benefit exceeds Fund Value. See "Cost of Insurance," page . Assuming that the Policy's Death Benefit is not based on the death benefit percentage under either Option 1 or 2, changing from Option 2 to Option 1 will generally decrease the net amount at risk, and therefore possibly decrease the cost of insurance charges. Changing from Option 1 to Option 2 will generally result in a net amount at risk that remains level. Such a change, however, will result in an increase in the cost of insurance charges over time, since the cost of insurance rates increase with each Insured's Age. CHANGES IN SPECIFIED AMOUNT A Policy Owner may request an increase or decrease in the Specified Amount under a Policy subject to approval from the Company. A change in Specified Amount may be made at any time after issue. Increases in Specified Amount are not permitted on or after the older Insured's Age 85 or the death of either Insured and will not be permitted if monthly deductions are being waived under the Waiver of Monthly Deductions Rider. Increasing the Specified Amount will generally increase the death benefit payable under the Policy, and decreasing the Specified Amount will generally decrease the death benefit payable. The amount of change in the death benefit will depend, among other things, upon the death benefit Option chosen by the Policy Owner and whether the death benefit under the Policy is being calculated using the Death Benefit Percentage at the 20 27 time of the change. Changing the Specified Amount could affect the subsequent level of the death benefit while the Policy is in force and the subsequent level of Policy values. For example, an increase in Specified Amount may increase the net amount at risk under a Policy, which will increase a Policy Owner's cost of insurance charges over time. Conversely, a decrease in Specified Amount may decrease the net amount at risk, which may decrease a Policy Owner's cost of insurance charges over time. Changes must be made by written application to the Company's Administrative Office. In addition, the Specified Amount remaining after a decrease must not be less than $100,000. The change will become effective on the Monthly Anniversary Day on or next following the Company's acceptance of the request. If the Policy Owner is not one of the Insureds, the Company may also require the consent of the Insureds before accepting a request. Increases Additional evidence of insurability satisfactory to the Company will be required for an increase in Specified Amount. A requested increase in the Specified Amount will create a new "coverage segment" for which cost of insurance and other charges will be computed separately. See "Charges and Deductions," page . In addition, the Surrender Charge associated with the Policy will increase. The Surrender Charge for the increase is calculated in a similar manner as for the original Specified Amount. The Minimum Monthly Premium and the required premiums under the Guaranteed Death Benefit Rider, if applicable, will also be adjusted prospectively to reflect the increase in Specified Amount. If the Specified Amount is increased at the same time that a premium payment is received, the increase will be processed before the premium payment is processed. If an increase creates a new coverage segment of Specified Amount, Fund Value after the increase will be allocated to the original coverage segment first, then to each coverage segment in the order of the increases. Decreases Any decrease in Specified Amount (whether specifically requested by the Policy Owner or as a result of a Partial Surrender or a death benefit Option change) will first be applied to reduce the coverage segments of Specified Amount associated with the most recent increases, then the next most recent increases successively, and finally to the original Specified Amount. A decrease will not be permitted if the Specified Amount would fall $100,000. The Minimum Monthly Premium will not be adjusted for the decrease in Specified Amount. The required premiums under the Guaranteed Death Benefit Rider, if applicable, will be adjusted for the decrease in Specified Amount. If the Specified Amount is decreased at the same time that a premium payment is received, the decrease will be processed before the premium payment is processed. Rider coverages may also be affected by a decrease in Specified Amount. The Company reserves the right to disallow a requested decrease, and will not permit a requested decrease, among other reasons, (i) if compliance with the guideline premium limitations under federal income tax law resulting from the requested decrease would result in immediate termination of the Policy, or (ii) if, to effect the requested decrease, payments to the Policy Owner would have to be made from Fund Value for compliance with the guideline premium limitations, and the amount of such payments would exceed the Cash Value under the Policy. If we do not approve a change you have requested, we will send you a written notice of our decision about making the change. See "Federal Income Tax Considerations -- Definition of Life Insurance," page . GUARANTEED DEATH BENEFIT Generally, the length of time the Policy remains in force depends on the Cash Value of the Policy. Because the charges that maintain the Policy are deducted monthly from the Fund Value, coverage will last as long as the Cash Value of the Policy is sufficient to pay these charges. See "Grace Period and Lapse," page . The investment experience of any amounts in the Subaccounts of the Variable Account and the interest 21 28 earned in the Guaranteed Interest Account will affect the amount of the Fund Value and, as a result, the length of time the Policy remains in force without the payment of additional premiums. When application for a Policy is made, the Policy Owner will have the opportunity to choose the Guaranteed Death Benefit Rider, which may extend the period that the Specified Amount of the Policy and certain other Rider coverages will remain in effect if the Subaccounts suffer adverse investment experience. See "Guaranteed Death Benefit Rider Premiums," page . On each Monthly Anniversary Day, the following test will be performed to determine whether the Guaranteed Death Benefit Rider will remain in effect: (i) the actual premiums paid, less the amount of any Partial Surrenders (and including any fees imposed as a result of any Partial Surrenders) less any Outstanding Debt must equal or exceed (ii) the Monthly Guarantee Premium for the Rider times the number of complete months since the Policy Date. If the Policy fails to meet this test on any Monthly Anniversary Day, the Guarantee Period, and therefore the Guaranteed Death Benefit Rider, will terminate. Once terminated, the Guaranteed Death Benefit Rider can not be reinstated. There is a Grace Period for this Rider. See "Grace Period and Lapse -- If Guaranteed Death Benefit Rider Is in Effect", page . There is a charge for the Guaranteed Death Benefit Rider. See "Guaranteed Death Benefit Charge," page . This charge will end at the conclusion of the Guarantee Period, if the Rider is chosen, and it will end if at any time the Policy fails the monthly tests. Please refer to the Policy for additional information on the Guaranteed Death Benefit Rider. The Guaranteed Death Benefit Rider is not available in all states. OTHER OPTIONAL INSURANCE BENEFITS Subject to certain requirements, a Policy Owner may elect to add one or more of the optional insurance benefits described below to the Policy at the time of application for a Policy. These other optional insurance benefits are added to the Policy by Rider. A charge will be deducted monthly from the Fund Value for each other optional insurance benefit added to the Policy. See "Charges and Deductions," page . The amounts of these benefits are fully guaranteed at issue, and they can be canceled by the Policy Owner at any time. Certain restrictions may apply and are described in the applicable Rider. In addition, adding or canceling these benefits may have an effect on the Policy's status as a modified endowment contract. See "Federal Income Tax Considerations -- Modified Endowment Contracts," page . An insurance agent authorized to sell the Policy can describe these extra benefits further. Samples of the provisions are available from the Company upon written request. From time to time we may make available Riders other than those listed below. Contact an insurance agent authorized to sell the Policy for a complete list of the Riders available. Waiver of Monthly Deductions Rider This Rider provides that during a covered disability of the selected Insured prior to Age 65, while the Policy remains in force, the monthly administrative charges, per $1,000 Specified Amount charges, cost of insurance charges and Rider charges will be waived and therefore not deducted from the Fund Value. This Rider does not waive the payment of premiums required by the Guaranteed Death Benefit Rider, however, the cumulative Monthly Guarantee Premium requirement does not change during the covered disability. It remains fixed at the level at the beginning of the disability. The Guaranteed Death Benefit Rider is not available in all states. Waiver of Specified Premium Rider This Rider provides that during a covered disability of the selected Insured, while the Policy remains in force, the monthly Specified Premium will be waived and therefore added to the Fund Value on each Monthly Anniversary. Net premiums will be allocated among the Subaccounts and the Guaranteed Interest Account 22 29 according to the Policy Owner's most recent instructions. This Rider does not waive the monthly deductions of the Policy nor does this Rider waive the payment of premiums required by the Guaranteed Death Benefit Rider. The Guaranteed Death Benefit Rider is not available in all states. Four Year Term Insurance The Four Year Term Insurance Rider provides non-renewable, non-convertible term insurance payable if the second death occurs within the first four policy years. If the Policy Owner makes any changes to the Specified Amount, the amount of this rider will be adjusted. Option to Split Policy Benefit This benefit provides that the Policy may be split into two other individual life insurance policies upon certain major changes in Federal income tax laws, divorce (if the Insureds are married at the time of Policy issue) or upon business dissolution (if the Insureds are employees of one organization at the time of Policy issue) in the six month period which follows such tax law change, divorce or business dissolution. Evidence of insurability at the time of the exercise of this option will not be required if as a result of tax law change, but will be required in all other instances. Certain conditions, as described in the Policy, must be met before this benefit can be exercised. This benefit is guaranteed by the Guaranteed Death Benefit Rider. There is no charge for this benefit. This Rider is not available in all states. BENEFITS AT MATURITY If one or both of the Insureds is living on the Maturity Date, the Company will pay to the Policy Owner, as an endowment benefit, the Cash Value of the Policy. Payment ordinarily will be made within seven days of the Policy Anniversary, although payments may be postponed in certain circumstances. See "Payments," page . At the option of the Policy Owner, payment of the endowment benefit may be deferred until the date of the last surviving Insured's death. Death proceeds payable immediately after the Maturity Date equal the Cash Value of the Policy multiplied by the death benefit percentage at the Insured's age 100. Premiums will not be accepted, nor will monthly deductions be made, after the Maturity Date. Please refer to the Policy for additional information on the Maturity Extension Rider. POLICY VALUES Fund Value The Fund Value is the sum of the amounts under the Policy held in each Subaccount of the Variable Account and any Guaranteed Interest Account, as well as the amount set aside in the Company's Loan Account, and any interest thereon, to secure Outstanding Debt. On each Business Day, the portion of the Fund Value allocated to any particular Subaccount will be adjusted to reflect the investment experience of that Subaccount. On each Monthly Anniversary Day, the portion of the Fund Value allocated to a particular Subaccount also will be adjusted to reflect the assessment of the monthly deduction. See "Determination of Fund Value," page . No minimum amount of Fund Value allocated to a particular Subaccount is guaranteed. A Policy Owner bears the risk for the investment experience of Fund Value allocated to the Subaccounts. Cash Value The Cash Value of the Policy equals the Fund Value less the Surrender Charge less any Outstanding Debt. Thus, the Fund Value will exceed the Policy's Cash Value by the amount of the Surrender Charge and any Outstanding Debts. Once the Surrender Charge has expired, the Fund Value will equal the Cash Value less any Outstanding Debt. 23 30 DETERMINATION OF FUND VALUE Although the death benefit under a Policy can never be less than the Policy's Specified Amount, the Fund Value will vary depending upon several factors, including the investment performance of the Subaccounts to which Fund Value has been allocated, payment of premiums, the amount of any Outstanding Debt, Partial Surrenders, and the charges assessed in connection with the Policy. There is no guaranteed minimum Fund Value and the Policy Owner bears the entire investment risk relating to the investment performance of Fund Value allocated to the Subaccounts. The amounts allocated to the Subaccounts will be invested in shares of the corresponding Portfolios of the Funds. The value of the Subaccounts will reflect the investment experience of the corresponding Portfolio. The investment experience reflects the investment income, realized and unrealized capital gains and losses and expenses of the Portfolio and any dividends or distributions declared by a Portfolio. Any dividends or distributions from any Portfolio of the Funds will be automatically reinvested in shares of the same Portfolio, unless the Company, on behalf of the Variable Account, elects otherwise. The Subaccount value will also reflect the mortality and expense risk charges the Company makes each day to the Variable Account. Amounts allocated to the Subaccounts are measured in terms of Units, which are a measure of value used for bookkeeping purposes. The value of amounts invested in each Subaccount is represented by the value of the Units credited to the Policy for that Subaccount. On any given day, the amount in a Subaccount of the Variable Account is equal to the Unit value times the number of Units credited to the Policy in that Subaccount. The Units of each Subaccount will have different Unit values. Units of a Subaccount are purchased (credited) whenever premiums or transfer amounts (including transfers from the Loan Account) are allocated to that Subaccount. Units are redeemed (debited) to make Partial or Full Surrenders, to transfer amounts from a Subaccount (including transfers to the Loan Account), and to pay the death benefit when the last surviving Insured dies. Units are also redeemed to pay the monthly deductions from the Policy's Fund Value, for Policy transaction charges, and to pay Surrender Charges, if any. The number of Units purchased or redeemed in connection with any such transaction is determined by dividing the dollar amount of such transaction by the Unit Value of the affected Subaccount, calculated after the close of business that day. The number of Units changes only as a result of Policy transactions or charges; the number of Units credited will not change because of subsequent changes in Unit Value. Transactions are processed as of the Transaction Date. The Transaction Date is the date a premium or an acceptable written or telephone request is received at the Administrative Office. If the premium or request reaches the Administrative Office on a day which is not a Business Day, or after the close of business on a Business Day (that is, after 4:00 p.m. Eastern Time), the Transaction Date will be the next succeeding Business Day. All Policy transactions are performed as of a Business Day. If a Transaction Date or Monthly Anniversary Day occurs on a day other than a Business Day (e.g., on a Saturday), the calculation will take place on the next Business Day (e.g., on the following Monday). CALCULATING UNIT VALUES FOR EACH SUBACCOUNT The Unit Value of a Subaccount on any Business Day is calculated by the Company on every Business Day as follows: 1. Calculate the value of the shares of the Portfolio belonging to the Subaccount as of the close of business that Business Day (before giving effect to any Policy transactions for that day, such as premium payments or surrenders). For this purpose, the Net Asset Value per share reported to the Company by the managers of the Portfolio is used. 2. Add the value of any dividends or capital gains distributions declared and reinvested in shares of the Portfolio during the Valuation Period. Subtract from this amount a charge for taxes, if any. 3. Subtract a charge for the mortality and expense risk assumed by the Company under the Policy. See "Daily Deductions From the Variable Account -- Mortality and Expense Risk Charge", page . If 24 31 the previous day was not a Business Day, then the charge is adjusted for the additional days between valuations. 4. Divide the resulting amount by the number of Units held in the Subaccount on the Business Day before the purchase or redemption of any Units on that Date. The Unit Value of each Subaccount on its first Business Day was set at $10.00. TRANSFER OF FUND VALUE Fund Value may be transferred after the Right to Return Policy Period among the Subaccounts by the Policy Owner upon proper written request to the Company's Administrative Office. Transfers may be made by telephone if an authorization for telephone transfer form has been properly completed and signed and filed at the Company's Syracuse Operations Center. See "Telephone Transfer Privileges," page . Currently, there are no limitations on the number of transfers between Subaccounts, no minimum amount required for a transfer, nor any minimum amount required to remain in a given Subaccount after a transfer. Further, no transfer may be made if a Policy is in the Grace Period and a payment required to avoid lapse is not paid. See "Grace Period and Lapse," page . No charges are currently imposed upon such transfers. The Company reserves the right, however, at a future date to assess a maximum $25 transfer charge on Policy transfers and to discontinue telephone transfers. Fund Value may also be transferred after the Right to Return Policy Period from the Subaccounts to the Guaranteed Interest Account. Transfers from the Guaranteed Interest Account to the Subaccounts will only be permitted in the Policy month following a Policy Anniversary as described in "The Guaranteed Interest Account," page . RIGHT TO EXCHANGE POLICY During the first 24 months following the Policy Date, the Policy Owner may exercise the right to exchange the Policy from one in which the investment experience is not guaranteed into a guaranteed Policy. This is accomplished by the transfer of the entire amount in the Subaccounts of the Variable Account to the Guaranteed Interest Account, and the allocation of all future premium payments to the Guaranteed Interest Account. This will, in effect, serve as an exchange of the Policy for the equivalent of a last survivor flexible premium joint survivorship universal life insurance policy. See "The Guaranteed Interest Account," page . No charge will be imposed on the transfer in exercising the exchange privilege. POLICY LOANS The Policy Owner may borrow money from the Company at any time using the Policy as the only security for the loan by submitting a proper written request to the Company's Administrative Office. A loan may be taken any time a Policy has a positive Cash Value. The maximum amount that can be borrowed at any time is 90% of the Cash Value of the Policy. (If the loan is requested on a Monthly Anniversary Day, the maximum loan amount is further reduced by the monthly deduction due on that day.) The Outstanding Debt is the cumulative amount of outstanding policy loans and loan interest payable to the Company at any time. Loan interest is payable in arrears on each Policy Anniversary at an annual rate which varies by the number of years since the Policy was issued. For the first ten Policy years a loan rate of 5.25% applies. After the tenth Policy Anniversary, a loan rate of 4.75% applies. Interest on the full amount of any Outstanding Debt is due on the Policy Anniversary, until the Outstanding Debt is repaid. If interest is not paid when due, it will be added to the amount of the Outstanding Debt. The Owner may repay all or part of the Outstanding Debt at any time while the Policy is in force. Only payments indicated as loan or interest payments will be treated as such. If a loan repayment is made which exceeds the Outstanding Debt, the excess will be applied as a Scheduled Premium Payment, subject to the rules on acceptance of premium payments. 25 32 When a Policy Owner takes a loan, an amount equal to the loan is transferred out of the Policy Owner's Fund Value in the Subaccounts and the Guaranteed Interest Account into the Loan Account to secure the loan. The Policy Owner may, within certain limits, specify the amount or the percentage of the loan amount to be deducted from the Subaccounts and the Guaranteed Interest. If the Policy Owner does not specify the source of the transfer, or if the transfer instructions are incorrect, the request for loan will not be accepted. On each Policy Anniversary, an amount equal to the loan interest due and unpaid for the Policy Year will be transferred to the Loan Account from the Subaccounts and Guaranteed Interest Account on a proportional basis. The Loan Account is a part of the Company's General Account. Amounts held in the Loan Account are credited monthly with a rate of interest not less than an annualized rate of 4.5%. Loan repayments release amounts from the Loan Account. Unless otherwise requested by a Policy Owner, amounts released from the Loan Account as a result of a loan repayment will be transferred into the Subaccounts and Guaranteed Interest Account in accordance with the most recent allocation instructions for Scheduled Premium Payments. In addition, Fund Value in the Loan Account in excess of the outstanding loan is treated differently depending on whether at the time the loan was made Fund Values were transferred from the Subaccounts or the Guaranteed Interest Account and whether or not loan interest due is paid when due or the amount of the interest is added to the loan ("capitalized"). If the loan is from the Subaccounts and loan interest is capitalized, this excess offsets the amount that must be transferred from the Subaccounts to the Loan Account on the policy anniversary. If the loan is from the Subaccounts and loan interest is paid in cash, this excess is allocated to the Subaccounts and/or the Guaranteed Interest Account on the policy anniversary using the most recent Scheduled Premium Payment allocation on record. If the loan is from the Guaranteed Interest Account, this excess is allocated back to the Guaranteed Interest Account on a monthly basis proportionately to all interest crediting generations from which the loan was taken. While the amount to secure the Outstanding Debt is held in the Loan Account, the Policy Owner forgoes the investment experience of the Subaccounts and the current interest rate of the Guaranteed Interest Account on that amount. Thus Outstanding Debt, whether or not repaid, will have a permanent effect on the Policy's values and may have an effect on the amount and duration of the Death Benefit. If not repaid, the Outstanding Debt will be deducted from the amount of Death Benefit paid upon the death of the last surviving Insured, or the value paid upon surrender or maturity. Outstanding Debt may affect the length of time the Policy remains in force. After the third Policy Anniversary, the Policy will lapse when Cash Value is insufficient to cover the monthly deduction against the Policy's Fund Value on any Monthly Anniversary Day and the minimum payment required is not made during the Grace Period. Moreover, the Policy may enter the Grace Period more quickly when Outstanding Debt exists, because the Outstanding Debt is not available to cover the monthly deduction. In addition, the Guarantee Period under the Guaranteed Minimum Death Benefit Rider may end if total premiums received less any Partial Surrenders and their fees, less Outstanding Debt do not exceed the premiums required under that Rider. The Guaranteed Death Benefit Rider is not available in all states. Additional payments or repayment of a portion of Outstanding Debt may be required to keep the Policy or Rider in force. See "Grace Period and Lapse," page . A loan will not be treated as a distribution from the Policy and will not result in taxable income to the Policy Owner unless the Policy is a modified endowment contract, in which case a loan will be treated as a distribution that may give rise to taxable income. For more information on the tax treatment of loans, see "Federal Income Tax Considerations," page . FULL SURRENDER A Policy Owner may fully surrender a Policy at any time while either or both of the Insureds is living. The amount received in the event of a full surrender is the Policy's Cash Value, which is equal to its Fund Value less Surrender Charge less any Outstanding Debt. 26 33 A Policy Owner may surrender a Policy by sending a written request together with the Policy to the Company's Administrative Office. The proceeds will be determined as of the end of the Valuation Period during which the request for a surrender is received. A Policy Owner may elect to have the proceeds paid in cash or applied under a payment plan offered under the Policy. See "Payment Plan/Settlement Provisions," page . For information on the tax effects of a surrender of a Policy, see "Federal Income Tax Considerations," page . PARTIAL SURRENDER A Partial Surrender allows the Policy Owner to obtain a portion of the Cash Value of the Policy without having to surrender the Policy in full. A Partial Surrender may be made at any time and the Partial Surrender will take effect on the Business Day that we receive your request at our Administrative Office, or on the next Business Day if that day is not a Business Day. There is currently no limit on the number of Partial Surrenders allowed in a Policy year. A Partial Surrender must be for at least $500 (plus the applicable fee), and the Policy's Cash Value after the Partial Surrender must be at least $500. If a Loan on the Policy has been taken, the amount of the Partial Surrender is limited so that the Loan amount, after giving effect to the Partial Surrender, is not greater than 90 percent of Cash Value. The Policy Owner may make a Partial Surrender by submitting a proper written request to the Company's Administrative Office. As of the effective date of any Partial Surrender, the Policy Owner's Fund Value and Cash Value will be reduced by the amount surrendered (plus the applicable fee). The amount of the Partial Surrender (plus the applicable fee) will be allocated by amount or percent to the Policy Owner's Fund Value in the Subaccounts and the Guaranteed Interest Account as specified by the Policy Owner. Allocations by percentage must be in whole percentages and the minimum percentage is 10% against any Subaccount or the Guaranteed Interest Account. Percentages must total 100%. We will not accept an allocation which does not comply with the rules or if there is not enough Fund Value in a Subaccount or the Guaranteed Interest Account to provide its share of the allocation. If the last surviving Insured dies after the request for a Partial Surrender is sent to the Company and prior to the Partial Surrender being effected, the amount of the Partial Surrender will be deducted from the death benefit proceeds, which will be determined without taking into account the amount surrendered. When a Partial Surrender is made on a Policy on which the Owner has selected death benefit Option 1, the Specified Amount under the Policy is decreased by the amount of the Partial Surrender (excluding its fee). A Partial Surrender will not change the Specified Amount of a Policy on which the Owner has selected death benefit Option 2. However, assuming that the death benefit is not equal to Fund Value times a death benefit percentage, the Partial Surrender will reduce the death benefit by the amount of the Partial Surrender. Under either death benefit Option, to the extent the death benefit is based upon the Fund Value times the death benefit percentage applicable to the Insured, a Partial Surrender may cause the death benefit to decrease by an amount greater than the amount of the Partial Surrender. See "Death Benefits under the Policy," page . A fee for each Partial Surrender will be assessed. See "Charges and Deductions -- Transaction and Other Charges", page . For information on the tax treatment of Partial Surrenders, see "Federal Income Tax Considerations," page . GRACE PERIOD AND LAPSE In general, the Policy and all Riders attached to it will continue in force as long as the Cash Value of the Policy is sufficient to pay all the deductions that are taken from Fund Value each month. The Policy will lapse only when the Cash Value is insufficient to cover the current monthly deduction against the Policy's Fund Value on any Monthly Anniversary Day, and a 61-day Grace Period expires without the Policy Owner making a sufficient payment. 27 34 Special Rule for First Three Policy Years During the first three Policy years, (or first three policy years following an increase in Specified Amount during that period), if on each Monthly Anniversary Day the sum of premiums paid, less the sum of Partial Surrenders (excluding its fees) and any Outstanding Debt is greater than or equal to the Minimum Monthly Premiums times the number of completed Policy months (or number of months from the most recent increase in Specified Amount) or the Cash Value is greater than zero, the Policy and all attached Riders are guaranteed not to lapse. If the insufficiency occurs at any other time, or if the Minimum Monthly Premium test has not been met during the first three Policy years, the Policy may be at risk of lapse depending on whether or not the Guaranteed Death Benefit Rider is in effect, as explained below. If Guaranteed Death Benefit Rider Is Not in Effect If an insufficiency occurs and the Guaranteed Death Benefit Rider is not in effect, the Owner must pay during the Grace Period the amount required under the Policy to avoid Lapse. In addition, payment of any loan interest accrued for the Policy year but unpaid as of the Monthly Anniversary Day when insufficiency occurs may be required prior to the end of the Grace Period. The Company will not accept any payment if it would cause the total premium payments to exceed the maximum permissible premium for the Policy's Specified Amount under the Internal Revenue Code. This may occur when the Policy Owner has Outstanding Debt, in which case the Policy Owner could repay a sufficient portion of the Outstanding Debt to avoid termination. In this instance, the Policy Owner may wish to repay an additional portion of the Outstanding Debt to avoid recurrence of the potential lapse. If premium payments have not exceeded the maximum permissible premiums for the Policy's Specified Amount, the Policy Owner may also wish to make larger or more frequent premium payments to avoid recurrence of the potential lapse. However, the Company will not reject any premium payments necessary to prevent lapse of the Policy. If the Cash Value of the Policy is insufficient to cover the entire monthly deduction on a Monthly Anniversary Day, the Company will deduct the amount that is available. The Company will notify the Policy Owner (and any assignee of record) of the payment required to keep the Policy in force. The Policy Owner will then have a Grace Period of 61 days, measured from the date the notice is sent, to make the required payment. During the first three Policy years, if the Cash Value of the Policy is less than zero, the payment required is the amount of Minimum Monthly Premium not paid plus one succeeding Minimum Monthly Premium. After the third Policy anniversary, the payment required is the amount of the Monthly Deduction not paid plus two succeeding Monthly Deductions. The Policy will remain in force through the Grace Period. Failure to make the required payment within the Grace Period will result in termination of coverage under the Policy and all Riders, and the Policy will lapse. If the required payment is made during the Grace Period, any premium paid will be allocated among the Subaccounts of the Variable Account and the Guaranteed Interest Account in accordance with the Policy Owner's current Scheduled Premium Payment allocation instructions. Any monthly deduction due will be charged to the Subaccounts and the Guaranteed Interest Account on a proportionate basis. If the last surviving Insured dies during the Grace Period, the death proceeds will equal the amount of the death benefit immediately prior to the commencement of the Grace Period, reduced by any unpaid monthly deductions (which for Policies offered to residents of, or issued for delivery in, the State of New Jersey cannot exceed the minimum premium for the following month) and any Outstanding Debt. If Guaranteed Death Benefit Rider Is in Effect If the Guaranteed Death Benefit Rider is in effect and the test for continuation of the Guarantee Period has been met, the Specified Amount of the Policy and certain Rider coverages will not lapse during the Guarantee Period even if the Cash Value is not sufficient to cover all the deductions from the Fund Value on any Monthly Anniversary Day. See "Guaranteed Death Benefits", page . 28 35 While the Guaranteed Death Benefit Rider is in effect, the Fund Value of the Policy may be reduced by Monthly Deductions, but not below zero. Any Monthly Deductions during the Guarantee Period which would reduce the Cash Value below zero will be waived. The Guaranteed Death Benefit Rider will be terminated if the Policy does not meet the monthly tests, as explained in "Guaranteed Death Benefits", page , and the payment required under the Rider is not made within the Grace Period. If the Guaranteed Death Benefit Rider is terminated, the normal test for lapse will resume. The Guaranteed Death Benefit Rider is not available in all states, and, therefore, Grace Period and Lapse will be treated as described in the immediately preceding section entitled "If the Guaranteed Death Benefit Is Not In Effect". REINSTATEMENT The Company will reinstate a lapsed Policy (but not a Policy which has been surrendered for its Cash Value) at any time within five years after the Monthly Anniversary Day immediately before the start of the Grace Period but before the Maturity Date, provided the Company receives the following: (i) a written application from the Policy Owner; (ii) evidence of insurability satisfactory to the Company; (iii) payment of all monthly deductions that were due and unpaid during the Grace Period; (iv) payment of an amount at least sufficient to keep the Policy in force for one month after the date of reinstatement; (v) payment or reinstatement of any Debt on the Policy Anniversary at the start of the grace period and (vi) payment of interest on debt reinstated from the beginning of the grace period to the end of the grace period at the rate which applies to policy loans on the date of reinstatement. When the Policy is reinstated, the Fund Value will be equal to the Fund Value on the date of the lapse, subject to the following: (i) the Surrender Charge will be equal to the Surrender Charge that would have existed had the Policy been in force since the original Policy Date; (ii) the Fund Value will be reduced by the decrease, if any, in the Surrender Charge during the period which the Policy was not in force; (iii) any Outstanding Debt on the date of lapse will also be reinstated; and, (iv) no interest on amounts held in the Company's Loan Account to secure Outstanding Debt will be paid or credited between lapse and reinstatement.. Reinstatement will be effective as of the Monthly Anniversary Day on or preceding the date of approval by the Company, and Fund Value minus, if applicable, Outstanding Debt will be allocated among the Subaccounts and the Guaranteed Interest Account in accordance with the Policy Owner's most recent Scheduled Premium Payment allocation instructions. CHARGES AND DEDUCTIONS DEDUCTIONS FROM PREMIUMS Certain charges are deducted from each premium payment under a Policy prior to allocation of the net premium to the Policy Owner's Fund Value. These charges consists of the following items: Sales Charge The sales charge in the first ten Policy years is equal to 6% of the premiums paid up to each year's Target Premium and 3% of premium paid in excess of the Target Premium in that year. The Target Premium is actuarially determined based upon the Specified Amount of the Policy and the Age, gender, underwriting class and smoker status of each of the Insureds. The Target Premium is established at issue, and will be adjusted if the Specified Amount is increased or decreased. The sales charge is equal to 3% of all premiums after the tenth Policy year. The sales charge is deducted to compensate the Company for the cost of distributing the Policies. The amount derived by the Company from the sales charge is not expected to be sufficient to cover the sales and distribution expenses in connection with the Policies. If surrendered within 10 years after issuance, or within 29 36 10 years following an increase in the Specified Amount, the Policy will also be subject to a Surrender Charge, which is described on page . To the extent that sales and distribution expenses exceed sales charges, such expenses may be recovered from other charges, including amounts derived indirectly from the charge for mortality and expense risks and from mortality gains. Tax Charges All states levy taxes on life insurance premium payments. The amount of these taxes vary from state to state, and may vary from jurisdiction to jurisdiction within a state. The Company currently deducts an amount equal to 2.25% of each premium to pay applicable premium taxes. Currently, these taxes range from 0% to 4%, and, therefore, the 2.25% deduction may be higher or lower than the actual premium tax imposed by the applicable jurisdiction. The 2.25% rate approximates the average tax rate the Company expects to pay on premiums. The Company does not expect to make a profit from this charge. A charge currently equal to 1.5% of each premium payment is deducted from each premium to cover the estimated cost for the Federal income tax treatment of deferred acquisition costs determined solely by the amount of life insurance premiums received. The Company believes this charge for deferred acquisitions costs is reasonable in relation to the Company's increased federal tax burden under IRC Section 848 resulting from the receipt of premium payments. No charge will be deducted where premiums received from a Policy Owner are not subject to this tax. The Company reserves the right to increase or decrease the charge for taxes due to any change in tax law or due to any change in the cost to the Company. DAILY DEDUCTIONS FROM THE VARIABLE ACCOUNT Mortality and Expense Risk Charge Each day a charge is deducted for mortality and expense risks assumed by the Company. This charge is guaranteed not to exceed .000959% per day of the amount in the Subaccounts of the Variable Account, which is equivalent to an annual rate of .35% of the portion of the Policy Fund Value allocated to the Variable Account. The mortality and expense risk charge is assessed to compensate the Company for assuming mortality and expense risks under the Policies. The mortality risk assumed is that Insureds, as a group, may live for a shorter period of time than estimated and, therefore, the cost of insurance charges specified in the Policy will be insufficient to meet the Company's actual claims. The expense risk the Company assumes is that other expenses incurred in issuing and administering the Policies and operating the Variable Account will be greater than the amount estimated when setting the charges for these expenses. The Company will realize a profit from this fee to the extent it is not needed to provide benefits and pay expenses under the Policies. The Company may use this profit for other purposes, including any distribution expenses not covered by the sales charge or Surrender Charge. This charge is not assessed against the amount of the Policy Fund Value which is allocated to the Guaranteed Interest Account, nor to amounts in the Loan Account. MONTHLY DEDUCTIONS FROM FUND VALUE A charge called the monthly deduction is deducted from a Policy's Fund Value in the Subaccounts and Guaranteed Interest Account beginning on the Policy Date and on each Monthly Anniversary Day thereafter. The monthly deduction consists of the following items: Cost of Insurance This monthly charge compensates the Company for the anticipated cost of paying death benefits in excess of Fund Value to Beneficiaries of Insureds who die. The amount of the charge is equal to a current cost of insurance rate applicable to each of the Insureds multiplied by the net amount at risk under a Policy at the 30 37 beginning of the Policy Month. The net amount at risk for these purposes is equal to the amount of Death Benefit of the Policy plus any death benefit payable under the Four Year Term Insurance Rider at the beginning of the Policy Month less the Fund Value at the beginning of the Policy Month. The Policy contains guaranteed cost of insurance rates that may not be increased. The guaranteed rates are based on the 1980 Commissioners Standard Ordinary Smoker and Nonsmoker Mortality Tables where unisex cost of insurance rates apply, the 1980 Commissioners Ordinary Smoker and Nonsmoker Mortality Table B). These rates are based on the Age and underwriting class of each of the Insureds. They are also based on the gender of the Insureds, except that unisex rates are used where appropriate under applicable law, including in the state of Montana. As of the date of this prospectus, the Company charges "current rates" that are lower (i.e., less expensive) than the guaranteed rates, and the Company may also change current rates in the future. Like the guaranteed rates, the current rates also vary with the Age, gender, smoking status, and underwriting class of each of the Insureds. In addition, they also vary with the size of the Policy and the Policy duration. The cost of insurance rate generally increases with the Ages of the Insureds. For purposes of this charge, the cost of insurance rates applicable to the original coverage segment of Specified Amount will be based on the underwriting class at issue and the number of Policy years since the Policy Date. Cost of insurance rates for new coverage segments of Specified Amount related to increases will be based on the underwriting classes at the time of the increase and the number of Policy years since such increase. If an increase in Specified Amount causes a Policy to change size bands, the cost of insurance charges for the previously existing coverage segments of Specified Amount will not be adjusted to reflect the change. Administrative Charge An administrative charge of $7.50 is deducted monthly from the Fund Value. The administrative charge is assessed to reimburse the Company for the expenses associated with administration and maintenance of the Policies. The administrative charge is guaranteed never to exceed $7.50. The Company does not expect to profit from this charge. Per $1,000 Specified Amount Charge For the first ten Policy Years following issue or increase in Specified Amount, a per $1,000 Specified Amount charge will apply. These per $1,000 of Specified Amount charges differ based on issue age of the coverage segment, underwriting class and smoking status of the younger Insured. The monthly per $1,000 factors are shown in Appendix A. Guaranteed Death Benefit Charge If the Guaranteed Death Benefit Rider has been elected, a charge of $0.01 per thousand dollars of Policy Specified Amount and certain Rider amounts is deducted each month during the Guarantee Period. This charge is guaranteed never to exceed this amount. The Guaranteed Death Benefit Rider is not available in all states. Other Optional Insurance Benefits Charges The monthly deduction will include charges for any other optional insurance benefits added to the Policy by Rider. See "Other Optional Insurance Benefits," page . SURRENDER CHARGE The Company will assess a Surrender Charge against Fund Value upon full surrender of a Policy or lapse within ten years of the Policy Date or a subsequent increase in Specified Amount. The Surrender Charge is designed to recover the Company's expenses in issuing and distributing Policies. 31 38 The surrender charge is based on a factor per $1,000 of Initial Specified Amount. Starting on the first anniversary, the charge decreases from its maximum by 10% per year until it reaches zero at the end of the 10th policy year. The Surrender Charge factors at issue vary by Specified Amount, issue age, gender and underwriting class. The Surrender Charge does not increase as the Insureds get older or with increases in the Specified Amount due to a death benefit Option change. A Surrender Charge will be calculated for new segments of Specified Amount added as a result of requested increases. A Surrender Charge will not be deducted on a decrease in Specified Amount.
POLICY YEAR GRADING % POLICY YEAR GRADING % - ----------- --------- ------------ --------- 1 100% 7 40 2 90 8 30 3 80 9 20 4 70 10 10 5 60 11 and later 0 6 50
CORPORATE PURCHASERS The Policy is available for purchase by individuals, trusts, corporations and other organizations. For corporate or other group or sponsored arrangements purchasing one or more Policies, the Company may reduce the amount of the Sales Charge, Surrender Charge, or other charges where the expenses associated with the sale of the Policy or Policies or the underwriting or other administrative costs associated with the Policy or Policies are reduced. Sales, underwriting or other administrative expenses may be reduced for reasons such as expected economies resulting from a corporate purchase or a group or sponsored arrangement, from the amount of the initial premium payment or payments, or the amount of projected premium payments. TRANSACTION AND OTHER CHARGES A Partial Surrender fee of $10 will be deducted from the Fund Value for each Partial Surrender transaction. This charge is guaranteed not to exceed $10. The Company currently does not charge for transfers of Fund Value between the Subaccounts. The Company does, however, reserve the right to assess a $25 charge on transfers (including telephone transfers, if permitted by the Company). For Policies issued for delivery to residents of the Commonwealth of Pennsylvania, the Company guarantees that no transfer charge will be imposed on transfers made within one year from the date the Policy is issued. The Company charges a fee of $200 for exercise of the Option to Split Policy Benefit. The Company may charge the Subaccounts for federal income taxes incurred by the Company that are attributable to the Variable Account and its Subaccounts. No such charge is currently assessed. See "Charge for Company Income Taxes," page . The Company will bear the direct operating expenses of the Variable Account. The Subaccounts purchase shares of the corresponding Portfolio of the underlying Fund. The Fund and each of its Portfolios incur certain charges including the investment advisory fee and certain operating expenses. The Funds are governed by their Boards. The Fund's expenses are not fixed or specified under the terms of the Policy. The advisory fees and other expenses are more fully described in the prospectuses of the Funds. FEES AND EXPENSES OF THE FUNDS The Subaccounts purchase shares of the corresponding Portfolio of the underlying Fund. The Fund and each of its Portfolios incur certain charges including the investment advisory fee and certain operating expenses. These fees and expenses vary by Portfolio are set forth below. The Funds are governed by their Boards. The Fund's expenses are not fixed or specified under the terms of the Policy. The advisory fees and 32 39 other expenses are summarized at pages of this Prospectus and are more fully described in the prospectuses of the Funds. Information contained in the following table was provided by the respective Funds and has not been independently verified by the Company. PRO FORMA ANNUAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1997
OTHER EXPENSES MANAGEMENT (AFTER TOTAL FUND/PORTFOLIO FEES REIMBURSEMENT) EXPENSES -------------- ---------- -------------- -------- MONY Series Fund, Inc. Intermediate Term Bond Portfolio................. .50%(1) .09%(2) .59% Long Term Bond Portfolio......................... .50(1) .07(2) .57 Government Securities Portfolio.................. .50(1) .14(2) .64 Money Market Portfolio........................... .40 .06(2) .46 Enterprise Accumulation Trust Equity Portfolio..... .80% .04% .84% Small Company Value Portfolio.................... .80 .06 .86 Managed Portfolio................................ .73 .03 .76 International Growth Portfolio................... .85 .34 1.19 High Yield Bond Portfolio........................ .60 .17 .77 Small Company Growth Portfolio................... 1.00 * * Equity Income Portfolio.......................... .75 * * Capital Appreciation Portfolio................... .75 * * Growth and Income Portfolio...................... .75 * * Growth Portfolio................................. .75 * *
- --------------- * No data is provided as these subaccounts first became available with the offering of the Policy. 1. Management Fees reflect investment advisory fees of .50% which became effective on and after October 14, 1997. Prior thereto, the investment advisory fees were .40%. 2. Includes custodial credit percentages as follows: Intermediate Term Bond -- .0080%; Long Term Bond -- .0043%; Government Securities -- .0169%; and Money Market -- .0084% which expenses are borne by the Investment Adviser pursuant to the Investment Advisory Agreement. GUARANTEE OF CERTAIN CHARGES The Company guarantees that certain charges will not increase. This includes the charge for mortality and expense risks, the administrative charge, the per $1,000 Specified Amount charge, the Sales Charge, and the guaranteed cost of insurance rates. Any changes in the current cost of insurance charges or charges for optional insurance benefits will be made by class of Insureds and will be based on changes in future expectations with respect to investment earnings, mortality, length of time policies will remain in effect, expenses, and taxes. In no event will they exceed the guaranteed rates defined in the Policy. 33 40 OTHER INFORMATION FEDERAL INCOME TAX CONSIDERATIONS The following discussion provides a general description of the federal income tax considerations relating to the Policy. This discussion is based upon the Company's understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service ("IRS"). This discussion is not intended as tax advice. Because of the inherent complexity of such laws and the fact that tax results will vary according to the particular circumstances of the individual involved, tax advice may be needed by a person contemplating the purchase of the Policy. It should, therefore, be understood that these comments concerning federal income tax consequences are not an exhaustive discussion of all tax questions that might arise under the Policy and that special rules which are not discussed herein may apply in certain situations. Moreover, no representation is made as to the likelihood of continuation of federal income tax or estate or gift tax laws or of the current interpretations by the IRS or the courts. Future legislation may adversely affect the tax treatment of life insurance policies or other tax rules described in this discussion or that relate directly or indirectly to life insurance policies. Finally, these comments do not take into account any state or local income tax considerations which may be involved in the purchase of the Policy. Definition of Life Insurance Section 7702 of the Internal Revenue Code (the "Code") provides that if one of two alternate tests are met, a policy will be treated as a life insurance policy for federal tax purposes. These tests are referred to as the "Cash Value Accumulation Test" and the "Guideline Premium/Cash Value Corridor Test". Under the Cash Value Accumulation Test, there is no limit to the amount that may be paid in premiums so long as there is enough death benefit in relation to Fund Value at all times. The death benefit at all times must be at least equal to an actuarially determined factor (the "death benefit percentage"), depending on the Insureds' Ages, genders, and underwriting classes at any point in time, times the Fund Value. The Guideline Premium/Cash Value Corridor Test provides for, among other things, (i) a maximum allowable premium per thousand dollars of death benefit, known as the "guideline annual premium", and (ii) a minimum ongoing "corridor" of death benefit in relation to the Fund Value of the Policy, known as the "death benefit percentage." See Appendix B, Page , for a table of the Guideline Premium/Cash Value Corridor Test death benefit percentages. In most situations, the death benefit that results from the Guideline Premium/Cash Value Corridor Test will ultimately be less that the amount of death benefit required under the Cash Value Accumulation Test. The Policy described in this Prospectus allows the Policy Owner to choose, at the time of application, which of these tests will apply to the Policy. A choice of tests is irrevocable. Regardless of the test chosen, the Company believes that the Policy meets this statutory definition of life insurance and hence will receive federal income tax treatment consistent with that of fixed life insurance. Thus, the Death Benefit should be excludable from the gross income of the Beneficiary (whether the Beneficiary is a corporation, individual or other entity) under Section 101(a)(1) of the Code for purposes of the regular Federal income tax and the Policy Owner generally should not be deemed to be in constructive receipt of the cash values under the Policy until a full surrender thereof, maturity of the Policy, or Partial Surrender. In addition, certain Policy loans may be taxable in the case of Policies that are modified endowment contracts. Prospective Policy Owners that intend to use Policies to fund deferred compensation arrangements for their employees are urged to consult their tax advisors with respect to the tax consequences of such arrangements. Prospective corporate Owners should consult their tax advisors about the treatment of life insurance in their particular circumstances for purposes of the alternative minimum tax applicable to corporations. Diversification Requirements To comply with regulations under Section 817(h) of the Code, each Portfolio is required to diversify its investments. Generally, a portfolio is required to diversify its investments so that on the last day of each 34 41 quarter of a calendar year, no more than 55% of the value of its assets is represented by any one investment, no more than 70% is represented by any two investments, no more than 80% is represented by any three investments, and no more than 90% is represented by any four investments. Securities of a single issuer generally are treated for purposes of Section 817(h) as a single investment. However, for this purpose, each U.S. Government agency or instrumentality is treated as a separate issuer, and any security issued, guaranteed, or insured (to the extent so guaranteed or insured) by the U.S. or by an agency or instrumentality of the U.S. is treated as a security issued by the U.S. Government or its agency or instrumentality, whichever is applicable. While there should be no question that, for federal income tax purposes, the Portfolio shares underlying the Policies are owned by the Company and not by a Policy Owner or any Beneficiary, no representation is or can be made regarding the likelihood of the continuation of current interpretations by the IRS. Tax Treatment of Policies The Technical and Miscellaneous Revenue Act of 1988 established a new class of life insurance contracts referred to as modified endowment contracts. With the enactment of this legislation, the Policies will be treated for tax purposes in one of two ways. Policies that are not classified as modified endowment contracts will be taxed as conventional life insurance contracts, as described below. Taxation of pre-death distributions from Policies that are classified as modified endowment contracts is somewhat different, as described below. A life insurance contract becomes a "modified endowment contract" if, at any time during the first seven contract years, the sum of actual premiums paid exceeds the sum of the "seven-pay premium." Generally, the "seven-pay premium" is the level annual premium, such that if paid for each of the first seven years, will fully pay for all future death and endowment benefits under a contract. For example, if the "seven-pay premiums" were $1,000, the maximum premiums that could be paid during the first seven years to avoid "modified endowment" treatment would be $1,000 in the first year; $2,000 through the first two years and $3,000 through the first three years, etc. Under this test, a Policy may or may not be a modified endowment contract, depending on the amount of premiums paid during each of the Policy's first seven contract years. Changes in benefits may require retesting to determine if the Policy is to be classified as a modified endowment contract. Conventional Life Insurance Policies If a Policy is not a modified endowment contract, upon full surrender or maturity of a Policy for its Cash Value, the excess, if any, of the Cash Value plus any Outstanding Debt over the cost basis under a Policy will be treated as ordinary income for federal income tax purposes. A Policy's cost basis will usually equal the premiums paid less any premiums previously recovered through Partial Surrenders. Under Section 7702 of the Code, special rules apply to determine whether part or all of the cash received through Partial Surrenders in the first 15 Policy years is paid out of the income of the Policy and therefore subject to income tax. Cash distributed to a Policy Owner on Partial Surrenders occurring more than 15 years after the Policy Date will be taxable as ordinary income to the Policy Owner to the extent that it exceeds the cost basis under a Policy. The Company also believes that loans received under Policies that are not modified endowment contracts will be treated as indebtedness of the Owner, and that no part of any loan under the Policy will constitute income to the Owner unless the Policy is surrendered or upon maturity of the Policy. Interest paid (or accrued by an accrual basis taxpayer) on a loan under a Policy that is not a modified endowment contract may be deductible, subject to several limitations, depending on the use to which the proceeds are put and the tax rules applicable to the Policy Owner. If, for example, the loan proceeds are used by an individual for business or investment purposes, all or part of the interest expense may be deductible. Generally, if the policy loan is used for personal purposes by an individual, the interest expense is not deductible. The deductibility of loan interest (whether incurred under a policy loan or on other indebtedness) also may be subject to other limitations. For example, where the interest is paid (or accrued by an accrual basis taxpayer) on a loan under a Policy covering the life of an officer, employee, or person financially interested in the trade or business of the Policy Owners, the interest may be deductible to the extent that the interest is attributable to the first $50,000 of the 35 42 Outstanding Debt, but only for a limited number of Insureds. Other tax law provisions may limit the deduction of interest payable on loan proceeds that are used to purchase or carry certain life insurance policies. Modified Endowment Contracts Pre-death distributions from modified endowment contracts may give rise to taxable income. Upon full surrender or maturity of the Policy, the Policy Owner would recognize ordinary income for federal income tax purposes equal to the amount by which the Cash Value plus Outstanding Debt exceeds the investment in the Policy (usually the premiums paid plus certain pre-death distributions that were taxable less any premiums previously recovered that were excludable from gross income). Upon Partial Surrenders and policy loans, the Policy Owner would recognize ordinary income to the extent allocable to income (which includes all previously non-taxed gains) on the Policy. The amount allocated to income is the amount by which the Fund Value of the Policy exceeds investment in the Policy immediately before the distribution. Under a tax law provision, if two or more policies which are classified as modified endowment contracts are purchased from any one insurance company, including the Company, during any calendar year, all such policies will be aggregated for purposes of determining the portion of the pre-death distributions allocable to income on the policies and the portion allocable to investment in the policies. Amounts received under a modified endowment contract that are included in gross income are subject to an additional tax equal to 10% of the amount included in gross income, unless an exception applies. The 10% additional tax does not apply to any amount received: (i) when the taxpayer is at least 59 1/2 years old; (ii) which is attributable to the taxpayer becoming disabled; or (iii) which is part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his or her beneficiary. If a Policy was not originally a modified endowment contract but becomes one, under Treasury Department regulations which are yet to be prescribed, pre-death distributions received in anticipation of a failure of a Policy to meet the seven-pay premium test are to be treated as pre-death distributions from a modified endowment contract (and, therefore, are to be taxable as described above) even though, at the time of the distribution(s), the Policy was not yet a modified endowment contract. For this purpose, pursuant to the Code, any distribution made within two years before the Policy is classified as a modified endowment contract shall be treated as being made in anticipation of the Policy's failing to meet the seven-pay premium test. It is unclear whether interest paid (or accrued by an accrual basis taxpayer) on Outstanding Debt with respect to a modified endowment contract constitutes interest for federal income tax purposes. If it does constitute interest, it may be deductible, subject to several limitations, depending on the use to which the proceeds are put and the tax rules applicable to the Policy Owner. If, for example, the loan proceeds are used by an individual for business or investment purposes, all or part of the interest expense may be deductible. Generally, if the Policy loan is used for personal purposes by an individual, the interest expense is not deductible. The deductibility of loan interest (whether incurred under a Policy loan or on other indebtedness) also may be subject to other limitations. For example, where the interest is paid (or accrued by an accrual basis taxpayer) on a loan under a Policy covering the life of an officer, employee, or person financially interested in the trade or business of the Policy Owners, the interest may be deductible to the extent that the interest is attributable to the first $50,000 of the Outstanding Debt. Other tax law provisions may limit the deduction of interest payable on loan proceeds that are used to purchase or carry certain life insurance policies. Reasonableness Requirement for Charges Another provision of the tax law deals with allowable charges for mortality costs and other expenses that are used in making calculations to determine whether a contract qualifies as life insurance for federal income tax purposes. For life insurance policies entered into on or after October 21, 1988, these calculations must be based upon reasonable mortality charges and other charges reasonably expected to be actually paid. The Treasury Department is expected to promulgate regulations governing reasonableness standards for mortality charges. The Company believes that the mortality costs and other expenses used in making calculations to determine whether the Policy qualifies as life insurance meet the current requirements. It is possible that 36 43 future regulations will contain standards that would require the Company to modify its mortality charges used for the purposes of the calculations in order to retain qualification of the Policy as life insurance for federal income tax purposes, and the Company reserves the right to make any such modifications. Riders, Policy Changes, and Transfers Certain Riders permit the splitting of the policy into two other individual policies upon divorce, business dissolution, or certain changes in the Federal estate tax law. The splitting of a Policy could have adverse tax consequences including but not limited to, the recognition of taxable income in an amount up to any gain in the policy at the time of the split. In order for the Beneficiary to receive the tax treatment discussed above, the policy must initially qualify and continue to qualify as life insurance under Sections 7702 and 817(h) of the Code. The Company may make changes in the Policy or Riders or make distributions from the Policy to the extent deemed necessary to qualify the Policy as life insurance for tax purposes. Any such change will uniformly apply to all policies that are affected. The Policy Owner will be given advance notice of such changes. Special tax rules may apply to the transfer of ownership of a Policy. Consult a qualified tax adviser before any transfer of the Policy. Other Employee Benefit Programs Complex rules may apply when a Policy is held by an employer or a trust, or acquired by an employee, in connection with the provision of employee benefits. These Policy Owners also must consider whether the Policy was applied for by or issued to a person having an insurable interest under applicable state law, as the lack of insurable interest may, among other things, affect the qualification of the Policy as life insurance for federal income tax purposes and the right of the beneficiary to death benefits. Employers and employer-created trusts may be subject to reporting, disclosure, and fiduciary obligations under the Employee Retirement Income Security Act of 1974 (ERISA). The Policy Owners legal advisor should be consulted to address these issues. Other Federal estate and gift and state and local estate, inheritance, and other tax consequences of ownership or receipt of Policy proceeds depend on the jurisdiction and the particular circumstances of each Owner or Beneficiary. For complete information on federal, state, local and other tax considerations, a qualified tax advisor should be consulted. THE COMPANY DOES NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF ANY POLICY. CHARGE FOR COMPANY INCOME TAXES For federal income tax purposes, variable life insurance generally is treated in a manner consistent with fixed life insurance. The Company will review the question of a charge to the Variable Account for the Company's federal income taxes periodically. A charge may be made for any federal income taxes incurred by the Company that are attributable to the Variable Account. This might become necessary if the tax treatment of the Company is ultimately determined to be other than what the Company currently believes it to be, if there are changes made in the federal income tax treatment of variable life insurance at the insurance company level, or if there is a change in the Company's tax status. Under current laws, the Company may incur state and local taxes (in addition to premium taxes imposed by the states) in several states. At present, these taxes are not significant. If there is a material change in 37 44 applicable state or local tax laws or in the cost to the Company, the Company reserves the right to charge the Account for such taxes, if any, attributable to the Account. VOTING OF FUND SHARES In accordance with its view of present applicable law, the Company will exercise voting rights attributable to the shares of each portfolio of the Funds held in the Subaccounts at any regular and special meetings of the shareholders of the Funds on matters requiring shareholder voting under the Investment Company Act of 1940. The Company will exercise these voting rights based on instructions received from persons having the voting interest in corresponding Subaccounts of the Variable Account. However, if the Investment Company Act of 1940 or any regulations thereunder should be amended, or if the present interpretation thereof should change, and as a result the Company determines that it is permitted to vote the shares of the Funds in its own right, it may elect to do so. The person having the voting interest under a Policy is the Policy Owner. Unless otherwise required by applicable law, the number of votes as to which a Policy Owner will have the right to instruct for any Portfolio will be determined by dividing a Policy Owner's Fund Value in the Subaccount which corresponds to the Portfolio by $100. Fractional votes will be counted. The number of votes as to which a Policy Owner will have the right to instruct will be determined as of the date determined by the Company, but in no event shall such date be more than 90 days prior to the date established by the respective Fund for determining shareholders eligible to vote at the meeting of the respective Fund. If required by the Securities and Exchange Commission, the Company reserves the right to determine in a different fashion the voting rights attributable to the shares of the respective Fund based upon the instructions received from Policy Owners. Voting instructions may be cast in person or by proxy. Voting rights attributable to the Policy Owner's Fund Value held in each Subaccount for which no timely voting instructions are received will be voted by the Company in the same proportion as the voting instructions which are received in a timely manner for all Policies participating in that Subaccount. The Company will also exercise the voting rights from assets in each Subaccount which are not otherwise attributable to Policy Owners, if any, in the same proportion as the voting instructions which are received in a timely manner for all Policies participating in that Subaccount and generally will exercise voting rights attributable to shares of Portfolios of the Funds held in its General Account, if any, in the same proportion as votes cast with respect to shares of Portfolios of the Funds held by the Variable Account and other separate accounts of the Company, in the aggregate. DISREGARD OF VOTING INSTRUCTIONS The Company may, when required by state insurance regulatory authorities, disregard voting instructions if the instructions require that voting rights be exercised so as to cause a change in the subclassification or investment objective of a Portfolio or to approve or disapprove an investment advisory contract. In addition, the Company itself may disregard voting instructions of changes initiated by Policy Owners in the investment policy or the investment adviser (or portfolio manager) of a Portfolio, provided that the Company's disapproval of the change is reasonable and is based on a good faith determination that the change would be contrary to state law or otherwise inappropriate, considering the Portfolio's objectives and purpose, and considering the effect the change would have on the Company. In the event the Company does disregard voting instructions, a summary of that action and the reasons for such action will be included in the next report to Policy Owners. REPORT TO POLICY OWNERS A statement will be sent at least annually to each Policy Owner setting forth a summary of the transactions which occurred since the last statement and indicating the death benefit, Specified Amount, Fund Value, Cash Value, and any Outstanding Debt. In addition, the statement will indicate the allocation of Fund Value among the Guaranteed Interest Account, the Loan Account and the Subaccounts and any other 38 45 information required by law. Confirmations will be sent out upon premium payments, transfers, loans, loan repayments, withdrawals, and surrenders. Each Policy Owner will also receive an annual and a semiannual report containing financial statements for the Variable Account and the Funds, the latter of which will include a list of the portfolio securities of the Funds, as required by the Investment Company Act of 1940, and/or such other reports as may be required by federal securities laws. SUBSTITUTION OF INVESTMENTS AND RIGHT TO CHANGE OPERATIONS The Company reserves the right, subject to compliance with the law as then in effect, to make additions to, deletions from, or substitutions for the securities that are held by the Variable Account or any of its other separate accounts or that the Variable Account or any of its other separate accounts may purchase. If shares of any or all of the Portfolios of the Funds should no longer be available for investment, or if, in the judgment of the Company's management, further investment in shares of any or all Portfolios of the Funds should become inappropriate in view of the purposes of the Policies, the Company may substitute shares of another Portfolio of the Funds or of a different fund for shares already purchased, or to be purchased in the future under the Policies. Where required, the Company will not substitute any shares attributable to a Policy Owner's interest in a Variable Account without notice, Policy Owner approval, or prior approval of the Securities and Exchange Commission and without following the filing or other procedures established by applicable state insurance regulators. Applicable state insurance regulators include the Commissioner of Insurance of the State of Arizona. The Company also reserves the right to establish additional Subaccounts of the Variable Account, each of which would invest in a new portfolio of the Funds, or in shares of another investment company, a portfolio thereof, or another suitable investment vehicle, with a specified investment objective. New Subaccounts may be established when, in the sole discretion of the Company, marketing needs or investment conditions warrant, and any new Subaccounts will be made available to existing Policy Owners on a basis to be determined by the Company. The Company may also eliminate one or more Subaccounts if, in its sole discretion, marketing, tax, or investment conditions so warrant. In the event of any such substitution or change, the Company may, by appropriate endorsement, make such changes in this and other policies as may be necessary or appropriate to reflect such substitution or change. If deemed by the Company to be in the best interests of persons having voting rights under the Policies, the Variable Account may be operated as a management investment company under the Investment Company Act of 1940 or any other form permitted by law, it may be deregistered under that Act in the event such registration is no longer required, or it may be combined with other separate accounts of the Company or an affiliate thereof. Subject to compliance with applicable law, the Company also may combine one or more Subaccounts and may establish a committee, board, or other group to manage one or more aspects of the operation of the Variable Account. CHANGES TO COMPLY WITH LAW The Company reserves the right to make any change without consent of Policy Owners to the provisions of the Policy to comply with, or give Policy Owners the benefit of, any Federal or State statute, rule, or regulation, including but not limited to requirements for life insurance contracts under the Internal Revenue Code, under regulations of the United States Treasury Department or any state. PERFORMANCE INFORMATION Performance information for the Subaccounts of the Variable Account may appear in advertisements, sales literature, or reports to Policy Owners or prospective purchasers. Performance information in advertisements or sales literature may be expressed in any fashion permitted under applicable law, which may include presentation of a change in a Policy Owner's Fund Value attributable to the performance of one or more 39 46 Subaccounts, or as a change in Policy Owner's death benefit. Performance quotations may be expressed as a change in a Policy Owner's Fund Value over time or in terms of the average annual compounded rate of return on the Policy Owner's Fund Value, based upon a hypothetical Policy in which premiums have been allocated to a particular Variable Account over certain periods of time that will include one, five and ten years, or from the commencement of operation of the Variable Account if less than one, five, or ten years. Any such quotation may reflect the deduction of all applicable charges to the Policy including premium load, the cost of insurance, the administrative charge, and the mortality and expense risk charge. The quotation may also reflect the deduction of the Surrender Charge, if applicable, by assuming a surrender at the end of the particular period, although other quotations may simultaneously be given that do not assume a surrender and do not take into account deduction of the Surrender Charge. Performance information for the Variable Account may be compared, in advertisements, sales literature, and reports to Policy Owners to: (i) other variable life separate accounts or investment products tracked by research firms, ratings services, companies, publications, or persons who rank separate accounts or investment products on overall performance or other criteria; and (ii) the Consumer Price Index (measure for inflation) to assess the real rate of return from the purchase of a Policy. Reports and promotional literature may also contain the Company's rating or a rating of the Company's claim paying ability as determined by firms that analyze and rate insurance companies and by nationally recognized statistical rating organizations. Performance information for any Subaccount of the Variable Account reflects only the performance of a hypothetical Policy whose Fund Value is allocated to the Variable Account during a particular time period on which the calculations are based. Performance information should be considered in light of the investment objectives and policies, characteristics and quality of the Portfolios of the Funds in which the Variable Account invests, and the market conditions during the given period of time, and should not be considered as a representation of what may be achieved in the future. THE GUARANTEED INTEREST ACCOUNT Policy Owners may allocate all or a portion of their net premiums and transfer Fund Value to the Guaranteed Interest Account of the Company. Amounts allocated to the Guaranteed Interest Account become part of the "General Account" of the Company, which supports insurance and annuity obligations. The amounts allocated to the General Account of the Company are subject to the liabilities arising from the business the Company conducts. Descriptions of the Guaranteed Interest Account are included in this Prospectus for the convenience of the Purchaser. The Guaranteed Interest Account and the General Account of the Company have not been registered under the Securities Act of 1933 and the Investment Company Act of 1940. Accordingly, neither the Guaranteed Interest Account nor any interest therein is generally subject to the provisions of these Acts and, as a result, the staff of the Securities and Exchange Commission has not reviewed the disclosure in this prospectus relating to the Guaranteed Interest Account. Disclosures regarding the Guaranteed Interest Account may, however, be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in the prospectus. For more details regarding the Guaranteed Interest Account, see the Policy. GENERAL DESCRIPTION Amounts allocated to the Guaranteed Interest Account become part of the General Account of Company which consists of all assets owned by the Company other than those in the Variable Account and other separate accounts of the Company. Subject to applicable law, the Company has sole discretion over the investment of the assets of its General Account. The Policy Owner may elect to allocate net premiums to the Guaranteed Interest Account, the Variable Account, or both. The Policy Owner may also transfer Fund Value from the Subaccounts of the Variable Account to the Guaranteed Interest Account, or from the Guaranteed Interest Account to the Subaccounts. Company guarantees that the Fund Value in the Guaranteed Interest Account will be credited with a minimum interest rate of 0.0121% daily, compounded daily, for a minimum effective annual rate of 4.5%. Such interest will be paid regardless of the actual investment experience of the Guaranteed Interest Account. 40 47 In addition, Company may in its sole discretion declare current interest in excess of the 4.5% annual rate, which will be guaranteed for approximately one year. (The portion of a Policy Owner's Fund Value that has been used to secure Outstanding Debt will be credited with a guaranteed interest rate of 0.0121% daily, compounded daily, for a minimum effective annual rate of 4.5%.) The Company bears the full investment risk for the Fund Value allocated to the Guaranteed Interest Account. DEATH BENEFIT The Death Benefit under the Policy will be determined in the same fashion for a Policy Owner who has Fund Value in the Guaranteed Interest Account as for a Policy Owner who has Fund Value in the Subaccounts. The Death Benefit under Option 1 will be equal to the Specified Amount of the Policy on the date of death of the last surviving Insured or, if greater, the Fund Value on the date of death of the last surviving Insured multiplied by a death benefit percentage. Under Option 2, the Death Benefit will be equal to the Specified Amount of the Policy on the date of death of the last surviving Insured plus the Fund Value on the date of death of the last surviving Insured or, if greater, the Fund Value on the date of death of the last surviving Insured multiplied by a death benefit percentage. See "Death Benefits under the Policy," page . POLICY CHARGES Deductions from premium and monthly deductions from the Fund Value will be the same for Policy Owners who allocate net premiums or transfer Fund Value to the Guaranteed Interest Account as for Policy Owners who allocate net premiums to the Subaccounts. These charges include the sales and tax charges; the charges for the cost of insurance, administrative charge, per $1,000 Specified Amount charge, the Surrender Charge, and the charge for any other optional insurance benefits added by Rider. Fees for Partial Surrenders and, if applicable, transfer charges, will also be deducted from the Guaranteed Interest Account. Charges applicable to the Portfolios, including the operating expenses of the Portfolios, as well as the investment advisory fee charged by the Portfolio managers, will not be paid directly or indirectly by Policy Owners to the extent the Fund Value is allocated to the Guaranteed Interest Account. Likewise, the mortality and expense risk charge applicable to the Fund Value allocated to the Subaccounts is not deducted from Fund Value allocated to the Guaranteed Interest Account. Any amounts that the Company pays for income taxes allocable to the Subaccounts will not be charged against the Guaranteed Interest Account. However, it is important to remember that Policy Owners will not participate in the investment experience of the Subaccounts to the extent that Fund Values are allocated to the Guaranteed Interest Account. TRANSFERS Amounts may be transferred after the Right to Return Policy Period from the Subaccounts to the Guaranteed Interest Account and from the Guaranteed Interest Account to the Subaccounts, subject to the following limitations. Transfers to the Guaranteed Interest Account may be made at any time and in any amount. Transfers from the Guaranteed Interest Account to the Subaccounts are limited to one in any Policy year. Transfers from the Guaranteed Interest Account may only be made during the time period which begins on the Policy Anniversary and which ends 30 days after the Policy Anniversary. If the transfer request is received on the Policy Anniversary, it will be processed as of the Policy Anniversary; if it is received within 30 days after the Policy Anniversary, the transfer will be effective as of the close of business on the date received if it is a Business Day, or if not a Business Day, then at the close of business on the next day which is a Business Day. Any request received within 10 days before the Policy Anniversary will be deemed received on the Policy Anniversary. Any transfer requests received at other times will not be honored, and will be returned to the Policy Owner. Currently there is no charge imposed upon transfers; however, the Company reserves the right to assess such a charge in the future. 41 48 SURRENDERS AND POLICY LOANS The Policy Owner may also make full surrenders and Partial Surrenders from the Guaranteed Interest Account to the same extent as a Policy Owner who has invested in the Subaccounts. See "Full Surrender," page and "Partial Surrenders," page . Transfers and surrenders payable from the Guaranteed Interest Account, and the payment of Policy loans allocated to the Guaranteed Interest Account, may be delayed for up to six months. However, with respect to Policies issued for delivery to residents of the Commonwealth of Pennsylvania, the Company will not delay payment of surrenders or loans, the proceeds of which will be used to pay premiums on the Policy. MORE ABOUT THE POLICY OWNERSHIP The Policy Owner is the person named as such in the application or in any later change shown in the Company's records. While either or both of the Insureds is living, the Policy Owner alone has the right to receive all benefits and exercise all rights that the Policy grants or the Company allows. Joint Owners If more than one person is named as Policy Owner, they are joint owners. Any Policy transaction requires the signature of all persons named jointly. Unless otherwise provided, if a joint owner dies, ownership passes to the surviving joint owner(s). When the last joint owner dies, ownership passes through that person's estate, unless otherwise provided. BENEFICIARY The Beneficiary is the individual named as such in the application or any later change shown in the Company's records. The Policy Owner may change the Beneficiary at any time while either or both of Insureds is living by written request on forms provided by the Company, which must be received by the Company at its Administrative Office. The change will be effective as of the date this form is signed. Contingent and/or concurrent Beneficiaries may be designated. The Policy Owner may designate a permanent Beneficiary, whose rights under the Policy cannot be changed without his or her consent. Unless otherwise provided, if no designated Beneficiary is living upon the death of the last surviving Insured, the Policy Owner or the Policy Owner's estate is the Beneficiary. The Company will pay the death benefit proceeds to the Beneficiary. Unless otherwise provided, in order to receive proceeds at the last surviving Insured's death, the Beneficiary must be living at the time of the last surviving Insured's death. THE POLICY This Policy is a contract between the Policy Owner and the Company. The entire contract consists of the Policy, a copy of the initial application, all subsequent applications to change the Policy, any endorsements, all Riders, and all additional Policy information sections (specification pages) added to the Policy. NOTIFICATION AND CLAIMS PROCEDURES Any election, designation, change, assignment, or request made by the Policy Owner must be in writing on a form acceptable to the Company. The Company is not liable for any action taken before such written notice is received and recorded. The Company may require that the Policy be returned for any Policy change or upon its surrender. In the event of the last surviving Insured's death while the Policy is in force notice should be given to the Company as soon as possible. Claim procedure instructions will be sent immediately. As due proof of death, the Company may require proof of Age and a certified copy of a death certificate for each Insured. The 42 49 Company may also require the Beneficiary and the last surviving Insured's next of kin to sign authorizations as part of this process. These authorization forms allow the Company to obtain information about the Insured, including but not limited to medical records of physicians and hospitals used by the Insureds. PAYMENTS The Company will pay death benefit proceeds, the Cash Value on surrender, Partial Surrenders, and loan proceeds based on allocations made to the Subaccounts, and will effect a transfer between Subaccounts or from the Variable Account to the Guaranteed Interest Account within seven days after the Company receives all the information needed to process a payment. However, the Company can postpone the calculation or payment of such a payment or transfer of amounts based on investment performance of the Subaccounts if: The New York Stock Exchange is closed on other than customary weekend and holiday closing or trading on the New York Stock Exchange is restricted as determined by the SEC; or An emergency exists, as determined by the SEC, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the Account's net assets; or PAYMENT PLAN/SETTLEMENT PROVISIONS Maturity or surrender benefits may be used to purchase a payment plan providing monthly income for the lifetime of the Beneficiary. The monthly payments consisting of proceeds plus interest will be paid in equal installments for at least ten years. The purchase rates for the payment plan are guaranteed not to exceed those shown in the Policy, but current rates that are lower (i.e., providing greater income) may be established by the Company from time to time. This benefit is not available if the income would be less than $25 per payment a month or if the proceeds are less than $1,000. Maturity or surrender benefits or death benefit proceeds may be used to purchase any other payment plan that the Company makes available at that time. PAYMENT IN CASE OF SUICIDE If either Insured dies by suicide, within two years from the Policy Date or Reinstatement Date, the Company will limit the Death Benefit proceeds to the premium payments less any Partial Surrender amounts (and their fees) and less any Outstanding Debt. If an Insured dies by suicide, within two years of the effective date of any increase in Specified Amount, the Company will refund the cost of insurance charges made with respect to such increase. Subject to terms and conditions set forth in the Policy, the Company will make coverage available to any surviving Insured, if the surviving Insured elects such coverage within 60 days after the suicide. ASSIGNMENT The Policy Owner may assign a Policy as collateral security for a loan or other obligation. No assignment will bind the Company unless the original, or a copy, is received at the Company's Administrative Office, and it will be effective only when recorded by the Company. An assignment does not change the ownership of the Policy. However, after an assignment, the rights of any Policy Owner or Beneficiary will be subject to the assignment. The entire Policy, including any attached payment option or Rider, will be subject to the assignment. The Company will rely solely on the assignee's statement as to the amount of the assignee's interest. The Company will not be responsible for the validity of any assignment. Unless otherwise provided, the assignee may exercise all rights this Policy grants except (a) the right to change the Policy Owner or Beneficiary; and (b) the right to elect a payment option. Assignment of a Policy that is a modified endowment contract may generate taxable income. (See "Federal Income Tax Considerations", page .) ERRORS ON THE APPLICATION If the Age or gender of an Insured has been misstated, the death benefit under this Policy will be the greater of that which would be purchased by the most recent cost of insurance charge at the correct age and 43 50 gender, or the death benefit derived by multiplying the Fund Value by the death benefit percentage for the correct Age and gender. If unisex cost of insurance rates apply, no adjustment will be made for a misstatement of gender. See "Cost of Insurance", page . INCONTESTABILITY The Company may contest the validity of this Policy if any material misstatements are made in the application. However, the Policy will be incontestable as follows: the initial Specified Amount cannot be contested after the Policy has been in force during an Insured's lifetime for two years from the Policy Date; and an increase in the Specified Amount or any reinstatement cannot be contested after the increase or the reinstated policy has been in force during an Insured's lifetime for two years from its effective date. POLICY ILLUSTRATIONS Upon request, the Company will send the Policy Owner an illustration of future benefits under the Policy based on both guaranteed and current cost assumptions. DISTRIBUTION OF THE POLICY MONY Securities Corp. ("MSC"), a wholly owned subsidiary of MONY, is principal underwriter (distributor) of the Policies. MSC is registered as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers. The Policies are sold by individuals who are registered representatives of MSC and who are also licensed as life insurance agents for the Company. The Policies may also be sold through other broker/dealers authorized by MSC and applicable law to do so. Except where MSC has authorized other broker/dealers to sell the Policies (as described in the preceding paragraph), compensation payable for the sale of the Policies will be based upon the following schedule. After issue of the Contract first Policy year, commissions will equal at most 50 percent of premiums paid up to the Target Premium and 3% of any amount in excess of the Target Premium. Thereafter, commissions will equal at most 3.0 percent of any additional premiums plus, on the sixth and each succeeding Policy Anniversary for so long as the Policy shall remain in force, .15 percent of the Fund Value less Loan Account Value. Upon any subsequent increase in Specified Amount, commissions in the first year following the increase will equal at most 50 percent of premiums paid on or after the increase up to the amount by which the Target Premium has been increased. Thereafter, commissions will return to no more than the 3.0 percent level. Further, registered representatives may be eligible to receive certain bonuses and other benefits based on the amount of earned commissions. In addition, registered representatives who meet specified production levels may qualify, under sales incentive programs adopted by Company, to receive noncash compensation such as expense-paid trips, expense-paid educational seminars and merchandise. Company makes no separate deductions, other than previously described, from premiums to pay sales commissions or sales expenses. 44 51 MORE ABOUT THE COMPANY MANAGEMENT The directors and officers of the Company are listed below. The business address for all directors and officers of MONY Life Insurance Company of America is 1740 Broadway, New York, New York 10019. Current Officers and Directors of MONY America are:
NAME POSITION AND OFFICES WITH DEPOSITOR - ---- ----------------------------------- Michael I. Roth........................... Director, Chairman and Chief Executive Officer Samuel J. Foti............................ Director, President and Chief Operating Officer Richard E. Connors........................ Director Richard Daddario.......................... Director, Vice President, and Controller Phillip A. Eisenberg...................... Director, Vice President and Actuary Margaret G. Gale.......................... Director, Vice President Michael Slipowitz......................... Vice President Stephen J. Hall........................... Director Edward E. Hill............................ Vice President -- Chief Compliance Officer Evelyn L. Peos............................ Vice President Kenneth M. Levine......................... Director and Executive Vice President David S. Waldman.......................... Secretary David V. Weigel........................... Treasurer Sam Chiodo................................ Vice President Charles P. Leone.......................... Director, Vice President and Chief Corporate Compliance Officer
No officer or director listed above receives any compensation from the Variable Account. No separately allocable compensation has been paid by the Company or any of its affiliates to any person listed for services rendered to the Account. STATE REGULATION The Company is subject to the laws of the state of Arizona governing insurance companies and to regulation by the Commissioner of Insurance of Arizona. In addition, it is subject to the insurance laws and regulations of the other states and jurisdictions in which it is licensed or may become licensed to operate. An annual statement in a prescribed form must be filed with the Commissioner of Insurance of Arizona and with regulatory authorities of other states on or before March 1st in each year. This statement covers the operations of the Company for the preceding year and its financial condition as of December 31st of that year. The Company's affairs are subject to review and examination at any time by the Commissioner of Insurance or his agents, and subject to full examination of Company's operations at periodic intervals. TELEPHONE TRANSFER PRIVILEGES A Policy Owner may request a transfer of Fund Value or change allocation instructions for future premiums by telephone if an authorization for telephone transfer form has been completed, signed, and received at the Company's Syracuse Operations Center. All or part of any telephone conversation with respect to transfer and allocation instructions may be recorded by the Company. Telephone instructions received by the Company by 4:00 p.m. Eastern time on any Valuation Date will be effected as of the end of that Valuation Date in accordance with the Policy Owner's instructions, subject to the limitations stated in this prospectus (presuming that the Right to Return Policy Period has expired). The Company reserves the right to deny any telephone transfer or allocation request. If all telephone lines are busy (which might occur, for example, during periods of substantial market fluctuations), Policy Owners might not be able to request transfers by telephone and would have to submit written requests. Telephone transfer and allocation instructions will only be accepted if complete and correct. 45 52 The Company has adopted guidelines relating to telephone transfers and allocation instructions that, among other things, outlines procedures to be followed which are designed, and which the Company believes are reasonable, to prevent unauthorized instructions. If these procedures are followed, the Company shall not be liable for, and the Policy Owner will therefore bear the entire risk of, any loss as a result of the Company's following telephone instructions in the event that such instructions prove to be fraudulent. A copy of the guidelines and the Company's form for electing telephone transfer privileges is available from licensed agents of the Company who are also registered representatives of MSC or by calling 1-800-487-6669. The Company's form must be signed and received at the Company's Syracuse Operations Center before telephone transfers will be accepted. LEGAL PROCEEDINGS There are no legal proceedings pending to which the Variable Account is a party, or which would materially affect the Variable Account. LEGAL MATTERS Legal matters in connection with the issue and sale of the Policies described in this Prospectus and the organization of the Company, its authority to issue the Policies under Arizona law, and the validity of the forms of the Policies under Arizona law have been passed on by the Vice President and Deputy General Counsel of MONY. Legal matters relating to the federal securities and federal income tax laws have been passed upon by Edward P. Bank, Vice President and Deputy General Counsel of MONY. REGISTRATION STATEMENT A Registration Statement under the Securities Act of 1933 has been filed with the SEC relating to the offering described in this Prospectus. This Prospectus does not include all of the information set forth in the Registration Statement, as portions have been omitted pursuant to the rules and regulations of the SEC. The omitted information may be obtained at the SEC's principal office in Washington, D.C., upon payment of the SEC's prescribed fees. INDEPENDENT ACCOUNTANTS The audited financial statements for the Variable Account and for Company included in this Prospectus and in the Registration Statement have been audited by PricewaterhouseCoopers LLP, independent accountants, as indicated in their report hereon, and are included in reliance upon the authority of said firm as experts in accounting and auditing. PricewaterhouseCoopers LLP's office is located at 1301 Avenue of the Americas, New York, New York, 10019. FINANCIAL STATEMENTS The audited financial statements for the Variable Account are set forth herein, starting on page F-1. The audited financial statements of the Company are set forth herein starting on page F- . The financial statements of the Variable Account and Company have been audited by PricewaterhouseCoopers LLP. The financial statements of the Company should be distinguished from the financial statements of the Variable Account and should be considered only as bearing upon the ability of the Company to meet its obligations under the Policies. 46 53 FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS INDEX TO FINANCIAL STATEMENTS
PAGE ---- With respect to MONY America Variable Account L: Report of Independent Accountants......................... F-2 Statements of assets and liabilities as of December 31, 1997................................................... F-3 Statements of operations for the year ended December 31, 1997................................................... F-5 Statements of changes in net assets for the years ended December 31, 1997 and 1996............................. F-7 Notes to financial statements............................. F-10 Report of Independent Accountants......................... F-13 Statements of assets and liabilities as of December 31, 1996................................................... F-14 Statements of operations for the year ended December 31, 1996................................................... F-16 Statements of changes in net assets for the years ended December 31, 1996 and 1995............................. F-18 Notes to financial statements............................. F-21 Report of Independent Accountants......................... F-24 Statements of assets and liabilities as of December 31, 1995................................................... F-25 Statements of operations for the year ended December 31, 1995................................................... F-27 Statements of changes in net assets for the years ended December 31, 1995 and 1994............................. F-29 Notes to financial statements............................. F-31 Statement of assets and liabilities as of June 30, 1998 (unaudited)............................................ F-34 Statements of operations for the six months ended June 30, 1998 (unaudited)....................................... F-36 Statements of changes in net assets for the six months ended June 30, 1998 (unaudited) and for the year ended December 31, 1997...................................... F-38 Notes to financial statements............................. F-41 With respect to MONY Life Insurance Company of America: Report of Independent Accountants......................... F-44 Statements of admitted assets, liabilities, capital and surplus as of December 31, 1997 and 1996............... F-45 Statements of operations for the years ended December 31, 1997 and 1996.......................................... F-46 Statements of capital and surplus for the years ended December 31, 1997 and 1996............................. F-47 Statements of cash flows for the years ended December 31, 1997 and 1996.......................................... F-48 Notes to financial statements............................. F-49 Unaudited interim statement of admitted assets, liabilities, capital and surplus as of June 30, 1998... F-64 Unaudited interim statements of operations for the six months ended June 30, 1998 and 1997.................... F-65 Unaudited interim statements of capital and surplus for the six months ended June 30, 1998 and 1997............ F-66 Unaudited interim statements of cash flows for the six months ended June 30, 1998 and 1997.................... F-67 Notes to unaudited interim financial statements........... F-68
F-1 54 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of MONY Life Insurance Company of America and the Contractholders of MONY America Variable Account L -- Variable Life/Variable Universal Life: We have audited the accompanying statements of assets and liabilities of MONY America Variable Account L -- Variable Life/Variable Universal Life (comprising, respectively, the Variable Life's Equity Growth, Equity Income, Intermediate Term Bond, Long Term Bond, Diversified and Money Market Subaccounts and the Variable Universal Life's Intermediate Term Bond, Long Term Bond, Government Securities, Money Market, Equity, Small Cap, Managed, International Growth and High Yield Bond Subaccounts) as of December 31, 1997, the related statements of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended. These financial statements are the responsibility of MONY America's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1997, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting MONY America Variable Account L -- Variable Life/Variable Universal Life as of December 31, 1997, the results of their operations and the changes in their net assets for each of the periods referred to above, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. New York, New York February 11, 1998 F-2 55 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1997
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- ASSETS Investments at cost (Note 4)..... $ 546,247 $ 487,414 $ 148,164 $ 63,055 $ 806,595 $ 75,563 ========= ========= ========= ========= ========== ========= Investments in MONY Series Fund, Inc. at net asset value (Note 2)............................. $ 798,134 $ 705,660 $ 156,537 $ 71,555 $1,111,163 $ 75,563 Amount due from MONY Series Fund, Inc. .......................... 9 9 0 0 26 0 --------- --------- --------- --------- ---------- --------- Total assets........... 798,143 705,669 156,537 71,555 1,111,189 75,563 --------- --------- --------- --------- ---------- --------- LIABILITIES Amount due to MONY America....... 9 9 0 0 26 0 --------- --------- --------- --------- ---------- --------- Net assets....................... $ 798,134 $ 705,660 $ 156,537 $ 71,555 $1,111,163 $ 75,563 ========= ========= ========= ========= ========== ========= Net assets consist of: Contractholders' net payments.................... $ 537,453 $ 445,418 $ 192,229 $ 108,555 $ 933,695 $ 198,422 Cost of insurance withdrawals (Note 3).................... (383,528) (486,949) (201,904) (156,404) (916,797) (200,035) Undistributed net investment income...................... 168,021 327,758 163,834 100,095 533,506 77,176 Accumulated net realized gain (loss) on investments....... 224,301 201,187 (5,995) 10,809 256,191 0 Unrealized appreciation of investments................. 251,887 218,246 8,373 8,500 304,568 0 --------- --------- --------- --------- ---------- --------- Net assets....................... $ 798,134 $ 705,660 $ 156,537 $ 71,555 $1,111,163 $ 75,563 ========= ========= ========= ========= ========== ========= Number of units outstanding* .... 14,506 12,292 6,639 2,334 28,291 4,207 --------- --------- --------- --------- ---------- --------- Net asset value per unit outstanding* .................. $ 55.02 $ 57.41 $ 23.58 $ 30.65 $ 39.28 $ 17.96 ========= ========= ========= ========= ========== =========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-3 56 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) DECEMBER 31, 1997
VARIABLE UNIVERSAL LIFE ---------------------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP MANAGED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ---------- ----------- ----------- ------------ ASSETS Investments at cost (Note 4)...... $229,105 $ 870,461 $482,067 $3,698,674 $15,117,468 $ 7,542,179 $ 54,701,619 ======== ========= ======== ========== =========== =========== ============ Investments in Enterprise Accumulation Trust at net asset value (Note 2).................. $ 0 $ 0 $ 0 $ 0 $16,482,798 $ 8,184,725 $ 60,069,001 Investments in MONY Series Fund, Inc. at net asset value (Note 2).............................. 234,365 948,462 498,405 3,698,674 0 0 0 Amount due from Enterprise Accumulation Trust.............. 0 0 0 0 3,531 859 9,107 Amount due from MONY America...... 48 418 202 80,882 25,829 2,025 37,486 Amount due from MONY Series Fund, Inc............................. 11 130 41 11,681 0 0 0 -------- --------- -------- ---------- ----------- ----------- ------------ Total assets.............. 234,424 949,010 498,648 3,791,237 16,512,158 8,187,609 60,115,594 -------- --------- -------- ---------- ----------- ----------- ------------ LIABILITIES Amount due to Enterprise Accumulation Trust.............. 0 0 0 0 25,829 2,025 37,486 Amount due to MONY America........ 11 130 41 11,681 3,531 859 9,107 Amount due to MONY Series Fund, Inc............................. 48 418 202 80,882 0 0 0 -------- --------- -------- ---------- ----------- ----------- ------------ Total liabilities......... 59 548 243 92,563 29,360 2,884 46,593 -------- --------- -------- ---------- ----------- ----------- ------------ Net assets........................ $234,365 $ 948,462 $498,405 $3,698,674 $16,482,798 $ 8,184,725 $ 60,069,001 ======== ========= ======== ========== =========== =========== ============ Net assets consist of: Contractholders' net payments...................... $265,298 $ 982,905 $552,598 $4,020,118 $16,582,774 $ 7,692,676 $ 58,710,094 Cost of insurance withdrawals (Note 3)...................... (43,218) (167,996) (91,027) (544,035) (2,948,581) (1,239,409) (10,471,466) Undistributed net investment income........................ 6,097 47,307 14,524 222,591 538,907 705,833 2,719,621 Accumulated net realized gain on investments................... 928 8,245 5,972 0 944,368 383,079 3,743,370 Unrealized appreciation (depreciation) of investments................... 5,260 78,001 16,338 0 1,365,330 642,546 5,367,382 -------- --------- -------- ---------- ----------- ----------- ------------ Net assets........................ $234,365 $ 948,462 $498,405 $3,698,674 $16,482,798 $ 8,184,725 $ 60,069,001 ======== ========= ======== ========== =========== =========== ============ Number of units outstanding* ..... 19,650 69,779 42,420 325,979 821,090 449,403 2,954,670 -------- --------- -------- ---------- ----------- ----------- ------------ Net asset value per unit outstanding* ................... $ 11.93 $ 13.59 $ 11.75 $ 11.35 $ 20.07 $ 18.21 $ 20.33 ======== ========= ======== ========== =========== =========== ============ VARIABLE UNIVERSAL LIFE -------------------------- INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT ------------- ---------- ASSETS Investments at cost (Note 4)...... $4,186,777 $1,900,963 ========== ========== Investments in Enterprise Accumulation Trust at net asset value (Note 2).................. $4,079,254 $1,939,719 Investments in MONY Series Fund, Inc. at net asset value (Note 2).............................. 0 0 Amount due from Enterprise Accumulation Trust.............. 308 240 Amount due from MONY America...... 214 71 Amount due from MONY Series Fund, Inc............................. 0 0 ---------- ---------- Total assets.............. 4,079,776 1,940,030 ---------- ---------- LIABILITIES Amount due to Enterprise Accumulation Trust.............. 214 71 Amount due to MONY America........ 308 240 Amount due to MONY Series Fund, Inc............................. 0 0 ---------- ---------- Total liabilities......... 522 311 ---------- ---------- Net assets........................ $4,079,254 $1,939,719 ========== ========== Net assets consist of: Contractholders' net payments...................... $4,679,851 $2,041,929 Cost of insurance withdrawals (Note 3)...................... (773,836) (338,204) Undistributed net investment income........................ 115,713 160,937 Accumulated net realized gain on investments................... 165,049 36,301 Unrealized appreciation (depreciation) of investments................... (107,523) 38,756 ---------- ---------- Net assets........................ $4,079,254 $1,939,719 ========== ========== Number of units outstanding* ..... 290,466 138,275 ---------- ---------- Net asset value per unit outstanding* ................... $ 14.04 $ 14.03 ========== ==========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-4 57 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- Dividend income.................... $ 57,504 $ 80,960 $ 10,378 $ 5,654 $ 84,416 $ 4,176 Mortality and expense risk charges (Note 3)......................... (4,464) (4,333) (1,004) (507) (6,671) (487) -------- --------- -------- -------- --------- -------- Net investment income.............. 53,040 76,627 9,374 5,147 77,745 3,689 -------- --------- -------- -------- --------- -------- Realized and unrealized gain on investments (Note 2): Proceeds from sales.............. 87,998 205,963 55,717 38,794 311,417 32,317 Cost of shares sold.............. (54,391) (121,259) (54,045) (35,014) (211,325) (32,317) -------- --------- -------- -------- --------- -------- Net realized gain on investments... 33,607 84,704 1,672 3,780 100,092 0 Net increase in unrealized appreciation of investments...... 101,936 32,332 288 649 59,772 0 -------- --------- -------- -------- --------- -------- Net realized and unrealized gain on investments...................... 135,543 117,036 1,960 4,429 159,864 0 -------- --------- -------- -------- --------- -------- Net increase in net assets resulting from operations........ $188,583 $ 193,663 $ 11,334 $ 9,576 $ 237,609 $ 3,689 ======== ========= ======== ======== ========= ========
See notes to financial statements. F-5 58 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1997
VARIABLE UNIVERSAL LIFE ----------------------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP MANAGED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ------------ ----------- ----------- ----------- Dividend income.................. $ 6,095 $ 42,293 $ 14,009 $ 135,531 $ 544,698 $ 694,933 $ 2,719,101 Mortality and expense risk charges (Note 3)............... (1,008) (5,751) (2,949) (19,730) (77,153) (34,486) (318,312) -------- --------- --------- ------------ ----------- ----------- ----------- Net investment income............ 5,087 36,542 11,060 115,801 467,545 660,447 2,400,789 -------- --------- --------- ------------ ----------- ----------- ----------- Realized and unrealized gain on investments (Note 2): Proceeds from sales............ 52,711 292,029 143,307 24,713,256 3,327,872 1,503,358 11,923,853 Cost of shares sold............ (51,442) (285,745) (138,374) (24,713,256) (2,581,752) (1,160,613) (9,087,421) -------- --------- --------- ------------ ----------- ----------- ----------- Net realized gain on investments.................... 1,269 6,284 4,933 0 746,120 342,745 2,836,432 Net increase (decrease) in unrealized appreciation of investments.................... 3,027 56,115 9,241 0 984,236 568,217 3,108,829 -------- --------- --------- ------------ ----------- ----------- ----------- Net realized and unrealized gain (loss) on investments.......... 4,296 62,399 14,174 0 1,730,356 910,962 5,945,261 -------- --------- --------- ------------ ----------- ----------- ----------- Net increase in net assets resulting from operations...... $ 9,383 $ 98,941 $ 25,234 $ 115,801 $ 2,197,901 $ 1,571,409 $ 8,346,050 ======== ========= ========= ============ =========== =========== =========== VARIABLE UNIVERSAL LIFE -------------------------- INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT ------------- ---------- Dividend income.................. 1$20,361.... $ 121,077 Mortality and expense risk charges (Note 3)............... (21,528) (9,887) ---------- --------- Net investment income............ 98,833 111,190 ---------- --------- Realized and unrealized gain on investments (Note 2): Proceeds from sales............ 1,007,459 636,523 Cost of shares sold............ (871,948) (600,592) ---------- --------- Net realized gain on investments.................... 135,511 35,931 Net increase (decrease) in unrealized appreciation of investments.................... (204,105) 12,532 ---------- --------- Net realized and unrealized gain (loss) on investments.......... (68,594) 48,463 ---------- --------- Net increase in net assets resulting from operations...... 3$0,239..... $ 159,653 ========== =========
See notes to financial statements. F-6 59 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31,
VARIABLE LIFE -------------------------------------------------------------------------------------- EQUITY GROWTH EQUITY INCOME INTERMEDIATE TERM LONG TERM SUBACCOUNT SUBACCOUNT BOND SUBACCOUNT BOND SUBACCOUNT ------------------- -------------------- ------------------- ------------------- 1997 1996 1997 1996 1997 1996 1997 1996 -------- -------- --------- -------- -------- -------- -------- -------- From operations: Net investment income (loss)........... $ 53,040 $ (3,666) $ 76,627 $ (2,649) $ 9,374 $ (1,063) $ 5,147 $ (582) Net realized gain on investments....... 33,607 22,971 84,704 35,481 1,672 665 3,780 1,989 Net increase (decrease) in unrealized appreciation of investments.......... 101,936 92,373 32,332 80,163 288 5,698 649 (2,681) -------- -------- --------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations.............. 188,583 111,678 193,663 112,995 11,334 5,300 9,576 (1,274) -------- -------- --------- -------- -------- -------- -------- -------- From unit transactions: Net proceeds from the issuance of units................................ 35,646 46,370 39,172 38,780 8,194 12,039 4,547 5,926 Net asset value of units redeemed or used to meet contract obligations.... (59,621) (75,563) (193,625) (90,508) (40,032) (23,076) (37,821) (15,517) -------- -------- --------- -------- -------- -------- -------- -------- Net decrease from unit transactions...... (23,975) (29,193) (154,453) (51,728) (31,838) (11,037) (33,274) (9,591) -------- -------- --------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets.... 164,608 82,485 39,210 61,267 (20,504) (5,737) (23,698) (10,865) Net assets beginning of year............. 633,526 551,041 666,450 605,183 177,041 182,778 95,253 106,118 -------- -------- --------- -------- -------- -------- -------- -------- Net assets end of year*.................. $798,134 $633,526 $ 705,660 $666,450 $156,537 $177,041 $ 71,555 $ 95,253 ======== ======== ========= ======== ======== ======== ======== ======== Units outstanding beginning of year...... 14,958 15,643 15,149 16,377 8,041 8,556 3,504 3,869 Units issued during the year............. 747 1,232 783 1,004 362 562 165 226 Units redeemed during the year........... (1,199) (1,917) (3,640) (2,232) (1,764) (1,077) (1,335) (591) -------- -------- --------- -------- -------- -------- -------- -------- Units outstanding end of year............ 14,506 14,958 12,292 15,149 6,639 8,041 2,334 3,504 ======== ======== ========= ======== ======== ======== ======== ======== - --------------- * Includes undistributed net investment income of: $168,021 $114,981 $ 327,758 $251,131 $163,834 $154,460 $100,095 $ 94,948 VARIABLE LIFE --------------------------------------------- DIVERSIFIED MONEY MARKET SUBACCOUNT SUBACCOUNT ----------------------- ------------------- 1997 1996 1997 1996 ---------- ---------- -------- -------- From operations: Net investment income (loss)........... $ 77,745 $ (6,210) $ 3,689 $ 3,835 Net realized gain on investments....... 100,092 29,580 0 0 Net increase (decrease) in unrealized appreciation of investments.......... 59,772 110,202 0 0 ---------- ---------- -------- -------- Net increase (decrease) in net assets resulting from operations.............. 237,609 133,572 3,689 3,835 ---------- ---------- -------- -------- From unit transactions: Net proceeds from the issuance of units................................ 77,730 85,626 6,471 9,558 Net asset value of units redeemed or used to meet contract obligations.... (287,917) (124,946) (19,886) (18,398) ---------- ---------- -------- -------- Net decrease from unit transactions...... (210,187) (39,320) (13,415) (8,840) ---------- ---------- -------- -------- Net increase (decrease) in net assets.... 27,422 94,252 (9,726) (5,005) Net assets beginning of year............. 1,083,741 989,489 85,289 90,294 ---------- ---------- -------- -------- Net assets end of year*.................. $1,111,163 $1,083,741 $ 75,563 $ 85,289 ========== ========== ======== ======== Units outstanding beginning of year...... 34,279 35,607 4,970 5,499 Units issued during the year............. 2,219 2,942 368 570 Units redeemed during the year........... (8,207) (4,270) (1,131) (1,099) ---------- ---------- -------- -------- Units outstanding end of year............ 28,291 34,279 4,207 4,970 ========== ========== ======== ======== - --------------- * Includes undistributed net investment income of: $ 533,506 $ 455,761 $ 77,176 $ 73,487
See notes to financial statements. F-7 60 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31,
VARIABLE UNIVERSAL LIFE ----------------------------------------------------------------------------------------------- INTERMEDIATE TERM LONG TERM GOVERNMENT MONEY BOND BOND SECURITIES MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- -------------------- -------------------- --------------------------- 1997 1996 1997 1996 1997 1996 1997 1996 -------- -------- --------- -------- --------- -------- ------------ ------------ From operations: Net investment income (loss)...................... $ 5,087 $ (404) $ 36,542 $ (3,193) $ 11,060 $ (1,630) $ 115,801 $ 86,414 Net realized gain (loss) on investments................. 1,269 (715) 6,284 795 4,933 906 0 0 Net increase in unrealized appreciation of investments................. 3,027 3,148 56,115 13,609 9,241 7,805 0 0 -------- -------- --------- -------- --------- -------- ------------ ------------ Net increase in net assets resulting from operations..... 9,383 2,029 98,941 11,211 25,234 7,081 115,801 86,414 -------- -------- --------- -------- --------- -------- ------------ ------------ From unit transactions: Net proceeds from the issuance of units.................... 172,340 82,991 471,749 425,430 288,293 149,977 20,219,389 15,675,163 Net asset value of units redeemed or used to meet contract obligations........ (38,182) (20,916) (236,759) (91,922) (107,779) (35,779) (20,985,756) (13,113,154) -------- -------- --------- -------- --------- -------- ------------ ------------ Net increase (decrease) from unit transactions............. 134,158 62,075 234,990 333,508 180,514 114,198 (766,367) 2,562,009 -------- -------- --------- -------- --------- -------- ------------ ------------ Net increase (decrease) in net assets........................ 143,541 64,104 333,931 344,719 205,748 121,279 (650,566) 2,648,423 Net assets beginning of year.... 90,824 26,720 614,531 269,812 292,657 171,378 4,349,240 1,700,817 -------- -------- --------- -------- --------- -------- ------------ ------------ Net assets end of year*......... $234,365 $ 90,824 $ 948,462 $614,531 $ 498,405 $292,657 $ 3,698,674 $ 4,349,240 ======== ======== ========= ======== ========= ======== ============ ============ Units outstanding beginning of year.......................... 8,138 2,464 50,910 22,127 26,498 15,959 400,565 163,465 Units issued during the year.... 14,831 7,592 37,613 36,743 25,322 13,851 1,818,649 1,469,700 Units redeemed during the year.......................... (3,319) (1,918) (18,744) (7,960) (9,400) (3,312) (1,893,235) (1,232,600) -------- -------- --------- -------- --------- -------- ------------ ------------ Units outstanding end of year... 19,650 8,138 69,779 50,910 42,420 26,498 325,979 400,565 ======== ======== ========= ======== ========= ======== ============ ============ - --------------- * Includes undistributed net investment income of: $ 6,097 $ 1,010 $ 47,307 $ 10,765 $ 14,524 $ 3,464 $ 222,591 $ 106,790
See notes to financial statements. F-8 61 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31,
VARIABLE UNIVERSAL LIFE (CONTINUED) ------------------------------------------------------------------------------- EQUITY SMALL CAP MANAGED SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------ ------------------------ ------------------------- 1997 1996 1997 1996 1997 1996 ----------- ---------- ----------- ---------- ----------- ----------- From operations: Net investment income (loss)....... $ 467,545 $ 46,194 $ 660,447 $ 28,953 $ 2,400,789 $ 134,759 Net realized gain on investments... 746,120 174,857 342,745 30,574 2,836,432 783,666 Net increase (decrease) in unrealized appreciation of investments...................... 984,236 357,881 568,217 78,392 3,108,829 2,166,435 ----------- ---------- ----------- ---------- ----------- ----------- Net increase in net assets resulting from operations.................... 2,197,901 578,932 1,571,409 137,919 8,346,050 3,084,860 ----------- ---------- ----------- ---------- ----------- ----------- From unit transactions: Net proceeds from the issuance of units......................... 11,812,002 4,459,200 5,248,401 2,152,749 36,238,986 20,620,582 Net asset value of units redeemed or used to meet contract obligations...................... (2,656,849) (952,864) (1,072,152) (454,428) (9,726,108) (4,735,332) ----------- ---------- ----------- ---------- ----------- ----------- Net increase from unit transactions....................... 9,155,153 3,506,336 4,176,249 1,698,321 26,512,878 15,885,250 ----------- ---------- ----------- ---------- ----------- ----------- Net increase in net assets........... 11,353,054 4,085,268 5,747,658 1,836,240 34,858,928 18,970,110 Net assets beginning of year......... 5,129,744 1,044,476 2,437,067 600,827 25,210,073 6,239,963 ----------- ---------- ----------- ---------- ----------- ----------- Net assets end of year*.............. $16,482,798 $5,129,744 $ 8,184,725 $2,437,067 $60,069,001 $25,210,073 =========== ========== =========== ========== =========== =========== Units outstanding beginning of year............................... 319,002 80,766 191,743 52,194 1,532,486 465,095 Units issued during the year......... 647,931 303,412 326,703 176,984 1,945,611 1,382,408 Units redeemed during the year....... (145,843) (65,176) (69,043) (37,435) (523,427) (315,017) ----------- ---------- ----------- ---------- ----------- ----------- Units outstanding end of year........ 821,090 319,002 449,403 191,743 2,954,670 1,532,486 =========== ========== =========== ========== =========== =========== - --------------- * Includes undistributed net investment income of: $ 538,907 $ 71,362 $ 705,833 $ 45,386 $ 2,719,621 $ 318,832 VARIABLE UNIVERSAL LIFE (CONTINUED) ------------------------------------------------ INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT ----------------------- ---------------------- 1997 1996 1997 1996 ---------- ---------- ---------- --------- From operations: Net investment income (loss)....... $ 98,833 $ (1,058) $ 111,190 $ 42,346 Net realized gain on investments... 135,511 23,372 35,931 180 Net increase (decrease) in unrealized appreciation of investments...................... (204,105) 96,691 12,532 25,863 ---------- ---------- ---------- --------- Net increase in net assets resulting from operations.................... 30,239 119,005 159,653 68,389 ---------- ---------- ---------- --------- From unit transactions: Net proceeds from the issuance of units......................... 3,034,936 1,524,746 1,268,282 535,643 Net asset value of units redeemed or used to meet contract obligations...................... (717,365) (291,724) (319,664) (125,293) ---------- ---------- ---------- --------- Net increase from unit transactions....................... 2,317,571 1,233,022 948,618 410,350 ---------- ---------- ---------- --------- Net increase in net assets........... 2,347,810 1,352,027 1,108,271 478,739 Net assets beginning of year......... 1,731,444 379,417 831,448 352,709 ---------- ---------- ---------- --------- Net assets end of year*.............. $4,079,254 $1,731,444 $1,939,719 $ 831,448 ========== ========== ========== ========= Units outstanding beginning of year............................... 128,820 31,566 66,709 31,730 Units issued during the year......... 211,751 120,205 95,695 45,756 Units redeemed during the year....... (50,105) (22,951) (24,129) (10,777) ---------- ---------- ---------- --------- Units outstanding end of year........ 290,466 128,820 138,275 66,709 ========== ========== ========== ========= - --------------- * Includes undistributed net investment income of: $ 115,713 $ 16,880 $ 160,937 $ 49,747
See notes to financial statements. F-9 62 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND BUSINESS MONY America Variable Account L (the "Variable Account") is a separate investment account established on February 19, 1985 by MONY Life Insurance Company of America ("MONY America"), under the laws of the State of Arizona. The Variable Account operates as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). The Variable Account holds assets that are segregated from all of MONY America's other assets and, at present, is used to support Flexible Premium Variable Life Insurance policies, which include Variable Life Insurance (Strategist), Variable Universal Life (MONYEquity Master) and Corporate Sponsored Variable Life Insurance policies. These policies are issued by MONY America, which is a wholly-owned subsidiary of The Mutual Life Insurance Company of New York ("MONY"). For presentation purposes, the information related to the Variable Life and Variable Universal Life Insurance policies are presented here. There are currently six Variable Life Subaccounts and nine Variable Universal Life Subaccounts within the Variable Account, each invests only in a corresponding portfolio of the MONY Series Fund, Inc. (the "Fund") or the Enterprise Accumulation Trust ("Enterprise") (collectively, the "Funds"). The subaccounts of the Variable Universal Life commenced operations during 1995. The Funds are registered under the 1940 Act as open end, diversified, management investment companies. A full presentation of the related financial statements and footnotes of the Fund and Enterprise are contained on pages 68 to 102 and 105 to 142, respectively, and should be read in conjunction with these financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES Investment: The investment in shares of each of the respective portfolios is stated at value which is the net asset values of the Funds. Except for the Money Market Portfolios, net asset values are based upon market quotations of the securities held in each of the corresponding portfolios of the Funds. For the Money Market Portfolios, the net asset values are based on amortized cost of the securities held which approximates value. Taxes: MONY America is currently taxed as a life insurance company and will include the Variable Account's operations in its tax return. MONY America does not expect, based on current tax law, to incur any income tax burden upon the earnings or realized capital gains attributable to the Variable Account. Based on this expectation, no charges are currently being deducted from the Variable Account for federal income tax purposes. 3. RELATED PARTY TRANSACTIONS MONY America is the legal owner of the assets held by the Variable Account. Policy premiums received from MONY America by the Variable Account represent gross policy premiums recorded by MONY America less deductions retained as compensation for certain sales distribution expenses and premium taxes. The cost of insurance, administration charges, and, if applicable, the cost of any optional benefits added by riders are deducted on each monthly date from the cash value of the contract to compensate MONY America. These deductions are treated as contractholder redemptions by the Variable Account. The amount deducted for the Variable Life and Variable Universal Subaccounts for 1997 aggregated $10,793,622. MONY America receives from the Variable Account the amounts deducted for mortality and expense risks at an annual rate of .60 percent (for the Variable Life Subaccounts) and .75 percent (for the Variable F-10 63 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. RELATED PARTY TRANSACTIONS (CONTINUED) Universal Life Subaccounts) of aggregate average daily net assets. As investment adviser to the Fund, it receives amounts paid by the Fund for those services. Enterprise Capital Management, Inc., a wholly-owned subsidiary of MONY, acts as investment adviser to Enterprise, and it receives amounts paid by Enterprise for those services. 4. INVESTMENTS Investments in Variable Life at cost, at December 31, 1997 consist of the following:
MONY SERIES FUND, INC. -------------------------------------------------------------------------- EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- ------------ --------- ----------- --------- Shares beginning of year: Shares....................... 20,860 28,432 16,153 7,418 60,241 85,289 Amount....................... $483,575 $ 480,537 $168,956 $ 87,403 $ 838,945 $ 85,289 -------- --------- -------- -------- --------- -------- Shares acquired: Shares....................... 1,812 1,865 2,121 395 4,933 18,415 Amount....................... $ 59,559 $ 47,176 $ 22,875 $ 5,012 $ 94,559 $ 18,415 Shares received for reinvestment of dividends: Shares....................... 2,038 3,766 1,007 483 5,055 4,176 Amount....................... $ 57,504 $ 80,960 $ 10,378 $ 5,654 $ 84,416 $ 4,176 Shares redeemed: Shares....................... (2,589) (8,024) (5,204) (3,051) (16,315) (32,317) Amount....................... $(54,391) $(121,259) $(54,045) $(35,014) $(211,325) $(32,317) -------- --------- -------- -------- --------- -------- Net change: Shares....................... 1,261 (2,393) (2,076) (2,173) (6,327) (9,726) Amount....................... $ 62,672 $ 6,877 $(20,792) $(24,348) $ (32,350) $ (9,726) -------- --------- -------- -------- --------- -------- Shares end of year: Shares....................... 22,121 26,039 14,077 5,245 53,914 75,563 Amount....................... $546,247 $ 487,414 $148,164 $ 63,055 $ 806,595 $ 75,563 ======== ========= ======== ======== ========= ========
F-11 64 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. INVESTMENTS (CONTINUED) Investments in Variable Universal Life at cost, at December 31, 1997 consist of the following:
MONY SERIES FUND, INC. ---------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ --------- ---------- ------------ Shares beginning of year: Shares............. 8,287 47,861 27,661 4,349,240 Amount............. $ 88,592 $ 592,645 $ 285,560 $ 4,349,240 -------- --------- --------- ------------ Shares acquired: Shares............. 17,072 40,961 30,184 23,927,159 Amount............. $185,860 $ 521,268 $ 320,872 $ 23,927,159 Shares received for reinvestment of dividends: Shares............. 591 3,615 1,373 135,531 Amount............. $ 6,095 $ 42,293 $ 14,009 $ 135,531 Shares redeemed: Shares............. (4,874) (22,902) (13,451) (24,713,256) Amount............. $(51,442) $(285,745) $(138,374) $(24,713,256) -------- --------- --------- ------------ Net change: Shares............. 12,789 21,674 18,106 (650,566) Amount............. $140,513 $ 277,816 $ 196,507 $ (650,566) -------- --------- --------- ------------ Shares end of year: Shares............. 21,076 69,535 45,767 3,698,674 Amount............. $229,105 $ 870,461 $ 482,067 $ 3,698,674 ======== ========= ========= ============ ENTERPRISE ACCUMULATION TRUST -------------------------------------------------------------------- HIGH INTERNATIONAL YIELD EQUITY SMALL CAP MANAGED GROWTH BOND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ----------- ----------- ----------- ------------- ---------- Shares beginning of year: Shares............. 177,746 120,528 734,773 286,189 150,898 Amount............. $ 4,748,651 $ 2,362,738 $22,951,520 $1,634,862 $ 805,224 ----------- ----------- ----------- ---------- ---------- Shares acquired: Shares............. 377,731 219,786 977,516 509,835 284,392 Amount............. $12,405,871 $ 5,645,121 $38,118,419 $3,303,502 $1,575,254 Shares received for reinvestment of dividends: Shares............. 15,523 26,027 66,677 19,476 17,799 Amount............. $ 544,698 $ 694,933 $ 2,719,101 $ 120,361 $ 121,077 Shares redeemed: Shares............. (101,270) (59,797) (305,965) (155,426) (113,383) Amount............. $(2,581,752) $(1,160,613) $(9,087,421) $ (871,948) $ (600,592) ----------- ----------- ----------- ---------- ---------- Net change: Shares............. 291,984 186,016 738,228 373,885 188,808 Amount............. $10,368,817 $ 5,179,441 $31,750,099 $2,551,915 $1,095,739 ----------- ----------- ----------- ---------- ---------- Shares end of year: Shares............. 469,730 306,544 1,473,001 660,074 339,706 Amount............. $15,117,468 $ 7,542,179 $54,701,619 $4,186,777 $1,900,963 =========== =========== =========== ========== ==========
F-12 65 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of MONY Life Insurance Company of America and the Contractholders of MONY America Variable Account L: We have audited the accompanying statements of assets and liabilities of MONY America Variable Account L (comprising, respectively, the Variable Life's Equity Growth, Equity Income, Intermediate Term Bond, Long Term Bond, Diversified and Money Market Subaccounts and the Variable Universal Life's Intermediate Term Bond, Long Term Bond, Government Securities, Money Market, Equity, Small Cap, Managed, International Growth and High Yield Bond Subaccounts) as of December 31, 1996, for the Variable Life's Subaccounts, the related statements of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended, and for the Variable Universal Life's Subaccounts, the related statements of operations for the year then ended and the statements of changes in net assets for the year ended December 31, 1996 and for the Intermediate Term Bond Subaccount for which the period is from April 20, 1995 (commencement of operations) to December 31, 1995, the Long Term Bond Subaccount for which the period is from March 31, 1995 (commencement of operations) to December 31, 1995, the Government Securities and High Yield Bond Subaccounts for which the period is from March 20, 1995 (commencement of operations) to December 31, 1995, the Money Market Subaccount for which the period is from February 17, 1995 (commencement of operations) to December 31, 1995, the Equity, Managed and International Growth Subaccounts for which the period is from March 8, 1995 (commencement of operations) to December 31, 1995, and the Small Cap Subaccount for which the period is from March 9, 1995 (commencement of operations) to December 31, 1995. These financial statements are the responsibility of MONY America's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1996, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting MONY America Variable Account L as of December 31, 1996, the results of their operations for the year then ended, and the changes in their net assets for each of the periods referred to above, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. New York, New York February 14, 1997 F-13 66 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- ASSETS Investments at cost (Note 4)..... $ 483,575 $ 480,536 $ 168,956 $ 87,402 $ 838,945 $ 85,289 ========= ========= ========= ========= ========== ========= Investments in MONY Series Fund, Inc. at net asset value (Note 2)............................. $ 633,526 $ 666,450 $ 177,041 $ 95,253 $1,083,741 $ 85,289 Amount due from MONY America..... 5 5 0 0 0 0 Amount due from MONY Series Fund, Inc. .......................... 9 9 0 0 26 0 --------- --------- --------- --------- ---------- --------- Total assets........... 633,540 666,464 177,041 95,253 1,083,767 85,289 --------- --------- --------- --------- ---------- --------- LIABILITIES Amount due to MONY America....... 9 9 0 0 26 0 Amount due to MONY Series Fund, Inc. .......................... 5 5 0 0 0 0 --------- --------- --------- --------- ---------- --------- Total liabilities...... 14 14 0 0 26 0 --------- --------- --------- --------- ---------- --------- Net assets....................... $ 633,526 $ 666,450 $ 177,041 $ 95,253 $1,083,741 $ 85,289 ========= ========= ========= ========= ========== ========= Net assets consist of: Contractholders' net payments.................. $ 530,611 $ 564,123 $ 211,304 $ 127,727 $1,079,623 $ 198,280 Cost of insurance withdrawals (Note 3)...... (352,711) (451,201) (189,141) (142,302) (852,538) (186,478) Undistributed net investment income.................... 114,981 251,131 154,460 94,948 455,761 73,487 Accumulated net realized gain (loss) on investments............... 190,694 116,483 (7,667) 7,029 156,099 0 Unrealized appreciation of investments............... 149,951 185,914 8,085 7,851 244,796 0 --------- --------- --------- --------- ---------- --------- Net assets....................... $ 633,526 $ 666,450 $ 177,041 $ 95,253 $1,083,741 $ 85,289 ========= ========= ========= ========= ========== ========= Number of units outstanding*..... 14,958 15,149 8,041 3,504 34,279 4,970 --------- --------- --------- --------- ---------- --------- Net asset value per unit outstanding*................... $ 42.35 $ 43.99 $ 22.02 $ 27.18 $ 31.62 $ 17.16 ========= ========= ========= ========= ========== =========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-14 67 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) DECEMBER 31, 1996
VARIABLE UNIVERSAL LIFE ------------------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP MANAGED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ---------- ---------- ---------- ----------- ASSETS Investments at cost (Note 4)....... $ 88,591 $592,645 $285,560 $4,349,240 $4,748,650 $2,362,738 $22,951,520 ======== ======== ======== ========== ========== ========== =========== Investments in Enterprise Accumulation Trust at net asset value (Note 2)................... $ 0 $ 0 $ 0 $ 0 $5,129,744 $2,437,067 $25,210,073 Investments in MONY Series Fund, Inc. at net asset value (Note 2)............................... 90,824 614,531 292,657 4,349,240 0 0 0 Amount due from Enterprise Accumulation Trust............... 0 0 0 0 1,772 1,113 5,270 Amount due from MONY America....... 33 123 85 8,194 2,031 583 30,697 Amount due from MONY Series Fund, Inc.............................. 10 0 26 113,916 0 0 0 -------- -------- -------- ---------- ---------- ---------- ----------- Total assets............... 90,867 614,654 292,768 4,471,350 5,133,547 2,438,763 25,246,040 -------- -------- -------- ---------- ---------- ---------- ----------- LIABILITIES Amount due to Enterprise Accumulation Trust............... 0 0 0 0 2,031 583 30,697 Amount due to MONY America......... 10 0 26 113,916 1,772 1,113 5,270 Amount due to MONY Series Fund, Inc.............................. 33 123 85 8,194 0 0 0 -------- -------- -------- ---------- ---------- ---------- ----------- Total liabilities.......... 43 123 111 122,110 3,803 1,696 35,967 -------- -------- -------- ---------- ---------- ---------- ----------- Net assets......................... $ 90,824 $614,531 $292,657 $4,349,240 $5,129,744 $2,437,067 $25,210,073 ======== ======== ======== ========== ========== ========== =========== Net assets consist of: Contractholders' net payments..................... $106,061 $656,214 $317,161 $4,461,789 $5,366,348 $2,733,551 $25,623,125 Cost of insurance withdrawals (Note 3)..................... (18,139) (76,295) (36,104) (219,339) (887,308) (456,533) (3,897,375) Undistributed net investment income....................... 1,010 10,765 3,464 106,790 71,362 45,386 318,832 Accumulated net realized gain (loss) on investments........ (341) 1,961 1,039 0 198,248 40,334 906,938 Unrealized appreciation of investments.................. 2,233 21,886 7,097 0 381,094 74,329 2,258,553 -------- -------- -------- ---------- ---------- ---------- ----------- Net assets......................... $ 90,824 $614,531 $292,657 $4,349,240 $5,129,744 $2,437,067 $25,210,073 ======== ======== ======== ========== ========== ========== =========== Number of units outstanding*....... 8,138 50,910 26,498 400,565 319,002 191,743 1,532,486 -------- -------- -------- ---------- ---------- ---------- ----------- Net asset value per unit outstanding*..................... $ 11.16 $ 12.07 $ 11.04 $ 10.86 $ 16.08 $ 12.71 $ 16.45 ======== ======== ======== ========== ========== ========== =========== VARIABLE UNIVERSAL LIFE -------------------------- INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT ------------- ---------- ASSETS Investments at cost (Note 4)....... $1,634,862 $ 805,224 ========== ========= Investments in Enterprise Accumulation Trust at net asset value (Note 2)................... $1,731,444 $ 831,448 Investments in MONY Series Fund, Inc. at net asset value (Note 2)............................... 0 0 Amount due from Enterprise Accumulation Trust............... 338 154 Amount due from MONY America....... 323 113 Amount due from MONY Series Fund, Inc.............................. 0 0 ---------- --------- Total assets............... 1,732,105 831,715 ---------- --------- LIABILITIES Amount due to Enterprise Accumulation Trust............... 323 113 Amount due to MONY America......... 338 154 Amount due to MONY Series Fund, Inc.............................. 0 0 ---------- --------- Total liabilities.......... 661 267 ---------- --------- Net assets......................... $1,731,444 $ 831,448 ========== ========= Net assets consist of: Contractholders' net payments..................... $1,864,972 $ 885,885 Cost of insurance withdrawals (Note 3)..................... (276,528) (130,778) Undistributed net investment income....................... 16,880 49,747 Accumulated net realized gain (loss) on investments........ 29,538 370 Unrealized appreciation of investments.................. 96,582 26,224 ---------- --------- Net assets......................... $1,731,444 $ 831,448 ========== ========= Number of units outstanding*....... 128,820 66,709 ---------- --------- Net asset value per unit outstanding*..................... $ 13.44 $ 12.46 ========== =========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-15 68 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- Dividend income..................... $ 0 $ 1,204 $ 0 $ 0 $ 0 $ 4,359 Mortality and expense risk charges (Note 3).......................... 3,666 3,853 1,063 582 6,210 524 -------- -------- ------- ------- -------- ------- Net investment income (loss)........ (3,666) (2,649) (1,063) (582) (6,210) 3,835 -------- -------- ------- ------- -------- ------- Realized and unrealized gain on investments (Note 2): Proceeds from sales............... 93,619 102,327 28,266 17,665 140,885 22,914 Cost of shares sold............... 70,648 66,846 27,601 15,676 111,305 22,914 -------- -------- ------- ------- -------- ------- Net realized gain on investments.... 22,971 35,481 665 1,989 29,580 0 Net increase (decrease) in unrealized appreciation of investments....................... 92,373 80,163 5,698 (2,681) 110,202 0 -------- -------- ------- ------- -------- ------- Net realized and unrealized gain (loss) on investments............. 115,344 115,644 6,363 (692) 139,782 0 -------- -------- ------- ------- -------- ------- Net increase (decrease) in net assets resulting from operations........................ $111,678 $112,995 $ 5,300 $(1,274) $133,572 $ 3,835 ======== ======== ======= ======= ======== =======
See notes to financial statements. F-16 69 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1996
VARIABLE UNIVERSAL LIFE ------------------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP MANAGED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ----------- ---------- ---------- ---------- Dividend income............... $ 0 $ 0 $ 0 $ 101,677 $ 66,222 $ 39,244 $ 243,882 Mortality and expense risk charges (Note 3)............ 404 3,193 1,630 15,263 20,028 10,291 109,123 ------- -------- ------- ----------- ---------- -------- ---------- Net investment income (loss)...................... (404) (3,193) (1,630) 86,414 46,194 28,953 134,759 ------- -------- ------- ----------- ---------- -------- ---------- Realized and unrealized gain (loss) on investments (Note 2): Proceeds from sales......... 38,393 159,811 53,965 15,827,331 1,265,465 634,803 6,072,015 Cost of shares sold......... 39,108 159,016 53,059 15,827,331 1,090,608 604,229 5,288,349 ------- -------- ------- ----------- ---------- -------- ---------- Net realized gain (loss) on investments................. (715) 795 906 0 174,857 30,574 783,666 Net increase in unrealized appreciation of investments................. 3,148 13,609 7,805 0 357,881 78,392 2,166,435 ------- -------- ------- ----------- ---------- -------- ---------- Net realized and unrealized gain on investments......... 2,433 14,404 8,711 0 532,738 108,966 2,950,101 ------- -------- ------- ----------- ---------- -------- ---------- Net increase in net assets resulting from operations... $ 2,029 $ 11,211 $ 7,081 $ 86,414 $ 578,932 $137,919 $3,084,860 ======= ======== ======= =========== ========== ======== ========== VARIABLE UNIVERSAL LIFE -------------------------- INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT ------------- ---------- Dividend income............... $ 6,221 $ 46,366 Mortality and expense risk charges (Note 3)............ 7,279 4,020 -------- -------- Net investment income (loss)...................... (1,058) 42,346 -------- -------- Realized and unrealized gain (loss) on investments (Note 2): Proceeds from sales......... 432,562 387,912 Cost of shares sold......... 409,190 387,732 -------- -------- Net realized gain (loss) on investments................. 23,372 180 Net increase in unrealized appreciation of investments................. 96,691 25,863 -------- -------- Net realized and unrealized gain on investments......... 120,063 26,043 -------- -------- Net increase in net assets resulting from operations... $119,005 $ 68,389 ======== ========
See notes to financial statements. F-17 70 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31,
VARIABLE LIFE ------------------------------------------------------------------------------------- EQUITY GROWTH EQUITY INCOME INTERMEDIATE TERM LONG TERM SUBACCOUNT SUBACCOUNT BOND SUBACCOUNT BOND SUBACCOUNT ------------------- ------------------- ------------------- ------------------- 1996 1995 1996 1995 1996 1995 1996 1995 -------- -------- -------- -------- -------- -------- -------- -------- From operations: Net investment income (loss)...... $ (3,666) $ 33,459 $ (2,649) $ 27,822 $ (1,063) $ 9,165 $ (582) $ 5,101 Net realized gain on investments..................... 22,971 30,308 35,481 39,090 665 2,059 1,989 5,208 Net increase (decrease) in unrealized appreciation of investments..................... 92,373 57,362 80,163 88,922 5,698 11,732 (2,681) 16,634 -------- -------- -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations.. 111,678 121,129 112,995 155,834 5,300 22,956 (1,274) 26,943 -------- -------- -------- -------- -------- -------- -------- -------- From unit transactions: Net proceeds from the issuance of units........................... 46,370 246,538 38,780 56,024 12,039 13,113 5,926 7,195 Net asset value of units redeemed or used to meet contract obligations..................... (75,563) (164,237) (90,508) (132,231) (23,076) (23,804) (15,517) (29,360) -------- -------- -------- -------- -------- -------- -------- -------- Net increase (decrease) from unit transactions...................... (29,193) 82,301 (51,728) (76,207) (11,037) (10,691) (9,591) (22,165) -------- -------- -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets............................ 82,485 203,430 61,267 79,627 (5,737) 12,265 (10,865) 4,778 Net assets beginning of year....... 551,041 347,611 605,183 525,556 182,778 170,513 106,118 101,340 -------- -------- -------- -------- -------- -------- -------- -------- Net assets end of year*............ $633,526 $551,041 $666,450 $605,183 $177,041 $182,778 $ 95,253 $106,118 ======== ======== ======== ======== ======== ======== ======== ======== Units outstanding beginning of year.............................. 15,643 12,809 16,377 18,826 8,556 9,112 3,869 4,777 Units issued during the year....... 1,232 8,221 1,004 1,763 562 652 226 296 Units redeemed during the year..... (1,917) (5,387) (2,232) (4,212) (1,077) (1,208) (591) (1,204) -------- -------- -------- -------- -------- -------- -------- -------- Units outstanding end of year...... 14,958 15,643 15,149 16,377 8,041 8,556 3,504 3,869 ======== ======== ======== ======== ======== ======== ======== ======== - --------------- *Includes undistributed net investment income of: $114,981 $118,647 $251,131 $253,780 $154,460 $155,523 $ 94,948 $ 95,530 DIVERSIFIED MONEY MARKET SUBACCOUNT SUBACCOUNT --------------------- ------------------- 1996 1995 1996 1995 ---------- -------- -------- -------- From operations: Net investment income (loss)...... $ (6,210) $ 46,804 $ 3,835 $ 5,662 Net realized gain on investments..................... 29,580 35,442 0 0 Net increase (decrease) in unrealized appreciation of investments..................... 110,202 125,651 0 0 ---------- -------- ------- -------- Net increase (decrease) in net assets resulting from operations.. 133,572 207,897 3,835 5,662 ---------- -------- ------- -------- From unit transactions: Net proceeds from the issuance of units........................... 85,626 90,610 9,558 137,395 Net asset value of units redeemed or used to meet contract obligations..................... (124,946) (145,580) (18,398) (235,050) ---------- -------- ------- -------- Net increase (decrease) from unit transactions...................... (39,320) (54,970) (8,840) (97,655) ---------- -------- ------- -------- Net increase (decrease) in net assets............................ 94,252 152,927 (5,005) (91,993) Net assets beginning of year....... 989,489 836,562 90,294 182,287 ---------- -------- ------- -------- Net assets end of year*............ $1,083,741 $989,489 $85,289 $ 90,294 ========== ======== ======= ======== Units outstanding beginning of year.............................. 35,607 37,807 5,499 11,659 Units issued during the year....... 2,942 3,647 570 8,586 Units redeemed during the year..... (4,270) (5,847) (1,099) (14,746) ---------- -------- ------- -------- Units outstanding end of year...... 34,279 35,607 4,970 5,499 ========== ======== ======= ======== - --------------- *Includes undistributed net investment income of: $ 455,761 $461,971 $73,487 $ 69,652
See notes to financial statements. F-18 71 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
VARIABLE UNIVERSAL LIFE -------------------------------------------------------------------------------- INTERMEDIATE TERM LONG TERM GOVERNMENT BOND BOND SECURITIES SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------------------- ------------------------------- ------------ FOR THE PERIOD FOR THE PERIOD FOR THE YEAR APRIL 20, 1995** FOR THE YEAR MARCH 31, 1995** FOR THE YEAR ENDED THROUGH ENDED THROUGH ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1996 1995 1996 1995 1996 ------------ ---------------- ------------ ---------------- ------------ From operations: Net investment income (loss)..... $ (404) $ 1,414 $ (3,193) $ 13,958 $ (1,630) Net realized gain (loss) on investments.................... (715) 374 795 1,166 906 Net increase (decrease) in unrealized appreciation of investments.................... 3,148 (915) 13,609 8,277 7,805 ------- ------- -------- -------- -------- Net increase in net assets resulting from operations........ 2,029 873 11,211 23,401 7,081 ------- ------- -------- -------- -------- From unit transactions: Net proceeds from the issuance of units.......................... 82,991 29,827 425,430 254,605 149,977 Net asset value of units redeemed or used to meet contract obligations.................... (20,916) (3,980) (91,922) (8,194) (35,779) ------- ------- -------- -------- -------- Net increase from unit transactions..................... 62,075 25,847 333,508 246,411 114,198 ------- ------- -------- -------- -------- Net increase in net assets......... 64,104 26,720 344,719 269,812 121,279 Net assets beginning of period..... 26,720 0 269,812 0 171,378 ------- ------- -------- -------- -------- Net assets end of period*.......... $90,824 $26,720 $614,531 $269,812 $292,657 ======= ======= ======== ======== ======== Units outstanding beginning of period........................... 2,464 0 22,127 0 15,959 Units issued during the period..... 7,592 2,838 36,743 22,925 13,851 Units redeemed during the period... (1,918) (374) (7,960) (798) (3,312) ------- ------- -------- -------- -------- Units outstanding end of period.... 8,138 2,464 50,910 22,127 26,498 ======= ======= ======== ======== ======== - --------------- *Includes undistributed net investment income of: $ 1,010 $ 1,414 $ 10,765 $ 13,958 $ 3,464 **Commencement of operations. VARIABLE UNIVERSAL LIFE ----------------------------------------------------- GOVERNMENT MONEY SECURITIES MARKET SUBACCOUNT SUBACCOUNT ---------------- ---------------------------------- FOR THE PERIOD FOR THE PERIOD MARCH 20, 1995** FOR THE YEAR FEBRUARY 17, 1995** THROUGH ENDED THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, 1995 1996 1995 ---------------- ------------ ------------------- From operations: Net investment income (loss)..... $ 5,094 $ 86,414 $ 20,376 Net realized gain (loss) on investments.................... 133 0 0 Net increase (decrease) in unrealized appreciation of investments.................... (708) 0 0 -------- ------------ ----------- Net increase in net assets resulting from operations........ 4,519 86,414 20,376 -------- ------------ ----------- From unit transactions: Net proceeds from the issuance of units.......................... 171,901 15,675,163 8,289,772 Net asset value of units redeemed or used to meet contract obligations.................... (5,042) (13,113,154) (6,609,331) -------- ------------ ----------- Net increase from unit transactions..................... 166,859 2,562,009 1,680,441 -------- ------------ ----------- Net increase in net assets......... 171,378 2,648,423 1,700,817 Net assets beginning of period..... 0 1,700,817 0 -------- ------------ ----------- Net assets end of period*.......... $171,378 $ 4,349,240 $ 1,700,817 ======== ============ =========== Units outstanding beginning of period........................... 0 163,465 0 Units issued during the period..... 16,439 1,469,700 807,565 Units redeemed during the period... (480) (1,232,600) (644,100) -------- ------------ ----------- Units outstanding end of period.... 15,959 400,565 163,465 ======== ============ =========== - --------------- *Includes undistributed net investment income of: $ 5,094 $ 106,790 $ 20,376 **Commencement of operations.
See notes to financial statements. F-19 72 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
VARIABLE UNIVERSAL LIFE (CONTINUED) ------------------------------------------------------------------------------ MANAGED EQUITY SUBACCOUNT SMALL CAP SUBACCOUNT SUBACCOUNT ------------------------------ ------------------------------ ------------ FOR THE PERIOD FOR THE PERIOD FOR THE YEAR MARCH 8, 1995** FOR THE YEAR MARCH 9, 1995** FOR THE YEAR ENDED THROUGH ENDED THROUGH ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1996 1995 1996 1995 1996 ------------ --------------- ------------ --------------- ------------ From operations: Net investment income (loss)................ $ 46,194 $ 25,168 $ 28,953 $ 16,433 $ 134,759 Net realized gain on investments............ 174,857 23,391 30,574 9,760 783,666 Net increase (decrease) in unrealized appreciation of investments............... 357,881 23,213 78,392 (4,063) 2,166,435 ---------- ---------- ---------- -------- ----------- Net increase in net assets resulting from operations.................................. 578,932 71,772 137,919 22,130 3,084,860 ---------- ---------- ---------- -------- ----------- From unit transactions: Net proceeds from the issuance of units..... 4,459,200 1,073,215 2,152,749 662,265 20,620,582 Net asset value of units redeemed or used to meet contract obligations................. (952,864) (100,511) (454,428) (83,568) (4,735,332) ---------- ---------- ---------- -------- ----------- Net increase from unit transactions.......... 3,506,336 972,704 1,698,321 578,697 15,885,250 ---------- ---------- ---------- -------- ----------- Net increase in net assets................... 4,085,268 1,044,476 1,836,240 600,827 18,970,110 Net assets beginning of period............... 1,044,476 0 600,827 0 6,239,963 ---------- ---------- ---------- -------- ----------- Net assets end of period*.................... $5,129,744 $1,044,476 $2,437,067 $600,827 $25,210,073 ========== ========== ========== ======== =========== Units outstanding beginning of period........ 80,766 0 52,194 0 465,095 Units issued during the period............... 303,412 88,980 176,984 59,708 1,382,408 Units redeemed during the period............. (65,176) (8,214) (37,435) (7,514) (315,017) ---------- ---------- ---------- -------- ----------- Units outstanding end of period.............. 319,002 80,766 191,743 52,194 1,532,486 ========== ========== ========== ======== =========== - --------------- *Includes undistributed net investment income of:.................................. $ 71,362 $ 25,168 $ 45,386 $ 16,433 $ 318,832 **Commencement of operations. VARIABLE UNIVERSAL LIFE (CONTINUED) ---------------------------------------------------------------------------------- INTERNATIONAL HIGH YIELD MANAGED GROWTH BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------- ------------------------------ ------------------------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD MARCH 8, 1995** FOR THE YEAR MARCH 8, 1995** FOR THE YEAR MARCH 20, 1995** THROUGH ENDED THROUGH ENDED THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1995 1996 1995 1996 1995 --------------- ------------ --------------- ------------ ---------------- From operations: Net investment income (loss)................ $ 184,073 $ (1,058) $ 17,938 $ 42,346 $ 7,401 Net realized gain on investments............ 123,272 23,372 6,166 180 190 Net increase (decrease) in unrealized appreciation of investments............... 92,118 96,691 (109) 25,863 361 ---------- ---------- -------- -------- -------- Net increase in net assets resulting from operations.................................. 399,463 119,005 23,995 68,389 7,952 ---------- ---------- -------- -------- -------- From unit transactions: Net proceeds from the issuance of units..... 6,530,478 1,524,746 394,240 535,643 367,392 Net asset value of units redeemed or used to meet contract obligations................. (689,978) (291,724) (38,818) (125,293) (22,635) ---------- ---------- -------- -------- -------- Net increase from unit transactions.......... 5,840,500 1,233,022 355,422 410,350 344,757 ---------- ---------- -------- -------- -------- Net increase in net assets................... 6,239,963 1,352,027 379,417 478,739 352,709 Net assets beginning of period............... 0 379,417 0 352,709 0 ---------- ---------- -------- -------- -------- Net assets end of period*.................... $6,239,963 $1,731,444 $379,417 $831,448 $352,709 ========== ========== ======== ======== ======== Units outstanding beginning of period........ 0 31,566 0 31,730 0 Units issued during the period............... 519,384 120,205 34,979 45,756 33,810 Units redeemed during the period............. (54,289) (22,951) (3,413) (10,777) (2,080) ---------- ---------- -------- -------- -------- Units outstanding end of period.............. 465,095 128,820 31,566 66,709 31,730 ========== ========== ======== ======== ======== - --------------- *Includes undistributed net investment income of:.................................. $ 184,073 $ 16,880 $ 17,938 $ 49,747 $ 7,401 **Commencement of operations.
See notes to financial statements. F-20 73 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND BUSINESS MONY America Variable Account L (the "Variable Account") is a separate investment account established on February 19, 1985 by MONY Life Insurance Company of America ("MONY America"), under the laws of the State of Arizona. The Variable Account operates as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). The Variable Account holds assets that are segregated from all of MONY America's other assets and, at present, is used to support Variable Life Insurance and Variable Universal Life Insurance Policies. These policies are issued by MONY America, which is a wholly-owned subsidiary of The Mutual Life Insurance Company of New York ("MONY"). MONY America is currently taxed as a life insurance company and will include the Variable Account's operations in its tax return. MONY America does not expect, based on current tax law, to incur any income tax burden upon the earnings or realized capital gains attributable to the Variable Account. Based on this expectation, no charges are currently being deducted from the Variable Account for federal income tax purposes. There are currently fifteen subaccounts within the Variable Account, each invests only in a corresponding portfolio of the MONY Series Fund, Inc. (the "Fund") or the Enterprise Accumulation Trust ("Enterprise") (collectively, the "Funds"). The subaccounts of the Variable Universal Life commenced operations during 1995. The Funds are registered under the 1940 Act as open end, diversified, management investment companies. 2. SIGNIFICANT ACCOUNTING POLICIES Investment: The investment in shares of each of the respective portfolios is stated at value which is the net asset values of the Funds. Except for the Money Market Portfolios, net asset values are based upon market quotations of the securities held in each of the corresponding portfolios of the Funds. For the Money Market Portfolios, the net asset values are based on amortized cost of the securities held which approximates value. 3. RELATED PARTY TRANSACTIONS MONY America is the legal owner of the assets held by the Variable Account. Policy premiums received from MONY America by the Variable Account represent gross policy premiums recorded by MONY America less deductions retained as compensation for certain sales distribution expenses and premium taxes. The cost of insurance, administration charges, and, if applicable, the cost of any optional benefits added by riders are deducted on each monthly date from the cash value of the contract to compensate MONY America. These deductions are treated as contractholder redemptions by the Variable Account. The amount deducted for all subaccounts for 1996 aggregated $5,429,287. MONY America receives from the Variable Account the amounts deducted for mortality and expense risks at an annual rate of .60 percent (for the Variable Life Subaccounts) and .75 percent (for the Variable Universal Life Subaccounts) of aggregate average daily net assets. As investment adviser to the Fund, it receives amounts paid by the Fund for those services. Enterprise Capital Management, Inc., a wholly-owned subsidiary of MONY, acts as investment adviser to Enterprise, and it receives amounts paid by Enterprise for those services. F-21 74 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. INVESTMENTS Investments in Variable Life at cost, at December 31, 1996 consist of the following:
MONY SERIES FUND, INC. -------------------------------------------------------------------------- EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- ------------ --------- ----------- --------- Shares beginning of year: Shares........................ 21,945 30,861 17,293 8,239 62,944 90,294 Amount........................ $493,463 $499,432 $180,391 $ 95,586 $ 854,895 $ 90,294 -------- -------- -------- -------- --------- -------- Shares acquired: Shares........................ 2,219 2,202 1,526 607 5,732 13,550 Amount........................ $ 60,760 $ 46,746 $ 16,166 $ 7,492 $ 95,355 $ 13,550 Shares received for reinvestment of dividends: Shares........................ 0 58 0 0 0 4,359 Amount........................ $ 0 $ 1,204 $ 0 $ 0 $ 0 $ 4,359 Shares redeemed: Shares........................ (3,304) (4,689) (2,666) (1,428) (8,436) (22,914) Amount........................ $(70,648) $(66,846) $(27,601) $(15,676) $(111,305) $(22,914) -------- -------- -------- -------- --------- -------- Net change: Shares........................ (1,085) (2,429) (1,140) (821) (2,704) (5,005) Amount........................ $ (9,888) $(18,896) $(11,435) $ (8,184) $ (15,950) $ (5,005) -------- -------- -------- -------- --------- -------- Shares end of year: Shares........................ 20,860 28,432 16,153 7,418 60,240 85,289 Amount........................ $483,575 $480,536 $168,956 $ 87,402 $ 838,945 $ 85,289 ======== ======== ======== ======== ========= ========
F-22 75 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. INVESTMENTS (CONTINUED) Investments in Variable Universal Life at cost, at December 31, 1996 consist of the following:
MONY SERIES FUND, INC. ---------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ --------- ---------- ------------ Shares beginning of year: Shares............. 2,528 20,948 16,786 1,700,817 Amount............. $ 27,635 $ 261,535 $172,086 $ 1,700,817 -------- --------- -------- ------------ Shares acquired: Shares............. 9,370 39,960 16,103 18,374,077 Amount............. $100,064 $ 490,126 $166,533 $ 18,374,077 Shares received for reinvestment of dividends: Shares............. 0 0 0 101,677 Amount............. $ 0 $ 0 $ 0 $ 101,677 Shares redeemed: Shares............. (3,611) (13,047) (5,228) (15,827,331) Amount............. $(39,108) $(159,016) $(53,059) $(15,827,331) -------- --------- -------- ------------ Net change: Shares............. 5,759 26,913 10,875 2,648,423 Amount............. $ 60,956 $ 331,110 $113,474 $ 2,648,423 -------- --------- -------- ------------ Shares end of year: Shares............. 8,287 47,861 27,661 4,349,240 Amount............. $ 88,591 $ 592,645 $285,560 $ 4,349,240 ======== ========= ======== ============ ENTERPRISE ACCUMULATION TRUST ------------------------------------------------------------------ HIGH INTERNATIONAL YIELD EQUITY SMALL CAP MANAGED GROWTH BOND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ----------- ---------- ----------- ------------- --------- Shares beginning of year: Shares............. 44,731 32,512 222,380 70,393 66,424 Amount............. $ 1,021,263 $ 604,890 $ 6,147,845 $ 379,526 $ 352,348 ----------- ---------- ----------- ---------- --------- Shares acquired: Shares............. 178,410 118,551 697,438 290,568 95,894 Amount............. $ 4,751,773 $2,322,833 $21,848,142 $1,658,305 $ 794,242 Shares received for reinvestment of dividends: Shares............. 2,295 1,941 7,108 1,028 61,650 Amount............. $ 66,222 $ 39,244 $ 243,882 $ 6,221 $ 46,366 Shares redeemed: Shares............. (47,690) (32,477) (192,152) (75,800) (73,070) Amount............. $(1,090,608) $ (604,229) $(5,288,349) $ (409,190) $(387,732) ----------- ---------- ----------- ---------- --------- Net change: Shares............. 133,015 88,015 512,394 215,796 84,474 Amount............. $ 3,727,387 $1,757,848 $16,803,675 $1,255,336 $ 452,876 ----------- ---------- ----------- ---------- --------- Shares end of year: Shares............. 177,746 120,527 734,774 286,189 150,898 Amount............. $ 4,748,650 $2,362,738 $22,951,520 $1,634,862 $ 805,224 =========== ========== =========== ========== =========
F-23 76 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of MONY Life Insurance Company of America and the Contractholders of MONY America Variable Account L: We have audited the accompanying statements of assets and liabilities of MONY America Variable Account L (comprising, respectively, the Variable Life's Equity Growth, Equity Income, Intermediate Term Bond, Long Term Bond, Diversified and Money Market Subaccounts and the Variable Universal Life's Intermediate Term Bond, Long Term Bond, Government Securities, Money Market, Equity, Small Cap, Managed, International Growth and High Yield Bond Subaccounts as of December 31, 1995, for the Variable Life's Subaccount the related statements of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended, and for the Variable Universal Life's Subaccounts the statements of operations and statements of changes in net assets for the Intermediate Term Bond Subaccount for which the period is from April 20, 1995 (commencement of operations) to December 31, 1995, the Long Term Bond Subaccount for which the period is from March 31, 1995 (commencement of operations) to December 31, 1995, the Government Securities and High Yield Subaccounts for which the period is March 20, 1995 (commencement of operations) to December 31, 1995, the Money Market Subaccount for which the period is from February 17, 1995 (commencement of operations) to December 31, 1995, the Equity, Managed and International Subaccounts for which the period is from March 8, 1995 (commencement of operations) to December 31, 1995, and the Small Cap Subaccounts for which the period is from March 9, 1995 (commencement of operations) to December 31, 1995. These financial statements are the responsibility of MONY America's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting MONY America Variable Account L as of December 31, 1995, the results of their operations, and the changes in their net assets for each of the periods referred to above, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. New York, New York February 19, 1996 F-24 77 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1995
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- ASSETS Investments at cost (Note 4).... $ 493,463 $ 499,432 $ 180,391 $ 95,586 $ 854,895 $ 90,294 ========= ========= ========= ========= ========== ========== Investments in MONY Series Fund, Inc. at net asset value (Note 2)............................ $ 551,041 $ 605,183 $ 182,778 $ 106,118 $ 989,489 $ 90,294 Amount due from MONY America.... 0 9 0 0 65 6 Amount due from MONY Series Fund, Inc. ................... 239 338 91 1 357 4 --------- --------- --------- --------- ---------- ---------- Total assets.......... 551,280 605,530 182,869 106,119 989,911 90,304 --------- --------- --------- --------- ---------- ---------- LIABILITIES Amount due to MONY America...... 239 338 91 1 357 4 Amount due to MONY Series Fund, Inc. ................... 0 9 0 0 65 6 --------- --------- --------- --------- ---------- ---------- Total liabilities..... 239 347 91 1 422 10 --------- --------- --------- --------- ---------- ---------- Net assets...................... $ 551,041 $ 605,183 $ 182,778 $ 106,118 $ 989,489 $ 90,294 ========= ========= ========= ========= ========== ========== Net assets consist of: Contractholders' net payments................. $ 531,034 $ 578,333 $ 207,122 $ 124,860 $1,050,514 $ 192,695 Cost of insurance withdrawals (Note 3)..... (323,941) (413,683) (173,922) (129,844) (784,109) (172,053) Undistributed net investment income........ 118,647 253,780 155,523 95,530 461,971 69,652 Accumulated net realized gains (loss) on investments.............. 167,723 81,002 (8,332) 5,040 126,519 0 Unrealized appreciation of investments.............. 57,578 105,751 2,387 10,532 134,594 0 --------- --------- --------- --------- ---------- ---------- Net assets...................... $ 551,041 $ 605,183 $ 182,778 $ 106,118 $ 989,489 $ 90,294 ========= ========= ========= ========= ========== ========== Number of units outstanding*.... 15,643 16,377 8,556 3,869 35,607 5,499 --------- --------- --------- --------- ---------- ---------- Net asset value per unit outstanding................... $ 35.23 $ 36.95 $ 21.36 $ 27.43 $ 27.79 $ 16.42 ========= ========= ========= ========= ========== ==========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-25 78 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) DECEMBER 31, 1995
VARIABLE UNIVERSAL LIFE ----------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ---------- ---------- ---------- ASSETS Investments at cost (Note 4)...................... $27,635 $261,535 $172,086 $1,700,817 $1,021,263 $604,890 ======= ======== ======== ========== ========== ======== Investments in Enterprise Accumulation Trust at net asset value (Note 2)........................ $ 0 $ 0 $ 0 $ 0 $1,044,476 $600,827 Investments in MONY Series Fund, Inc. at net asset value (Note 2).................................. 26,720 269,812 171,378 1,700,817 0 0 Amount due from Enterprise Accumulation Trust..... 0 0 0 0 364 306 Amount due from MONY America...................... 0 22 0 29,305 375 483 Amount due from MONY Series Fund, Inc............. 13 6 23 7 0 0 ------- -------- -------- ---------- ---------- -------- Total assets.............................. 26,733 269,840 171,401 1,730,129 1,045,215 601,616 ------- -------- -------- ---------- ---------- -------- LIABILITIES Amount due to Enterprise Accumulation Trust....... 0 0 0 0 375 483 Amount due to MONY America........................ 13 6 23 7 364 306 Amount due to MONY Series Fund, Inc............... 0 22 0 29,305 0 0 ------- -------- -------- ---------- ---------- -------- Total liabilities......................... 13 28 23 29,312 739 789 ------- -------- -------- ---------- ---------- -------- Net assets........................................ $26,720 $269,812 $171,378 $1,700,817 $1,044,476 $600,827 ======= ======== ======== ========== ========== ======== Net assets consist of: Contractholders' net payments................. $27,817 $254,451 $171,675 $1,710,823 $1,065,456 $644,769 Cost of insurance withdrawals (Note 3)........ (1,970) (8,040) (4,816) (30,382) (92,752) (66,072) Undistributed net investment income........... 1,414 13,958 5,094 20,376 25,168 16,433 Accumulated net realized gains on investments................................. 374 1,166 133 0 23,391 9,760 Unrealized appreciation (depreciation) of investments................................. (915) 8,277 (708) 0 23,213 (4,063) ------- -------- -------- ---------- ---------- -------- Net assets........................................ $26,720 $269,812 $171,378 $1,700,817 $1,044,476 $600,827 ======= ======== ======== ========== ========== ======== Number of units outstanding*...................... 2,464 22,127 15,959 163,465 80,766 52,194 ------- -------- -------- ---------- ---------- -------- Net asset value per unit outstanding.............. $ 10.84 $ 12.19 $ 10.74 $ 10.40 $ 12.93 $ 11.51 ======= ======== ======== ========== ========== ======== VARIABLE UNIVERSAL LIFE --------------------------------------- INTERNATIONAL HIGH YIELD MANAGED GROWTH BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ------------- ---------- ASSETS Investments at cost (Note 4)...................... $6,147,845 $379,526 $352,348 ========== ======== ======== Investments in Enterprise Accumulation Trust at net asset value (Note 2)........................ $6,239,963 $379,417 $352,709 Investments in MONY Series Fund, Inc. at net asset value (Note 2).................................. 0 0 0 Amount due from Enterprise Accumulation Trust..... 15,893 202 61 Amount due from MONY America...................... 1,689 376 173 Amount due from MONY Series Fund, Inc............. 0 0 0 ---------- -------- -------- Total assets.............................. 6,257,545 379,995 352,943 ---------- -------- -------- LIABILITIES Amount due to Enterprise Accumulation Trust....... 1,689 376 173 Amount due to MONY America........................ 15,893 202 61 Amount due to MONY Series Fund, Inc............... 0 0 0 ---------- -------- -------- Total liabilities......................... 17,582 578 234 ---------- -------- -------- Net assets........................................ $6,239,963 $379,417 $352,709 ========== ======== ======== Net assets consist of: Contractholders' net payments................. $6,329,873 $389,734 $362,971 Cost of insurance withdrawals (Note 3)........ (489,373) (34,312) (18,214) Undistributed net investment income........... 184,073 17,938 7,401 Accumulated net realized gains on investments................................. 123,272 6,166 190 Unrealized appreciation (depreciation) of investments................................. 92,118 (109) 361 ---------- -------- -------- Net assets........................................ $6,239,963 $379,417 $352,709 ========== ======== ======== Number of units outstanding*...................... 465,095 31,566 31,730 ---------- -------- -------- Net asset value per unit outstanding.............. $ 13.42 $ 12.02 $ 11.12 ========== ======== ========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-26 79 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- Dividend income..................... $ 36,269 $ 31,156 $10,214 $ 5,730 $ 52,334 $ 6,355 Mortality and expense risk charges (Note 3).......................... 2,810 3,334 1,049 629 5,530 693 -------- -------- ------- ------- -------- -------- Net investment income............... 33,459 27,822 9,165 5,101 46,804 5,662 -------- -------- ------- ------- -------- -------- Realized and unrealized gain on investments (Note 2): Proceeds from sales............... 201,342 154,706 30,377 41,657 185,053 264,962 Cost of shares sold............... 171,034 115,616 28,318 36,449 149,611 264,962 -------- -------- ------- ------- -------- -------- Net realized gains on investments... 30,308 39,090 2,059 5,208 35,442 0 Net increase in unrealized appreciation of investments....... 57,362 88,922 11,732 16,634 125,651 0 -------- -------- ------- ------- -------- -------- Net realized and unrealized gains on investments....................... 87,670 128,012 13,791 21,842 161,093 0 -------- -------- ------- ------- -------- -------- Net increase in net assets resulting from operations................... $121,129 $155,834 $22,956 $26,943 $207,897 $ 5,662 ======== ======== ======= ======= ======== ========
See notes to financial statements. F-27 80 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS (CONTINUED)
VARIABLE UNIVERSAL LIFE ------------------------------------------------------------------------------------------ INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------- --------------- --------------- ------------------ --------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD APRIL 20, MARCH 31, MARCH 20, FEBRUARY 17, MARCH 8, 1995* 1995* 1995* 1995* 1995* THROUGH THROUGH THROUGH THROUGH THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1995 1995 1995 1995 1995 --------------- --------------- --------------- ------------------ --------------- Dividend income.................. $ 1,489 $14,565 $ 5,452 $ 23,644 $ 27,509 Mortality and expense risk charges (Note 3)............... 75 607 358 3,268 2,341 ------- ------- ------- ---------- -------- Net investment income............ 1,414 13,958 5,094 20,376 25,168 ------- ------- ------- ---------- -------- Realized and unrealized gains on investments (Note 2): Proceeds from sales............ 14,675 23,454 20,277 8,312,134 187,733 Cost of shares sold............ 14,301 22,288 20,144 8,312,134 164,342 ------- ------- ------- ---------- -------- Net realized gains on investments.................... 374 1,166 133 0 23,391 Net increase (decrease) in unrealized appreciation of investments.................... (915) 8,277 (708) 0 23,213 ------- ------- ------- ---------- -------- Net realized and unrealized gains (losses) on investments........ (541) 9,443 (575) 0 46,604 ------- ------- ------- ---------- -------- Net increase in net assets resulting from operations...... $ 873 $23,401 $ 4,519 $ 20,376 $ 71,772 ======= ======= ======= ========== ======== VARIABLE UNIVERSAL LIFE --------------------------------------------------------------------- INTERNATIONAL HIGH YIELD SMALL CAP MANAGED GROWTH BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------- --------------- --------------- --------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD MARCH 9, MARCH 8, MARCH 8, MARCH 20, 1995* 1995* 1995* 1995* THROUGH THROUGH THROUGH THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1995 1995 1995 1995 --------------- --------------- --------------- --------------- Dividend income.................. $17,779 $ 197,666 $18,775 $ 8,030 Mortality and expense risk charges (Note 3)............... 1,346 13,593 837 629 ------- ---------- ------- -------- Net investment income............ 16,433 184,073 17,938 7,401 ------- ---------- ------- -------- Realized and unrealized gains on investments (Note 2): Proceeds from sales............ 156,201 1,299,150 85,432 112,342 Cost of shares sold............ 146,441 1,175,878 79,266 112,152 ------- ---------- ------- -------- Net realized gains on investments.................... 9,760 123,272 6,166 190 Net increase (decrease) in unrealized appreciation of investments.................... (4,063) 92,118 (109) 361 ------- ---------- ------- -------- Net realized and unrealized gains (losses) on investments........ 5,697 215,390 6,057 551 ------- ---------- ------- -------- Net increase in net assets resulting from operations...... $22,130 $ 399,463 $23,995 $ 7,952 ======= ========== ======= ========
- --------------- * Commencement of operations. See notes to financial statements. F-28 81 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31,
VARIABLE LIFE --------------------------------------------------------------- EQUITY GROWTH EQUITY INCOME INTERMEDIATE TERM SUBACCOUNT SUBACCOUNT BOND SUBACCOUNT ------------------- ------------------- ------------------- 1995 1994 1995 1994 1995 1994 -------- -------- -------- -------- -------- -------- From operations: Net investment income...................... $ 33,459 $ 6,953 $ 27,822 $ 29,418 $ 9,165 $ 8,849 Net realized gains on investments.......... 30,308 9,428 39,090 11,825 2,059 765 Net increase (decrease) in unrealized appreciation of investments.............. 57,362 (10,655) 88,922 (40,147) 11,732 (13,415) -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations.................. 121,129 5,726 155,834 1,096 22,956 (3,801) -------- -------- -------- -------- -------- -------- From unit transactions: Net proceeds from the issuance of units.... 246,538 40,449 56,024 49,919 13,113 12,962 Net asset value of units redeemed or used to meet contract obligations............. 164,237 118,555 132,231 79,426 23,804 21,236 -------- -------- -------- -------- -------- -------- Net increase (decrease) from unit transactions............................... 82,301 (78,106) (76,207) (29,507) (10,691) (8,274) -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets........ 203,430 (72,380) 79,627 (28,411) 12,265 (12,075) Net assets beginning of year................. 347,611 419,991 525,556 553,967 170,513 182,588 -------- -------- -------- -------- -------- -------- Net assets end of year*...................... $551,041 $347,611 $605,183 $525,556 $182,778 $170,513 ======== ======== ======== ======== ======== ======== Units outstanding beginning of year.......... 12,809 15,712 18,826 19,878 9,112 9,552 Units issued during the year................. 8,221 1,506 1,763 1,767 652 692 Units redeemed during the year............... 5,387 4,409 4,212 2,819 1,208 1,132 -------- -------- -------- -------- -------- -------- Units outstanding end of year................ 15,643 12,809 16,377 18,826 8,556 9,112 ======== ======== ======== ======== ======== ======== - --------------- *Includes undistributed net investment income of: $118,647 $ 85,188 $253,780 $225,958 $155,523 $146,358 VARIABLE LIFE --------------------------------------------------------------- LONG TERM DIVERSIFIED MONEY MARKET BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------------- ------------------- ------------------- 1995 1994 1995 1994 1995 1994 -------- -------- -------- -------- -------- -------- From operations: Net investment income...................... $ 5,101 $ 6,859 $ 46,804 $ 23,875 $ 5,662 $ 5,483 Net realized gains on investments.......... 5,208 1,489 35,442 17,533 0 0 Net increase (decrease) in unrealized appreciation of investments.............. 16,634 (16,392) 125,651 (38,475) 0 0 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations.................. 26,943 (8,044) 207,897 2,933 5,662 5,483 -------- -------- -------- -------- -------- -------- From unit transactions: Net proceeds from the issuance of units.... 7,195 6,144 90,610 95,640 137,395 93,348 Net asset value of units redeemed or used to meet contract obligations............. 29,360 18,657 145,580 148,999 235,050 18,485 -------- -------- -------- -------- -------- -------- Net increase (decrease) from unit transactions............................... (22,165) (12,513) (54,970) (53,359) (97,655) 74,863 -------- -------- -------- -------- -------- -------- Net increase (decrease) in net assets........ 4,778 (20,557) 152,927 (50,426) (91,993) 80,346 Net assets beginning of year................. 101,340 121,897 836,562 886,988 182,287 101,941 -------- -------- -------- -------- -------- -------- Net assets end of year*...................... $106,118 $101,340 $989,489 $836,562 $ 90,294 $182,287 ======== ======== ======== ======== ======== ======== Units outstanding beginning of year.......... 4,777 5,361 37,807 40,254 11,659 6,734 Units issued during the year................. 296 290 3,647 4,346 8,586 6,128 Units redeemed during the year............... 1,204 874 5,847 6,793 14,746 1,203 -------- -------- -------- -------- -------- -------- Units outstanding end of year................ 3,869 4,777 35,607 37,807 5,499 11,659 ======== ======== ======== ======== ======== ======== - --------------- *Includes undistributed net investment income of: $ 95,530 $ 90,429 $461,971 $415,167 $ 69,652 $ 63,990
See notes to financial statements. F-29 82 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
VARIABLE UNIVERSAL LIFE ---------------------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------------- ---------------- ---------------- ------------------- --------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD APRIL 20, 1995** MARCH 31, 1995** MARCH 20, 1995** FEBRUARY 17, 1995** MARCH 8, 1995** THROUGH THROUGH THROUGH THROUGH THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1995 1995 1995 1995 1995 ---------------- ---------------- ---------------- ------------------- --------------- From operations: Net investment income........... $ 1,414 $ 13,958 $ 5,094 $ 20,376 $ 25,168 Net realized gains on investments................... 374 1,166 133 0 23,391 Net increase (decrease) in unrealized appreciation of investments................... (915) 8,277 (708) 0 23,213 ------- -------- -------- ---------- ---------- Net increase in net assets resulting from operations....... 873 23,401 4,519 20,376 71,772 ------- -------- -------- ---------- ---------- From unit transactions: Net proceeds from the issuance of units...................... 29,827 254,605 171,901 8,289,772 1,073,215 Net asset value of units redeemed or used to meet contract obligations.......... 3,980 8,194 5,042 6,609,331 100,511 ------- -------- -------- ---------- ---------- Net increase from unit transactions.................... 25,847 246,411 166,859 1,680,441 972,704 ------- -------- -------- ---------- ---------- Net increase in net assets........ 26,720 269,812 171,378 1,700,817 1,044,476 Net assets beginning of year...... 0 0 0 0 0 ------- -------- -------- ---------- ---------- Net assets end of year*........... $26,720 $269,812 $171,378 $1,700,817 $1,044,476 ======= ======== ======== ========== ========== Units outstanding beginning of year............................ 0 0 0 0 0 Units issued during the year...... 2,838 22,925 16,439 807,565 88,980 Units redeemed during the year.... 374 798 480 644,100 8,214 ------- -------- -------- ---------- ---------- Units outstanding end of year..... 2,464 22,127 15,959 163,465 80,766 ======= ======== ======== ========== ========== - --------------- * Includes undistributed net investment income of: $ 1,414 $ 13,958 $ 5,094 $ 20,376 $ 25,168 ** Commencement of operations. VARIABLE UNIVERSAL LIFE ---------------------------------------------------------------------- INTERNATIONAL HIGH YIELD SMALL CAP MANAGED GROWTH BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------- --------------- --------------- ---------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD MARCH 9, 1995** MARCH 8, 1995** MARCH 8, 1995** MARCH 20, 1995** THROUGH THROUGH THROUGH THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1995 1995 1995 1995 --------------- --------------- --------------- ---------------- From operations: Net investment income........... $ 16,433 $ 184,073 $ 17,938 $ 7,401 Net realized gains on investments................... 9,760 123,272 6,166 190 Net increase (decrease) in unrealized appreciation of investments................... (4,063) 92,118 (109) 361 -------- ---------- -------- -------- Net increase in net assets resulting from operations....... 22,130 399,463 23,995 7,952 -------- ---------- -------- -------- From unit transactions: Net proceeds from the issuance of units...................... 662,265 6,530,478 394,240 367,392 Net asset value of units redeemed or used to meet contract obligations.......... 83,568 689,978 38,818 22,635 -------- ---------- -------- -------- Net increase from unit transactions.................... 578,697 5,840,500 355,422 344,757 -------- ---------- -------- -------- Net increase in net assets........ 600,827 6,239,963 379,417 352,709 Net assets beginning of year...... 0 0 0 0 -------- ---------- -------- -------- Net assets end of year*........... $600,827 $6,239,963 $379,417 $352,709 ======== ========== ======== ======== Units outstanding beginning of year............................ 0 0 0 0 Units issued during the year...... 59,708 519,384 34,979 33,810 Units redeemed during the year.... 7,514 54,289 3,413 2,080 -------- ---------- -------- -------- Units outstanding end of year..... 52,194 465,095 31,566 31,730 ======== ========== ======== ======== - --------------- * Includes undistributed net investment income of: $ 16,433 $ 184,073 $ 17,938 $ 7,401 ** Commencement of operations.
See notes to financial statements. F-30 83 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND BUSINESS MONY America Variable Account L (the "Variable Account") is a separate investment account established on February 19, 1985 by MONY Life Insurance Company of America ("MONY America"), under the laws of the State of Arizona. The Variable Account operates as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). The Variable Account holds assets that are segregated from all of MONY America's other assets and, at present, is used to support Variable Life Insurance and Variable Universal Life Insurance Policies. These policies are issued by MONY America, which is a wholly-owned subsidiary of The Mutual Life Insurance Company of New York ("MONY"). MONY America is currently taxed as a life insurance company and will include the Variable Account's operations in its tax return. MONY America does not expect, based on current tax law, to incur any income tax burden upon the earnings or realized capital gains attributable to the Variable Account. Based on this expectation, no charges are currently being deducted from the Variable Account for federal income tax purposes. There are currently fifteen subaccounts within the Variable Account, each invests only in a corresponding portfolio of the MONY Series Fund, Inc. (the "Fund") or the Enterprise Accumulation Trust ("Enterprise") (collectively, the "Funds"). The subaccounts of the Variable Universal Life commenced operations during 1995. The Funds are registered under the 1940 Act as an open end, diversified, management investment companies. A full presentation of the related financial statements and footnotes of the Fund and Enterprise are contained on pages 66 to 128 and 129 to 174, respectively, and should be read in conjunction with these financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES Investment: The investment in shares of each of the respective portfolios is stated at value which is the net asset values of the Fund. Except for the Money Market Portfolio, net asset values are based upon market quotations of the securities held in each of the corresponding portfolios of the Funds. For the Money Market Portfolio, the net asset values are based on amortized cost of the securities held which approximates value. 3. RELATED PARTY TRANSACTIONS MONY America is the legal holder of the assets held by the Variable Account. Policy premiums received from MONY America by the Variable Account represent gross policy premiums recorded by MONY America less deductions retained as compensation for certain sales distribution expenses and premium taxes. The cost of insurance, administration charges, and, if applicable, the cost of any optional benefits added by riders are deducted on each monthly date from the cash value of the contract to compensate MONY America. These deductions are treated as contractholder redemptions by the Variable Account. The amount deducted for all subaccounts for 1995 aggregated $917,026. MONY America receives from the Variable Account the amounts deducted for mortality and expense risks at an annual rate of .60 percent (for the Variable Life Subaccounts) and .75 percent (for the Variable Universal Life Subaccounts) of aggregate average daily net assets. As investment adviser to the Fund, it receives amounts paid by the Fund for those services. F-31 84 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. RELATED PARTY TRANSACTIONS (CONTINUED) Enterprise Capital Management, Inc., a wholly-owned subsidiary of MONY, acts as investment adviser to Enterprise, and it receives amounts paid by Enterprise for those services. 4. INVESTMENTS Investments in Variable Life at cost, at December 31, 1995 consist of the following:
LONG EQUITY EQUITY INTERMEDIATE TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- ------------ --------- ----------- --------- Shares beginning of year: Shares.......................... 16,883 33,841 17,489 9,679 63,665 182,287 Amount.......................... $347,395 $508,727 $179,858 $107,442 $827,619 $182,287 -------- -------- -------- -------- -------- -------- Shares acquired: Shares.......................... 12,139 4,146 1,752 1,501 8,255 166,614 Amount.......................... $280,833 $ 75,165 $ 18,637 $ 18,863 $124,553 $166,614 Shares received for reinvestment of dividends: Shares.......................... 1,444 1,589 966 445 3,329 6,355 Amount.......................... $ 36,269 $ 31,156 $ 10,214 $ 5,730 $ 52,334 $ 6,355 Shares redeemed: Shares.......................... 8,521 8,715 2,914 3,386 12,305 264,962 Amount.......................... $171,034 $115,616 $ 28,318 $ 36,449 $149,611 $264,962 -------- -------- -------- -------- -------- -------- Net change: Shares.......................... 5,062 (2,980) (196) (1,440) (721) (91,993) Amount.......................... $146,068 ($ 9,295) $ 533 ($11,856) $ 27,276 ($91,993) -------- -------- -------- -------- -------- -------- Shares end of year: Shares.......................... 21,945 30,861 17,293 8,239 62,944 90,294 Amount.......................... $493,463 $499,432 $180,391 $ 95,586 $854,895 $ 90,294 ======== ======== ======== ======== ======== ========
F-32 85 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. INVESTMENTS (CONTINUED) Investments in Variable Universal Life at cost, at December 31, 1995 consist of the following:
LONG INTERMEDIATE TERM GOVERNMENT MONEY SMALL INTERNATIONAL TERM BOND BOND SECURITIES MARKET EQUITY CAP MANAGED GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ --------- ---------- ---------- ---------- --------- ---------- ------------- Shares beginning of year: Shares............. 0 0 0 0 0 0 0 0 Amount............. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ------- -------- -------- ---------- ---------- -------- ---------- -------- Shares acquired: Shares............. 3,719 21,651 18,234 9,989,307 51,815 40,031 262,958 82,905 Amount............. $40,447 $269,258 $186,778 $9,989,307 $1,158,096 $733,552 $7,126,057 $440,017 Shares received for reinvestment of dividends: Shares............. 141 1,131 534 23,644 1,178 962 7,044 3,464 Amount............. $ 1,489 $ 14,565 $ 5,452 $ 23,644 $ 27,509 $ 17,779 $ 197,666 $ 18,775 Shares redeemed: Shares............. 1,332 1,834 1,982 8,312,134 8,262 8,481 47,622 15,976 Amount............. $14,301 $ 22,288 $ 20,144 $8,312,134 $ 164,342 $146,441 $1,175,878 $ 79,266 ------- -------- -------- ---------- ---------- -------- ---------- -------- Net change: Shares............. 2,528 20,948 16,786 1,700,817 44,731 32,512 222,380 70,393 Amount............. $27,635 $261,535 $172,086 $1,700,817 $1,021,263 $604,890 $6,147,845 $379,526 ------- -------- -------- ---------- ---------- -------- ---------- -------- Shares end of year: Shares............. 2,528 20,948 16,786 1,700,817 44,731 32,512 222,380 70,393 Amount............. $27,635 $261,535 $172,086 $1,700,817 $1,021,263 $604,890 $6,147,845 $379,526 ======= ======== ======== ========== ========== ======== ========== ======== HIGH YIELD BOND PORTFOLIO ---------- Shares beginning of year: Shares............. 0 Amount............. $ 0 -------- Shares acquired: Shares............. 86,158 Amount............. $456,470 Shares received for reinvestment of dividends: Shares............. 1,515 Amount............. $ 8,030 Shares redeemed: Shares............. 21,249 Amount............. $112,152 -------- Net change: Shares............. 66,424 Amount............. $352,348 -------- Shares end of year: Shares............. 66,424 Amount............. $352,348 ========
F-33 86 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1998 (UNAUDITED)
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- ASSETS Investments at cost (Note 4)... $ 690,738 $ 605,462 $ 151,450 $ 61,641 $1,038,787 $ 73,159 ========= ========= ========= ========= ========== ========= Investments in MONY Series Fund, Inc. at net asset value (Note 2)..................... $ 902,727 $ 758,612 $ 156,568 $ 69,179 $1,198,581 $ 73,159 Amount due from MONY Series Fund, Inc. .................. 251 532 228 0 286 136 Amount due from MONY America... 189 70 0 0 327 56 --------- --------- --------- --------- ---------- --------- Total assets......... 903,167 759,214 156,796 69,179 1,199,194 73,351 --------- --------- --------- --------- ---------- --------- LIABILITIES Amount due to MONY Series Fund, Inc. ........................ 189 70 0 0 327 56 Amount due to MONY America..... 251 532 228 0 286 136 --------- --------- --------- --------- ---------- --------- Total liabilities.... 440 602 228 0 613 192 --------- --------- --------- --------- ---------- --------- Net assets..................... $ 902,727 $ 758,612 $ 156,568 $ 69,179 $1,198,581 $ 73,159 ========= ========= ========= ========= ========== ========= Net assets consist of: Contractholders' net payments.................. $ 531,146 $ 435,233 $ 187,265 $ 102,649 $ 874,416 $ 194,332 Cost of insurance withdrawals (Note 3).................. (383,528) (486,949) (201,904) (156,404) (916,797) (200,035) Undistributed net investment income.................... 303,927 443,853 171,505 103,801 791,252 78,862 Accumulated net realized gain (loss) on investments..... 239,193 213,325 (5,416) 11,595 289,916 0 Unrealized appreciation of investments............... 211,989 153,150 5,118 7,538 159,794 0 --------- --------- --------- --------- ---------- --------- Net assets..................... $ 902,727 $ 758,612 $ 156,568 $ 69,179 $1,198,581 $ 73,159 ========= ========= ========= ========= ========== ========= Number of units outstanding*... 14,392 12,131 6,432 2,145 26,889 3,982 --------- --------- --------- --------- ---------- --------- Net asset value per unit outstanding*................. $ 62.73 $ 62.54 $ 24.34 $ 32.24 $ 44.58 $ 18.37 ========= ========= ========= ========= ========== =========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-34 87 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) JUNE 30, 1998 (UNAUDITED)
VARIABLE UNIVERSAL LIFE ------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ---------- ----------- ----------- ASSETS Investments at cost (Note 4)................... $327,692 $1,117,720 $485,666 $3,314,283 $21,357,437 $12,042,034 ======== ========== ======== ========== =========== =========== Investments in Enterprise Accumulation Trust at net asset value (Note 2)..................... $ 0 $ 0 $ 0 $ 0 $24,287,314 $13,632,944 Investments in MONY Series Fund, Inc. at net asset value (Note 2)......................... 327,335 1,167,798 489,467 3,314,283 0 0 Amount due from Enterprise Accumulation Trust........................................ 0 0 0 0 4,430 2,697 Amount due from MONY America................... 0 13,886 0 30,006 26,033 20,070 Amount due from MONY Series Fund, Inc.......... 712 314 54 308 0 0 -------- ---------- -------- ---------- ----------- ----------- Total assets........................... 328,047 1,181,998 489,521 3,344,597 24,317,777 13,655,711 -------- ---------- -------- ---------- ----------- ----------- LIABILITIES Amount due to Enterprise Accumulation Trust.... 0 0 0 0 26,033 20,070 Amount due to MONY America..................... 712 314 54 308 4,430 2,697 Amount due to MONY Series Fund, Inc............ 0 13,886 0 30,006 0 0 -------- ---------- -------- ---------- ----------- ----------- Total liabilities...................... 712 14,200 54 30,314 30,463 22,767 -------- ---------- -------- ---------- ----------- ----------- Net assets..................................... $327,335 $1,167,798 $489,467 $3,314,283 $24,287,314 $13,632,944 ======== ========== ======== ========== =========== =========== Net assets consist of: Contractholders' net payments................ $349,618 $1,149,831 $532,002 $3,574,764 $22,241,943 $11,737,561 Cost of insurance withdrawals (Note 3)....... (43,218) (167,996) (91,027) (544,035) (2,948,581) (1,239,409) Undistributed net investment income.......... 19,742 96,924 31,146 283,554 462,899 664,950 Accumulated net realized gain on investments................................ 1,550 38,961 13,545 0 1,601,176 878,932 Unrealized appreciation (depreciation) of investments................................ (357) 50,078 3,801 0 2,929,877 1,590,910 -------- ---------- -------- ---------- ----------- ----------- Net assets..................................... $327,335 $1,167,798 $489,467 $3,314,283 $24,287,314 $13,632,944 ======== ========== ======== ========== =========== =========== Number of units outstanding*................... 26,601 81,736 40,623 285,756 1,084,383 656,312 -------- ---------- -------- ---------- ----------- ----------- Net asset value per unit outstanding*.......... $ 12.31 $ 14.29 $ 12.05 $ 11.60 $ 22.40 $ 20.77 ======== ========== ======== ========== =========== =========== VARIABLE UNIVERSAL LIFE ----------------------------------------- INTERNATIONAL HIGH YIELD MANAGED GROWTH BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ------------- ---------- ASSETS Investments at cost (Note 4)................... $ 71,066,712 $5,597,050 $2,681,287 ============ ========== ========== Investments in Enterprise Accumulation Trust at net asset value (Note 2)..................... $ 81,829,457 $5,989,695 $2,711,629 Investments in MONY Series Fund, Inc. at net asset value (Note 2)......................... 0 0 0 Amount due from Enterprise Accumulation Trust........................................ 15,220 913 1,852 Amount due from MONY America................... 60,248 3,107 707 Amount due from MONY Series Fund, Inc.......... 0 0 0 ------------ ---------- ---------- Total assets........................... 81,904,925 5,993,715 2,714,188 ------------ ---------- ---------- LIABILITIES Amount due to Enterprise Accumulation Trust.... 60,248 3,107 707 Amount due to MONY America..................... 15,220 913 1,852 Amount due to MONY Series Fund, Inc............ 0 0 0 ------------ ---------- ---------- Total liabilities...................... 75,468 4,020 2,559 ------------ ---------- ---------- Net assets..................................... $ 81,829,457 $5,989,695 $2,711,629 ============ ========== ========== Net assets consist of: Contractholders' net payments................ $ 72,909,930 $6,015,809 $2,719,688 Cost of insurance withdrawals (Note 3)....... (10,471,466) (773,836) (338,204) Undistributed net investment income.......... 2,454,353 96,926 242,896 Accumulated net realized gain on investments................................ 6,173,895 258,151 56,907 Unrealized appreciation (depreciation) of investments................................ 10,762,745 392,645 30,342 ------------ ---------- ---------- Net assets..................................... $ 81,829,457 $5,989,695 $2,711,629 ============ ========== ========== Number of units outstanding*................... 3,607,673 377,353 185,146 ------------ ---------- ---------- Net asset value per unit outstanding*.......... $ 22.68 $ 15.87 $ 14.65 ============ ========== ==========
- --------------- * Units outstanding have been rounded for presentation purposes. See notes to financial statements. F-35 88 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
VARIABLE LIFE ------------------------------------------------------------------------------ EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ---------- ---------- ------------ ---------- ----------- ---------- Dividend income............. $138,442 $118,315 $8,132 $3,912 $ 261,166 $1,905 Mortality and expense risk charges (Note 3).......... (2,536) (2,220) (461) (206) (3,420) (219) -------- -------- ------ ------ --------- ------ Net investment income....... 135,906 116,095 7,671 3,706 257,746 1,686 -------- -------- ------ ------ --------- ------ Realized and unrealized gain on investments (Note 2): Proceeds from sales....... 36,894 30,004 10,111 7,446 100,513 7,713 Cost of shares sold....... (22,002) (17,866) (9,532) (6,660) (66,788) (7,713) -------- -------- ------ ------ --------- ------ Net realized gain on investments............... 14,892 12,138 579 786 33,725 0 Net decrease in unrealized appreciation of investments............... (39,898) (65,096) (3,255) (962) (144,774) 0 -------- -------- ------ ------ --------- ------ Net realized and unrealized loss on investments....... (25,006) (52,958) (2,676) (176) (111,049) 0 -------- -------- ------ ------ --------- ------ Net increase in net assets resulting from operations................ $110,900 $ 63,137 $4,995 $3,530 $ 146,697 $1,686 ======== ======== ====== ====== ========= ======
See notes to financial statements. F-36 89 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF OPERATIONS (CONTINUED) FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
VARIABLE UNIVERSAL LIFE ----------------------------------------------------------------------------------------------- INTERMEDIATE LONG TERM GOVERNMENT MONEY TERM BOND BOND SECURITIES MARKET EQUITY SMALL CAP MANAGED SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT ------------ ---------- ---------- ------------ ----------- ----------- ----------- Dividend income.................. $ 14,696 $ 53,185 $ 18,282 $ 71,134 $ 0 $ 0 $ 0 Mortality and expense risk charges (Note 3)....................... (1,051) (3,568) (1,660) (10,171) (76,008) (40,883) (265,268) -------- --------- --------- ------------ ----------- ----------- ----------- Net investment income (loss)..... 13,645 49,617 16,622 60,963 (76,008) (40,883) (265,268) -------- --------- --------- ------------ ----------- ----------- ----------- Realized and unrealized gain on investments (Note 2): Proceeds from sales............ 40,740 276,713 171,180 11,544,812 2,634,266 1,549,975 7,943,371 Cost of shares sold............ (40,118) (245,997) (163,607) (11,544,812) (1,977,458) (1,054,122) (5,512,846) -------- --------- --------- ------------ ----------- ----------- ----------- Net realized gain on investments.................... 622 30,716 7,573 0 656,808 495,853 2,430,525 Net increase (decrease) in unrealized appreciation of investments.................... (5,617) (27,923) (12,537) 0 1,564,547 948,364 5,395,363 -------- --------- --------- ------------ ----------- ----------- ----------- Net realized and unrealized gain (loss) on investments.......... (4,995) 2,793 (4,964) 0 2,221,355 1,444,217 7,825,888 -------- --------- --------- ------------ ----------- ----------- ----------- Net increase in net assets resulting from operations...... $ 8,650 $ 52,410 $ 11,658 $ 60,963 $ 2,145,347 $ 1,403,334 $ 7,560,620 ======== ========= ========= ============ =========== =========== =========== VARIABLE UNIVERSAL LIFE -------------------------- INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT ------------- ---------- Dividend income.................. $ 0 $ 90,721 Mortality and expense risk charges (Note 3)....................... (18,787) (8,762) --------- --------- Net investment income (loss)..... (18,787) 81,959 --------- --------- Realized and unrealized gain on investments (Note 2): Proceeds from sales............ 725,269 369,346 Cost of shares sold............ (632,167) (348,740) --------- --------- Net realized gain on investments.................... 93,102 20,606 Net increase (decrease) in unrealized appreciation of investments.................... 500,168 (8,414) --------- --------- Net realized and unrealized gain (loss) on investments.......... 593,270 12,192 --------- --------- Net increase in net assets resulting from operations...... $ 574,483 $ 94,151 ========= =========
See notes to financial statements. F-37 90 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
VARIABLE LIFE --------------------------------------------------------------------------------------- EQUITY GROWTH EQUITY INCOME INTERMEDIATE TERM SUBACCOUNT SUBACCOUNT BOND SUBACCOUNT --------------------------- --------------------------- --------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, 1998 1997 1998 1997 1998 1997 ------------ ------------ ------------ ------------ ------------ ------------ From operations: Net investment income.......... $135,906 $ 53,040 $116,095 $ 76,627 $ 7,671 $ 9,374 Net realized gain on investments.................. 14,892 33,607 12,138 84,704 579 1,672 Net increase (decrease) in unrealized appreciation of investments.................. (39,898) 101,936 (65,096) 32,332 (3,255) 288 -------- -------- -------- --------- -------- -------- Net increase in net assets resulting from operations...... 110,900 188,583 63,137 193,663 4,995 11,334 -------- -------- -------- --------- -------- -------- From unit transactions: Net proceeds from the issuance of units..................... 27,757 35,646 15,141 39,172 4,591 8,194 Net asset value of units redeemed or used to meet contract obligations......... (34,064) (59,621) (25,326) (193,625) (9,555) (40,032) -------- -------- -------- --------- -------- -------- Net decrease from unit transactions................... (6,307) (23,975) (10,185) (154,453) (4,964) (31,838) -------- -------- -------- --------- -------- -------- Net increase (decrease) in net assets......................... 104,593 164,608 52,952 39,210 31 (20,504) Net assets beginning of period... 798,134 633,526 705,660 666,450 156,537 177,041 -------- -------- -------- --------- -------- -------- Net assets end of period*........ $902,727 $798,134 $758,612 $ 705,660 $156,568 $156,537 ======== ======== ======== ========= ======== ======== Units outstanding beginning of period......................... 14,506 14,958 12,292 15,149 6,639 8,041 Units issued during the period... 457 747 254 783 193 362 Units redeemed during the period......................... (571) (1,199) (415) (3,640) (400) (1,764) -------- -------- -------- --------- -------- -------- Units outstanding end of period......................... 14,392 14,506 12,131 12,292 6,432 6,639 ======== ======== ======== ========= ======== ======== - --------------- * Includes undistributed net investment income of: $303,927 $168,021 $443,853 $ 327,758 $171,505 $163,834 VARIABLE LIFE --------------------------------------------------------------------------------------- LONG TERM DIVERSIFIED MONEY MARKET BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------------------- --------------------------- --------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, 1998 1997 1998 1997 1998 1997 ------------ ------------ ------------ ------------ ------------ ------------ From operations: Net investment income.......... $ 3,706 $ 5,147 $ 257,746 $ 77,745 $ 1,686 $ 3,689 Net realized gain on investments.................. 786 3,780 33,725 100,092 0 0 Net increase (decrease) in unrealized appreciation of investments.................. (962) 649 (144,774) 59,772 0 0 -------- -------- ---------- ---------- ------- -------- Net increase in net assets resulting from operations...... 3,530 9,576 146,697 237,609 1,686 3,689 -------- -------- ---------- ---------- ------- -------- From unit transactions: Net proceeds from the issuance of units..................... 1,218 4,547 32,883 77,730 3,352 6,471 Net asset value of units redeemed or used to meet contract obligations......... (7,124) (37,821) (92,162) (287,917) (7,442) (19,886) -------- -------- ---------- ---------- ------- -------- Net decrease from unit transactions................... (5,906) (33,274) (59,279) (210,187) (4,090) (13,415) -------- -------- ---------- ---------- ------- -------- Net increase (decrease) in net assets......................... (2,376) (23,698) 87,418 27,422 (2,404) (9,726) Net assets beginning of period... 71,555 95,253 1,111,163 1,083,741 75,563 85,289 -------- -------- ---------- ---------- ------- -------- Net assets end of period*........ $ 69,179 $ 71,555 $1,198,581 $1,111,163 $73,159 $ 75,563 ======== ======== ========== ========== ======= ======== Units outstanding beginning of period......................... 2,334 3,504 28,291 34,279 4,207 4,970 Units issued during the period... 39 165 788 2,219 185 368 Units redeemed during the period......................... (228) (1,335) (2,190) (8,207) (410) (1,131) -------- -------- ---------- ---------- ------- -------- Units outstanding end of period......................... 2,145 2,334 26,889 28,291 3,982 4,207 ======== ======== ========== ========== ======= ======== - --------------- * Includes undistributed net investment income of: $103,801 $100,095 $ 791,252 $ 533,506 $78,862 $ 77,176
See notes to financial statements. F-38 91 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) (UNAUDITED)
VARIABLE UNIVERSAL LIFE --------------------------------------------------------------------------------------- INTERMEDIATE TERM LONG TERM GOVERNMENT BOND BOND SECURITIES SUBACCOUNT SUBACCOUNT SUBACCOUNT --------------------------- --------------------------- --------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, 1998 1997 1998 1997 1998 1997 ------------ ------------ ------------ ------------ ------------ ------------ From operations: Net investment income............ $ 13,645 $ 5,087 $ 49,617 $ 36,542 $ 16,622 $ 11,060 Net realized gain on investments.................... 622 1,269 30,716 6,284 7,573 4,933 Net increase (decrease) in unrealized appreciation of investments................. (5,617) 3,027 (27,923) 56,115 (12,537) 9,241 -------- -------- ---------- --------- --------- --------- Net increase in net assets resulting from operations........ 8,650 9,383 52,410 98,941 11,658 25,234 -------- -------- ---------- --------- --------- --------- From unit transactions: Net proceeds from the issuance of units.......................... 118,343 172,340 400,847 471,749 122,700 288,293 Net asset value of units redeemed or used to meet contract obligations.................... (34,023) (38,182) (233,921) (236,759) (143,296) (107,779) -------- -------- ---------- --------- --------- --------- Net increase (decrease) from unit transactions..................... 84,320 134,158 166,926 234,990 (20,596) 180,514 -------- -------- ---------- --------- --------- --------- Net increase (decrease) in net assets........................... 92,970 143,541 219,336 333,931 (8,938) 205,748 Net assets beginning of period..... 234,365 90,824 948,462 614,531 498,405 292,657 -------- -------- ---------- --------- --------- --------- Net assets end of period*.......... $327,335 $234,365 $1,167,798 $ 948,462 $ 489,467 $ 498,405 ======== ======== ========== ========= ========= ========= Units outstanding beginning of period........................... 19,650 8,138 69,779 50,910 42,420 26,498 Units issued during the period..... 9,749 14,831 28,804 37,613 10,316 25,322 Units redeemed during the period... (2,798) (3,319) (16,847) (18,744) (12,113) (9,400) -------- -------- ---------- --------- --------- --------- Units outstanding end of period.... 26,601 19,650 81,736 69,779 40,623 42,420 ======== ======== ========== ========= ========= ========= - --------------- * Includes undistributed net investment income of: $ 19,742 $ 6,097 $ 96,924 $ 47,307 $ 31,146 $ 14,524 VARIABLE UNIVERSAL LIFE --------------------------- MONEY MARKET SUBACCOUNT --------------------------- FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, 1998 1997 ------------ ------------ From operations: Net investment income............ $ 60,963 $ 115,801 Net realized gain on investments.................... 0 0 Net increase (decrease) in unrealized appreciation of investments................. 0 0 ----------- ------------ Net increase in net assets resulting from operations........ 60,963 115,801 ----------- ------------ From unit transactions: Net proceeds from the issuance of units.......................... 9,315,113 20,219,389 Net asset value of units redeemed or used to meet contract obligations.................... (9,760,467) (20,985,756) ----------- ------------ Net increase (decrease) from unit transactions..................... (445,354) (766,367) ----------- ------------ Net increase (decrease) in net assets........................... (384,391) (650,566) Net assets beginning of period..... 3,698,674 4,349,240 ----------- ------------ Net assets end of period*.......... $ 3,314,283 $ 3,698,674 =========== ============ Units outstanding beginning of period........................... 325,979 400,565 Units issued during the period..... 810,944 1,818,649 Units redeemed during the period... (851,167) (1,893,235) ----------- ------------ Units outstanding end of period.... 285,756 325,979 =========== ============ - --------------- * Includes undistributed net investment income of: $ 283,554 $ 222,591
See notes to financial statements. F-39 92 MONY AMERICA VARIABLE ACCOUNT L STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) (UNAUDITED)
VARIABLE UNIVERSAL LIFE (CONTINUED) --------------------------------------------------------------------------------------- EQUITY MANAGED SUBACCOUNT SMALL CAP SUBACCOUNT SUBACCOUNT --------------------------- --------------------------- --------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, 1998 1997 1998 1997 1998 1997 ------------ ------------ ------------ ------------ ------------ ------------ From operations: Net investment income (loss)...................... $ (76,008) $ 467,545 $ (40,883) $ 660,447 $ (265,268) $ 2,400,789 Net realized gain on investments................. 656,808 746,120 495,853 342,745 2,430,525 2,836,432 Net increase (decrease) in unrealized appreciation of investments................. 1,564,547 984,236 948,364 568,217 5,395,363 3,108,829 ----------- ----------- ----------- ----------- ----------- ----------- Net increase in net assets resulting from operations..... 2,145,347 2,197,901 1,403,334 1,571,409 7,560,620 8,346,050 ----------- ----------- ----------- ----------- ----------- ----------- From unit transactions: Net proceeds from the issuance of units.................... 7,970,494 11,812,002 5,176,331 5,248,401 21,000,033 36,238,986 Net asset value of units redeemed or used to meet contract obligations........ (2,311,325) (2,656,849) (1,131,446) (1,072,152) (6,800,197) (9,726,108) ----------- ----------- ----------- ----------- ----------- ----------- Net increase from unit transactions.................. 5,659,169 9,155,153 4,044,885 4,176,249 14,199,836 26,512,878 ----------- ----------- ----------- ----------- ----------- ----------- Net increase in net assets...... 7,804,516 11,353,054 5,448,219 5,747,658 21,760,456 34,858,928 Net assets beginning of period........................ 16,482,798 5,129,744 8,184,725 2,437,067 60,069,001 25,210,073 ----------- ----------- ----------- ----------- ----------- ----------- Net assets end of period*....... $24,287,314 $16,482,798 $13,632,944 $ 8,184,725 $81,829,457 $60,069,001 =========== =========== =========== =========== =========== =========== Units outstanding beginning of period........................ 821,090 319,002 449,403 191,743 2,954,670 1,532,486 Units issued during the period........................ 371,149 647,931 264,383 326,703 966,250 1,945,611 Units redeemed during the period........................ (107,856) (145,843) (57,474) (69,043) (313,247) (523,427) ----------- ----------- ----------- ----------- ----------- ----------- Units outstanding end of period........................ 1,084,383 821,090 656,312 449,403 3,607,673 2,954,670 =========== =========== =========== =========== =========== =========== - --------------- * Includes undistributed net investment income of: $ 462,899 $ 538,907 $ 664,950 $ 705,833 $ 2,454,353 $ 2,719,621 VARIABLE UNIVERSAL LIFE (CONTINUED) --------------------------------------------------------- INTERNATIONAL HIGH YIELD GROWTH BOND SUBACCOUNT SUBACCOUNT --------------------------- --------------------------- FOR THE SIX FOR THE FOR THE SIX FOR THE MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, 1998 1997 1998 1997 ------------ ------------ ------------ ------------ From operations: Net investment income (loss)...................... $ (18,787) $ 98,833 $ 81,959 $ 111,190 Net realized gain on investments................. 93,102 135,511 20,606 35,931 Net increase (decrease) in unrealized appreciation of investments................. 500,168 (204,105) (8,414) 12,532 ---------- ---------- ---------- ---------- Net increase in net assets resulting from operations..... 574,483 30,239 94,151 159,653 ---------- ---------- ---------- ---------- From unit transactions: Net proceeds from the issuance of units.................... 1,952,718 3,034,936 928,475 1,268,282 Net asset value of units redeemed or used to meet contract obligations........ (616,760) (717,365) (250,716) (319,664) ---------- ---------- ---------- ---------- Net increase from unit transactions.................. 1,335,958 2,317,571 677,759 948,618 ---------- ---------- ---------- ---------- Net increase in net assets...... 1,910,441 2,347,810 771,910 1,108,271 Net assets beginning of period........................ 4,079,254 1,731,444 1,939,719 831,448 ---------- ---------- ---------- ---------- Net assets end of period*....... $5,989,695 $4,079,254 $2,711,629 $1,939,719 ========== ========== ========== ========== Units outstanding beginning of period........................ 290,466 128,820 138,275 66,709 Units issued during the period........................ 127,685 211,751 64,149 95,695 Units redeemed during the period........................ (40,798) (50,105) (17,278) (24,129) ---------- ---------- ---------- ---------- Units outstanding end of period........................ 377,353 290,466 185,146 138,275 ========== ========== ========== ========== - --------------- * Includes undistributed net investment income of: $ 96,926 $ 115,713 $ 242,896 $ 160,937
See notes to financial statements. F-40 93 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND BUSINESS MONY America Variable Account L (the "Variable Account") is a separate investment account established on February 19, 1985 by MONY Life Insurance Company of America ("MONY America"), under the laws of the State of Arizona. The Variable Account operates as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). The Variable Account holds assets that are segregated from all of MONY America's other assets and, at present, is used to support Flexible Premium Variable Life Insurance policies, which include Variable Life Insurance (Strategist), Variable Universal Life (MONYEquity Master) and Corporate Sponsored Variable Life Insurance policies. These policies are issued by MONY America, which is a wholly-owned subsidiary of The Mutual Life Insurance Company of New York ("MONY"). For presentation purposes, the information related to the Variable Life and Variable Universal Life Insurance policies are presented here. There are currently six Variable Life Subaccounts and nine Variable Universal Life Subaccounts within the Variable Account, each invests only in a corresponding portfolio of the MONY Series Fund, Inc. (the "Fund") or the Enterprise Accumulation Trust ("Enterprise") (collectively, the "Funds"). The subaccounts of the Variable Universal Life commenced operations during 1995. The Funds are registered under the 1940 Act as open end, diversified, management investment companies. A full presentation of the related financial statements and footnotes of the Fund and Enterprise are contained on pages 60 to 93 and 95 to 126, respectively, and should be read in conjunction with these financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES Investment: The investment in shares of each of the respective portfolios is stated at value which is the net asset values of the Funds. Except for the Money Market Portfolios, net asset values are based upon market quotations of the securities held in each of the corresponding portfolios of the Funds. For the Money Market Portfolios, the net asset values are based on amortized cost of the securities held which approximates value. Taxes: MONY America is currently taxed as a life insurance company and will include the Variable Account's operations in its tax return. MONY America does not expect, based on current tax law, to incur any income tax burden upon the earnings or realized capital gains attributable to the Variable Account. Based on this expectation, no charges are currently being deducted from the Variable Account for federal income tax purposes. 3. RELATED PARTY TRANSACTIONS MONY America is the legal owner of the assets held by the Variable Account. Policy premiums received from MONY America by the Variable Account represent gross policy premiums recorded by MONY America less deductions retained as compensation for certain sales distribution expenses and premium taxes. The cost of insurance, administration charges, and, if applicable, the cost of any optional benefits added by riders are deducted on each monthly date from the cash value of the contract to compensate MONY America. These deductions are treated as contractholder redemptions by the Variable Account. The amount deducted for the Variable Life and Variable Universal Subaccounts for 1998 aggregated $7,530,394. F-41 94 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 3. RELATED PARTY TRANSACTIONS (CONTINUED) MONY America receives from the Variable Account the amounts deducted for mortality and expense risks at an annual rate of .60 percent (for the Variable Life Subaccounts) and .75 percent (for the Variable Universal Life Subaccounts) of aggregate average daily net assets. As investment adviser to the Fund, it receives amounts paid by the Fund for those services. Enterprise Capital Management, Inc., a wholly-owned subsidiary of MONY, acts as investment adviser to Enterprise, and it receives amounts paid by Enterprise for those services. 4. INVESTMENTS Investments in Variable Life at cost, at June 30, 1998 consist of the following:
MONY SERIES FUND, INC. -------------------------------------------------------------------------- EQUITY EQUITY INTERMEDIATE LONG TERM MONEY GROWTH INCOME TERM BOND BOND DIVERSIFIED MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------- --------- ------------ --------- ----------- --------- Shares beginning of period: Shares........................ 22,121 26,039 14,077 5,245 53,914 75,563 Amount........................ $546,247 $487,414 $148,164 $ 63,055 $ 806,595 $ 75,563 -------- -------- -------- -------- ---------- -------- Shares acquired: Shares........................ 796 654 423 100 1,963 3,404 Amount........................ $ 28,051 $ 17,599 $ 4,686 $ 1,334 $ 37,814 $ 3,404 Shares received for reinvestment of dividends: Shares........................ 4,089 4,582 759 300 14,780 1,905 Amount........................ $138,442 $118,315 $ 8,132 $ 3,912 $ 261,166 $ 1,905 Shares redeemed: Shares........................ (1,073) (1,135) (922) (551) (5,233) (7,713) Amount........................ $(22,002) $(17,866) $ (9,532) $ (6,660) $ (66,788) $ (7,713) -------- -------- -------- -------- ---------- -------- Net change: Shares........................ 3,812 4,101 260 (151) 11,510 (2,404) Amount........................ $144,491 $118,048 $ 3,286 $ (1,414) $ 232,192 $ (2,404) -------- -------- -------- -------- ---------- -------- Shares end of period: Shares........................ 25,933 30,140 14,337 5,094 65,424 73,159 Amount........................ $690,738 $605,462 $151,450 $ 61,641 $1,038,787 $ 73,159 ======== ======== ======== ======== ========== ========
F-42 95 MONY AMERICA VARIABLE ACCOUNT L NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) 4. INVESTMENTS (CONTINUED) Investments in Variable Universal Life at cost, at June 30, 1998 consist of the following:
MONY SERIES FUND, INC. ----------------------------------------------------- INTERMEDIATE LONG TERM TERM GOVERNMENT MONEY BOND BOND SECURITIES MARKET PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ---------- ---------- ------------ Shares beginning of period: Shares............. 21,076 $ 69,535 45,767 3,698,674 Amount............. $229,105 $ 870,461 $ 482,067 $ 3,698,674 -------- ---------- --------- ------------ Shares acquired: Shares............. 11,212 32,608 13,757 11,089,287 Amount............. $124,009 $ 440,071 $ 148,924 $ 11,089,287 Shares received for reinvestment of dividends: Shares............. 1,372 4,085 1,728 71,134 Amount............. $ 14,696 $ 53,185 $ 18,282 $ 71,134 Shares redeemed: Shares............. (3,684) (20,234) (15,763) (11,544,812) Amount............. $(40,118) $ (245,997) $(163,607) $(11,544,812) -------- ---------- --------- ------------ Net change: Shares............. 8,900 16,459 (278) (384,391) Amount............. $ 98,587 $ 247,259 $ 3,599 $ (384,391) -------- ---------- --------- ------------ Shares end of period: Shares............. 29,976 85,994 45,489 3,314,283 Amount............. $327,692 $1,117,720 $ 485,666 $ 3,314,283 ======== ========== ========= ============ ENTERPRISE ACCUMULATION TRUST -------------------------------------------------------------------- HIGH INTERNATIONAL YIELD EQUITY SMALL CAP MANAGED GROWTH BOND PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ----------- ----------- ----------- ------------- ---------- Shares beginning of period: Shares............. 469,730 306,544 1,473,001 660,074 339,706 Amount............. $15,117,468 $ 7,542,179 $54,701,619 $4,186,777 $1,900,963 ----------- ----------- ----------- ---------- ---------- Shares acquired: Shares............. 218,389 192,950 499,841 303,244 179,136 Amount............. $ 8,217,427 $ 5,553,977 $21,877,939 $2,042,440 $1,038,343 Shares received for reinvestment of dividends: Shares............. 0 0 0 0 15,654 Amount............. $ 0 $ 0 $ 0 $ 0 $ 90,721 Shares redeemed: Shares............. (69,964) (53,390) (180,695) (108,867) (63,727) Amount............. $(1,977,458) $(1,054,122) $(5,512,846) $ (632,167) $ (348,740) ----------- ----------- ----------- ---------- ---------- Net change: Shares............. 148,425 139,560 319,146 194,377 131,063 Amount............. $ 6,239,969 $ 4,499,855 $16,365,093 $1,410,273 $ 780,324 ----------- ----------- ----------- ---------- ---------- Shares end of period: Shares............. 618,155 446,104 1,792,147 854,451 470,769 Amount............. $21,357,437 $12,042,034 $71,066,712 $5,597,050 $2,681,287 =========== =========== =========== ========== ==========
F-43 96 REPORT OF INDEPENDENT ACCOUNTANTS TO THE BOARD OF DIRECTORS OF MONY LIFE INSURANCE COMPANY OF AMERICA: We have audited the accompanying statutory statements of admitted assets, liabilities, capital and surplus of MONY Life Insurance Company of America ("the Company") as of December 31, 1997 and 1996, and the related statutory statements of operations, capital and surplus, and cash flows for the years then ended. These statutory financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. The Company presents its financial statements in conformity with the accounting practices prescribed or permitted by the Insurance Department of the State of Arizona ("statutory"), which is a comprehensive basis of accounting other than generally accepted accounting principles ("GAAP"). As explained in Note 2 to the financial statements, the accounting practices used by the Company vary from generally accepted accounting principles, and the effects of these variances are material. In our opinion, because of the effects of the matter discussed in the preceding paragraph, the statutory financial statements referred to above do not present fairly, in conformity with GAAP, the financial position of the Company as of December 31, 1997 and 1996, or the results of its operations and its cash flows, for the years then ended. In our opinion, however, the statutory financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities, capital and surplus of the Company as of December 31, 1997 and 1996, and the results of its operations and its cash flows for the years then ended on the basis of accounting described in Note 2. Our audits were conducted for the purpose of expressing an opinion on the financial statements taken as a whole. The Supplemental Schedule of Selected Financial Data is presented to comply with the National Association of Insurance Commissioners' Annual Statement Instructions and is not a required part of the basic financial statements. The Supplemental Schedule of Selected Financial Data has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. COOPERS & LYBRAND L.L.P. New York, New York February 27, 1998 F-44 97 MONY LIFE INSURANCE COMPANY OF AMERICA STATEMENTS OF ADMITTED ASSETS, LIABILITIES, CAPITAL AND SURPLUS -- STATUTORY BASIS (IN THOUSANDS)
DECEMBER 31, ----------------------- 1997 1996 ---- ---- ASSETS Cash and invested assets: Cash and short-term investments........................ $ 45,956 $ 90,207 Bonds.................................................. 1,074,724 1,047,957 Common stocks.......................................... 981 1,235 Mortgage loans......................................... 134,828 158,847 Real estate............................................ 22,627 40,725 Policy loans........................................... 45,892 41,464 Other invested assets.................................. 7,001 8,518 ---------- ---------- Total cash and invested assets.................... 1,332,009 1,388,953 Investment income due and accrued........................... 22,402 20,401 Other assets................................................ 247 2,511 Separate account assets..................................... 3,606,711 2,529,992 ---------- ---------- Total assets...................................... $4,961,369 $3,941,857 ========== ========== LIABILITIES, CAPITAL AND SURPLUS Liabilities: Life insurance and annuity reserves.................... $1,241,979 $1,284,529 Deposits left with the Company......................... 23,197 23,525 Policy claims in process of settlement................. 8,331 6,085 Federal income taxes due or accrued.................... 17,837 29,077 Transfers from separate accounts....................... (128,943) (97,477) Other liabilities...................................... 32,869 18,842 Separate account liabilities........................... 3,606,711 2,529,992 Interest maintenance reserve........................... 3,965 3,583 Investment reserves.................................... 6,000 4,000 Asset valuation reserve................................ 16,272 17,887 ---------- ---------- Total liabilities................................. 4,828,218 3,820,043 Capital and surplus: Capital stock, $1.00 par value; authorized, 5,000,000 shares issued and outstanding, 2,500,000 shares....... 2,500 2,500 Additional paid-in capital............................. 133,500 133,500 Unassigned funds....................................... (2,849) (14,186) ---------- ---------- Total capital and surplus......................... 133,151 121,814 ---------- ---------- Total liabilities, capital and surplus............ $4,961,369 $3,941,857 ========== ==========
The accompanying notes are an integral part of these financial statements. F-45 98 MONY LIFE INSURANCE COMPANY OF AMERICA STATEMENTS OF OPERATIONS -- STATUTORY BASIS (IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, -------------------- 1997 1996 ---- ---- Premiums, annuity considerations and fund deposits.......... $799,035 $741,870 Net investment income....................................... 99,006 102,092 Other income (net).......................................... 332 22 -------- -------- 898,373 843,984 Policyholder and contractholder benefits.................... 407,381 336,731 Change in policy and contract reserves...................... (42,879) (35,010) Commissions................................................. 40,860 36,793 Operating expenses.......................................... 64,866 53,212 Transfer to separate accounts............................... 397,492 428,101 -------- -------- 867,720 819,827 Net gain from operations before federal income taxes........ 30,653 24,157 Federal income taxes........................................ 17,390 14,407 -------- -------- Net gain from operations.................................... 13,263 9,750 Net realized capital losses (See Note 7).................. (3,544) (1,720) -------- -------- Net Income.................................................. $ 9,719 $ 8,030 ======== ========
The accompanying notes are an integral part of these financial statements. F-46 99 MONY LIFE INSURANCE COMPANY OF AMERICA STATEMENTS OF CAPITAL AND SURPLUS -- STATUTORY BASIS (IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, -------------------- 1997 1996 ---- ---- Capital and surplus, beginning of year...................... $121,814 $115,630 -------- -------- Net income.................................................. 9,719 8,030 Change in net unrealized capital gains...................... 2,774 1,618 Change in non-admitted assets............................... (771) 384 Change in asset valuation reserve........................... 1,615 (3,848) Increase in investment reserve.............................. (2,000) 0 -------- -------- Net change in capital and surplus for the year.............. 11,337 6,184 -------- -------- Capital and surplus, end of year............................ $133,151 $121,814 ======== ========
The accompanying notes are an integral part of these financial statements. F-47 100 MONY LIFE INSURANCE COMPANY OF AMERICA STATEMENTS OF CASH FLOWS -- STATUTORY BASIS (IN THOUSANDS)
FOR THE YEARS ENDED DECEMBER 31, ---------------------- 1997 1996 ---- ---- CASH FROM OPERATIONS: Premiums, annuity considerations and fund deposits..... $ 799,751 $ 741,905 Investment income, net of investment expenses.......... 97,589 104,606 Other income........................................... 833 985 Policy benefits paid................................... (405,289) (336,206) Transfers to separate accounts......................... (428,958) (460,502) Commissions, other expenses and taxes paid............. (105,188) (91,150) Federal income taxes (excluding tax on capital gains)................................................ (27,516) 0 --------- --------- Net cash from operations..................... (68,778) (40,362) --------- --------- CASH FROM INVESTMENTS: Proceeds from investments sold, matured or repaid: Bonds............................................. 130,649 134,846 Stocks............................................ 1,050 0 Mortgage loans.................................... 37,670 53,226 Real estate....................................... 18,453 19,790 Other invested assets............................. 1,512 18 Other............................................. 361 88 Taxes paid on net capital gains................... (1,564) 0 --------- --------- Total investment proceeds.................... 188,131 207,968 --------- --------- Cost of investments acquired: Bonds............................................. 157,583 163,792 Stocks............................................ 68 40 Mortgage loans.................................... 13,641 38,651 Real estate....................................... 1,180 3,392 Other invested assets............................. 574 1,388 Change in policy loans............................ 4,428 3,339 --------- --------- Total investments acquired................... 177,474 210,602 --------- --------- Net cash from investments.................... 10,657 (2,634) --------- --------- CASH FROM FINANCING AND MISCELLANEOUS SOURCES: Cash provided: Other sources..................................... 13,870 8,041 --------- --------- Net cash from financing and miscellaneous sources.................................... 13,870 8,041 --------- --------- Net change in cash and short-term investments.......... (44,251) (34,955) Cash and short-term investments, beginning of year.......... 90,207 125,162 --------- --------- Cash and short-term investments, end of year................ $ 45,956 $ 90,207 ========= =========
The accompanying notes are an integral part of these financial statements. F-48 101 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION: MONY Life Insurance Company of America (the "Company"), an Arizona corporation, is a wholly owned subsidiary of The Mutual Life Insurance Company of New York ("MONY"), a mutual life insurance company. The Company's primary business is to provide interest-sensitive life insurance and asset accumulation products to business owners, growing families, and pre-retirees. The Company's insurance and financial products are marketed and distributed directly to individuals primarily through MONY's career agency sales force. These products are sold throughout the United States (except New York) and Puerto Rico. On September 8, 1997, MONY announced that it is pursuing converting to a stock life insurance company through demutualization. In connection with the demutualization, MONY has prepared a Plan of Reorganization ("the Plan") which is subject to approval by the Insurance Department of the State of New York as well as adoption by MONY's Board of Trustees and approval by MONY's policyholders. In accordance with the Plan, subject to the approvals indicated above, among other things, MONY will convert from a New York mutual life insurance company to a New York stock life insurance company (the "Plan of Demutualization") and become a wholly owned subsidiary of MONY Financial Services Corporation (the "Holding Company"), a holding company organized in Delaware for the purpose of becoming the parent holding company of MONY. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The accompanying statutory financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Insurance Department of the State of Arizona ("statutory"), which is a comprehensive basis of accounting other than generally accepted accounting principles ("GAAP"). The preparation of statutory financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of results of operations and changes in surplus during the reporting period. Actual results could differ significantly from those estimates. The most significant estimates made in conjunction with the preparation of the Company's financial statements include those used in determining (i) valuation reserves for mortgage loans and real estate investments, and (ii) the liability for future policy benefits. In financial statements prepared in conformity with statutory accounting, the accounting treatment of certain items is different than for financial statements prepared in conformity with GAAP. Some of the general differences include: - Policy acquisition costs, such as commissions and other costs incurred in connection with acquiring new and renewal business, are expensed when incurred; under GAAP, such costs are deferred and amortized over the present value of expected gross margins. - Premiums for universal life and investment-type products are recognized as revenue when due; under GAAP, they are reported as deposits to policyholders' account balances. Revenues from these contracts under GAAP consist of amounts assessed during the period against policyholders' account balances for mortality, policy administration and surrender charges. - Policy reserves are based on statutory mortality and interest requirements, without consideration of withdrawals, and are reported net of reinsurance reserve credits; under GAAP, the reserves for interest sensitive life and annuity products are equal to the fund value and are reported gross of reinsurance reserve credits. F-49 102 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): - No provision is made for deferred income taxes; under GAAP, deferred income taxes result from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. - An interest maintenance reserve ("IMR") is established as a liability to capture realized investment gains and losses, net of tax, on the sale of fixed maturities and mortgage loans resulting from changes in the general level of interest rates, and is amortized into income over the remaining years to expected maturity of the assets sold; under GAAP, assets are carried on the balance sheet, net of appropriate valuation allowances. - An asset valuation reserve ("AVR"), based upon a formula prescribed by the NAIC, is established as a liability to offset potential non-interest related investment losses, and changes in the AVR are charged or credited to surplus; under GAAP, no such reserve is required. - Bonds in good standing are generally carried at amortized cost; under GAAP, bonds which are classified as available for sale are carried at fair value and the related change in unrealized gains and losses, net of related deferred taxes and an adjustment for deferred policy acquisition costs, is reported as a component of other comprehensive income in equity. - Certain assets designated as "non-admitted," are excluded from assets by a direct charge to surplus; under GAAP, such assets are carried on the balance sheet, net of appropriate valuation allowances. - Methods used for calculating real estate and mortgage loan values and real estate depreciation under statutory reporting are different from those used for GAAP. - Cash equivalents are defined as all highly liquid debt securities with original maturities of twelve months or less; under GAAP, cash equivalents are defined as short-term, highly liquid investments, which generally have original maturities of three months or less. The following is a description of the Company's principal statutory accounting policies: a. Premiums and Insurance Expenses Premiums are included in revenue over the premium payment periods of the related policies. Annuity considerations and fund deposits are included in revenue as received. The costs of acquiring new business, primarily commissions, underwriting, agency and other costs related to issuance, maintenance and settlement of policies are charged to operations in the year incurred. b. Investments Bonds are stated at amortized cost, except those bonds not in good standing, which are carried at NAIC-designated values, which approximate fair value. Loan-backed bonds and structured securities are valued at amortized cost using the effective interest method considering anticipated prepayments at the date of purchase; significant changes in the estimated cash flows from the original purchase assumptions are accounted for using the retrospective method. Common stocks are carried at fair value. Policy loans are carried at their unpaid principal balances. Short-term investments are carried at amortized cost and consist of securities with original maturities of twelve months or less. Mortgage loans other than those in process of foreclosure are carried at their unpaid principal balances adjusted for unamortized premium or discount. Real estate owned for investment is carried at depreciated cost, less encumbrances, if any. There were no encumbrances in 1997 or 1996. Joint ventures in real estate are F-50 103 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): included in Other Invested Assets and are carried principally at their equity value. Other investments are generally carried at cost. Real estate acquired through foreclosure is carried at the lower of cost, less accumulated depreciation and encumbrances, if any, or estimated fair value at the time of foreclosure. There were no encumbrances in 1997 or 1996. Mortgage loans in process of foreclosure are carried at the lower of the current carrying value or estimated fair value. Fair value is determined by using the estimated discounted cash flows expected from the underlying real estate properties. These projected cash flows are based on estimates regarding future operating expenses, lease rates, occupancy levels and investors' targeted yields. The Company provides, through a direct charge to surplus, an investment valuation reserve for permanent impairment of real estate investments, joint ventures in real estate, mortgage loans delinquent for more than 60 days and restructured mortgage loans. This reserve reflects, in part, the excess of the carrying value of such assets over the estimated undiscounted cash flows expected from the underlying real estate properties. These projected cash flows are based on estimates similar to those described in the preceding paragraph. As of December 31, 1997 and 1996, the Company's investment valuation reserve was $6 million and $4 million, respectively. Derivative instruments are valued consistently with the items being hedged. Hedges of fixed income assets and/or liabilities are valued at amortized cost. Derivatives that cease to be effective hedges are valued at market value. Realized capital gains and losses on sales of investments are determined on the basis of specific identification. Unrealized capital gains and losses are recorded directly to surplus. Investment income is recognized as earned. Investment income earned includes the amortization of premium and accretion of discount relative to bonds acquired at other than their par value and excludes certain overdue due and accrued interest income. c. Interest Maintenance Reserve and Asset Valuation Reserve Realized investment gains and losses (net of tax) for bonds and mortgage loans resulting from changes in interest rates are deferred, and credited or charged to the IMR. These amounts are amortized into net income over the remaining years to expected maturity of the assets sold. The AVR is based upon a formula prescribed by the NAIC and functions as a reserve for potential non-interest related investment losses. In addition, realized investment gains and losses (not subject to the IMR) and unrealized gains and losses result in changes in the AVR which are recorded directly to surplus. d. Policy Reserves Policy reserves for deferred annuity contracts are computed by using the Commissioners' Annuity Reserve Valuation Method by using the 1971 IAM Table for contracts issued before 1984 and the 1983 Table A for contracts issued since 1983 and prescribed statutory interest rates. Policy reserves for universal life and single premium whole life contracts are computed by using the Commissioners' Reserve Valuation Method and by using the 1958 and 1980 CSO Tables, and prescribed statutory interest rates. e. Non-admitted Assets Certain assets designated as "non-admitted" assets (principally miscellaneous receivables) are excluded from the statements of admitted assets, liabilities, capital and surplus. F-51 104 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): f. Separate Account Assets and Liabilities Separate account assets and liabilities represent primarily segregated funds administered and invested by the Company for the benefit of certain contractholders. Assets consist of securities reported at market value. Premiums, benefits and expenses of the separate accounts are included in the Company's statements of operations. g. Depreciation The Company uses the constant-yield method of depreciation for substantially all investments in real estate and real estate joint ventures and limited partnerships acquired prior to January 1, 1991. Acquisitions subsequent to January 1, 1991 and foreclosed real estate are depreciated on the straight-line method. Real estate assets and improvements are generally depreciated over ten to forty-year periods and leasehold improvements are depreciated over the lives of the leases. Depreciation expense related to investments in real estate was $1.1 million and $1.4 million in 1997 and 1996, respectively; accumulated depreciation was $4.4 million at December 31, 1997 and 1996. h. Cash Flows Short-term investments are characterized as cash equivalents for purposes of the statements of cash flows. Certain amounts for 1996 have been reclassified to conform to the 1997 presentation. 3. CAPITAL AND SURPLUS: MONY guaranteed to the states who requested it, pursuant to conditions imposed by such states as a prerequisite for the licensing of new subsidiaries, that the Company's capital and surplus would be maintained at a level at least equivalent to the minimum capital and surplus required for admission to conduct business in those states. As of December 31, 1997 and 1996, this guarantee was outstanding in the state of New Jersey. 4. RELATED PARTY TRANSACTIONS: At both December 31, 1997 and 1996, approximately 26 percent of the Company's investments in mortgages were held through joint participation with MONY. In addition, approximately 100 percent and 87 percent of the Company's real estate and joint venture investments were held through joint participation with MONY at December 31, 1997 and 1996, respectively. In 1997 the New York City Industrial Development Agency issued bonds in the total amount of $16.0 million for the benefit of MONY related to MONY's consolidation of site locations to New York City. Debt service under the bonds is funded by lease payments by MONY to the bond trustee for the benefit of the Company, which is the sole bondholder. The bonds are listed as affiliated bonds on Schedule D. The Company and MONY are parties to an agreement whereby MONY agrees to reimburse the Company to the extent that the Company's recognized loss as a result of mortgage loan default or foreclosure or subsequent sale of the underlying collateral exceeds 75 percent of the appraised value of the loan at origination for each such mortgage loan. Pursuant to the agreement, the Company received payments from MONY totaling $0.1 million in both 1997 and 1996. The Company has a service agreements with MONY whereby MONY provides personnel services, facilities, supplies and equipment to the Company to conduct its business as well as for the Company to F-52 105 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 4. RELATED PARTY TRANSACTIONS (CONTINUED): provide services to MONY Series Fund, Inc. ("the Fund"), an affiliate of the Company, as an investment advisor. Services rendered by MONY under these agreements are provided on a cost reimbursable basis. The Company has an investment advisory agreement with the Fund with respect to the investment and management of the Fund's invested assets. The Company is compensated for such services with an investment management fee computed in accordance with the terms of the agreement. The Company has three underwriting agreements with the Fund and MONY Securities Corporation ("MSC"). The agreements provide for MSC to act as the principal underwriter for the sale of the Company's flexible premium variable annuity contracts and as the broker for the sale of the Fund's shares. These agreements may be terminated at any time by either MSC or the Company upon sixty days prior notice. In addition, the Company has an investment advisory agreement with MONY whereby MONY provides investment advisory services with respect to the investment and management of the Company's investment portfolio. The agreement provides for scheduled fees for actual cost reimbursement and may be terminated by either party upon 60 days written notice. 5. FIXED MATURITY SECURITIES AND COMMON STOCKS: Fixed Maturity Securities by Investment Type and Common Stocks: The cost and estimated fair value (see Note 8) of investments in fixed maturity securities (including short-term investments and bonds) and common stocks as of December 31, 1997 and December 31, 1996 are presented in the table below. Cost is amortized cost for fixed maturity securities and original cost for common stocks.
GROSS GROSS ESTIMATED UNREALIZED UNREALIZED FAIR COST GAINS LOSSES VALUE ------------------- ------------- ----------- ------------------- 1997 1996 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- ---- ---- (DOLLARS IN MILLIONS) U.S. Treasury securities & obligations of U.S. government agencies................ $ 5.9 $ 5.9 $ 0.0 $ 0.0 $0.0 $0.0 $ 5.9 $ 5.9 Collateralized mortgage obligations: Government agency backed................ 123.7 126.4 2.2 1.3 0.1 1.0 125.8 126.7 Non-agency backed....................... 34.5 35.0 2.0 1.5 0.0 0.2 36.5 36.3 Other asset backed securities: Government agency backed................ 0.2 0.2 0.0 0.0 0.0 0.0 0.2 0.2 Non-agency backed....................... 93.8 98.5 2.1 1.3 0.2 0.7 95.7 99.1 Public utilities.......................... 123.8 129.0 3.1 2.3 0.2 1.0 126.7 130.3 Corporate bonds........................... 676.8 653.0 18.0 13.2 2.2 4.8 692.6 661.4 Affiliates................................ 16.0 0.0 0.0 0.0 0.0 0.0 16.0 0.0 -------- -------- ----- ----- ---- ---- -------- -------- Total bonds............................. 1,074.7 1,048.0 27.4 19.6 2.7 7.7 1,099.4 1,059.9 Commercial paper.......................... 25.7 86.5 0.0 0.0 0.0 0.0 25.7 86.5 -------- -------- ----- ----- ---- ---- -------- -------- Total bonds and short-term investments........................... $1,100.4 $1,134.5 $27.4 $19.6 $2.7 $7.7 $1,125.1 $1,146.4 ======== ======== ===== ===== ==== ==== ======== ======== Common stocks............................. $ 0.8 $ 1.1 $ 0.2 $ 0.1 $0.0 $0.0 $ 1.0 $ 1.2 ======== ======== ===== ===== ==== ==== ======== ========
Amortized cost represents the principal amount of the fixed maturity securities adjusted by unamortized premium or discount and reduced by writedowns of $0.4 million and $3.4 million at December 31, 1997 and 1996, respectively, as required by the NAIC for securities which are in or near default. F-53 106 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. FIXED MATURITY SECURITIES AND COMMON STOCKS (CONTINUED): At December 31, 1997, 78.2% of the Company's Collateralized Mortgage Obligation (CMO) portfolio was held in U.S. government and government agency-backed securities. The remainder of the CMO portfolio consisted of NAIC category 1 investment grade securities. Maturities of Fixed Maturity Securities: The amortized cost and estimated fair value of fixed maturity securities by maturity date as of December 31, 1997 are as follows:
ESTIMATED AMORTIZED FAIR COST VALUE --------- --------- ($ IN MILLIONS) Due in one year or less................................. $ 48.9 $ 49.0 Due after one year through five years................... 411.4 418.1 Due after five years through ten years.................. 380.4 391.3 Due after ten years..................................... 259.7 266.7 -------- -------- $1,100.4 $1,125.1 ======== ========
Fixed maturity securities that are not due at a single maturity date have been included in the preceding table in the year of final maturity. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Proceeds from sales of investments in fixed maturity securities during 1997 and 1996 were $31.3 million and $13.3 million, respectively. Gross gains of $0.5 million in 1997 and $0.2 million in 1996, and gross losses of $4.3 million in 1997 and $0.3 million in 1996 were realized on these sales. Proceeds from sales of investments in common stocks during 1997 and 1996 were $1.0 million and $0, respectively. Gross gains of $0.7 million in 1997 and $0 in 1996, and gross losses of $0 in 1997 and $0 in 1996 were realized on these sales. There were no non-income producing bonds and redeemable preferred stocks for the twelve months preceding December 31, 1997. The carrying values of fixed maturity securities which were non-income producing for the twelve months preceding December 31, 1996 were $1.0 million. 6. MORTGAGE LOANS AND REAL ESTATE: The Company invests in mortgage loans collateralized by commercial and agricultural real estate. Such mortgage loans consist primarily of first mortgage liens on completed income-producing properties, including agricultural properties. As of December 31, 1997, $55.3 million of mortgage loans have terms that require amortization, and $79.5 million of mortgage loans require partial amortization or are non-amortizing. Mortgage loans delinquent over 90 days or in process of foreclosure were $0.6 million at December 31, 1997 and there were no mortgage loans delinquent over 90 days or in process of foreclosure at December 31, 1996. There were no properties acquired through foreclosure during 1997 or 1996. The Company has performing restructured mortgage loans of $14.1 million as of December 31, 1997 and $15.0 million as of December 31, 1996. The new terms typically reduce the contract rate of interest. Interest is recognized in income based on the modified rate of the loan. Gross interest income on restructured loans that would have been recorded in accordance with the loans' original terms was approximately $1.4 million in 1997 and $1.5 million in 1996. Gross interest income recognized in net income for the period from these loans was $1.0 million in 1997 and $1.1 million in 1996. There are no commitments to lend additional funds to any debtor involved in a restructuring. F-54 107 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. MORTGAGE LOANS AND REAL ESTATE (CONTINUED): At both December 31, 1997 and 1996, there were no mortgage loans that were non-income producing for the preceding twelve months. At both December 31, 1997 and 1996, there were no real estate properties that were non-income producing for the preceding twelve months. 7. INVESTMENT INCOME, REALIZED AND UNREALIZED CAPITAL GAINS (LOSSES): Net investment income for the years ended December 31, 1997 and 1996 was derived from the following sources:
1997 1996 ---- ---- ($ IN MILLIONS) NET INVESTMENT INCOME - ------------------------------------------------------------ Bonds and common stock...................................... $ 79.0 $ 77.5 Mortgage loans.............................................. 12.0 14.4 Real estate (net of property expenses)...................... 1.2 3.0 Policy loans................................................ 3.5 2.7 Other investments (including cash & short-term investments).............................................. 6.6 7.5 ------ ------ Total investment income................................ 102.3 105.1 Investment expenses......................................... 3.3 3.0 ------ ------ Net investment income.................................. $ 99.0 $102.1 ====== ======
Net realized capital gains (losses) on investments for the years ended December 31, 1997 and 1996 are summarized as follows:
1997 1996 ---- ---- ($ IN MILLIONS) REALIZED CAPITAL GAINS (LOSSES) - ------------------------------------------------------------ Bonds and common stock...................................... $(2.4) $ 0.9 Real estate and mortgage loans.............................. 0.4 (0.1) Derivative instruments...................................... 0.0 (0.8) Other....................................................... (0.2) 0.0 ----- ----- (2.2) 0.0 Taxes....................................................... (0.5) (0.8) Transferred to IMR, net of taxes............................ (0.8) (0.9) ----- ----- Net realized capital losses............................ $(3.5) $(1.7) ===== =====
During 1997 and 1996, realized capital losses resulting from changes in interest rates on bonds of $0.8 million (net of $0.5 million tax) and $0.9 million (net of $0.5 million tax), respectively, were transferred to the Company's IMR for future amortization into net income. Net unrealized capital gains were $2.8 million in 1997 and $1.6 million in 1996. The 1997 and 1996 net unrealized gains include writedowns of approximately $0.2 million in 1997 and $0 in 1996 on real estate acquired through foreclosure and mortgage loans in process of foreclosure. These gains and losses are detailed by asset type in the table below. F-55 108 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 7. INVESTMENT INCOME, REALIZED AND UNREALIZED CAPITAL GAINS (LOSSES) (CONTINUED):
1997 1996 ---- ---- ($ IN MILLIONS) UNREALIZED CAPITAL GAINS (LOSSES) - ------------------------------------------------------------ Bonds and stocks............................................ $ 3.0 $1.6 Real estate and mortgage loans.............................. (0.2) 0.0 ----- ---- Total net unrealized capital gains..................... $ 2.8 $1.6 ===== ====
8. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS: The estimated fair values of mortgage loans, common stocks, cash, short-term investments, separate account assets and liabilities, and investment-type contracts approximate their carrying amounts. The carrying values of bonds were $1,074.7 million and $1,048.0 million at December 31, 1997 and 1996, respectively. The estimated fair values of bonds were $1,099.4 million and $1,059.9 million at December 31, 1997 and 1996, respectively. The methods and assumptions utilized in estimating these fair values of financial instruments are summarized as follows: Fixed maturity securities (See Note 5) The estimated fair values of fixed maturity securities are based upon quoted market prices, where available. The fair values of fixed maturity securities not actively traded and other non-publicly traded securities are estimated using values obtained from independent pricing services or, in the case of private placements, by discounting expected future cash flows using a current market interest rate commensurate with the credit quality and term of the investments. Mortgage loans The fair value of mortgage loans is estimated by discounting expected future cash flows, using current interest rates for similar loans to borrowers with similar credit risk. Loans with similar characteristics are aggregated for purposes of the calculations. The fair value of mortgage loans in process of foreclosure is the estimated fair value of the underlying collateral. Policy loans Policy loans are an integral component of insurance contracts and have no maturity dates. Management has determined that it is not practicable to estimate the fair value of policy loans. Separate account assets and liabilities The estimated fair value of assets held in separate accounts is based principally on quoted market prices. The fair value of liabilities related to separate accounts is the amount payable on demand, net of surrender charges. Investment-type Contract Liabilities The fair values of annuities are based on estimates of the value of payments available upon full surrender. The fair values of the Company's liabilities under guaranteed investment contracts are estimated by discounting expected cash outflows using interest rates currently offered for similar contracts with maturities consistent with those remaining for the contracts being valued, where appropriate. F-56 109 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 9. OFF BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK: Financial Instruments with Off-Balance Sheet Risk: In 1992, the Company entered into an agreement with a bank to lend securities to approved borrowers. There were $65,000 of loaned securities as of December 31, 1997. The minimum collateral on securities loaned is 102% of the market value of loaned securities. Such securities are marked to market on a daily basis, adjusting required collateral values accordingly. Concentrations of Credit Risk: As of December 31, 1997 and 1996, the Company had no single investment or series of investments with a single issuer (excluding U.S. Government Agency securities) exceeding 1.4 percent and 1.3 percent, respectively, of total cash and invested assets. The bond portfolio is diversified by industry type. The industries comprising 10 percent or more of the carrying value of the bond portfolio at December 31, 1997 are Financial Services of $133.5 million (12.4 percent), Government and Agencies of $129.8 million (12.1 percent), Energy of $128.3 million (11.9 percent), Non-Government Asset/Mortgage-Backed of $128.3 million (11.9 percent), Public Utilities of $123.8 million (11.5 percent), and Consumer Goods and Services of $112.5 million (10.5 percent). At December 31, 1996, the industries comprising 10 percent or more of the carrying value of the bond portfolio were Government and Agencies of $132.5 million (12.7 percent), Non-Government Asset/Mortgage-Backed of $133.5 million (12.7 percent), Public Utilities of $129.0 million (12.3 percent), Energy of $119.7 million (11.4 percent), and Other Manufacturing of $116.9 million (11.2 percent). The Company holds below investment grade bonds of $79.7 million at December 31, 1997. Below, investment grade bonds are defined as those securities rated in categories 3 through 6 by the NAIC, which are approximately equivalent to bonds rated below BBB by rating agencies. These bonds consist mostly of privately issued bonds, which are monitored by the Company through extensive internal analysis of the financial condition of the borrowers, and which include protective debt covenants. Of these bonds, $66.6 million are in category 3, which is considered to be medium quality by the NAIC. At December 31, 1996, the Company's investments in below investment grade bonds were $59.4 million. The Company has investments in commercial and agricultural mortgage loans and real estate (including joint ventures). The locations of property collateralizing mortgage loans and real estate investment carrying values at December 31, 1997 and 1996 are as follows:
1997 1996 -------------- -------------- $ % $ % - - - - ($ IN MILLIONS) GEOGRAPHIC REGION - ------------------------------------------ West...................................... 54.0 32.9 71.3 34.3 Mountain.................................. 41.2 25.1 48.3 23.3 Northeast................................. 25.3 15.4 25.6 12.3 Southwest................................. 16.8 10.2 20.9 10.1 Midwest................................... 14.7 8.9 25.5 12.3 Southeast................................. 12.4 7.5 16.1 7.7 ----- ----- ----- ----- Total........................... 164.4 100.0 207.7 100.0 ===== ===== ===== =====
The states with the largest concentrations of mortgage loans and real estate investments at December 31, 1997 are: California, $33.8 million (20.6%); New York, $19.1 million (11.6%); Texas, $16.2 million (9.9%); Arizona, $13.6 million (8.3%); Washington, $11.6 million (7.1%) and Idaho, $10.7 million (6.5%). F-57 110 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 9. OFF BALANCE SHEET RISK AND CONCENTRATIONS OF CREDIT RISK (CONTINUED): As of December 31, 1997 and 1996, the real estate and mortgage loan portfolio was also diversified as follows:
1997 1996 -------------- -------------- $ % $ % - - - - ($ IN MILLIONS) PROPERTY TYPE - -------------------------------------------- Agriculture................................. 99.5 60.5 117.8 56.7 Office Building............................. 24.5 14.9 34.9 16.8 Hotel....................................... 15.0 9.1 21.5 10.4 Retail...................................... 10.3 6.3 12.3 5.9 Industrial.................................. 7.3 4.5 9.4 4.5 Other....................................... 4.4 2.6 4.4 2.1 Apartments.................................. 3.4 2.1 7.4 3.6 ----- ----- ----- ----- Total............................. 164.4 100.0 207.7 100.0 ===== ===== ===== =====
10. RESERVES: The withdrawal characteristics of the Company's annuity actuarial reserves and deposit liabilities as of December 31, 1997 were as follows:
($ IN MILLIONS) Not subject to discretionary withdrawal provision........... $ 77.1 Subject to discretionary withdrawal -- with adjustment: - at book value less surrender charges of 5% or more................................................. 180.9 - at market value..................................... 3,403.3 -------- Subtotal..................................... 3,584.2 Subject to discretionary withdrawal -- without adjustment: - at book value (minimal or no charge or adjustment).......................................... 475.1 -------- Total annuity actuarial reserves and deposit liabilities -- gross and net of reinsurance................................ $4,136.4 ========
The amounts above are included in the Company's statements of admitted assets, liabilities, capital and surplus as life insurance and annuity reserves ($0.7) billion and separate account liabilities ($3.4) billion. 11. REINSURANCE: Life insurance business is ceded on a yearly renewable term basis to MONY and other insurance companies under various reinsurance contracts. The Company's general practice is to retain no more than $0.5 million of risk on any one person. The total amount of reinsured life insurance in force on this basis was $2.7 billion and $2.6 billion at December 31, 1997 and 1996, respectively. Premiums ceded under these contracts were $16.1 million and $14.6 million; benefit payments recovered were $11.6 million and $17.3 million; policy reserve credits recorded were $11.1 million and $10.6 million; and recoverable amounts on paid and unpaid losses were $2.4 million and $3.5 million in 1997 and 1996, respectively. The Company is contingently liable with respect to ceded insurance should any reinsurer be unable to meet its obligations under these agreements. To limit the possibility of such losses, the Company evaluates the financial condition of its reinsurers and monitors concentration of credit risk. F-58 111 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 12. FEDERAL INCOME TAXES: The Company is included in the consolidated federal income tax return with its parent, MONY, and the parent's non-life subsidiaries. The allocation of federal income taxes is based upon separate return calculations with current credit for net losses and other federal income tax credits provided to the life insurance members of the affiliated group. Intercompany tax balances are settled annually in the fourth quarter. The Company's federal income tax returns for years through 1991 have been examined with no proposed material adjustments. In the opinion of management, adequate provision has been made for any additional taxes that may become due with respect to open years. Pre-tax operating gains and pre-tax realized gains, as reported in the accompanying statements of operations, differ from taxable income reported for tax purposes. Significant differences include the deferral and amortization of policy acquisition costs for tax purposes, the difference between statutory and tax reserves, depreciation expense and related recapture, capital gains deferred to the IMR, and equity in joint ventures. 13. COMMITMENTS AND CONTINGENCIES: In late 1995 and during 1996, a number of purported class actions were commenced in various state and federal courts against the Company and MONY ("the Companies") alleging that the Companies engaged in deceptive sales practices in connection with the sale of whole and universal life insurance policies during the period 1980 to the present. Although the claims asserted in each case are not identical, they seek substantially the same relief under essentially the same theories of recovery (i.e. breach of contract, fraud, negligent misrepresentation, negligent supervision and training, breach of fiduciary duty, unjust enrichment and violation of state insurance and/or deceptive business practice laws). The Companies have answered the complaints in each action (except for one being voluntarily held in abeyance), have denied any wrongdoing, and have asserted numerous affirmative defenses. On June 7, 1996, the New York State Supreme Court certified the Goshen case, being the first of the aforementioned class actions filed, as a nationwide class consisting of all persons or entities who have, or at the time of the policy's termination, had an ownership interest in a whole or universal life insurance policy issued by the Companies and sold on an alleged "vanishing premium" basis during the period January 1, 1982 to December 31, 1995. On March 27, 1997, the Companies filed a motion to dismiss or, alternatively, motion for summary judgment on all counts of the complaint. The Massachusetts District Court in the Multidistrict Litigation has entered an order recognizing the Goshen case as the lead case and essentially holding all of the federal cases in abeyance pending the action of the Goshen case. Consequently, all other putative class actions have been either consolidated and transferred by the Judicial Panel on Multidistrict Litigation to the United States District Court for the District of Massachusetts, or are being voluntarily held in abeyance pending the outcome of the Goshen case. On October 21, 1997, the New York State Supreme Court granted the Companies' motion for summary judgment and dismissed all claims filed in the Goshen case against the Companies. The order by the New York State Supreme Court has been appealed to the Appellate Division by plaintiffs and all actions before the United States District Court for the District of Massachusetts are still pending. In addition to the matters discussed above, the Company is involved in various other legal actions and proceedings in connection with its businesses. The claimants in certain of these actions and proceedings seek damages of unspecified amounts. In addition, insurance companies are subject to assessments, up to statutory limits, by state guaranty funds for losses of policyholders of insolvent insurance companies. F-59 112 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 13. COMMITMENTS AND CONTINGENCIES (CONTINUED): In the opinion of management of the Company, resolution of contingent liabilities arising from litigation, income taxes and other matters will not have a material adverse effect on the Company's statutory surplus or results of operations. At December 31, 1997, the Company had a commitment to issue a $1.9 million fixed rate farm loan with an interest rate of 7.8% and a duration of 10 years. There were no outstanding bond commitments as of December 31, 1997. 14. YEAR 2000: The Year 2000 issue is the result of the widespread use of computer programs written using two digits (rather than four) to define the applicable year. Such programming was a common industry practice designed to avoid the significant costs associated with additional mainframe capacity necessary to accommodate a four-digit year field. As a result, any of the Company's computer systems that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a major systems failure or miscalculations. The Company has conducted a comprehensive review of its computer systems to identify the systems that could be affected by the Year 2000 issue and has developed and implemented a plan to resolve the issue. The Company currently believes that, with modifications to existing software and converting to new software, the Year 2000 issue will not pose significant operational problems for the Company's computer systems. However, if such modifications and conversions are not completed on a timely basis, the Year 2000 issue may have a material impact on the operations of the Company. Furthermore, even if the Company completes such modifications and conversions on a timely basis, there can be no assurance that the failure by vendors or other third parties to solve the Year 2000 problem will not have a material impact on the operations of the Company. F-60 113 MONY LIFE INSURANCE COMPANY OF AMERICA SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA FOR THE YEAR ENDED DECEMBER 31, 1997 (AMOUNTS IN $ THOUSANDS) The following is a summary of certain financial data from the Company's Annual Statement included in other exhibits and schedules subjected to audit procedures by independent accountants and utilized by the Company's actuaries in the determination of reserves: INVESTMENT INCOME EARNED: - ------------------------------------------------------------ U.S. Government bonds................................... 387 Other bonds (unaffiliated).............................. 77,378 Bonds of affiliates..................................... 602 Preferred stocks (unaffiliated)......................... 0 Preferred stocks of affiliates.......................... 0 Common stocks (unaffiliated)............................ 1 Common stocks of affiliates............................. 0 Mortgage loans.......................................... 12,097 Real estate............................................. 8,565 Premium notes, policy loans and liens................... 3,465 Collateral loans........................................ 0 Cash on hand and on deposit............................. 117 Short-term investments.................................. 4,652 Other invested assets................................... 571 Derivative instruments.................................. 0 Aggregate write-ins for investment income............... 1,355 ---------- Gross investment income............................. 109,190 ========== REAL ESTATE OWNED -- BOOK VALUE LESS ENCUMBRANCES........... 22,627 MORTGAGE LOANS -- BOOK VALUE: - ------------------------------------------------------------ Farm mortgages.......................................... 99,492 Residential mortgages................................... 0 Commercial mortgages.................................... 35,336 ---------- Total mortgage loans................................ 134,828 ========== MORTGAGE LOANS BY STANDING -- BOOK VALUE: - ------------------------------------------------------------ Good standing........................................... 120,120 Good standing with restructured terms................... 14,126 Interest overdue more than three months, not in foreclosure............................................ 0 Foreclosure in process.................................. 582 ---------- Total mortgage loans................................ 134,828 ========== OTHER LONG TERM ASSETS -- STATEMENT VALUE................... 52,824 COLLATERAL LOANS............................................ 0 BONDS AND STOCKS OF PARENTS, SUBSIDIARIES AND AFFILIATES -- BOOK VALUE: - ------------------------------------------------------------ Bonds................................................... 16,000 Preferred Stocks........................................ 0 Common Stocks........................................... 0
F-61 114 MONY LIFE INSURANCE COMPANY OF AMERICA SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1997 (AMOUNTS IN $ THOUSANDS) BONDS AND SHORT-TERM INVESTMENTS BY CLASS AND MATURITY: - ------------------------------------------------------------ BONDS AND SHORT-TERM INVESTMENTS BY MATURITY -- STATEMENT VALUE: - ------------------------------------------------------------ Due within one year or less............................. 84,300 Over 1 year through 5 years............................. 573,903 Over 5 years through 10 years........................... 344,927 Over 10 years through 20 years.......................... 68,716 Over 20 years........................................... 28,578 ---------- Total by Maturity................................... 1,100,424 ========== BONDS AND SHORT-TERM INVESTMENTS BY MATURITY -- STATEMENT VALUE: - ------------------------------------------------------------ Class 1................................................. 579,042 Class 2................................................. 441,677 Class 3................................................. 66,571 Class 4................................................. 12,524 Class 5................................................. 0 Class 6................................................. 610 ---------- Total by Class...................................... 1,100,424 ========== TOTAL BONDS AND SHORT-TERM INVESTMENTS -- PUBLICLY TRADED... 645,558 TOTAL BONDS AND SHORT-TERM INVESTMENTS -- PRIVATELY PLACED.................................................... 454,866 PREFERRED STOCKS -- STATEMENT VALUE......................... 0 COMMON STOCKS -- MARKET VALUE............................... 981 SHORT-TERM INVESTMENTS -- BOOK VALUE........................ 25,700 FINANCIAL OPTIONS OWNED -- STATEMENT VALUE.................. 0 FINANCIAL OPTIONS WRITTEN AND IN FORCE -- STATEMENT VALUE... 0 FINANCIAL FUTURES CONTRACTS OPEN -- CURRENT PRICE........... 0 CASH ON HAND AND ON DEPOSIT................................. 20,256 LIFE INSURANCE IN FORCE: - ------------------------------------------------------------ Industrial.............................................. 0 Ordinary................................................ 11,744,853 Credit Life............................................. 0 Group Life.............................................. 1,875,204 AMOUNT OF ACCIDENTAL DEATH INSURANCE IN FORCE UNDER ORDINARY POLICIES.................................................. 158,466 LIFE INSURANCE POLICIES WITH DISABILITY PROVISIONS IN FORCE: - ------------------------------------------------------------ Industrial.............................................. 0 Ordinary................................................ 3,671,469 Credit Life............................................. 0 Group Life.............................................. 199,912 SUPPLEMENTARY CONTRACTS IN FORCE: - ------------------------------------------------------------ Ordinary -- Not Involving Life Contingencies Amount on Deposit................................... 19,131 Income Payable...................................... 969 Ordinary -- Involving Life Contingencies Income Payable...................................... 2,996 Group -- Not Involving Life Contingencies Amount on Deposit................................... 28 Income Payable...................................... 0 Group -- Involving Life Contingencies Income Payable...................................... 15
F-62 115 MONY LIFE INSURANCE COMPANY OF AMERICA SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 1997 (AMOUNTS IN $ THOUSANDS) ANNUITIES: - ------------------------------------------------------------ Ordinary - ------------------------------------------------------------ Immediate -- Amount of Income Payable............... 0 Deferred -- Fully Paid -- Account Balance........... 0 Deferred -- Not Fully Paid -- Account Balance....... 0 Group - ------------------------------------------------------------ Amount of Income Payable............................ 0 Fully Paid -- Account Balance....................... 61,031 Not Fully Paid -- Account Balance................... 0 ACCIDENT AND HEALTH INSURANCE -- PREMIUMS IN FORCE: - ------------------------------------------------------------ Ordinary................................................ 0 Group................................................... 0 Credit.................................................. 0 DEPOSIT FUNDS AND DIVIDEND ACCUMULATIONS: - ------------------------------------------------------------ Deposit Funds -- Account Balance........................ 632,579 Dividend Accumulations -- Account Balance............... 0 CLAIM PAYMENTS 1997: - ------------------------------------------------------------ Group Accident and Health -- Year Ended December 31, 1997................................................... 0 1997................................................ 0 1996................................................ 0 1995................................................ 0 1994................................................ 0 1993................................................ 0 Prior............................................... 0 CLAIM PAYMENTS 1997: - ------------------------------------------------------------ Other Accident and Health -- Year Ended December 31, 1997 1997................................................ 0 1996................................................ 0 1995................................................ 0 1994................................................ 0 1993................................................ 0 Prior............................................... 0 Other coverages that use developmental methods to calculate claims reserves -- Year Ended December 31, 1997 1997................................................ 0 1996................................................ 0 1995................................................ 0 1994................................................ 0 1993................................................ 0 Prior............................................... 0
F-63 116 MONY LIFE INSURANCE COMPANY OF AMERICA UNAUDITED INTERIM STATEMENT OF ADMITTED ASSETS, LIABILITIES, CAPITAL AND SURPLUS -- STATUTORY BASIS JUNE 30, 1998 (IN THOUSANDS) ASSETS Cash and invested assets: Cash and short-term investments........................ $ 25,974 Bonds.................................................. 1,095,489 Common stocks.......................................... 76 Mortgage loans......................................... 138,017 Real estate............................................ 9,536 Policy loans........................................... 48,674 Other invested assets.................................. 7,443 ---------- Total cash and invested assets.................... 1,325,209 Investment income due and accrued........................... 23,042 Other assets................................................ 6 Separate account assets..................................... 4,211,882 ---------- Total assets...................................... $5,560,139 ========== LIABILITIES, CAPITAL AND SURPLUS Liabilities: Life insurance and annuity reserves.................... $1,216,022 Deposits left with the Company......................... 23,292 Policy claims in process of settlement................. 7,268 Federal income taxes due or accrued.................... 26,802 Transfers from separate accounts....................... (140,762) Other liabilities...................................... 48,211 Separate account liabilities........................... 4,211,882 Interest maintenance reserve........................... 4,579 Investment reserves.................................... 6,000 Asset valuation reserve................................ 15,041 ---------- Total liabilities................................. 5,418,335 Capital and surplus: Capital stock, $1.00 par value; authorized, 5,000,000 shares Issued and outstanding, 2,500,000 shares............. 2,500 Additional paid-in capital............................. 133,500 Unassigned funds....................................... 5,804 ---------- Total capital and surplus......................... 141,804 ---------- Total liabilities, capital and surplus............ $5,560,139 ==========
The accompanying notes are an integral part of these financial statements. F-64 117 MONY LIFE INSURANCE COMPANY OF AMERICA UNAUDITED INTERIM STATEMENTS OF OPERATIONS -- STATUTORY BASIS
FOR THE SIX MONTHS ENDED JUNE 30, ------------------------ 1998 1997 ---- ---- (IN THOUSANDS) Premiums, annuity considerations and fund deposits.......... $442,820 $395,251 Net investment income....................................... 48,222 49,739 Other income (net).......................................... (14) 118 -------- -------- 491,028 445,108 -------- -------- Policyholder and contractholder benefits.................... 263,826 191,859 Change in policy and contract reserves...................... (25,861) (21,816) Commissions................................................. 19,101 17,868 Operating expenses.......................................... 44,066 30,022 Transfer to separate accounts............................... 175,055 206,407 -------- -------- 476,187 424,340 -------- -------- Net gain from operations before federal income tax.......... 14,841 20,768 Federal income taxes........................................ 7,587 10,390 -------- -------- Net gain from operations.................................... 7,254 10,378 Net realized capital losses............................ (78) (1,897) -------- -------- Net income.................................................. $ 7,176 $ 8,481 ======== ========
The accompanying notes are an integral part of these financial statements. F-65 118 MONY LIFE INSURANCE COMPANY OF AMERICA UNAUDITED INTERIM STATEMENTS OF CAPITAL AND SURPLUS -- STATUTORY BASIS
FOR THE SIX MONTHS ENDED JUNE 30, ------------------------ 1998 1997 ---- ---- (IN THOUSANDS) Capital and surplus, beginning of period.................... $133,151 $121,814 -------- -------- Net income.................................................. 7,176 8,482 Change in net unrealized capital gains...................... (124) (37) Change in non-admitted assets............................... 371 142 Change in asset valuation reserve........................... 1,230 149 -------- -------- Net change in capital and surplus for the period............ 8,653 8,736 -------- -------- Capital and surplus, end of period.......................... $141,804 $130,550 ======== ========
The accompanying notes are an integral part of these financial statements. F-66 119 MONY LIFE INSURANCE COMPANY OF AMERICA UNAUDITED INTERIM STATEMENTS OF CASH FLOWS -- STATUTORY BASIS
FOR THE SIX MONTHS ENDED JUNE 30, ------------------------ 1998 1997 ---- ---- (IN THOUSANDS) CASH FROM OPERATIONS: Premiums, annuity considerations and fund deposits..... $442,792 $395,250 Investment income, net of investment expenses.......... 47,250 45,364 Other income........................................... (14) 141 Policy benefits paid................................... (264,718) (191,539) Transfers to separate accounts......................... (186,874) (220,565) Commissions, other expenses and taxes paid............. (61,795) (46,757) Federal income taxes (excluding tax on capital gains)................................................ 0 (3) -------- -------- Net cash from operations..................... (23,359) (18,109) -------- -------- CASH FROM INVESTMENTS: Proceeds from investments sold, matured or repaid: Bonds............................................. 89,715 66,670 Stocks............................................ 955 0 Mortgage loans.................................... 10,704 14,640 Real estate....................................... 14,017 11,451 Other invested assets............................. 357 1,356 Other............................................. (2) 3,318 -------- -------- Total investment proceeds.................... 115,746 97,435 -------- -------- Cost of investments acquired: Bonds............................................. 109,190 88,935 Stocks............................................ 0 68 Mortgage loans.................................... 13,517 6,378 Real estate....................................... 355 777 Other invested assets............................. 800 6,517 Change in policy loans............................ 2,781 2,865 -------- -------- Total investments acquired................... 126,643 105,540 -------- -------- Net cash from investments.................... (10,897) (8,105) -------- -------- CASH FROM FINANCING AND MISCELLANEOUS SOURCES: Cash provided: Other sources..................................... 14,274 (2,452) -------- -------- Net cash from financing and miscellaneous sources................................... 14,274 (2,452) -------- -------- Net change in cash and short-term investments.......... (19,982) (28,666) Cash and short-term investments, beginning of period........ 45,956 90,207 -------- -------- Cash and short-term investments, end of period.............. $ 25,974 $ 61,541 ======== ========
The accompanying notes are an integral part of these financial statements. F-67 120 MONY LIFE INSURANCE COMPANY OF AMERICA NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS 1. ORGANIZATION: MONY Life Insurance Company of America (the "Company"), an Arizona corporation, is a wholly owned subsidiary of The Mutual Life Insurance Company of New York ("MONY"), a mutual life insurance company. The Company's primary business is to provide interest-sensitive life insurance and asset accumulation products to business owners, growing families, and pre-retirees. The Company's insurance and financial products are marketed and distributed directly to individuals primarily through MONY's career agency sales force. These products are sold throughout the United States (except New York) and Puerto Rico. On September 8, 1997, MONY announced that it is pursuing converting to a stock life insurance company through demutualization. In connection with the demutualization, MONY has prepared a Plan of Reorganization ("the Plan") which is subject to approval by the Insurance Department of the State of New York as well as adoption by MONY's Board of Trustees and approval by MONY's policyholders. In accordance with the Plan, subject to the approvals indicated above, among other things, MONY will convert from a New York mutual life insurance company to a New York stock life insurance company (the "Plan of Demutualization") and become a wholly owned subsidiary of MONY Group, Inc. (the "Holding Company"), a holding company organized in Delaware for the purpose of becoming the parent holding company of MONY. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The unaudited interim financial statements of MONY Life Insurance Company of America have been prepared on the basis of accounting practices and procedures prescribed or permitted by the Insurance Department of the State of Arizona, which are currently considered generally accepted accounting principles for stock life insurance subsidiaries (domiciled in Arizona) of mutual life insurance companies. The accompanying unaudited interim financial statements, in the opinion of the Company's management, reflect all normal recurring adjustments necessary for a fair presentation of the interim financial position and results of operations. Results of operations for the six months ended June 30, 1998 are not necessarily indicative of results to be expected for the full year. These interim financial statements should be read in conjunction with the Company's annual audited financial statements. 3. ESTIMATED FAIR VALUE OF FIXED INCOME AND MORTGAGE INVESTMENTS: The Company's fixed income securities are carried at amortized cost which represents the principal amount adjusted by unamortized premium or discount. The carrying value of securities which are not in good standing was reduced by write-downs required by the National Association of Insurance Commissioners (NAIC) of $0.4 million at June 30, 1998. Fair values of fixed income securities are based upon quoted market prices, where available. The fair values of fixed income securities not actively traded and other non-publicly traded securities are estimated using values obtained from independent pricing services or, in the case private placements, by discounting expected future cash flows using a current market interest rate commensurate with the credit, quality and term of the investments. Fixed income securities, which include short-term investments and bonds, had an estimated fair value of $1,136.1 million and an amortized cost of $1,109.0 million at June 30, 1998. Mortgage loans are collateralized by commercial and agricultural real estate and consist primarily of first mortgage liens on completed income producing properties or agricultural properties. The fair value of mortgage loans is estimated by discounting expected future cash flows, using current interest rates for similar loans to borrowers with similar credit risk. Loans with similar characteristics are aggregated for purposes of the calculations. The resulting estimated fair values are not necessarily indicative of the values that could be negotiated in an actual sale. The estimated fair value of the Company's investment in mortgage loans at June 30, 1998 approximates its carrying value of $138.0 million. F-68 121 APPENDIX A DEATH BENEFIT PERCENTAGE FOR GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST
APPLICABLE ATTAINED AGE PERCENTAGE - ------------ ---------- 40 and Under................................................ 250% 41.......................................................... 243 42.......................................................... 236 43.......................................................... 229 44.......................................................... 222 45.......................................................... 215 46.......................................................... 209 47.......................................................... 203 48.......................................................... 197 49.......................................................... 191 50.......................................................... 185 51.......................................................... 178 52.......................................................... 171 53.......................................................... 164 54.......................................................... 157 55.......................................................... 150 56.......................................................... 146 57.......................................................... 142 58.......................................................... 138 59.......................................................... 134 60.......................................................... 130 61.......................................................... 128 62.......................................................... 126 63.......................................................... 124 64.......................................................... 122 65.......................................................... 120 66.......................................................... 119 67.......................................................... 118 68.......................................................... 117 69.......................................................... 116 70.......................................................... 115 71.......................................................... 113 72.......................................................... 111 73.......................................................... 109 74.......................................................... 107 75-90....................................................... 105 91.......................................................... 104 92.......................................................... 103 93.......................................................... 102 94-100...................................................... 101
A-1 122 APPENDIX B MONTHLY PER $1,000 SPECIFIED AMOUNT FACTORS
ISSUE FACTOR AGE PER $1,000 - ----- ---------- 0-17........................................................ $0.07 18-36....................................................... 0.08 37.......................................................... 0.09 38.......................................................... 0.09 39.......................................................... 0.10 40.......................................................... 0.10 41.......................................................... 0.10 42.......................................................... 0.11 43.......................................................... 0.11 44.......................................................... 0.12 45.......................................................... 0.12 46.......................................................... 0.12 47.......................................................... 0.13 48.......................................................... 0.13 49.......................................................... 0.14 50.......................................................... 0.14 51.......................................................... 0.14 52.......................................................... 0.15 53.......................................................... 0.15 54.......................................................... 0.16 55.......................................................... 0.16 56.......................................................... 0.16 57.......................................................... 0.17 58.......................................................... 0.17 59.......................................................... 0.18 60.......................................................... 0.18 61.......................................................... 0.18 62.......................................................... 0.19 63.......................................................... 0.19 64.......................................................... 0.20 65.......................................................... 0.20 66.......................................................... 0.20 67.......................................................... 0.21 68.......................................................... 0.21 69.......................................................... 0.22 70.......................................................... 0.22 71.......................................................... 0.22 72.......................................................... 0.23 73.......................................................... 0.23 74.......................................................... 0.24 75.......................................................... 0.24 76.......................................................... 0.24 77.......................................................... 0.25 78.......................................................... 0.25 79.......................................................... 0.26 80.......................................................... 0.26 81.......................................................... 0.26 82.......................................................... 0.27 83.......................................................... 0.27 84.......................................................... 0.28 85.......................................................... 0.28
B-1 123 APPENDIX C GUARANTEED DEATH BENEFIT RIDER MONTHLY GUARANTEE PREMIUM FOR GUARANTEED DEATH BENEFIT RIDER WITH TEN YEAR/AGE 70 GUARANTEE PERIOD
MONTHLY GUARANTEE PREMIUM ----------------- Specified Amount = $200,000 Male age 45 Preferred Nonsmoker Death Benefit Option 1...... $229.17 Female age 45 Preferred Nonsmoker Death Benefit Option 1.... $174.00 Male age 45 Standard Smoker Death Benefit Option 1.......... $379.83 Male age 45 Preferred Nonsmoker Death Benefit Option 2...... $229.17 Male age 35 Preferred Nonsmoker Death Benefit Option 1...... $155.83 Male age 55 Preferred Nonsmoker Death Benefit Option 1...... $370.83
C-1 124 APPENDIX D ILLUSTRATIONS OF DEATH PROCEEDS, FUND VALUES AND CASH VALUES, AND PREMIUM OUTLAYS The following tables illustrate how the key financial elements of the Policy work, specifically, how the death benefits, Fund Values and Cash Values could vary over an extended period of time. In addition, each table compares these values with premiums paid accumulated with interest. The Policies illustrated include the following:
BENEFIT SPECIFIED SEE SEX AGE SMOKER OPTION AMOUNT PAGE - --- --- ------ ------- --------- ---- Male 45 Preferred Non-smoker 1 $200,000 D- Male 45 Standard Smoker 1 $200,000 D- Male 45 Preferred Non-smoker 2 $200,000 D- Male 35 Preferred Non-smoker 1 $200,000 D- Male 55 Preferred Non-smoker 1 $200,000 D-
The tables show how Death Proceeds, Fund Values and Cash Values of a hypothetical Policy could vary over an extended period of time if the Subaccounts of the Variable Account had constant hypothetical gross annual investment returns of 0%, 6% or 12% over the periods indicated in each table. The values will differ from those shown in the tables if the annual investment returns are not absolutely constant. That is, the death benefits, Fund Values and Cash Values will be different if the returns averaged 0%, 6% or 12% over a period of years but went above or below those figures in individual Policy years. These illustrations assume that no Policy Loan has been taken. The amounts shown would differ if unisex rates were used. The amounts shown for Death Proceeds, Fund Values and Cash Values reflect the fact the net investment return on the Policy is lower than the gross investment return on the Subaccounts of the Variable Account. This results from the charges levied against the Subaccounts of the Variable Account (i.e., the mortality and expense risk charge) as well as the premium loads, administrative charges and Surrender Charges. The difference between the Fund Value and the Cash Value in the first 14 years is the Surrender Charge. The tables illustrate cost of insurance and expense charges at both current rates (which are described under Cost of Insurance, page ) and at the maximum rates guaranteed in the Policies. The amounts shown at the end of each Policy year reflect a daily charge against the Funds as well as those assessed against the Subaccounts. These charges include the charge against the Subaccounts for mortality and expense risks and the effect on each Subaccount's investment experience of the charge to Portfolio assets for investment management and direct expenses. The mortality and expense risk fee is .35% annually on a guaranteed basis. The tables also reflect a deduction for a daily investment advisory fee and for other expenses of the Portfolio at a rate equivalent to an annual rate of 0.75% of the aggregate average daily net assets of the Portfolio. This hypothetical rate is representative of the average maximum investment advisory fee and other expenses of the Portfolios applicable to the Subaccounts of the Variable Account. Actual fees and other expenses vary by Portfolio and may be subject to agreements by the sponsor to waive or otherwise reimburse each Portfolio for operating expenses which exceed certain limits. There can be no assurance that the expense reimbursement arrangements will continue in the future, and any unreimbursed expenses would be reflected in the values included on the tables. The effect of these investment management, direct expenses and mortality and expense risk charges on a 0% gross rate of return would result in a net rate of return of -.75%, on 6% it would be 5.25%, and on 12% it would be 11.25%. The tables assume the deduction of charges including administrative and sales charges. There are tables for the Policies listed in the chart above for death benefit Options 1 or 2 and each option is illustrated using current and guaranteed policy cost factors. The tables reflect the fact that the Company does not currently D-1 125 make any charge against the Variable Account for state or federal taxes. If such a charge is made in the future, it will take a higher rate of return to produce after-tax returns of 0%, 6% or 12%. The following are descriptions of Table columns and key terms: Age: Younger Insured's attained age at the end of the policy year Premium Outlay: The annualized out-of-pocket premium payments for each policy year including scheduled and any anticipated unscheduled premium payments. Premium payments are assumed to be paid at the beginning of each premium paying period. Amounts of surrenders and loans plus loan interest if any, are shown on the pages captioned "Premiums, Full Surrender and Policy Loans". Premium Accumulated at 5%: is equal to the premiums compounded at an annual effective rate of 5% and is shown at the end of the year. GUARANTEED CHARGES AT 0.00%, 6.00% OR 12.00% Cash Value: The value of the subaccounts at the end of each policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less all charges, fees and deductions at their guaranteed maximum. The cash value also takes into account any loans illustrated, as well as, the applicable surrender charges that would apply if the policy were surrendered prior to the end of the first fourteen years. Fund Value: The value of the subaccounts at the end of each policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less all charges, fees and deductions at their guaranteed maximum. The Fund Value DOES NOT take into account the applicable surrender charges that would apply if the policy were surrendered prior to the end of the first fourteen years. Death Proceeds: The benefit payable if the insured's death occurs at the end of the policy year, assuming a 0.00%, 6.00% or 12,00% hypothetical rate of return on the Funds, less all charges, fees and deductions at their guaranteed maximums. CURRENT CHARGES AT 0.00%, 6.00% OR 12.00% Cash Value: The value of the subaccounts at the end of each policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less all charges, fees and deductions at the current, non-guaranteed rates. The cash value also takes into account any loans illustrated, as well as, the applicable surrender charges that would apply if the policy were surrendered prior to the end of the first fourteen years. Fund Value: The value of the subaccounts at the end of each policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less all charges, fees and deductions at the current, non-guaranteed rates. The Fund Value DOES NOT take into account the applicable surrender charges that would apply if the policy were surrendered prior to the end of the first fourteen years. Death Proceeds: The benefit payable if the insured's death occurs at the end of the policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less all charges, fees and deductions at the current, non-guaranteed rates. The Company will furnish, upon request, a comparable illustration based on the age and sex of the proposed Insured, standard Premium Class assumptions and an initial Specified Amount and Scheduled Premium Payments of the applicant's choice. If a Policy is purchased, an individualized illustration will be delivered reflecting the Scheduled Premium Payment chosen and the Insured's actual risk class. After issuance, the Company will provide upon request an illustration of future Policy benefits based on both guaranteed and current cost factor assumptions and actual Account Value. The following is the page of supplemental footnotes to each of the flexible premium variable life to age 100 numeric summary and standard ledger statements which follow and which begin on pages B-4. D-2 126 STANDARD LEDGER STATEMENT -- SUPPLEMENTAL FOOTNOTE PAGE MONY CUSTOM EQUITYMASTER FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY MONY LIFE INSURANCE COMPANY OF AMERICA ADDITIONAL INFORMATION This policy has been tested for the possibility of classification as a modified endowment. This test is not a guarantee that a policy will not be classified as a modified endowment. This illustration has been checked against federal tax laws relating to their definition of life insurance and is in compliance based on proposed premium payments and coverages. Any decrease in specified amount and/or a change in death benefit option 2 to death benefit option 1 and/or surrenders occurring in the first 15 years may cause a taxable event. In addition, if the policy is defined as a modified endowment policy, a loan, surrender, or assignment or pledge (unless such assignment or pledge is for burial expenses and the maximum death benefit is not in excess of $25,000) may be considered a taxable distribution and a ten percent penalty may be added to any tax on the distribution. Please consult your tax advisor for advice. GUIDELINE PREMIUMS
AGE, GENDER, UNDERWRITING CLASSIFICATION INITIAL GUIDELINE INITIAL GUIDELINE AND DEATH BENEFIT OPTION SINGLE PREMIUM ANNUAL PREMIUM ---------------------------------------- ----------------- ----------------- Age 45, Male, Non-Smoker Preferred, Option 1 $28,330.66 $2,420.01 Age 45, Male, Smoker Standard, Option 1 $33,905.16 $2,881.48 Age 45, Male, Non-Smoker, Preferred, Option 2 $28,330.66 $9,458.29 Age 35, Male, Non-Smoker, Preferred, Option 1 $17,379.05 $1,518.57 Age 55, Male, Non-Smoker, Preferred, Option 1 $46,771.69 $4,057.53
Values shown on this illustration are based on a policyowner tax bracket of 0%. Premiums are assumed to be paid at the beginning of the payment period. Policy values and ages are shown as of the end of the policy year and reflect the effect of all loans and surrenders. The death proceeds, fund value and value upon surrender will differ if premiums are paid in different amounts, frequencies, or not on the due date. The policy's cash value is net of any applicable surrender charge. Premiums less the following deductions are added to the fund value: 1. A premium tax charge of 2.25% of gross premiums in all policy years. 2. A sales charge on the gross premiums. The sales charges equal 6% of each premium dollar paid up to the Target Premium, and 3% of all premiums after the tenth Policy year. 3. A DAC tax charge of 1.50% of gross premiums in all policy years. Those columns assuming guaranteed charges use the current monthly mortality charges, current monthly administrative charges, current charges for mortality and expense risks, current charges for rider benefits, if any, and current premium sales charge ("current charges" for the first year) as well as the assumed hypothetical gross annual investment return indicated. Thereafter these columns use guaranteed monthly mortality charges, guaranteed monthly administrative charges, guaranteed charges for mortality and expense risks, guaranteed charges for rider benefits if any, guaranteed maximum premium sales charge, and the assumed hypothetical gross annual investment return indicated. Those columns assuming current charges are based upon "current charges" and the assumed hypothetical gross annual investment return indicated. The current charges declared by MONY Life Insurance Company of America are guaranteed for the first policy year and apply to policies issued as of the illustration preparation date and could change between the preparation date and the date the policy is issued. After the first policy year, current charges are not guaranteed, and may be changed at the discretion of MONY Life Insurance Company of America. D-3 127 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 0 876 200,000 0 876 200,000 0 876 200,000 5 1,323 3,428 4,221 200,000 3,428 4,221 200,000 3,479 4,272 200,000 10 1,323 7,817 7,949 200,000 7,817 7,949 200,000 8,101 8,233 200,000 20 1,323 14,448 14,448 200,000 14,448 14,448 200,000 16,065 16,065 200,000 @ Age 70 1,323 12,911 12,911 200,000 12,911 12,911 200,000 17,458 17,458 200,000 @ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. *** Policy lapses in policy year 37 based on current charges and a gross investment return of 0.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-4 128 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 1,389 0 876 200,000 0 876 200,000 0 876 200,000 2 1,323 2,847 546 1,736 200,000 546 1,736 200,000 552 1,742 200,000 3 1,323 4,379 1,523 2,581 200,000 1,523 2,581 200,000 1,539 2,597 200,000 4 1,323 5,986 2,484 3,410 200,000 2,484 3,410 200,000 2,514 3,440 200,000 5 1,323 7,675 3,428 4,221 200,000 3,428 4,221 200,000 3,479 4,272 200,000 6 1,323 9,447 4,352 5,014 200,000 4,352 5,014 200,000 4,431 5,092 200,000 7 1,323 11,309 5,256 5,785 200,000 5,256 5,785 200,000 5,370 5,899 200,000 8 1,323 13,263 6,137 6,534 200,000 6,137 6,534 200,000 6,296 6,693 200,000 9 1,323 15,315 6,992 7,256 200,000 6,992 7,256 200,000 7,206 7,471 200,000 10 1,323 17,470 7,817 7,949 200,000 7,817 7,949 200,000 8,101 8,233 200,000 11 1,323 19,732 8,863 8,863 200,000 8,863 8,863 200,000 9,229 9,229 200,000 12 1,323 22,108 9,737 9,737 200,000 9,737 9,737 200,000 10,200 10,200 200,000 13 1,323 24,602 10,566 10,566 200,000 10,566 10,566 200,000 11,141 11,141 200,000 14 1,323 27,221 11,347 11,347 200,000 11,347 11,347 200,000 12,035 12,035 200,000 15 1,323 29,971 12,072 12,072 200,000 12,072 12,072 200,000 12,867 12,867 200,000 16 1,323 32,858 12,732 12,732 200,000 12,732 12,732 200,000 13,642 13,642 200,000 17 1,323 35,890 13,317 13,317 200,000 13,317 13,317 200,000 14,353 14,353 200,000 18 1,323 39,074 13,811 13,811 200,000 13,811 13,811 200,000 14,991 14,991 200,000 19 1,323 42,416 14,195 14,195 200,000 14,195 14,195 200,000 15,555 15,555 200,000 20 1,323 45,926 14,448 14,448 200,000 14,448 14,448 200,000 16,065 16,065 200,000 21 1,323 49,611 14,549 14,549 200,000 14,549 14,549 200,000 16,527 16,527 200,000 22 1,323 53,481 14,473 14,473 200,000 14,473 14,473 200,000 16,906 16,906 200,000 23 1,323 57,544 14,196 14,196 200,000 14,196 14,196 200,000 17,186 17,186 200,000 24 1,323 61,810 13,689 13,689 200,000 13,689 13,689 200,000 17,371 17,371 200,000 25 1,323 66,289 12,911 12,911 200,000 12,911 12,911 200,000 17,458 17,458 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-5 129 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,323 70,992 11,807 11,807 200,000 11,807 11,807 200,000 17,425 17,425 200,000 27 1,323 75,931 10,303 10,303 200,000 10,303 10,303 200,000 17,257 17,257 200,000 28 1,323 81,116 8,300 8,300 200,000 8,300 8,300 200,000 16,930 16,930 200,000 29 1,323 86,561 5,674 5,674 200,000 5,674 5,674 200,000 16,381 16,381 200,000 30 1,323 92,278 2,288 2,288 200,000 2,288 2,288 200,000 15,569 15,569 200,000 31 1,323 98,281 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 14,436 14,436 200,000 32 1,323 104,584 12,919 12,919 200,000 33 1,323 111,202 10,938 10,938 200,000 34 1,323 118,151 8,397 8,397 200,000 35 1,323 125,448 5,182 5,182 200,000 36 1,323 133,109 1,154 1,154 200,000 37 1,323 141,153 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-6 130 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** --------------------------- --------------------------- -------------------------- 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 0 876 200,000 0 938 200,000 0 938 200,000 5 1,323 3,428 4,221 200,000 4,305 5,099 200,000 4,361 5,155 200,000 10 1,323 7,817 7,949 200,000 11,137 11,270 200,000 11,472 11,604 200,000 20 1,323 14,448 14,448 200,000 29,129 29,129 200,000 31,345 31,345 200,000 @ Age 70 1,323 12,911 12,911 200,000 37,182 37,182 200,000 43,076 43,076 200,000 @ Age 85 1,323 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 59,917 59,917 200,000 @ Age 90 1,323 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 7,383 7,383 200,000
* Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 37 based on guaranteed charges and a gross investment return of 6.00%. *** Policy lapses in policy year 46 based on current charges and a gross investment return of 6.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-7 131 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES --------------------------------------------------- ------------------------ END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 1,389 0 876 200,000 0 938 200,000 0 938 200,000 2 1,323 2,847 546 1,736 200,000 724 1,915 200,000 730 1,920 200,000 3 1,323 4,379 1,523 2,581 200,000 1,875 2,933 200,000 1,891 2,950 200,000 4 1,323 5,986 2,484 3,410 200,000 3,068 3,994 200,000 3,101 4,027 200,000 5 1,323 7,675 3,428 4,221 200,000 4,305 5,099 200,000 4,361 5,155 200,000 6 1,323 9,447 4,352 5,014 200,000 5,585 6,247 200,000 5,673 6,334 200,000 7 1,323 11,309 5,256 5,785 200,000 6,910 7,439 200,000 7,039 7,568 200,000 8 1,323 13,263 6,137 6,534 200,000 8,277 8,674 200,000 8,459 8,856 200,000 9 1,323 15,315 6,992 7,256 200,000 9,687 9,951 200,000 9,937 10,201 200,000 10 1,323 17,470 7,817 7,949 200,000 11,137 11,270 200,000 11,472 11,604 200,000 11 1,323 19,732 8,863 8,863 200,000 12,890 12,890 200,000 13,328 13,328 200,000 12 1,323 22,108 9,737 9.737 200,000 14,560 14,560 200,000 15,121 15,121 200,000 13 1,323 24,602 10,566 10,566 200,000 16,277 16,277 200,000 16,983 16,983 200,000 14 1,323 27,221 11,347 11,347 200,000 18,040 18,040 200,000 18,899 18,899 200,000 15 1,323 29,971 12,072 12,072 200,000 19,843 19,843 200,000 20,859 20,859 200,000 16 1,323 32,858 12,732 12,732 200,000 21,680 21,680 200,000 22,867 22,867 200,000 17 1,323 35,890 13,317 13,317 200,000 23,542 23,542 200,000 24,921 24,921 200,000 18 1,323 39,074 13,811 13,811 200,000 25,416 25,416 200,000 27,014 27,014 200,000 19 1,323 42,416 14,195 14,195 200,000 27,285 27,285 200,000 29,148 29,148 200,000 20 1,323 45,926 14,448 14,448 200,000 29,129 29,129 200,000 31,345 31,345 200,000 21 1,323 49,611 14,549 14,549 200,000 30,929 30,929 200,000 33,613 33,613 200,000 22 1,323 53,481 14,473 14,473 200,000 32,660 32,660 200,000 35,925 35,925 200,000 23 1,323 57,544 14,196 14,196 200,000 34,301 34,301 200,000 38,269 38,269 200,000 24 1,323 61,810 13,689 13,689 200,000 35,821 35,821 200,000 40,652 40,652 200,000 25 1,323 66,289 12,911 12,911 200,000 37,182 37,182 200,000 43,076 43,076 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-8 132 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES --------------------------------------------------- ------------------------ END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,323 70,992 11,807 11,807 200,000 38,332 38,332 200,000 45,526 45,526 200,000 27 1,323 75,931 10,303 10,303 200,000 39,200 39,200 200,000 47,991 47,991 200,000 28 1,323 81,116 8,300 8,300 200,000 39,691 39,691 200,000 50,457 50,457 200,000 29 1,323 86,561 5,674 5,674 200,000 39,691 39,691 200,000 52,876 52,876 200,000 30 1,323 92,278 2,288 2,288 200,000 39,066 39,066 200,000 55,216 55,216 200,000 31 1,323 98,281 LAPSED LAPSED LAPSED 37,661 37,661 200,000 57,438 57,438 200,000 32 1,323 104,584 35,301 35,301 200,000 59,494 59,494 200,000 33 1,323 111,202 31,773 31,773 200,000 61,328 61,328 200,000 34 1,323 118,151 26,810 26,810 200,000 62,872 62,872 200,000 35 1,323 125,448 20,053 20,053 200,000 64,046 64,046 200,000 36 1,323 133,109 11,003 11,003 200,000 64,753 64,753 200,000 37 1,323 141,155 LAPSED LAPSED LAPSED 64,888 64,888 200,000 38 1,323 149,600 64,320 64,320 200,000 39 1,323 158,469 62,769 62,769 200,000 40 1,323 167,781 59,917 59,917 200,000 41 1,323 177,559 55,447 55,447 200,000 42 1,323 187,826 48,831 48,831 200,000 43 1,323 198,606 39,388 39,388 200,000 44 1,323 209,925 26,043 26,043 200,000 45 1,323 221,811 7,383 7,383 200,000 46 1,323 234,290 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-9 133 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** --------------------------- ---------------------------- ---------------------------- 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 0 876 200,000 0 999 200,000 0 999 200,000 5 1,323 3,428 4,221 200,000 5,336 6,130 200,000 5,398 6,191 200,000 10 1,323 7,817 7,949 200,000 15,927 16,059 200,000 16,324 16,456 200,000 20 1,323 14,448 14,448 200,000 61,553 61,553 200,000 64,679 64,679 200,000 @ Age 70 1,323 12,911 12,911 200,000 105,845 105,845 200,000 113,582 113,582 200,000 @ Age 85 1,323 LAPSED LAPSED LAPSED 508,652 508,652 534,085 563,513 563,513 591,688 @ Age 90 1,323 LAPSED LAPSED LAPSED 828,345 828,345 869,763 933,169 933,169 979,828
* Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. ** Policy continues to age 100 based on guaranteed charges and a gross investment return of 12.00%. *** Policy continues to age 100 based on current charges and a gross investment return of 12.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-10 134 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------------ --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 1,389 0 876 200,000 0 999 200,000 0 999 200,000 2 1,323 2,847 546 1,736 200,000 910 2,100 200,000 916 2,107 200,000 3 1,323 4,379 1,523 2,581 200,000 2,257 3,315 200,000 2,274 3,332 200,000 4 1,323 5,986 2,484 3,410 200,000 3,728 4,654 200,000 3,763 4,689 200,000 5 1,323 7,675 3,428 4,221 200,000 5,336 6,130 200,000 5,398 6,191 200,000 6 1,323 9,447 4,352 5,014 200,000 7,094 7,756 200,000 7,192 7,853 200,000 7 1,323 11,309 5,256 5,785 200,000 9,017 9,546 200,000 9,162 9,691 200,000 8 1,323 13,263 6,137 6,534 200,000 11,118 11,515 200,000 11,328 11,725 200,000 9 1,323 15,315 6,992 7,256 200,000 13,416 13,680 200,000 13,708 13,972 200,000 10 1,323 17,470 7,817 7,949 200,000 15,927 16,059 200,000 16,324 16,456 200,000 11 1,323 19,732 8,863 8,863 200,000 18,945 18,945 200,000 19,471 19,471 200,000 12 1,323 22,108 9,737 9.737 200,000 22,115 22,115 200,000 22,800 22,800 200,000 13 1,323 24,602 10,566 10,566 200,000 25,597 25,597 200,000 26,472 26,472 200,000 14 1,323 27,221 11,347 11,347 200,000 29,422 29,422 200,000 30,508 30,508 200,000 15 1,323 29,971 12,072 12,072 200,000 33,623 33,623 200,000 34,937 34,937 200,000 16 1,323 32,858 12,732 12,732 200,000 38,232 38,232 200,000 39,805 39,805 200,000 17 1,323 35,890 13,317 13,317 200,000 43,289 43,289 200,000 45,157 45,157 200,000 18 1,323 39,074 13,811 13,811 200,000 48,832 48,832 200,000 51,041 51,041 200,000 19 1,323 42,416 14,195 14,195 200,000 54,903 54,903 200,000 57,520 57,520 200,000 20 1,323 45,926 14,448 14,448 200,000 61,553 61,553 200,000 64,679 64,679 200,000 21 1,323 49,611 14,549 14,549 200,000 68,836 68,836 200,000 72,601 72,601 200,000 22 1,323 53,481 14,473 14,473 200,000 76,822 76,822 200,000 81,352 81,352 200,000 23 1,323 57,544 14,196 14,196 200,000 85,587 85,587 200,000 91,019 91,019 200,000 24 1,323 61,810 13,689 13,689 200,000 95,227 95,227 200,000 101,720 101,720 200,000 25 1,323 66,289 12,911 12,911 200,000 105,845 105,845 200,000 113,582 113,582 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-11 135 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------------ --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,323 70,992 11,807 11,807 200,000 117,566 117,566 200,000 126,739 126,739 200,000 27 1,323 75,931 10,303 10,303 200,000 130,537 130,537 200,000 141,352 141,352 200,000 28 1,323 81,116 8,300 8,300 200,000 144,939 144,939 200,000 157,604 157,604 200,000 29 1,323 86,561 5,674 5,674 200,000 161,005 161,005 200,000 175,706 175,706 200,000 30 1,323 92,278 2,288 2,288 200,000 179,042 179,042 200,000 195,901 195,901 209,614 31 1,323 98,281 LAPSED LAPSED LAPSED 199,406 199,406 209,376 218,335 218,335 229,252 32 1,323 104,584 222,003 222,003 233,103 243,170 243,170 255,328 33 1,323 111,202 246,953 246,953 259,300 270,654 270,654 284,186 34 1,323 118,151 274,483 274,483 288,208 301,060 301,060 316,113 35 1,323 125,448 304,840 304,840 320,083 334,686 334,686 351,421 36 1,323 133,109 338,285 338,285 355,200 371,859 371,859 390,452 37 1,323 141,153 375,094 375,094 393,848 412,933 412,933 433,579 38 1,323 149,600 415,553 415,553 436,331 458,295 458,295 481,209 39 1,323 158,469 459,967 459,967 482,966 508,345 508,345 533,762 40 1,323 167,781 508,652 508,652 534,085 563,513 563,513 591,688 41 1,323 177,559 561,942 561,942 590,039 624,272 624,272 655,485 42 1,323 187,826 620,186 620,186 651,195 691,105 691,105 725,661 43 1,323 198,606 683,749 683,749 717,937 764,525 764,525 802,752 44 1,323 209,925 753,009 753,009 790,660 845,035 845,035 887,287 45 1,323 221,811 828,345 828,345 869,763 933,169 933,169 979,828 46 1,323 234,290 910,133 910,133 955,639 1,029,472 1,029,472 1,080,946 47 1,323 247,393 1,001,198 1,001,198 1,041,246 1,136,221 1,136,221 1,181,670 48 1,323 261,152 1,103,166 1,103,166 1,136,261 1,255,059 1,255,059 1,292,711 49 1,323 275,599 1,218,081 1,218,081 1,242,443 1,388,172 1,388,172 1,415,935 50 1,323 290,767 1,348,624 1,348,624 1,362,110 1,538,085 1,538,085 1,553,466
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-12 136 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------------ --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 51 1,323 306,695 1,492,374 1,492,374 1,507,298 1,703,795 1,703,795 1,720,833 52 1,323 323,418 1,650,054 1,650,054 1,666,555 1,886,851 1,886,851 1,905,720 53 1,323 340,978 1,821,428 1,821,428 1,839,642 2,089,117 2,089,117 2,110,009 54 1,323 359,416 2,007,836 2,007,836 2,027,914 2,312,558 2,312,558 2,335,684 55 1,323 378,776 2,213,192 2,213,192 2,235,324 2,559,344 2,559,344 2,584,937
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-13 137 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** --------------------------- --------------------------- --------------------------- 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,932 0 1,419 200,000 0 1,419 200,000 0 1,419 200,000 5 1,932 5,593 6,752 200,000 5,593 6,752 200,000 5,673 6,833 200,000 10 1,932 12,196 12,389 200,000 12,196 12,389 200,000 12,536 12,730 200,000 20 1,932 18,908 18,908 200,000 18,908 18,908 200,000 20,182 20,182 200,000 @ Age 70 1,932 13,304 13,304 200,000 13,304 13,304 200,000 17,644 17,644 200,000 @ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 29 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 29 based on guaranteed charges and a gross investment return of 0.00%. *** Policy lapses in policy year 32 based on current charges and a gross investment return of 0.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-14 138 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,932 2,029 0 1,419 200,000 0 1,419 200,000 0 1,419 200,000 2 1,932 4,159 1,064 2,803 200,000 1,064 2,803 200,000 1,077 2,815 200,000 3 1,932 6,395 2,610 4,156 200,000 2,610 4,156 200,000 2,640 4,186 200,000 4 1,932 8,744 4,121 5,473 200,000 4,121 5,473 200,000 4,174 5,526 200,000 5 1,932 11,210 5,593 6,752 200,000 5,593 6,752 200,000 5,673 6,833 200,000 6 1,932 13,799 7,023 7,989 200,000 7,023 7,989 200,000 7,136 8,102 200,000 7 1,932 16,518 8,404 9,177 200,000 8,404 9,177 200,000 8,558 9,331 200,000 8 1,932 19,372 9,732 10,312 200,000 9,732 10,312 200,000 9,936 10,515 200,000 9 1,932 22,369 10,999 11,385 200,000 10,999 11,385 200,000 11,264 11,650 200,000 10 1,932 25,517 12,196 12,389 200,000 12,196 12,389 200,000 12,536 12,730 200,000 11 1,932 28,821 13,587 13,587 200,000 13,587 13,587 200,000 14,009 14,009 200,000 12 1,932 32,291 14,698 14,698 200,000 14,698 14,698 200,000 15,207 15,207 200,000 13 1,932 35,934 15,712 15,712 200,000 15,712 15,712 200,000 16,309 16,309 200,000 14 1,932 39,759 16,623 16,623 200,000 16,623 16,623 200,000 17,286 17,286 200,000 15 1,932 43,776 17,418 17,418 200,000 17,418 17,418 200,000 18,148 18,148 200,000 16 1,932 47,994 18,083 18,083 200,000 18,083 18,083 200,000 18,881 18,881 200,000 17 1,932 52,422 18,596 18,596 200,000 18,596 18,596 200,000 19,464 19,464 200,000 18 1,932 57,072 18,927 18,927 200,000 18,927 18,927 200,000 19,878 19,878 200,000 19 1,932 61,954 19,042 19,042 200,000 19,042 19,042 200,000 20,122 20,122 200,000 20 1,932 67,080 18,908 18,908 200,000 18,908 18,908 200,000 20,182 20,182 200,000 21 1,932 72,463 18,489 18,489 200,000 18,489 18,489 200,000 20,134 20,134 200,000 22 1,932 78,115 17,753 17,753 200,000 17,753 17,753 200,000 19,851 19,851 200,000 23 1,932 84,049 16,670 16,670 200,000 16,670 16,670 200,000 19,349 19,349 200,000 24 1,932 90,280 15,205 15,205 200,000 15,205 15,205 200,000 18,622 18,622 200,000 25 1,932 96,823 13,304 13,304 200,000 13,304 13,304 200,000 17,644 17,644 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-15 139 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,932 103,693 10,888 10,888 200,000 10,888 10,888 200,000 16,361 16,361 200,000 27 1,932 110,906 7,843 7,843 200,000 7,843 7,843 200,000 14,769 14,769 200,000 28 1,932 118,480 4,022 4,022 200,000 4,022 4,022 200,000 12,813 12,813 200,000 29 1,932 126,433 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 10,336 10,336 200,000 30 1,932 134,783 7,237 7,237 200,000 31 1,932 143,551 3,407 3,407 200,000 32 1,932 152,757 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-16 140 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,932 0 1,419 200,000 0 1,513 200,000 0 1,513 200,000 5 1,932 5,593 6,752 200,000 6,978 8,137 200,000 7,066 8,226 200,000 10 1,932 12,196 12,389 200,000 17,429 17,623 200,000 17,837 18,031 200,000 20 1,932 18,908 18,908 200,000 41,265 41,265 200,000 43,114 43,114 200,000 @ Age 70 1,932 13,304 13,304 200,000 49,957 49,957 200,000 55,342 55,342 200,000 @ Age 85 1,932 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 30,895 30,895 200,000 @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 29 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 37 based on guaranteed charges and a gross investment return of 6.00%. *** Policy lapses in policy year 42 based on current charges and a gross investment return of 6.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-17 141 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,932 2,029 0 1,419 200,000 0 1,513 200,000 0 1,513 200,000 2 1,932 4,159 1,064 2,803 200,000 1,342 3,081 200,000 1,354 3,093 200,000 3 1,932 6,395 2,610 4,156 200,000 3,162 4,708 200,000 3,194 4,740 200,000 4 1,932 8,744 4,121 5,473 200,000 5,041 6,394 200,000 5,098 6,451 200,000 5 1,932 11,210 5,593 6,752 200,000 6,978 8,137 200,000 7,066 8,226 200,000 6 1,932 13,799 7,023 7,989 200,000 8,970 9,936 200,000 9,098 10,064 200,000 7 1,932 16,518 8,404 9,177 200,000 11,016 11,789 200,000 11,193 11,966 200,000 8 1,932 19,372 9,732 10,312 200,000 13,112 13,692 200,000 13,349 13,929 200,000 9 1,932 22,369 10,999 11,385 200,000 15,251 15,638 200,000 15,565 15,952 200,000 10 1,932 25,517 12,196 12,389 200,000 17,429 17,623 200,000 17,837 18,031 200,000 11 1,932 28,821 13,587 13,587 200,000 19,922 19,922 200,000 20,435 20,435 200,000 12 1,932 32,291 14,698 14,698 200,000 22,262 22,262 200,000 22,891 22,891 200,000 13 1,932 35,934 15,712 15,712 200,000 24,636 24,636 200,000 25,389 25,389 200,000 14 1,932 39,759 16,623 16,623 200,000 27,040 27,040 200,000 27,901 27,901 200,000 15 1,932 43,776 17,418 17,418 200,000 29,465 29,465 200,000 30,441 30,441 200,000 16 1,932 47,994 18,083 18,083 200,000 31,899 31,899 200,000 32,996 32,996 200,000 17 1,932 52,422 18,596 18,596 200,000 34,323 34,323 200,000 35,551 35,551 200,000 18 1,932 57,072 18,927 18,927 200,000 36,712 36,712 200,000 38,090 38,090 200,000 19 1,932 61,954 19,042 19,042 200,000 39,036 39,036 200,000 40,614 40,614 200,000 20 1,932 67,080 18,908 18,908 200,000 41,265 41,265 200,000 43,114 43,114 200,000 21 1,932 72,463 18,489 18,489 200,000 43,369 43,369 200,000 45,660 45,660 200,000 22 1,932 78,115 17,753 17,753 200,000 45,318 45,318 200,000 48,147 48,147 200,000 23 1,932 84,049 16,670 16,670 200,000 47,090 47,090 200,000 50,593 50,593 200,000 24 1,932 90,280 15,205 15,205 200,000 48,651 48,651 200,000 52,996 52,996 200,000 25 1,932 96,823 13,304 13,304 200,000 49,957 49,957 200,000 55,342 55,342 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-18 142 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,932 103,693 10,888 10,888 200,000 50,943 50,943 200,000 57,593 57,593 200,000 27 1,932 110,906 7,843 7,843 200,000 51,513 51,513 200,000 59,750 59,750 200,000 28 1,932 118,480 4,022 4,022 200,000 51,547 51,547 200,000 61,779 61,779 200,000 29 1,932 126,433 LAPSED LAPSED LAPSED 50,899 50,899 200,000 63,567 63,567 200,000 30 1,932 134,783 49,397 49,397 200,000 65,050 65,050 200,000 31 1,932 143,551 46,848 46,848 200,000 66,154 66,154 200,000 32 1,932 152,757 43,035 43,035 200,000 66,773 66,773 200,000 33 1,932 162,424 37,705 37,705 200,000 66,783 66,783 200,000 34 1,932 172,574 30,529 30,529 200,000 66,034 66,034 200,000 35 1,932 183,281 21,055 21,055 200,000 64,347 64,347 200,000 36 1,932 194,421 8,651 8,651 200,000 61,529 61,529 200,000 37 1,932 206,171 LAPSED LAPSED LAPSED 57,284 57,284 200,000 38 1,932 218,508 51,265 51,265 200,000 39 1,932 231,463 42,765 42,765 200,000 40 1,932 245,064 30,895 30,895 200,000 41 1,932 259,346 14,791 14,791 200,000 42 1,932 274,342 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-19 143 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- --------------------------------- --------------------------------- 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,932 0 1,419 200,000 0 1,608 200,000 0 1,608 200,000 5 1,932 5,593 6,752 200,000 8,603 9,762 200,000 8,701 9,860 200,000 10 1,932 12,196 12,389 200,000 24,984 25,178 200,000 25,476 25,669 200,000 20 1,932 18,908 18,908 200,000 91,845 91,845 200,000 94,631 94,631 200,000 @ Age 70 1,932 13,304 13,304 200,000 158,601 158,601 200,000 165,137 165,137 200,000 @ Age 85 1,932 LAPSED LAPSED LAPSED 768,788 768,788 807,228 811,134 811,134 851,691 @ Age 90 1,932 LAPSED LAPSED LAPSED 1,246,739 1,246,739 1,309,076 1,326,609 1,326,609 1,392,939
* Policy lapses in policy year 29 based on guaranteed charges and a gross investment return of 0.00%. ** Policy continues to age 100 based on guaranteed charges and a gross investment return of 12.00%. *** Policy continues to age 100 based on current charges and a gross investment return of 12.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-20 144 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES --------------------------------------------------------- ----------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,932 2,029 0 1,419 200,000 0 1,608 200,000 0 1,608 200,000 2 1,932 4,159 1,064 2,803 200,000 1,631 3,370 200,000 1,644 3,383 200,000 3 1,932 6,395 2,610 4,156 200,000 3,760 5,306 200,000 3,794 5,340 200,000 4 1,932 8,744 4,121 5,473 200,000 6,079 7,431 200,000 6,140 7,493 200,000 5 1,932 11,210 5,593 6,752 200,000 8,603 9,762 200,000 8,701 9,860 200,000 6 1,932 13,799 7,023 7,989 200,000 11,351 12,317 200,000 11,495 12,461 200,000 7 1,932 16,518 8,404 9,177 200,000 14,342 15,115 200,000 14,544 15,317 200,000 8 1,932 19,372 9,732 10,312 200,000 17,596 18,176 200,000 17,874 18,453 200,000 9 1,932 22,369 10,999 11,385 200,000 21,136 21,522 200,000 21,508 21,895 200,000 10 1,932 25,517 12,196 12,289 200,000 24,984 25,178 200,000 25,476 25,669 200,000 11 1,932 28,821 13,587 13,587 200,000 29,462 29,462 200,000 30,091 30,091 200,000 12 1,932 32,291 14,698 14,698 200,000 34,148 34,148 200,000 34,933 34,933 200,000 13 1,932 35,934 15,712 15,712 200,000 39,273 39,273 200,000 40,232 40,232 200,000 14 1,932 39,759 16,623 16,623 200,000 44,883 44,883 200,000 46,015 46,015 200,000 15 1,932 43,776 17,418 17,418 200,000 51,028 51,028 200,000 52,350 52,350 200,000 16 1,932 47,994 18,083 18,083 200,000 57,761 57,761 200,000 59,295 59,295 200,000 17 1,932 52,422 18,596 18,596 200,000 65,140 65,140 200,000 66,911 66,911 200,000 18 1,932 57,072 18,927 18,927 200,000 73,229 73,229 200,000 75,271 75,271 200,000 19 1,932 61,954 19,042 19,042 200,000 82,100 82,100 200,000 84,475 84,475 200,000 20 1,932 67,080 18,908 18,908 200,000 91,845 91,845 200,000 94,631 94,631 200,000 21 1,932 72,463 18,489 18,489 200,000 102,576 102,576 200,000 105,916 105,916 200,000 22 1,932 78,115 17,753 17,753 200,000 114,429 114,429 200,000 118,412 118,412 200,000 23 1,932 84,049 16,670 16,670 200,000 127,577 127,577 200,000 132,308 132,308 200,000 24 1,932 90,280 15,205 15,205 200,000 142,220 142,220 200,000 147,805 147,805 200,000 25 1,932 96,823 13,304 13,304 200,000 158,601 158,601 200,000 165,137 165,137 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-21 145 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,932 103,693 10,888 10,888 200,000 177,010 177,010 203,562 184,526 184,526 212,205 27 1,932 110,906 7,843 7,843 200,000 197,525 197,525 223,203 206,026 206,026 232,809 28 1,932 118,480 4,022 4,022 200,000 220,217 220,217 244,441 229,842 229,842 255,124 29 1,932 126,433 LAPSED LAPSED LAPSED 245,343 245,343 267,424 256,229 256,229 279,289 30 1,932 134,783 273,204 273,204 292,329 285,492 285,492 305,476 31 1,932 143,551 304,163 304,163 319,372 317,985 317,985 333,884 32 1,932 152,757 338,316 338,316 355,232 353,892 353,892 371,587 33 1,932 162,424 375,973 375,973 394,771 393,552 393,552 413,230 34 1,932 172,574 417,469 417,469 438,342 437,332 437,332 459,199 35 1,932 183,231 463,165 463,165 486,323 485,631 485,631 509,913 36 1,932 194,421 513,444 513,444 539,117 538,887 538,887 565,831 37 1,932 206,171 568,712 568,712 597,148 597,563 597,563 627,442 38 1,932 218,508 629,394 629,394 660,863 662,165 662,165 695,273 39 1,932 231,463 695,927 695,927 730,724 733,182 733,182 769,841 40 1,932 245,064 768,788 768,788 807,228 811,134 811,134 851,691 41 1,932 259,346 848,483 848,483 890,907 896,638 896,638 941,470 42 1,932 274,342 935,549 935,549 982,327 990,242 990,242 1,039,754 43 1,932 290,088 1,030,553 1,030,553 1,082,081 1,092,691 1,092,691 1,147,326 44 1,932 306,621 1,134,078 1,134,078 1,190,782 1,204,585 1,204,585 1,264,814 45 1,932 323,981 1,246,739 1,246,739 1,309,076 1,326,609 1,326,609 1,392,939 46 1,932 342,209 1,369,104 1,369,104 1,437,559 1,459,602 1,459,602 1,532,582 47 1,932 361,348 1,505,603 1,505,603 1,565,827 1,607,612 1,607,612 1,671,917 48 1,932 381,444 1,658,671 1,658,671 1,708,432 1,773,174 1,773,174 1,826,370 49 1,932 402,545 1,831,347 1,831,347 1,867,974 1,959,662 1,959,662 1,998,855 50 1,932 424,700 2,027,591 2,027,591 2,047,866 2,170,759 2,170,759 2,192,467
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-22 146 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 51 1,932 447,964 2,243,695 2,243,695 2,266,131 2,404,174 2,404,174 2,428,216 52 1,932 472,391 2,480,740 2,480,740 2,505,547 2,662,241 2,662,241 2,688,863 53 1,932 498,039 2,738,370 2,738,370 2,765,754 2,947,523 2,947,523 2,976,998 54 1,932 524,970 3,018,609 3,018,609 3,048,795 3,262,832 3,262,832 3,295,460 55 1,932 553,247 3,327,334 3,327,334 3,360,607 3,611,251 3,611,251 3,647,364
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-23 147 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 0 876 200,876 0 876 200,876 0 876 200,876 5 1,323 3,426 4,220 204,220 3,426 4,220 204,220 3,478 4,272 204,272 10 1,323 7,803 7,936 207,936 7,803 7,936 207,936 8,096 8,229 208,229 20 1,323 14,189 14,189 214,189 14,189 14,189 214,189 15,897 15,897 215,897 @ Age 70 1,323 12,166 12,166 212,166 12,166 12,166 212,166 16,981 16,981 216,981 @ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. *** Policy lapses in policy year 36 based on current charges and a gross investment return of 0.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-24 148 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 1,389 0 876 200,876 0 876 200,876 0 876 200,876 2 1,323 2,847 546 1,736 201,736 546 1,736 201,736 552 1,742 201,742 3 1,323 4,379 1,523 2,581 202,581 1,523 2,581 202,581 1,539 2,597 202,597 4 1,323 5,986 2,483 3,409 203,409 2,483 3,409 203,409 2,514 3,440 203,440 5 1,323 7,675 3,426 4,220 204,220 3,426 4,220 204,220 3,478 4,272 204,272 6 1,323 9,447 4,350 5,011 205,011 4,350 5,011 205,011 4,430 5,092 205,092 7 1,323 11,309 5,253 5,782 205,782 5,253 5,782 205,782 5,369 5,898 205,898 8 1,323 13,263 6,131 6,528 206,528 6,131 6,528 206,528 6,294 6,691 206,691 9 1,323 15,315 6,983 7,247 207,247 6,983 7,247 207,247 7,204 7,468 207,468 10 1,323 17,470 7,803 7,936 207,936 7,803 7,936 207,936 8,096 8,229 208,229 11 1,323 19,732 8,843 8,843 208,843 8,843 8,843 208,843 9,223 9,223 209,223 12 1,323 22,108 9,709 9,709 209,709 9,709 9,709 209,709 10,191 10,191 210,191 13 1,323 24,602 10,528 10,528 210,528 10,528 10,528 210,528 11,128 11,128 211,128 14 1,323 27,221 11,295 11,295 211,295 11,295 11,295 211,295 12,014 12,014 212,014 15 1,323 29,971 12,002 12,002 212,002 12,002 12,002 212,002 12,835 12,835 212,835 16 1,323 32,858 12,639 12,639 212,639 12,639 12,639 212,639 13,594 13,594 213,594 17 1,323 35,890 13,195 13,195 213,195 13,195 13,195 213,195 14,284 14,284 214,284 18 1,323 39,074 13,653 13,653 213,653 13,653 13,653 213,653 14,895 14,895 214,895 19 1,323 42,416 13,992 13,992 213,992 13,992 13,992 213,992 15,425 15,425 215,425 20 1,323 45,926 14,189 14,189 214,189 14,189 14,189 214,189 15,897 15,897 215,897 21 1,323 49,611 14,221 14,221 214,221 14,221 14,221 214,221 16,315 16,315 216,315 22 1,323 53,481 14,063 14,063 214,063 14,063 14,063 214,063 16,642 16,642 216,642 23 1,323 57,544 13,689 13,689 213,689 13,689 13,689 213,689 16,860 16,860 216,860 24 1,323 61,810 13,070 13,070 213,070 13,070 13,070 213,070 16,974 16,974 216,974 25 1,323 66,289 12,166 12,166 212,166 12,166 12,166 212,166 16,981 16,981 216,981
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-25 149 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,323 70,992 10,924 10,924 210,924 10,924 10,924 210,924 16,856 16,856 216,856 27 1,323 75,931 9,273 9,273 209,273 9,273 9,273 209,273 16,585 16,585 216,585 28 1,323 81,116 7,121 7,121 207,121 7,121 7,121 207,121 16,141 16,141 216,141 29 1,323 86,561 4,361 4,361 204,361 4,361 4,361 204,361 15,459 15,459 215,459 30 1,323 92,278 879 879 200,879 879 879 200,879 14,496 14,496 214,496 31 1,323 98,281 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 13,197 13,197 213,197 32 1,323 104,584 11,500 11,500 211,500 33 1,323 111,202 9,334 9,334 209,334 34 1,323 118,151 6,614 6,614 206,614 35 1,323 125,448 3,251 3,251 203,251 36 1,323 133,109 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Smoker Standard Prepared On: 09/11/1998 Age 45 Female Smoker Standard Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $1,932.08-Premium Mode: Annual-Riders: None D-26 150 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 0 876 200,876 0 938 200,938 0 938 200,938 5 1,323 3,426 4,220 204,220 4,304 5,097 205,097 4,361 5,154 205,154 10 1,323 7,803 7,936 207,936 11,118 11,250 211,250 11,466 11,598 211,598 20 1,323 14,189 14,189 214,189 28,580 28,580 228,580 30,999 30,999 230,999 @ Age 70 1,323 12,166 12,166 212,166 35,153 35,153 235,153 41,853 41,853 241,853 @ Age 85 1,323 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 33,741 33,741 233,741 @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 36 based on guaranteed charges and a gross investment return of 6.00%. *** Policy lapses in policy year 43 based on current charges and a gross investment return of 6.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-27 151 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 1,389 0 876 200,876 0 938 200,938 0 938 200,938 2 1,323 2,847 546 1,736 201,736 724 1,914 201,914 730 1,920 201,920 3 1,323 4,379 1,523 2,581 202,581 1,875 2,933 202,933 1,891 2,950 202,950 4 1,323 5,986 2,483 3,409 203,409 3,068 3,993 203,993 3,101 4,027 204,027 5 1,323 7,675 3,426 4,220 204,220 4,304 5,097 205,097 4,361 5,154 205,154 6 1,323 9,447 4,350 5,011 205,011 5,583 6,244 206,244 5,672 6,334 206,334 7 1,323 11,309 5,253 5,782 205,782 6,905 7,434 207,434 7,037 7,566 207,566 8 1,323 13,263 6,131 6,528 206,528 8,269 8,666 208,666 8,457 8,854 208,854 9 1,323 15,315 6,983 7,247 207,247 9,674 9,939 209,939 9,933 10,198 210,198 10 1,323 17,470 7,803 7,936 207,936 11,118 11,250 211,250 11,466 11,598 211,598 11 1,323 19,732 8,843 8,843 208,843 12,860 12,860 212,860 13,319 13,319 213,319 12 1,323 22,108 9,709 9,709 209,709 14,516 14,516 214,516 15,107 15,107 215,107 13 1,323 24,602 10,528 10,528 210,528 16,215 16,215 216,215 16,961 16,961 216,961 14 1,323 27,221 11,295 11,295 211,295 17,951 17,951 217,951 18,864 18,864 218,864 15 1,323 29,971 12,002 12,002 212,002 19,720 19,720 219,720 20,803 20,803 220,803 16 1,323 32,858 12,639 12,639 212,639 21,511 21,511 221,511 22,782 22,782 222,782 17 1,323 35,890 13,195 13,195 213,195 23,313 23,313 223,313 24,795 24,795 224,795 18 1,323 39,074 13,653 13,653 213,653 25,107 25,107 225,107 26,832 26,832 226,832 19 1,323 42,416 13,992 13,992 213,992 26,871 26,871 226,871 28,893 28,893 228,893 20 1,323 45,926 14,189 14,189 214,189 28,580 28,580 228,580 30,999 30,999 230,999 21 1,323 49,611 14,221 14,221 214,221 30,203 30,203 230,203 33,159 33,159 233,159 22 1,323 53,481 14,063 14,063 214,063 31,710 31,710 231,710 35,335 35,335 235,335 23 1,323 57,544 13,689 13,689 213,689 33,067 33,067 233,067 37,508 37,508 237,508 24 1,323 61,810 13,070 13,070 213,070 34,232 34,232 234,232 39,682 39,682 239,682 25 1,323 66,289 12,166 12,166 212,166 35,153 35,153 235,153 41,853 41,853 241,853
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-28 152 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,323 70,992 10,924 10,924 210,924 35,760 35,760 235,760 43,995 43,995 243,995 27 1,323 75,931 9,273 9,273 209,273 35,961 35,961 235,961 46,089 46,089 246,089 28 1,323 81,116 7,121 7,121 207,121 35,636 35,636 235,636 48,103 48,103 248,103 29 1,323 86,561 4,361 4,361 204,361 34,643 34,643 234,643 49,966 49,966 249,966 30 1,323 92,278 879 879 200,879 32,826 32,826 232,826 51,622 51,622 251,622 31 1,323 98,281 LAPSED LAPSED LAPSED 30,017 30,017 230,017 53,001 53,001 253,001 32 1,323 104,584 26,044 26,044 226,044 54,023 54,023 254,023 33 1,323 111,202 20,721 20,721 220,721 54,591 54,591 254,591 34 1,323 118,151 13,842 13,842 213,842 54,592 54,592 254,592 35 1,323 125,448 5,156 5,156 205,156 53,899 53,899 253,899 36 1,323 133,109 LAPSED LAPSED LAPSED 52,361 52,361 252,361 37 1,323 141,153 49,827 49,827 249,827 38 1,323 149,600 46,123 46,123 246,123 39 1,323 158,469 40,883 40,883 240,883 40 1,323 167,781 33,741 33,741 233,741 41 1,323 177,559 24,417 24,417 224,417 42 1,323 187,826 12,460 12,460 212,460 43 1,323 198,606 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-29 153 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- ---------------------------- ---------------------------- 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 0 876 200,876 0 999 200,999 0 999 200,999 5 1,323 3,426 4,220 204,220 5,335 6,128 206,128 5,397 6,191 206,191 10 1,323 7,803 7,936 207,936 15,898 16,030 216,030 16,315 16,447 216,447 20 1,323 14,189 14,189 214,189 60,350 60,350 260,350 63,941 63,941 263,941 @ Age 70 1,323 12,166 12,166 212,166 100,148 100,148 300,148 110,276 110,276 310,276 @ Age 85 1,323 LAPSED LAPSED LAPSED 268,483 268,483 468,483 453,642 453,642 653,642 @ Age 90 1,323 LAPSED LAPSED LAPSED 252,535 252,535 452,535 661,426 661,426 861,426
* Policy lapses in policy year 31 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 51 based on guaranteed charges and a gross investment return of 12.00%. *** Policy continues to age 100 based on current charges and a gross investment return of 12.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-30 154 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 1,323 1,389 0 876 200,876 0 999 200,999 0 999 200,999 2 1,323 2,847 546 1,736 201,736 910 2,100 202,100 916 2,107 202,107 3 1,323 4,379 1,523 2,581 202,581 2,256 3,315 203,315 2,274 3,332 203,332 4 1,323 5,986 2,483 3,409 203,409 3,727 4,653 204,653 3,763 4,689 204,689 5 1,323 7,675 3,426 4,220 204,220 5,335 6,128 206,128 5,397 6,191 206,191 6 1,323 9,447 4,350 5,011 205,011 7,091 7,752 207,752 7,191 7,852 207,852 7 1,323 11,309 5,253 5,782 205,782 9,010 9,539 209,539 9,161 9,690 209,690 8 1,323 13,263 6,131 6,528 206,528 11,107 11,504 211,504 11,325 11,722 211,722 9 1,323 15,315 6,983 7,247 207,247 13,397 13,662 213,662 13,702 13,967 213,967 10 1,323 17,470 7,803 7,936 207,936 15,898 16,030 216,030 16,315 16,447 216,447 11 1,323 19,732 8,843 8,843 208,843 18,899 18,899 218,899 19,457 19,457 219,457 12 1,323 22,108 9,709 9,709 209,709 22,045 22,045 222,045 22,777 22,777 222,777 13 1,323 24,602 10,528 10,528 210,528 25,494 25,494 225,494 26,436 26,436 226,436 14 1,323 27,221 11,295 11,295 211,295 29,271 29,271 229,271 30,450 30,450 230,450 15 1,323 29,971 12,002 12,002 212,002 33,404 33,404 233,404 34,840 34,840 234,840 16 1,323 32,858 12,639 12,639 212,639 37,920 37,920 237,920 39,652 39,652 239,652 17 1,323 35,890 13,195 13,195 213,195 42,847 42,847 242,847 44,921 44,921 244,921 18 1,323 39,074 13,653 13,653 213,653 48,212 48,212 248,212 50,686 50,686 250,686 19 1,323 42,416 13,992 13,992 213,992 54,037 54,037 254,037 56,998 56,998 256,998 20 1,323 45,926 14,189 14,189 214,189 60,350 60,350 260,350 63,941 63,941 263,941 21 1,323 49,611 14,221 14,221 214,221 67,174 67,174 267,174 71,586 71,586 271,586 22 1,323 53,481 14,063 14,063 214,063 74,538 74,538 274,538 79,970 79,970 279,970 23 1,323 57,544 13,689 13,689 213,689 82,471 82,471 282,471 89,152 89,152 289,152 24 1,323 61,810 13,070 13,070 213,070 91,001 91,001 291,001 99,223 99,223 299,223 25 1,323 66,289 12,166 12,166 212,166 100,148 100,148 300,148 110,276 110,276 310,276
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-31 155 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES --------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 1,323 70,992 10,924 10,924 210,924 109,919 109,919 309,919 122,391 122,391 322,391 27 1,323 75,931 9,273 9,273 209,273 120,303 120,303 320,303 135,664 135,664 335,664 28 1,323 81,116 7,121 7,121 207,121 131,264 131,264 331,264 150,192 150,192 350,192 29 1,323 86,561 4,361 4,361 204,361 142,745 142,745 342,745 166,042 166,042 366,042 30 1,323 92,278 879 879 200,879 154,677 154,677 354,677 183,307 183,307 383,307 31 1,323 98,281 LAPSED LAPSED LAPSED 166,977 166,977 366,977 202,081 202,081 402,081 32 1,323 104,584 179,559 179,559 379,559 222,457 222,457 422,457 33 1,323 111,202 192,321 192,321 392,321 244,531 244,531 444,531 34 1,323 118,151 205,140 205,140 405,140 268,392 268,392 468,392 35 1,323 125,448 217,845 217,845 417,845 294,135 294,135 494,135 36 1,323 133,109 230,195 230,195 430,195 321,844 321,844 521,844 37 1,323 141,153 241,869 241,869 441,869 351,621 351,621 551,621 38 1,323 149,600 252,459 252,459 452,459 383,564 383,564 583,564 39 1,323 158,469 261,498 261,498 461,498 417,593 417,593 617,593 40 1,323 167,781 268,483 268,483 468,483 453,642 453,642 653,642 41 1,323 177,559 272,882 272,882 472,882 491,740 491,740 691,740 42 1,323 187,826 274,131 274,131 474,131 531,762 531,762 731,762 43 1,323 198,606 271,620 271,620 471,620 573,582 573,582 773,582 44 1,323 209,925 264,682 264,682 464,682 616,885 616,885 816,885 45 1,323 221,811 252,535 252,535 452,535 661,426 661,426 861,426 46 1,323 234,290 234,269 234,269 434,269 706,924 706,924 906,924 47 1,323 247,393 208,749 208,749 408,749 753,017 753,017 953,017 48 1,323 261,152 174,502 174,502 374,502 799,280 799,280 999,280 48 1,323 275,599 129,375 129,375 329,375 846,275 846,275 1,046,275 50 1,323 290,767 69,777 69,777 269,777 893,821 893,821 1,093,821
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-32 156 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 51 1,323 306,695 LAPSED LAPSED LAPSED 941,638 941,638 1,141,638 51 1,323 323,418 988,262 988,262 1,188,262 53 1,323 340,978 1,034,946 1,034,946 1,234,946 54 1,323 359,416 1,081,483 1,081,483 1,281,483 55 1,323 378,776 1,127,792 1,127,792 1,327,792
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-33 157 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 752 0 415 200,000 0 415 200,000 0 415 200,000 5 752 1,561 2,013 200,000 1,561 2,013 200,000 1,573 2,024 200,000 10 752 3,779 3,855 200,000 3,779 3,855 200,000 3,835 3,910 200,000 20 752 8,456 8,456 200,000 8,456 8,456 200,000 8,793 8,793 200,000 @ Age 70 752 4,569 4,569 200,000 4,569 4,569 200,000 9,758 9,758 200,000 @ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 38 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 38 based on guaranteed charges and a gross investment return of 0.00%. *** Policy lapses in policy year 43 based on current charges and a gross investment return of 0.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-34 158 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 752 790 0 415 200,000 0 415 200,000 0 415 200,000 2 752 1,618 146 823 200,000 146 823 200,000 148 824 200,000 3 752 2,489 624 1,226 200,000 624 1,226 200,000 628 1,229 200,000 4 752 3,403 1,096 1,622 200,000 1,096 1,622 200,000 1,103 1,629 200,000 5 752 4,363 1,561 2,013 200,000 1,561 2,013 200,000 1,573 2,024 200,000 6 752 5,370 2,020 2,396 200,000 2,020 2,396 200,000 2,037 2,413 200,000 7 752 6,428 2,472 2,772 200,000 2,472 2,772 200,000 2,496 2,797 200,000 8 752 7,539 2,916 3,141 200,000 2,916 3,141 200,000 2,949 3,174 200,000 9 752 8,706 3,352 3,502 200,000 3,352 3,502 200,000 3,395 3,545 200,000 10 752 9,930 3,779 3,855 200,000 3,779 3,855 200,000 3,835 3,910 200,000 11 752 11,216 4,387 4,387 200,000 4,387 4,387 200,000 4,458 4,458 200,000 12 752 12,567 4,907 4,907 200,000 4,907 4,907 200,000 4,996 4,996 200,000 13 752 13,985 5,414 5,414 200,000 5,414 5,414 200,000 5,525 5,525 200,000 14 752 15,473 5,906 5,906 200,000 5,906 5,906 200,000 6,041 6,041 200,000 15 752 17,036 6,383 6,383 200,000 6,383 6,383 200,000 6,543 6,543 200,000 16 752 18,678 6,843 6,843 200,000 6,843 6,843 200,000 7,028 7,028 200,000 17 752 20,401 7,283 7,283 200,000 7,283 7,283 200,000 7,495 7,495 200,000 18 752 22,211 7,701 7,701 200,000 7,701 7,701 200,000 7,942 7,942 200,000 19 752 24,111 8,093 8,093 200,000 8,093 8,093 200,000 8,374 8,374 200,000 20 752 26,106 8,456 8,456 200,000 8,456 8,456 200,000 8,793 8,793 200,000 21 752 28,201 8,786 8,786 200,000 8,786 8,786 200,000 9,199 9,199 200,000 22 752 30,400 9,078 9,078 200,000 9,078 9,078 200,000 9,580 9,580 200,000 23 752 32,710 9,329 9,329 200,000 9,329 9,329 200,000 9,934 9,934 200,000 24 752 35,135 9,533 9,533 200,000 9,533 9,533 200,000 10,255 10,255 200,000 25 752 37,681 9,683 9,683 200,000 9,683 9,683 200,000 10,540 10,540 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-35 159 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 752 40,355 9,768 9,768 200,000 9,768 9,768 200,000 10,782 10,782 200,000 27 752 43,162 9,778 9,778 200,000 9,778 9,778 200,000 10,973 10,973 200,000 28 752 46,109 9,695 9,695 200,000 9,695 9,695 200,000 11,105 11,105 200,000 29 752 49,204 9,499 9,499 200,000 9,499 9,499 200,000 11,171 11,171 200,000 30 752 52,454 9,167 9,167 200,000 9,167 9,167 200,000 11,168 11,168 200,000 31 752 55,866 8,675 8,675 200,000 8,675 8,675 200,000 11,075 11,075 200,000 32 752 59,449 8,000 8,000 200,000 8,000 8,000 200,000 10,898 10,898 200,000 33 752 63,211 7,113 7,113 200,000 7,113 7,113 200,000 10,618 10,618 200,000 34 752 67,161 5,984 5,984 200,000 5,984 5,984 200,000 10,238 10,238 200,000 35 752 71,309 4,569 4,569 200,000 4,569 4,569 200,000 9,758 9,758 200,000 36 752 75,664 2,809 2,809 200,000 2,809 2,809 200,000 9,152 9,152 200,000 37 752 80,236 622 622 200,000 622 622 200,000 8,404 8,404 200,000 38 752 85,038 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 7,487 7,487 200,000 39 752 90,079 6,333 6,333 200,000 40 752 95,373 4,896 4,896 200,000 41 752 100,931 3,115 3,115 200,000 42 752 106,767 918 918 200,000 43 752 112,895 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 45 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 45 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 2 Form # B1-98 Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None D-36 160 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 752 0 415 200,000 0 447 200,000 0 447 200,000 5 752 1,561 2,013 200,000 1,995 2,446 200,000 2,008 2,459 200,000 10 752 3,779 3,855 200,000 5,405 5,481 200,000 5,472 5,547 200,000 20 752 8,456 8,456 200,000 15,963 15,963 200,000 16,429 16,429 200,000 @ Age 70 752 4,569 4,569 200,000 33,240 33,240 200,000 40,010 40,010 200,000 @ Age 85 752 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 33,873 33,873 200,000 @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 38 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 46 based on guaranteed charges and a gross investment return of 6.00%. *** Policy lapses in policy year 53 based on current charges and a gross investment return of 6.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-37 161 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 752 790 0 415 200,000 0 447 200,000 0 447 200,000 2 752 1,618 146 823 200,000 237 914 200,000 239 915 200,000 3 752 2,489 624 1,226 200,000 801 1,402 200,000 805 1,406 200,000 4 752 3,403 1,096 1,622 200,000 1,387 1,913 200,000 1,394 1,920 200,000 5 752 4,363 1,561 2,013 200,000 1,995 2,446 200,000 2,008 2,459 200,000 6 752 5,370 2,020 2,396 200,000 2,628 3,004 200,000 2,647 3,023 200,000 7 752 6,428 2,472 2,772 200,000 3,284 3,585 200,000 3,311 3,612 200,000 8 752 7,539 2,916 3,141 200,000 3,965 4,191 200,000 4,003 4,229 200,000 9 752 8,706 3,352 3,502 200,000 4,672 4,823 200,000 4,723 4,874 200,000 10 752 9,930 3,779 3,855 200,000 5,405 5,481 200,000 5,472 5,547 200,000 11 752 11,216 4,387 4,387 200,000 6,361 6,361 200,000 6,447 6,447 200,000 12 752 12,567 4,907 4,907 200,000 7,278 7,278 200,000 7,387 7,387 200,000 13 752 13,985 5,414 5,414 200,000 8,232 8,232 200,000 8,371 8,371 200,000 14 752 15,473 5,906 5,906 200,000 9,224 9,224 200,000 9,395 9,395 200,000 15 752 17,036 6,383 6,383 200,000 10,255 10,255 200,000 10,460 10,460 200,000 16 752 18,678 6,843 6,843 200,000 11,323 11,323 200,000 11,566 11,566 200,000 17 752 20,401 7,283 7,283 200,000 12,430 12,430 200,000 12,713 12,713 200,000 18 752 22,211 7,701 7,701 200,000 13,573 13,573 200,000 13,902 13,902 200,000 19 752 24,111 8,093 8,093 200,000 14,751 14,751 200,000 15,140 15,140 200,000 20 752 26,106 8,456 8,456 200,000 15,963 15,963 200,000 16,429 16,429 200,000 21 752 28,201 8,786 8,786 200,000 17,206 17,206 200,000 17,773 17,773 200,000 22 752 30,400 9,078 9,078 200,000 18,477 18,477 200,000 19,164 19,164 200,000 23 752 32,710 9,329 9,329 200,000 19,774 19,774 200,000 20,601 20,601 200,000 24 752 35,135 9,533 9,533 200,000 21,093 21,093 200,000 22,082 22,082 200,000 25 752 37,681 9,683 9,683 200,000 22,428 22,428 200,000 23,604 23,604 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-38 162 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 752 40,355 9,768 9,768 200,000 23,770 23,770 200,000 25,163 25,163 200,000 27 752 43,162 9,778 9,778 200,000 25,110 25,110 200,000 26,754 26,754 200,000 28 752 46,109 9,695 9,695 200,000 26,431 26,431 200,000 28,373 28,373 200,000 29 752 49,204 9,499 9,499 200,000 27,714 27,714 200,000 30,012 30,012 200,000 30 752 52,454 9,167 9,167 200,000 28,937 28,937 200,000 31,672 31,672 200,000 31 752 55,866 8,675 8,675 200,000 30,076 30,076 200,000 33,336 33,336 200,000 32 752 59,449 8,000 8,000 200,000 31,107 31,107 200,000 35,009 35,009 200,000 33 752 63,211 7,113 7,113 200,000 32,002 32,002 200,000 36,677 36,677 200,000 34 752 67,161 5,984 5,984 200,000 32,728 32,728 200,000 38,344 38,344 200,000 35 752 71,309 4,569 4,569 200,000 33,240 33,240 200,000 40,010 40,010 200,000 36 752 75,664 2,809 2,809 200,000 33,479 33,479 200,000 41,656 41,656 200,000 37 752 80,236 622 622 200,000 33,364 33,364 200,000 43,269 43,269 200,000 38 752 85,038 LAPSED LAPSED LAPSED 32,788 32,788 200,000 44,827 44,827 200,000 39 752 90,079 31,621 31,621 200,000 46,276 46,276 200,000 40 752 95,373 29,708 29,708 200,000 47,577 47,577 200,000 41 752 100,931 26,869 26,869 200,000 48,680 48,680 200,000 42 752 106,767 22,898 22,898 200,000 49,525 49,525 200,000 43 752 112,895 17,543 17,543 200,000 50,041 50,041 200,000 44 752 119,329 10,485 10,485 200,000 50,140 50,140 200,000 45 752 126,085 1,295 1,295 200,000 49,720 49,720 200,000 46 752 133,179 LAPSED LAPSED LAPSED 48,652 48,652 200,000 47 752 140,627 46,793 46,793 200,000 48 752 148,448 43,964 43,964 200,000 49 752 156,660 39,798 39,798 200,000 50 752 165,282 33,873 33,873 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-39 163 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 51 752 174,336 25,743 25,743 200,000 52 752 183,842 14,688 14,688 200,000 53 752 193,824 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-40 164 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- --------------------------------- --------------------------------- 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 752 0 415 200,000 0 479 200,000 0 479 200,000 5 752 1,561 2,013 200,000 2,507 2,958 200,000 2,521 2,972 200,000 10 752 3,779 3,855 200,000 7,756 7,831 200,000 7,837 7,912 200,000 20 752 8,456 8,456 200,000 32,195 32,195 200,000 32,866 32,866 200,000 @ Age 70 752 4,569 4,569 200,000 163,025 163,025 200,000 171,179 171,179 200,000 @ Age 85 752 LAPSED LAPSED LAPSED 760,174 760,174 798,182 813,493 813,493 854,168 @ Age 90 752 LAPSED LAPSED LAPSED 1,230,455 1,230,455 1,291,978 1,339,849 1,339,849 1,406,841
* Policy lapses in policy year 38 based on guaranteed charges and a gross investment return of 0.00%. ** Policy continues to age 100 based on guaranteed charges and a gross investment return of 12.00%. *** Policy continues to age 100 based on current charges and a gross investment return of 12.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-41 165 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES -------------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 752 790 0 415 200,000 0 479 200,000 0 479 200,000 2 752 1,618 146 823 200,000 332 1,009 200,000 334 1,010 200,000 3 752 2,489 624 1,226 200,000 993 1,595 200,000 997 1,599 200,000 4 752 3,403 1,096 1,622 200,000 1,716 2,242 200,000 1,724 2,250 200,000 5 752 4,363 1,561 2,013 200,000 2,507 2,958 200,000 2,521 2,972 200,000 6 752 5,370 2,020 2,396 200,000 3,373 3,749 200,000 3,394 3,770 200,000 7 752 6,428 2,472 2,772 200,000 4,322 4,623 200,000 4,353 4,654 200,000 8 752 7,539 2,916 3,141 200,000 5,363 5,588 200,000 5,407 5,632 200,000 9 752 8,706 3,352 3,502 200,000 6,504 6,654 200,000 6,564 6,715 200,000 10 752 9,930 3,779 3,855 200,000 7,756 7,831 200,000 7,837 7,912 200,000 11 752 11,216 4,387 4,387 200,000 9,334 9,334 200,000 9,439 9,439 200,000 12 752 12,567 4,907 4,907 200,000 10,992 10,992 200,000 11,129 11,129 200,000 13 752 13,985 5,414 5,414 200,000 12,824 12,824 200,000 12,999 12,999 200,000 14 752 15,473 5,906 5,906 200,000 14,846 14,846 200,000 15,065 15,065 200,000 15 752 17,036 6,383 6,383 200,000 17,077 17,077 200,000 17,347 17,347 200,000 16 752 18,678 6,843 6,843 200,000 19,540 19,540 200,000 19,866 19,866 200,000 17 752 20,401 7,283 7,283 200,000 22,256 22,256 200,000 22,647 22,647 200,000 18 752 22,211 7,701 7,701 200,000 25,252 25,252 200,000 25,716 25,716 200,000 19 752 24,111 8,093 8,093 200,000 28,555 28,555 200,000 29,110 29,110 200,000 20 752 26,106 8,456 8,456 200,000 32,195 32,195 200,000 32,866 32,866 200,000 21 752 28,201 8,786 8,786 200,000 36,207 36,207 200,000 37,024 37,024 200,000 22 752 30,400 9,078 9,078 200,000 40,628 40,628 200,000 41,618 41,618 200,000 23 752 32,710 9,329 9,329 200,000 45,500 45,500 200,000 46,694 46,694 200,000 24 752 35,135 9,533 9,533 200,000 50,872 50,872 200,000 52,302 52,302 200,000 25 752 37,681 9,683 9,683 200,000 56,793 56,793 200,000 58,497 58,497 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-42 166 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES -------------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 752 40,355 9,768 9,768 200,000 63,321 63,321 200,000 65,341 65,341 200,000 27 752 43,162 9,778 9,778 200,000 70,518 70,518 200,000 72,902 72,902 200,000 28 752 46,109 9,695 9,695 200,000 78,452 78,452 200,000 81,259 81,259 200,000 29 752 49,204 9,499 9,499 200,000 87,201 87,201 200,000 90,500 90,500 200,000 30 752 52,454 9,167 9,167 200,000 96,852 96,852 200,000 100,726 100,726 200,000 31 752 55,866 8,675 8,675 200,000 107,511 107,511 200,000 112,045 112,045 200,000 32 752 59,449 8,000 8,000 200,000 119,300 119,300 200,000 124,593 124,593 200,000 33 752 63,211 7,113 7,113 200,000 132,364 132,364 200,000 138,512 138,512 200,000 34 752 67,161 5,984 5,984 200,000 146,872 146,872 200,000 153,977 153,977 200,000 35 752 71,309 4,569 4,569 200,000 163,025 163,025 200,000 171,179 171,179 200,000 36 752 75,664 2,809 2,809 200,000 181,046 181,046 208,203 190,289 190,289 218,832 37 752 80,236 622 622 200,000 201,035 201,035 227,170 211,463 211,463 238,953 38 752 85,038 LAPSED LAPSED LAPSED 223,156 223,156 247,703 234,925 234,925 260,767 39 752 90,079 247,651 247,651 269,939 260,926 260,926 284,410 40 752 95,373 274,799 274,799 294,035 289,752 289,752 310,035 41 752 100,931 304,931 304,931 320,178 321,726 321,726 337,813 42 752 106,767 338,214 338,214 355,125 357,119 357,119 374,975 43 752 112,895 374,958 374,958 393,705 396,285 396,285 416,100 44 752 119,329 415,497 415,497 436,272 439,612 439,612 461,593 45 752 126,085 460,195 460,195 483,204 487,525 487,525 511,902 46 752 133,179 509,433 509,433 534,904 540,487 540,487 567,511 47 752 140,627 563,616 563,616 591,797 599,003 599,003 628,953 48 752 148,448 623,168 623,168 654,327 663,624 663,624 696,805 49 752 156,660 688,532 688,532 722,959 734,917 734,917 771,663 50 752 165,282 760,174 760,174 798,182 813,493 813,493 854,168
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-43 167 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES -------------------------------------------------------------- --------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 51 752 174,336 838,582 838,582 880,511 900,025 900,025 945,027 52 752 183,842 924,272 924,272 970,485 995,200 995,200 1,044,960 53 752 193,824 1,017,777 1,017,777 1,068,666 1,099,744 1,099,744 1,154,731 54 752 204,305 1,119,652 1,119,652 1,175,635 1,214,374 1,214,374 1,275,092 55 752 215,309 1,230,455 1,230,455 1,291,978 1,339,849 1,339,849 1,406,841 56 752 226,864 1,350,734 1,350,734 1,418,270 1,476,940 1,476,940 1,550,787 57 752 238,997 1,484,677 1,484,677 1,544,065 1,628,917 1,628,917 1,694,074 58 752 251,737 1,634,684 1,634,684 1,683,724 1,798,125 1,798,125 1,852,069 59 752 265,113 1,803,765 1,803,765 1,839,840 1,987,683 1,987,683 2,027,437 60 752 279,158 1,995,876 1,995,876 2,015,834 2,201,195 2,201,195 2,223,207 61 752 293,905 2,207,418 2,207,418 2,229,492 2,437,203 2,437,203 2,461,575 62 752 309,390 2,439,451 2,439,451 2,463,846 2,697,915 2,697,915 2,724,894 63 752 325,649 2,691,617 2,691,617 2,718,533 2,985,983 2,985,983 3,015,843 64 752 342,721 2,965,892 2,965,892 2,995,551 3,304,205 3,304,205 3,337,247 65 752 360,647 3,268,046 3,268,046 3,300,726 3,655,673 3,655,673 3,692,230
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 35 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 35 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None D-44 168 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- --------------------------- --------------------------- 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 2,305 0 1,634 200,000 0 1,634 200,000 0 1,634 200,000 5 2,305 6,286 7,669 200,000 6,286 7,669 200,000 6,585 7,969 200,000 10 2,305 13,364 13,594 200,000 13,364 13,594 200,000 15,100 15,330 200,000 20 2,305 13,343 13,343 200,000 13,343 13,343 200,000 28,269 28,269 200,000 @ Age 70 2,305 17,750 17,750 200,000 17,750 17,750 200,000 23,530 23,530 200,000 @ Age 85 2,305 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 4,225 4,225 200,000 @ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
* Policy lapses in policy year 24 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 24 based on guaranteed charges and a gross investment return of 0.00%. *** Policy lapses in policy year 31 based on current charges and a gross investment return of 0.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-45 169 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 2,305 2,421 0 1,634 200,000 0 1,634 200,000 0 1,634 200,000 2 2,305 4,962 1,142 3,216 200,000 1,142 3,216 200,000 1,174 3,248 200,000 3 2,305 7,631 2,909 4,753 200,000 2,909 4,753 200,000 2,999 4,843 200,000 4 2,305 10,433 4,626 6,239 200,000 4,626 6,239 200,000 4,803 6,417 200,000 5 2,305 13,376 6,286 7,669 200,000 6,286 7,669 200,000 6,585 7,969 200,000 6 2,305 16,465 7,881 9,034 200,000 7,881 9,034 200,000 8,344 9,497 200,000 7 2,305 19,709 9,402 10,324 200,000 9,402 10,324 200,000 10,078 11,000 200,000 8 2,305 23,115 10,834 11,526 200,000 10,834 11,526 200,000 11,784 12,475 200,000 9 2,305 26,691 12,162 12,623 200,000 12,162 12,623 200,000 13,459 13,920 200,000 10 2,305 30,447 13,364 13,594 200,000 13,364 13,594 200,000 15,100 15,330 200,000 11 2,305 34,389 14,822 14,822 200,000 14,822 14,822 200,000 17,100 17,100 200,000 12 2,305 38,530 15,878 15,878 200,000 15,878 15,878 200,000 18,818 18,818 200,000 13 2,305 42,877 16,737 16,737 200,000 16,737 16,737 200,000 20,476 20,476 200,000 14 2,305 47,441 17,373 17,373 200,000 17,373 17,373 200,000 22,052 22,052 200,000 15 2,305 52,234 17,750 17,750 200,000 17,750 17,750 200,000 23,530 23,530 200,000 16 2,305 57,266 17,817 17,817 200,000 17,817 17,817 200,000 24,860 24,860 200,000 17 2,305 62,550 17,509 17,509 200,000 17,509 17,509 200,000 26,019 26,019 200,000 18 2,305 68,098 16,736 16,736 200,000 16,736 16,736 200,000 26,973 26,973 200,000 19 2,305 73,924 15,389 15,389 200,000 15,389 15,389 200,000 27,731 27,731 200,000 20 2,305 80,041 13,343 13,343 200,000 13,343 13,343 200,000 28,269 28,269 200,000 21 2,305 86,463 10,455 10,455 200,000 10,455 10,455 200,000 28,562 28,562 200,000 22 2,305 93,207 6,567 6,567 200,000 6,567 6,567 200,000 28,523 28,523 200,000 23 2,305 100,288 1,495 1,495 200,000 1,495 1,495 200,000 28,086 28,086 200,000 24 2,305 107,723 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 27,168 27,168 200,000 25 2,305 115,530 25,674 25,674 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-46 170 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ----------------------------------------------------- ------------------------- END PREMIUM 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 2,305 123,727 23,490 23,490 200,000 27 2,305 132,334 20,485 20,485 200,000 28 2,305 141,371 16,504 16,504 200,000 29 2,305 150,861 11,212 11,212 200,000 30 2,305 160,824 4,225 4,225 200,000 31 2,305 171,286 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 0.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-47 171 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- -------------------------- -------------------------- 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 2,305 0 1,634 200,000 0 1,745 200,000 0 1,745 200,000 5 2,305 6,286 7,669 200,000 7,882 9,265 200,000 8,208 9,592 200,000 10 2,305 13,364 13,594 200,000 19,314 19,545 200,000 21,338 21,568 200,000 20 2,305 13,343 13,343 200,000 37,968 37,968 200,000 56,620 56,620 200,000 @ Age 70 2,305 17,750 17,750 200,000 31,265 31,265 200,000 38,300 38,300 200,000 @ Age 85 2,305 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 83,867 83,867 200,000 @ Age 90 2,305 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 63,619 63,619 200,000
* Policy lapses in policy year 24 based on guaranteed charges and a gross investment return of 0.00%. ** Policy lapses in policy year 28 based on guaranteed charges and a gross investment return of 6.00%. *** Policy lapses in policy year 39 based on current charges and a gross investment return of 6.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-48 172 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 2,305 2,421 0 1,634 200,000 0 1,745 200,000 0 1,745 200,000 2 2,305 4,962 1,142 3,216 200,000 1,465 3,540 200,000 1,498 3,573 200,000 3 2,305 7,631 2,909 4,753 200,000 3,549 5,394 200,000 3,644 5,488 200,000 4 2,305 10,433 4,626 6,239 200,000 5,689 7,303 200,000 5,879 7,493 200,000 5 2,305 13,376 6,286 7,669 200,000 7,882 9,265 200,000 8,208 9,592 200,000 6 2,305 16,465 7,881 9,034 200,000 10,120 11,273 200,000 10,633 11,786 200,000 7 2,305 19,709 9,402 10,324 200,000 12,397 13,319 200,000 13,157 14,079 200,000 8 2,305 23,115 10,834 11,526 200,000 14,699 15,391 200,000 15,781 16,472 200,000 9 2,305 26,691 12,162 12,623 200,000 17,011 17,472 200,000 18,507 18,968 200,000 10 2,305 30,447 13,364 13,594 200,000 19,314 19,545 200,000 21,338 21,568 200,000 11 2,305 34,389 14,822 14,822 200,000 22,004 22,004 200,000 24,686 24,686 200,000 12 2,305 38,530 15,878 15,878 200,000 24,432 24,432 200,000 27,923 27,923 200,000 13 2,305 42,877 16,737 16,737 200,000 26,804 26,804 200,000 31,281 31,281 200,000 14 2,305 47,441 17,373 17,373 200,000 29,094 29,094 200,000 34,743 34,743 200,000 15 2,305 52,234 17,750 17,750 200,000 31,265 31,265 200,000 38,300 38,300 200,000 16 2,305 57,266 17,817 17,817 200,000 33,268 33,268 200,000 41,911 41,911 200,000 17 2,305 62,550 17,509 17,509 200,000 35,037 35,037 200,000 45,561 45,561 200,000 18 2,305 68,098 16,736 16,736 200,000 36,485 36,485 200,000 49,224 49,224 200,000 19 2,305 73,924 15,389 15,389 200,000 37,503 37,503 200,000 52,915 52,915 200,000 20 2,305 80,041 13,343 13,343 200,000 37,968 37,968 200,000 56,620 56,620 200,000 21 2,305 86,463 10,455 10,455 200,000 37,736 37,736 200,000 60,328 60,328 200,000 22 2,305 93,207 6,567 6,567 200,000 36,649 36,649 200,000 63,976 63,976 200,000 23 2,305 100,288 1,495 1,495 200,000 34,515 34,515 200,000 67,520 67,520 200,000 24 2,305 107,723 LAPSED LAPSED LAPSED 31,096 31,096 200,000 70,910 70,910 200,000 25 2,305 115,530 26,073 26,073 200,000 74,089 74,089 200,000
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-49 173 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES CURRENT CHARGES ------------------------------------------------------- -------------------------- END PREMIUM 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 2,305 123,727 19,003 19,003 200,000 76,992 76,992 200,000 27 2,305 132,334 9,270 9,270 200,000 79,547 79,547 200,000 28 2,305 141,371 LAPSED LAPSED LAPSED 81,647 81,647 200,000 29 2,305 150,861 83,183 83,183 200,000 30 2,305 160,824 83,867 83,867 200,000 31 2,305 171,286 83,537 83,537 200,000 32 2,305 182,271 81,870 81,870 200,000 33 2,305 193,805 78,458 78,458 200,000 34 2,305 205,916 72,651 72,651 200,000 35 2,305 218,633 63,619 63,619 200,000 36 2,305 231,985 50,164 50,164 200,000 37 2,305 246,005 30,482 30,482 200,000 38 2,305 260,726 1,804 1,804 200,000 39 2,305 276,183 LAPSED LAPSED LAPSED
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 6.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-50 174 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY NUMERIC SUMMARY The following table shows how differences in investment returns and policy charges would affect policy cash value and death benefit.
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES*** -------------------------- ---------------------------- ---------------------------- 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET) POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 2,305 0 1,634 200,000 0 1,855 200,000 0 1,855 200,000 5 2,305 6,286 7,669 200,000 9,757 11,140 200,000 10,113 11,496 200,000 10 2,305 13,364 13,594 200,000 27,938 28,169 200,000 30,303 30,533 200,000 20 2,305 13,343 13,343 200,000 95,873 95,873 200,000 118,811 118,811 200,000 @ Age 70 2,305 17,750 17,750 200,000 55,748 55,748 200,000 64,339 64,339 200,000 @ Age 85 2,305 LAPSED LAPSED LAPSED 269,847 269,847 283,339 363,140 363,140 381,297 @ Age 90 2,305 LAPSED LAPSED LAPSED 449,303 449,303 471,768 610,796 610,796 641,336
* Policy lapses in policy year 24 based on guaranteed charges and a gross investment return of 0.00%. ** Policy continues to age 100 based on guaranteed charges and a gross investment return of 12.00%. *** Policy continues to age 100 based on current charges and a gross investment return of 12.00%. APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and could be either higher or lower. The agent has told me that they are not guaranteed. ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date ------------------------------------------------------ ------------------------- Signature of Applicant or Policyowner Date REPRESENTATIVE'S I certify that this illustration has been presented to the ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed elements illustrated are subject to change. I have made no statements that are inconsistent with the illustration. ------------------------------------------------------ ------------------------- Signature of Representative Date
Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-51 175 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT
GUARANTEED CHARGES --------------------------------------------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 1 2,305 2,421 0 1,634 200,000 0 1,855 200,000 2 2,305 4,962 1,142 3,216 200,000 1,802 3,877 200,000 3 2,305 7,631 2,909 4,753 200,000 4,244 6,088 200,000 4 2,305 10,433 4,626 6,239 200,000 6,890 8,504 200,000 5 2,305 13,376 6,286 7,669 200,000 9,757 11,140 200,000 6 2,305 16,465 7,881 9,034 200,000 12,861 14,013 200,000 7 2,305 19,709 9,402 10,324 200,000 16,217 17,139 200,000 8 2,305 23,115 10,834 11,526 200,000 19,839 20,531 200,000 9 2,305 26,691 12,162 12,623 200,000 23,742 24,203 200,000 10 2,305 30,447 13,364 13,594 200,000 27,938 28,169 200,000 11 2,305 34,389 14,822 14,822 200,000 32,876 32,876 200,000 12 2,305 38,530 15,878 15,878 200,000 37,958 37,958 200,000 13 2,305 42,877 16,737 16,737 200,000 43,443 43,443 200,000 14 2,305 47,441 17,373 17,373 200,000 49,362 49,362 200,000 15 2,305 52,234 17,750 17,750 200,000 55,748 55,748 200,000 16 2,305 57,266 17,817 17,817 200,000 62,632 62,632 200,000 17 2,305 62,550 17,509 17,509 200,000 70,047 70,047 200,000 18 2,305 68,098 16,736 16,736 200,000 78,027 78,027 200,000 19 2,305 73,924 15,389 15,389 200,000 86,614 86,614 200,000 20 2,305 80,041 13,343 13,343 200,000 95,873 95,873 200,000 21 2,305 86,463 10,455 10,455 200,000 105,903 105,903 200,000 22 2,305 93,207 6,567 6,567 200,000 116,842 116,842 200,000 23 2,305 100,288 1,495 1,495 200,000 128,887 128,887 200,000 24 2,305 107,723 LAPSED LAPSED LAPSED 142,302 142,302 200,000 25 2,305 115,530 157,441 157,441 200,000 CURRENT CHARGES --------------------------------- END 12.00% (11.25% NET) OF CASH FUND DEATH YEAR VALUE VALUE PROCEEDS 1 0 1,855 200,000 2 1,836 3,911 200,000 3 4,343 6,187 200,000 4 7,093 8,707 200,000 5 10,113 11,496 200,000 6 13,429 14,582 200,000 7 17,071 17,993 200,000 8 21,073 21,764 200,000 9 25,470 25,931 200,000 10 30,303 30,533 200,000 11 36,043 36,043 200,000 12 42,121 42,121 200,000 13 48,828 48,828 200,000 14 56,212 56,212 200,000 15 64,339 64,339 200,000 16 73,259 73,259 200,000 17 83,055 83,055 200,000 18 93,818 93,818 200,000 19 105,690 105,690 200,000 20 118,811 118,811 200,000 21 133,348 133,348 200,000 22 149,483 149,483 200,000 23 167,456 167,456 200,000 24 187,572 187,572 200,000 25 210,048 210,048 220,550
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-52 176 LIFE INSURANCE ILLUSTRATION MONY Custom EstateMaster LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY STANDARD LEDGER STATEMENT continued
GUARANTEED CHARGES --------------------------------------------------------------------- END PREMIUM 0.00% (-.75% NET) 12.00% (11.25% NET) OF PREMIUM ACCUM'D CASH FUND DEATH CASH FUND DEATH YEAR OUTLAY AT 5% VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS 26 2,305 123,727 174,786 174,786 200,000 27 2,305 132,334 194,991 194,991 204,740 28 2,305 141,371 217,658 217,658 228,541 29 2,305 150,861 242,550 242,550 254,678 30 2,305 160,824 269,847 269,847 283,339 31 2,305 171,286 299,736 299,736 314,723 32 2,305 182,271 332,418 332,418 349,038 33 2,305 193,805 368,096 368,096 386,501 34 2,305 205,916 406,986 406,986 427,336 35 2,305 218,633 449,303 449,303 471,768 36 2,305 231,985 495,259 495,259 520,022 37 2,305 246,005 546,403 546,403 568,259 38 2,305 260,726 603,639 603,639 621,749 39 2,305 276,183 668,106 668,106 681,468 40 2,305 292,412 741,295 741,295 748,708 41 2,305 309,454 821,896 821,896 830,114 42 2,305 327,347 910,317 910,317 919,421 43 2,305 346,135 1,006,441 1,006,441 1,016,506 44 2,305 365,862 1,111,017 1,111,017 1,122,127 45 2,305 386,576 1,226,223 1,226,223 1,238,485 CURRENT CHARGES --------------------------------- END 12.00% (11.25% NET) OF CASH FUND DEATH YEAR VALUE VALUE PROCEEDS 26 234,902 234,902 246,647 27 262,373 262,373 275,491 28 292,719 292,719 307,355 29 326,211 326,211 342,522 30 363,140 363,140 381,297 31 403,822 403,822 424,013 32 448,585 448,585 471,014 33 497,771 497,771 522,660 34 551,722 551,722 579,308 35 610,796 610,796 641,336 36 675,360 675,360 709,128 37 746,901 746,901 776,777 38 826,512 826,512 851,307 39 915,645 915,645 933,958 40 1,015,985 1,015,985 1,026,145 41 1,126,899 1,126,899 1,138,168 42 1,249,425 1,249,425 1,261,919 43 1,384,810 1,384,810 1,398,658 44 1,534,369 1,534,369 1,549,712 45 1,699,554 1,699,554 1,716,549
This is an illustration, not a policy. Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid at the beginning of the year or month. All other values and ages are at the end of the year and reflect any loans and surrenders. The current cost of insurance rates are not guaranteed and subject to change. The hypothetical investment results are illustrative only, and should not be deemed a representation of past or future investment results. Actual investment results may be more or less than those shown, and will depend on a number of factors, including the investment allocations by policyowners, and the different investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy would be different from those shown if the actual rates of investment return applicable to the policy averaged 0.00% or 12.00% over a period of years, but also fluctuated above or below those averages for individual policy years. No representations can be made by MONY Life Insurance Company of America, MONY Series Fund, Inc. or Enterprise Accumulation Trust that these hypothetical rates of return can be achieved for any one year, or sustained over any period of time. Age 55 Male Non-Smoker Preferred Prepared On: 09/11/1998 Age 55 Female Non-Smoker Preferred Version 98.09.01 Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option 1 Form # B1-98 Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None D-53 177 PART II (INFORMATION NOT REQUIRED IN A PROSPECTUS) 178 PART II UNDERTAKING TO FILE REPORTS Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the 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 The By-Laws of MONY Life Insurance Company of America ("MONY America") provide, in Article VI as follows: SECTION 1. The Corporation shall indemnify any existing or former director, officer, employee or agent of the Corporation against all expenses incurred by them and each of them which may arise or be incurred, rendered or levied in any legal action brought or threatened against any of them for or on account of any action or omission alleged to have been committed while acting within the scope of employment as director, officer, employee or agent of the Corporation, whether or not any action is or has been filed against them and whether or not any settlement or compromise is approved by a court, all subject and pursuant to the provisions of the Articles of Incorporation of this Corporation. SECTION 2. The indemnification provided in this By-Law shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under By-Law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification for such liabilities (other than the payment by the Registrant of expense 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. REPRESENTATIONS RELATING TO SECTION 26 OF THE INVESTMENT COMPANY ACT OF 1940 Registrant and MONY Life Insurance Company of America represent that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by MONY Life Insurance Company of America. II-1 179 CONTENTS OF REGISTRATION STATEMENT This Registration Statement comprises the following papers and documents: The Facing Sheet. Cross-Reference to items required by Form N-8B-2. Prospectus consisting of pages. The Undertaking to file reports. The signatures. Written consents of the following persons: a. Edward P. Bank, Vice President and Deputy General Counsel, The Mutual Life Insurance Company of New York b. PricewaterhouseCoopers LLP, Independent Accountants The following exhibits: 1. The following exhibits correspond to those required by paragraph A of the instructions as exhibits to Form N-8B2: (1) Resolution of the Board of Directors of MONY America authorizing establishment of MONY America Variable Account L, filed as Exhibit 1 to Registration Statement on Form S-6, dated February 21, 1985 (Registration Nos. 2-95900 and 811-4235), is incorporated herein by reference. (2) Not applicable. (3) (a) Underwriting Agreement between MONY Life Insurance Company of America, MONY Series Fund, Inc., and MONY Securities Corp., filed as Exhibit 3(a) to Pre-Effective Amendment No. 1 to Registration Statement on Form S-6, dated January 6, 1995 (Registration Nos. 33-82570 and 811-4235), is incorporated by referenced herein. (b) Proposed specimen agreement between MONY Securities Corp. and registered representatives, filed as Exhibit 3(b) of Pre-Effective Amendment No. 1, dated December 17, 1990, to Registration Statement on Form N-4 (Registration Nos. 33-37722 and 811-6126) is incorporated herein by reference. (c) Commission schedule (with Commission Contract), filed as Exhibit 3(c) to Pre-Effective Amendment No. 1 to Registration Statement on Form S-6, dated January 6, 1995 (Registration Nos. 33-82570 and 811-4235), is incorporated by referenced herein. (4) Not applicable. (5) Form of policy, filed herewith as Exhibit 1(5). (6) Articles of Incorporation and By-Laws of MONY America filed as Exhibits 6(a) and 6(b), respectively, to Registration Statement Registration No. 33-13183) dated April 6, 1987, is incorporated herein by reference. (7) Not applicable. (8) (a) Form of agreement to purchase shares. Application Form for Flexible Premium Variable Universal Life Insurance Policy, filed as Exhibit 1.(10) to Pre-Effective Amendment No. 1, dated January 6, 1995, to Registration Statement on Form S-6 (Registration No. 33-82570), is incorporated herein by reference. (b) Investment Advisory Agreement between MONY Life Insurance Company of America and MONY Series Fund, Inc. filed as Exhibit 5(i) to Post-Effective amendment No. 14 to Registration Statement (Registration Nos. 2-95501 and 811-4209) dated February 27, 1998, is incorporated herein by reference. II-2 180 Portfolio Manager Agreement between Enterprise Capital Management, Inc., ("Enterprise Capital") and The Enterprise Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and OpCap Advisors, as sub-advisor, filed as Exhibit 5 to Post-Effective Amendment No. 8, dated September 30, 1994, to Registration Statement on Form N-1A (Registration No. 33-21534), is incorporated herein by reference. Portfolio Manager Agreement between Enterprise Capital Management, Inc., ("Enterprise Capital") and The Enterprise Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and Gabelli Asset Management Co., as sub-adviser, filed as Exhibit 5 to Post-Effective Amendment No. 8, dated September 30, 1994, to Registration Statement on Form N-1A (Registration No. 33-21534), is incorporated herein by reference. Portfolio Manager Agreement between Enterprise Capital Management, Inc., ("Enterprise Capital") and The Enterprise Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and Brinson Partners, Inc., as sub-adviser, filed as Exhibit 5 to Post-Effective Amendment No. 8, dated September 30, 1994, to Registration Statement on Form N-1A (Registration No. 33-21534), is incorporated herein by reference. Portfolio Manager Agreement between Enterprise Capital Management, Inc., ("Enterprise Capital") and The Enterprise Accumulation Trust ("Trust"), and Enterprise Capital, the Trust, and Caywood-Scholl Capital Management, Inc., as sub-adviser, filed as Exhibit 5 to Post-Effective Amendment No. 8, dated September 30, 1994, to Registration Statement on Form N-1A (Registration No. 33-21534), is incorporated herein by reference. (c) Services Agreement between The Mutual Life Insurance Company of New York and MONY Life Insurance Company of America filed as Exhibit 5(ii) to Pre-Effective Amendment to Registration Statement (Registration Nos. 2-95501 and 811-4209) dated July 19, 1985, is incorporated herein by reference. (9) Not applicable. (10) Application Form for Flexible Premium Variable Universal Life Insurance Policy, filed as Exhibit 1.(10) to Pre-Effective Amendment No. 1, dated January 6, 1995, to Registration Statement on Form S-6 (Registration No. 33-82570), is incorporated herein by reference. 2. Opinion and consent of Edward P. Bank, Vice President and Deputy General Counsel, The Mutual Life Insurance Company of New York, as to legality of the securities being registered, is filed herewith as Exhibit 2. 3. Not applicable. 4. Not applicable. 5. Not applicable. 6. Not Applicable. 7. Consent of PricewaterhouseCoopers LLP as to the inclusion of their reports on the audits of the financial statements of MONY America Variable Account L and the statutory financial statements of MONY Life Insurance Company of America, is filed herewith as Exhibit 7. II-3 181 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, MONY America Variable Account L of MONY Life Insurance Company of America, has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and the State of New York, on this 28th day of September, 1998. MONY AMERICA VARIABLE ACCOUNT L OF MONY LIFE INSURANCE COMPANY OF AMERICA By: /s/ MICHAEL I. ROTH ------------------------------------ Michael I. Roth, Director, Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been duly signed below by the following persons in the capacities and on the date indicated.
SIGNATURE DATE - --------- ---- /s/ MICHAEL I. ROTH Director, Chairman of the Board September 28, 1998 - ------------------------------------------------ and Chief Executive Officer Michael I. Roth /s/ SAMUEL J. FOTI Director, President and Chief September 28, 1998 - ------------------------------------------------ Operating Officer Samuel J. Foti /s/ RICHARD DADDARIO Director, Vice President and September 28, 1998 - ------------------------------------------------ Controller Richard Daddario (Principal Financial and Accounting Officer) /s/ KENNETH M. LEVINE Director and Executive Vice September 28, 1998 - ------------------------------------------------ President Kenneth M. Levine /s/ PHILLIP A. EISENBERG Director, Vice President and September 28, 1998 - ------------------------------------------------ Chief Actuary Phillip A. Eisenberg /s/ MARGARET G. GALE Director and Vice President September 28, 1998 - ------------------------------------------------ Margaret G. Gale /s/ CHARLES P. LEONE Director and Vice President September 28, 1998 - ------------------------------------------------ Charles P. Leone /s/ RICHARD E. CONNORS Director September 28, 1998 - ------------------------------------------------ Richard E. Connors /s/ STEPHEN J. HALL Director September 28, 1998 - ------------------------------------------------ Stephen J. Hall
II-4 182 EXHIBIT INDEX 1.(5). Form of Policy 2. Opinion and Consent of Edward P. Bank 7. Consent of PricewaterhouseCoopers LLP 27. Financial Data Schedule
EX-99.1.5 2 FORM OF POLICY 1 EXHIBIT 1.(5) [New Logo Here] MONY LIFE INSURANCE COMPANY OF AMERICA Signed for MONY Life Insurance Company of America, a stock company, on the Date of Issue. Administrative Office 1740 Broadway New York, NY 10019 Operations Center One MONY Plaza, PO Box 4830, Syracuse, NY 13221 1(800) 487-6669 Home Office 40 North Central Avenue, Phoenix, AZ 85004 MICHAEL I. ROTH, Chairman SAMUEL J. FOTI, President DAVID S. WALDMAN, Secretary RIGHT TO RETURN POLICY - THIS POLICY MAY BE RETURNED TO US WITHIN TEN DAYS FROM THE DATE YOU RECEIVE IT BY DELIVERING OR MAILING IT TO OUR ADMINISTRATIVE OFFICE, A LOCAL OFFICE OF OURS, OR TO ANY AGENT OF OURS. WE WILL THEN REFUND ANY PREMIUM PAID. THE POLICY WILL BE CONSIDERED NEVER TO HAVE BEEN ISSUED. IF YOU RETURN BY MAIL THE CANCELLATION WILL BE EFFECTIVE ON THE DATE IT IS POSTMARKED (IF PROPERLY ADDRESSED WITH POSTAGE PREPAID). MONY Life Insurance Company of America will pay the benefits provided in this Policy, subject to all the policy provisions. INSUREDS: NAME: Jane Doe ISSUE AGE: 35 CLASS: Standard Class - Non Smoker NAME: John Doe ISSUE AGE: 35 CLASS: Standard Class - Non Smoker POLICY NUMBER: B 0000-00-00 POLICY DATE: 04-01-1998 INITIAL SPECIFIED AMOUNT: $100,000 DATE OF ISSUE: 04-01-1998 MATURITY DATE: 04-0l-2063 - -------------------------------------------------------------------------------- BRIEF DESCRIPTION THIS IS A LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY DATE POLICY. SPECIFIED AMOUNT MAY BE INCREASED OR DECREASED. NET PREMIUMS MAY BE ALLOCATED TO ONE OR MORE SUB-ACCOUNTS OF THE VARIABLE ACCOUNT OR TO THE GUARANTEED INTEREST ACCOUNT. IF THE VALUES HAVE BEEN SUFFICIENT TO CONTINUE THE POLICY IN FORCE: DEATH PROCEEDS ARE PAYABLE IN EVENT OF DEATH OF THE SURVIVING INSURED (NO BENEFIT IS PAYABLE UPON THE DEATH OF THE FIRST INSURED TO DIE) BEFORE THE MATURITY DATE; CASH VALUE, IF ANY, IS PAYABLE IF EITHER INSURED IS LIVING AT THE MATURITY DATE. DEATH BENEFIT AND POLICY VALUES REFLECT INVESTMENT RESULTS. FLEXIBLE PREMIUMS UNTIL THE MATURITY DATE. NONPARTICIPATING (NO DIVIDENDS PAYABLE). - -------------------------------------------------------------------------------- IMPORTANT NOTICE(s) THIS POLICY IS A LEGAL CONTRACT BETWEEN THE POLICY OWNER AND THE COMPANY. READ YOUR POLICY CAREFULLY. THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) MAY INCREASE OR DECREASE DEPENDING ON INVESTMENT RESULTS. BUT THE DEATH BENEFIT WILL NEVER BE LESS THAN THE SPECIFIED AMOUNT IN FORCE LESS ANY DEBT. SEE DEATH PROCEEDS DEATH BENEFIT OPTIONS SECTION TO DETERMINE DEATH PROCEEDS. THE FUND VALUE IN THE VARIABLE ACCOUNT INCREASES OR DECREASES DEPENDING ON INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM FUND VALUE, CASH VALUE OR SURRENDER VALUE. SEE FUND VALUE, CASH VALUE, SURRENDER AND SUB-ACCOUNT UNIT VALUE SECTIONS. B1-98 LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE PAGE 1 2
- ----------------------------------------------------------------------------------------------------------------- TABLE OF CONTENTS Section Page 1. BENEFITS AND PREMIUMS, CHARGES AND EXPENSES............................................................3 Policy Description; Death Benefit; Riders; Premium; Specifications And Charges. 2. GUARANTEED MONTHLY INSURANCE RATES....................................................................3B Table Of Younger Insured's Attained Age And Corresponding Rate. 3. VARIABLE ACCOUNT, THE FUNDS AND SUB-ACCOUNTS...........................................................4 Listing Of Sub-Accounts And Funds. 4. ABOUT THIS POLICY......................................................................................5 An Overview Of Basic Policy Provisions. 5. WE WILL PAY............................................................................................6 Payment Of Death Proceeds; How Death Proceeds Are Determined. 6. PREMIUMS...............................................................................................6 Payment Of Premiums; Guideline Premium Limit; Net Premium; Premiums Before Or At Delivery; Allocation Of Net Premiums; Scheduled Premiums; Unscheduled Premiums 7. DEATH PROCEEDS-DEATH BENEFIT OPTIONS...................................................................8 Death Benefit Options; Change In Death Benefit Options. 8. FUND VALUE.............................................................................................9 How Fund Value Is Determined. 9. CASH VALUE.............................................................................................9 Cash Value Of The Policy. 10. TRANSFERS..............................................................................................9 Types Of Transfers; Allocation Rules. 11. SURRENDER.............................................................................................10 Surrender For Cash Value. 12. PARTIAL SURRENDER.....................................................................................10 Partial Surrenders; Surrender Fees; Allocation Rules; Effect On Death Benefit. 13. SURRENDER CHARGE......................................................................................11 Surrender Charge; Surrender Charge After Increase In Specified Amount. 14. LOANS.................................................................................................11 Loan Value; Loan Interest; Allocation Rules. 15. LOAN ACCOUNT..........................................................................................12 Loan Account; Annual Loan Interest Rate; Interest Allocation. 16. OPTIONAL POLICY CHANGES...............................................................................13 Increasing And Decreasing The Specified Amount; Changing The Death Benefit Option. 17. OPTION TO SPLIT POLICY................................................................................13 Terms And Conditions For Splitting Policy Into Two Individual Life Policies.
FOR INFORMATION OR TO MAKE A COMPLAINT, CALL 1-800-487-MONY (1-800-487-6669) OR WRITE TO US AT OUR OPERATIONS CENTER: ONE MONY PLAZA, PO BOX 4830, SYRACUSE, NY 13221 PAGE 2 3 - --------------------------------------------------------------------------------
Section Page 18. RIGHTS OF OWNER.......................................................................................16 Owner Of The Policy; Owner's Rights. 19. BENEFICIARY...........................................................................................16 Beneficiary Of The Policy; Changing The Beneficiary. 20. THE VARIABLE ACCOUNT..................................................................................16 Variable Account; Sub-Accounts; Changes To The Variable Account. 21. SUB-ACCOUNT UNIT VALUE................................................................................17 Unit Value Determination. 22. THE GUARANTEED INTEREST ACCOUNT.......................................................................18 Guaranteed Interest Account; Interest Rate Applied To The Guaranteed Interest Account. 23. MONTHLY DEDUCTION.....................................................................................18 Monthly Deduction Determination; Monthly Deduction Allocation. 24. GRACE PERIOD..........................................................................................18 Minimum Monthly Premium; Notice of Insufficient Premium/Value; Length of Grace Period. 25. REINSTATEMENT.........................................................................................19 Period And Requirements For Reinstatement. 26. COST OF INSURANCE.....................................................................................20 Cost Of Insurance Determination; Amount At Risk. 27. INSURANCE RATE........................................................................................21 Insurance Rate Determination; Review Of Insurance Rate. 28. CONTINUATION OF INSURANCE.............................................................................21 Continuation Of Policy If Premium Payments Are Not Continued. 29. DEFINITION OF LIFE INSURANCE..........................................................................21 Cash Value Accumulation Test; Guideline Premium/Cash Value Corridor Test. 30. BASIS OF CALCULATION..................................................................................22 Method Of Calculations On File With State Supervisory Official. 31. DATES AND POLICY PERIODS..............................................................................22 How Dates Are Determined; How Periods Are Measured. 32. GENERAL PROVISIONS....................................................................................22 The Contract; Statements In Application; Incontestability; Misstatement Of Age Or Gender; Suicide Exclusion; Assignment; Policy Payment; Relationships; Postponement Of Certain Payments Or Transfers; Reports; Projection of Benefits And Values; Nonparticipation. 33. SETTLEMENT OPTIONS....................................................................................24 Election Of Settlement Options; Settlement (Payout) Options Available; Minimum Monthly Income Tables. ENDORSEMENTS, IF ANY RIDERS, IF ANY APPLICATION
PAGE 2A 4
- --------------------------------------------------------------------------------------------------------------------------------- 1. SCHEDULE OF BENEFITS AND PREMIUMS, CHARGES AND EXPENSES BENEFITS AND PREMIUMS Last Survivor Flexible Premium Variable Life Policy - --------------------------------------------------------------------------------------------------------------------------------- Death Benefit Option 1 in effect Specified Amount In Force $100,000 Guaranteed Monthly Insurance Rates for Initial Specified Amount see Section 2 - --------------------------------------------------------------------------------------------------------------------------------- Guaranteed Death Benefit Rider Guarantee period to later of 10th policy anniversary or the date the younger Insured attains (or would have attained) age 70 Monthly Guarantee Premium $39.72 - --------------------------------------------------------------------------------------------------------------------------------- Four Year Term Insurance Rider Initial Amount $100,000 - --------------------------------------------------------------------------------------------------------------------------------- First Premium $50.00 Scheduled Premiums $50.00 at 1 Policy Month intervals measured from 5-1-98 Guideline Premium Limit as of Policy Date $9760.43 Minimum Monthly Premium $31.00 - --------------------------------------------------------------------------------------------------------------------------------- Under the terms of the Policy, the scheduled premium shown above may not continue the Policy inverse to the Maturity Date even if this amount is paid as scheduled. The period for which the Policy will continue will depend on: the amount of premiums paid; changes in Specified Amount and death benefit options; changes in interest credited, expenses, fund performance and mortality deductions; deductions for riders and benefits and any partial surrenders and policy loans. During the first three policy years, premiums paid less partial surrenders (excluding their fees) must equal the Minimum Monthly Premium times the number of months the Policy has been in force. Election of the Guaranteed Death Benefit Rider can provide for guaranteed continuation of the Policy and some riders if certain requirements are met. - --------------------------------------------------------------------------------------------------------------------------------- CHARGES AND EXPENSES Transfer Charge Current $0 (subject to change; see Transfers, Section 10) Guaranteed Maximum $25 Daily Mortality and Expense Risk Charge. 000959% (0.35% annually) Sales Charge 6% of each premium received until the total of all premiums received in the year equals $461.23; plus 3% of each premium received in excess of that amount during years 1 through 10. 3% of each premium received during years 11 and later. Premium Tax Charge 2.25% of each premium received subject to change based upon changes in applicable state tax laws or cost to the Company. Federal Tax Charge 1.5% of each premium received subject to change based upon changes in applicable federal tax laws or cost to the Company. Administrative Charge $7.50 per month is included in the monthly deduction on a Monthly Anniversary Day. Per $1,000 Initial Specified Amount Charge $7.00 per month during years 1 through 10.
PAGE 3 5 - -------------------------------------------------------------------------------- SECTION 1 CONTINUED Table of Death Benefit Percentages; Cash Value Accumulation Test
- ------------------------------------------------------------------------------------------------------------- Attained Age Of Applicable Death Attained Age Of Applicable Death - ------------------------------------------------------------------------------------------------------------- Younger Insured Benefit Percentage Younger Insured Benefit Percentage - ------------------------------------------------------------------------------------------------------------- 35 785.8 68 197.2 - ------------------------------------------------------------------------------------------------------------- 36 752.0 69 190.2 - ------------------------------------------------------------------------------------------------------------- 37 719.7 70 183.6 - ------------------------------------------------------------------------------------------------------------- 38 688.7 71 177.4 - ------------------------------------------------------------------------------------------------------------- 39 659.2 72 171.5 - ------------------------------------------------------------------------------------------------------------- 40 630.9 73 166.1 - ------------------------------------------------------------------------------------------------------------- 41 603.9 74 160.9 - ------------------------------------------------------------------------------------------------------------- 42 578.0 75 156.1 - ------------------------------------------------------------------------------------------------------------- 43 553.4 76 151.7 - ------------------------------------------------------------------------------------------------------------- 44 529.8 77 147.5 - ------------------------------------------------------------------------------------------------------------- 45 507.2 78 143.7 - ------------------------------------------------------------------------------------------------------------- 46 485.7 79 140.1 - ------------------------------------------------------------------------------------------------------------- 47 465.1 80 136.8 - ------------------------------------------------------------------------------------------------------------- 48 445.4 81 133.7 - ------------------------------------------------------------------------------------------------------------- 49 426.6 82 130.8 - ------------------------------------------------------------------------------------------------------------- 50 408.7 83 128.2 - ------------------------------------------------------------------------------------------------------------- 51 391.5 84 125.8 - ------------------------------------------------------------------------------------------------------------- 52 375.1 85 123.7 - ------------------------------------------------------------------------------------------------------------- 53 359.5 86 121.7 - ------------------------------------------------------------------------------------------------------------- 54 344.6 87 119.9 - ------------------------------------------------------------------------------------------------------------- 55 330.4 88 118.2 - ------------------------------------------------------------------------------------------------------------- 56 316.9 89 116.6 - ------------------------------------------------------------------------------------------------------------- 57 303.9 90 115.2 - ------------------------------------------------------------------------------------------------------------- 58 291.6 91 113.8 - ------------------------------------------------------------------------------------------------------------- 59 279.9 92 112.4 - ------------------------------------------------------------------------------------------------------------- 60 268.7 93 111.0 - ------------------------------------------------------------------------------------------------------------- 61 258.0 94 109.5 - ------------------------------------------------------------------------------------------------------------- 62 247.9 95 108.1 - ------------------------------------------------------------------------------------------------------------- 63 238.3 96 106.6 - ------------------------------------------------------------------------------------------------------------- 64 229.1 97 105.1 - ------------------------------------------------------------------------------------------------------------- 65 220.5 98 104.1 - ------------------------------------------------------------------------------------------------------------- 66 212.3 99 103.0 - ------------------------------------------------------------------------------------------------------------- 67 204.5 100 101.0 - -------------------------------------------------------------------------------------------------------------
PAGE 3-CONT. 6 - -------------------------------------------------------------------------------- 1A. SURRENDER CHARGE The surrender charge as of the policy date for the Initial Specified Amount is $461.23 The surrender charge for the Initial Specified Amount declines each year and is the applicable percentage (shown in the table below) of the surrender charge as of the policy date.
------------------------------------------------------------------------------- Policy Year Applicable % Policy Year Applicable % ------------------------------------------------------------------------------- 1 100% 7 40 ------------------------------------------------------------------------------- 2 90 8 30 ------------------------------------------------------------------------------- 3 80 9 20 ------------------------------------------------------------------------------- 4 70 10 10 ------------------------------------------------------------------------------- 5 60 11 and later 0 ------------------------------------------------------------------------------- 6 50 -------------------------------------------------------------------------------
See surrender charge section for the effect of any change in Specified Amount. PAGE3A 7 - ------------------------------------------------------------------------------- 2. GUARANTEED MONTHLY INSURANCE RATES FOR INITIAL SPECIFIED AMOUNT Rates are per $1,000 of Amount at Risk - see Cost of Insurance section.
- ------------------------------------------------------------------------------------------------- Younger Insured's Younger Insured's - ------------------------------------------------------------------------------------------------- Attain Age Rate Attained Age Rate - ------------------------------------------------------------------------------------------------- 35 .00006 67 .61475 - ------------------------------------------------------------------------------------------------- 36 .00070 68 .72150 - ------------------------------------------------------------------------------------------------- 37 .00129 69 .84601 - ------------------------------------------------------------------------------------------------- 38 .00199 70 .99430 - ------------------------------------------------------------------------------------------------- 39 .00283 71 1.17414 - ------------------------------------------------------------------------------------------------- 40 .00387 72 1.39468 - ------------------------------------------------------------------------------------------------- 41 .00512 73 1.66251 - ------------------------------------------------------------------------------------------------- 42 .00658 74 1.98046 - ------------------------------------------------------------------------------------------------- 43 .00830 75 2.34948 - ------------------------------------------------------------------------------------------------- 44 .01030 76 2.76899 - ------------------------------------------------------------------------------------------------- 45 .01269 77 3.23953 - ------------------------------------------------------------------------------------------------- 46 .01547 78 3.76645 - ------------------------------------------------------------------------------------------------- 47 .01875 79 4.36390 - ------------------------------------------------------------------------------------------------- 48 .02256 80 5.05200 - ------------------------------------------------------------------------------------------------- 49 .02707 81 5.85173 - ------------------------------------------------------------------------------------------------- 50 .03243 82 6.78444 - ------------------------------------------------------------------------------------------------- 51 .03884 83 7.85568 - ------------------------------------------------------------------------------------------------- 52 .04661 84 9.05986 - ------------------------------------------------------------------------------------------------- 53 .05595 85 10.38554 - ------------------------------------------------------------------------------------------------- 54 .06693 86 11.82373 - ------------------------------------------------------------------------------------------------- 55 .07993 87 13.36648 - ------------------------------------------------------------------------------------------------- 56 .09497 88 15.01179 - ------------------------------------------------------------------------------------------------- 57 .11205 89 16.77412 - ------------------------------------------------------------------------------------------------- 58 .13173 90 18.67204 - ------------------------------------------------------------------------------------------------- 59 .15495 91 20.75205 - ------------------------------------------------------------------------------------------------- 60 .18258 92 23.10056 - ------------------------------------------------------------------------------------------------- 61 .21591 93 25.91960 - ------------------------------------------------------------------------------------------------- 62 .25695 94 29.68300 - ------------------------------------------------------------------------------------------------- 63 .30744 95 35.41389 - ------------------------------------------------------------------------------------------------- 64 .36792 96 45.47716 - ------------------------------------------------------------------------------------------------- 65 .43908 97 66.01833 - ------------------------------------------------------------------------------------------------- 66 .52120 98 83.33333 - ------------------------------------------------------------------------------------------------- 99 83.33333 - -------------------------------------------------------------------------------------------------
PAGE 3B 8 - -------------------------------------------------------------------------------- 3. VARIABLE ACCOUNT. THE FUNDS AND SUB-ACCOUNTS See Variable The Variable Account is MONY America Variable Account L and includes the Account Sub-accounts listed below. section for further The Sub-accounts available for investment purposes, and the corresponding information portfolios of the applicable funds are:
- ------------------------------------------------------------------------------------------------------------- SUB-ACCOUNT APPLICABLE FUND - ------------------------------------------------------------------------------------------------------------- Money Market MONY Series Fund, Inc. Government Securities MONY Series Fund, Inc. Intermediate Term Bond MONY Series Fund, Inc. Long Term Bond MONY Series Fund, Inc. Equity Income Enterprise Accumulation Trust Growth and Income Enterprise Accumulation Trust Growth Enterprise Accumulation Trust Equity Enterprise Accumulation Trust Managed Enterprise Accumulation Trust Capital Appreciation Enterprise Accumulation Trust Small Company Value Enterprise Accumulation Trust Small Company Growth Enterprise Accumulation Trust International Growth Enterprise Accumulation Trust High Yield Bond Enterprise Accumulation Trust - -------------------------------------------------------------------------------------------------------------
The MONY Series Fund, Inc. is organized under the laws of Maryland. The Enterprise Accumulation Trust is organized under the laws of Massachusetts. Each fund is registered with the Securities and Exchange Commission (SEC) as an open end, diversified management investment company under the Investment Company Act of 1940. PAGE4 9 - -------------------------------------------------------------------------------- 4. ABOUT THIS POLICY The following is an overview of some basic policy provisions to aid your understanding. The specific provisions of the Policy are found in the pages following this overview. In the event of a discrepancy between this overview and any specific provisions of this Policy, the specific Policy provisions will control. This is a Last Survivor Flexible Premium Variable Life to Maturity Date Insurance policy. This Policy goes into effect on the Policy Date. This Policy is a "promise to pay" the Death Proceeds in the event the last surviving Insured (the second Insured to die) dies before the Maturity Date while the Policy is in force. Payment will be made when we receive due proof of the death of the last surviving Insured. The Insureds are the persons on whose lives the policy is based. "Specified Amount in Force" is the Initial Specified Amount, adjusted for any increases or decreases in Specified Amount. The Death Proceeds are paid to the Beneficiary. If either Insured is living on the Maturity Date, while the Policy is in force, we will pay the Cash Value, if any, to the Owner(s). Maturity Date means the policy anniversary following the younger Insured's 100th Birthday and is shown on page 1. The value of this Policy is based on Premiums which you allocate to either the Variable Account and/or the Guaranteed Interest Account. The Fund Value is the combined value of the Variable Account, the Guaranteed Interest Account and the Loan Account BEFORE the surrender charge. The Cash Value, if any, is the value AFTER the surrender charge and any Debt is deducted. The "Guaranteed Interest Account" is a "fixed" account and is part of our General Account. The Variable Account is an account which is separate from our General Account. The value of the Variable Account can increase or decrease depending on investment experience. The Variable Account is made up of several Sub-accounts (subdivisions) with different investment objectives. Each Sub-account invests only in the shares of its own portfolio of its fund. The measure of value in a Sub-account is called a Unit. The value of Units in a Sub-account can only change on a Business Day. A Business Day is any day the New York Stock Exchange is open for trading or on any other day there is enough trading to change the Unit value of a Sub-account. Trading refers to the securities held by the portfolio. A "Monthly Anniversary Day" is the first Business Day of each policy month. Each month, a Monthly Deduction (the cost of insurance, cost of additional benefits, an Administrative Charge and a Per $1,000 of Specified Amount Charge) is deducted from the Fund Value. If, on a Monthly Anniversary Day, additional payments by you are required to keep this Policy in force, we will send a notice of INSUFFICIENT PREMIUM or INSUFFICIENT VALUE to you. A grace period of 61 days will be allowed for payment of the required amount. When we refer to "I" or "my" in a question, or to "you" or "your" in an answer, we mean the Owner. The Owner is the person who holds the Policy and who has the rights of ownership. The Owner chooses any options the Policy offers. When we refer to "we", "us" and "our", we mean MONY Life Insurance Company of America. "Administrative Office" means our office at 1740 Broadway, New York, N.Y. 10019 and also includes our Operations Center at One MONY Plaza, P.O. Box 4830, Syracuse, NY 13221. You can read more about the terms used in the summary on the following pages. "Beneficiary" (see Section 19) "Cash Value" (see Section 9) "Death Proceeds" (see Section 7) "Fund Value" (see Section 8) "Grace Period" (see Section 24) "Guaranteed Interest Account" (see Section 22) "Monthly Deduction" (see Section 23) "Owner" (see Section 18) "Specified Amount in Force" (see Section 16) "Units" and "Sub-account (see Section 21) unit value" "Variable Account" and (see Section 20) "Sub-accounts
PAGE5 10 - -------------------------------------------------------------------------------- 5. WE WILL PAY WHAT WILL THE COMPANY PAY AND WHEN WILL THEY PAY IT? If the surviving lnsured dies before the Maturity Date and while this Policy is in force, I will pay the Death Proceeds of the Policy to the Beneficiary. Payment will be made subject to all the provisions of this Policy, when we receive due proof of death at our Administrative Office. If the proceeds are not paid by the end of 30 days from the date we receive due proof of death of the last surviving Insured, we will pay interest on the proceeds if required by the state in which the Policy is delivered at the rate specified by that state. If interest is payable, it will be paid from date of the death to date of payment of proceeds. We must be given due proof of the first death as soon as possible. Payment in any case will only be made in accordance with all the provisions of this Policy. We must receive due proof of the death of both Insureds. If either Insured is living at the Maturity Date, we will pay the Cash Value, if any, to the Owner(s). - -------------------------------------------------------------------------------- 6. PREMIUMS WHERE DO I PAY PREMIUMS? Premiums after the first may be paid at any time to us at our Administrative Office or through any agent or other person authorized by us to accept them in exchange for a receipt signed by our Treasurer and by the person receiving the payment. The next three questions and answers apply only to policies where the Guideline Premium/Cash Value Corridor Test has been selected as the Definition of Life Insurance. IS THERE A LIMIT ON PREMIUMS? Yes. Premiums after the first (shown in section 1), are limited as described below. We will not accept any part of an unscheduled premium if that part would result in the sum of all premiums paid, less any partial surrenders (including their fees), being in excess of the Guideline Premium Limit that then applies to the Policy. We reserve the right to reject all or a portion of any unscheduled premium if part (b) of either Death Benefit Option 1 or Death Benefit Option 2 is in effect. How is the Guideline Premium Limit determined? The Guideline Premium Limit that applies to the Policy at any time will never be more than as determined in accordance with Section 7702 of the Internal Revenue Code of 1986 as now or later amended or any further amendment of such Code superseding or modifying that section. The Guideline Premium Limit that applies to the Policy on the Policy Date is shown in Section 1. CAN THE GUIDELINE PREMIUM LIMIT CHANGE? Yes. Changes in the Specified Amount in Force, the Death Benefit Option in effect or an additional benefit provided by rider will change the Guideline Premium Limit. In the event of any such change, we reserve the right to reduce the Policy's Fund Value after deduction of any surrender charge, so that the Guideline Premium Limit that applies to the Policy is not violated. The amount by which we reduce the Fund Value after deduction of any surrender charge, will be refunded to you in cash. We will issue an endorsement to reflect any such change and it will include the revised Guideline Premium Limit that then applies to the Policy. WHAT IS A NET PREMIUM? A net premium is a premium paid by you, less the Sales Charge, Premium Tax Charge and Federal Tax Charge shown in Section 1. WHEN MUST I PAY THE FIRST PREMIUM AND WILL THE PREMIUM EARN INTEREST? You must pay the first premium before or at delivery of the Policy. The premium will earn interest at a rate not less than 4.5%. Interest will be credited annually from the later of the Policy Date and the Business Day that falls on, or next follows, the date we receive it at our Administrative Office until the date we transfer it to the PAGE6 11 - -------------------------------------------------------------------------------- Sub-accounts and/or Guaranteed Interest Account as you have chosen. If you do not accept the Policy at delivery, we will refund any premium paid without interest. WILL ANY SUBSEQUENT PREMIUMS EARN INTEREST DURING THE "RIGHT TO RETURN POLICY" PERIOD? Any premium we receive after delivery of the Policy but before the end of the "Right to Return Policy" period (see page 1) will also earn interest at a rate not less than a 4.5% annual interest rate. WHEN IS THIS VALUE TRANSFERRED INTO THE ACCOUNTS I'VE CHOSEN? If you have not returned the Policy, at the end of the "Right to Return Policy" period, we transfer the net premiums with interest less any monthly deductions that may apply to the Sub-accounts and/or the Guaranteed Interest Account as you have chosen. When we do this, we use the most recent valid scheduled premium allocation choice we have from you. If we have no valid scheduled premium allocation choice from you, we will transfer the net premiums with interest, less deductions to the Money Market Sub-account. AFTER THE "RIGHT TO RETURN POLICY" PERIOD, WHERE ARE NET PREMIUMS ALLOCATED? After the "Right to Return Policy" period, we allocate net premiums to the Sub-Accounts and/or the Guaranteed Interest Account as chosen by you on the day we receive them if it is a Business Day. If the day we receive the premium is not a Business Day, we allocate it on the next Business Day. When we do this, we use the most recent valid scheduled premium allocation choice we have from you. If we have no valid scheduled premium allocation choice from you, we will allocate the net premiums, less deductions to the Money Market Sub-account. ARE THERE ANY ALLOCATION RULES FOR SCHEDULED PREMIUMS? Yes, allocations must be made in whole percentages. If a Sub-account or the Guaranteed Interest Account is to receive any allocation, the allocation must be at least 10% and the total must equal 100% of the net premium. We use the most recent valid allocation choice we have from you. You may change your allocation choice by writing to us at our Administrative Office. A change will take effect within 7 days after we receive that notice. WILL I RECEIVE ANY NOTICE REGARDING SCHEDULED PREMIUMS? Yes, we will send reminder notices to you for the payment of the scheduled premiums shown in Section 1. CAN I CHANGE THE AMOUNT AND INTERVAL OF SCHEDULED PREMIUMS? Yes, you can change the amount and interval of payment of scheduled premiums by writing to us. But the new payment interval must satisfy our rules in use at the time of the change. CAN I MAKE UNSCHEDULED PREMIUM PAYMENTS? Yes, additional premium payments may be made at any time. However, we will not accept any part of an unscheduled premium if that part will result in total premiums paid less any partial surrenders (including their fees) in excess of the Guideline Premium Limit, if applicable. CAN I EARMARK AN UNSCHEDULED PREMIUM FOR AN ALLOCATION DIFFERENT FROM MY REGULAR ALLOCATION CHOICE? Yes, you can choose a specific allocation for an unscheduled premium and it will not change your allocation choice for future scheduled premiums. Allocations must be by amount or percentage in whole numbers only. If a Sub-account or the Guaranteed Interest Account is to receive any allocation, the allocation must be at least 10% and the total must equal 100% of the net premium. If you do not give us a specific allocation for the unscheduled premium, or if your allocation choice is not valid, we will use the most recent valid scheduled premium allocation choice we have from you. PAGE7 12 - -------------------------------------------------------------------------------- 7. DEATH PROCEEDS-DEATH BENEFIT OPTIONS WHAT ARE THE DEATH PROCEEDS OF THE POLICY? THE DEATH PROCEEDS WILL BE PAID TO THE BENEFICIARY WHEN WE RECEIVE DUE PROOF OF THE DEATH OF THE SURVIVING INSURED WHILE THIS POLICY IS IN FORCE. THE DEATH PROCEEDS WILL BE THE SUM OF: - -- the Death Benefit; and - -- any Death Benefit provided by any additional benefit rider in force on the date of death. LESS: - -- any Debt due us on this Policy; and - -- if the death of the surviving Insured occurs during any period for which a monthly deduction has not been made, any monthly deduction that may apply to that period, including the deduction for the month of death. WHAT IS THE DEATH BENEFIT UNDER DEATH BENEFIT OPTION 1? If Death Benefit Option 1 is in effect on the date of death of the surviving Insured, the Death Benefit is the greater of: (a) the Specified Amount in Force on the date of death; and (b) the Fund Value on the date of death multiplied by the applicable percentage (see below). WHAT IS THE DEATH BENEFIT UNDER DEATH BENEFIT OPTION 2? If Death Benefit Option 2 is in effect on the date of death of the surviving Insured, the Death Benefit is the greater of: (a) the Specified Amount in Force on the date of death, plus the Fund Value on the date of death; and (b) the Fund Value on the date of death multiplied by the applicable percentage (see below). WHAT IS THE APPLICABLE PERCENTAGE? The applicable percentage varies based on the definition of life insurance test you choose in the application for this Policy. Once the test is chosen, it may not be changed. If the Cash Value Accumulation Test is chosen, the applicable percent ages are as shown in Section 1 of this Policy. If the Guideline Premium/Cash Value Corridor Test is chosen, the applicable percentage of the Fund Value used to determine the Death Benefit payable is
- -------------------------------------------------------------------------- Younger Insured's Applicable Percentage Attained Age on of Fund Value date of Second Death - -------------------------------------------------------------------------- 40 or under 250% - -------------------------------------------------------------------------- 41-45 250% less 7% for each year over attained age 40 - -------------------------------------------------------------------------- 46-50 215% less 6% for each year over attained age 45 - -------------------------------------------------------------------------- 51-55 185% less7% for each year over attained age 50 - -------------------------------------------------------------------------- 56-60 150% less 4% for each year over attained age 55 - -------------------------------------------------------------------------- 61-65 130% less 2% for each year over attained age 60 - -------------------------------------------------------------------------- 66-70 120% less 1% for each year over attained age 65 - -------------------------------------------------------------------------- 71-74 115%less 2% for each year over attained age 70 - -------------------------------------------------------------------------- 75-90 105% - -------------------------------------------------------------------------- 91-94 105% less 1% for each year over attained age 90 - -------------------------------------------------------------------------- 95-99 101% - -------------------------------------------------------------------------- 101 101% - --------------------------------------------------------------------------
UNDER WHAT CIRCUMSTANCES WILL THE DEATH BENEFIT OPTION CHANGE AUTOMATICALLY? If a Waiver of Monthly Deduction Benefit rider or a Waiver of Specified Premium rider is part of this Policy, and if Death Benefit Option 1 is in effect, it will automatically change to Death Benefit Option 2 under the terms and conditions explained in that rider. PAGE8 13 - -------------------------------------------------------------------------------- 8. FUND VALUE WHAT IS THE FUND VALUE ON THE POLICY DATE? The Fund Value on the Policy Date is the net Premiums received by us on or before the Policy Date with interest, if applicable, less the monthly deduction due on the Policy Date. WHEN ARE FUND VALUE CALCULATIONS MADE? After the Policy Date, Fund Value calculations are made on Business Days. If a Fund Value calculation has to be made for a day that is not a Business Day, then we will use the next Business Day. HOW IS THE FUND VALUE DETERMINED ON A BUSINESS DAY? The Fund Value on a Business Day is determined as follows: (a) Determine the Fund Value in each Sub-account on that Day (see below for details). (b) Total the Fund Value in each Sub-account on that Day. (c) Add the Fund Value in the Guaranteed Interest Account on that Day (see below for details). (d) Add any amounts in the Loan Account on that Day. (e) Add interest credited on that Day on the amounts in (d) since the last Monthly Anniversary Day. (f) Add any net Premiums received on that Day. (g) Deduct any Transfer Charges on that Day. (h) Deduct any partial surrender, and its fee, made on that Day. (i) Deduct any monthly deduction to be made on that Day. REGARDING (a) ABOVE, HOW IS THE FUND VALUE FOR EACH SUB-ACCOUNT DETERMINED ON THAT BUSINESS DAY? For each Sub-account we multiply the number of Units credited to that Sub-account by its Unit value on that Day. The multiplication is done BEFORE the purchase or redemption of any Units on that Day. REGARDING (c) ABOVE, WHAT MAKES UP THE FUND VALUE IN THE GUARANTEED INTEREST ACCOUNT ON THAT BUSINESS DAY? The Fund Value in the Guaranteed Interest Account on that Day is the accumulated value with interest of net Premiums allocated, and amounts transferred, to the Guaranteed Interest Account BEFORE that Day, decreased by allocations against the Guaranteed Interest Account BEFORE that Day for: (i) any partial surrender, and its fee; (ii) any amounts transferred from the Guaranteed Interest Account, and Transfer Charge; and (iii) any monthly deductions. HOW IS THE FUND VALUE DETERMINED ON A MONTHLY ANNIVERSARY DAY FOR PURPOSES OF CALCULATING THE COST OF INSURANCE AND THE COST OF ANY WAIVER OF MONTHLY DEDUCTION RIDER? The Fund Value on a Monthly Anniversary Day for purposes of calculating the cost of insurance and the cost of any Waiver of Monthly Deduction Rider is determined as described in items (a) through (h) above. - -------------------------------------------------------------------------------- 9. CASH VALUE WHAT IS THE CASH VALUE OF THIS POLICY? The Cash Value of this Policy at any time is the Fund Value, less the surrender charge and less any Debt. - -------------------------------------------------------------------------------- 10. TRANSFERS WHEN CAN I MAKE TRANSFERS? Transfers may be made only after the "Right to Return Policy" period has ended. WHAT TRANSFERS CAN I MAKE? There are 2 types of transfers you can make. Each type is explained (along with any rules and limitations) below: TYPE 1. Transfers FROM a Sub-account. There are no restrictions on this type of transfer. PAGE9 14 - -------------------------------------------------------------------------------- TYPE 2. Transfers FROM the Guaranteed Interest Account. This type of transfer can only be made ONCE per policy year. Your request for this type of transfer MUST be received at our Administrative Office WITHIN 10 DAYS BEFORE OR 30 DAYS AFTER a policy anniversary. There is no limit on transfers INTO a Sub-account or the Guaranteed Interest Account. WHEN WILL A TRANSFER REQUEST TAKE EFFECT? Type 1 transfers will take effect on the Business Day that falls on, or next follows, the date we receive the request at our Administrative Office. Type 2 transfers will take effect on the policy anniversary or, if later, (subject to above rules), on the Business Day that falls on, or next follows, the date we receive the request at our Administrative Office. WHAT IS THE CHARGE FOR A TRANSFER AND HOW DOES IT WORK? Each request for a transfer is considered one transaction and is subject to a Transfer Charge. The current amount of that charge is shown on page 3. We may increase the charge but it will never be more than the guaranteed maximum shown on page 3. If we change the amount of the charge we will send an endorsement to show the change. IF A TRANSFER CHARGE IS APPLICABLE, HOW IS IT ALLOCATED AMONG THE ACCOUNTS? The Transfer Charge is allocated against the first of the Sub-accounts and/or the Guaranteed Interest Account from which Fund Value is being transferred. CAN I CHANGE THIS POLICY TO A POLICY THAT DOES NOT DEPEND ON THE INVESTMENT RESULTS OF A SEPARATE ACCOUNT? Yes. During the first 24 months after the Date of Issue of the Policy, the entire amount of Fund Value in the Sub-accounts may be transferred to the Guaranteed Interest Account. Election of this exchange transfer will change this Policy to a policy that is not dependent upon the investment results of a separate account. There will be no Transfer Charge for an exchange transfer. On the date an exchange transfer takes effect, the premium allocation will be changed so that all future net premiums will be allocated to the Guaranteed Interest Account only. - -------------------------------------------------------------------------------- 11. SURRENDER WHEN MAY I SURRENDER THE POLICY AND WHAT IS ITS VALUE ON SURRENDER? You may surrender the Policy at any time during either Insureds' lifetime for its Cash Value, if any. If the Policy is surrendered within 30 days of a policy anniversary, the following will apply. The portion of the Cash Value of the policy in the Guaranteed Interest Account on the surrender date will not be less than the Cash Value in the Guaranteed Interest Account on that anniversary. The Cash Value on that anniversary will be adjusted for amounts attributable to: any partial surrender and its fee; any transfer to or from the Guaranteed Interest Account and applicable Transfer Charge, and any policy loan. - -------------------------------------------------------------------------------- 12 PARTIAL SURRENDER CAN I WITHDRAW MONEY FROM THE POLICY? Yes, money may be withdrawn by making a partial surrender. WHAT ARE THE RULES AND LIMITATIONS FOR A PARTIAL SURRENDER? A partial surrender of this Policy may be made for any amount of at least $500 which, with its fee (see below), is less than the Policy's Cash Value on the date of the partial surrender. A partial surrender may not result in a Specified Amount in Force less than $100,000. Nor may it result in a remaining Cash Value of less than $500. IS THERE A FEE FOR A PARTIAL SURRENDER? Yes, a partial surrender fee equal to $10 will apply to each partial surrender. The amount of a partial surrender, plus its fee, will be deducted from the Fund Value of the Policy on the date of the partial surrender. The fee will be retained by us. PAGE 10 15 - -------------------------------------------------------------------------------- WHEN WILL PARTIAL SURRENDERS TAKE EFFECT? Partial surrenders will take effect on the Business Day that falls on, or next follows, the date we receive your request at our Administrative Office. HOW CAN 1 SPECIFY PARTIAL SURRENDER ALLOCATIONS AND ARE THERE MINIMUMS? You can specify partial surrender allocations by amount or percentage. Allocations by percentage must be in whole percentages and the minimum percentage is 10% against any Sub-account or the Guaranteed Interest Account. Percentages must total 100%. We will not accept an allocation which does not comply with the above rules or if there is not enough Fund Value in a Sub-account or the Guaranteed Interest Account to provide its share of the allocation. WHAT IF I DON'T SPECIFY AN ALLOCATION? If you do not specify an allocation, we will not accept the request for partial surrender. HOW WILL THE PARTIAL SURRENDER FEE BE ALLOCATED? Each Sub-account and/or the Guaranteed Interest Account will be charged its pro-rata share of the partial surrender fee, based on the allocation percentages you specify for the partial surrender. HOW WILL A PARTIAL SURRENDER AFFECT THE AMOUNT OF DEATH BENEFIT AND SPECIFIED AMOUNT IN FORCE? If Death Benefit Option 1 is in effect on the day on which a partial surrender is made, we shall then reduce the Specified Amount in Force on that day by the amount of the partial surrender, excluding its fee. But the amount of partial surrender cannot result in a Specified Amount in Force less than $100,000. If Death Benefit Option 2 is in effect on the day on which a partial surrender is made, the Fund Value on that day will be reduced by the amount of the partial surrender, plus its fee. The Specified Amount in Force on that day will be unaffected. HOW DO PARTIAL SURRENDERS AFFECT THE SURRENDER CHARGE DESCRIBED IN SURRENDER CHARGE SECTION 13? Partial surrenders have no effect on the amount of surrender charge that may be applicable. - -------------------------------------------------------------------------------- 13. SURRENDER CHARGE WHAT IS THE SURRENDER CHARGE FOR THE INITIAL SPECIFIED AMOUNT? The surrender charge for the Initial Specified Amount is shown in Section lA. WHAT EFFECT DOES AN INCREASE IN SPECIFIED AMOUNT HAVE ON THE SURRENDER CHARGE? A new separate surrender charge will be determined for each increase in Specified Amount and will be provided in the endorsement issued to reflect that increase. The surrender charge for the Specified Amount in Force reflects any charge attributable to the Initial Specified Amount and to each increase in Specified Amount. WHEN WILL A SURRENDER CHARGE BE ASSESSED? A full surrender will result in all of the outstanding surrender charge (if any) being assessed against the Fund Value. - -------------------------------------------------------------------------------- 14. LOANS MAY I OBTAIN A LOAN FROM THE POLICY? Yes, loans may be obtained at any time while this Policy has a loan value. The loan value is up to 90% of the Cash Value on the date of the loan. A proper assignment of this Policy to us will be needed. PAGE 11 16 - -------------------------------------------------------------------------------- IS THERE ANY INTEREST CHARGED ON LOANS AND HOW IS IT PAYABLE? Loan interest at an annual rate of 5.25% will be charged in arrears on new or outstanding loans (4.75% in policy years 11 and later). This includes a loan continued after any reinstatement of the Policy. Loan interest will accrue from day to day between policy anniversaries. Interest will be payable in arrears on each policy anniversary. WHAT ELSE SHOULD I KNOW ABOUT LOANS? The Policy will be the sole security for any policy loan. But it need not be given to us for endorsement unless we ask for it Any reference to Debt under this Policy means total loan principal under this Policy plus any accrued loan interest. If ever the Debt exceeds the Fund Value less any outstanding surrender charge, this Policy will end. But we must first give at least 61 days notice of INSUFFICIENT VALUE. Any Debt may be repaid in whole or part before the surviving Insureds' death. Any written notice referred to in this "Loans" Section will be mailed to the last known address of the Owner or any assignee of record. WHEN WILL LOANS TAKE EFFECT? Loans will take effect on the Business Day that falls on, or next follows, the date we receive the request for the loan at our Administrative Office. HOW CAN I SPECIFY LOAN ALLOCATIONS AND ARE THERE MINIMUMS? You can specify loan allocations by amount or percentage. Allocations by percentage must be in whole percentages and the minimum percentage is 10% against any Sub-account and/or the Guaranteed Interest Account. Percentages must total l00% We will not accept an allocation which does not comply with the above rules or if there is not enough Cash Value in a Sub-account and/or the Guaranteed Interest Account to provide its share of the allocation. WHAT IF I DON'T SPECIFY AN ALLOCATION? If you do not specify an allocation, we will not accept the request for loan. WHAT HAPPENS IF I DON'T PAY THE LOAN INTEREST WHEN IT'S DUE? Any interest not paid when due will be added to the loan and bear interest at the 5.25(degree)/o annual rate (4.75% in policy years 11 and later). It will be deducted from the Fund Value of each Sub-account and/or the Guaranteed Interest Account in the same proportion each bears to the total Fund Value on the policy anniversary. HOW WILL DEBT REPAYMENTS BE ALLOCATED? Any Debt repayment must be earmarked as such and will be allocated to the Sub-accounts and/or the Guaranteed Interest Account in accordance with the most recent valid scheduled premium allocation choice we have from you. - -------------------------------------------------------------------------------- 15. LOAN ACCOUNT WHAT IS THE LOAN ACCOUNT AND HOW IS INTEREST CREDITED TO IT? The Loan Account is a portion of the Policy's Fund Value that was transferred from the Sub-accounts and/or the Guaranteed Interest Account to secure any outstanding loan. The Loan Account will earn interest at a rate not less than 4.5% per year. Any interest in excess of this rate will be credited in a manner determined by us. The Fund Value of the Loan Account in excess of the Debt will be allocated to the Sub-accounts and/or the Guaranteed Interest Account in a manner determined by us. WHAT IF I PAY THE ENTIRE DEBT BETWEEN POLICY ANNIVERSARIES? If the entire Debt is repaid on a date that is not a policy anniversary, we determine the interest earned on the Loan Account from the last date it was calculated to the date that payment was received by us at our Administrative Office. This interest will be allocated on the date of repayment among the Sub-accounts and/or the Guaranteed Interest Account in accordance with the most re- PAGE 12 17 - -------------------------------------------------------------------------------- cent valid scheduled premium allocation we have from you (see Premiums section 6). - -------------------------------------------------------------------------------- 16. OPTIONAL POLICY CHANGES WHAT CHANGES CAN I MAKE TO THE POLICY? You may request an increase or a decrease to the Specified Amount. You may also request a change in Death Benefit Option. Requests for these changes may be made by writing to us at our Administrative Office. We will issue an endorsement to the Policy to show any such change. ARE THERE ANY RULES OR LIMITATIONS REGARDING A REQUEST FOR AN INCREASE IN SPECIFIED AMOUNT? Yes. The rules and limitations for a requested increase in Specified Amount are: (1) Both Insureds must be living; (2) The request can not be made after the policy anniversary on which the older Insured attains the maximum age we then allow for increases; (3) Monthly deductions are not being waived under the terms of a Waiver of Monthly Deduction Benefit Rider. (4) Specified Premiums are not being waived under the terms of a Waiver of Specified Premium Rider. HOW DO I REQUEST AN INCREASE IN SPECIFIED AMOUNT? You must submit a supplemental application to us and provide evidence satisfactory to us of the insurability of both Insureds. WHEN WILL AN INCREASE TAKE EFFECT? The increase will take effect on the Monthly Anniversary Day that falls on, or next follows, the date we approve it. ARE THERE ANY RULES OR LIMITATIONS REGARDING A DECREASE IN SPECIFIED AMOUNT? Yes. We will reject any requested decrease if that decrease would result in a Specified Amount, which is less than $100,000. WHEN WILL THE DECREASE TAKE EFFECT AND HOW WILL IT BE APPLIED? The decrease will take effect on the Monthly Anniversary Day that falls on, or next follows, the date we approve it. The decrease will be applied as follows: (a) first, to reduce the amount provided by the most recent increase in Specified Amount; (b) next, to reduce the next most recent increases, successively; (c) finally, to reduce the Initial Specified Amount. WHEN WILL A CHANGE IN DEATH BENEFIT OPTION TAKE EFFECT AND HOW WILL THE SPECIFIED AMOUNT BE AFFECTED? Any change in Death Benefit Option will take effect on the Monthly Anniversary Day that falls on, or next follows, the date on which we approve the request to change the Option. If the change is from Option 2 to Option 1, the Specified Amount in Force will be increased by the amount of the Fund Value on the effective date of the change. If the change is from Option 1 to Option 2, the Specified Amount in force will be decreased by the amount of the Fund Value on the effective date of the change. But, the Specified Amount in Force after the decrease cannot be less than $100.000. ARE THERE ANY REQUIREMENTS FOR A CHANGE IN DEATH BENEFIT OPTION? We reserve the right to request evidence satisfactory to us of the insurability of both Insureds for a change from Option 1 to Option 2. - -------------------------------------------------------------------------------- 17. OPTION TO SPLIT POLICY CAN I SPLIT THE POLICY? Yes. At your request, this Policy may be split (exchanged) into two individual single life policies, one on the life of each Insured. WHAT ARE THE TERMS AND CONDITIONS FOR A SPLIT? The terms and conditions for a split are as follows: PAGE 13 18 - -------------------------------------------------------------------------------- (1) A written request for the split must be received by us at our Administrative Office. (2) Evidence of insurability of both Insureds, as required by us, must be given at the time the request for the split is made (see below for details). (3) Each Insured must be insurable for the new policy under our published rules in effect on the Effective Date. If either Insured does not meet those rules, that Insured will receive his or her share of the Cash Value of this Policy in cash. (4) Both Insureds must be living on the Effective Date. (5) Payment to us of any cost due (see Split Cost or Credit) plus, if required, payment of the first premium for each new policy. (6) Any assignee must agree in writing to the split. (7) At least one Insured must receive a new policy as a result of the split. (8) Payment to us of any monthly deduction(s) payable under this Policy as of the Effective Date. WHAT ARE THE REQUIREMENTS FOR EVIDENCE OF INSURABILITY FOR A SPLIT? For splits requested within 6 months of the event described in (a) below, no new evidence of insurability will be required. For splits requested within 6 months of the events described in (b) or (c) below, we may waive certain requirements for evidence of insurability. We will require proof of (b) or (c) at the time the request for a split is received. Any split requested more than 6 months after an event described in (a), (b) or (c) will be subject to our standard requirements for evidence of insurability. (a) Tax Law Change- If the Insureds are married to each other and there is a change to Federal Estate Tax Law, which results in either: (i) a repeal of the Unlimited Marital Deduction; or (ii) a reduction of at least 50% of the maximum rate of estate tax which was in effect on the Date of Issue of this Policy; (b) Divorce - If the Insureds were married to each other on the Date of Issue of this Policy and a final decree of divorce ending the Insureds marriage is issued; (c) Business Dissolution - If the business partnership or corporation under which both Insureds were employed on the Date of Issue of this Policy is dissolved. WHEN WILL THE SPLIT BE EFFECTIVE? If all of the above conditions are met, the split will take effect on the Effective Date. The Effective Date is the first Monthly Anniversary Day next following the latest of: (a) the date(s) we approve or decline the application(s) for the new policy(ies); and (b) the date we receive payment at our Administrative Office of all amounts due us for both new policies. WHAT TYPE OF POLICY CAN EACH NEW POLICY BE AND WHAT WILL THE POLICY DATE OF THE NEW POLICY(IES) BE? The new policy or policies can be any flexible premium variable adjustable life policy which was available on the Date of Issue of this Policy or any other policy we agree to make available. Each Insured may elect a different new policy. The Policy Date of each new policy will be the same as this Policy's. WHAT WILL THE GUARANTEED COST OF INSURANCE RATES OF THE NEW POLICY(IES) BE BASED ON? Guaranteed cost of insurance rates for each new policy will be based on each Insured's: (a) gender; (b) age on the Date of Issue of this Policy; and (c) class of risk as follows: for splits requested within 6 months of a Tax Law change, each Insured's class of risk on the later of the Date of Issue of this Policy or the effective date of the most recent increase in Specified Amount; for all other splits, each Insured's class of risk on the Effective Date. PAGE 14 19 - -------------------------------------------------------------------------------- WHAT WILL THE SPECIFIED AMOUNT OF THE NEW POLICY(IES) BE? The Specified Amount of each new policy will equal one half of this Policy's Specified Amount, exclusive of any coverage provided by rider under this Policy. WHAT WILL BE DEDUCTED FROM THIS POLICY'S FUND VALUE PRIOR TO THE SPLIT? Prior to implementing the split, we will deduct from this Policy's Fund Value: - - any Debt, unless that Debt is repaid to us in cash; and - - a $200 service charge. If that Fund Value is less than $200, the difference will be added to any cost (see Split Cost or Credit). WHAT WILL BE EACH NEW POLICY'S FUND VALUE ON THE EFFECTIVE DATE? The Fund Value of each new policy on the Effective Date will be: - - one half of the Fund Value of this Policy, less - - the difference between one half of the outstanding surrender charge for this Policy and the new policy's surrender charge, if any. WHAT WILL BE EACH NEW POLICY'S SURRENDER CHARGE ON THE EFFECTIVE DATE? The surrender charge of each new policy will be the amount that would have applied had that new policy been issued on the Date of Issue of this Policy. IS THERE A COST OR CREDIT FOR THE SPLIT AND HOW IS IT DETERMINED? If the Fund Value of any new policy would be greater than the guideline premium limit that would have been applicable had that policy been issued on the Date of Issue of this Policy, then that excess will be a credit (refunded to the Owner). If the Cash Value of the new policy is not enough to cover the monthly deductions until the next premium due date, then the difference will be a cost (payable to us). For purposes of this calculation, zero interest under the new policy will be assumed All amounts are determined as of the Effective Date and after the values of this Policy have been allocated to each new policy. WHAT IF A DISABILITY WAIVER BENEFIT RIDER IS IN EFFECT UNDER THIS POLICY? If a Disability Waiver Benefit Rider is in effect under this Policy on either Insured, then the new policy for that Insured will include a Disability Waiver Benefit Rider. CAN OTHER ADDITIONAL BENEFITS OR ADJUSTMENTS BE INCLUDED IN EITHER NEW POLICY? Any other additional benefit may be included in either new policy or other adjustments may be allowed only: (a) with our approval; and (b) subject to any requirements we then consider necessary. WHAT IF THERE IS AN EXISTING ASSIGNMENT ON THIS POLICY? Each new policy will be subject to any existing assignment of this Policy. HOW WILL THE INCONTESTABILITY AND SUICIDE PROVISIONS OF THE NEW POLICIES BE MEASURED IF A SPLIT IS MADE WITHOUT EVIDENCE OF INSURABILITY? For splits made without evidence of insurability, the Incontestability and Suicide provisions of the new policies will be measured from the Issue Date of this Policy. WHAT WILL THE COMPANY PAY IN CASE OF THE SUICIDE OF THE INSURED UNDER EITHER NEW POLICY? Despite anything else in the "Suicide Exclusion" provision of either new policy, in case of the suicide of the Insured in the manner and within the period specified in that provision, the amount payable by us will be limited to the sum of (a) and (b), where: (a) is the Cash Value of the new policy PAGE 15 20 - -------------------------------------------------------------------------------- on the Effective Date, less any part of that Cash Value which has since been paid to the Owner; and (b) is the premiums paid under the new policy to the date of death. - -------------------------------------------------------------------------------- 18. RIGHTS OF OWNER WHO IS THE OWNER OF THE POLICY AND WHAT RIGHTS DOES THE OWNER HAVE? While either Insured is living, all rights, benefits, options and privileges under this Policy or allowed by us belong to the Owner unless otherwise provided by endorsement. These rights include the right to change the Beneficiary, to assign the Poicy, to transfer policy values or make full or partial surrenders, all in accordance with our rules and procedures. The Owner is the person so named in the attached application for this Policy unless otherwise provided by endorsement. - -------------------------------------------------------------------------------- 19. BENEFICIARY WHO IS THE BENEFICIARY? The Beneficiary is the person to whom the proceeds of the Policy are payable upon the death of the last surviving Insured. The Beneficiary is the person so named in the attached application for this Policy unless otherwise provided by endorsement. If the beneficiary designation requires the Beneficiary to be living or surviving, then, unless otherwise provided, that Beneficiary must be living on the 14th day after the surviving Insured's death or, if earlier, the date we receive due proof of the surviving Insured's death. The share of the Death Proceeds of any Beneficiary who is not living on that earlier day will be payable to the remaining Beneficiaries. Payment will be made in the manner provided for in that designation. WHAT IF THERE IS NO BENEFICIARY NAMED OR THEN LIVING? Unless otherwise provided in the Beneficiary designation, the Death Proceeds will be payable to the surviving Insured's executors or administrators. CAN I CHANGE THE BENEFICIARY? Yes, you can change the Beneficiary, unless you have given up this right, as long as either Insured is living by writing to us at our Administrative Office. You do not need to return the Policy to make the change unless we ask for it. WHEN WILL A CHANGE OF BENEFICIARY TAKE EFFECT? A change will take effect when we record it retroactively as of the date the request was signed. We shall not be charged with notice of a change of Beneficiary until the change is received at our Administrative Office. The change will be subject to any payment made or action taken by us before we received your request. - -------------------------------------------------------------------------------- 20. THE VARIABLE ACCOUNT WHAT IS THE VARIABLE ACCOUNT AND WHAT IS ITS PURPOSE? The Variable Account is an investment account established and maintained by us, separate from our general account or other separate accounts. The variable benefits under this Policy are provided through investments we make in the Variable Account. It is used for our flexible premium variable life policies and, if permitted by law, may be used for other policies. WHAT ELSE SHOULD I KNOW ABOUT THE VARIABLE ACCOUNT? We own the assets in the Variable Account. Assets equal to the reserves and other liabilities of the Variable Account will not be charged with liabilities that arise from any other business we conduct. We may from time to time transfer to our general account, assets which exceed the reserves and other liabilities of the Variable Account. The Variable Account is registered with the Securities and Exchange Commission (SEC) as a unit investment trust under the Investment Company Act of 1940. It is also governed by the laws of the state of Arizona. PAGE 16 21 - -------------------------------------------------------------------------------- WHAT CHANGES CAN THE COMPANY MAKE TO THE VARIABLE ACCOUNT? We may, to the extent permitted by applicable laws and regulations, make these changes: (a) the Variable Account may be operated as a management company under the Investment Company Act of 1940; or (b) the Variable Account may be de-registered under that Act if registration is no longer required; or (c) the Variable Account may be combined with any of our other separate accounts. WHAT SHOULD I KNOW ABOUT SUB-ACCOUNTS? We use the assets of each separate Sub-account to buy shares in a corresponding portfolio of the applicable fund. (See Section 3). WHAT RIGHTS DOES THE COMPANY HAVE TO CHANGE SUB-ACCOUNTS? We reserve the right to establish new Sub-accounts or eliminate one or more Sub-accounts if marketing needs, tax considerations or investment conditions warrant. Any new Sub-accounts may be made available to existing policies on a basis to be determined by us. If any of these changes are made, we may by appropriate endorsement change the Policy to reflect the change. Income and realized and unrealized gains or losses from assets of each Sub-account are credited to or charged against that Sub-account without regard to income, gains or losses in the other Sub-accounts, our general account or any other separate accounts. We reserve the right to credit or charge a Sub-account in a different manner if required, or appropriate, by reason of a change in the law. WHEN WILL THE COMPANY VALUE THE ASSETS IN THE SUB-ACCOUNTS? We will value the assets of each Sub-account on each Business Day after the assets in its corresponding fund portfolio have been valued on that Day. WHAT CHANGES CAN THE COMPANY MAKE TO THE PORTFOLIO? If, in our judgment, a portfolio no longer suits the purposes of the Policy due to a change in its investment objectives or restrictions, we may substitute shares of another portfolio of that fund or shares of another investment fund. But, we will notify you before doing so and, to the extent required by law, we will get prior approval from the SEC and the Arizona Insurance Department. Such approval process is on file with the Arizona Insurance Department. We also will get any other required approvals. - -------------------------------------------------------------------------------- 21. SUB-ACCOUNT UNIT VALUE WHAT IS THE UNIT VALUE OF EACH SUB-ACCOUNT? The unit value of each Sub-account on its first Business Day was set at $10. The unit value of each Sub-account on any subsequent Business Day is obtained by subtracting (b) from (a) and dividing the result by (c), where: (a) is the per share net asset value on the Business Day of the applicable fund portfolio in which the Sub-account invests times the number of such shares held in the Sub-account before the purchase or redemption of any shares on that Day. (b) is the Daily Mortality and Expense Risk Charge accrued as of that Business Day. The Daily Mortality and Expense Risk Charge is a percentage (shown in Section 1) of the Sub-account's net asset value on the previous Business Day. (If the previous day was not a Business Day, then the Daily Mortality and Expense Risk Charge is the percentage shown in Section 1 times the number of days since the last Business Day times the Sub-account's net asset value on that last Business Day.) (c) is the total number of Units held in the Sub-account on the Business Day before the purchase or redemption of any Units on that Day. PAGE 17 22 - -------------------------------------------------------------------------------- For any Policy transaction which is applied to a Sub-account, the dollar amount of transaction is divided by the Sub-account unit value to determine the number of units credited or subtracted from a Sub-account. - -------------------------------------------------------------------------------- 22. GUARANTEED INTEREST ACCOUNT WHAT IS THE GUARANTEED INTEREST ACCOUNT? The Guaranteed Interest Account is an account, which is part of our general account. The general account consists of all of our assets except those held by the Variable Account and other separate accounts maintained by us. WHAT INTEREST RATE APPLIES TO THE GUARANTEED INTEREST ACCOUNT? The guaranteed annual interest rate that applies in the calculation of the Fund Value in the Guaranteed Interest Account is 4.5%(0.0121%, compounded daily). Interest in excess of the guaranteed rate may be applied in the calculation of that Fund Value in a manner determined by us. We may use different rates of interest for different portions of the Fund Value in the Guaranteed Interest Account. - -------------------------------------------------------------------------------- 23. MONTHLY DEDUCTION WHAT IS THE MONTHLY DEDUCTION? The monthly deduction on a Monthly Anniversary Day for the following policy month is the sum of (a) through (d), where: (a) is the cost of insurance (see Cost of Insurance section below). (b) is the cost of any additional benefits provided by rider. (c) is the Administrative Charge (shown in Section 1). (d) is the per $1,000 Specified Amount in Force charge. HOW IS A MONTHLY DEDUCTION ALLOCATED BEFORE THE END OF THE "RIGHT TO RETURN POLICY" PERIOD? Any monthly deduction to be made before the end of the "Right to Return Policy" period (see page 1) will be charged against the net premiums accumulated with int. HOW ARE MONTHLY DEDUCTIONS ALLOCATED AFTER THE END OF THE "RIGHT TO RETURN POLICY" PERIOD? Monthly deductions made after the end of the "Right to Return Policy" period will be allocated against each Sub-account and/or the Guaranteed Interest Account in the same proportion that the Policy's Fund Value held in each bears to the total Fund Value of the Policy on that Business Day. WHAT EFFECT DOES AN INCREASE IN SPECIFIED AMOUNT HAVE ON THE PER $1,000 SPECIFIED AMOUNT CHARGE? An additional per $1,000 charge will be determined for each increase in Specified Amount and will be provided in the endorsement issued to reflect that increase. The charge for the Specified Amount in Force reflects any charge attributable to the Initial Specified Amount and to each increase in Specified Amount. - -------------------------------------------------------------------------------- 24. GRACE PERIOD WHAT IS THE GRACE PERIOD? The grace period is the time we allow you to pay any amount needed to keep this Policy in force. WILL I BE NOTIFIED IF I NEED TO PAY ADDITIONAL AMOUNTS TO KEEP THIS POLICY IN FORCE? Yes. During the first three policy years, we will send a notice of INSUFFICIENT PREMIUM if you must pay an additional amount to keep this Policy in force. PAGE 18 23 - -------------------------------------------------------------------------------- After the first three policy years, we will send a notice of INSUFFICIENT VALUE if you must pay an additional amount to keep this Policy in force. IS THERE A MINIMUM MONTHLY PREMIUM? Yes. The Minimum Monthly Premium is shown in Section 1. The Minimum Monthly Premium after any increase in Specified Amount will be provided in the endorsement issued to reflect that increase. The Minimum Monthly Premium is not reduced after any decrease in Specified Amount. WHEN ARE THE PREMIUMS I'VE PAID INSUFFICIENT TO KEEP THE POLICY IN FORCE? (1) On each Monthly Anniversary Day during the first three policy years, we total all premiums paid and subtract any partial surrenders (excluding their fees) and any Debt. (2) Then we calculate the sum of: (i) the Minimum Monthly Premium shown in Section 1 times the number of months the Policy has been in force; plus (ii) any increase in the Minimum Monthly Premium due to an increase in Specified Amount times the number of months that increase has been in effect. If the amount from (1) above is less than the amount from (2) above, we will send a notice of INSUFFICIENT PREMIUM to the last known address of the Owner or any assignee of record at least 61 days before the Policy ends. The Cash Value of the Policy must also be less than zero for this notice to be sent. WHAT AMOUNT MUST I PAY AFTER A NOTICE OF INSUFFICIENT PREMIUM IS SENT AND, IS THERE A GRACE PERIOD FOR THAT PAYMENT? A. After you receive a notice of INSUFFICIENT PREMIUM, you must pay: (i) any balance needed on the Monthly Anniversary Day to cover the Minimum Monthly Premium for the following month plus; (ii) an amount equal to 1 Minimum Monthly Premium. A grace period of 61 days from the date of the notice will be allowed for payment of the above amount. The Policy is in force during the grace period. WHEN IS THE VALUE OF THE POLICY INSUFFICIENT TO KEEP THE POLICY IN FORCE? After the first three policy years, on each Monthly Anniversary Day, if the Cash Value is not enough to cover the monthly deduction (see Monthly Deduction Section 23) for the following month, we will send a notice of INSUFFICIENT VALUE to the last known address of the Owner or any assignee of record at least 61 days before the Policy ends. WHAT AMOUNT MUST I PAY AFTER A NOTICE OF INSUFFICIENT VALUE IS SENT AND, IS THERE A GRACE PERIOD FOR THAT PAYMENT? B. After you receive a notice of INSUFFICIENT VALUE, you must pay: (i) any balance needed for the monthly deduction plus; (ii) an amount equal to 2 monthly deductions. A grace period of 61 days from the date of the notice will be allowed for payment of the above amount. The Policy is in force during the grace period. WHAT HAPPENS IF I DON'T PAY THE AMOUNT DESCRIBED? If the payment described in A or B above, as applicable, is not received within the grace period, the Policy will end at the end of the grace period and any remaining Cash Value on that date will be refunded. - -------------------------------------------------------------------------------- 25. REINSTATEMENT IF THE POLICY ENDS AT THE END OF THE GRACE PERIOD, MAY IT BE REINSTATED? Yes. If the Policy ends at the end of the grace period, the Policy may be reinstated. PAGE l9 24 - -------------------------------------------------------------------------------- WHAT IS THE PERIOD OF REINSTATEMENT AND WHAT IS REQUIRED TO REINSTATE THE POLICY? Reinstatement may only be done within 5 years after the Monthly Anniversary Day at the beginning of the grace period. We shall need: (a) evidence satisfactory to us of the insurability if both Insureds; (b) payment of a premium large enough to cover: (i) the balance needed as described in subsection A or B of Grace Period, whichever is applicable, (see Section 24 above); and (ii) an amount sufficient to keep the Policy in force for at least 1 month from the reinstatement date. (c) payment or reinstatement of any Debt due us on the Policy, plus payment of interest on any reinstated Debt from the beginning of the grace period to the end of the grace period at the rate which applies to policy loans on the date of reinstatement. This is an annual rate of 5.25% for policy years 1 through 10; 4.75% for policy years 11 and later. We will reinstate any surrender charge that would have been outstanding on the date of reinstatement had the Policy remained in force. IF I FULFILL THE ABOVE REQUIREMENTS FOR REINSTATEMENT, WHEN WILL THE POLICY BE REINSTATED? The reinstatement date will be the Monthly Anniversary Day that falls on, or immediately precedes, the date the application for reinstatement is approved by us. - -------------------------------------------------------------------------------- 26. COST OF INSURANCE HOW IS THE COST OF INSURANCE DETERMINED? The cost of insurance is determined on a monthly basis on a Monthly Anniversary Day. It is determined separately for each of the following, in the order shown: (a) the Initial Specified Amount; and (b) each increase in Specified Amount, successively, in the order in which it took effect; and (c) either (i) or (ii) below, depending upon the Death Benefit Option in effect on the Monthly Anniversary Day: (i) if Death Benefit Option 1 is in effect, and excess between the Death Benefit payable on that Day and the Specified Amount then in force; or (ii) if Death Benefit Option 2 is in effect, any excess between the Death Benefit payable on that Day less the Fund Value on that Day, less the Specified Amount then in force. The cost of insurance on a Monthly Anniversary Day for each of (a), (b), (c)(i) and (c)(ii) above is calculated by multiplying its insurance rate (see Insurance Rate section below) by its Amount At Risk (defined below) divided by 1,000. The insurance rate that applies to (c)(i) and (c)(ii) is the same as the rate that applies to the most recent increase in Specified Amount. (If there has been no increase, the rate for the Initial Specified Amount applies.) WHAT IS THE "AMOUNT AT RISK"? If Death Benefit Option 1 is in effect, the "Amount At Risk" on the Monthly Anniversary Day is the difference between (1) and (2), where: (1) is the Death Benefit that would have been payable in the event of the death of the surviving Insured on that Day divided by 1.003675; and (2) is the Fund Value on that Day determined as de-scribed in the last paragraph of the Fund Value section before any monthly deduction made on that Day. The Policy's Fund Value on the Monthly Anniversary Day is applied in the order shown to (a), (b) and, if applicable, (c)(i) above, to determine the Amount At Risk for each. If the Fund Value when so applied equals or exceeds the Initial Specified Amount divided by 1.003675, there is no Amount At Risk for that Initial Specified Amount and no cost of insurance for it. If the Fund Value when so applied equals or exceeds the Initial Specified Amount plus any increase in Specified Amount divided by 1.003675, there is no Amount at Risk for that increase and no cost of insurance for it. If Death Benefit Option 2 is in effect, the "Amount At Risk" on the Monthly Anniversary Day is the Specified Amount in Force plus the amount described in (c)(ii) above, if applicable. PAGE 20 25 - -------------------------------------------------------------------------------- 27. INSURANCE RATE WHAT IS THE INSURANCE RATE FOR THE LNITIAL SPECIFIED AMOUNT BASED ON? The insurance rate for the Initial Specified Amount is based jointly on both Insureds' gender, age on the Policy Date, "Class of Risk", the number of years since the Policy Date, and the amount of Initial Specified Amount. "Class of Risk" for the Initial Specified Amount is the class of risk to which each Insured belonged on the Policy Date and is shown on Page 1. WHAT IS THE INSURANCE RATE FOR ANY OPTIONAL INCREASES IN SPECIFIED AMOUNT BASED ON? The insurance rate for any optional increase in Specified Amount will be based jointly on both Insureds' gender, age on the effective date of the increase, "Class of Risk" on that date, number of years since that date, and the total Specified Amount including the increase. WHEN ARE MONTHLY INSURANCE RATES REVIEWED AND ON WHAT BASIS ARE ANY CHANGES IN MONTHLY INSURANCE RATES MADE? Each year we shall review the monthly insurance rates to determine if any change should be made. Monthly insurance rates will be based on our expectations as to future: (a) mortality; (b) investment earnings; (c) expenses, and (d) persistency. But, we guarantee that the insurance rates for the Initial Specified Amount will never be more than the rates shown in the Guaranteed Monthly Insurance Rates for Initial Specified Amount table in Section 2. And, insurance rates for any optional increase in Specified Amount will never be more than the guaranteed rates provided by us at the time the increase takes effect. WHAT ARE GUARANTEED RATES BASED ON? All guaranteed rates are based on the 1980 Commissioners Standard Ordinary Age Last Birthday Smoker or Nonsmoker Mortality Tables as applicable, with interest at the rate of 4.5% a year (0.0121%, compounded daily) with appropriate increase for rated risk. Any change in insurance rates will be on a uniform basis for Insureds of the same age, gender and class of risk. Changes in rates and the way in which they are determined will be filed with the insurance supervisory official of the state in which the Policy is delivered. - -------------------------------------------------------------------------------- 28. CONTINUATION OF INSURANCE IF I DON'T CONTINUE PREMIUM PAYMENTS, HOW LONG WILL THE POLICY BE CONTINUED? If premium payments are not continued? the Policy will be continued only as long as stated in (a) or (b) below, as applicable: (a) during the first 3 policy years, if the Cash Value of the Policy is less than zero, as long as the sum of all premiums paid less any partial surrenders (excluding their fees) and less any Debt is equal to or greater than the sum of each Minimum Monthly Premium times the number of in force policy months during which that premium was applicable; or (b) in all other situations, as long as the Cash Value is sufficient to cover any monthly deductions. (See Grace Period section 24.) This Continuation of Insurance provision will not continue the Policy beyond the Maturity Date. Nor will it continue any additional benefit rider beyond its date for termination. - -------------------------------------------------------------------------------- 29. DEFINITION OF LIFE INSURANCE TEST WHAT CRITERIA DOES THE INTERNAL REVENUE CODE USE TO DEFINE THIS POLICY AS LIFE INSURANCE? In order for the Policy to be deemed "life insurance" according to the Internal Revenue Code of 1986 as now or later amended, one of the following tests must be met. (1) Cash Value Accumulation Test - The Death Benefit must be greater than or equal to the Fund Value multiplied by the Cash Value Accumulation Test Death Benefit Percentage. (2) Guideline Premium/Cash Value Corridor Test -The Death Benefit must be greater than or equal to the Fund Value multiplied by the Guideline Premium/Cash Value Corridor Test Death Benefit Percentage. In addition, premium payments less any partial surrenders including their fees may not exceed the Guideline Premium Limit. (See Premiums section 6) PAGE 21 26 - -------------------------------------------------------------------------------- WHO DECIDES WHICH TEST WILL APPLY TO THIS POLICY? You elect which of the above tests will apply in the application for the Policy. Once elected it may not be changed for the duration of the Policy. - -------------------------------------------------------------------------------- 30. BASIS OF CALCULATION WHAT SHOULD I KNOW ABOUT THE BASIS OF CALCULATION? The method of determining Cash Values, surrender charge and other charges has been filed with the insurance supervisory official of the state in which this Policy is delivered. The values under this Policy are not less than the minimum values required by the law of the state in which the Policy is delivered. Minimum Cash Values are based on the 1980 Commissioners Standard Ordinary Age Last Birthday Smoker or Nonsmoker Mortality Tables, as applicable and interest at an annual rate of 4.5% a year. - -------------------------------------------------------------------------------- 31. DATES AND POLICY PERIODS HOW ARE PERIODS MEASURED IN THE POLICY? Months, years and anniversaries are measured from the Policy Date unless we state otherwise. Policy months start on the same date in each calendar month as the Policy Date. That means if the Policy Date is on the 1st of the month, then each policy month will start on the 1st of the month WHAT IF THE POLICY DATE IS A DATE THAT DOESN'T OCCUR IN ALL MONTHS, SUCH AS THE 31ST? If the Policy Date is the 29th, 30th or 31st of a month, there will be some calendar months when there is no such date. For those months the policy month will start on the last day of the calendar month. Where dates are shown, the numbers stand for month, day and year, in that order. The Policy Date is shown on Page 1. 32. GENERAL PROVISIONS WHAT MAKES UP THIS CONTRACT? This Policy is a contract and has been issued in consideration of the application and payment of the first premium (shown in Section 1). The application, a copy of which is attached, and any supplemental applications are a part of the Policy. Any such supplemental application will be attached to the Policy. The Policy, any attached riders and/or endorsements, the application and any supplemental applications make up the entire contract. The questions in this Policy, including the questions in any rider or endorsement attached hereto, are for purposes of convenience and reference only. They do not form a part of and shall not in any way limit or affect the meaning or interpretation of any of the terms and conditions of this Policy. HOW DOES THE COMPANY USE THE STATEMENTS I MAKE IN THE APPLICATION? All statements made in the application will be considered to be representations and not warranties. No statement may be used to make this Policy invalid or to deny a claim under it, unless the statement is contained in the written application, a copy of which must have been attached to the Policy at issue or delivery or on the effective date of any increase in Specified Amount. WHEN WILL THIS POLICY BE INCONTESTABLE? With respect to the life of each Insured, this Policy will be incontestable, as to statements made in the application for it, after it has been in force during the lifetime of that Insured for 2 years from its Date of Issue, except as to any provision for benefits in case of disability. But, with respect to the life of each Insured, any optional increase in Specified Amount or any reinstatement will be incontestable, as to statements made in the application for it, only after the increase or reinstatement has been in force during the lifetime of that Insured for 2 years from the date it took effect. PAGE22 27 - -------------------------------------------------------------------------------- WHAT IF EITHER LNSURED'S AGE OR GENDER HAS BEEN MISSTATED? If the age, date of birth or gender of either Insured has been misstated, the amount of any Death Benefit will be the sum of (a) and (b), where: (a) is the Fund Value on the date of death of the surviving Insured; and (b) is the Amount At Risk on the last Monthly Anniversary Day, multiplied by the ratio of the insurance rate on the last Monthly Anniversary Day based on the incorrect age or gender to the insurance rate that would have applied on that Day based on the correct age or gender. A misstatement of age or gender does not affect the Fund Value. WHAT DOES THE COMPANY PAY IN CASE OF THE SUICIDE OF EITHER INSURED? If either Insured commits suicide, within 2 years of the Date of Issue, the amount payable by us will be limited to the amount of the premiums paid less: (a) any Debt; and (b) any partial surrenders and their fees. But, in case of the suicide of either Insured, within 2 years of the date any optional increase in Specified Amount took effect, the amount payable by us with respect to that increase will be limited to its cost. HOW DOES THE COMPANY HANDLE AN ASSIGNMENT OF THE POLICY? We shall not be charged with notice of assignment of any interest in this Policy until the assignment (or a copy) is received and recorded by us at our Administrative Office. We are not responsible as to the validity or effect of any assignment. We may rely solely on the statement of the assignee as to the amount of his or her interest. All assignments will be subject to any Debt on this Policy. The interest of any Beneficiary (except an irrevocable beneficiary) or other person will be subordinate to any assignment, whenever made. The assignee will receive any sum payable to the extent of his or her interest. WHAT MAY THE COMPANY REQUIRE FOR POLICY PAYMENT? In any settlement of this Policy, by reason of death, surrender, or otherwise, we may require the return of the Policy. Any Debt on this Policy will be deducted when we determine the proceeds. Due proof of death or disability must be submitted to us at our Administrative Office WHAT DO RELATIONSHIPS IN ANY DESIGNATION REFER TO? Relationships used in any Beneficiary or other designation will refer to the Insureds unless the wording indicates otherwise. WHO HAS THE AUTHORITY TO CHANGE THIS POLICY? No change in the Policy will be valid until it is approved by one of our executive officers. This approval must be endorsed on or attached to this Policy. No agent or other person has authority to change the Policy, waive any of its provisions or accept representations or information not in the written application. CAN THE COMPANY POSTPONE CERTAIN PAYMENTS OR TRANSFERS? We will usually pay any amount payable on surrender, partial surrender or loan within 7 days after we receive written request for the payment at our Administrative Office. We will usually pay any Death Proceeds within 7 days after we receive due proof of death of the last surviving Insured. But, any payment involving Cash Value in the Guaranteed Interest Account (except when used to pay premiums) may be postponed for up to 6 months from the date we receive the request for a surrender or receive due proof of death. And, any payment involving a determination of Cash Value in Sub-accounts (except when used to pay premiums), may be postponed in any case whenever: (a) the New York Stock Exchange is closed (except for customary weekend and holiday closings), or trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission (SEC); or PAGE 23 28 - -------------------------------------------------------------------------------- (b) the SEC determines that a state of emergency exists, so that valuation of the assets of the Variable Account or disposal of securities is not reasonably practicable. Transfers among Sub-accounts, and allocations to and against Sub-accounts, also may be postponed under the circumstances described in (a) or (b) above. WHAT REPORTS WILL THE COMPANY SEND? We will send a report at least annually to the Owner showing the then current status of the Policy. It will show since the last report: premiums received; expense charges (including any Transfer Charges); cost of insurance and any riders; interest earned on Fund Value in the Loan Account; interest earned on Fund Value in the Guaranteed Interest Account; and any partial surrenders (and their fees). It will show as of the current report date: Death Benefit; Specified Amount; Cash Value; and any Debt. It will also show as of the current and prior report dates: Fund Value; Sub-account Unit values; Fund Value in the Guaranteed Interest Account; and any other information required by state law or regulation. We will also send to the Owner any reports required by the Investment Company Act of 1940. WILL THE COMPANY PROVIDE AN ILLUSTRATION WHICH PROJECTS FUTURE BENEFITS AND VALUES? Yes. We will provide a projection of illustrative future benefits and values at any time after the first policy anniversary upon: (a) written request; and (b) payment of a service fee. The fee will be the one then in effect for this service, but in no case more than $25. The illustration will be based on (a) the current Policy status as to Specified Amount, Death Benefit Option and scheduled premiums; and (b) any other assumptions that are needed and that we agree to. IS THIS POLICY ELIGIBLE TO EARN DIVIDENDS? No, this Policy is nonparticipating and does not earn any dividends. - -------------------------------------------------------------------------------- 33. SETTLEMENT OPTIONS WHAT IS A SETTLEMENT OPTION? Instead of being paid in a single sum, you may elect to receive any death or surrender proceeds from this Policy in the form of a Settlement Option. If you elect a Settlement Option in the form of income payments, the dollar amount of the payments and how long will we pay them (for example, over the lifetime of a single Payee or joint Payees), will depend on the terms of that settlement. CAN ANY PROCEEDS BE PAID IN A SINGLE SUM? Yes, if one of the Settlement Options described below is not elected, any death or surrender proceeds will be paid in a single sum. WHOM CAN I SELECT AS THE PAYEE UNDER A SETTLEMENT OPTION? Any natural person (not a business entity or trust) in his or her own right. The Payee must be the person to whom proceeds are payable under this Policy. WHEN CAN I ELECT A SETTLEMENT OPTION? At any time while either Insured is living, you may elect to have the proceeds paid under one of the Settlement Options described below. HOW CAN I ELECT OR CHANGE A SETTLEMENT OPTION FOR DEATH PROCEEDS? You may choose an option or change a prior election while either Insured is living by sending written request to us at our Administrative Office. However, we must record this choice or change. You do not need to return the Policy to us to make the choice or change unless we ask for it. PAGE 24 29 - -------------------------------------------------------------------------------- WHAT IS THE MINIMUM AMOUNT OF PROCEEDS I CAN ELECT TO HAVE APPLIED TOWARD ONE OF THESE SETTLEMENT OPTIONS? The amount of proceeds applied toward any of these Settlement Options must be at least $1,000. CAN THE PAYEE CHOOSE A SETTLEMENT OPTION? Yes, if the Payee was to receive the proceeds in a single sum, the Payee may instead choose one of the Settlement Options for proceeds not yet paid. This must be done by written request to us at our Administrative Office not more than 1 month after the proceeds become payable. WHAT SETTLEMENT OPTIONS ARE AVAILABLE? - -- Option 1. Interest Income - Under this option, we hold the proceeds and credit the interest earned on those proceeds to the Payee. We set the rate of interest for each year, but that rate will never be less than 2 3/4% a year. This option will continue until the earlier of the date the Payee dies or the date you elect another Settlement Option. - -- Option 2. Income for Specified Period - Under this option, the Payee receives an income for the number of years chosen. We then calculate an income that will be based on the Minimum Monthly Income Table 2 for that period. Note that the longer the period selected (i.e. number of years) the lower the dollar amount per $1,000 of proceeds. Payments may be increased by additional interest as we may determine for each year. - -- Option 3. Single Life Income - Under this option, a number of years called the period certain is chosen. We will then pay income to a single Payee for as long as that Payee lives or for the number of years chosen (the period certain), whichever is longer. If the Payee dies after the of end of the period certain, the income payments will stop. The period certain elected may be: (a) 0, 10, or 20 years; or (b) until the total income payments equal the proceeds applied (this is called a refund period certain). The amount of the income payments will be figured by us on the date the proceeds become payable. This amount will be at least as much as the applicable amount shown in the Minimum Monthly Income Table 3. The income amounts are based on the 1983 Table a (discrete functions, without projections for future mortality) with 3 1/2(degree)/o interest. If the income payments for the period certain elected are the same as income payments based on another available longer period certain, we will deem an election to have been made for the longer period certain. Option 3A. Joint Life Income - We pay income during the joint lifetime of two people (the Payee and another person). That means if one person dies, we will continue to pay the same income (or a lesser income) to the survivor for as long as the survivor lives. The survivor may receive the same dollar amount that we were paying before the first Payee died or two-thirds of that amount depending on the election made at the time of settlement. Note that if the lesser (two-thirds) amount paid to the survivor is elected, the dollar amount payable while both persons are living will be larger than it would have been if the same amount paid to the survivor had been elected. The amount of income payable while both persons are living (the joint lifetime) will be figured by us on the date the proceeds become payable. This amount will be at least as much as the applicable amount shown in the Minimum Monthly Income Table 3A. The minimum income amounts are based on the 1983 Table a (discrete functions, without projections for future mortality) with 3 1/2% interest. If a person for whom Option 3A is chosen dies before the first income amount is payable, the survivor will receive settlement instead under Option 3 with 10 years certain. Option 4. Income of Specified Amount - Under this Option, the dollar amount of the income payments is chosen. We will pay that amount for as long as the proceeds and interest last; but, the dollar amount chosen must add up to a yearly amount of at least 10% of the proceeds applied. Interest will be credited annually on the balance of the proceeds. We set the rate of interest for each year, but that rate will never be less than 2 3/4% a year. PAGE 25 30 - -------------------------------------------------------------------------------- ARE ANY OTHER SETTLEMENT OPTIONS AVAILABLE? Yes, the proceeds may be settled under any other option we may agree to. HOW OFTEN WILL THE PAYEE RECEIVE INCOME PAYMENTS? Payment will be made monthly unless quarterly, semi-annual or annual payment is requested by you (or the Payee) when the option is chosen. If payments of the chosen frequency would be less than $25 each, we may use a less frequent payment basis. Multiply the monthly payment by the appropriate factor to obtain less frequent payment amounts.
Ann. Semi- Quar- Ann. terly - -------------------------------------------------------------------------------------- OPTION 2 11.85 5.97 2.99 - -------------------------------------------------------------------------------------- OPTION 3 0 Years Certain 11.68 5.90 2.97 - -------------------------------------------------------------------------------------- OPTION 3 20 Years Certain, or 11.80 5.95 2.99 Refund Period Certain - -------------------------------------------------------------------------------------- OPTION 3 10 Years Certain or 11.74 5.92 2.97 OPTION 3A
WILL I (OR THE PAYEE) RECEIVE AN EXPLANATION OF THE SETTLEMENT OPTION? Yes, you (or the Payee) will receive a supplementary contract when the proceeds are settled under one of these options. The contract will state the terms of the settlement. WHAT WILL BE PAID WHEN THE PAYEE DIES AFTER THE EFFECTIVE DATE OF THE SUPPLEMENTARY CONTRACT? The amount payable under each Option at the Payee's death will be paid as stated below in a single sum to the Payee's executors or administrators unless otherwise provided in the settlement approved by us at the time it was chosen. Option 1 or 4 - Any unpaid proceeds and interest to the date of death. Option 2 or 3 - The amount which, with compound annual interest, would have provided any future income premiums for: (a) the specified period (Option 2); or (b) the specified period certain (Option 3). Interest will be at the rate or rates assumed in computing the amount of income. WHAT ELSE SHOULD I KNOW ABOUT SETTLEMENT OPTIONS? Before we pay Option 3 or 3A, we shall need proof of age of the Payee(s) which satisfies us. - -------------------------------------------------------------------------------- MINIMUM MONTHLY INCOME TABLES These Tables show the minimum monthly income per $1,000 of proceeds applied under the applicable option. Table 2 - Income for a Specified Period Option
Years Monthly Years Monthly Amount Amount - ------------------------------------------------------------------------------------------------ 1 $84.37 11 $8.75 2 42.76 12 8.13 3 28.89 13 7.60 4 21.96 14 7.15 5 17.80 15 6.76 6 15.03 16 6.41 7 13.06 17 6.11 8 11.58 18 5.85 9 10.42 19 5.61 10 9.50 20 5.39
Page 26 31 - -------------------------------------------------------------------------------- MINIMUM MONTHLY INCOME TABLES (CONTINUED) TABLE 3 - SINGLE LIFE INCOME OPTION. The life income shown is based on the Payee's age last birthday on the due date of the first income payment. - --------------------------------------------------------------------------------
10 Years Certain 20 Years Certain 10 Years Certain 20 Years Certain Male Female AGE Male Female Male Female AGE Male Female $3.21 $3.14 10 $3.20 $3.13 $3.74 $3.56 35 $3.71 $3.55 3.22 3.15 11 3.21 3.14 3.78 3.59 36 3.75 3.58 3.23 3.16 12 3.23 3.15 3.82 3.62 37 3.78 3.61 3.24 3.17 13 3.24 3.17 3.86 3.65 38 3.82 3.64 3.26 3.18 14 3.25 3.18 3.90 3.69 39 3.85 3.67 3.27 3.19 15 3.27 3.19 3.94 3.72 40 3.89 3.70 3.29 3.20 16 3.28 3.20 3.99 3.76 41 3.93 3.73 3.30 3.22 17 3.30 3.21 4.04 3.80 42 3.98 3.77 3.32 3.23 18 3.31 3.23 4.09 3.84 43 4.02 3.81 3.34 3.24 19 3.33 3.24 4.14 3.88 44 4.06 3.84 3.36 3.26 20 3.35 3.25 4.20 3.92 45 4.11 3.88 3.37 3.27 21 3.37 3.27 4.25 3.97 46 4.16 3.93 3.39 3.29 22 3.38 3.28 4.31 4.02 47 4.21 3.97 3.41 3.30 23 3.40 3.30 4.38 4.07 48 4.26 4.01 3.43 3.32 24 3.42 3.32 4.44 4.12 49 4.31 4.06 3.46 3.34 25 3.45 3.33 4.51 4.18 50 4.37 4.11 3.48 3.36 26 3.47 3.35 4.58 4.24 51 4.42 4.16 3.50 3.38 27 3.49 3.37 4.66 4.30 52 4.48 4.21 3.53 3.40 28 3.52 3.39 4.74 4.36 53 4.54 4.27 3.56 3.42 29 3.54 3.41 4.82 4.43 54 4.60 4.32 3.58 3.44 30 3.57 3.43 4.91 4.51 55 4.66 4.38 3.61 3.46 31 3.59 3.45 5.00 4.58 56 4.72 4.44 3.64 3.49 32 3.62 3.48 5.10 4.66 57 4.78 4.51 3.67 3.51 33 3.65 3.50 5.20 4.75 58 4.85 4.57 3.71 3.54 34 3.68 3.52 5.31 4.84 59 4.91 4.64
10 Years Certain 20 Years Certain 0 Years Certain Male Female AGE Male Female Male AGE Female $5.42 $4.93 60 $4.97 $4.71 $3.46 25 $3.34 5.54 5.04 61 5.04 4.77 3.59 30 3.44 5.67 5.14 62 5.10 4.84 3.75 35 3.57 5.80 5.25 63 5.16 4.91 3.96 40 3.73 5.94 5.37 64 5.22 4.98 4.22 45 3.93 6.08 5.50 65 5.28 5.05 4.56 50 4.20 6.23 5.63 66 5.33 5.12 4.99 55 4.54 6.38 5.77 67 5.38 5.19 5.57 60 5.00 6.54 5.92 68 5.43 5.25 6.39 65 5.64 6.71 6.07 69 5.48 5.32 7.53 70 6.53 6.88 6.23 70 5.52 5.38 7.05 6.40 71 5.55 5.43 7.22 6.58 72 5.59 5.48 Refund Period 7.40 6.76 73 5.62 5.53 Certain 7.57 6.95 74 5.64 5.57 Male AGE Female -------------------------- 7.75 7.15 75 5.66 5.60 $3.44 25 $3.33 7.92 7.34 76 5.68 5.63 3.56 30 3.42 8.09 7.54 77 5.70 5.66 3.70 35 3.54 8.26 7.74 78 5.71 5.68 3.88 40 3.69 8.42 7.94 78 5.72 5.70 4.11 45 3.87 8.57 8.14 80+ 5.73 5.71 4.38 50 4.11 4.73 55 4.40 5.18 60 4.78 5.76 65 5.28 6.52 70 5.94
* AND UNDER + AND OVER The minimum income for any age not shown in the 0 Years Certain and Refund Period Certain columns is calculated on the same mortality and interest assumptions as the minimum income ages shown and will be quoted on request. - -------------------------------------------------------------------------------- TABLE 3A - JOINT LIFE INCOME OPTION The income shown is based on the ages (at last birthday on the due date of the first income payment) of the 2 persons during whose joint lifetime payments are to be made.
- --------------------------------------------------------------------------------------------------------------------------- SAME INCOME CONTINUED TO SURVIVOR TWO-THIRDS OF INCOME CONTINUED TO SURVIVOR - ------------------------------------------------------------ --------------------------------------------------------- AGE AGE OF AGE OF MALE OF AGE OF MALE FEMALE FEMALE 50 55 60 65 70 50 55 60 65 70 - ------------------------------------------------------------ --------------------------------------------------------- 50 $3.89 $3.98 $4.04 $4.09 $4.13 50 $4.20 $4.35 $4.51 $4.69 $4.89 55 4.03 4.16 4.27 4.36 4.42 55 4.36 4.54 4.73 4.95 5.18 60 4.16 4.34 4.51 4.66 4.78 60 4.55 4.76 4.99 5.25 5.53 65 4.27 4.51 4.76 4.99 5.20 65 4.76 5.01 5.29 5.62 5.97 70 4.37 4.66 4.99 5.34 5.67 70 4.99 5.28 6.04 6.04 6.49
The minimum income for any other combination of ages or for 2 persons of the same gender are calculated on the same mortality and interest assumptions as the minimum income for the combination of ages shown and will be quoted on request. 32 This is a LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY DATE POLICY. Specified Amount may be increased or decreased. Net premiums may be allocated to one or more Sub-accounts of the Variable Account or to the Guaranteed Interest Account. If the values have been sufficient to continue the Policy in force: death proceeds are payable in event of death of the surviving Insured (no benefit is payable upon the death of the first insured to die) before the Maturity Date; Cash Value, if any, is payable if either Insured is living at the Maturity Date. Death Benefit and Policy Values reflect investment results. Flexible premiums until the Maturity Date. Nonparticipating (no dividends payable). B1-98 EX-99.2 3 OPINION AND CONSENT OF EDWARD P. BANK 1 EXHIBIT 2 September 23, 1998 MONY Life Insurance Company of America 1740 Broadway New York, New York 10019 Gentlemen: In my capacity as Vice President and Deputy General Counsel of The Mutual Life Insurance Company of New York, I have supervised the preparation and review of the Registration Statement on Form S-6 (Registration No. 333- ) filed by MONY Life Insurance Company of America ("MONY America") with the Securities and Exchange Commission under the Securities Act of 1933 for the registration of last survivor flexible premium variable life insurance policies ("Policies") to be issued by MONY America, the premium payments for which may be allocated by purchasers of the Policies to MONY America Variable Account L ("Account"), I am familiar with the establishment of the Account by the Board of Directors of MONY America on February 19, 1985 as a separate account under the laws of the State of Arizona. My opinion is as follows: 1. MONY America has been duly organized under the laws of the State of Arizona, is a validly existing corporation, and has been duly authorized to issue the Policies. 2. The Account has been duly created and is validly existing as a separate account pursuant to the aforesaid provisions of Arizona law. 3. The portion of the assets to be held in the Account equal to the reserve and other liabilities for variable benefits under the Policies is not chargeable with liabilities arising out of any other business MONY America may conduct. 4. The Policies, when issued as contemplated by the Registration Statement, will be legal, validly issued, and binding obligations of MONY America in accordance with their terms. In arriving at the foregoing opinion, I have made such examination of law and examined such records and other documents as I judged to be necessary or appropriate. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to it under the caption "Legal Matters" in the Prospectus contained in the Registration Statement. Very truly yours, /s/ Edward P. Bank Edward P. Bank Vice President and Deputy General Counsel EX-99.7 4 CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 PRICEWATERHOUSECOOPERS EXHIBIT 7 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the inclusion in this Registration Statement of MONY America Variable Account L on Form S-6 of our reports dated February 11, 1998, February 14, 1997 and February 19, 1996, on our audits of the financial statements of MONY America Variable Account L and our report dated February 27, 1998, on our audits of the statutory financial statements of MONY Life Insurance Company of America. We also consent to the references to our Firm under the captions "Independent Accountants" and "Financial Statements" in the Prospectus. PricewaterhouseCoopers LLP New York, New York September 28, 1998 EX-27 5 FINANCIAL DATA SCHEDULE
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MONY LIFE INSURANCE COMPANY OF AMERICA ANNUAL STATEMENT WHICH IS PREPARED IN CONFORMITY WITH STATUTORY ACCOUNTING PRINCIPLES. YEAR DEC-31-1997 JAN-01-1997 DEC-31-1997 0 1,074,724,142 1,081,902,689 981,115 134,828,204 22,626,801 1,286,053,106 45,955,728 248,881 0 4,961,369,195 581,230,946 0 8,331,025 683,944,239 0 0 0 2,500,000 130,650,663 4,961,369,195 799,035,036 99,006,242 (3,544,265) 332,438 761,994,174 0 105,726,347 27,108,931 17,389,702 9,719,228 0 0 0 9,719,228 3.89 0 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----