EX-99.(M) 3 b49965cvexv99wxmy.txt CALCULATIONS FOR ILLUSTRATIONS VENTURE CORPORATE VUL CVUL2004 ILLUSTRATION SAMPLE CALCULATIONS THE ASSUMED POLICYHOLDER Male standard nonsmoker, age 45. Face Amount $365,000. Death benefit option 1. $20,000 planned annual premium paid on the policy anniversary. Assuming current cost of insurance rates and a hypothetical gross annual investment return of 12.000%. The sample calculations are shown for policy year 5 month 1. The following is a detailed representation of the interim policy value calculations during policy year 5.
BEGINNING MONTHLY NET ENDING POLICY NET VALUE ADMIN COI INVESTMENT POLICY POLICY VALUE PREMIUM AFTER CHARGE CHARGE FACTOR VALUE MONTH (Step 1) (Step 2) PREMIUM (Step 3a) (Step 3c) (Step 4) (Step 5) --------------------------------------------------------------------------------------------- 1 89,836 19,900 109,736 12 89 1.008343748 110,550 2 110,550 0 110,550 12 89 1.008343748 111,370 3 111,370 0 111,370 12 88 1.008343748 112,198 4 112,198 0 112,198 12 88 1.008343748 113,034 5 113,034 0 113,034 12 88 1.008343748 113,876 6 113,876 0 113,876 12 88 1.008343748 114,726 7 114,726 0 114,726 12 87 1.008343748 115,583 8 115,583 0 115,583 12 87 1.008343748 116,447 9 116,447 0 116,447 12 87 1.008343748 117,320 10 117,320 0 117,320 12 86 1.008343748 118,199 11 118,199 0 118,199 12 86 1.008343748 119,087 12 119,087 0 119,087 12 86 1.008343748 119,982
THE GROSS ANNUAL INVESTMENT RETURNS Derivation of annual subaccount rate of return from hypothetical gross annual investment return. Annual Net SubAccount Rate of Return = Hypothetical Gross Annual Investment Return - Assumed Annual Investment Management Fees and Expenses* - Annual Mortality and Expense Charge = 12.000% - 1.065% - 0.450% = 10.485% * Investment management fees and expenses vary by subaccount. Actual investment management fees and expenses will vary with the policyholder's allocation of premium and policy value between the available subaccounts. Investment management fees and expenses represent investment advisory fees and other expenses paid by the portfolios. This illustration reflects an average of the current expenses for the available subaccounts, which is 1.065% per annum. THE ILLUSTRATED POLICY VALUES How the Policy Value is Calculated: Ending Policy Value = (Beginning Policy Value + Net Premium - Total Monthly Deductions) x (Monthly Net Investment Factor) Step 1: The Beginning Policy Value The Beginning Policy Value is the policy value at the end of the previous month. For year 5 month 1, the Beginning Policy Value is the policy value in year 4 month 12, or $89,836 Step 2: Calculating the Net Premium Net Premium = Gross Premium - (Premium Charge + Sales Load) For year 5 month 1, the premium charge is 0.00% of gross premium paid. The Sales Load is 0.50% of gross premium paid. There is no premium for the other months in year 5. Net Premium = $20,000 - ($20,00 x (0.00% premium charge + 0.50% sales load) = $19,900 Step 3: Calculating the Total Monthly Deductions Total Monthly Deductions = Administrative charge + Cost of Insurance Charge Step 3a: Administrative charge of $12.00 per month. Step 3b: Cost of Insurance (COI) Charge = Monthly COI rate x [(Death Benefit / Discount Factor) - (Beginning Policy Value + Net Premium - Administrative charge)] In the illustrated example, the Monthly COI rate for year 5 is 0.00035, the Death Benefit is $365,000 and the Discount Factor is 1.00246627 The Beginning Policy Value is $89,836 COI Deduction = 0.00035 x [($365,000 / 1.00246627) - ($89,836+ $19,900 - $12.00] = $89.03 Total Monthly Deductions = $12.00 + $89.00 = $101.00 Step 4: Determining the Net Investment Factor The value of a unit of each sub-account was initially fixed at $10.00. For each subsequent Business Day the unit value for that sub-account is determined by multiplying the unit value for the immediately preceding Business Day by the net investment factor for the that sub-account on such subsequent Business Day. The net investment factor for a sub-account on any Business Day is equal to (a) divided by (b) where: a) is the net asset value of the underlying Portfolio shares held by that sub-account as of the end of such Business Day before any policy transactions are made on that day; and b) is the net asset value of the underlying Portfolio shares held by that sub-account as of the end of the immediately preceding Business Day after all policy transactions were made for that day; The value of a unit may increase, decrease, or remain the same, depending on the investment performance of a sub-account from one Business Day to the next. For the illustration, a hypothetical monthly net investment factor is calculated which is equivalent to a 10.485% net annual subaccount rate of return: Monthly Net Investment Factor (hypothetical) = (1 + 0.1048) to the power of 1/12 = 1.008343748 Step 5: Ending Policy Value Ending Policy Value = (Beginning Policy Value + Net Premium - Total Monthly Deductions) x (Monthly Net Investment Factor) For year 5 month 1 Ending Policy Value = ($89,836 + $19,900 - $101.00) x (1.008343748) = $110,550 THE ILLUSTRATED DEATH BENEFITS How the Death Benefit is determined: Death Benefit = greater of [Face Amount] or [Policy Value x Minimum Death Benefit Percentage] In year 5 of the illustration, the attained age of the policyholder is 50 and the applicable Minimum Death Benefit Percentage is 130%. Death Benefit = greater of [$365,000] or [130% x 119,982] = $365,000 THE CALCULATIONS IN OTHER POLICY YEARS How the Policy Value calculation will differ in other years:
YEAR PREMIUM CHARGE SALES LOAD MONTHLY M&E CHARGE ADMINISTRATION CHARGE ----------------------------------------------------------------------------------------------- 1 1.00% 13.00% 0.45% 12 2 1.00% 6.25% 0.45% 12 3 1.00% 3.50% 0.45% 12 4 0.00% 2.50% 0.45% 12 5 0.00% 0.50% 0.45% 12 6 0.00% 0.50% 0.45% 12 7 0.00% 0.00% 0.45% 12 8 0.00% 0.00% 0.45% 12 9 0.00% 0.00% 0.45% 12 10 0.00% 0.00% 0.45% 12 11+ 0.00% 0.00% 0.20% 12
The monthly COI rates will vary by attained age. How the Death Benefit will differ in other years: Under Death Benefit Option 1, the death benefit is the Face Amount of the policy or, if greater, the Minimum Death Benefit. The Minimum Death Benefit is required to ensure the policy continues to qualify as life insurance under the Internal Revenue Code, and is equal to the Policy Value times the applicable Minimum Death Benefit Percentage. VENTURE CORPORATE VUL CVUL2003 SL ILLUSTRATION SAMPLE CALCULATIONS THE ASSUMED POLICYHOLDER Male standard nonsmoker, age 45. Face Amount $365,000. Death benefit option 1. $20,000 planned annual premium paid on the policy anniversary. Assuming current cost of insurance rates and a hypothetical gross annual investment return of 12.000%. The sample calculations are shown for policy year 5 month 1. The following is a detailed representation of the interim policy value calculations during policy year 5.
BEGINNING MONTHLY NET ENDING POLICY NET VALUE ADMIN COI INVESTMENT POLICY POLICY VALUE PREMIUM AFTER CHARGE CHARGE FACTOR VALUE MONTH (Step 1) (Step 2) PREMIUM (Step 3a) (Step 3c) (Step 4) (Step 5) --------------------------------------------------------------------------------------------- 1 91,307 19,400 110,707 12 81 1.008305713 111,533 2 111,533 0 111,533 12 81 1.008305713 112,366 3 112,366 0 112,366 12 80 1.008305713 113,206 4 113,206 0 113,206 12 80 1.008305713 114,054 5 114,054 0 114,054 12 80 1.008305713 114,909 6 114,909 0 114,909 12 79 1.008305713 115,771 7 115,771 0 115,771 12 79 1.008305713 116,640 8 116,640 0 116,640 12 79 1.008305713 117,517 9 117,517 0 117,517 12 79 1.008305713 118,402 10 118,402 0 118,402 12 78 1.008305713 119,294 11 119,294 0 119,294 12 78 1.008305713 120,194 12 120,194 0 120,194 12 78 1.008305713 121,102
THE GROSS ANNUAL INVESTMENT RETURNS Derivation of annual subaccount rate of return from hypothetical gross annual investment return. Annual Net SubAccount Rate of Return = Hypothetical Gross Annual Investment Return - Assumed Annual Investment Management Fees and Expenses* - Annual Mortality and Expense Charge = 12.000% - 1.065% - 0.500% = 10.435% * Investment management fees and expenses vary by subaccount. Actual investment management fees and expenses will vary with the policyholder's allocation of premium and policy value between the available subaccounts. Investment management fees and expenses represent investment advisory fees and other expenses paid by the portfolios. This illustration reflects an average of the current expenses for the available subaccounts, which is 1.065% per annum. THE ILLUSTRATED POLICY VALUES How the Policy Value is Calculated: Ending Policy Value = (Beginning Policy Value + Net Premium - Total Monthly Deductions) x (Monthly Net Investment Factor) Step 1: The Beginning Policy Value The Beginning Policy Value is the policy value at the end of the previous month. For year 5 month 1, the Beginning Policy Value is the policy value in year 4 month 12, or $91,307 Step 2: Calculating the Net Premium Net Premium = Gross Premium - (Premium Charge + Sales Load) For year 5 month 1, the premium charge is 2.0% of gross premium paid. The Sales Load is 1.0% of gross premium paid. There is no premium for the other months in year 5. Net Premium = $20,000 - ($20,00 x (2.0% premium charge + 1.0% sales load) = $19,400 Step 3: Calculating the Total Monthly Deductions Total Monthly Deductions = Administrative charge + Cost of Insurance Charge Step 3a: Administrative charge of $12.00 per month. Step 3b: Cost of Insurance (COI) Charge = Monthly COI rate x [(Death Benefit / Discount Factor) - (Beginning Policy Value + Net Premium - Administrative charge)] In the illustrated example, the Monthly COI rate for year 5 is .0003190, the Death Benefit is $365,000 and the Discount Factor is 1.00246627 The Beginning Policy Value is $91,307 COI Deduction = 0.0003190 x [( $365,000 / 1.00246627) - ($91,307 + $19,400 - $12.00] = $80.83 Total Monthly Deductions = $12.00 + $81.00 = $93.00 Step 4: Determining the Net Investment Factor The value of a unit of each sub-account was initially fixed at $10.00. For each subsequent Business Day the unit value for that sub-account is determined by multiplying the unit value for the immediately preceding Business Day by the net investment factor for the that sub-account on such subsequent Business Day. The net investment factor for a sub-account on any Business Day is equal to (a) divided by (b) where: a) is the net asset value of the underlying Portfolio shares held by that sub-account as of the end of such Business Day before any policy transactions are made on that day; and b) is the net asset value of the underlying Portfolio shares held by that sub-account as of the end of the immediately preceding Business Day after all policy transactions were made for that day; The value of a unit may increase, decrease, or remain the same, depending on the investment performance of a sub-account from one Business Day to the next. For the illustration, a hypothetical monthly net investment factor is calculated which is equivalent to a 10.440% net annual subaccount rate of return: Monthly Net Investment Factor (hypothetical) = (1 + 0.1044) to the power of 1/12 = 1.008305713 Step 5: Ending Policy Value Ending Policy Value = (Beginning Policy Value + Net Premium - Total Monthly Deductions) x (Monthly Net Investment Factor) For year 5 month 1 Ending Policy Value = ( $91,307 + $19,400.00 - $93.00) x ( 1.008305713) = $111,533 THE ILLUSTRATED DEATH BENEFITS How the Death Benefit is determined: Death Benefit = greater of [Face Amount] or [Policy Value x Minimum Death Benefit Percentage] In year 5 of the illustration, the attained age of the policyholder is 50 and the applicable Minimum Death Benefit Percentage is 130%. Death Benefit = greater of [ $365,000] or [ 130% x 121,102] = $365,000 THE CALCULATIONS IN OTHER POLICY YEARS How the Policy Value calculation will differ in other years:
YEAR PREMIUM CHARGE SALES LOAD MONTHLY M&E CHARGE ADMINISTRATION CHARGE ------------------------------------------------------------------------------------------------ 1 2.00% 8.00% 0.50% 12 2 2.00% 6.00% 0.50% 12 3 2.00% 3.00% 0.50% 12 4 2.00% 2.00% 0.50% 12 5 2.00% 1.00% 0.50% 12 6 2.00% 0.00% 0.50% 12 7 2.00% 0.00% 0.50% 12 8 2.00% 0.00% 0.50% 12 9 2.00% 0.00% 0.50% 12 10 2.00% 0.00% 0.50% 12 11+ 0.00% 0.00% 0.20% 12
The monthly COI rates will vary by attained age. How the Death Benefit will differ in other years: Under Death Benefit Option 1, the death benefit is the Face Amount of the policy or, if greater, the Minimum Death Benefit. The Minimum Death Benefit is required to ensure the policy continues to qualify as life insurance under the Internal Revenue Code, and is equal to the Policy Value times the applicable Minimum Death Benefit Percentage. VENTURE CORPORATE VUL CVUL2003 SC ILLUSTRATION SAMPLE CALCULATIONS THE ASSUMED POLICYHOLDER Male standard nonsmoker, age 45. Face Amount $365,000. Death benefit option 1. $20,000 planned annual premium paid on the policy anniversary. Assuming current cost of insurance rates and a hypothetical gross annual investment return of 12.000%. The sample calculations are shown for policy year 5 month 1. The following is a detailed representation of the interim policy value calculations during policy year 5.
BEGINNING MONTHLY NET ENDING POLICY NET VALUE ADMIN COI INVESTMENT POLICY POLICY VALUE PREMIUM AFTER CHARGE CHARGE FACTOR VALUE MONTH (Step 1) (Step 2) PREMIUM (Step 3a) (Step 3c) (Step 4) (Step 5) --------------------------------------------------------------------------------------------- 1 93,134 19,600 112,734 12 123 1.008305713 113,534 2 113,534 0 113,534 12 123 1.008305713 114,341 3 114,341 0 114,341 12 123 1.008305713 115,155 4 115,155 0 115,155 12 122 1.008305713 115,976 5 115,976 0 115,976 12 122 1.008305713 116,804 6 116,804 0 116,804 12 121 1.008305713 117,640 7 117,640 0 117,640 12 121 1.008305713 118,483 8 118,483 0 118,483 12 121 1.008305713 119,333 9 119,333 0 119,333 12 120 1.008305713 120,191 10 120,191 0 120,191 12 120 1.008305713 121,056 11 121,056 0 121,056 12 119 1.008305713 121,929 12 121,929 0 121,929 12 119 1.008305713 122,810
THE GROSS ANNUAL INVESTMENT RETURNS Derivation of annual subaccount rate of return from hypothetical gross annual investment return. Annual Net SubAccount Rate of Return = Hypothetical Gross Annual Investment Return - Assumed Annual Investment Management Fees and Expenses* - Annual Mortality and Expense Charge = 12% - 1.065% - 0.500% = 10.435% * Investment management fees and expenses vary by subaccount. Actual investment management fees and expenses will vary with the policyholder's allocation of premium and policy value between the available subaccounts. Investment management fees and expenses represent investment advisory fees and other expenses paid by the portfolios. This illustration reflects an average of the current expenses for the available subaccounts, which is 1.065% per annum. THE ILLUSTRATED POLICY VALUES How the Policy Value is Calculated: Ending Policy Value = (Beginning Policy Value + Net Premium - Total Monthly Deductions) x (Monthly Net Investment Factor) Step 1: The Beginning Policy Value The Beginning Policy Value is the policy value at the end of the previous month. For year 5 month 1, the Beginning Policy Value is the policy value in year 4 month 12, or $93,134 Step 2: Calculating the Net Premium Net Premium = Gross Premium - Premium Charge For year 5 month 1, the premium charge is 2.0% of gross premium paid. There is no premium for the other months in year 5. Net Premium = $20,000 - ($20,000 x 2.0%) = $19,600 Step 3: Calculating the Total Monthly Deductions Total Monthly Deductions = Administrative charge + Cost of Insurance Charge Step 3a: Administrative charge of $12.00 per month. Step 3b: Cost of Insurance (COI) Charge = Monthly COI rate x [(Death Benefit / Discount Factor) - (Beginning Policy Value + Net Premium - Administrative charge)] In the illustrated example, the Monthly COI rate for year 5 is .0004910, the Death Benefit is $365,000 and the Discount Factor is 1.00246627 The Beginning Policy Value is $93,134 COI Deduction = 0.0004910 x [( $365,000 / 1.00246627) - ($93,134 + $19,600 - $12.00] = $123.43 Total Monthly Deductions = $12.00 + $123.00 = $135.00 Step 4: Determining the Net Investment Factor The value of a unit of each sub-account was initially fixed at $10.00. For each subsequent Business Day the unit value for that sub-account is determined by multiplying the unit value for the immediately preceding Business Day by the net investment factor for the that sub-account on such subsequent Business Day. The net investment factor for a sub-account on any Business Day is equal to (a) divided by (b) where: a) is the net asset value of the underlying Portfolio shares held by that sub-account as of the end of such Business Day before any policy transactions are made on that day; and b) is the net asset value of the underlying Portfolio shares held by that sub-account as of the end of the immediately preceding Business Day after all policy transactions were made for that day; The value of a unit may increase, decrease, or remain the same, depending on the investment performance of a sub-account from one Business Day to the next. For the illustration, a hypothetical monthly net investment factor is calculated which is equivalent to a 10.440% net annual subaccount rate of return: Monthly Net Investment Factor (hypothetical) = (1 + 0.1044) to the power of 1/12 = 1.008305713 Step 5: Ending Policy Value Ending Policy Value = (Beginning Policy Value + Net Premium - Total Monthly Deductions) x (Monthly Net Investment Factor) For year 5 month 1 Ending Policy Value = ($93,134+ $19,600.00 - $135.00) x (1.008305713) = $113,534 THE ILLUSTRATED CASH SURRENDER VALUES How the Cash Surrender Value is Calculated: Cash Surrender Value = Ending Policy Value - Surrender Charge The Surrender Charge is expressed as a percentage of total premiums paid from issue to the applicable policy year. Amounts not included in this total premium paid for surrender charge purposes include: 1. Premiums in any year in excess of the target premium 2. Premium paid after the fifth policy year. A portion of the surrender charge is assessed on a partial withdrawal or a decrease in the face amount. The surrender charge percentages vary by policy year and as per the table below
SURRENDER POLICY CHARGE YEAR PERCENT ------ --------- 1 5.0% 2 4.0% 3 3.0% 4 2.5% 5 2.0% 6 1.5% 7 1.0% 8 1.0% 9 0.5% 10+ 0.0%
Surrender Charge = Surrender Charge Rate x Total Premiums Paid from Issue during the First Five Policy Years The Surrender Charge Rate used in this illustration is 2.0% The Total Premiums Paid from Issue during the First Five Policy Years is $100,000 The Target Premium is $20,000 per year For year 5 month 1, the Surrender Charge = 2.0% x ($100,000) = $2,000 and for month 12, the Surrender Charge = 2.0% x ($100,000) = $2,000 Cash Surrender Value month 1 = $113,534 - $2,000 = $111,534 Cash Surrender Value month 12 = $122,810 - $2,000 = $120,810 The following is a detailed representation of the interim cash surrender value calculations during policy year 5.
ENDING SURRENDER TOTAL CASH POLICY POLICY CHARGE PREMIUMS SURRENDER SURRENDER MONTH VALUE RATE PAID* CHARGES VALUE ---------------------------------------------------------------- 1 113,534 2.0% 100,000 2,000 111,534 2 114,341 2.0% 100,000 2,000 112,341 3 115,155 2.0% 100,000 2,000 113,155 4 115,976 2.0% 100,000 2,000 113,976 5 116,804 2.0% 100,000 2,000 114,804 6 117,640 2.0% 100,000 2,000 115,640 7 118,483 2.0% 100,000 2,000 116,483 8 119,333 2.0% 100,000 2,000 117,333 9 120,191 2.0% 100,000 2,000 118,191 10 121,056 2.0% 100,000 2,000 119,056 11 121,929 2.0% 100,000 2,000 119,929 12 122,810 2.0% 100,000 2,000 120,810
THE ILLUSTRATED DEATH BENEFITS How the Death Benefit is determined: Death Benefit = greater of [Face Amount] or [Policy Value x Minimum Death Benefit Percentage] In year 5 of the illustration, the attained age of the policyholder is 50 and the applicable Minimum Death Benefit Percentage is 130%. Death Benefit = greater of [$365,000] or [130% x 122,810] = $365,000 THE CALCULATIONS IN OTHER POLICY YEARS How the Policy Value calculation will differ in other years:
YEAR PREMIUM CHARGE MONTHLY M&E CHARGE ADMINISTRATION CHARGE ---------------------------------------------------------------------------- 1 2.00% 0.50% 12 2 2.00% 0.50% 12 3 2.00% 0.50% 12 4 2.00% 0.50% 12 5 2.00% 0.50% 12 6 2.00% 0.50% 12 7 2.00% 0.50% 12 8 2.00% 0.50% 12 9 2.00% 0.50% 12 10 2.00% 0.50% 12 11+ 0.00% 0.20% 12
The monthly COI rates will vary by attained age. How the Cash Surrender Value will differ in other years: The surrender charge rate is based on the duration of the coverage. The surrender charge percentage decrease from policy year 1 to 9, and is zero for year 10 and later. Within a policy year, the surrender charge percentage is level on a monthly basis.
SURRENDER CHARGE POLICY YEAR PERCENTAGE --------------------------------------- 1 5.0% 2 4.0% 3 3.0% 4 2.5% 5 2.0% 6 1.5% 7 1.0% 8 1.0% 9 0.5% 10+ 0.0%
How the Death Benefit will differ in other years: Under Death Benefit Option 1, the death benefit is the Face Amount of the policy or, if greater, the Minimum Death Benefit. The Minimum Death Benefit is required to ensure the policy continues to qualify as life insurance under the Internal Revenue Code, and is equal to the Policy Value times the applicable Minimum Death Benefit Percentage.