EX-99.1 3 g73574bex99-1.txt SAMPLE HYPOTHETICAL ILLUSTRATIONS Exhibit 1.A. (12) Sample Hypothetical Illustrations HYPOTHETICAL ILLUSTRATIONS The following illustrations show how certain values under a sample Policy would change with different rates of fictional investment performance over an extended period of time. In particular, the illustrations show how the death benefit, cash value, and net surrender value under a Policy issued to an insured of a given age, would change over time if the premiums indicated were paid and the return on the assets in the subaccounts were a uniform gross annual rate (before any expenses) of 0%, 6% or 12%. The tables illustrate Policy values that would result based on assumptions that you pay the premiums indicated, you do not change your specified amount, and you do not take any cash withdrawals or Policy loans. The actual values under the Policy could be significantly different from those shown even if actual returns averaged 0%, 6% and 12%, but fluctuated over and under those averages throughout the years shown. Depending on the timing and degree of fluctuation, the actual values could be substantially less than those shown, and may, under certain circumstances, result in the lapse of the Policy unless the owner pays more than the stated premium. We based the first illustration on a Policy for an insured who is a 35 year old male in the non-tobacco use, ultimate select rate class, annual premiums of $5,500, a $500,000 specified amount and death benefit Option A. This illustration also assumes cost of insurance charges based on our current cost of insurance rates. The second illustration is based on the same factors as the first illustration, except that cost of insurance rates are based on the guaranteed cost of insurance rates (based on the 1980 Commissioners Standard Ordinary Mortality Table). The amounts we show for the death benefits, cash values and net surrender values take into account (1) the daily charge for assuming mortality and expense risks assessed against each subaccount. This charge is equivalent to an annual charge of 0.90% of the average net assets of the subaccounts during the first 15 Policy years (we guarantee to reduce this charge to 0.60% after the first 15 Policy years). We intend to reduce this charge to 0.30% in the 16th Policy year but we do not guarantee that we will do so, and we reserve the right to maintain this charge at the 0.60% level after the 15th Policy year. The following illustrations use 0.30% after the 15th Policy year; (2) estimated daily expenses equivalent to an effective average annual expense level of 0.94% of the portfolios' average daily net assets; and (3) all applicable premium expense charges and cash value charges. The 0.94% average portfolio expense level assumes an equal allocation of amounts among the 42 subaccounts (this percentage does not include Janus Global portfolio because this portfolio is no longer available to new investors). We used annualized actual audited expenses incurred during 2001 as shown in the Portfolio Annual Expense Table in the Policy prospectus for the portfolios to calculate the average annual expense level. Taking into account the assumed charges of 1.84%, the gross annual investment return rates of 0%, 6% and 12% are equivalent to net annual investment return rates of -1.84%, 4.16% and 10.16% during the first 15 Policy years and -1.24%, 4.76% and 10.76% thereafter. During 2001, AEGON/Transamerica Fund Advisers, Inc. ("AEGON/Transamerica Advisers") undertook to pay those normal operating expenses of certain AEGON/Transamerica Series Fund, Inc. ("Series Fund") portfolios that exceeded a certain stated percentage of those portfolios' average daily net assets. AEGON/Transamerica Advisers has undertaken until at least April 30, 2003 to pay expenses to the extent normal operating expenses of certain portfolios of the Series Fund exceed a stated percentage of the portfolio's average daily net assets. For details on these expense limits, the amounts reimbursed by AEGON/Transamerica Advisers during 2001, and the expense ratios without the reimbursements, see the Portfolio Annual Expense Table in the Policy prospectus. Without these waivers and reimbursements, total annual expenses for the portfolios would have been greater, and the illustrations would have assumed that the assets in the portfolios were subject to an average annual expense level of 1.01%. THE HYPOTHETICAL RETURNS SHOWN IN THE TABLES ARE PROVIDED ONLY TO ILLUSTRATE THE MECHANICS OF A HYPOTHETICAL POLICY AND DO NOT REPRESENT PAST OR FUTURE INVESTMENT RATES OF RETURN. Tax charges that may be attributable to the separate account are not reflected because we are not currently making such charges. In order to produce after tax returns of 0%, 6% or 12% if such charges are made in the future, the separate account would have to earn a sufficient amount in excess of 0%, 6% or 12% to cover any tax charges. The "Premium Accumulated at 5%" column of each table shows the amount which would accumulate i you invested an amount equal to the premium to earn interest at 5% per year, compounded annually. We will furnish, upon request, a comparable illustration reflecting the proposed insured's age, gender, risk classification and desired Policy features. WRL FREEDOM ELITE BUILDER WESTERN RESERVE LIFE ASSUARANCE CO. OF OHIO FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE HYPOTHETICAL ILLUSTRATIONS MALE ISSUE AGE 35 Specified Amount $500,000 Ultimate Select Class Annual Premium $ 5,500 Option Type A Using Current Cost of Insurance Rates
DEATH BENEFIT ASSUMING HYPOTHETICAL GROSS AND NET ANNUAL INVESTMENT RETURN OF PREMIUMS 0.00% (GROSS) 6.00% (GROSS) 12.00% (GROSS) END OF ACCUMULATED -1.91% (NET) YEARS 1 - 15 4.09% (NET) YEARS 1 - 15 10.09% (NET) YEARS 1 - 15 POLICY YEAR AT 5% -1.31% (NET) YEARS 16+ 4.69% (NET) YEARS 16+ 10.69% (NET) YEARS 16+ 1 5,775 500,000 500,000 500,000 2 11,839 500,000 500,000 500,000 3 18,206 500,000 500,000 500,000 4 24,891 500,000 500,000 500,000 5 31,911 500,000 500,000 500,000 6 39,281 500,000 500,000 500,000 7 47,020 500,000 500,000 500,000 8 55,146 500,000 500,000 500,000 9 63,678 500,000 500,000 500,000 10 72,637 500,000 500,000 500,000 15 124,616 500,000 500,000 500,000 20 190,956 500,000 500,000 500,000 30 (AGE 65) 383,684 500,000 500,000 1,094,716 40 (AGE 75) 697,619 500,000 510,954 2,715,981 50 (AGE 85) 1,208,985 500,000 857,382 7,377,773 60 (AGE 95) 2,041,946 * 1,352,229 19,354,434
CASH VALUE NET SURRENDER VALUE ASSUMING HYPOTHETICAL GROSS AND NET ASSUMING HYPOTHETICAL GROSS AND NET ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF 0.00% (GROSS) 6.00% (GROSS) 12.00% (GROSS) 0.00% (GROSS) 6.00% (GROSS) 12.00% (GROSS) -1.91% (NET) 4.09% (NET) 10.09% (NET) -1.91% (NET) 4.09% (NET) 10.09% (NET) YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 END OF -1.31% (NET) 4.69% (NET) 10.69% (NET) -1.31% (NET) 4.69% (NET) 10.69% (NET) POLICY YEAR YEARS 16+ YEARS 16+ YEARS 16+ YEARS 16+ YEARS 16+ YEARS 16+ 1 4,605 4,909 5,214 0 0 0 2 9,110 10,008 10,943 1,350 2,248 3,183 3 13,507 15,293 17,229 5,747 7,533 9,469 4 17,804 20,780 24,136 10,044 13,020 16,376 5 21,970 26,444 31,694 14,210 18,684 23,934 6 26,006 32,289 39,968 19,022 25,305 32,984 7 29,904 38,316 49,025 23,696 32,108 42,817 8 33,668 44,535 58,947 28,236 39,103 53,515 9 37,237 50,889 69,761 32,581 46,233 65,105 10 40,641 57,413 81,591 36,761 53,533 77,711 15 55,210 92,850 160,198 55,210 92,850 160,198 20 67,992 138,003 294,957 67,992 138,003 294,957 30 (AGE 65) 88,651 268,466 897,308 88,651 268,466 897,308 40 (AGE 75) 87,325 477,527 2,538,300 87,325 477,527 2,538,300 50 (AGE 85) 35,565 816,555 7,026,450 35,565 816,555 7,026,450 60 (AGE 95) * 1,338,841 19,162,806 * 1,338,841 19,162,806
WRL FREEDOM ELITE BUILDER WESTERN RESERVE LIFE ASSUARANCE CO. OF OHIO FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE HYPOTHETICAL ILLUSTRATIONS MALE ISSUE AGE 35 Specified Amount $500,000 Ultimate Select Class Annual Premium $ 5,500 Option Type A Using Guaranteed Cost of Insurance Rates
DEATH BENEFIT ASSUMING HYPOTHETICAL GROSS AND NET ANNUAL INVESTMENT RETURN OF PREMIUMS 0.00% (GROSS) 6.00% (GROSS) 12.00% (GROSS) END OF ACCUMULATED -1.91% (NET) YEARS 1 - 15 4.09% (NET) YEARS 1 - 15 10.09% (NET) YEARS 1 - 15 POLICY YEAR AT 5% -1.31% (NET) YEARS 16+ 4.69% (NET) YEARS 16+ 10.69% (NET) YEARS 16+ 1 5,775 500,000 500,000 500,000 2 11,839 500,000 500,000 500,000 3 18,206 500,000 500,000 500,000 4 24,891 500,000 500,000 500,000 5 31,911 500,000 500,000 500,000 6 39,281 500,000 500,000 500,000 7 47,020 500,000 500,000 500,000 8 55,146 500,000 500,000 500,000 9 63,678 500,000 500,000 500,000 10 72,637 500,000 500,000 500,000 15 124,616 500,000 500,000 500,000 20 190,956 500,000 500,000 500,000 30 (AGE 65) 383,684 500,000 500,000 1,036,041 40 (AGE 75) 697,619 * 500,000 2,499,173 50 (AGE 85) 1,208,985 * 561,099 6,575,000 60 (AGE 95) 2,041,946 * 859,414 16,279,289
CASH VALUE NET SURRENDER VALUE ASSUMING HYPOTHETICAL GROSS AND NET ASSUMING HYPOTHETICAL GROSS AND NET ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF 0.00% (GROSS) 6.00% (GROSS) 12.00% (GROSS) 0.00% (GROSS) 6.00% (GROSS) 12.00% (GROSS) -1.91% (NET) 4.09% (NET) 10.09% (NET) -1.91% (NET) 4.09% (NET) 10.09% (NET) YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 YEARS 1 - 15 END OF -1.31% (NET) 4.69% (NET) 10.69% (NET) -1.31% (NET) 4.69% (NET) 10.69% (NET) POLICY YEAR YEARS 16+ YEARS 16+ YEARS 16+ YEARS 16+ YEARS 16+ YEARS 16+ 1 4,605 4,909 5,214 0 0 0 2 8,995 9,889 10,821 1,235 2,129 3,061 3 13,255 15,027 16,947 5,495 7,267 9,187 4 17,384 20,325 23,644 9,624 12,565 15,884 5 21,377 25,783 30,961 13,617 18,023 23,201 6 25,230 31,404 38,961 18,246 24,420 31,977 7 28,935 37,183 47,700 22,727 30,975 41,492 8 32,494 43,129 57,260 27,062 37,697 51,828 9 35,898 49,236 67,716 31,242 44,580 63,060 10 39,152 55,516 79,165 35,272 51,636 75,285 15 52,833 89,419 155,109 52,833 89,419 155,109 20 63,021 130,907 284,118 63,021 130,907 284,118 30 (AGE 65) 54,119 229,044 849,214 54,119 229,044 849,214 40 (AGE 75) * 345,250 2,335,676 * 345,250 2,335,676 50 (AGE 85) * 534,380 6,261,905 * 534,380 6,261,905 60 (AGE 95) * 850,905 16,118,108 * 850,905 16,118,108