-----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, TEp9dpsZUtY2567rmg1aL38I/R3BIFCIsNhjGPPFEjUpYeakrlZEWTcULGMSJRuV aAOpCw3ZS2UwSv66XEmvpw== 0000312576-96-000021.txt : 19961212 0000312576-96-000021.hdr.sgml : 19961212 ACCESSION NUMBER: 0000312576-96-000021 CONFORMED SUBMISSION TYPE: S-6EL24 PUBLIC DOCUMENT COUNT: 48 FILED AS OF DATE: 19961211 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEPARATE ACCOUNT I OF EQUITABLE VARIABLE LIFE INSURANCE CO CENTRAL INDEX KEY: 0000312576 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 132729441 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-6EL24 SEC ACT: 1933 Act SEC FILE NUMBER: 333-17633 FILM NUMBER: 96679111 BUSINESS ADDRESS: STREET 1: 787 7TH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2126418357 MAIL ADDRESS: ZIP: 10019 S-6EL24 1 SEPARATE ACCOUNT I MERGER FILING Registration No. 333- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - -------------------------------------------------------------------------------- FORM S-6 FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2 SEPARATE ACCOUNT I of THE EQUITABLE LIFE ASSURANCE James M. Benson, President SOCIETY OF THE UNITED STATES The Equitable Life Assurance Society (Exact Name of Trust) of the United States 787 Seventh Avenue THE EQUITABLE LIFE ASSURANCE New York, New York 10019 SOCIETY OF THE UNITED STATES (Name and Address of Agent for Service) (Exact Name of Depositor) 1290 Avenue of the Americas New York, New York 10104 (Address of Depositor's Principal Executive Offices) --------------------------------------- Telephone Number, Including Area Code: (212) 554-1234 ---------------------------------------- Please send copies of all communications to: MARY P. BREEN, ESQ. with a copy to: Vice President and Associate General Counsel THOMAS C. LAUERMAN The Equitable Life Assurance Freedman, Levy, Kroll & Simonds Society of the United States 1050 Connecticut Avenue, N.W., Suite 825 787 Seventh Avenue Washington, D.C. 20036 New York, New York 10019 ---------------------------------------- Securities Being Registered: Units of Interest in Separate Account I - -------------------------------------------------------------------------------- Approximate date of proposed public offering: As soon as practicable after the effective date of the Registration Statement. An indefinite amount of the Registrant's securities has been registered pursuant to a declaration, under Rule 24f-2 under the Investment Company Act of 1940, set out in the Form S-6 Registration Statement contained in File No. 2-54015. The Registrant filed a Rule 24f-2 Notice for the December 31, 1995 fiscal year end on February 27, 1996. The registrant hereby amends this Registration Statement under the Securities Act of 1933 on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. Reconciliation and Tie (The Champion) Form N-8B-2* Prospectus Item No. Heading - ------------ ----------- 1 Cover Page.*** 2 Cover Page.**** 3 Inapplicable. 4 Cover Page; Part 2: Equitable; Part 4: Sales And Other Agreements. 5 and 6 Part 2: The Separate Account And Its Divisions. 7 and 8 Inapplicable.** 9 Part 4: Legal Proceedings. lO(a) Part 3: Additional Information About The Champion - Beneficiary; Assignment. - ---------- * Registrants include this Reconciliation and Tie in their Registration Statement in compliance with Instruction 4 as to the Prospectus as set out in Form S-6. Separate Account I is an investment company registered under the Investment Company Act of 1940 on a Form N-8B-2 Registration Statement (File No. 811-2581). Pursuant to Sections 8 and 30(b)(1) of the Investment Company Act of 1940, Rule 30a-1 under that Act, and Forms N-8B-2 and N-SAR under that Act, the Account keeps its Form N-8B-2 Registration Statement current through the filing of periodic reports required by the Securities and Exchange Commission. ** Not required pursuant to either Instruction l(a) as to the Prospectus as set out in Form S-6 or the administrative practice of the Commission and its staff of adapting the disclosure requirements of the Commission's registration statement forms in recognition of the differences between variable life insurance policies and other periodic payment plan certificates issued by investment companies and between separate accounts organized as management companies and unit investment trusts. *** However, the Separate Account does not have an I.R.S. Employer Identification Number. **** Equitable Variable's I.R.S. Employer Identification Number (13-2729441) is not furnished in the prospectus. - 2 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 10(b) Part 3: Account Values And Cash Surrender Values; Additional Information About The Champion - When We Pay Proceeds; Dividends. 10(c) and (d) Part 3: Death Benefits; Account Values And Cash Surrender Values; Policy Loans; Other Policy Transactions; Your Right to Examine The Policy; Your Right to Exchange The Policy; Additional Information About The Champion - When We Pay Proceeds; Your Payment Options. 10(e) Part 3: Your Policy Can Lapse. 10(f) Part 4: Your Voting Privileges. 10(g)(l) and (2) and Part 4: Your Voting Privileges; Our Rights. 10(h)(l) and (2) 10(g)(3) and (4), and Inapplicable. 10(h)(3) and (4) 10(i) Part 2: The Separate Account And Its Divisions; The Trust; Part 3: Premiums; Deductions From Premiums; Charges Against The Separate Account; Additional Information About The Champion - Additional Benefits You May Get By Rider; Part 4: Tax Effects 11 Part 2: The Separate Account And Its Divisions; The Trust. 12(a) Cover Page. 12(b) Inapplicable. 12(c) Part 2: The Trust. 12(d) Part 4: Sales And Other Agreements. 12(e) Part 2: The Separate Account And Its Divisions. 13(a) Part 3: Deductions From Premiums; Surrender Charge; Charges Against The Separate Account; Options on Lapse - Reinstatement Option. - 3 - Form N-8B-2 Prospectus Item No. Heading - ------------ ---------- 13(b), (c) and (g) Inapplicable.** (But see Part 5: Illustration). 13(d), (e) and (f) Inapplicable. 14 Part 4: Sales And Other Agreements. 15 Part 3: Premiums. 16 Part 2: The Separate Account And Its Divisions; Part 3: Account Values And Cash Surrender Values; Policy Loans; Other Policy Transactions. 17 See Items 10(c), (d), (e) and (i). 18(a) and (c) Part 2: The Separate Account And Its Divisions; Part 3: Premiums; Account Values and Cash Surrender Values. 18(b) and (d) Inapplicable. 19 Part 3: Additional Information About The Champion - You Will Receive Periodic Reports; Part 4: Additional Information. 20(a) and (b) See Items 10(g)(1) and (2), and 10(h)(1) and (2). 20(c), (d), (e) and (f) Inapplicable. 21(a) and (b) Part 3: Policy Loans. 21(c) Inapplicable.** 22 Part 3: Limits On Our Right To Challenge The Policy; Additional Information About The Champion - When We Pay Proceeds. - -------- ** Not required pursuant to either Instruction 1(a) as to the Prospectus as set out in Form S-6 or the administrative practice of the Commission and its staff of adapting the disclosure requirements of the Commission's registration statement forms in recognition of the differences between variable life insurance policies and other periodic payment plan certificates issued by investment companies and between separate accounts organized as management companies and unit investment trusts. - 4 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 23 Inapplicable. 24 Part 3: Additional Information About The Champion. 25 Part 2: Equitable Variable. 26(a) Inapplicable.** 26(b) Inapplicable. 27 Part 2: Equitable Variable. 28(a) Part 2: Equitable. 28(b) Part 2: Equitable Variable; Part 4: Management. 29 Part 2: Equitable. 30 Inapplicable. 31, 32, 33 and 34 Inapplicable.** 35 Part 2: Equitable Variable. Part 4: Regulation. 36 Inapplicable.** 37 Inapplicable. 38 Part 4: Sales and Other Agreements. 39(a) Part 2: Equitable Variable; Equitable. 39(b) Part 4: Sales and Other Agreements. 40(a) Inapplicable.** (But see Part 4: Sales and Other Agreements -- Joint Services Agreement). - -------- ** Not required pursuant to either Instruction 1(a) as to the Prospectus as set out in Form S-6 or the administrative practice of the Commission and its staff of adapting the disclosure requirements of the Commission's registration statement forms in recognition of the differences between variable life insurance policies and other periodic payment plan certificates issued by investment companies and between separate accounts organized as management companies and unit investment trusts. - 5 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 40(b) Inapplicable. 41(a) Part 2: Equitable Variable; Part 4: Your Voting Privileges -- Voting Privileges Of Others; Sales And Other Agreements. 41(b) and (c), and Inapplicable. 43 42 Inapplicable.** 44(a)(1) Part 3: Variable Adjustment Amount -- Net Return. 44(a)(2) Captions referenced under Items 44(a)(1), 16, lO(c) and (d) above. 44(a)(3) Captions referenced under Item 44(a)(2). 44(a)(4) Part 3: Variable Adjustment Amount; Account Values And Cash Surrender Values; Part 4: Tax Effects. 44(a)(5) Part 3: Charges Against The Separate Account. 44(a)(6) Part 3: Deductions From Premiums; Charges Against The Separate Account; Variable Adjustment Amount; Account Values and Cash Surrender Values; Part 5: Illustrations. 44(b) Inapplicable.** 44(c) and 45 Inapplicable. 46(a) Captions referenced under Item 44(a) above. 46(b) Inapplicable.** - -------- ** Not required pursuant to either Instruction 1(a) as to the Prospectus as set out in Form S-6 or the administrative practice of the Commission and its staff of adapting the disclosure requirements of the Commission's registration statement forms in recognition of the differences between variable life insurance policies and other periodic payment plan certificates issued by investment companies and between separate accounts organized as management companies and unit investment trusts. - 6 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 47, 48 and 49 Inapplicable.** 50 Part 2: The Separate Account And Its Divisions; Part 3: Policy Loans. 51 Inapplicable.** (But see Part 1; Part 2; Part 3; Part 4.) 52(a) and (c) Part 4: Our Rights. 52(b) and (d) Inapplicable. 53 Part 4: Tax Effects. 54 Inapplicable. 55 Inapplicable.** (But see Part 5 - Illustrations.) 56-58 and 59 Inapplicable.** 0033i Reconciliation and Tie ---------------------- (SP--l) Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- l(a) Page 1; Summary - The Policy - The Separate Account, Its Investments and Its Investment Experience; Detailed Information - General Information - About Us. l(b) Page 1; Summary - The Policy - The Separate Account, Its Investments And Its Investment Experience; Detailed Information - General Information - About Us; Our Separate Account And Its Divisions 2 Page 1; Summary - The Issuing Company - Our Parent, Equitable - The Fund; Detailed Information - General Information - Equitable 3 Not Applicable 4 Page 1; Summary - Our Parent, Equitable - The Trust; Detailed Information - General Information - Equitable 5 Detailed Information - General Information - About Us (Reorganization) - Regulation; Our Separate Account And Its Divisions 6(a) Detailed Information - General Information - About Us; Our Separate Account And Its Divisions 6(b) Not Applicable 9 Legal Proceedings 10(a) and (b) Not Applicable - 2 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 10(c) and (d) Summary - Death Benefits - Cash Surrender Value - Policy Loans - Cancellation and Exchange Rights; Death Benefits Under Our Policies; Account Values, Cash Surrender Values and Loan Provisions Under Our Policies; General Provisions Of Our Policy - Cancellation Right - Exchanging Our Policies For Fixed Whole Life Insurance - Payment Options 10(e) General Provisions Of Our Policy 10(f), (g) and (h) Your Voting Privileges; Our Rights 10(i) Summary - The Separate Account, Its Investments and Its Investment Experience - The Trust; Our Rights 11 Page 1; Summary - The Policy - The Separate Account, Its Investments And Its Account Investment Experience; Detailed Information - General Information - About Us; Our Separate Account And Its Divisions 12 Page 1; Summary - The Fund; Detailed Information - General Information - About Us; Our Rights 13(a), (b) and (c) Page 1; Summary - The Policy - The Separate Account, Its Investments And Its Investment Experience - The Trust - Charges Against Premium - Charges Against The Separate Account - Contingent Deferred Sales Load - Policy Loans - Income Taxes; Deductions From Premium; Contingent Deferred Sales Load; Charges Against The Separate Account; Sales And Other Agreements; General Provisions Of Our Policy - Premiums 13(d), (e) and (f) Not Applicable - 3 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 14 General Provisions Of Our Policy - Premium; Sales And Other Agreements - Sales By Agents Of Equitable - Sales By Brokers 15 Page 1; Summary - The Separate Account, Its Investments And Its Investment Experience; Our Separate Account And Its Divisions; General Provisions Of Our Policy - Premium; Sales And Other Agreements - Applications 16 Page 1; Summary - The Separate Account, Its Investments And Its Investment Experience; Our Separate Account And Its Divisions; Sales And Other Agreements - Applications 17 See Items 10(c), (d), and (e) 18(a), (b) and (c) Summary - The Separate Account, Its Investments And Its Account Investment Experience 18(d) Not Applicable 19 Page 1; Summary - More Information; You Will Receive Periodic Reports; Where You Can Get Additional Information 20 Not Applicable 21(a) and (b) Summary - Policy Loans; Account Values, Cash Surrender Values And Loan Privileges Under Our Policies - Taking A Policy Loan 21(c) Not Applicable 22 Summary - The Trust; General Provisions Of Our Policy - Assignment - Limits On Our Right To Challenge The Policy - When We Pay Proceeds; Our Rights - 4 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 23 Not Applicable 24 Not Applicable 25 Summary - The Issuing Company; Detailed Information - General Information - About Us 26 See Item 13(a), (b) and (c) 27 Detailed Information - General Information - About Us 28(a) Detailed Information - General Information - About Us - Equitable 28(b) Management 29 Detailed Information - General Information - About Us - Equitable 30 Not Applicable 31 Not Applicable 32 Not Applicable 33(a) Not Applicable 33(b) Summary - Commissions; Sales And Other Agreements 34 Summary - The Trust; Sales And Other Agreements 35 Detailed Information - General Information - About Us 37 Not Applicable 38 Detailed Information - General Information - About Us; Sales And Other Agreements 39(a) and (b) Detailed Information - General Information - Equitable; Sales And Other Agreements 40(a) Sales And Other Agreements 40(b) Summary - The Trust; Detailed Information - General Information - About Us - Equitable; Sales and Other Agreements - 5 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 41(a) Detailed Information - General Information - About Us 42 Members Of Our Management 43 Not Applicable 44(a) General Provisions Of Our Policy - Premiums; The Impact Of Taxes 44(b) and (c) Not Applicable 45 Not Applicable 46(a) See Item 10(c), (d) and (c); Death Benefits Under Our Policies - Net Return; Account Values, Cash Surrender Values And Loan Privileges Under Our Policies - How We Determine Account Value - How We Determine Cash Surrender Value 46(b) Not Applicable 47 Summary - The Trust 48 Not Applicable 49 See Item 13(a), (b) and (c) 50 General Provisions Of Our Policy; Our Separate Account And Its Divisions 51 Not Applicable 52(a), (b) and (c) Summary - The Trust 52(d) Not Applicable 53(a) The Impact Of Taxes; Policy Proceeds 53(b) Not Applicable 54 Not Applicable 55 Not Applicable 5319I Reconciliation and Tie ---------------------- (Basic Policy, Expanded Policy) Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 1(a) Page 1; Summary - The Policies - The Separate Account, Its Investments and Its Investment Experience; Detailed Information - General Information - About Us. l(b) Page 1; Summary - The Policies; The Separate Account, Its Investments And Its Investment Experience; Detailed Information - General Information - About Us; Our Separate Account And Its Divisions 2 Page 1; Summary - The Issuing Company - Our Parent, Equitable - The Fund; Detailed Information - General Information - Equitable 3 Not Applicable 4 Page 1; Summary - Our Parent, Equitable - The Fund; Detailed Information - General Information - Equitable 5 Detailed Information - General Information - About Us (Reorganization) - Regulation; Our Separate Account And Its Divisions 6(a) Detailed Information - General Information - About Us (Reorganization); Our Separate Account And Its Divisions 6(b) Not Applicable 9 Legal Proceedings 10(a) and (b) Not Applicable - 2 - Form N-8B-2 Prospectus Item No. Heading - ----------- --------- 10(c) and (d) Summary - Death Benefits - Cash Value - Policy Loans - Cancellation and Exchange Rights; Death Benefits Under Our Policies; Cash Value and Loan Provisions Under Our Policies; General Provisions Of Our Policies - Cancellation Right - Exchanging Our Policies For Fixed Whole Life Insurance - Payment Options 10(e) General Provisions Of Our Policy - Options On Lapse 10(f), (g) and (h) Your Voting Privileges; Our Rights lO(i) Summary - The Separate Account, Its Investments and Its Investment Experience - The Fund; Our Rights 11 Page 1; Summary - The Policies - The Separate Account, Its Investments And Its Account Investment Experience; Detailed Information - General Information - About Us (Reorganization); Our Separate Account And Its Divisions 12 Page 1; Summary - The Fund; Detailed Information - General Information - About Us (Reorganization); Our Rights 13(a), (b) and (c) Page 1; Summary - The Policies - The Separate Account, Its Investments And Its Investment Experience - The Fund - Charges Against Premiums - Charges Against The Separate Account - Contingent Deferred Sales Load - Policy Loans - Income Taxes; Deductions From Premiums; Contingent Deferred Sales Load; Charges Against The Separate Account; Sales And Other Agreements; General Provisions Of Our Policies - Premiums - Options On Lapse (Reinstatement Option) 13(d), (e) and (f) Not Applicable - 3 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 14 General Provisions Of Our Policies - Premiums; Sales And Other Agreements - Sales By Agents Of Equitable - Sales By Brokers - Application 15 Page 1; Summary - The Separate Account, Its Investments And Its Investment Experience; Our Separate Account And Its Divisions; General Provisions Of Our Policies - Premiums; Sales And Other Agreements - Applications 16 Page 1; Summary - The Separate Account, Its Investments And Its Investment Experience; Our Separate Account And Its Divisions; Sales And Other Agreements - Application 17 See Items 10(c), (d), and (e) 18(a), (b) and (c) Summary - The Separate Account, Its Investments And Its Investment Experience 18(d) Not Applicable 19 Page 1; Summary - More Information; You Will Receive Periodic Reports; Where You Can Get Additional Information 20 Not Applicable 21(a) and (b) Summary - Policy Loans; Cash Value And Loan Privileges Under Our Policies - Taking A Policy Loan 21(c) Not Applicable 22 Summary - The Fund; General Provisions Of Our Policies - Assignment - Limits On Our Right To Challenge The Policy - Policy Proceeds; Our Rights - 4 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 23 Not Applicable 24 Not Applicable 25 Summary - The Issuing Company; Detailed Information - General Information - About Us 26 See Item 13(a), (b) and (c) 27 Detailed Information - General Information - About Us 28(a) Detailed Information - General Information - About Us - Equitable 28(b) Management 29 Detailed Information - General Information - About Us - Equitable 30 Not Applicable 31 Not Applicable 32 Not Applicable 33(a) Not Applicable 33(b) Summary - Commissions; Sales And Other Agreements 34 Summary - The Fund; Sales And Other Agreements 35 Detailed Information - General Information - About Us - Regulation 37 Not Applicable 38 Detailed Information - General Information - About Us; Sales And Other Agreements 39(a) and (b) Detailed Information - General Information - Equitable; Sales And Other Agreements - 5 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 40(a) Sales And Other Agreements 40(b) Summary - The Fund; Detailed Information - General Information - About Us - Equitable; Sales And Other Agreements 41(a) Detailed Information - General Information - About Us 42 Management 43 Not Applicable 44(a) General Provisions Of Our Policies - Premiums; The Impact Of Taxes 44(b) and (c) Not Applicable 45 Not Applicable 46(a) See Item 10(c), (d) and (c); Death Benefits Under Our Policies - Net Return; Cash Value And Loan Privileges Under Our Policies - How We Determine Cash Value 46(b) Not Applicable 47 Summary - The Fund 48 Not Applicable 49 See Item 13 (a), (b) and (c) 50 General Provisions Of Our Policies; Our Separate Account And Its Division 51 Not Applicable 52(a), (b) and (c) Summary - The Fund; Our Rights 52(d) Not Applicable 53(a) The Impact Of Taxes - 6 - Form N-8B-2 Prospectus Item No. Heading - ----------- ---------- 53(b) Not Applicable 54 Not Applicable 55 Not Applicable 6097I THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES VARIABLE LIFE INSURANCE POLICIES FUNDED THROUGH SEPARATE ACCOUNT I THE CHAMPION SP-1 BASIC POLICY EXPANDED POLICY PROSPECTUS SUPPLEMENT DATED JANUARY 1, 1997 This prospectus supplement updates certain information in the Prospectus you received for the variable life insurance policy you purchased from Equitable Variable Life Insurance Company ("Equitable Variable")*. We also mailed to you a prospectus supplement dated May 1, 1996. Capitalized terms used in this supplement have the same meanings as in the Prospectus. You should keep this supplement with your Prospectus and your May 1, 1996 supplement. We will send you another copy of any prospectus or supplement, without charge, upon written request. On January 1, 1997, Equitable Variable, a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States ("Equitable") was merged with and into Equitable. As a result of this merger, all of Equitable Variable's assets, including the assets of Equitable Variable's Separate Account I, became the assets of Equitable, and all of Equitable Variable's obligations, including your policy, were assumed by Equitable. The merger did not affect any policy values, premiums, investment options or other terms and conditions of your policy in any way. Policy Account values allocated to the Separate Account Funds continue after the merger without change or interruption. Management. A list of our directors and, to the extent they are responsible for variable life insurance operations, our principal officers and a brief statement of their business experience for the past five years is contained in Appendix A to this supplement. Financial Statements. The financial statements of Separate Account I and Equitable included in this prospectus supplement have been audited for the years ended December 31, 1995, 1994 and 1993 by the accounting firm of Price Waterhouse LLP, independent accountants, to the extent stated in their reports. The financial statements of Separate Account I and Equitable for the years ended December 31, 1995, 1994 and 1993 included in this prospectus supplement have been so included in reliance on the reports of Price Waterhouse LLP, given on the authority of such firm as experts in accounting and auditing. The financial statements of Separate Account I and Equitable for the periods ended September 30, 1996 and 1995 included in this prospectus supplement are unaudited. The financial statements of Equitable contained in this prospectus supplement should be considered only as bearing upon the ability of Equitable to meet its obligations under the policies. They should not be considered as bearing upon the investment experience of the funds of the Separate Account. The financial statements of Separate Account I include periods prior to the merger when Separate Account I was part of Equitable Variable. - ------------------- * This supplement updates certain information contained in The Champion Prospectuses dated September 30, 1987 and December 18, 1986; the SP-1 Prospectuses dated September 30, 1987, April 30, 1986 and January 1, 1984; and the Basic and Expanded Prospectuses dated April 30, 1986 and March 26, 1985. EVM-104 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I INDEX TO FINANCIAL STATEMENTS Independent Auditor's Report........................................................................................... FSA-2 Financial Statements: Statement of Assets and Liabilities, December 31, 1995........................................................... FSA-3 Statement of Operations for the Years Ended December 31, 1995, 1994 and 1993..................................... FSA-4 Statement of Changes in Net Assets for the Years Ended December 31, 1995, 1994 and 1993.......................... FSA-7 Notes to Financial Statements.................................................................................... FSA-10 Interim Financial Statements: Statement of Assets and Liabilities, September 30, 1996 (unaudited).............................................. FSA-13 Statement of Operations for the Nine Months Ended September 30, 1996 and 1995 (unaudited)........................ FSA-14 Statement of Changes in Net Assets for the Nine Months Ended September 30, 1996 and 1995 (unaudited)............. FSA-16 Notes to Interim Financial Statements (unaudited)................................................................ FSA-18
FSA-1 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Equitable Variable Life Insurance Company and Policyowners of Separate Account I of Equitable Variable Life Insurance Company In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of Money Market Division, Intermediate Government Securities Division, High Yield Division, Balanced Division, Common Stock Division and Aggressive Stock Division, separate investment divisions of Equitable Variable Life Insurance Company ("Equitable Variable Life") Separate Account I at December 31, 1995 and the results of each of their operations and changes in each of their net assets for the years indicated, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Equitable Variable Life's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of shares in The Hudson River Trust at December 31, 1995 with the transfer agent, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP New York, NY February 7, 1996, except as to Note 8 which is as of September 19, 1996 FSA-2 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1995
INTERMEDIATE MONEY GOVERNMENT HIGH MARKET SECURITIES YIELD DIVISION DIVISION DIVISION ------------- ------------- ------------ ASSETS Investments in shares of The Hudson River Trust -- at market value (Notes 2 and 7) Cost: $ 68,810,062........................................................ $69,878,080 2,278,572........................................................ $2,270,685 8,122,292........................................................ $8,889,685 30,772,800........................................................ 288,549,569........................................................ 15,051,041........................................................ Receivable for sales of shares of The Hudson River Trust................... -- -- 4,028 Receivable for policy-related transactions................................. -- 122 -- ----------- ---------- ---------- Total Assets............................................................... 69,878,080 2,270,807 8,893,713 ----------- ---------- ---------- LIABILITIES Payable for purchases of shares of The Hudson River Trust.................. 42,175 146 -- Payable for policy-related transactions.................................... 374,717 -- 75,483 Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 556,502 108,596 584,394 ----------- ---------- ---------- Total Liabilities.......................................................... 973,394 108,742 659,877 ----------- ---------- ---------- NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $68,904,686 $2,162,065 $8,233,835 =========== ========== ==========
COMMON AGGRESSIVE BALANCED STOCK STOCK DIVISION DIVISION DIVISION ------------ ------------ ----------- ASSETS Investments in shares of The Hudson River Trust -- at market value (Notes 2 and 7) Cost: $ 68,810,062........................................................ 2,278,572........................................................ 8,122,292........................................................ 30,772,800........................................................ $36,956,684 288,549,569........................................................ $466,189,272 15,051,041........................................................ $24,149,766 Receivable for sales of shares of The Hudson River Trust................... -- -- -- Receivable for policy-related transactions................................. -- -- -- ----------- ------------ ----------- Total Assets............................................................... 36,956,684 466,189,272 24,149,766 ----------- ------------ ----------- LIABILITIES Payable for purchases of shares of The Hudson River Trust.................. 13,111 171,915 25,293 Payable for policy-related transactions.................................... 548,410 4,222,963 373,127 Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 552,645 5,700,933 532,544 ----------- ------------ ----------- Total Liabilities.......................................................... 1,114,166 10,095,811 930,964 ----------- ------------ ----------- NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $35,842,518 $456,093,461 $23,218,802 =========== ============ ===========
See Notes to Financial Statements. FSA-3 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,
MONEY MARKET DIVISION -------------------------------------- 1995 1994 1993 ----------- ----------- ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust................................ $3,738,980 $2,684,291 $2,083,651 Expenses (Note 3): Mortality and expense risk charges................................... 347,935 355,911 373,075 ---------- ---------- ---------- NET INVESTMENT INCOME..................................................... 3,391,045 2,328,380 1,710,576 ---------- ---------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.................................. 31,732 52,117 65,261 Realized gain distribution from The Hudson River Trust............... -- -- -- ---------- ---------- ---------- NET REALIZED GAIN (LOSS).................................................. 31,732 52,117 65,261 Unrealized appreciation/depreciation on investments: Beginning of period.................................................. 920,431 844,597 812,147 End of period........................................................ 1,068,018 920,431 844,597 ---------- ---------- ---------- Change in unrealized appreciation/depreciation during the period....... 147,587 75,834 32,450 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 179,319 127,951 97,711 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $3,570,364 $2,456,331 $1,808,287 ========== ========== ==========
INTERMEDIATE GOVERNMENT SECURITIES DIVISION ------------------------------------ 1995 1994 1993 ---------- ---------- -------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust................................ $145,274 $ 199,648 $115,827 Expenses (Note 3): Mortality and expense risk charges................................... 11,943 11,365 8,896 -------- --------- -------- NET INVESTMENT INCOME..................................................... 133,331 188,283 106,931 -------- --------- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.................................. (94,891) (303,584) (3,141) Realized gain distribution from The Hudson River Trust............... -- 157,383 157,383 -------- --------- -------- NET REALIZED GAIN (LOSS).................................................. (94,891) (146,201) 154,242 Unrealized appreciation/depreciation on investments: Beginning of period.................................................. (267,346) (100,844) 8,264 End of period........................................................ (7,887) (267,346) (100,844) -------- --------- -------- Change in unrealized appreciation/depreciation during the period....... 259,459 (166,502) (109,108) -------- --------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 164,568 (312,703) 45,134 -------- --------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $297,899 $(124,420) $152,065 ======== ========= ========
See Notes to Financial Statements. FSA-4 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31,
HIGH YIELD DIVISION -------------------------------------- 1995 1994 1993 ----------- ---------- ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust...................................... $ 862,089 $ 806,574 $ 763,325 Expenses (Note 3): Mortality and expense risk charges......................................... 39,170 41,676 40,466 ----------- --------- ---------- NET INVESTMENT INCOME........................................................... 822,919 764,898 722,859 ----------- --------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.......................................... (10,426) (94,683) 11,131 Realized gain distribution from The Hudson River Trust....................... -- -- 170,999 ---------- --------- ---------- NET REALIZED GAIN (LOSS)........................................................ (10,426) (94,683) 182,130 Unrealized appreciation/depreciation on investments: Beginning of period........................................................ 98,061 1,064,280 338,796 End of period.............................................................. 767,393 98,061 1,064,280 ---------- ---------- ---------- Change in unrealized appreciation/depreciation during the period............. 669,332 (966,219) 725,484 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 658,906 (1,060,902) 907,614 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $1,481,825 $ (296,004) $1,630,473 ========== ========== ==========
BALANCED DIVISION -------------------------------------- 1995 1994 1993 ---------- ------------ ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust...................................... $1,126,871 $ 1,006,200 $ 963,517 Expenses (Note 3): Mortality and expense risk charges......................................... 167,041 164,873 162,512 ---------- ----------- ---------- NET INVESTMENT INCOME........................................................... 959,830 841,327 801,005 ---------- ----------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.......................................... (113,948) (379,076) (6,104) Realized gain distribution from The Hudson River Trust....................... 1,008,186 -- 1,948,704 ---------- ----------- ---------- NET REALIZED GAIN (LOSS)........................................................ 894,238 (379,076) 1,942,600 Unrealized appreciation/depreciation on investments: Beginning of period........................................................ 2,080,968 5,526,191 4,624,699 End of period.............................................................. 6,183,884 2,080,968 5,526,191 ---------- ----------- ---------- Change in unrealized appreciation/depreciation during the period............. 4,102,916 (3,445,223) 901,492 ---------- ----------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 4,997,154 (3,824,299) 2,844,092 ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $5,956,984 $(2,982,972) $3,645,097 ========== =========== ==========
See Notes to Financial Statements. FSA-5 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31,
COMMON STOCK DIVISION ------------------------------------------- 1995 1994 1993 -------------- ------------- ------------ INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust..................................... $ 5,978,397 $ 5,727,748 $ 5,678,972 Expenses (Note 3): Mortality and expense risk charges........................................ 2,095,213 1,942,844 1,844,849 ------------ ------------ ------------ NET INVESTMENT INCOME.......................................................... 3,883,184 3,784,904 3,834,123 ------------ ------------ ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments......................................... 1,269,512 (328,604) 2,630,537 Realized gain distribution from The Hudson River Trust...................... 25,928,481 20,219,440 47,068,505 ------------ ------------ ------------ NET REALIZED GAIN (LOSS)....................................................... 27,197,993 19,890,836 49,699,042 Unrealized appreciation/depreciation on investments: Beginning of period....................................................... 92,693,149 126,545,990 98,769,799 End of period............................................................. 177,639,703 92,693,149 126,545,990 ------------ ------------ ------------ Change in unrealized appreciation/depreciation during the period............ 84,946,554 (33,852,841) 27,776,191 ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 112,144,547 (13,962,005) 77,475,233 ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $116,027,731 $(10,177,101) $ 81,309,356 ============ ============ ============
AGGRESSIVE STOCK DIVISION ------------------------------------------ 1995 1994 1993 ----------- ------------- ------------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust..................................... $ 57,627 $ 22,268 $ 45,872 Expenses (Note 3): Mortality and expense risk charges........................................ 102,259 89,577 82,479 ---------- ----------- ---------- NET INVESTMENT INCOME.......................................................... (44,632) (67,309) (36,607) ---------- ----------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments......................................... 42,192 (226,938) (57,409) Realized gain distribution from The Hudson River Trust...................... 2,691,238 -- 1,550,537 ---------- ----------- ---------- NET REALIZED GAIN (LOSS)....................................................... 2,733,430 (226,938) 1,493,128 Unrealized appreciation/depreciation on investments: Beginning of period....................................................... 6,102,433 6,618,938 5,529,963 End of period............................................................. 9,098,725 6,102,433 6,618,938 ---------- ----------- ---------- Change in unrealized appreciation/depreciation during the period............ 2,996,292 (516,505) 1,088,975 ---------- ----------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 5,729,722 (743,443) 2,582,103 ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $5,685,090 $ (810,752) $2,545,496 ========== =========== ==========
See Notes to Financial Statements. FSA-6 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31,
MONEY MARKET DIVISION --------------------------------------- 1995 1994 1993 ---------- ------------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $3,391,045 $ 2,328,380 $ 1,710,576 Net realized gain (loss)..................................................... 31,732 52,117 65,261 Change in unrealized appreciation (depreciation) on investments.............. 147,587 75,834 32,450 ----------- ----------- ----------- Net increase (decrease) from operations...................................... 3,570,364 2,456,331 1,808,287 ----------- ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 5,540,000 6,128,438 7,171,866 Benefits and other policy-related transactions............................... (8,585,006) (8,940,995) (10,608,028) Net transfers among divisions................................................ (340,867) (1,904,223) (3,931,738) ----------- ----------- ----------- Net increase (decrease) from policy-related transactions..................... (3,385,873) (4,716,780) (7,367,900) ----------- ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (33,731) (22,105) (424) ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS............................................... 150,760 (2,282,554) (5,560,037) NET ASSETS, BEGINNING OF PERIOD................................................. 68,753,926 71,036,480 76,596,517 ----------- ----------- ----------- NET ASSETS, END OF PERIOD....................................................... $68,904,686 $68,753,926 $71,036,480 =========== =========== ===========
INTERMEDIATE GOVERNMENT SECURITIES DIVISION -------------------------------------- 1995 1994 1993 ----------- ------------- ---------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 133,331 $ 188,283 $ 106,931 Net realized gain (loss)..................................................... (94,891) (146,201) 154,242 Change in unrealized appreciation (depreciation) on investments.............. 259,459 (166,502) (109,108) ---------- ----------- ---------- Net increase (decrease) from operations...................................... 297,899 (124,420) 152,065 ---------- ----------- ---------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 120,110 130,572 114,331 Benefits and other policy-related transactions............................... (292,199) (402,355) (135,104) Net transfers among divisions................................................ (65,399) 606,857 557,742 ---------- ----------- ---------- Net increase (decrease) from policy-related transactions..................... (237,488) 335,074 536,969 ---------- ----------- ---------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (12,591) 4,561 (986) ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS............................................... 47,820 215,215 688,048 NET ASSETS, BEGINNING OF PERIOD................................................. 2,114,245 1,899,030 1,210,982 ---------- ---------- ---------- NET ASSETS, END OF PERIOD....................................................... $2,162,065 $2,114,245 $1,899,030 ========== ========== ==========
See Notes to Financial Statements. FSA-7 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31,
HIGH YIELD DIVISION ----------------------------------------- 1995 1994 1993 ----------- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 822,919 $ 764,898 $ 722,859 Net realized gain (loss)..................................................... (10,426) (94,683) 182,130 Change in unrealized appreciation (depreciation) on investments.............. 669,332 (966,219) 725,484 ---------- ----------- ----------- Net increase (decrease) from operations...................................... 1,481,825 (296,004) 1,630,473 ---------- ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 821,557 852,874 862,281 Benefits and other policy-related transactions............................... (1,690,910) (1,525,854) (1,494,464) Net transfers among divisions................................................ 154,049 (38,627) 626,135 ---------- ----------- ----------- Net increase (decrease) from policy-related transactions..................... (715,304) (711,607) (6,048) ---------- ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (96,346) 14,805 (5,206) ---------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS............................................... 670,175 (992,806) 1,619,219 NET ASSETS, BEGINNING OF PERIOD................................................. 7,563,660 8,556,466 6,937,247 ---------- ----------- ----------- NET ASSETS, END OF PERIOD....................................................... $8,233,835 $ 7,563,660 $ 8,556,466 ========== =========== ===========
BALANCED DIVISION ----------------------------------------- 1995 1994 1993 ------------ ------------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 959,830 $ 841,327 $ 801,005 Net realized gain (loss)..................................................... 894,238 (379,076) 1,942,600 Change in unrealized appreciation (depreciation) on investments.............. 4,102,916 (3,445,223) 901,492 ----------- ----------- ----------- Net increase (decrease) from operations...................................... 5,956,984 (2,982,972) 3,645,097 ----------- ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 3,295,027 3,487,888 3,674,964 Benefits and other policy-related transactions............................... (3,348,951) (3,823,829) (4,982,073) Net transfers among divisions................................................ (376,087) (3,406) 1,192,337 ----------- ----------- ----------- Net increase (decrease) from policy-related transactions..................... (430,011) (339,347) (114,772) ----------- ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (89,517) 42,214 (13,867) ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS............................................... 5,437,456 (3,280,105) 3,516,458 NET ASSETS, BEGINNING OF PERIOD................................................. 30,405,062 33,685,167 30,168,709 ----------- ----------- ----------- NET ASSETS, END OF PERIOD....................................................... $35,842,518 $30,405,062 $33,685,167 =========== =========== ===========
See Notes to Financial Statements. FSA-8 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31,
COMMON STOCK DIVISION ----------------------------------------- 1995 1994 1993 ----------- -------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 3,883,184 $ 3,784,904 $ 3,834,123 Net realized gain (loss)..................................................... 27,197,993 19,890,836 49,699,042 Change in unrealized appreciation (depreciation) on investments.............. 84,946,554 (33,852,841) 27,776,191 ------------ ------------ ------------ Net increase (decrease) from operations...................................... 116,027,731 (10,177,101) 81,309,356 ------------ ------------ ------------ FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 22,520,480 24,056,215 25,806,986 Benefits and other policy-related transactions............................... (43,155,008) (44,688,333) (46,157,443) Net transfers among divisions................................................ (27,413) 459,966 1,338,478 ------------ ------------ ------------ Net increase (decrease) from policy-related transactions..................... (20,661,941) (20,172,152) (19,011,979) ------------ ------------ ------------ NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (1,859,326) 149,257 (1,173,722) ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS............................................... 93,506,464 (30,199,996) 61,123,655 NET ASSETS, BEGINNING OF PERIOD................................................. 362,586,997 392,786,993 331,663,338 ------------ ------------ ------------ NET ASSETS, END OF PERIOD....................................................... $456,093,461 $362,586,997 $392,786,993 ============ ============ ============
AGGRESSIVE STOCK DIVISION ------------------------------------------- 1995 1994 1993 ----------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ (44,632) $ (67,309) $ (36,607) Net realized gain (loss)..................................................... 2,733,430 (226,938) 1,493,128 Change in unrealized appreciation (depreciation) on investments.............. 2,996,292 (516,505) 1,088,975 ----------- ------------- ------------ Net increase (decrease) from operations...................................... 5,685,090 (810,752) 2,545,496 ----------- ------------- ------------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 1,509,349 1,480,535 1,490,827 Benefits and other policy-related transactions............................... (2,642,068) (1,982,576) (1,737,214) Net transfers among divisions................................................ 655,717 1,279,484 565,989 ----------- ------------- ------------- Net increase (decrease) from policy-related transactions..................... (477,002) 777,443 319,602 ----------- ------------- ------------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (150,764) 20,425 (5,961) ----------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS............................................... 5,057,324 (12,884) 2,859,137 NET ASSETS, BEGINNING OF PERIOD................................................. 18,161,478 18,174,362 15,315,225 ----------- ------------- ------------- NET ASSETS, END OF PERIOD....................................................... $23,218,802 $ 18,161,478 $ 18,174,362 =========== ============= =============
See Notes to Financial Statements. FSA-9 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 1. General Equitable Variable Life Insurance Company (Equitable Variable Life), a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States (Equitable Life), established Separate Account I (the Account) under New York insurance law to support the operations of Equitable Variable Life's scheduled and single premium variable life insurance policies (Policies). The Account is a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940. The Account consists of six investment divisions: the Money Market Division, the Intermediate Government Securities Division, the High Yield Division, the Balanced Division, the Common Stock Division and the Aggressive Stock Division. The assets in each Division are invested in shares of a designated portfolio (Portfolio) of a mutual fund, The Hudson River Trust (the Trust). Each Portfolio has separate investment objectives. The assets of the Account are the property of Equitable Variable Life. However, the portion of the Account's assets equal to the reserves and other policy liabilities with respect to the Account will not be chargeable with liabilities arising out of any other business Equitable Variable Life may conduct. The net assets may not be less than the amount required under New York insurance law to provide for death benefits (without regard to the minimum death benefit guarantee) and other policy benefits. Additional assets are held in Equitable Variable Life's General Account to cover the contingency that the guaranteed minimum death benefit might exceed the death benefit which would have been payable in the absence of such guarantee. 2. Significant Accounting Policies The accompanying financial statements are prepared in conformity with generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Investments made in shares of the Trust are valued at the net asset value per share of the respective Portfolios. The net asset value is determined by the Trust using the market or fair value of the underlying assets of the Portfolios. Investment transactions are recorded on the trade date. Realized gains and losses include gains and losses on redemptions of the Trust's shares (determined on the identified cost basis) and Trust distributions representing the net realized gains on Trust investment transactions. The operations of the Account are included in the consolidated Federal income tax return of Equitable. Under the provisions of the Policies, Equitable Variable Life has the right to charge the Account for Federal income tax attributable to the Account. No charge is currently being made against the Account for such tax since, under current tax law, Equitable Variable Life pays no tax on investment income and capital gains reflected in variable life insurance policy reserves. However, Equitable Variable Life retains the right to charge for any Federal income tax incurred which is attributable to the Account if the law is changed. Charges for state and local taxes, if any, attributable to the Account may also be made. Dividends are recorded as income at the end of each quarter on the ex-dividend date. Capital gains are distributed by the Trust at the end of each year. 3. Asset Charges Under the policies, Equitable Variable Life assumes mortality and expense risks and, to cover these risks, deducts a charge from the assets of the Account at an annual rate of 0.50% of net assets attributable to policyowners. Equitable Variable Life makes certain deductions from net premiums before amounts are allocated to the Account. The deductions are for (1) premiums for optional benefits, (2) additional premiums for extra mortality risks, (3) administrative expenses, (4) state premium taxes, and (5) except as to single premium policies, a risk charge for the guaranteed minimum death benefit. 4. Amounts Retained by Equitable Variable Life in Separate Account I The amount retained by Equitable Variable Life in the Account arises principally from (1) mortality and other gains and losses resulting from the Account's operations, (2) contributions from Equitable Variable Life, and (3) that portion, determined ratably, of the Account's investment results applicable to those assets in the Account in excess of the net assets for the Policies. Amounts retained by Equitable Variable Life are not subject to charges for mortality and expense risks. Amounts retained by Equitable Variable Life in the Account may be transferred at any time by Equitable Variable Life to its General Account. FSA-10 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 1995 The following table shows the surplus contributions (withdrawals) by Equitable Variable Life by investment division:
INVESTMENT DIVISION 1995 1994 1993 ------------------- ---- ---- ---- Common Stock $(1,975,000) -- -- Money Market -- -- $ 585,000 Balanced -- -- 375,000 Aggressive Stock (100,000) -- 460,000 High Yield -- -- 475,000 Short-Term World Income -- $(119,356) -- Intermediate Government Securities -- -- 90,000 ----------- --------- ---------- $(2,075,000) $(119,356) $1,985,000 =========== ========= ==========
Equitable Variable Life credits the values of the Policies participating in the Account to compensate policyowners for their share of the Trust expenses in excess of (1) fees for advisory services at an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the Portfolios, and (2) the Trust income taxes, if any. For Money Market and Common Stock Divisions, fees for advisory services in excess of an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the related Trust Portfolios are refunded to the Divisions. Excess fees for advisory services for Intermediate Government Securities, High Yield, Balanced and Aggressive Stock Divisions are absorbed by Equitable Variable Life's surplus account. 5. Distribution and Servicing Agreement Equitable Variable Life has entered into a Distribution and Servicing Agreement with Equitable Life and Equico Securities Inc., (Equico), whereby registered representatives of Equico, authorized as variable life insurance agents under applicable state insurance laws, sell the Policies. The registered representatives are compensated on a commission basis by Equitable Life. Equitable Variable Life also has entered into an agreement with Equitable Life under which Equitable Life performs the administrative services related to the Policies, including underwriting and issuance, billings and collections, and policyowner services. There is no charge to the Account related to this agreement. 6. Share Substitution On February 22, 1994, Equitable Variable Life, the Account and the Trust substituted shares of the Trust's Intermediate Government Securities Portfolio for shares of the Trust's Short-Term World Income Portfolio. The amount transferred to Intermediate Government Securities Portfolio was $390,705. The statements of operations and statements of changes in net assets for the Intermediate Government Securities Portfolio is combined with the Short-Term World Income Portfolio for periods prior to the merger on February 22, 1994. The Short-Term World Income Division is not available for future investment. 7. Investment Returns The tables on the following page show the gross and net investment returns with respect to the Divisions for the periods shown. The net return for each Division is based upon net assets for a policy which commences with the beginning date of such period and is not based on the average net assets in the Division during such period. Gross return is equal to the total return earned by the underlying Trust investment. FSA-11 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 1995
RATES OF RETURN: YEAR ENDED DECEMBER 31, MONEY MARKET ---------------------------------------------------------------------------------------------------- DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return.............. 5.74% 4.02% 3.16% 3.75% 6.38% 8.44% 9.44% 7.56% 6.85% 6.86% Net return................ 5.41% 3.68% 2.62% 3.23% 5.85% 7.90% 8.85% 7.02% 6.32% 6.31%
APRIL 1(B) TO INTERMEDIATE YEAR ENDED DECEMBER 31, DECEMBER 31, GOVERNMENT ------------------------------------ -------------------- SECURITIES DIVISION 1995 1994 1993 1992 1991 - ------------------- ---- ---- ---- ---- ---- Gross return.............. 13.33% (4.37)% 10.87% 5.88% 12.51% Net return................ 13.12% (4.54)% 10.29% 5.35% 12.09%
YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------------ HIGH YIELD DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987 - ------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return.............. 19.92% (2.79)% 23.60% 12.69% 24.91% (0.75)% 5.52% 10.55% 5.30% Net return................ 19.74% (2.94)% 22.99% 12.13% 24.29% (1.25)% 4.99% 9.73% 4.77% BALANCED DIVISION - ----------------- Gross return.............. 19.75% (8.02)% 12.44% (2.68)% 41.52% 0.43 % 26.08% 13.84% (0.65)% Net return................ 19.33% (8.35)% 11.91% (3.17)% 40.81% (0.07)% 25.45% 12.99% (1.15)%
YEAR ENDED DECEMBER 31, COMMON STOCK --------------------------------------------------------------------------------------------------- DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return.............. 32.45% (2.14)% 24.99% 3.36% 38.10% (7.95)% 25.82% 22.69% 7.71% 17.59% Net return................ 31.97% (2.50)% 24.36% 2.84% 37.41% (8.41)% 25.19% 22.08% 7.17% 17.00%
YEAR ENDED DECEMBER 31, AGGRESSIVE -------------------------------------------------------------------------------------------- STOCK DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987 - -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 31.63% (3.81)% 17.05% (2.91)% 87.41% 8.49% 43.93% 1.78% 7.69% Net return............... 31.29% (4.07)% 16.45% (3.40)% 86.47% 7.95% 43.21% 1.02% 7.15%
(a) The net returns for periods prior to March 22, 1985 are those of the respective Separate Accounts I and II reorganized on that date into a unit investment trust. The reorganization was accounted for under the continuing entity basis of accounting. (b) Date as of which net premiums under the Policies were first allocated to the Division. The gross return and the net return for the periods indicated are not annual rates of return. (c) Subsequent to March 22, 1985, the date the Account commenced investing in the Trust, the advisory fees have been deducted prior to calculating the gross return. 8. Subsequent Event On September 19, 1996 the Board of Directors of Equitable Life approved an Agreement and Plan of Merger by and between Equitable Life and Equitable Variable Life (the "Merger Agreement"). The merger is expected to be effective on January 1, 1997, subject to receipt of all necessary regulatory approvals. On that date, and in accordance with the provisions of the Merger Agreement, the separate existence of Equitable Variable Life will cease and Equitable Life will survive the merger. From and after the effective date of the merger, Equitable Life will be liable in place of Equitable Variable Life for the liabilities and obligations of Equitable Variable Life, including liabilities under policies and contracts issued by Equitable Variable Life, and all of Equitable Variable Life's assets will become assets of Equitable Life. FSA-12 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996 (UNAUDITED)
INTERMEDIATE MONEY GOVERNMENT HIGH MARKET SECURITIES YIELD FUND FUND FUND ------------ ---------------- ------------ ASSETS Investments in shares of The Hudson River Trust-- at market value (Note 2) Cost: $ 65,816,081........................................................ $66,797,368 2,402,918........................................................ $2,377,040 9,021,262........................................................ $10,364,008 33,507,147........................................................ 288,721,133........................................................ 19,055,900........................................................ Receivable for sales of shares of The Hudson River Trust................... 36,680 -- 3,893 ----------- ---------- ---------- Total Assets............................................................... 66,834,048 2,377,040 10,367,901 ----------- ---------- ---------- LIABILITIES Payable for purchases of shares of The Hudson River Trust.................. -- 19 -- Payable for policy-related transactions.................................... 503,791 54,903 122,898 Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 708,282 137,206 744,692 ----------- ---------- ---------- Total Liabilities.......................................................... 1,212,073 192,128 867,590 ----------- ---------- ---------- NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $65,621,975 $2,184,912 $9,500,311 =========== ========== ==========
See Notes to Financial Statements.
COMMON AGGRESSIVE BALANCED STOCK STOCK FUND FUND FUND ------------- -------------- ------------ ASSETS Investments in shares of The Hudson River Trust-- at market value (Note 2) Cost: $ 65,816,081........................................................ 2,402,918........................................................ 9,021,262........................................................ 33,507,147........................................................ $38,786,778 288,721,133........................................................ $505,143,180 19,055,900........................................................ $29,473,001 Receivable for sales of shares of The Hudson River Trust................... 16,961 103,275 16,684 ----------- ------------ ----------- Total Assets............................................................... 38,803,739 505,246,455 29,489,685 ----------- ------------ ----------- LIABILITIES Payable for purchases of shares of The Hudson River Trust.................. -- -- -- Payable for policy-related transactions.................................... 506,522 5,954,659 390,716 Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 698,553 5,729,479 650,927 ----------- ------------ ----------- Total Liabilities.......................................................... 1,205,075 11,684,138 1,041,643 ----------- ------------ ----------- NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $37,598,664 $493,562,317 $28,448,042 =========== ============ ===========
See Notes to Financial Statements. FSA-13 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
INTERMEDIATE GOVERNMENT MONEY MARKET FUND SECURITIES FUND ------------------------- --------------------- 1996 1995 1996 1995 ---------- ---------- -------- --------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust................................ $2,623,766 $2,823,624 $99,545 $112,846 Expenses (Note 3): Mortality and expense risk charges................................... 252,854 259,710 7,941 9,055 --------- --------- ------- -------- NET INVESTMENT INCOME..................................................... 2,370,912 2,563,914 91,604 103,791 --------- --------- ------- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.................................. 78,613 19,315 (40,532) (70,145) Realized gain distribution from The Hudson River Trust............... -- -- -- -- --------- --------- ------- -------- NET REALIZED GAIN (LOSS).................................................. 78,613 19,315 (40,532) (70,145) Unrealized appreciation (depreciation) on investments: Beginning of period.................................................. 1,068,018 920,431 (7,887) (267,346) End of period........................................................ 981,287 1,029,603 (25,878) (72,389) --------- --------- ------- -------- Change in unrealized appreciation (depreciation) during the period..... (86,731) 109,172 (17,991) 194,957 --------- --------- ------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... (8,118) 128,487 (58,523) 124,812 --------- --------- ------- -------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $2,362,794 $2,692,401 $33,081 $228,603 ========== ========== ======= ========
See Notes to Financial Statements.
HIGH YIELD FUND ------------------------- 1996 1995 ---------- ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust................................ $ 678,192 $ 613,872 Expenses (Note 3): Mortality and expense risk charges................................... 32,611 29,067 --------- ---------- NET INVESTMENT INCOME..................................................... 645,581 584,805 --------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.................................. 12,826 (11,371) Realized gain distribution from The Hudson River Trust............... 364,913 -- --------- ---------- NET REALIZED GAIN (LOSS).................................................. 377,739 (11,371) Unrealized appreciation (depreciation) on investments: Beginning of period.................................................. 767,393 98,061 End of period........................................................ 1,342,746 648,836 --------- ---------- Change in unrealized appreciation (depreciation) during the period..... 575,353 550,775 --------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 953,092 539,404 --------- ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $1,598,673 $1,124,209 ========= ==========
See Notes to Financial Statements. FSA-14 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS (CONCLUDED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
BALANCED FUND COMMON STOCK FUND ------------------------- ----------------------------- 1996 1995 1996 1995 ----------- ------------ ------------- -------------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust............................. $ 898,355 $ 829,898 $ 3,185,919 4,147,917 Expenses (Note 3): Mortality and expense risk charges................................ 139,177 122,111 1,776,617 1,524,143 ---------- ---------- ----------- ------------ NET INVESTMENT INCOME.................................................. 759,178 707,787 1,409,302 2,623,774 ---------- ---------- ----------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments................................. (93,209) (114,928) 677,848 423,149 Realized gain distribution from The Hudson River Trust.............. 2,521,013 -- 21,716,415 -- ---------- ---------- ----------- ------------ NET REALIZED GAIN (LOSS)............................................... 2,427,804 (114,928) 22,394,263 423,149 Unrealized appreciation (depreciation) on investments: Beginning of period............................................... 6,183,884 2,080,968 177,639,703 92,693,149 End of period..................................................... 5,279,631 6,178,907 216,422,047 194,019,081 ---------- ---------- ----------- ------------ Change in unrealized appreciation (depreciation) during the period.. (904,253) 4,097,939 38,782,344 101,325,932 ---------- ---------- ----------- ------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS........................ 1,523,551 3,983,011 61,176,607 101,749,081 ---------- ---------- ----------- ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $2,282,729 $4,690,798 $62,585,909 $104,372,855 ========== ========== =========== ============
See Notes to Financial Statements.
AGGRESSIVE FUND ------------------------- 1996 1995 ----------- ----------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust............................... $ 44,822 $ 49,592 Expenses (Note 3): Mortality and expense risk charges.................................. 97,706 73,856 ---------- ---------- NET INVESTMENT INCOME.................................................... (52,884) (24,264) ---------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments................................... (110,842) 46,894 Realized gain distribution from The Hudson River Trust................ 3,485,865 -- ---------- ---------- NET REALIZED GAIN (LOSS)................................................. 3,375,023 46,894 Unrealized appreciation (depreciation) on investments: Beginning of period................................................. 9,098,725 6,102,433 End of period....................................................... 10,417,101 10,713,391 ---------- ---------- Change in unrealized appreciation (depreciation) during the period.... 1,318,376 4,610,958 ---------- ---------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.......................... 4,693,399 4,657,852 ---------- ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $4,640,515 $4,633,588 ========== ==========
See Notes to Financial Statements. FSA-15 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
INTERMEDIATE GOVERNMENT MONEY MARKET FUND SECURITIES FUND --------------------------- ------------------------- 1996 1995 1996 1995 ------------ ------------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO POLICYOWNERS: FROM OPERATIONS: Net investment income............................................... $ 2,370,912 $ 2,563,914 $ 91,604 $ 103,791 Net realized gain (loss)............................................ 78,613 19,315 (40,532) (70,145) Change in unrealized appreciation (depreciation) on investments..... (86,731) 109,172 (17,991) 194,957 ----------- ----------- ---------- ---------- Net increase (decrease) from operations............................. 2,362,794 2,692,401 33,081 228,603 ----------- ----------- ---------- ---------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)............................................... 3,400,149 3,875,243 80,192 93,791 Benefits and other policy-related transactions...................... (6,244,847) (6,874,172) (200,737) (265,235) Net transfers among Funds........................................... (2,649,027) 996,904 138,922 217,455 ----------- ----------- ---------- ---------- Net increase (decrease) from policy-related transactions............ (5,493,725) (2,002,025) 18,377 46,011 ----------- ----------- ---------- ---------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)...................................... (151,780) (25,308) (28,611) (9,398) ----------- ----------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS........ (3,282,711) 665,068 22,847 265,216 NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, BEGINNING OF PERIOD.......... 68,904,686 68,753,926 2,162,065 2,114,245 ----------- ----------- ---------- ---------- NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, END OF PERIOD................ $65,621,975 $69,418,994 $2,184,912 $2,379,461 =========== =========== ========== ==========
See Notes to Financial Statements.
HIGH YIELD FUND ------------------------- 1996 1995 ----------- ------------ INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO POLICYOWNERS: FROM OPERATIONS: Net investment income............................................... $ 645,581 $ 584,805 Net realized gain (loss)............................................ 377,739 (11,371) Change in unrealized appreciation (depreciation) on investments..... 575,353 550,775 ---------- ----------- Net increase (decrease) from operations............................. 1,598,673 1,124,209 ---------- ---------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)............................................... 735,503 721,327 Benefits and other policy-related transactions...................... (1,285,311) (1,514,715) Net transfers among Funds........................................... 377,909 (105,561) ---------- ---------- Net increase (decrease) from policy-related transactions............ (171,899) (898,949) ---------- ---------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)...................................... (160,298) (72,048) ---------- ---------- INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS........ 1,266,476 153,212 NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, BEGINNING OF PERIOD.......... 8,233,835 7,563,660 ---------- ---------- NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, END OF PERIOD................ $9,500,311 $7,716,872 ========== ==========
See Notes to Financial Statements. FSA-16 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
BALANCED FUND COMMON STOCK FUND -------------------------- ----------------------------- 1996 1995 1996 1995 ------------ ------------ ------------- ------------- INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO POLICYOWNERS: FROM OPERATIONS: Net investment income.................................................. 759,178 707,787 1,409,302 2,623,774 Net realized gain (loss)............................................... 2,427,804 (114,928) 22,394,263 423,149 Change in unrealized appreciation (depreciation) on investments........ (904,253) 4,097,939 38,782,344 101,325,932 ----------- ----------- ------------ ------------ Net increase (decrease) from operations................................ 2,282,729 4,690,798 62,585,909 104,372,855 ----------- ----------- ------------ ------------ FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3).................................................. 2,534,463 2,665,082 15,335,047 16,544,662 Benefits and other policy-related transactions......................... (2,566,106) (2,578,282) (40,957,127) (32,578,616) Net transfers among Funds.............................................. (349,031) (355,615) 533,573 (699,382) ----------- ----------- ------------ ------------ Net increase (decrease) from policy-related transactions............... (380,674) (268,815) (25,088,507) (16,733,336) ----------- ----------- ------------ ------------ NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)......................................... (145,909) (70,379) (28,546) (1,666,168) ----------- ----------- ------------ ------------ INCREASE IN NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS...................... 1,756,146 4,351,604 37,468,856 85,973,351 NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, BEGINNING OF PERIOD............. 35,842,518 30,405,062 456,093,461 362,586,997 ----------- ----------- ------------ ------------ NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, END OF PERIOD...................$37,598,664 $34,756,666 $493,562,317 $448,560,348 =========== =========== ============ ============
See Notes to Financial Statements.
AGGRESSIVE FUND -------------------------- 1996 1995 ------------- ----------- INCREASE (DECREASE) IN NET ASSETS ATTRIBUTABLE TO POLICYOWNERS: FROM OPERATIONS: Net investment income.................................................. (52,884) (24,264) Net realized gain (loss)............................................... 3,375,023 46,894 Change in unrealized appreciation (depreciation) on investments........ 1,318,376 4,610,958 ----------- ----------- Net increase (decrease) from operations................................ 4,640,515 4,633,588 ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3).................................................. 1,110,361 1,094,139 Benefits and other policy-related transactions......................... (2,350,909) (1,983,885) Net transfers among Funds.............................................. 1,947,654 (53,801) ----------- ----------- Net increase (decrease) from policy-related transactions............... 707,106 (943,547) ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)......................................... (118,381) (122,544) ----------- ----------- INCREASE IN NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS...................... 5,229,240 3,567,497 NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, BEGINNING OF PERIOD............. 23,218,802 18,161,478 ----------- ----------- NET ASSETS ATTRIBUTABLE TO POLICYHOLDERS, END OF PERIOD................... $28,448,042 $21,728,975 =========== ===========
See Notes to Financial Statements. FSA-17 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (UNAUDITED) 1. General Equitable Variable Life Insurance Company (Equitable Variable Life), a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States (Equitable Life), established Separate Account I (the Account) under New York insurance law to support the operations of Equitable Variable Life's scheduled and single premium variable life insurance policies (Policies). The Account is a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940. The Account consists of six investment funds: the Money Market Fund, the Intermediate Government Securities Fund, the High Yield Fund, the Balanced Fund, the Common Stock Fund and the Aggressive Stock Fund. The assets in each Fund are invested in shares of a designated portfolio (Portfolio) of a mutual fund, The Hudson River Trust (the Trust). Each Portfolio has separate investment objectives. The assets of the Account are the property of Equitable Variable Life. However, the portion of the Account's assets equal to the reserves and other policy liabilities with respect to the Account will not be chargeable with liabilities arising out of any other business Equitable Variable Life may conduct. The net assets may not be less than the amount required under New York insurance law to provide for death benefits (without regard to the minimum death benefit guarantee) and other policy benefits. Additional assets are held in Equitable Variable Life's General Account to cover the contingency that the guaranteed minimum death benefit might exceed the death benefit which would have been payable in the absence of such guarantee. 2. Significant Accounting Policies The accompanying financial statements are prepared in conformity with generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. These statements should be read in conjunction with the financial statements of Separate Account I for the year ended December 31, 1995. The results of operations for the nine months ended September 30, 1996 are not necessarily indicative of the results to be expected for the full year. Investments made in shares of the Trust are valued at the net asset value per share of the respective Portfolios. The net asset value is determined by the Trust using the market or fair value of the underlying assets of the Portfolios. Investment transactions are recorded on the trade date. Realized gains and losses include gains and losses on redemptions of the Trust's shares (determined on the identified cost basis) and Trust distributions representing the net realized gains on Trust investment transactions. The operations of the Account are included in the consolidated Federal income tax return of Equitable. Under the provisions of the Policies, Equitable Variable Life has the right to charge the Account for Federal income tax attributable to the Account. No charge is currently being made against the Account for such tax since, under current tax law, Equitable Variable Life pays no tax on investment income and capital gains reflected in variable life insurance policy reserves. However, Equitable Variable Life retains the right to charge for any Federal income tax incurred which is attributable to the Account if the law is changed. Charges for state and local taxes, if any, attributable to the Account may also be made. Dividends are recorded as income at the end of each quarter on the ex-dividend date. 3. Asset Charges Under the policies, Equitable Variable Life assumes mortality and expense risks and, to cover these risks, deducts a charge from the assets of the Account at an annual rate of 0.50% of net assets attributable to policyowners. Equitable Variable Life makes certain deductions from net premiums before amounts are allocated to the Account. The deductions are for (1) premiums for optional benefits, (2) additional premiums for extra mortality risks, (3) administrative functions, (4) state premium taxes, and (5) except as to single premium policies, a risk charge for the guaranteed minimum death benefit. 4. Amounts Retained by Equitable Variable Life in Separate Account I The amount retained by Equitable Variable Life in the Account arises principally from (1) mortality and other gains and losses resulting from the Account's operations, (2) contributions from Equitable Variable Life, and (3) that portion, determined ratably, of the Account's investment results applicable to those assets in the Account in excess of the net assets for the Policies. Amounts retained by Equitable Variable Life are not subject to charges for mortality and expense risks. Amounts retained by Equitable Variable Life in the Account may be transferred at any time by Equitable Variable Life to its General Account. FSA-18 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) SEPTEMBER 30, 1996 (UNAUDITED) Equitable Variable Life credits the values of the Policies participating in the Account to compensate policyowners for their share of the Trust expenses in excess of (1) fees for advisory services at an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the Portfolios, and (2) the Trust income taxes, if any. For Money Market and Common Stock Funds, fees for advisory services in excess of an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the related Trust Portfolios are refunded to the Funds. Excess fees for advisory services for Intermediate Government Securities, High Yield, Balanced and Aggressive Stock Funds are absorbed by Equitable Variable Life's surplus account. There were no surplus contributions (withdrawals) by Equitable Variable Life in any of its investment funds. 5. Distribution and Servicing Agreements Equitable Variable Life has entered into a Distribution and Servicing Agreement with Equitable Life and EQ Financial Consultants Inc., whereby registered representatives of EQ Financial Consultants Inc., authorized as variable life insurance agents under applicable state insurance laws, sell the Policies. The registered representatives are compensated on a commission basis by Equitable Life. Equitable Variable Life also has entered into an agreement with Equitable Life under which Equitable Life performs the administrative services related to the Policies, including underwriting and issuance, billings and collections, and policyowner services. There is no charge to the Account related to this agreement. 6. Investment Returns The tables on the following page show the gross and net investment returns with respect to the Funds for the periods shown. The net return for each Fund is based upon net assets for a policy which commences with the beginning date of such period and is not based on the average net assets in the Fund during such period. Gross return is equal to the total return earned by the underlying Trust investment. FSA-19 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS -- (CONCLUDED) SEPTEMBER 30, 1996 (UNAUDITED) RATES OF RETURN:
NINE MONTHS ENDED (B) SEPTEMBER 30, YEAR ENDED DECEMBER 31, -------------------- -------------------------------------------------------------------------------------- MONEY MARKET FUND (C) 1996 1995 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - --------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 3.91% 4.30% 5.74% 4.02% 3.16% 3.75% 6.38% 8.44% 9.44% 7.56% 6.85% 6.86% Net return............... 3.66% 4.06% 5.41% 3.68% 2.62% 3.23% 5.85% 7.90% 8.85% 7.02% 6.32% 6.31%
NINE MONTHS ENDED (B) APRIL 1(A) TO SEPTEMBER 30, YEAR ENDED DECEMBER 31, DECEMBER 31, ------------------- -------------------------------------------- ------------------ INTERNATIONAL FUND 1996 1995 1995 1994 1993 1992 1991 - ------------------ ---- ---- ---- ---- ---- ---- ---- Gross return............. 1.71% 9.94% 13.33% (4.37)% 10.87% 5.88% 12.51% Net return............... 1.56% 9.79% 13.12% (4.54)% 10.29% 5.35% 12.09%
NINE MONTHS ENDED (B) SEPTEMBER 30, YEAR ENDED DECEMBER 31, ------------------ ----------------------------------------------------------------------------------- HIGH YIELD FUND 1996 1995 1995 1994 1993 1992 1991 1990 1989 1988 1987 - --------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 18.79% 14.89% 19.92% (2.79)% 23.60% 12.69% 24.91% (0.75)% 5.52% 10.55% 5.30% Net return............... 18.65% 14.76% 19.74% (2.94)% 22.99% 12.13% 24.29% (1.25)% 4.99% 9.73% 4.77%
NINE MONTHS ENDED (B) SEPTEMBER 30, YEAR ENDED DECEMBER 31, ------------------ ----------------------------------------------------------------------------------- BALANCED FUND 1996 1995 1995 1994 1993 1992 1991 1990 1989 1988 1987 - ------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 6.63% 15.50% 19.75% (8.02)% 12.44% (2.68)% 41.52% 0.43 % 26.08% 13.84% (0.65)% Net return............... 6.34% 15.20% 19.33% (8.35)% 11.91% (3.17)% 40.81% (0.07)% 25.45% 12.99% (1.15)%
NINE MONTHS ENDED (B) SEPTEMBER 30, YEAR ENDED DECEMBER 31, COMMON STOCK -------------------- -------------------------------------------------------------------------------------- FUND (A)(C) 1996 1995 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - ----------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 14.25% 28.99% 32.45% (2.14)% 24.99% 3.36% 38.10% (7.95)% 25.82% 22.69% 7.71% 17.59% Net return............... 13.93% 28.65% 31.97% (2.50)% 24.36% 2.84% 37.41% (8.41)% 25.19% 22.08% 7.17% 17.00%
NINE MONTHS ENDED (B) SEPTEMBER 30, YEAR ENDED DECEMBER 31, -------------------- --------------------------------------------------------------------------- AGGRESSIVE STOCK FUND 1996 1995 1995 1994 1993 1992 1991 1990 1989 1988 1987 - --------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 19.52% 25.74% 31.63% (3.81)% 17.05% (2.91)% 87.41% 8.49% 43.93% 1.78% 7.69% Net return............... 19.28% 25.44% 31.29% (4.07)% 16.45% (3.40)% 86.47% 7.95% 43.21% 1.02% 7.15%
(a) The net returns for periods prior to March 22, 1985 are those of the respective Separate Accounts I and II reorganized on that date into a unit investment trust. The reorganization was accounted for under the continuing entity basis of accounting. (b) The gross return and the net return for the periods indicated are not annual rates of return. (c) Advisory fees have been deducted prior to calculating the gross return. 7. Subsequent Event On September 19, 1996 the Board of Directors of Equitable Life approved an Agreement and Plan of Merger by and between Equitable Life and Equitable Variable Life (the "Merger Agreement"). The Merger is expected to be effective on January 1, 1997, subject to receipt of all necessary regulatory approvals. On that date, and in accordance with the provisions of the Merger Agreement, the separate existence of Equitable Variable Life will cease and Equitable Life will survive the merger. From and after the effective date of the merger, Equitable Life will be liable in place of Equitable Variable Life for the liabilities and obligations of Equitable Variable Life, including liabilities under policies and contracts issued by Equitable Variable Life, and all of Equitable Variable Life's assets will become assets of Equitable Life. FSA-20 INDEX TO FINANCIAL STATEMENTS THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Independent Auditors' Report....................................................................................F-2 Consolidated Financial Statements: Consolidated Balance Sheets, December 31, 1995 and 1994...................................................F-3 Consolidated Statements of Earnings for the Years Ended December 31, 1995, 1994 and 1993...............................................................................................F-4 Consolidated Statements of Equity for the Years Ended December 31, 1995, 1994 and 1993...............................................................................................F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993...............................................................................................F-6 Notes to Consolidated Financial Statements................................................................F-7 Unaudited Interim Consolidated Financial Statements: Consolidated Balance Sheets, September 30, 1996 and December 31, 1995....................................F-42 Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 1996 and 1995...........................................................................F-43 Consolidated Statements of Equity for the Nine Months Ended September 30, 1996 and 1995...........................................................................F-44 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1996 and 1995...........................................................................F-45 Notes to Consolidated Financial Statements...............................................................F-46
F-1 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholder of The Equitable Life Assurance Society of the United States In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of shareholder's equity and of cash flows present fairly, in all material respects, the financial position of The Equitable Life Assurance Society of the United States and its subsidiaries ("Equitable Life") at December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Equitable Life's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As discussed in Note 2 to the consolidated financial statements, Equitable Life changed its methods of accounting for loan impairments in 1995, for postemployment benefits in 1994 and for investment securities in 1993. PRICE WATERHOUSE LLP New York, New York February 7, 1996 F-2 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1995 AND 1994
1995 1994 ----------------- ----------------- (IN MILLIONS) ASSETS Investments: Fixed maturities: Available for sale, at estimated fair value............................. $ 15,899.9 $ 7,586.0 Held to maturity, at amortized cost..................................... - 5,223.0 Mortgage loans on real estate............................................. 3,638.3 4,018.0 Equity real estate........................................................ 3,916.2 4,446.4 Policy loans.............................................................. 1,976.4 1,731.2 Other equity investments.................................................. 621.1 678.5 Investment in and loans to affiliates..................................... 636.6 560.2 Other invested assets..................................................... 706.1 489.3 ----------------- ----------------- Total investments..................................................... 27,394.6 24,732.6 Cash and cash equivalents................................................... 774.7 693.6 Deferred policy acquisition costs........................................... 3,083.3 3,221.1 Amounts due from discontinued GIC Segment................................... 2,097.1 2,108.6 Other assets................................................................ 2,713.1 2,078.6 Closed Block assets......................................................... 8,612.8 8,105.5 Separate Accounts assets.................................................... 24,566.6 20,469.5 ----------------- ----------------- TOTAL ASSETS................................................................ $ 69,242.2 $ 61,409.5 ================= ================= LIABILITIES Policyholders' account balances............................................. $ 21,752.6 $ 21,238.0 Future policy benefits and other policyholders' liabilities................. 4,171.8 3,840.8 Short-term and long-term debt............................................... 1,899.3 1,337.4 Other liabilities........................................................... 3,379.5 2,300.1 Closed Block liabilities.................................................... 9,507.2 9,069.5 Separate Accounts liabilities............................................... 24,531.0 20,429.3 ----------------- ----------------- Total liabilities..................................................... 65,241.4 58,215.1 ----------------- ----------------- Commitments and contingencies (Notes 10, 12, 13, 14 and 15) SHAREHOLDER'S EQUITY Common stock, $1.25 par value 2.0 million shares authorized, issued and outstanding........................................................... 2.5 2.5 Capital in excess of par value.............................................. 2,913.6 2,913.6 Retained earnings........................................................... 781.6 484.0 Net unrealized investment gains (losses).................................... 338.2 (203.0) Minimum pension liability................................................... (35.1) (2.7) ----------------- ----------------- Total shareholder's equity............................................ 4,000.8 3,194.4 ----------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.................................. $ 69,242.2 $ 61,409.5 ================= =================
See Notes to Consolidated Financial Statements. F-3 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF EARNINGS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------------- ----------------- ----------------- (IN MILLIONS) REVENUES Universal life and investment-type product policy fee income...................................................... $ 771.0 $ 715.0 $ 644.5 Premiums...................................................... 606.8 625.6 599.1 Net investment income......................................... 2,127.7 2,030.9 2,599.3 Investment gains, net......................................... 5.3 91.8 533.4 Commissions, fees and other income............................ 886.8 845.4 1,717.2 Contribution from the Closed Block............................ 124.4 151.0 128.3 ----------------- ----------------- ----------------- Total revenues.......................................... 4,522.0 4,459.7 6,221.8 ----------------- ----------------- ----------------- BENEFITS AND OTHER DEDUCTIONS Interest credited to policyholders' account balances.......... 1,244.2 1,201.3 1,330.0 Policyholders' benefits....................................... 1,011.3 920.6 1,003.9 Other operating costs and expenses............................ 1,856.5 1,943.1 3,584.2 ----------------- ----------------- ----------------- Total benefits and other deductions..................... 4,112.0 4,065.0 5,918.1 ----------------- ----------------- ----------------- Earnings before Federal income taxes and cumulative effect of accounting change................................. 410.0 394.7 303.7 Federal income taxes.......................................... 112.4 101.2 91.3 ----------------- ----------------- ----------------- Earnings before cumulative effect of accounting change........ 297.6 293.5 212.4 Cumulative effect of accounting change, net of Federal income taxes................................................ - (27.1) - ----------------- ----------------- ----------------- Net Earnings.................................................. $ 297.6 $ 266.4 $ 212.4 ================= ================= =================
See Notes to Consolidated Financial Statements. F-4 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------------- ----------------- ----------------- (IN MILLIONS) Common stock, at par value, beginning of year................. $ 2.5 $ 2.5 $ 2.0 Increase in par value......................................... - - .5 ----------------- ----------------- ----------------- Common stock, at par value, end of year....................... 2.5 2.5 2.5 ----------------- ----------------- ----------------- Capital in excess of par value, beginning of year............. 2,913.6 2,613.6 2,273.9 Additional capital in excess of par value..................... - 300.0 340.2 Increase in par value......................................... - - (.5) ----------------- ----------------- ----------------- Capital in excess of par value, end of year................... 2,913.6 2,913.6 2,613.6 ----------------- ----------------- ----------------- Retained earnings, beginning of year.......................... 484.0 217.6 5.2 Net earnings.................................................. 297.6 266.4 212.4 ----------------- ----------------- ----------------- Retained earnings, end of year................................ 781.6 484.0 217.6 ----------------- ----------------- ----------------- Net unrealized investment (losses) gains, beginning of year... (203.0) 131.9 78.8 Change in unrealized investment gains (losses)................ 541.2 (334.9) (9.5) Effect of adopting new accounting standard.................... - - 62.6 ----------------- ----------------- ----------------- Net unrealized investment gains (losses), end of year......... 338.2 (203.0) 131.9 ----------------- ----------------- ----------------- Minimum pension liability, beginning of year.................. (2.7) (15.0) - Change in minimum pension liability........................... (32.4) 12.3 (15.0) ----------------- ----------------- ----------------- Minimum pension liability, end of year........................ (35.1) (2.7) (15.0) ----------------- ----------------- ----------------- TOTAL SHAREHOLDER'S EQUITY, END OF YEAR....................... $ 4,000.8 $ 3,194.4 $ 2,950.6 ================= ================= =================
See Notes to Consolidated Financial Statements. F-5 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------------- ----------------- ----------------- (IN MILLIONS) Net earnings.................................................. $ 297.6 $ 266.4 $ 212.4 Adjustments to reconcile net earnings to net cash provided (used) by operating activities: Net change in trading activities and broker-dealer related receivables/payables.............................. - - (4,177.8) Increase in matched resale agreements....................... - - (2,900.5) Increase in matched repurchase agreements................... - - 2,900.5 Investment gains, net of dealer and trading gains........... (5.3) (91.8) (160.8) Change in amounts due from discontinued GIC Segment......... - 57.3 47.8 General Account policy charges.............................. (769.7) (711.9) (623.4) Interest credited to policyholders' account balances........ 1,244.2 1,201.3 1,330.0 Changes in Closed Block assets and liabilities, net......... (69.6) (95.1) (73.3) Other, net.................................................. 627.1 7.8 (416.1) ----------------- ----------------- ----------------- Net cash provided (used) by operating activities.............. 1,324.3 634.0 (3,861.2) ----------------- ----------------- ----------------- Cash flows from investing activities: Maturities and repayments................................... 1,863.1 2,319.7 3,479.6 Sales....................................................... 8,901.4 5,661.9 7,399.2 Return of capital from joint ventures and limited partnerships.............................................. 65.2 39.0 119.5 Purchases................................................... (11,675.5) (7,417.6) (11,184.2) Decrease (increase) in loans to discontinued GIC Segment.... 1,226.9 (40.0) (880.0) Cash received on sale of 61% interest in DLJ................ - - 346.7 Other, net.................................................. (625.5) (371.1) (317.0) ----------------- ----------------- ----------------- Net cash (used) provided by investing activities.............. (244.4) 191.9 (1,036.2) ----------------- ----------------- ----------------- Cash flows from financing activities: Policyholders' account balances: Deposits.................................................. 2,414.9 2,082.7 2,410.7 Withdrawals............................................... (2,692.7) (2,887.4) (2,433.5) Net (decrease) increase in short-term financings............ (16.4) (173.0) 4,717.2 Additions to long-term debt................................. 599.7 51.8 97.7 Repayments of long-term debt................................ (40.7) (199.8) (64.4) Proceeds from issuance of Alliance units.................... - 100.0 - Payment of obligation to fund accumulated deficit of discontinued GIC Segment.................................. (1,215.4) - - Capital contribution from the Holding Company............... - 300.0 - Other, net.................................................. (48.2) - - ----------------- ----------------- ----------------- Net cash (used) provided by financing activities.............. (998.8) (725.7) 4,727.7 ----------------- ----------------- ----------------- Change in cash and cash equivalents........................... 81.1 100.2 (169.7) Cash and cash equivalents, beginning of year.................. 693.6 593.4 763.1 ----------------- ----------------- ----------------- Cash and Cash Equivalents, End of Year........................ $ 774.7 $ 693.6 $ 593.4 ================= ================= ================= Supplemental cash flow information Interest Paid............................................... $ 89.6 $ 34.9 $ 1,437.2 ================= ================= ================= Income Taxes (Refunded) Paid................................ $ (82.7) $ 49.2 $ 41.0 ================= ================= =================
See Notes to Consolidated Financial Statements. F-6 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1) ORGANIZATION The Equitable Life Assurance Society of the United States ("Equitable Life") converted to a stock life insurance company on July 22, 1992 and became a wholly owned subsidiary of The Equitable Companies Incorporated (the "Holding Company"). Equitable Life's insurance business, which is comprised of an Individual Insurance and Annuities segment and a Group Pension segment is conducted principally by Equitable Life and its wholly owned life insurance subsidiary, Equitable Variable Life Insurance Company ("EVLICO"). Equitable Life's investment management business, which comprises the Investment Services segment, is conducted principally by Alliance Capital Management L.P. ("Alliance"), Equitable Real Estate Investment Management, Inc. ("EREIM") and Donaldson, Lufkin and Jenrette, Inc. ("DLJ"), an investment banking and brokerage affiliate. AXA, a French holding company for an international group of insurance and related financial services companies is the Holding Company's largest shareholder, owning approximately 60.6% at December 31, 1995 (63.5% assuming conversion of Series E Convertible Preferred Stock held by AXA and 54.2% if all securities convertible into, or options on, common stock were to be converted or exercised). 2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation ----------------------------------------------------- The accompanying consolidated financial statements are prepared in conformity with generally accepted accounting principles ("GAAP"). The accompanying consolidated financial statements include the accounts of Equitable Life and its wholly owned life insurance subsidiaries (collectively, the "Insurance Group"); non-insurance subsidiaries, principally Alliance, an investment advisory subsidiary and EREIM, a real estate investment management subsidiary; and those partnerships and joint ventures in which the Company has control and a majority economic interest (collectively, including its consolidated subsidiaries, the "Company"). The consolidated statement of earnings and cash flow for the year ended December 31, 1993 include the results of operations and cash flow of DLJ, an investment banking and brokerage affiliate, on a consolidated basis through December 15, 1993 (see Note 20). Subsequent to that date, DLJ is accounted for on the equity basis. The Closed Block assets and liabilities and results of operations are presented in the consolidated financial statements as single line items (see Note 6). Unless specifically stated, all disclosures contained herein supporting the consolidated financial statements exclude the Closed Block related amounts. The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. All significant intercompany transactions and balances have been eliminated in consolidation other than intercompany transactions and balances with the Closed Block and the discontinued Guaranteed Interest Contract ("GIC") Segment (see Note 7). Certain reclassifications have been made in the amounts presented for prior periods to conform these periods with the 1995 presentation. F-7 Closed Block ------------ As of July 22, 1992, Equitable Life established the Closed Block for the benefit of certain classes of individual participating policies for which Equitable Life had a dividend scale payable in 1991 and which were in force on that date. Assets were allocated to the Closed Block in an amount which, together with anticipated revenues from policies included in the Closed Block, was reasonably expected to be sufficient to support such business, including provision for payment of claims, certain expenses and taxes, and for continuation of dividend scales payable in 1991, assuming the experience underlying such scales continues. Assets allocated to the Closed Block inure solely to the benefit of the holders of policies included in the Closed Block and will not revert to the benefit of the Holding Company. The plan of demutualization prohibits the reallocation, transfer, borrowing or lending of assets between the Closed Block and other portions of Equitable Life's General Account, any of its Separate Accounts or to any affiliate of Equitable Life without the approval of the New York Superintendent of Insurance. Closed Block assets and liabilities are carried on the same basis as similar assets and liabilities held in the General Account. The excess of Closed Block liabilities over Closed Block assets represents the expected future post-tax contribution from the Closed Block which would be recognized in income over the period the policies and contracts in the Closed Block remain in force. If the actual contribution from the Closed Block in any given period equals or exceeds the expected contribution for such period as determined at the establishment of the Closed Block, the expected contribution would be recognized in income for that period. Any excess of the actual contribution over the expected contribution would also be recognized in income to the extent that the aggregate expected contribution for all prior periods exceeded the aggregate actual contribution. Any remaining excess of actual contribution over expected contributions would be accrued in the Closed Block as a liability for future dividends to be paid to the Closed Block policyholders. If, over the period the policies and contracts in the Closed Block remain in force, the actual contribution from the Closed Block is less than the expected contribution from the Closed Block, only such actual contribution would be recognized in income. Discontinued Operations ----------------------- In 1991, the Company's management adopted a plan to discontinue the business operations of the GIC Segment, consisting of the Guaranteed Interest Contract and Group Non-Participating Wind-Up Annuities lines of business. The Company established a pre-tax provision for the estimated future losses of the GIC line of business and a premium deficiency reserve for the Group Non-Participating Wind-Up Annuities. Subsequent losses incurred have been charged to the allowance for future losses and the premium deficiency reserve. Total allowances are based upon management's best judgment and there is no assurance that the ultimate losses will not differ. Accounting Changes ------------------ In the first quarter of 1995, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan". This statement applies to all loans, including loans restructured in a troubled debt restructuring involving a modification of terms. This statement addresses the accounting for impairment of a loan by specifying how allowances for credit losses should be determined. Impaired loans within the scope of this statement are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, at the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. The Company provides for impairment of loans through an allowance for possible losses. The adoption of this statement did not have a material effect on the level of these allowances or on the Company's consolidated statements of earnings and shareholder's equity. F-8 In the fourth quarter of 1994 (effective as of January 1, 1994), the Company adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits," which required employers to recognize the obligation to provide postemployment benefits. Implementation of this statement resulted in a charge for the cumulative effect of accounting change of $27.1 million, net of a Federal income tax benefit of $14.6 million. At December 31, 1993, the Company adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which expanded the use of fair value accounting for those securities that a company does not have positive intent and ability to hold to maturity. Implementation of this statement increased consolidated shareholder's equity by $62.6 million, net of deferred policy acquisition costs, amounts attributable to participating group annuity contracts and deferred Federal income tax. Beginning coincident with issuance of SFAS No. 115 implementation guidance in November 1995, the Financial Accounting Standards Board ("FASB") permitted companies a one-time opportunity, through December 31, 1995, to reassess the appropriateness of the classification of all securities held at that time. On December 1, 1995, the Company transferred $4,794.9 million of securities classified as held to maturity to the available for sale portfolio. As a result consolidated shareholder's equity increased by $126.2 million, net of deferred policy acquisition costs, amounts attributable to participating group annuity contracts and deferred Federal income tax. New Accounting Pronouncements ----------------------------- In January 1995, the FASB issued SFAS No. 120, "Accounting and Reporting by Mutual Life Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration Participating Contracts," which permits, but does not require, stock life insurance companies with participating life contracts to account for those contracts in accordance with Statement of Position No. 95-1, "Accounting for Certain Insurance Activities of Mutual Life Insurance Enterprises". The Company has decided to retain the existing methodology to account for traditional participating policies and, therefore, will not adopt this statement. In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. The Company will implement this statement as of January 1, 1996. The cumulative effect of this accounting change will be a charge of $23.4 million, net of a Federal income tax benefit of $12.1 million, due to the writedown to fair value of building improvements relating to facilities being vacated beginning in 1996. The Company currently provides allowances for possible losses for other assets under the scope of this statement. Management has not yet determined the impact of this statement on assets to be held and used. In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage Servicing Rights," which requires a mortgage banking enterprise to recognize rights to service mortgage loans for others as separate assets however those servicing rights are acquired. It further requires capitalized mortgage servicing rights be assessed for impairment based on the fair value of those rights. The Company will implement this statement as of January 1, 1996. Implementation of this statement will not have a material effect on the Company's consolidated financial statements. In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based Compensation". This statement defines a fair value based method of accounting for stock-based employee compensation plans while continuing to allow an entity to measure compensation cost for such plans using the intrinsic value based method of accounting. Management has decided to retain the current compensation cost methodology prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees". F-9 Valuation of Investments ------------------------ Fixed maturities, which the Company has both the ability and the intent to hold to maturity, are stated principally at amortized cost. Fixed maturities identified as available for sale are reported at estimated fair value. The amortized cost of fixed maturities is adjusted for impairments in value deemed to be other than temporary. Mortgage loans on real estate are stated at unpaid principal balances, net of unamortized discounts and valuation allowances. Effective with the adoption of SFAS No. 114 on January 1, 1995, the valuation allowances are based on the present value of expected future cash flows discounted at the loan's original effective interest rate or the collateral value if the loan is collateral dependent. However, if foreclosure is or becomes probable, the measurement method used is collateral value. Prior to the adoption of SFAS No. 114, the valuation allowances were based on losses expected by management to be realized on transfers of mortgage loans to real estate (upon foreclosure or in-substance foreclosure), on the disposition or settlement of mortgage loans and on mortgage loans management believed may not be collectible in full. In establishing valuation allowances, management previously considered, among other things the estimated fair value of the underlying collateral. Real estate, including real estate acquired in satisfaction of debt, is stated at depreciated cost less valuation allowances. At the date of foreclosure (including in-substance foreclosure), real estate acquired in satisfaction of debt is valued at estimated fair value. Valuation allowances on real estate held for the production of income are computed using the forecasted cash flows of the respective properties discounted at a rate equal to the Company's cost of funds; valuation allowances on real estate available for sale are computed using the lower of current estimated fair value, net of disposition costs, or depreciated cost. Policy loans are stated at unpaid principal balances. Partnerships and joint venture interests in which the Company does not have control and a majority economic interest are reported on the equity basis of accounting and are included either with equity real estate or other equity investments, as appropriate. Common stocks are carried at estimated fair value and are included in other equity investments. Short-term investments are stated at amortized cost which approximates fair value and are included with other invested assets. Cash and cash equivalents includes cash on hand, amounts due from banks and highly liquid debt instruments purchased with an original maturity of three months or less. All securities are recorded in the consolidated financial statements on a trade date basis. Investment Results and Unrealized Investment Gains (Losses) ----------------------------------------------------------- Net investment income and realized investment gains and losses (collectively, "investment results") related to certain participating group annuity contracts are passed through to the contractholders as interest credited to policyholders' account balances. Realized investment gains and losses are determined by specific identification and are presented as a component of revenue. Valuation allowances are netted against the asset categories to which they apply and changes in the valuation allowances are included in investment gains or losses. Unrealized investment gains and losses on fixed maturities available for sale and equity securities held by the Company are accounted for as a separate component of shareholder's equity, net of related deferred Federal income taxes, amounts attributable to the discontinued GIC Segment, Closed Block, participating group annuity contracts and deferred policy acquisition costs related to universal life and investment-type products. F-10 Recognition of Insurance Income and Related Expenses ---------------------------------------------------- Premiums from universal life and investment-type contracts are reported as deposits to policyholders' account balances. Revenues from these contracts consist of amounts assessed during the period against policyholders' account balances for mortality charges, policy administration charges and surrender charges. Policy benefits and claims that are charged to expense include benefit claims incurred in the period in excess of related policyholders' account balances. Premiums from traditional life and annuity policies with life contingencies generally are recognized as income when due. Benefits and expenses are matched with such income so as to result in the recognition of profits over the life of the contracts. This match is accomplished by means of the provision for liabilities for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. For contracts with a single premium or a limited number of premium payments due over a significantly shorter period than the total period over which benefits are provided, premiums are recorded as income when due with any excess profit deferred and recognized in income in a constant relationship to insurance in force or, for annuities, the amount of expected future benefit payments. Premiums from individual health contracts are recognized as income over the period to which the premiums relate in proportion to the amount of insurance protection provided. Deferred Policy Acquisition Costs --------------------------------- The costs of acquiring new business, principally commissions, underwriting, agency and policy issue expenses, all of which vary with and are primarily related to the production of new business, are deferred. Deferred policy acquisition costs are subject to recoverability testing at the time of policy issue and loss recognition testing at the end of each accounting period. For universal life products and investment-type products, deferred policy acquisition costs are amortized over the expected average life of the contracts (periods ranging from 15 to 35 years and 5 to 17 years, respectively) as a constant percentage of estimated gross profits arising principally from investment results, mortality and expense margins and surrender charges based on historical and anticipated future experience, updated at the end of each accounting period. The effect on the amortization of deferred policy acquisition costs of revisions to estimated gross profits is reflected in earnings in the period such estimated gross profits are revised. The effect on the deferred policy acquisition cost asset that would result from realization of unrealized gains (losses) is recognized with an offset to unrealized gains (losses) in consolidated shareholder's equity as of the balance sheet date. For traditional life and annuity policies with life contingencies, deferred policy acquisition costs are amortized in proportion to anticipated premiums. Assumptions as to anticipated premiums are estimated at the date of policy issue and are consistently applied during the life of the contracts. Deviations from estimated experience are reflected in earnings in the period such deviations occur. For these contracts, the amortization periods generally are for the estimated life of the policy. For individual health benefit insurance, deferred policy acquisition costs are amortized over the expected average life of the contracts (10 years for major medical policies and 20 years for disability income products) in proportion to anticipated premium revenue at time of issue. Policyholders' Account Balances and Future Policy Benefits ---------------------------------------------------------- Policyholders' account balances for universal life and investment-type contracts are equal to the policy account values. The policy account values represent an accumulation of gross premium payments plus credited interest less expense and mortality charges and withdrawals. F-11 For traditional life insurance policies, future policy benefit and dividend liabilities are estimated using a net level premium method on the basis of actuarial assumptions as to mortality, persistency and interest established at policy issue. Assumptions established at policy issue as to mortality and persistency are based on the Insurance Group's experience which, together with interest and expense assumptions, provide a margin for adverse deviation. When the liabilities for future policy benefits plus the present value of expected future gross premiums for a product are insufficient to provide for expected future policy benefits and expenses for that product, deferred policy acquisition costs are written off and thereafter, if required, a premium deficiency reserve is established by a charge to earnings. Benefit liabilities for traditional annuities during the accumulation period are equal to accumulated contractholders' fund balances and after annuitization are equal to the present value of expected future payments. Interest rates used in establishing such liabilities range from 2.25% to 11.5% for life insurance liabilities and from 2.25% to 13.5% for annuity liabilities. Individual health benefit liabilities for active lives are estimated using the net level premium method, and assumptions as to future morbidity, withdrawals and interest which provide a margin for adverse deviation. Benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Claim reserves and associated liabilities for individual disability income and major medical policies were $639.6 million, $570.6 million at December 31, 1995 and 1994, respectively. Incurred benefits (benefits paid plus changes in claim reserves) and benefits paid for individual disability income and major medical policies are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Incurred benefits related to current year.......... $ 176.0 $ 188.6 $ 193.1 Incurred benefits related to prior years........... 67.8 28.7 106.1 ----------------- ---------------- ----------------- Total Incurred Benefits............................ $ 243.8 $ 217.3 $ 299.2 ================= ================ ================= Benefits paid related to current year.............. $ 37.0 $ 43.7 $ 48.9 Benefits paid related to prior years............... 137.8 132.3 123.1 ----------------- ---------------- ----------------- Total Benefits Paid................................ $ 174.8 $ 176.0 $ 172.0 ================= ================ =================
The amount of policyholders' dividends to be paid (including those on policies included in the Closed Block) is determined annually by Equitable Life's Board of Directors. The aggregate amount of policyholders' dividends is related to actual interest, mortality, morbidity and expense experience for the year and judgment as to the appropriate level of statutory surplus to be retained by Equitable Life. Equitable Life is subject to limitations on the amount of statutory profits which can be retained with respect to certain classes of individual participating policies that were in force on July 22, 1992 which are not included in the Closed Block and with respect to participating policies issued subsequent to July 22, 1992. Excess statutory profits, if any, will be distributed over time to such policyholders and will not be available to Equitable Life's shareholder. Earnings in excess of limitations are accrued as policyholders' dividends. At December 31, 1995, participating policies including those in the Closed Block represent approximately 27.2% ($58.4 billion) of directly written life insurance in force, net of amounts ceded. Participating policies represent primarily all of the premium income as reflected in the consolidated statements of earnings and in the results of the Closed Block. F-12 Federal Income Taxes -------------------- Equitable Life and its life insurance and non-life insurance subsidiaries file a consolidated Federal income tax return with the Holding Company and its non-life insurance subsidiaries. Current Federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year. Deferred income tax assets and liabilities are recognized based on the difference between financial statement carrying amounts and income tax bases of assets and liabilities using enacted income tax rates and laws. Separate Accounts ----------------- Separate Accounts are established in conformity with the New York State Insurance Law and generally are not chargeable with liabilities that arise from any other business of the Insurance Group. Separate Accounts assets are subject to General Account claims only to the extent the value of such assets exceeds the Separate Accounts liabilities. Assets and liabilities of the Separate Accounts, representing net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contractholders, and for which the Insurance Group does not bear the investment risk, are shown as separate captions in the consolidated balance sheets. The Insurance Group bears the investment risk on assets held in one Separate Account, therefore, such assets are carried on the same basis as similar assets held in the General Account portfolio. Assets held in the other Separate Accounts are carried at quoted market values or, where quoted values are not available, at estimated fair values as determined by the Insurance Group. The investment results of Separate Accounts on which the Insurance Group does not bear the investment risk are reflected directly in Separate Accounts liabilities. For the years ended December 31, 1995, 1994 and 1993, investment results of such Separate Accounts were $1,956.3 million, $676.3 million and $1,676.5 million, respectively. Deposits to all Separate Accounts are reported as increases in Separate Accounts liabilities and are not reported in revenues. Mortality, policy administration and surrender charges on all Separate Accounts are included in revenues. F-13 3) INVESTMENTS The following tables provide additional information relating to fixed maturities and equity securities:
GROSS GROSS AMORTIZED UNREALIZED UNREALIZED ESTIMATED COST GAINS LOSSES FAIR VALUE ----------------- ----------------- ---------------- --------------- (IN MILLIONS) DECEMBER 31, 1995 ----------------- Fixed Maturities: Available for Sale: Corporate.......................... $ 10,910.7 $ 617.6 $ 118.1 $ 11,410.2 Mortgage-backed.................... 1,838.0 31.2 1.2 1,868.0 U.S. Treasury securities and U.S. government and agency securities................ 2,257.0 77.8 4.1 2,330.7 States and political subdivisions.. 45.7 5.2 - 50.9 Foreign governments................ 124.5 11.0 .2 135.3 Redeemable preferred stock......... 108.1 5.3 8.6 104.8 ----------------- ----------------- ---------------- --------------- Total Available for Sale............... $ 15,284.0 $ 748.1 $ 132.2 $ 15,899.9 ================= ================= ================ =============== Equity Securities: Common stock......................... $ 97.3 $ 49.1 $ 18.0 $ 128.4 ================= ================= ================ =============== December 31, 1994 ----------------- Fixed Maturities: Available for Sale: Corporate.......................... $ 5,663.4 $ 34.6 $ 368.0 $ 5,330.0 Mortgage-backed.................... 686.0 2.9 44.8 644.1 U.S. Treasury securities and U.S. government and agency securities................ 1,519.3 6.7 71.9 1,454.1 States and political subdivisions.. 23.4 .1 .7 22.8 Foreign governments................ 43.8 .3 4.2 39.9 Redeemable preferred stock......... 108.4 .4 13.7 95.1 ----------------- ----------------- ---------------- --------------- Total Available for Sale............... $ 8,044.3 $ 45.0 $ 503.3 $ 7,586.0 ================= ================= ================ =============== Held to Maturity: Corporate.......................... $ 4,661.0 $ 67.9 $ 233.8 $ 4,495.1 U.S. Treasury securities and U.S. government and agency securities................ 428.9 4.6 44.2 389.3 States and political subdivisions.. 63.4 .9 3.7 60.6 Foreign governments................ 69.7 4.2 2.0 71.9 ================= ================= ================ =============== Total Held to Maturity................. $ 5,223.0 $ 77.6 $ 283.7 $ 5,016.9 ================= ================= ================ =============== Equity Securities: Common stock......................... $ 126.4 $ 31.2 $ 23.5 $ 134.1 ================= ================= ================ ===============
F-14 For publicly traded fixed maturities and equity securities, estimated fair value is determined using quoted market prices. For fixed maturities without a readily ascertainable market value, the Company has determined an estimated fair value using a discounted cash flow approach, including provisions for credit risk, generally based upon the assumption that such securities will be held to maturity. Estimated fair value for equity securities, substantially all of which do not have a readily ascertainable market value, has been determined by the Company. Such estimated fair values do not necessarily represent the values for which these securities could have been sold at the dates of the consolidated balance sheets. At December 31, 1995 and 1994, securities without a readily ascertainable market value having an amortized cost of $3,748.9 million and $3,980.4 million, respectively, had estimated fair values of $3,981.8 million and $3,858.7 million, respectively. The contractual maturity of bonds at December 31, 1995 is shown below:
AVAILABLE FOR SALE ------------------------------------ AMORTIZED ESTIMATED COST FAIR VALUE ---------------- ----------------- (IN MILLIONS) Due in one year or less................................................ $ 357.9 $ 360.0 Due in years two through five.......................................... 3,773.1 3,847.1 Due in years six through ten........................................... 4,709.8 4,821.8 Due after ten years.................................................... 4,497.1 4,898.2 Mortgage-backed securities............................................. 1,838.0 1,868.0 ---------------- ----------------- Total.................................................................. $ 15,175.9 $ 15,795.1 ================ =================
Bonds not due at a single maturity date have been included in the above table in the year of final maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Investment valuation allowances and changes thereto are shown below:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Balances, beginning of year........................ $ 284.9 $ 355.6 $ 512.0 Additions charged to income........................ 136.0 51.0 92.8 Deductions for writedowns and asset dispositions... (95.6) (121.7) (249.2) ----------------- ---------------- ----------------- Balances, End of Year.............................. $ 325.3 $ 284.9 $ 355.6 ================= ================ ================= Balances, end of year comprise: Mortgage loans on real estate.................... $ 65.5 $ 64.2 $ 144.4 Equity real estate............................... 259.8 220.7 211.2 ----------------- ---------------- ----------------- Total.............................................. $ 325.3 $ 284.9 $ 355.6 ================= ================ =================
Deductions for writedowns and asset dispositions for 1993 include an $87.1 million writedown of fixed maturity investments at December 31, 1993 as a result of adopting a new accounting statement for the valuation of these investments that requires specific writedowns instead of valuation allowances. At December 31, 1995, the carrying values of investments held for the production of income which were non-income producing for the twelve months preceding the consolidated balance sheet date were $37.2 million of fixed maturities and $84.7 million of mortgage loans on real estate. F-15 The Insurance Group's fixed maturity investment portfolio includes corporate high yield securities consisting of public high yield bonds, redeemable preferred stocks and directly negotiated debt in leveraged buyout transactions. The Insurance Group seeks to minimize the higher than normal credit risks associated with such securities by monitoring the total investments in any single issuer or total investment in a particular industry group. Certain of these corporate high yield securities are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa or National Association of Insurance Commissioners ("NAIC") designation of 3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near default). At December 31, 1995, approximately 15.57% of the $15,139.9 million aggregate amortized cost of bonds held by the Insurance Group were considered to be other than investment grade. In addition to its holdings of corporate high yield securities, the Insurance Group is an equity investor in limited partnership interests which primarily invest in securities considered to be other than investment grade. The Company has restructured or modified the terms of certain fixed maturity investments. The fixed maturity portfolio, based on amortized cost, includes $15.9 million and $30.5 million at December 31, 1995 and 1994, respectively, of such restructured securities. These amounts include fixed maturities which are in default as to principal and/or interest payments, are to be restructured pursuant to commenced negotiations or where the borrowers went into bankruptcy subsequent to acquisition (collectively, "problem fixed maturities") of $1.6 million and $9.7 million as of December 31, 1995 and 1994, respectively. Gross interest income that would have been recorded in accordance with the original terms of restructured fixed maturities amounted to $3.0 million, $7.5 million and $11.7 million in 1995, 1994 and 1993, respectively. Gross interest income on these fixed maturities included in net investment income aggregated $2.9 million, $6.8 million and $9.7 million in 1995, 1994 and 1993, respectively. At December 31, 1995 and 1994, mortgage loans on real estate with scheduled payments 60 days (90 days for agricultural mortgages) or more past due or in foreclosure (collectively, "problem mortgage loans on real estate") had an amortized cost of $87.7 million (2.4% of total mortgage loans on real estate) and $96.9 million (2.3% of total mortgage loans on real estate), respectively. The payment terms of mortgage loans on real estate may from time to time be restructured or modified. The investment in restructured mortgage loans on real estate, based on amortized cost, amounted to $531.5 million and $447.9 million at December 31, 1995 and 1994, respectively. These amounts include $3.8 million and $1.0 million of problem mortgage loans on real estate at December 31, 1995 and 1994, respectively. Gross interest income on restructured mortgage loans on real estate that would have been recorded in accordance with the original terms of such loans amounted to $52.1 million, $44.9 million and $51.8 million in 1995, 1994 and 1993, respectively. Gross interest income on these loans included in net investment income aggregated $37.4 million, $32.8 million and $46.0 million in 1995, 1994 and 1993, respectively. Impaired mortgage loans (as defined under SFAS No. 114) along with the related provision for losses were as follows:
December 31, 1995 ------------------- (IN MILLIONS) Impaired mortgage loans with provision for losses....................................... $ 310.1 Impaired mortgage loans with no provision for losses.................................... 160.8 ------------------- Recorded investment in impaired mortgage loans.......................................... 470.9 Provision for losses.................................................................... 62.7 ------------------- Net Impaired Mortgage Loans............................................................. $ 408.2 ===================
F-16 Impaired mortgage loans with no provision for losses are loans where the fair value of the collateral or the net present value of the loan equals or exceeds the recorded investment. Interest income earned on loans where the collateral value is used to measure impairment is recorded on a cash basis. Interest income on loans where the present value method is used to measure impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows. Changes in the present value attributable to changes in the amount or timing of expected cash flows are reported as investment gains or losses. During the year ended December 31, 1995, the Company's average recorded investment in impaired mortgage loans was $429.0 million. Interest income recognized on these impaired mortgage loans totaled $27.9 million for the year ended December 31, 1995, including $13.4 million recognized on a cash basis. At December 31, 1995, investments owned of any one issuer, including its affiliates, for which the aggregate carrying values are 10% or more of total shareholders' equity, were $508.3 million relating to Trammell Crow and affiliates (including holdings of the Closed Block and the discontinued GIC Segment). The amount includes restructured mortgage loans on real estate with an amortized cost of $152.4 million. A $294.0 million commercial loan package which was in bankruptcy at the beginning of the year was resolved in 1995, with part of the package reclassified as restructured and the remainder reclassified as equity real estate. The Insurance Group's investment in equity real estate is through direct ownership and through investments in real estate joint ventures. At December 31, 1995 and 1994, the carrying value of equity real estate available for sale amounted to $255.5 million and $447.8 million, respectively. For the years ended December 31, 1995, 1994 and 1993, respectively, real estate of $35.3 million, $189.8 million and $261.8 million was acquired in satisfaction of debt. At December 31, 1995 and 1994, the Company owned $862.7 million and $1,086.9 million, respectively, of real estate acquired in satisfaction of debt. Depreciation of real estate is computed using the straight-line method over the estimated useful lives of the properties, which generally range from 40 to 50 years. Accumulated depreciation on real estate was $662.4 million and $703.1 million at December 31, 1995 and 1994, respectively. Depreciation expense on real estate totaled $121.7 million, $117.0 million and $115.3 million for the years ended December 31, 1995, 1994 and 1993, respectively. F-17 4) JOINT VENTURES AND PARTNERSHIPS Summarized combined financial information of real estate joint ventures (38 and 47 individual ventures as of December 31, 1995 and 1994, respectively) and of limited partnership interests accounted for under the equity method, in which the Company has an investment of $10.0 million or greater and an equity interest of 10% or greater is as follows:
DECEMBER 31, ------------------------------------ 1995 1994 ---------------- ----------------- (IN MILLIONS) FINANCIAL POSITION Investments in real estate, at depreciated cost........................ $ 2,684.1 $ 2,786.7 Investments in securities, generally at estimated fair value........... 2,459.8 3,071.2 Cash and cash equivalents.............................................. 489.1 359.8 Other assets........................................................... 270.8 398.7 ---------------- ----------------- Total assets........................................................... 5,903.8 6,616.4 ---------------- ----------------- Borrowed funds - third party........................................... 1,782.3 1,759.6 Borrowed funds - the Company........................................... 220.5 238.0 Other liabilities...................................................... 593.9 987.7 ---------------- ----------------- Total liabilities...................................................... 2,596.7 2,985.3 ---------------- ----------------- Partners' Capital...................................................... $ 3,307.1 $ 3,631.1 ================ ================= Equity in partners' capital included above............................. $ 902.2 $ 964.2 Equity in limited partnership interests not included above............. 212.8 224.6 Excess (deficit) of equity in partners' capital over investment cost and equity earnings.................................................. 3.6 (1.8) Notes receivable from joint venture.................................... 5.3 6.1 ---------------- ----------------- Carrying Value......................................................... $ 1,123.9 $ 1,193.1 ================ =================
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) STATEMENTS OF EARNINGS Revenues of real estate joint ventures............. $ 463.5 $ 537.7 $ 602.7 Revenues of other limited partnership interests.... 242.3 103.4 319.1 Interest expense - third party..................... (135.3) (114.9) (118.8) Interest expense - the Company..................... (41.0) (36.9) (52.1) Other expenses..................................... (397.7) (430.9) (531.7) ----------------- ---------------- ----------------- Net Earnings....................................... $ 131.8 $ 58.4 $ 219.2 ================= ================ ================= Equity in net earnings included above.............. $ 49.1 $ 18.9 $ 71.6 Equity in net earnings of limited partnerships interests not included above..................... 44.8 25.3 46.3 Excess of earnings in joint ventures over equity ownership percentage and amortization of differences in bases............................. .9 1.8 9.2 Interest on notes receivable....................... .1 - .5 ----------------- ---------------- ----------------- Total Equity in Net Earnings....................... $ 94.9 $ 46.0 $ 127.6 ================= ================ =================
F-18 5) NET INVESTMENT INCOME AND INVESTMENT GAINS (LOSSES) The sources of net investment income are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Fixed maturities................................... $ 1,151.0 $ 1,024.5 $ 981.7 Trading account securities......................... - - 709.3 Securities purchased under resale agreements....... - - 533.8 Mortgage loans on real estate...................... 329.0 384.3 457.4 Equity real estate................................. 560.4 561.8 539.1 Other equity investments........................... 76.9 35.7 110.4 Policy loans....................................... 144.4 122.7 117.0 Broker-dealer related receivables.................. - - 292.2 Other investment income............................ 279.7 336.3 304.9 ----------------- ---------------- ----------------- Gross investment income.......................... 2,541.4 2,465.3 4,045.8 ----------------- ---------------- ----------------- Interest expense to finance short-term trading instruments...................................... - - 983.4 Other investment expenses.......................... 413.7 434.4 463.1 ----------------- ---------------- ----------------- Investment expenses.............................. 413.7 434.4 1,446.5 ----------------- ---------------- ----------------- Net Investment Income.............................. $ 2,127.7 $ 2,030.9 $ 2,599.3 ================= ================ =================
Investment gains (losses), net, including changes in the valuation allowances, are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Fixed maturities................................... $ 119.9 $ (14.1) $ 123.1 Mortgage loans on real estate...................... (40.2) (43.1) (65.1) Equity real estate................................. (86.6) 20.6 (18.5) Other equity investments........................... 12.8 76.0 119.5 Dealer and trading gains........................... - - 372.5 Sales of newly issued Alliance Units............... - 52.4 - Other.............................................. (.6) - 1.9 ----------------- ---------------- ----------------- Investment Gains, Net.............................. $ 5.3 $ 91.8 $ 533.4 ================= ================ =================
Writedowns of fixed maturities amounted to $46.7 million, $30.8 million and $5.4 million for the years ended December 31, 1995, 1994 and 1993, respectively. For the years ended December 31, 1995 and 1994, respectively, proceeds received on sales of fixed maturities classified as available for sale amounted to $8,206.0 million and $5,253.9 million. Gross gains of $211.4 million and $65.2 million and gross losses of $64.2 million and $50.8 million, respectively, were realized on these sales. The change in unrealized investment gains (losses) related to fixed maturities classified as available for sale for the years ended December 31, 1995 and 1994 amounted to $1,077.2 million and $(742.2) million, respectively. Gross gains of $188.5 million and gross losses of $145.0 million were realized on sales of investments in fixed maturities held for investment and available for sale for the year ended December 31, 1993. F-19 During each of the years ended December 31, 1995 and 1994, one security classified as held to maturity was sold and during the eleven months ended November 30, 1995 and the year ended December 31, 1994, respectively, twelve and six securities so classified were transferred to the available for sale portfolio. All actions were taken as a result of a significant deterioration in creditworthiness. The aggregate amortized cost of the securities sold were $1.0 million and $19.9 million with a related investment gain of $-0- million and $.8 million recognized in 1995 and 1994, respectively; the aggregate amortized cost of the securities transferred was $116.0 million and $42.8 million with gross unrealized investment losses of $3.2 million and $3.1 million charged to consolidated shareholders' equity for the eleven months ended November 30, 1995 and the year ended December 31, 1994, respectively. On December 1, 1995, the Company transferred $4,794.9 million of securities classified as held to maturity to the available for sale portfolio. As a result, unrealized gains on fixed maturities increased $307.0 million, offset by deferred policy acquisition costs of $73.7 million, amounts attributable to participating group annuity contracts of $39.2 million and deferred Federal income tax of $67.9 million. Investment gains from other equity investments for the year ended December 31, 1993, included $79.9 million generated by DLJ's involvement in long-term corporate development investments. For the years ended December 31, 1995, 1994 and 1993, investment results passed through to certain participating group annuity contracts as interest credited to policyholders' account balances amounted to $131.2 million, $175.8 million and $243.2 million, respectively. During 1995, Alliance entered into an agreement to acquire the business of Cursitor-Eaton Asset Management Company and Cursitor Holdings Limited (collectively, "Cursitor") for approximately $141.5 million consisting of $84.9 million in cash, 1,764,115 of Alliance's publicly traded units ("Alliance Units"), 6% notes aggregating $21.5 million payable ratably over four years, and substantial additional consideration which will be determined at a later date. The transaction, which is expected to be completed during the first quarter of 1996, is subject to the receipt of consents, regulatory approvals, and certain other closing conditions, including client approval of the transfer of Cursitor accounts. Upon completion of this transaction, the Company's ownership percentage of Alliance will be reduced. In 1994, Alliance sold 4.96 million newly issued Alliance Units to third parties at prevailing market prices. The sales decreased the Company's ownership of Alliance's Units from 63.2% to 59.2%. In addition, the Company continues to hold its 1% general partnership interest in Alliance. The Company recognized an investment gain of $52.4 million as a result of these transactions. The Company's ownership interest in Alliance will be further reduced upon the exercise of options granted to certain Alliance employees. At December 31, 1995, Alliance had options outstanding to purchase an aggregate of 4.8 million Alliance Units at a price ranging from $6.0625 to $22.25 per unit. Options are exercisable at a rate of 20% on each of the first five anniversary dates from the date of grant. Net unrealized investment gains (losses), included in the consolidated balance sheets as a component of equity and the changes for the corresponding years, are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Balance, beginning of year......................... $ (203.0) $ 131.9 $ 78.8 Changes in unrealized investment (losses) gains.... 1,117.7 (823.8) (14.1) Effect of adopting SFAS No. 115.................... - - 283.9 Changes in unrealized investment (gains) losses attributable to: Participating group annuity contracts.......... (78.1) 40.8 (36.2) Deferred policy acquisition costs.............. (208.4) 269.5 (150.5) Deferred Federal income taxes.................. (290.0) 178.6 (30.0) ----------------- ---------------- ----------------- Balance, End of Year............................... $ 338.2 $ (203.0) $ 131.9 ================= ================ =================
F-20
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Balance, end of year comprises: Unrealized investment (losses) gains on: Fixed maturities............................... $ 615.9 $ (461.3) $ 283.9 Other equity investments....................... 31.1 7.7 75.8 Other.......................................... 31.6 14.5 25.0 ----------------- ---------------- ----------------- Total........................................ 678.6 (439.1) 384.7 Amounts of unrealized investment (gains) losses attributable to: Participating group annuity contracts........ (72.2) 5.9 (34.9) Deferred policy acquisition costs............ (89.4) 119.0 (150.5) Deferred Federal income taxes................ (178.8) 111.2 (67.4) ----------------- ---------------- ----------------- Total.............................................. $ 338.2 $ (203.0) $ 131.9 ================= ================ =================
6) CLOSED BLOCK Summarized financial information of the Closed Block follows:
DECEMBER 31, -------------------------------------- 1995 1994 ----------------- ----------------- (IN MILLIONS) Assets Fixed Maturities: Available for sale, at estimated fair value (amortized cost, $3,662.8 and $1,270.3)........................................... $ 3,896.2 $ 1,197.0 Held to maturity, at amortized cost (estimated fair value of $1,785.0 in 1994)................................................ - 1,927.8 Mortgage loans on real estate........................................ 1,368.8 1,543.7 Policy loans......................................................... 1,797.2 1,827.9 Cash and other invested assets....................................... 440.9 442.5 Deferred policy acquisition costs.................................... 823.6 878.1 Other assets......................................................... 286.1 288.5 ----------------- ----------------- Total Assets......................................................... $ 8,612.8 $ 8,105.5 ================= ================= Liabilities Future policy benefits and policyholders' account balances........... $ 9,346.7 $ 8,965.3 Other liabilities.................................................... 160.5 104.2 ----------------- ----------------- Total Liabilities.................................................... $ 9,507.2 $ 9,069.5 ================= =================
F-21
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Revenues Premiums and other revenue......................... $ 753.4 $ 798.1 $ 860.2 Investment income (net of investment expenses of $26.7, $19.0 and $17.3).............. 538.9 523.0 526.5 Investment losses, net............................. (20.2) (24.0) (15.0) ----------------- ---------------- ----------------- Total revenues............................... 1,272.1 1,297.1 1,371.7 ----------------- ---------------- ----------------- Benefits and Other Deductions Policyholders' benefits and dividends.............. 1,085.1 1,075.6 1,141.4 Other operating costs and expenses................. 62.6 70.5 102.0 ----------------- ---------------- ----------------- Total benefits and other deductions.......... 1,147.7 1,146.1 1,243.4 ----------------- ---------------- ----------------- Contribution from the Closed Block................. $ 124.4 $ 151.0 $ 128.3 ================= ================ =================
The fixed maturity portfolio, based on amortized cost, includes $4.3 million and $23.8 million at December 31, 1995 and 1994, respectively, of restructured securities which includes problem fixed maturities of $1.9 million and $6.4 million, respectively. During the eleven months ended November 30, 1995, one security classified as held to maturity was sold and ten securities classified as held to maturity were transferred to the available for sale portfolio. All actions resulted from a significant deterioration in creditworthiness. The amortized cost of the security sold was $4.2 million. The aggregate amortized cost of the securities transferred was $81.3 million with gross unrealized investment losses of $.1 million transferred to equity. At December 1, 1995, $1,750.7 million of securities classified as held to maturity were transferred to the available for sale portfolio. As a result, unrealized gains of $88.5 million on fixed maturities were recognized and offset by an increase to the deferred dividend liability. Implementation of SFAS No. 115 for the valuation of fixed maturities at December 31, 1993 resulted in the recognition of a deferred dividend liability of $49.6 million. At December 31, 1995 and 1994, problem mortgage loans on real estate had an amortized cost of $36.5 million and $27.6 million, respectively, and mortgage loans on real estate for which the payment terms have been restructured had an amortized cost of $137.7 million and $179.2 million, respectively. At December 31, 1995 and 1994, the restructured mortgage loans on real estate amount included $8.8 million and $.7 million, respectively, of problem mortgage loans on real estate. Valuation allowances amounted to $18.4 million and $46.2 million on mortgage loans on real estate and $4.3 million and $2.6 million on equity real estate at December 31, 1995 and 1994, respectively. Writedowns of fixed maturities amounted to $16.8 million and $15.9 million and $1.7 million for the years ended December 31, 1995, 1994 and 1993, respectively. Many expenses related to Closed Block operations are charged to operations outside of the Closed Block; accordingly, the contribution from the Closed Block does not represent the actual profitability of the Closed Block operations. Operating costs and expenses outside of the Closed Block are, therefore, disproportionate to the business outside of the Closed Block. F-22 7) DISCONTINUED OPERATIONS Summarized financial information of the GIC Segment follows:
DECEMBER 31, -------------------------------------- 1995 1994 ----------------- ----------------- (IN MILLIONS) Assets Mortgage loans on real estate........................................ $ 1,485.8 $ 1,730.5 Equity real estate................................................... 1,122.1 1,194.8 Other invested assets................................................ 665.2 978.8 Other assets......................................................... 579.3 529.5 ----------------- ----------------- Total Assets......................................................... $ 3,852.4 $ 4,433.6 ================= ================= Liabilities Policyholders' liabilities........................................... $ 1,399.8 $ 1,924.0 Allowance for future losses.......................................... 164.2 185.6 Amounts due to continuing operations................................. 2,097.1 2,108.6 Other liabilities.................................................... 191.3 215.4 ----------------- ----------------- Total Liabilities.................................................... $ 3,852.4 $ 4,433.6 ================= =================
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Revenues Investment income (net of investment expenses of $143.8, $174.0 and $175.8).................... $ 325.1 $ 395.0 $ 535.1 Investment (losses) gains, net..................... (22.9) 26.8 (22.6) Policy fees, premiums and other income............. .7 .3 8.7 ----------------- ---------------- ----------------- Total revenues..................................... 302.9 422.1 521.2 Benefits and other deductions...................... 328.0 443.8 545.9 ----------------- ---------------- ----------------- Losses Charged to Allowance for Future Losses...... $ (25.1) $ (21.7) $ (24.7) ================= ================ =================
In 1991, the Company established a pre-tax provision of $396.7 million for the estimated future losses of the GIC Segment. At December 31, 1993, implementation of SFAS No. 115 for the valuation of fixed maturities resulted in a benefit of $13.1 million, offset by a corresponding addition to the allowance for future losses. The amounts due to continuing operations at December 31, 1994 consisted of $3,324.0 million borrowed by the GIC Segment from continuing operations, offset by $1,215.4 million representing an obligation of continuing operations to provide assets to fund the accumulated deficit of the GIC Segment. In January 1995, continuing operations transferred $1,215.4 million in cash to the GIC Segment in settlement of its obligation. Subsequently, the GIC Segment remitted $1,155.4 million in cash to continuing operations in partial repayment of borrowings by the GIC Segment. No gains or losses were recognized on these transactions. Amounts due to continuing operations at December 31, 1995, consisted of $2,097.1 million borrowed by the discontinued GIC Segment. F-23 Investment income included $88.2 million and $97.7 million of interest income for the years ended December 31, 1994 and 1993, respectively, on amounts due from continuing operations. Benefits and other deductions includes $154.6 million, $219.7 million and $197.1 million of interest expense related to amounts borrowed from continuing operations in 1995, 1994 and 1993, respectively. Valuation allowances amounted to $19.2 million and $50.2 million on mortgage loans on real estate and $77.9 million and $74.7 million on equity real estate at December 31, 1995 and 1994, respectively. Writedowns of fixed maturities amounted to $8.1 million, $17.8 million and $1.1 million for the years ended December 31, 1995, 1994 and 1993, respectively. The fixed maturity portfolio, based on amortized cost, includes $15.1 million and $43.3 million at December 31, 1995 and 1994, respectively, of restructured securities. These amounts include problem fixed maturities of $6.1 million and $9.7 million at December 31, 1995 and 1994, respectively. At December 31, 1995 and 1994, problem mortgage loans on real estate had amortized costs of $35.4 million and $14.9 million, respectively, and mortgage loans on real estate for which the payment terms have been restructured had amortized costs of $289.3 million and $371.2 million, respectively. At December 31, 1995 and 1994, the GIC Segment had $310.9 million and $312.2 million, respectively, of real estate acquired in satisfaction of debt. 8) SHORT-TERM AND LONG-TERM DEBT Short-term and long-term debt consists of the following:
DECEMBER 31, -------------------------------------- 1995 1994 ----------------- ----------------- (IN MILLIONS) Short-term debt...................................................... $ - $ 20.0 ----------------- ----------------- Long-term debt: Equitable Life: Surplus notes, 6.95%, scheduled to mature 2005..................... 399.3 - Surplus notes, 7.70%, scheduled to mature 2015..................... 199.6 - Eurodollar notes, 10.375% due 1995................................. - 34.6 Eurodollar notes, 10.5% due 1997................................... 76.2 76.2 Zero coupon note, 11.25% due 1997.................................. 120.1 107.8 Other.............................................................. 16.3 14.3 ----------------- ----------------- Total Equitable Life........................................... 811.5 232.9 ----------------- ----------------- Wholly Owned and Joint Venture Real Estate: Mortgage notes, 4.98% - 12.75% due through 2019.................... 1,084.4 1,080.6 ----------------- ----------------- Alliance: Other.............................................................. 3.4 3.9 ----------------- ----------------- Total long-term debt................................................. 1,899.3 1,317.4 ----------------- ----------------- Total Short-term and Long-term Debt.................................. $ 1,899.3 $ 1,337.4 ================= =================
Short-term Debt --------------- Equitable Life has a $350.0 million bank credit facility available to fund short-term working capital needs and to facilitate the securities settlement process. The credit facility consists of two types of borrowing options with varying interest rates. The interest rates are based on external indices dependent on the type of borrowing and at December 31, 1995 range from 5.8% (the London Interbank Offering Rate plus 22.5 basis points) to 8.5% (the prime rate). There were no borrowings outstanding under this bank credit facility at December 31, 1995. F-24 Equitable Life has a commercial paper program with an issue limit of $500.0 million. This program is available for general corporate purposes used to support Equitable Life's liquidity needs and is supported by Equitable Life's existing $350.0 million five-year bank credit facility. There were no borrowings outstanding under this program at December 31, 1995. In 1994, Alliance established a $100.0 million revolving credit facility with several banks. On March 31, 1997, the revolving credit facility converts into a term loan payable in quarterly installments through March 31, 1999. Outstanding borrowings generally bear interest at the Eurodollar rate plus .875% per annum through March 31, 1997 and at the Eurodollar rate plus 1.125% per annum after conversion through March 31, 1999. In addition, a quarterly commitment fee of .25% per annum is paid on the average daily unused amount. At December 31, 1995, there were no amounts outstanding under the facility. In 1994, Alliance also established a $100.0 million commercial paper program and entered into a three-year $100.0 million revolving credit facility with a group of commercial banks to support commercial paper to be issued under the program and for general corporate purposes. Amounts outstanding under the facility bear interest at an annual rate ranging from the Eurodollar rate plus .225% to the Eurodollar rate plus .2875%. A fee of .125% per annum is paid quarterly on the entire facility. At December 31, 1995, Alliance had not issued any commercial paper and there were no amounts outstanding under the revolving credit facility. During 1994, EREIM established two bank lines of credit totaling $30.0 million of which $20.0 million was outstanding at December 31, 1994. Long-term Debt -------------- Several of the long-term debt agreements have restrictive covenants related to the total amount of debt, net tangible assets and other matters. The Company is in compliance with all debt covenants. On December 18, 1995, Equitable Life issued, in accordance with Section 1307 of the New York Insurance Law, $400.0 million of surplus notes having an interest rate of 6.95% scheduled to mature in 2005 and $200.0 million of surplus notes having an interest rate of 7.70% scheduled to mature in 2015. Proceeds from the issuance of the surplus notes were $596.6 million, net of related issuance costs. The unamortized discount on the surplus notes was $1.1 million at December 31, 1995. Payments of interest on or principal of the surplus notes are subject to prior approval by the New York Insurance Department. The Company has pledged real estate, mortgage loans, cash and securities amounting to $1,629.7 million and $1,744.4 million at December 31, 1995 and 1994, respectively, as collateral for certain long-term debt. At December 31, 1995, aggregate maturities of the long-term debt based on required principal payments at maturity for 1996 and the succeeding four years are $124.0 million, $466.6 million, $309.5 million, $15.8 million, respectively, and $1,015.0 million thereafter. 9) FEDERAL INCOME TAXES A summary of the Federal income tax expense (benefit) in the consolidated statements of earnings is shown below:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Federal income tax expense (benefit): Current.......................................... $ (11.7) $ 4.0 $ 115.8 Deferred......................................... 124.1 97.2 (24.5) ----------------- ---------------- ----------------- Total.............................................. $ 112.4 $ 101.2 $ 91.3 ================= ================ =================
F-25 The Federal income taxes attributable to consolidated operations are different from the amounts determined by multiplying the earnings before Federal income taxes and cumulative effect of accounting change by the expected Federal income tax rate of 35%. The sources of the difference and the tax effects of each are as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Expected Federal income tax expense................ $ 143.5 $ 138.1 $ 106.3 Differential earnings amount....................... - (16.8) (23.2) Adjustment of tax audit reserves................... 4.1 (4.6) 22.9 Tax rate adjustment................................ - - (5.0) Other.............................................. (35.2) (15.5) (9.7) ----------------- --------------- ----------------- Federal Income Tax Expense......................... $ 112.4 $ 101.2 $ 91.3 ================= ================ =================
Prior to the date of demutualization, Equitable Life reduced its deduction for policyholder dividends by the differential earnings amount. This amount was computed, for each tax year, by multiplying Equitable Life's average equity base, as determined for tax purposes, by an estimate of the excess of an imputed earnings rate for stock life insurance companies over the average mutual life insurance companies' earnings rate. The differential earnings amount for each tax year was subsequently recomputed when actual earnings rates were published by the Internal Revenue Service. As a stock life insurance company, Equitable Life is no longer required to reduce its policyholder dividend deduction by the differential earnings amount, but differential earnings amounts for pre-demutualization years were still being recomputed in 1994 and 1993. The components of the net deferred Federal income tax asset are as follows:
DECEMBER 31, 1995 December 31, 1994 --------------------------------- --------------------------------- ASSETS LIABILITIES Assets Liabilities --------------- ---------------- --------------- --------------- (IN MILLIONS) Deferred policy acquisition costs, reserves and reinsurance............. $ - $ 303.2 $ - $ 220.3 Investments............................ - 326.9 - 18.7 Compensation and related benefits...... 293.0 - 307.3 - Other.................................. - 32.3 - 5.8 --------------- ---------------- --------------- --------------- Total.................................. $ 293.0 $ 662.4 $ 307.3 $ 244.8 =============== ================ =============== ===============
The deferred Federal income tax expense (benefit) impacting operations reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The sources of these temporary differences and the tax effects of each are as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Deferred policy acquisition costs, reserves and reinsurance.................................. $ 55.1 $ 13.0 $ (46.7) Investments........................................ 13.0 89.3 60.4 Compensation and related benefits.................. 30.8 10.0 (50.1) Other.............................................. 25.2 (15.1) 11.9 ----------------- ---------------- ----------------- Deferred Federal Income Tax Expense (Benefit)...... $ 124.1 $ 97.2 $ (24.5) ================= ================ =================
F-26 The Internal Revenue Service completed its audit of the Company's Federal income tax returns for the years 1984 through 1988. There was no material effect on the Company's consolidated results of operations. 10) REINSURANCE AGREEMENTS The Insurance Group assumes and cedes reinsurance with other insurance companies. The Insurance Group evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The effect of reinsurance (excluding group life and health) is summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Direct premiums.................................... $ 474.2 $ 476.7 $ 458.8 Reinsurance assumed................................ 171.3 180.5 169.9 Reinsurance ceded.................................. (38.7) (31.6) (29.6) ----------------- ---------------- ----------------- Premiums........................................... $ 606.8 $ 625.6 $ 599.1 ================= ================ ================= Universal Life and Investment-type Product Policy Fee Income Ceded.......................... $ 38.9 $ 27.5 $ 33.7 ================= ================ ================= Policyholders' Benefits Ceded...................... $ 48.2 $ 20.7 $ 72.3 ================= ================ ================= Interest Credited to Policyholders' Account Balances Ceded................................... $ 28.5 $ 25.4 $ 24.1 ================= ================ =================
In February 1993, management established a practice limiting the risk retention on new policies issued by the Insurance Group to a maximum of $5.0 million. In addition, effective January 1, 1994, all in force business above $5.0 million was reinsured. The Insurance Group also reinsures the entire risk on certain substandard underwriting risks as well as in certain other cases. The Insurance Group cedes 100% of its group life and health business to a third party insurance company. Premiums ceded totaled $260.6 million, $241.0 million and $895.1 million for the years ended December 31, 1995, 1994 and 1993, respectively. Ceded death and disability benefits totaled $188.1 million, $235.5 million and $787.8 million for the years ended December 31, 1995, 1994 and 1993, respectively. Insurance liabilities ceded totaled $724.2 million and $833.4 million at December 31, 1995 and 1994, respectively. 11) EMPLOYEE BENEFIT PLANS The Company sponsors qualified and non-qualified defined benefit plans covering substantially all employees (including certain qualified part-time employees), managers and certain agents. The pension plans are non-contributory and benefits are based on a cash balance formula or years of service and final average earnings, if greater, under certain grandfathering rules in the plans. The Company's funding policy is to make the minimum contribution required by the Employee Retirement Income Security Act of 1974. Components of net periodic pension (credit) cost for the qualified and non-qualified plans are as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Service cost....................................... $ 30.0 $ 30.3 $ 29.8 Interest cost on projected benefit obligations..... 122.0 111.0 108.0 Actual return on assets............................ (309.2) 24.4 (178.6) Net amortization and deferrals..................... 155.6 (142.5) 55.3 ----------------- ---------------- ----------------- Net Periodic Pension (Credit) Cost................. $ (1.6) $ 23.2 $ 14.5 ================= ================ =================
F-27 The funded status of the qualified and non-qualified pension plans is as follows:
DECEMBER 31, ------------------------------------ 1995 1994 ---------------- ----------------- (IN MILLIONS) Actuarial present value of obligations: Vested............................................................... $ 1,642.4 $ 1,295.5 Non-vested........................................................... 10.9 8.7 --------------- ----------------- Accumulated Benefit Obligation......................................... $ 1,653.3 $ 1,304.2 ================ ================= Plan assets at fair value.............................................. $ 1,503.8 $ 1,193.5 Projected benefit obligation........................................... 1,743.0 1,403.4 ---------------- ----------------- Projected benefit obligation in excess of plan assets.................. (239.2) (209.9) Unrecognized prior service cost........................................ (25.5) (33.2) Unrecognized net loss from past experience different from that assumed.............................................................. 368.2 298.9 Unrecognized net asset at transition................................... (7.3) (20.8) Additional minimum liability........................................... (51.9) (37.8) ---------------- ----------------- Prepaid (Accrued) Pension Cost......................................... $ 44.3 $ (2.8) ================ =================
The discount rate and rate of increase in future compensation levels used in determining the actuarial present value of projected benefit obligations were 7.25% and 4.50%, respectively, at December 31, 1995 and 8.75% and 4.88%, respectively, at December 31, 1994. As of January 1, 1995 and 1994, the expected long-term rate of return on assets for the retirement plan was 11% and 10%, respectively. The Company recorded, as a reduction of shareholder's equity, an additional minimum pension liability of $35.1 million and $2.7 million, net of Federal income taxes, at December 31, 1995 and 1994, respectively, representing the excess of the accumulated benefit obligation over the fair value of plan assets and accrued pension liability. The pension plan's assets include corporate and government debt securities, equity securities, equity real estate and shares of Group Trusts managed by Alliance. As of December 31, 1993, the Company changed the method of determining the market-related value of plan assets from fair value to a calculated value. This change in estimate had no material effect on the Company's consolidated statements of earnings. Prior to 1987, the qualified plan funded participants' benefits through the purchase of non-participating annuity contracts from Equitable Life. Benefit payments under these contracts were approximately $36.4 million, $38.1 million and $39.9 million for the years ended December 31, 1995, 1994 and 1993, respectively. The Company provides certain medical and life insurance benefits (collectively, "postretirement benefits") for qualifying employees, managers and agents retiring from the Company on or after attaining age 55 who have at least 10 years of service. The life insurance benefits are related to age and salary at retirement. The costs of postretirement benefits are recognized in accordance with the provisions of SFAS No. 106. The Company continues to fund postretirement benefits costs on a pay-as-you-go basis and, for the years ended December 31, 1995, 1994 and 1993, the Company made estimated postretirement benefits payments of $31.1 million, $29.8 million and $29.7 million, respectively. F-28 The following table sets forth the postretirement benefits plan's status, reconciled to amounts recognized in the Company's consolidated financial statements:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Service cost....................................... $ 4.0 $ 3.9 $ 5.3 Interest cost on accumulated postretirement benefits obligation.............................. 34.7 28.6 29.2 Unrecognized prior service cost.................... (2.3) (3.9) (6.9) Net amortization and deferrals..................... - - 1.5 ----------------- ---------------- ----------------- Net Periodic Postretirement Benefits Costs......... $ 36.4 $ 28.6 $ 29.1 ================= ================ =================
DECEMBER 31, ------------------------------------ 1995 1994 ---------------- ----------------- (IN MILLIONS) Accumulated postretirement benefits obligation: Retirees............................................................. $ 391.8 $ 300.4 Fully eligible active plan participants.............................. 50.4 33.0 Other active plan participants....................................... 64.2 44.0 ---------------- ----------------- 506.4 377.4 Unrecognized benefit of plan amendments................................ - 3.2 Unrecognized prior service cost........................................ 56.3 61.9 Unrecognized net loss from past experience different from that assumed and from changes in assumptions.............................. (181.3) (64.7) ---------------- ----------------- Accrued Postretirement Benefits Cost................................... $ 381.4 $ 377.8 ================ =================
In 1993, the Company amended the cost sharing provisions of postretirement medical benefits. At January 1, 1994, medical benefits available to retirees under age 65 are the same as those offered to active employees and medical benefits will be limited to 200% of 1993 costs for all participants. The assumed health care cost trend rate used in measuring the accumulated postretirement benefits obligation was 10% in 1995, gradually declining to 3.5% in the year 2008 and in 1994 was 10%, gradually declining to 5% in the year 2004. The discount rate used in determining the accumulated postretirement benefits obligation was 7.25% and 8.75% at December 31, 1995 and 1994, respectively. If the health care cost trend rate assumptions were increased by 1%, the accumulated postretirement benefits obligation as of December 31, 1995 would be increased 6.5%. The effect of this change on the sum of the service cost and interest cost would be an increase of 6.7%. 12) DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS Derivatives ----------- The Insurance Group primarily uses derivatives for asset/liability risk management and for hedging individual securities. Derivatives mainly are utilized to reduce the Insurance Group's exposure to interest rate fluctuations. Accounting for interest rate swap transactions is on an accrual basis. Gains and losses related to interest rate swap transactions are amortized as yield adjustments over the remaining life of the underlying hedged security. Income and expense resulting from interest rate swap activities are reflected in net investment income except for hedging transactions related to insurance liabilities. The notional amount of matched interest rate swaps outstanding at December 31, 1995 was $1,120.8 million. The average unexpired terms at December 31, 1995 range from 2.5 to 3.0 years. At December 31, 1995, the cost of terminating outstanding matched swaps in a loss position was $15.9 million and the unrealized gain on F-29 outstanding matched swaps in a gain position was $19.0 million. The Company has no intention of terminating these contracts prior to maturity. During 1995, 1994 and 1993, net gains (losses) of $1.4 million, $(.2) million and $-0- million, respectively, were recorded in connection with interest rate swap activity. Equitable Life has implemented an interest rate cap program designed to hedge crediting rates on interest-sensitive individual annuities contracts. The outstanding notional amounts at December 31, 1995 of contracts purchased and sold were $2,625.0 million and $300.0 million, respectively. The net premium paid by Equitable Life on these contracts was $12.5 million and is being amortized ratably over the contract periods ranging from 3 to 5 years. Income and expense resulting from this program are reflected as an adjustment to interest credited to policyholders' account balances. Substantially all of DLJ's business related derivatives is by its nature trading activities which are primarily for the purpose of customer accommodations. DLJ's derivative activities consist of option writing and trading in forward and futures contracts. Derivative financial instruments have both on-and-off balance sheet implications depending on the nature of the contracts. DLJ's involvement in swap contracts is not significant. Fair Value of Financial Instruments ----------------------------------- The Company defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. The fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of timing, amount of expected future cash flows and the credit standing of counterparties. Such estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument. Certain financial instruments are excluded, particularly insurance liabilities other than financial guarantees and investment contracts. Fair market value of off-balance-sheet financial instruments of the Insurance Group was not material at December 31, 1995 and 1994. Fair value for mortgage loans on real estate are estimated by discounting future contractual cash flows using interest rates at which loans with similar characteristics and credit quality would be made. Fair values for foreclosed mortgage loans and problem mortgage loans are limited to the estimated fair value of the underlying collateral if lower. The estimated fair values for the Company's liabilities under GIC and association plan contracts are estimated using contractual cash flows discounted based on the T. Rowe Price GIC Index Rate for the appropriate duration. For durations in excess of the published index rate, the appropriate Treasury rate is used plus a spread equal to the longest duration GIC rate spread published. The estimated fair values for those group annuity contracts which are classified as investment contracts are measured at the estimated fair value of the underlying assets. Deposit administration contracts (included with group annuity contracts) classified as insurance contracts are measured at estimated fair value of the underlying assets. The estimated fair values for single premium deferred annuities ("SPDA") are estimated using projected cash flows discounted at current offering rates. The estimated fair values for supplementary contracts not involving life contingencies ("SCNILC") and annuities certain are derived using discounted cash flows based upon the estimated current offering rate. Fair value for long-term debt is determined using published market values, where available, or contractual cash flows discounted at market interest rates. The estimated fair values for non-recourse mortgage debt are determined by discounting contractual cash flows at a rate which takes into account the level of current market interest rates and collateral risk. The estimated fair values for recourse mortgage debt are determined by discounting contractual cash flows at a rate based upon current interest rates of other companies with credit ratings similar to the Company. The Company's fair value of short-term borrowings approximates their carrying value. F-30 The following table discloses carrying value and estimated fair value for financial instruments not otherwise disclosed in Notes 3, 6 and 7:
DECEMBER 31, -------------------------------------------------------------------- 1995 1994 --------------------------------- --------------------------------- CARRYING ESTIMATED Carrying Estimated VALUE FAIR VALUE Value Fair Value --------------- ---------------- --------------- --------------- (IN MILLIONS) Consolidated Financial Instruments: ----------------------------------- Mortgage loans on real estate.......... $ 3,638.3 $ 3,973.6 $ 4,018.0 $ 3,919.4 Other joint ventures................... 492.7 492.7 544.4 544.4 Policy loans........................... 1,976.4 2,057.5 1,731.2 1,676.6 Policyholders' account balances: Association plans.................... 101.0 100.0 141.0 141.0 Group annuity contracts.............. 2,335.0 2,395.0 2,450.0 2,469.0 SPDA................................. 1,265.8 1,272.0 1,744.3 1,732.7 Annuities certain and SCNILC......... 649.1 680.7 599.1 624.7 Long-term debt......................... 1,899.3 1,962.9 1,317.4 1,249.2 Closed Block Financial Instruments: ----------------------------------- Mortgage loans on real estate.......... 1,368.8 1,461.4 1,543.7 1,477.8 Other equity investments............... 151.6 151.6 179.5 179.5 Policy loans........................... 1,797.2 1,891.4 1,827.9 1,721.9 SCNILC liability....................... 34.8 34.5 39.5 37.0 GIC Segment Financial Instruments: ---------------------------------- Mortgage loans on real estate.......... 1,485.8 1,666.1 1,730.5 1,743.7 Fixed maturities....................... 107.4 107.4 219.3 219.3 Other equity investments............... 455.9 455.9 591.8 591.8 Guaranteed interest contracts.......... 329.0 352.0 835.0 855.0 Long-term debt......................... 135.1 136.0 134.8 127.9
13) COMMITMENTS AND CONTINGENT LIABILITIES The Company has provided, from time to time, certain guarantees or commitments to affiliates, investors and others. These arrangements include commitments by the Company, under certain conditions: to make liquidity advances to cover delinquent principal and interest and property protection expenses with respect to loan servicing agreements for securitized mortgage loans which at December 31, 1995 totaled $2.8 billion (as of December 31, 1995, $4.0 million have been advanced under these commitments); to make capital contributions of up to $246.7 million to affiliated real estate joint ventures; to provide equity financing to certain limited partnerships of $129.4 million at December 31, 1995, under existing loan or loan commitment agreements; and to provide short-term financing loans which at December 31, 1995 totaled $45.8 million. Management believes the Company will not incur any material losses as a result of these commitments. Equitable Life is the obligor under certain structured settlement agreements which it had entered into with unaffiliated insurance companies and beneficiaries. To satisfy its obligations under these agreements, Equitable Life owns single premium annuities issued by previously wholly owned life insurance subsidiaries. Equitable Life has directed payment under these annuities to be made directly to the beneficiaries under the structured settlement agreements. A contingent liability exists with respect to these agreements should the previously wholly owned subsidiaries be unable to meet their obligations. Management believes the satisfaction of those obligations by Equitable Life is remote. At December 31, 1995, the Insurance Group had $29.0 million of letters of credit outstanding. F-31 14) LITIGATION A number of lawsuits have been filed against life and health insurers in the jurisdictions in which Equitable Life and its subsidiaries do business involving insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters. Some of the lawsuits have resulted in the award of substantial judgments against other insurers, including material amounts of punitive damages, or in substantial settlements. In some states juries have substantial discretion in awarding punitive damages. Equitable Life and its insurance subsidiaries, like other life and health insurers, from time to time are involved in such litigation. To date, no such lawsuit has resulted in an award or settlement of any material amount against the Company. Among litigations pending against Equitable Life and its insurance subsidiaries of the type referred to in this paragraph are the litigations described in the following two paragraphs. An action entitled Golomb et al. v. The Equitable Life Assurance Society of the United States was filed on January 20, 1995 in New York County Supreme Court. The action purports to be brought on behalf of a class of persons insured after 1983 under Lifetime Guaranteed Renewable Major Medical Insurance Policies issued by Equitable Life (the "policies"). The complaint alleges that premium increases for these policies after 1983, all of which were filed with and approved by the New York State Insurance Department and certain other state insurance departments, breached the terms of the insurance policies, and that statements in the policies and elsewhere concerning premium increases constituted fraudulent concealment, misrepresentations in violation of New York Insurance Law Section 4226 and deceptive practices under New York General Business Law Section 349. The complaint seeks a declaratory judgment, injunctive relief restricting the methods by which Equitable Life increases premiums on the policies in the future, a refund of premiums, and punitive damages. Plaintiffs also have indicated that they will seek damages in an unspecified amount. Equitable Life has moved to dismiss the complaint in its entirety on the grounds that it fails to state a claim and that uncontroverted documentary evidence establishes a complete defense to the claims. That motion is awaiting decision by the court. In January 1996, separate actions were filed in Pennsylvania and Texas state courts (entitled, respectively, Malvin et al. v. The Equitable Life Assurance Society of the United States and Bowler et al. v. The Equitable Life Assurance Society of the United States), making claims similar to those in the New York action described above. These new actions are asserted on behalf of proposed classes of Pennsylvania issued or renewed policyholders and Texas issued or renewed policyholders, insured under the policies. The Pennsylvania and Texas actions seek compensatory and punitive damages and injunctive relief restricting the methods by which Equitable Life increases premiums in the future based on the common law and statutes of those states. Although the outcome of any litigation cannot be predicted with certainty, particularly in the early stages of an action, Equitable Life's management believes that the ultimate resolution of those litigations should not have a material adverse effect on the financial position of the Company. Due to the early stage of such litigation, Equitable Life's management cannot make an estimate of loss, if any, or predict whether or not such litigation will have a material adverse effect on the Company's results of operations in any particular period. An action was instituted on April 6, 1995 against Equitable Life and its wholly owned subsidiary, The Equitable of Colorado, Inc. ("EOC"), in New York State Court, entitled Sidney C. Cole et al. v. The Equitable Life Assurance Society of the United States and The Equitable of Colorado, Inc., No. 95/108611 (N.Y. County). The action is brought by the holders of a joint survivorship whole life policy issued by EOC. The action purports to be on behalf of a class consisting of all persons who from January 1, 1984 purchased life insurance policies sold by Equitable Life and EOC based upon their allegedly uniform sales presentations and policy illustrations. The complaint puts in issue various alleged sales practices that plaintiffs assert, among other things, misrepresented the stated number of years that the annual premium would need to be paid. Plaintiffs seek damages in an unspecified amount, imposition of a constructive trust, and seek to enjoin Equitable Life and EOC from engaging in the challenged sales practices. Equitable Life and EOC intend to defend vigorously and believe that they have meritorious defenses which, if successful, would dispose of the action completely. Equitable Life and EOC further do not believe that this case is an appropriate class action. Although the outcome of any litigation cannot be predicted with certainty, particularly in the early stages of an action, Equitable Life's management believes that the ultimate F-32 resolution of this litigation should not have a material adverse effect on the financial position of the Company. Due to the early stage of such litigation, the Company's management cannot make an estimate of loss, if any, or predict whether or not such litigation will have a material adverse effect on the Company's results of operations in any particular period. Equitable Casualty Insurance Company ("Casualty"), a captive property and casualty insurance company organized under the laws of Vermont, which is an indirect wholly owned subsidiary of Equitable Life, is a party to an arbitration proceeding that commenced in August 1995 with the selection of three arbitrators. The arbitration will resolve a dispute among Casualty, Houston General Insurance Company ("Houston General"), and GEICO General Insurance Company ("GEICO General") regarding the interpretation of a reinsurance agreement that was entered into as part of a 1980 transaction whereby Equitable General Insurance Company ("Equitable General"), formerly an indirect subsidiary of Equitable Life and the predecessor of GEICO General, sold its commercial lines business along with the stock of Houston General to subsidiaries of Tokio Marine & Fire Insurance Company, Ltd. ("Tokio Marine"). Casualty and GEICO General maintain that, under the reinsurance agreement, Houston General assumed liability for all losses insured under commercial lines policies written by Equitable General and its predecessors in order to effect the transfer of that business to Tokio Marine's subsidiaries. Houston General contends that it did not assume reinsurance liability for losses insured under certain of those commercial lines policies. The arbitration panel determined to begin hearing evidence in the arbitration in June 1996. The result of the arbitration is expected to resolve two litigations that were commenced by Houston General and that have been stayed by the presiding courts pending the completion of the arbitration (in one case, Houston General named as a defendant only GEICO General but Casualty intervened as a defendant with GEICO General, and in the other case, Houston General named GEICO General and Equitable Life). The arbitration is expected to be completed during the second half of 1996. While the ultimate outcome of the arbitration cannot be predicted with certainty, the Company's management believes that the arbitrators will recognize that Houston General's position is without merit and contrary to the way in which the reinsurance industry operates and therefore the ultimate resolution of this matter should not have a material adverse effect on the Company's financial position or results of operations. On July 25, 1995, a Consolidated and Supplemental Class Action Complaint ("Complaint") was filed against the Alliance North American Government Income Trust, Inc. (the "Fund"), Alliance and certain other defendants affiliated with Alliance, including the Holding Company, alleging violations of Federal securities laws, fraud and breach of fiduciary duty in connection with the Fund's investments in Mexican and Argentine securities. A similar complaint was filed on November 7, 1995 and was subsequently consolidated with the Complaint. The Complaint, which seeks certification of a plaintiff class of persons who purchased or owned Class A, B or C shares of the Fund from March 27, 1992 through December 23, 1994, seeks an unspecified amount of damages, costs, attorneys' fees and punitive damages. The principal allegations of the Complaint are that the Fund purchased debt securities issued by the Mexican and Argentine governments in amounts that were not permitted by the Fund's investment objective, and that there was no shareholder vote to change the investment objective to permit purchases in such amounts. The Complaint further alleges that the decline in the value of the Mexican and Argentine securities held by the Fund caused the Fund's net asset value to decline to the detriment of the Fund's shareholders. On September 26, 1995, the defendants jointly filed a motion to dismiss the Complaint which has not yet been decided by the Court. Alliance believes that the allegations in the Complaint are without merit and intends to vigorously defend against these claims. While the ultimate results of this action cannot be determined, management of Alliance does not expect that this action will have a material adverse effect on Alliance's business. On January 26, 1996, a purported purchaser of certain notes and warrants to purchase shares of common stock of Rickel Home Centers, Inc. ("Rickel") filed a class action complaint against Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC"), a wholly owned subsidiary of DLJ, and certain other defendants for unspecified compensatory and punitive damages in the United States District Court for the Southern District of New York. The suit was brought on behalf of the purchasers of 126,457 units consisting of $126,457,000 aggregate principal amount of 13 1/2% senior notes due 2001 and 126,457 warrants to purchase shares of common stock of Rickel (the "Units") issued by Rickel in October 1994. The complaint alleges violations of Federal securities laws and common law fraud against DLJSC, as the underwriter of F-33 the Units and as an owner of 7.3% of the common stock of Rickel, Eos Partners, L.P., and General Electric Capital Corporation, each as owners of 44.2% of the common stock of Rickel, and members of the Board of Directors of Rickel, including a DLJSC Managing Director. The complaint seeks to hold DLJSC liable for alleged misstatements and omissions contained in the prospectus and registration statement filed in connection with the offering of the Units, alleging that the defendants knew of financial losses and a decline in value of Rickel in the months prior to the offering and did not disclose such information. The complaint also alleges that Rickel failed to pay its semi-annual interest payment due on the Units on December 15, 1995 and that Rickel filed a voluntary petition for reorganization pursuant to Chapter 11 of the United States Bankruptcy Code on January 10, 1996. DLJSC intends to defend itself vigorously against all of the allegations contained in the complaint. Although there can be no assurance, DLJ does not believe the outcome of this litigation will have a material adverse effect on its financial condition. Due to the early stage of this litigation, based on the information currently available to it, DLJ's management cannot make an estimate of loss or predict whether or not such litigation will have a material adverse effect on DLJ's results of operations in any particular period. On June 12, 1995, a purported purchaser of certain securities issued by Spectravision, Inc. ("Spectravision") filed a class action complaint against DLJSC and certain other defendants for unspecified damages in the U.S. District Court for the Northern District of Texas. The suit was brought on behalf of the purchasers of $260,795,000 of securities issued by Spectravision in November 1992, and alleges violations of the Federal securities laws and the Texas Securities Act, common law fraud and negligent misrepresentation. The securities were issued by Spectravision pursuant to a prepackaged bankruptcy reorganization plan. DLJSC served as financial advisor to Spectravision in its reorganization and as Dealer Manager for Spectravision's 1992 issuance of the securities. DLJSC is also being sued as a seller of certain notes of Spectravision acquired and resold by DLJSC. The complaint seeks to hold DLJSC liable for various alleged misstatements and omissions contained in prospectuses and other materials issued between July 1992 and June 1994. DLJSC intends to defend itself vigorously against all of the allegations contained in the complaint. On June 8, 1995, Spectravision filed a Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware. On January 5, 1996, the district court in the litigation involving DLJSC ordered a partial stay of discovery until Spectravision has emerged from bankruptcy or six months from the date of the stipulated stay (whichever comes first). Accordingly, discovery of DLJSC has not yet occurred. Although there can be no assurance, DLJ does not believe that the ultimate outcome of this litigation will have a material adverse effect on its financial condition. Due to the early stage of such litigation, based upon information currently available to it, DLJ's management cannot make an estimate of loss or predict whether or not such litigation will have a material adverse effect on DLJ's results of operations in any particular period. Plaintiff's counsel in the class action against DLJSC described above has also filed another securities class action based on similar factual allegations. Such suit names as defendants Spectravision and its directors, and was brought on behalf of a class of purchasers of $209.0 million of stock and $77.0 million of notes issued by Spectravision in October 1993. DLJSC served as the managing underwriter for both of these issuances. DLJSC has not been named as a defendant in this suit, although it has been reported to DLJSC that plaintiff's counsel is contemplating seeking to amend the complaint to add DLJSC as a defendant in that action. In October 1995, DLJSC was named as a defendant in a purported class action filed in a Texas State Court on behalf of the holders of $550.0 million principal amount of subordinated redeemable discount debentures of National Gypsum Corporation ("NGC") canceled in connection with a Chapter 11 plan of reorganization for NGC consummated in July 1993. The named plaintiff in the State Court action also filed an adversary proceeding in the Bankruptcy Court for the Northern District of Texas seeking a declaratory judgment that the confirmed NGC plan of reorganization does not bar the class action claims. Subsequent to the consummation of NGC's plan of reorganization, NGC's shares traded for values substantially in excess of, and in 1995 NGC was acquired for a value substantially in excess of, the values upon which NGC's plan of reorganization was based. The two actions arise out of DLJSC's activities as financial advisor to NGC in the course of NGC's Chapter 11 reorganization proceedings. The class action complaint alleges that the plan of reorganization submitted by NGC was based upon projections by NGC and DLJSC which intentionally understated forecasts, and provided misleading and incorrect information in order to hide NGC's true value and that defendants breached their fiduciary duties by, among other things, providing false, misleading or incomplete information to deliberately understate the value of NGC. The class action complaint seeks compensatory and punitive damages purportedly sustained by the class. The Texas State F-34 Court action has subsequently been removed to the Bankruptcy Court, which removal is being opposed by the plaintiff. DLJSC intends to defend itself vigorously against all of the allegations contained in the complaint. Although there can be no assurance, DLJ does not believe that the ultimate outcome of this litigation will have a material adverse effect on its financial condition. Due to the early stage of such litigation, based upon the information currently available to it, DLJ's management cannot make an estimate of loss or predict whether or not such litigation will have a material adverse effect on DLJ's results of operations in any particular period. In November and December 1995, DLJSC, along with various other parties, was named as a defendant in a number of purported class actions filed in the U.S. District Court for the Eastern District of Louisiana. The complaints allege violations of the Federal securities laws arising out of a public offering in 1994 of $435.0 million of first mortgage notes of Harrah's Jazz Company and Harrah's Jazz Finance Corp. The complaints seek to hold DLJSC liable for various alleged misstatements and omissions contained in the prospectus dated November 9, 1994. DLJSC intends to defend itself vigorously against all of the allegations contained in the complaints. Although there can be no assurance, DLJ does not believe that the ultimate outcome of this litigation will have a material adverse effect on its financial condition. Due to the early stage of this litigation, based upon the information currently available to it, DLJ's management cannot make an estimate of loss or predict whether or not such litigation will have a material adverse effect on DLJ's results of operations in any particular period. In addition to the matters described above, Equitable Life and its subsidiaries and DLJ and its subsidiaries are involved in various legal actions and proceedings in connection with their businesses. Some of the actions and proceedings have been brought on behalf of various alleged classes of claimants and certain of these claimants seek damages of unspecified amounts. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on the Company's consolidated financial position or results of operations. 15) LEASES The Company has entered into operating leases for office space and certain other assets, principally data processing equipment and office furniture and equipment. Future minimum payments under noncancelable leases for 1996 and the succeeding four years are $114.8 million, $101.8 million, $90.0 million, $73.6 million, $57.7 million and $487.0 million thereafter. Minimum future sublease rental income on these noncancelable leases for 1996 and the succeeding four years are $11.0 million, $8.7 million, $6.9 million, $4.6 million, $2.9 million and $1.1 million thereafter. At December 31, 1995, the minimum future rental income on noncancelable operating leases for wholly owned investments in real estate for 1996 and the succeeding four years are $292.9 million, $271.2 million, $248.1 million, $226.4 million, $195.5 million and $1,018.8 million thereafter. F-35 16) OTHER OPERATING COSTS AND EXPENSES Other operating costs and expenses consisted of the following:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Compensation costs................................. $ 595.9 $ 690.0 $ 1,452.3 Commissions........................................ 314.3 313.0 551.1 Short-term debt interest expense................... 11.4 19.0 317.1 Long-term debt interest expense.................... 108.1 98.3 86.0 Amortization of policy acquisition costs........... 320.4 318.1 275.9 Capitalization of policy acquisition costs......... (391.0) (410.9) (397.8) Rent expense, net of sub-lease income.............. 124.8 128.9 159.5 Other.............................................. 772.6 786.7 1,140.1 ----------------- ---------------- ----------------- Total.............................................. $ 1,856.5 $ 1,943.1 $ 3,584.2 ================= ================ =================
During the years ended December 31, 1995, 1994 and 1993, the Company restructured certain operations in connection with cost reduction programs and recorded pre-tax provisions of $32.0 million, $20.4 million and $96.4 million, respectively. The amounts paid during 1995, associated with the 1995 and 1994 cost reduction programs, totaled $24.0 million. At December 31, 1995, the liabilities associated with the 1995 and 1994 cost reduction programs amounted to $37.8 million. The 1995 cost reduction program included relocation expenses, including the accelerated amortization of building improvements associated with the relocation of the home office. The 1994 cost reduction program included costs associated with the termination of operating leases and employee severance benefits in connection with the consolidation of 16 insurance agencies. The 1993 cost reduction program primarily reflected severance benefits of terminated employees in connection with the combination of a wholly owned subsidiary of the Company with Alliance. 17) INSURANCE GROUP STATUTORY FINANCIAL INFORMATION Equitable Life is restricted as to the amounts it may pay as dividends to the Holding Company. Under the New York Insurance Law, the New York Superintendent has broad discretion to determine whether the financia1 condition of a stock life insurance company would support the payment of dividends to its shareholders. For the years ended December 31, 1995, 1994 and 1993, statutory (loss) earnings totaled $(352.4) million, $67.5 million and $324.0 million, respectively. No amounts are expected to be available for dividends from Equitable Life to the Holding Company in 1996. At December 31, 1995, the Insurance Group, in accordance with various government and state regulations, had $18.9 million of securities deposited with such government or state agencies. F-36 Accounting practices used to prepare statutory financial statements for regulatory filings of stock life insurance companies differ in certain instances from GAAP. The following reconciles the Company's statutory change in surplus and capital stock and statutory surplus and capital stock determined in accordance with accounting practices prescribed by the New York Insurance Department with net earnings and equity on a GAAP basis.
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Net change in statutory surplus and capital stock.. $ 78.1 $ 292.4 $ 190.8 Change in asset valuation reserves................. 365.7 (285.2) 639.1 ----------------- ---------------- ----------------- Net change in statutory surplus, capital stock and asset valuation reserves..................... 443.8 7.2 829.9 Adjustments: Future policy benefits and policyholders' account balances............................... (67.9) (11.0) (171.0) Deferred policy acquisition costs................ 70.6 92.8 121.8 Deferred Federal income taxes.................... (150.0) (59.7) (57.5) Valuation of investments......................... 189.1 45.2 202.3 Valuation of investment subsidiary............... (188.6) 396.6 (464.9) Limited risk reinsurance......................... 416.9 74.9 85.2 Issuance of surplus notes........................ (538.9) - - Sale of subsidiary and joint venture............. - - (366.5) Contribution from the Holding Company............ - (300.0) - Postretirement benefits.......................... (26.7) 17.1 23.8 Other, net....................................... 115.1 (44.0) 60.3 GAAP adjustments of Closed Block................. (3.1) 4.5 (16.0) GAAP adjustments of discontinued GIC Segment........................................ 37.3 42.8 (35.0) ----------------- ---------------- ----------------- Net Earnings....................................... $ 297.6 $ 266.4 $ 212.4 ================= ================ =================
DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Statutory surplus and capital stock................ $ 2,202.9 $ 2,124.8 $ 1,832.4 Asset valuation reserves........................... 1,345.9 980.2 1,265.4 ----------------- ---------------- ----------------- Statutory surplus, capital stock and asset valuation reserves............................... 3,548.8 3,105.0 3,097.8 Adjustments: Future policy benefits and policyholders' account balances............................... (1,017.4) (949.5) (938.5) Deferred policy acquisition costs................ 3,083.3 3,221.1 2,858.8 Deferred Federal income taxes.................... (450.8) (26.8) (137.8) Valuation of investments......................... 417.7 (794.1) (29.8) Valuation of investment subsidiary............... (665.1) (476.5) (873.1) Limited risk reinsurance......................... (429.0) (845.9) (920.8) Issuance of surplus notes........................ (538.9) - - Postretirement benefits.......................... (343.3) (316.6) (333.7) Other, net....................................... 4.4 (79.2) (81.9) GAAP adjustments of Closed Block................. 575.7 578.8 574.2 GAAP adjustments of discontinued GIC Segment........................................ (184.6) (221.9) (264.6) ----------------- ---------------- ----------------- Total Shareholder's Equity......................... $ 4,000.8 $ 3,194.4 $ 2,950.6 ================= ================ =================
F-37 18) BUSINESS SEGMENT INFORMATION The Company has three major business segments: Individual Insurance and Annuities; Investment Services and Group Pension. Consolidation/elimination principally includes debt not specific to any business segment. Attributed Insurance Capital represents net assets and related revenues and earnings of the Insurance Group not assigned to the insurance segments. Interest expense related to debt not specific to any business segment is presented within Corporate interest expense. Information for all periods is presented on a comparable basis. The Individual Insurance and Annuities segment offers a variety of traditional, variable and interest-sensitive life insurance products, disability income, annuity products and mutual fund and other investment products to individuals and small groups. This segment includes Separate Accounts for certain individual insurance and annuity products. The Investment Services segment provides investment fund management, primarily to institutional clients. This segment includes Separate Accounts which provide various investment options for group clients through pooled or single group accounts. Intersegment investment advisory and other fees of approximately $124.1 million, $135.3 million and $128.6 million for 1995, 1994 and 1993, respectively, are included in total revenues of the Investment Services segment. These fees, excluding amounts related to the discontinued GIC Segment of $14.7 million, $27.4 million and $17.0 million for 1995, 1994 and 1993, respectively, are eliminated in consolidation. The Group Pension segment administers traditional participating group annuity contracts with conversion features, generally for corporate qualified pension plans, and association plans which provide full service retirement programs for individuals affiliated with professional and trade associations.
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Revenues Individual insurance and annuities................. $ 3,254.6 $ 3,110.7 $ 2,981.5 Group pension...................................... 292.0 359.1 426.6 Attributed insurance capital....................... 61.2 79.4 61.6 ----------------- ---------------- ----------------- Insurance operations............................. 3,607.8 3,549.2 3,469.7 Investment services................................ 949.1 935.2 2,792.6 Consolidation/elimination.......................... (34.9) (24.7) (40.5) ----------------- ---------------- ----------------- Total.............................................. $ 4,522.0 $ 4,459.7 $ 6,221.8 ================= ================ ================= Earnings (loss) before Federal income taxes and cumulative effect of accounting change Individual insurance and annuities................. $ 274.4 $ 245.5 $ 76.2 Group pension...................................... (13.3) 15.8 2.0 Attributed insurance capital....................... 18.7 69.8 49.0 ----------------- ---------------- ----------------- Insurance operations............................. 279.8 331.1 127.2 Investment services................................ 161.2 177.5 302.1 Consolidation/elimination.......................... (3.1) .3 .5 ----------------- ---------------- ----------------- Subtotal..................................... 437.9 508.9 429.8 Corporate interest expense......................... (27.9) (114.2) (126.1) ----------------- ---------------- ----------------- Total.............................................. $ 410.0 $ 394.7 $ 303.7 ================= ================ =================
F-38
DECEMBER 31, ------------------------------------ 1995 1994 ---------------- ----------------- (IN MILLIONS) Assets Individual insurance and annuities..................................... $ 50,328.8 $ 44,063.4 Group pension.......................................................... 4,033.3 4,222.8 Attributed insurance capital........................................... 2,391.6 2,609.8 ---------------- ----------------- Insurance operations................................................. 56,753.7 50,896.0 Investment services.................................................... 12,842.9 12,127.9 Consolidation/elimination.............................................. (354.4) (1,614.4) ---------------- ----------------- Total.................................................................. $ 69,242.2 $ 61,409.5 ================ =================
19) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The quarterly results of operations for the years ended December 31, 1995, 1994 and 1993, are summarized below:
THREE MONTHS ENDED, ------------------------------------------------------------------------------ MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 ----------------- ----------------- ------------------ ------------------ (IN MILLIONS) 1995 ---- Total Revenues................ $ 1,074.7 $ 1,158.4 $ 1,127.1 $ 1,161.8 ================= ================= ================== ================== Net Earnings.................. $ 59.0 $ 94.3 $ 91.2 $ 53.1 ================= ================= ================== ================== 1994 ---- Total Revenues................ $ 1,107.4 $ 1,075.0 $ 1,153.8 $ 1,123.5 ================= ================= ================== ================== Earnings before Cumulative Effect of Accounting Change...................... $ 64.0 $ 68.4 $ 89.1 $ 72.0 ================= ================= ================== ================== Net Earnings.................. $ 36.9 $ 68.4 $ 89.1 $ 72.0 ================= ================= ================== ================== 1993 ---- Total Revenues................ $ 1,502.2 $ 1,539.7 $ 1,679.4 $ 1,500.5 ================= ================= ================== ================== Net Earnings.................. $ 32.3 $ 47.1 $ 68.8 $ 64.2 ================= ================= ================== ==================
20) INVESTMENT IN DLJ On December 15, 1993, the Company sold a 61% interest in DLJ to the Holding Company for $800.0 million in cash and securities. The excess of the proceeds over the book value in DLJ at the date of sale of $340.2 million has been reflected as a capital contribution. In 1995, DLJ completed the initial public offering ("IPO") of 10.58 million shares of its common stock, which included 7.28 million of the Holding Company's shares in DLJ, priced at $27 per share. Concurrent with the IPO, the Company contributed equity securities to DLJ having a market value of $21.2 million. Upon completion of the IPO, the Company's ownership percentage was reduced to 36.1%. The Company's ownership interest will be further reduced upon the issuance of common stock after the vesting of forfeitable restricted stock units acquired by and/or the exercise of options granted to certain DLJ employees. At December 31, 1995, DLJ had options F-39 outstanding to purchase approximately 9.2 million shares of DLJ common stock at $27.00 per share. Options are exercisable over a period of up to ten years. DLJ restricted stock units represents forfeitable rights to receive approximately 5.2 million shares of DLJ common stock through February 2000. The results of operations and cash flows of DLJ through the date of sale are included in the consolidated statements of earnings and cash flow for the year ended December 31, 1993. For the period subsequent to the date of sale, the results of operations of DLJ are accounted for on the equity basis and are included in commissions, fees and other income in the consolidated statements of earnings. The Company's carrying value of DLJ is included in investment in and loans to affiliates in the consolidated balance sheets. Summarized balance sheets information for DLJ, reconciled to the Company's carrying value of DLJ, are as follows:
DECEMBER 31, ------------------------------------ 1995 1994 ---------------- ----------------- (IN MILLIONS) Assets: Trading account securities, at market value............................ $ 10,911.4 $ 8,970.0 Securities purchased under resale agreements........................... 18,748.2 10,476.4 Broker-dealer related receivables...................................... 13,023.7 11,784.8 Other assets........................................................... 1,893.2 2,030.4 ---------------- ----------------- Total Assets........................................................... $ 44,576.5 $ 33,261.6 ================ ================= Liabilities: Securities sold under repurchase agreements............................ $ 26,744.8 $ 18,356.7 Broker-dealer related payables......................................... 12,915.5 10,618.0 Short-term and long-term debt.......................................... 1,717.5 1,956.5 Other liabilities...................................................... 1,775.0 1,285.1 ---------------- ----------------- Total liabilities...................................................... 43,152.8 32,216.3 Cumulative exchangeable preferred stock................................ 225.0 225.0 Total shareholders' equity............................................. 1,198.7 820.3 ---------------- ----------------- Total Liabilities, Cumulative Exchangeable Preferred Stock and Shareholders' Equity................................................. $ 44,576.5 $ 33,261.6 ================ ================= DLJ's equity as reported............................................... $ 1,198.7 $ 820.3 Unamortized cost in excess of net assets acquired in 1985 and other adjustments................................................ 40.5 50.8 The Holding Company's equity ownership in DLJ.......................... (499.0) (532.1) Minority interest in DLJ............................................... (324.3) - ---------------- ----------------- The Company's Carrying Value of DLJ.................................... $ 415.9 $ 339.0 ================ =================
F-40 Summarized statements of earnings information for DLJ reconciled to the Company's equity in earnings of DLJ is as follows:
YEARS ENDED DECEMBER 31, ------------------------------------ 1995 1994 ---------------- ----------------- (IN MILLIONS) Commission, fees and other income...................................... $ 1,325.9 $ 953.5 Net investment income.................................................. 904.1 791.9 Dealer, trading and investment gains, net.............................. 528.6 263.3 ---------------- ----------------- Total Revenues......................................................... 2,758.6 2,008.7 Total expenses including income taxes.................................. 2,579.5 1,885.7 ---------------- ----------------- Net earnings........................................................... 179.1 123.0 Dividends on preferred stock........................................... 19.9 20.9 ---------------- ----------------- Earnings Applicable to Common Shares................................... $ 159.2 $ 102.1 ================ ================= DLJ's earnings applicable to common shares as reported................. $ 159.2 $ 102.1 Amortization of cost in excess of net assets acquired in 1985.......... (3.9) (3.1) The Holding Company's equity in DLJ's earnings......................... (90.4) (60.9) Minority interest in DLJ............................................... (6.5) - ---------------- ----------------- The Company's Equity in DLJ's Earnings................................. $ 58.4 $ 38.1 ================ =================
21) RELATED PARTY TRANSACTIONS On August 31, 1993, the Company sold $661.0 million of primarily privately placed below investment grade fixed maturities to EQ Asset Trust 1993, a limited purpose business trust, wholly owned by the Holding Company. The Company recognized a $4.1 million gain net of related deferred policy acquisition costs, deferred Federal income tax and amounts attributable to participating group annuity contracts. In conjunction with this transaction, the Company received $200.0 million of Class B Notes issued by EQ Asset Trust 1993. These notes have interest rates ranging from 6.85% to 9.45%. The Class B Notes are reflected in investments in and loans to affiliates on the consolidated balance sheets. F-41 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, December 31, 1996 1995 ------------- ------------ (IN MILLIONS) ASSETS Investments: Fixed maturities: Available for sale, at estimated fair value ............ $ 17,117.5 $ 15,899.9 Mortgage loans on real estate ............................ 3,298.5 3,638.3 Equity real estate ....................................... 3,705.0 3,916.2 Policy loans ............................................. 2,167.3 1,976.4 Investment in and loans to affiliates .................... 686.8 636.6 Other equity investments ................................. 561.4 621.1 Other invested assets .................................... 358.4 706.1 ----------- ----------- Total investments .................................... 27,894.9 27,394.6 Cash and cash equivalents .................................. 528.2 774.7 Deferred policy acquisition costs .......................... 3,279.3 3,083.3 Amounts due from discontinued GIC Segment .................. 1,270.1 2,097.1 Other assets ............................................... 2,720.0 2,713.1 Closed Block assets ........................................ 8,345.7 8,612.8 Separate Accounts assets ................................... 28,242.3 24,566.6 ----------- ----------- TOTAL ASSETS ............................................... $ 72,280.5 $ 69,242.2 =========== ============ LIABILITIES Policyholders' account balances ............................ $ 21,795.3 $ 21,911.2 Future policy benefits and other policyholders' liabilities 4,155.9 4,013.2 Short-term and long-term debt .............................. 2,029.9 1,899.3 Other liabilities .......................................... 2,988.2 3,379.5 Closed Block liabilities ................................... 9,193.2 9,507.2 Separate Accounts liabilities .............................. 28,154.7 24,531.0 ----------- ----------- Total liabilities .................................... 68,317.2 65,241.4 ----------- ----------- Commitments and contingencies (Note 10) SHAREHOLDER'S EQUITY Common stock, $1.25 par value; 2.0 million shares authorized issued and outstanding ......................... 2.5 2.5 Capital in excess of par value ............................. 2,913.6 2,913.6 Retained earnings .......................................... 1,019.0 781.6 Net unrealized investment gains ............................ 63.3 338.2 Minimum pension liability .................................. (35.1) (35.1) ----------- ----------- Total shareholder's equity ........................... 3,963.3 4,000.8 ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY ................. $ 72,280.5 $ 69,242.2 =========== ===========
See Notes to Consolidated Financial Statements. F-42 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- --------------------- 1996 1995 1996 1995 ----------- --------- --------- ---------- (IN MILLIONS) REVENUES Universal life and investment-type product policy fee income ..................... $ 220.7 $ 197.1 $ 651.4 $ 581.4 Premiums ........................................ 145.8 140.2 439.2 452.7 Net investment income ........................... 534.3 517.5 1,605.9 1,551.7 Investment (losses) gains, net .................. (5.5) 8.8 (21.5) 27.7 Commissions, fees and other income .............. 262.5 232.3 786.8 650.5 Contribution from the Closed Block .............. 23.7 28.2 73.8 85.4 ---------- --------- --------- -------- Total revenues ............................ 1,181.5 1,124.1 3,535.6 3,349.4 ---------- --------- --------- -------- BENEFITS AND OTHER DEDUCTIONS Interest credited to policyholders' account balances ...................................... 315.8 314.8 948.8 921.3 Policyholders' benefits ......................... 268.4 245.7 795.6 766.1 Other operating costs and expenses .............. 457.2 421.8 1,379.0 1,282.4 ---------- --------- --------- -------- Total benefits and other deductions ....... 1,041.4 982.3 3,123.4 2,969.8 ---------- --------- --------- -------- Earnings before Federal income taxes, minority interest and cumulative effect of accounting change ............................. 140.1 141.8 412.2 379.6 Federal income taxes ............................ 33.7 33.9 92.2 89.9 Minority interest in net income of consolidated subsidiaries .................................. 20.6 16.7 59.5 45.2 ---------- --------- --------- -------- Earnings before cumulative effect of accounting change ............................. 85.8 91.2 260.5 244.5 Cumulative effect of accounting change, net of Federal income taxes ................... - - (23.1) - ---------- --------- --------- -------- Net Earnings .................................... $ 85.8 $ 91.2 $ 237.4 $ 244.5 ========== ========== ======== ========
See Notes to Consolidated Financial Statements. F-43 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED)
1996 1995 ---------- ---------- (IN MILLIONS) Common stock, at par value, beginning of year and end of period .. $ 2.5 $ 2.5 ---------- ---------- Capital in excess of par value, beginning of year and end of period ............................................... 2,913.6 2,913.6 ---------- ---------- Retained earnings, beginning of year ............................. 781.6 484.0 Net earnings ..................................................... 237.4 244.5 ---------- ---------- Retained earnings, end of period ................................. 1,019.0 728.5 ---------- ---------- Net unrealized investment gains (losses), beginning of year ...... 338.2 (203.0) Change in unrealized investment (losses) gains ................... (274.9) 270.5 ---------- ---------- Net unrealized investment gains, end of period ................... 63.3 67.5 ---------- ---------- Minimum pension liability, beginning of year and end of period ... (35.1) (2.7) ---------- ---------- TOTAL SHAREHOLDER'S EQUITY, END OF PERIOD ........................ $ 3,963.3 $ 3,709.4 ========== ==========
See Notes to Consolidated Financial Statements. F-44 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED)
1996 1995 ----------- ---------- (IN MILLIONS) Net earnings ......................................................... $ 237.4 $ 244.5 Adjustments to reconcile net earnings to net cash provided by operating activities: Interest credited to policyholders' account balances ............. 948.8 921.3 General Account policy charges ................................... (651.4) (581.4) Investment losses (gains) ........................................ 21.5 (27.7) Change in Federal income taxes payable ........................... (96.2) 110.8 Changes in Closed Block assets and liabilities, net .............. (46.9) (52.6) Other, net ....................................................... 33.8 102.2 ---------- ---------- Net cash provided by operating activities ............................ 447.0 717.1 ---------- ---------- Cash flows from investing activities: Maturities and repayments .......................................... 1,626.0 1,312.6 Sales .............................................................. 6,913.2 5,371.0 Return of capital from joint ventures and limited partnerships ..... 64.3 34.7 Purchases .......................................................... (9,646.9) (7,100.5) Decrease in loans to discontinued GIC Segment ...................... 827.0 1,155.4 Other, net ......................................................... (97.9) (176.7) ---------- ---------- Net cash (used) provided by investing activities ..................... (314.3) 596.5 ---------- ---------- Cash flows from financing activities: Policyholders' account balances: Deposits ......................................................... 1,402.2 2,034.3 Withdrawals ...................................................... (1,839.5) (2,078.9) Net increase in short-term financings .............................. 195.3 272.5 Repayments of long-term debt ....................................... (88.5) (5.3) Payment of obligation to fund accumulated deficit of discontinued GIC Segment ...................................................... - (1,215.4) Other, net ......................................................... (48.7) (33.8) ---------- ---------- Net cash used by financing activities ................................ (379.2) (1,026.6) ---------- ---------- Change in cash and cash equivalents .................................. (246.5) 287.0 Cash and cash equivalents, beginning of year ......................... 774.7 693.6 ---------- ---------- Cash and Cash Equivalents, End of Period ............................. $ 528.2 $ 980.6 ========== ========== Supplemental cash flow information Interest Paid ...................................................... $ 70.6 $ 61.2 ========== ========== Income Taxes (Refunded) Paid ....................................... $ (7.9) $ 4.1 ========== ==========
See Notes to Consolidated Financial Statements. F-45 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1) BASIS OF PRESENTATION The preparation of the accompanying consolidated financial statements in conformity with GAAP required management to make estimates and assumptions (including normal, recurring accruals) 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 revenues and expenses during the reporting period. These statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 1995. The results of operations for the nine months ended September 30, 1996 are not necessarily indicative of the results to be expected for the full year. Certain reclassifications have been made in the amounts presented for prior periods to conform those periods with the current presentation. 2) ACCOUNTING CHANGES AND PRONOUNCEMENTS The Company implemented SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," as of January 1, 1996. The statement requires long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable. Impaired real estate is written down to fair value with the impairment loss being included in Investment gains, net. Before implementing SFAS No. 121, valuation allowances on real estate held for the production of income were computed using the forecasted cash flows of the respective properties discounted at a rate equal to the Company's cost of funds. The adoption of the statement resulted in the release of valuation allowances of $152.4 million and recognition of impairment losses of $144.0 million on real estate held and used. Real estate which management has committed to disposing of by sale or abandonment is classified as real estate to be disposed of. Valuation allowances on real estate to be disposed of continue to be computed using the lower of estimated fair value or depreciated cost, net of disposition costs. Implementation of the SFAS No. 121 impairment requirements relative to other assets to be disposed of resulted in a charge for the cumulative effect of an accounting change of $23.1 million, net of a Federal income tax benefit of $12.4 million, due to the writedown to fair value of building improvements relating to facilities being vacated beginning in 1996. In June 1996, the FASB issued SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". SFAS No. 125 specifies the accounting and reporting requirements for transfers of financial assets, the recognition and measurement of servicing assets and liabilities and extinguishments of liabilities. SFAS No. 125 is effective for transactions occurring after December 31, 1996 and is to be applied prospectively. Management has not yet determined the effect of implementing SFAS No. 125. 3) FEDERAL INCOME TAXES Federal income taxes for interim periods have been computed using an estimated annual effective tax rate. This rate is revised, if necessary, at the end of each successive interim period to reflect the current estimate of the annual effective tax rate. F-46 4) INVESTMENTS Investment valuation allowances and changes thereto are shown below:
NINE MONTHS ENDED SEPTEMBER 30, --------------------- 1996 1995 --------- ---------- (IN MILLIONS) Balances, beginning of year ............................ $ 325.3 $ 284.9 SFAS No. 121 release ................................... (152.4) - Additions charged to income ............................ 88.7 67.8 Deductions for writedowns and asset dispositions ....... (105.2) (49.7) -------- -------- Balances, End of Period ................................ $ 156.4 $ 303.0 ======== ======== Balances, end of period: Mortgage loans on real estate ........................ $ 93.3 $ 66.8 Equity real estate ................................... 63.1 236.2 -------- -------- Total............................................. $ 156.4 $ 303.0 ======== ========
For the three months and nine months ended September 30, 1996 and 1995, investment income is shown net of investment expenses of $89.9 million, $272.1 million, $115.2 million and $343.3 million, respectively. As of September 30, 1996 and December 31, 1995, fixed maturities classified as available for sale had amortized costs of $17,001.8 million and $15,284.0 million, respectively. Other equity investments included equity securities with carrying values of $125.0 million and $128.4 million and costs of $101.3 million and $97.3 million as of September 30, 1996 and December 31, 1995, respectively. For the nine months ended September 30, 1996 and 1995, proceeds received on sales of fixed maturities classified as available for sale amounted to $6,645.1 million and $5,009.6 million, respectively. Gross gains of $94.0 million and $135.1 million and gross losses of $58.4 million and $49.8 million were realized on these sales for the nine months ended September 30, 1996 and 1995, respectively. The decrease in unrealized investment gains related to fixed maturities classified as available for sale for the nine months ended September 30, 1996 amounted to $500.1 million. During the nine months ended September 30, 1995, one security classified as held to maturity was sold and twelve securities classified as held to maturity were transferred to the available for sale portfolio. All actions were taken as a result of significant deterioration in creditworthiness. The amortized cost of the security sold was $4.2 million. The aggregate amortized cost of the securities transferred was $116.0 million with gross unrealized investment losses of $3.2 million transferred to equity for the nine months ended September 30, 1995. Impaired mortgage loans along with the related provision for losses follows:
SEPTEMBER 30, December 31, 1996 1995 ------------- ---------- (IN MILLIONS) Impaired mortgage loans with provision for losses ........ $ 428.6 $ 310.1 Impaired mortgage loans with no provision for losses ..... 148.3 160.8 -------- -------- Recorded investment in impaired mortgage loans ........... 576.9 470.9 Provision for losses ..................................... 88.0 62.7 -------- -------- Net Impaired Mortgage Loans .............................. $ 488.9 $ 408.2 ======== ========
F-47 Impaired mortgage loans with no provision for losses are loans where the fair value of the collateral or the net present value of the loans equals or exceeds the recorded investment. Interest income earned on loans where the collateral value is used to measure impairment is recorded using the cash basis method. Interest income on loans where the present value method is used to measure impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows. Changes in the present value attributable to changes in the amount or timing of expected cash flows are reported as investment gains or losses. During the nine months ended September 30, 1996 and 1995, respectively, the Company's average recorded investment in impaired mortgage loans was $548.7 million and $295.5 million. Interest income recognized on these impaired mortgage loans totaled $30.9 million and $20.3 million for the nine months ended September 30, 1996 and 1995, respectively, including $13.7 million and $10.8 million recognized on the cash basis method. 5) ALLIANCE - CURSITOR TRANSACTION On February 29, 1996, Alliance acquired the business of Cursitor-Eaton Asset Management Company and Cursitor Holdings Limited in exchange for approximately 1.8 million Alliance Units, $84.9 million in cash, $21.5 million in notes which are payable ratably over the next four years and substantial additional consideration which will be determined at a later date. The Company recognized an investment gain of $20.6 million as a result of the issuance of Units in this transaction. At September 30, 1996, the Company's ownership of Alliance Units was approximately 57.4%. 6) BUSINESS SEGMENT INFORMATION
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------- ---------------------- 1996 1995 1996 1995 ----------- ---------- ----------- ---------- (IN MILLIONS) Revenues Individual insurance and annuities .. $ 841.7 $ 793.5 $ 2,496.9 $ 2,436.6 Group pension ....................... 60.7 77.1 189.3 209.4 Attributed insurance capital ........ 17.9 17.0 49.2 45.6 ---------- ---------- ---------- ---------- Insurance operations .............. 920.3 887.6 2,735.4 2,691.6 Investment services ................. 267.0 243.7 818.3 681.1 Consolidation/elimination ........... (5.8) (7.2) (18.1) (23.3) ---------- ---------- ---------- ---------- Total ............................... $ 1,181.5 $ 1,124.1 $ 3,535.6 $ 3,349.4 ========== ========== ========== ========== EARNINGS (LOSS) BEFORE FEDERAL INCOME TAXES, MINORITY INTEREST AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE Individual insurance and annuities .. $ 86.8 $ 80.6 $ 240.3 $ 232.2 Group pension ....................... (8.3) (.9) (28.6) (12.7) Attributed insurance capital ........ 9.7 9.9 23.5 22.5 ---------- ---------- ---------- ---------- Insurance operations .............. 88.2 89.6 235.2 242.0 Investment services ................. 68.8 59.2 226.8 157.2 ---------- ---------- ---------- ---------- Subtotal .......................... 157.0 148.8 462.0 399.2 Corporate interest expense .......... (16.9) (7.0) (49.8) (19.6) ---------- ---------- ---------- ---------- Total ............................... $ 140.1 $ 141.8 $ 412.2 $ 379.6 ========== ========== ========== ==========
F-48
SEPTEMBER 30, December 31, 1996 1995 -------------- ------------ (IN MILLIONS) ASSETS Individual insurance and annuities ........... $ 53,559.8 $ 50,328.8 Group pension ................................ 3,601.0 4,033.3 Attributed insurance capital ................. 2,055.5 2,391.6 ----------- ----------- Insurance operations ....................... 59,216.3 56,753.7 Investment services .......................... 13,434.1 12,842.9 Consolidation/elimination .................... (369.9) (354.4) ----------- ----------- Total ........................................ $ 72,280.5 $ 69,242.2 =========== ===========
7) DISCONTINUED OPERATIONS Summarized financial information of the discontinued GIC Segment follows:
SEPTEMBER 30, DECEMBER 31, 1996 1995 -------------- ------------ (IN MILLIONS) ASSETS Mortgage loans on real estate .................... $ 1,285.0 $ 1,485.8 Equity real estate ............................... 1,057.1 1,122.1 Cash and other invested assets ................... 361.7 665.2 Other assets ..................................... 191.5 579.3 ---------- ---------- Total Assets ..................................... $ 2,895.3 $ 3,852.4 ========== ========== LIABILITIES Policyholders' liabilities ....................... $ 1,360.3 $ 1,399.8 Allowance for future losses ...................... 118.8 164.2 Amounts due to continuing operations ............. 1,270.1 2,097.1 Other liabilities ................................ 146.1 191.3 ---------- ---------- Total Liabilities ................................ $ 2,895.3 $ 3,852.4 ========== ==========
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ------------------ 1996 1995 1996 1995 ------- -------- ------- --------- (IN MILLIONS) REVENUES Investment income (net of investment expenses of $31.8, $40.5, $96.1 and $117.9) ............................ $ 50.2 $ 52.6 $ 182.4 $ 202.1 Investment (losses) gains, net ........... (6.2) 6.6 (23.8) (12.3) Policy fees, premiums and other income, net ............................ .1 .1 .2 .6 --------- -------- -------- -------- Total revenues ........................... 44.1 59.3 158.8 190.4 BENEFITS AND OTHER DEDUCTIONS ............ 56.9 76.6 196.2 253.9 --------- -------- -------- -------- Losses Charged to Allowance for Future Losses ...................... $ (12.8) $ (17.3) $ (37.4) $ (63.5) ======= ======= ======== ========
F-49 Investment valuation allowances amounted to $19.9 million on mortgage loans and $16.3 million on equity real estate for an aggregate of $36.2 million at September 30, 1996. As of January 1, 1996, the adoption of SFAS No. 121 resulted in a release of existing valuation allowances of $71.9 million on equity real estate and recognition of impairment losses of $69.8 million on real estate held and used. At December 31, 1995, valuation allowances amounted to $19.2 million on mortgage loans and $77.9 million on equity real estate for an aggregate of $97.1 million. Benefits and other deductions included $23.3 million, $94.8 million, $38.7 million and $116.0 million of interest expense related to amounts borrowed from continuing operations for the three months and nine months ended September 30, 1996 and 1995, respectively. The allowance for future losses is based upon management's best judgment and there can be no assurance ultimate losses will not differ. 8) CLOSED BLOCK Summarized financial information of the Closed Block follows:
SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ (IN MILLIONS) ASSETS Fixed maturities: Available for sale, at estimated fair value (amortized cost of $3,730.0 and $3,662.8) ...................... $ 3,736.2 $ 3,896.2 Mortgage loans on real estate ........................... 1,422.2 1,368.8 Policy loans ............................................ 1,778.8 1,797.2 Cash and other invested assets .......................... 321.8 440.9 Deferred policy acquisition costs ....................... 780.8 823.6 Other assets ............................................ 305.9 286.1 ---------- ---------- Total Assets ............................................ $ 8,345.7 $ 8,612.8 ========== ========== LIABILITIES Future policy benefits and other policyholders' account balances ....................................... $ 9,159.6 $ 9,346.7 Other liabilities ....................................... 33.6 160.5 --------- ---------- Total Liabilities ....................................... $ 9,193.2 $ 9,507.2 ========= ==========
F-50
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ -------------------- 1996 1995 1996 1995 -------- -------- -------- ---------- (IN MILLIONS) REVENUES Premiums and other income ......... $ 171.3 $ 178.8 $ 539.1 $ 561.3 Investment income (net of investment expenses of $6.9, $6.6, $21.0 and $20.3) .......................... 140.2 133.3 408.4 400.7 Investment losses, net ............ (4.6) (.6) (13.2) (7.5) -------- -------- -------- -------- Total revenues .................... 306.9 311.5 934.3 954.5 -------- -------- -------- -------- BENEFITS AND OTHER DEDUCTIONS Policyholders' benefits and dividends 266.9 270.8 810.2 824.1 Other operating costs and expenses . 16.3 12.5 50.3 45.0 -------- -------- -------- -------- Total benefits and other deductions 283.2 283.3 860.5 869.1 -------- -------- -------- -------- Contribution from the Closed Block $ 23.7 $ 28.2 $ 73.8 $ 85.4 ======== ======== ======== ========
Investment valuation allowances amounted to $33.4 million and $18.4 million on mortgage loans and $2.5 million and $4.3 million on equity real estate for an aggregate of $35.9 million and $22.7 million at September 30, 1996 and December 31, 1995, respectively. As of January 1, 1996, the adoption of SFAS No. 121 resulted in the recognition of impairment losses of $5.6 million on real estate held and used. 9) RESTRUCTURE COSTS At September 30, 1996, liabilities associated with 1994 and 1995 cost reduction programs totaled $27.3 million. During the nine months ended September 30, 1996 and 1995, the Company restructured certain operations in connection with cost reduction programs and incurred costs of $2.6 million and $8.6 million, respectively, primarily associated with severance related benefits. Amounts paid during the nine months ended September 30, 1996 and charged against the liabilities for the 1994 and 1995 cost reduction programs totaled $13.1 million. 10) LITIGATION There have been no new material legal proceedings and no material developments in matters which were previously reported in the Company's Notes to Consolidated Financial Statements for the year ended December 31, 1995, except as follows: On May 29, 1996, the New York County Supreme Court entered a judgment dismissing the complaint with prejudice in the previously reported action Golomb, et al. v. The Equitable Life Assurance Society of the United States. Plaintiffs have filed a notice of appeal of that judgment. On February 9, 1996, Equitable Life removed the Pennsylvania action, Malvin v. The Equitable Life Assurance Society of the United States, to the United States District Court for the Middle District of Pennsylvania. Following the decision granting Equitable Life's motion to dismiss the New York action (Golomb), on the consent of the parties, the District Court ordered an indefinite stay of all proceedings in the Pennsylvania action, pending either party's right to reinstate the proceeding, and ordered that for administrative purposes the case be deemed administratively closed. On February 2, 1996, Equitable Life removed the Texas action, Bowler, et al. v. The Equitable Life Assurance Society of the United States, to the United States District Court for the Northern District of Texas. On July 1, 1996, Equitable Life filed a motion for summary judgment dismissing the complaint in its entirety. The Company's management has been advised that plaintiffs plan to oppose the motion for summary judgment. In August, 1996, the court granted plaintiffs leave to file a supplemental complaint on behalf of a proposed class of Texas policyholders claiming unfair discrimination, breach of contract and other claims arising out of alleged differences between premiums charged to Texas policyholders and premiums charged to F-51 similarly situated policyholders in New York and certain other states. Plaintiffs seek refunds of alleged overcharges, exemplary or additional damages citing Texas statutory provisions which among other things, permit two times the amount of actual damage plus additional penalties if the acts complained of are found to be knowingly committed, and injunctive relief. Equitable Life has also filed a motion for summary judgment dismissing the supplemental complaint in its entirety. Equitable Life's management has been advised that plaintiffs plan to oppose that motion. On May 22, 1996, a separate action entitled Bachman v. The Equitable Life Assurance Society of the United States, was filed in Florida state court making claims similar to those in the previously reported Golomb action. The Florida action is asserted on behalf of a proposed class of Florida issued or renewed policyholders, insured after 1983 under Lifetime Guaranteed Renewable Major Medical Insurance Policies issued by Equitable Life. The Florida action seeks compensatory and punitive damages and injunctive relief restricting the methods by which Equitable Life increases premiums in the future, based on various common law claims. On June 20, 1996, Equitable Life removed the Florida action to Federal court. Equitable Life has answered the complaint, denying the material allegations and asserting certain affirmative defenses. Although the outcome of any litigation cannot be predicted with certainty, particularly in the early stages of an action, The Equitable's management believes that the ultimate resolution of this litigation should not have a material adverse effect on the financial position of the Company. Due to the early stage of such litigation, the Company's management cannot make an estimate of loss, if any, or predict whether or not such litigation will have a material adverse effect on the Company's results of operations in any particular period. On November 6, 1996, a proposed class action entitled Fletcher, et al. v. The Equitable Life Assurance Society of the United States, was filed in California Superior Court for Fresno County, making substantially the same allegations concerning premium rates and premium rate increases on guaranteed renewable policies made in the Bowler action. The complaint alleges, among other things, that differentials between rates charged California policyholders and policyholders in New York and certain other states, and the methods used by Equitable Life to calculate premium increases, breached the terms of its policies and that Equitable Life misrepresented and concealed the facts pertaining to such differentials and methods in violation of California law. Plaintiffs seek compensatory damages in an unspecified amount, rescission, injunctive relief and attorneys fees. Although the outcome of any litigation cannot be predicted with certainty, particularly in the early stages of an action, Equitable Life's management believes that the ultimate resolution of this litigation should not have a material adverse effect on the financial position of Equitable Life. Due to the early stage of such litigation, Equitable Life's management cannot make an estimate of loss, if any, or predict whether or not such litigation will have a material adverse effect on Equitable Life's results of operations in any particular period. In connection with the previously reported action entitled Sidney C. Cole et al. v. The Equitable Life Assurance Society of the United States and The Equitable of Colorado, Inc., on June 28, 1996, the court issued a decision and order dismissing with prejudice plaintiff's causes of action for fraud, constructive fraud, breach of fiduciary duty, negligence, and unjust enrichment, and dismissing without prejudice plaintiff's cause of action under the New York State consumer protection statute. The only remaining causes of action are for breach of contract and negligent misrepresentation. Plaintiffs have made a motion for reargument with respect to this order, which was submitted to the court in October 1996. On May 21, 1996, an action entitled Elton F. Duncan, III v. The Equitable Life Assurance Society of the United States, was commenced against Equitable Life in the Civil District Court for the Parish of Orleans, State of Louisiana. The action is brought by an individual who purchased a whole life policy. Plaintiff alleges misrepresentations concerning the extent to which the policy was a proper replacement policy and the number of years that the annual premium would need to be paid. Plaintiff purports to represent a class consisting of all persons who purchased whole life or universal life insurance policies from Equitable Life from January 1, 1982 to the present. Plaintiff seeks damages, including punitive damages, in an unspecified amount. On June 21, 1996, Equitable Life removed the action to the United States District Court for the Eastern District of Louisiana. Plaintiff has made a motion to remand to the Louisiana Civil District Court, and Equitable Life will F-52 oppose such motion. On July 26, 1996, an action entitled Michael Bradley v. Equitable Variable Life Insurance Company, was commenced in New York state court. The action is brought by the holder of a variable life insurance policy issued by EVLICO. The plaintiff purports to represent a class consisting of all persons or entities who purchased one or more life insurance policies issued by EVLICO from January 1, 1980. The complaint puts at issue various alleged sales practices and alleges misrepresentations concerning the extent to which the policy was a proper replacement policy and the number of years that the annual premium would need to be paid. Plaintiff seeks damages, including punitive damages, in an unspecified amount and also seeks injunctive relief prohibiting EVLICO from canceling policies for failure to make premium payments beyond the alleged stated number of years that the annual premium would need to be paid. Equitable Life and EVLICO have made a motion to consolidate or jointly try this proceeding with the Cole action, which will not be heard until November 1996. Although the outcome of any litigation cannot be predicted with certainty, particularly in the early stages of an action, the Company's management believes that the ultimate resolution of the litigations discussed in this paragraph should not have a material adverse effect on the financial position of the Company. Due to the early stages of such litigation, the Company's management cannot make an estimate of loss, if any, or predict whether or not such litigation will have a material adverse effect on the Company's results of operations in any particular period. Equitable Life recently received a subpoena from the U.S. Department of Labor ("DOL") requesting copies of any third-party appraisals in Equitable Life's possession relating to the ten largest properties (by value) in the Prime Property Fund ("PPF"). PPF is an open-end, commingled real estate separate account of Equitable Life's for pension clients. Equitable Life serves as investment manager in PPF and has retained Equitable Real Estate Investment Management, Inc. ("Equitable Real Estate") as adviser. In early 1995, the DOL commenced a national investigation of commingled real estate funds with pension investors, including PPF. The investigation now appears to be focused principally on appraisal and valuation procedures in respect of fund properties. The most recent request from the DOL seems to reflect, at least in part, an interest in the relationship between the valuations for those properties reflected in appraisals prepared for local property tax proceedings and the valuations used by PPF for other purposes. At no time has the DOL made any specific allegation that Equitable Life or Equitable Real Estate has acted improperly and Equitable Life and Equitable Real Estate believe that any such allegation would be without foundation. While the outcome of this investigation cannot be predicted with certainty, in the opinion of management, the ultimate resolution of this matter should not have a material adverse effect on the Company's consolidated financial position or results of operations. In connection with the previously reported arbitration involving Equitable Casualty Insurance Company ("Casualty"), the arbitration panel issued a final award in favor of Casualty and GEICO General Insurance Company ("GEICO General") on June 17, 1996. The result of the arbitration is expected to resolve in favor of Casualty and GEICO General two litigations that were commenced by Houston General Insurance Company ("Houston General") and that have been stayed by the presiding courts pending the completion of the arbitration. Houston General has informed Casualty, through counsel, that it is considering whether to consent to entry of a judgment enforcing the arbitration award or whether to contest the award. The Company's management believes that Houston General has no valid basis for contesting the arbitration award and therefore the ultimate resolution of this matter should not have a material adverse effect on the Company's financial position or results of operations. With respect to the previously reported National Gypsum litigation, the Bankruptcy Court has remanded the Texas state court action to state court. With respect to the previously reported Spectravision litigation, plaintiffs have filed an amended complaint in which DLJSC is no longer named as a defendant. F-53 On September 26, 1996, the United States District Court for the Southern District of New York granted the defendants' motion to dismiss all counts of the complaint in the previously reported litigation involving Alliance and the Alliance North American Government Income Fund, Inc. The plaintiffs have filed motions requesting that the court reconsider its decision and for permission to file an amended complaint. While the ultimate outcome cannot be determined at this time, Alliance's management does not expect that it will have a material adverse effect on Alliance's consolidated financial position or results of operations. In addition to the matters previously reported and the matters described above, Equitable Life and its subsidiaries and DLJ and its subsidiaries are involved in various legal actions and proceedings in connection with their businesses. Some of the actions and proceedings have been brought on behalf of various alleged classes of claimants and certain of these claimants seek damages of unspecified amounts. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on the Company's consolidated financial position or results of operations. F-54 APPENDIX A MANAGEMENT Here is a list of our directors and, to the extent they are responsible for variable life insurance operations, our principal officers and a brief statement of their business experience for the past five years. Unless otherwise noted, their address is 1290 Avenue of the Americas, New York, New York 10104.
NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------- ------------------------ DIRECTORS Claude Bebear Director of Equitable since July 1991. Chairman of the Board of the Holding Company (February AXA S.A. 1996-present) and a Director of other affiliates of Equitable. Chairman and Chief Executive 23, Avenue Matignon Officer of AXA since February 1989. Chief Executive Officer of the AXA Group since 1974 and 75008 Paris, France Chairman or Director of numerous subsidiaries and affiliated companies of the AXA Group. Christopher J. Brocksom Director of Equitable since July 1992. Chief Executive Officer, AXA Equity & Law Life AXA Equity & Law Assurance Society ("AXA Equity & Law") and various directorships and officerships with AXA Amersham Road Equity & Law affiliated companies. High Wycombe Bucks HP 13 5 AL, England Francoise Colloc'h Director of Equitable since July 1992. Executive Vice President, Culture -- Management -- AXA S.A. Communications, AXA, and various positions with AXA affiliated companies. 23, Avenue Matignon 75008 Paris, France Henri de Castries Director of Equitable since September 1993. Vice Chairman of the Board of the Holding AXA S.A. Company since February 1996. Executive Vice President Financial Services and Life Insurance 23, Avenue Matignon Activities of AXA since 1993. Prior thereto, General Secretary from 1991 to 1993 and 75008 Paris, France Central Director of Finances from 1989 to 1991. Also Director or Officer of various subsidiaries and affiliates of the AXA Group. Director of the Holding Company and of other Equitable affiliates. Joseph L. Dionne Director of Equitable since May 1982. Chairman (since April 1988) and Chief Executive The McGraw-Hill Companies Officer (Since April 1983) of The McGraw-Hill Companies. Director of the Holding Company. 1221 Avenue of the Americas New York, NY 10020 William T. Esrey Director of Equitable since July 1986. Chairman (since April 1990) and Chief Executive Sprint Corporation Officer (since 1985) and President (1985 to February 1996) of Sprint Corporation. Director P.O. Box 11315 of the Holding Company. Kansas City, MO 64112 Jean-Rene Fourtou Director of Equitable since July 1992. Chairman and Chief Executive Officer, Rhone-Poulenc, Rhone-Poulenc S.A. S.A. since 1986. Director of the Holding Company and AXA. 25 Quai Paul Doumer 92408 Courbevoie Cedex, France Norman C. Francis Director of Equitable since March 1989. President, Xavier University of Louisiana. Xavier University of Louisiana 7325 Palmetto Street New Orleans, LA 70125 Donald J. Greene Director of Equitable since July 1991. Partner, LeBoeuf, Lamb, Greene & MacRae since 1965. LeBouef, Lamb, Greene & MacRae Director of the Holding Company. 125 West 55th Street New York, NY 10019-4513 John T. Hartley Director of Equitable since August 1987. Retired Chairman and Chief Executive Officer of Harris Corporation Harris Corporation (until July 1995); prior thereto, he held the positions of Chairman of 1025 NASA Boulevard Harris Corporation from 1987, Chief Executive Officer from 1986 and President from October Melbourne, FL 32919 1987 to April 1993. John H.F. Haskell, Jr. Director of Equitable since July 1992. Managing Director of Dillon, Read & Co., Inc. since Dillon, Read & Co., Inc. 1975 and member of its Board of Directors. 535 Madison Avenue New York, NY 10022
A-1
NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------- ------------------------ DIRECTORS (continued) W. Edwin Jarmain Director of Equitable since July 1992. President of Jarmain Group Inc. since 1979; also an Jarmain Group Inc. Officer or Director of several affiliated companies. Chairman and Director of FCA 121 King Street West International Ltd.; served as President, CEO and Director from 1992 through 1993. Director of Suite 2525, Box 36 various AXA affiliated companies. Director of the Holding Company since July 1992. Toronto, Ontario M5H 3T9, Canada G. Donald Johnston, Jr. Director of Equitable since January 1986. Retired Chairman and Chief Executive Officer, JWT 184-400 Ocean Road Group, Inc. and J. Walter Thompson Company. John's Island Vero Beach, FL 32963 Winthrop Knowlton Director of Equitable since October 1973. Chairman of the Board of Knowlton Brothers, Inc. Knowlton Brothers, Inc. since May 1989; also President of Knowlton Associates, Inc. since September 1987; Director 530 Fifth Avenue of the Holding Company. New York, NY 10036 Arthur L. Liman Director of Equitable since March 1984. Partner, Paul, Weiss, Rifkind, Wharton & Garrison Paul, Weiss, Rifkind, Wharton since 1966. and Garrison 1285 Avenue of the Americas New York, NY 10019 George T. Lowy Director of Equitable since July 1992. Partner, Cravath, Swaine & Moore. Cravath, Swaine & Moore 825 Eighth Avenue New York, NY 10019 Didier Pineau-Valencienne Director of Equitable since February 1996. Chairman and Chief Executive Officer of Schneider S.A. Schneider S.A. since 1981 and Chairman or Director of numerous subsidiaries and affiliated 64-70 Avenue Jean-Baptiste companies of Schneider. Director of AXA and the Holding Company. Clament 96646 Boulogne-Billancourt Cedex France George J. Sella, Jr. Director of Equitable since May 1987. Retired Chairman and Chief Executive Officer of P.O. Box 397 American Cyanamid Company (until April 1993); prior thereto, Chairman from 1984, Chief Newton, NJ 07860 Executive Officer from 1983 and President from 1979 to 1991. Dave H. Williams Director of Equitable since March 1991. Chairman and Chief Executive Officer of Alliance Alliance Capital Management since 1977 and Chairman or Director of numerous subsidiaries and affiliated companies of Corporation Alliance. Director of the Holding Company. 1345 Avenue of the Americas New York, NY 10105 OFFICERS -- DIRECTORS James M. Benson Director of Equitable since February 1994. Chief Executive Officer (since February 1996) and President of Equitable (since February 1994); prior thereto, Chief Operating Officer (February 1994 to February 1996) and Senior Executive Vice President of Equitable (April 1993 to February 1994). Prior thereto, President, Management Compensation Group (1983 to February 1993). Previously, President, Chief Executive Officer and a Director of Equitable Variable Life Insurance Company ("EVLICO"). Senior Executive Vice President of the Holding Company since February 1994 and Chief Operating Officer since February 1996; Director of various Equitable affiliated companies; Director of the Holding Company since February 1994. William T. McCaffrey Director of Equitable since February 1996. Senior Executive Vice President and Chief Operating Officer of Equitable (all since February 1996). Prior thereto, Executive Vice President (from February 1986 to February 1996) and Chief Administrative Officer (from February 1988 to February 1996). Executive Vice President and Chief Administrative Officer (since February 1994) of the Holding Company. Director of various Equitable affiliated companies, including EVLICO.
A-2
NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------- ------------------------ OFFICERS -- DIRECTORS (continued) Joseph J. Melone Chairman of Equitable since February 1994 and a Director of Equitable since November 1990. Chief Executive Officer of the Holding Company since February 1996 and President of the Holding Company since May 1992. Previously, Chief Executive Officer of Equitable from February 1994, to February 1996; prior to February 1994, President, Chief Executive Officer and Director of Equitable from September 1992 to February 1994 and President, Chief Operating Officer and a Director since November 1990. Former Chairman, Chief Executive Officer and Director of EVLICO. Director of various Equitable and AXA affiliated companies. OTHER OFFICERS A. Frank Beaz Senior Vice President, Equitable; prior thereto, Vice President, Equitable (until March 1995). Executive Vice President, EQ Financial Consultants, Inc. ("EQF") (May 1995-present). Leon B. Billis Senior Vice President, Equitable; prior thereto, Vice President, Equitable (until November 1994); Vice President, EVLICO (July 1996 to December 1996). Harvey Blitz Senior Vice President and Deputy Chief Financial Officer, Equitable. Senior Vice President, Holding Company; Director or Chairman of various Equitable affiliated companies; Director (October 1992 to December 1996) and Vice President, EVLICO (April 1995 to December 1996). Kevin R. Byrne Vice President and Treasurer, Equitable; Vice President and Treasurer, Holding Company; Treasurer, EVLICO (until December 1996) and Frontier Trust Company; Director or Officer of other Equitable affiliated companies. Jerry M. de St. Paer Executive Vice President, Equitable. Senior Executive Vice President (since May 1996) and Chief Financial Officer (since May 1992) of the Holding Company. Executive Vice President and Chief Operating Officer (since September 1994) of Equitable Investment Corporation. Previously held various officerships with Equitable and its affiliates. Director and Senior Investment Officer, EVLICO (until December 1996). Director of various Equitable affiliated companies. Gordon G. Dinsmore Senior Vice President and Corporate Actuary, Equitable. Executive Vice President, Equico. Director and Senior Vice President, EVLICO (until December 1996); Director of other Equitable affiliated companies. Alvin H. Fenichel Senior Vice President and Controller, Equitable. Senior Vice President and Controller, Holding Company. Vice President and Controller (until December 1996), EVLICO; Vice President, The Equitable of Colorado, Inc. ("Colorado"). Paul J. Flora Senior Vice President and Auditor, Equitable. Prior thereto, Vice President and Auditor (February 1994 to March 1996). Vice President and Auditor, Holding Company (September 1994 to present). Vice President/Auditor, National Westminster Bank (November 1984 to June 1994). Robert E. Garber Executive Vice President and General Counsel, Equitable; Executive Vice President and General Counsel, Holding Company. Prior thereto, Senior Vice President and General Counsel of Equitable and the Holding Company (September 1993 to September 1994) and Senior Vice President and Deputy General Counsel of Equitable (September 1989 to September 1993). Donald R. Kaplan Vice President and Acting Chief Compliance Officer, Equitable. Prior thereto, Vice President and Counsel (until June 1996). Michael S. Martin Senior Vice President, Equitable. Chairman, EQF; Chairman and Chief Executive Officer, EquiSource of New York (January 1992 to October 1994) and Frontier (April 1992 to October 1994); Vice President, Hudson River Trust ("HRT") (February 1993 to February 1995); Director, Vice President and Treasurer, Equitable Distributors, Inc. (August 1993 to February 1995), also Chairman, President, and Chief Executive Officer (December 1993 to February 1995); Director, Equitable Underwriting and Sales Agency (Bahamas), Ltd. (May 1996 to present) and Colorado (January 1995 to present).
A-3
NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------- ------------------------ OTHER OFFICERS (continued) Peter D. Noris Executive Vice President and Chief Investment Officer, Equitable. Executive Vice President (since May 1995) and Chief Investment Officer (since July 1995), Holding Company. Prior thereto, Vice President/Manager, Insurance Companies Investment Strategies Group, Solomon Brothers, Inc. (November 1992 to May 1995). Prior thereto, with Morgan Stanley & Co., Inc., from October 1984 to November 1992 as Principal, Fixed Income Insurance Group. Former Director and Senior Vice President of EVLICO. Director of other Equitable affiliates. Anthony C. Pasquale Senior Vice President, Equitable. Chairman and President, Equitable Realty Assets Corporation (July 1995 to present). Director of other Equitable affiliates. Michael J. Rich Senior Vice President, Equitable, since October 1994; prior thereto, Vice President of Underwriting, John Hancock Mutual Life Insurance Co. since 1988. Director of EVLICO (May 1995 to December 1996). Pauline Sherman Vice President, Secretary and Associate General Counsel, Equitable; prior thereto, Vice President and Associate General Counsel (until September 1995). Vice President, Secretary and Associate General Counsel, Holding Company (September 1995 to present). Samuel Shlesinger Senior Vice President and Actuary, Equitable; prior thereto, Vice President and Actuary. Previously, Director and Senior Vice President, EVLICO (February 1988 to December 1996). Director, Chairman and Chief Executive Officer, Equitable of Colorado. Vice President, HRT. Jose S. Suquet Executive Vice President and Chief Agency Officer, Equitable, since August 1994; prior thereto, Agency Manager, Equitable (February 1985 to August 1994). Stanley B. Tulin Senior Executive Vice President and Chief Financial Officer, Equitable; prior thereto, Chairman, Insurance Consulting and Actuarial Practice, Coopers & Lybrand (until April 1996); Executive Vice President, Holding Company.
A-4 VARIABLE LIFE INSURANCE POLICIES FUNDED THROUGH SEPARATE ACCOUNT I PROSPECTUS SUPPLEMENT DATED MAY 1, 1996 The Champion(TM) Basic Policy SP-1(TM) Expanded Policy Issued By EQUITABLE VARIABLE LIFE INSURANCE COMPANY Principal Office Located at: 787 Seventh Avenue New York, NY 10019 VM 520 - ------------------------------------------------------------------------------- THE HUDSON RIVER TRUST PROSPECTUS DATED MAY 1, 1996 HRT 596 - ------------------------------------------------------------------------------- VARIABLE LIFE INSURANCE POLICIES FUNDED THROUGH SEPARATE ACCOUNT I THE CHAMPION(TM) (85-11) SP-1(TM) (85-09) ISSUED BY BASIC POLICY (85-01) EQUITABLE VARIABLE EXPANDED POLICY (85-02) LIFE INSURANCE COMPANY PROSPECTUS SUPPLEMENT DATED MAY 1, 1996 INTRODUCTION. This Supplement updates certain information contained in the prospectuses for: o THE CHAMPION dated September 30, 1987 and December 18, 1986; o SP-1 dated September 30, 1987, April 30, 1986 and January 1, 1984; and o BASIC AND EXPANDED dated April 30, 1986 and March 26, 1985. For your convenience, we have consolidated the prior updating supplements that have been previously distributed. For this reason, you may already be familiar with some of the information in this prospectus supplement, but we encourage you to read it carefully anyway. You should attach this supplement to your prospectus and retain it for future reference. Equitable Variable Life Insurance Company (Equitable Variable) will send you an additional copy of any prospectus without charge, on written request. These Policies are no longer offered for sale. EQUITABLE VARIABLE. The information under the heading EQUITABLE VARIABLE is updated as follows: Equitable Variable was organized in 1972 in New York State as a stock life insurance company. We are licensed to do business in all 50 states, Puerto Rico, the Virgin Islands and the District of Columbia. At December 31, 1995, we had approximately $132.8 billion face amount of variable life insurance in force. EQUITABLE. The information under the heading OUR PARENT, EQUITABLE is updated as follows: Equitable is a wholly-owned subsidiary of The Equitable Companies Incorporated (the Holding Company). The largest stockholder of the Holding Company is AXA S.A. (AXA), a French insurance holding company. AXA beneficially owns 60.6% of the outstanding shares of common stock of the Holding Company plus convertible preferred stock. Under its investment arrangements with Equitable and the Holding Company, AXA is able to exercise significant influence over the operations and capital structure of the Holding Company and its subsidiaries, including Equitable and Equitable Variable. AXA is the principal holding company for most of the companies in one of the largest insurance groups in Europe. The majority of AXA's stock is controlled by a group of five French mutual insurance companies. Equitable, the Holding Company and their subsidiaries managed approximately $195.3 billion in assets as of December 31, 1995. HUDSON RIVER TRUST INVESTMENT POLICIES. Net premiums under your policy can be allocated to the investment funds of our Separate Account I ("Funds"). The funds of Separate Account I in turn invest those net premiums in corresponding portfolios of The Hudson River Trust, a mutual fund. Each portfolio has a different investment objective which it tries to achieve by following separate investment policies. The objectives and policies of each portfolio will affect its return and its risks. There is no guarantee that these objectives will be achieved. The policies and objectives of the Trust's portfolios are as follows:
- ------------------------------------------------------------------------------------------------------------------------------- PORTFOLIO INVESTMENT POLICY OBJECTIVE --------- ----------------- --------- MONEY MARKET ............. Primarily high quality short-term money market High level of current income while instruments. preserving assets and maintaining liquidity. INTERMEDIATE ............. Primarily debt securities issued or guaranteed High current income consistent with GOVERNMENT by the U.S. Government, its agencies and relative stability of principal. SECURITIES instrumentalities. Each investment will have a final maturity of not more than 10 years or a duration not exceeding that of a 10-year Treasury note. HIGH YIELD ............... Primarily a diversified mix of high yield, High return by maximizing current fixed-income securities involving greater income and, to the extent volatility of price and risk of principal and consistent with that objective, income than high quality fixed-income capital appreciation. securities. The medium and lower quality debt securities in which the Portfolio may invest are known as "junk bonds." - -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- THIS SUPPLEMENT SHOULD BE RETAINED FOR FUTURE REFERENCES. VM520 Copyright 1996 Equitable Variable Life Insurance Company. All rights reserved. 2
- ------------------------------------------------------------------------------------------------------------------------------- PORTFOLIO INVESTMENT POLICY OBJECTIVE --------- ----------------- --------- BALANCED ................. Primarily common stocks, publicly-traded debt High return through a combination securities and high quality money market of current income and capital instruments. The portfolio is generally appreciation. expected to hold 50% of its assets in equity securities and 50% in fixed income securities. COMMON STOCK ............. Primarily common stock and other equity-type Long-term growth of capital and instruments. increasing income. AGGRESSIVE STOCK ......... Primarily common stock and other equity-type Long-term growth of capital. securities issued by medium and other smaller sized companies with strong growth potential. - -------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PERFORMANCE. Footnote 7 to the Separate Account I financial statements included herein contains information about the net return for each Fund. The attached prospectus supplement for The Hudson River Trust contains rates of return and other portfolio performance information of the Trust for various periods ended December 31, 1995. Remember, the changes in the Account/Cash Value of your policy depend not only on the performance of the Trust portfolios, but also on the deductions and charges under your policy. To obtain the current index values of the Separate Account Funds for Champion policies, call (212)714-5015. The index values and the information contained in Footnote 7 are computed using the gross rates of return for the corresponding portfolios of the Trust, reduced by a daily asset charge for investment advisory services of 0.25% and by the mortality and expense risk charge. THE TRUST'S INVESTMENT ADVISER. The information about Alliance Capital Management L.P. (Alliance), the Trust's investment adviser, is updated as follows: As of December 31, 1995, Alliance was managing approximately $146.5 billion in assets. Alliance, a publicly traded limited partnership, is indirectly majority-owned by Equitable. For your convenience, we are restating the advisory fees payable by the Trust to Alliance, which is based on the following annual percentages of the value of each portfolio's daily average net assets, are as follows:
- ------------------------------------------------------------------------------------------------------------ DAILY AVERAGE NET ASSETS -------------------------------------------- FIRST NEXT OVER PORTFOLIO $350 MILLION $400 MILLION $750 MILLION --------- ------------ ------------ ------------ Common Stock, Money Market and Balanced..................... .400% .375% .350% Aggressive Stock and Intermediate Government Securities..... .500% .475% .450% High Yield.................................................. .550% .525% .500% - ------------------------------------------------------------------------------------------------------------
Equitable Variable credits the Separate Account Funds daily to offset investment advisory fees of the Trust which exceed a 0.25% effective annual rate. LIVING BENEFIT OPTION AVAILABLE. Subject to regulatory approval in your state and our underwriting guidelines, you may now be eligible for a Living Benefit payment under your policy. The Living Benefit enables the policyowner to receive a portion of the policy's death benefit (excluding death benefits payable under certain riders) if the insured has a terminal illness. Certain eligibility requirements apply when you submit a Living Benefit claim (for example, satisfactory evidence of less than six month life expectancy). We will deduct an administrative charge of up to $250 from the proceeds of the Living Benefit payment. This charge may be less in some states. When a Living Benefit claim is paid, Equitable Variable establishes a lien against the policy. The amount of the lien is the sum of the Living Benefit payment, any accrued interest on that payment and any unpaid scheduled premium. Interest will be charged at a rate equal to the greater of: (i) the yield on a 90-day Treasury bill and (ii) the maximum adjustable policy loan interest rate permitted in the state in which your policy was delivered. Until a death benefit is paid, or the policy is surrendered, a portion of the lien is allocated to the policy's net cash surrender value. This portion of the liened amount will be transferred to the Money Market Fund. This portion of the liened amount will not be available for loans. Any death benefit or Cash Surrender Value payable upon policy surrender will be reduced by the amount of the lien. Unlike a death benefit received by a beneficiary after the death of an insured, receipt of a Living Benefit payment may be taxable as a distribution under the policy. See THE IMPACT OF TAXES or TAX EFFECTS in your prospectus and TAX EFFECTS in this supplement for a discussion of the tax treatment of distributions under the policy. Consult your tax adviser. Receipt of a Living Benefit payment may also affect a policyowner's eligibility for certain government benefits or entitlements. For additional information about this benefit, please contact your Equitable agent. 3 CASH/ACCOUNT VALUE TRANSFERS. You may transfer all or part of your Cash/Account Value among the Funds of the Separate Account up to four times in a policy year. A transfer will go into effect on the day we receive your signed request at our Administrative Office. Your request should show the policy number and amount (either in dollars or as a percentage) you want to transfer. We reallocate loans if you transfer Cash/Account Value. TELEPHONE TRANSFERS. In order to make a transfer by telephone, each policyowner must first complete and return an authorization form. Authorization forms can be obtained from your Equitable agent or our Administrative Office. The completed form MUST be returned to our Administrative Office before requesting a telephone transfer. Telephone transfers may be requested on each day we are open to transact business. You will receive the Fund's index value as of the close of business on the day you call. We do not accept telephone transfer requests after 4:00 p.m. Eastern Time. Only one telephone transfer request is permitted per day and it may not be revoked at any time. Telephone transfer requests are automatically recorded and are invalid if incomplete information is given, portions of the request are inaudible, no authorization form is on file, or the request does not comply with the transfer limitations described in your policy. We have established reasonable procedures designed to confirm that instructions communicated by telephone are genuine. Such procedures include requiring certain personal identification information prior to acting on telephone instructions and providing written confirmation of instructions communicated by telephone. If we do not employ reasonable procedures to confirm that instructions communicated by telephone are genuine, we may be liable for any losses arising out of any act or any failure to act resulting from our own negligence, lack of good faith, or willful misconduct. In light of the procedures established, we will not be liable for following telephone instructions that we reasonably believe to be genuine. During times of extreme market activity it may be impossible to contact us to make a telephone transfer. If this occurs, you should submit a written transfer request to our Administrative Office. Our rules on telephone transfers are subject to change and we reserve the right to discontinue telephone transfers in the future. TAX EFFECTS. The discussion of the tax effects on policy proceeds contained in your prospectus and this supplement is based on our interpretation of Federal income tax laws as of the date of such prospectus or supplement, as applied to Policies owned by U.S. resident individuals. The tax effects on corporate taxpayers, subject to the Federal alternative minimum tax, other non-natural owners such as trusts, non-U.S. residents or non-U.S. citizens, may be different. This discussion is general in nature and should not be considered tax advice, for which you should consult your legal or tax adviser. SPECIAL TAX RULES MAY APPLY IF YOU TRANSFER YOUR OWNERSHIP OF THE POLICY. CONSULT YOUR TAX ADVISER BEFORE ANY TRANSFER OF YOUR POLICY. POLICY PROCEEDS. A policy will be treated as "life insurance" for Federal income tax purposes if it meets the definitional requirement of the Internal Revenue Code (Code) and for as long as the portfolios of the Trust satisfy the diversification requirements under the Code. We believe that the Policies will meet these requirements, and that under Federal income tax law: o the death benefit received by the beneficiary under your policy will not be subject to Federal income tax; and o as long as your policy remains in force, increases in the value of your policy as a result of investment experience will not be subject to Federal income tax unless and until there is a distribution from your policy. The Federal income tax consequences of a distribution from your policy will depend on whether your policy is determined to be a "modified endowment." Except for SP-1 policies entered into after June 20, 1988, the Policies will generally not be considered modified endowments. Also, SP-1 policies acquired after June 20, 1988 as a result of an exchange from a policy that is not a modified endowment, will generally not be considered a modified endowment as long as no additional premiums are paid and the death benefit of the new policy is not reduced below that of the old policy. Although Champion policies should generally not be considered modified endowments, a Champion policy entered into after June 20, 1988 could become a modified endowment if it were issued in exchange for a modified endowment or if the policy is allowed to lapse. IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT, as long as it remains in force, a loan under your policy will be treated as indebtedness and no part of the loan will be subject to Federal income tax. Interest on loans is not deductible. If your policy lapses, matures or is surrendered, the excess, if any, of your Cash Surrender Value (which includes the amount of any unpaid policy loan and loan interest) over your Basis will be subject to Federal income tax. Your Basis in your policy generally will equal the premiums you have paid. Also, if your policy provides for a policy split, a split of your policy into two policies followed by a return of one for cash may result in taxable income to you. IF YOUR POLICY IS A MODIFIED ENDOWMENT, any loan from your policy will be taxed in a manner comparable to distributions from annuities (e.g., on an "income-first" basis). A loan for this purpose includes any increase in the loan amount to pay interest on an existing loan or an assignment or a pledge to secure a loan. A loan will be considered taxable income to you to the extent your Account Value exceeds your Basis in the policy at the time you make the loan. For modified endowments, your Basis would be increased by the amount of any prior loan under your policy that was considered taxable income to you. A 10% penalty tax will also apply to the taxable portion of a loan under a modified endowment. The penalty tax will not, however, apply to loans (i) to taxpayers 59 1/2 years of age or older, (ii) in the case of a disability (as defined in the Code) or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and his beneficiary. In addition, if your policy lapses, matures or is 4 surrendered, the excess, if any, of your Cash Surrender Value over your Basis will be subject to Federal income tax and, unless one of the above exceptions applies, the 10% penalty tax. If a policy is a modified endowment, a policy distribution will be taxed as described in the two preceding paragraphs. "Distributions" include loans, and payments made upon surrender, maturity, lapse, or upon surrender of one of the policies resulting from a policy split. In addition, a distribution from a policy within two years before it becomes a modified endowment will be subject to tax in this manner. The Secretary of the Treasury has been authorized to prescribe rules which would treat similarly other loans made in anticipation of a policy becoming a modified endowment. For the purpose of determining the taxable income to you resulting from a distribution under your policy, all modified endowments issued to you by the same insurer or an affiliate during any calendar year will be aggregated and treated as one policy. This provision applies to policies entered into after June 20, 1988, but does not affect contracts purchased by certain qualified plans. Under prior law, a "twelve-month period" rather than a calendar year standard was used. The paragraphs above described how certain 1988 Federal tax legislation changed the tax consequences of distributions for "modified endowments", a newly described category of life insurance policies. DIVERSIFICATION. Under Section 817(h) of the Code, the Secretary of the Treasury has the authority to set standards for diversification of the investments underlying variable life insurance policies. The Treasury Department has issued regulations regarding the diversification requirements. Failure by us to meet these requirements would disqualify your policy as a life insurance policy under Section 7702 of the Code. If this were to occur, you would be subject to Federal income tax on the income under the policy. Equitable Variable Separate Account I, through the Trust, intends to comply with these requirements. In connection with the issuance of the temporary diversification regulations, the Treasury Department stated that it anticipates the issuance of regulations or rulings prescribing the circumstances in which the ability of a policyowner to direct his investment to particular funds of a separate account may cause the policyowner, rather than the insurance company, to be treated as the owner of the assets in the account. If you were considered the owner of the assets of the Separate Account, income and gains from the Separate Account would be included in your gross income for Federal income tax purposes. TAX CHANGES. The United States Congress may in the future enact legislation that could change the tax treatment of life insurance policies. In addition, the Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing laws. There is no way of predicting whether, when or in what form any such change would be adopted. Any such change could have a retroactive effect regardless of the date of enactment. State tax laws or, if you are not a United States resident, foreign tax laws, may affect the tax consequences to you, the insured person or your beneficiary. These laws may change from time to time without notice. DISTRIBUTION. Equico Securities Inc. ("Equico"), a wholly-owned subsidiary of Equitable, is the principal underwriter of the Trust under a Distribution Agreement. Equico is also the distributor of our variable life insurance policies and Equitable's variable annuity contracts under a Distribution and Servicing Agreement. Equico is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. Equico's principal business address is 1755 Broadway, New York, NY 10019. Equico is paid a fee for its services as distributor of our policies. In 1994 and 1995, Equitable and Equitable Variable paid Equico fees of $216,920 and $325,380, respectively, for its services under the Distribution and Servicing Agreement. On or about May 1, 1996, Equico will change its name to EQ Financial Consultants, Inc. The amounts paid and accrued to Equitable by us under our sales and services agreements with Equitable totaled approximately $377.2 million in 1995, $380.5 million in 1994 and $355.7 million in 1993. MANAGEMENT. A list of our directors and principal officers and a brief statement of their business experience for the past five years is contained in Appendix A to this supplement. LONG-TERM MARKET TRENDS. Appendix B to this supplement presents historical return trends for various types of securities which may be useful for understanding how different investment strategies may affect long term results. FINANCIAL STATEMENTS. The financial statements of Separate Account FP and Equitable Variable included in this prospectus supplement have been audited for the years ended December 31, 1995, 1994 and 1993 by the accounting firm of Price Waterhouse LLP, independent accountants, to the extent stated in their reports. The financial statements of Separate Account FP and Equitable Variable for the years ended December 31, 1995, 1994 and 1993 included in this prospectus supplement have been so included in reliance on the reports of Price Waterhouse LLP, given on the authority of such firm as experts in accounting and auditing. The financial statements of Equitable Variable contained in this prospectus supplement should be considered only as bearing upon the ability of Equitable Variable to meet its obligations under the policies. They should not be considered as bearing upon the investment experience of the Funds of the Separate Account. 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Equitable Variable Life Insurance Company and Policyowners of Separate Account I of Equitable Variable Life Insurance Company In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of Money Market Division, Intermediate Government Securities Division, High Yield Division, Balanced Division, Common Stock Division and Aggressive Stock Division, separate investment divisions of Equitable Variable Life Insurance Company ("Equitable Variable Life") Separate Account I at December 31, 1995 and the results of each of their operations and changes in each of their net assets for the years indicated, in conformity with generally accepted accounting principles. These financial statements are the responsibility of Equitable Variable Life's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of shares in The Hudson River Trust at December 31, 1995 with the transfer agent, provide a reasonable basis for the opinion expressed above. PRICE WATERHOUSE LLP New York, NY February 7, 1996 FSA-1 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1995
INTERMEDIATE MONEY GOVERNMENT HIGH MARKET SECURITIES YIELD DIVISION DIVISION DIVISION ------------- ------------- ------------ ASSETS Investments in shares of The Hudson River Trust -- at market value (Notes 2 and 7) Cost: $ 68,810,062........................................................ $69,878,080 2,278,572........................................................ $2,270,685 8,122,292........................................................ $8,889,685 30,772,800........................................................ 288,549,569........................................................ 15,051,041........................................................ Receivable for sales of shares of The Hudson River Trust................... -- -- 4,028 Receivable for policy-related transactions................................. -- 122 -- ----------- ---------- ---------- Total Assets............................................................... 69,878,080 2,270,807 8,893,713 ----------- ---------- ---------- LIABILITIES Payable for purchases of shares of The Hudson River Trust.................. 42,175 146 -- Payable for policy-related transactions.................................... 374,717 -- 75,483 Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 556,502 108,596 584,394 ----------- ---------- ---------- Total Liabilities.......................................................... 973,394 108,742 659,877 ----------- ---------- ---------- NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $68,904,686 $2,162,065 $8,233,835 =========== ========== ==========
COMMON AGGRESSIVE BALANCED STOCK STOCK DIVISION DIVISION DIVISION ------------ ------------ ----------- ASSETS Investments in shares of The Hudson River Trust -- at market value (Notes 2 and 7) Cost: $ 68,810,062........................................................ 2,278,572........................................................ 8,122,292........................................................ 30,772,800........................................................ $36,956,684 288,549,569........................................................ $466,189,272 15,051,041........................................................ $24,149,766 Receivable for sales of shares of The Hudson River Trust................... -- -- -- Receivable for policy-related transactions................................. -- -- -- ----------- ------------ ----------- Total Assets............................................................... 36,956,684 466,189,272 24,149,766 ----------- ------------ ----------- LIABILITIES Payable for purchases of shares of The Hudson River Trust.................. 13,111 171,915 25,293 Payable for policy-related transactions.................................... 548,410 4,222,963 373,127 Amount retained by Equitable Variable Life in Separate Account I (Note 4).. 552,645 5,700,933 532,544 ----------- ------------ ----------- Total Liabilities.......................................................... 1,114,166 10,095,811 930,964 ----------- ------------ ----------- NET ASSETS ATTRIBUTABLE TO POLICYOWNERS.................................... $35,842,518 $456,093,461 $23,218,802 =========== ============ ===========
See Notes to Financial Statements. FSA-2 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31,
MONEY MARKET DIVISION -------------------------------------- 1995 1994 1993 ----------- ----------- ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust................................ $3,738,980 $2,684,291 $2,083,651 Expenses (Note 3): Mortality and expense risk charges................................... 347,935 355,911 373,075 ---------- ---------- ---------- NET INVESTMENT INCOME..................................................... 3,391,045 2,328,380 1,710,576 ---------- ---------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.................................. 31,732 52,117 65,261 Realized gain distribution from The Hudson River Trust............... -- -- -- ---------- ---------- ---------- NET REALIZED GAIN (LOSS).................................................. 31,732 52,117 65,261 Unrealized appreciation/depreciation on investments: Beginning of period.................................................. 920,431 844,597 812,147 End of period........................................................ 1,068,018 920,431 844,597 ---------- ---------- ---------- Change in unrealized appreciation/depreciation during the period....... 147,587 75,834 32,450 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 179,319 127,951 97,711 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $3,570,364 $2,456,331 $1,808,287 ========== ========== ==========
INTERMEDIATE GOVERNMENT SECURITIES DIVISION ------------------------------------ 1995 1994 1993 ---------- ---------- -------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust................................ $145,274 $ 199,648 $115,827 Expenses (Note 3): Mortality and expense risk charges................................... 11,943 11,365 8,896 -------- --------- -------- NET INVESTMENT INCOME..................................................... 133,331 188,283 106,931 -------- --------- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.................................. (94,891) (303,584) (3,141) Realized gain distribution from The Hudson River Trust............... -- 157,383 157,383 -------- --------- -------- NET REALIZED GAIN (LOSS).................................................. (94,891) (146,201) 154,242 Unrealized appreciation/depreciation on investments: Beginning of period.................................................. (267,346) (100,844) 8,264 End of period........................................................ (7,887) (267,346) (100,844) -------- --------- -------- Change in unrealized appreciation/depreciation during the period....... 259,459 (166,502) (109,108) -------- --------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 164,568 (312,703) 45,134 -------- --------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........... $297,899 $(124,420) $152,065 ======== ========= ========
See Notes to Financial Statements. FSA-3 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31,
HIGH YIELD DIVISION -------------------------------------- 1995 1994 1993 ----------- ---------- ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust...................................... $ 862,089 $ 806,574 $ 763,325 Expenses (Note 3): Mortality and expense risk charges......................................... 39,170 41,676 40,466 ----------- --------- ---------- NET INVESTMENT INCOME........................................................... 822,919 764,898 722,859 ----------- --------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.......................................... (10,426) (94,683) 11,131 Realized gain distribution from The Hudson River Trust....................... -- -- 170,999 ---------- --------- ---------- NET REALIZED GAIN (LOSS)........................................................ (10,426) (94,683) 182,130 Unrealized appreciation/depreciation on investments: Beginning of period........................................................ 98,061 1,064,280 338,796 End of period.............................................................. 767,393 98,061 1,064,280 ---------- ---------- ---------- Change in unrealized appreciation/depreciation during the period............. 669,332 (966,219) 725,484 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 658,906 (1,060,902) 907,614 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $1,481,825 $ (296,004) $1,630,473 ========== ========== ==========
BALANCED DIVISION -------------------------------------- 1995 1994 1993 ---------- ------------ ---------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust...................................... $1,126,871 $ 1,006,200 $ 963,517 Expenses (Note 3): Mortality and expense risk charges......................................... 167,041 164,873 162,512 ---------- ----------- ---------- NET INVESTMENT INCOME........................................................... 959,830 841,327 801,005 ---------- ----------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments.......................................... (113,948) (379,076) (6,104) Realized gain distribution from The Hudson River Trust....................... 1,008,186 -- 1,948,704 ---------- ----------- ---------- NET REALIZED GAIN (LOSS)........................................................ 894,238 (379,076) 1,942,600 Unrealized appreciation/depreciation on investments: Beginning of period........................................................ 2,080,968 5,526,191 4,624,699 End of period.............................................................. 6,183,884 2,080,968 5,526,191 ---------- ----------- ---------- Change in unrealized appreciation/depreciation during the period............. 4,102,916 (3,445,223) 901,492 ---------- ----------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.......................... 4,997,154 (3,824,299) 2,844,092 ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................. $5,956,984 $(2,982,972) $3,645,097 ========== =========== ==========
See Notes to Financial Statements. FSA-4 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF OPERATIONS (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31,
COMMON STOCK DIVISION ------------------------------------------- 1995 1994 1993 -------------- ------------- ------------ INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust..................................... $ 5,978,397 $ 5,727,748 $ 5,678,972 Expenses (Note 3): Mortality and expense risk charges........................................ 2,095,213 1,942,844 1,844,849 ------------ ------------ ------------ NET INVESTMENT INCOME.......................................................... 3,883,184 3,784,904 3,834,123 ------------ ------------ ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments......................................... 1,269,512 (328,604) 2,630,537 Realized gain distribution from The Hudson River Trust...................... 25,928,481 20,219,440 47,068,505 ------------ ------------ ------------ NET REALIZED GAIN (LOSS)....................................................... 27,197,993 19,890,836 49,699,042 Unrealized appreciation/depreciation on investments: Beginning of period....................................................... 92,693,149 126,545,990 98,769,799 End of period............................................................. 177,639,703 92,693,149 126,545,990 ------------ ------------ ------------ Change in unrealized appreciation/depreciation during the period............ 84,946,554 (33,852,841) 27,776,191 ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 112,144,547 (13,962,005) 77,475,233 ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $116,027,731 $(10,177,101) $ 81,309,356 ============ ============ ============
AGGRESSIVE STOCK DIVISION ------------------------------------------ 1995 1994 1993 ----------- ------------- ------------- INCOME AND EXPENSES: Income (Note 2): Dividends from The Hudson River Trust..................................... $ 57,627 $ 22,268 $ 45,872 Expenses (Note 3): Mortality and expense risk charges........................................ 102,259 89,577 82,479 ---------- ----------- ---------- NET INVESTMENT INCOME.......................................................... (44,632) (67,309) (36,607) ---------- ----------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2): Realized gain (loss) on investments......................................... 42,192 (226,938) (57,409) Realized gain distribution from The Hudson River Trust...................... 2,691,238 -- 1,550,537 ---------- ----------- ---------- NET REALIZED GAIN (LOSS)....................................................... 2,733,430 (226,938) 1,493,128 Unrealized appreciation/depreciation on investments: Beginning of period....................................................... 6,102,433 6,618,938 5,529,963 End of period............................................................. 9,098,725 6,102,433 6,618,938 ---------- ----------- ---------- Change in unrealized appreciation/depreciation during the period............ 2,996,292 (516,505) 1,088,975 ---------- ----------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 5,729,722 (743,443) 2,582,103 ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................ $5,685,090 $ (810,752) $2,545,496 ========== =========== ==========
See Notes to Financial Statements. FSA-5 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31,
MONEY MARKET DIVISION --------------------------------------- 1995 1994 1993 ---------- ------------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $3,391,045 $ 2,328,380 $ 1,710,576 Net realized gain (loss)..................................................... 31,732 52,117 65,261 Change in unrealized appreciation (depreciation) on investments.............. 147,587 75,834 32,450 ----------- ----------- ----------- Net increase (decrease) from operations...................................... 3,570,364 2,456,331 1,808,287 ----------- ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 5,540,000 6,128,438 7,171,866 Benefits and other policy-related transactions............................... (8,585,006) (8,940,995) (10,608,028) Net transfers among divisions................................................ (340,867) (1,904,223) (3,931,738) ----------- ----------- ----------- Net increase (decrease) from policy-related transactions..................... (3,385,873) (4,716,780) (7,367,900) ----------- ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (33,731) (22,105) (424) ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS............................................... 150,760 (2,282,554) (5,560,037) NET ASSETS, BEGINNING OF PERIOD................................................. 68,753,926 71,036,480 76,596,517 ----------- ----------- ----------- NET ASSETS, END OF PERIOD....................................................... $68,904,686 $68,753,926 $71,036,480 =========== =========== ===========
INTERMEDIATE GOVERNMENT SECURITIES DIVISION -------------------------------------- 1995 1994 1993 ----------- ------------- ---------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 133,331 $ 188,283 $ 106,931 Net realized gain (loss)..................................................... (94,891) (146,201) 154,242 Change in unrealized appreciation (depreciation) on investments.............. 259,459 (166,502) (109,108) ---------- ----------- ---------- Net increase (decrease) from operations...................................... 297,899 (124,420) 152,065 ---------- ----------- ---------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 120,110 130,572 114,331 Benefits and other policy-related transactions............................... (292,199) (402,355) (135,104) Net transfers among divisions................................................ (65,399) 606,857 557,742 ---------- ----------- ---------- Net increase (decrease) from policy-related transactions..................... (237,488) 335,074 536,969 ---------- ----------- ---------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (12,591) 4,561 (986) ---------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS............................................... 47,820 215,215 688,048 NET ASSETS, BEGINNING OF PERIOD................................................. 2,114,245 1,899,030 1,210,982 ---------- ---------- ---------- NET ASSETS, END OF PERIOD....................................................... $2,162,065 $2,114,245 $1,899,030 ========== ========== ==========
See Notes to Financial Statements. FSA-6 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEAR ENDED DECEMBER 31,
HIGH YIELD DIVISION ----------------------------------------- 1995 1994 1993 ----------- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 822,919 $ 764,898 $ 722,859 Net realized gain (loss)..................................................... (10,426) (94,683) 182,130 Change in unrealized appreciation (depreciation) on investments.............. 669,332 (966,219) 725,484 ---------- ----------- ----------- Net increase (decrease) from operations...................................... 1,481,825 (296,004) 1,630,473 ---------- ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 821,557 852,874 862,281 Benefits and other policy-related transactions............................... (1,690,910) (1,525,854) (1,494,464) Net transfers among divisions................................................ 154,049 (38,627) 626,135 ---------- ----------- ----------- Net increase (decrease) from policy-related transactions..................... (715,304) (711,607) (6,048) ---------- ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (96,346) 14,805 (5,206) ---------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS............................................... 670,175 (992,806) 1,619,219 NET ASSETS, BEGINNING OF PERIOD................................................. 7,563,660 8,556,466 6,937,247 ---------- ----------- ----------- NET ASSETS, END OF PERIOD....................................................... $8,233,835 $ 7,563,660 $ 8,556,466 ========== =========== ===========
BALANCED DIVISION ----------------------------------------- 1995 1994 1993 ------------ ------------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 959,830 $ 841,327 $ 801,005 Net realized gain (loss)..................................................... 894,238 (379,076) 1,942,600 Change in unrealized appreciation (depreciation) on investments.............. 4,102,916 (3,445,223) 901,492 ----------- ----------- ----------- Net increase (decrease) from operations...................................... 5,956,984 (2,982,972) 3,645,097 ----------- ----------- ----------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 3,295,027 3,487,888 3,674,964 Benefits and other policy-related transactions............................... (3,348,951) (3,823,829) (4,982,073) Net transfers among divisions................................................ (376,087) (3,406) 1,192,337 ----------- ----------- ----------- Net increase (decrease) from policy-related transactions..................... (430,011) (339,347) (114,772) ----------- ----------- ----------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (89,517) 42,214 (13,867) ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS............................................... 5,437,456 (3,280,105) 3,516,458 NET ASSETS, BEGINNING OF PERIOD................................................. 30,405,062 33,685,167 30,168,709 ----------- ----------- ----------- NET ASSETS, END OF PERIOD....................................................... $35,842,518 $30,405,062 $33,685,167 =========== =========== ===========
See Notes to Financial Statements. FSA-7 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I STATEMENTS OF CHANGES IN NET ASSETS (CONCLUDED) FOR THE YEAR ENDED DECEMBER 31,
COMMON STOCK DIVISION ----------------------------------------- 1995 1994 1993 ----------- -------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ 3,883,184 $ 3,784,904 $ 3,834,123 Net realized gain (loss)..................................................... 27,197,993 19,890,836 49,699,042 Change in unrealized appreciation (depreciation) on investments.............. 84,946,554 (33,852,841) 27,776,191 ------------ ------------ ------------ Net increase (decrease) from operations...................................... 116,027,731 (10,177,101) 81,309,356 ------------ ------------ ------------ FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 22,520,480 24,056,215 25,806,986 Benefits and other policy-related transactions............................... (43,155,008) (44,688,333) (46,157,443) Net transfers among divisions................................................ (27,413) 459,966 1,338,478 ------------ ------------ ------------ Net increase (decrease) from policy-related transactions..................... (20,661,941) (20,172,152) (19,011,979) ------------ ------------ ------------ NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (1,859,326) 149,257 (1,173,722) ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS............................................... 93,506,464 (30,199,996) 61,123,655 NET ASSETS, BEGINNING OF PERIOD................................................. 362,586,997 392,786,993 331,663,338 ------------ ------------ ------------ NET ASSETS, END OF PERIOD....................................................... $456,093,461 $362,586,997 $392,786,993 ============ ============ ============
AGGRESSIVE STOCK DIVISION ------------------------------------------- 1995 1994 1993 ----------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income........................................................ $ (44,632) $ (67,309) $ (36,607) Net realized gain (loss)..................................................... 2,733,430 (226,938) 1,493,128 Change in unrealized appreciation (depreciation) on investments.............. 2,996,292 (516,505) 1,088,975 ----------- ------------- ------------ Net increase (decrease) from operations...................................... 5,685,090 (810,752) 2,545,496 ----------- ------------- ------------- FROM POLICY-RELATED TRANSACTIONS: Net premiums (Note 3)........................................................ 1,509,349 1,480,535 1,490,827 Benefits and other policy-related transactions............................... (2,642,068) (1,982,576) (1,737,214) Net transfers among divisions................................................ 655,717 1,279,484 565,989 ----------- ------------- ------------- Net increase (decrease) from policy-related transactions..................... (477,002) 777,443 319,602 ----------- ------------- ------------- NET (INCREASE) DECREASE IN AMOUNT RETAINED BY EQUITABLE VARIABLE LIFE IN SEPARATE ACCOUNT I (Note 4)............................................... (150,764) 20,425 (5,961) ----------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS............................................... 5,057,324 (12,884) 2,859,137 NET ASSETS, BEGINNING OF PERIOD................................................. 18,161,478 18,174,362 15,315,225 ----------- ------------- ------------- NET ASSETS, END OF PERIOD....................................................... $23,218,802 $ 18,161,478 $ 18,174,362 =========== ============= =============
See Notes to Financial Statements. FSA-8 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 1. General Equitable Variable Life Insurance Company (Equitable Variable Life), a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States (Equitable Life), established Separate Account I (the Account) under New York insurance law to support the operations of Equitable Variable Life's scheduled and single premium variable life insurance policies (Policies). The Account is a unit investment trust registered with the Securities and Exchange Commission under the Investment Company Act of 1940. The Account consists of six investment divisions: the Money Market Division, the Intermediate Government Securities Division, the High Yield Division, the Balanced Division, the Common Stock Division and the Aggressive Stock Division. The assets in each Division are invested in shares of a designated portfolio (Portfolio) of a mutual fund, The Hudson River Trust (the Trust). Each Portfolio has separate investment objectives. The assets of the Account are the property of Equitable Variable Life. However, the portion of the Account's assets equal to the reserves and other policy liabilities with respect to the Account will not be chargeable with liabilities arising out of any other business Equitable Variable Life may conduct. The net assets may not be less than the amount required under New York insurance law to provide for death benefits (without regard to the minimum death benefit guarantee) and other policy benefits. Additional assets are held in Equitable Variable Life's General Account to cover the contingency that the guaranteed minimum death benefit might exceed the death benefit which would have been payable in the absence of such guarantee. 2. Significant Accounting Policies The accompanying financial statements are prepared in conformity with generally accepted accounting principles (GAAP). The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Investments made in shares of the Trust are valued at the net asset value per share of the respective Portfolios. The net asset value is determined by the Trust using the market or fair value of the underlying assets of the Portfolios. Investment transactions are recorded on the trade date. Realized gains and losses include gains and losses on redemptions of the Trust's shares (determined on the identified cost basis) and Trust distributions representing the net realized gains on Trust investment transactions. The operations of the Account are included in the consolidated Federal income tax return of Equitable. Under the provisions of the Policies, Equitable Variable Life has the right to charge the Account for Federal income tax attributable to the Account. No charge is currently being made against the Account for such tax since, under current tax law, Equitable Variable Life pays no tax on investment income and capital gains reflected in variable life insurance policy reserves. However, Equitable Variable Life retains the right to charge for any Federal income tax incurred which is attributable to the Account if the law is changed. Charges for state and local taxes, if any, attributable to the Account may also be made. Dividends are recorded as income at the end of each quarter on the ex-dividend date. Capital gains are distributed by the Trust at the end of each year. 3. Asset Charges Under the policies, Equitable Variable Life assumes mortality and expense risks and, to cover these risks, deducts a charge from the assets of the Account at an annual rate of 0.50% of net assets attributable to policyowners. Equitable Variable Life makes certain deductions from net premiums before amounts are allocated to the Account. The deductions are for (1) premiums for optional benefits, (2) additional premiums for extra mortality risks, (3) administrative expenses, (4) state premium taxes, and (5) except as to single premium policies, a risk charge for the guaranteed minimum death benefit. 4. Amounts Retained by Equitable Variable Life in Separate Account I The amount retained by Equitable Variable Life in the Account arises principally from (1) mortality and other gains and losses resulting from the Account's operations, (2) contributions from Equitable Variable Life, and (3) that portion, determined ratably, of the Account's investment results applicable to those assets in the Account in excess of the net assets for the Policies. Amounts retained by Equitable Variable Life are not subject to charges for mortality and expense risks. Amounts retained by Equitable Variable Life in the Account may be transferred at any time by Equitable Variable Life to its General Account. FSA-9 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 1995 The following table shows the surplus contributions (withdrawals) by Equitable Variable Life by investment division:
INVESTMENT DIVISION 1995 1994 1993 ------------------- ---- ---- ---- Common Stock $(1,975,000) -- -- Money Market -- -- $ 585,000 Balanced -- -- 375,000 Aggressive Stock (100,000) -- 460,000 High Yield -- -- 475,000 Short-Term World Income -- $(119,356) -- Intermediate Government Securities -- -- 90,000 ----------- --------- ---------- $(2,075,000) $(119,356) $1,985,000 =========== ========= ==========
Equitable Variable Life credits the values of the Policies participating in the Account to compensate policyowners for their share of the Trust expenses in excess of (1) fees for advisory services at an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the Portfolios, and (2) the Trust income taxes, if any. For Money Market and Common Stock Divisions, fees for advisory services in excess of an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the related Trust Portfolios are refunded to the Divisions. Excess fees for advisory services for Intermediate Government Securities, High Yield, Balanced and Aggressive Stock Divisions are absorbed by Equitable Variable Life's surplus account. 5. Distribution and Servicing Agreement Equitable Variable Life has entered into a Distribution and Servicing Agreement with Equitable Life and Equico Securities Inc., (Equico), whereby registered representatives of Equico, authorized as variable life insurance agents under applicable state insurance laws, sell the Policies. The registered representatives are compensated on a commission basis by Equitable Life. Equitable Variable Life also has entered into an agreement with Equitable Life under which Equitable Life performs the administrative services related to the Policies, including underwriting and issuance, billings and collections, and policyowner services. There is no charge to the Account related to this agreement. 6. Share Substitution On February 22, 1994, Equitable Variable Life, the Account and the Trust substituted shares of the Trust's Intermediate Government Securities Portfolio for shares of the Trust's Short-Term World Income Portfolio. The amount transferred to Intermediate Government Securities Portfolio was $390,705. The statements of operations and statements of changes in net assets for the Intermediate Government Securities Portfolio is combined with the Short-Term World Income Portfolio for periods prior to the merger on February 22, 1994. The Short-Term World Income Division is not available for future investment. 7. Investment Returns The tables on the following page show the gross and net investment returns with respect to the Divisions for the periods shown. The net return for each Division is based upon net assets for a policy which commences with the beginning date of such period and is not based on the average net assets in the Division during such period. Gross return is equal to the total return earned by the underlying Trust investment. FSA-10 EQUITABLE VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT I NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 1995
RATES OF RETURN: YEAR ENDED DECEMBER 31, MONEY MARKET ---------------------------------------------------------------------------------------------------- DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return.............. 5.74% 4.02% 3.16% 3.75% 6.38% 8.44% 9.44% 7.56% 6.85% 6.86% Net return................ 5.41% 3.68% 2.62% 3.23% 5.85% 7.90% 8.85% 7.02% 6.32% 6.31%
APRIL 1(B) TO INTERMEDIATE YEAR ENDED DECEMBER 31, DECEMBER 31, GOVERNMENT ------------------------------------ -------------------- SECURITIES DIVISION 1995 1994 1993 1992 1991 - ------------------- ---- ---- ---- ---- ---- Gross return.............. 13.33% (4.37)% 10.87% 5.88% 12.51% Net return................ 13.12% (4.54)% 10.29% 5.35% 12.09%
YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------------ HIGH YIELD DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987 - ------------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return.............. 19.92% (2.79)% 23.60% 12.69% 24.91% (0.75)% 5.52% 10.55% 5.30% Net return................ 19.74% (2.94)% 22.99% 12.13% 24.29% (1.25)% 4.99% 9.73% 4.77% BALANCED DIVISION - ----------------- Gross return.............. 19.75% (8.02)% 12.44% (2.68)% 41.52% 0.43 % 26.08% 13.84% (0.65)% Net return................ 19.33% (8.35)% 11.91% (3.17)% 40.81% (0.07)% 25.45% 12.99% (1.15)%
YEAR ENDED DECEMBER 31, COMMON STOCK --------------------------------------------------------------------------------------------------- DIVISION(A)(C) 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 - -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return.............. 32.45% (2.14)% 24.99% 3.36% 38.10% (7.95)% 25.82% 22.69% 7.71% 17.59% Net return................ 31.97% (2.50)% 24.36% 2.84% 37.41% (8.41)% 25.19% 22.08% 7.17% 17.00%
YEAR ENDED DECEMBER 31, AGGRESSIVE -------------------------------------------------------------------------------------------- STOCK DIVISION 1995 1994 1993 1992 1991 1990 1989 1988 1987 - -------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- Gross return............. 31.63% (3.81)% 17.05% (2.91)% 87.41% 8.49% 43.93% 1.78% 7.69% Net return............... 31.29% (4.07)% 16.45% (3.40)% 86.47% 7.95% 43.21% 1.02% 7.15% (a) The net returns for periods prior to March 22, 1985 are those of the respective Separate Accounts I and II reorganized on that date into a unit investment trust. The reorganization was accounted for under the continuing entity basis of accounting. (b) Date as of which net premiums under the Policies were first allocated to the Division. The gross return and the net return for the periods indicated are not annual rates of return. (c) Subsequent to March 22, 1985, the date the Account commenced investing in the Trust, the advisory fees have been deducted prior to calculating the gross return.
FSA-11 EQUITABLE VARIABLE LIFE INSURANCE COMPANY CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1995 AND 1994
1995 1994 ----------------- ---------------- ASSETS (IN MILLIONS) Investments: Fixed maturities: Available for sale, at estimated fair value........................................ $ 4,366.3 $ 2,138.8 Held to maturity, at amortized cost................................................ -- 2,008.5 Policy loans......................................................................... 1,300.1 1,185.2 Mortgage loans on real estate........................................................ 771.5 888.5 Equity real estate................................................................... 525.4 641.0 Other equity investments............................................................. 200.5 239.1 Other invested assets................................................................ 120.9 107.8 ----------------- ---------------- Total investments.................................................................. 7,284.7 7,208.9 Cash and cash equivalents............................................................... 277.6 182.3 Deferred policy acquisition costs....................................................... 2,037.8 2,077.1 Other assets............................................................................ 250.6 240.7 Separate Accounts assets................................................................ 4,611.6 3,345.3 ----------------- ---------------- TOTAL ASSETS............................................................................ $ 14,462.3 $ 13,054.3 ================= ================ LIABILITIES Policyholders' account balances......................................................... $ 7,045.9 $ 7,340.0 Future policy benefits and other policyholders' liabilities............................. 570.8 509.4 Other liabilities....................................................................... 521.4 441.1 Separate Accounts liabilities........................................................... 4,586.5 3,314.9 ----------------- ---------------- Total liabilities.................................................................. 12,724.6 11,605.4 ----------------- ---------------- Commitments and contingencies (Notes 7, 9, 10 and 11) SHAREHOLDER'S EQUITY Common stock, par value $1 per share; 5.0 million shares authorized, 1.5 million shares issued and outstanding............. 1.5 1.5 Capital in excess of par value.......................................................... 1,480.7 1,355.7 Retained earnings....................................................................... 221.6 165.5 Net unrealized investment gains (losses)................................................ 44.6 (72.6) Minimum pension liability............................................................... (10.7) (1.2) ----------------- ---------------- Total shareholder's equity......................................................... 1,737.7 1,448.9 ----------------- ---------------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY.............................................. $ 14,462.3 $ 13,054.3 ================= ================ See Notes to Consolidated Financial Statements.
F-1 EQUITABLE VARIABLE LIFE INSURANCE COMPANY CONSOLIDATED STATEMENTS OF EARNINGS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) REVENUES Universal life and investment-type product policy fee income...... $ 584.5 $ 552.6 $ 485.2 Premiums.......................................................... 33.7 40.1 46.9 Net investment income............................................. 529.1 526.8 557.6 Investment (losses) gains, net.................................... (.5) (4.6) 1.5 Other income...................................................... 2.1 2.9 3.0 ----------------- ---------------- ----------------- Total revenues.................................................. 1,148.9 1,117.8 1,094.2 ----------------- ---------------- ----------------- BENEFITS AND OTHER DEDUCTIONS Interest credited to policyholders' account balances.............. 376.1 389.3 439.2 Policyholders' benefits........................................... 267.5 242.3 251.0 Other operating costs and expenses................................ 419.5 413.8 356.7 ----------------- ---------------- ----------------- Total benefits and other deductions............................. 1,063.1 1,045.4 1,046.9 ----------------- ---------------- ----------------- Earnings before Federal income taxes and cumulative effect of accounting change....................................... 85.8 72.4 47.3 Federal income tax expense........................................... 29.7 25.0 20.5 ----------------- ---------------- ----------------- Earnings before cumulative effect of accounting change............... 56.1 47.4 26.8 Cumulative effect of accounting change, net of Federal income taxes. -- (11.4) -- ----------------- ---------------- ----------------- Net Earnings......................................................... $ 56.1 $ 36.0 $ 26.8 ================= ================ ================= See Notes to Consolidated Financial Statements.
F-2 EQUITABLE VARIABLE LIFE INSURANCE COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) COMMON STOCK AT PAR VALUE, beginning and end of year................. $ 1.5 $ 1.5 $ 1.5 ----------------- ---------------- ----------------- CAPITAL IN EXCESS OF PAR VALUE, beginning of year.................... 1,355.7 1,305.7 1,055.7 Additional capital in excess of par value............................ 125.0 50.0 250.0 ----------------- ---------------- ----------------- Capital in excess of par value, end of year.......................... 1,480.7 1,355.7 1,305.7 ----------------- ---------------- ----------------- RETAINED EARNINGS, beginning of year................................. 165.5 129.5 102.7 Net earnings......................................................... 56.1 36.0 26.8 ----------------- ---------------- ----------------- Retained earnings, end of year....................................... 221.6 165.5 129.5 ----------------- ---------------- ----------------- NET UNREALIZED INVESTMENT (LOSSES) GAINS, beginning of year.......... (72.6) 22.3 11.1 Change in unrealized investment gains (losses)....................... 117.2 (94.9) 11.2 ----------------- ---------------- ----------------- Net unrealized investment gains (losses), end of year................ 44.6 (72.6) 22.3 ----------------- ---------------- ----------------- MINIMUM PENSION LIABILITY, beginning of year......................... (1.2) (6.3) -- Change in minimum pension liability.................................. (9.5) 5.1 (6.3) ----------------- ---------------- ----------------- Minimum pension liability, end of year............................... (10.7) (1.2) (6.3) ----------------- ---------------- ----------------- TOTAL SHAREHOLDER'S EQUITY, END OF YEAR.............................. $ 1,737.7 $ 1,448.9 $ 1,452.7 ================= ================ ================= See Notes to Consolidated Financial Statements.
F-3 EQUITABLE VARIABLE LIFE INSURANCE COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) NET EARNINGS......................................................... $ 56.1 $ 36.0 $ 26.8 ADJUSTMENTS TO RECONCILE NET EARNINGS TO NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES: Interest credited to policyholders' account balances.............. 376.1 389.3 439.2 General Account policy charges.................................... (618.7) (572.8) (496.7) Investment losses (gains), net.................................... .5 4.6 (1.5) Other, net........................................................ 63.8 (17.2) 117.2 ----------------- ---------------- ----------------- Net cash (used) provided by operating activities..................... (122.2) (160.1) 85.0 ----------------- ---------------- ----------------- CASH FLOWS FROM INVESTING ACTIVITIES: Maturities and repayments......................................... 640.7 511.8 1,165.8 Sales............................................................. 2,667.0 2,119.0 2,844.2 Return of capital from joint ventures and limited partnerships.... 23.9 14.2 56.3 Purchases......................................................... (3,065.9) (2,251.7) (4,414.0) Other, net........................................................ (114.8) (102.2) (98.8) ----------------- ---------------- ----------------- Net cash provided (used) by investing activities..................... 150.9 291.1 (446.5) ----------------- ---------------- ----------------- CASH FLOWS FROM FINANCING ACTIVITIES: Policyholders' account balances: Deposits........................................................ 581.1 602.8 612.9 Withdrawals..................................................... (636.6) (697.7) (506.2) Capital contribution from Equitable Life.......................... 125.0 50.0 250.0 Other, net........................................................ (2.9) (1.8) 2.0 ----------------- ---------------- ----------------- Net cash provided (used) by financing activities..................... 66.6 (46.7) 358.7 ----------------- ---------------- ----------------- Change in cash and cash equivalents.................................. 95.3 84.3 (2.8) Cash and cash equivalents, beginning of year......................... 182.3 98.0 100.8 ----------------- ---------------- ----------------- Cash and Cash Equivalents, End of Year............................... $ 277.6 $ 182.3 $ 98.0 ================= ================ ================= Supplemental cash flow information Interest Paid..................................................... $ -- $ 5.7 $ 2.1 ================= ================ ================= Income Taxes Refunded............................................. $ -- $ 8.4 $ .3 ================= ================ ================= See Notes to Consolidated Financial Statements.
F-4 EQUITABLE VARIABLE LIFE INSURANCE COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION Equitable Variable Life Insurance Company ("Equitable Variable Life") was incorporated on September 11, 1972 as a wholly owned subsidiary of The Equitable Life Assurance Society of the United States ("Equitable Life"). Equitable Variable Life's operations consist principally of the sale of interest-sensitive life insurance and annuity products. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements are prepared in conformity with generally accepted accounting principles ("GAAP"). The accompanying consolidated financial statements include the accounts of Equitable Variable Life and its subsidiaries, (collectively "EVLICO"). The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications have been made in the amounts presented for prior periods to conform these periods with the 1995 presentation. Accounting Changes In the first quarter of 1995, EVLICO adopted Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan." This statement applies to all loans, including loans restructured in a troubled debt restructuring involving a modification of terms. This statement addresses the accounting for impairment of a loan by specifying how allowances for credit losses should be determined. Impaired loans within the scope of this statement are measured based on the present value of expected future cash flows discounted at the loan's effective interest rate, at the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. EVLICO provides for impairment of loans through an allowance for possible losses. The adoption of this statement did not have a material effect on the level of these allowances or on EVLICO's consolidated statements of earnings and shareholder's equity. In the fourth quarter of 1994 (effective as of January 1, 1994), EVLICO adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits," which required employers to recognize the obligation to provide postemployment benefits. Implementation of this statement resulted in a charge for the cumulative effect of accounting change of $11.4 million, net of a Federal income tax benefit of $6.2 million. At December 31, 1993, EVLICO adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which expanded the use of fair value accounting for those securities that a company does not have positive intent and ability to hold to maturity. Implementation of this statement increased consolidated shareholder's equity by $7.2 million, net of deferred policy acquisition costs and deferred Federal income tax. Beginning coincident with issuance of SFAS No. 115 implementation guidance in November 1995, the Financial Accounting Standards Board ("FASB") permitted companies a one-time opportunity, through December 31, 1995, to reassess the appropriateness of the classification of all securities held at that time. On December 1, 1995, EVLICO transferred $1,806.7 million of securities classified as held to maturity to the available for sale portfolio. As a result, consolidated shareholder's equity increased by $17.9 million, net of deferred policy acquisition costs and deferred Federal income tax. New Accounting Pronouncements In March 1995, the FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. EVLICO will implement this statement as of January 1, 1996. EVLICO currently provides allowances for possible losses for assets under the scope of this statement. Management has not yet determined the impact of this statement on these assets. Valuation of Investments Fixed maturities which have been identified as available for sale are reported at estimated fair value. At December 31, 1994, fixed maturities which EVLICO had both the ability and the intent to hold to maturity, were stated principally at amortized cost. The amortized cost of fixed maturities is adjusted for impairments in value deemed to be other than temporary. F-5 Mortgage loans on real estate are stated at unpaid principal balances, net of unamortized discounts and valuation allowances. Effective with the adoption of SFAS No. 114 on January 1, 1995, the valuation allowances are based on the present value of expected future cash flows discounted at the loan's original effective interest rate or the collateral value if the loan is collateral dependent. However, if foreclosure is or becomes probable, the measurement method used is collateral value. Prior to the adoption of SFAS No. 114, the valuation allowances were based on losses expected by management to be realized on transfers of mortgage loans to real estate (upon foreclosure or in-substance foreclosure), on the disposition or settlement of mortgage loans and on mortgage loans management believed may not be collectible in full. In establishing valuation allowances, management previously considered, among other things, the estimated fair value of the underlying collateral. Real estate, including real estate acquired in satisfaction of debt, is stated at depreciated cost less valuation allowances. At the date of foreclosure (including in-substance foreclosure), real estate acquired in satisfaction of debt is valued at estimated fair value. Valuation allowances on real estate held for the production of income are computed using the forecasted cash flows of the respective properties discounted at a rate equal to EVLICO's cost of funds; valuation allowances on real estate available for sale are computed using the lower of current estimated fair value, net of disposition costs, or depreciated cost. Policy loans are stated at unpaid principal balances. Partnerships and joint venture interests in which EVLICO does not have control and a majority economic interest are reported on the equity basis of accounting and are included with either equity real estate or other equity investments, as appropriate. Common stocks are carried at estimated fair value and are included in other equity investments. Short-term investments are stated at amortized cost which approximates fair value and are included with other invested assets. Cash and cash equivalents includes cash on hand, amounts due from banks and highly liquid debt instruments purchased with an original maturity of three months or less. All securities are recorded in the consolidated financial statements on a trade date basis. Investment Results and Unrealized Investment Gains (Losses) Realized investment gains and losses are determined by specific identification and are presented as a component of revenue. Valuation allowances are netted against the asset categories to which they apply and changes in the valuation allowances are included in investment gains or losses. Unrealized investment gains and losses on fixed maturities available for sale and equity securities held by EVLICO are accounted for as a separate component of shareholder's equity, net of related deferred Federal income taxes and deferred policy acquisition costs related to universal life and investment-type products. Recognition of Insurance Income and Related Expenses Premiums from universal life and investment-type contracts are reported as deposits to policyholders' account balances. Revenues from these contracts consist of amounts assessed during the period against policyholders' account balances for mortality charges, policy administration charges and surrender charges. Policy benefits and claims that are charged to expenses include benefit claims incurred in the period in excess of related policyholders' account balances. Premiums from life and annuity policies with life contingencies generally are recognized as income when due. Benefits and expenses are matched with such income so as to result in the recognition of profits over the life of the contracts. This match is accomplished by means of the provision for liabilities for future policy benefits and the deferral and subsequent amortization of policy acquisition costs. Deferred Policy Acquisition Costs The costs of acquiring new business, principally commissions, underwriting, agency and policy issue expenses, all of which vary with and are primarily related to the production of new business, are deferred. Deferred policy acquisition costs are subject to recoverability testing at the time of policy issue and loss recognition testing at the end of each accounting period. For universal life products and investment-type products, deferred policy acquisition costs are amortized over the expected average life of the contracts (periods ranging from 15 to 35 years and 5 to 17 years, respectively) as a constant percentage of estimated gross profits arising principally from investment results, mortality and expense margins and surrender charges based on historical and anticipated future experience, updated at the end of each accounting period. The effect on the amortization of deferred policy acquisition costs of revisions to estimated gross profits is reflected in earnings in the period such estimated gross profits are revised. The effect on the deferred policy acquisition cost asset that would result from realization of unrealized gains (losses) is recognized with an offset to unrealized gains (losses) in consolidated shareholder's equity as of the balance sheet date. Amortization charged to income amounted to $199.0 million, $200.2 million and $135.5 million for the years ended December 31, 1995, 1994 and 1993, respectively. F-6 Policyholders' Account Balances and Future Policy Benefits EVLICO's insurance contracts primarily are universal life and investment-type contracts. Policyholders' account balances are equal to the policy account values. The policy account values represent an accumulation of gross premium payments plus credited interest less expense and mortality charges and withdrawals. The future policy benefit liabilities for the remainder of EVLICO's insurance contracts, consisting primarily of supplementary contracts with life contingencies and various policy riders, are computed by various valuation methods based on assumed interest rates and mortality and morbidity assumptions reflecting EVLICO's experience and industry standards. Federal Income Taxes EVLICO is included in a consolidated Federal income tax return with Equitable Life and its other eligible subsidiaries. In accordance with an agreement between EVLICO and Equitable Life, the amount of current income taxes as determined on a separate return basis will be paid to, or received from, Equitable Life. Benefits for losses, which are paid to EVLICO to the extent they are utilized by Equitable Life, may not have been received in the absence of such agreement. Deferred income tax assets and liabilities are recognized based on the difference between financial statement carrying amounts and income tax bases of assets and liabilities using the enacted income tax rates and laws. Separate Accounts Separate Accounts are established in conformity with the New York State Insurance Law and generally are not chargeable with liabilities that arise from any other business of EVLICO. Separate Accounts assets are subject to General Account claims only to the extent the value of such assets exceeds the Separate Accounts liabilities. Assets and liabilities of the Separate Accounts, representing net deposits and accumulated net investment earnings less fees, held primarily for the benefit of contractholders are shown as separate captions in the consolidated balance sheets. Assets held in the Separate Accounts are carried at quoted market values or, where quoted values are not available, at estimated fair values as determined by management. The investment results of Separate Accounts are reflected directly in Separate Accounts liabilities. For the years ended December 31, 1995, 1994 and 1993, investment results of Separate Accounts were $342.2 million, $135.9 million and $344.1 million, respectively. Deposits to Separate Accounts are reported as increases in Separate Accounts liabilities and are not reported in revenues. Mortality, policy administration and surrender charges of the Separate Accounts are included in revenues. F-7 3. INVESTMENTS The following tables provide additional information relating to fixed maturities and equity securities:
GROSS GROSS AMORTIZED UNREALIZED UNREALIZED ESTIMATED COST GAINS LOSSES FAIR VALUE ---------------- ----------------- ----------------- --------------- (IN MILLIONS) December 31, 1995 ----------------- Fixed Maturities: Available for Sale: Corporate................................. $ 3,053.5 $ 101.0 $ 22.0 $ 3,132.5 Mortgage-backed........................... 573.9 7.7 .4 581.2 U.S. Treasury securities and U.S. government and agency securities....... 569.2 9.2 2.6 575.8 States and political subdivisions......... 4.3 .1 -- 4.4 Foreign governments....................... 16.2 .8 -- 17.0 Redeemable preferred stock................ 56.8 3.7 5.1 55.4 ---------------- ----------------- ----------------- --------------- Total Available for Sale.................... $ 4,273.9 $ 122.5 $ 30.1 $ 4,366.3 ================ ================= ================= =============== Equity Securities: Common stock................................ $ 36.2 $ 10.3 $ 4.7 $ 41.8 ================ ================= ================= =============== December 31, 1994 ----------------- Fixed Maturities: Available for Sale: Corporate................................. $ 1,622.3 $ 5.1 $ 112.6 $ 1,514.8 Mortgage-backed........................... 221.9 .5 16.4 206.0 U.S. Treasury securities and U.S. government and agency securities....... 365.4 1.4 20.7 346.1 States and political subdivisions......... 4.8 -- .6 4.2 Foreign governments....................... 14.8 .2 -- 15.0 Redeemable preferred stock................ 58.0 .1 5.4 52.7 ---------------- ----------------- ----------------- --------------- Total Available for Sale.................... $ 2,287.2 $ 7.3 $ 155.7 $ 2,138.8 ================ ================= ================= =============== Held to Maturity: Corporate................................. $ 1,812.4 $ 11.9 $ 93.1 $ 1,731.2 U.S. Treasury securities and U.S. government and agency securities....... 180.4 -- 21.7 158.7 States and political subdivisions......... 14.4 -- .9 13.5 Foreign governments....................... 1.3 .1 -- 1.4 ---------------- ----------------- ----------------- --------------- Total Held to Maturity...................... $ 2,008.5 $ 12.0 $ 115.7 $ 1,904.8 ================ ================= ================= =============== Equity Securities: Common stock................................ $ 42.0 $ 10.1 $ 9.4 $ 42.7 ================ ================= ================= ===============
For publicly traded fixed maturities and equity securities, estimated fair value is determined using quoted market prices. For fixed maturities without a readily ascertainable market value, EVLICO has determined an estimated fair value using a discounted cash flow approach, including provisions for credit risk, generally based upon the assumption that such securities will be held to maturity. Estimated fair value for equity securities, substantially all of which do not have a readily ascertainable market value, has been determined by EVLICO. Such estimated fair values do not necessarily represent the values for which these securities could have been sold at the dates of the consolidated balance sheets. At December 31, 1995 and 1994, respectively, securities without a readily ascertainable market value having an amortized cost of $1,233.7 million and $1,571.5 million, respectively, had estimated fair values of $1,291.1 million and $1,512.2 million, respectively. F-8 The contractual maturity of bonds at December 31, 1995 are shown below:
AVAILABLE FOR SALE ------------------------------------ AMORTIZED ESTIMATED COST FAIR VALUE ----------------- ---------------- (IN MILLIONS) Due in one year or less............................................................. $ 133.3 $ 133.4 Due in years two through five....................................................... 1,416.4 1,444.9 Due in years six through ten........................................................ 1,361.5 1,391.8 Due after ten years................................................................. 732.0 759.6 Mortgage-backed securities.......................................................... 573.9 581.2 ----------------- ---------------- Total............................................................................... $ 4,217.1 $ 4,310.9 ================= ================
Bonds not due at a single maturity date have been included in the above table in the year of final maturity. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Investment valuation allowances and changes thereto are shown below:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ----------------- ----------------- (IN MILLIONS) Balances, beginning of year.................................... $ 68.5 $ 87.3 $ 147.2 Additions charged to income.................................... 31.0 12.7 44.4 Deductions for writedowns and asset dispositions............... (33.8) (31.5) (104.3) ----------------- ----------------- ----------------- Balances, End of Year.......................................... $ 65.7 $ 68.5 $ 87.3 ================= ================= ================= Balances, end of year comprise: Mortgage loans on real estate............................... $ 15.9 $ 24.0 $ 46.7 Equity real estate.......................................... 49.8 44.5 40.6 ----------------- ----------------- ----------------- Total.......................................................... $ 65.7 $ 68.5 $ 87.3 ================= ================= =================
Deductions for writedowns and asset dispositions for 1993 include a $20.2 million writedown of fixed maturity investments at December 31, 1993 as a result of adopting a new accounting statement for the valuation of these investments that requires specific writedowns instead of valuation allowances. At December 31, 1995, the carrying values of investments held for the production of income which were non-income producing for the twelve months preceding the consolidated balance sheet date were $21.5 million of fixed maturities and $29.1 million of mortgage loans on real estate. EVLICO's fixed maturity investment portfolio includes corporate high yield securities consisting of public high yield bonds, redeemable preferred stocks and directly negotiated debt in leveraged buyout transactions. EVLICO seeks to minimize the higher than normal credit risks associated with such securities by monitoring the total investments in any single issuer or total investment in a particular industry group. Certain of these corporate high yield securities are classified as other than investment grade by the various rating agencies, i.e., a rating below Baa or an NAIC (National Association of Insurance Commissioners) designation of 3 (medium grade), 4 or 5 (below investment grade) or 6 (in or near default). At December 31, 1995, approximately 11.0% of the $4,217.2 million aggregate amortized cost of bonds held by EVLICO were considered to be other than investment grade. In addition to its holding of corporate high yield securities, EVLICO is an equity investor in limited partnership interests which primarily invest in securities considered to be other than investment grade. EVLICO has restructured or modified the terms of certain fixed maturity investments. The fixed maturity portfolio, based on amortized cost, includes $13.7 million and $13.3 million at December 31, 1995 and 1994, respectively, of such restructured securities. The December 31, 1994 amount includes fixed maturities which are in default as to principal and/or interest payments, are to be restructured pursuant to commenced negotiations or where the borrowers went into bankruptcy subsequent to acquisition (collectively, "problem fixed maturities") of $5.6 million. Gross interest income that would have been recorded in accordance with the original terms of restructured fixed maturities amounted to $1.4 million, $1.1 million and $2.2 million in 1995, 1994 and 1993, respectively. Gross interest income on these fixed maturities included in net investment income aggregated $1.4 million, $1.0 million and $1.5 million in 1995, 1994 and 1993, respectively. F-9 At December 31, 1995 and 1994, mortgage loans on real estate with scheduled payments 60 days (90 days for agricultural mortgages) or more past due or in foreclosure (collectively, "problem mortgage loans on real estate") had an amortized cost of $36.0 million (4.6% of total mortgage loans on real estate) and $35.2 million (3.9% of total mortgage loans on real estate), respectively. The payment terms of mortgage loans on real estate may from time to time be restructured or modified. The investment in restructured mortgage loans on real estate, based on amortized cost, amounted to $173.5 million and $130.8 million at December 31, 1995 and 1994, respectively. Gross interest income on restructured mortgage loans on real estate that would have been recorded in accordance with the original terms of such loans amounted to $16.1 million, $12.3 million and $13.9 million in 1995, 1994 and 1993, respectively. Gross interest income on these loans included in net investment income aggregated $14.0 million, $11.4 million and $11.5 million in 1995, 1994 and 1993, respectively. Impaired mortgage loans (as defined under SFAS No. 114) along with the related provision for losses were as follows: DECEMBER 31, 1995 ------------------ (IN MILLIONS) Impaired mortgage loans with provision for losses.... $ 99.0 Impaired mortgage loans with no provision for losses. 24.5 ------------------ Recorded investment in impaired mortgage loans....... 123.5 Provision for losses................................. 14.5 ------------------ Net Impaired Mortgage Loans.......................... $ 109.0 ================== Impaired mortgage loans with no provision for losses are loans where the fair value of the collateral or the net present value of the loan equals or exceeds the recorded investment. Interest income earned on loans where the collateral value is used to measure impairment is recorded on a cash basis. Interest income on loans where the present value method is used to measure impairment is accrued on the net carrying value amount of the loan at the interest rate used to discount the cash flows. Changes in the present value attributable to changes in the amount or timing of expected cash flows are reported as investment gains or losses. During the year ended December 31, 1995, EVLICO's average recorded investment in impaired mortgage loans was $99.2 million. Interest income recognized on these impaired mortgage loans totaled $8.2 million for the year ended December 31, 1995, including $2.2 million recognized on a cash basis. EVLICO's investment in equity real estate is through direct ownership and through investments in real estate joint ventures. At December 31, 1995 and 1994, the carrying value of equity real estate available for sale amounted to $55.6 million and $138.4 million, respectively. For the years ended December 31, 1995, 1994 and 1993, respectively, real estate of $12.2 million, $59.0 million and $92.1 million was acquired in satisfaction of debt. At December 31, 1995 and 1994, EVLICO owned $196.6 million and $230.5 million, respectively, of real estate acquired in satisfaction of debt. Depreciation on real estate is computed using the straight-line method over the estimated useful lives of the properties, which generally range from 40 to 50 years. Accumulated depreciation on real estate was $51.0 million and $51.1 million at December 31, 1995 and 1994, respectively. Depreciation expense on real estate totaled $12.8 million, $12.7 million and $11.6 million for the years ended December 31, 1995, 1994 and 1993, respectively. F-10 4. JOINT VENTURES AND PARTNERSHIPS Summarized combined financial information of real estate joint ventures (10 and 12 individual ventures as of December 31, 1995 and 1994, respectively) and of other limited partnership interests accounted for under the equity method, in which EVLICO has an investment of $10.0 million or greater and an equity interest of 10% or greater is as follows:
DECEMBER 31, ------------------------------------------ 1995 1994 ------------------- ------------------ (IN MILLIONS) FINANCIAL POSITION Investments in real estate, at depreciated cost............................... $ 966.3 $ 1,047.0 Investments in securities, generally at estimated fair value.................. 648.5 3,061.2 Cash and cash equivalents..................................................... 99.2 46.4 Other assets.................................................................. 90.8 261.9 ------------------- ------------------ Total assets.................................................................. 1,804.8 4,416.5 ------------------- ------------------ Borrowed funds -- third party.................................................. 74.4 1,233.6 Other liabilities............................................................. 132.4 611.0 ------------------- ------------------ Total liabilities............................................................. 206.8 1,844.6 ------------------- ------------------ Partners' Capital............................................................. $ 1,598.0 $ 2,571.9 =================== ================== Equity in partners' capital included above.................................... $ 243.8 $ 327.3 Equity in limited partnership interests not included above.................... 82.3 50.4 (Deficit) excess of equity in partners' capital over investment cost and equity earnings........................................ (.4) 3.7 ------------------- ------------------ Carrying Value................................................................ $ 325.7 $ 381.4 =================== ==================
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) STATEMENTS OF EARNINGS Revenues of real estate joint ventures............................ $ 152.3 $ 180.1 $ 136.6 Revenues of other limited partnership interests................... 86.9 102.5 318.9 Interest expense -- third party.................................... (23.1) (88.1) (79.7) Interest expense -- The Equitable.................................. (5.6) -- -- Other expenses.................................................... (131.8) (172.4) (132.7) ----------------- ---------------- ----------------- Net Earnings...................................................... $ 78.7 $ 22.1 $ 243.1 ================= ================ ================= Equity in net earnings included above............................. $ 14.4 $ 11.7 $ 34.0 Equity in net earnings of limited partnership interests not included above................................... 12.9 6.3 12.0 Reduction of earnings in joint ventures over equity ownership percentage and amortization of differences in bases........................... -- (1.1) (.1) ----------------- ----------------- ----------------- Total Equity in Net Earnings...................................... $ 27.3 $ 16.9 $ 45.9 ================= ================ =================
F-11 5. NET INVESTMENT INCOME AND INVESTMENT (LOSSES) GAINS The sources of net investment income are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Fixed maturities................................................. $ 319.5 $ 331.4 $ 319.9 Mortgage loans on real estate.................................... 70.3 86.7 105.7 Equity real estate............................................... 66.2 67.0 69.8 Policy loans..................................................... 86.8 79.5 76.1 Other equity investments......................................... 22.4 13.4 38.5 Other investment income.......................................... 30.5 24.5 17.0 ----------------- ---------------- ----------------- Gross investment income.......................................... 595.7 602.5 627.0 Investment expenses.............................................. 66.6 75.7 69.4 ----------------- ---------------- ----------------- Net Investment Income............................................ $ 529.1 $ 526.8 $ 557.6 ================= ================ =================
Investment (losses) gains, net, including changes in valuation allowances, are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Fixed maturities................................................. $ 23.7 $ (6.8) $ 45.1 Mortgage loans on real estate.................................... (7.0) (13.3) (32.0) Equity real estate............................................... (18.9) (5.3) (13.4) Other equity investments......................................... 1.7 20.8 1.8 ----------------- ---------------- ----------------- Investment (Losses) Gains, Net................................... $ (.5) $ (4.6) $ 1.5 ================= ================ =================
Writedowns of fixed maturities amounted to $11.1 million, $8.2 million and $1.4 million for the years ended December 31, 1995, 1994 and 1993, respectively. For the years ended December 31, 1995 and 1994, respectively, proceeds received on sales of fixed maturities classified as available for sale amounted to $2,551.6 million and $2,065.1 million. Gross gains of $49.6 million and $22.1 million and gross losses of $18.7 million and $24.4 million, respectively, were realized on these sales. The change in unrealized investment gains (losses) related to fixed maturities classified as available for sale for the years ended December 31, 1995 and 1994, amounted to $240.8 million and $(215.2) million, respectively. Gross gains of $66.2 million and gross losses of $66.5 million were realized on sales of investments in fixed maturities held for investment and available for sale for the year ended December 31, 1993. F-12 Net unrealized investment gains (losses), included in the consolidated balance sheets as a component of equity, and the changes for the corresponding years are summarized as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Balance, beginning of year....................................... $ (72.6) $ 22.3 $ 11.1 Changes in unrealized investment gains (losses).................. 244.7 (241.8) 3.4 Effect of adopting SFAS No. 115.................................. -- -- 72.2 Changes in unrealized investment (gains) losses attributable to: Deferred policy acquisition costs............................. (64.4) 95.8 (58.2) Deferred Federal income taxes................................. (63.1) 51.1 (6.2) ----------------- ---------------- ----------------- Balance, End of Year............................................. $ 44.6 $ (72.6) $ 22.3 ================= ================ ================= Balance, end of year comprises: Unrealized investment gains (losses) on: Fixed maturities............................................ $ 92.4 $ (148.4) $ 66.8 Other equity investments.................................... 5.6 .7 25.6 Other....................................................... (2.7) (1.7) -- ----------------- ---------------- ----------------- Total......................................................... 95.3 (149.4) 92.4 Amounts of unrealized investment (gains) losses attributable to: Deferred policy acquisition costs........................... (26.8) 37.6 (58.2) Deferred Federal income taxes............................... (23.9) 39.2 (11.9) ----------------- ---------------- ----------------- Total............................................................ $ 44.6 $ (72.6) $ 22.3 ================= ================ =================
6. FEDERAL INCOME TAXES A summary of the Federal income tax expense in the consolidated statements of earnings is shown below:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Federal income tax expense (benefit): Current....................................................... $ -- $ (1.4) $ (3.4) Deferred...................................................... 29.7 26.4 23.9 ----------------- ---------------- ----------------- Total............................................................ $ 29.7 $ 25.0 $ 20.5 ================= ================ =================
The Federal income taxes attributable to consolidated operations are different from the amounts determined by multiplying the earnings before Federal income taxes and cumulative effect of accounting change by the expected Federal income tax rate of 35%. The sources of the difference and the tax effects of each are as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Expected Federal income tax expense.............................. $ 30.0 $ 25.3 $ 16.6 Tax rate adjustment.............................................. -- -- 4.0 Other............................................................ (.3) (.3) (.1) ----------------- ---------------- ----------------- Federal Income Tax Expense....................................... $ 29.7 $ 25.0 $ 20.5 ================= ================ =================
F-13 The components of the net deferred Federal income tax account are as follows:
DECEMBER 31, 1995 DECEMBER 31, 1994 --------------------------------- --------------------------------- ASSETS LIABILITIES ASSETS LIABILITIES --------------- --------------- --------------- --------------- (IN MILLIONS) Deferred policy acquisition costs, reserves and reinsurance....................................... $ -- $ 253.8 $ -- $ 250.6 Investments.......................................... -- 20.5 38.4 -- Compensation and related benefits.................... 44.3 -- 52.2 -- Other................................................ 7.9 -- 25.6 -- --------------- --------------- --------------- --------------- Total................................................ $ 52.2 $ 274.3 $ 116.2 $ 250.6 =============== =============== =============== ===============
The deferred Federal income tax expense (benefit) impacting operations reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The sources of these temporary differences and the tax effects of each are as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Deferred policy acquisition costs, reserves and reinsurance................................................... $ 3.2 $ (11.4) $ (6.8) Investments...................................................... (4.2) 26.1 11.4 Compensation and related benefits................................ 13.0 (2.8) 1.9 Other............................................................ 17.7 14.5 17.4 ----------------- ---------------- ----------------- Deferred Federal Income Tax Expense.............................. $ 29.7 $ 26.4 $ 23.9 ================= ================ =================
At December 31, 1995, EVLICO had net operating loss carryforwards of approximately $10.2 million. These loss carryforwards are available to offset future tax payments to Equitable Life under the tax sharing agreement. 7. REINSURANCE AGREEMENTS EVLICO cedes reinsurance to other insurance companies. EVLICO evaluates the financial condition of its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. The effect of reinsurance is summarized as follows:
DECEMBER 31, ------------------------------------ 1995 1994 ----------------- ---------------- (IN MILLIONS) Direct premiums..................................................................... $ 34.1 $ 40.2 Reinsurance ceded................................................................... (.4) (.1) ----------------- ---------------- Premiums............................................................................ $ 33.7 $ 40.1 ================= ================ Universal Life and Investment-type Product Policy Fee Income Ceded.................. $ 31.0 $ 24.9 ================= ================ Policyholders' Benefits Ceded....................................................... $ 18.7 $ 8.3 ================= ================
EVLICO reinsures mortality risks in excess of $5.0 million on any single life. EVLICO also reinsures the entire risk on certain substandard underwriting risks as well as in certain other cases. F-14 8. RELATED PARTY TRANSACTIONS Under a cost sharing agreement, EVLICO reimburses Equitable Life for its use of Equitable Life's personnel, property and facilities in carrying out certain of its operations. Reimbursement for intercompany services is based on the allocated cost of the services provided. The incurred balances of these intercompany transactions, which are included in other operating costs and expenses are as follows:
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Personnel and facilities......................................... $ 249.8 $ 257.9 $ 252.7 Agent commissions and fees....................................... 127.4 122.6 103.0
These cost allocations include various employee related obligations for pensions and postretirement benefits. At December 31, 1995 and 1994, EVLICO recorded as a reduction of shareholder's equity its allocated portion of an additional minimum pension liability of $10.7 million and $1.2 million, net of Federal income taxes, respectively, representing the excess of the accumulated benefit obligation over the fair value of plan assets and accrued pension liability. During 1995, 1994 and 1993, Equitable Life restructured certain operations in connection with cost reduction programs. EVLICO recorded provisions of $6.7 million, $6.9 million and $17.3 million in 1995, 1994 and 1993, respectively, relating primarily to allocated lease obligations (net of sub-lease rentals) and severance liabilities. EVLICO incurred investment advisory and asset management fee expenses of $17.6 million, $19.2 million and $16.0 million during 1995, 1994 and 1993, respectively. EVLICO and Equitable Life have an agreement whereby certain Equitable Life policyholders may purchase EVLICO's policies without presenting evidence of insurability. Under the agreement, Equitable Life pays EVLICO a conversion charge for the extra mortality risk associated with issuing these policies. EVLICO received payments of $2.9 million, $3.0 million and $3.1 million in 1995, 1994 and 1993, respectively, which were reported as other income. On August 31, 1993, EVLICO sold $250.0 million of primarily privately placed below investment grade fixed maturities to EQ Asset Trust 1993 (the "Trust"). EVLICO realized a $1.1 million gain, net of related deferred policy acquisition costs and deferred Federal income taxes. In conjunction with this transaction, EVLICO received $75.4 million of Class B notes issued by the Trust. These notes have interest rates ranging from 6.85% to 9.45%. The Class B notes are classified as other invested assets on the consolidated balance sheets. Net amounts payable to Equitable Life were $190.2 million and $226.7 million at December 31, 1995 and 1994, respectively. 9. DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS Derivatives EVLICO primarily uses derivatives for asset/liability risk management and for hedging individual securities. Derivatives mainly are utilized to reduce EVLICO's exposure to interest rate fluctuations. Accounting for interest rate swap transactions is on an accrual basis. Gains and losses related to interest rate swap transactions are amortized as yield adjustments over the remaining life of the underlying hedged security. Income and expense resulting from interest rate swap activities are reflected in net investment income. The notional amount of matched interest rate swaps outstanding at December 31, 1995 was $444.8 million. The average unexpired terms at December 31, 1995 is 3.0 years. At December 31, 1995, the cost of terminating outstanding matched swaps in a loss position was $10.1 million and the unrealized gain on outstanding matched swaps in a gain position was $3.4 million. EVLICO has no intention of terminating these contracts prior to maturity. Fair Value of Financial Instruments EVLICO defines fair value as the quoted market prices for those instruments that are actively traded in financial markets. In cases where quoted market prices are not available, fair values are estimated using present value or other valuation techniques. The fair value estimates are made at a specific point in time, based on available market information and judgments about the financial instrument, including estimates of timing, amount of expected future cash flows and the credit standing of counterparties. Such estimates do not reflect any premium or discount that could result from offering for sale at one time EVLICO's entire holdings of a particular financial instrument, nor do they consider the tax impact of the realization of unrealized gains or losses. In many cases, the fair value estimates cannot be substantiated by comparison to independent markets, nor can the disclosed value be realized in immediate settlement of the instrument. Certain financial instruments are excluded, particularly insurance liabilities other than financial guarantees and investment contracts. Fair market value of off-balance-sheet financial instruments of EVLICO was not material at December 31, 1995 and 1994. F-15 Fair value for mortgage loans on real estate are estimated by discounting future contractual cash flows using interest rates at which loans with similar characteristics and credit quality would be made. Fair values for foreclosed mortgage loans and problem mortgage loans are limited to the estimated fair value of the underlying collateral if lower. The estimated fair values for single premium deferred annuities ("SPDA") are estimated using projected cash flows discounted at current offering rates. The estimated fair values for supplementary contracts not involving life contingencies ("SCNILC") and annuities certain are derived using discounted cash flows based upon the estimated current offering rate. The following table discloses carrying value and estimated fair value for financial instruments not otherwise disclosed in Note 3:
DECEMBER 31, ------------------------------------------------------------------- 1995 1994 -------------------------------- -------------------------------- CARRYING ESTIMATED CARRYING ESTIMATED VALUE FAIR VALUE VALUE FAIR VALUE --------------- --------------- --------------- --------------- (IN MILLIONS) Consolidated Financial Instruments: ----------------------------------- Mortgage loans on real estate....................... $ 771.5 $ 809.4 $ 888.5 $ 865.3 Other joint ventures................................ 158.7 158.7 196.4 196.4 Policy loans........................................ 1,300.1 1,374.0 1,185.2 1,138.7 Policyholders' account balances: SPDA............................................. 1,265.8 1,272.0 1,744.3 1,732.7 Annuities certain and SCNILC..................... 188.0 188.1 159.0 151.3
10. COMMITMENTS AND CONTINGENT LIABILITIES EVLICO is the obligor under certain structured settlement agreements which it had entered into with unaffiliated insurance companies and beneficiaries. To satisfy its obligations under these agreements, EVLICO has purchased single premium annuities from Equitable Life and directed Equitable Life to make payments directly to the beneficiaries. A contingent liability exists with respect to these agreements should Equitable Life be unable to meet its obligations. Management believes the need to satisfy such obligations is remote. 11. LITIGATION A number of lawsuits have been filed against life and health insurers in the jurisdictions in which EVLICO does business involving insurers' sales practices, alleged agent misconduct, failure to properly supervise agents, and other matters. Some of the lawsuits have resulted in the award of substantial judgments against other insurers, including material amounts of punitive amounts, or in substantial settlements. In some states juries have substantial discretion in awarding punitive damages. EVLICO, like other life and health insurers, from time to time is involved in such litigation as well as other legal actions and proceedings in connection with its businesses. Some of these litigations have been brought on behalf of various alleged classes of claimants and certain of these claimants seek damages of unspecified amounts. While the ultimate outcome of such matters cannot be predicted with certainty, in the opinion of management no such matter is likely to have a material adverse effect on EVLICO's financial position or results of operations. 12. STATUTORY FINANCIAL INFORMATION EVLICO is restricted as to the amounts it may pay as dividends to Equitable Life. Under the New York Insurance Law, the New York Superintendent has broad discretion to determine whether the financial condition of a stock life insurance company would support the payment of dividends to its shareholders. For the years ended December 31, 1995, 1994 and 1993, statutory (loss) earnings totaled $(102.5) million, $27.3 million and $(88.4) million, respectively. No amounts are expected to be available for dividends from EVLICO to Equitable Life in 1996. At December 31, 1995, EVLICO, in accordance with various government and state regulations, had $4.2 million of securities deposited with such government or state agencies. Accounting practices used to prepare statutory financial statements for regulatory filings of stock life insurance companies differ in certain instances from GAAP. The following reconciles EVLICO's net change in statutory surplus and capital stock and statutory surplus and capital stock determined in accordance with accounting practices prescribed by the New York Insurance Department with net earnings and equity on a GAAP basis. F-16
YEARS ENDED DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Net change in statutory surplus and capital stock................ $ (56.6) $ 64.8 $ 184.4 Change in asset valuation reserves............................... 57.8 18.5 26.0 ----------------- ---------------- ----------------- Net change in statutory surplus, capital stock and asset valuation reserves.................................. 1.2 83.3 210.4 Adjustments: Future policy benefits and policyholders' account balances.... (12.9) (13.5) (22.5) Initial fee liability......................................... (34.2) (20.3) (11.6) Deferred policy acquisition costs............................. 25.1 34.7 62.2 Deferred Federal income taxes................................. (29.7) (20.2) (23.9) Valuation of investments...................................... 38.3 19.9 25.9 Limited risk reinsurance...................................... 146.9 .1 (5.4) Contribution from Equitable Life.............................. (125.0) (50.0) (250.0) Other, net.................................................... 46.4 2.0 41.7 ----------------- ---------------- ----------------- Net Earnings..................................................... $ 56.1 $ 36.0 $ 26.8 ================= ================ =================
DECEMBER 31, -------------------------------------------------------- 1995 1994 1993 ----------------- ---------------- ----------------- (IN MILLIONS) Statutory surplus and capital stock.............................. $ 720.9 $ 777.6 $ 712.7 Asset valuation reserves......................................... 146.1 88.3 69.8 ----------------- ---------------- ----------------- Statutory surplus, capital stock and asset valuation reserves.... 867.0 865.9 782.5 Adjustments: Future policy benefits and policyholders' account balances.... (367.4) (354.5) (341.1) Initial fee liability......................................... (234.7) (200.5) (180.3) Deferred policy acquisition costs............................. 2,037.8 2,077.1 1,946.7 Deferred Federal income taxes................................. (222.1) (134.4) (159.5) Valuation of investments...................................... 68.4 (219.2) 4.4 Limited risk reinsurance...................................... (231.7) (378.6) (378.7) Postretirement and other pension liabilities.................. (111.6) (105.8) (122.7) Other, net.................................................... (68.0) (101.1) (98.6) ----------------- ---------------- ----------------- Shareholder's Equity............................................. $ 1,737.7 $ 1,448.9 $ 1,452.7 ================= ================ =================
F-17 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Equitable Variable Life Insurance Company In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of shareholder's equity and of cash flows present fairly, in all material respects, the financial position of Equitable Variable Life Insurance Company and its subsidiaries ("EVLICO") at December 31, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of EVLICO's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As discussed in Note 2 to the consolidated financial statements, EVLICO changed its methods of accounting for loan impairments in 1995, for postemployment benefits in 1994 and for investment securities in 1993. PRICE WATERHOUSE LLP New York, New York February 7, 1996 F-18 APPENDIX A MANAGEMENT Here is a list of our directors and principal officers and a brief statement of their business experience for the past five years. Unless otherwise noted, the following persons have been involved in the management of Equitable and its subsidiaries in various positions for the last five years. Unless otherwise noted, their address is 787 Seventh Avenue, New York, New York 10019.
NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ----------------------- ------------------------- DIRECTORS Michel Beaulieu...................... Director of Equitable Variable since February 1992. Senior Vice President, Equitable, since September 1991; prior thereto, Chief Life Actuary AXA group 1989 to 1991; Managing Director Blondeau & CIE (France) 1986 to 1989. Director, Equity & Law (London). Laurent Clamagirand.................. Director of Equitable Variable since February 1995; Vice President, Financial Reporting, Equitable, since March 1996; prior thereto, Director from November 1994 to March 1996; prior thereto, International Controller, AXA, January 1990 to October 1994; Director, Equitable of Colorado, since March 1995. William T. McCaffrey................. Director of Equitable Variable since February 1987; Senior Executive Vice President and Chief Operating Officer, Equitable Life, since February 1996; prior thereto, Executive Vice President, since February 1986 and Chief Administrative Officer since February 1988; Director, Equitable Life, since February 1996 and Equitable Foundation since September 1986. Michael J. Rich...................... Director of Equitable Variable since May 1995. Senior Vice President, Equitable, since October 1994; prior thereto, Vice President of Underwriting, John Hancock Mutual Life Insurance Co. since 1988. Jose S. Suquet....................... Director of Equitable Variable since January 1995. Executive Vice President and Chief Agency Officer, Equitable, since August 1994; prior thereto, Agency Manager, Equitable, since February 1985. OFFICERS -- DIRECTORS James M. Benson...................... President and Chief Executive Officer, Equitable Variable since March 1996; prior thereto, President from December 1993 to March 1996; Vice Chairman of the Board, Equitable Variable, July 1993 to December 1993. President & Chief Executive Officer, Equitable Life, since February 1996; President and Chief Operating Officer, Equitable, February 1994 to present; Senior Executive Vice President, April 1993 to February 1994. Prior thereto, President, Management Compensation Group, 1983 to February 1993. Director, Alliance Capital, October 1993 to present; National Mutual Association of Australasia, September 1995 to present and AXA Re Life Insurance Co., January 1995 to present. Harvey Blitz......................... Vice President, Equitable Variable since April 1995; Director of Equitable Variable since October 1992. Senior Vice President, Equitable, since September 1987. Senior Vice President, The Equitable Companies Incorporated, since July 1992. Director, Equico Securities, Inc., since September 1992; Equitable of Colorado, since September 1992; Equisource and its subsidiaries since October 1992, and Chairman of the Board Frontier Trust since September 1995 and Director of Equitable Distributors, Inc. since February 1995. Gordon Dinsmore...................... Senior Vice President, Equitable Variable, since February 1991. Senior Vice President, Equitable, since September 1989; prior thereto, various other Equitable positions. Director and Senior Vice President, March 1991 to present, Equitable of Colorado; Director, FHJV Holdings, Inc., December 1990 to present; Director, Equitable Distributors, Inc., August 1993 to present, and Director, Equitable Foundation, May 1991 to present. Jerry de St. Paer.................... Senior Investment Officer, Equitable Variable, since April 1995; Director of Equitable Variable since April 1992. Senior Executive Vice President & Chief Financial Officer, Equitable Life, since February 1996; prior thereto, Executive Vice President & Chief Financial Officer, Equitable, since April 1992; Executive Vice President since December 1990; Senior Vice President & Treasurer June 1990 to December 1990; Senior Vice President, Equitable Investment Corporation, January 1987 to January 1991; Executive Vice President & Chief Financial Officer, The Equitable Companies Incorporated, since May 1992; Director, Economic Services Corporation & various Equitable subsidiaries.
A-1
NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ----------------------- ------------------------- OFFICERS -- DIRECTORS (Continued) Joseph J. Melone..................... Chairman of the Board, Equitable Variable since March 1996; Chairman of the Board and Chief Executive Officer, Equitable Variable, November 1990 to March 1996; Chairman of the Board, Equitable Life, since February 1996; prior thereto, Chairman of the Board and Chief Executive Officer, Equitable, February 1994 to February 1996; President and Chief Executive Officer, September 1992 to February 1994; President and Chief Operating Officer from November 1990 to September 1992. President & Chief Executive Officer of The Equitable Companies Incorporated since February 1996; prior thereto, President and Chief Operating Officer since July 1992. Prior thereto, President, The Prudential Insurance Company of America, since December 1984. Director, Equity & Law (United Kingdom) and various other Equitable subsidiaries. Peter D. Noris....................... Executive Vice President and Chief Investment Officer, Equitable Variable, since September 1995. Director of Equitable Variable since June 1995. Executive Vice President and Chief Investment Officer, Equitable, since May 1995; prior thereto, Vice President, Salomon Brothers, Inc., 1992 to 1995; Principal of Equity Division, Morgan Stanley & Co. Inc., from 1984 to 1992. Director, various Equitable subsidiaries. Samuel B. Shlesinger................. Senior Vice President, Equitable Variable, since February 1988. Senior Vice President and Actuary, Equitable; prior thereto, Vice President and Actuary. Director, Chairman and CEO, Equitable of Colorado. Dennis D. Witte...................... Senior Vice President, Equitable Variable, since February 1991; Senior Vice President, Equitable, since July 1990; prior thereto, various other Equitable positions; Director, Equitable Distributors, Inc. since February 1995. OFFICERS Kevin R. Byrne....................... Treasurer, Equitable Variable, since September 1990; Vice President and Treasurer, Equitable, since September 1993; prior thereto, Vice President from March 1989 to September 1993. Vice President and Treasurer, The Equitable Companies Incorporated, September 1993 to present; Frontier Trust since August 1990; Equisource and its subsidiaries October 1990 to present. Stephen Hogan........................ Vice President and Controller, Equitable Variable, February 1994 to present. Vice President, 135 West 50th Street Equitable, January 1994 to present; prior thereto, Controller, John Hancock subsidiaries, New York, New York 10020 from 1987 to December 1993. J. Thomas Liddle, Jr................. Senior Vice President and Chief Financial Officer, Equitable Variable, since February 1986. Senior Vice President, Equitable, since April 1991; prior thereto, Vice President and Actuary, Equitable; Director, Equitable of Colorado since December 1985. William A. Narducci.................. Vice President and Chief Claims Officer, Equitable Variable, since February 1989. Vice 200 Plaza Drive President, Equitable, since February 1988; prior thereto, Assistant Vice President. Secaucus, New Jersey 07096 John P. Natoli....................... Vice President and Chief Underwriting Officer, Equitable Variable, since February 1988. Vice President, Equitable.
A-2 APPENDIX B COMMUNICATING PERFORMANCE DATA In reports or other communications to policyowners or in advertising material, we may describe general economic and market conditions affecting the Separate Account and the Trust and may compare the performance or ranking of the Separate Account Funds and Trust portfolios with (1) that of other insurance company separate accounts or mutual funds included in the rankings prepared by Lipper Analytical Services, Inc., Morningstar, Inc. or similar investment services that monitor the performance of insurance company separate accounts or mutual funds, (2) other appropriate indices of investment securities and averages for peer universes of funds, or (3) data developed by us derived from such indices or averages. Advertisements or other communications furnished to present or prospective policyowners may also include evaluations of a Separate Account Fund or Trust portfolio by financial publications that are nationally recognized such as Barron's, Morningstar's Variable Annuities / Life, Business Week, Forbes, Fortune, Institutional Investor, Money, Kiplinger's Personal Finance, Financial Planning, Investment Adviser, Investment Management Weekly, Money Management Letter, Investment Dealers Digest, National Underwriter, Pension & Investments, USA Today, Investor's Daily, The New York Times, The Wall Street Journal, the Los Angeles Times and the Chicago Tribune. Performance data for peer universes of funds with similar investment objectives are compiled by Lipper Analytical Services, Inc. (Lipper) in its Lipper Variable Insurance Products Performance Analysis Service (Lipper Survey) and Morningstar, Inc. in the Morningstar Variable Annuity / Life Report (Morningstar Report). The Lipper Survey records performance data as reported to it by over 800 funds underlying variable annuity and life insurance products. The Lipper Survey divides these actively managed funds into 25 categories by portfolio objectives. The Lipper Survey contains two different universes, which differ in terms of the types of fees reflected in performance data. The "Separate Account" universe reports performance data net of investment management fees, direct operating expenses and asset-based charges applicable under variable insurance and annuity contracts. The "Mutual Fund" universe reports performance net only of investment management fees and direct operating expenses, and therefore reflects asset-based charges that relate only to the underlying mutual fund. The Morningstar Report consists of over 700 variable life and annuity funds, all of which report their data net of investment management fees, direct operating expenses and separate account level charges. LONG-TERM MARKET TRENDS As a tool for understanding how different investment strategies may affect long-term results, it may be useful to consider the historical returns on different types of assets. The following chart presents historical return trends for various types of securities. The information presented, while not directly related to the performance of the Funds of the Separate Account or the Trust portfolios, may help to provide a perspective on the potential returns of different asset classes over different periods of time. By combining this information with your knowledge of your own financial needs, you may be able to better determine how you wish to allocate your Incentive Life Plus premiums. Historically, the investment performance of common stocks over the long term has generally been superior to that of long or short-term debt securities, although common stocks have been subject to more dramatic changes in value over short periods of time. The Common Stock Fund of the Separate Account may, therefore, be a desirable selection for policyowners who are willing to accept such risks. Policyowners who have a need to limit short-term risk, may find it preferable to allocate a smaller percentage of their net premiums to those funds that invest primarily in common stock. Any investment in securities, whether equity or debt, involves varying degrees of potential risk, in addition to offering varying degrees of potential reward. The chart on page A-2 illustrates the average annual compound rates of return over selected time periods between December 31, 1925 and December 31, 1995 for common stocks, long-term government bonds, long-term corporate bonds, intermediate-term government bonds and Treasury Bills. The Consumer Price Index is shown as a measure of inflation for comparison purposes. The average annual returns assume the reinvestment of dividends, capital gains and interest. The information presented is an historical record of unmanaged groups of securities and is neither an estimate nor a guarantee of future results. In addition, investment management fees and expenses and charges associated with a variable life insurance policy, are not reflected. The rates of return illustrated do not represent returns of the Separate Account or the Trust and do not constitute a representation that the performance of the Separate Account funds or the Trust portfolios will correspond to rates of return such as those illustrated in the chart. For a comparative illustration of performance results of The Hudson River Trust, see page A-1 of the Trust's prospectus. B-1 AVERAGE ANNUAL RATES OF RETURN
FOR THE FOLLOWING LONG-TERM LONG-TERM INTERMEDIATE U.S. CONSUMER PERIODS ENDING COMMON GOVERNMENT CORPORATE TERM GOV'T TREASURY PRICE 12/31/95: STOCKS BONDS BONDS BONDS BILLS INDEX - -------- ------ ----- ----- ----- ----- ---- 1 year.................. 37.43 31.67 26.39 16.80 5.60 2.74 3 years................. 15.26 12.82 10.47 7.22 4.13 2.72 5 years................. 16.57 13.10 12.07 8.81 4.29 2.83 10 years................. 14.84 11.92 11.25 9.08 5.55 3.48 20 years................. 14.59 10.45 10.54 9.69 7.28 5.23 30 years................. 10.68 7.92 8.17 8.36 6.72 5.39 40 years................. 10.78 6.38 6.75 7.02 5.73 4.46 50 years................. 11.94 5.35 5.75 5.87 4.80 4.36 60 years................. 11.34 5.20 5.46 5.34 4.01 4.10 Since 1926............... 10.54 5.17 5.69 5.25 3.72 3.12 Inflation Adjusted Since 1926............... 7.20 1.99 2.49 2.07 0.58 0.00 - ----------------------------
*Source: Ibbotson, Roger G. and Rex A. Sinquefield, STOCKS, BONDS, BILLS, AND INFLATION (SBBI), 1982, updated in STOCKS, BONDS, BILLS, AND INFLATION 1996 YEARBOOK,(TM) Ibbotson Associates, Inc., Chicago. All rights reserved. Common Stocks (S&P 500) -- Standard and Poor's Composite Index, an unmanaged weighted index of the stock performance of 500 industrial, transportation, utility and financial companies. Long-term Government Bonds -- Measured using a one-bond portfolio constructed each year containing a bond with approximately a twenty year maturity and a reasonably current coupon. Long-term Corporate Bonds -- For the period 1969-1995, represented by the Salomon Brothers Long-Term, High-Grade Corporate Bond Index; for the period 1946-1968, the Salomon Brothers' Index was backdated using Salomon Brothers' monthly yield data and a methodology similar to that used by Salomon for 1969-1995; for the period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite yield data were used, assuming a 4 percent coupon and a twenty year maturity. Intermediate-term Government Bonds -- Measured by a one-bond portfolio constructed each year containing a bond with approximately a five year maturity. U.S. Treasury Bills -- Measured by rolling over each month a one-bill portfolio containing, at the beginning of each month, the bill having the shortest maturity not less than one month. Inflation -- Measured by the Consumer Price Index for all Urban Consumers (CPI-U), not seasonally adjusted. B-2 VM-520 - -------------------------------------------------------------------------------- -------------- EQUITABLE VARIABLE LIFE Bulk Rate INSURANCE COMPANY U.S. Postage Mailing Address: Paid 2 Penn Plaza Permit No. 148 New York, New York 10121 Brooklyn, N.Y. -------------- VARIABLE LIFE INSURANCE POLICY [THE CHAMPION LOGO] ISSUED BY [EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO] VM 372 PROSPECTUS DATED SEPTEMBER 30, 1987 - -------------------------------------------------------------------------------- THE HUDSON RIVER TRUST PRINCIPAL OFFICE LOCATED AT: 787 SEVENTH AVENUE NEW YORK, N.Y. 10019 HRT 102 PROSPECTUS DATED SEPTEMBER 30, 1987 [THE CHAMPION LOGO] A VARIABLE LIFE INSURANCE POLICY ISSUED BY [EQUITABLE VARIABLE LIFE INSURANCE LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY NEW YORK, N.Y. PROSPECTUS DATED SEPTEMBER 30, 1987 - -------------------------------------------------------------------------------- In this prospectus, "Equitable Variable", "we", "our", and "us" mean Equitable Variable Life Insurance Company. We are a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States, a New York mutual life insurance company (Equitable). "You" and "your" mean the policyowner. We refer to the person who is covered by the policy as the "insured", because the policyowner may be someone other than the insured. - -------------------------------------------------------------------------------- The Champion(TM) (Policy Form No. 85-11) is a scheduled premium variable whole life insurance policy with a level face amount. The Death Benefit, Account Value and Cash Surrender Value of a policy may vary based on the investment experience of the assets supporting the policy; however, a policy's Death Benefit will never be less than its face amount. You direct the allocation of your premiums, net of certain deductions, among one or more of the investment divisions of Equitable Variable's Separate Account I. The assets in each division are invested in corresponding portfolios of The Hudson River Trust. The Trust is the successor to The Hudson River Fund, Inc. pursuant to an Agreement and Plan of Reorganization dated September 30, 1987. The prospectus for the Trust, attached to this prospectus, describes the investment objectives, policies and risks of each of the Trust's Portfolios. Currently, High Yield, Aggressive Stock, Common Stock, Balanced and Money Market Portfolios are available under the Champion. This is a permanent life insurance policy which provides insurance coverage and requires periodic premium payments over time. When purchasing this policy, you should consider your ability to pay these premiums on a periodic schedule. During the policy's early years, if you fail to pay premiums or surrender your policy you will incur a significant surrender charge. A policy is serviced through the regional Life Insurance Center listed on page 3 of the policy when issued. Equitable Variable's Home Office is 787 Seventh Avenue, New York, N.Y. 10019, telephone (212) 714-5289. You have the right to examine this policy and return it to us for a refund. Read this prospectus carefully and keep it for future reference. This prospectus is not valid unless attached to a current prospectus for The Hudson River Trust. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Replacing existing insurance with the policy described in this prospectus may not be to your advantage. We recommend that you consult with your Equitable agent or financial adviser to determine if replacement would be to your advantage. - -------------------------------------------------------------------------------- M-372 Copyright 1987 Equitable Variable Life Insurance Company. All rights reserved. - -------------------------------------------------------------------------------- TABLE OF CONTENTS - -------------------------------------------------------------------------------- PAGE - -------------------------------------------------------------------------------- PART 1 -- SUMMARY 1 - -------------------------------------------------------------------------------- FEATURES OF THE CHAMPION 1 ------------------------------------------------------------------------- USING YOUR ACCOUNT VALUE 1 ------------------------------------------------------------------------- INVESTMENT CHOICES OF THE CHAMPION 2 ------------------------------------------------------------------------- DEDUCTIONS AND CHARGES 2 ------------------------------------------------------------------------- ADDITIONAL INFORMATION 3 ------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION 4 ------------------------------------------------------------------------- HYPOTHETICAL ILLUSTRATIONS 5 - -------------------------------------------------------------------------------- PART 2 -- DETAILED INFORMATION ABOUT EQUITABLE VARIABLE AND THE TRUST 6 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE 6 ------------------------------------------------------------------------- EQUITABLE 6 ------------------------------------------------------------------------- Equitable's Investment In Equitable Variable 6 ---------------------------------------------------------------------- Donaldson, Lufkin & Jenrette, Inc. 6 ------------------------------------------------------------------------- INVESTMENT CHOICES 6 ------------------------------------------------------------------------- THE SEPARATE ACCOUNT AND ITS DIVISIONS 6 ------------------------------------------------------------------------- A Unit Investment Trust 6 ---------------------------------------------------------------------- The Investment Divisions Of The Separate Account 6 ---------------------------------------------------------------------- Other Policies Use The Separate Account 7 ---------------------------------------------------------------------- We Own The Assets Of The Separate Account 7 ------------------------------------------------------------------------- THE TRUST 7 ------------------------------------------------------------------------- PREDECESSORS OF THE TRUST 7 ------------------------------------------------------------------------- INVESTMENT OBJECTIVES OF THE PORTFOLIOS 8 ------------------------------------------------------------------------- THE TRUST'S INVESTMENT ADVISER 8 - -------------------------------------------------------------------------------- PART 3 -- DETAILED INFORMATION ABOUT THE CHAMPION 9 - -------------------------------------------------------------------------------- PREMIUMS 9 - -------------------------------------------------------------------------------- You Direct The Investment Of Your Premiums 9 ---------------------------------------------------------------------- Premium Reductions For Non-Smokers 9 ---------------------------------------------------------------------- Illustration Of Premium Rates 9 ------------------------------------------------------------------------- DEDUCTIONS FROM PREMIUMS 10 ------------------------------------------------------------------------- Annual Administrative Charge 10 ---------------------------------------------------------------------- Additional First Year Administrative Charge 10 ---------------------------------------------------------------------- Risk Charge 10 ---------------------------------------------------------------------- Front-End Sales Load 10 ---------------------------------------------------------------------- State Premium Tax Charge 10 ---------------------------------------------------------------------- Example of Deductions From Premiums 11 ------------------------------------------------------------------------- SURRENDER CHARGE 11 ------------------------------------------------------------------------- CHARGES AGAINST THE SEPARATE ACCOUNT 12 ------------------------------------------------------------------------- Cost of Insurance 12 ---------------------------------------------------------------------- Charges For Mortality And Expense Risks 12 ---------------------------------------------------------------------- Expenses Of The Trust 12 ------------------------------------------------------------------------- DEATH BENEFITS 12 ------------------------------------------------------------------------- VARIABLE ADJUSTMENT AMOUNT 13 ------------------------------------------------------------------------- The Variable Adjustment Amount Is Cumulative 14 ---------------------------------------------------------------------- Net Return 14 ---------------------------------------------------------------------- How The Death Benefit Varies 14 ------------------------------------------------------------------------- ACCOUNT VALUES AND CASH SURRENDER VALUES 15 ------------------------------------------------------------------------- How We Determine Account Value 15 ---------------------------------------------------------------------- How We Determine Cash Surrender Value 15 ------------------------------------------------------------------------- POLICY LOANS 15 ------------------------------------------------------------------------- How To Request A Loan 16 ---------------------------------------------------------------------- Repayment 16 ---------------------------------------------------------------------- Policy Loan Interest 16 ---------------------------------------------------------------------- The Effect Of A Policy Loan 16 ---------------------------------------------------------------------- Additional Information About Adjustable Rates 17 ------------------------------------------------------------------------- OTHER POLICY TRANSACTIONS 17 ------------------------------------------------------------------------- Returning The Policy For Cash 17 ---------------------------------------------------------------------- Transfers Among Investment Choices 18 ---------------------------------------------------------------------- When A Division Becomes Inactive 18 ------------------------------------------------------------------------- YOUR RIGHT TO EXAMINE THE POLICY 18 ------------------------------------------------------------------------- YOUR RIGHT TO EXCHANGE THE POLICY 18 ------------------------------------------------------------------------- YOUR POLICY CAN LAPSE 19 ------------------------------------------------------------------------- OPTIONS ON LAPSE 19 ------------------------------------------------------------------------- Payment Of Cash Option 19 ---------------------------------------------------------------------- Continued Insurance Option 19 ---------------------------------------------------------------------- Reinstatement Option 20 ------------------------------------------------------------------------- POLICY PERIODS, ANNIVERSARIES, DATES AND AGES 20 ------------------------------------------------------------------------- LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY 21 ------------------------------------------------------------------------- ADDITIONAL INFORMATION ABOUT THE CHAMPION 21 ------------------------------------------------------------------------- When We Pay Proceeds 21 ---------------------------------------------------------------------- Your Payment Options 21 ---------------------------------------------------------------------- Additional Benefits You May Get By Rider 22 ---------------------------------------------------------------------- Beneficiary 23 ---------------------------------------------------------------------- Assignment 23 ---------------------------------------------------------------------- Premium Payments By Salary Allotment 23 ---------------------------------------------------------------------- Employee Benefit Plans 23 ---------------------------------------------------------------------- You Will Receive Periodic Reports 23 ---------------------------------------------------------------------- Dividends 23 - -------------------------------------------------------------------------------- PART 4 -- ADDITIONAL INFORMATION 24 - -------------------------------------------------------------------------------- TAX EFFECTS 24 ------------------------------------------------------------------------- Policy Proceeds 24 ---------------------------------------------------------------------- Pension And Profit Sharing Plans 24 ---------------------------------------------------------------------- Our Income Taxes 25 ---------------------------------------------------------------------- Tax Reform 25 ---------------------------------------------------------------------- Income Tax Withholding 25 ------------------------------------------------------------------------- YOUR VOTING PRIVILEGES 25 ------------------------------------------------------------------------- General 25 ---------------------------------------------------------------------- Voting Privileges Of Others 26 ---------------------------------------------------------------------- Determining Your Vote 26 ---------------------------------------------------------------------- Law Changes May Affect Your Voting Privileges 27 ------------------------------------------------------------------------- OUR RIGHTS 27 ------------------------------------------------------------------------- Substitution of Trust Shares 27 ------------------------------------------------------------------------- SALES AND OTHER AGREEMENTS 27 ------------------------------------------------------------------------- Sales By Agents Of Equitable 27 ---------------------------------------------------------------------- Commission Schedule 28 ---------------------------------------------------------------------- Sales By Brokers 28 ---------------------------------------------------------------------- Applications 28 ---------------------------------------------------------------------- Joint Services Agreement 28 ------------------------------------------------------------------------- REGULATION 28 ------------------------------------------------------------------------- LEGAL PROCEEDINGS 28 ------------------------------------------------------------------------- LEGAL MATTERS 28 ------------------------------------------------------------------------- FINANCIAL AND ACTUARIAL EXPERTS 29 ------------------------------------------------------------------------- ADDITIONAL INFORMATION 29 ------------------------------------------------------------------------- MANAGEMENT 29 - -------------------------------------------------------------------------------- PART 5 -- ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUMS 32 - -------------------------------------------------------------------------------- PART 6 -- FINANCIAL STATEMENTS 39 - -------------------------------------------------------------------------------- THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR A POLICY'S BENEFICIARY. WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY SIMILAR TO OR COMPARABLE TO A MUTUAL FUND'S SYSTEMATIC INVESTMENT PLAN. - -------------------------------------------------------------------------------- THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFERING OF THE CHAMPION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ANY SUPPLEMENT HERETO OR IN ANY SUPPLEMENTAL SALES MATERIAL AUTHORIZED BY EQUITABLE VARIABLE. - -------------------------------------------------------------------------------- i - -------------------------------------------------------------------------------- PART 1 -- SUMMARY - -------------------------------------------------------------------------------- The summary contained in this Part 1 is qualified in its entirety by the more detailed information and financial statements appearing elsewhere in this prospectus. Unless indicated otherwise, this prospectus assumes that all premiums are paid on time and there is no outstanding policy loan. The description of The Champion in this prospectus is subject to the terms of the policy you buy and any supplement or endorsement to it. You may review a copy of our policy and any supplement or endorsement to it on request. - -------------------------------------------------------------------------------- FEATURES OF THE CHAMPION PREMIUMS. This policy requires premium payments on a regular basis (monthly, quarterly, semi-annually or annually) for life. We guarantee that a premium will not increase once it has been determined. The size of an annual premium depends on the initial face amount and the insured's risk class, age and sex. The initial face amount must be at least $50,000. Failure to pay premiums will result in the lapse of your policy. See "Surrender Charge" in Part 3. For non-smokers who meet our requirements we reduce our premiums by approximately 7% for policies with face amounts under $200,000 and approximately 9% for larger policies. DEATH BENEFIT. The Death Benefit under the policy may increase or decrease if the investment experience of the division or divisions of the Separate Account into which you choose to put your net annual premiums varies from the assumed investment return of 4-1/2%. The Death Benefit is adjusted annually on each policy anniversary. However, if the Account Value at the date of death, considered as a single premium, can buy more Death Benefit, then the Death Benefit will be this higher amount. The guaranteed minimum Death Benefit is the face amount of the policy regardless of the investment experience of the divisions of the Separate Account. See "Death Benefits" in Part 3. ACCOUNT VALUE. We put your annual premiums, net of certain deductions, in one or more of the investment divisions of Equitable Variable's Separate Account I (the Separate Account). You decide whether your policy's net annual premium will be put entirely in one division or whether you want a percentage in two or more divisions. The Account Value of a policy may vary daily to reflect the investment experience of the divisions of the Separate Account in which you have value. The Account Value is the tabular Account Value specified in the policy (based on a constant net investment return of 4-1/2% a year), adjusted for investment experience. Unlike the Death Benefit, which has a guaranteed minimum, we do not guarantee a minimum Account Value. You will bear the entire market risk for Account Value. You may request that all or part of your Account Value be transferred among the divisions of the Separate Account. See "Other Policy Transactions -- Transfers Among Investment Choices" in Part 3. - -------------------------------------------------------------------------------- USING YOUR ACCOUNT VALUE POLICY LOANS. You may borrow up to 90% of your policy's loan value during the first ten years and 100% thereafter. The loan value is based on your adjusted Cash Surrender Value. The Cash Surrender Value is the difference between the Account Value and the surrender charge which applies during the first ten policy years. Loans are available at a fixed interest rate of 5-1/2% or at an adjustable rate. The portion of your Cash Surrender Value equal to the amount you borrow is transferred out of the Separate Account and, therefore, is not affected by investment experience. You will, however, earn interest on amounts set aside to secure your loan. For a loan at a fixed interest rate of 5-1/2%, we will credit the assumed interest rate of 4-1/2%. For a loan at an adjustable rate, we will credit the adjustable loan interest rate less 0.75% (and less any charge for taxes) on the borrowed amounts. See "Policy Loans" in Part 3. SURRENDERING YOUR POLICY FOR CASH. If you surrender your policy for cash, we will pay you the Cash Surrender Value less any outstanding loan and loan interest due. Subject to certain conditions, you may split your policy into two policies and return one for cash. See "Other Policy Transactions -- Returning The Policy For Cash" in Part 3. TRANSFERS AMONG INVESTMENT CHOICES. You may transfer your Account Value among the divisions of the Separate Account up to four times in a policy year. See "Other Policy Transactions -- Transfers Among Investment Choices" in Part 3. - -------------------------------------------------------------------------------- 1 - -------------------------------------------------------------------------------- INVESTMENT CHOICES OF THE CHAMPION THE TRUST. Each division of the Separate Account invests in a corresponding portfolio (Portfolio) of The Hudson River Trust (the Trust), a "series" type mutual fund. Each Portfolio has different investment objectives. Currently, the following Portfolios are available for investment by the corresponding divisions of the Separate Account: o High Yield o Aggressive Stock o Common Stock o Balanced o Money Market INVESTMENT ADVISERS. Equitable Capital Management Corporation (Equitable Capital) is the investment adviser of the Trust. Equitable Capital is registered with the Securities and Exchange Commission (SEC) as an investment adviser under the Investment Advisers Act of 1940. The maximum effective annual rate at which the Trust pays advisory fees is 0.55% of the average daily value of a Portfolio's aggregate net assets. HOWEVER, WE CREDIT THE CHAMPION POLICIES SO THAT THE TRUST'S ADVISORY FEES DO NOT EXCEED A 0.25% EFFECTIVE ANNUAL RATE. For a full description of the Trust, see the attached Trust prospectus and the Trust's Statement of Additional Information referred to therein. - -------------------------------------------------------------------------------- DEDUCTIONS AND CHARGES DEDUCTIONS FROM PREMIUMS. Your net annual premium is put into the Separate Account each year. Deductions are made from your payments for any optional insurance benefits, a front-end sales load at a maximum of 5% per year, state premium taxes, annual administrative expenses and a risk charge for the guaranteed minimum Death Benefit. In the first policy year we also deduct a fixed charge for expenses incurred in issuing the policy. See "Deductions From Premiums" in Part 3. Commissions and other sales expenses in any year are paid by Equitable Variable. They do not represent a charge against your premiums. During the early policy years, these sales expenses will be considerably higher than the sales charges that will be collected for those years. See "Sales And Other Agreements" in Part 4. CHARGES AGAINST THE SEPARATE ACCOUNT. The amount in the divisions of the Separate Account credited to your policy is decreased by the cost of your insurance protection. Also, the investment experience of the Separate Account reflects a daily charge we make at an effective annual rate of 0.50% of the value of the policy assets of the Separate Account for certain mortality and expense risks. In addition, we reserve the right to make a charge in the future for taxes or provisions made for taxes. Any charges against the divisions will have an impact on whether the divisions earn more than the assumed rate of 4-1/2% and whether your policy's Death Benefit increases above the guaranteed minimum. See "Charges Against The Separate Account" in Part 3. EXPENSES OF THE TRUST. Shares of the Trust are purchased and redeemed at their net asset value which reflects management fees and other expenses already deducted from the assets of the Trust. The Trust does not impose a sales charge. See "The Trust" in Part 2. SURRENDER CHARGE. If you surrender your policy or allow it to lapse before its tenth anniversary you will incur a surrender charge. The charge is a maximum of 22-1/2% of the premiums paid if the surrender is during the first policy year. Thereafter the percentage of total premiums declines until it reaches zero at the end of the tenth policy year. See "Surrender Charge" and "Your Policy Can Lapse" in Part 3. - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION YOUR RIGHT TO EXAMINE THE POLICY. You have a limited right to return your policy for cancellation and a full refund of premiums paid. Your request must be postmarked by the latest of o 10 days after you receive your policy; or o 10 days after we mail a written Notice of Withdrawal Right; or o 45 days after Part 1 of the policy application was signed. Also, within 24 months of a policy's issue date, you may exchange it for a fixed whole life policy issued by us on the life of the insured without submitting proof of insurability. INCOME TAXES. Generally, the Death Benefit paid to the beneficiary of this policy is not subject to Federal income tax. In addition, under current Federal tax law, you do not have to pay income tax on any increase in your Account Value unless the policy is surrendered or allowed to lapse. See "Tax Effects" in Part 4. YOUR POLICY CAN LAPSE. This policy will remain in force for the life of the insured person unless you fail to pay premiums or unless the unpaid portion of any policy loan plus unpaid loan interest exceeds the Cash Surrender Value of your policy. See "Your Policy Can Lapse" in Part 3. - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION The effective annual net rates of return for the Common Stock Division from the date on which premiums were first allocated to its predecessor, January 13, 1976, to December 31, 1986 was 14.36%. For the same period ended December 31, 1986, the average annual increase for the Standard and Poor's 500 Stock Index with dividends reinvested was 14.06%. (Standard and Poor's is an unmanaged index of groups of common stocks.) The effective annual net rates of return for the Money Market Division from the date on which premiums were first allocated to its predecessor, August 21, 1981, to December 31, 1986 was 9.60%. The tables below show the actual net returns of the Common Stock and Money Market Divisions of the Separate Account, as if the Reorganization discussed under "Predecessors Of The Trust" in Part 2 had always been in effect. The tables show the actual net returns of the predecessors of the Common Stock and Money Market Divisions operating as management investment companies prior to the Reorganization. The same results would have been achieved if the Separate Account had operated as a unit investment trust investing in the Trust for all the periods shown with the operations of the Trust having been as currently reported in the Trust's separate Prospectus and Statement of Additional Information. The tables break the net return into its component parts. The tables reflect mortality and expense risk charges but do not reflect cost of insurance charges. See "Charges Against the Separate Account." When you examine the tables, remember that the percentages apply to a policy with its policy year starting on the first day of the periods shown and apply to a policy that would have been in force throughout the periods shown. Because they are determined each December 31, the percentages do not reflect the average net assets in the Common Stock and Money Market Divisions during those periods. To get a more complete picture of the Separate Account and its divisions, refer to the financial statements and related notes in the Statement of Additional Information for the Trust.
- ------------------------------------------------------------------------------------------------------------------------------------ COMMON STOCK DIVISION January 13, Year Ended December 31, 1976 to ---------------------------------------------------------------------------------------------- December 31, 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976(a)(b) ------------------------------------------------------------------------------------------------------------- NET RETURN: Income(c) 1.55 % 2.92 % 3.22 % 2.65 % 4.64 % 4.02 % 4.35 % 3.91 % 4.06 % 3.49 % 2.63 % Net realized and unrealized gain (loss) on investments 16.04 % 30.91 % (4.68)% 24.06 % 13.58 % (9.40)% 46.48 % 26.56 % 4.72 % (12.26)% 7.00 % ----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ---- Gross Return 17.59 % 33.83 % (1.46)% 26.71 % 18.22 % (5.38)% 50.83 % 30.47 % 8.78 % (8.77)% 9.63 % Expense charges(c) (.59)% (.74)% (.74)% (.94)% (.95)% (.70)% (1.13)% (.98)% (.81)% (.69)% (.77)% ----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ---- Net Return 17.00 % 33.09 % (2.20)% 25.77 % 17.27 % (6.08)% 49.70 % 29.49 % 7.97 % (9.46)% 8.86 % ===== ===== ==== ===== ===== ==== ===== ===== ==== ===== ====
- ------------------------------------------------------------------------------------------------------------------------------------ MONEY MARKET DIVISION Year Ended December 31, August 21, 1981 ------------------------------------------ to December 31, 1986 1985(d) 1984 1983 1982 1981(a)(b) ------------------------------------------------------------------------ NET RETURN: Income(c) 6.83 % 8.65 % 11.00 % 9.56 % 13.53% 5.46 % Net realized and unrealized gain (loss) on investments 0.03 % (.09)% .42 % (.06)% .03% .06 % ---- ---- ----- ---- ----- ---- Gross Return 6.86 % 8.56 % 11.42 % 9.50 % 13.56% 5.52 % Expense charges(c) (.55)% (.60)% (.84)% (.83)% (.84)% (.35)% ---- ---- ----- ---- ----- ---- Net Return 6.31 % 7.96 % 10.58 % 8.67 % 12.72% 5.17 % ==== ==== ===== ==== ===== ==== - -------------------------------------------------------------------------------- S(a) Date as of which net premiums under variable life policies were first allocated to the predecessor of the division. (b) The gross return and the net return for the periods indicated are not annual rates of return. (c) Subsequent to March 22, 1985, the advisory service fees have been deducted in arriving at income rather than as an expense charge. (d) Net return for 1985 has been adjusted to reflect a recalculation of the net return of the division.
- -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- HYPOTHETICAL ILLUSTRATIONS The following illustrations are based on the assumptions that since January 1, 1976 The Champion policy had been available and the Separate Account and the Trust had been operating in the same manner as they now operate. Each of these examples of past investment performance is for a specific age, sex, risk class, premium amount and policy anniversary. The benefits illustrated under this policy are calculated on the policy anniversary and do not represent the average net investment performance of our pre-Reorganization Separate Accounts during the policy year. The guaranteed minimum Death Benefit is the face amount of the policy and does not vary based on investment performance. The difference between the Account Value and the Cash Surrender Value is the surrender charge. These examples assume that net premiums and related Account Values and Cash Surrender Values are 100% in the respective divisions of the Separate Account for the entire period illustrated. PAST INVESTMENT RESULTS SHOULD NOT BE DEEMED A REPRESENTATION OF FUTURE INVESTMENT EXPERIENCE OF THE DIVISIONS OF THE SEPARATE ACCOUNT OR INVESTMENT PERFORMANCE OF THE TRUST. For illustrations based on various constant hypothetical annual investment returns, see "Illustrations Of Death Benefits, Account Values And Cash Surrender Values, And Accumulated Premiums" in Part 5. COMMON STOCK DIVISION. The following example shows how the net return of the Common Stock Division would have affected the Death Benefits, Account Values and Cash Surrender Values of an annual premium policy dated January 1, 1976. Assume a premium of $500 and that the insured was a 25 year old male on January 1, 1976. THE CHAMPION - -------------------------------------------------------------------------------- VARIABLE WHOLE LIFE INSURANCE POLICY ($53,427 Face Amount Standard Risk)
- ------------------------------------------------------------------------------------------------- Cash Guaranteed Policy Anniversary Account Surrender Death Minimum on January 1 of Value Value Benefit Death Benefit - ------------------------------------------------------------------------------------------------- 1977 $ 184 $ 81 $53,496 $53,427 1978 448 310 53,427 53,427 1979 859 686 53,427 53,427 1980 1,510 1,307 54,732 53,427 1981 2,881 2,651 60,033 53,427 1982 3,006 2,758 58,209 53,427 1983 3,817 3,560 59,947 53,427 1984 5,316 5,095 64,871 53,427 1985 5,465 5,341 62,905 53,427 1986 7,783 7,783 70,973 53,427 1987 9,625 9,625 76,259 53,427 - -------------------------------------------------------------------------------------------------
This example reflects net investment income credited at the assumed rate of 4-1/2% from January 1, 1976 to January 12, 1976, and an actual rate of return for the Common Stock Division assuming the investment performance of the Trust's Common Stock Portfolio was the same as that of our pre-Reorganization Separate Account I starting January 13, 1976. MONEY MARKET DIVISION. The following example shows how the net return of the Money Market Division would have affected the Death Benefits, Account Values and Cash Surrender Values of an annual premium policy dated January 1, 1982. Assume a premium of $500 and that the insured was a 25 year old male on January 1, 1982. THE CHAMPION - -------------------------------------------------------------------------------- VARIABLE WHOLE LIFE INSURANCE POLICY ($53,427 Face Amount Standard Risk)
- ------------------------------------------------------------------------------------------------- Cash Guaranteed Policy Anniversary Account Surrender Death Minimum on January 1 of Value Value Benefit Death Benefit - ------------------------------------------------------------------------------------------------- 1983 $ 195 $ 91 $53,562 $53,427 1984 573 436 53,721 53,427 1985 1,004 831 54,076 53,427 1986 1,444 1,242 54,357 53,427 1987 1,890 1,660 54,548 53,427 - -------------------------------------------------------------------------------------------------
5 PART 2 -- DETAILED INFORMATION ABOUT EQUITABLE VARIABLE AND THE TRUST - -------------------------------------------------------------------------------- EQUITABLE VARIABLE Equitable Variable, a wholly-owned subsidiary of Equitable, was organized in 1972 in New York State as a stock life insurance company. We are licensed to do business in all 50 states, Puerto Rico, the Virgin Islands and the District of Columbia. We sell both traditional and innovative forms of life insurance designed to give policyowners maximum choice and flexibility. In 1976 we began selling variable life insurance policies with death benefits that varied with the experience of each policy's investment account. In 1983 we began selling variable life insurance policies which could be purchased with a single premium payment. In 1986, we began selling an individual flexible premium variable life policy designed to provide insurance coverage with flexibility in death benefits and premium payments. We also sell single premium annuity contracts, fixed life insurance, term life insurance and universal life insurance. At the end of 1986, we had approximately $9.7 billion face amount of variable life insurance in force and $47.1 billion face amount of fixed life insurance in force. We also had $1.9 billion of fixed annuity payment obligations. Our financial statements and those of the Separate Account are in Part 6. - -------------------------------------------------------------------------------- EQUITABLE Equitable is a New York mutual life insurance company that has its home office at 787 Seventh Avenue, New York, New York 10019. Equitable has been in business since 1859. Its total assets make it the third largest life insurance company in the United States. On December 31, 1986, these assets were approximately $55 billion. Equitable is also one of the largest managers of pension fund assets in the United States. On December 31, 1986, Equitable and its subsidiaries were managing pension fund assets of $66.2 billion and total assets of $102.7 billion. These assets include amounts in our General Account, Equitable's General Account and separate accounts, and other accounts managed by Equitable and Equitable Capital. On December 31, 1986, Equitable Capital was managing approximately $30 billion in assets. Equitable Capital acts as an investment adviser to various separate accounts and general accounts of Equitable and other affiliated insurance companies. Equitable Capital also provides management and consulting services to mutual funds, endowment funds, insurance companies, foreign entities, and non-tax-qualified corporate funds, pension and profit-sharing plans, foundations and tax-exempt organizations. EQUITABLE'S INVESTMENT IN EQUITABLE VARIABLE. Between the time Equitable Variable was organized and December 31, 1986, Equitable invested over $570 million in us. We have used the money to help meet operational costs and policy reserve requirements. Equitable will probably invest more money in us in the future, although it has no legal obligation to do so. Equitable's assets do not back the benefits that we pay under our policies. DONALDSON, LUFKIN & JENRETTE, INC. Donaldson, Lufkin & Jenrette, Inc. (DLJ) is a wholly-owned subsidiary of Equitable. DLJ and its subsidiaries offer investment banking and securities services, market independently originated research to institutions and supply correspondent services, including order execution, securities clearance and other centralized financial services, to approximately 300 independent regional securities firms and 100 banks. To the extent permitted by law, we and our separate accounts, Equitable and its separate accounts, and companies affiliated with us, including the Trust, may engage in securities or other transactions with DLJ and its subsidiaries, including buying shares of affiliated investment companies. - -------------------------------------------------------------------------------- INVESTMENT CHOICES After making certain deductions from premiums, we put your net annual premiums in one or more of the divisions of the Separate Account. You decide how your policy's net annual premiums will be allocated. See "Premiums -- You Direct The Investment Of Your Premiums" in Part 3. The Separate Account also invests income or capital gains dividends received from the Fund in shares of the Fund. - -------------------------------------------------------------------------------- THE SEPARATE ACCOUNT AND ITS DIVISIONS A UNIT INVESTMENT TRUST. The Separate Account is registered as a unit investment trust with the SEC under the Investment Company Act of 1940. This registration does not involve any supervision by the SEC of the management or investment policy of the Separate Account. A unit investment trust is a type of investment company. THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT. The Separate Account has five investment divisions, each of which invests in shares of a corresponding Portfolio of the Trust. Currently, the Separate Account consists of High Yield, Aggressive Stock, Common Stock, Balanced and Money Market Divisions. - -------------------------------------------------------------------------------- 6 - -------------------------------------------------------------------------------- THE SEPARATE ACCOUNT AND ITS DIVISIONS (continued) OTHER POLICIES USE THE SEPARATE ACCOUNT. Owners of policies other than The Champion who have our variable life policies on a single premium basis, as well as on a periodic premium basis, also have monies placed in the Separate Account. We may also permit charges owed to us to stay in the Separate Account. Thus, we may also participate proportionately in the Separate Account. These accumulated amounts belong to us and we may transfer them from the Separate Account to our General Account. WE OWN THE ASSETS OF THE SEPARATE ACCOUNT. Under New York law, we own the assets of the Separate Account and use them to support your policy and other variable life policies. The portion of the Separate Account's assets supporting these policies may not be used to satisfy liabilities arising out of any other business of ours. Under certain unlikely circumstances, one division of the Separate Account may be liable for claims relating to the operations of another division. - -------------------------------------------------------------------------------- THE TRUST The Trust is an open-end diversified management investment company, more commonly called a mutual fund. As a "series" type of mutual fund, it issues several different "series" of stock, each of which relates to a different Trust Portfolio. The Trust does not impose a sales charge or "load" for buying and selling its shares. The Trust's shares are bought and sold by the Separate Account at net asset value. The Trust's custodian is The Chase Manhattan Bank, N.A. The Trust sells its shares to separate accounts of insurance companies, both affiliated and not affiliated with Equitable. We currently do not foresee any disadvantages to our policyowners arising out of this. However, if we ever believe that any of the Trust's Portfolios is so large as materially to impair the investment performance of a Portfolio or the Trust, we will examine other investment options. More detailed information about the Trust, its investment policies, risks, expenses and all other aspects of its operations, appears in its prospectus, which is attached to this prospectus, and in its Statement of Additional Information referred to therein. - -------------------------------------------------------------------------------- PREDECESSORS OF THE TRUST Pursuant to a Plan of Reorganization (Reorganization) approved at a meeting of our policyowners held on February 14, 1985, effective as of March 22, 1985, we restructured our Separate Accounts I and II into one separate account in unit investment trust form. To accomplish this restructuring, we converted our then existing Separate Account I, a Common Stock Account, and Separate Account II, a Money Market Account, into our continuing Separate Account I with two investment divisions: the Common Stock Division and the Money Market Division. Our pre-Reorganization Separate Account I was established on June 28, 1973 and our pre-Reorganization Separate Account II was established on December 12, 1980. Both pre-Reorganization Separate Accounts were established under the insurance law of New York State as separate investment accounts. On March 22, 1985, all of the assets and related liabilities of our former Separate Accounts I and II were transferred to the Common Stock and Money Market Portfolios of The Hudson River Fund, Inc., respectively, in exchange for shares in the Portfolios, and we ceased to be an investment adviser of our continuing Separate Account. The Separate Account no longer requires an investment adviser. The Reorganization did not change the policy values of then outstanding policies. On September 30, 1987, pursuant to an Agreement and Plan of Reorganization approved by policyowners, The Hudson River Fund, Inc., a Maryland corporation, was reorganized as a Massachusetts business trust and its name was changed to The Hudson River Trust. Refer to the prospectus for the Trust for further information. - -------------------------------------------------------------------------------- 7 - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES OF THE PORTFOLIOS Each Portfolio has a different investment objective which it tries to achieve by following separate investment policies. The objectives and policies of each Portfolio will affect its return and its risks. Remember that the investment experience of the divisions of the Separate Account depends on the performance of the corresponding Portfolios. The policies and objectives of the Portfolios corresponding to the divisions available for investment under The Champion are as follows:
- ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Investment Policy Objective - ------------------------------------------------------------------------------------------------------------------------------------ High Yield Primarily a diversified mix of high yield, High return by maximizing current income and, to fixed income securities involving greater the extent consistent with that objective, capital volatility of price and risk of principal and appreciation income than high quality fixed income securities Aggressive Stock Primarily common stocks and other Long-term growth of capital equity-type securities issued by medium and smaller sized companies with strong growth potential Common Stock Primarily common stock and other equity-type Long-term growth of capital and increasing income instruments Balanced Common stocks, publicly-traded debt securities High return through a combination of current and high quality money market instruments income and capital appreciation Money Market Primarily high quality short-term money market High level of current income while preserving instruments assets and maintaining liquidity - ------------------------------------------------------------------------------------------------------------------------------------
There is no guarantee that these objectives will be achieved. - -------------------------------------------------------------------------------- THE TRUST'S INVESTMENT ADVISER The Trust is advised by Equitable Capital, a wholly-owned subsidiary of Equitable. Equitable Capital is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. Equitable Capital's address is 1285 Avenue of the Americas, New York, New York 10019. We credit the divisions of the Separate Account daily to offset investment advisory fees of the Trust which exceed a 0.25% effective annual rate and all other Trust expenses except (a) all brokers' commissions, transfer taxes and other fees and expenses for services relating to purchases and sales of Portfolio investments and (b) any Trust income tax liabilities. Equitable capital provides services pursuant to an investment advisory agreement for a fee based on the following maximum effective annual percentages of the average daily value of the aggregate net assets of each of the Portfolios. These annual percentages for the Portfolios corresponding to the divisions available for investment under The Champion are: 0.40% for the Common Stock, Balanced and Money Market Portfolios, 0.50% for the Aggressive Stock Portfolio and 0.55% for the High Yield Portfolio. - -------------------------------------------------------------------------------- 8 PART 3 -- DETAILED INFORMATION ABOUT THE CHAMPION - -------------------------------------------------------------------------------- PREMIUMS The size and frequency of your premium payments depend on the initial face amount, the mode of payment selected, and your risk class, age and sex. We will charge an additional premium if an extra mortality risk is involved or if you want certain optional insurance benefits. In general, premium rates for females will be lower than those for males. In Montana there will be no distinctions based on sex. The minimum face amount of a policy you may apply for is $50,000. The policy may be issued to age 75. Before issuing any policy, we require satisfactory evidence of insurability. If we do not issue a policy, we will refund any premium that has been paid. (Equitable guarantees the refund.) Your premium is due on or before the due date shown in the policy and may be paid annually, semiannually, quarterly or monthly. Monthly payments may be made through a direct automatic payment plan arranged with your bank. You may request a change in the frequency of your premium payment by writing to your regional Life Insurance Center. Regardless of the frequency of your premium payment, your net annual premium is put into the Separate Account on your policy anniversary. Premiums are payable over time for the insured's lifetime. However, we guarantee that your premium will not increase once it has been determined. Premiums are not affected by the investment experience of the Separate Account. If you fail to pay your premiums your policy will lapse. See "Your Policy Can Lapse". YOU DIRECT THE INVESTMENT OF YOUR PREMIUMS. You direct how your net annual premiums will be applied to the divisions of the Separate Account. You can put your whole net annual premiums in one or more divisions of the Separate Account. Percentages cannot be fractions and must add up to 100. You make your initial decision on the application for your policy. You may write to your regional Life Insurance Center at any time requesting to change your decision. Regardless of when you make your request, changes go into effect only on the next policy anniversary because we allocate net annual premiums to the Separate Account only on policy anniversaries. It may not always be possible to make a change that is received less than seven days before a policy anniversary. In this case, the change will not go into effect until the policy anniversary following the entire next policy year. PREMIUM REDUCTIONS FOR NON-SMOKERS. We offer premium reductions that vary with age, sex and face amount if the insured is a standard risk and meets additional requirements as to smoking habits. The reduction will be approximately 7% for policies with face amounts under $200,000 and approximately 9% for larger policies. Non-smoker rates are available for ages 20 and over. ILLUSTRATION OF PREMIUM RATES. The following table shows premium rates for each $1,000 of face amount for a $50,000 policy, which is the minimum, and for a $200,000 policy, which is the amount where our rates per $1,000 go down. - -------------------------------------------------------------------------------- ILLUSTRATIVE TABLE OF ANNUAL PREMIUM FOR EACH $1,000 FACE AMOUNT - -------------------------------------------------------------------------------- Male $50,000 FACE AMOUNT $200,000 FACE AMOUNT Issue ---------------------------- ---------------------------- Age Standard Risk Non-Smoker Standard Risk Non-Smoker - -------------------------------------------------------------------------------- 10 $ 5.73 n.a. $ 5.00 n.a. 25 9.41 $ 8.80 8.68 $ 7.92 40 17.63 16.43 16.88 15.38 - -------------------------------------------------------------------------------- 9 PREMIUMS (continued) Premiums for semi-annual, quarterly and monthly periods will be higher per year than the annual premium. This is due to a charge for loss of interest and added billing and collection costs. The following table compares annual and monthly premiums for standard risks: - -------------------------------------------------------------------------------- COMPARATIVE TABLE OF ANNUAL AND MONTHLY PREMIUMS FOR EACH $1,000 FACE AMOUNT - -------------------------------------------------------------------------------- Male Issue % Excess Of Total Age Initial Monthly Premiums (Standard Face Annual Monthly For Policy Year Over Risk) Amount Basis Basis Annual Premiums - -------------------------------------------------------------------------------- 10 $ 50,000 $ 5.73 $ .52 8.9% 200,000 5.00 .44 5.6 25 50,000 9.41 .84 7.1 200,000 8.68 .76 5.1 40 50,000 17.63 1.55 5.5 200,000 16.88 1.46 3.8 - -------------------------------------------------------------------------------- DEDUCTIONS FROM PREMIUMS ANNUAL ADMINISTRATIVE CHARGE. We charge $40 in each policy year for administrative expenses. The charge is designed to cover the continuing costs of maintaining your policy, such as premium billing and collection, claim processing, policy transactions, recordkeeping, communicating with policyowners, and other expenses and overhead. ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE. In the first policy year we make a one-time administrative charge of $3.00 for each $1,000 of initial face amount of a policy with a face amount under $200,000. This charge is $.50 for each $1,000 of initial face amount for larger policies. This first year administrative charge is applied to the cost of processing applications, conducting medical examinations, establishing policy records, and determining insurability and assigning the insured to a risk class. RISK CHARGE. We charge 2% of the basic annual premium to provide for the possibility that an insured will die at a time when, based on the investment experience of the Separate Account, the Death Benefit that would ordinarily be paid is less than the guaranteed minimum Death Benefit of the policy. The basic annual premium is the total annual premium for a standard mortality risk policy minus the $40 annual administrative charge and minus the premiums for any optional insurance benefits you take. FRONT-END SALES LOAD. We make a charge that can be considered a "sales load". Our front-end sales load will not be more than 5% of the basic annual premium for each year. Commissions and other sales expenses in any year are paid by Equitable Variable. They do not represent a charge against premiums. During the early policy years, these sales expenses are considerably higher than the front-end sales load charged against the premium for that year. See "Sales And Other Agreements" in Part 4. We expect to recover our total sales expenses over the lifetimes of the insureds partly from the front-end sales load and partly from the surrender charge. To the extent sales expenses are not covered by such sources, we will cover them from other funds. STATE PREMIUM TAX CHARGE. We deduct 2% of the annual premium for the risk class of the insured to cover state premium taxes payable by us. These taxes vary from state to state and the 2% rate is an average. - -------------------------------------------------------------------------------- 10 - -------------------------------------------------------------------------------- DEDUCTIONS FROM PREMIUMS (continued) EXAMPLE OF DEDUCTIONS FROM PREMIUMS. The following example (using the policies shown in "Illustrations Of Death Benefits, Account Values And Cash Surrender Values, And Accumulated Premiums" in Part 5) shows what amount of net annual premium would be put into the Separate Account at the start of each policy year. The net annual premium is the basic annual premium less the additional first year administrative charge, risk charge, front-end sales load and state premium tax charge. - -------------------------------------------------------------------------------- ILLUSTRATIVE TABLE OF DEDUCTIONS FROM PREMIUMS - -------------------------------------------------------------------------------- Male Male Male Beginning of Issue Age 10 Issue Age 25 Issue Age 40 Policy Year Standard Risk Standard Risk Standard Risk - -------------------------------------------------------------------------------- $300 Annual $500 Annual $1,000 Annual Premium Premium Premium ------- ------- ------- POLICIES UNDER $200,000 (Initial Face Amount) ($52,739) ($53,427) ($57,041) 1st Year 78.58 258.59 702.75 2nd Year and later 236.80 418.87 873.87 $1,000 Annual $2,000 Annual $4,000 Annual Premium Premium Premium ------- ------- ------- POLICIES $200,000 AND OVER (Initial Face Amount) ($200,000) ($231,133) ($237,411) 1st Year 774.00 1,668.78 3,485.19 2nd Year and later 874.00 1,784.35 3,603.90 - -------------------------------------------------------------------------------- SURRENDER CHARGE There is a difference between the Account Value and the Cash Surrender Value of our policy in the first ten policy years. This difference is a surrender charge, a contingent deferred sales load against your Account Value. It is designed to recover expenses of distributing policies which are terminated in their early years. The surrender charge does not affect Account Value transfers among divisions of the Separate Account, Separate Account investment experience, Death Benefits or the 24-month exchange right to fixed life insurance. The surrender charge is a maximum of 22-1/2% of the basic annual premiums (as defined in "Deductions From Premiums -- Risk Charge") paid if the policy lapses or is surrendered during the first policy year. Thereafter, the surrender charge is a percentage of all basic annual premiums paid. This percentage declines until it reaches zero at the end of the tenth policy year. The following table shows the maximum surrender charge assuming the surrender occurs at the end of a policy year. - -------------------------------------------------------------------------------- TABLE OF SURRENDER CHARGES - -------------------------------------------------------------------------------- End of Maximum End of Maximum Policy Year Surrender Charge Policy Year Surrender Charge - -------------------------------------------------------------------------------- 1 22-1/2% 6 9% 2 15 7 8 3 12-1/2 8 6 4 11 9 3 5 10 10 0 - -------------------------------------------------------------------------------- If you surrender your policy or allow it to lapse in the first ten years and receive its net Cash Surrender Value, you will incur the surrender charge. Options available on lapse of a policy, whether taken as cash or placed on an insurance option on lapse, are also based on its net Cash Surrender Value. Since the loan of value of the policy is based on the amount of Cash Surrender Value rather than on the Account Value, the surrender charge has the effect of reducing the amount available for a policyowner to borrow under a policy. - -------------------------------------------------------------------------------- 11 - -------------------------------------------------------------------------------- CHARGES AGAINST THE SEPARATE ACCOUNT We support the operations of a policy by putting the net annual premium (see "Deductions From Premiums") into the division or divisions of the Separate Account which the policyowner chooses. We do this when the policy is issued and, after that, at the beginning of each policy year. Even though the gross premium will be higher for an insured who is a high risk than the gross premium for an insured who is a standard risk, any Account Value that may build up on a policy covering a high risk insured will be the same as the Account Value that would build up on a policy covering a standard risk insured of the same age and sex, for the same amount, and having the same date of issue and allocation to the divisions of the Separate Account. This is also true for an insured who is a non-smoker, even though the gross premium for a non-smoker insured will be lower than the gross premium for an insured who is a standard risk but not a non-smoker. The policy is designed so that the net annual premium put in the divisions of the Separate Account does not vary with the risk class of the insured. Therefore, we charge a higher gross premium for an insured who is a high risk to cover the extra risk of mortality. We charge a lower gross premium for non-smokers because of the expected lower mortality. COST OF INSURANCE. Once the net annual premium is placed into the divisions of the Separate Account we charge for the cost of insurance based on the sex and attained age for the amount at risk without regard to differences in risk class. The amount at risk on policy anniversaries is the Death Benefit payable less the amounts in the divisions of the Separate Account in which a policy participates (adjusted for any loans). The cost of insurance is based on the 1980 Commissioner's Standard Ordinary Mortality Table, and generally increases with attained age. The cost of insurance differs in each year because, based on this mortality table, the probability of death generally increases with attained age and the amount at risk is different year by year. The dollar amount of the cost of insurance also depends on investment experience of the divisions of the Separate Account in which a policy participates. The cost of insurance for females will generally be less than that for males. In Montana, there will be no distinctions based on sex. The amount in the divisions of the Separate Account in which your policy participates is further decreased (after the cost of your insurance protection) by the following charges. CHARGES FOR MORTALITY AND EXPENSE RISKS. We charge the Separate Account for the mortality and expense risks we assume. The mortality risk we assume is that insureds may live for shorter periods of time than we estimated. If this occurs, we have to pay a greater amount of Death Benefits than we expected in relation to the premiums we received. The expense risk we assume is that our costs of issuing and administering policies may be more than we estimated. The charge is made daily at an effective annual rate of 0.50% of the value of the assets of each division of the Separate Account that are attributable to variable life policies. The money we collect from this charge may exceed the amount needed to cover benefits and expenses and would be our gain. EXPENSES OF THE TRUST. The Separate Account purchases shares of the Trust at their net value which reflects the management fees and other expenses deducted from the assets of the Trust. The Trust does not impose a sales charge. See "The Trust" in Part 2. - -------------------------------------------------------------------------------- DEATH BENEFITS We pay a Death Benefit (net of indebtedness) to the beneficiary of this policy when the insured dies. All or part of the Death Benefit can be paid in cash or applied under one or more of our payment options described under "Additional Information About The Champion -- Your Payment Options". The Death Benefit will at least equal the face amount of the policy. Whether the Death Benefit is higher than this guaranteed minimum depends on the investment experience of the divisions of the Separate Account in which a policy participates. See "Illustrations Of Death Benefits, Account Values And Cash Surrender Values, And Accumulated Premiums" in Part 5. - -------------------------------------------------------------------------------- 12 - -------------------------------------------------------------------------------- DEATH BENEFITS (continued) The Death Benefit will be the greater of (i) the guaranteed minimum Death Benefit, plus the sum (if positive) of the variable adjustment amounts (determined annually) in the divisions of the Separate Account in which you have Account Value, or (ii) the insurance coverage that can be purchased by the Account Value at the date of death. The percentage change in the Death Benefit for any year is not the same as the net return for the preceding year and it is not necessarily related to current or future rates of inflation. In any year that the sum of the variable adjustment amounts increases (and is positive), the Death Benefit will increase. If the sum of the variable adjustment amounts is negative, investment experience cannot increase the Death Benefit above the guaranteed minimum until it has increased the variable adjustment amount of at least one division of the Separate Account so that the sum is positive. In any year that the sum of the variable adjustment amounts for the divisions decreases, the Death Benefit will decrease, unless it is already at the guaranteed minimum. See "Variable Adjustment Amount". There is no guarantee that the investment experience of a division of the Separate Account, which will reflect the investment performance of the corresponding Portfolio of the Fund, will be sufficient to result in an increase in Death Benefits. However, the historical pattern of stock market investment performance has been one of long-range growth, and money market investments in recent years have returned more than 4-1/2%. The amount of Death Benefit actually paid to the insured's beneficiary will be adjusted as of the date of the insured's death to reflect: o any policy loans together with accrued interest; o part of any unpaid premium due if the insured dies during the grace period; o any premium paid for a period beyond the policy month in which the insured dies; and o any insurance added to the policy by a rider. In addition, we may challenge the validity of the policy based on material misstatement in the application or if the insured commits suicide within two years after the policy's date of issue. See "Limits On Our Right To Challenge The Policy". If you have submitted an application and paid the first premium, we may, subject to certain conditions, provide a limited amount of temporary insurance on the person proposed to be insured. You may review a copy of our Temporary Insurance Agreement on request. Except as stated in the Temporary Insurance Agreement, no insurance will take effect: (a) until a policy is delivered and the full first premium for it is paid while the person proposed to be insured is living; (b) before the register date; and (c) unless the information in the application continues to be true and complete, without material change, as of the time the premium is paid. - -------------------------------------------------------------------------------- VARIABLE ADJUSTMENT AMOUNT The variable adjustment amount for each division of the Separate Account is the amount of the Death Benefit that results from all past investment experience of that division. In the first policy year, the variable adjustment amount in each division of the Separate Account is zero. After that, the variable adjustment amount is the amount of insurance purchased by the difference between the actual rate of return and 4-1/2%. Therefore, a division's variable adjustment amount will not change in any year that the division's gross return minus the charges to that division results in a net return of 4-1/2%. If the net return is more than 4-1/2%, the variable adjustment amount will increase. The variable adjustment amount will increase because additional amounts of paid-up life insurance are purchased. If the net return is less than 4-1/2%, it will decrease. The variable adjustment amount will decrease because these additional amounts of paid-up life insurance are lost. The rates at which these additional amounts of paid-up life insurance are purchased or lost are based on sex and attained age and are guaranteed. These rates are specified in your policy when issued and generally increase with the attained age of the insured. The rates for females are generally lower than those for males; however, there will be no distinctions based on sex in Montana. - -------------------------------------------------------------------------------- 13 - -------------------------------------------------------------------------------- VARIABLE ADJUSTMENT AMOUNT (continued) The variable adjustment amount for each division of the Separate Account is set on each policy anniversary. Once set, it remains the same for the following policy year. If it is set above the guaranteed minimum, we will be responsible for keeping it at that level until the next policy anniversary. You will bear the risk that it could drop on the next policy anniversary (but not below the guaranteed minimum). THE VARIABLE ADJUSTMENT AMOUNT IS CUMULATIVE. Increases and decreases in the variable adjustment amount are carried into each succeeding year. The variable adjustment amount for a division of the Separate Account can be positive or negative. If it is positive, good investment experience will produce a larger variable adjustment amount. If it is negative, good investment experience must first offset the current negative variable adjustment amount before there can be a positive amount. EXAMPLE: You were a 25 year old male when your policy was issued, and you have a variable whole life policy with a $500 annual premium (standard rates). Assume a hypothetical gross annual investment return of 0% for the first 9 policy years. This results in a negative variable adjustment amount. A net return of approximately 31.3% in the 10th policy year would affect the cumulative negative variable adjustment amount so that it would equal zero. Any net return above that would produce a positive variable adjustment amount. On the other hand, the negative variable adjustment amount may be offset over a number of years. Thus, if the gross return in the 10th policy year was 8% (net return of 7.19%), a net return of 7.19% in each of the seven following policy years would be required to produce a positive variable adjustment amount by the 18th policy year. For a given net return, the greater the Account Value is in a division of the Separate Account, the greater the effect of investment experience on the variable adjustment amount. Therefore, in later policy years, when your total Account Value may be greater, investment experience may have a greater effect on the Death Benefit. NET RETURN. The Death Benefit based on the net return of a division of the Separate Account is set on each policy anniversary. The net return depends on the division's investment experience from the first day of that policy year to the first day of the next policy year. It takes into account investment income, capital gains and capital losses (whether realized or unrealized) with respect to Trust shares owned by the division of the Separate Account and gains resulting from the reimbursement by us to the division of amounts corresponding to certain Trust expenses. The charges against the division are then deducted to determine the net return. The net return on a date during a policy year depends on the investment experience of the division from the first day of that policy year to that date and can effect Account Values, Cash Surrender Values and Death Benefits. The net return of each division of the Separate Account is determined at the end of each business day. Generally, a business day is any day that we are open and the New York Stock Exchange is open. However, we are closed on Martin Luther King Day and the Friday after Thanksgiving Day. The assets of each division of the Separate Account are valued by multiplying the number of Trust shares in each Division by the net asset value of such shares and is adjusted by the charge for mortality and expense risks. See the financial statements for the Separate Account in this prospectus. The net return for a policy year is not the same as for a calendar year unless the policy anniversary is January 1. A statement of the method we use to calculate net return is an exhibit to the Registration Statement we filed with the SEC. It will be furnished on request. HOW THE DEATH BENEFIT VARIES. The following example shows how the Death Benefit varies from the guaranteed minimum as a result of investment experience. Assume that the insured was a 25 year old male when the policy was issued, that he has a variable whole life policy - -------------------------------------------------------------------------------- 14 - -------------------------------------------------------------------------------- VARIABLE ADJUSTMENT AMOUNT (continued) with a $500 annual premium (standard rates) and that the gross annual return for each of the first six policy years was 8% for each division or their combination (which is equal to a net return of 7.19%). Use the amounts from the "Illustrations Of Death Benefits, Account Values And Cash Surrender Values, And Accumulated Premiums" in Part 5. - -------------------------------------------------------------------------------- Variable Guaranteed Adjustment Death Minimum + Amount = Benefit - -------------------------------------------------------------------------------- End of policy year 5 $53,427 $ 775 $54,202 Increase -- 322 322(0.6%) - -------------------------------------------------------------------------------- End of policy year 6 $53,427 $ 1,097 $54,524 - -------------------------------------------------------------------------------- If the gross annual return in the sixth policy year had been 0% (equal to a net return of -.75%), the Death Benefit would have been $53,373 (a 1.2% decrease). This reflects a decrease in the variable adjustment amount of $629. - -------------------------------------------------------------------------------- ACCOUNT VALUES AND CASH SURRENDER VALUES HOW WE DETERMINE ACCOUNT VALUE. Your Account Value is the sum on any date of your Account Values in each division of the Separate Account in which your policy participates. There is no guaranteed minimum Account Value. If no premium is due and unpaid, your Account Value in a division equals the tabular Account Value (stated in the policy as of the end of each policy year) multiplied by the allocation percentage in effect, increased or decreased by the aggregate net single premium specified in the policy for the variable adjustment amount for that division. The tabular Account Value is what the Account Value for the policy would be if all of the divisions of the Separate Account in which you had funds had a constant net investment return of 4-1/2% a year. The premium allocation percentage is the percentage of your current net annual premium allocated to each of the divisions. The net single premium is the one-time net cost at your sex and attained age to purchase one dollar of Death Benefit, as specified in your policy. Adjustments during a year reflect a division's investment experience, the cost of insurance, premium payments, any indebtedness and any Account Value transfers. The Account Values for substandard risk policies and non-smoker policies are the same as for comparable standard risk policies. HOW WE DETERMINE CASH SURRENDER VALUE. Your policy's Cash Surrender Value will vary daily with investment experience. There is no guaranteed minimum Cash Surrender Value. Cash Surrender Value is the same as Account Value except in the first ten years of the policy. During the first ten policy years the Cash Surrender Value on any date will equal the tabular cash value (which is stated in your policy) increased or decreased by the net single premium for the variable adjustment amount for that division of the Separate Account. After the tenth policy year, the Cash Surrender Value will equal the Account Value. The difference between the Cash Surrender Value and the Account Value is a surrender charge. See "Surrender Charge". - -------------------------------------------------------------------------------- POLICY LOANS You may borrow money, using only your policy as security, up to the loan value of your policy. The loan value is a percentage of your Cash Surrender Value on the next premium due date with two adjustments. The first adjustment assumes that the net investment return is exactly 4-1/2% a year from the date of the loan to the next premium due date. The second adjustment is a discount at 5-1/2% a year from that due date back to the loan date. The maximum percentage of your adjusted Cash Surrender Value that you may borrow is 90% during the first ten policy years. It is 100% after the tenth policy year. If the policy has lapsed and is continued under either the fixed or variable reduced paid-up option on lapse, you may borrow up to 100% of the adjusted cash value. If you borrow your policy's entire loan value, you increase your risk of having your policy end. This might happen if the combination of policy loan interest (as it builds up), the cost of - -------------------------------------------------------------------------------- 15 POLICY LOANS (continued) insurance, asset charges against the Separate Account, and investment experience of the divisions of the Separate Account where you have Cash Surrender Value uses up the remaining value. See "Your Policy Can Lapse". Unless it is being used to pay premiums, we will not grant a loan that is not at least $100 more than any outstanding loan with accrued interest. The amount of your premium will not be affected by the fact you have a loan or by how you repay the loan. If a loan is made after the due date of a premium, that premium will be subtracted from the loan proceeds. If you request a loan in order to pay a premium, we will charge loan interest from the date we make the loan even if it is before the premium due date. HOW TO REQUEST A LOAN. You may request a loan by contacting our regional Life Insurance Center. We allocate a loan based on the net Cash Surrender Value in each division of the Separate Account on the date the loan is made. We reallocate loans if you transfer Account Value. Whenever the loan with accrued interest from one division equals or exceeds the Account Value in that division, that division will become inactive for your policy. We will transfer the total Account Value and loan allocation to the other divisions. See "Other Policy Transactions -- When A Division Becomes Inactive". REPAYMENT. You may repay all or part of any outstanding loan with accrued interest at any time while the policy is in effect and the insured is alive. Your repayment, whether full or partial, will be allocated among the divisions of the Separate Account in proportion to the loan allocation to each division at the time of repayment. The amount of any outstanding loan with accrued interest will be deducted from the Death Benefit or Cash Surrender Value proceeds. POLICY LOAN INTEREST. You decide whether interest on your policy loan will be charged at a fixed rate of 5-1/2% or an adjustable loan interest rate. The adjustable rate is determined as of the beginning of each policy year, and will apply to any new or outstanding loan during that year. The adjustable rate will be the greater of (i) 5-1/2%, or (ii) the Monthly Average Corporate yield shown in the Corporate Bond Yield Averages published by Moody's Investors Services, Inc., for the month ending two months before the beginning of the policy year. However, if you have elected an adjustable loan interest rate, it will be the same for a policy year after the first as it was for the immediately preceding policy year if the formula above would produce a change of less than 1/2 of 1% from the rate applicable to your policy for the preceding year. Interest is charged daily and is payable by the policyowner on each anniversary. However, if it is not paid, it will be compounded on the policy anniversary because it will be added to the loan principal. As to the deductibility of loan interest, see "Tax Effects -- Policy Proceeds" in Part 4. THE EFFECT OF A POLICY LOAN. A loan against your policy will have a permanent effect on your Death Benefit, Account Value and Cash Surrender Value under this policy, even if the loan is repaid. When you take out a loan, we transfer part of the Cash Surrender Value equal to the amount of the loan from the divisions of the Separate Account in which your policy participates to our General Account. This amount is set aside as security for your loan. In addition, unpaid interest on the policy loan will be transferred to our General Account from time to time. The amount taken out of the divisions of the Separate Account will neither be affected by the divisions' investment experience nor be subject to the charges described in "Charges Against The Separate Account", while the loan is outstanding. However, you will earn a return on this amount. If you have chosen the fixed interest rate alternative, we will credit your policy with a 4-1/2% annual return on any amount transferred to our General Account as a result of your policy loan. This can protect Cash Surrender Value and Death Benefits from decreasing if investment experience is below 4-1/2%. It will also prevent them from increasing if investment experience is above 4-1/2%. If you have chosen an adjustable loan interest rate, we will credit your policy with a rate of return which is 0.75% below the interest rate that is charged as a result of your policy loan, - -------------------------------------------------------------------------------- 16 POLICY LOANS (continued) minus any charges for taxes or amounts set aside as a provision for taxes. (We are not making charges for taxes or provisions for taxes now but we may make such charges in the future. See "Tax Effects -- Our Income Taxes" in Part 4.) For example, if the adjustable loan interest rate were 10%, the credit rate would be 9.25%. If the adjustable loan interest rate were below 5-1/2%, the actual interest rate would be 5-1/2% and the credit rate would be 4.75%. Any amounts credited over 4-1/2% will increase your policy's Death Benefit, Account Value and Cash Surrender Value. If you elect the adjustable loan interest rate, you will bear the additional risk connected with changes in the annual credit rate. If the adjustable loan interest rate less 0.75% (and less any charge for taxes or provision for taxes) is greater than the net return for that year of the divisions of the Separate Account in which you have Account Value, then the Death Benefit and Cash Surrender Value for that year will be greater than if no loan were made. The reverse would also be true. EXAMPLE: You were a 25 year old male when your policy was issued, and you have a variable whole life insurance policy with a $500 annual premium (standard rates). Use the illustration in Part 5, and assume an 8% gross annual investment return for each Division or their combination (which is a net return of 7.19%). Assume that at the beginning of the 10th policy year the Adjustable Loan Interest Rate is 9.79% (the actual rate for June, 1986). If you take a loan for $3,000 at the beginning of the 10th policy year, it will affect the Death Benefit, Account Value and Cash Surrender Value (before subtracting the amount of the loan with loan interest) in the 10th policy year as follows: - -------------------------------------------------------------------------------- With Loan With Loan Without Loan (Fixed Rate) (Applicable Rate) - -------------------------------------------------------------------------------- Death Benefit $56,372 $55,999 $56,628 Account Value 4,615 4,534 4,670 Cash Surrender Value 4,615 4,534 4,670 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION ABOUT ADJUSTABLE RATES. We will notify you of the initial interest rate at the time a loan is made under the adjustable loan interest rate election. Initial loan interest rates are also available on request. We will also notify you in advance of each policy anniversary of the interest rate for the following policy year. You may cancel your election of the adjustable loan interest rate in writing at any time, but the request will not take effect until the next policy anniversary. When the cancellation takes effect, the loan rate will revert to the fixed rate of 5-1/2%. Election or re-election of the adjustable loan interest rate may be made in writing at any time but will not take effect until the next policy anniversary even if no loan is outstanding. Not all states have laws permitting adjustable policy loan interest rates. Some states permit adjustable rates but set maximums. Some states do not permit cancellation of an adjustable loan interest rate provision, and there are other variations from state to state. For details about the policy loan interest rate laws in your state, contact your agent or your regional Life Insurance Center. - -------------------------------------------------------------------------------- OTHER POLICY TRANSACTIONS RETURNING THE POLICY FOR CASH. During the insured's lifetime, and subject to our rules, your policy can be returned for payment of the Cash Surrender Value net of any indebtedness. The amount payable will be based on the net Cash Surrender Value next computed after we receive your signed request for payment of the Cash Surrender Value at your regional Life Insurance Center, accompanied by your policy. The insurance coverage will end on the date you send us the policy and your request. As an alternative to surrendering your policy, you may request to split your policy into two policies. You may then return one policy for cash and continue the other based on the new initial face amount. If you split a policy, each policy we continue must have a face amount of at least $50,000. The premium for the policy that continues will be based on the new initial face amount but the same age, sex and risk class as the original policy. These are our current procedures, which may change. - -------------------------------------------------------------------------------- 17 - -------------------------------------------------------------------------------- OTHER POLICY TRANSACTIONS (continued) TRANSFERS AMONG INVESTMENT CHOICES. You may transfer Account Value among the divisions by contacting our regional Life Insurance Center. You may transfer all or part of your Account Value among the divisions of the Separate Account up to four times in a policy year. A transfer will go into effect on the day we receive your request. When Account Value is transferred a portion of the net annual premium is transferred as well. We reallocate loans if you transfer Account Value. WHEN A DIVISION BECOMES INACTIVE. If you have a policy loan allocated to a division of the Separate Account and your Account Value plus remaining net annual premium less your loan (including accrued loan interest) in that division reaches zero, that division will become inactive for your policy. We will reallocate the loan to the other divisions of the Separate Account based on the proportions that your unloaned amounts in each of the other divisions bears to the unloaned amount of your total Account Value. A division will also become inactive for your policy if you transfer its entire Account Value to the other divisions. We will notify you when a division becomes inactive. If a division of the Separate Account becomes inactive, the future variable adjustment amount, Account Value and net return will be affected. We will assume that you do not want to put any part of future net annual premiums into the inactive division. You can request us to put any part of a future net annual premium into the inactive division effective on the next policy anniversary after your request is received. You may also transfer Account Value into an inactive division from the other divisions. - -------------------------------------------------------------------------------- YOUR RIGHT TO EXAMINE THE POLICY You have a right to examine the policy. If for any reason you are not satisfied with it, you may cancel it by returning the policy to your regional Life Insurance Center with a written request for cancellation. We will give you a full refund (guaranteed by Equitable) of the premiums paid if your request and policy are postmarked by the latest of the following: o 10 days after you receive your policy; or o 10 days after we mail a written Notice of Withdrawal Right; or o 45 days after Part 1 of the policy application was signed. Insurance coverage ends when you send your request. - -------------------------------------------------------------------------------- YOUR RIGHT TO EXCHANGE THE POLICY You may exchange The Champion policy for a fixed whole life insurance policy on the life of the insured. The new policy will be our Life Account(TM) policy on a level premium whole life plan with premiums payable for life. You have this right for 24 months from the date your policy is issued, but only if no premium remains due and unpaid. The exchange will be effective when we receive your request, accompanied by your policy and an application for the fixed policy. We will not require evidence of the insured's insurability before an exchange. The new policy's face amount will be the same as the initial face amount of The Champion policy. It will also have the same register date, date of issue and risk class. The premium for the new policy will be that in effect on the register date for the same sex, age and risk class. There will be a cash adjustment on exchange. The adjustment will reflect the difference in premiums between the two policies. Since the exchange is based on premiums, the surrender charge will have no effect. There will also be an adjustment for the difference in the rates of return credited to the two policies because the Life Account policy has declared rates of return. We will refund or bill you for any amount due. We have filed a description of the method we use to calculate the adjustment with the appropriate state insurance officials. Any policy loan with accrued interest must be repaid before the exchange. The exchange is also subject to limits described in the policy. - -------------------------------------------------------------------------------- 18 - -------------------------------------------------------------------------------- YOUR POLICY CAN LAPSE Your policy can lapse if you fail to pay premiums or if the unpaid portion of any amount you have borrowed under your policy plus any unpaid loan interest exceeds the Cash Surrender Value of your policy. If your policy lapses within the first ten policy years you will incur a surrender charge. See "Surrender Charge". We allow a grace period of 31 days to pay each premium after the first one. Insurance will continue during the grace period, but we will deduct one month's premium from the Death Benefit if the insured dies during the grace period. If a premium has not been paid by the end of the 31-day grace period, the policy will lapse as of the date the premium was due. When a policy lapses, any riders will end. All insurance may end unless the policy's net Cash Surrender Value is used under a continued insurance option on lapse. Whenever the unpaid portion of any amount you have borrowed under your policy plus unpaid loan interest exceeds the Cash Surrender Value of your policy, we will send a notice to you and to anyone to whom you told us you assigned the policy. The policy will end 31 days after we send the notice unless you make a repayment during the 31-day period that is large enough to reduce your outstanding loan with accrued interest to below the total Cash Surrender Value of your policy. - -------------------------------------------------------------------------------- OPTIONS ON LAPSE If a policy lapses because a premium remains due and unpaid beyond its 31-day grace period, you may use one of the following options. A key element in these options is your policy's net Cash Surrender Value on any day for a period of up to three months after the unpaid premium was due. If you elect the reduced paid-up variable insurance option, the Cash Surrender Value used is on the date of lapse. Net Cash Surrender Value is Cash Surrender Value minus any policy loans with accrued interest on the date an option is used. If your policy has no net Cash Surrender Value, you cannot use the options. PAYMENT OF CASH OPTION. You can withdraw the net Cash Surrender Value and receive payment in cash. CONTINUED INSURANCE OPTION. Within three months from the date a policy lapses (which is the date the unpaid premium was due), you can use its net Cash Surrender Value to obtain one of two types of fixed life insurance plans. These are fixed reduced paid-up insurance or extended term insurance. If it is at least $5,000, you may also use your policy's net Cash Surrender Value to obtain a variable life insurance plan. This plan is variable reduced paid-up insurance. You will not have to pay any additional premium on any option because you are, in effect, using the net Cash Surrender Value of your variable life policy to buy continued life coverage. If we do not receive a written request to use the fixed or variable reduced paid-up insurance option within three months after lapse, extended term insurance will automatically go into effect. The extended term insurance option may not be available under your policy if the insured's risk class is not at least standard. If so, that fact will be stated on page 3 of the policy and fixed reduced paid-up insurance will apply instead. If the insured dies after the grace period but within three months of the date of lapse, the fixed continued insurance option that would provide the greater benefit will automatically apply, regardless of any restriction stated on page 3 of the policy. Here are details on the three types of plans offered under our continued insurance option. o REDUCED PAID-UP VARIABLE INSURANCE. You may use the net Cash Surrender Value to buy reduced paid-up variable whole life insurance. The net Cash Surrender Value available to purchase this option must be at least $5,000. The net Cash Surrender Value determines the face amount that can be purchased at the insured's age at the time of purchase. Reduced paid-up variable insurance has cash value. The cash value and death benefit will go up or down depending on the investment experience of the divisions of the Separate Account where you have cash value. The death benefit under this option has no guaranteed minimum. You may use the net cash value during the insured's lifetime for a loan or for cash payment. You may transfer cash value among the divisions up to four times in one year. - -------------------------------------------------------------------------------- 19 - -------------------------------------------------------------------------------- OPTIONS ON LAPSE (continued) EXAMPLE: You are a 30 year old male. Your variable life policy was issued when you were 25 and you have paid five $2,000 annual premiums. Use the illustration in Part 5, and assume a 4% gross annual investment return for each division of the Separate Account or their combination. At the end of the fifth policy year, your net Cash Surrender Value could buy reduced paid-up variable whole life insurance with an initial face amount of $36,318. After the fifth policy year, the face amount will continue to vary depending on the investment experience of the divisions in which the cash value is invested. There is no guaranteed minimum Death Benefit or Cash Value. o REDUCED PAID-UP FIXED INSURANCE. You may use the net Cash Surrender Value to buy reduced paid-up fixed whole life insurance. The net Cash Surrender Value determines the face amount that can be purchased at the insured's age at the time of purchase. Paid-up insurance has cash value. You may use the net cash value during the insured's lifetime for a loan or for cash payment. EXAMPLE: You are a 30 year old male. Your variable life policy was issued when you were 25 and you have paid five $500 annual premiums. Use the illustration in Part 5, and assume a 4% gross annual investment return for each division of the Separate Account or their combination. At the end of the fifth policy year, your net Cash Surrender Value could buy reduced paid-up fixed whole life insurance with a face amount of $7,705 for life. o EXTENDED TERM INSURANCE. If the insured's risk class is at least standard, you may use the net Cash Surrender Value to buy extended term insurance. The face amount will equal the Death Benefit under your variable life policy on the date of lapse minus any unpaid loan with accrued interest. The net Cash Surrender Value determines how long coverage will last at the insured's then attained age. It will last at least 90 days if the premium has been paid on the variable life policy for three months before lapse and there is no policy loan. Extended term coverage has cash value, but it cannot be used for a loan. EXAMPLE: Assume the same facts as in the previous example. At the end of the fifth policy year, your net Cash Surrender Value could buy fixed extended term insurance with a face amount of $53,427 for a term of 11 years and 125 days. REINSTATEMENT OPTION. You may request that we reinstate the policy during the insured's lifetime. You must make this request within five years after lapse. We will not reinstate the policy if it has been returned for its net Cash Surrender Value. Before we will reinstate, we must receive evidence satisfactory to us of the insured's insurability. We must also receive the larger of all due and unpaid premiums with interest at 6% a year; or an amount equal to: o the Cash Surrender Value just after reinstatement, MINUS o the cash value of the option just before reinstatement, and further MINUS o any policy loan with accrued interest at the annual loan interest rate compounded daily to the date of reinstatement, TIMES o 110%. If we do reinstate, the policy will have the same variable adjustment amount and premium allocation between the divisions of the Separate Account as if there had been no lapse. If a policy has enough Cash Surrender Value at the time it lapses, it might be possible to reinstate it by requesting a policy loan for that purpose. - -------------------------------------------------------------------------------- POLICY PERIODS, ANNIVERSARIES, DATES AND AGES Policy years and policy anniversaries are measured from the register date shown on page 3 of the policy when issued. The register date is the day the net annual premiums you allocate to the divisions of the Separate Account first become subject to charges and begin to vary with the investment experience of the divisions. As to when insurance coverage under a policy starts, see "Death Benefits". The time between submission of an application and the register date will vary, depending on the underwriting and other requirements for issuing a particular policy. The register date will be the application date if the full first premium is paid with the application and no medical evidence is required. Otherwise the register date will normally be the date we receive the latest of the application, the full first premium and any required medical evidence. The issue date, shown on page 3 of the policy when issued, is the date your policy is actually issued. Both the contestibility and suicide exclusion periods are measured from the issue date. See "Limits On Our Right To Challenge The Policy". - -------------------------------------------------------------------------------- 20 - -------------------------------------------------------------------------------- LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY We can challenge the validity of your insurance policy based on material misstatements in the application. However, we cannot challenge the validity of the policy after it has been in effect during the insured's lifetime for two years from the date of issue or reinstatement (unless another date is required by law). We can challenge at any time any rider that provides benefits in the event of total disability. If death occurs within the time we can challenge validity, our payment will generally be delayed while we determine whether to make such a challenge. If the insured's age or sex is misstated in the policy application, the Death Benefit will be what the premium paid would have purchased based on the insured's true age and sex. If the insured commits suicide within two years from the date the policy was issued or reinstated (or less where required by law), the Death Benefit will be limited to the sum of all premiums paid minus outstanding policy loans with loan interest. - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION ABOUT THE CHAMPION WHEN WE PAY PROCEEDS. Payment of the Death Benefit, Cash Surrender Value (net of indebtedness) or loan proceeds will be made within seven days after we receive the required form or request (and other documents that may be required for payment of the Death Benefit) at your regional Life Insurance Center. The Death Benefit is determined as of the date of death and will not be affected by the subsequent investment experience of the divisions of the Separate Account. We pay interest from the date of death to the date of payment at an annual rate greater than or equal to the rate we are paying under the deposit option described in "Payment Options" below. If an Equitable agent is assisting the beneficiary in preparing the documents required for payment of the Death Benefit, we will send the check to the agent within seven days after we receive all required documents. The agent will then deliver the check to the beneficiary. But we can delay payment if: o we contest the policy; o it is not reasonably practicable to determine the amount because the New York Stock Exchange is closed, trading is restricted by the SEC, or the SEC declares that an emergency exists; or o the SEC, by order, permits us to delay to protect our policyowners. If your policy is being continued as fixed reduced paid-up or extended term insurance, we can delay payment of a loan or cash value for up to six months. We will pay at least 3% interest a year if we delay paying the Cash Surrender Value or loan proceeds more than 30 days. YOUR PAYMENT OPTIONS. The Death Benefit or the Cash Surrender Value may be paid (net of indebtedness) in one sum or you may choose another form of payment for all or part of the money. Payments under these options are not affected by the investment experience of any investment division of the Separate Account. Instead, interest accrues pursuant to the options chosen. If you do not arrange for a specific form of payment before the insured dies, the beneficiary will have this choice. However, if you do make an arrangement with us for how the money will be paid, the beneficiary cannot change the choice after the insured dies. Payment options will also be subject to our rules at the time of selection. Currently, these alternate payment options are only available if the proceeds applied are $2500 or more and if any periodic payment will be at least $25. You have the following payment options: o DEPOSIT OPTION: The money will stay on deposit with us for a period agreed upon. You will receive interest on the money at a declared interest rate. o INSTALLMENT PAYMENT OPTIONS: There are two ways that we pay installments: FIXED PERIOD: We will pay the amount applied in equal installments plus applicable interest, for a specific number of years (not more than 30). FIXED AMOUNT: We will pay the sum in installments in an amount agreed upon. We will pay the installments until we pay the original amount, together with any interest earned. - -------------------------------------------------------------------------------- 21 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION ABOUT THE CHAMPION (continued) o MONTHLY LIFE INCOME OPTION: We will pay the money as monthly income for life. You may choose any one of three ways to receive the income: We will guarantee payments for at least 10 years (called "10 Years Certain"); at least 20 years (called "20 Years Certain"); or until the payments we make equal the original sum (called "Refund Certain"). o OTHER: You may ask us to apply the money under any option that we make available at the time the Death Benefit or Cash Surrender Value is paid. We guarantee interest under the Deposit Option at the rate of 3% a year, and under either Installment Option at 3-1/2% a year. We may also credit interest under the Deposit Option and under either Installment Option at a rate that is above the guaranteed rate. The beneficiary or any other person who is entitled to receive payment may name a successor to receive any amount that we would otherwise pay to that person's estate if that person died. The person who is entitled to receive payment may change the successor at any time. We must approve any arrangements that involve more than one of the payment options, or a payee who is not a natural person (for example, a corporation), or a payee who is a fiduciary. Also, the details of all arrangements will be subject to our rules at the time the arrangements take effect. This includes rules on the minimum amount we will pay under an option, minimum amounts for installment payments, withdrawal or commutation rights (your rights to receive payments over time, for which we may offer a lump sum payment), the naming of people who are entitled to receive payment and their successors, and the ways of proving age and survival. You will make a choice of payment option (or any later changes) and your choice will take effect in the same way as it would if you were changing a beneficiary. (See "Beneficiary" below). Any amounts that we pay under the payment options will not be subject to the claims of creditors or to legal process, to the extent that the law provides. ADDITIONAL BENEFITS YOU MAY GET BY RIDER. Your policy can include additional benefits that we approve based on our standards for issuing insurance and classifying risks. An additional benefit requires an additional premium. An additional benefit is provided by a rider that is subject to the terms of the policy. The following riders are available. o WAIVER OF PREMIUM RIDER. With this rider, we will waive the premium if the insured person becomes totally disabled and the disability continues for six months. The disability must start before the policy anniversary nearest the insured's 60th birthday. If disability starts after that, we will waive the premium only up to the policy anniversary nearest the insured's 65th birthday. o ACCIDENTAL DEATH BENEFIT RIDER. With this rider, we will pay a benefit if the insured dies from an accidental bodily injury before the policy anniversary nearest his or her 70th birthday. o OPTION TO PURCHASE ADDITIONAL INSURANCE RIDER. With this rider, you have the right to buy additional insurance on the life of the insured at certain future dates. We will not require evidence of the insured's insurability when you use your right to buy additional insurance. o SUPPLEMENTAL PROTECTIVE BENEFIT RIDER. With this rider, we will waive the premium if the insured is a child under age 15 on the date of issue and: the person who applied for the policy dies; or the person who applied for the policy is totally disabled for at least six months before the policy anniversary nearest his or her 60th birthday. We will waive the premium only while the disability continues. In any case, we will not waive the premium that is due after the policy anniversary nearest the insured's 25th birthday. o TERM INSURANCE RIDER. Several types of riders are available that provide for term insurance on the life of the insured or an additional insured. - -------------------------------------------------------------------------------- 22 - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION ABOUT THE CHAMPION (continued) BENEFICIARY. You name your beneficiary when you apply for your policy. You may change the beneficiary during the insured's lifetime by writing to your regional Life Insurance Center. If no beneficiary is living when the insured dies, the Death Benefit will be paid in equal shares to the insured's surviving children. If there is no surviving child, the Death Benefit will be paid to the insured's estate. ASSIGNMENT. You may assign the policy as collateral for a loan or other obligation. We are not responsible for any payment we make or action we take before we receive a copy of the assignment at your regional Life Insurance Center. PREMIUM PAYMENTS BY SALARY ALLOTMENT. If your employer permits you to pay insurance premiums by deduction from your salary, and you choose to do so, we may offer you temporary fixed insurance in the amount applied for (subject to a maximum of $250,000). This insurance will be without charge (except that a premium will be deducted from any fixed death benefit). Once we receive the first payment from your employer, the fixed insurance will be discontinued and The Champion policy will begin. EMPLOYEE BENEFIT PLANS. Employers and employee organizations should consider, in consultation with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase of The Champion in connection with an employment-related insurance or benefit plan. The United States Supreme Court held, in a 1983 decision, that, under Title VII, optional annuity benefits under a deferred compensation plan could not vary on the basis of sex. YOU WILL RECEIVE PERIODIC REPORTS. As a policyowner, you will receive an annual statement about your policy giving you the status as of the first day of the current policy year of: o the way the net annual premium is divided among the divisions of the Separate Account; o the Death Benefit; o the Account Value and Cash Surrender Value; and o your outstanding policy loans. Notice will also be sent to your for policy issuance, transfers of funds among divisions of the Separate Account and certain other policy transactions. We will not send you an annual statement for any year your policy is in effect under extended term insurance or reduced paid-up fixed insurance. You will receive a billing notice each year showing accrued interest for the past policy year if you have a policy loan outstanding. We will also send you semiannual and annual reports with financial information on the Separate Account and the Trust (including a list of the investments held by each Portfolio in which the divisions of the Separate Account invest) as required by the 1940 Act. DIVIDENDS. No dividends will be paid on The Champion policy. - -------------------------------------------------------------------------------- 23 - -------------------------------------------------------------------------------- PART 4 -- ADDITIONAL INFORMATION - -------------------------------------------------------------------------------- TAX EFFECTS POLICY PROCEEDS. The Tax Reform Act of 1984 (1984 Act) includes a definition of life insurance for tax purposes. Generally, The Champion policy meets this definition of life insurance and receives the same Federal income tax treatment as fixed benefit life insurance. Thus: o Death Benefits under The Champion policy will generally be excludable from the gross income of the beneficiary under Section 101(a)(1) of the Internal Revenue Code (Code) and o the policyowner will not generally be considered to have received any increases in the Account Value due to interest or investment experience before a surrender or lapse of the policy. In general, if you surrender your policy or allow it to lapse, you will not be taxed on the amount you receive, except for the portion that, together with any unpaid loan and loan interest, exceeds the premiums you have paid. A split of the policy into two policies followed by a return of one for cash, or an exchange referred to under "Your Right To Exchange The Policy" in Part 3, may result in taxable income to the policyowner depending on the circumstances. We suggest you consult your tax adviser. The 1984 Act also gives the Secretary of the Treasury authority to set standards for diversification of the investments underlying variable life insurance policies in order for such policies to be treated as life insurance. On September 15, 1986, Treasury issued temporary regulations regarding the diversification requirements. Failure to meet these diversification requirements would disqualify The Champion as a variable life insurance policy under Section 7702 of the Code. If this were to occur, you would be taxed on the amount your Account Value exceeds the premiums you have paid. We believe that the investments underlying The Champion are in compliance with the requirements. We do not anticipate any problems with the investments continuing to meet the requirements. You will not be taxed on amounts transferred among investment choices within your Policy Account. We also believe that loans received under the policies will be treated as indebtedness of the policyowner, and that no part of any loan under a policy will constitute income to the owner. Generally, a portion of the interest on loans under life insurance policies (other than single premium policies) is deductible subject to certain limitations. For future years, most policy loan interest will no longer be deductible. See "Tax Reform" below. Death Benefits under The Champion policy will generally be includable in the estate of the insured for purposes of Federal estate tax. Federal estate tax is integrated with Federal gift tax under a unified gift rate schedule. Federal estate tax is imposed on distributions at graduated rates from 37% to 55% (with the maximum rate applying to distributions in excess of $3,000,000). In general, estates not in excess of $600,000 are exempt from Federal estate tax. In addition, an unlimited marital deduction applies for Federal estate tax purposes. The individual situation of each policyowner or beneficiary will determine how ownership or receipt of policy proceeds will be treated for purposes of Federal estate tax as well as state and local estate, inheritance and other taxes. Again, we suggest you consult your tax adviser. See the prospectus for the Trust for a discussion of the Trust's tax aspects, including the diversification requirements. PENSION AND PROFIT-SHARING PLANS. If policies are purchased by a trust which forms part of a pension or profit sharing plan qualified under Section 401(a) of the Code for the benefit of participants covered under the plan, the Federal income tax treatment of such policies will be somewhat different from that described above. We suggest you consult your legal or tax adviser. If purchased as part of a pension or profit-sharing plan, the current cost of insurance for the net amount at risk is treated as a "current fringe benefit" and is required to be included annually in the plan participant's gross income. This cost (generally referred to as the "P.S. 58" cost) is reported to the participant annually as an addition to wages and salaries on the Form W-2 furnished by the employer who is maintaining the plan. Second, if the plan participant dies while covered by the plan and the policy proceeds are paid to the participant's beneficiary, then the excess of the Death Benefits over the Account Value will not be subject to Federal income tax. However, the Account Value will be taxable to the extent it exceeds the sum of $5,000 plus the participant's cost basis in the policy. The participant's cost basis will include the costs of insurance previously reported on the participant's Form W-2. Special rules may apply if the participant had borrowed from his policy or was an owner-employee under the plan. - -------------------------------------------------------------------------------- 24 - -------------------------------------------------------------------------------- There are limits on the amount of life insurance that may be purchased on behalf of a participant in a pension or profit-sharing plan. Complex rules, in addition to those discussed above, apply whenever life insurance is purchased by a tax qualified plan. We suggest you consult your legal or tax adviser prior to purchase of this policy by a pension or profit-sharing plan. - -------------------------------------------------------------------------------- TAX EFFECTS (continued) OUR INCOME TAXES. Under the life insurance company tax provisions of the Code, as amended by the 1984 Act, variable life insurance is treated in a manner consistent with fixed life insurance. The operations of the Separate Account are included in the Federal income tax return of Equitable Variable. Under current tax law, Equitable Variable pays no tax on investment income and capital gains reflected in variable life insurance policy reserves. Consequently, no charge is currently being made to the divisions of the Separate Account for our Federal income taxes. We reserve the right, however, to make such a charge in the future, if the law changes and we incur Federal income tax which is attributable to the Separate Account. If such a charge is made, it would be set aside as a provision for taxes which we would keep in the affected Division rather than in our general account. We anticipate that our variable life policyowners will benefit from any investment earnings that are not needed to maintain this provision. We may have to pay state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not substantial. If they increase, however, charges may be made for such taxes when they are attributable to the Separate Account. TAX REFORM. Under the Tax Reform Act of 1986, the deduction for policy loan interest is being phased out over a five year period (35% of such interest would not be deductible in 1987, 60% in 1988, 80% in 1989, 90% in 1990 and 100% in 1991). Interest on loans taken under policies purchased or carried as part of a trade or business is subject to special rules. INCOME TAX WITHHOLDING. Federal tax law requires us to withhold income tax from any portion of your surrender proceeds that is subject to tax, unless you request us not to withhold. If you surrender your policy and do not advise us in writing that you do not want us to withhold Federal income tax before the date payment must be made, we are required by law to withhold tax from the surrender payment. If you elect not to have tax withheld from the surrender payment, or if the mount of Federal income tax withheld is insufficient, you may be responsible for payment of tax. You may incur penalties under the tax rules if your withholding and estimated tax payments are not sufficient. You may wish to consult you tax adviser. - -------------------------------------------------------------------------------- YOUR VOTING PRIVILEGES GENERAL. As we have already said, all assets held in the divisions of the Separate Account are invested in shares of the corresponding Portfolios of the Trust. We are the legal owners of those shares and as such have the right to vote upon certain matters at any meeting of the Trust's shareholders that may be held. Among other things, we may vote on any matters described in the Trust's prospectus or Statement of Additional Information that require a shareholder vote or requiring a vote by shareholders under the Investment Company Act of 1940. However, in accordance with our view of current Federal securities law requirements, we will offer you the opportunity to instruct us as to how Trust shares allocable to your policy and held by us in the Separate Account will be voted on these matters. We will vote the shares of the Trust at meetings of shareholders of the Trust in accordance with your instructions. Thus, you will have the right to have a voice in the affairs of the Trust. Trust shares held in each division of the Separate Account for which no timely instructions from policyowners are received will be voted by us in the same proportion as shares in that division for which instructions are received. We will also vote any Trust shares that we are entitled to vote directly due to amounts we have accumulated in the Separate Account in the same proportions that all policyowners vote, including those who participate in other Separate Accounts. See "Your Voting Privileges -- Voting Privileges of Others". - -------------------------------------------------------------------------------- 25 - -------------------------------------------------------------------------------- YOUR VOTING PRIVILEGES (continued) Each policy having a voting interest will be sent proxy material and a form for giving voting instructions. If required by state insurance officials, we may disregard voting instructions if those instructions would require shares to be voted so as to cause a change in the investment objectives or policies of one or more of the Trust's Portfolios, or to approve or disapprove an investment policy or investment adviser of one or more of the Trust's Portfolios. In addition, we may disregard voting instructions in favor of changes initiated by a policyowner or the Trust's Board of Trustees in the investment policy or the investment adviser of a Portfolio, provided that our disapproval of the change is reasonable and is based on a good faith determination that the change would be contrary to state law, the proposed advisory fee would be higher than we are permitted to pay by the terms of our variable life policies, or the charge would lead to an adverse effect on our general account because it would result in unsound or overly speculative investments. We will advise policyowners if we do disregard voting instructions, and give our reasons for such actions in the next semiannual report we send to policyowners. All Trust shares of whatever class are entitled to one vote, and the votes of all classes are cast on an aggregate basis, except on matters where the interests of the Portfolios differ. In such a case, the voting is on a Portfolio-by-Portfolio basis. Approval or disapproval by the shareholders in one Portfolio on such a matter would not generally be a prerequisite of approval or disapproval by shareholders in another Portfolio; and shareholders in a Portfolio not affected by a matter generally would not be entitled to vote on that matter. Examples of matters which would require a Portfolio-by-Portfolio vote are changes in the fundamental investment policy or restrictions of a particular Portfolio and approval of the investment advisory agreement. VOTING PRIVILEGES OF OTHERS. Currently, we control the Trust. Trust shares are held by other separate accounts of ours and by separate accounts of insurance companies affiliated or unaffiliated with us. Shares held by these separate accounts will probably be voted according to the instructions of the owners of insurance policies and contracts issued by those insurance companies. While this will dilute the effect of the voting instructions of owners of The Champion, we currently do not foresee any disadvantages to our policyowners arising out of this. The Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the Trust's response to any of those events insufficiently protects our policyowners, we will see to it that appropriate action is taken to protect our policyowners. DETERMINING YOUR VOTE. If all your Account Value is in one division of the Separate Account, you can only participate in the voting of the shares in the Portfolio that corresponds to that division. If your Account Value is divided among the divisions, you are entitled to participate in the voting of the shares of each of the Portfolios which correspond to those divisions. The number of Trust shares held in each division of the Separate Account attributable to your policy for purposes of your voting privilege will be determined by dividing your policy's Account Value (less any policy indebtedness) allocable to that division by the net asset value of one share of the corresponding Portfolio as of the record date for the Trust's shareholder meeting. The record date for this purpose will not be more than 90 days before the meeting of the Trust. Fractional shares are counted. EXAMPLE: Your policy has an Account Value of $3,000, 50% of which is attributable to the Common Stock Division and 50% of which is attributable to the Money Market Division. Assuming the net asset value of one share in each Trust Portfolio is $100, you would have the privilege of voting 30 shares. You will have the privilege of instructing us regarding 15 votes in each of these divisions. EXAMPLE (ASSUMING AN OUTSTANDING LOAN): Assuming the same facts as in the preceding example and also that you have a $1,000 loan (including interest) equally allocated between the Common Stock and Money Market Divisions, you would be entitled to 10 votes in each of these Divisions, or an aggregate of 10 fewer votes. - -------------------------------------------------------------------------------- 26 - -------------------------------------------------------------------------------- YOUR VOTING PRIVILEGES (continued) LAW CHANGES MAY AFFECT YOUR VOTING PRIVILEGES. The Separate Account is required by Federal securities laws or regulations as currently interpreted to have policyowners instruct us as to the Trust's voting rights. However, if amendments to or interpretations of those laws or regulations change what must be voted on, or restrict the matters for which policyowners are given the opportunity to provide voting instructions, we will in turn change what is submitted to policyowners. - -------------------------------------------------------------------------------- OUR RIGHTS We reserve the right to take certain actions in connection with our operations and the operations of the Separate Account. We will always attempt to comply with applicable laws before we take any of these actions. If necessary, we will seek approval by policyowners. Specifically, we reserve the right to: o add divisions to or remove divisions from the Separate Account; o combine any two or more divisions within the Separate Account; o transfer assets of the variable life policy offered by this prospectus, as well as the assets of our other variable life policies, from one division to another (if we do, we will withdraw proportional amounts of each investment in the division, but we will also make whatever adjustments are needed to avoid odd lots and fractions); o operate the Separate Account as a management investment company under the 1940 Act, or in any other form the law allows (if we do, we may invest the assets in any legal investments and we or one of our affiliates, such as Equitable Capital, will serve as investment adviser and charge the Separate Account an advisory fee); o end the registration of the Separate Account under the 1940 Act; o operate the Separate Account under the general supervision of a committee made up of individuals all of whom may be, under the 1940 Act, interested persons of us or of Equitable or discharge such committee. SUBSTITUTION OF TRUST SHARES. Although we believe it to be highly unlikely, it is possible that, in our judgment, one or more of the Portfolios of the Trust may become unsuitable for investment by the Separate Account because, for example, of a change in investment policy, or a change in the tax laws, or because the shares are no longer available for investment. For those or other reasons, we may seek to substitute the shares of another Portfolio or of an entirely different mutual fund. Before we can do this, we would obtain the approval of the SEC, and possibly one or more state insurance departments, to the extent legally required. - -------------------------------------------------------------------------------- SALES AND OTHER AGREEMENTS Equitable Variable and Integrity Life Insurance Company, a wholly-owned subsidiary of Equitable, are the principal underwriters for the Trust pursuant to a Distribution Agreement. Under the Distribution Agreement, we have entered into a Sales Agreement with Equitable by which Equitable will distribute our policies. Both Equitable Variable and Equitable are registered with the SEC as broker-dealers under the Securities Exchange Act of 1934 and we are each a member of the National Association of Securities Dealers, Inc. We are also the principal underwriter for our policies funded through our Separate Account I and our other policies funded through our Separate Account FP, which is also a registered investment company. (Equitable may also be deemed a principal underwriter for our policies.) SALES BY AGENTS OF EQUITABLE. We sell The Champion policy through agents who are licensed by state insurance officials to sell our variable life policies. These agents are also registered representatives of Equitable. Under the Sales Agreement, agents receive commissions from Equitable for selling our policies. We reimburse Equitable for these commissions. We also reimburse Equitable for other expenses incurred in marketing and selling our policies. These expenses include agency and district managers' compensation, agents' training allowance, deferred compensation, insurance benefits of agents and agency and district managers, and agency clerical and advertising expenses. - -------------------------------------------------------------------------------- 27 - -------------------------------------------------------------------------------- SALES AND OTHER AGREEMENTS (continued) COMMISSION SCHEDULE. Agents receive the equivalent of up to 50% of the premium payable in the first policy year. In the second policy year, agents receive up to 10% of the premium paid for that year. In the third, fourth and fifth policy years, agents receive up to 8% of the premium paid in each year. In the sixth through tenth policy years, agents receive up to 5% of the premium paid in each year. After that, agents receive up to 2% of the premium paid in each year. Agents with less than three full years of service with Equitable may be paid differently. Agents who meet certain production and persistency standards in selling our policies and Equitable policies will be eligible for added compensation. Agents who meet certain lifetime production standards will be eligible to receive increased fees for servicing our policies. Agents also are eligible for added compensation for servicing our policies when there is no assigned soliciting agent. SALES BY BROKERS. We also sell The Champion policy through independent brokers who are licensed by state insurance officials to sell our variable life policies. They will also be registered representatives either of Equitable or of another company registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934. The commissions for independent brokers will be no more than those for agents. Commissions will be paid through the registered broker-dealer. APPLICATIONS. When an application for The Champion policy is completed, it is submitted to us. Based on the information in the application and our standards for issuing insurance and classifying risks, a policy may be issued. If a policy is not issued, we will refund any premium that has been paid. (Equitable guarantees the refund.) JOINT SERVICES AGREEMENT. In addition to acting as distributor for The Champion policy, Equitable performs certain other sales and administrative duties for us. Equitable does this pursuant to a written agreement. The agreement is automatically renewed each year, unless either party terminates. Under this agreement, we pay Equitable for salary costs and other services and an amount for indirect costs incurred through our use of Equitable personnel and facilities. We also reimburse Equitable for sales expenses related to business other than variable life policies. The amounts paid or accrued to Equitable by us under sales and joint services agreements totalled approximately $249.4 million in 1986, $225.7 million in 1985 and $164.8 million in 1984. - -------------------------------------------------------------------------------- REGULATION We are regulated and supervised by the New York State Insurance Department. In addition, we are subject to insurance laws and regulations in every jurisdiction where we sell our policies. We submit annual reports on our operations and finances to insurance officials in these jurisdictions. The officials are responsible for reviewing our reports to be sure we are financially sound and that we are complying with applicable laws and regulations. The Champion has been approved in each of the 50 states, Puerto Rico and the Virgin Islands. We are also subject to various Federal securities laws and regulations. - -------------------------------------------------------------------------------- LEGAL PROCEEDINGS We are not involved in any material legal proceedings. - -------------------------------------------------------------------------------- LEGAL MATTERS The legal validity of the policies described in this prospectus has been passed on by Herbert P. Shyer, who is Executive Vice President and General Counsel of Equitable. The Washington, D.C. law firm of Freedman, Levy, Kroll & Simonds has advised Equitable Variable with respect to certain matters relating to Federal securities laws. - -------------------------------------------------------------------------------- 28 - -------------------------------------------------------------------------------- FINANCIAL AND ACTUARIAL EXPERTS The financial statements of the Separate Account and of Equitable Variable in this prospectus have been examined by the accounting firm of Deloitte Haskins & Sells, our independent auditors, to the extent stated in their opinions, and their opinions on them are part of this prospectus. We have relied on the opinions of Deloitte Haskins & Sells given upon their authority as experts in accounting and auditing. Actuarial matters in this prospectus have been examined by Joseph O. North, Jr., F.S.A., M.A.A.A., who is Vice President and Actuary of Equitable Variable and a Vice President and Actuary of Equitable. His opinion on actuarial matters is filed as an exhibit to the Registration Statement we filed with the SEC. - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION We have filed with the SEC a Registration Statement relating to the Separate Account and the variable life policy described in this prospectus. The Registration Statement, which is required by the Securities Act of 1933, includes additional information that is not required in this prospectus under the rules and regulations of the SEC. If you would like the additional information, you may obtain copies of that document from the SEC's main office in Washington, D.C. You will have to pay a fee for the material. - -------------------------------------------------------------------------------- MANAGEMENT Here is a list of our directors and officers and a brief statement of their business experience for the past five years. Unless otherwise noted, the following persons have been involved in the management of Equitable and its subsidiaries in various positions for the last five years. Unless otherwise noted, their address is 787 Seventh Avenue, New York, New York 10019.
- ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Harry Douglas Garber...................... Vice Chairman of the Board, Equitable, since February 1984; prior thereto, Executive Vice President and Chief Financial Officer. Director, Equitable Investment Corporation (EIC) and Genesco, Inc. Former Chairman and Chief Executive Officer, Equitable Variable. Glenn Howard Gettier, Jr. ................ Executive Vice President and Chief Financial Officer, Equitable, since December 1984; prior thereto, Partner, Peat, Marwick, Mitchell & Co. Richard Hampton Jenrette.................. Vice Chairman, Chief Investment Officer and Director, Equitable. Chairman, Donaldson, Lufkin and Jenrette, Inc., since February 1985; prior thereto, Chairman and Chief Executive Officer. Director, Equitable Capital Management Corporation (Equitable Capital) and various other Equitable subsidiaries. William Thomas McCaffrey.................. Executive Vice President, Equitable, since March 1986; prior thereto, various other Equitable positions. Francis Helmut Schott..................... Senior Vice President and Chief Economist, Equitable. Leo Martin Walsh, Jr. .................... Senior Executive Vice President, Director and Chief Operating Officer, Equitable, since July 1986; prior thereto, Executive Vice President, Director and Chief Investment Officer. Chairman, EIC since July 1986; prior thereto, President and Chief Executive Officer. Director, Equitable Capital and various other Equitable subsidiaries. - ------------------------------------------------------------------------------------------------------------------------------------
29
- ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Peter Rawlinson Wilde..................... Executive Vice President, Equitable, since July 1984. Director, Integrity Life Insurance Company (Integrity) and National Integrity Life Insurance Company (National Integrity). Chairman and Chief Executive Officer, Equitable Variable, from November 1984 to December 1986. Chief Financial Officer, CIGNA Corporation, from April 1983 to June 1984; prior thereto, Senior Vice President. Brian Fredrick Wruble..................... Chairman, President and Chief Executive Officer, Equitable Capital. Executive Vice President, Equitable, since September 1984; prior thereto, various other Equitable positions.
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICER -- DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Robert Wayne Barth........................ Chairman and Chief Executive Officer, Equitable Variable, since December 1986; President and Chief Operating Officer, from December 1985 to December 1986. Executive Vice President, Equitable, since June 1985; Senior Vice President since September 1984; prior thereto, Vice President since April 1984. Thomas Michael Kirwan..................... President and Chief Operating Officer, Equitable Variable, since December 1986. Executive Vice President and Chief Financial Officer, EIC, since March 1985; prior thereto, President, Columbia Group -- CBS, Inc. Director, Equitable Capital and various other Equitable subidiaries. Robert Seymour Jones...................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since June 1985; prior thereto, Vice President. Michael Searle Martin..................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since June 1985; prior thereto, Vice President. Stanley Julian Rispler.................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since October 1984; prior thereto, Vice President. Samuel Barry Shlesinger................... Senior Vice President and Actuary, Equitable Variable, since February 1986. Senior Vice President and Actuary, Equitable; prior thereto Vice President and Actuary. - ------------------------------------------------------------------------------------------------------------------------------------
30
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ James Thomas Liddle, Jr. ................. Senior Vice President and Chief Financial Officer, Equitable Variable, since February 1986. Vice President and Actuary, Equitable. Richard Marshall Stenson.................. Senior Vice President, Equitable Variable, since December 1981. Senior Vice President, Equitable, since October 1984; prior thereto, Vice President and Actuary, Integrity. William Arnold Canfield................... Vice President and Chief Underwriting Officer, Equitable Variable. Vice President, 2 Penn Plaza Equitable. New York, New York 10121 Franklin Kennedy, III..................... Vice President, Equitable Variable, since August 1981. Senior Vice President, Equitable 1221 Avenue of the Americas Capital since January 1987. Managing Director and Chief Investment Officer, Equitable New York, New York 10020 Investment Management Corporation, from November 1983 to January 1987. Vice President, Equitable. Donald Anthony King....................... Vice President, Equitable Variable, since February 1986. Vice President, Integrity, 1285 Avenue of the Americas since April 1984. Vice President, Equitable, since January 1976. Executive Vice New York, New York 10020 President, Equitable Capital. Joseph Oswell North, Jr. ................. Vice President and Actuary, Equitable Variable, since February 1984. Vice President and 2 Penn Plaza Actuary, Equitable, since October 1984; prior thereto, Assistant Vice President and New York, New York 10121 Actuary, since April 1982. Stephen Anthony Scarpati.................. Vice President and Controller, Equitable Variable, since June 1986. Vice President, 2 Penn Plaza Equitable, since December 1985. Vice President and Controller, EIC, from November 1984 New York, New York 10121 to December 1985; prior thereto, Division Controller, Colgate-Palmolive Company. Larry Kenneth Mills....................... Treasurer, Equitable Variable, Integrity and National Integrity, since February 1986. Vice President and Treasurer, Equitable, since March 1986; prior thereto, Vice President. Theodore Edward Plucinski, M.D. .......... Chief Medical Director, Equitable Variable, Integrity and National Integrity. Chief 2 Penn Plaza Medical Director, Equitable since September 1985; prior thereto, Chief Medical New York, New York 10121 Director, MONY. Kevin Brian Keefe......................... Secretary, Equitable Variable, Integrity, National Integrity and The Hudson River Trust, Vice President and Assistant Secretary, Equitable, since June 1986; prior thereto, Assistant Vice President and Assistant Secretary. - ------------------------------------------------------------------------------------------------------------------------------------
31 - -------------------------------------------------------------------------------- PART 5 -- ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUMS To help you get a picture of how the key financial elements of our policy work, we have prepared a series of tables. The tables show how Death Benefits, Account Values and Cash Surrender Values of policies with premiums of $300, $500, $1,000 (for policies with face amounts under $200,000) and $1,000, $2,000, and $4,000 (for policies with face amounts at least $200,000) could vary over an extended period of time if the divisions of the Separate account had CONSTANT hypothetical gross annual investment returns of 0%, 4%, 8% or 12% over the years covered by each table. The Death Benefits, Account Values and Cash Surrender Values would differ from those shown in the tables if the annual investment returns did not remain absolutely constant. Thus, the figures would be different if the return AVERAGED 0%, 4%, 8% or 12% over a period of years but went above or below those figures in individual policy years. The Death Benefits, Account Values and Cash Surrender Values would also differ, depending on the investment allocations made to the divisions, if the actual rates of investment return averaged 0%, 4%, 8% or 12%, but went above or below those figures for individual divisions. The tables are for standard policies. The difference between the Account Value and the Cash Surrender Value in the first ten years is the surrender charge. The Account Values and Cash Surrender Values in the tables are related to the annual premiums shown in "Premiums -- Illustration of Premium Rates" in Part 3. The amounts of Death Benefits, Account Values and Cash Surrender Values shown in the tables for the end of each policy year take into account a daily charge against each division of the Separate Account that is equivalent to an annual charge of 0.75% at the beginning of each year. This charge is the 0.50% charge against the Separate Account for mortality and expense risks and a 0.25% charge for investment advisory services. The effect of these adjustments is that on a 0% actual rate of return the net rate of return would be -0.75%, on 4% it would be 3.22%, on 8% it would be 7.19% and on 12% it would be 11.16%. The hypothetical returns shown in the tables do not reflect any charges for Trust expenses in addition to the 0.25% investment advisory fee charge, because the divisions of the Separate Account will generally be reimbursed for such expenses. See "The Trust's Investment Adviser" in Part 2. The tables reflect the fact that we do not currently charge the divisions of the Separate Account for Federal income tax. However, if we do make such a charge in the future, it would take a higher rate of return to produce after-tax returns of 0%, 4%, 8% or 12% than it does now. The second and third columns of each table show what would happen if an amount equal to the total premium were invested to earn interest, after taxes, of 4% or 5% compounded annually. These tables show that if a policy is returned in its very early years for payment of its Cash Surrender Value, the Cash Surrender Value will be low in comparison to the premium accumulated with interest. This means that the cost of owning your policy for a relatively short time will be high. If you request, we will furnish you with a comparable illustration based on the proposed insured's sex and age and an initial face amount or premium amount of your choice. A specific illustration will assume that the insured is a standard risk and that the premium will be paid on an annual basis. In addition, if you do purchase a policy, we will deliver a specific illustration that reflects how the premium will actually be paid and to what risk class the insured has been assigned. We have also prepared special illustrations showing the effects of policy loans on a planned basis. These are available on request. - -------------------------------------------------------------------------------- TABLE OF CONTENTS OF ILLUSTRATIONS Page ---- $ 300 annual premium Male Age 10 33 $ 500 annual premium Male Age 25 34 $1,000 annual premium Male Age 40 35 $1,000 annual premium Male Age 10 36 $2,000 annual premium Male Age 25 37 $4,000 annual premium Male Age 40 38 The first three illustrations show values based on policies with face amounts under $200,000 and the second three for policies with face amounts at least $200,000. - -------------------------------------------------------------------------------- 32 THE CHAMPION - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY VARIABLE WHOLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $52,739 (GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 10 ANNUAL PREMIUM $300(2) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
DEATH BENEFIT(1) PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY -------------------------- ------------------------------------------------------------------ YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 312 $ 315 $52,739 $52,739 $ 52,761 $ 52,793 2 636 646 52,739 52,739 52,838 52,985 3 974 993 52,739 52,739 52,968 53,319 4 1,325 1,358 52,739 52,739 53,152 53,796 5 1,690 1,741 52,739 52,739 53,387 54,420 6 2,070 2,143 52,739 52,739 53,673 55,193 7 2,464 2,565 52,739 52,739 54,006 56,118 8 2,875 3,008 52,739 52,739 54,388 57,199 9 3,302 3,473 52,739 52,739 54,816 58,441 10 3,746 3,962 52,739 52,739 55,291 59,849 11 4,208 4,475 52,739 52,739 55,811 61,431 12 4,688 5,014 52,739 52,739 56,377 63,197 13 5,188 5,580 52,739 52,739 56,991 65,155 14 5,707 6,174 52,739 52,739 57,651 67,316 15 6,247 6,797 52,739 52,739 58,360 69,694 16 6,809 7,452 52,739 52,739 59,117 72,298 17 7,394 8,140 52,739 52,739 59,924 75,144 18 8,001 8,862 52,739 52,739 60,782 78,245 19 8,633 9,620 52,739 52,739 61,690 81,617 20 9,291 10,416 52,739 52,739 62,651 85,275 55 (Age 65) 59,642 85,905 52,739 52,739 135,015 640,103
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF - ------------------------------------------------------- ------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% - ------ ------- ------- -------- ------ ------- ------- -------- $ 38 $ 41 $ 44 $ 47 $ 0 $ 0 $ 2 $ 5 232 246 261 275 153 168 183 197 419 453 487 523 322 355 390 426 599 659 723 792 485 545 609 677 769 864 967 1,081 639 734 837 950 929 1,066 1,219 1,392 789 926 1,079 1,252 1,080 1,266 1,480 1,728 935 1,120 1,335 1,583 1,223 1,464 1,751 2,091 1,098 1,339 1,626 1,966 1,360 1,663 2,035 2,488 1,289 1,593 1,965 2,418 1,494 1,866 2,335 2,922 1,494 1,866 2,335 2,922 1,625 2,074 2,654 3,401 1,625 2,074 2,654 3,401 1,757 2,289 2,995 3,931 1,757 2,289 2,995 3,931 1,891 2,513 3,361 4,518 1,891 2,513 3,361 4,518 2,028 2,747 3,755 5,172 2,028 2,747 3,755 5,172 2,165 2,990 4,178 5,896 2,165 2,990 4,178 5,896 2,307 3,245 4,635 6,702 2,307 3,245 4,635 6,702 2,450 3,510 5,126 7,597 2,450 3,510 5,126 7,597 2,596 3,787 5,653 8,591 2,596 3,787 5,653 8,591 2,742 4,074 6,217 9,692 2,742 4,074 6,217 9,692 2,889 4,371 6,822 10,912 2,889 4,371 6,822 10,912 5,619 17,920 74,624 362,630 5,619 17,920 74,624 362,630 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes no policy loan has been made. (2) If premiums are paid more frequently than annually the payments would be $153 semi-annually, $77 quarterly or $27 monthly. The Death Benefits, Account Values and Cash Surrender Values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the insured's risk classification.
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
DEATH BENEFIT(1) PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY -------------------------- ------------------------------------------------------------------ YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 520 $ 525 $53,427 $53,427 $53,471 $53,537 2 1,061 1,076 53,427 53,427 53,570 53,787 3 1,623 1,655 53,427 53,427 53,725 54,184 4 2,208 2,263 53,427 53,427 53,936 54,734 5 2,816 2,901 53,427 53,427 54,202 55,444 6 3,449 3,571 53,427 53,427 54,524 56,322 7 4,107 4,275 53,427 53,427 54,902 57,374 8 4,791 5,013 53,427 53,427 55,337 58,608 9 5,503 5,789 53,427 53,427 55,826 60,031 10 6,243 6,603 53,427 53,427 56,372 61,653 11 7,013 7,459 53,427 53,427 56,974 63,481 12 7,813 8,356 53,427 53,427 57,631 65,526 13 8,646 9,299 53,427 53,427 58,344 67,797 14 9,512 10,289 53,427 53,427 59,112 70,307 15 10,412 11,329 53,427 53,427 59,936 73,066 16 11,349 12,420 53,427 53,427 60,815 76,087 17 12,323 13,566 53,427 53,427 61,750 79,384 18 13,336 14,770 53,427 53,427 62,741 82,971 19 14,389 16,033 53,427 53,427 63,788 86,864 20 15,485 17,360 53,427 53,427 64,890 91,079 40 (Age 65) 49,413 63,420 53,427 53,427 99,610 283,063
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF - ------------------------------------------------------- ------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% - ------ ------- ------- -------- ------ ------- ------- -------- $ 160 $ 170 $ 180 $ 190 $ 56 $ 66 $ 76 $ 87 481 514 549 583 343 376 411 446 801 871 945 1,022 628 698 772 849 1,121 1,241 1,370 1,510 918 1,039 1,168 1,307 1,439 1,623 1,827 2,052 1,209 1,393 1,596 1,821 1,755 2,017 2,315 2,652 1,507 1,769 2,067 2,404 2,068 2,422 2,836 3,317 1,810 2,165 2,578 3,059 2,377 2,839 3,392 4,052 2,156 2,618 3,171 3,831 2,682 3,266 3,984 4,863 2,558 3,142 3,860 4,740 2,982 3,704 4,615 5,760 2,982 3,704 4,615 5,760 3,277 4,151 5,284 6,748 3,277 4,151 5,284 6,748 3,566 4,609 5,995 7,838 3,566 4,609 5,995 7,838 3,848 5,075 6,749 9,038 3,848 5,075 6,749 9,038 4,124 5,549 7,548 10,358 4,124 5,549 7,548 10,358 4,392 6,031 8,394 11,811 4,392 6,031 8,394 11,811 4,651 6,520 9,288 13,405 4,651 6,520 9,288 13,405 4,902 7,016 10,233 15,158 4,902 7,016 10,233 15,158 5,144 7,517 11,231 17,083 5,144 7,517 11,231 17,083 5,378 8,025 12,286 19,196 5,378 8,025 12,286 19,196 5,603 8,539 13,399 21,516 5,603 8,539 13,399 21,516 8,079 19,251 52,618 157,225 8,079 19,251 52,618 157,225 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes no policy loan has been made. (2) If premiums are paid more frequently than annually the payments would be $255 semi-annually, $129 quarterly or $44 monthly. The Death Benefits, Account Values and Cash Surrender Values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the insured's risk classification.
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
DEATH BENEFIT(1) PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY -------------------------- ------------------------------------------------------------------ YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 1,040 $ 1,050 $57,041 $57,041 $57,111 $ 57,214 2 2,122 2,153 57,041 57,041 57,250 57,566 3 3,246 3,310 57,041 57,041 57,459 58,103 4 4,416 4,526 57,041 57,041 57,735 58,828 5 5,633 5,802 57,041 57,041 58,078 59,747 6 6,898 7,142 57,041 57,041 58,486 60,866 7 8,214 8,549 57,041 57,041 58,961 62,194 8 9,583 10,027 57,041 57,041 59,500 63,737 9 11,006 11,578 57,041 57,041 60,104 65,505 10 12,486 13,207 57,041 57,041 60,772 67,506 11 14,026 14,917 57,041 57,041 61,503 69,752 12 15,627 16,713 57,041 57,041 62,299 72,253 13 17,292 18,599 57,041 57,041 63,158 75,021 14 19,024 20,579 57,041 57,041 64,080 78,070 15 20,825 22,658 57,041 57,041 65,066 81,414 16 22,697 24,840 57,041 57,041 66,115 85,066 17 24,645 27,132 57,041 57,041 67,227 89,045 18 26,671 29,539 57,041 57,041 68,402 93,366 19 28,778 32,066 57,041 57,041 69,641 98,048 20 30,969 34,719 57,041 57,041 70,944 103,113 25 (Age 65) 43,312 50,114 57,041 57,041 78,433 134,982
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF - ------------------------------------------------------ ------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% - ------ ------- ------- ------- ------ ------- ------- -------- $ 521 $ 549 $ 577 $ 605 $ 305 $ 333 $ 361 $ 389 1,196 1,280 1,366 1,455 908 992 1,078 1,167 1,854 2,022 2,199 2,386 1,494 1,662 1,839 2,026 2,493 2,773 3,076 3,403 2,070 2,350 2,653 2,980 3,115 3,535 4,001 4,518 2,634 3,055 3,521 4,038 3,717 4,305 4,975 5,738 3,198 3,786 4,457 5,220 4,303 5,085 6,002 7,075 3,765 4,548 5,465 6,538 4,870 5,875 7,084 8,538 4,409 5,414 6,623 8,077 5,419 6,674 8,225 10,140 5,160 6,415 7,966 9,881 5,951 7,481 9,426 11,894 5,951 7,481 9,426 11,894 6,464 8,297 10,690 13,814 6,464 8,297 10,690 13,814 6,958 9,119 12,019 15,912 6,958 9,119 12,019 15,912 7,430 9,944 13,413 18,204 7,430 9,944 13,413 18,204 7,880 10,772 14,874 20,704 7,880 10,772 14,874 20,704 8,305 11,598 16,402 23,429 8,305 11,598 16,402 23,429 8,706 12,424 18,000 26,398 8,706 12,424 18,000 26,398 9,084 13,247 19,671 29,633 9,084 13,247 19,671 29,633 9,440 14,069 21,419 33,157 9,440 14,069 21,419 33,157 9,773 14,889 23,247 36,997 9,773 14,889 23,247 36,997 10,087 15,708 25,159 41,182 10,087 15,708 25,159 41,182 11,304 19,694 36,009 68,254 11,304 19,694 36,009 68,254 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes no policy loan has been made. (2) If premiums are paid more frequently than annually the payments would be $509 semi-annually, $257 quarterly or $87 monthly. The Death Benefits, Account Values and Cash Surrender Values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the insured's risk classification.
IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. - -------------------------------------------------------------------------------- 35 THE CHAMPION - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY VARIABLE WHOLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $200,000 (GUARANTEED MINIMUM DEATH BENEFIT) MALE AGE 10 ANNUAL PREMIUM $1,000(2) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
DEATH BENEFIT(1) PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- -------------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- -------- -------- -------- ---------- 1 $ 1,040 $ 1,050 $200,000 $200,000 $200,218 $ 200,542 2 2,122 2,153 200,000 200,000 200,642 201,612 3 3,246 3,310 200,000 200,000 201,268 203,226 4 4,416 4,526 200,000 200,000 202,094 205,398 5 5,633 5,802 200,000 200,000 203,114 208,138 6 6,898 7,142 200,000 200,000 204,324 211,458 7 8,214 8,549 200,000 200,000 205,718 215,368 8 9,583 10,027 200,000 200,000 207,292 219,888 9 11,006 11,578 200,000 200,000 209,042 225,034 10 12,486 13,207 200,000 200,000 210,966 230,830 11 14,026 14,917 200,000 200,000 213,066 237,310 12 15,627 16,713 200,000 200,000 215,340 244,506 13 17,292 18,599 200,000 200,000 217,792 252,456 14 19,024 20,579 200,000 200,000 220,422 261,204 15 20,825 22,658 200,000 200,000 223,236 270,796 16 22,697 24,840 200,000 200,000 226,234 281,280 17 24,645 27,132 200,000 200,000 229,420 292,710 18 26,671 29,539 200,000 200,000 232,798 305,142 19 28,778 32,066 200,000 200,000 236,370 318,636 20 30,969 34,719 200,000 200,000 240,140 333,254 55 (Age 65) 198,805 286,348 200,000 200,000 520,190 2,527,266
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF - --------------------------------------------------------- --------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% - ------ ------- -------- ---------- ------- ------- -------- ---------- $ 620 $ 650 $ 680 $ 712 $ 404 $ 434 $ 464 $ 496 1,328 1,418 1,512 1,608 1,040 1,130 1,224 1,320 2,016 2,196 2,386 2,586 1,656 1,836 2,026 2,226 2,668 2,968 3,292 3,642 2,246 2,546 2,870 3,220 3,288 3,736 4,232 4,784 2,808 3,256 3,752 4,304 3,872 4,494 5,202 6,012 3,354 3,976 4,684 5,494 4,420 5,244 6,208 7,340 3,882 4,706 5,670 6,802 4,938 5,986 7,250 8,776 4,478 5,526 6,790 8,316 5,434 6,734 8,346 10,342 5,174 6,474 8,086 10,082 5,920 7,496 9,504 12,064 5,920 7,496 9,504 12,064 6,400 8,272 10,732 13,956 6,400 8,272 10,732 13,956 6,880 9,078 12,046 16,050 6,880 9,078 12,046 16,050 7,366 9,918 13,456 18,372 7,366 9,918 13,456 18,372 7,862 10,792 14,974 20,950 7,862 10,792 14,974 20,950 8,364 11,704 16,606 23,812 8,364 11,704 16,606 23,812 8,880 12,662 18,364 26,998 8,880 12,662 18,364 26,998 9,404 13,658 20,254 30,532 9,404 13,658 20,254 30,532 9,936 14,696 22,284 34,456 9,936 14,696 22,284 34,456 10,468 15,772 24,458 38,804 10,468 15,772 24,458 38,804 11,004 16,886 26,784 43,618 11,004 16,886 26,784 43,618 20,922 67,682 287,900 1,432,354 20,922 67,682 287,900 1,432,354 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes no policy loan has been made. (2) If premiums are paid more frequently than annually the payments would be $509 semi-annually, $257 quarterly or $87 monthly. The Death Benefits, Account Values and Cash Surrender Values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the insured's risk classification.
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
DEATH BENEFIT(1) PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- -------------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- -------- -------- -------- ---------- 1 $ 2,080 $ 2,100 $231,133 $231,133 $231,419 $ 231,842 2 4,243 4,305 231,133 231,133 231,941 233,164 3 6,493 6,620 231,133 231,133 232,702 235,129 4 8,833 9,051 231,133 231,133 233,703 237,764 5 11,266 11,604 231,133 231,133 234,944 241,099 6 13,797 14,284 231,133 231,133 236,425 245,165 7 16,428 17,098 231,133 231,133 238,150 249,993 8 19,166 20,053 231,133 231,133 240,114 255,616 9 22,012 23,156 231,133 231,133 242,319 262,072 10 24,973 26,414 231,133 231,133 244,765 269,394 11 28,052 29,834 231,133 231,133 247,450 277,627 12 31,254 33,426 231,133 231,133 250,377 286,810 13 34,584 37,197 231,133 231,133 253,543 296,989 14 38,047 41,157 231,133 231,133 256,950 308,213 15 41,649 45,315 231,133 231,133 260,595 320,535 16 45,395 49,681 231,133 231,133 264,480 334,007 17 49,291 54,265 231,133 231,133 268,606 348,694 18 53,342 59,078 231,133 231,133 272,972 364,656 19 57,556 64,132 231,133 231,133 277,581 381,965 20 61,938 69,439 231,133 231,133 282,432 400,694 40 (Age 65) 197,653 253,680 231,133 231,133 434,432 1,250,452
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF - ------------------------------------------------------- ------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% - ------ ------- -------- -------- ------- ------- -------- -------- $ 1,238 $ 1,305 $ 1,370 $ 1,437 $ 797 $ 864 $ 929 $ 996 2,595 2,782 2,976 3,175 2,008 2,195 2,389 2,588 3,952 4,317 4,703 5,112 3,217 3,582 3,968 4,377 5,304 5,905 6,559 7,266 4,442 5,043 5,697 6,404 6,649 7,546 8,547 9,661 5,669 6,566 7,567 8,681 7,985 9,240 10,673 12,312 6,927 8,182 9,615 11,253 9,305 10,978 12,941 15,245 8,207 9,880 11,843 14,147 10,613 12,767 15,365 18,492 9,672 11,827 14,425 17,552 11,903 14,602 17,945 22,075 11,374 14,073 17,415 21,546 13,174 16,484 20,691 26,037 13,174 16,484 20,691 26,037 14,422 18,407 23,607 30,400 14,422 18,407 23,607 30,400 15,645 20,372 26,707 35,213 15,645 20,372 26,707 35,213 16,842 22,373 29,994 40,512 16,842 22,373 29,994 40,512 18,007 24,412 33,477 46,344 18,007 24,412 33,477 46,344 19,140 26,480 37,159 52,753 19,140 26,480 37,159 52,753 20,238 28,581 41,058 59,803 20,238 28,581 41,058 59,803 21,296 30,708 45,172 67,541 21,296 30,708 45,172 67,541 22,320 32,864 49,524 76,045 22,320 32,864 49,524 76,045 23,307 35,044 54,117 85,378 23,307 35,044 54,117 85,378 24,257 37,251 58,968 95,624 24,257 37,251 58,968 95,624 34,646 83,235 229,933 695,234 34,646 83,235 229,933 695,234 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes no policy loan has been made. (2) If premiums are paid more frequently than annually the payments would be $1,019 semi-annually, $515 quarterly or $173 monthly. The Death Benefits, Account Values and Cash Surrender Values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the insured's risk classification.
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
DEATH BENEFIT(1) PREMIUMS(2) ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- ------------------------------------------------------------------ YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- -------- -------- -------- -------- 1 $ 4,160 $ 4,200 $237,411 $237,411 $237,757 $238,272 2 8,486 8,610 237,411 237,411 238,393 239,882 3 12,986 13,241 237,411 237,411 239,315 242,258 4 17,665 18,103 237,411 237,411 240,516 245,423 5 22,532 23,208 237,411 237,411 241,995 249,400 6 27,593 28,568 237,411 237,411 243,747 254,217 7 32,857 34,196 237,411 237,411 245,772 259,903 8 38,331 40,106 237,411 237,411 248,066 266,491 9 44,024 46,312 237,411 237,411 250,627 274,019 10 49,945 52,827 237,411 237,411 253,455 282,526 11 56,103 59,669 237,411 237,411 256,548 292,055 12 62,507 66,852 237,411 237,411 259,905 302,656 13 69,168 74,395 237,411 237,411 263,526 314,379 14 76,094 82,314 237,411 237,411 267,410 327,278 15 83,298 90,630 237,411 237,411 271,557 341,413 16 90,790 99,361 237,411 237,411 275,968 356,847 17 98,582 108,530 237,411 237,411 280,643 373,646 18 106,685 118,156 237,411 237,411 285,581 391,884 19 115,112 128,264 237,411 237,411 290,783 411,639 20 123,877 138,877 237,411 237,411 296,250 432,997 25 (Age 65) 173,247 200,454 237,411 237,411 327,643 567,305
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(1) CASH SURRENDER VALUE(1) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF - ------------------------------------------------------- ------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% - ------ ------- -------- -------- ------- ------- -------- -------- $ 2,727 $ 2,865 $ 3,003 $ 3,143 $ 1,837 $ 1,975 $ 2,112 $ 2,253 5,500 5,894 6,298 6,713 4,313 4,707 5,111 5,526 8,202 8,964 9,771 10,624 6,716 7,478 8,285 9,137 10,830 12,079 13,435 14,904 9,088 10,336 11,692 13,162 13,382 15,232 17,295 19,588 11,402 13,252 15,315 17,608 15,856 18,420 21,357 24,714 13,717 16,281 19,218 22,575 18,259 21,651 25,642 30,331 16,041 19,434 23,425 28,114 20,590 24,921 30,160 36,480 18,688 23,019 28,259 34,578 22,846 28,230 34,918 43,215 21,777 27,162 33,850 42,147 25,030 31,575 39,932 50,589 25,030 31,575 39,932 50,589 27,133 34,951 45,207 58,654 27,133 34,951 45,207 58,654 29,161 38,353 50,753 67,476 29,161 38,353 50,753 67,476 31,098 41,772 56,572 77,111 31,098 41,772 56,572 77,111 32,943 45,198 62,671 87,621 32,943 45,198 62,671 87,621 34,685 48,619 69,048 99,076 34,685 48,619 69,048 99,076 36,333 52,040 75,724 111,561 36,333 52,040 75,724 111,561 37,878 55,449 82,697 125,160 37,878 55,449 82,697 125,160 39,336 58,854 89,995 139,979 39,336 58,854 89,995 139,979 40,701 62,249 97,623 156,126 40,701 62,249 97,623 156,126 41,986 65,639 105,607 173,720 41,986 65,639 105,607 173,720 46,957 82,139 150,910 287,568 46,957 82,139 150,910 287,568 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes no policy loan has been made. (2) If premiums are paid more frequently than annually the payments would be $2,036 semi-annually, $1,027 quarterly or $345 monthly. The Death Benefits, Account Values and Cash Surrender Values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the insured's risk classification.
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rospectus Dated September 30, 1987 - -------------------------------------------------------------------------------- THE HUDSON RIVER TRUST PRINCIPAL OFFICE LOCATED AT: 787 Seventh Avenue, New York, New York 10019 - -------------------------------------------------------------------------------- HRT 102 PROSPECTUS DATED SEPTEMBER 30, 1987 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY LEVEL FACE AMOUNT [VARIABLE LIFE INSURANCE LOGO] [SP LOGO] - -------------------------------------------------------------------------------- PROSPECTUS DATED SEPTEMBER 30, 1987 ISSUED BY [EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO - 1987 VERSION] - -------------------------------------------------------------------------------- This prospectus describes a variable life insurance policy being offered by Equitable Variable. Your net premium is invested among one or more of the Divisions of Equitable Variable's Separate Account I. Each policy owner decides in which Divisions the premium for his or her policy will be put, after certain deductions have been made. The Separate Account has the following Divisions: o Aggressive Stock o High Yield o Common Stock o Balanced o Money Market The assets in each Division are invested in shares of corresponding Portfolios of The Hudson River Trust. The Trust is the successor to The Hudson River Fund, Inc. pursuant to an Agreement and Plan of Reorganization dated September 30, 1987. The prospectus for the Trust, which is attached to this prospectus, describes the investment objectives and policies of each of the Trust Portfolios, as well as the risks relating to investments in the Trust. The Death Benefit, Account Value, and Cash Surrender Value of a policy will vary up or down depending on investment experience of the Divisions, which in turn depends on the investment performance of the corresponding Portfolios. While there is no guaranteed minimum Account Value or Cash Surrender Value for a policy, Equitable Variable guarantees that a policy's Death Benefit will never be less than its face amount as long as there is no outstanding policy loan. A policy is serviced through a regional Life Insurance Center. This is the Administrative Office shown on page 3 of a policy when it is issued. Equitable Variable's Home Office is 787 Seventh Avenue, New York, New York. Telephone (212) 714-4643. REPLACING EXISTING INSURANCE WITH THE POLICY DESCRIBED IN THIS PROSPECTUS MAY NOT BE TO YOUR ADVANTAGE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PLEASE READ THIS PROSPECTUS FOR DETAILS ON THE POLICY BEING OFFERED AND KEEP IT FOR FUTURE REFERENCE. IT IS NOT VALID UNLESS ATTACHED TO A CURRENT PROSPECTUS FOR THE HUDSON RIVER TRUST. - -------------------------------------------------------------------------------- VM-371 Copyright 1987 Equitable Variable Life Insurance Company. All rights reserved. - -------------------------------------------------------------------------------- THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR A POLICY'S BENEFICIARY. WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY SIMILAR TO OR COMPARABLE TO A MUTUAL FUND. Because we want you to have as much information as possible about our variable life policy before you buy one, we urge you to examine this prospectus carefully, and we also urge you to read the attached Trust prospectus. Unless otherwise stated, this prospectus assumes that there is no outstanding policy loan. The first Part of this prospectus contains a summary that will introduce us and our variable life policy to you. You will find more detailed information in Part 2 and financial statements in Part 3. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART 1 -- SUMMARY - -------------------------------------------------------------------------------- THE ISSUING COMPANY We are Equitable Variable Life Insurance Company (Equitable Variable) a New York stock life insurance company. - -------------------------------------------------------------------------------- OUR PARENT, EQUITABLE We are a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States (Equitable), a New York mutual life insurance company. - -------------------------------------------------------------------------------- THE POLICY By this prospectus we are offering a single premium variable life insurance policy with a level face amount. This is SP-1(TM), Policy Number 85-09. We also offer, through separate prospectuses, three periodic premium variable life policies and a flexible premium variable life policy. The net premiums for SP-1 are invested in our Separate Account I (Separate Account), which in turn buys shares in The Hudson River Trust (Trust). - -------------------------------------------------------------------------------- WHY VARIABLE LIFE VARIES This variable life policy is first and foremost a whole life insurance policy with Death Benefits, Account Values, Cash Surrender Values and loan privileges traditionally associated with whole life insurance. It is called "variable" because, unlike the fixed death benefits of an ordinary single premium whole life policy, the Death Benefits, Account Values and Cash Surrender Values may increase or decrease. They do so because your net premium is put into one or more of the Divisions of our Separate Account. The assets in each Division buy shares in a corresponding Trust Portfolio. The Separate Account's investment experience will vary over the years reflecting the investment performance of the Trust's Portfolios in which it invests. When the Separate Account's net investment return is greater than the assumed investment return of 4%, additional amounts of paid-up life insurance are purchased. This results in additional Death Benefit, Account Value and Cash Surrender Value. If the Separate Account's net investment return is less than the assumed investment return, this additional paid-up life insurance may be lost, resulting in smaller Account Value, Cash Surrender Value and Death Benefit, but the Death Benefit will never be less than the guaranteed minimum. - -------------------------------------------------------------------------------- THE SEPARATE ACCOUNT, ITS INVESTMENTS AND ITS INVESTMENT EXPERIENCE Our Separate Account is registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 (1940 Act) as a unit investment trust, which is a type of investment company. For state law purposes the Separate Account is treated as part of us. After making certain deductions from premiums, we put the net premium in one or more of the Divisions of the Separate Account. You decide in which Divisions your policy's net premium will be put. The Separate Account has the following Divisions: o Aggressive Stock o High Yield o Common Stock o Balanced o Money Market Each Division invests in shares of a corresponding investment portfolio (Portfolio) of the Trust. Each Portfolio has a different investment policy. Throughout this prospectus we will discuss the investment experience of the Separate Account and the Divisions. On these occasions you should keep in mind that THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT AND THE DIVISIONS DEPENDS ON THE INVESTMENT PERFORMANCE OF THE TRUST AND THE CORRESPONDING PORTFOLIOS. - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- THE TRUST The Hudson River Trust is a "series" type of mutual fund registered with the SEC under the 1940 Act as an open-end diversified management investment company. In addition to the Portfolios available for investment by Divisions of the Separate Account, the Trust has a Global Portfolio which currently is not available. The Trust does not impose a sales charge. The Trust serves as an investment medium for variable life policies issued by us, and by insurers affiliated or unaffiliated with Equitable. We are currently in control of the Trust; however, purchasers of each of these contracts will also have voting privileges in the Trust. See YOUR VOTING PRIVILEGES. For a full description of the Trust, including the investment policies and objectives of the Portfolios, see its prospectus which is attached to this prospectus and its Statement of Additional Information referred to therein. - -------------------------------------------------------------------------------- THE TRUST'S INVESTMENT ADVISER The Trust is advised by Equitable Capital Management Corporation (Equitable Capital), a wholly-owned subsidiary of Equitable. Equitable Capital is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. The Trust pays advisory fees to Equitable Capital based on maximum annual rates of between 0.40% and 0.55% of the average daily value of the aggregate net assets of each Portfolio. However, we credit the values of our SP-1 policies to offset completely the effect on such values of the portion of the Trust's advisory fees which exceeds a 0.25% annual rate. - -------------------------------------------------------------------------------- DEATH BENEFITS The Death Benefit under the policy can go up or down depending on the investment experience of the Division or Divisions into which you choose to put your net premium. The guaranteed minimum Death Benefit is the face amount of the policy regardless of the investment experience of the Divisions. The Death Benefit is the guaranteed minimum Death Benefit, plus the sum (if positive) of the variable adjustment amounts (determined annually) in the Divisions in which you have Account Value. However, if the Account Value at the date of death, considered as a single premium, can buy more Death Benefit, then the Death Benefit will be this higher amount. See THE VARIABLE ADJUSTMENT AMOUNT, THE GUARANTEED MINIMUM DEATH BENEFIT, and DEATH BENEFIT BASED ON ACCOUNT VALUE in Part 2. - -------------------------------------------------------------------------------- ACCOUNT VALUE Our policy is a whole life policy and it will have both an Account Value and a Cash Surrender Value. The Account Value of a policy may increase or decrease daily to reflect the investment experience of the Divisions in which your policy participates. The Account Value is your net single premium, minus the cost of insurance and the Separate Account asset charges, plus or minus investment experience. Unlike the Death Benefit, which has a guaranteed minimum, we do not guarantee a minimum amount of Account Value. You will bear the entire market risk for Account Value. You can request that all or part of your Account Value be transferred between the Divisions. See YOU CAN TRANSFER ACCOUNT VALUE BETWEEN DIVISIONS in Part 2. - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- CASH SURRENDER VALUE Our policy also has a Cash Surrender Value. The Cash Surrender Value will be less than the Account Value during the first ten policy years, and will equal the Account Value thereafter. The difference between the Cash Surrender Value and the Account Value is considered a contingent deferred sales load. Any contingent deferred sales load will not be more than 9% of your single premium. The Cash Surrender Value is not guaranteed. See CONTINGENT DEFERRED SALES LOAD in Part 2. - -------------------------------------------------------------------------------- COMMISSIONS The agent or broker who sells you one of our single premium policies will receive a commission for the sale equivalent to a maximum of 3% of the single premium that is payable. (You do not pay any sales charge for shares of the Trust purchased by the Separate Account). The agent or broker will not receive commissions in later policy years. - -------------------------------------------------------------------------------- CHARGES AGAINST PREMIUM Your total premium after deduction for state premium taxes and a $200 administrative expense charge is put into our Separate Account. The administrative charge is used to pay administrative expenses. - -------------------------------------------------------------------------------- CHARGES AGAINST THE SEPARATE ACCOUNT The amount in the Divisions credited to your policy is decreased by the cost of your insurance protection. Also, the investment experience of the Separate Account reflects a daily charge we make at an effective annual rate of 0.50% of the value of the assets of the Separate Account for certain mortality and expense risks. Any charges against the Divisions will have an impact on whether the Divisions earn more than the assumed rate of 4% and whether your policy's Death Benefit increases above the guaranteed minimum. For more information on the cost of insurance, see HOW WE SUPPORT THE OPERATIONS OF A POLICY in Part 2. - -------------------------------------------------------------------------------- CONTINGENT DEFERRED SALES LOAD We charge a contingent deferred sales load if you surrender your policy before its 10th anniversary. The charge will be a percentage of the Account Value which will vary by issue age and sex. The rate will never be more than 9% of the Account Value and will diminish to zero over the first 10 policy years. In any event the rate will never be more than 9% of your single premium. This charge affects your Cash Surrender Value and the amount available for policy loans. It does not affect Account Value transfers, Separate Account investment experience or Death Benefits. See CONTINGENT DEFERRED SALES LOAD in Part 2. - -------------------------------------------------------------------------------- POLICY LOANS As a policy owner, you may borrow up to 90% of your policy's Cash Surrender Value at 5% interest but borrowed amounts are transferred out of the Divisions and, therefore, not affected by investment experience. We will credit the assumed interest rate of 4% on the borrowed amounts. See TAKING A POLICY LOAN in Part 2. - -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- PREMIUM You may choose to purchase a policy based on a single premium or an initial face amount. The size of the initial face amount depends on the single premium, and the insured's age and sex. The minimum premium for this policy is $2,500. - -------------------------------------------------------------------------------- CANCELLATION AND EXCHANGE RIGHTS You have a limited right to return your policy for cancellation and a full refund of premium paid. Your request must be postmarked by the latest of o 10 days after you receive your policy; or o 10 days after we mail a written Notice of Withdrawal Right; or o 45 days after Part 1 of the policy application was signed. Also, within 24 months of a policy's issue date, it may be exchanged for a fixed single premium whole life insurance policy on the life of the insured without submitting proof of insurability. - -------------------------------------------------------------------------------- INCOME TAXES Any Death Benefit paid under our policy will be fully excludable from the gross income of the beneficiary for Federal income tax purposes. We may, in the future, charge the Divisions for any of our income taxes attributable to the Separate Account. See THE IMPACT OF TAXES in Part 2. - -------------------------------------------------------------------------------- MORE INFORMATION For further information, including illustrations of how the investment experience of the Separate Account Divisions and the investment performance of the Trust could cause Death Benefits, Account Values and Cash Surrender Values to vary, please see Part 2 of this prospectus and the Trust's current prospectus. Our financial statements are in Part 3 of this prospectus. The Trust's prospectus contains Condensed Financial Information for the Trust and its Statement of Additional Information contains its financial statements. - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT I The tables below show the actual net returns of the Common Stock and Money Market Divisions of our Separate Account as if the Reorganization discussed under GENERAL INFORMATION -- PREDECESSORS OF THE TRUST in Part 2 had always been in effect. The tables show the actual net returns of the predecessors of the Common Stocks and Money Market Divisions operating as management investment companies prior to the Reorganization. The same results would have been achieved if the Separate Account had operated as a unit investment trust investing in The Hudson River Trust, for all the periods shown, the operations of the Trust having been as currently reported in the Trust's separate Prospectus and Statement of Additional Information. The net returns for each Division for the periods shown assume the Common Stock Division and the Money Market Division would have received initial policy premium allocations on January 13, 1976 and August 21, 1981, respectively, the dates on which the predecessors of these Divisions first received premium allocations under variable life policies. The tables break the net return into its component parts. When you examine the tables, remember that the percentages apply to a policy with its policy year starting on the first day of the periods shown and apply to a policy that would have been in force throughout the periods shown. Because they are determined each December 31, the percentages do not reflect the average net assets in the Divisions during those periods. To get a more complete picture of the Separate Account and its Divisions you may want to refer to the financial statements and related notes in the Statement of Additional Information for The Hudson River Trust. - -------------------------------------------------------------------------------- 5 - -------------------------------------------------------------------------------- COMMON STOCK DIVISION
January 13, Year Ended December 31, 1976 to ----------------------------------------------------------------------------------------------- December 31, 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976(a)(b) -------------------------------------------------------------------------------------------------------------- NET RETURN: Income(c) 1.55 % 2.92 % 3.22 % 2.65 % 4.64 % 4.02 % 4.35 % 3.91 % 4.06 % 3.49 % 2.63 % Net realized and unrealized gain (loss) on invest- ments 16.04 % 30.91 % (4.68)% 24.06 % 13.58 % (9.40)% 46.48 % 26.56 % 4.72 % (12.26)% 7.00 % ----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ---- Gross Return 17.59 % 33.83 % (1.46)% 26.71 % 18.22 % (5.38)% 50.83 % 30.47 % 8.78 % (8.77)% 9.63 % Expense charges(c) (.59)% (.74)% (.74)% (.94)% (.95)% (.70)% (1.13)% (.98)% (.81)% (.69)% (.77)% ----- ----- ---- ----- ----- ---- ----- ----- ---- ----- ---- Net Return 17.00 % 33.09 % (2.20)% 25.77 % 17.27 % (6.08)% 49.70 % 29.49 % 7.97 % (9.46)% 8.86 % ===== ===== ==== ===== ===== ==== ===== ===== ==== ===== ==== - -------------------------------------------------------------------------------- (a) Date as of which net premiums under the policies were first allocated to the predecessor of the Division. (b) The gross return and the net return for the periods indicated are not annual rates of return. (c) Subsequent to March 22, 1985, the advisory service fees have been deducted in arriving at income rather than as an expense charge.
The effective annual net rate of return for the Common Stock Division from January 13, 1976 to December 31, 1986 was 14.36%. For the same period ended December 31, 1986, the average annual increase for the Standard and Poor's 500 Stock Index with dividends reinvested was 14.06%. (Standard and Poor's is an unmanaged index of groups of common stocks.) - -------------------------------------------------------------------------------- MONEY MARKET DIVISION
Year Ended December 31, August 21, 1981 ------------------------------------------------------ to December 31, 1986 1985(d) 1984 1983 1982 1981(a)(b) ---------------------------------------------------------------------------- NET RETURN: Income(c) 6.83 % 8.65 % 11.00 % 9.56 % 13.53 % 5.46 % Net realized and unrealized gain (loss) on investments 0.03 % (.09)% .42 % (.06)% .03 % .06 % ---- ---- ----- ---- ----- ---- Gross Return 6.86 % 8.56 % 11.42 % 9.50 % 13.56 % 5.52 % Expense charges(c) (.55)% (.60)% (.84)% (.83)% (.84)% (.35)% ---- ---- ----- ---- ----- ---- Net Return 6.31 % 7.96 % 10.58 % 8.67 % 12.72 % 5.17 % ==== ==== ===== ==== ===== ==== - -------------------------------------------------------------------------------- (a) Date as of which net premiums under the policies were first allocated to the predecessor of the Division. (b) The gross return and the net return for the periods indicated are not annual rates of return. (c) Subsequent to March 22, 1985, the advisory service fees have been deducted in arriving at income rather than as an expense charge. (d) Net return for 1985 has been adjusted to reflect a recalculation of the net return of the Division.
- -------------------------------------------------------------------------------- 6 - -------------------------------------------------------------------------------- HYPOTHETICAL ILLUSTRATIONS The following illustrations are based on the assumption that the Separate Account and the Trust had been operating since January 1, 1976 in the same manner as they operate as a result of the implementation of the Reorganization described under GENERAL INFORMATION -- PREDECESSORS OF THE TRUST in Part 2. For illustrations based on various constant hypothetical annual investment returns, see ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUM in Part 2. - -------------------------------------------------------------------------------- ILLUSTRATION OF VARIATIONS OF THE DEATH BENEFIT, THE ACCOUNT VALUE AND THE CASH SURRENDER VALUE IN RELATION TO INVESTMENT EXPERIENCE OF THE COMMON STOCK DIVISION The following example shows how the net return of the Common Stock Division would have affected the Death Benefits, Account Values and Cash Surrender Values of a single premium policy dated January 1, 1976. Assume a single premium of $25,000 and that the insured was a 40 year old male on January 1, 1976. - -------------------------------------------------------------------------------- SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY ($81,932 Face Amount)
- ------------------------------------------------------------------------------------------------------------------------------------ Cash Guaranteed Policy Anniversary on Surrender Minimum January 1 in Year: Value Account Value Death Benefit Death Benefit - ------------------------------------------------------------------------------------------------------------------------------------ 1977* $24,171 $26,224 $ 85,615 $81,932 1978 21,713 23,353 81,932 81,932 1979 23,835 25,410 81,932 81,932 1980 29,920 31,618 93,868 81,932 1981 46,298 48,487 139,540 81,932 1982 43,575 45,227 126,201 81,932 1983 49,898 51,320 138,888 81,932 1984 63,970 65,188 171,147 81,932 1985 62,235 62,829 160,066 81,932 1986 83,742 83,742 207,077 81,932 1987 98,819 98,819 237,244 81,932 - ------------------------------------------------------------------------------------------------------------------------------------ * Reflects net investment income credited at the assumed rate of 4% from January 1, 1976 to January 12, 1976, and an actual rate of return for the Common Stock Division assuming the investment performance of the Trust's Common Stock Portfolio was the same as our pre-Reorganization Separate Account I starting January 13, 1976. Net annual premiums under variable life policies were first put into our pre-Reorganization Separate Account I on January 13, 1976.
Remember, this example of past investment performance is for a specific age, sex, premium amount and policy anniversary. Also, the policy described in this prospectus was not available in 1976. The benefits illustrated under this policy are calculated on the policy anniversary and do not represent the average net investment performance of our pre-Reorganization Separate Account I during the policy year. Past investment performance should not be deemed a representation of future investment experience of the Division or investment performance of the Trust. The difference between the Account Value and the Cash Surrender Value is the contingent deferred sales load. This example assumes that the net single premium and related Account Values and Cash Surrender Values are 100% in the Common Stock Division for the entire period. - -------------------------------------------------------------------------------- 7 - -------------------------------------------------------------------------------- ILLUSTRATION OF VARIATIONS OF THE DEATH BENEFIT, THE ACCOUNT VALUE AND THE CASH SURRENDER VALUE IN RELATION TO INVESTMENT EXPERIENCE OF THE MONEY MARKET DIVISION The following example shows how the net return of the Money Market Division would have affected the Death Benefits, Account Values and Cash Surrender Values of a single premium policy dated January 1, 1982. Assume a single premium of $25,000 and that the insured was a 40 year old male on January 1, 1982. - -------------------------------------------------------------------------------- SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY ($81,932 Face Amount)
- ------------------------------------------------------------------------------------------------------------------------------------ Cash Guaranteed Policy Anniversary on Surrender Minimum January 1 in Year: Value Account Value Death Benefit Death Benefit - ------------------------------------------------------------------------------------------------------------------------------------ 1983 $25,074 $27,204 $ 88,814 $81,932 1984 27,305 29,366 92,864 81,932 1985 30,227 32,225 98,726 81,932 1986 32,674 34,527 102,505 81,932 1987 34,784 36,429 104,839 81,932 - ------------------------------------------------------------------------------------------------------------------------------------
This example reflects Money Market Division investment experience assuming the investment performance of the Trust's Money Market Portfolio was the same as our pre-Reorganization Separate Account II starting January 1, 1982. Net premiums under variable life policies were first put into our pre-Reorganization Separate Account II on August 21, 1981. Remember, this example of past investment performance is for a specific age, sex, premium amount and policy anniversary. Also, the policy described in this prospectus was not available in 1982. The benefits illustrated under this policy are calculated on the policy anniversary and do not represent the average net investment performance of our pre-Reorganization Separate Account II during the policy year. Past investment performance should not be deemed a representation of future investment experience of the Division or future investment performance of the Trust. The difference between the Account Value and the Cash Surrender Value is the contingent deferred sales load. This example assumes that the net premium and related Account Values and Cash Surrender Values are 100% in the Money Market Division for the entire period. - -------------------------------------------------------------------------------- 8 - -------------------------------------------------------------------------------- PART 2 -- DETAILED INFORMATION - -------------------------------------------------------------------------------- GENERAL INFORMATION ABOUT US We are Equitable Variable. We were organized in 1972 in New York State as a stock life insurance company and are authorized to sell life insurance and annuities there. We also are authorized to sell life insurance and annuities in other jurisdictions. In January of 1976 we began selling periodic premium variable life policies, and two years later, in January of 1978, we began selling fixed annuity contracts. In 1983 we began selling a form of fixed life insurance policy, the Equitable Life Account. In 1983 we also began selling single premium variable life policies. In 1986 we began selling an individual flexible premium variable life policy designed to provide insurance coverage with flexibility in death benefits and premium payments. We also sell two types of term insurance policies, fixed single premium life insurance policies and universal life insurance policies. At the end of 1986 we had approximately $9.7 billion face amount of variable life insurance in force and $47.1 billion of fixed life insurance in force (and about $1.9 billion of fixed annuity payment obligations). Policy owners who have our variable life policies on a single premium basis, as well as on a periodic premium basis, have monies placed in our Separate Account. Our financial statements including those of our continuing Separate Account are in Part 3. - -------------------------------------------------------------------------------- EQUITABLE Equitable is a New York mutual life insurance company that has its home office at 787 Seventh Avenue, New York, N.Y. 10019. Equitable has been in business since 1859. Equitable's total assets make it the third largest life insurance company in the United States. At December 31, 1986 these assets were approximately $55 billion. Equitable is also one of the largest managers of retirement fund assets. At December 31, 1986, Equitable and its subsidiaries were managing pension fund assets of $66.2 billion and total assets of $102.7 billion. These assets include amounts in our General Account, Equitable's General Account and separate accounts, and other accounts managed by Equitable and Equitable Capital. On December 31, 1986, Equitable Capital was managing approximately $30 billion in assets. Equitable Capital acts as an investment adviser to various separate accounts and general accounts of Equitable and other affiliated insurance companies. Equitable Capital also provides management and consulting services to mutual funds, endowment funds, insurance companies, foreign entities, and non-tax-qualified corporate funds, pension and profit-sharing plans, foundations and tax-exempt organizations. Between the time we were organized and the end of December 1986, Equitable invested over $570 million in us. This money has been used to help us meet operational costs and policy reserve requirements. Equitable probably will invest more money in us in the future although it has no legal obligation to do so. Its assets do not back benefits that may be paid under the policy discussed in this prospectus. In December, 1984, Equitable acquired Donaldson, Lufkin & Jenrette, Inc. (DLJ). A DLJ subsidiary, Donaldson, Lufkin & Jenrette Securities Corporation, is one of the nation's largest investment banking and securities firms. Another DLJ subsidiary, Autranet, Inc., is a securities broker that markets independently originated research to institutions. Through the Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation, DLJ supplies correspondent services, including order execution, securities clearance and other centralized financial services, to approximately 300 independent regional securities firms and 100 banks. To the extent permitted by law, Equitable, Equitable Variable and their separate accounts and affiliated companies, several of which are registered investment companies (including the Trust), may engage in securities and other transactions with the various entities mentioned in the preceding paragraph or may invest in shares of investment companies with which those entities have affiliations. - -------------------------------------------------------------------------------- REGULATION We are regulated and supervised by the New York State Insurance Department. In addition, we are subject to insurance laws and regulations in every jurisdiction where we sell our policies. We submit annual reports on our operations and finances to insurance officials in these jurisdictions. The officials are responsible for reviewing our reports to be sure we are financially sound and that we are complying with applicable laws and regulations. - -------------------------------------------------------------------------------- 9 - -------------------------------------------------------------------------------- Our single premium variable life policy has been approved in 50 states and the Virgin Islands. We are also subject to various Federal securities laws and regulations. - -------------------------------------------------------------------------------- THE TRUST The Hudson River Trust currently issues six series or classes of shares, each of which represents an interest in one of the Trust's Portfolios. Shares of the Aggressive Stock, High Yield, Common Stock, Balanced and Money Market Portfolios are purchased and redeemed by the corresponding Separate Account Division. The Global Portfolio is not available for investment under SP-1. The Trust sells and redeems its shares at net asset value. It does not impose a sales charge. The Trust serves as an investment medium for variable life policies issued by us and by insurers affiliated or unaffiliated with Equitable. We currently do not foresee any disadvantages to our policy owners arising out of this. However, the Trust's Board of Trustees intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the Trust's response to any of those events insufficiently protects our policy owners, we will see to it that appropriate action is taken to protect our policy owners. Also, if we ever believe that any of the Trust's Portfolios is so large as to materially impair the investment performance of a Portfolio or the Trust, we will examine other investment options. The Trust's shares will be sold only to separate accounts of insurance companies. Since we are the only insurance company now investing in the Trust, we are currently in control of the Trust. We owned approximately $475 million worth of the Trust's shares as of December 31, 1986, and will continue to control the Trust at least until other insurance companies, selling significant amounts of variable insurance products, have made substantial investments in Trust shares. The Trust's address is 787 Seventh Avenue, New York, New York 10019. The custodian of the securities and other assets of the Trust is The Chase Manhattan Bank, N.A. The Trust, its investment objectives and policies, its risks, expenses, organization and other aspects of its operations are described in more detail in its prospectus, which is attached to this prospectus, and in a Statement of Additional Information which may be obtained free of charge by written request to the Trust at 787 Seventh Avenue, New York, New York 10019. Please carefully read the Trust's prospectus. - -------------------------------------------------------------------------------- PREDECESSORS OF THE TRUST Pursuant to a Plan of Reorganization (Reorganization) approved at a meeting of our policy owners held on February 14, 1985, effective as of March 22, 1985, we restructured our Separate Accounts I and II into one separate account in unit investment trust form. To accomplish this restructuring, we converted our then existing Separate Account I, a Common Stock Account, and Separate Account II, a Money Market Account, into our continuing Separate Account I with two investment divisions: the Common Stock Division and the Money Market Division. On March 22, 1985, all of the assets and related liabilities of our former Separate Accounts I and II were transferred to the Common Stock and Money Market Portfolios of The Hudson River Fund, Inc. respectively, in exchange for shares in the Portfolios, and we ceased to be an investment adviser of our continuing Separate Account. The Reorganization did not change the policy values of then outstanding policies. On September 30, 1987, pursuant to an Agreement and Plan of Reorganization approved by policyowners, The Hudson River Fund, Inc., a Maryland corporation, was reorganized as a Massachusetts business trust and its name was changed to The Hudson River Trust. Refer to the Prospectus for the Trust for further information. - -------------------------------------------------------------------------------- INVESTMENT OBJECTIVES OF THE PORTFOLIOS Each Portfolio of the Trust has a different investment objective which it tries to achieve by following separate investment policies. The objectives and policies of each Portfolio will affect its return and its risks. The policies and objectives of the Portfolios available for investment under SP-1 are as follows:
- ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Investment Policy Objective - ------------------------------------------------------------------------------------------------------------------------------------ HIGH YIELD Primarily a diversified mix of high yield, High return by maximizing current income fixed income securities involving greater and, to the extent consistent with that volatility of price and risk of principal objective, capital appreciation and income than high quality fixed income securities - ------------------------------------------------------------------------------------------------------------------------------------
10
- ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Investment Policy Objective - ------------------------------------------------------------------------------------------------------------------------------------ AGGRESSIVE STOCK Primarily common stocks and other equity-type Long-term growth of capital securities issued by medium and smaller sized companies with strong growth potential COMMON STOCK Primarily common stock and other equity-type Long-term growth of capital and increasing instruments income BALANCED Common stocks, publicly-traded debt High return through a combination of securities and high quality money market current income and capital appreciation instruments MONEY MARKET Primarily high quality short-term money High level of current income while market instruments preserving assets and maintaining liquidity - ------------------------------------------------------------------------------------------------------------------------------------
There is no guarantee that these objectives will be achieved. - -------------------------------------------------------------------------------- THE TRUST'S INVESTMENT ADVISER The Trust is advised by Equitable Capital, a wholly-owned subsidiary of Equitable. Equitable Capital is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940. Equitable Capital's address is 1285 Avenue of the Americas, New York, New York 10019. We make a daily credit to the values of the divisions of the Separate Account to offset completely the effect on such values of the portion of the Trust's investment advisory fees which exceed a 0.25% effective annual rate and all other Trust expenses except (a) all brokers' commissions, transfer taxes and other fees and expenses for services relating to purchases and sales of Portfolio investments and (b) any Trust income tax liabilities. Equitable Capital provides services pursuant to an investment advisory agreement for a fee based on the following maximum effective annual percentages of the average daily value of the aggregate net assets of each of the Portfolios. These annual percentages for the Portfolios corresponding to the Divisions available for investment under SP-1 are: 0.40% for the Common Stock, Balanced and Money Market Portfolios, 0.50% for the Aggressive Stock Portfolio and 0.55% for the High Yield Portfolio. - -------------------------------------------------------------------------------- DEDUCTIONS FROM PREMIUM The amount of premium for a standard mortality risk policy put into the Separate Account's Divisions is the total single premium minus a $200 administrative charge and a charge for state premium taxes. This is the net single premium that is then put into the Separate Account. We do this as of the date of your application if the application and the premium are received at our Regional Service Center within 10 days after you sign the application. If the application and the premium are received more than 10 days from the date you sign the application, the net single premium will be put into the Separate Account when received. A summary of the charges against the single premium follows. - -------------------------------------------------------------------------------- ADMINISTRATIVE EXPENSE CHARGE We charge $200 for administrative expenses. These include: o processing applications; o establishing policy records; o conducting medical examinations; o determining insurability; o processing claims, paying Cash Surrender Values, and making policy changes; o record keeping; o communicating with policy owners; and o other expenses and overhead. - -------------------------------------------------------------------------------- 11 - -------------------------------------------------------------------------------- STATE PREMIUM TAX CHARGE We deduct an amount from your single premium to cover state and local premium taxes payable by us. These taxes vary from state to state and also vary in some areas by municipalities and counties. Taxes currently range up to 4%. - -------------------------------------------------------------------------------- EXAMPLE OF DEDUCTIONS FROM PREMIUM The following (using the policies shown in the ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUM) shows what amount of net single premium would be put into the Separate Account at the start of the first policy year. A policy's actual Account Value and Cash Surrender Value are related to the policy's net single premium. - -------------------------------------------------------------------------------- NET SINGLE PREMIUMS
- ------------------------------------------------------------------------------------------------------------------------------------ State Male or Female Male or Female Male or Female Male or Female Premium Issue Age 5 Issue Age 25 Issue Age 40 Issue Age 55 Tax ($10,000 Premium) ($20,000 Premium) ($25,000 Premium) ($50,000 Premium) - ------------------------------------------------------------------------------------------------------------------------------------ 0% $9,800 $19,800 $24,800 $49,800 1% 9,700 19,600 24,550 49,300 2% 9,600 19,400 24,300 48,800 3% 9,500 19,200 24,050 48,300 4% 9,400 19,000 23,800 47,800 - ------------------------------------------------------------------------------------------------------------------------------------
There is no sales load deducted from the single premium. There will never be a sales load deducted unless you surrender your policy for its Cash Surrender Value in the first 10 policy years or exchange your policy for a fixed life policy. See CONTINGENT DEFERRED SALES LOAD. To the extent sales expenses are not covered by the sales loads, we will recover them from funds other than premium deductions. - -------------------------------------------------------------------------------- CONTINGENT DEFERRED SALES LOAD There is a difference between the Account Value and the Cash Surrender Value of our policy in the first ten policy years. This difference is a contingent deferred sales load against your Account Value decreasing from between 8% and 9% in the first policy year to zero in the 10th policy year. The initial percentage depends on the insured's age and sex. The percentage decreases evenly over the first 10 policy years. This charge is designed to recover expenses of distributing policies which are terminated by surrender in their early years. It will never be greater than 9% of your single premium. We charge the contingent deferred sales load if you surrender your policy in the first ten years and receive its net Cash Surrender Value. Since the loan value of the policy is based on the amount of Cash Surrender Value rather than on the Account Value, the contingent deferred sales load has the effect of reducing the amount available for a policy owner to borrow under a policy. The contingent deferred sales load is not imposed on Account Value transfers between Divisions, Separate Account investment experience, Death Benefits or exchanges to fixed benefit policies. - -------------------------------------------------------------------------------- OUR SEPARATE ACCOUNT AND ITS DIVISIONS Our Separate Account is registered with the SEC as a unit investment trust, which is a type of investment company. This does not involve any supervision by the SEC of the management or investment policy or practices of the Separate Account. For state law purposes the Separate Account is treated as a part of us. After making certain deductions from premiums, we put your net premium in one or more Divisions of our Separate Account. You decide in which Divisions your policy's net premium will be put. (Also, you have certain voting privileges with respect to the Trust shares held in the Divisions. See YOUR VOTING PRIVILEGES.) Each Division invests in shares of a corresponding investment Portfolio of the Trust. The Separate Account also invests income or capital gains dividends received from the Trust in shares of the Trust. - -------------------------------------------------------------------------------- 12 - -------------------------------------------------------------------------------- The Separate Account purchases and redeems shares of the Trust at their net asset value per share. The Separate Account's assets are allocated among the Divisions in accordance with the allocations of the net premium invested in the Separate Account and the earnings on those assets. Also, liabilities of the Separate Account will be allocated to the Division to which they relate. Accrued liabilities that are not allocable to one Division will be allocated to the Divisions in proportion to their relative net assets. In the unlikely event that any Division incurred liabilities in excess of its assets, the other Divisions could be liable for such excess. Each Portfolio has a different investment policy (see THE TRUST). You should keep in mind that the investment experience of the Separate Account and the Divisions depends on the investment performance of the Trust and the corresponding Portfolios. Also, values of SP-1 policies are increased to compensate policy owners for their share of Trust expenses in excess of the sum of (1) expenses for brokers' commissions, transfer taxes and other fees relating to purchases and sale of Portfolio investments, (2) fees for advisory services at an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the Portfolios and (3) Trust income taxes, if any. The Common Stock Division of our Separate Account superseded our pre-Reorganization Separate Account I, which was established on June 28, 1973. The Money Market Division of our Separate Account superseded our pre-Reorganization Separate Account II, which was established on December 12, 1980. Both pre-Reorganization Separate Accounts were established under the insurance law of New York State as separate investment accounts. Assets that were used to provide money to pay benefits under our variable life policies were allocated to the pre-Reorganization Separate Accounts from time to time. As a result of the Reorganization, those assets and additional assets to be received from premiums under in-force policies and future policies, will be allocated to the Separate Account Divisions from time to time and used to provide money to pay benefits under our variable life policies. Any increase or decrease in a policy's Death Benefit, Account Value or Cash Surrender Value will reflect the investment experience of the Division where you have Account Value, which in turn will depend upon the investment performance of the corresponding Portfolio of the Trust. (It will not be affected by the experience of the other Divisions unless you have Account Value in other Separate Account Divisions.) - -------------------------------------------------------------------------------- HOW WE SUPPORT THE OPERATIONS OF A POLICY We support the operations of a policy by putting the net single premium (which is the single premium less the charges described under DEDUCTIONS FROM PREMIUM) into the Separate Account Division or Divisions as the policy owner chooses. We do this when the policy is issued. Once the net single premium is placed into the Divisions we charge for the cost of insurance based on the attained sex and age for the amount at risk. The amount at risk on policy anniversaries is the Death Benefit payable less the Account Value in the Divisions (adjusted for any loans). The cost of insurance deducted from the amount in the Divisions is based on the 1980 Commissioners' Standard Ordinary Mortality Table, and generally increases with attained age. The cost of insurance differs in each year because, based on this mortality table, the probability of death generally increases with attained age and the amount at risk is different year by year. The dollar amount of the cost of insurance also depends on investment experience of the Divisions in which a policy participates. - -------------------------------------------------------------------------------- SEPARATE ACCOUNT ASSETS ARE OUR PROPERTY The assets of the Separate Account are our property. However, New York Insurance Law provides that the portion of Separate Account's assets that relates to variable life policies may not be used to satisfy any obligations that may arise out of any other business we conduct, although under certain circumstances one Division could be liable for claims arising out of the other Divisions' operations. - -------------------------------------------------------------------------------- 13 - -------------------------------------------------------------------------------- We permit money from charges owed to us to stay in the Divisions and accumulate. These accumulated amounts are in excess of each Division's net assets attributed to variable life policies. These amounts belong to us. There probably will be more assets in the Separate Account than those that apply to our variable life policies. We expect to transfer part or all of the excess to our General Account. These transfers will be in cash, but before we make them we will consider whether the transfer could have any adverse effect on the Separate Account. In 1986 we made no such transfer to our General Account. - -------------------------------------------------------------------------------- CHARGES AGAINST THE SEPARATE ACCOUNT The amount in the Separate Account Divisions in which your policy participates is further decreased (after the following charges) by the cost of your insurance protection. See HOW WE SUPPORT THE OPERATIONS OF A POLICY. - -------------------------------------------------------------------------------- CHARGES FOR MORTALITY AND EXPENSE RISKS We charge the Separate Account for the mortality and expense risks we assume. The charge is made daily at an effective annual rate of 0.50% of the value of each Division's assets that are attributable to variable life policies. The mortality risk we assume is that insureds may live for shorter periods of time than we estimated. If this occurs, we have to pay a greater amount of death benefits than we expected in relation to the premiums we received. The expense risk we assume is that our costs of issuing and administering policies may be more than we estimated. The money we collect from this charge may exceed the amount needed to cover benefits and expenses and would be our gain. - -------------------------------------------------------------------------------- OTHER CHARGES The Separate Account purchases shares of the Trust at their net asset value. The net asset value of those shares reflects management fees and other expenses already deducted from the assets of the Trust that are briefly described under THE TRUST. More detailed information about the Trust is in its prospectus and its Statement of Additional Information. - -------------------------------------------------------------------------------- YOUR VOTING PRIVILEGES GENERAL As we have already said, all assets held in the Divisions are invested in shares of the corresponding Portfolios of the Trust. We are the legal owners of those shares and as such have the right to vote upon certain matters at any meeting of the Trust's shareholders that may be held. Among other things, we may vote on any matters described in the Trust's prospectus or Statement of Additional Information or requiring a vote by shareholders under the 1940 Act. However, in accordance with our view of current Federal securities law requirements, we will offer you the opportunity to instruct us as to how Trust shares allocable to your policy and held by us in the Separate Account will be voted on these matters. We will vote the shares of the Trust at meetings of shareholders of the Trust in accordance with your instructions. Thus, you will have the right to have a voice in the affairs of the Trust. Trust shares held in each Division of the Separate Account for which no timely instructions from policy owners are received will be voted by us in the same proportion as shares in that Division for which instructions are received. We will also vote any Trust shares that we are entitled to vote directly due to amounts we have accumulated in the Separate Account in the same proportions that all policy owners vote, including those who participate in other separate accounts. See YOUR VOTING PRIVILEGES -- VOTING INSTRUCTIONS OF OTHER SEPARATE ACCOUNT PARTICIPANTS. Each policy having a voting interest will be sent proxy material and a form for giving voting instructions. If required by state insurance officials, we may disregard voting instructions if those instructions would require shares to be voted so as to cause a change in the investment objectives or policies of one or more of the Trust's Portfolios, or to approve or disapprove an investment policy or investment adviser of one or more of the Trust's Portfolios. In addition, we may disregard voting instructions in favor of changes initiated by a policy owner or the Trust's Board of - -------------------------------------------------------------------------------- 14 - -------------------------------------------------------------------------------- Trustees in the investment policy or the investment adviser of a Portfolio, provided that our disapproval of the change is reasonable and is based on a good faith determination that the change would be contrary to state law, the proposed advisory fee would be higher than we are permitted to pay by the terms of our variable life policies, or the charge would lead to an adverse effect on our general account because it would result in unsound or overly speculative investments. We will advise policy owners if we do disregard voting instructions, and give our reasons for such actions in the next semiannual report we send to policy owners. All Trust shares of whatever class are entitled to one vote, and the votes of all classes are cast on an aggregate basis, except on matters where the interests of the Portfolios differ. In such a case, the voting is on a Portfolio-by-Portfolio basis. Approval or disapproval by the shareholders in one Portfolio on such a matter would not generally be a prerequisite of approval or disapproval by shareholders in another Portfolio; and shareholders in a Portfolio not affected by a matter generally would not be entitled to vote on that matter. Examples of matters which would require a Portfolio-by-Portfolio vote are changes in the fundamental investment policy or restrictions of a particular Portfolio and approval of the investment advisory agreement. - -------------------------------------------------------------------------------- VOTING INSTRUCTIONS OF OTHER SEPARATE ACCOUNT PARTICIPANTS Net premiums for our individual flexible premium variable life policy and premiums from our variable life insurance policy with additional premium option are invested in our Separate Account FP, which, in turn, invests in the Trust. In addition, Trust shares are held by other separate accounts established by us and other insurance companies affiliated and unaffiliated with us. We expect that those shares will be voted through those separate accounts in accordance with instructions of their participants. This will dilute the effect of the voting instructions of policy owners whose net premiums are invested in the Separate Account. - -------------------------------------------------------------------------------- DETERMINING THE TRUST PORTFOLIO FOR WHICH YOU CAN GIVE VOTING INSTRUCTIONS If all your Account Value is in one Division, you can participate in the voting only for the shares in the Trust Portfolio that corresponds to that Division. If your Account Value is divided among the Divisions, you are entitled to participate in the voting of the shares of the Trust Portfolios that correspond to each Division in which you have Account value. The number of Trust shares held in each Division attributable to your policy for purposes of your voting privilege will be determined by dividing your policy's Account Value (less any policy indebtedness) allocable to that Division by the net asset value of one share of the corresponding Trust Portfolio as of the record date for the Trust's shareholder meeting. The record date for this purpose will not be more than 90 days before the meeting of the Trust. Fractional shares are counted. EXAMPLE: Your policy has an Account Value of $3,000, 50% of which is attributable to the Common Stock Division and 50% of which is attributable to the Money Market Division. Assuming the net asset value of one share in each Trust Portfolio is $100, you would have the privilege of voting 30 shares. You will have the privilege of instructing us regarding 15 votes in each Division. EXAMPLE (ASSUMING AN OUTSTANDING LOAN): Your policy has an Account Value of $3,000, which entitles you to 30 votes. If you have a $1,000 loan (including interest due) equally allocated between each Division, you would be entitled to 10 votes in each Division, or an aggregate of 10 fewer votes. - -------------------------------------------------------------------------------- LAW CHANGES MAY AFFECT YOUR VOTING PRIVILEGES Our Separate Account is required by Federal securities laws or regulations as currently interpreted to have policy owners instruct us as to the Trust's voting rights. However, if amendments to or interpretations of those laws or regulations change what must be voted on, or restrict the matters for which policy owners are given the opportunity to provide voting instructions, we will in turn change what is submitted to policy owners. - -------------------------------------------------------------------------------- 15 - -------------------------------------------------------------------------------- OUR RIGHTS We reserve the right to take certain actions in connection with our operations and the operations of the Separate Account. We will always attempt to comply with applicable laws before we take any of these actions. If necessary, we will seek approval by policy owners. Specifically we reserve the right to: o add Divisions to or remove Divisions from the Separate Account; o combine any two or more Divisions within the Separate Account; o transfer assets of the variable life policy offered by this prospectus, as well as the assets of our other variable life policies, from one Division to another (if we do, we will withdraw proportional amounts of each investment in the Division, but we will also make whatever adjustments are needed to avoid odd lots and fractions); o operate the Separate Account as a management investment company under the 1940 Act, or in any other form the law allows (if we do, we may invest the assets in any legal investments and we or one of our affiliates, such as Equitable Capital, will serve as investment adviser); o end the registration of the Separate Account under the 1940 Act; or o operate the Separate Account under the general supervision of a Committee made up of individuals all of whom may be, under the 1940 Act, interested persons of us or of Equitable or discharge such Committee. - -------------------------------------------------------------------------------- SUBSTITUTION OF TRUST SHARES Although we believe it to be highly unlikely, it is possible that, in our judgment, one or more of the Portfolios of the Trust may become unsuitable for investment by the Separate Account because, for example, of a change in the investment policy, or a change in the tax laws, or because the shares are no longer available for investment. For those or other reasons, we may seek to substitute the shares of another Portfolio or of an entirely different mutual fund. Before we can do this, we would obtain the approval of the SEC, and possibly one or more state insurance departments, to the extent legally required. - -------------------------------------------------------------------------------- DEATH BENEFITS UNDER OUR POLICIES The Death Benefit is the amount payable to the named beneficiary when the insured dies. All or part of the Death Benefit can be paid in cash or applied under one or more of our payment options described under PAYMENT OPTIONS. The Death Benefit will at least equal the guaranteed minimum of insurance. Whether the Death Benefit is higher than the guaranteed minimum depends on the investment experience of the Divisions in which a policy participates. See the ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUM. The Death Benefit is the higher of the guaranteed minimum Death Benefit, plus the sum (if positive) of the variable adjustment amounts (determined annually) in the Divisions in which you have Account Value, or the insurance coverage that can be purchased by the Account Value at the date of death. The amount of Death Benefit actually paid to the insured's beneficiary will be adjusted as of the date of the insured's death to reflect: o any policy loans together with accrued interest; o the insured's suicide within 2 years after the policy's date of issue. See LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY; and o any material misstatement in the application for insurance, including a misstatement of the insured's age or sex. See LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY. Interest will be paid from the date of death to the date the Death Benefit is paid at the annual rate that we are paying under the deposit option described in PAYMENT OPTIONS. If you sign an application and send us money, and if the person proposed to be insured dies between the application date and the date we act on the application, we have a special rule. Should we decide the proposed insured was insurable and accept the application, we will pay the initial face amount to the proposed beneficiary. - -------------------------------------------------------------------------------- THE GUARANTEED MINIMUM DEATH BENEFIT The guaranteed minimum Death Benefit equals a policy's initial face amount regardless of the investment experience of the Divisions in which a policy participates. - -------------------------------------------------------------------------------- 16 - -------------------------------------------------------------------------------- THE VARIABLE ADJUSTMENT AMOUNT The variable adjustment amount for each Division is the amount of the Death Benefit that results from all past investment experience of that Division. In the first policy year, the variable adjustment amount in each Division is zero. After that, the variable adjustment amount is the amount of insurance purchased by the difference between the actual rate of return and 4%. Therefore, a Division's variable adjustment amount will not change in any year that the Division's gross return minus the charges to the Division results in a net return of 4%. If the net return is more than 4%, that variable adjustment amount will increase. The variable adjustment amount will increase because additional amounts of paid-up life insurance are purchased. If the net return is less than 4%, it will decrease. The variable adjustment amount will decrease because these additional amounts of paid-up life insurance are lost. The rates at which these additional amounts of paid-up life insurance are purchased or lost are based on sex and attained age and are guaranteed. The percentage change in the Death Benefit for any year is not the same as the net return for the preceding year and it is not necessarily related to current or future rates of inflation. The Death Benefit is equal to the guaranteed minimum Death Benefit plus the sum (if positive) of the variable adjustment amounts for each Division in which you have funds. However, even if the sum of the variable adjustment amounts is negative, the Death Benefit will never be less than the guaranteed minimum. In any year that the sum of the variable adjustment amounts increases (and is positive), the Death Benefit will increase. If the sum of the variable adjustment amounts is negative, investment experience can not increase the Death Benefit above the guaranteed minimum until it has increased the variable adjustment amount of at least one Division so that the sum is positive. In any year that the sum of the variable adjustment amounts for the Divisions in which the policy participates decreases, the Death Benefit will decrease, unless it is already at the guaranteed minimum. The variable adjustment amount for each Division is set on each policy anniversary. Once set, it remains the same for the following policy year. If it is set above the guaranteed minimum, we will be responsible for keeping it at that level until the next policy anniversary. You will bear the risk that it could drop on the next policy anniversary (but not below the guaranteed minimum). In addition, if the Account Value at the date of death, considered as a single premium, can buy more Death Benefit than what was calculated at the beginning of the policy year, this increased Death Benefit will be paid. There is no guarantee that a Division's investment experience, which will reflect the investment performance of the corresponding Portfolio of the Trust, will be sufficient to result in an increase in Death Benefits. However, the historical pattern of stock performance has been one of long-range growth, and money market investments in recent years have returned more than 4%. THE VARIABLE ADJUSTMENT AMOUNT IS CUMULATIVE. Increases and decreases in the variable adjustment amount are carried into each succeeding year. The variable adjustment amount for a Division can be positive or negative. If it is positive, good investment experience will produce a larger variable adjustment amount. If it is negative, good investment experience must first offset the current negative variable adjustment amount before there can be a positive amount. EXAMPLE: You were a 40 year old male when your policy was issued. Assume a hypothetical gross annual investment return of 0% for the first 4 policy years. This results in a negative variable adjustment amount. A net return of approximately 25.4% in the 5th policy year would offset the cumulative negative variable adjustment amount so that it would equal zero. Any net return above that would produce a positive variable adjustment amount. On the other hand, the negative variable adjustment amount may be offset over a number of years. Thus, if the gross return in the 5th policy year were 8%, (equivalent to 7.19% net), a gross return of 8% in each of the 6 following policy years would be required to produce a positive variable adjustment amount by the 12th policy year. - -------------------------------------------------------------------------------- 17 - -------------------------------------------------------------------------------- For a given net return, the greater the Account Value in a Division, the greater the effect of investment experience on the variable adjustment amount. Therefore, in later policy years, when your total Account Value may be greater, investment experience may have a greater effect on the Death Benefit. - -------------------------------------------------------------------------------- THE DEATH BENEFIT BASED ON ACCOUNT VALUE If the Account Value increases at an annual rate of more than 4% between the beginning of the policy year and the date of death, the Death Benefit will be greater than the amount determined at the beginning of the policy year. This is because we see how much insurance the Account Value would buy if it were considered as a single premium. - -------------------------------------------------------------------------------- NET RETURN The Death Benefit based on a Division's net return is set on each policy anniversary. The net return depends on the investment experience of the Division from the first day of that policy year to the first day of the next policy year. It takes into account investment income, capital gains and capital losses (whether realized or unrealized), with respect to Trust shares owned by the Division and gains resulting from the reimbursement by us to the Division of amounts corresponding to certain Trust expenses. The charges against the Division are then deducted to determine the net return. The net return on a date during a policy year depends on the investment experience of the Division from the first day of that policy year to that date and can affect Account Values, Cash Surrender Values and Death Benefits. The net return of each Division is determined at the close of trading on each day in which the degree of trading in the corresponding Portfolio of the Trust might materially affect the net return of that Division. We call this a "business day". Normally this would be each day that the New York Stock Exchange is open. However, because we are closed on Martin Luther King Day and the Friday after Thanksgiving Day, no determination will be made on those days. The assets of each Division are valued by multiplying the number of Trust shares in each Division by the net asset value of such shares and is adjusted by the charge for mortality and expense risks. See the financial statements for the Separate Account in this prospectus. The net return for a policy year is not the same as for a calendar year unless the policy anniversary is January 1. A statement of the method we use to calculate net return is an exhibit to the Registration Statement we filed with the SEC. It will be furnished on request. - -------------------------------------------------------------------------------- HOW THE DEATH BENEFIT VARIES FROM THE GUARANTEED MINIMUM The following example shows how the Death Benefit varies from the guaranteed minimum as a result of investment experience. Assume that the insured was a 40 year old male when the policy was issued, and the hypothetical gross annual return for each of the first 6 policy years was 8% for each Division or their combination (which is equal to a net return of 7.19%). Use the amounts from the ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUM.
- ------------------------------------------------------------------------------------------------------------------------------------ Variable Guaranteed Adjustment Death Minimum + Amount = Benefit - ------------------------------------------------------------------------------------------------------------------------------------ End of policy year 5 $81,932 $13,468 $95,400 Increase -- 2,951 2,951 (3.1% increase) - ------------------------------------------------------------------------------------------------------------------------------------ End of policy year 6 $81,932 $16,419 $98,351 - ------------------------------------------------------------------------------------------------------------------------------------
If the gross annual return was 0% (equal to a net return of -.75%), the Death Benefit at the end of policy year 6 would have been $91,006 (a 4.6% decrease). This reflects a decrease in the variable adjustment amount of $4,394. - -------------------------------------------------------------------------------- 18 - -------------------------------------------------------------------------------- ACCOUNT VALUES, CASH SURRENDER VALUES AND LOAN PRIVILEGES UNDER OUR POLICIES HOW WE DETERMINE ACCOUNT VALUE When your policy is issued, your total Account Value is your total single premium net of deductions. See DEDUCTIONS FROM PREMIUM. On dates other than at issue, the total Account Value is the sum of the funds allocated to each Division. The funds in each Division, on any date other than a policy anniversary, are the sum of (1) the portion of the tabular Account Value for that date attributable to that Division, (2) the aggregate net single premium on that date for the variable adjustment amount, (3) adjustments to reflect investment experience of the Division from the last policy anniversary to that date and (4) adjustments to reflect charges to the Separate Account, cost of insurance charges and transfers to and from that Division from the last policy anniversary to that date. The tabular Account Value is what the Account Value for the policy would be if each Division in which you had funds had a constant net investment return of 4% a year. On each policy anniversary, the policy's net investment return in excess of 4% per year is used as a net single premium to purchase additional paid up variable life insurance (see THE VARIABLE ADJUSTMENT AMOUNT and NET RETURN). The net single premium is the one time net cost for your sex and attained age to purchase one dollar of Death Benefit, as specified in your policy. On each policy anniversary, the process begins again. - -------------------------------------------------------------------------------- HOW WE DETERMINE CASH SURRENDER VALUE Account Value minus any contingent deferred sales load equals Cash Surrender Value. The policy's Cash Surrender Value will vary daily with investment experience. Cash Surrender Value is the same as Account Value except in the first ten years of the policy. During the first ten policy years the Cash Surrender Value on any date will equal the product of the Account Value on that date and the tabular cash value (which is stated in your policy) divided by the tabular Account Value for that date. After the tenth policy year, the Cash Surrender Value will equal the Account Value. The difference between the Cash Surrender Value and the Account Value is a contingent deferred sales load. See CONTINGENT DEFERRED SALES LOAD. - -------------------------------------------------------------------------------- THERE IS NO GUARANTEED MINIMUM ACCOUNT VALUE OR CASH SURRENDER VALUE Daily increases or decreases in Account Value or Cash Surrender Value depend on the investment experience of the Divisions. There is no guaranteed minimum Account Value or Cash Surrender Value. - -------------------------------------------------------------------------------- RETURNING THE POLICY FOR CASH During the insured's lifetime, and subject to our rules, your policy can be returned for payment of the Cash Surrender Value net of any indebtedness. The amount payable will be based on the net Cash Surrender Value next computed after we receive your signed request for payment of the Cash Surrender Value at your Regional Service Center, accompanied by your policy. The insurance coverage will end on the date you send us the policy and your request. SPLITTING THE POLICY. You can request to split your policy into two policies. In addition, you may return one for cash. Any policy that continues will be based on the new initial face amount. If you split a policy, each continued policy must have a face amount that is at least equal to what the face amount of the $2,500 premium policy would be at the time of the split. This face amount will also be based on the same age and sex as the original policy. These are our current procedures, which may change. - -------------------------------------------------------------------------------- 19 - -------------------------------------------------------------------------------- INCOME TAX WITHHOLDING Federal tax law requires us to withhold income tax from any portion of your surrender proceeds that is subject to tax, unless you request us not to withhold. If you surrender your policy and do not advise us in writing that you do not want us to withhold Federal income tax before the date payment must be made, we are required by law to withhold tax from the surrender payment. If you elect not to have tax withheld from the surrender payment, or if the amount of Federal income tax withheld is insufficient, you may be responsible for payment of tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You may wish to consult your tax adviser. - -------------------------------------------------------------------------------- YOU CAN TRANSFER ACCOUNT VALUE AMONG DIVISIONS You may transfer Account Value among the Divisions by contacting our regional Life Insurance Center. You can request to transfer part or all of your Account Value among the Divisions. You may do this up to four times in a policy year. A transfer will go into effect on the day we receive your request. We reallocate loans if you transfer Account Value. - -------------------------------------------------------------------------------- WHEN A DIVISION BECOMES INACTIVE If you have a policy loan allocated to a Division and your Account Value less your loan (including accrued loan interest) in that Division reaches zero, that Division will become inactive for your policy. We will reallocate the loan to the other Divisions based on the proportion that your Account Value in each Division has to your total Account Value. A Division will also become inactive for your policy if you transfer its entire Account Value to the other Divisions. We will notify you when a Division becomes inactive. If a Division becomes inactive, the future variable adjustment amount, Account Value and net return will be affected. You may transfer Account Value into an inactive Division from the other Divisions. See YOU CAN TRANSFER ACCOUNT VALUE AMONG DIVISIONS. - -------------------------------------------------------------------------------- TAKING A POLICY LOAN You may borrow up to 90% of your policy's Cash Surrender Value (net of previous loans) using the policy as security. We will not grant a loan that is not at least $100 more than any outstanding loan with accrued interest. Borrowing money against your policy will have a permanent effect on your policy's Account Value and Cash Surrender Value, and the amount by which the Death Benefit may increase above the guaranteed minimum. This effect remains even though the loan is repaid in whole or in part. Whenever the loan with accrued interest from one Division equals or exceeds the Account Value in that Division, that Division will become inactive for your policy. We will transfer the total Account Value and loan allocation to the other Divisions. See WHEN A DIVISION BECOMES INACTIVE. IF LOANS EXCEED THE CASH SURRENDER VALUE OF YOUR POLICY. Whenever the loan with accrued interest exceeds the Cash Surrender Value of your policy, we will send a notice to you and to anyone to whom you told us you assigned the policy. The policy will end 31 days after we send the notice unless you make a repayment during the 31-day period that is large enough to reduce your outstanding loan with accrued interest to below the total Cash Surrender Value of your policy. If you borrow the maximum of 90% of your policy's Cash Surrender Value, you increase your risk of having your policy end. This might happen if the combination of policy loan interest as it builds up, the cost of insurance, asset charges against the Separate Account, and investment experience of the Divisions where you have Cash Surrender Value uses up the remaining 10%. - -------------------------------------------------------------------------------- 20 - -------------------------------------------------------------------------------- INTEREST. Interest on loans is 5% a year. Interest is charged daily and is payable by the policy owner on each anniversary. However, if it is not paid, it will be compounded on the policy anniversary because it will be added to the loan principal. This unpaid interest is transferred out of each Division where you have your loan into our general account. This interest is not deductible for Federal income tax purposes. REPAYMENT. You can repay all or part of any outstanding loan with accrued interest at any time while the policy is in effect and the insured is alive. Your repayment, whether full or partial, will be allocated to the Divisions in proportion to the loan allocation to each Division at the time of repayment. The amount of any outstanding loan with accrued interest will be deducted from the Death Benefit or Cash Surrender Value proceeds. WHAT DIVISION WE CHARGE LOANS AGAINST. We allocate a loan based on the net Cash Surrender Value in each Division on the date the loan is made. We reallocate loans if you transfer Account Value. THE PERMANENT EFFECT OF A LOAN. When you take out a loan, we transfer part of the Cash Surrender Value equal to the amount of the loan from the Divisions to our general account. In addition, unpaid interest on the policy loan will be transferred to our general account from time to time. The amount taken out of the Divisions will not be affected by the Divisions' investment experience while the loan is outstanding. Since the amount is not in the Divisions, it cannot contribute to any possible increase in your policy's Death Benefit, Account Value or Cash Surrender Value. We will credit your policy with a 4% annual return on any amount transferred to our general account as a result of your policy loan. This can protect Cash Surrender Value and Death Benefits from decreasing if investment experience is below 4%. It will also prevent them from increasing if investment experience is above 4%. EXAMPLE: You were a 40 year old male when your policy was issued, and you have a Single Premium Variable Life Insurance policy. Use the illustration on page 25 and assume an 8% hypothetical gross annual investment return for each Division or their combination (which is a net return of 7.19%). If you take a loan for $22,000 at the end of the 9th policy year, it will affect the Death Benefit, Account Value, and Cash Surrender Value (before subtracting the amount of the loan with loan interest) in the 10th policy year as follows: - -------------------------------------------------------------------------------- Without Loan With Loan - -------------------------------------------------------------------------------- Death Benefit $111,106 $109,370 Account Value 44,931 44,229 Cash Surrender Value 44,931 44,229 - -------------------------------------------------------------------------------- The difference results from the transfer of the portion of the Cash Surrender Value equal to the loan from the Division to the general account. The return on the amount transferred is reduced to 4% a year, rather than the Division's net return of 7.19%. See DEATH BENEFITS UNDER OUR POLICIES for adjustments that are made as of the date of the insured's death. - -------------------------------------------------------------------------------- 21 - -------------------------------------------------------------------------------- ILLUSTRATIONS OF DEATH BENEFITS, ACCOUNT VALUES AND CASH SURRENDER VALUES, AND ACCUMULATED PREMIUM To help you get a picture of how the key financial elements of our policy work, we have prepared a series of tables. The tables show how Death Benefits, Account Values and Cash Surrender Values of policies with single premiums of $10,000, $20,000, $25,000 and $50,000 could vary over an extended period of time if the Divisions had CONSTANT hypothetical gross annual investment returns of 0%, 4%, 8%, and 12% over the years covered by each table. The Death Benefits, Account Values and Cash Surrender Values would differ from those shown in the tables if the annual investment returns did not remain absolutely constant. Thus, the figures would be different if the return AVERAGED 0%, 4%, 8%, or 12% over a period of years but went above or below those figures in individual policy years. The Death Benefits, Account Values and Cash Surrender Values would also differ, depending on the investment allocations made to the Divisions, if the actual investment experience averaged 0%, 4%, 8%, or 12%, but went above or below those figures for individual Divisions. The difference between the Account Value and the Cash Surrender Value in the first ten years is the contingent deferred sales load. The amounts of Death Benefits, Account Values and Cash Surrender Values shown in the tables for the end of each policy year take into account a daily charge against each Division that is equivalent to an annual charge of 0.75% at the beginning of each year. This charge is the 0.50% charge against the Separate Account for mortality and expense risks and the effect on each Division's investment experience of the charge to the Trust assets for investment advisory services (equivalent to an annual rate of 0.25% of the aggregate average daily net assets of the Portfolios). The effect of these adjustments is that on a 0% actual rate of return the return would be -0.75%, on 4% it would be 3.22%, on 8% it would be 7.19% and on 12% it would be 11.16%. The hypothetical returns shown in the tables do not reflect any charges for Trust expenses in addition to the 0.25% investment advisory fee charge, because the Divisions in general will be reimbursed for their share of such expenses, as previously discussed under THE SEPARATE ACCOUNT, ITS INVESTMENTS AND ITS INVESTMENT EXPERIENCE and THE TRUST. The tables reflect the fact that we do not currently charge the Divisions for Federal income tax. However, if we do make such a charge in the future, it would take a higher rate of return to produce after-tax returns of 0%, 4%, 8%, and 12% than it does now. The second and third columns of each table show what would happen if an amount equal to the total premium were invested to earn interest, after taxes, of 4% or 5% compounded annually. These tables show that if a policy is returned in its very early years for payment of its Cash Surrender Value, the Cash Surrender Value will be low in comparison to the premium accumulated with interest. This means that the cost of owning your policy for a relatively short time will be high. If you request, we will furnish you with a comparable illustration based on the proposed insured's sex, age and an initial face amount or premium amount of your choice. In addition, if you do purchase a policy, we will deliver a specific illustration that reflects your actual premium paid. We have also prepared special illustrations showing the effects of policy loans on a planned basis. These are available on request. - -------------------------------------------------------------------------------- TABLE OF CONTENTS OF ILLUSTRATIONS Page ---- $10,000 Single premium Male Age 5 23 $20,000 Single premium Male Age 25 24 $25,000 Single premium Male Age 40 25 $50,000 Single premium Male Age 55 26 $10,000 Single premium Female Age 5 27 $20,000 Single premium Female Age 25 28 $25,000 Single premium Female Age 40 29 $50,000 Single premium Female Age 55 30 - -------------------------------------------------------------------------------- 22 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $98,654 MALE AGE 5 SINGLE PREMIUM $10,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- -------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- ------- ------- -------- ----------- 1 $ 10,400 $ 10,500 $98,654 $98,654 $101,705 $ 105,501 2 10,816 11,025 98,654 98,654 104,848 112,820 3 11,249 11,576 98,654 98,654 108,087 120,642 4 11,699 12,155 98,654 98,654 111,423 128,999 5 12,167 12,763 98,654 98,654 114,861 137,934 6 12,653 13,401 98,654 98,654 118,404 147,482 7 13,159 14,071 98,654 98,654 122,056 157,694 8 13,686 14,775 98,654 98,654 125,823 168,616 9 14,233 15,513 98,654 98,654 129,708 180,303 10 14,802 16,289 98,654 98,654 133,716 192,810 11 15,395 17,103 98,654 98,654 137,853 206,196 12 16,010 17,959 98,654 98,654 142,120 220,524 13 16,651 18,856 98,654 98,654 146,523 235,857 14 17,317 19,799 98,654 98,654 151,063 252,260 15 18,009 20,789 98,654 98,654 155,745 269,806 16 18,730 21,829 98,654 98,654 160,570 288,570 17 19,479 22,920 98,654 98,654 165,544 308,634 18 20,258 24,066 98,654 98,654 170,669 330,082 19 21,068 25,270 98,654 98,654 175,951 353,011 20 21,911 26,533 98,654 98,654 181,394 377,520 60 (Age 65) 105,196 186,792 98,654 98,654 614,156 5,545,865
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ---------------------------------------------------------- ---------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------ ------- -------- ---------- ------ ------- -------- ---------- $9,447 $ 9,827 $ 10,208 $ 10,590 $8,691 $ 9,041 $ 9,392 $ 9,743 9,302 10,067 10,863 11,689 8,634 9,344 10,083 10,849 9,165 10,320 11,567 12,910 8,585 9,666 10,834 12,093 9,038 10,585 12,324 14,268 8,544 10,007 11,650 13,487 8,915 10,862 13,135 15,773 8,505 10,363 12,533 15,049 8,797 11,149 14,004 17,444 8,471 10,737 13,486 16,797 8,680 11,443 14,930 19,288 8,436 11,123 14,511 18,748 8,561 11,740 15,909 21,321 8,400 11,519 15,611 20,920 8,436 12,037 16,943 23,552 8,356 11,923 16,783 23,329 8,308 12,331 18,030 25,998 8,308 12,331 18,030 25,998 8,173 12,620 19,169 28,673 8,173 12,620 19,169 28,673 8,034 12,907 20,366 31,600 8,034 12,907 20,366 31,600 7,892 13,191 21,622 34,805 7,892 13,191 21,622 34,805 7,751 13,478 22,950 38,326 7,751 13,478 22,950 38,326 7,611 13,770 24,358 42,198 7,611 13,770 24,358 42,198 7,474 14,070 25,856 46,468 7,474 14,070 25,856 46,468 7,342 14,380 27,453 51,183 7,342 14,380 27,453 51,183 7,216 14,704 29,162 56,401 7,216 14,704 29,162 56,401 7,096 15,042 30,990 62,175 7,096 15,042 30,990 62,175 6,981 15,396 32,950 68,576 6,981 15,396 32,950 68,576 3,509 37,715 370,342 3,344,211 3,509 37,715 370,342 3,344,211 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made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
23 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $106,799 MALE AGE 25 SINGLE PREMIUM $20,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- -------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- -------- -------- -------- -------- ----------- 1 $20,800 $ 21,000 $106,799 $106,799 $110,101 $ 114,209 2 21,632 22,050 106,799 106,799 113,503 122,131 3 22,497 23,153 106,799 106,799 117,010 130,598 4 23,397 24,310 106,799 106,799 120,623 139,649 5 24,333 25,526 106,799 106,799 124,347 149,326 6 25,306 26,802 106,799 106,799 128,185 159,671 7 26,319 28,142 106,799 106,799 132,141 170,733 8 27,371 29,549 106,799 106,799 136,218 182,560 9 28,466 31,027 106,799 106,799 140,422 195,206 10 29,605 32,578 106,799 106,799 144,756 208,727 11 30,789 34,207 106,799 106,799 149,223 223,187 12 32,021 35,917 106,799 106,799 153,830 238,649 13 33,301 37,713 106,799 106,799 158,578 255,185 14 34,634 39,599 106,799 106,799 163,475 272,870 15 36,019 41,579 106,799 106,799 168,523 291,784 16 37,460 43,658 106,799 106,799 173,728 312,014 17 38,958 45,840 106,799 106,799 179,096 333,653 18 40,516 48,132 106,799 106,799 184,631 356,799 19 42,137 50,539 106,799 106,799 190,339 381,557 20 43,822 53,066 106,799 106,799 196,225 408,040 40 (Age 65) 96,020 140,800 106,799 106,799 361,588 1,568,889
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF --------------------------------------------------------- --------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------- ------- -------- -------- ------- ------- -------- -------- $19,096 $19,866 $ 20,637 $ 21,407 $17,579 $18,288 $ 18,996 $ 19,705 18,808 20,355 21,964 23,633 17,465 18,902 20,396 21,947 18,530 20,863 23,384 26,099 17,363 19,549 21,910 24,455 18,263 21,390 24,903 28,832 17,268 20,225 23,547 27,260 18,005 21,936 26,527 31,857 17,180 20,932 25,313 30,398 17,753 22,500 28,263 35,206 17,096 21,669 27,218 33,904 17,506 23,081 30,115 38,910 17,017 22,436 29,273 37,822 17,264 23,679 32,090 43,007 16,940 23,234 31,486 42,198 17,026 24,292 34,195 47,536 16,864 24,061 33,871 47,085 16,792 24,922 36,439 52,542 16,792 24,922 36,439 52,542 16,558 25,565 38,826 58,070 16,558 25,565 38,826 58,070 16,327 26,223 41,367 64,177 16,327 26,223 41,367 64,177 16,096 26,895 44,068 70,915 16,096 26,895 44,068 70,915 15,866 27,577 46,937 78,346 15,866 27,577 46,937 78,346 15,636 28,271 49,981 86,540 15,636 28,271 49,981 86,540 15,405 28,976 53,213 95,570 15,405 28,976 53,213 95,570 15,172 29,690 56,635 105,511 15,172 29,690 56,635 105,511 14,940 30,415 60,265 116,463 14,940 30,415 60,265 116,463 14,707 31,147 64,112 128,519 14,707 31,147 64,112 128,519 14,473 31,890 68,184 141,786 14,473 31,890 68,184 141,786 9,750 47,521 218,040 946,055 9,750 47,521 218,040 946,055 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. - --------------------------------------------------------------------------------
24 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $81,932 MALE AGE 40 SINGLE PREMIUM $25,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- -------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- --------- 1 $26,000 $26,250 $81,932 $81,932 $ 84,462 $ 87,612 2 27,040 27,563 81,932 81,932 87,072 93,688 3 28,122 28,941 81,932 81,932 89,763 100,187 4 29,246 30,388 81,932 81,932 92,538 107,139 5 30,416 31,907 81,932 81,932 95,400 114,575 6 31,633 33,502 81,932 81,932 98,351 122,530 7 32,898 35,178 81,932 81,932 101,394 131,039 8 34,214 36,936 81,932 81,932 104,532 140,142 9 35,583 38,783 81,932 81,932 107,769 149,879 10 37,006 40,722 81,932 81,932 111,106 160,296 11 38,486 42,758 81,932 81,932 114,547 171,440 12 40,026 44,896 81,932 81,932 118,096 183,362 13 41,627 47,141 81,932 81,932 121,757 196,118 14 43,292 49,498 81,932 81,932 125,532 209,767 15 45,024 51,973 81,932 81,932 129,427 224,373 16 46,825 54,572 81,932 81,932 133,444 240,002 17 48,697 57,300 81,932 81,932 137,587 256,729 18 50,645 60,165 81,932 81,932 141,861 274,628 19 52,671 63,174 81,932 81,932 146,269 293,783 20 54,778 66,332 81,932 81,932 150,817 314,282 25 (Age 65) 66,646 84,659 81,932 81,932 175,799 440,537
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ------------------------------------------------------------ ---------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------- ------- -------- -------- ------- ------- -------- -------- $23,941 $24,906 $ 25,870 $ 26,836 $22,066 $22,956 $ 23,845 $ 24,734 23,580 25,519 27,534 29,627 21,925 23,727 25,602 27,547 23,219 26,142 29,299 32,702 21,779 24,520 27,483 30,674 22,857 26,772 31,170 36,087 21,630 25,335 29,497 34,150 22,494 27,410 33,149 39,812 21,478 26,172 31,652 38,014 22,130 28,055 35,246 43,911 21,322 27,031 33,959 42,307 21,767 28,708 37,466 48,420 21,164 27,912 36,427 47,078 21,403 29,368 39,815 53,378 21,004 28,819 39,070 52,380 21,040 30,036 42,301 58,830 20,842 29,752 41,901 58,274 20,678 30,711 44,931 64,823 20,678 30,711 44,931 64,823 20,316 31,393 47,712 71,410 20,316 31,393 47,712 71,410 19,953 32,078 50,649 78,639 19,953 32,078 50,649 78,639 19,589 32,767 53,747 86,572 19,589 32,767 53,747 86,572 19,224 33,456 57,012 95,268 19,224 33,456 57,012 95,268 18,856 34,144 60,447 104,791 18,856 34,144 60,447 104,791 18,487 34,830 64,062 115,217 18,487 34,830 64,062 115,217 18,115 35,514 67,863 126,629 18,115 35,514 67,863 126,629 17,744 36,195 71,860 139,113 17,744 36,195 71,860 139,113 17,373 36,875 76,063 152,773 17,373 36,875 76,063 152,773 17,003 37,554 80,481 167,713 17,003 37,554 80,481 167,713 15,154 40,845 106,009 265,648 15,154 40,845 106,009 265,648 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. - --------------------------------------------------------------------------------
25 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $104,488 MALE AGE 55 SINGLE PREMIUM $50,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------------- ------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- -------- -------- -------- --------- 1 $ 52,000 $ 52,500 $104,488 $104,488 $107,731 $111,766 2 54,080 55,125 104,488 104,488 111,075 119,556 3 56,243 57,881 104,488 104,488 114,526 127,892 4 58,493 60,775 104,488 104,488 118,085 136,812 5 60,833 63,814 104,488 104,488 121,755 146,358 6 63,266 67,005 104,488 104,488 125,542 156,575 7 65,797 70,355 104,488 104,488 129,448 167,509 8 68,428 73,873 104,488 104,488 133,478 179,213 9 71,166 77,566 104,488 104,488 137,635 191,742 10 74,012 81,445 104,488 104,488 141,925 205,154 11 76,973 85,517 104,488 104,488 146,351 219,513 12 80,052 89,793 104,488 104,488 150,917 234,886 13 83,254 94,282 104,488 104,488 155,628 251,344 14 86,584 98,997 104,488 104,488 160,489 268,965 15 90,047 103,946 104,488 104,488 165,504 287,831 16 93,649 109,144 104,488 104,488 170,679 308,029 17 97,395 114,601 104,488 104,488 176,018 329,657 18 101,291 120,331 104,488 104,488 181,529 352,820 19 105,342 126,348 104,488 104,488 187,216 377,630 20 109,556 132,665 104,488 104,488 193,086 404,206
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ---------------------------------------------------------- ---------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------- ------- -------- -------- ------- ------- -------- -------- $47,844 $49,781 $ 51,718 $ 53,655 $44,341 $46,136 $ 47,932 $ 49,727 46,883 50,758 54,787 58,969 43,790 47,410 51,174 55,080 45,921 51,732 58,012 64,783 43,232 48,703 54,617 60,991 44,961 52,703 61,406 71,144 42,670 50,019 58,278 67,521 44,003 53,673 64,973 78,102 42,103 51,356 62,169 74,731 43,045 54,637 68,720 85,707 41,533 52,718 66,305 82,697 42,089 55,593 72,651 94,013 40,960 54,100 70,700 91,488 41,134 56,538 76,771 103,076 40,383 55,506 75,368 101,193 40,177 57,467 81,079 112,953 39,802 56,931 80,323 111,899 39,218 58,377 85,581 123,710 39,218 58,377 85,581 123,710 38,258 59,266 90,282 135,415 38,258 59,266 90,282 135,415 37,298 60,132 95,186 148,148 37,298 60,132 95,186 148,148 36,343 60,981 100,307 161,999 36,343 60,981 100,307 161,999 35,393 61,808 105,651 177,063 35,393 61,808 105,651 177,063 34,451 62,617 111,229 193,439 34,451 62,617 111,229 193,439 33,516 63,403 117,041 211,227 33,516 63,403 117,041 211,227 32,586 64,160 123,087 230,526 32,586 64,160 123,087 230,526 31,659 64,883 129,361 251,427 31,659 64,883 129,361 251,427 30,735 65,563 135,852 274,023 30,735 65,563 135,852 274,023 29,809 66,193 142,551 298,417 29,809 66,193 142,551 298,417 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made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
26 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $118,930 FEMALE AGE 5 SINGLE PREMIUM $10,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ---------------------------- ---------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- -------- -------- -------- ------------ 1 $ 10,400 $ 10,500 $118,930 $118,930 $122,609 $ 127,188 2 10,816 11,025 118,930 118,930 126,401 136,014 3 11,249 11,576 118,930 118,930 130,308 145,450 4 11,699 12,155 118,930 118,930 134,333 155,535 5 12,167 12,763 118,930 118,930 138,482 166,316 6 12,653 13,401 118,930 118,930 142,757 177,839 7 13,159 14,071 118,930 118,930 147,163 190,160 8 13,686 14,775 118,930 118,930 151,707 203,335 9 14,233 15,513 118,930 118,930 156,389 217,423 10 14,802 16,289 118,930 118,930 161,217 232,491 11 15,395 17,103 118,930 118,930 166,196 248,605 12 16,010 17,959 118,930 118,930 171,328 265,837 13 16,651 18,856 118,930 118,930 176,620 284,267 14 17,317 19,799 118,930 118,930 182,075 303,974 15 18,009 20,789 118,930 118,930 187,698 325,047 16 18,730 21,829 118,930 118,930 193,495 347,578 17 19,479 22,920 118,930 118,930 199,470 371,670 18 20,258 24,066 118,930 118,930 205,629 397,428 19 21,068 25,270 118,930 118,930 211,978 424,969 20 21,911 26,533 118,930 118,930 218,521 454,413 60 (Age 65) 105,196 186,792 118,930 118,930 738,965 6,658,114
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ---------------------------------------------------------- ---------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------ ------- -------- ---------- ------ ------- -------- ---------- $9,444 $ 9,824 $ 10,206 $ 10,587 $8,690 $ 9,041 $ 9,391 $ 9,742 9,295 10,061 10,857 11,682 8,629 9,340 10,079 10,845 9,152 10,306 11,551 12,894 8,574 9,654 10,822 12,079 9,017 10,562 12,298 14,239 8,524 9,985 11,626 13,461 8,886 10,828 13,096 15,728 8,478 10,331 12,494 15,006 8,761 11,105 13,951 17,380 8,436 10,694 13,434 16,737 8,639 11,391 14,863 19,206 8,396 11,072 14,447 18,668 8,517 11,683 15,835 21,224 8,357 11,463 15,538 20,825 8,397 11,984 16,871 23,455 8,317 11,869 16,709 23,231 8,277 12,287 17,969 25,913 8,277 12,287 17,969 25,913 8,158 12,599 19,137 28,626 8,158 12,599 19,137 28,626 8,040 12,916 20,379 31,621 8,040 12,916 20,379 31,621 7,921 13,239 21,697 34,922 7,921 13,239 21,697 34,922 7,806 13,571 23,103 38,571 7,806 13,571 23,103 38,571 7,692 13,911 24,599 42,600 7,692 13,911 24,599 42,600 7,580 14,262 26,195 47,054 7,580 14,262 26,195 47,054 7,471 14,621 27,896 51,978 7,471 14,621 27,896 51,978 7,364 14,992 29,711 57,424 7,364 14,992 29,711 57,424 7,259 15,374 31,648 63,447 7,259 15,374 31,648 63,447 7,157 15,767 33,715 70,111 7,157 15,767 33,715 70,111 3,749 40,206 393,875 3,548,841 3,749 40,206 393,875 3,548,841 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made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
27 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $125,738 FEMALE AGE 25 SINGLE PREMIUM $20,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY -------------------------- ---------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- -------- -------- -------- ----------- 1 $20,800 $21,000 $125,738 $125,738 $129,619 $ 134,449 2 21,632 22,050 125,738 125,738 133,620 143,763 3 22,497 23,153 125,738 125,738 137,743 153,722 4 23,397 24,310 125,738 125,738 141,994 164,369 5 24,333 25,526 125,738 125,738 146,376 175,754 6 25,306 26,802 125,738 125,738 150,893 187,926 7 26,319 28,142 125,738 125,738 155,549 200,943 8 27,371 29,549 125,738 125,738 160,348 214,858 9 28,466 31,027 125,738 125,738 165,296 229,738 10 29,605 32,578 125,738 125,738 170,396 245,649 11 30,789 34,207 125,738 125,738 175,654 262,661 12 32,021 35,917 125,738 125,738 181,075 280,854 13 33,301 37,713 125,738 125,738 186,664 300,312 14 34,634 39,599 125,738 125,738 192,426 321,121 15 36,019 41,579 125,738 125,738 198,369 343,377 16 37,460 43,658 125,738 125,738 204,496 367,185 17 38,958 45,840 125,738 125,738 210,814 392,650 18 40,516 48,132 125,738 125,738 217,330 419,889 19 42,137 50,539 125,738 125,738 224,050 449,025 20 43,822 53,066 125,738 125,738 230,978 480,190 40 (Age 65) 96,020 140,800 125,738 125,738 425,204 1,842,347
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF -------------------------------------------------------- ------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------- ------- -------- -------- ------- ------- -------- -------- $19,128 $19,899 $ 20,668 $ 21,439 $17,600 $18,308 $ 19,017 $ 19,725 18,863 20,412 22,023 23,695 17,512 18,951 20,446 21,999 18,602 20,941 23,468 26,191 17,427 19,617 21,985 24,535 18,347 21,484 25,009 28,949 17,345 20,311 23,643 27,369 18,096 22,044 26,653 32,002 17,266 21,032 25,430 30,534 17,849 22,619 28,405 35,377 17,188 21,781 27,354 34,067 17,605 23,207 30,272 39,107 17,111 22,557 29,425 38,011 17,365 23,813 32,265 43,233 17,038 23,364 31,657 42,418 17,130 24,435 34,389 47,796 16,968 24,204 34,063 47,344 16,897 25,073 36,652 52,838 16,897 25,073 36,652 52,838 16,667 25,727 39,064 58,412 16,667 25,727 39,064 58,412 16,437 26,396 41,629 64,568 16,437 26,396 41,629 64,568 16,208 27,075 44,352 71,357 16,208 27,075 44,352 71,357 15,980 27,767 47,248 78,847 15,980 27,767 47,248 78,847 15,748 28,469 50,317 87,101 15,748 28,469 50,317 87,101 15,517 29,180 53,571 96,192 15,517 29,180 53,571 96,192 15,283 29,899 57,019 106,200 15,283 29,899 57,019 106,200 15,049 30,628 60,672 117,220 15,049 30,628 60,672 117,220 14,814 31,365 64,542 129,350 14,814 31,365 64,542 129,350 14,579 32,113 68,644 142,707 14,579 32,113 68,644 142,707 10,167 49,469 226,637 981,989 10,167 49,469 226,637 981,989 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made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
28 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $95,798 FEMALE AGE 40 SINGLE PREMIUM $25,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY --------------------------- ---------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- --------- 1 $26,000 $26,250 $95,798 $95,798 $ 98,757 $102,439 2 27,040 27,563 95,798 95,798 101,808 109,544 3 28,122 28,941 95,798 95,798 104,955 117,143 4 29,246 30,388 95,798 95,798 108,200 125,272 5 30,416 31,907 95,798 95,798 111,546 133,966 6 31,633 33,502 95,798 95,798 114,995 143,266 7 32,898 35,178 95,798 95,798 118,552 153,213 8 34,214 36,936 95,798 95,798 122,221 163,852 9 35,583 38,783 95,798 95,798 126,003 175,233 10 37,006 40,722 95,798 95,798 129,903 187,406 11 38,486 42,758 95,798 95,798 133,924 200,428 12 40,026 44,896 95,798 95,798 138,071 214,357 13 41,627 47,141 95,798 95,798 142,348 229,258 14 43,292 49,498 95,798 95,798 146,757 245,199 15 45,024 51,973 95,798 95,798 151,305 262,252 16 46,825 54,572 95,798 95,798 155,994 280,496 17 48,697 57,300 95,798 95,798 160,830 300,012 18 50,645 60,165 95,798 95,798 165,816 320,888 19 52,671 63,174 95,798 95,798 170,957 343,218 20 54,778 66,332 95,798 95,798 176,257 367,101 25 (Age 65) 66,646 84,659 95,798 95,798 205,345 513,986
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF ---------------------------------------------------------- ---------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------- ------- -------- -------- ------- ------- -------- -------- $23,941 $24,906 $ 25,871 $ 26,835 $22,060 $22,949 $ 23,838 $ 24,726 23,581 25,520 27,536 29,628 21,919 23,722 25,595 27,540 23,219 26,142 29,300 32,702 21,773 24,514 27,475 30,666 22,856 26,771 31,168 36,087 21,626 25,330 29,491 34,144 22,494 27,410 33,150 39,813 21,475 26,168 31,647 38,008 22,134 28,059 35,250 43,916 21,322 27,031 33,959 42,308 21,774 28,718 37,478 48,435 21,169 27,920 36,436 47,090 21,418 29,387 39,840 53,411 21,017 28,837 39,093 52,410 21,062 30,067 42,341 58,885 20,862 29,782 41,941 58,328 20,709 30,756 44,994 64,911 20,709 30,756 44,994 64,911 20,357 31,454 47,801 71,539 20,357 31,454 47,801 71,539 20,007 32,162 50,775 78,830 20,007 32,162 50,775 78,830 19,657 32,877 53,921 86,843 19,657 32,877 53,921 86,843 19,310 33,601 57,246 95,647 19,310 33,601 57,246 95,647 18,962 34,331 60,764 105,320 18,962 34,331 60,764 105,320 18,617 35,068 64,481 115,946 18,617 35,068 64,481 115,946 18,275 35,816 68,417 127,624 18,275 35,816 68,417 127,624 17,937 36,576 72,584 140,465 17,937 36,576 72,584 140,465 17,604 37,350 77,002 154,592 17,604 37,350 77,002 154,592 17,278 38,141 81,689 170,141 17,278 38,141 81,689 170,141 15,686 42,225 109,451 273,960 15,686 42,225 109,451 273,960 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made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
29 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY SINGLE PREMIUM VARIABLE LIFE INSURANCE POLICY INITIAL FACE AMOUNT $121,514 FEMALE AGE 55 SINGLE PREMIUM $50,000(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLE APPEARED IN A LANDSCAPED FORMAT IN THE PRINTED PROSPECTUS AND HAD TO BE BROKEN INTO TWO TABLES TO FIT THE EDGAR FORMAT:]
- ------------------------------------------------------------------------------------------------------------------------------------ DEATH BENEFIT(2) PREMIUM ACCUMULATED ASSUMING HYPOTHETICAL GROSS END OF AT INTEREST PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ---------------------------- ------------------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ -------- -------- -------- -------- -------- --------- 1 $ 52,000 $ 52,500 $121,514 $121,514 $125,279 $129,967 2 54,080 55,125 121,514 121,514 129,163 139,010 3 56,243 57,881 121,514 121,514 133,167 148,683 4 58,493 60,775 121,514 121,514 137,296 159,030 5 60,833 63,814 121,514 121,514 141,552 170,096 6 63,266 67,005 121,514 121,514 145,941 181,934 7 65,797 70,355 121,514 121,514 150,467 194,597 8 68,428 73,873 121,514 121,514 155,134 208,144 9 71,166 77,566 121,514 121,514 159,948 222,641 10 74,012 81,445 121,514 121,514 164,915 238,155 11 76,973 85,517 121,514 121,514 170,038 254,758 12 80,052 89,793 121,514 121,514 175,321 272,526 13 83,254 94,282 121,514 121,514 180,771 291,541 14 86,584 98,997 121,514 121,514 186,391 311,887 15 90,047 103,946 121,514 121,514 192,187 333,658 16 93,649 109,144 121,514 121,514 198,166 356,954 17 97,395 114,601 121,514 121,514 204,333 381,886 18 101,291 120,331 121,514 121,514 210,695 408,575 19 105,342 126,348 121,514 121,514 217,260 437,149 20 109,556 132,665 121,514 121,514 224,035 467,746
[THE LEFT HALF OF THE ILLUSTRATION TABLE (ABOVE) AND THE RIGHT HALF (BELOW) APPEARED SIDE-BY-SIDE IN THE PRINTED PROSPECTUS:]
ACCOUNT VALUE(2) CASH SURRENDER VALUE(2) ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF ANNUAL INVESTMENT RETURN OF -------------------------------------------------------- -------------------------------------------------------- 0% 4% 8% 12% 0% 4% 8% 12% ------- ------- -------- -------- ------- ------- -------- -------- $47,910 $49,848 $ 51,785 $ 53,723 $44,282 $46,072 $ 47,863 $ 49,654 47,030 50,911 54,946 59,134 43,822 47,439 51,198 55,102 46,160 51,990 58,292 65,084 43,371 48,849 54,770 61,151 45,305 53,091 61,840 71,630 42,928 50,305 58,596 67,872 44,465 54,215 65,605 78,834 42,494 51,812 62,696 75,338 43,638 55,359 69,593 86,757 42,070 53,368 67,092 83,639 42,821 56,519 73,816 95,465 41,650 54,974 71,796 92,853 42,006 57,688 78,273 105,019 41,228 56,620 76,823 103,075 41,189 58,857 82,967 115,486 40,801 58,303 82,185 114,399 40,368 60,021 87,902 126,939 40,368 60,021 87,902 126,939 39,543 61,176 93,084 139,462 39,543 61,176 93,084 139,462 38,718 62,329 98,532 153,162 38,718 62,329 98,532 153,162 37,895 63,477 104,261 168,149 37,895 63,477 104,261 168,149 37,081 64,634 110,300 184,565 37,081 64,634 110,300 184,565 36,276 65,797 116,663 202,540 36,276 65,797 116,663 202,540 35,479 66,965 123,364 222,215 35,479 66,965 123,364 222,215 34,686 68,125 130,401 243,712 34,686 68,125 130,401 243,712 33,891 69,270 137,770 267,159 33,891 69,270 137,770 267,159 33,090 70,382 145,452 292,662 33,090 70,382 145,452 292,662 32,280 71,453 153,439 320,354 32,280 71,453 153,439 320,354 [THE FOOTNOTES BELOW APPLY TO BOTH THE LEFT AND RIGHT HALVES OF THE ILLUSTRATION TABLE ABOVE:] (1) Assumes a 2% premium tax. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE TRUST PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. - --------------------------------------------------------------------------------
30 - -------------------------------------------------------------------------------- YOU WILL RECEIVE PERIODIC REPORTS As a policy owner, you will receive an annual statement about your policy giving you the status as of the first day of the current policy year of: o the Death Benefit; o the Account Value and Cash Surrender Value; and o your outstanding loans. Notice will also be sent to you for policy issuance, transfers of funds between Divisions and certain other policy transactions. You will receive a billing notice each year showing accrued interest for the past policy year if you have a policy loan outstanding. We will also send you semiannual reports with financial information on the Separate Account and the Trust (including a list of the investments held by each Portfolio in which the Divisions invest) as required by the 1940 Act. - -------------------------------------------------------------------------------- THE IMPACT OF TAXES POLICY PROCEEDS The Tax Reform Act of 1984 (1984 Act) includes a definition of life insurance for tax purposes. Our variable life policy meets the statutory definition of life insurance and hence will receive the same Federal income tax treatment as fixed benefit life insurance. Thus, (a) the Death Benefit under our policy will be excludable from the gross income of the beneficiary under Section 101(a)(1) of the Internal Revenue Code (Code) and (b) the policy owner will not be deemed to be in constructive receipt of the Cash Surrender Value under the policy until the policy is actually surrendered. Only then would the owner be taxed on any increase in Cash Surrender Value due to investment experience. In general, if you return your policy for its Cash Surrender Value, you will not be taxed on the amount you receive, except for the portion which exceeds the premium you have paid. A split of the policy into two policies followed by a return of one for cash, or an exchange referred to under CANCELLATION AND EXCHANGE RIGHTS, may result in taxable income to the policy owner depending on the circumstances. We suggest you consult your tax adviser. The 1984 Act also gives the Secretary of the Treasury authority to set standards for diversification of the investments underlying variable life policies in order for such policies to be treated as life insurance. On September 15, 1986, Treasury issued temporary regulations regarding the diversification requirements. Failure to meet the diversification requirements would disqualify SP-1 as a variable life insurance policy under Section 7702 of the Code. If this were to occur, you would be taxed on the amount in your Policy Account that exceeds the premiums you have paid. We believe that the investments underlying SP-1 are in compliance with the requirements. We do not anticipate any problems with the investments continuing to meet the requirements. We also believe that loans received under the policies will be treated as indebtedness of an owner, and that no part of any loan under a policy will constitute income to the owner. (However, interest on policy loans is not deductible.) The individual situation of each policy owner or beneficiary will determine how ownership or receipt of policy proceeds will be treated for purposes of Federal estate tax as well as state and local estate, inheritance and other taxes. See the Prospectus for the Trust for a discussion of the Trust's tax aspects, including the diversification requirements. - -------------------------------------------------------------------------------- OUR INCOME TAXES Under the life insurance company tax provisions of the Code, as amended by the 1984 Act, variable life insurance is treated in a manner consistent with fixed life insurance. The operations of the Separate Account are included in the Federal income tax return of Equitable Variable. Under current tax law, Equitable Variable pays no tax on investment income and capital gains reflected in variable life insurance policy reserves. Consequently, no charge is currently being made to either Division of the Separate Account for our Federal income taxes. We reserve the right, however, to make such a charge in the future, if the law changes and we incur Federal income tax - -------------------------------------------------------------------------------- 31 - -------------------------------------------------------------------------------- which is attributable to the Separate Account. If such a charge is made, it would be set aside as a provision for taxes which we would keep in the affected Division rather than in our general account. We anticipate that our variable life policy owners will benefit from any investment earnings that are not needed to maintain this provision. We may have to pay state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not substantial. If they increase, however, charges may be made for such taxes when they are attributable to the Separate Account. - -------------------------------------------------------------------------------- GENERAL PROVISIONS OF OUR POLICY This section of the prospectus describes the general provisions of our policy and is subject to the terms of the policy you buy. You may review a copy of our policy upon request. The minimum single premium for this policy is $2,500. The policy may be issued to age 75. The policy is issued only on a standard risk basis. Before issuing any policy, we require satisfactory evidence of insurability. You will handle all business connected with your policy at your regional Life Insurance Center shown on page 3 of your policy. - -------------------------------------------------------------------------------- PREMIUM Your premium is a single premium payment that must accompany your signed application for the policy. YOU CAN CHOOSE THE DIVISION OR DIVISIONS WHERE YOUR NET SINGLE PREMIUM WILL BE PUT. You can decide how your net single premium will be applied to the Divisions. You can put the whole net single premium in one Division or a percentage in more than one Division. Percentages cannot be fractions and must add up to 100. You will make your decision on the application for your policy. HOW WE USE THE PREMIUM. The single premium is used to cover expenses and to pay Death Benefits. We make no charge to cover the possibility that, at an insured's death, the guaranteed minimum will be more than what would have been payable, based on the investment experience of the Divisions, if there were no guaranteed minimum Death Benefit. If the net premium exceeds what is needed to meet Death Benefits over the years, the excess contributes to our profits. CHANGES IN PREMIUM RATES. Congress and the legislatures of various states have from time to time considered legislation that would require premium rates to be the same for males and females of the same age and risk class. ILLUSTRATION OF PREMIUM RATES. Premiums are based on actuarial estimates of Death Benefits, Account Values, Cash Surrender Value benefits, expenses, investment experience, and amounts contributed to our surplus. The following table shows premium rates for certain face amounts. The rates per $1,000 differ for different face amounts only because of our $200 administrative fee, which is constant. - -------------------------------------------------------------------------------- PREMIUMS PER $1,000 INITIAL FACE AMOUNT* Age at $10,000 Initial $25,000 Initial $50,000 Initial Issue Face Amount Face Amount Face Amount - -------------------------------------------------------------------------------- Age 5 Male $119.70 $107.46 $103.38 Female 102.78 90.53 86.45 Age 25 Male 205.77 193.52 189.44 Female 177.85 165.60 161.52 Age 40 Male 323.05 310.81 306.72 Female 279.24 267.00 262.92 Age 55 Male 496.98 484.73 480.65 Female 430.20 417.96 413.88 - -------------------------------------------------------------------------------- *Assuming a 2% state premium tax. - -------------------------------------------------------------------------------- 32 - -------------------------------------------------------------------------------- CANCELLATION RIGHT You have a limited right to return your policy to your regional Life Insurance Center with a written request for cancellation. We will give you a full refund (guaranteed by Equitable) of the single premium paid if your request and policy are postmarked by the latest of the following: o 10 days after you receive your policy; or o 10 days after we mail a written Notice of Withdrawal Right; or o 45 days after Part 1 of the policy application was signed. - -------------------------------------------------------------------------------- EXCHANGING OUR POLICY FOR FIXED WHOLE LIFE INSURANCE You may exchange your single premium variable life policy for a fixed whole life single premium policy on the life of the insured (benefits will be as described in the single premium fixed life policy). The fixed policy will be issued by Equitable. You have this right for 24 months from the date your policy is issued. The exchange will be effective when we receive your request, accompanied by your policy and an application for the fixed policy. We will not require evidence of the insured's insurability before an exchange. The new policy's face amount will be the same as the initial face amount of the variable life policy. It will also have the same register date and date of issue. The new policy will be based on premiums for the same sex and age. Any policy loan with accrued interest must be repaid before the exchange. The exchange is also subject to limits described in the policy. CASH ADJUSTMENT ON EXCHANGE. There will be a cash adjustment on exchange. The adjustment will reflect the difference in premiums between the two policies. The cash adjustment will also reflect the market performance of the variable life policy. The difference in premium will be payable by the owner. This amount, however, will be adjusted. It will be decreased by the excess, if any, of the total Cash Surrender Value over the tabular Cash Surrender Value of the policy or will be increased by the excess, if any, of the tabular Cash Surrender Value over the total Cash Surrender Value of the policy. We have filed a description of the method we use to calculate the adjustment with the appropriate state insurance officials. You may choose, instead, Equitable Variable's single premium fixed life policy, SP Plus. If you choose SP Plus, we will advise you of the cash adjustment and how it is calculated. - -------------------------------------------------------------------------------- PAYMENT OPTIONS The Death Benefit proceeds or Cash Surrender Value proceeds (net of loans) of the policy offered by this prospectus can be paid in a lump sum. Or you may choose to apply all or part of the proceeds under one of our payment options. A combination of options can be used if we agree. Proceeds applied under an option will no longer be affected by investment experience. For an option to be used, the proceeds to be applied must be at least $2,500. If no option is chosen at the insured's death, the beneficiary can choose an option. The following options are available, subject to limits described in the policy. DEPOSIT OPTION. Proceeds are left on deposit with us. We will pay interest on the proceeds of at least 3% a year, or we may set and pay a higher rate. INSTALLMENT OPTION FOR A FIXED PERIOD. Proceeds are paid in installments for up to 30 years, with interest of at least 3-1/2% a year. INSTALLMENT OPTION OF A FIXED AMOUNT. Proceeds are paid in installments with interest of at least 3-1/2% a year until the proceeds are used up. LIFE INCOME OPTION WITH A PERIOD CERTAIN. Proceeds are paid in monthly installments for the longer of the life of the person being paid or the end of a chosen period of 10 or 20 years. LIFE INCOME OPTION WITH A REFUND CERTAIN. Proceeds are paid in monthly installments for the longer of the life of the person being paid or until they are used up. - -------------------------------------------------------------------------------- 33 - -------------------------------------------------------------------------------- BENEFICIARY You name your beneficiary when you apply for your policy. You may change the beneficiary during the insured's lifetime by writing to your regional Life Insurance Center. If no beneficiary is living when the insured dies, the Death Benefit will be paid in equal shares to the insured's surviving children. If there is no surviving child, the Death Benefit will be paid to the insured's estate. - -------------------------------------------------------------------------------- ASSIGNMENT You may assign the policy as collateral for a loan or other obligation. We are not responsible for any payment we make or action we take before we receive a copy of the assignment at your regional Life Insurance Center. - -------------------------------------------------------------------------------- CREDITORS' CLAIMS Proceeds are paid free from the claims of creditors to the extent allowed by law. - -------------------------------------------------------------------------------- LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY We cannot challenge the validity of the policy after it has been in effect during the insured's lifetime for 2 years from the date of issue (unless another date is required by law). If a death claim is made within the time we can challenge validity, our payment will generally be delayed while we determine whether to make such a challenge. MISSTATEMENT OF AGE OR SEX. If the insured's age or sex is misstated in the policy application, the Death Benefit will be what the premium paid would have purchased based on the insured's true age and sex. SUICIDE. If the insured commits suicide within 2 years from the date the policy was issued (or less where required by law), the Death Benefit will be limited to the sum of the premium paid minus outstanding policy loans with interest. - -------------------------------------------------------------------------------- DIVIDENDS No dividends will be paid on the policy described in this prospectus. - -------------------------------------------------------------------------------- WHEN WE PAY PROCEEDS Payment of the Death Benefit, Cash Surrender Value (net of loans) or loan proceeds will be made within 7 days after we receive the required form or request (and other documents that may be required for payment of the Death Benefit) at your regional Life Insurance Center. If an Equitable agent is assisting the beneficiary in preparing the documents required for payment of the Death Benefit, we will send the check to the agent within 7 days after we receive all required documents. The agent will then deliver the check to the beneficiary. But we can delay payment if: o payment is contested; o it is not reasonably practicable to determine the amount because the New York Stock Exchange is closed, trading is restricted by the SEC, or the SEC declares that an emergency exists; or o the SEC, by order, permits us to delay in order to protect our policy owners. We will pay at least 3% interest a year if we delay paying the Cash Surrender Value or loan proceeds more than 30 days. - -------------------------------------------------------------------------------- SALES AND OTHER AGREEMENTS Equitable Variable and Integrity Life Insurance Company, a wholly-owned subsidiary of Equitable, are the principal underwriters for the Trust pursuant to a Distribution Agreement. Under the Distribution Agreement, we have entered into a Sales Agreement with Equitable by which Equitable will distribute our policies. Both Equitable Variable and Equitable are registered with the SEC as broker-dealers under the Securities and Exchange Act of 1934, and we are each a member of the National Association of Securities Dealers, Inc. We are also the principal underwriter for our policies funded through our Separate Account I and our other policies funded through our Separate Account FP, which is also a registered investment company. (Equitable may also be deemed a principal underwriter for our policies.) - -------------------------------------------------------------------------------- SALES BY AGENTS OF EQUITABLE We sell our policies through agents who are licensed by state insurance officials to sell our variable life insurance. These agents are also registered representatives of Equitable. Under the Sales Agreement, agents receive commissions from Equitable for selling our policies. We reimburse Equitable for these commissions. We also reimburse Equitable for other expenses incurred in marketing and selling our policies. These expenses include agency and district managers' compensation, agents' training allowance, deferred compensation, insurance benefits of agents and agency and district managers, and agency clerical and advertising expenses. - -------------------------------------------------------------------------------- 34 - -------------------------------------------------------------------------------- COMMISSION SCHEDULE. Agents may receive the equivalent of up to a maximum of 3% of the premium. Agents with less than 3 full years of service with Equitable may be paid differently. Agents who meet certain production and persistency standards in selling our policies and Equitable policies will be eligible for added compensation. Agents who meet certain lifetime production standards will be eligible to receive increased fees for servicing our policies. Agents also are eligible for added compensation for servicing our policies when there is no assigned soliciting agent. - -------------------------------------------------------------------------------- SALES BY BROKERS We also sell our policies through independent brokers who are licensed by state insurance officials to sell our variable life insurance. They will also be registered representatives either of Equitable or of another company registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934. The commissions for independent brokers will be no more than those for agents. Commissions will be paid through the registered broker-dealer. - -------------------------------------------------------------------------------- APPLICATIONS When an application for one of our policies is completed, it is submitted to us. Based on the information in the application and our standards for issuing insurance and classifying risks, a policy may be issued. If a policy is not issued, we will refund any premium that has been paid. (Equitable guarantees the refund.) - -------------------------------------------------------------------------------- JOINT SERVICES AGREEMENT In addition to acting as distributor for our policies, Equitable performs certain other sales and administrative duties for us. Equitable does this pursuant to a written agreement. The agreement is automatically renewed each year, unless either party terminates. Under this agreement, we pay Equitable for salary costs and other services and an amount for indirect costs incurred through our use of Equitable personnel and facilities. We also reimburse Equitable for sales expenses related to business other than variable life policies. - -------------------------------------------------------------------------------- AMOUNTS PAID UNDER SALES AND JOINT SERVICES AGREEMENTS The amounts paid or accrued to Equitable by us under sales and the joint services agreements totalled approximately $249.4 million in 1986, $225.7 million in 1985 and $164.8 million in 1984. - -------------------------------------------------------------------------------- LEGAL PROCEEDINGS We are not involved in any material legal proceedings. - -------------------------------------------------------------------------------- LEGAL MATTERS The legal validity of the policy described in this prospectus has been passed on by Herbert P. Shyer, who is Executive Vice President and General Counsel of Equitable. The Washington, D.C. law firm of Freedman, Levy, Kroll & Simonds has advised Equitable Variable with respect to certain matters relating to Federal securities laws. - -------------------------------------------------------------------------------- FINANCIAL AND ACTUARIAL EXPERTS The financial statements of the Separate Account and of Equitable Variable in this prospectus have been examined by the accounting firm of Deloitte Haskins & Sells, our independent auditors, to the extent stated in their opinions, and their opinions on them are part of this prospectus. We have relied on the opinions of Deloitte Haskins & Sells given upon their authority as experts in accounting and auditing. Actuarial matters in this prospectus have been examined by Joseph O. North, Jr., F.S.A., M.A.A.A., who is Vice President and Actuary of Equitable Variable and an Assistant Vice President and Actuary of Equitable. His opinion on actuarial matters is filed as an exhibit to the Registration Statement we filed with the SEC. - -------------------------------------------------------------------------------- 35 - -------------------------------------------------------------------------------- WHERE YOU CAN GET ADDITIONAL INFORMATION We have filed with the SEC a Registration Statement relating to the Separate Account and the variable life policy described in this prospectus. The Registration Statement, which is required by the Securities Act of 1933, includes additional information that is not required in this prospectus under the rules and regulations of the SEC. If you would like the additional information, you may obtain copies of that document from the SEC's main office in Washington, D.C. You will have to pay a fee for the material. - -------------------------------------------------------------------------------- MANAGEMENT Here is a list of our directors and officers and a brief statement of their business experience for the past five years. Unless otherwise noted, the following persons have been involved in the management of Equitable and its subsidiaries in various positions for the last five years. Unless otherwise noted, their address is 787 Seventh Avenue, New York, New York 10019.
- ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Harry Douglas Garber................................ Vice Chairman of the Board, Equitable, since February 1984; prior thereto, Executive Vice President and Chief Financial Officer. Director, Equitable Investment Corporation (EIC) and Genesco, Inc. Former Chairman and Chief Executive Officer, Equitable Variable. Glenn Howard Gettier, Jr. .......................... Executive Vice President and Chief Financial Officer, Equitable, since December 1984; prior thereto, Partner, Peat, Marwick, Mitchell & Co. Richard Hampton Jenrette............................ Vice Chairman, Chief Investment Officer and Director, Equitable. Chairman, Donaldson, Lufkin and Jenrette, Inc., since February 1985; prior thereto, Chairman and Chief Executive Officer. Director, Equitable Capital Management Corporation (Equitable Capital) and various other Equitable subsidiaries. William Thomas McCaffrey............................ Executive Vice President, Equitable, since March 1986; prior thereto, various other Equitable positions. Francis Helmut Schott............................... Senior Vice President and Chief Economist, Equitable. Leo Martin Walsh, Jr. .............................. Senior Executive Vice President, Director and Chief Operating Officer, Equitable, since July 1986; prior thereto, Executive Vice President, Director and Chief Investment Officer. Chairman, EIC since July 1986; prior thereto, President and Chief Executive Officer. Director, Equitable Capital and various other Equitable subsidiaries. Peter Rawlinson Wilde............................... Executive Vice President, Equitable, since July 1984. Director, Integrity Life Insurance Company (Integrity) and National Integrity Life Insurance Company (National Integrity). Chairman and Chief Executive Officer, Equitable Variable, from November 1984 to December 1986. Chief Financial Officer, CIGNA Corporation, from April 1983 to June 1984; prior thereto, Senior Vice President. Brian Fredrick Wruble............................... Chairman, President and Chief Executive Officer, Equitable Capital. Executive Vice President, Equitable, since September 1984; prior thereto, various other Equitable positions. - ------------------------------------------------------------------------------------------------------------------------------------
36
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICER -- DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Robert Wayne Barth.................................. Chairman and Chief Executive Officer, Equitable Variable, since December 1986; President and Chief Operating Officer, from December 1985 to December 1986. Executive Vice President, Equitable, since June 1985; Senior Vice President since September 1984; prior thereto, Vice President since April 1984. Thomas Michael Kirwan............................... President and Chief Operating Officer, Equitable Variable, since December 1986. Executive Vice President and Chief Financial Officer, EIC, since March 1985; prior thereto, President, Columbia Group -- CBS, Inc. Director, Equitable Capital and various other Equitable subsidiaries. Robert Seymour Jones................................ Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since June 1985; prior thereto, Vice President. Michael Searle Martin............................... Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since June 1985; prior thereto, Vice President. Stanley Julian Rispler.............................. Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since October 1984; prior thereto, Vice President. Samuel Barry Shlesinger............................. Senior Vice President and Actuary, Equitable Variable, since February 1986. Senior Vice President and Actuary, Equitable; prior thereto, Vice President and Actuary. - ------------------------------------------------------------------------------------------------------------------------------------
37
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ James Thomas Liddle, Jr. ........................... Senior Vice President and Chief Financial Officer, Equitable Variable, since February 1986. Vice President and Actuary, Equitable. Richard Marshall Stenson............................ Senior Vice President, Equitable Variable, since December 1981. Senior Vice President, Equitable, since October 1984; prior thereto, Vice President and Actuary. Actuary, Integrity. William Arnold Canfield............................. Vice President and Chief Underwriting Officer, Equitable Variable. Vice 2 Penn Plaza President, Equitable. New York, New York 10121 Franklin Kennedy, III............................... Vice President, Equitable Variable, since August 1981. Senior Vice 1221 Avenue of the Americas President, Equitable Capital since January 1987. Managing Director and New York, New York 10020 Chief Investment Officer, Equitable Investment Management Corporation, from November 1983 to January 1987. Vice President, Equitable. Donald Anthony King................................. Vice President, Equitable Variable, since February 1986. Vice President, 1285 Avenue of the Americas Integrity, since April 1984. Vice President, Equitable, since January 1976. New York, New York 10020 Executive Vice President, Equitable Capital. Joseph Oswell North, Jr. ........................... Vice President and Actuary, Equitable Variable, since February 1984. Vice 2 Penn Plaza President and Actuary, Equitable, since October 1984; prior thereto, New York, New York 10121 Assistant Vice President and Actuary, since April 1982. Stephen Anthony Scarpati............................ Vice President and Controller, Equitable Variable, since June 1986. Vice 2 Penn Plaza President, Equitable, since December 1985. Vice President and Controller, New York, New York 10121 EIC, from November 1984 to December 1985; prior thereto, Division Controller, Colgate-Palmolive Company. Larry Kenneth Mills................................. Treasurer, Equitable Variable, Integrity and National Integrity, since February 1986. Vice President and Treasurer, Equitable, since March 1986; prior thereto, Vice President. Theodore Edward Plucinski, M.D. .................... Chief Medical Director, Equitable Variable, Integrity and National 2 Penn Plaza Integrity. Chief Medical Director, Equitable, since September 1985; prior New York, New York 10121 thereto, Chief Medical Director, MONY. Kevin Brian Keefe................................... Secretary, Equitable Variable, Integrity, National Integrity and The Hudson River Trust, Vice President and Assistant Secretary, Equitable, since June 1986; prior thereto, Assistant Vice President and Assistant Secretary. - ------------------------------------------------------------------------------------------------------------------------------------
38 [THE EQUITABLE FINANCIAL COMPANIES LOGO -- 1986 VERSION] - -------------------------------------------------------------------------------- Catalogue No. 121503 [EDGARIZER'S NOTE:] [THE SP-1 PROSPECTUS ENDS HERE; THE BASIC & EXPANDED PROSPECTUS FOLLOWS] - -------------------------------------------------------------------------------- [VLI LOGO] - -------------------------------------------------------------------------------- LEVEL FACE AMOUNT VARIABLE LIFE INSURANCE POLICY (Basic Policy) INCREASING FACE AMOUNT VARIABLE LIFE INSURANCE POLICY (Expanded Policy) ISSUED BY [EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO -- 1986 VERSION] - -------------------------------------------------------------------------------- VM 346 PROSPECTUS DATED APRIL 30, 1986 - -------------------------------------------------------------------------------- THE HUDSON RIVER FUND, INC. PRINCIPAL OFFICE LOCATED AT: 787 Seventh Avenue, New York, New York 10019 - -------------------------------------------------------------------------------- VM 348 SUPPLEMENT DATED MAY 1, 1986 TO VM 342 PROSPECTUS DATED APRIL 17, 1986 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [VLI LOGO] - -------------------------------------------------------------------------------- LEVEL FACE AMOUNT VARIABLE LIFE INSURANCE POLICY (Basic Policy) INCREASING FACE AMOUNT VARIABLE LIFE INSURANCE POLICY (Expanded Policy) - -------------------------------------------------------------------------------- ISSUED BY [EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO -- 1986 VERSION] This prospectus describes two variable life insurance policies being offered by Equitable Variable. The Basic policy is available only for face amounts under $50,000. Your net annual premiums are invested in the Common Stock Division and the Money Market Division of Equitable Variable's Separate Account I. Each policy owner decides whether the premiums for his or her policy will be put into the Common Stock Division of the Money Market Division, or both, after certain deductions have been made. The assets in each Division are invested in shares of corresponding Portfolios of The Hudson River Fund, Inc. The prospectus for the Fund, which is attached to this prospectus, describes the investment objectives and policies of each of the Fund Portfolios as well as the risks relating to investment in the Fund. The investment policy of the Fund's Common Stock Portfolio is to purchase primarily common stock and other equity-type instruments with the objective of long-term growth of its capital and increasing income. The investment policy of the Fund's Money Market Portfolio is to purchase primarily high quality short-term money market instruments with the objective of obtaining a high level of current income while preserving its assets and maintaining liquidity. There is no guaranty that the objectives will be achieved. The death benefit and cash value of a policy will vary up or down depending on investment experience of the Divisions, which in turn depends on the investment performance of the corresponding Portfolios. While there is no guaranteed minimum cash value for a policy, Equitable Variable guarantees that a policy's death benefit will never be less than its face amount as long as premiums are paid on time and there is no outstanding policy loan. A policy is serviced through a regional Life Insurance Center. This is the Administrative Office shown on page 3 of a policy when it is issued. Equitable Variable's Home Office is 787 Seventh Avenue, New York, New York. Telephone (212) 714-5288. REPLACING EXISTING INSURANCE WITH A POLICY DESCRIBED IN THIS PROSPECTUS MAY NOT BE TO YOUR ADVANTAGE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. PLEASE READ THIS PROSPECTUS FOR DETAILS ON THE POLICIES BEING OFFERED AND KEEP IT FOR FUTURE REFERENCE. IT IS NOT VALID UNLESS ATTACHED TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. PROSPECTUS DATED APRIL 30, 1986 - -------------------------------------------------------------------------------- VM-346 Copyright 1986 Equitable Variable Life Insurance Company. All rights reserved. - -------------------------------------------------------------------------------- THE PURPOSES OF THE POLICIES WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR A POLICY'S BENEFICIARY. WE DO NOT CLAIM THAT THE POLICIES ARE IN ANY WAY SIMILAR TO OR COMPARABLE TO A MUTUAL FUND'S SYSTEMATIC INVESTMENT PLAN. Because we want you to have as much information as possible about our variable life policies before you buy one, we urge you to examine this prospectus carefully, and we also urge you to read the attached Fund prospectus. This prospectus assumes that all premiums are paid on time and there is no outstanding policy loan. The first Part of this prospectus contains a summary that will introduce us and our variable life policies to you. You will find more detailed information in Part 2 and financial statements in Part 3. - -------------------------------------------------------------------------------- PART 1 -- SUMMARY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE ISSUING COMPANY We are Equitable Variable Life Insurance Company (Equitable Variable), a New York stock life insurance company. - -------------------------------------------------------------------------------- OUR PARENT, EQUITABLE We are a wholly-owned subsidiary of The Equitable Life Assurance Society of the United States (Equitable), a New York mutual life insurance company. - -------------------------------------------------------------------------------- THE POLICIES By this prospectus we are offering two types of variable life insurance policies: o Level Face Amount Policy (Basic Policy, Policy Number 85-01) o Increasing Face Amount Policy (Expanded Policy, Policy Number 85-02). The Basic policy is available only for face amounts between $25,000 and $49,999. We also offer, through separate prospectuses, a single premium variable life policy, a periodic premium variable life policy and a flexible premium variable life policy. The net premiums for the Basic Policy and the Expanded Policy are invested in our Separate Account I (Separate Account) which in turn buys shares in The Hudson River Fund, Inc. (Fund). - -------------------------------------------------------------------------------- WHY VARIABLE LIFE VARIES Our variable life policies are, first and foremost, whole life insurance policies with death benefits, cash values, loan privileges, level premiums, and other features traditionally associated with whole life insurance. They are called "variable" because, unlike the fixed death benefits of an ordinary whole life policy, the death benefits and cash values of our policies may increase or decrease. They do so because your net annual premiums are put into our Separate Account's Common Stock Division or Money Market Division. The assets of each Division buy shares in the Fund's corresponding Common Stock Portfolio or Money Market Portfolio. The Separate Account's investment experience will vary over the years reflecting the investment performance of the Fund's Portfolios in which it invests. When the Separate Account's net investment return is greater than the assumed investment return of 4%, additional amounts of paid-up life insurance are purchased. This results in additional death benefit and cash value. If the Separate Account's net investment return is less than the assumed investment return, this additional paid-up life insurance may be lost, resulting in smaller cash value and death benefit, but the death benefit will never be less than the guaranteed minimum. - -------------------------------------------------------------------------------- THE SEPARATE ACCOUNT, ITS INVESTMENTS AND ITS INVESTMENT EXPERIENCE Our Separate Account is registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 (1940 Act) as a unit investment trust, which is a type of investment company. For state law purposes the Separate Account is treated as a part of us. After making certain deductions from premiums, we put the net annual premiums in either the Common Stock Division or the Money Market Division (Division) of the Separate Account. You decide whether your policy's net annual premium will be put entirely in one Division or whether you want a percentage in each Division. Each Division invests in shares of a corresponding investment portfolio of the Fund: the Common Stock Portfolio and the Money Market Portfolio (Portfolio). Each Portfolio has a different investment policy. Throughout this prospectus we will discuss the investment experience of the Separate Account and the Divisions. You should keep in mind that THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT AND THE DIVISIONS DEPENDS ON THE INVESTMENT PERFORMANCE OF THE FUND AND THE CORRESPONDING PORTFOLIOS. - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- THE FUND The Hudson River Fund, Inc. is a "series" type of mutual fund registered with the SEC under the 1940 Act as an open-end diversified management investment company. In addition to the Common Stock Portfolio and the Money Market Portfolio referred to above, the Fund has a Balanced Portfolio and an Aggressive Stock Portfolio which currently are not available for investment by the Separate Account. The Fund does not impose a sales charge. It is anticipated that, subject to obtaining additional necessary governmental exemptions and approvals, if any, the Fund may serve as an investment medium for, among others, variable annuity contracts issued by Equitable, variable life policies and variable annuity contracts issued by Integrity Life Insurance Company (Integrity, a wholly-owned subsidiary of Equitable), new series of variable life policies issued by us, and variable life policies and variable annuity contracts issued by insurers affiliated or unaffiliated with Equitable. We are currently in control of the Fund; however, purchasers of each of these contracts will also have voting privileges in the Fund. See YOUR VOTING PRIVILEGES. The Fund's address is 787 Seventh Avenue, New York, New York 10019. The Fund's custodian is The Chase Manhattan Bank, N.A. - -------------------------------------------------------------------------------- FUND PORTFOLIO INVESTMENT POLICIES AND OBJECTIVES The investment policy of the Common Stock Portfolio is to purchase primarily common stock and other equity-type instruments to achieve long-term growth of its capital and increasing income. The investment policy of the Money Market Portfolio is to purchase primarily high quality short-term money market instruments to obtain a high level of current income while preserving its assets and maintaining liquidity. - -------------------------------------------------------------------------------- THE FUND'S INVESTMENT ADVISERS The Fund is advised by Equitable Investment Management Corporation (EIMC), which is a subsidiary of Equitable, and by Integrity. They are registered with the SEC as investment advisers under the Investment Advisers Act of 1940. The Fund pays advisory fees to EIMC and Integrity based on maximum annual rates of 0.40% of the average daily value of the aggregate net assets of the Common Stock, Money Market and Balanced Portfolios and 0.50% of the average daily value of the aggregate net assets of the Aggressive Stock Portfolio. However, we credit the values of our Basic and Expanded policies to offset completely the effect on such values of the portion of the Fund's advisory fees which exceeds a 0.25% annual rate. - -------------------------------------------------------------------------------- DEATH BENEFITS The death benefit under a policy can go up or down depending on the investment experience of the Division or Divisions into which you choose to put your net premiums. The guaranteed minimum Death Benefit is the face amount of the policy regardless of the investment experience of the Divisions. In the first policy year, the death benefit equals the initial face amount. In each later policy year, the death benefit equals the guaranteed minimum death benefit, plus the sum (if positive) of the variable adjustment amounts in the Divisions in which you have cash value. See THE VARIABLE ADJUSTMENT AMOUNT and THE GUARANTEED MINIMUM DEATH BENEFIT in Part 2. - -------------------------------------------------------------------------------- CASH VALUE Our policies are whole life policies and they can have a cash value. The cash value of a policy may increase or decrease daily to reflect the investment experience of the Divisions in which your policy participates. Unlike the death benefits, which have a guaranteed minimum, we do not guarantee a minimum amount of cash value. You will bear the entire market risk for cash value. You can request that all or part of your cash value be transferred between the Divisions. See YOU CAN TRANSFER CASH VALUE BETWEEN DIVISIONS in Part 2. - -------------------------------------------------------------------------------- COMMISSIONS The agent or broker who sells you one of our policies will receive a commission for the first policy year equivalent to a maximum of 50% of the first year premium that is payable. Commissions and fees the agent or broker will receive in later policy years are described under SALES AND OTHER AGREEMENTS in Part 2. The commissions and fees are paid by Equitable Variable and do not equal the charges for sales load discussed in this prospectus. See DEDUCTIONS FROM PREMIUMS in Part 2. - -------------------------------------------------------------------------------- CHARGES AGAINST PREMIUMS Your net annual premium is put into our Separate Account each year. This is your total premium after deductions for any optional insurance benefits, the sales load, state premium taxes, annual administrative expenses and a risk charge for the guaranteed minimum death benefit. The charge for sales load is used to pay agent or broker commissions and other sales expenses for the policy. (You do not pay any sales charge for shares of the Fund purchased by the Separate Account.) In the first policy year we also deduct a fixed charge for expenses incurred in issuing the policy. See DEDUCTIONS FROM PREMIUMS in Part 2. - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- CHARGES AGAINST THE SEPARATE ACCOUNT The amount in the Divisions credited to your policy is decreased by the cost of your insurance protection. Also, the investment experience of the Separate Account reflects a daily charge we make at an effective annual rate of 0.50% of the value of the assets of the Separate Account for certain mortality and expense risks. Any charges against the Divisions will have an impact on whether the Divisions earn more than the assumed rate of 4% and whether your policy's death benefit increases above the guaranteed minimum. For more information on the cost of insurance, see HOW WE SUPPORT THE OPERATIONS OF A POLICY in Part 2. - -------------------------------------------------------------------------------- POLICY LOANS As a policy owner, you may borrow up to 90% of your policy's cash value at 5% interest but borrowed amounts are transferred out of the Divisions and, therefore, are not affected by the investment experience. You may choose an adjustable loan interest rate, and if you do, we will credit the adjustable loan interest rate less 0.75% (and less any charge for taxes) on the borrowed amounts. For a loan at 5% interest, we will credit the assumed interest rate of 4% to the borrowed amounts. See TAKING A POLICY LOAN in Part 2. - -------------------------------------------------------------------------------- PREMIUMS The size of an annual premium depends on which policy you choose, the initial face amount (which must be at least $25,000) and the insured's risk class, age and sex. We guarantee that a premium will remain the same once it has been determined. - -------------------------------------------------------------------------------- CANCELLATION AND EXCHANGE RIGHTS You have a limited right to return your policy for cancellation and a full refund of premiums paid. Your request must be postmarked by the latest of o 10 days after you receive your policy; or o 10 days after we mail a written Notice of Withdrawal Right; or o 45 days after Part 1 of the policy application was signed. Also, within 18 months of a policy's issue date, it may be exchanged for a fixed whole life insurance policy on the life of the insured without submitting proof of insurability. - -------------------------------------------------------------------------------- INCOME TAXES Any death benefit paid under our policies is fully excludable from the gross income of the beneficiary for Federal income tax purposes. This may differ for policies owned by pension or profit sharing plans. We may, in the future, charge the Divisions for any portion of our income taxes attributable to the Separate Account. See THE IMPACT OF TAXES in Part 2. - -------------------------------------------------------------------------------- MORE INFORMATION For further information, including illustrations of how the investment experience of the Separate Account Divisions and the investment performance of the Fund could cause death benefits and cash values to vary, please see Part 2 of this prospectus and the Fund's current prospectus. Our financial statements are in Part 3 of this prospectus. The Fund's prospectus contains Condensed Financial Information for the Fund and its Statement of Additional Information contains its financial statements. - -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- CONDENSED FINANCIAL INFORMATION SEPARATE ACCOUNT I The tables below show the actual net returns of the Divisions of our Separate Account as if the Reorganization discussed under GENERAL INFORMATION -- ABOUT US - -- REORGANIZATION had always been in effect. The tables show the actual net returns of the predecessor Separate Accounts I and II operating as management investment companies prior to the Reorganization. The same results would have been achieved if the continuing Separate Account had operated as a unit investment trust investing in The Hudson River Fund, Inc., for all the periods shown, the operations of the Fund having been as currently reported in the Fund's separate Prospectus and Statement of Additional Information. The net returns for each Division for the periods shown assume the Common Stock Division and the Money Market Division would have received initial policy premium allocations on January 13, 1976 and August 21, 1981, respectively, the dates on which our former Separate Accounts I and II first received premium allocations under variable life policies. The tables break the net return into its component parts. When you examine the tables, remember that the percentages apply to a policy with its policy year starting on the first day of the periods shown and apply to a policy that would have been in force throughout the periods shown. Because they are determined each December 31, the percentages do not reflect the average net assets in the Divisions during those periods. The auditing firm of Deloitte Haskins & Sells, our independent auditors, has examined the tables (for its opinion, see the Separate Account financial statements in part 3 of this prospectus). To get a more complete picture of the Separate account and its Divisions you may want to refer to the financial statements and related notes in the Statement of Additional Information for The Hudson River Fund, Inc. - -------------------------------------------------------------------------------- COMMON STOCK DIVISION
January 13, Year Ended December 31, 1976 to --------------------------------------------------------------------------------------- December 31, 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976(a)(b) --------------------------------------------------------------------------------------------------------- NET RETURN: Income 2.95 % 3.22 % 2.65 % 4.64 % 4.02 % 4.35 % 3.91 % 4.06 % 3.49 % 2.63 % Net realized and unrealized gain (loss) on investments 31.14 % (4.68)% 24.06 % 13.58 % (9.40)% 46.48 % 26.56 % 4.72 % (12.26)% 7.00 % ----- ----- ----- ----- ----- ----- ----- ---- ----- ---- Gross Return 34.09 % (1.46)% 26.71 % 18.22 % (5.38)% 50.83 % 30.47 % 8.78 % (8.77)% 9.63 % Expense charges (1.00)% (.74)% (.94)% (.95)% (.70)% (1.13)% (.98)% (.81)% (.69)% (.77)% ----- ----- ----- ----- ----- ----- ----- ---- ----- ---- Net Return 33.09 % (2.20)% 25.77 % 17.27 % (6.08)% 49.70 % 29.49 % 7.97 % (9.46)% 8.86 % ===== ===== ===== ===== ===== ===== ===== ==== ===== ==== - -------------------------------------------------------------------------------- (a) Date as of which net premiums under the policies were first allocated to the predecessor of the Division. (b) The gross return and the net return for the periods indicated are not annual rates of return, and they are not necessarily indicative of those returns which would have been realized for a full year.
The effective annual rate of return for the Common Stock Division from January 13, 1976 to December 31, 1985 was 14.09%. For the same period ended December 31, 1985, the average annual increase for the Standard and Poor's 500 Stock Index with dividends reinvested was 13.63%. (Standard and Poor's is an unmanaged index of groups of common stocks.) - -------------------------------------------------------------------------------- MONEY MARKET DIVISION
August 21, Year Ended December 31, 1981 to ------------------------------------------------- December 31, 1985 1984 1983 1982 1981(a)(b) ---------------------------------------------------------------------- NET RETURN: Income 9.36 % 11.00 % 9.56 % 13.53 % 5.46 % Net realized and unrealized gain (loss) on investments (.09)% .42 % (.06)% .03 % .06 % ---- ----- ---- ----- ---- Gross Return 9.27 % 11.42 % 9.50 % 13.56 % 5.52 % Expense charges (.81)% (.84)% (.83)% (.84)% (.35)% ---- ----- ---- ----- ---- Net Return 8.46 % 10.58 % 8.67 % 12.72 % 5.17 % ==== ===== ==== ===== ==== - -------------------------------------------------------------------------------- (a) Date as of which net premiums under the policies were first allocated to the predecessor of the Division. (b) The gross return and the net return for the periods indicated are not annual rates of return, and they are not necessarily indicative of those returns which would have been realized for a full year. - --------------------------------------------------------------------------------
5 - -------------------------------------------------------------------------------- HYPOTHETICAL ILLUSTRATIONS The following illustrations are based on the assumption that the Separate Account and the Fund had been operating since January 1, 1976 in the same manner as they operate as a result of the implementation of the Reorganization described under GENERAL INFORMATION -- ABOUT US -- REORGANIZATION in Part 2. For illustrations based on various constant hypothetical annual investment returns, see ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS in Part 2. - -------------------------------------------------------------------------------- ILLUSTRATIONS OF VARIATIONS OF THE DEATH BENEFIT AND THE CASH VALUE IN RELATION TO ACTUAL INVESTMENT EXPERIENCE OF THE COMMON STOCK DIVISION The following example shows how the net return of the Common Stock Division would have affected the death benefits and cash values of two policies dated January 1, 1976. Assume an annual premium of $500 and that the insured was a 25 year old male and a standard risk on January 1, 1976.
- ------------------------------------------------------------------------------------------------------------------------- BASIC POLICY EXPANDED POLICY ($40,034 Face Amount) ($29,541 Initial Face Amount) - ------------------------------------------------------------------------------------------------------------------------- Cash Death Guaranteed Cash Death Guaranteed Policy Anniversary In: Value Benefit Minimum Value Benefit Minimum - ------------------------------------------------------------------------------------------------------------------------- 1977* $ 96 $40,071 $40,034 $ 174 $30,476 $30,427 1978 359 40,034 40,034 443 31,343 31,343 1979 744 40,034 40,034 848 32,288 32,288 1980 1,343 41,017 40,034 1,482 34,323 33,263 1981 2,636 44,863 40,034 2,865 39,448 34,238 1982 2,787 43,595 40,034 3,015 39,119 35,272 1983 3,578 44,949 40,034 3,850 41,633 36,335 1984 5,022 48,724 40,034 5,378 46,757 37,428 1985 5,195 47,338 40,034 5,547 46,403 38,551 1986 7,433 53,596 40,034 7,908 54,206 39,703 - ------------------------------------------------------------------------------------------------------------------------- *Reflects net investment income credited at the assumed rate of 4% from January 1, 1976 to January 12, 1976, and the actual rate of return for the Common Stock Division assuming the investment performance of the Fund's Common Stock Portfolio was the same as our pre-Reorganization Separate Account I starting January 13, 1976. Net annual premiums were first put into our pre-Reorganization Separate Account I on January 13, 1976.
Remember, this example of past investment performance is for a specific age, sex, risk class, premium amount and policy anniversary. Also, the policy series described in this prospectus was not available in 1976. The benefits illustrated under these policies are calculated on the policy anniversary and do not represent the average net investment performance of our pre-Reorganization Separate Account I during the policy year. Past investment performance should not be deemed a representation of future investment experience of the Division or investment performance of the Fund. This example assumes that net annual premiums and related cash values are 100% in the Common Stock Division for the entire period. - -------------------------------------------------------------------------------- ILLUSTRATION OF VARIATIONS OF THE DEATH BENEFIT AND THE CASH VALUE IN RELATION TO ACTUAL INVESTMENT EXPERIENCE OF THE MONEY MARKET DIVISION The following example shows how the net return of the Money Market Division would have affected the death benefits and cash values of two policies dated January 1, 1982. Assume an annual premium of $500 and that the insured was a 25 year old male and a standard risk on January 1, 1982.
- ------------------------------------------------------------------------------------------------------------------------- BASIC POLICY EXPANDED POLICY ($40,034 Face Amount) ($29,541 Initial Face Amount) - ------------------------------------------------------------------------------------------------------------------------- Cash Death Guaranteed Cash Death Guaranteed Policy Anniversary In: Value Benefit Minimum Value Benefit Minimum - ------------------------------------------------------------------------------------------------------------------------- 1983 $ 102 $40,103 $40,034 $ 182 $30,519 $30,427 1984 458 40,214 40,034 558 31,563 31,343 1985 860 40,471 40,034 982 32,793 32,288 1986 1,277 40,721 40,034 1,419 34,041 33,263 - -------------------------------------------------------------------------------------------------------------------------
This example reflects Money Market Division investment experience assuming the investment performance of the Fund's Money Market Portfolio was the same as our pre-Reorganization Separate Account II starting January 1, 1982. Net annual premiums under variable life policies were first put into our pre-Reorganization Separate Account II on August 21, 1981. Remember, this example of past investment performance is for a specific age, sex, risk class, premium amount and policy anniversary. The benefits illustrated under the Basic and Expanded policies are calculated on the policy anniversary and do not represent the average net investment performance of our pre-Reorganization Separate Account II during the policy year. Past investment performance should not be deemed a representation of future investment experience of the Division or future investment performance of the Fund. This example assumes that net annual premiums and related cash values are 100% in the Money Market Division for the entire period. - -------------------------------------------------------------------------------- 6 - -------------------------------------------------------------------------------- PART 2 -- DETAILED INFORMATION - -------------------------------------------------------------------------------- GENERAL INFORMATION ABOUT US We are Equitable Variable. We were organized in 1972 in New York State as a stock life insurance company and are authorized to sell life insurance and annuities there. We also are authorized to sell life insurance and annuities in other jurisdictions. In January of 1976 we began selling periodic premium variable life policies, and two years later, in January of 1978, we began selling fixed annuity contracts. In 1983 we began selling a form of fixed life insurance policy, the Equitable Life Account. In 1983 we also began selling single premium variable life policies. In 1986 we began selling an individual flexible premium variable life policy designed to provide insurance coverage with flexibility in death benefits and premium payments. We also sell two types of term insurance policies, fixed single premium life insurance policies and universal life insurance policies. At the end of 1985 we had approximately $6.9 billion face amount of variable life insurance in force and $38 billion of fixed life insurance in force (and about $1.6 billion of fixed annuity payment obligations). REORGANIZATION. Pursuant to a Plan of Reorganization (Reorganization) approved at a meeting of our policy owners held on February 14, 1985, effective as of March 22, 1985, we restructured our Separate Accounts I and II into one separate account in unit investment trust form. To accomplish this restructuring, we converted our then existing Separate Account I, a Common Stock Account and Separate Account II, a Money Market Account, into our continuing Separate Account I with two investment divisions: the Common Stock Division and the Money Market Division. On March 22, 1985, all of the assets and related liabilities of our former Separate Accounts I and II were transferred to the Common Stock and Money Market Portfolios of the Fund, respectively, in exchange for shares in the Portfolios, and we ceased to be an investment adviser of our continuing Separate Account. EIMC, which served with us as an investment adviser of our former Separate Accounts I and II, continues as an investment adviser to the Fund. At the Reorganization, Integrity began to serve, together with EIMC, as an investment adviser to the Fund. The Separate Account no longer requires an investment adviser. The Reorganization did not change the policy values of then outstanding policies or policies. Policy owners who have our variable life policies on a single premium basis, as well as on a periodic premium basis, have monies placed in our Separate Account. Our financial statement including those of our continuing Separate Account are in Part 3. - -------------------------------------------------------------------------------- EQUITABLE Equitable is a New York mutual life insurance company that has its home office at 787 Seventh Avenue, New York, N.Y. 10019. Equitable has been in business since 1859. Equitable's total assets make it the third largest life insurance company in the United States. At December 31, 1985 these assets were over $51 billion. Equitable is also one of the largest managers of retirement fund assets. At December 31, 1985, Equitable and its subsidiaries, such as Alliance Capital Management Corporation, were managing pension fund assets of over $54 billion and total assets of over $91 billion. At December 31, 1985, Equitable, together with EIMC, was responsible for stock portfolios of over $5 billion and debt portfolios of about $23 billion. These portfolios include amounts in our General Account, Equitable's General Account and separate accounts, and other accounts managed by Equitable and EIMC. Between the time we were organized and the end of December 1985, Equitable invested over $334 million in us. This money has been used to help us meet operational costs and policy reserve requirements. Equitable probably will invest more money in us in the future although it has no legal obligation to do so. Its assets do not back benefits that may be paid under the policy discussed in this prospectus. In December, 1984, Equitable acquired Donaldson, Lufkin & Jenrette, Inc. (DLJ). A DLJ subsidiary, Donaldson, Lufkin & Jenrette Securities Corporation, is one of the nation's largest investment banking and securities firms. Another DLJ subsidiary, Autranet, Inc., is a securities broker that markets independently originated research to institutions. Through the Pershing Division of Donaldson, Lufkin & Jenrette Securities Corporation, DLJ supplies correspondent services, including order execution, securities clearance and other centralized financial services, to approximately 300 independent regional securities firms and 100 banks. - -------------------------------------------------------------------------------- 7 - -------------------------------------------------------------------------------- To the extent permitted by law, Equitable Variable and their separate accounts and affiliated companies, several of which are registered investment companies (including the Fund), may engage in securities and other transactions with the various entities mentioned in the preceding paragraph or may invest in shares of investment companies with which those entities have affiliations. - -------------------------------------------------------------------------------- REGULATION We are regulated and supervised by the New York State Insurance Department. In addition, we are subject to insurance laws and regulations in ever jurisdiction where we sell our policies. We submit annual reports on our operations and finances to insurance officials in these jurisdictions. The officials are responsible for reviewing our reports to be sure we are financially sound and that we are complying with applicable laws and regulations. Our Basic and Expanded variable life policies have been approved in 49 states and the Virgin Islands. We are also subject to various Federal securities laws and regulations. - -------------------------------------------------------------------------------- THE FUND The Hudson River Fund, Inc. currently issues four series of classes of shares, each of which represents an interest in one of the Fund's Portfolios. Shares of the Common Stock and Money Market Portfolios are purchased and redeemed by the corresponding Separate Account Division. The Fund sells and redeems its shares at net asset value. It does not impose a sales charge. It is anticipated that, subject to obtaining additional necessary governmental exemptions and approvals, if any, the Fund may serve as an investment medium for, among others, variable annuity contracts issued by Equitable, variable life policies and variable annuity contracts issued by Integrity, new series of variable life policies issued by us, and variable life insurance policies and variable annuity contracts issued by insurers affiliated or unaffiliated with Equitable. Letters of intent have been signed with two such unaffiliated insurers and preliminary discussions are now going on with several additional unaffiliated insurers. We currently do not foresee any disadvantages to our policy owners arising out of this. However, the Fund's Board of Directors intends to monitor events in order to identify any material irreconcilable conflicts that possibly may arise and to determine what action, if any, should be taken in response. If we believe that the Fund's response to any of those events insufficiently protects our policy owners, we will see to it that appropriate action is taken to protect our policy owners. Also, if we ever believe that any of the Fund's Portfolios is so large as to materially impair the investment performance of a Portfolio or the Fund, we will examine other investment options. The Fund's shares will be sold only to separate accounts of insurance companies. Since we are the only insurance company now investing in the Fund, we are currently in control of the Fund. We owned approximately $331 million worth of the Fund's shares as of December 31, 1985, and we will continue to control the Fund at least until other insurance companies, selling significant amounts of variable insurance products, have made substantial investments in Fund shares. The Fund's address is 787 Seventh Avenue, New York, New York 10019. The custodian of the securities and other assets of the Fund is The Chase Manhattan Bank, N.A. The Fund, its investment objectives and policies, its risks, expenses, organization and other aspects of its operations are described in more detail in its prospectus, which is attached to this prospectus, and in a Statement of Additional Information which may be obtained free of charge by written request to the Fund at 787 Seventh Avenue, New York, New York 10019. Please carefully read the Fund's prospectus. - -------------------------------------------------------------------------------- THE FUND'S INVESTMENT ADVISERS The Fund is advised by EIMC and Integrity. They are registered with the SEC as investment advisers under the Investment Advisers Act of 1940. EIMC's address is 1221 Avenue of the Americas, New York, New York 10020 and Integrity's address is 787 Seventh Avenue, New York, New York 10019. - -------------------------------------------------------------------------------- 8 - -------------------------------------------------------------------------------- Services are provided pursuant to an investment advisory agreement among the Fund, EIMC and Integrity for a fee equivalent to maximum annual rates of 0.40% of the average daily value of the aggregate net assets of the Common Stock, Money Market and Balanced Portfolios (0.25% to EIMC and 0.15% to Integrity) and 0.50% of the average daily value of the Aggressive Stock Portfolio's aggregate net assets (0.35% to EIMC and 0.15% to Integrity). We make a daily credit to the values of our Basic and Expanded policies to offset completely the effect on such values of the portion of the Fund's investment advisory fee which exceeds a 0.25% annual rate and all other Fund expenses except (a) all brokers' commissions, transfer taxes and other fees and expenses for services relating to purchases and sales of Portfolio investments and (b) any Fund income tax liabilities. - -------------------------------------------------------------------------------- DEDUCTIONS FROM PREMIUMS The amount of premium put into the Separate Account's Divisions is based on what is called the basic annual premium. This is the total annual premium for a standard mortality risk policy minus a $30 annual administrative charge and minus the premiums for any optional insurance benefits you take. After we figure the basic annual premium, we deduct certain charges and put the rest (the net annual premium) into the Separate Account's Divisions. A summary of charges against premiums follows. We guarantee that premiums will not increase. - -------------------------------------------------------------------------------- ANNUAL ADMINISTRATIVE CHARGE We charge $30 in each policy year for administrative expenses. These include: o premium billing and collection; o processing claims, paying cash values, and making policy changes; o record keeping; o communicating with policy owners; and o other expenses and overhead. - -------------------------------------------------------------------------------- ADDITIONAL FIRST YEAR ADMINISTRATIVE CHARGE In the first policy year we make a one-time administrative charge of $5 for each $1,000 of initial face amount of a policy. This charge is applied to the cost of: o processing applications; o conducting medical examinations; o establishing policy records; and o determining insurability and assigning the insured to a risk class. - -------------------------------------------------------------------------------- SALES LOAD We make a charge that can be considered a "sales load". The amount of the sales load in a policy year is not necessarily related to our actual sales expenses for that year. We expect to recover our total sales expenses over the lifetimes of the insureds. Our sales load charge will not be more than: o 20% of the basic annual premium for the first policy year; o 14.5% of the basic annual premium for the 2nd through 4th policy years; and o 7.25% of the basic annual premium for all policy years after the 4th. To the extent sales expenses are not covered by the sales load, we will cover them from funds other than premium deductions. - -------------------------------------------------------------------------------- RISK CHARGE We charge 1.2% of the basic annual premium to provide for the possibility that an insured will die at a time when, based on the investment experience of the Separate Account, the death benefit that would ordinarily be paid is less than the guaranteed minimum death benefit of the policy. - -------------------------------------------------------------------------------- STATE PREMIUM TAX CHARGE We deduct 2% of the basic annual premium to cover state premium taxes. These taxes vary from state to state and the 2% rate is an average. - -------------------------------------------------------------------------------- 9 - -------------------------------------------------------------------------------- EXAMPLE OF DEDUCTIONS FROM PREMIUMS The following example (using the policies shown in the ILLUSTRATION OF DEATH BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS) shows what amount of net annual premium would be put into the Separate Account at the start of each policy year. A policy's actual cash value is related to the policy's net annual premium. The differences between net annual premiums for males and females are due to two factors: the higher face amounts for females cause higher first year administrative charges and our pricing policies lead to other variations. These variations sometimes lead to lower sales loads.
- ------------------------------------------------------------------------------------------------------ Issue Age 10 Issue Age 25 Issue Age 40 $300 Annual $500 Annual $1,000 Annual Beginning of Premium for Premium for Premium for Policy Year Standard Risk Standard Risk Standard Risk - ------------------------------------------------------------------------------------------------------ MALE FEMALE MALE FEMALE MALE FEMALE Basic Policy (Initial Face Amount) ($37,605) ($42,654) ($40,034) ($45,898) ($49,238) ($57,396) 1st 57.91 60.57 160.94 131.73 498.78 458.02 2nd through 4th 238.79 238.01 392.73 405.74 900.56 873.57 5th through 40th 242.18 241.85 421.16 421.34 928.63 912.60 Expanded Policy (Initial Face Amount) ($29,316) ($33,708) ($29,541) ($34,382) ($34,754) ($40,756) 1st 60.98 45.51 213.58 189.44 571.36 541.65 2nd through 4th 233.94 240.34 386.99 387.14 900.48 873.40 5th and later 241.86 242.02 421.25 421.52 928.63 912.93 - ------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- OUR SEPARATE ACCOUNT AND ITS DIVISIONS Our Separate Account is registered with the SEC as a unit investment trust, which is a type of investment company. This does not involve any supervision by the SEC of the management or investment policy or practices of the Separate Account. For state law purposes the Separate Account is treated as a part of us. After making certain deductions from premiums, we put your net annual premiums in the Common Stock Division or the Money Market Division of our Separate Account. You decide whether your policy's net annual premium will be put entirely in one Division or whether you want a percentage in each Division. (Also, you have certain voting privileges with respect to the Fund shares held in the Divisions. See YOUR VOTING PRIVILEGES.) Each Division invests in shares of a corresponding investment Portfolio of the Fund. The Separate Account also invests income or capital gains dividends received from the Fund in shares of the Fund. The Separate Account purchases and redeems shares of the Fund at their net asset value per share. The Separate Account's assets are allocated between the Divisions in accordance with the allocations of the net annual premiums invested in the Separate Account and the earnings on those assets. Also, liabilities of the Separate Account will be allocated to the Division to which they relate. Accrued liabilities that are not allocable to one Division will be allocated to both Divisions in proportion to their relative net assets. In the unlikely event that any Division incurred liabilities in excess of its assets, the other Division could be liable for such excess. Each Portfolio has a different investment policy (see THE FUND). You should keep in mind that the investment experience of the Separate Account and the Divisions depends on the investment performance of the Fund and the corresponding Portfolios. Also, values of Basic and Expanded policies are increased to compensate policy owners for their share of Fund expenses in excess of the sum of (1) expenses for brokers' commissions, transfer taxes and other fees relating to purchases and sale of Portfolio investments, (2) fees for advisory services at an annual rate equivalent to 0.25% of the average daily value of the aggregate net assets of the Portfolios and (3) Fund income taxes, if any. The Common Stock Division of our Separate Account superseded our pre-Reorganization Separate Account I, which was established on June 28, 1973. The Money Market Division of our Separate Account superseded our pre-Reorganization Separate Account II, which was - -------------------------------------------------------------------------------- 10 - -------------------------------------------------------------------------------- established on December 12, 1980. Both pre-Reorganization Separate Accounts were established under the insurance law of New York State as separate investment accounts. Assets that were used to provide money to pay benefits under our variable life policies were allocated to the pre-Reorganization Separate Accounts from time to time. As a result of the Reorganization those assets, and additional assets to be received from premiums under in-force policies and future policies, will be allocated to the Separate Account Divisions from time to time and used to provide money to pay benefits under our variable life policies. Any increase or decrease in a policy's death benefit or cash value will reflect the investment experience of the Division where you have cash value, which in turn will depend upon the investment performance of the corresponding Portfolio of the Fund. (It will not be affected by the experience of the other Division unless you have cash value in both Separate Account Divisions.) - -------------------------------------------------------------------------------- HOW WE SUPPORT THE OPERATIONS OF A POLICY We support the operations of a policy by putting the net annual premium (which is the annual premium less the charges described under DEDUCTIONS FROM PREMIUMS) into the appropriate Separate Account Division or Divisions as the policy owner chooses. We do this when the policy is issued and, after that, at the beginning of each policy year during the premium payment period. Even though the gross premium will be higher for an insured who is a high risk than the gross premium for an insured who is a standard risk, any cash value that may build up on a policy covering a high risk insured will be the same as the cash value that would build up on a policy covering a standard risk insured of the same age and sex, for the same amount and plan of insurance, and having the same date of issue and allocation to the Divisions. This is also true for an insured who is a non-smoker, even though the gross premium for a non-smoker insured will be lower than for an insured who is a standard risk. The policy is designed so that the net annual premium put in the Divisions does not vary with the risk class of the insured. Therefore, we charge a higher gross premium for an insured who is a high risk to cover the extra risk of mortality. We charge a lower gross premium for certain non-smokers because of the expected lower mortality. The amount at risk on policy anniversaries is the death benefit payable less the amounts in the Divisions in which a policy participates (adjusted for any loans). Once the net annual premium is placed into the Divisions, we charge for the cost of insurance based on the attained age for the amount at risk without regard to differences in risk class. The cost of insurance is based on the 1958 Commissioners' Standard Ordinary Mortality Table, and generally increases with attained age. The cost of insurance differs in each year because, based on this mortality table, the probability of death generally increases with attained age and the amount at risk is different year by year. The dollar amount of the cost of insurance also depends on investment experience of the Divisions in which a policy participates. Your net annual premium will be put into the Divisions only once each year, regardless of whether you pay your premium monthly, quarterly, semiannually, or annually. - -------------------------------------------------------------------------------- SEPARATE ACCOUNT ASSETS ARE OUR PROPERTY The assets of the Separate Account are our property. However, New York Insurance Law provides that the portion of Separate Account's assets that relates to variable life policies may not be used to satisfy any obligations that may arise out of any other business we conduct, although under certain circumstances one Division could perhaps be liable for claims arising out of the other Division's operations. We permit money from charges owed to us to stay in the Divisions and accumulate. These accumulated amounts are in excess of each Division's net assets attributed to variable life policies. These amounts belong to us. There probably will be more assets in the Separate Account than those that apply to our variable life policies. We expect to transfer part or all of the excess to our General Account. These transfers will be in cash, but before we make them we will consider whether the transfer could have any adverse effect on our Separate Account. In 1985 we made no such transfer to our General Account. - -------------------------------------------------------------------------------- 11 - -------------------------------------------------------------------------------- CHARGES AGAINST THE SEPARATE ACCOUNT The amount in the Separate Account Divisions in which your policy participates is further decreased (after the following charges) by the cost of your insurance protection. See HOW WE SUPPORT THE OPERATIONS OF A POLICY. - -------------------------------------------------------------------------------- CHARGES FOR MORTALITY AND EXPENSE RISKS We charge the Separate Account for the mortality and expense risk we assume. The charge is made daily at an effective annual rate of 0.50% of the value of each Division's assets that are attributable to variable life policies. The mortality risk we assume is that insureds may live for shorter periods of time than we estimated. If this occurs, we have to pay a greater amount of death benefits than we expected in relation to the premiums we received. The expense risk we assume is that our costs of issuing and administering policies may be more than we estimated. The money we collect from this charge may exceed the amount needed to cover benefits and expenses and would be our gain. - -------------------------------------------------------------------------------- OTHER CHARGES The Separate Account purchases shares of the Fund at their net asset value. The net asset value of those shares reflects management fees and other expenses already deducted from the assets of the Fund that are briefly described under THE FUND. More detailed information about the Fund is in its prospectus and in its Statement of Additional Information. - -------------------------------------------------------------------------------- YOUR VOTING PRIVILEGES GENERAL As we have already said, all assets held in the Divisions are invested in shares of the corresponding Portfolios of the Fund. We are the legal owners of those shares and as such have the right to vote upon certain matters that are required by the 1940 Act to be approved or ratified by the shareholders of a mutual fund and to vote upon any other matters that may be voted upon at a shareholder's meeting. Among other things, we may vote on: o the election of the Fund's Board of Directors; o the ratification of the selection of the Fund's independent auditors; and o matters spelled out in the Fund's prospectus or Statement of Additional Information that require a shareholder vote. However, in accordance with our view of current Federal securities law requirements, we will offer you the opportunity to instruct us as to how Fund shares allocable to your policy and held by us in the Separate Account will be voted on these matters. We will vote the shares of the Fund at regular and special meetings of shareholders of the Fund in accordance with your instructions. Thus, you will have the right to have a voice in the affairs of the Fund. Fund shares held in each Division of the Separate Account which are not allocable to policies or for which no timely instructions from policy owners are received will be voted by us in the same proportion as shares in that Division for which instructions are received. Each policy having a voting interest will be sent proxy material and a form for giving voting instructions. If required by state insurance officials, we may disregard voting instructions if those instructions would require shares to be voted so as to cause a change in the investment objectives or policies of one or more of the Fund's Portfolios, or to approve or disapprove an investment policy or investment adviser of one or more of the Fund's Portfolios. In addition, we may disregard voting instructions in favor of changes initiated by a policy owner or the Fund's Board of Directors in the investment policy or the investment adviser of a Portfolio, provided that our disapproval of the change is reasonable and is based on a good faith determination that the change would be contrary to state law, the proposed advisory fee would be higher than we are permitted to pay by the terms of our variable life policies, or the charge would lead to an adverse effect on our general account because it would result in unsound or overly speculative investments. We will advise policy owners if we do disregard voting instructions, and give our reasons for such actions in the next semiannual report we send to policy owners. - -------------------------------------------------------------------------------- 12 - -------------------------------------------------------------------------------- All Fund shares of whatever class are entitled to one vote, and the votes of all classes are cast on an aggregate basis, except on matters where the interests of the Portfolios differ. In such case, the voting is on a Portfolio-by-Portfolio basis. Approval or disapproval by the shareholders in one Portfolio on such a matter would not generally be a prerequisite of approval or disapproval by shareholders in another Portfolio; and shareholders in a Portfolio not affected by a matter generally would not be entitled to vote on that matter. Examples of matters which would require a Portfolio-by-Portfolio vote are changes in the fundamental investment policy or restrictions of a particular Portfolio and approval of the investment advisory agreement. - -------------------------------------------------------------------------------- VOTING INSTRUCTIONS OF OTHER SEPARATE ACCOUNT PARTICIPANTS Net premiums for our individual flexible premium variable life policy are invested in our Separate Account FP, which, in turn, invests in the Fund. In addition, we anticipate that Fund shares will be held by other separate accounts established by us or other insurance companies affiliated or unaffiliated with us. We expect that those shares will be voted through those separate accounts in accordance with instructions of their participants. This will dilute the effect of voting instructions of policy owners whose net premiums are invested in the Separate Account. - -------------------------------------------------------------------------------- DETERMINING THE FUND PORTFOLIO FOR WHICH YOU CAN GIVE VOTING INSTRUCTIONS If all your cash value is in one Division, you can participate in the voting only for the shares in the Fund Portfolio that corresponds to that Division. If your cash value is divided between the Divisions, you are entitled to participate in the voting of the shares of the Fund that correspond to each of the Fund Portfolios. The number of Fund shares held in each Division attributable to your policy for purposes of your voting privilege will be determined by dividing your policy's cash value (less any policy indebtedness) allocable to that Division by the net asset value of one share of the corresponding Fund Portfolio as of the record date for the Fund's shareholder meeting. The record date for this purpose will not be more than 90 days before the meeting of the Fund. Fractional shares are counted. EXAMPLE: Your policy has a cash value of $3,000, 50% of which is attributable to the Common Stock Division and 50% of which is attributable to the Money Market Division. Assuming the net asset value of one share in each Fund Portfolio is $100, you would have the privilege of voting 30 shares. You will have the privilege of instructing us regarding 15 votes in each Division. EXAMPLE (ASSUMING AN OUTSTANDING LOAN): Your policy has a cash value of $3,000, which entitles you to 30 votes. If you have a $1,000 loan (including interest) equally allocated between each Division, you would be entitled to 10 votes in each Division, or an aggregate 10 fewer votes. - -------------------------------------------------------------------------------- LAW CHANGES MAY AFFECT YOUR VOTING PRIVILEGES Our Separate Account is required by Federal securities laws or regulations as currently interpreted to have policy owners instruct us as to the Fund's voting rights. However, if amendments to or interpretations of those laws or regulations change what must be voted on or restrict the matters for which policy owners are given the opportunity to provide voting instructions, we will in turn change what is submitted to policy owners. - -------------------------------------------------------------------------------- 13 - -------------------------------------------------------------------------------- OUR RIGHTS We reserve the right to take certain actions in connection with our operations and the operations of the Separate Account. We will always attempt to comply with applicable laws before we take any of these actions. If necessary, we will seek approval by policy owners. Specifically, we reserve the right to: o add Divisions to or remove Divisions from the Separate Account; o combine any two or more Divisions within the Separate Account; o transfer assets of the two types of variable life policies offered by this prospectus, as well as the assets of our other variable life policies, from one Division to another (if we do, we will withdraw proportional amounts of each investment to the Division, but we will also make whatever adjustments are needed to avoid odd lots and fractions); o operate the Separate Account as a management investment company under the 1940 Act, or in any other form the law allows (if we do, we may invest the assets in any legal investments and we or one of our affiliates, such as EIMC, will serve as investment adviser); o end the registration of the Separate Account under the 1940 Act; or o operate the Separate Account under the general supervision of a committee made up of individuals all of whom may be, under the 1940 Act, interested persons of us or of Equitable or discharge such Committee. - -------------------------------------------------------------------------------- SUBSTITUTION OF FUND SHARES Although we believe it to be highly unlikely, it is possible that, in our judgment, one or more of the Portfolios of the Fund may become unsuitable for investment by the Separate Account because, for example, of a change in the investment policy, or a change in the tax laws, or because the shares are no longer available for investment. For those or other reasons, we may seek to substitute the shares of another Portfolio or of an entirely different mutual fund. Before we can do this, we would obtain the approval of the SEC, and possibly one or more state insurance departments, to the extent legally required. - -------------------------------------------------------------------------------- 14 - -------------------------------------------------------------------------------- DEATH BENEFITS UNDER OUR POLICIES The death benefit is the amount payable to the named beneficiary when the insured dies. All or part of the benefit can be paid in cash or applied under one or more of our payment options described under PAYMENT OPTIONS. The death benefit will at least equal the guaranteed minimum of insurance for the policy year in which the insured dies. Whether the death benefit is higher than the guaranteed minimum depends on the investment experience of the Divisions in which you have cash value. See ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS. The death benefit is the guaranteed minimum death benefit, plus the sum (if positive) of the variable adjustment amounts (determined annually) in the Divisions in which you have cash value. The amount of death benefit actually paid to the insured's beneficiary will be adjusted as of the date of the insured's death to reflect: o any policy loans together with accrued interest; o part of any unpaid premium due if the insured dies during the grace period; o any premium paid for a period beyond the policy month in which the insured dies; o any insurance added to the policy by a rider; o the insured's suicide within 2 years after the policy's date of issue. See LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY; and o any material misstatement in the application for insurance, including a misstatement of the insured's age or sex. See LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY. Interest will be paid from the date of death to the date the death benefit is paid at least at the annual rate that we are paying under the deposit option described in PAYMENT OPTIONS. If you sign an application and send us money, and if the person proposed to be insured dies between the application date and the date we act on the application, we have a special rule. Should we decide the proposed insured was insurable and accept the application, we will pay the initial face amount to the proposed beneficiary. - -------------------------------------------------------------------------------- THE GUARANTEED MINIMUM DEATH BENEFIT The guaranteed minimum death benefit equals a policy's face amount for the policy year in which the insured dies, regardless of the investment experience of the Divisions in which a policy participates. BASIC POLICY. The guaranteed minimum death benefit of a Basic Policy is equal to its face amount and remains level as long as the policy is in force. EXPANDED POLICY. The guaranteed minimum death benefit of an Expanded Policy is equal to its face amount for the policy year in which the insured dies. The policy's face amount in the first policy year is its initial face amount. On each policy anniversary the face amount will increase by 3% over the prior year's face amount until the 14th policy anniversary, when the face amount is set at 150% of the initial face amount. Thereafter, the face amount always remains at that level. In the table below, we show the face amount for each $1,000 of initial face amount in an Expanded Policy. - -------------------------------------------------------------------------------- On Policy Face Amount On Policy Face Amount Anniversary Increases To Anniversary Increases To - -------------------------------------------------------------------------------- 1 $1,030 8 $1,267 2 1,061 9 1,305 3 1,093 10 1,344 4 1,126 11 1,384 5 1,159 12 1,426 6 1,194 13 1,469 7 1,230 14 and beyond 1,500 - -------------------------------------------------------------------------------- 15 - -------------------------------------------------------------------------------- THE VARIABLE ADJUSTMENT AMOUNT The variable adjustment amount for each Division is the amount of the death benefit that results from all past investment experience of that Division. In the first policy year, the variable adjustment amount in each Division is zero. After that, the variable adjustment amount is the amount of insurance purchased by the difference between the actual rate of return and 4%. Therefore, a Division's variable adjustment amount will not change in any year that the Division's gross return minus the charges to that Division results in a net return of 4%. If the net return is more than 4%, the variable adjustment amount will increase. The variable adjustment amount will increase because additional amounts of paid-up life insurance are purchased. If the net return is less than 4%, it will decrease. The variable adjustment amount will decrease because these additional amounts of paid-up life insurance are lost. The rates at which these additional amounts of paid-up life insurance are purchased or lost are based on sex and attained age and are guaranteed. The percentage change in the death benefit for any year is not the same as the net return for the preceding year and it is not necessarily related to current or future rates of inflation. The death benefit is equal to the guaranteed minimum death benefit plus the sum (if positive) of the variable adjustment amounts for both Divisions. However, even if the sum of the variable adjustment amounts is negative, the death benefit in the year the insured dies will never be less than the guaranteed minimum. In any year that the sum of the variable adjustment amounts increases (and is positive), the death benefit will increase. If the sum of the variable adjustment amounts is negative, investment experience can not increase the death benefit above the guaranteed minimum until it has increased the variable adjustment amount of at least one Division so that the sum is positive. In any year that the sum of the variable adjustment amounts for the Divisions decreases, the death benefit may decrease, unless it is already at the guaranteed minimum. The variable adjustment amount for each Division is set on each policy anniversary. Once set, it remains the same for the following policy year. If it is set above the guaranteed minimum, we will be responsible for keeping it at that level until the next policy anniversary. You will bear the risk that it could drop on the next policy anniversary (but not below the guaranteed minimum). There is no guarantee that a Division's investment experience, which will reflect the investment performance of the corresponding Portfolio of the Fund, will be sufficient to result in an increase in death benefits. However, the historical pattern of stock market investment performance has been one of long-range growth, and money market investments in recent years have returned over 4%. THE VARIABLE ADJUSTMENT IS CUMULATIVE. Increases and decreases in the variable adjustment amount are carried into each succeeding year. The variable adjustment amount for a Division can be positive or negative. If it is positive, good investment experience will produce a larger variable adjustment amount. If it is negative, good investment experience must first offset the current negative variable adjustment amount before there can be a positive amount. For a given net return, the greater the cash value in a Division, the greater the effect of investment experience will be on the variable adjustment amount. Therefore, in later policy years, when your total cash value is likely to be greater, investment experience may have a greater effect on the death benefit. EXAMPLE: You were a 25 year old male when your policy was issued, and you have a Basic Policy. Assume a hypothetical gross annual investment return of 0% for the first 9 policy years. This results in a negative variable adjustment amount. A net return of approximately 26.6% in the 10th policy year would offset the cumulative negative variable adjustment - -------------------------------------------------------------------------------- 16 - -------------------------------------------------------------------------------- amount so that it would equal zero. Any net return above that would produce a positive variable adjustment amount. On the other hand, the negative variable adjustment amount may be offset over a number of years. Thus, if the gross return in the 10th policy year was 8% (net return of 7.19%), a net return of 7.19% in each of the 5 following policy years would be required to produce a positive variable adjustment amount by the 16th policy year. - -------------------------------------------------------------------------------- NET RETURN The death benefit based on a Division's net return is set on each policy anniversary. The net return depends on a Division's investment experience from the first day of that policy year to the first day of the next policy year. It takes into account investment income, capital gains and capital losses (whether realized or unrealized) with respect to Fund shares owned by the Division and gains resulting from the reimbursement by us to the Division of amounts corresponding to certain Fund expenses. The charges against the Division are then deducted to determine the net return. the net return on a date during a policy year depends on the investment experience of the Division from the first day of that policy year to that date and can affect cash values but not death benefits. The net return of each Division is determined at the close of business on each day in which the degree of trading in the corresponding Portfolio of the Fund might materially affect the net return of the Division. We call this a "business day". Normally this would be each day that the New York Stock Exchange is open. However, because we are closed on Martin Luther King Day and the Friday after Thanksgiving Day, no determinations will be made on those days. The assets of each Division are valued by multiplying the number of Fund shares in each Division by the net asset value of such shares and is adjusted by the charge for mortality and expense risks. See the financial statements for the Separate Account in this prospectus. The net return for a policy year is not the same as for a calendar year unless the policy anniversary is January 1. A statement of the method we use to calculate net return is an exhibit to the Registration Statement we filed with the SEC. It will be furnished on request. - -------------------------------------------------------------------------------- HOW THE DEATH BENEFIT VARIES FROM THE GUARANTEED MINIMUM The following example shows how the death benefit varies from the guaranteed minimum as a result of investment experience. Assume that the insured was a 25 year old male when the policy was issued, and the hypothetical gross annual return is 8% for each Division or their combination (which is equal to a net return of 7.19%). Use the amounts from the ILLUSTRATION OF DEATH BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS. - -------------------------------------------------------------------------------- Variable Guaranteed Adjustment Death Minimum + Amount = Benefit - -------------------------------------------------------------------------------- BASIC POLICY End of policy year 5 $40,034 $621 $40,655 Increase -- 280 280 (0.7% increase) - -------------------------------------------------------------------------------- End of policy year 6 $40,034 $901 $40,935 - -------------------------------------------------------------------------------- EXPANDED POLICY End of policy year 5 $34,238 $688 $34,926 Increase 1,033 302 1,335 (3.8% increase) - -------------------------------------------------------------------------------- End of policy year 6 $35,271 $990 $36,261 - -------------------------------------------------------------------------------- If the gross annual return was 0% (equal to a net return of -.75%), the death benefit at the end of policy year 6 would have been: o $40,238 (a 1.0% decrease) for the Basic Policy. This reflects a decrease in the variable adjustment amount of $417. o $35,511 (a 1.7% increase) for the Expanded Policy. This reflects a decrease in the variable adjustment amount of $449. - -------------------------------------------------------------------------------- 17 - -------------------------------------------------------------------------------- CASH VALUE AND LOAN PRIVILEGES UNDER OUR POLICIES HOW WE DETERMINE CASH VALUE The cash value is the sum, on any date, of the cash values in each Division of the Separate Account in which your policy participates. If no premium is due and unpaid, the cash value of the Division equals the tabular cash value at the end of each year as stated in the policy multiplied by the annual premium allocation percentage selected by the policy owner for that Division in effect on the last anniversary, increased or decreased by the aggregate net single premium specified in the policy for the variable adjustment amount for that Division. The tabular cash value is what the cash value for the policy would be if all the Divisions in which you had funds had a constant net investment return of 4% a year. The premium allocation percentage is the percentage of your current net annual premium allocated to each of the Divisions. The net single premium is the one-time cost at your attained age to purchase one dollar of death benefit, as specified in your policy. Adjustments during a year reflect a Division's investment experience, the cost of insurance, premium payments, any indebtedness and any cash value transfers. The cash values for substandard risk policies and non-smoker policies are the same as for comparable standard risk policies. See THE VARIABLE ADJUSTMENT AMOUNT and NET RETURN. - -------------------------------------------------------------------------------- THERE IS NO GUARANTEED MINIMUM CASH VALUE Daily increases or decreases in cash value depend on the investment experience of the Divisions. It is unlikely that there will be a cash value during the early part of the first policy year because of the first year administrative charges. There is no guaranteed minimum cash value. - -------------------------------------------------------------------------------- RETURNING THE POLICY FOR CASH During the insured's lifetime, and subject to our rules, your policy can be returned for payment of the cash value net of any indebtedness. The amount payable will be based on the net cash value next computed after we receive your signed request for payment of the cash value at your Regional Service Center, accompanied by your policy. The insurance coverage will end on the date you send us the policy and your request. SPLITTING THE POLICY. You can request to split your policy into two policies. In addition, you may return one for cash. Any policy that continues will be based on the new initial face amount. The premium for the policy that continues will be based on the new initial face amount but the same age, sex and risk class as the original policy. If you split a Basic Policy, the policy we continue must have a face amount of at least $25,000. If you split an Expanded Policy, the policy we continue must have a face amount that at least equals what an Expanded Policy with an initial face amount of $25,000 with its automatic 3% a year increases would have reached in the policy year during which you split your policy. These are our current procedures, which may change. - -------------------------------------------------------------------------------- INCOME TAX WITHHOLDING Federal tax law requires us to withhold income tax from any portion of your surrender proceeds that is subject to tax, unless you request us not to withhold. If you surrender your policy and do not advise us in writing that you do not want us to withhold Federal income tax before the date payment must be made, we are required by law to withhold tax from the surrender payment. If you elect not to have tax withheld from the surrender payment, or if the amount of Federal income tax withheld is insufficient, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You may wish to consult your tax adviser. - -------------------------------------------------------------------------------- 18 - -------------------------------------------------------------------------------- YOU CAN TRANSFER CASH VALUE BETWEEN DIVISIONS You can request to transfer part or all of your cash value between the Divisions. You may do this up to twice in a policy year. A transfer will go into effect on the day we receive your signed request at your regional Life Insurance Center. Your request should show the policy number an amount (either in dollars or as a percentage) you want to transfer. When cash value is transferred a portion of the net annual premium is transferred as well. We reallocate loans if you transfer cash value. - -------------------------------------------------------------------------------- WHEN A DIVISION BECOMES INACTIVE If you have a policy loan allocated to a Division and your cash value plus remaining net annual premium less your loan (including accrued loan interest) in that Division reaches zero, that Division will become inactive for your policy. We will reallocate the loan to the other Division. A Division will also become inactive for your policy if you transfer its entire cash value to the other Division. We will notify you when a Division becomes inactive. If a Division becomes inactive, the future variable adjustment amount, cash value and net return will be affected. We will assume that you do not want to put any part of future net annual premiums into the inactive Division. You can request us to put any part of a future net annual premium into the inactive Division effective on the next policy anniversary after your request is received. You may also transfer cash value into an inactive Division from the other Division. See YOU CAN TRANSFER CASH VALUE BETWEEN DIVISIONS. - -------------------------------------------------------------------------------- TAKING A POLICY LOAN For policy loans, we offer both a fixed and an adjustable interest rate provision. This section will first discuss loans with fixed interest rates and will then discuss the special features of the adjustable loan interest rate, if it is elected. Borrowing money against your policy will have a permanent effect on your policy's cash value and the amount by which the death benefit may increase above the guaranteed minimum. The effect remains even though the loan is repaid in whole or in part. You may borrow up to 90% of your policy's cash value using the policy as security. Unless it is being used to pay premiums, we will not grant a loan that is not at least $100 more than any outstanding loan with accrued interest. The amount of your premium will not be affected by the fact you have a loan or by how you repay the loan. If a loan is made after the due date of a premium, that premium will be subtracted from the loan proceeds. If you request a loan in order to pay a premium, we will charge loan interest from the date we make the loan even if it is before the premium due date. Whenever the loan with accrued interest from one Division equals or exceeds the cash value in that Division, that Division will become inactive for your policy. We will transfer the total cash value and loan allocation to the other Division. See WHEN A DIVISION BECOMES INACTIVE. IF LOANS EXCEED THE CASH VALUE OF YOUR POLICY. Whenever the loan with accrued interest exceeds the total cash value of your policy, we will send a notice to you and to anyone to whom you told us you assigned the policy. The policy will end 31 days after we send the notice unless you make a repayment during the 31 day period that is large enough to reduce your outstanding loan with accrued interest to below the total cash value of your policy. See OPTIONS ON LAPSE. If you borrow the maximum of 90% of your policy's cash value, you increase your risk of having your policy end. This might happen if the combination of policy loan interest (as it builds up), the cost of insurance, asset charges against the Separate Account and investment experience in the Divisions where you have cash value uses up the remaining 10%. INTEREST. Except as discussed under ADJUSTABLE LOAN INTEREST RATE, interest on loans is 5% a year. Interest is charged daily and is payable by the policy owner on each anniversary. However, if it is not paid, it will be compounded on the policy anniversary because it will be added to the loan principal. This unpaid interest is transferred out of each Division where you have your loan into our general account. You should rely on your tax adviser as to whether this interest is deductible. REPAYMENT. You can repay all or part of any outstanding loan with accrued interest at any time while the policy is in effect and the insured is alive. You repayment, whether full or partial, will be reallocated to the Divisions in proportion to the loan allocation to each Division at the time of repayment. - -------------------------------------------------------------------------------- 19 - -------------------------------------------------------------------------------- The amount of any outstanding loan with accrued interest will be deducted from the death benefit or cash value proceeds. WHICH DIVISION WE CHARGE LOANS AGAINST. We allocate a loan based on the net cash value in each Division on the date the loan is made. We reallocate loans if you transfer cash value. THE PERMANENT EFFECT OF A FIXED INTEREST RATE LOAN. When you take out a loan, we transfer part of the cash value equal to the amount of the loan from the Divisions to our general account. In addition, unpaid interest on the policy loan will be transferred to our general account from time to time. The amount taken out of the Divisions will not be affected by the Divisions' investment experience while the loan is outstanding. Since the amount is not in the Divisions, it cannot contribute to any possible increase in your policy's death benefit or cash value. We will credit your policy with a 4% annual return on any amount transferred to our general account as a result of your policy loan. This can protect cash value from decreasing if investment experience is below 4%. It will also prevent cash value from increasing if investment experience is above 4%. EXAMPLE: You were a 25 year old male when your policy was issued, and you have a Basic Policy with standard rates. Use the illustration on page 25, and assume an 8% hypothetical gross annual investment return for each Division of their combination (which is a net return of 7.19%). If you take a loan for $3,000 at the end of the 9th policy year, it will affect the death benefit and cash value (before subtracting the amount of the loan with loan interest) in the 10th policy year as follows: - -------------------------------------------------------------------------------- Without Loan With Loan - -------------------------------------------------------------------------------- Death Benefit $42,603 $42,250 Cash Value 4,456 4,360 - -------------------------------------------------------------------------------- The difference results from the transfer of the portion of the cash value equal to the loan from the Division to the general account. The return on the amount transferred is reduced to 4% a year, rather than the Division's net return of 7.19%. See DEATH BENEFITS UNDER OUR POLICIES for adjustments that are made as of the date of the insured's death. ADJUSTABLE LOAN INTEREST RATE. As an alternative to the fixed loan interest rate of 5%, you may elect (in writing) the Adjustable Loan Interest Rate. Under this alternative, a rate will be determined as of the beginning of each policy year and it will apply to any new or outstanding loan under your policy during that policy year. The annual interest rate for a policy year will be the greater of 5% or the Monthly Average Corporates yield shown in Moody's Corporate Bond Yield Averages published by Moody's Investors Service, Inc., for the month ending two months before the beginning of the policy year. However, if you have elected an Adjustable Loan Interest Rate, it will be the same for a policy year after the first as it was for the immediately preceding policy year if the formula above would produce a change of less than 1/2 of 1% from the rate applicable to your policy for the preceding year. NOTIFICATION OF ADJUSTABLE LOAN INTEREST RATE. We will notify you of the initial interest rate at the time a loan is made under the Adjustable Loan Interest Rate election. Initial loan interest rates are also available on request. We will also notify you in advance of each policy anniversary of the interest rate for the following policy year. CANCELLATION OF ADJUSTABLE LOAN INTEREST RATE ELECTION. You may cancel your election of the Adjustable Loan Interest Rate in writing at any time, but the request will not take effect until the next policy anniversary. When the cancellation takes effect, the loan rate will revert to the fixed rate of 5%. Election or re-election of the Adjustable Loan Interest Rate may be made in writing at any time but will not take effect until the next policy anniversary even if no loan is outstanding. - -------------------------------------------------------------------------------- 20 STATE VARIATIONS. Not all states have laws permitting adjustable policy loan interest rates. Some states permit adjustable rates but set maximums. Some states do not permit cancellation of an adjustable loan interest rate provision, and there are other variations from state to state. For details about the policy loan interest rate laws in your state, contact your agent or your regional Life Insurance Center. AMOUNTS CREDITED ON BORROWED FUNDS. When you take out a loan, we transfer part of the cash value equal to the amount of the loan from the Divisions in which your policy participates to our general account. In addition, unpaid interest on the policy loan will be transferred to our general account from time to time. The amount taken out of the Divisions will not be affected by the investment experience of the Divisions while the loan is outstanding. Since the amounts is not in the Divisions, it contributes to possible increases in your policy's death benefit or cash value only if you have elected the Adjustable Loan Interest Rate. If you have chosen an Adjustable Loan Interest Rate, we will credit your policy with a rate of return which is 0.75% below the interest rate that is charged as a result of your policy loan, minus any charges for taxes or amounts set aside as a provision for taxes. We are not making charges for taxes or provisions for taxes now but we may make such charges in the future. See OUR INCOME TAXES. For example, if the Adjustable Loan Interest Rate were 10%, the credit rate would be 9.25%. If the Adjustable Loan Interest Rate were below 5%, the actual interest rate would be 5% and the credit rate would be 4.25%. Any amounts credited over 4% will increase your policy's death benefit and cash value. If you elect the Adjustable Loan Interest Rate, you will bear the additional investment risk connected with changes in the annual credit rate because they affect the death benefit and cash value under your policy. THE PERMANENT EFFECT OF AN ADJUSTABLE INTEREST RATE LOAN. If the current policy year's Adjustable Loan Interest Rate less 0.75% (and less any charge for taxes or provision for taxes) is greater than the net return for that year of the Divisions in which you have funds, then the death benefit and cash value for that year will be greater than if no loan were made. The reverse would also be true. EXAMPLE: You were a 25 year old male when your policy was issued, and you have a Basic Policy with standard rates. Use the illustration on page 25, and assume an 8% hypothetical gross annual investment return for each Division of their combination (which is a net return of 7.19%). If you take a loan for $3,000 at the beginning of the 10th policy year and you have elected the Adjustable Loan Interest Rate with an assumed hypothetical loan interest rate of 12.88% (the actual rate for February, 1985) in the 10th policy year, it will affect the death benefit and cash value (before subtracting the amount of the loan with loan interest) in the 10th policy year as follows: - -------------------------------------------------------------------------------- Without Loan With Loan - -------------------------------------------------------------------------------- Death Benefit $42,603 $43,150 Cash Value 4,456 4,604 - -------------------------------------------------------------------------------- See the example under THE PERMANENT EFFECT OF A FIXED INTEREST RATE LOAN for a loan with the fixed interest rate of 5%. WHENEVER THIS PROSPECTUS DISCUSSES INCREASES AND DECREASES IN THE DEATH BENEFIT AND CASH VALUES UNDER OUR VARIABLE LIFE POLICIES, YOU SHOULD CONSIDER THE IMPACT OF HAVING ELECTED AN ADJUSTABLE LOAN INTEREST RATE. 21 - -------------------------------------------------------------------------------- ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, AND ACCUMULATED PREMIUMS To help you get a picture of how the key financial elements of our policies work, we have prepared a series of tables. The tables show how death benefits and cash value of policies with annual premiums of $300, $500, and $1,000 could vary over an extended period of time if the Divisions had CONSTANT hypothetical gross annual investment returns of 0%, 4%, 8% and 12% over the years covered by each table. The death benefits and cash values would differ from those shown in the tables if the annual investment returns did not remain absolutely constant. Thus, the figures would be different if the return AVERAGED 0%, 4%, 8% and 12% over a period of years but went above or below those figures in individual policy years. The death benefits and cash values would also differ, depending on the investment allocations made to the Divisions, if the actual rates of investment return averaged 0%, 4%, 8% and 12%, but went above or below those figures for individual Divisions. The tables are for standard risk policies. The cash values in the tables are related to the annual premiums shown on page 38. The amounts of death benefits and cash values shown in the tables for the end of each policy year take into account a daily charge against each Division that is equivalent to an annual charge of 0.75% at the beginning of each year. This charge is the 0.50% charge against the Separate Account for mortality and expense risks and the effect on each Division's investment experience of the charge to the Fund assets for investment advisory services (equivalent to an annual rate of 0.25% of the aggregate average daily net assets of the Portfolios). The effect of these adjustments is that on a 0% actual rate of return the net rate of return would be -0.75%, on 4% it would be 3.22%, on 8% it would be 7.19% and on 12% it would be 11.16%. The hypothetical returns shown in the tables do not reflect any charges for Fund expenses in addition to an investment advisory fee charge of 0.25%, because the Divisions in general will be reimbursed for their share of such expenses, as previously discussed under THE SEPARATE ACCOUNT, ITS INVESTMENTS AND ITS INVESTMENT EXPERIENCE and THE FUND. The tables reflect the fact that we do not currently charge the Divisions for Federal income tax. However, if we do make such a charge in the future, it would take a higher rate of return to produce after-tax returns of 0%, 4%, 8% and 12% than it does now. The second and third columns of each table show what would happen if an amount equal to the total annual premiums for the premium payment period were invested to earn interest, after taxes, of 4% or 5% compounded annually. These tables show that if a policy is returned in its early years for payment of its cash value, the cash value will be low in comparison to premiums accumulated with interest. This means that the cost of carrying insurance for a relatively short time will be high. The Basic Policy has a level guaranteed minimum death benefit. The Expanded Policy has a guaranteed death benefit which increases by 3% per year regardless of investment experience until it reaches 150% of the original face amount in the fifteenth year. If you request, we will furnish you with a comparable illustration based on the proposed insured's sex and age and an initial face amount or premium amount of your choice. A specific illustration will assume that the insured is a standard risk and that the premium will be paid on an annual basis. In addition, if you do purchase a policy, we will deliver a specific illustration that reflects how the premium will actually be paid and to what risk class the insured has been assigned. We have also prepared special illustrations showing the effects of policy loans on a planned basis and showing various insurance plans suitable for special purposes. These are available on request. - -------------------------------------------------------------------------------- TABLE OF CONTENTS OF ILLUSTRATIONS - -------------------------------------------------------------------------------- Basic policy Expanded policy Page Page --------------------------------------- $ 300 annual premium Male Age 10 23 24 $ 500 annual premium Male Age 25 25 26 $1,000 annual premium Male Age 40 27 28 $ 300 annual premium Female Age 10 29 30 $ 500 annual premium Female Age 25 31 32 $1,000 annual premium Female Age 40 33 34 - -------------------------------------------------------------------------------- 22 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY BASIC POLICY $37,605 FACE AMOUNT MALE ISSUE AGE 10 (GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ----------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 312 $ 315 $37,605 $37,605 $ 37,619 $ 37,637 2 636 646 37,605 37,605 37,680 37,775 3 974 993 37,605 37,605 37,788 38,025 4 1,325 1,358 37,605 37,605 37,944 38,391 5 1,690 1,741 37,605 37,605 38,149 38,881 6 2,069 2,143 37,605 37,605 38,402 39,500 7 2,464 2,565 37,605 37,605 38,704 40,254 8 2,875 3,008 37,605 37,605 39,055 41,149 9 3,302 3,473 37,605 37,605 39,455 42,193 10 3,746 3,962 37,605 37,605 39,905 43,394 15 6,247 6,797 37,605 37,605 42,921 52,064 20 9,291 10,416 37,605 37,605 47,286 66,260 25 12,993 15,034 37,605 37,605 53,123 87,932 30 17,498 20,928 37,605 37,605 60,578 119,837 55 (Age 65) 53,393 79,106 37,605 37,605 128,494 637,584
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 7 $ 10 $ 12 $ 14 197 209 221 234 385 414 445 477 569 624 683 746 753 842 939 1,045 934 1,065 1,211 1,375 1,112 1,292 1,500 1,738 1,286 1,525 1,806 2,138 1,457 1,762 2,131 2,578 1,627 2,006 2,478 3,065 2,456 3,338 4,595 6,390 3,270 4,896 7,548 11,915 4,066 6,706 11,647 21,071 4,828 8,779 17,285 36,150 4,419 17,723 80,874 401,295 (1) If premiums are paid more frequently than annually the payments would be $153 semi-annually, $78 quarterly or $27 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 23 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY EXPANDED POLICY $29,316 FACE AMOUNT MALE ISSUE AGE 10 (GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2)(3) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ----------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 312 $ 315 $30,195 $30,195 $ 30,210 $ 30,229 2 636 646 31,104 31,104 31,183 31,283 3 974 993 32,042 32,042 32,234 32,482 4 1,325 1,358 33,009 33,009 33,363 33,829 5 1,690 1,741 33,977 33,977 34,543 35,304 6 2,069 2,143 35,003 35,003 35,381 36,971 7 2,464 2,565 36,058 36,058 37,198 38,807 8 2,875 3,008 37,143 37,143 38,646 40,817 9 3,302 3,473 38,257 38,257 40,172 43,008 10 3,746 3,962 39,400 39,400 41,779 45,388 15 6,247 6,797 43,974 43,974 49,430 58,830 20 9,291 10,416 43,974 43,974 53,823 73,195 25 12,993 15,034 43,974 43,974 59,641 94,983 30 17,498 20,928 43,974 43,974 67,022 126,924 55 (Age 65) 59,642 85,905 43,974 43,974 134,792 645,712
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 26 $ 28 $ 31 $ 33 220 233 246 259 411 442 474 508 598 656 717 782 788 881 982 1,092 974 1,110 1,262 1,431 1,156 1,342 1,557 1,804 1,332 1,578 1,870 2,213 1,504 1,818 2,201 2,663 1,671 2,063 2,551 3,158 2,459 3,362 4,652 6,497 3,208 4,852 7,550 12,009 3,933 6,575 11,561 21,129 4,604 8,523 17,050 36,119 5,878 19,389 82,508 404,081 (1) If premiums are paid more frequently than annually the payments would be $153 semi-annually, $78 quarterly or $27 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. (3) The amounts shown for the death benefit at the end of the first through fourteenth Policy years take into account the annual increase in the face amount (guaranteed minimum death benefit) in such years. The increases in the death benefit in the 0% and 4% columns for the end of the first through fourteenth Policy years result only from such increases in the guaranteed minimum death benefit and are unrelated to the hypothetical gross annual investment returns. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 24 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY BASIC POLICY $40,034 FACE AMOUNT MALE ISSUE AGE 25 (GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ---------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 520 $ 525 $40,034 $40,034 $40,059 $ 40,090 2 1,061 1,076 40,034 40,034 40,133 40,259 3 1,623 1,655 40,034 40,034 40,256 40,544 4 2,208 2,263 40,034 40,034 40,429 40,952 5 2,816 2,901 40,034 40,034 40,655 41,496 6 3,449 3,571 40,034 40,034 40,935 42,183 7 4,107 4,275 40,034 40,034 41,270 43,021 8 4,791 5,013 40,034 40,034 41,659 44,016 9 5,503 5,789 40,034 40,034 42,103 45,177 10 6,243 6,603 40,034 40,034 42,603 46,513 15 10,412 11,329 40,034 40,034 45,957 56,162 20 15,484 17,360 40,034 40,034 50,786 71,906 25 21,656 25,057 40,034 40,034 57,191 95,840 30 29,164 34,880 40,034 40,034 65,321 131,001 40 (Age 65) 49,413 63,419 40,034 40,034 87,684 254,387
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 80 $ 86 $ 93 $ 99 389 415 441 467 696 753 813 875 1,001 1,102 1,211 1,328 1,330 1,491 1,667 1,861 1,656 1,890 2,154 2,451 1,979 2,301 2,674 3,104 2,299 2,725 3,230 3,828 2,615 3,160 3,823 4,628 2,929 3,608 4,456 5,514 4,424 6,016 8,286 11,535 5,748 8,659 13,420 21,282 6,884 11,510 20,219 36,906 7,825 14,525 29,093 61,649 9,395 21,081 55,188 160,111 (1) If premiums are paid more frequently than annually the payments would be $255 semi-annually, $130 quarterly or $44 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 25 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY EXPANDED POLICY $29,541 FACE AMOUNT MALE ISSUE AGE 25 (GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2)(3) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ---------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 520 $ 525 $30,427 $30,427 $30,460 $ 30,502 2 1,061 1,076 31,343 31,343 31,461 31,612 3 1,623 1,655 32,288 32,288 32,543 32,874 4 2,208 2,263 33,263 33,263 33,706 34,294 5 2,816 2,901 34,238 34,238 34,926 35,859 6 3,449 3,571 35,271 35,271 36,261 37,634 7 4,107 4,275 36,335 36,335 37,682 39,596 8 4,791 5,013 37,428 37,428 39,190 41,754 9 5,503 5,789 38,551 38,551 40,785 44,114 10 6,243 6,603 39,703 39,703 42,467 46,686 15 10,412 11,329 44,311 44,311 50,595 61,470 20 15,484 17,360 44,311 44,311 55,595 77,894 25 21,656 25,057 44,311 44,311 62,157 102,683 30 29,164 34,880 44,311 44,311 70,410 138,898 55 (Age 65) 49,413 63,419 44,311 44,311 92,742 264,957
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 153 $ 161 $ 170 $ 179 476 506 537 568 794 859 928 999 1,108 1,222 1,344 1,475 1,451 1,629 1,824 2,039 1,790 2,046 2,335 2,661 2,123 2,473 2,879 3,349 2,451 2,911 3,458 4,108 2,774 3,359 4,074 4,947 3,091 3,818 4,730 5,872 4,553 6,234 8,641 12,103 5,794 8,824 13,818 22,118 6,802 11,562 20,614 38,111 7,540 14,356 29,378 63,326 8,140 19,699 54,314 162,706 (1) If premiums are paid more frequently than annually the payments would be $255 semi-annually, $130 quarterly or $44 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. (3) The amounts shown for the death benefit at the end of the first through fourteenth Policy years take into account the annual increase in the face amount (guaranteed minimum death benefit) in such years. The increases in the death benefit in the 0% and 4% columns for the end of the first through fourteenth Policy years result only from such increases in the guaranteed minimum death benefit and are unrelated to the hypothetical gross annual investment returns. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 26 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY BASIC POLICY $49,238 FACE AMOUNT MALE ISSUE AGE 40 (GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ---------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 1,040 $ 1,050 $49,238 $49,238 $49,286 $ 49,346 2 2,122 2,153 49,238 49,238 49,404 49,617 3 3,246 3,310 49,238 49,238 49,593 50,053 4 4,416 4,526 49,238 49,238 49,850 50,662 5 5,633 5,802 49,238 49,238 50,177 51,454 6 6,898 7,142 49,238 49,238 50,576 52,438 7 8,214 8,549 49,238 49,238 51,046 53,621 8 9,583 10,027 49,238 49,238 51,586 55,012 9 11,006 11,578 49,238 49,238 52,196 56,620 10 12,486 13,207 49,238 49,238 52,878 58,457 15 20,824 22,657 49,238 49,238 57,353 71,501 20 30,969 34,719 49,238 49,238 63,660 92,439 25 (Age 65) 43,312 50,113 49,238 49,238 71,913 124,015
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------- ------- ------- -------- $ 321 $ 340 $ 360 $ 380 1,022 1,091 1,161 1,233 1,705 1,852 2,005 2,167 2,370 2,623 2,897 3,190 3,045 3,435 3,867 4,342 3,700 4,257 4,888 5,603 4,335 5,089 5,966 6,984 4,950 5,930 7,100 8,496 5,543 6,778 8,292 10,148 6,115 7,633 9,546 11,955 8,627 11,972 16,809 23,822 10,551 16,333 25,967 42,151 11,884 20,574 37,322 70,115 (1) If premiums are paid more frequently than annually the payments would be $510 semi-annually, $258 quarterly or $87 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 27 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY EXPANDED POLICY $34,754 FACE AMOUNT MALE ISSUE AGE 40 (GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2)(3) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ----------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 1,040 $ 1,050 $35,796 $35,796 $35,852 $35,921 2 2,122 2,153 36,873 36,873 37,060 37,297 3 3,246 3,310 37,986 37,986 38,379 38,889 4 4,416 4,526 39,133 39,133 39,806 40,700 5 5,633 5,802 40,280 40,280 41,310 42,710 6 6,898 7,142 41,496 41,496 42,959 44,996 7 8,214 8,549 42,747 42,747 44,720 47,532 8 9,583 10,027 44,033 44,033 46,591 50,327 9 11,006 11,578 45,353 45,353 48,573 53,392 10 12,486 13,207 46,709 46,709 50,666 56,737 15 20,824 22,657 52,131 52,131 60,904 76,223 20 30,969 34,719 52,131 52,131 67,604 98,584 25 (Age 65) 43,312 50,113 52,131 52,131 76,279 132,073
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------- ------- ------- -------- $ 450 $ 473 $ 495 $ 518 1,203 1,280 1,359 1,439 1,939 2,101 2,271 2,450 2,655 2,934 3,235 3,557 3,381 3,808 4,281 4,802 4,085 4,693 5,384 6,165 4,767 5,589 6,545 7,657 5,425 6,491 7,766 9,288 6,057 7,399 9,047 11,068 6,662 8,310 10,390 13,011 9,182 12,789 18,017 25,611 10,955 17,126 27,458 44,880 12,067 21,243 39,069 74,185 (1) If premiums are paid more frequently than annually the payments would be $510 semi-annually, $258 quarterly or $87 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. (3) The amounts shown for the death benefit at the end of the first through fourteenth Policy years take into account the annual increase in the face amount (guaranteed minimum death benefit) in such years. The increases in the death benefit in the 0% and 4% columns for the end of the first through fourteenth Policy years result only from such increases in the guaranteed minimum death benefit and are unrelated to the hypothetical gross annual investment returns. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 28 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY BASIC POLICY $42,654 FACE AMOUNT FEMALE ISSUE AGE 10 (GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ----------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 312 $ 315 $42,654 $42,654 $ 42,671 $ 42,692 2 636 646 42,654 42,654 42,741 42,851 3 974 993 42,654 42,654 42,864 43,135 4 1,325 1,358 42,654 42,654 43,040 43,550 5 1,690 1,741 42,654 42,654 43,272 44,105 6 2,069 2,143 42,654 42,654 43,559 44,806 7 2,464 2,565 42,654 42,654 43,901 45,660 8 2,875 3,008 42,654 42,654 44,299 46,676 9 3,302 3,473 42,654 42,654 44,754 47,862 10 3,746 3,962 42,654 42,654 45,266 49,226 15 6,247 6,797 42,654 42,654 48,695 59,082 20 9,291 10,416 42,654 42,654 53,646 75,193 25 12,993 15,034 42,654 42,654 60,256 99,768 30 17,498 20,928 42,654 42,654 68,700 135,933 55 (Age 65) 53,393 79,106 42,654 42,654 145,533 721,273
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 12 $ 15 $ 17 $ 20 200 212 225 238 386 416 447 479 569 624 684 747 754 843 940 1,046 937 1,067 1,214 1,378 1,117 1,298 1,506 1,745 1,295 1,534 1,817 2,150 1,471 1,776 2,147 2,596 1,642 2,023 2,497 3,087 2,459 3,345 4,607 6,410 3,248 4,871 7,522 11,888 4,032 6,657 11,580 20,973 4,804 8,734 17,206 36,011 4,601 18,399 83,802 415,330 (1) If premiums are paid more frequently than annually the payments would be $153 semi-annually, $78 quarterly or $27 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 29 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY EXPANDED POLICY $33,708 FACE AMOUNT FEMALE ISSUE AGE 10 (GUARANTEED MINIMUM DEATH BENEFIT) $300 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2)(3) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ----------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 312 $ 315 $34,719 $34,719 $ 34,732 $ 34,748 2 636 646 35,764 35,764 35,846 35,948 3 974 993 36,842 36,842 37,049 37,315 4 1,325 1,358 37,955 37,955 38,343 38,852 5 1,690 1,741 39,067 39,067 39,693 40,534 6 2,069 2,143 40,247 40,247 41,167 42,433 7 2,464 2,565 41,460 41,460 42,732 44,524 8 2,875 3,008 42,708 42,708 44,389 46,813 9 3,302 3,473 43,988 43,988 46,136 49,309 10 3,746 3,962 45,303 45,303 47,974 52,019 15 6,247 6,797 50,562 50,562 56,715 67,297 20 9,291 10,416 50,562 50,562 61,670 83,499 25 12,993 15,034 50,562 50,562 68,220 108,044 30 17,498 20,928 50,562 50,562 76,529 144,011 55 (Age 65) 59,641 85,903 50,562 50,562 152,983 727,459
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 7 $ 9 $ 11 $ 13 206 218 229 242 402 431 462 494 594 650 709 773 785 875 974 1,081 972 1,105 1,255 1,421 1,156 1,341 1,553 1,796 1,336 1,581 1,869 2,209 1,511 1,824 2,203 2,661 1,681 2,070 2,555 3,158 2,452 3,353 4,639 6,475 3,168 4,801 7,478 11,901 3,873 6,487 11,422 20,890 4,555 8,432 16,873 35,747 6,259 20,283 85,423 416,224 (1) If premiums are paid more frequently than annually the payments would be $157 semi-annually, $78 quarterly or $27 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. (3) The amounts shown for the death benefit at the end of the first through fourteenth Policy years take into account the annual increase in the face amount (guaranteed minimum death benefit) in such years. The increases in the death benefit in the 0% and 4% columns for the end of the first through fourteenth Policy years result only from such increases in the guaranteed minimum death benefit and are unrelated to the hypothetical gross annual investment returns. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 30 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY BASIC POLICY $37,605 FACE AMOUNT FEMALE ISSUE AGE 25 (GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ---------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 520 $ 525 $45,898 $45,898 $45,921 $ 45,950 2 1,061 1,076 45,898 45,898 46,000 46,131 3 1,623 1,655 45,898 45,898 46,136 46,445 4 2,208 2,263 45,898 45,898 46,329 46,899 5 2,816 2,901 45,898 45,898 46,582 47,507 6 3,449 3,571 45,898 45,898 46,895 48,274 7 4,107 4,275 45,898 45,898 47,270 49,210 8 4,791 5,013 45,898 45,898 47,706 50,323 9 5,503 5,789 45,898 45,898 48,204 51,623 10 6,243 6,603 45,898 45,898 48,765 53,119 15 10,412 11,329 45,898 45,898 52,537 63,952 20 15,484 17,360 45,898 45,898 57,993 81,687 25 21,656 25,057 45,898 45,898 65,259 108,718 30 29,164 34,880 45,898 45,898 74,502 148,463 40 (Age 65) 49,413 63,419 45,898 45,898 99,952 287,894
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 42 $ 48 $ 53 $ 58 358 381 405 429 671 725 781 840 981 1,079 1,185 1,297 1,305 1,461 1,633 1,820 1,627 1,855 2,112 2,400 1,946 2,261 2,625 3,044 2,262 2,679 3,173 3,757 2,576 3,110 3,759 4,547 2,887 3,554 4,385 5,421 4,403 5,974 8,210 11,402 5,811 8,711 13,441 21,228 7,053 11,713 20,450 37,125 8,125 14,958 29,733 62,589 9,916 22,140 57,555 165,778 (1) If premiums are paid more frequently than annually the payments would be $255 semi-annually, $130 quarterly or $44 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 31 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY EXPANDED POLICY $45,898 FACE AMOUNT FEMALE ISSUE AGE 25 (GUARANTEED MINIMUM DEATH BENEFIT) $500 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2)(3) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ----------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- -------- -------- 1 $ 520 $ 525 $35,413 $35,413 $ 35,447 $ 35,489 2 1,061 1,076 36,479 36,479 36,604 36,762 3 1,623 1,655 37,579 37,579 37,852 38,206 4 2,208 2,263 38,714 38,714 39,192 39,827 5 2,816 2,901 39,848 39,848 40,595 41,609 6 3,449 3,571 41,052 41,052 42,131 43,628 7 4,107 4,275 42,289 42,289 43,764 45,857 8 4,791 5,013 43,561 43,561 45,495 48,305 9 5,503 5,789 44,868 44,868 47,326 50,982 10 6,243 6,603 46,209 46,209 49,254 53,896 15 10,412 11,329 51,573 51,573 58,538 70,567 20 15,484 17,360 51,573 51,573 64,137 88,895 25 21,656 25,057 51,573 51,573 71,522 116,639 30 29,164 34,880 51,573 51,573 80,839 157,228 40 (Age 65) 49,413 63,419 51,573 51,573 106,116 298,586
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 124 $ 131 $ 139 $ 146 440 468 497 526 752 814 878 945 1,060 1,168 1,284 1,409 1,398 1,568 1,754 1,960 1,731 1,977 2,255 2,568 2,060 2,398 2,789 3,240 2,384 2,829 3,357 3,983 2,703 3,270 3,961 4,803 3,016 3,721 4,604 5,707 4,494 6,134 8,479 11,843 5,819 8,810 13,721 21,857 6,938 11,693 20,689 38,000 7,817 14,717 29,821 63,756 8,728 20,769 56,456 167,286 (1) If premiums are paid more frequently than annually the payments would be $255 semi-annually, $130 quarterly or $44 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. (3) The amounts shown for the death benefit at the end of the first through fourteenth Policy years take into account the annual increase in the face amount (guaranteed minimum death benefit) in such years. The increases in the death benefit in the 0% and 4% columns for the end of the first through fourteenth Policy years result only from such increases in the guaranteed minimum death benefit and are unrelated to the hypothetical gross annual investment returns. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 32 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY BASIC POLICY $57,396 FACE AMOUNT FEMALE ISSUE AGE 40 (GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ---------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 1,040 $ 1,050 $57,396 $57,396 $57,446 % 57,509 2 2,122 2,153 57,396 57,396 57,576 57,805 3 3,246 3,310 57,396 57,396 57,784 58,289 4 4,416 4,526 57,396 57,396 58,070 58,968 5 5,633 5,802 57,396 57,396 58,439 59,857 6 6,898 7,142 57,396 57,396 58,889 60,964 7 8,214 8,549 57,396 57,396 59,420 62,301 8 9,583 10,027 57,396 57,396 60,032 63,875 9 11,006 11,578 57,396 57,396 60,726 65,699 10 12,486 13,207 57,396 57,396 61,502 67,785 15 20,824 22,657 57,396 57,396 66,616 82,643 20 30,969 34,719 57,396 57,396 73,853 106,568 25 (Age 65) 43,312 50,113 57,396 57,396 83,351 142,705
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ----------------------------------------------------- 0% 4% 8% 12% - ------ ------- ------- -------- $ 305 $ 323 $ 341 $ 359 1,007 1,073 1,140 1,208 1,696 1,837 1,986 2,142 2,368 2,615 2,881 3,167 3,063 3,446 3,869 4,335 3,739 4,290 4,913 5,617 4,399 5,147 6,016 7,025 5,040 6,017 7,182 8,569 5,663 6,900 8,413 10,264 6,268 7,794 9,713 12,123 8,991 12,409 17,337 24,457 11,173 17,172 27,123 43,770 12,814 21,970 39,517 73,695 (1) If premiums are paid more frequently than annually the payments would be $510 semi-annually, $258 quarterly or $87 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 33 - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY EXPANDED POLICY $40,756 FACE AMOUNT FEMALE ISSUE AGE 40 (GUARANTEED MINIMUM DEATH BENEFIT) $1,000 ANNUAL PREMIUM FOR STANDARD RISK(1) - -------------------------------------------------------------------------------- [THE FOLLOWING TABLES APPEARED AS ONE LANDSCAPED TABLE IN THE PRINTED PROSPECTUS, BUT HAD TO BE SPLIT INTO TWO TABLES TO ACCOMMODATE THE EDGAR FORMAT. THE FOOTNOTES WHICH FOLLOW THE TABLES BELOW APPLY TO BOTH TABLES ON THIS PAGE.]
PREMIUMS(1) DEATH BENEFIT(2)(3) ACCUMULATED AT INTEREST ASSUMING HYPOTHETICAL GROSS END OF PER ANNUM OF ANNUAL INVESTMENT RETURN OF POLICY ----------------------- ---------------------------------------------------- YEAR 4% 5% 0% 4% 8% 12% ------ ------- ------- ------- ------- ------- -------- 1 $ 1,040 $ 1,050 $41,978 $41,978 $42,038 $ 42,112 2 2,122 2,153 43,242 43,242 43,445 43,704 3 3,246 3,310 44,546 44,546 44,977 45,537 4 4,416 4,526 45,891 45,891 46,633 47,619 5 5,633 5,802 47,236 47,376 48,376 49,926 6 6,898 7,142 48,662 48,662 50,287 52,547 7 8,214 8,549 50,129 50,129 52,325 55,453 8 9,583 10,027 51,637 51,637 54,491 58,653 9 11,006 11,578 53,186 53,186 56,783 62,160 10 12,486 13,207 54,776 54,776 59,202 65,985 15 20,824 22,657 61,134 61,134 70,999 88,188 20 30,969 34,719 61,134 61,134 78,599 113,460 25 (Age 65) 43,312 50,113 61,134 61,134 88,471 151,369
CASH VALUE(2) ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF - ------------------------------------------------------ 0% 4% 8% 12% - ------- ------- ------- -------- $ 431 $ 453 $ 474 $ 496 1,177 1,251 1,327 1,404 1,908 2,065 2,230 2,402 2,622 2,894 3,186 3,500 3,358 3,776 4,239 4,748 4,074 4,672 5,350 6,117 4,771 5,581 6,524 7,618 5,447 6,502 7,762 9,265 6,099 7,432 9,066 11,068 6,729 8,370 10,438 13,041 9,436 13,082 18,352 25,989 11,458 17,786 28,342 46,082 12,855 22,410 40,881 77,099 (1) If premiums are paid more frequently than annually the payments would be $510 semi-annually, $258 quarterly or $87 monthly. The death benefits and cash values shown would not be affected by the more frequent premium payments, nor would such amounts be affected by the Insured's risk classification. (2) Assumes no policy loan has been made. (3) The amounts shown for the death benefit at the end of the first through fourteenth Policy years take into account the annual increase in the face amount (guaranteed minimum death benefit) in such years. The increases in the death benefit in the 0% and 4% columns for the end of the first through fourteenth Policy years result only from such increases in the guaranteed minimum death benefit and are unrelated to the hypothetical gross annual investment returns. IT IS EMPHASIZED THAT 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. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT AND CASH VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT AND THE DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS, IF THE ACTUAL RATES OF INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, 4%, 8% OR 12%, BUT VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. NO REPRESENTATIONS CAN BE MADE THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME. 34 - -------------------------------------------------------------------------------- YOU WILL RECEIVE PERIODIC REPORTS As a policy owner, you will receive an annual statement about your policy giving you the status as of the first day of the current policy year of: o the way the net annual premium is divided between the Divisions; o the death benefit; o the cash value; and o your outstanding policy loans. Notice will also be sent to you for policy issuance, transfers of funds between Division and certain other policy transactions. We will not send you an annual statement for any year your policy is in effect under an option on lapse. You will also receive a billing notice each year showing accrued interest for the past policy year if you have a policy loan outstanding. We will also send you semiannual reports with financial information on the Separate Account and the Fund (including a list of the investments held by each Portfolio of the Fund in which the Divisions invest) as required by the 1940 Act. - -------------------------------------------------------------------------------- THE IMPACT OF TAXES POLICY PROCEEDS The Tax Reform Act of 1984 (1984 Act) includes a definition of life insurance for tax purposes. Our variable life policies meet the statutory definition of life insurance and hence will receive the same Federal income tax treatment as fixed benefit life insurance. Thus, (a) the death benefit under our policies will be excludable from the gross income of the beneficiary under Section 101(a)(1) of the Internal Revenue Code (Code) and (b) the policy owner will not be deemed to be in constructive receipt of the cash value under the policy until the policy is actually surrendered. Only then would the owner be taxed on any increase in cash value due to investment experience. In general if you return your policy for its cash value, you will not be taxed on the amount you receive, except for the portion which exceeds the premiums you have paid. A split of the policy into two policies followed by a return of one for cash, or an exchange referred to under CANCELLATION AND EXCHANGE RIGHTS, may result in taxable income to the policy owner depending on the circumstances. We suggest you consult your tax adviser. The 1984 Act also gives the Secretary of the Treasury authority to set standards for diversification of the investments underlying variable life policies in order for such policies to be treated as life insurance. Based on a Temporary Regulation, we believe that we will have 90 days following publication in the Federal Register of the regulations prescribing diversification standards to comply with those standards. We do not anticipate any problem in complying with the regulatory standards within the 90-day period. We also believe that loans received under the policies will be treated as indebtedness of an owner, and that no part of any loan under a policy will constitute income to the owner. The individual situation of each policy owner or beneficiary will determine how ownership or receipt of policy proceeds will be treated for purposes of Federal estate tax as well as state and local estate, inheritance and other taxes. See the prospectus of the Fund for discussion of the Fund's tax aspects. - -------------------------------------------------------------------------------- PENSION AND PROFIT SHARING PLANS If our policies are purchased by a trust which forms part of a pension or profit sharing plan qualified under Section 401(a) of the Code for the benefit of participants covered under the plan, the Federal income tax treatment with respect to our policies will be somewhat different from that described above. We suggest you consult your tax adviser. - -------------------------------------------------------------------------------- 35 - -------------------------------------------------------------------------------- The first difference is that the current value of the "at risk" portion of our policies, that is, the amount by which the current death benefit exceeds the cash value, is treated as a "current fringe benefit" and is required to be included annually in the plan participant's gross income. This value, commonly referred to as the "P.S. 58 cost", is computed by using tables published by the Internal Revenue Service and is reported to the participant annually as an addition to wages and salaries on the Form W-2 annually furnished by the employer who is maintaining the plan. Second, if the plan participant dies while covered by the plan and the policy proceeds are paid to the participant's beneficiary, then a portion of the proceeds of our policies may be includable in the gross income of the beneficiary. The 1984 Act repeals the $100,000 exclusion for death benefits payable under qualified plans effective for deaths after December 31, 1984. - -------------------------------------------------------------------------------- OUR INCOME TAXES Under the life insurance company tax provisions of the Code, as amended by the 1984 Act, variable life insurance is treated in a manner consistent with fixed life insurance. The operations of the Separate Account are included in the Federal income tax return of Equitable Variable. Under current tax law, Equitable Variable pays no tax on investment income and capital gains reflected in variable life insurance policy reserves. Consequently, no charge is currently being made to either Division of the Separate Account for our Federal income taxes. We reserve the right, however, to make such a charge in the future, if the law changes and we incur Federal income tax which is attributable to the Separate Account. If such a charge is made, it would be set aside as a provision for taxes which we would keep in the affected Division rather than in our general account. We anticipate that our variable life policy owners will benefit from any investment earnings that are not needed to maintain this provision. We may have to pay state and local taxes (in addition to premium taxes) in several states. At present, these taxes are not substantial. If they increase, however, charges may be made for such taxes when they are attributable to the Separate Account. - -------------------------------------------------------------------------------- TAX REFORM The President of the United States recently submitted a comprehensive set of tax reform proposals to Congress. These proposals were substantially modified by the House of Representatives which adopted a comprehensive tax reform bill. The Senate is also considering comprehensive tax reform. The House bill would not affect the taxes paid by life insurance companies such as Equitable Variable as they relate to our Separate Account and would not alter the favorable tax treatment of life insurance policies described in this prospectus. The ultimate nature and the prospects for enactment of proposals for tax reform and their precise effect are uncertain at this time. - -------------------------------------------------------------------------------- GENERAL PROVISIONS OF OUR POLICIES This section of the prospectus describes the general provisions of our policies and is subject to the terms of the policy you buy. You can review copies of our Basic and Expanded Policies upon request. The minimum face amount of a policy you may apply for is $25,000. The Basic Policy may be issued to age 75 and the Expanded Policy to age 65. Before issuing any policy, we require satisfactory evidence of insurability. You will pay your premium and handle all other business connected with your policy at your regional Life Insurance Center shown on page 3 of your policy. - -------------------------------------------------------------------------------- PREMIUMS Your premium is due on or before the due date shown in the policy and may be paid annually, semiannually, quarterly or monthly. Monthly payments can be made through a direct automatic payment plan arranged with your bank. You can request a change in the frequency of the premium payment by writing to your regional Life Insurance Center. Premiums for the Basic Policy are payable for 40 years (but never beyond an insured's attained age of 95). Premiums for the Expanded Policy are payable for the insured's lifetime. The length of time during which your premium must be paid is called the premium payment period. Premiums are not affected by the investment experience of the Separate Account, or, in the case of our Expanded Policy, by increases in the policy's face amount. We guarantee that your premium will not go up during your premium payment period. - -------------------------------------------------------------------------------- 36 - -------------------------------------------------------------------------------- Because the Basic Policy does not provide for an increasing guaranteed minimum, the premium for it is lower than for the Expanded Policy, which does have this feature. We offer reduced premiums if the insured is a standard risk and meets additional requirements as to smoking habits. The reduction is greater for face amounts of at least $100,000. Non-smoker rates are available for ages 20 and over. We will charge an additional premium if an extra mortality risk is involved or if you want certain optional insurance benefits. YOU CAN CHOOSE THE DIVISION OR DIVISIONS WHERE YOUR NET ANNUAL PREMIUM WILL BE PUT. You can decide how your net annual premium will be applied to the Divisions. You can put the whole net annual premium in either Division, or you can put a percentage in each Division. Percentages cannot be fractions and must add up to 100. You make your initial decision on the application for your policy. You can write to your regional Life Insurance Center at any time requesting to change your decision. Regardless of when you make your request, changes go into effect only on the next policy anniversary because we allocate net annual premiums to the Separate Account only on policy anniversaries. It may not always be possible to make a change that is received less than 7 days before a policy anniversary. In this case, the change will not go into effect until the policy anniversary following the entire next policy year. HOW WE USE PREMIUMS. Premiums are used to cover expenses and to pay death benefits. The amount of your annual premium does not change during the premium payment period. The way we use the premium does change. This is because, in early policy years, policy expenses are greater and the risk of paying death benefits is less than in later policy years. The risk of paying death benefits increases as the insured gets older, while expenses decrease. Part of the net annual premium put into the Separate Account in early policy years is used to pay death benefits in those years, while the balance is used as a reserve to pay death benefits in later policy years. The net annual premium in early policy years is more than what is needed to meet death benefits. The net annual premium in later policy years is less than what is needed to meet death benefits. If the net annual premiums exceed what is needed to meet death benefits over the years, the excess contributes to our profits. Part of our premiums are retained in our general account as a reserve to cover the possibility that, at an insured's death, the guaranteed minimum will be more than what would have been payable, based on the investment experience of the Separate Account, if there were no guaranteed minimum death benefit. PREMIUM PAYMENTS BY SALARY ALLOTMENT. If you work for an employer which permits you to pay insurance premiums by deduction from your salary, we may offer you and your fellow employees fixed insurance in the amount of the face amount for the variable insurance you apply for (with a maximum of $250,000). This insurance would be without charge (except that a premium will be deducted from any fixed death benefit), and would be in effect until we receive the first payment from your employer. At that time, your policy will begin its participation in our Separate Account. CHANGES IN PREMIUM RATES. Congress and the legislatures of various states have from time to time considered legislation that would require premium rates to be the same for males and females of the same age and risk class. In addition, employers and employee organizations should consider, in consultation with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the purchase of the Basic Policy or the Expanded Policy in connection with an employment-related insurance or benefit plan. The United States Supreme Court held, in a 1983 decision, that, under Title VII, optional annuity benefits under a deferred compensation plan could not vary on the basis of sex. - -------------------------------------------------------------------------------- 37 - -------------------------------------------------------------------------------- ILLUSTRATION OF PREMIUM RATES. Premiums are based on actuarial estimates of death benefits, cash value benefits, lapses, expenses, investment experience and amount contributed to our surplus. The following tables show premium rates for each $1,000 of face amount for $25,000 policies, which is the minimum, and for a $100,000 Expanded policy, which is the amount where our rates per $1,000 go down (except for smokers). - -------------------------------------------------------------------------------- $25,000 FACE AMOUNT BASIC POLICY Annual Premium for each $1,000 Face Amount MALE FEMALE Age At ----------------------------- ----------------------------- Issue Standard Risk Non-Smoker Standard Risk Non-Smoker - -------------------------------------------------------------------------------- 10 $ 8.38 n.a. $ 7.53 n.a. 25 12.94 $12.60 11.44 $11.24 40 20.90 19.88 18.10 17.49 - -------------------------------------------------------------------------------- $25,000 INITIAL FACE AMOUNT EXPANDED POLICY Annual Premium for each $1,000 Initial Face Amount MALE FEMALE Age At ----------------------------- ----------------------------- Issue Standard Risk Non-Smoker Standard Risk Non-Smoker - -------------------------------------------------------------------------------- 10 $10.41 n.a. $ 9.21 n.a. 25 17.11 $16.77 14.87 $14.67 40 29.11 28.09 25.00 24.39 - -------------------------------------------------------------------------------- $100,000 INITIAL FACE AMOUNT EXPANDED POLICY Annual Premium for each $1,000 Initial Face Amount MALE FEMALE Age At ----------------------------- ----------------------------- Issue Standard Risk Non-Smoker Standard Risk Non-Smoker - -------------------------------------------------------------------------------- 10 $ 9.33 n.a. $ 8.15 n.a. 25 16.21 $15.30 13.97 $13.27 40 28.21 26.26 24.10 22.68 - -------------------------------------------------------------------------------- 38 - -------------------------------------------------------------------------------- Premiums for semiannual, quarterly, and monthly periods will be higher per year than the annual premium. This is due to a charge for loss of interest and added billing and collection costs. The following tables compare annual and monthly premiums for standard risks: - -------------------------------------------------------------------------------- PREMIUMS FOR EACH $1,000 FACE AMOUNT
% Excess of Total Monthly Premiums for Policy Year Over Initial Annual Basis Monthly Basis Annual Premiums Age at Face ------------------ ----------------- ---------------- Issue Amount Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------ BASIC POLICY 10 $ 25,000 $ 8.38 $ 7.53 $ .78 $ .70 11.7% 11.6% 25 25,000 12.94 11.44 1.17 1.04 8.5 9.1 40 25,000 20.90 18.10 1.85 1.61 6.2 6.7 EXPANDED POLICY 10 $ 25,000 $10.41 $ 9.21 $ .95 $ .85 9.5% 10.7% 100,000 9.51 8.31 .83 .73 4.7 5.4 25 25,000 17.11 14.87 1.53 1.34 7.3 8.1 100,000 16.21 13.97 1.41 1.22 4.4 4.8 40 25,000 29.11 25.00 2.56 2.21 5.5 6.1 100,000 28.21 24.10 2.44 2.09 3.8 4.1 - ------------------------------------------------------------------------------------------------------
GRACE PERIOD. We allow a grace period of 31 days to pay each premium after the first one. Insurance will continue during the grace period, but we will deduct one month's premium from the death benefit if the insured dies during the grace period. LAPSE. If a premium has not been paid by the end of the 31-day grace period, the policy will lapse as of the date the premium was due. When a policy lapses, any riders will end. All insurance may end unless the policy's net cash value is used under a continued insurance option on lapse. See OPTIONS ON LAPSE. - -------------------------------------------------------------------------------- OPTIONS ON LAPSE If a policy lapses because a premium remains due and unpaid beyond its 31-day grace period, you may use one of the following options. A key element in these options is your policy's net cash value on any day for a period of up to 3 months after the unpaid premium was due. Net cash value is cash value minus any policy loans with accrued interest on the date an option is used. If your policy has no net cash value, you cannot use the options. PAYMENT OF NET CASH VALUE OPTION. You can withdraw the net cash value and receive payment in cash. CONTINUED INSURANCE OPTION. Within 3 months from the date a policy lapses (which is the date the unpaid premium was due), you can use its net cash value to obtain one of two types of fixed life insurance plans. These are reduced paid-up insurance or extended term insurance. You will not have to pay any additional premium on either type because you are, in effect, using the net cash value of your variable life policy to buy continued life coverage. If we do not receive a written request to use the continued insurance option with 3 months after lapse, extended term insurance will automatically go into effect. The extended term insurance option may not be available under your policy if the insured's risk class is not at least standard. If so, that fact will be stated on page 3 of the policy and reduced paid-up insurance will apply instead. If the insured dies after the grace period but within 3 months of the date of lapse, the continued insurance option that would provide the greater benefit will automatically apply, regardless of any restriction stated on page 3 of the policy. - -------------------------------------------------------------------------------- 39 - -------------------------------------------------------------------------------- Here are details on the two types of plans offered under our continued insurance option. o REDUCED PAID-UP FIXED INSURANCE. You can use the net cash value to buy reduced paid-up fixed whole life insurance. The net cash value determines the face amount that can be purchased at the insured's age at the time of purchase. Paid-up insurance has cash value. You can use the net cash value during the insured's lifetime for a loan or for cash payment. EXAMPLE: You are a 30 year old male insured. Your variable life policy was issued when you were 25. Use the illustrations on page 25, and assume a 4% hypothetical gross annual investment return for each Division or their combination. At the end of the 5th policy year, depending on whether you had a Basic or an Expanded Policy, its net cash value could buy reduced paid-up fixed whole life insurance with a face amount as follows: - -------------------------------------------------------------------------------- Face Amount Term - -------------------------------------------------------------------------------- Basic Policy $6,477 Life Expanded Policy $7,076 Life - -------------------------------------------------------------------------------- o EXTENDED TERM INSURANCE. If the insured's risk class is at least standard, you can use the net cash value to buy extended term insurance. The face amount will equal the death benefit under your variable life policy on the date of lapse minus any unpaid loan with accrued interest. The net cash value determines how long coverage will last at the insured's then attained age. It will last at least 90 days if the premium has been paid on the variable life policy for 3 months before lapse and there is no policy loan. Extended term coverage has cash value, but it cannot be used for a loan. EXAMPLE: You are a 30 year old male insured. Your variable life policy was issued when you were 25. Use the illustrations on page 25, and assume a 4% hypothetical gross annual investment return for each Division or their combination. At the end of the 5th policy year, depending on whether you had a Basic or Expanded Policy, its net cash value could buy extended term insurance as follows: - -------------------------------------------------------------------------------- Face Amount Term - -------------------------------------------------------------------------------- Basic Policy $40,034 13 Years Expanded Policy $34,238 16 Years - -------------------------------------------------------------------------------- REINSTATEMENT OPTION. You can request that we reinstate the policy during the insured's lifetime. You must make this request within 5 years after lapse. We will not reinstate the policy if it has been returned for net cash value. Before we will reinstate, we must receive evidence satisfactory to us of the insured's insurability. We must also receive the larger of: o all due and unpaid premiums with interest at 6% a year; or o an amount equal to: the cash value just after reinstatement, MINUS the cash value just before reinstatement, and further MINUS any policy loan with accrued interest at 5% a year compounded daily to the date of reinstatement, TIMES 110%. If we do reinstate, the policy will have the same variable adjustment amount and premium allocation between the Divisions as if there had been no lapse. If a policy has enough cash value at the time it lapses, it might be possible to reinstate it by requesting a policy loan for that purpose. - -------------------------------------------------------------------------------- 40 - -------------------------------------------------------------------------------- CANCELLATION RIGHT You have a limited right to return your policy to your regional Life Insurance Center with a written request for cancellation. We will give you a full refund (guaranteed by Equitable) of premiums paid if your request and policy are postmarked by the latest of the following: o 10 days after your receive your policy; or o 10 days after we mail a written Notice of Withdrawal Right; or o 45 days after Part 1 of the policy application was signed. - -------------------------------------------------------------------------------- EXCHANGING OUR POLICIES FOR FIXED WHOLE LIFE INSURANCE You may exchange your variable life policy for a fixed whole life policy on the life of the insured (benefits will be as described in the fixed life policy). You have this right for 18 months from the date your policy is issued, but only if no premium remains due and unpaid. The fixed policy may be issued by Equitable. The exchange will be effective when we receive your request, accompanied by your policy and an application for the fixed policy. We will not require evidence of the insured's insurability before an exchange. The new policy's face amount will be the same as the initial face amount of the variable life policy. It will also have the same register date, date of issue and risk class. The premium for the new policy will be that in effect on the register date for the same sex, age and risk class. Any policy loan with accrued interest must be repaid before the exchange. The exchange is also subject to limits described in the policy. CASH ADJUSTMENT ON EXCHANGE. There will be a cash adjustment on exchange. The adjustment will reflect the difference in premiums between the two policies. There will also be an adjustment for the difference in cash values between the two policies. If the new policy's cash value is more than the cash value of the policy that is turned in, you pay the difference. If it is less, the difference is paid to you. The adjustment will also reflect the effect of the investment performance on cash value. We have filed a description of the method we use to calculate the adjustment with the appropriate state insurance officials. - -------------------------------------------------------------------------------- PAYMENT OPTIONS The death benefit proceeds or net cash value proceeds of the policies offered by this prospectus can be paid in a lump sum. Or you can choose to apply all or part of the proceeds under one of our payment options. A combination of options can be used if we agree. Proceeds applied under an option will no longer be affected by investment experience. For an option to be used, the proceeds to be applied must be at least $2,500. If no option is chosen at the insured's death, the beneficiary can choose an option. The following options are available, subject to limits described in the policy. DEPOSIT OPTION. Proceeds are left on deposit with us. We will pay interest on the proceeds of at least 3% a year, or we may set and pay a higher rate. INSTALLMENT OPTION FOR A FIXED PERIOD. Proceeds are paid in installment for up to 30 years, with interest of at least 3-1/2% a year. INSTALLMENT OPTION OF A FIXED AMOUNT. Proceeds are paid in installments with interest of at least 3-1/2% a year until the proceeds are used up. LIFE INCOME OPTION WITH A PERIOD CERTAIN. Proceeds are paid in monthly installments for the longer of the life of the person being paid or the end of a chosen period of 10 or 20 years. LIFE INCOME OPTION WITH A REFUND CERTAIN. Proceeds are paid in monthly installments for the longer of the life of the person being paid or until they are used up. - -------------------------------------------------------------------------------- 41 - -------------------------------------------------------------------------------- ADDITIONAL BENEFITS YOU CAN GET BY RIDER Your policy can include additional benefits that we approve based on our standards for issuing insurance and classifying risks. An additional benefit requires an additional premium. An additional benefit is provided by a rider that is subject to the terms of the policy. The following riders are available. WAIVER OF PREMIUM RIDER. With this rider, we will waive the premium if the insured becomes totally disabled and the disability continues for 6 months. The disability must start before the policy anniversary nearest the insured's 60th birthday. If disability starts after that, we will waive the premium only up to the policy anniversary nearest the insured's 65th birthday. ACCIDENTAL DEATH BENEFIT RIDER. With this rider, we will pay a benefit if the insured dies from an accidental bodily injury before the policy anniversary nearest his or her 70th birthday. OPTION TO PURCHASE ADDITIONAL INSURANCE RIDER. With this rider, you have the right to buy additional insurance on the life of the insured at certain future dates. We will not require evidence of the insured's insurability when you use your right to buy additional insurance. SUPPLEMENTAL PROTECTIVE BENEFIT RIDER. With this rider, we will waive the premium if the insured is a child under age 15 on the date of issue and: o the person who applied for the policy dies; or o the person who applied for the policy is totally disabled for at least 6 months before the policy anniversary nearest his or her 60th birthday. We will only waive the premium while the disability continues. In any case, we will not waive the premium that is due after the policy anniversary nearest the insured's 25th birthday. TERM INSURANCE RIDER. Several types of riders are available that provide for term insurance on the life of the insured or an additional insured. - -------------------------------------------------------------------------------- BENEFICIARY You name your beneficiary when you apply for your policy. You can change the beneficiary during the insured's lifetime by writing to your regional Life Insurance Center. If no beneficiary is living when the insured dies, the death benefit will be paid in equal shares to the insured's surviving children. If there is no surviving child, the death benefit will be paid to the insured's estate. - -------------------------------------------------------------------------------- ASSIGNMENT You can assign the policy as collateral for a loan or other obligation. We are not responsible for any payment we make or action we take before we receive a copy of the assignment at your regional Life Insurance Center. - -------------------------------------------------------------------------------- CREDITORS' CLAIMS Proceeds are paid free from the claims of creditors to the extent allowed by law. - -------------------------------------------------------------------------------- LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY We cannot challenge the validity of the policy after it has been in effect during the insured's lifetime for 2 years from the date of issue or reinstatement (unless another date is required by law). But we can challenge at any time any rider that provides benefits in the event of total disability. If a death claim is made within the time we can challenge validity, our payment will generally be delayed while we determine whether to make such a challenge. MISSTATEMENT OF AGE OR SEX. If the insured's age or sex is misstated in the policy application, the death benefit will be what the premium paid would have purchased based on the insured's true age and sex. SUICIDE. If the insured commits suicide within 2 years from the date the policy was issued or reinstated (or less where required by law), the death benefit will be limited to the sum of all premiums paid minus outstanding policy loans with interest. - -------------------------------------------------------------------------------- 42 - -------------------------------------------------------------------------------- DIVIDENDS No dividends will be paid on the policies described in this prospectus. - -------------------------------------------------------------------------------- WHEN WE PAY PROCEEDS Payment of the death benefit, net cash value, or loan proceeds will be made within 7 days after we receive the required form or request (and other documents that may be required for payment of the death benefit) at your regional Life Insurance Center. If an Equitable agent is assisting the beneficiary in preparing the documents required for payment of the death benefit, we will send the check to the agent within 7 days after we receive all required documents. The agent will then deliver the check to the beneficiary. But we can delay payment if: o payment is contested; o it is not reasonably practicable to determine the amount because the New York Stock Exchange is closed, trading is restricted by the SEC, or the SEC declares that an emergency exists; or o the SEC, by order, permits us to delay to protect our policy owners. If your policy is being continued as reduced paid-up or extended term insurance, we can delay payment of a loan or cash value for up to 6 months. We will pay at least 3% interest a year if we delay paying the cash value or loan proceeds more than 30 days. - -------------------------------------------------------------------------------- SALES AND OTHER AGREEMENTS Equitable Variable and Integrity are the principal underwriters for the Fund pursuant to a Distribution Agreement. Under the Distribution Agreement, we have entered into a Sales Agreement with Equitable by which Equitable will distribute our policies. Equitable Variable, Integrity and Equitable are registered with the SEC as broker-dealers under the Securities Exchange Act of 1934 and each of us is a member of the National Association of Securities Dealers, Inc. We are also the principal underwriter for our policies. (Equitable may also be deemed a principal underwriter for our policies.) - -------------------------------------------------------------------------------- SALES BY AGENTS OF EQUITABLE We sell our policies through agents who are licensed by state insurance officials to sell our variable life policies. These agents are also registered representatives of Equitable. Under the Sales Agreement, agents receive commissions from Equitable for selling our policies. We reimburse Equitable for these commissions. We also reimburse Equitable for other expenses incurred in marketing and selling our policies. These expenses include agency and district managers' compensation, agents' training allowance, deferred compensation, insurance benefits of agents and agency and district managers, and agency clerical and advertising expenses. COMMISSION SCHEDULE. Agents receive the equivalent of up to 50% of the premium payable in the first policy year. In the second policy year, agents receive up to 10% of the premium paid for that year. In the third, fourth and fifth policy years, agents receive up to 8% of the premium paid in each year. In the sixth through tenth policy years, agents receive up to 5% of the premium paid in each year. After that, agents receive up to 2% of the premium paid in each year. Agents will less than 3 full years of service with Equitable may be paid differently. Agents who meet certain production and persistency standards in selling Equitable Variable and Equitable policies will be eligible for added compensation. Agents who meet certain lifetime production standards will be eligible to receive increased fees for servicing our policies. Agents also are eligible for added compensation for servicing our policies when there is no assigned soliciting agent. - -------------------------------------------------------------------------------- 43 - -------------------------------------------------------------------------------- SALES BY BROKERS We also sell our policies through independent brokers who are licensed by state insurance officials to sell our variable life policies. They will also be registered representatives either of Equitable or of another company registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934. The commissions for independent brokers will be no more than those for agents. Commissions will be paid through the registered broker-dealer. - -------------------------------------------------------------------------------- APPLICATIONS When an application for one of our policies is completed, it is submitted to us. Based on the information in the application and our standards for issuing insurance and classifying risks, a policy may be issued. If a policy is not issued, we will refund any premium that has been paid. (Equitable guarantees the refund.) - -------------------------------------------------------------------------------- JOINT SERVICES AGREEMENT In addition to acting as distributor for our policies, Equitable performs certain other sales and administrative duties for us. Equitable does this pursuant to a written agreement. The agreement is automatically renewed each year, unless either party terminates and have been superseded by the sales agreement referred to above. Under this agreement, we pay Equitable for salary costs and other services and an amount for indirect costs incurred through our use of Equitable personnel and facilities. We also reimburse Equitable for sales expenses related to business other than variable life policies. - -------------------------------------------------------------------------------- AMOUNTS PAID UNDER SALES AND JOINT SERVICES AGREEMENTS The aggregate amounts paid or accrued to Equitable by us under sales and joint services agreements totalled approximately $225,277,000 in 1985, $164,754,000 in 1984 and $93,361,000 in 1983. - -------------------------------------------------------------------------------- LEGAL PROCEEDINGS We are not involved in any material legal proceedings. - -------------------------------------------------------------------------------- LEGAL MATTERS The legal validity of the policies described in this prospectus has been passed on by Herbert L. Shyer, who is Executive Vice President and General Counsel of Equitable. The Washington, D.C. law firm of Freedman, Levy, Kroll & Simonds has served as special counsel on matters relating to Federal securities laws. - -------------------------------------------------------------------------------- FINANCIAL AND ACTUARIAL EXPERTS The financial statements of the Separate Account and of Equitable Variable in this prospectus have been examined by the accounting firm of Deloitte Haskins & Sells, our independent auditors, to the extent stated in its opinions, and its opinions on them are part of this prospectus. We have relied on the fact that Deloitte Haskins & Sells is expert in accounting and auditing. Actuarial matters in this prospectus have been examined by Joseph O. North, Jr., F.S.A., M.A.A.A., who is Vice President and Actuary of Equitable Variable and an Assistant Vice President and Actuary of Equitable. His opinion on actuarial matters is filed as an exhibit to the Registration Statement we filed with the SEC. - -------------------------------------------------------------------------------- 44 - -------------------------------------------------------------------------------- MANAGEMENT Here is a list of our directors and officers and their business experience for the past five years. Unless otherwise noted, the following persons have been involved in the management of Equitable and its subsidiaries in various positions for the last five years. Unless otherwise noted, their address is 787 Seventh Avenue, New York, New York 10019.
- ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Richard Lee Anderson Executive Vice President -- Operations and Director, Melville Corp. since 3000 Westchester Avenue January 1983; prior thereto, President F.W. Woolworth Co. Director, Harrison, New York 10528 Equitable. Ruth Smolensky Block Executive Vice President and Chief Insurance Officer, Equitable, since February 1985; prior thereto, Executive Vice President. Chairman and Chief Executive Officer, Equitable Variable, until November 1984. Director, Integrity Life Insurance Company, National Integrity Life Insurance Company, Tandem Financial Group, Inc., Equitable Investment Management Corporation, Equitable Tax-Free Account, Inc., Equitable Money Market Account, Inc., Equitable Real Estate Group, Inc., Donaldson, Lufkin & Jenrette, Inc., Avon Products, Inc., Economics Laboratory, Inc. Trustee, The Life Underwriters Training Council. Joseph Lewis Dionne President and Chief Executive Officer McGraw-Hill, Inc. since June 1983; 1221 Avenue of the Americas prior thereto, President and Chief Operating Officer. Director, Equitable New York, New York 10020 and Equitable Investment Corporation. Raymond Bernard Dolan Executive Vice President, Equitable, since February 1985; prior thereto, Executive Vice President and Chief Agency Officer. Chairman, The Equitable of Delaware, Inc. Director, Equico Securities, Inc., Donaldson, Lufkin & Jenrette, Inc., Equitable Capital Management Corporation, Equitable Life Leasing Corporation and Equitable/Omnilease, Inc. Harry Douglas Garber Vice Chairman of the Board, Equitable, since February 1984; prior thereto, Executive Vice President and Chief Financial Officer. Director, Equitable Investment Corporation and Genesco, Inc. Former Chairman and Chief Executive Officer, Equitable Variable. Glenn Howard Gettier, Jr. Executive Vice President and Chief Financial Officer, Equitable, since December 1984; prior thereto, Partner, Peat, Marwick, Mitchell & Co. - ------------------------------------------------------------------------------------------------------------------------------------
45
- ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Donald Richardson Kurtz Chairman and Chief Executive Officer, Equitable Investment Management 1221 Avenue of the Americas Corporation, since November 1983. Executive Vice President, Equitable. New York, New York 10020 Director, Calvin Bullock, Ltd., Integrity Life Insurance Company, National Integrity Life Insurance Company and Equitable Real Estate Group, Inc. Member, Advisory Board of the Investment Management Institute, the Board of Overseers of Bowdoin College and the Board of Trustees of Investor Responsibility Research Center, Inc. Donald James Mooney Executive Vice President, Equitable, since October 1984; prior thereto, Senior Vice President. President, Equitable Variable, until November 1984. Director, Integrity Life Insurance Company, The Equitable of Delaware, Inc., Equico Securities, Inc., and The Equitable of Colorado, Inc. Francis Helmut Schott Senior Vice President and Chief Economist, Equitable. Leo Martin Walsh, Jr. Executive Vice President, Director and Chief Investment Officer, Equitable, since June 1983; prior thereto, Executive Vice President. Director since March 1983 and President and Chief Executive Officer since March 1984, Equitable Investment Corporation; prior thereto, Executive Vice President and Chief Operating Officer. Chairman, Calvin Bullock, Ltd., Equitable Casualty Insurance Company, Equitable General Insurance Company of Oklahoma, Equitable Money Market Account, Inc., Equitable Tax-Free Account, Inc., Equitable Life Leasing Corporation, and Equitable Relocation Management Corporation. Director, Equitable Mortgage Resources, Inc., Equitable Real Estate Investment Management, Inc., Equitable Agri-Business, Inc., mutual funds to which Calvin Bullock, Ltd. is investment adviser, ELAFUND, INC., Tandem Financial Group, Inc., Equitable Investment Management Corporation, Equitable Capital Management Corporation, Alliance Capital Management Corporation and Donaldson, Lufkin & Jenrette, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
46
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS -- DIRECTORS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Robert Wayne Barth President and Chief Operating Officer, Equitable Variable, since December 1985. Executive Vice President, Equitable, since June 1985; Senior Vice President since September 1984; prior thereto, Vice President since April 1984. Director, The Equitable of Colorado, Inc. Director, President and Chief Executive Officer, The Equitable of Delaware, Inc. Peter Rawlinson Wilde Chairman and Chief Executive Officer, Equitable Variable, since November 1984. Chairman and Chief Executive Officer, The Equitable of Delaware, Inc. Executive Vice President, Equitable, since July 1984; Chief Financial Officer, CIGNA Corporation, from April 1983 to June 1984; prior thereto, Senior Vice President. Director, Integrity Life Insurance Company, National Integrity Life Insurance Company and Tandem Financial Group, Inc. - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Robert Seymour Jones Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since June 1985; prior thereto, Vice President. James Thomas Liddle, Jr. Senior Vice President and Chief Financial Officer, Equitable Variable, 2 Penn Plaza since February 1986. Vice President and Actuary, The Equitable of Colorado, New York, New York 10121 since February 1984. Vice President and Actuary, Equitable. Michael Searle Martin Senior Vice President, Equitable Variable, since February 1986. Director, The Equitable of Colorado and The Equitable of Delaware. Senior Vice President, Equitable, since June 1985; Vice President, from June 1982 to June 1985; prior thereto, Agency Manager. Stanley Julian Rispler Senior Vice President, Equitable Variable, since February 1986. Senior Vice President, Equitable, since October 1984; prior thereto, Vice President. Samuel Barry Shlesinger Senior Vice President, Equitable Variable, since February 1986; President and Chief Executive Officer, The Equitable of Colorado, since September 1985. Vice President and Actuary, Equitable. - ------------------------------------------------------------------------------------------------------------------------------------
47
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Richard Marshall Stenson Senior Vice President, Equitable Variable, since December 1981. Senior Vice President, Equitable, since October 1984; prior thereto, Vice President and Actuary. Actuary, Integrity Life Insurance Company. Director, The Equitable of Colorado, Inc. Michael Guy Carew Vice President, Equitable Variable, since February 1986. Vice President, Equitable, since February 1985. Prior thereto, Chief Financial Officer and Treasurer, City Trust Bancorp, Inc. Richard Henry Fitzpatrick Vice President, Equitable Variable, since February 1986. Vice President, Equitable. Diane Marie Giachino Vice President, Equitable Variable, since February 1986. Vice President, Equitable, since October 1985; Assistant Vice President, from March 1983 to October 1985; prior thereto, various managerial positions. Catherine Theresa Henry Vice President, Equitable Variable, since February 1986. Vice President, Equitable, since October, 1983; prior thereto, Assistant Vice President. David Joseph Hughes Vice President, Equitable Variable, since February 1986; Vice President and 2 Penn Plaza Chief of Staff, The Equitable of Colorado. Vice President, Equitable, since New York, New York 10121 October 1985; Assistant Vice President from August 1982 to October 1985; prior thereto, Manager. Franklin Kennedy, III Vice President, Equitable Variable, since August 1981; Managing Director 1221 Avenue of the Americas and Chief Investment Officer, Equitable Investment Management Corporation, New York, New York 10020 since November 1983. Vice President, Equitable. John Alfred Kern Vice President, Equitable Variable, since February 1986. Vice President, 2 Penn Plaza Equitable. New York, New York 10121 Donald Anthony King Vice President, Equitable Variable, since February 1986; Vice President, 1285 Avenue of the Americas Integrity Life Insurance Company, since April 1984; Vice President, New York, New York 10020 Equitable, since January 1976. Executive Vice President, Equitable Capital Management Corporation. - ------------------------------------------------------------------------------------------------------------------------------------
48
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Joseph Oswell North, Jr. Vice President and Actuary, Equitable Variable, since February 1984. Vice 2 Penn Plaza President and Actuary, Equitable, since October 1984; prior thereto, New York, New York 10121 Assistant Vice President and Actuary, Equitable, since April 1982; prior thereto, Associate Actuary, John Hancock Mutual Life Insurance Company. Geoffrey Hall Radbill Vice President, Equitable Variable, since February 1986. Vice President, 135 West 50th Street Equitable, since February 1983; prior thereto, Assistant Vice President. New York, New York 10020 Thomas Willard Shade, Jr. Vice President, Equitable Variable, since February 1986. Vice President, 2 Penn Plaza Equitable, since October 1985; Assistant Vice President from March 1983 to New York, New York 10121 October 1985; prior thereto, various managerial positions. Alan Romney Thomander Vice President and Controller, Equitable Variable, since February 1983; 2 Penn Plaza prior thereto, Vice President New York, New York 10121 -- Controller's Operations. Vice President, Equitable, from May 1982 until February 1983; prior thereto, Assistant Vice President. Controller, Integrity Life Insurance Company. Larry Kenneth Mills Treasurer, Equitable Variable, Integrity Life Insurance Company and National Integrity Life Insurance Company, since February 1986. Vice President and Treasurer, Equitable and Equico Securities, Inc., since March 1986; prior thereto, Vice President, Equitable. Treasurer, Equitable Real Estate Group, Inc. Vice President, Treasurer and Director, Equitable Realty Assets Corp. Theodore Edward Plucinski, M.D. Chief Medical Director, Equitable Variable, since February 1986; Integrity 2 Penn Plaza Life Insurance Company and National Integrity Life Insurance Company since New York, New York 10121 November 1985, and Equitable since September 1985. Prior thereto, Chief Medical Director, MONY. Kevin Brian Keefe Secretary, Equitable Variable, Assistant Vice President and Assistant Secretary, Equitable, since August 1983; prior thereto, Assistant Secretary. Secretary, Integrity Life Insurance Company, National Integrity Life Insurance Company, Tandem Financial Group, Inc., The Hudson River Fund, Inc., The Equitable of Delaware, Inc., and The Equitable of Colorado, Inc. Assistant Secretary, Equitable Life Leasing Corporation and Equico Securities. - ------------------------------------------------------------------------------------------------------------------------------------
49
- ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS NAME AND PRINCIPAL BUSINESS EXPERIENCE BUSINESS ADDRESS WITHIN PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Vincent Walter Jiminez Assistant Vice President, Equitable Variable, since June 1985; prior 2 Penn Plaza thereto, Vice President, Equitable Real Estate Investment Management Inc. New York, New York 10121 Assistant Vice President, Equitable, since June 1984; prior thereto, various managerial positions with Equitable. Director, Equico Capital Corporation. Norman Russell Meise Assistant Vice President, Equitable Variable, since February 1983; prior 2 Penn Plaza thereto, Assistant Vice President and Controller and Assistant Vice New York, New York 10121 President, Equitable. Robert Floyd Wiseman Assistant Vice President, Equitable Variable, since February 1986. 2 Penn Plaza Assistant Vice President, Equitable. New York, New York 10121 - ------------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- WHERE YOU CAN GET ADDITIONAL INFORMATION We have filed with the SEC a Registration Statement relating to the Separate Account and the variable life policies described in this prospectus. The Registration Statement, which is required by the Securities Act of 1933, includes additional information that is not required in this prospectus under the rules and regulations of the SEC. If you would like the additional information, you may obtain copies of that document from the SEC's main office in Washington, D.C. You will have to pay a fee for the material. - -------------------------------------------------------------------------------- 50 - -------------------------------------------------------------------------------- PART 3 -- FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- SEPARATE ACCOUNT 1 INDEX PAGE - -------------------------------------------------------------------------------- Statements of Assets and Liabilities, December 31, 1985 52 - -------------------------------------------------------------------------------- Statement of Operations for the Year Ended December 31, 1985 52 - -------------------------------------------------------------------------------- Statements of Changes in Net Assets for the Years Ended December 31, 1985 and 1984 53 - -------------------------------------------------------------------------------- Notes to Financial Statements 54 - -------------------------------------------------------------------------------- Opinion of Independent Auditors 55 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- EQUITABLE VARIABLE LIFE INSURANCE COMPANY INDEX PAGE - -------------------------------------------------------------------------------- Balance Sheets, December 31, 1985 and 1984 56 - -------------------------------------------------------------------------------- Summaries of Operations and Capital and Surplus Funds for the Years Ended December 31, 1985 and 1984 57 - -------------------------------------------------------------------------------- Statements of Changes in Financial Position for the Years Ended December 31, 1985 and 1984 58 - -------------------------------------------------------------------------------- Notes to Financial Statements 59 - -------------------------------------------------------------------------------- Opinion of Independent Auditors 62 - -------------------------------------------------------------------------------- The financial statements of Equitable Variable herein should be considered only as bearing upon the ability of Equitable Variable to meet its obligations under the policies. - -------------------------------------------------------------------------------- 51 - -------------------------------------------------------------------------------- [VARIABLE LIFE INSURANCE LOGO] - -------------------------------------------------------------------------------- [EQUITABLE VARIABLE LIFE INSURANCE COMPANY LOGO -- 1986 VERSION] - -------------------------------------------------------------------------------- Catalogue No. 11776 PART II REPRESENTATION REGARDING REASONABLENESS OF AGGREGATE POLICY FEES AND CHARGES Equitable represents that the fees and charges deducted under the Policies described in this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Equitable under the Policies. Equitable bases its representation on its assessment of all of the facts and circumstances, including such relevant factors as: the nature and extent of such services, expenses and risks, the need for Equitable to earn a profit, the degree to which the Policies include innovative features, and regulatory standards for the grant of exemptive relief under the Investment Company Act of 1940 used prior to October 1996, including the range of industry practice. UNDERTAKING TO FILE REPORTS --------------------------- Subject to the terms and conditions of Section 15(d) of the Securities and Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore, or hereafter duly adopted pursuant to authority conferred in that section. UNDERTAKING PURSUANT TO RULE 484 (b)(1) --------------------------------------- Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controling 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. II-1 CONTENTS OF REGISTRATION STATEMENT ---------------------------------- This registration statement comprises the following papers and documents: The facing sheet. The Champion Reconciliation and Tie. The SP-1 Reconciliation and Tie. The Basic and Expanded Reconciliation and Tie. The Supplement dated January 1, 1997, consisting of 79 pages. The Supplement of Equitable Variable dated May 1, 1996, consisting of 38 pages. The Champion prospectus consisting of 40 pages. SP-1 prospectus consisting of 40 pages. Basic & Expanded prospectus consisting of 52 pages. Representation regarding reasonableness of aggregate policy fees and charges. Undertaking to file reports Undertaking pursuant to Rule 484(b)(i) under the Securities Act of 1933. The signatures. Written Consents of the following persons: Mary P. Breen, Vice President and Associate General Counsel of Equitable (See exhibit 2(a)) Joseph O. North, Jr. F.S.A., M. A.A.A., Vice President and Senior Actuary of Equitable (See exhibit 2(b)). Independent Public Accountants (see exhibit 6). The following exhibits: Exhibits required by Article IX, paragraph A of Form N-8B-2: 1-A(1)(a) Certified resolution re authority to market variable life insurance and establish separate accounts. 1-A(2) Inapplicable. 1-A(3)(a) See Exhibit 1-A(8). 1-A(3)(b) Selling Agreement. 1-A(3)(c) See Exhibit 1-A(8)(i) 1-A(4) Inapplicable. 1-A(5)(a)(i) Variable Whole Life Insurance Policy. 1-A(5)(a)(ii) Variable Increasing Protection Life Insurance Policy. 1-A(5)(a)(iii) Variable Limited Payment Life Insurance Policy -- Level Face Amount. 1-A(5)(a)(iv) Variable Whole Life Insurance Policy -- Increasing Face Amount. 1-A(5)(a)(v) Variable Limited Payment Life Plan Insurance Policy-- Level Face Amount. II-2 1-A(5)(a)(vi) Variable Whole Life Plan Insurance Policy -- Increasing Face Amount. 1-A(5)(a)(vii) Single Premium Whole Life Plan Insurance Policy. 1-A(5)(a)(viii) Single Premium Whole Life Plan Insurance Policy -- Level Face Amount. 1-A(5)(a)(ix) Variable Whole Life Plan Insurance Policy. 1-A(5)(a)(x) Variable Whole Life Plan -- Level Face Amount. 1-A(5)(a)(xi) Single Premium Whole Life Plan Insurance Policy -- Level Face Amount. 1-A(5)(a)(xii) Variable Limited Payment Life Plan Insurance Policy -- Level Face Amount. 1-A(5)(a)(xiii) Variable Whole Life Plan Insurance Policy -- Increasing Face Amount. 1-A(5)(b) Rider adding Separate Account II to existing policies. R81-100). 1-A(5)(c) Rider re "Loan Value." (S. 83-23). 1-A(5)(d) Rider re "Account Value." (S. 83-41). 1-A(5)(e) Rider re "Loans." (S. 83-61). 1-A(5)(f) Rider re "VAA Change Amount" and "Calculation of Cash Values." (S. 84-81). 1-A(5)(g) Rider re "Unit Investment Trust Endorsement" (S.85-101). 1-A(5)(h) Backdating Endorsement No. S.85-81 relating to Policy No. 85-11. 1-A(5)(i) Adjustable Loan Interest Rate Endorsement No. S.85-83 relating to Policy No. 85-11. 1-A(5)(j) Accelerated Death Benefit Rider. 1-A(5)(k) Name change endorsement (S.97-1). 1-A(6)(a) Declaration and Charter of Equitable, as amended 1-A(6)(b) By-Laws of Equitable, as amended. 1-A(7) Inapplicable. 1-A(8) Distribution and Servicing Agreement among EQ Financial Consultants, Inc. (formerly known as Equico Securities, Inc.), Equitable and Equitable Variable dated as of May 1, 1994. 1-A(8)(i) Schedule of Commissions. 1-A(9)(a) Agreement and Plan of Merger of Equitable Variable with and into Equitable dated September 19, 1996. 1-A(10)(a) Application Form EV4-200N 1-A(10)(b) Application Form EV4-200P 1-A(10)(c) Application Form EV4-200Q Other Exhibits: 2(a) Opinion and Consent of Mary P. Breen, Vice President and Associate General Counsel of The Equitable Life Assurance Society of the United States. 2(b)(i) Opinion and Consent of Joseph O. North, Vice President and Senior Actuary, relating to the SP-1 policies. 2(b)(ii) Opinion and Consent of Joseph O. North, Vice President and Senior Actuary, relating to the Champion and the Basic and Expanded policies. 2(b)(iii) Consent of Joseph O. North, Vice President and Senior Actuary, relating to Exhibits 2(b)(i) and 2(b)(ii). 3 Inapplicable. 4 Inapplicable. 5 Financial Data Schedule. (See Exhibit 27 below). 6 Consent of Independent Public Accountant. 7 Powers of Attorney. 8 Amended and Restated Description of Equitable's Issuance, Transfer and Redemption Procedures for Policies pursuant to Rule 6e-2(b)(12) (ii). 9 Schedule Regarding Equitable Variable Policies and Related Post-Effective Amendments. 27 Financial Data Schedule. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City and State of New York on the 9th day of December, 1996. SEPARATE ACCOUNT FP OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, DEPOSITOR By: /s/ Samuel B. Shlesinger ------------------------ (Samuel B. Shlesinger) Senior Vice President Attest: /s/ Linda Galasso ----------------------- (Linda Galasso) Assistant Secretary December 9, 1996 II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City and State of New York on the 9th day of December, 1996. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/ Samuel B. Shlesinger ------------------------ (Samuel B. Shlesinger) Senior Vice President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated: PRINCIPAL EXECUTIVE OFFICERS: * Joseph J. Melone Chairman of the Board * James M. Benson President and Chief Executive Officer * William T. McCaffrey Senior Executive Vice President and Chief Operating Officer * Jerry M. de St. Paer Executive Vice President PRINCIPAL FINANCIAL OFFICER: * Stanley B. Tulin. Senior Executive Vice President and Chief Financial Officer PRINCIPAL ACCOUNTING OFFICER: /s/Alvin H. Fenichel Alvin H. Fenichel Senior Vice President and Controller December 9, 1996 * DIRECTORS: Claude Bebear Jean-Rene Foutou Winthrop Knowlton James M. Benson Norman C. Francis Arthur L. Liman Christopher Brocksom Donald J. Greene George T. Lowy Francoise Colloc'h John T. Hartley William T. McCaffrey Henri de Castries John H.F. Haskell, Jr. Joseph J. Melone Joseph L. Dionne W. Edwin Jarmain Didier Pineau-Valencienne William T. Esrey G.Donald Johnson, Jr. George J. Sella, Jr. Dave H. Williams * By: /s/ Samuel B. Shlesinger ------------------------ (Samuel B. Shlesinger) Attorney-in-Fact December 9, 1996 II-5 EXHIBIT INDEX -------------
EXHIBIT NO. TAG VALUE - ----------- --------- 1-A(1)(a) Certified resolution re authority to market variable EX-99.1A1a RESOLU life insurance and establish separate accounts. 1-A(3)(b) Selling Agreement. EX-99.3b Sales AGR 1-A(5)(a)(i) Variable Whole Life Insurance Policy. EX-99.1A5ai POLICY 1-A(5)(a)(ii) Variable Increasing Protection Life Insurance Policy. EX-99.1A5aii POLICY 1-A(5)(a)(iii) Variable Limited Payment Life Insurance Policy -- EX-99.1A5aiii POLICY Level Face Amount. 1-A(5)(a)(iv) Variable Whole Life Insurance Policy -- Increasing EX-99.1A5aiv POLICY Face Amount. 1-A(5)(a)(v) Variable Limited Payment Life Plan Insurance Policy -- EX-99.1A5av POLICY Level Face Amount. 1-A(5)(a)(vi) Variable Whole Life Plan Insurance Policy -- EX-99.1A5avi POLICY Increasing Face Amount. 1-A(5)(a)(vii) Single Premium Whole Life Plan Insurance Policy. EX-99.1A5avii POLICY 1-A(5)(a)(viii) Single Premium Whole Life Plan Insurance Policy -- EX-99.1A5aviii POLICY Level Face Amount. 1-A(5)(a)(ix) Variable Whole Life Plan Insurance Policy. EX-99.1A5aix POLICY 1-A(5)(a)(x) Variable Whole Life Plan -- Level Face Amount. EX-99.1A5ax POLICY 1-A(5)(a)(xi) Single Premium Whole Life Plan Insurance Policy -- EX-99.1A5axi POLICY Level Face Amount. 1-A(5)(a)(xii) Variable Limited Payment Life Plan Insurance Policy EX-99.1A5axii POLICY -- Level Face Amount. 1-A(5)(a)(xiii) Variable Whole Life Plan Insurance Policy -- EX-99.1A5axiii POLICY Increasing Face Amount. 1-A(5)(b) Rider adding Separate Account II to existing policies. EX-99.1A5b RIDER R81-100). 1-A(5)(c) Rider re "Loan Value." (S. 83-23). EX-99.1A5c RIDER 1-A(5)(d) Rider re "Account Value." (S. 83-41). EX-99.1A5d RIDER 1-A(5)(e) Rider re "Loans." (S. 83-61). EX-99.1A5e RIDER 1-A(5)(f) Rider re "VAA Change Amount" and "Calculation of Cash EX-99.1A5f RIDER Values." (S. 84-81). 1-A(5)(g) Rider re "Unit Investment Trust Endorsement" EX-99.1A5g RIDER (S.85-101). 1-A(5)(h) Backdating Endorsement No. S.85-81 relating to Policy EX-99.1A5h ENDORSE No. 85-11. 1-A(5)(i) Adjustable Loan Interest Rate Endorsement No. S.85-83 EX-99.1A5i ENDORSE relating to Policy No. 85-11. 1-A(5)(j) Accelerated Death Benefit Rider. EX-99.1A5j RIDER 1-A(5)(k) Name change endorsement (S.97-1). EX-99.1A5k ENDORSE 1-A(6)(a) Declaration and Charter of Equitable, as amended EX-99.1A6a CHARTER 1-A(6)(b) By-Laws of Equitable, as amended. EX-99.1A6b BYLAWS 1-A(8) Distribution and Servicing Agreement among EQ Financial EX-99.1A8 DIST AGR Consultants, Inc. (formerly known as Equico Securities, Inc.), Equitable and Equitable Variable dated as of May 1, 1994. 1-A(8)(i) Schedule of Commissions. EX-99.1A8i SCHED COM 1-A(9)(a) Agreement and Plan of Merger of Equitable Variable with EX-99.1A9a MERG AGR and into Equitable dated September 19, 1996. 1-A(10)(a) Application Form EV4-200N EX-99.1A10a APPLIC 1-A(10)(b) Application Form EV4-200P EX-99.1A10b APPLIC 1-A(10)(c) Application Form EV4-200Q EX-99.1A10c APPLIC 2(a) Opinion and Consent of Mary P. Breen, Vice President and Associate EX-99.2a Leg Opin General Counsel of The Equitable Life Assurance Society of the United States. 2(b)(i) Opinion and Consent of Joseph O. North, Vice EX-99.2bi OPIN President and Actuary, relating to the SP-1 policies. 2(b)(ii) Opinion and Consent of Joseph O. North, Vice EX-99.2bii OPIN President and Actuary, relating to the Champion and the Basic and Expanded policies. 2(b)(iii) Consent of Joseph O. North, Vice President and Senior Actuary, EX-99.2biii Act Opin relating to exhibits 2(b)(i) and 2(b)(ii) 6 Consent of Independent Public Accountant, EX-99.6 CONSENT 7 Powers of Attorney. EX-99.7 POW ATTY 8 Amended and Restated Description of Equitable's EX-99.8 DESC PROC Issuance, Transfer and Redemption Procedures for Policies pursuant to Rule 6e-2(b)(12)(ii). 9 Schedule Regarding Equitable Variable Policies and EX-99.9 SCHEDULE Related Post-Effective Amendments. 27 Financial Data Schedule. EX-27
II-7 EX-99.1A1ARESOLU 2 RESOLUTION DATED 9-21-95 ELAS THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ASSISTANT SECRETARY'S CERTIFICATE As an Assistant Secretary of The Equitable Life Assurance Society of the United States (the "Corporation"), a corporation organized and existing under the laws of the State of New York, I, Janet E. Hannon, hereby certify that attached hereto marked Exhibit A is a true, correct, and complete copy of Resolution B28-95, duly adopted by the Board of Directors of the Corporation at a meeting held on September 21, 1995, at which a quorum was present and acting throughout; and that said resolution has not been amended, annulled, rescinded, or revoked, and is now in full force and effect. IN WITNESS WHEREOF, I have hereunto affixed my signature and the seal of the Corporation this 30th day of May, 1996. SEAL /s/ Janet E. Hannon ------------------- Assistant Secretary 7275N/21 EXHIBIT A AUTHORITY TO MARKET VARIABLE LIFE INSURANCE AND ESTABLISH SEPARATE ACCOUNTS ------------------------------- B28-95 WHEREAS, by memorandum to Executive Vice President and Chief Administrative Officer William T. McCaffrey, dated September 6, 1995 (the "Memorandum"), Senior Vice President Samuel B. Shlesinger referred to a proposal currently under consideration by management to merge Equitable Variable Life Insurance Company into Equitable Life (the "Proposed Merger"); WHEREAS, if the Proposed Merger were to occur, the Company would require all necessary licenses and other approvals to carry on the business of EVLICO, some of which must be applied for in advance upon authority granted by this Board to engage in a variable life insurance business; and WHEREAS, the Memorandum requests that this Board authorize, contingent upon the effectiveness of the Proposed Merger, the conduct by the Company of a variable life insurance business and other actions to facilitate the operation of such business; NOW, THEREFORE, BE IT RESOLVED, That authorization is given to continue studying the feasibility of merging EVLICO into the Company; FURTHER RESOLVED, That, contingent upon the effectiveness of the Proposed Merger, the Company shall commence a variable life insurance business in order to perform its obligations under the EVLICO variable life insurance policies issued prior to the Proposed Merger and to offer and sell variable life insurance policies thereafter; FURTHER RESOLVED, That the Company hereby establishes Separate Accounts I, FP, PVT and P-1 (the "Separate Accounts") to become operational upon the effectiveness of the Merger; FURTHER RESOLVED, That the Separate Accounts shall fund variable life insurance policies currently funded in corresponding separate accounts of EVLICO and policies to be issued by Equitable Life after the Merger. FURTHER RESOLVED, That the Chief Investment Officer of the Company, with power to sub-delegate, is authorized in his discretion as he may deem appropriate from time to time and in accordance with applicable laws and regulations (a) to divide the Separate Accounts into one or more divisions or subdivisions, (b) to modify or eliminate any such division or subdivision, (c) to change the designation of the Separate Accounts to another designation (d) to designate additional divisions or subdivisions thereof and (e) to authorize and establish any and all additional separate accounts as may be deemed by such officer to by necessary or desirable for the Company's variable life insurance business and having investment policies substantially similar to any current or future separate account of the Company which has been or may be specifically approved by this Board; FURTHER RESOLVED, That the officers of the Company be, and each of them hereby is, authorized to invest cash in the Separate Accounts or in any division thereof as may be deemed necessary or appropriate to facilitate the commencement of the Separate Account's operations or to meet any minimum capital requirements under the Investment Company Act of 1940 (the "1949 Act") and to transfer cash or securities from time to time between the Company's general account and any Separate Account as deemed necessary or appropriate as long as such transfers are not prohibited by law and are consistent with the terms of the variable life insurance policies issued by the Company providing for allocations to such Separate Accounts; FURTHER RESOLVED, That authority is hereby delegated to the Chief Executive Officer, the President and the Chief Investment Officer, with power to sub-delegate, to adopt Rules and Regulations for Certain Operations of the Separate Accounts, providing for, among other things, criteria by which the Company shall institute procedures to provide for a pass-through of voting rights to the owners of variable life insurance policies issued by the Company providing for allocation to any Separate Account with respect to the shares of any investment companies which are held in such Separate Account; FURTHER RESOLVED, That the initial fundamental investment policy of each Separate Account shall be the investment policy of the corresponding separate account of EVLICO at the effective date of the Proposed Merger, provided, however, that such investment policy may be changed from time to time in accordance with applicable law by the Chief Investment Officer of the Company or such other officer as he may designate; FURTHER RESOLVED, That the Company may register under the Securities Act of 1933 (the "1933 Act") variable life insurance policies, or units of interest thereunder, under which amounts will be allocated by the Company to the Separate Accounts to support reserves for such policies and, in connection therewith, the officers of the Company be, and each of them hereby is, authorized, with the assistance of accountants, legal counsel and other consultants, to prepare, execute and file with the Securities and Exchange Commission, in the name and on behalf of the Company, registration statements under the 1933 Act, including prospectuses, supplements, exhibits and other documents relating thereto, and amendments to the foregoing, in such form as the officer executing the same may deem necessary or appropriate; FURTHER RESOLVED, That the officers of the Company are authorized, with the assistance of accountants, legal counsel and other consultants, to take all actions necessary to register the Separate Accounts under the 1940 Act and to take such related actions as they deem necessary and appropriate to carry out the foregoing; FURTHER RESOLVED, That the officers of the Company be, and each of them hereby is, authorized to prepare, execute, and file with the Securities and Exchange Commission such no-action requests and applications for such exemptions from or orders under the federal or state securities laws as they may from time to time deem necessary or desirable; FURTHER RESOLVED, That the President of the Company is hereby appointed as agent for service under any registration statement under the 1933 Act or the 1940 Act relating to the Separate Accounts, such person to by duly authorized to receive communications and notices from the Securities and Exchange Commission with respect to such registration statement and to exercise powers given to such agent by the 1933 Act and 1940 Act and the rules and regulations thereunder, and any other applicable law; FURTHER RESOLVED, That the officers of the Company be, and each of them hereby is, authorized to effect, in the name and on behalf of the Company, all such registrations, filing and qualifications under applicable securities laws and regulations and under insurance securities laws and insurance laws and regulations of such states and other jurisdictions as they may deem necessary or appropriate, with respect to the Company, and with respect to any variable life insurance policies under which amounts will be allocated by the Company to the Separate Accounts to support reserves for such policies; such authorization to include registration, filing and qualification of the Company and of said policies, as well as registration, filing and qualification of officers, employees and agents of the Company as brokers, dealers, agents, salesmen, or otherwise; and such authorization shall also include, in connection therewith, authority to prepare, execute, acknowledge and file all such applications, applications for exemptions, certificates, affidavits, covenants, consents to service of process and other instruments and to take all such action as the officer executing the same or taking such action may deem necessary or desirable; B28-95 (continued) FURTHER RESOLVED, That the standards of suitability and code of conduct relating to the doing by the Company of a variable life insurance business, in the forms annexed to the Memorandum, are hereby approved; and FURTHER RESOLVED, That the officers of the Company are, and each of them hereby is, authorized and instructed to take all such acts and prepare and deliver all such documents in the name and on behalf of the Company, including all documents required by state licensing authorities to conduct a variable life insurance business, as may be necessary or desirable to effectuate the purposes of the foregoing resolutions. EX-99.3BSALESAGR 3 SPECIMEN SELLING AGREEMENT (SEP ACCT I) SELLING AGREEMENT ----------------- Agreement dated ________________________, 1987, by and between The Equitable Life Assurance Society of the United States ("Equitable" or "Distributor"), a New York corporation, and _________________ ("Broker-Dealer"), a ______________________ corporation. Section 1. Introduction 1.1 General. ------- Equitable or its affiliated insurer Equitable Variable Life Insurance Company (EVLICO) is the issuer and Equitable is deemed to be the principal underwriter of certificates issued pursuant to various group deferred variable annuity contracts marketed under the trademark EQUIVEST (the "Certificates") and other variable contracts, including variable annuity, variable life insurance, and other variable insurance contracts and certificates ("Variable Contracts"). Equitable and its Separate Accounts for EQUIVEST [A, E, J and K] are also parties to a Sales Agreement pursuant to which Equitable distributes such Certificates. Broker-Dealer desires to distribute the Certificates and other Variable Contracts and Equitable desires that Broker-Dealer do so. Equitable may also enter into selling agreements with other entities registered as broker-dealers under the Securities Exchange Act of 1934 which desire to distribute the Certificates or Variable Contracts. 1.2 Scope of Agreement. ------------------ This agreement will record the understandings between Equitable and Broker-Dealer relating to sales of the Certificates or Variable Contracts by Broker-Dealer. Section 2. Representations of Equitable 2.1 Authority. --------- Equitable represents to Broker-Dealer that it has full power and authority to enter into this Agreement and that it has all appropriate licenses to carry on its business and issue the Certificates or Variable Contracts. 2.2 Registration Statements and Prospectuses. ---------------------------------------- Equitable represents to Broker-Dealer as follows, with respect to each Certificate or Variable Contract: (a) A Registration Statement under the Securities Act of 1933 has become effective. (b) The prospectus relating to each Certificate or Variable Contract contained in the appropriate Registration Statement or any amendment thereto ("Prospectus"), as of their respective effective dates, contains all statements and information which are required to be stated therein by the Securities Act of 1933 and in all respects conforms to the requirements thereof, and the Prospectus does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Section 3. Representations of Broker-Dealer 3.1 Authority. --------- Broker-Dealer represents to Equitable that it has full power and authority to enter into this Agreement. 3.2 Licenses. -------- Broker-Dealer represents to Equitable that it is registered as a broker-dealer under the Securities Exchange Act of 1934, is a member in good standing of the National Association of Securities Dealers, Inc. ("NASD"), and is bonded as required by all applicable laws and regulations. Broker-Dealer further represents that it or its subsidiaries or its affiliated companies, as appropriate, are licensed as insurance agencies in all states which require such licensing and in which the Certificates or Variable Contracts are sold by Broker-Dealer or its subsidiaries or its affiliated companies. 3.3 Qualifications of Registered Representatives. -------------------------------------------- Broker-Dealer represents to Equitable that each person signing an application as agent or receiving compensation for soliciting purchases of the Certificates or Variable Contracts will be a registered representative or principal of Broker-Dealer ("Registered Representative") with a license to sell life insurance (including annuities) in the state of such signing or solicitation (and to sell variable contracts if required by the state in question), an appropriate appointment by Equitable, and a level of -2- qualification with the NASD appropriate for the Certificates or Variable Contracts. Broker-Dealer hereby makes the additional representations set forth in Exhibit I hereto as to each Registered Representative for whom an application to obtain an insurance license will be submitted to Equitable. 3.4 Compensation. ------------ Broker-Dealer represents that it will pay commissions, or portions thereof, or other compensation based upon a percentage of premium or other valuable consideration only to a person who is duly licensed to sell life insurance (and to sell variable contracts if required by the state in question) and who is a registered representative of Broker-Dealer. Section 4. Sales of the Certificates or Variable Contracts 4.1 Authorization. ------------- Broker-Dealer is hereby authorized to solicit applications for the purchase of the Certificates or Variable Contracts through its Registered Representatives. This authorization is limited to states where the Broker-Dealer and its Registered Representatives are appropriately licensed. 4.2 Suitability. ----------- Equitable wishes to ensure that the Certificates or Variable Contracts solicited by Broker-Dealer will be issued to persons for whom the Certificates or Variable Contracts will be suitable. Broker-Dealer shall take reasonable steps to ensure that the Registered Representatives shall not make recommendations to an applicant to purchase any of the Certificates or Variable Contracts in the absence of reasonable grounds to believe that the purchase of any of the Certificates or Variable Contracts is suitable for such applicant. While not limited to the following, a determination of suitability shall be based on information furnished to a Registered Representative after reasonable inquiry of such applicant concerning the applicant's insurance and investment objectives, financial situation and needs. 4.3 Distribution Allowance. ---------------------- Subject to paragraph 4.4 below, Equitable shall compensate Broker-Dealer for its services under this Agreement with the distribution allowance set forth on Schedule A where the application is signed by a Registered Representative of Broker-Dealer. -3- 4.4 No Compensation Payable. ----------------------- No compensation shall be payable, and any compensation already paid shall be returned to Equitable on request, under each of the following conditions: (a) if Equitable or EVLICO, in its sole discretion, determines not to issue the Certificates or Variable Contracts applied for, (b) if Equitable or EVLICO refunds the contribution paid by the applicant, which Equitable or EVLICO will do by check to the applicant upon the exercise of applicant's right of withdrawal, (c) if Equitable or EVLICO refunds the contribution paid by the applicant, which Equitable or EVLICO will do by check to the applicant, as a result of a complaint by applicant, recognizing that Equitable and EVLICO have sole discretion to refund contributions paid by applicants, or (d) if Equitable determines that any person signing an application or any person or entity receiving compensation for soliciting purchases of EQUIVEST or other Variable Contracts is not duly licensed to sell life insurance (and to sell variable contracts if required by the state in question). If Equitable determines that any Certificate or Variable Contract applied for is a replacement of any insurance or annuity product issued by Equitable or any of its affiliates, Equitable reserves the right not to pay any compensation and to request the return of any compensation already paid. 4.5 Premium Payments. ---------------- Initial contribution payments for the Certificates or Variable Contracts accepted by Broker-Dealer shall be made by applicant's check made payable to the issuing insurer (Equitable or EVLICO). Broker-Dealer shall hold all contribution payments received by it in a fiduciary capacity at all times and shall promptly trasmit initial payments to Equitable. Subsequent payments shall be sent directly by the Certificate or Variable Contract owner to Equitable. Any such payments sent to Broker-Dealer shall be promptly forwarded to Equitable. -4- 4.6 Applications. ------------ Unless otherwise agreed in writing by the parties hereto, Broker-Dealer shall transmit promptly all applications for the Certificates or Variable Contracts, together with required documentation, to Equitable. All such applications shall be on the appropriate Equitable or EVLICO form. Applicant's check shall accompany the related application. 4.7 Investment Start Date. --------------------- Broker-Dealer understands that the date for the start of the Certificates which are variable annuities, or the Variable Contracts, will be the date a signed application and the initial contribution are actually received by Equitable at its administrative office specified on the current prospectus. 4.8 Underwriting and Administration. ------------------------------- Equitable and EVLICO maintain responsibility for policy underwriting and, in their sole discretion, will determine whether to issue any of the Certificates or Variable Contracts to each applicant. Once a Certificate or Variable Contract has been issued, it will be mailed by Equitable promptly to the Applicant, accompanied by any applicable Notice of Withdrawal Right, illustration, and additional appropriate documents. Equitable will administer all of the Certificates or Variable Contracts after they have been delivered, but may from time to time require assistance from the Registered Representative. 4.9 Prospectuses and Sales Literature. --------------------------------- The prospectus for a Certificate or Variable Contract, and any supplements provided by Equitable from time to time, shall be delivered by Broker-Dealer, through its representatives, to every applicant for that Certificate or Variable Contract. Equitable shall keep Broker-Dealer informed of the dates for the appropriate current Prospectus and any supplements required to be delivered. Broker-Dealer shall not use any sales literature or advertisements for the Certificates or Variable Contracts or mention Equitable or EVLICO without the prior written permission of Equitable. This includes brochures, letters, illustrations, training materials, materials for oral presentation and all other similar materials, whether transmitted directly to potential applicants or published in print or audio-visual media, but does not include generic materials which do not make reference to Equitable or EVLICO, the Certificates or Variable Contracts. -5- 4.10 Unauthorized Information. ------------------------ Broker-Dealer shall not give any information or make any representations concerning any aspect of any of the Certificates, Variable Contracts, Equitable or EVLICO or their operations unless the information or representations are contained in the appropriate Prospectus, as it may be supplemented from time to time, or are contained in sales literature, advertisements or other promotional literature approved pursuant to paragraph 4.9 above. 4.11 Materials Furnished By Equitable. -------------------------------- Equitable, will make available to Broker-Dealer the following: (a) the appropriate Prospectus and any supplements thereto, (b) applications, (c) specimen policies, (d) the most recent Semi-Annual or Annual Report of the Separate Accounts, and (e) any sales literature and advertisements which Equitable chooses to make available. Broker-Dealer, either directly or by reimbursing Equitable on request, shall pay all other expenses of soliciting applications for the Certificates or Variable Contracts, including but not limited to sales literature and advertisements originated by Broker-Dealer. 4.12 Confirmations. ------------- Equitable, as agent for the Broker-Dealer, will confirm to the applicant the initial allocation of premiums to the Separate Accounts and the issuance of the Certificates or Variable Contracts. Equitable will also notify applicant of the name of the Broker-Dealer through whom applicant was solicited and confirm certain subsequent policy transactions. -6- 4.13 Maintenance of Books and Records. -------------------------------- Both Equitable and Broker-Dealer agree to keep all records required by federal and state laws, to maintain books, accounts and records so as to clearly and accurately disclose the precise nature and details of the transaction, and to assist one another in the timely preparation of records. Equitable and Broker-Dealer may conduct due diligence inspections of the others, to the extent either deems it necessary or appropriate. 4.14 Regulatory Matters. ------------------ Equitable and Broker-Dealer shall each submit to all regulatory and administrative bodies which have jurisdiction over the Certificates or Variable Contracts or persons soliciting its purchase any information, reports or other material required pursuant to applicable laws or regulations. 4.15 Reporting. --------- Each party hereto shall promptly furnish to the other party any reports and information which the other party may request for the purpose of meeting its reporting and recordkeeping requirements under the insurance laws of the State of New York and any other state or jurisdiction and under the federal securities laws or the rules of the NASD, as well as for the purpose of ongoing due diligence. 4.16 Confidentiality. --------------- Broker-Dealer shall keep confidential any information obtained pursuant to this Agreement and shall disclose such information only if Equitable has authorized such disclosure, or if such disclosure is required by state or federal regulatory bodies. 4.17 Notification of Complaints. -------------------------- Broker-Dealer shall immediately notify Equitable, at the address in the notice provision of this Agreement, of any sales or other complaint or grievance relating to any of the Certificates or Variable Contracts and shall promptly reduce it to writing if oral. Broker-Dealer shall promptly furnish all written materials in connection with any such complaints to Equitable and will cooperate in Equitable's investigation of all complaints. Equitable retains absolute discretion to resolve complaints, by settlement or any other means. -7- Equitable shall immediately notify Broker-Dealer, at the address in the notice provision of this Agreement, of any sales-related complaint or grievance relating to the Certificates or Variable Contracts sold by such Broker-Dealer's Registered Representative and shall promptly reduce it to writing if oral. Equitable and EVLICO will cooperate in any investigation of such complaints by Broker-Dealer but retain absolute discretion to resolve complaints with owners of its Certificates or Variable Contracts. 4.18 Compliance, Supervision and Training. ------------------------------------ Equitable, EVLICO and Broker-Dealer will each comply with all applicable federal, state and NASD laws, regulations and rules relating to the issuance and sale of the Certificates or Variable Contracts. Broker-Dealer will bear full responsibility for the training and supervision of its Registered Representatives in their solicitation of applications for the Certificates or Variable Contracts and all activities relating to this Agreement. Broker-Dealer will train its Registered Representatives as to the Certificates or Variable Contracts. Equitable will assist Broker-Dealer by assisting in the training of Broker-Dealer's training personnel in product specifications and markets. Broker-Dealer shall establish and implement reasonable procedures for periodic inspection and supervision of sales practices of its Registered Representatives and submit reports to Equitable as requested from time to time on the result of such inspections and the compliance with such procedures. Broker-Dealer shall also permit Equitable to inspect Broker-Dealer's procedures and practices and shall permit Equitable access to all relevant books and records. 4.19 Notification of Regulatory Proceedings. -------------------------------------- In order to further the licensing of each Registered Representative to sell the Certificates or Variable Contracts, Broker-Dealer will make the representation contained in paragraph 3.3 above as to each Registered Representative by name which may take the form of an appointment request. Upon receipt of such representation, in writing, accompanied by an appropriate application form, Equitable will use its best efforts to obtain insurance licenses for such Registered Representatives to sell the Certificates or Variable Contracts. Broker-Dealer will cooperate in obtaining such licenses. -8- In addition, Equitable agrees to cooperate with Broker-Dealer to appoint Broker-Dealer its insurance agent in all states which require such appointment and in which the Certificates or Variable Contracts are sold. Equitable shall immediately notify Broker-Dealer, at the address in the notice provision of this Agreement, of the issuance by any regulatory body of any stop order with respect to any of the Prospectuses, or the initiation of any proceedings for that purpose or for any other purpose relating to the registration or offering of any of the Certificates or Variable Contracts and of any other action or circumstances that may prevent the lawful offer or sale of any of the Certificates or Variable Contracts in any state or jurisdiction. Broker-Dealer shall immediately notify Equitable, at the address in the notice provision of this Agreement, of the issuance by any regulatory body of any order with respect to the operation or business of the Broker-Dealer, or the initiation of any proceeding for any purpose relating to the sale of the Certificates or Variable Contracts by the Broker-Dealer and of any other action or circumstance that may prevent the lawful offer or sale of any of the Certificates or Variable Contracts by Broker-Dealer in any state or jurisdiction. In addition, Broker-Dealer shall promptly advise Equitable if any of its Registered Representatives which are licensed agents of Equitable is subject to any proceedings or are sanctioned or suspended by the NASD, the SEC or any state securities authority. 4.20 Licensing and Appointment of Registered Representatives. ------------------------------------------------------- Equitable will promptly notify Broker-Dealer of the licensing of each Registered Representative (and of Broker-Dealer if requested) and will maintain a list of all Registered Representatives authorized to sell the Certificates or Variable Contracts. Applications bearing the signature of an individual who is not on such lists will be returned promptly to Broker-Dealer. Upon Equitable's request, Broker-Dealer will designate a Registered Representative to service Certificates or Variable Contracts sold by Registered Representatives who have been terminated, are no longer qualified, or who are otherwise unavailable to provide services to the Certificates or Variable Contracts. Equitable and EVLICO have the right either not to appoint or to terminate the licensing of any Registered Representative to sell the Certificates or Variable Contracts at any time, with or without cause. -9- 4.21 Relationship of Broker-Dealer and Equitable. ------------------------------------------- Broker-Dealer is an independent contractor. Nothing contained in this Agreement shall create, or shall be construed to create, the relationship of an employer and employee between Equitable and Broker-Dealer or its Registered Representatives. 4.22 Limits on Broker-Dealer Authority. --------------------------------- Broker-Dealer shall have no authority on behalf of Equitable or EVLICO to: (a) make, alter or discharge any contract, (b) incur any indebtedness or liability or expend or contract for the expenditure of the funds of Equitable or EVLICO, (c) extend the time for the making of any payments, bind Equitable or EVLICO to the reinstatement of any terminated Certificate or Variable Contract, or accept notes for payment, or accept contributions other than initial contributions in accordance with paragraph 4.5, or accept or receive for any money due or to become due to Equitable or EVLICO with respect to any Certificates or Variable Contracts covered by this agreement, (d) waive or modify any terms, conditions or limitations of any Certificate or Variable Contract, grant permits, name special rates or guarantee dividends or interest rates, make endorsements or any contracts, or deliver any Certificate or Variable Contract unless payment of the initial contribution shall have been made, (e) adjust or settle any claim or commit Equitable or EVLICO with respect thereto, or bind Equitable or EVLICO or any of its affiliates in any way, (f) enter into legal proceedings in connection with any matter pertaining to Equitable's or EVLICO's business without the prior consent of Equitable unless Broker-Dealer is named in such proceedings. Where Broker-Dealer is named, it may retain counsel of its choice. 4.23 Violation of Law. ---------------- Nothing contained in this Agreement shall require Equitable, EVLICO or Broker-Dealer to do anything which, in its judgment, would be a violation of any federal, state or NASD law or regulation applicable to it. -10- Section 5. Indemnification 5.1 Of Equitable With Respect to Negligence. --------------------------------------- Broker-Dealer shall indemnify and hold Equitable and EVLICO harmless from any and all expenses, costs, causes of action, loss or damages resulting from negligent, improper, fraudulent or unauthorized acts or omissions by Broker-Dealer, its employees or Registered Representatives or principals, including but not limited to improper solicitation of applications for the Certificates or Variable Contracts. Broker-Dealer shall indemnify and hold Equitable and EVLICO harmless for any losses, claims, damages or liabilities to which they may become subject, insofar as the liabilities arise out of or are based upon any unauthorized use of sales materials or advertisements or any oral or written misrepresentations or any unlawful sales practices concerning the Certificates or Variable Contracts of Equitable or EVLICO by such Broker-Dealer. Broker-Dealer shall indemnify and hold Equitable harmless for any penalties, losses or liabilities resulting from Equitable's improperly paying any compensation under this agreement, unless such improper payment was caused by Equitable's negligence. Unless such improper payment was caused by Broker-Dealer's negligence, the indemnity under the immediately preceding sentence shall be limited to all compensation received by Broker-Dealer pursuant to this Agreement. The foregoing indemnities shall, upon the same terms and conditions, extend to the benefit of each director and officer of Equitable and EVLICO. 5.2 Of Broker-Dealer With Respect to Negligence. ------------------------------------------- Equitable shall indemnify and hold Broker-Dealer harmless from any and all expenses, costs, causes of action, loss or damages resulting from negligent, improper, fraudulent or unauthorized acts or omissions by Equitable or EVLICO or their employees. 5.3 Notice of Actions. ----------------- Promptly after receipt by an indemnified party of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party, notify the indemnifying party in writing of the commencement thereof; but the -11- omission so to notify the indemnifying party shall not relieve it from any liability which it may otherwise have to any indemnified party. In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party, similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. Section 6. Effectiveness and Termination 6.1 Effectiveness. -------------- This Agreement shall be effective, as of______________________________, upon execution by both parties and will remain in effect until terminated by either Equitable or Broker-Dealer at any time within the time periods and for the reasons stipulated by Sections 6.2 and 6.3 below. 6.2 Termination. ----------- This Agreement may be terminated by either Equitable or Broker-Dealer at any time by 60 days written notice to the other. 6.3 Termination for Cause. --------------------- In the event of any material breach of this Agreement, the other party may, at its option, terminate this Agreement by giving notice of termination, effective upon the date specified in such termination notice. This remedy shall be in addition to any other remedies available under this Agreement or at law. 6.4 Material Breach by Equitable. ---------------------------- Equitable shall be deemed to have materially breached this Agreement and failed to perform hereunder upon the occurrence of any of the following events: -12- (a) Equitable shall become insolvent or otherwise admit in writing its inability to pay its debts when they became due, become bankrupt, seek protection under any law for the protection of insolvents, or have a receiver or conservator appointed for it under any law pertaining to Equitable insolvency; or (b) Equitable shall breach any material provision of this Agreement and such breach shall remain uncured for more than ninety (90) days following Equitable's receipt of Broker-Dealer's written notice of such breach. 6.5 Material Breach by Broker-Dealer. -------------------------------- Broker-Dealer shall be deemed to have materially breached this Agreement and failed to perform hereunder upon the occurrence of any of the following events: (a) Broker-Dealer shall become insolvent or otherwise admit in writing its inability to pay its debts when they become due, become bankrupt, seek protection under any law for the protection of insolvents, or have a receiver or conservator appointed for it under any law pertaining to Broker-Dealer insolvency; or (b) Broker-Dealer shall breach any material provision of this Agreement and such breach shall remain uncured for more than thirty (30) days following Broker-Dealer's receipt of Equitable's written notice of such breach. In the event of a breach of the provisions of paragraph 4.18 or 4.19 the thirty (30) day period for cure is reduced to seven (7) days. 6.6 Survival Provisions. ------------------- Upon termination of this Agreement, the provisions of the following shall survive: (a) Sections 2 and 3, (b) paragraphs 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 4.10 and 4.12, insofar as they relate to the Certificates or Variable Contracts applied for no later than the date of termination of this Agreement. -13- (c) paragraphs 4.13, 4.14, 4.15, 4.16, and 4.17, and (d) Section 5. (e) Section 7. Section 7. Miscellaneous 7.1 Assignment. ---------- This Agreement is not assignable by Broker-Dealer and will terminate automatically in the event of a purported assignment. 7.2 Applicable Law. -------------- This Agreement shall be subject to the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940, and the rules, regulations, and rulings issued thereunder, including such exemptions as the Securities and Exchange Commission may grant. This Agreement shall also be subject to the rules and By-Laws of the NASD. All disputes arising hereunder shall be submitted to arbitration under the Code of Arbitration Procedure of the NASD. Except as provided in this paragraph, this Agreement shall be construed in accordance with the laws of the State of New York and shall be subject to its insurance and securities laws and the applicable insurance and securities laws of any other state or jurisdiction in which the Certificates or Variable Contracts are sold by Broker-Dealer. 7.3 Enforceability. -------------- If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 7.4 Entire Agreement. ---------------- Both parties declare that there are no oral or other agreements or understandings between them affecting this Agreement or relating to the selling or servicing of the Certificates or Variable Contracts. This Agreement supersedes all prior agreements between the parties and constitutes the entire Agreement between the parties. -14- This Agreement may be modified only if in writing and if attested to by those persons authorized to enter into Agreements on behalf of Equitable and Broker-Dealer, respectively. 7.5 No Waiver. --------- If either party fails to require performance by the other party of any provision of this Agreement, that party does not waive its right to require such performance at a later time. If either party waives the breach of any provision of this Agreement by the other party, the waiving party still has the right to require performance of that provision and its conduct shall not be construed to waive succeeding breaches of that provision or any breaches of any other provision. 7.6 Notices. ------- Unless otherwise provided in this Agreement, all notices, requests, demands and other communications which must be provided under this Agreement shall be in writing and shall be deemed to have been given on the date of service if served personally on the party to whom notice is to be given or on the date of mailing if sent by first class mail, registered or certified, postage prepaid. All notices to Equitable shall be sent to: The Equitable Life Assurance Society of the United States Attention: Michael S. Martin, Sr. Vice President 787 Seventh Avenue New York, New York 10019 All notices to Broker-Dealer shall be sent to: -15- 7.7 Headings. -------- The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers. - ------------------------------------------- Broker-Dealer By: Witness: -------------------------------------- --------------------------- Equitable Life Assurance Society of the United States By: Witness: -------------------------------------- --------------------------- -16- EX-99.1A5AIPOLICY 4 POLICY VWL-75 (EVLICO) VARIABLE WHOLE LIFE INSURANCE POLICY THE INSURED REGISTER DATE FACE AMOUNT POLICY NUMBER [EVLICO LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) HOME OFFICE: 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019 ADMINISTRATIVE OFFICE: HUNTINGTON STATION, NEW YORK 11746 EVLICO agrees, subject to the provisions of this policy, to pay a Death Benefit (determined in accordance with the Death Benefit provision on page seven) to the beneficiary upon receipt of due proof of the death of the Insured and the surrender of this policy, PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT WILL EQUAL THE FACE AMOUNT AS SHOWN ON PAGE THREE AND THEREAFTER MAY INCREASE OR DECREASE ON EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I. Premiums as shown on page three are fixed as to amount and will not vary with the investment experience of Separate Account I. NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any time within 10 days after receipt of this policy, or within 45 days of completion of Part 1 of the Application, whichever is later, may return it with a written request for cancellation to the Administrative Office and obtain a full refund of the premium paid. The provisions on the following pages are part of this contract. SPECIMEN PRESIDENT SPECIMEN SECRETARY SPECIMEN ASSISTANT REGISTRAR Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Fixed Premiums Payable For Life. Non-Participating. Investment Experience Reflected in Benefits. Variable Whole Life VWL-75 Page Two -------- GUIDE TO POLICY PROVISIONS PAGE Owner..................................................... 2 Assignments............................................... 2 Beneficiary............................................... 2 Premiums.................................................. 5 Grace..................................................... 5 Loans..................................................... 5 Reinstatement............................................. 5 Separate Account I........................................ 6 Separate Account Index.................................... 6 Actual and Base Net Rates of Return....................... 7 Death Benefit............................................. 7 Variable Adjustment Amount................................ 7 Cash Value................................................ 8 Options on Lapse.......................................... 8 Exchange of Policy........................................ 8-9 General Provisions........................................ 9 Optional Modes of Settlement.............................. 10-11 OWNER The Owner is the Insured unless otherwise specified in the application or endorsed on this policy by EVLICO. While the insured is living, the Owner may exercise all rights and take any other action agreed to by EVLICO in connection with this policy (including changing the ownership). Exercise of the rights of ownership shall not require the concurrence of any person whose interest at the time of such exercise is that of a contingent or successor owner, or of any other person referred to in this policy. ASSIGNMENTS EVLICO assumes no responsibility for the validity of any assignment. No assignment of this policy will bind EVLICO or be deemed to be in force as to EVLICO unless in writing and until filed at EVLICO's Administrative Office. The Owner may assign this policy and all rights hereunder except the right to change the beneficiary and the right to make an election under the Optional Modes of Settlement provision. If an assignment of this policy as collateral security is on file with EVLICO, the Owner may change the beneficiary or make an election under the Optional Modes of Settlement provision, but the rights of the beneficiary shall be subordinate to those of the assignee. So long as an assignment remains in force, the rights of the Owner and of any other person referred to in this policy shall be subordinate to those of the assignee but shaLL not otherwise be affected by the assignment. EVLICO may pay to an assignee, in a single sum, any amount claimed by the assignee to be payable under the terms of the assignment. Any amount payable which is not claimed by the assignee shall be payable in accordance with the terms of the policy to the person or persons who would have been entitled to the amount then payable had there been no assignment outstanding. BENEFICIARY The beneficiary is as designated in the application unless changed. The Owner may change the beneficiary from time to time during the lifetime of the Insured, by written notice in a form satisfactory to EVLICO. The change will, upon recording at EVLICO's Administrative Office, take effect as of the time the written notice was signed, whether or not the Insured is living at the time of recording, but without further liability as to any payment or other settlement made by EVLICO before recording the change. Unless otherwise specified in the designation, if two or more persons are designated as beneficiary, the beneficiary will be the designated person or persons who survive the Insured, and if more than one survive, they will share equally. Any proceeds for which there is no designated beneficiary surviving at the death of the Insured will be payable in a single sum to the children of the Insured who survive the Insured, in equal shares, or should none survive, then to the Insured's executors or administrators. VWL-75 -------- Page Two DATE OF ISSUE JAN 01, 1976 THE INSURED RICHARD ROE JAN 01, 1976 REGISTER DATE FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER BENEFICIARY MARGARET H ROE, WIFE 35M ISSUE AGE & SEX **************************BENEFITS AND PREMIUMS TABLE ************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $1,921.00 FOR LIFE THE FIRST PREMIUM IS $1,921.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1977 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. ************************** TABLE OF NET ANNUAL PREMIUMS ************************ BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $1,072.00 2 - 4 1,576.00 5 AND LATER 1,714.00 VWL-75-03 ---------- PAGE THREE THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981 FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1981 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE **************************** TABULAR CASH VALUES******************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE 5 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $ 0 5 $ 0 9 $ 278 2 0 6 16 10 366 3 0 7 104 11 452 4 0 8 192 12 540
TABULAR CASH VALUES AT ENDS OF POLICY YEARS* END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 540 9 $ 12,069 17 $ 26,057 2 1,808 10 13,701 18 27,941 3 3,114 11 15,368 19 29,851 4 4,456 12 17,070 20 31,788 5 5 907 13 18,806 AGE 60 41,808 6 7,393 14 20,574 AGE 62 45,947 7 8,916 15 22,373 AGE 65 52,277 8 10,474 16 24,201 AGE 70 63,165 * VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
------- V81-01-3A PAGE 3A Page Three-B ------------ TABLE OF NET SINGLE PREMIUMS (MALE) For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - ----------- ---------- ----------- ----------- ----------- ----------- ---------- ----------- ----------- ----------- 1 $ .15949 21 $ .25687 41 $ .42294 61 $ .65332 81 $ .85569 2 .16277 22 .26320 42 .43340 62 .66514 82 .86326 3 .16637 23 .26971 43 .44402 63 .67688 83 .87050 4 .17013 24 .27641 44 .45480 64 .68851 84 .87746 5 .17405 25 .28330 45 .46575 65 .70002 85 .88417 6 .17814 26 . .29040 46 .47684 66 .71138 86 .89067 7 .18241 27 .29771 47 .48807 67 .72257 87 .89701 8 .18683 28 .30523 48 .49944 68 .73354 88 .90325 9 .19143 29 .31296 49 .51092 69 .74427 89 .90943 10 .19618 30 .32091 50 .52250 70 .75473 90 .91561 11 .20108 31 .32907 51 .53418 71 .76492 91 .92185 12 .20612 32 .33746 52 .54593 72 .77487 92 .92818 13 .21129 33 .34608 53 .55775 73 .78461 93 .93469 14 .21657 34 .35493 54 .56964 74 .79418 94 .94149 15 .22197 35 .36402 55 .58157 75 .80361 95 .94880 16 .22748 36 .37333 56 .59354 76 .81290 96 .95685 17 .23310 37 .38286 57 .60553 77 .82201 97 .96594 18 .23883 38 .39260 58 .61752 78 .83090 98 .97584 19 .24470 39 .40253 59 .62949 79 .83950 99 .98538 20 .25071 40 .41265 60 64143 80 .84777 100 1.00000
------------ VWL-7J-03B(M) Page Three-B Page Four --------- --------- Page Four Page Five --------- PREMIUMS Premiums are payable for the premium period indicated on page three but no premium will fall due after the death of the Insured. The premium period is measured from the Register Date. If the end of the premium period is indicated by an age, it extends to the policy anniversary nearest the birthday on which the Insured attains that age. Premiums are payable on or before their due dates at the Administrative Office or to an EVLICO premium collection office. A receipt, signed by a Vice President, the Secretary or the Treasurer, will be furnished upon request. Premiums are as shown on page three except that by written request premiums may be made payable at a different frequency allowed by EVLICO at its applicable rates provided each premium payment is at least $20. If the request is applicable to the first premium, it must be made on or before the payment of that premium and delivery of this policy. Requests made after the first premium has been paid are subject to the approval of EVLICO. A premium not paid on or before its due date will be in default, and its due date will be the date of default. Upon default this policy will lapse and the insurance will cease as of the date of default, except as stated in the Grace and Options on Lapse provisions. The proceeds payable upon the death of the Insured while this policy is in force on a premium paying basis will be increased by the portion of the last premium due and paid which is applicable to any part of the then current premium interval extending after the end of the policy month in which death occurs. GRACE A grace period of 31 days will be granted for the payment of each premium after the first. The insurance will continue in force during the grace period but if the Insured dies during the grace period of a premium then due and unpaid, the portion of the premium due which is applicable to the period from the premium due date to the end of the policy month in which death occurs will be deducted from the proceeds. If a premium is paid during the grace period, then all benefits thereafter under the policy shall be the same as if such premium were paid on its due date. LOANS While this policy has a loan value, the Owner may obtain a loan from EVLICO upon assignment of the policy as sole security if no premium is in default beyond the grace period or if this policy is being continued under Option (a) of the Options on Lapse provision. "Indebtedness" as used in this policy means a loan by EVLICO on the sole security of this policy together with accrued interest. The loan may not exceed the loan value, and EVLICO will deduct from the loan proceeds an amount necessary to repay any outstanding indebtedness. The loan value of this policy, if no premium is in default beyond the grace period, is an amount equal to 75% of the cash value determined in accordance with the Cash Value provision on page eight. The loan value, if the policy is continued under Option (a) of the Options on Lapse provision, is the amount which, accumulated with interest to the next policy anniversary, equals the cash value as of such anniversary determined in accordance with the Cash Value provision. Extended term insurance under Option (b) of the Options on Lapse provision has no loan value. A loan will have a permanent effect on the Variable Adjustment Amount, Death Benefit and cash value under this policy whether or not the indebtedness created thereby is repaid in whole or in part. The following will apply: 1. Except when used to pay premiums, a loan will not be permitted unless it is at least $100 more than the existing indebtedness. 2. Interest on a loan will accrue daily at the effective rate of 4-1/2% per year, will become part of the indebtedness as it accrues and will be compounded on policy anniversaries. 3. Whenever the indebtedness under this policy exceeds the cash value, EVLICO will mail to the Owner and any assignee of record at their last known addresses a notice that the policy will terminate if the excess indebtedness is not repaid within 31 days after the date of mailing of such notice. 4. Any indebtedness may be repaid, in whole or in part, while the Insured is living and the policy is in force, except that if the policy is being continued under one of the options on lapse, any indebtedness which was deducted in determining the benefit on lapse may not be repaid unless the policy is reinstated. Indebtedness will be deducted in a single sum in any settlement. REINSTATEMENT If premiums are in default and if this policy has not been terminated by payment of its cash value, it may be reinstated within five years from the date of default upon production of evidence of insurability satisfactory to EVLICO and the payment of the larger of (a) all overdue premiums with interest at 6%; compounded annually and (b) 110% of the difference between (i) and (ii), where (i) is the excess of the cash value immediately following reinstatement over the cash value immediately preceding reinstatement*, and (ii) is any indebtedness in effect at the date any option on lapse became effective, with interest at 4-1/2% compounded annually to the date of reinstatement. Upon reinstatement this policy will have the same benefit base and the same Variable Adjustment Amount (as these are determined in the Variable Adjustment Amount provision on page seven) as if default had not occurred. Also upon reinstatement this policy will have indebtedness equal to the sum of (i) and (ii), where (i) is any indebtedness in effect at the date any option on lapse became effective, with interest at 4-1/2% compounded annually to the date of reinstatement, and (ii) is any indebtedness arising subsequent to the date any option on lapse became effective, with interest at 4-1/2% compounded annually to the date of reinstatement. --------- VWL-75 Page Five Page Six -------- SEPARATE ACCOUNT I Separate Account I is an account established and maintained by EVLICO pursuant to the laws of the State of New York under which income, gains and losses, whether or not realized, from assets allocated to such account, are credited to or charged against such account without regard to other income, gains, or losses of EVLICO. Assets will be allocated to Separate Account I to support the operation of this policy and certain other variable life insurance policies. Assets may also be allocated to Separate Account I for other purposes, but not to support the operation of any contracts or policies other than variable life insurance. It is contemplated that investments in Separate Account I will, at most times, consist primarily of common stocks and other equity-type investments. However, EVLICO may, in its discretion, invest the assets of Separate Account I in any investments permitted by applicable law. EVLICO may rely conclusively on the opinion of counsel (including attorneys in its employ) as to what investments it is permitted by law to make. In lieu of making such investments directly, to the extent permitted by applicable laws and regulations EVLICO reserves the right to operate Separate Account I as a unit investment trust, or other form, investing all or part of its assets in shares or units of a fund, the investment adviser of which would be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States. The assets of such a fund would be invested as provided herein with respect to Separate Account I. The assets of Separate Account I are the property of EVLICO. However, the portion of the assets of Separate Account I equal to the reserves and other policy liabilities with respect to Separate Account I will not be chargeable with liabilities arising out of any other business EVLICO may conduct. EVLICO reserves the right to transfer assets of Separate Account I in excess of such reserves and policy liabilities to the general account of EVLICO. The assets of Separate Account I shall be valued on each business day. EVLICO reserves the right to withdraw from Separate Account I and allocate to another separate account assets determined by EVLICO to be associated with the class of policies to which this policy belongs. In any such event, to the extent practicable and permissible under applicable laws and regulations, the withdrawal shall be made by withdrawing the same percentage of each investment in Separate Account I, with appropriate adjustments to avoid odd lots and fractions. On and after the date of such withdrawal the term "Separate Account I" in this policy shall mean such other separate account to which the withdrawn assets were allocated. EVLICO reserves the right to the extent permitted by applicable laws and regulations (including any order of the Securities and Exchange Commission): (a) to cause the registration or deregistration of Separate Account I under the Investment Company Act of 1940; (b) to operate Separate Account I under the general supervision of a Committee any or all of the members of which may, but need not, be interested persons of EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States, or to discharge such Committee at any time; or (c) to eliminate or restrict any voting rights of policyholders or other persons having such voting rights in respect of Separate Account I. CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless otherwise required by applicable law, the investment adviser or any investment policy of Separate Account I may not be changed without the consent of EVLICO. If required by applicable laws and regulations, the investment policy of Separate Account I will not be changed unless approved by the Superintendent of Insurance of the State of New York or deemed approved in accordance with such laws and regulations. If so required, the process for obtaining such approval will be filed with the insurance supervisory official of the state in which this policy is delivered. SEPARATE ACCOUNT INDEX The Separate Account Index for the valuation period which included the first day on which there were assets in Separate Account I was 100. The Separate Account Index for each subsequent valuation period is the Separate Account index for the immediately preceding valuation period multiplied by the Net Investment Factor for such subsequent valuation period. The Separate Account Index for a valuation period applies to each day in that period. VALUATION PERIOD. Each business day together with any non-business day or consecutive non-business days immediately preceding such business day will constitute a valuation period. A business day is any day on which the New York Stock Exchange is open for trading. NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a) divided by (b), minus (c), where (a) is (1) the value of the assets in Separate Account I at the close of business of the preceding valuation period, plus (2) the investment income and the capital gains, realized or unrealized, credited to the assets of Separate Account I in the valuation period for which the Net Investment Factor is being determined, minus (3) the capital losses, realized or unrealized, charged against such assets in such valuation period, minus (4) any amount charged against Separate Account I in such valuation period for taxes or for amounts set aside by EVLICO as a reserve for taxes attributable to the maintenance or operation of Separate Account I; (b) is the value of the assets in Separate Account I at the close of business of the preceding valuation period; and (c) is a charge not exceeding .00002063 for each day in the valuation period, corresponding to the sum of (i) a charge not exceeding .25% per year for investment management expense, and (ii) a charge not exceeding .50% per year for mortality and expense risks and other contingencies. The value of the assets in Separate Account I shall be taken at their fair market value or, where there is no readily available market, their fair value determined in accordance with accepted accounting practices and applicable laws and regulations. -------- VWL-75 Page Six Page Seven ---------- ACTUAL AND BASE NET RATES OF RETURN ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is equal to the change in the Separate Account Index from the first day of such policy year to the first day of the next policy year, divided by the Separate Account Index for the first day of such policy year. The Actual Net Rate of Return for a policy year is negative if the Separate Account Index decreased over the year. The Actual Net Rate of Return for a period less than a year is determined on a corresponding basis. BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .03 (3%) per year. (For a period less than a year, it is a pro-rata part of the annual rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for each policy year equals the Base Net Rate of Return, the Death Benefit in each policy year will equal the face amount and the cash value at the end of each policy year will equal the tabular cash value as shown on page three-A. "The difference between the Actual and Base Net Rates of Return" as used in this policy is positive if the Actual Net Rate of Return is greater than the Base Net Rate of Return, and is negative if the Actual Net Rate of Return is less than the Base Net Rate of Return. DEATH BENEFIT A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face amount plus the Variable Adjustment Amount for the policy year in which death occurs; except that if the Variable Adjustment Amount is negative, the Death Benefit shall equal the face amount. In no event, however, will the Death Benefit be less than the amount of insurance under Option (a) of the Options on Lapse provision, assuming premiums had been paid to the date of death of the Insured and such Option had become effective on that date. B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as provided in the Grace and Options on Lapse provisions. VARIABLE ADJUSTMENT AMOUNT On each policy anniversary to which premiums have been duly paid, EVLICO will determine the Variable Adjustment Amount for the policy year beginning on that anniversary, to take into account the investment experience of Separate Account I for the preceding policy year. The Variable Adjustment Amount is zero during the first policy year, and thereafter it may be positive or negative. It remains at a constant amount during a policy year as long as premiums are duly paid. The Variable Adjustment Amount during the policy year will equal the sum of the VAA Change Amount determined on the policy anniversary at the beginning of such policy year and the Variable Adjustment Amount for the preceding policy year. A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will be positive or negative depending on whether the Actual Net Rate of Return for the preceding policy year is greater or less than the Base Net Rate of Return, and will equal the product of (a) and (b), divided by (c) where (a) is the difference between such Actual and Base Net Rates of Return; (b) is the benefit base defined below; and (c) is the net single premium on the current policy anniversary for $1.00 of Variable Adjustment Amount. In determining the VAA Change Amount on the first policy anniversary the benefit base will be the net annual premium applicable at the beginning of the first policy year. In determining the VAA Change Amount on a policy anniversary after the first the benefit base will be the sum of (a) the tabular cash value on the previous anniversary, (b) the net single premium for the Variable Adjustment Amount on the previous anniversary, and (c) the net annual premium for such previous policy anniversary, less the indebtedness, if any, as of such previous policy anniversary. The net annual premium is determined from the table on page three and the tabular cash value from the table on page three-A. The net single premium for the Variable Adjustment Amount is determined from the table on page three-B. If the Variable Adjustment Amount is negative, the net single premium for it is negative. B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will equal the VAA Change Amount as calculated in Section A above, plus the Repayment Adjustment Amounts on such policy anniversary, if any, less the Loan Adjustment Amounts on such policy anniversary, if any. The Repayment Adjustment Amount and Loan Adjustment Amount are defined as follows: (i) For each such repayment, the Repayment Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the repayment to the policy anniversary following such repayment; (b) is the amount of the repayment; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. (ii) For each such loan, the Loan Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the loan to the policy anniversary following such loan; (b) is the amount of the loan; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. ---------- VWL-75 Page Seven Page Eight ---------- CASH VALUE The Owner may surrender this policy for its net cash value at any time. The net cash value is the cash value as defined below less any indebtedness, and will be determined as of the date the signed request for surrender is received by EVLICO at its Administrative Office. Surrender will take effect as of the date the policy and request are transmitted to EVLICO. The cash value is defined as follows: A. If no premium is in default, the cash value on any date DURING THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the Register Date to such date and (ii) is the net annual premium applicable at the beginning of the first policy year. B. If no premium is in default the cash value on any date AFTER THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date and (2) the net single premium on such date for the Variable Adjustment Amount, and (3) if such date is not a policy anniversary, the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the last policy anniversary to such date and (ii) is the benefit base on the previous policy anniversary (as determined in the Variable Adjustment Amount provision). C. If a premium is in default, then within three months after the date of default, the cash value is equal to the sum of (1) the cash value as of the date to which premiums have been paid, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period of default and (ii) is the cash value as of the date to which premiums have been paid less the indebtedness, if any, as of the date to which premiums have been paid. Account will be taken of any loans or repayments of indebtedness in calculating the cash value in paragraphs A., B. and C. above. D. More than three months after the date of default, if this policy is continued under Option (a) or Option (b) of the Options on Lapse provision, the cash value on any date is equal to the reserve for the policy as of such date, provided that the cash value within 30 days after a policy anniversary will not be less than on that anniversary. TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the first policy year will be determined by EVLICO based on the first year interim tabular cash value, with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. First year interim tabular cash values are determined in accordance with the table on page three-A which shows values at the ends of policy months assuming premiums have been duly paid to the end of such policy months. TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the first policy year is determined in accordance with the table on page three-A which shows values applicable at the ends of policy years, provided premiums are duly paid. Values not shown will be furnished on request. Where an age is shown, the values are those applicable at the end of the policy year nearest the birthday on which the Insured attains such age. The tabular cash value during a policy year will be determined by EVLICO with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. OPTIONS ON LAPSE Upon default in the payment of a premium while this policy has a net cash value, the Owner may elect by written notice to continue insurance on the Insured under one of the following options if he does not elect to surrender the policy for its net cash value. OPTION (a). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of insurance equal to the net cash value as of the date the option becomes effective divided by the net single premium on the date of default for $1.00 of paid-up whole life insurance. OPTION (b). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of insurance equal to the Death Benefit less any indebtedness as of the date the option becomes effective (determined as if default had not occurred) and for the period from the date of default which the net cash value as of the date the option becomes effective will purchase as a net single premium at the Insured's age at nearest birthday on the date of default. SEE PAGE THREE FOR ANY RESTRICTIONS UNDER THIS POLICY AS TO AVAILABILITY OF OPTION (b). The following will apply: 1. The election of an option made within three months after the date of default will become effective on the date written notice is received by EVLICO at its Administrative Office. 2. If an option has not been elected within three months after the date of default, Option (b) will take effect automatically at the end of such three month period. 3. Option (a) will replace Option (b) if Option (b) is not available under this policy or if Option (a) provides an equal or greater amount of insurance at the date the option becomes effective. 4. If the Insured dies after the grace period but within three months from the date of default, and if the policy has not been surrendered for its net cash value, Option (b) will apply notwithstanding any restrictions stated on page three as to the availability of Option (b) under this policy, provided that the net cash value as of the date of death (determined as if death had not occurred) will purchase extended term insurance for a period from the date of default to at least the date of death. In that event, any election of Option (a) will be automatically cancelled. EXCHANGE OF POLICY Within 18 months after the Date of Issue shown on page three, provided premiums are duly paid, the Owner may exchange this policy, without evidence of insurability, for a policy of permanent fixed benefit life insurance (as described below) on the life of the Insured. The exchange will take effect as of the date this policy and the signed request on EVLICO's form for such ---------- VWL-75 Page Eight --------- Page Nine exchange are transmitted to EVLICO, or as of the date any amounts required to be paid for such exchange by the Owner are received by EVLICO at its Administrative Office, whichever is later. The new policy will be the form of policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy, known as the "Executive Policy." The new policy will have a face amount of life insurance equal to the face amount of this policy and will have the same Register Date, Date of Issue and Issue Age as shown on page three of this policy. Premiums for the new policy will be based on Equitable's premium rates for such policy in effect at such Register Date for the same classification of risk as under this policy. The exchange will be subject to a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the state in which this policy is delivered. Any indebtedness under this policy must be repaid on the date of the exchange. Any additional benefit provisions included under this policy will be included with the new policy only to the extent that such provisions were being offered with the new policy on the Date of Issue. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. All statements made in the application shall be deemed representations and not warranties. No statement shall avoid this policy or be used in defense of a claim unless contained in the application. This policy may not be modified, nor may any of the rights or requirements of EVLICO be waived, except in writing signed by the President, a Vice President, the Secretary or the Treasurer of EVLICO. All sums payable by EVLICO under this policy are payable at its Administrative Office. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, and policy anniversaries are measured from the Register Date shown on page three. Each policy month begins on the same day in each calendar month as that specified in the Register Date. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be such as the premium paid would have purchased at the correct age and sex. SUICIDE. In the event of the suicide of the Insured, sane or insane, within two years from the Date of Issue shown on page three, the liability of EVLICO will be limited to the payment to the beneficiary of a single sum equal to the premiums paid less any indebtedness. INCONTESTABILITY. Except as to any disability provision, this policy will be incontestable, except for non-payment of premiums, after it has been in force during the lifetime of the Insured for two years from the Date of Issue shown on page three. POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to another form, kind or plan of insurance or make any other change permitted by EVLICO. REPORTS TO OWNER. Except while this policy is continued under the Options on Lapse provision, a statement will be sent to the Owner setting forth the Death Benefit and the cash value as of the first day of such year and, if there is existing indebtedness, the amount of such indebtedness as of the first day of such year and the accrued interest for the previous policy year. Other reports will be furnished to the Owner as required by law. BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred to in this policy are based on the Commissioners 1958 Standard Ordinary Mortality Table, except that for any extended term insurance they are based on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used and interest is assumed at a rate of 3% compounded annually. The cash values and paid-up insurance benefits are equal to or greater than those required by the state in which this policy is delivered. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of that state. Tabular cash values at the end of each policy year are equal to reserves, which are not less than reserves determined according to the Commissioners Reserve Valuation Method. Expense and mortality results of EVLICO shall not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more than three months, then except as provided below, EVLICO will (1) make payment of the cash value within seven days after receipt by EVLICO at its Administrative Office of the policy and a signed request for its surrender; (2) make payment of any loan within seven days after receipt by EVLICO at its Administrative Office of a request for loan; and (3) subject to the provisions of this policy, make payment of the Death Benefit within seven days after receipt by EVLICO at its Administrative Office of this policy, due proof of the death of the Insured, and all other requirements deemed necessary before such payment may be made. During any period when (i) the sale of securities or the determination of the Separate Account Index is not reasonably practicable because the New York Stock Exchange is closed or conditions are such that, under rules and regulations adopted by the Securities and Exchange Commission, trading is deemed to be restricted or an emergency is deemed to exist, or (ii) the Commission by order permits postponement for the protection of EVLICO policyholders, EVLICO reserves the right: (a) to defer determination of cash values and payment of the cash value; (b) to defer payment of a loan; (c) to defer determination of a change in Variable Adjustment Amount and, if such determination has been deferred, to defer payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; and (d) if payment of all or part of the Death Benefit is deferred, to defer application of the Death Benefit under the Optional Modes of Settlement provision. DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The payment of the cash value under Option (a) or Option (b) of the Options on Lapse provision and the making of a loan under Option (a) may be deferred by EVLICO for up to six months after the receipt of request. Interest at the rate of 3% per year will be allowed on such cash payment deferred for 30 days or more. --------- VWL-75 Page Nine Page Ten -------- OPTIONAL MODES OF SETTLEMENT A. ELECTIONS In lieu of payment in one sum, an election may be made to apply the whole or any part of the proceeds under the following options. An election for the benefit of a payee who is not a natural person or who is acting in a fiduciary capacity, or which includes more than one of the options, may be made only with the approval of EVLICO. ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may make an election for the benefit of the beneficiary and may change or revoke a previous election. A change of beneficiary revokes any previous election. An election in effect at the death of the Insured may not be changed or revoked by an election made after the death of the Insured. If no election is effective at the death of the Insured, the beneficiary may then make an election for his own benefit, or in the case of Option 5, for the benefit of two persons, one of whom must be the beneficiary. ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value, the Owner may make an election for the benefit of the Owner or the Insured, or in the case of Option 5 for the benefit of two persons, one of whom must be the Owner or the Insured. B. OPTIONS 1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate of 3% per year. The deposit period and withdrawal rights and rights to change to another option will be as approved by EVLICO at the time of election. 2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the number of years elected (not more than 30) in an amount determined by the Table of instalments. Rights of commutation of unpaid instalments (based on interest of 3% per year compounded annually) will be as approved by EVLICO at the time of election. 3. LIFE INCOME OPTIONS: A. 10 or 20 Years Certain. Payable in instalments for the certain period elected, and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. B. Refund Certain. Payable in instalments until the total amount paid equals the proceeds applied under this option and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly instalment shown in the Table of instalments. instalments shall be without the right of commutation. 4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds applied, together with interest on the unpaid balance at the effective rate of 3% per year, are exhausted. Amounts of instalments and withdrawal rights will be as approved by EVLICO at the time of election. 5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten years, and continuing thereafter while either of two persons upon whose lives the income depends is surviving. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. C. GENERAL PROVISIONS Interest under Option 1 and instalments under Options 2 and 4 will be paid annually, semi-annually, quarterly or monthly, in accordance with the election. instalments under Options 3 and 5 will be paid monthly. Deposit years under Option 1 and instalment years under the other options are measured from the date the option becomes operative, and the first instalment under the other options will be due on such date. Excess interest may be allowed under Options 1, 2 and 4 as determined annually by EVLICO. Any such excess interest will be applied to increase the payments under Option 1, the payment at the end of each instalment year under Option 2, and the unpaid balance at the end of each instalment year under Option 4. If at the death of any payee there is no designated person living entitled to receive any remaining payments, EVLICO will pay in a single sum to such payee's executors or administrators: (a) any balance left with EVLICO under Option 1 or 4, or (b) the commuted value of any remaining instalments under Option 2, 3 or 5 on the basis of compound interest of 3% per year, except that if the amount of instalments under Option 3 or 5 is greater than the amount determined in accordance with the Table of Instalments, the commutation interest rate will be that associated with the more favorable amount. The payee for whose benefit an option is operative may designate (with the right to change such designation) a person or persons to receive any amount which would otherwise become payable to such payee's executors or administrators. Any election, change, revocation or designation shall be made, and will take effect, in the same manner as a change of beneficiary. If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the age of any person upon whose life the income depends. instalments under Option 3 or 5 terminate with the last instalment due before the death of the person upon whose life the income depends or the end of the certain period, whichever is later. EVLICO will require satisfactory evidence of survival whenever a payment depends upon the survival of any person. If instalments or interest payments to any payee would amount to less than $20 each, EVLICO may change the interval of payment so that the payments will amount to at least $20 each. If the amount to be applied under an option with respect to a payee is less than $2,000, EVLICO may pay the amount to the payee in a single sum instead of applying it under the option. No sum payable under any option elected by the Owner for the benefit of a payee other than the Owner may be assigned or encumbered by such payee and, to the extent permitted by law, no such sum shall in any way be subject to any legal process to subject the same to the payment of any claim against such payee. If a withdrawal or commutation right under an option is exercised, EVLICO may defer payment for up to six months from the receipt of request. -------- VWL-75 Page Ten Page Eleven ----------- TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT FOR EACH $1,000 OF PROCEEDS Instalment amounts for Options 3 and 5 are based on age nearest birthday on the due date of the first instalment. Option 5 instalment amounts for ages not shown, or for two males or two females, will be furnished on request.
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Number of Years' Monthly Annual 10 20 10 20 Instal- Instal- Instal- Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1 $84.48 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $ 3.98 $3.62 2 42.86 507.39 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67 3 28.99 343.23 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72 4 22.06 261.19 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77 5 17.91 211.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82 6 15.14 179.22 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87 7 13.16 155.83 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93 8 11.68 138.30 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99 9 10.53 124.69 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05 10 9.61 113.81 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11 11 8.86 104.92 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18 12 8.24 97.53 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25 13 7.71 91.29 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33 14 7.26 85.94 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41 15 6.87 81.32 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49 16 6.53 77.29 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58 17 6.23 73.74 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67 18 5.96 70.59 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77 19 5.73 67.78 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88 20 5.51 65.25 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99 21 5.32 62.98 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10 22 5.15 60.91 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22 23 4.99 59.04 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35 24 4.84 57.32 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49 25 4.71 55.75 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64 26 4.59 54.30 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79 27 4.47 52.97 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96 28 4.37 51.74 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13 29 4.27 50.59 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32 30 4.18 49.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52 - ---------------------------- 35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73 Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96 are 25.28% of the 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21 annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47 39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75 Semi-annual 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05 instalments are 50.37% 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39 of the annual 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73 instalments. 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12 44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Female Age Male ----------------------------------------------------------------------------------------------------------------------------- Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75 - ------------------------------------------------------------------------------------------------------------------------------------ 45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06 50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39 55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76 56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84 57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92 58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01 59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09 60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18 61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27 62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37 63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46 64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55 65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65 66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75 67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84 68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94 69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03 70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12 75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54 - ------------------------------------------------------------------------------------------------------------------------------------
----------- VWL-75 Page Eleven ******************************************************************************** VARIABLE WHOLE LIFE INSURANCE POLICY [EVLICO LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Fixed Premiums Payable For Life. Non-Participating. Investment Experience Reflected in Benefits. ******************************************************************************** VWL-75 EX-99.1A5AIIPOLICY 5 POLICY VIP-75-EVLICO VARIABLE INCREASING PROTECTION LIFE INSURANCE POLICY THE INSURED REGISTER DATE INITIAL POLICY NUMBER FACE AMOUNT EQUITABLE VARIABLE LIFE INSURANCE INSURANCE COMPANY (EVLICO) EVLICO Home Office: 1285 Avenue of the Americas, New York, New York 10019 Administrative Office: Huntington Station, New York 11746 EVLICO agrees, subject to the provision of this policy, to pay a Death Benefit (determined in accordance with the Death Benefit provision on page seven) to the beneficiary upon receipt of due proof of the death of the Insured and the surrender of this policy. As shown on page three, the face amount increases at the beginning of each policy year from the second to the fifteenth and is constant thereafter at 150% of the initial face amount. PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT WILL EQUAL THE INITIAL FACE AMOUNT AND THEREAFTER MAY INCREASE OR DECREASE ON EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN WHICH DEATH OCCURS. AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I. Premiums as shown on page three are fixed as to amount and will not vary with the investment experience of Separate Account I. NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any time within 10 days after receipt of this policy, or within 45 days of completion of Part 1 of the Application, whichever is later, may return it with a written request for cancellation to the Administrative Office and obtain a full refund of the premium paid. The provisions of the following pages are part of this contract. SPECIMEN PRESIDENT SPECIMEN SECRETARY SPECIMEN ASSISTANT REGISTRAR Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Face Amount Increases Annually to 150% of Initial Face Amount. Fixed Premiums Payable For Life. Non-Participating. Investment Experience Reflected in Benefits. Variable Increasing Protection Life VIP-75 Page Two -------- GUIDE TO POLICY PROVISIONS Owner ....................................... 2 Assignments ................................. 2 Beneficiary ................................. 2 Premiums .................................... 5 Grace ....................................... 5 Loans ....................................... 5 Reinstatement ............................... 5 Separate Account I .......................... 6 Separate Account Index ...................... 6 Actual and Base Net Rate of Return .......... 7 Death Benefit ............................... 7 Variable Adjustment Amount .................. 7 Cash Value .................................. 8 Options on Lapse ............................ 8 Exchange of Policy .......................... 8-9 General Provisions .......................... 9 Optional Modes of Settlement ................ 10-11 OWNER The Owner is the Insured unless otherwise specified in the application or endorsed on this policy by EVLICO. While the Insured is living, the Owner may exercise all rights and take any other action agreed to by EVLICO in connection with this policy (including changing the ownership). Exercise of the rights of ownership shall not require the concurrence of any person whose interest at the time of such exercise is that of a contingent or successor owner, or of any other person referred to in this policy. ASSIGNMENTS EVLICO assumes no responsibility for the validity of any assignment. No assignment of this policy will bind EVLICO or be deemed to be in force as to EVLICO unless in writing and until filed at EVLICO's Administrative Office. The Owner may assign this policy and all rights hereunder except the right to change the beneficiary and the right to make an election under the Optional Modes of Settlement provision. If an assignment of this policy as collateral security is on file with EVLICO, the Owner may change the beneficiary or make an election under the Optional Modes of settlement provision, but the rights of the beneficiary shall be subordinate to those of the assignee. So long as an assignment remains in force, the rights of the Owner and of any other person referred to in this policy shall be subordinate to those of the assignee but shall not otherwise be affected by the assignment. EVLICO may pay to an assignee, in a single sum, any amount claimed by the assignee to be payable under the terms of the assignment. Any amount payable which is not claimed by the assignee shall be payable in accordance with the terms of the policy to the person or persons who would have been entitled to the amount then payable had there been no assignment outstanding. BENEFICIARY The beneficiary is as designated in the application unless changed. The Owner may change the beneficiary from time to time during the liftime of the Insured, by written notice in a form satisfactory to EVLICO. The change will, upon recording at EVLICO's Administrative Office, take effect as of the time the written notice was signed, whether or not the Insured is living at the time of recording, but without further liability as to any payment or other settlement made by EVLICO before recording the change. Unless otherwise specified in the designation, if two or more persons are designated as beneficiary the beneficiary will be the designated person or persons who survive the Insured, and if more than one survive, they will share equally. Any proceeds for which there is no designated beneficiary surviving at the death of the Insured will be payable in a single sum to the children of the Insured who survive the Insured, in equal shares, or should none survive, then to the Insured's executors or administrators. -------- VIP-75 Page Two DATE OF ISSUE JAN 01, 1976 THE INSURED RICHARD ROE JAN 01, 1976 REGISTER DATE INITIAL SPECIMEN POLICY NUMBER FACE AMOUNT $100,000 BENEFICIARY MARGARET H ROE, WIFE 35M ISSUE AGE & SEX **************************BENEFITS AND PREMIUMS TABLE ************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $2,595.00 FOR LIFE THE FIRST PREMIUM IS $2,595.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1977 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. ************************** TABLE OF FACE AMOUNTS ******************************* POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT 1 $100,000 6 $115,900 11 $134,400 2 $103,000 7 $119,400 12 $138,400 3 $106,100 8 $123,000 13 $142,600 4 $109,300 9 $126,700 14 $146,900 5 $112,600 10 $130,500 15 AND OVER $150,000 ************************* TABLE OF NET ANNUAL PREMIUMS ************************* BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $1,495.00 2 - 4 2,136.00 5 AND LATER 2,323.00 VIP-75-03 PAGE THREE THE INSURED RICHARD ROE JAN 01, 1976 REGISTER DATE INITIAL FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER ISSUE DATE JAN 01, 1976 35M ISSUE AGE & SEX ****************************** TABULAR CASH VALUES ***************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE EIGHT FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $ 0 5 $ 240 9 $ 838 2 0 6 387 10 990 3 0 7 539 11 1137 4 88 8 691 12 1289
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 1,289 9 $19,437 17 $40,356 2 3,274 10 21,971 18 43,070 3 5,308 11 24,538 19 45,806 4 7,389 12 27,131 20 48,561 5 9,708 13 29,744 AGE 60 62,506 6 12,074 14 32,368 AGE 62 68,083 7 14,485 15 35,003 AGE 65 76,341 8 16,941 16 37,666 AGE 70 89,414 * VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
VIP-75-03A PAGE THREE-A Page Three-B ------------ TABLE OF NET SINGLE PREMIUMS (MALE) For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- 1 $.12306 21 $.21025 41 $.37203 61 $.61279 81 $.83521 2 .12579 22 .21615 42 .38261 62 .62552 82 .84371 3 .12885 23 .22223 43 .39340 63 .63820 83 .85186 4 .13206 24 .22852 44 .40440 64 .65079 84 .85970 5 .13545 25 .23502 45 .41559 65 .66329 85 .86726 6 .13900 26 .24175 46 .42698 66 .67565 86 .87461 7 .14273 27 .24871 47 .43854 67 .68785 87 .88178 8 .14663 28 .25590 48 .45029 68 .69985 88 .88885 9 .15070 29 .26332 49 .46219 69 .71159 89 .89586 10 .15493 30 .27098 50 .47424 70 .72308 90 .90288 11 .15931 31 .27890 51 .48642 71 .73429 91 .90998 12 .16384 32 .28706 52 .49872 72 .74525 92 .91721 13 .16850 33 .29548 53 .51113 73 .75600 93 .92464 14 .17329 34 .30417 54 .52364 74 .76660 94 .93240 15 .17818 35 .31312 55 .53624 75 .77706 95 .94078 16 .18320 36 .32234 56 .54892 76 .78738 96 .95007 17 .18834 37 .33181 57 .56166 77 .79753 97 .96051 18 .19360 38 .34153 58 .57443 78 .80745 98 .97196 19 .19899 39 .35148 59 .58722 79 .81706 99 .98283 20 .20454 40 .36165 60 .60002 80 .82633 100 1.00000
------------ VIP-75 Page Three-B Page Four --------- --------- Page Four Page Five --------- PREMIUMS Premiums are payable for the premium period indicated on page three but no premium will fall due after the death of the Insured. The premium period is measured from the Register Date. If the end of the premium period is indicated by an age it extends to the policy anniversary nearest the birthday on which the Insured attains that age. Premiums are payable on or before their due dates at the Administrative Office or to an EVLICO premium collection office. A receipt, signed by a Vice President, the Secretary or the Treasurer, will be furnished upon request. Premiums are as shown on page three except that by written request premiums may be made payable at a different frequency allowed by EVLICO at its applicable rates provided each premium payment is at least $20. If the request is applicable to the first premium, it must be made on or before the payment of that premium and delivery of this policy. Requests made after the first premium has been paid are subject to the approval of EVLICO. A premium not paid on or before its due date will be in default, and its due date will be the date of default. Upon default this policy will lapse and the insurance will cease as of the date of default, except as stated in the Grace and Options on Lapse provisions. The proceeds payable upon the death of the Insured while this policy is in force on a premium paying basis will be increased by the portion of the last premium due and paid which is applicable to any part of the then current premium interval extending after the end of the policy month in which death occurs. GRACE A grace period of 31 days will be granted for the payment of each premium after the first. The insurance will continue in force during the grace period but if the Insured dies during the grace period of a premium then due and unpaid, the portion of the premium due which is applicable to the period from the premium due date to the end of the policy month in which death occurs will be deducted from the proceeds. If a premium is paid during the grace period, then all benefits thereafter under the policy shall be the same as if such premium were paid on its due date. LOANS While this policy has a loan value, the Owner may obtain a loan from EVLICO upon assignment of the policy as sole security, if no premium is in default beyond the grace period or if this policy is being continued under Option (a) of the Options on Lapse provision. "Indebtedness" as used in this policy means a loan by EVLICO on the sole security of this policy together with accrued interest. The loan may not exceed the loan value, and EVLICO will deduct from the loan proceeds an amount necessary to repay any outstanding indebtedness. The loan value of this policy, if no premium is in default beyond the grace period, is an amount equal to 75% of the cash value determined in accordance with the Cash Value provision on page eight. The loan value, if the policy is continued under Option (a) of the Options on Lapse provision, is the amount which, accumulated with interest to the next policy anniversary, equals the cash as of such anniversary determined in accordance with the Cash Value provision. Extended term insurance under Option (b) of the Options on Lapse provision has no loan value. A loan will have a permanent effect on the Variable Adjustment Amount, Death Benefit and cash value under this policy whether or not the indebtedness created thereby is repaid in whole or in part. The following will apply: 1. Except when used to pay premiums, a loan will not be permitted unless it is at least $100 more than the existing indebtedness. 2. Interest on a loan will accrue daily at the effective rate of 5% per year, will become part of the indebtedness as it accrues and will be compounded on policy anniversaries. 3. Whenever the indebtedness under this policy exceeds the cash value, EVLICO will mail to the Owner and any assignee of record at their last known addresses a notice that the policy will terminate if the excess indebtedness is not repaid within 31 days after the date of mailing of such notice. 4. Any indebtedness may be repaid, in whole or in part, while the Insured is living and the policy is in force, except that if the policy is being continued under one of the options on lapse, any indebtedness which was deducted in determining the benefit on lapse may not be repaid unless the policy is reinstated. Indebtedness will be deducted in a single sum in any settlement. REINSTATEMENT If premiums are in default and if this policy has not been terminated by payment of its cash value, it may be reinstated within five years from the date of default upon production of evidence of insurability satisfactory to EVLICO and the payment of the larger of (a) all overdue premiums with interest at 6% compounded annually and (b) 110% of the difference between (i) and (ii), where (i) is the excess of the cash value immediately following reinstatement over the cash value immediately preceding reinstatement, and (ii) is any indebtedness in effect at the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement. Upon reinstatement this policy will have the same benefit base and the same Variable Adjustment Amount (as these are determined in the Variable Adjustment Amount provision on page seven) as if default had not occured. Also upon reinstatement this policy will have indebtedness equal to the sum of (i) and (ii), where (i) is any indebtedness in effect at the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement, and (ii) is any indebtedness arising subsequent to the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement. --------- Page Five VIP-75 Page Six -------- SEPARATE ACCOUNT I Separate Account I is an account established and maintained by EVLICO pursuant to the laws of the State of New York under which income, gains and losses, whether or not realized from assets allocated to such account, are credited to or charged against such account without regard to other income, gains, or losses of EVLICO. Assets will be allocated to Separate Account I to support the operation of this policy and certain other variable life insurance policies. Assets may also be allocated to Separated Account I for other purposes, but not to support the operation of any contracts or policies other than variable life insurance. It is contemplated that investment is Separate Account I will, at most times, consist primarily of common stocks and other equity-type investment. However. EVLICO may, in its discretion, invest the assets of Separate Account I in any investments permitted by applicable law. EVLICO may rely conclusively on the opinion of counsel (including attorneys in its employ) as to what investments it is permitted by law to make. In lieu of making such investments directly, to the extent permited by applicable laws and regulations EVLICO reserves the right to operate Separate Account I as a unit investment trust, or other form, investing all or part of its assets in shares or units of a fund, the investment adviser of which would be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States. The assets of such a fund would be invested as provided herein with respect to Separate Account I. The assets of Separate Account I are the property of EVLICO. However, the portion of the assets of Separate Account I equal to the reserves and other policy liabilities with respect to Separate Account I will not be chargeable with liabilities arising out of any other business EVLICO may conduct. EVLICO reserves the right to transfer assets of Separate Account I in excess of such reserves and policy liabilities to the general account of EVLICO. The assets of Separate Account I shall be valued on each business day. EVLICO reserve the right to withdraw from Separate Account I and allocate to another separate account assets determined by EVLICO to be associated with the class of policies to which this policy belongs. In any such event, to the extent practicable and permissible under applicable laws and regulations, the withdrawal shall be made by withdrawing the same percentage of each investment in Separate Account I, with appropriate adjustments to avoid odd lots and fractions. On and after the date of such withdrawal the term "Separate Account I" in this policy shall mean such other separate account to which the withdrawn assets were allocated. EVLICO reserves the right to the extent permitted by applicable laws and regulations (including any order of the Securities and Exchange Commission): (a) to cause the registration or deregistration of Separate Account I under the Investment Company Act of 1940; (b) to operate Separate Account I under the general supervision of a Committee any or all of the members of which may, but need not, be interested perons of EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States, or to discharge such Committee at any time; or (c) to eliminate or restrict any voting rights of policyholders or other persons having such voting rights in respect of Separate Account I. CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless otherwise required by applicable law, the investment adviser or any investment policy of Separate Account I may not be changed without the consent of EVLICO. If required by applicable laws and regulations, the investment policy of Separate Account I may not be changed unless approved by the Superintendent of Insurance of the State of New York or deemed approved in accordance with such laws and regulations. If so required, the process for obtaining such approval will be filed ith the insurance supervisory official of the state in which this policy is delivered. SEPARATE ACCOUNT INDEX The Separate Account Index for the valuation period which included the first day on which there were assets in Separate Account I was 100. The Separate Account Index for each subsequent valuation period is the Separate Account Index for the immediately preceding valuation period multiplied by the Net Investment Factor for such subsequent valuation period. The Separate Account Index for a valuation period applies to each day in that period. VALUATION PERIOD. Each business day together with any non-business day or consecutive non-business days immediately preceding such business day will constitute a valuation period. A business day is any day on which the New York Stock Exchange is open for trading. NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a) divided by, (b), minus (c), where (a) is (1) the value of the assets in Separate Account I at the close of business of the preceding valuation period, plus (2) the investment income and the capital gains, realized or unrealized, credited to the assets of Separate Account I in the valuation period for which the Net Investment Factor is being determined, minus (3) the capital losses, realized or unrealized, charged against such assets in such valuation period, minus (4) any amount charged against Separate Account I in such valuation period for taxes or for amounts set aside by EVLICO as a reserve for taxes attributable to the maintenance or operation of Separate Account I; (b) is the value of the assets in Separate Account I at the close of business of the preceding valuation period; and (c) is a charge not exceeding .00002063 for each day in the valuation period, corresponding to the sum of (i) a charge not exceeding .25% per year for investment management expense, and (ii) a charge not exceeding .50% per year for mortality and expense risks and other contingencies. The value of the assets in Separate Account I shall be taken at their fair market value or, where there is no readily available market, their fair value determined in accordance with accepted accounting practices and applicable laws and regulations. -------- VIP-75 Page Six ---------- Page Seven ACTUAL AND BASE NET RATES OF RETURN ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is equal to the change in the Separate Account Index from the first day of such policy year to the first day of the next policy year, divided by the Separate Account Index for the first day of such policy year. The Actual Net Rate of Return for a policy year is negative if the Separate Account Index decreased over the year. The Actual Net Rate of Return for a period less than a year is determined on a corresponding basis. BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .035 (3-1/2%) per year. (For a period less than a year, it is a pro-rata part of the annual rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for each policy year equals the Base Net Rate of Return, the Death Benefit in each policy year will equal the face amount for that policy year and the cash value at the end of each policy year will equal the tabular cash value as shown on page three-A. "The difference between the Actual and Base Net Rates of Return" as used in this policy is positive if the Actual Net Rate of Return is greater than the Base Net Rate of Return, and is negative if the Actual Net Rate of Return is less than the Base Net Rate of Return. DEATH BENEFIT A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face amount plus the Variable Adjustment Amount for the policy year in which death occurs; except that if the Variable Adjustment Amount is negative, the Death Benefit shall equal the face amount for that policy year. In no event, however, will the Death Benefit be less than the amount of insurance under Option (a) of the Options on Lapse provision, assuming premiums had been paid to the date of death of the Insured and such Option had become effective on that date. B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as provided in the Grace and Options on Lapse provisions. VARIABLE ADJUSTMENT AMOUNT On each policy anniversary to which premiums have been duly paid, EVLICO will determine the Variable Adjustment Amount for the policy year beginning on that anniversary, to take into account the investment experience of Separate Account I for the preceding policy year. The Variable Adjustment Amount is zero during the first policy year, and thereafter it may be positive or negative. It remains at a constant amount during a policy year as long as premiums are duly paid. The Variable Adjustment Amount during the policy year will equal the sum of the VAA Change Amount determined on the policy anniversary at the beginning of such policy year and the Variable Adjustment Amount for the preceding policy year. A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will be positive or negative depending on whether the Actual Net Rate of Return for the preceding policy year is greater or less than the Base Net Rate of Return, and will equal the product of (a) and (b), divided by (c), where (a) is the difference between such Actual and Base Net Rates of Return: (b) is the benefit base defined below; and (c) is the net single premium on the current policy anniversary for $1.00 of Variable Adjustment Amount. In determining the VAA Change amount on the first policy anniversary the benefit base will be the net annual premium applicable at the beginning of the first policy year. In determining the VAA Change Amount on a policy anniversary after the first the benefit base will be the sum of (a) the tabular cash value on the previous policy anniversary, (b) the net single premium for the Variable Adjustment Amount on the previous anniversary, and (c) the net annual premium for such previous policy anniversary, less the indebtedness, if any, as of such previous policy anniversary. The net annual premium is determined from the table on page three and the tabular cash value from the table on page three-A. The net single premium for the Variable Adjustment Amount is determined from the table on page three-B. If the Variable Adjustment Amount is negative, the net single premium for it is negative. B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change amount on a policy anniversary will equal the VAA Change Amount as calculated in Section A above, plus the Repayment Adjustment Amounts on such policy anniversary, if any, less the Loan Adjustment amounts on such policy anniversary, if any. The Repayment Adjustment Amount and Loan Adjustment Amount are defined as follows: (i) For each such repayment, the Repayment Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the repayment to the policy anniversary following such repayment; (b) is the amount of the repayment; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. (ii) For each such loan, the Loan Adjustment Amount on a policy anniversary, will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the loan to the policy anniversary following such loan: (b) is the amount of the loan; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. ---------- VIP-75 Page Seven Page Eight ---------- CASH VALUE The Owner may surrender this policy for its net cash value at any time. The net cash value is the cash value as defined below less any indebtedness, and will be determined as of the date the signed request for surrender is received by EVLICO at its Administrative Office. Surrender will take effect as of the date the policy and request are transmitted to EVLICO. The cash value is defined as follows: A. If no premium is in default, the cash value on any date DURING THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the Register Date to such date and (ii) is the net annual premium applicable at the beginning of the first policy year. B. If no premium is in default, the cash value on any date AFTER THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date and (2) the net single premium on such date for the Variable Adjustment Amount, and (3) if such date is not a policy anniversary, the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the last policy anniversary to such date and (ii) is the benefit base on the previous policy anniversary (as determined in the Variable Adjustment Amount provision). C. If a premium is in default, then within three months after the date of default, the cash value is equal to the sum of (1) the cash value as of the date to which premiums have been paid, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period of default and (ii) is the cash value as of the date to which premiums have been paid less the indebtedness, if any, as of the date to which premiums have been paid. Account will be taken of any loans or repayment of indebtedness in calculating the cash value in paragraphs A., B. and C. above. D. More than three months after the date of default, if this policy is continued under Option (b) or Option (c) of the Options on Lapse provision, the cash value on any date is equal to the reserve for the policy as of such date, provided that the cash value within 30 days after a policy anniversary will not be less than on that anniversary. TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the first policy year will be determined by EVLICO based on the first year interim tabular cash value, with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. First year interim tabular cash values are determined in accordance with the table on page three-A which shows values at the ends of policy months assuming premiums have been duly paid to the end of such policy months. TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the first policy year is determined in accordance with the table on page three-A which shows values applicable at the ends of policy years, provided premiums are duly paid. Values not shown will be furnished on request. Where an age is shown, the values are those applicable at the end of the policy year nearest the birthday on which the Insured attains such age. The tabular cash value during a policy year will be determined by EVLICO with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. OPTIONS OF LAPSE Upon default in the payment of a premium while this policy has a net cash value, the Owner may elect by written notice to continue insurance on the Insured under one of the following options if he does not elect to surrender the policy for its net cash value. OPTION (A). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of insurance equal to the net cash value as of the date the option becomes effective divided by the net single premium on the date of default for $1.00 of paid-up whole life insurance. OPTION (B). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of insurance equal to the Death Benefit less any indebtedness as of the date the option becomes effective (determined as if default had not occured) and for the period from the date of default which the net cash value as of the date the option becomes effective will purchase as a net single premium at the Insured's age at nearest birthday on the date of default. SEE PAGE THREE FOR ANY RESTRICTIONS UNDER THIS POLICY AS TO AVAILABILITY OF OPTION (b). The following will apply: 1. The election of an option made within three months after the date of default will become effective on the date written notice is received by EVLICO at its Administrative Office. 2. If an option has not been elected within three months after the date of default, Option (b) will take effect automatically at the end of such three month period. 3. Option (a) will replace Option (b) if Option (b) is not available under this policy or if Option (a) provides an equal or greater amount of insurance at the date the option becomes effective. 4. If the Insured dies after the grace period but within three months from the date of default, and if the policy has not been surrendered for its net cash value, Option (b) will apply notwithstanding any restrictions stated on page three as to the availability of Option (b) under this policy, provided that the net cash value as of the date of death (determined as if death had not occurred) will purchase extended term insurance for a period from the date of default to at least the date of death. In that event, any election of Option (a) will be automatically cancelled. EXCHANGE OF POLICY Within 18 months after the Date of Issue shown on page three, provided premiums are duly paid, the Owner may exchange this policy, without evidence of insurability, for a policy of permanent fixed benefit life insurance (as described below) on the life of the Insured. The exchange will take effect as of the date this policy and the signed request EVLICO's form for such ---------- VIP-75 Page Eight Page Nine --------- exchange are tranmitted to EVLCIO, or as of the date any amounts required to be paid for such exchange by the Owner are received by EVLICO at its Administrative Office, whichever is later. The new policy will be the form of policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy, known as the "Executive Policy." The new policy will have a face amount of life insurance equal to the initial face amount of this policy and will have the same Register Date, Date of Issue and Issue Age as shown on page three of this policy. Premiums for the new policy will be based on Equitable's premium rates for such policy in effect at such Register Date for the same classification of risk as under this policy. The exchange will be subject to a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the state in which this policy is delivered. Any indebtedness under this policy must be repaid on the date of the exchange. Any additional benefit provisions included under this policy will be included with the new policy only to the extent that such provisions were being offered with the new policy on the Date of Issue. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. All statements made in the application shall be deemed representations and not warranties. No statement shall avoid this policy or be used in defense of a claim unless contained in the application. This policy may not be modified, nor may any of the rights or requirements of EVLICO be waived, except in writing signed by the President, a Vice President, the Secretary or the Treasurer of EVLICO. All sums payable by EVLICO under this policy are payable at its Administrative Office. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months and policy anniversaries are measured from the Register Date shown on page three. Each policy month begins on the same day in each calendar month as that specified in the Register Date. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be such as the premium paid would have purchased at the correct age and sex. SUICIDE. In the event of the suicide of the Insured, sane or insane, within two years from the Date of Issue shown on page three, the liability of EVLICO will be limited to the payment to the beneficiary of a single sum equal to the premiums paid less any indebtedness. INCONTESTABILITY. Except as to any disability provision, this policy will be incontestable, except for non-payment of premiums, after it has been in force during the lifetime of the Insured for two years from the Date of Issue shown on page three. POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to another form, kind or plan of insurance or make any other change permitted by EVLICO. REPORTS TO OWNER. Except while this policy is continued under the Options on Lapse provision, a statement will be sent to the Owner setting forth the Death Benefit and the cash value as of the first day of such year and. if there is existing indebtedness, the amount of such indebtedness as of the first day of such year and the accrued interest for the previous policy year. Other reports will be furnished to the Owner as required by law. BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred to in this policy are based on the Commissioners 1958 Standard Ordinary Mortality Table, except that for any extended term insurance they are based on the Commissioners 1958 Extended Term Insurance Table. Continuous function are used and interest is assumed at a rate of 3-1/2% compounded annually. The cash values and paid-up insurance benefits are equal to or greater than those required by the state in which this policy is delivered. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of that state. The tabular cash values at the end of each policy year is equal to reserves which are not less than reserves determined according to the Commissioners Reserve Valuation Method. Expense and mortality results of EVLICO shall not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more than three months, then, except as provided below, EVLICO will (1) make payment of the cash value within seven days after receipt by EVLICO at its Administrative Office of the policy and a signed request for its surrender; (2) make payment of any loan within seven days after receipt by EVLICO at its Administrative Office of a request for loan; and (3) subject to the provisions of this policy, make payment of the Death Benefit within seven days after receipt by EVLICO at its Administrative Office of this policy, due proof of the death of the Insured, and all other requirements deemed necessary before such payment may be made. During any period when (i) the sale of securities or the determination of the Separate Account Index is not reasonably practicable because the New York Stock Exchange is closed or conditions are such that, under rules and regulations adopted by the Securities and Exchange Commission, trading is deemed to be restricted or an emergency is deemed to exist, or (ii) the Commission by order permits postponement for the protection of EVLICO policyholders, EVLICO reserves the right: (a) to defer determination of cash values and payment of the cash value; (b) to defer payment of a loan; (c) to defer determination of a change in Variable Adjustment Amount and, if such determination has been deferred, to defer payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; and (d) if payment of all or part of the Death Benefit is deferred, to defer application of the Death Benefit under the Optional Modes of Settlement provision. DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The payment of the cash value under Option (a) or Option (b) of the Options on Lapse provision and the making of a loan under Option (a) may be deferred by EVLICO for up to six months after the receipt of request. Interest at the rate of 3% per year will be allowed on such cash payment deferred for 30 days or more. --------- VIP-75 Page Nine Page Ten -------- OPTIONAL MODES OF SETTLEMENT A. ELECTIONS In lieu of payment in one sum, an election may be made to apply the whole or any part of the proceeds under the following options. An election for the benefit of a payee who is not a natural person or who is acting in a fiduciary capacity, or which includes more than one of the options, may be made only with the approval of EVLICO. ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may make an election for the benefit of the beneficiary and may change or revoke a previous election. A change of beneficiary revokes any previous election. An election in effect at the death of the Insured may not be changed or revoked by an election made after the death of the Insured. If no election is effective at the death of the Insured, the beneficiary may then make an election for his own benefit, or in the case of Option 5, for the benefit of two persons, one of whom must be the beneficiary. ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value, the Owner may make an election for the benefit of the Owner or the Insured, or in the case of Option 5 for the benefit of two persons, one of whom must be the Owner or the Insured. B. OPTIONS 1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate of 3% per year. The deposit period and withdrawal rights and rights to change to another option will be as approved by EVLICO at the time of election. 2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the number of years elected (not more than 30) in an amount determined by the Table of Instalments. Rights of commutation of unpaid instalments (based on interest of 3% per year compounded annually) will be as approved by EVLICO at the time of election. 3. LIFE INCOME OPTIONS: A. 10 or 20 Years Certain. Payable in instalments for the certain period elected, and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. B. Refund Certain. Payable in instalments until the total amount paid equals the proceeds applied under this option and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly Instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. 4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds applied, together with interest on the unpaid balance at the effective rate of 3% per year, are exhausted. Amounts of instalments and withdrawal rights will be approved by EVLICO at the time of election. 5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten years, and continuing thereafter while either of two persons upon whose lives the income depends is surviving. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly Instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. C. GENERAL PROVISIONS Interest under Option 1 and instalments under Options 2 and 4 will be paid annually, semi-annually, quarterly or monthly, in accordance with the election. Instalments under Options 3 and 5 will be paid monthly. Deposit years under Option 1 and instalments years under the other options are measured from the date the option becomes operative, and the first instalment under the other options will be due on such date. Excess interest may be allowed under Option 1, 2 and 4 as determined annually by EVLICO. Any such excess interest will be applied to increase the payments under Option 1, the payment at the end of each instalment year under Option 2, and the unpaid balance at the end of each instalment year under Option 4. If at the death of any payee there is no designated person living entitled to receive any remaining payments, EVLICO will pay in a single sum to such payee's executors or administrators: (a) any balance left with EVLICO under Option 1 or 4, or (b) the commuted value of any remaining instalments under Option 2,3 or 5 on the basis of compound interest of 3% per year, except that if the amount of instalments under Option 3 or 5 is greater than the amount determined in accordance with the Table of Instaments, the commutation interest rate will be that associated with the more favorable amount. The payee for whose benefit an option is operative may designate (with the right to change such designation) a person or persons to receive any amount which would otherwise become payable to such payee's executors or administrators. Any election, change, revocation or designation shall be made, and will take effect, in the same manner as a change of beneficiary. If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the age of any person upon whose life the income depends. Instalments under Option 3 or 5 terminate with the last instalment due before the death of the person upon whose life the income depends or the end of the certain period, whichever is later. EVLICO will require satisfactory evidence of survival whenever a payment depends upon the survival of any person. If instalments or interest payments to any payee would amount to less than $20 each, EVLICO may change the interval of payment so that the payments will amount to at least $20 each. If the amount to be applied under an option with respect to a payee is less than $2,000, EVLICO may pay the amount to the payee in a single sum instead of applying it under the option. No sum payable under any option elected by the Owner for the benefit of a payee other than the Owner may be assigned or encumbered by such payee and, to the extent permitted by law, no such sum shall in any way be subject to any legal process to subject the same to the payment of any claim against such payee. If a withdrawal or commutation right under an option is exercised, EVLICO may defer payment for up to six months from the receipt of request. -------- VIP-75 Page Ten Page Eleven ----------- TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT FOR EACH $1,000 OF PROCEEDS Instalment amounts for Options 3 and 5 are based on age nearest birthday on the due date of the first instalment. Option 5 instalment amounts for ages not shown, or for two males or two females, will be furnished on request.
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Number of Years' Monthly Annual 10 20 10 20 Instal- Instal- Instal- Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1 $84.48 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $ 3.98 $3.62 2 42.86 507.39 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67 3 28.99 343.23 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72 4 22.06 261.19 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77 5 17.91 211.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82 6 15.14 179.22 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87 7 13.16 155.83 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93 8 11.68 138.30 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99 9 10.53 124.69 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05 10 9.61 113.81 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11 11 8.86 104.92 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18 12 8.24 97.53 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25 13 7.71 91.29 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33 14 7.26 85.94 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41 15 6.87 81.32 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49 16 6.53 77.29 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58 17 6.23 73.74 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67 18 5.96 70.59 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77 19 5.73 67.78 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88 20 5.51 65.25 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99 21 5.32 62.98 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10 22 5.15 60.91 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22 23 4.99 59.04 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35 24 4.84 57.32 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49 25 4.71 55.75 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64 26 4.59 54.30 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79 27 4.47 52.97 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96 28 4.37 51.74 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13 29 4.27 50.59 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32 30 4.18 49.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52 - ---------------------------- 35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73 Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96 are 25.28% of the 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21 annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47 39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75 Semi-annual 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05 instalments are 50.37% 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39 of the annual 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73 instalments. 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12 44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Female Age Male ----------------------------------------------------------------------------------------------------------------------------- Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75 - ------------------------------------------------------------------------------------------------------------------------------------ 45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06 50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39 55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76 56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84 57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92 58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01 59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09 60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18 61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27 62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37 63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46 64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55 65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65 66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75 67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84 68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94 69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03 70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12 75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54 - ------------------------------------------------------------------------------------------------------------------------------------
----------- VWL-75 Page Eleven ******************************************************************************** VARIABLE INCREASING PROTECTION LIFE INSURANCE POLICY [EVLICO LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Face Amount Increases Annually to 150% of Initial Face Amount. Fixed Premiums Payable For Life. Non-Participating. Investment Experience Reflected in Benefits. ******************************************************************************** SPECIMEN POLICY NOTE -- Because of variations in state policy form requirements, the policy as actually issued may differ somewhat from this specimen policy. VWL-75 EX-99.1A5AIIIPOLICY 6 POLICY 79-01 (EVLICO) (SEP ACCT I) VARIABLE LIFE INSURANCE POLICY DATE OF ISSUE JAN 01, 1979 THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE FACE AMOUNT POLICY NUMBER EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) HOME OFFICE: 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019 ADMINISTRATIVE OFFICE: HUNTINGTON STATION, NEW YORK 11746 EVLICO agrees, subject to the provisions of this policy, to pay a Death Benefit (determined in accordance with the Death Benefit provision on page seven) to the beneficiary upon receipt of due proof of the death of the Insured and the surrender of this policy. PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT WILL EQUAL THE FACE AMOUNT AS SHOWN ON PAGE THREE AND THEREAFTER MAY INCREASE OR DECREASE ON EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I. Premiums as shown on page three are fixed as to amount and will not vary with the investment experience of Separate Account I. NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any time within 10 days after receipt of this policy, or within 45 days of completion of Part 1 of the Application, whichever is later, may return it with a written request for cancellation to the Administrative Office and obtain a full refund of the premium paid. The provisions on the following pages are part of this contract. /s/ Donald J. Mooney PRESIDENT /s/ Kevin Keefe SECRETARY ASSISTANT REGISTRAR LIMITED PAYMENT LIFE -- LEVEL FACE AMOUNT. Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Fixed Premiums Payable For Premium Period Shown on Page 3 or Until Earlier Death. Non-Participating. Investment Experience Reflected in Benefits. No. 79-01 Page Two -------- GUIDE TO POLICY PROVISIONS PAGE Owner.................................................... 2 Assignments.............................................. 2 Beneficiary.............................................. 2 Premiums................................................. 5 Grace.................................................... 5 Loans.................................................... 5 Reinstatement............................................ 5 Separate Account I....................................... 6 Separate Account Index................................... 6 Actual and Base Net Rates of Return...................... 7 Death Benefit............................................ 7 Variable Adjustment Amount............................... 7 Cash Value............................................... 8 Options on Lapse......................................... 8 Exchange of Policy....................................... 8-9 General Provisions....................................... 9 Optional Modes of Settlement............................. 10-11 OWNER The Owner is the Insured unless otherwise specified in the application or endorsed on this policy by EVLICO. While the Insured is living, the Owner may exercise all rights and take any other action agreed to by EVLICO in connection with this policy (including changing the ownership). Exercise of the rights of ownership shall not require the concurrence of any person whose interest at the time of such exercise is that of a contingent or successor owner, or of any other person referred to in this policy. ASSIGNMENTS EVLICO assumes no responsibility for the validity of any assignment. No assignment of this policy will bind EVLICO or be deemed to be in force as to EVLICO unless in writing and until filed at EVLICO's Administrative Office. The Owner may assign this policy and all rights hereunder except the right to change the beneficiary and the right to make an election under the Optional Modes of Settlement provision. If an assignment of this policy as collateral security is on file with EVLICO, the Owner may change the beneficiary or make an election under the Optional Modes of Settlement provision, but the rights of the beneficiary shall be subordinate to those of the assignee. So long as an assignment remains in force, the rights of the Owner and of any other person referred to in this policy shall be subordinate to those of the assignee but shall not otherwise be affected by the assignment. EVLICO may pay to an assignee, in a single sum, any amount claimed by the assignee to be payable under the terms of the assignment. Any amount payable which is not claimed by the assignee shall be payable in accordance with the terms of the policy to the person or persons who would have been entitled to the amount then payable had there been no assignment outstanding. BENEFICIARY The beneficiary is as designated in the application unless changed. The Owner may change the beneficiary from time to time during the lifetime of the Insured, by written notice in a form satisfactory to EVLICO. The change will, upon recording at EVLICO's Administrative Office, take effect as of the time the written notice was signed, whether or not the Insured is living at the time of recording, but without further liability as to any payment or other settlement made by EVLICO before recording the change. Unless otherwise specified in the designation, if two or more persons are designated as beneficiary, the beneficiary will be the designated person or persons who survive the Insured, and if more than one survive, they will share equally. Any proceeds for which there is no designated beneficiary surviving at the death of the Insured will be payable in a single sum to the children of the Insured who survive the Insured, in equal shares, or should none survive, then to the Insured's executors or administrators. -------- Page Two No. 79-01 DATE OF ISSUE JAN 01, 1979 THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER BENEFICIARY MARGARET H. ROE, WIFE 35M ISSUE AGE & SEX ************************* BENEFITS AND PREMIUMS TABLE ************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $1,659.00 40 YEARS THE FIRST PREMIUM IS $1,659.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1980 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. **************************** TABLE OF NET ANNUAL PREMIUMS ********************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $ 752.00 2 - 4 1,455.00 5 - 40 1,526.00 V1-03 PAGE THREE THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER ISSUE DATE JAN 01, 1979 35M ISSUE AGE & SEX ******************************* TABULAR CASH VALUES **************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE 8 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES ----- ------ ----- ------ ----- ------ 1 $0 5 $ 0 9 $278 2 0 6 16 10 366 3 0 7 104 11 452 4 0 8 192 12 540
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES ---- ------ ---- ------ ---- ------ 1 $ 540 9 $12,069 17 $26,057 2 1,808 10 13,701 18 27,941 3 3,114 11 15,368 19 29,851 4 4,456 12 17,070 20 31,788 5 5,907 13 18,806 AGE 60 41,808 6 7,393 14 20,574 AGE 62 45,947 7 8,916 15 22,373 AGE 65 52,277 8 10,474 16 24,201 AGE 70 63,165 * VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
V1-03A PAGE THREE-A Page Three-B ------------ TABLE OF NET SINGLE PREMIUMS (MALE) For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- 1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560 2 .09871 22 .17890 42 .33918 62 .58929 82 .82496 3 .10126 23 .18450 43 .34995 63 .60272 83 .83394 4 .10397 24 .19031 44 .36096 64 .61610 84 .84259 5 .10685 25 .19635 45 .37222 65 .62940 85 .85096 6 .10990 26 .20263 46 .38370 66 .64260 86 .85909 7 .11312 27 .20915 47 .39541 67 .65565 87 .86704 8 .11650 28 .21591 48 .40733 68 .66851 88 .87488 9 .12005 29 .22293 49 .41945 69 .68114 89 .88268 10 .12377 30 .23021 50 .43176 70 .69350 90 .89050 11 .12764 31 .23775 51 .44424 71 .70559 91 .89841 12 .13166 32 .24556 52 .45688 72 .71744 92 .90648 13 .13581 33 .25366 53 .46968 73 .72908 93 .91479 14 .14008 34 .26205 54 .48261 74 .74057 94 .92350 15 .14447 35 .27073 55 .49568 75 .75194 95 .93291 16 .14897 36 .27970 56 .50886 76 .76319 96 .94339 17 .15360 37 .28896 57 .52214 77 .77427 97 .95520 18 .15835 38 .29850 58 .53550 78 .78512 98 .96810 19 .16323 39 .30830 59 .54892 79 .79566 99 .98063 20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
------------ V1-03B(M) Page Three-B Page Four --------- --------- Page Four Page Five --------- PREMIUMS Premiums are payable for the premium period indicated on page three but no premium will fall due after the death of the Insured. The premium period is measured from the Register Date. If the end of the premium period is indicated by an age, it extends to the policy anniversary nearest the birthday on which the Insured attains that age. Premiums are payable on or before their due dates at the Administrative Office or to an EVLICO premium collection office. A receipt, signed by a Vice President, the Secretary or the Treasurer, will be furnished upon request. Premiums are as shown on page three except that by written request premiums may be made payable at a different frequency allowed by EVLICO at its applicable rates. If the request is applicable to the first premium, it must be made on or before the payment of that premium and delivery of this policy. Requests made after the first premium has been paid are subject to the approval of EVLICO. A premium not paid on or before its due date will be in default, and its due date will be the date of default. Upon default this policy will lapse and the insurance will cease as of the date of default, except as stated in the Grace and Options on Lapse provisions. The proceeds payable upon the death of the Insured while this policy is in force on a premium paying basis will be increased by the portion of the last premium due and paid which is applicable to any part of the then current premium interval extending after the end of the policy month in which death occurs. GRACE A grace period of 31 days will be granted for the payment of each premium after the first. The insurance will continue in force during the grace period but if the Insured dies during the grace period of a premium then due and unpaid, the portion of the premium due which is applicable to the period from the premium due date to the end of the policy month in which death occurs will be deducted from the proceeds. If a premium is paid during the grace period, then all benefits thereafter under the policy shall be the same as if such premium were paid on its due date. LOANS While this policy has a loan value, the Owner may obtain a loan from EVLICO upon assignment of the policy as sole security, if no premium is in default beyond the grace period or if this policy is being continued under Option (a) of the Options on Lapse provision. "Indebtedness" as used in this policy means a loan by EVLICO on the sole security of this policy together with accrued interest. The loan may not exceed the loan value, and EVLICO will deduct from the loan proceeds an amount necessary to repay any outstanding indebtedness. If no premium is in default beyond the grace period (or if this policy is paid up), the loan value of this policy is an amount equal to 75% of the cash value determined in accordance with the Cash Value provision on page eight. The loan value, if the policy is continued under Option (a) of the Options on Lapse provision, is the amount which, accumulated with interest to the next policy anniversary, equals the cash value as of such anniversary determined in accordance with the Cash Value provision. Extended term insurance under Option (b) of the Options on Lapse provision has no loan value. A loan will have a permanent effect on the Variable Adjustment Amount, Death Benefit and cash value under this policy whether or not the indebtedness created thereby is repaid in whole or in part. The following will apply: 1. Except when used to pay premiums, a loan will not be permitted unless it is at least $100 more than the existing indebtedness. 2. Interest on a loan will accrue daily at the effective rate of 5% per year, will become part of the indebtedness as it accrues and will be compounded on policy anniversaries. 3. Whenever the indebtedness under this policy exceeds the cash value, EVLICO will mail to the Owner and any assignee of record at their last known addresses a notice that the policy will terminate if the excess indebtedness is not repaid within 31 days after the date of mailing of such notice. 4. Any indebtedness may be repaid, in whole or in part, while the Insured is living and the policy is in force, except that if the policy is being continued under one of the options on lapse, any indebtedness which was deducted in determining the benefit on lapse may not be repaid unless the policy is reinstated. Indebtedness will be deducted in a single sum in any settlement. REINSTATEMENT If premiums are in default and if this policy has not been terminated by payment of its cash value, it may be restated within five years from the date of default upon production of evidence of insurability satisfactory to EVLICO and the payment of the larger of (a) all overdue premiums with interest at 6% compounded annually and (b) 110% of the difference between (i) and (ii), where (i) is the excess of the cash value immediately following reinstatement over the cash value immediately preceding reinstatement, and (ii) is any indebtedness in effect at the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement. Upon reinstatement this policy will have the same benefit base and the same Variable Adjustment Amount (as there are determined in the Variable Adjustment Amount provision on page seven) as if default had not occurred. Also upon reinstatement this policy will have indebtedness equal to the sum of (i) and (ii), where (i) is any indebtedness in effect at the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement, and (ii) is any indebtedness arising subsequent to the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement. --------- V1-05 Page Five Page Six -------- SEPARATE ACCOUNT I Separate Account I is an account established and maintained by EVLICO pursuant to the laws of the State of New York under which income, gains and losses, whether or not realized, from assets allocated to such account, are credited to or charged against such account without regard to other income, gains, or losses of EVLICO. Assets will be allocated to Separate Account I to support the operation of this policy and certain other variable life insurance policies. Assets may also be allocated to Separate Account I for other purposes, but not to support the operation of any contracts or policies other than variable life insurance. It is contemplated that investments in Separate Account I will, at most times, consist primarily of common stocks and other equity-type investments. However, EVLICO may, in its discretion, invest the assets of Separate Account I in any investments permitted by applicable law. EVLICO may rely conclusively on the opinion of counsel (including attorneys in its employ) as to what investments it is permitted by law to make. In lieu of making such investments directly, to the extent permitted by applicable laws and regulations EVLICO reserves the right to operate Separate Account I as a unit investment trust, or other form, investing all or part of its assets in shares or units of a fund, the investment adviser of which would be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States. The assets of such a fund would be invested as provided herein with respect to Separate Account I. The assets of Separate Account I are the property of EVLICO. However, the portion of the assets of Separate Account I equal to the reserves and other policy liabilities with respect to Separate Account I will not be chargeable with liabilities arising out of any other business EVLICO may conduct. EVLICO reserves the right to transfer assets of Separate Account I in excess of such reserves and policy liabilities to the general account of EVLICO. The assets of Separate Account I shall be valued on each business day. EVLICO reserves the right to withdraw from Separate Account I and allocate to another separate account assets determined by EVLICO to be associated with the class of policies to which this policy belongs. In any such event, to the extent practicable and permissible under applicable laws and regulations, the withdrawal shall be made by withdrawing the same percentage of each investment in Separate Account I, with appropriate adjustments to avoid odd lots and fractions. On and after the date of such withdrawal the term "Separate Account I" in this policy shall mean such other separate account to which the withdrawn assets were allocated. EVLICO reserves the right to the extent permitted by applicable laws and regulations (including any order of the Securities and Exchange Commission): (a) to cause the registration or deregistration of Separate Account I under the Investment Company Act of 1940; (b) to operate Separate Account I under the general supervision of a Committee any or all of the members of which may, but need not, be interested persons of EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States, or to discharge such Committee at any time; or (c) to eliminate or restrict any voting rights of policyholders or other persons having such voting rights in respect of Separate Account I. CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless otherwise required by applicable law, the investment adviser or any investment policy of Separate Account I may not be changed without the consent of EVLICO. If required by applicable laws and regulations, the investment policy of Separate Account I will not be changed unless approved by the Superintendent of Insurance of the State of New York or deemed approved in accordance with such laws and regulations. If so required, the process for obtaining such approval will be filed with the insurance supervisory official of the state in which this policy is delivered. SEPARATE ACCOUNT INDEX The Separate Account Index for the valuation period which included the first day on which there were assets in Separate Account I was 100. The Separate Account Index for each subsequent valuation period is the Separate Account Index for the immediately preceding valuation period multiplied by the Net Investment Factor for such subsequent valuation period. The Separate Account Index for a valuation period applies to each day in that period. VALUATION PERIOD. Each business day together with any non-business day or consecutive non-business days immediately preceding such business day will constitute a valuation period. A business day is any day on which the New York Stock Exchange is open for trading. NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a) divided by (b), minus (c), where (a) is (1) the value of the assets in Separate Account I at the close of business of the preceding valuation period, plus (2) the investment income and the capital gains, realized or unrealized, credited to the assets of Separate Account I in the valuation period for which the Net Investment Factor is being determined, minus (3) the capital losses, realized or unrealized, charged against such assets in such valuation period, minus (4) any amount charged against Separate Account I in such valuation period for taxes or for amounts set aside by EVLICO as a reserve for taxes attributable to the maintenance or operation of Separate Account I; (b) is the value of the assets in Separate Account I at the close of business of the preceding valuation period; and (c) is a charge not exceeding .00002063 for each day in the valuation period, corresponding to the sum of (i) a charge not exceeding .25% per year for investment management expense, and (ii) a charge not exceeding .50% per year for mortality and expense risks and other contingencies. The value of the assets in Separate Account I shall be taken at their fair market value or, where there is no readily available market, their fair value determined in accordance with accepted accounting practices and applicable laws and regulations. -------- V1-06 Page Six Page Seven ---------- ACTUAL AND BASE NET RATES OF RETURN ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is equal to the change in the Separate Account Index from the first day of such policy year to the first day of the next policy year, divided by the Separate Account Index for the first day of such policy year. The Actual Net Rate of Return for a policy year is negative if the Separate Account index decreased over the year. The Actual Net Rate of Return for a period less than a year is determined on a corresponding basis. BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .04 (4%) per year. (For a period less than a year, it is a pro-rata part of the annual rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for each policy year equals the Base Net Rate of Return, the Death Benefit in each policy year will equal the face amount and the cash value at the end of each policy year will equal the tabular cash value as shown on page three-A. "The difference between the Actual and Base Net Rates of Return" as used in this policy is positive if the Actual Net Rate of Return is greater than the Base Net Rate of Return, and is negative if the Actual Net Rate of Return is less than the Base Net Rate of Return. DEATH BENEFIT A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face amount plus the Variable Adjustment Amount for the policy year in which death occurs; except that if the Variable Adjustment Amount is negative, the Death Benefit shall equal the face amount. In no event, however, will the net insurance benefit as of the date of death be less than the net cash value on such date divided by the net single premium on such date for $1.00 of paid up whole life insurance. For this purpose, the "net insurance benefit" will equal the Death Benefit otherwise determined, decreased by any indebtedness and increased by any pro-rata portion of premiums returned on death, all determined as of the date of death. B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as provided in the Grace and Options on Lapse provisions. VARIABLE ADJUSTMENT AMOUNT Provided premiums are duly paid, EVLICO will determine on each policy anniversary the Variable Adjustment Amount for the policy year beginning on that policy anniversary to take into account the investment experience of Separate Account I for the preceding policy year. The Variable Adjustment Amount is zero during the first policy year, and thereafter it may be positive or negative. As long as premiums are duly paid, the Variable Adjustment Amount remains at a constant amount during a policy year. The Variable Adjustment Amount during the policy year will equal the sum of the VAA Change Amount determined on the policy anniversary at the beginning of such policy year and the Variable Adjustment Amount for the preceding policy year. A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will be positive or negative depending on whether the Actual Net Rate of Return for the preceding policy year is greater or less than the Base Net Rate of Return, and will equal the product of (a) and (b), divided by (c), where (a) is the difference between such Actual and Base Net Rates of Return; (b) is the benefit base defined below; and (c) is the net single premium on the current policy anniversary for $1.00 of Variable Adjustment Amount. In determining the VAA Change Amount on the first policy anniversary the benefit base will be the net annual premium applicable at the beginning of the first policy year. In determining the VAA Change Amount on a policy anniversary after the first the benefit base will be the sum of (a) the tabular cash value on the previous anniversary, (b) the net single premium for the Variable Adjustment Amount on the previous anniversary, and (c) the net annual premium for such previous policy anniversary, less the indebtedness, if any, as of such previous policy anniversary. The net annual premium is determined from the table on page three and applies only during the premium-paying period. The tabular cash value is determined from the table on page three-A. The net single premium for the Variable Adjustment Amount is determined from the table on page three-B. If the Variable Adjustment Amount is negative, the net single premium for it is negative. B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will equal the VAA Change Amount as calculated in Section A above, plus the Repayment Adjustment Amounts on such policy anniversary, if any, less the Loan Adjustment Amounts on such policy anniversary, if any. The Repayment Adjustment Amount and Loan Adjustment Amount are defined as follows: (i) For each such repayment, the Repayment Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the repayment to the policy anniversary following such repayment; (b) is the amount of the repayment; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. (ii) For each such loan, the Loan Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the loan to the policy anniversary following such loan; (b) is the amount of the loan; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. ---------- V1-07 Page Seven Page Eight ---------- CASH VALUE The Owner may surrender this policy for its net cash value at any time. The net cash value is the cash value as defined below less any indebtedness, and will be determined as of the date the signed request for surrender is received by EVLICO at its Administrative Office. Surrender will take effect as of the date the policy and request are transmitted to EVLICO. The cash value is defined as follows: A. If no premium is in default, the cash value on any date DURING THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the Register Date to such date and (ii) is the net annual premium applicable at the beginning of the first policy year. B. If no premium is in default (or if the policy is paid up), the cash value on any date AFTER THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date and (2) the net single premium on such date for the Variable Adjustment Amount, and (3) if such date is not a policy anniversary, the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the last policy anniversary to such date and (ii) is the benefit base on the previous policy anniversary (as determined in the Variable Adjustment Amount provision). C. If a premium is in default, then within three months after the date of default, the cash value is equal to the sum of (1) the cash value as of the date to which premiums have been paid, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period of default and (ii) is the cash value as of the date to which premiums have been paid less the indebtedness, if any, as of the date to which premiums have been paid. Account will he taken of any loans or repayments of indebtedness in calculating the cash value in paragraphs A., B. and C. above. D. More than three months after the date of default, if this policy is continued under Option (a) or Option (b) of the Options on Lapse provision, the cash value on any date is equal to the reserve for the policy as of such date, provided that the cash value within 30 days after a policy anniversary will not be less than on that anniversary. TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the first policy year will be determined by EVLICO based on the first year interim tabular cash value, with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. First year interim tabular cash values are determined in accordance with the table on page three-A which shows values at the ends of policy months assuming premiums have been duly paid to the end of such policy months. TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the first policy year is determined in accordance with the table on page three-A which shows values applicable at the ends of policy years, provided premiums are duly paid. Values not shown will be furnished on request. Where an age is shown, the values are those applicable at the end of the policy year nearest the birthday on which the Insured attains such age. The tabular cash value during a policy year will be determined by EVLICO with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. OPTIONS ON LAPSE Upon default in the payment of a premium while this policy has a net cash value, the Owner may elect by written notice to continue insurance on the Insured under one of the following options if he does not elect to surrender the policy for its net cash value. OPTION (a). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of insurance equal to the net cash value as of the date the option becomes effective divided by the net single premium on the date of default for $1.00 of paid-up whole life insurance. OPTION (b). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of insurance equal to the Death Benefit less any indebtedness as of the date the option becomes effective (determined as if default had not occurred) and for the period from the date of default which the net cash value as of the date the option becomes effective will purchase as a net single premium at the Insured's current age on the date of default. SEE PAGE THREE FOR ANY RESTRICTIONS UNDER THIS POLICY AS TO AVAILABILITY OF OPTION (b). The following will apply: 1. The election of an option made within three months after the date of default will become effective on the date written notice is received by EVLICO at its Administrative Office. 2. If an option has not been elected within three months after the date of default, Option (b) will take effect automatically at the end of such three month period. 3. Option (a) will replace Option (b) if Option (b) is not available under this policy or if Option (a) provides an equal or greater amount of insurance at the date the option becomes effective. 4. If the Insured dies after the grace period but within three months from the date of default, and if the policy has not been surrendered for its net cash value, Option (b) will apply notwithstanding any restrictions stated on page three as to the availability of Option (b) under this policy, provided that the net cash value as of the date of death (determined as if death had not occurred) will purchase extended term insurance for a period from the date of default to at least the date of death. In that event, any election of Option (a) will be automatically cancelled. EXCHANGE OF POLICY Within 18 months after the Date of Issue shown on page three, provided premiums are duly paid, the Owner may exchange this policy, without evidence of insurability, for a policy of permanent fixed benefit life insurance (as described below) on the life of the Insured. The exchange will take effect as of the date this policy and the signed request on EVLICO's form for such ---------- V1-08 Page Eight Page Nine --------- exchange are transmitted to EVLICO, or as of the date any amounts required to be paid for such exchange by the Owner are received by EVLICO at its Administrative Office, whichever is later. The new policy will be the form of policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy, known as the "Executive Policy." The new policy will have a face amount of life insurance equal to the face amount of this policy and will have the same Register Date, Date of Issue and Issue Age as shown on page three of this policy. Premiums for the new policy will be based on Equitable's premium rates for such policy in effect at such Register Date for the same classification of risk as under this policy. The exchange will be subject to a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the state in which this policy is delivered. Any indebtedness under this policy must be repaid on the date of the exchange. Any additional benefit provisions included under this policy will be included with the new policy only to the extent that such provisions were being offered with the new policy on the Date of Issue. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. All statements made in the application shall be deemed representations and not warranties. No statement shall avoid this policy or be used in defense of a claim unless contained in the application. This policy may not be modified, nor may any of the rights or requirements of EVLICO be waived, except in writing signed by the President, a Vice President, the Secretary or the Treasurer of EVLICO. All sums payable by EVLICO under this policy are payable at its Administrative Office. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, and policy anniversaries are measured from the Register Date shown on page three. Each policy month begins on the same day in each calendar month as that specified in the Register Date. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be such as the premium paid would have purchased at the correct age and sex. SUICIDE. In the event of the suicide of the Insured, sane or insane, within two years from the Date of Issue shown on page three, the liability of EVLICO will be limited to the payment to the beneficiary of a single sum equal to the premiums paid less any indebtedness. INCONTESTABILITY. Except as to any disability provision, this policy will be incontestable, except for non-payment of premiums, after it has been in force during the lifetime of the Insured for two years from the Date of Issue shown on page three. POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to another form, kind or plan of insurance or make any other change permitted by EVLICO. REPORTS TO OWNER. Except while this policy is continued under the Options on Lapse provision, a statement will be sent to the Owner setting forth the Death Benefit and the cash value as of the first day of such year and, if there is existing indebtedness, the amount of such indebtedness as of the first day of such year and the accrued interest for the previous policy year. Other reports will be furnished to the Owner as required by law. BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred to in this policy are based on the Commissioners 1958 Standard Ordinary Mortality Table, except that for any extended term insurance they are based on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used and interest is assumed at a rate of 4% compounded annually. The cash values and paid-up insurance benefits are equal to or greater than those required by the state in which this policy is delivered. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of that state. Tabular cash values at the end of each policy year are equal to reserves, which are not less than reserves determined according to the Commissioners Reserve Valuation Method. Expense and mortality results of EVLICO shall not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more than three months (or if this policy is paid up), then, except as provided below, EVLICO will (1) make payment of the cash value within seven days after receipt by EVLICO at its Administrative Office of the policy and a signed request for its surrender; (2) make payment of any loan within seven days after receipt by EVLICO at its Administrative Office of a request for loan; and (3) subject to the provisions of this policy, make payment of the Death Benefit within seven days after receipt by EVLICO at its Administrative Office of this policy, due proof of the death of the Insured, and all other requirements deemed necessary before such payment may be made. During any period when (i) the sale of securities or the determination of the Separate Account Index is not reasonably practicable because the New York Stock Exchange is closed or conditions are such that, under rules and regulations adopted by the Securities and Exchange Commission, trading is deemed to be restricted or an emergency is deemed to exist, or (ii) the Commission by order permits postponement for the protection of EVLICO policyholders, EVLICO reserves the right: (a) to defer determination of cash values and payment of the cash value; (b) to defer payment of a loan; (c) to defer determination of a change in Variable Adjustment Amount and, if such determination has been deferred, to defer payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; and (d) if payment of all or part of the Death Benefit is deferred, to defer application of the Death Benefit under the Optional Modes of Settlement provision. DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The payment of the cash value under Option (a) or Option (b) of the Options on Lapse provision and the making of a loan under Option (a) may be deferred by EVLICO for up to six months after the receipt of request. Interest at the rate of 3% per year will be allowed on such cash payment deferred for 30 days or more. --------- V1-09 Page Nine Page Ten -------- OPTIONAL MODES OF SETTLEMENT A. ELECTIONS In lieu of payment in one sum, an election may be made to apply the whole or any part of the proceeds under the following options. An election for the benefit of a payee who is not a natural person or who is acting in a fiduciary capacity, or which includes more than one of the options, may be made only with the approval of EVLICO. ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may make an election for the benefit of the beneficiary and may change or revoke a previous election. A change of beneficiary revokes any previous election. An election in effect at the death of the Insured may not be changed or revoked by an election made after the death of the Insured. If no election is effective at the death of the Insured, the beneficiary may then make an election for his own benefit, or in the case of Option 5, for the benefit of two persons, one of whom must be the beneficiary. ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value, the Owner may make an election for the benefit of the Owner or the Insured, or in the case of Option 5 for the benefit of two persons, one of whom must be the Owner or the Insured. B. OPTIONS 1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate of 3% per year. The deposit period and withdrawal rights and rights to change to another option will be as approved by EVLICO at the time of election. 2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the number of years elected (not more than 30) in an amount determined by the Table of Instalments. Rights of commutation of unpaid instalments (based on interest of 3-1/2% per year compounded annually) will be as approved by EVLICO at the time of election. 3. LIFE INCOME OPTIONS: A. 10 or 20 Years Certain. Payable in instalments for the certain period elected, and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. B. Refund Certain. Payable in instalments until the total amount paid equals the proceeds applied under this option and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly Instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. 4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds applied, together with interest on the unpaid balance at the effective rate of 3-1/2% per year, are exhausted. Amounts of instalments and withdrawal rights will be as approved by EVLICO at the time of election. 5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten years, and continuing thereafter while either of two persons upon whose lives the income depends is surviving. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly Instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. C. GENERAL PROVISIONS Interest under Option 1 and instalments under Options 2 and 4 will be paid annually, semi-annually, quarterly or monthly, in accordance with the election. Instalments under Options 3 and 5 will be paid monthly. Deposit years under Option 1 and instalment years under the other options are measured from the date the option becomes operative, and the first instalment under the other options will be due on such date. Excess interest may be allowed under Options 1, 2 and 4 as determined annually by EVLICO. Any such excess interest will be applied to increase the payments under Option 1, the payment at the end of each instalment year under Option 2, and the unpaid balance at the end of each instalment year under Option 4. If at the death of any payee there is no designated person living entitled to receive any remaining payments, EVLICO will pay in a single sum to such payee's executors or administrators: (a) any balance left with EVLICO under Option 1 or 4, or (b) the commuted value of any remaining instalments under Option 2 on the basis of compound interest of 3-1/2% per year, or Option 3 or 5 on the basis of compound interest of 3% per year, except that if the amount of instalments under Option 3 or 5 is greater than the amount determined in accordance with the Table of Instalments, the commutation interest rate will be that associated with the more favorable amount. The payee for whose benefit an option is operative may designate (with the right to change such designation) a person or persons to receive any amount which would otherwise become payable to such payee's executors or administrators. Any election, change, revocation or designation shall be made, and will take effect, in the same manner as a change of beneficiary. If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the age of any person upon whose life the income depends. Instalments under Option 3 or 5 terminate with the last instalment due before the death of the person upon whose life the income depends or the end of the certain period, whichever is later. EVLICO will require satisfactory evidence of survival whenever a payment depends upon the survival of any person. If instalments or interest payments to any payee would amount to less than $25 each, EVLICO may change the interval of payment so that the payments will amount to at least $25 each. If the amount to be applied under an option with respect to a payee is less than $2,000, EVLICO may pay the amount to the payee in a single sum instead of applying it under the option. No sum payable under any option elected by the Owner for the benefit of a payee other than the Owner may be assigned or encumbered by such payee and, to the extent permitted by law, no such sum shall in any way be subject to any legal process to subject the same to the payment of any claim against such payee. If a withdrawal or commutation right under an option is exercised, EVLICO may defer payment for up to six months from the receipt of request. -------- V1-10 Page Ten Page Eleven ----------- TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT FOR EACH $1,000 OF PROCEEDS Instalment amounts for Options 3 and 5 are based on age nearest birthday on the due date of the first instalment. Option 5 instalment amounts for ages not shown, or for two males or two females, will be furnished on request.
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Number 10 20 10 20 of Years' Monthly Annual Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain Instal- Instal- Instal- ------------- ------------- -------------- ------------- ------------- -------------- ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1 $84.70 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $3.98 $3.62 2 43.08 508.60 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67 3 29.21 344.86 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72 4 22.28 263.04 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77 5 18.12 213.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82 6 15.36 181.32 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87 7 13.38 158.01 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93 8 11.91 140.56 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99 9 10.76 127.00 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05 10 9.84 116.18 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11 11 9.09 107.34 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18 12 8.47 99.98 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25 13 7.94 93.78 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33 14 7.49 88.47 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41 15 7.11 83.89 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49 16 6.77 79.89 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58 17 6.47 76.37 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67 18 6.20 73.25 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77 19 5.97 70.47 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88 20 5.76 67.98 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99 21 5.57 65.74 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10 22 5.40 63.70 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22 23 5.24 61.85 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35 24 5.10 60.17 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49 25 4.97 58.62 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64 26 4.84 57.20 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79 27 4.73 55.90 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96 28 4.63 54.69 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13 29 4.54 53.57 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32 30 4.45 52.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52
- -------------------------- 35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73 Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96 are 25.32% of 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21 the annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47 39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75 Semi-annual instalments 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05 are 50.43% of the 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39 instalments. 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12 44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Female Age Male ----------------------------------------------------------------------------------------------------------------------------- Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75 - ------------------------------------------------------------------------------------------------------------------------------------ 45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06 50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39 55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76 56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84 57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92 58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01 59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09 60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18 61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27 62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37 63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46 64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55 65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65 66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75 67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84 68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94 69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03 70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12 75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54 - ------------------------------------------------------------------------------------------------------------------------------------
----------- No. 79-01 Page Eleven ******************************************************************************** VARIABLE LIFE INSURANCE POLICY EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) LIMITED PAYMENT LIFE -- LEVEL FACE AMOUNT. Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Fixed Premiums Payable For Premium Period Shown on Page 3 or Until Earlier Death. Non-Participating. Investment Experience Reflected in Benefits. ******************************************************************************** No. 79-01 EX-99.1A5AIVPOLICY 7 POLICY 79-02-EVLICO VARIABLE LIFE INSURANCE POLICY THE INSURED RICHARD ROE JAN 0l, 1979 REGISTER DATE INITIAL FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER EQUITABLE VARIBLE LIFE INSURANCE COMPANY (EVLICO) HOME OFFICE: 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10019 ADMINISTRATIVE OFFICE: HUNTINGTON STATION, NEW YORK 11746 EVLICO agrees, subject to the provisions of this policy, to pay a Death Benefit (determined in accordance with the Death Benefit provision on page seven) to the beneficiary upon receipt of due proof of the death of the Insured and the surrender of this policy. As shown on page three, the face amount increases at the beginning of each policy year from the second to the fifteenth and is constant thereafter at 150% of the initial face amount. PROVIDED PREMIUMS ARE DULY PAID, DURING THE FIRST POLICY YEAR THE DEATH BENEFIT WILL EQUAL THE INITIAL FACE AMOUNT AND THEREAFTER MAY INCREASE OR DECREASE ON EACH ANNIVERSARY OF THE REGISTER DATE, DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN WHICH DEATH OCCURS. AS PROVIDED IN THE CASH VALUE PROVISION ON PAGE EIGHT, THE CASH VALUE UNDER THIS POLICY WILL VARY FROM DAY TO DAY AND MAY INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF SEPARATE ACCOUNT I. Premiums as shown on page three are fixed as to amount and will not vary with the investment experience of Separate Account I. NOTICE OF RIGHT TO EXAMINE POLICY. The Owner may examine this policy and at any time within 10 days after receipt of this policy, or within 45 days of completion of Part 1 of the Application, whichever is later, may return it with a written request for cancellation to the Administrative Office and obtain a full refund of the premium paid. The provisions on the following pages are part of this contract. PRESIDENT SECRETARY ASSISTANT REGISTRAR WHOLE LIFE -- INCREASING FACE AMOUNT. Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Face Amount Increases Annually to 150% of Initial Face Amount. Fixed Premiums Payable For Life. Non-Participating. Investment Experience Reflected in Benefits. No. 79-02 Page Two -------- GUIDE TO POLICY PROVISIONS PAGE Owner................................................... 2 Assignments............................................. 2 Beneficiary............................................. 2 Premiums................................................ 5 Grace................................................... 5 Loans................................................... 5 Reinstatement........................................... 5 Separate Account I...................................... 6 Separate Account Index.................................. 6 Actual and Base Net Rates of Return..................... 7 Death Benefit........................................... 7 Variable Adjustment Amount.............................. 7 Cash Value.............................................. 8 Options on Lapse........................................ 8 Exchange of Policy...................................... 8-9 General Provisions...................................... 9 Optional Modes of Settlement............................ 10-11 OWNER The Owner is the Insured unless otherwise specified in the application or endorsed on this policy by EVLICO. While the Insured is living, the Owner may exercise all rights and take any other action agreed to by EVLICO in connection with this policy (including changing the ownership). Exercise of the rights of ownership shall not require the concurrence of any person whose interest at the time of such exercise is that of a contingent or successor owner, or of any other person referred to in this policy. ASSIGNMENTS EVLICO assumes no responsibility for the validity of any assignment. No assignment of this policy will bind EVLICO or be deemed to be in force as to EVLICO unless in writing and until filed at EVLICO's Administrative Office. The Owner may assign this policy and all rights hereunder except the right to change the beneficiary and the right to make an election under the Optional Modes of Settlement provision. If an assignment of this policy as collateral security is on file with EVLICO, the Owner may change the beneficiary or make an election under the Optional Modes of Settlement provision, but the rights of the beneficiary shall be subordinate to those of the assignee. So long as an assignment remains in force, the rights of the Owner and of any other person referred to in this policy shall be subordinate to those of the assignee but shall not otherwise be affected by the assignment. EVLICO may pay to an assignee, in a single sum, any amount claimed by the assignee to be payable under the terms of the assignment. Any amount payable which is not claimed by the assignee shall be payable in accordance with the terms of the policy to the person or persons who would have been entitled to the amount then payable had there been no assignment outstanding. BENEFICIARY The beneficiary is as designated in the application unless changed. The Owner may change the beneficiary from time to time during the lifetime of the Insured, by written notice in a form satisfactory to EVLICO. The change will, upon recording at EVLICO's Administrative Office, take effect as of the time the written notice was signed, whether or not the Insured is living at the time of recording, but without further liability as to any payment or other settlement made by EVLICO before recording the change. Unless otherwise specified in the designation, if two or more persons are designated as beneficiary, the beneficiary will be the designated person or persons who survive the Insured, and if more than one survive, they will share equally. Any proceeds for which there is no designated beneficiary surviving at the death of the Insured will be payable in a single sum to the children of the Insured who survive the Insured, in equal shares, or should none survive, then to the Insured's executors or administrators. No. 79-02 -------- Page Two DATE OF ISSUE JAN 01, 1979 THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE INITIAL FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER BENEFICIARY MARGARET H ROE, WIFE 35M ISSUE AGE & SEX ************************** BENEFITS AND PREMIUMS TABLE ************************* BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $2,320.00 FOR LIFE THE FIRST PREMIUM IS $2,320.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY SUBSEQUENT PREMIUMS ARE DUE ON JAN 01, 1980 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. **************************** TABLE OF FACE AMOUNTS *****************************
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT 1 $100,000 6 $115,900 11 $134,400 2 $103,000 7 $119,400 12 $138,400 3 $106,100 8 $123,000 13 $142,600 4 $109,300 9 $126,700 14 $146,900 5 $112,600 10 $130,500 15 AND OVER $150,000
************************ TABLE OF NET ANNUAL PREMIUMS ************************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $1,259.00 2 - 4 2,045.00 5 AND LATER 2,145.00 V2-03 PAGE THREE THE INSURED RICHARD ROE JAN 01, 1979 REGISTER DATE INITIAL FACE AMOUNT $100,000 SPECIMEN POLICY NUMBER ISSUE DATE JAN 01, 1979 35M ISSUE AGE & SEX **************************** TABULAR CASH VALUES ******************************* THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE EIGHT FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $ 0 5 $146 9 $ 668 2 0 6 275 10 801 3 0 7 407 11 929 4 14 8 540 12 1062
TABULAR CASH VALUES AT ENDS OF POLICY YEARS* END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 1,062 9 $18,221 17 $38,251 2 2,959 10 20,622 18 40,884 3 4,912 11 23,062 19 43,546 4 6,917 12 25,534 20 46,235 5 9,077 13 28,033 AGE 60 59,960 6 11,290 14 30,548 AGE 62 65,499 7 13,552 15 33,081 AGE 65 73,755 8 15,864 16 35,650 AGE 70 86,944 * VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
V2-03A PAGE THREE-A Page Three-B ------------
TABLE OF NET SINGLE PREMIUMS (MALE) For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries. Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- 1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560 2 .09871 22 .17890 42 .33918 62 .58929 82 .82496 3 .10126 23 .18450 43 .34995 63 .60272 83 .83394 4 .10397 24 .19031 44 .36096 64 .61610 84 .84259 5 .10685 25 .19635 45 .37222 65 .62940 85 .85096 6 .10990 26 .20263 46 .38370 66 .64260 86 .85909 7 .11312 27 .20915 47 .39541 67 .65565 87 .86704 8 .11650 28 .21591 48 .40733 68 .66851 88 .87488 9 .12005 29 .22293 49 .41945 69 .68114 89 .88268 10 .12377 30 .23021 50 .43176 70 .69350 90 .89050 11 .12764 31 .23775 51 .44424 71 .70559 91 .89841 12 .13166 32 .24556 52 .45688 72 .71744 92 .90648 13 .13581 33 .25366 53 .46968 73 .72908 93 .91479 14 .14008 34 .26205 54 .48261 74 .74057 94 .92350 15 .14447 35 .27073 55 .49568 75 .75194 95 .93291 16 .14897 36 .27970 56 .50886 76 .76319 96 .94339 17 .15360 37 .28896 57 .52214 77 .77427 97 .95520 18 .15835 38 .29850 58 .53550 78 .78512 98 .96810 19 .16323 39 .30830 59 .54892 79 .79566 99 .98063 20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
------------ V2-03B(M) Page Three-B Page Four --------- --------- Page Four Page Five --------- PREMIUMS Premiums are payable for the premium period indicated on page three but no premium will fall due after the death of the Insured. The premium period is measured from the Register Date. If the end of the premium period is indicated by an age it extends to the policy anniversary nearest the birthday on which the Insured attains that age. Premiums are payable on or before their due dates at the Administrative Office or to an EVLICO premium collection office. A receipt, signed by a Vice President, the Secretary or the Treasurer, will be furnished upon request. Premiums are as shown on page three except that by written request premiums may be made payable at a different frequency allowed by EVLICO at its applicable rates. If the request is applicable to the first premium, it must be made on or before the payment of that premium and delivery of this policy. Requests made after the first premium has been paid are subject to the approval of EVLICO. A premium not paid on or before its due date will be in default, and its due date will be the date of default. Upon default this policy will lapse and the insurance will cease as of the date of default, except as stated in the Grace and Options on Lapse provisions. The proceeds payablee upon the death of the Insured while this policy is in force on a premium paying basis will be increased by the portion of the last premium due and paid which is applicable to any part of the then current premium interval extending after the end of the policy month in which death occurs. GRACE A grace period of 31 days will be granted for the payment of each premium after the first. The insurance will continue in force during the grace period but if the Insured dies during the grace period of a premium then due and unpaid, the portion of the premium due which is applicable to the period from the premium due date to the end of the policy month in which death occurs will be deducted from the proceeds. If a premium is paid during the grace period, then all benefits thereafter under the policy shall be the same as if such premium were paid on its due date. LOANS While this policy has a loan value, the Owner may obtain a loan from EVLICO upon assignment of the policy as sole security, if no premium is in default beyond the grace period or if this policy is being continued under Option (a) of the Options on Lapse provision. "Indebtedness" as used in this policy means a loan by EVLICO on the sole security of this policy together with accrued interest. The loan may not exceed the loan value, and EVLICO will deduct from the loan proceeds an amount necessary to repay any outstanding indebtedness. The loan value of this policy, if no premium is in default beyond the grace period, is an amount equal to 75% of the cash value determined in accordance with the Cash Value provision on page eight. The loan value, if the policy is continued under Option (a) of the Options on Lapse provision, is the amount which, accumulated with interest to the next policy anniversary, equals the cash value as of such anniversary determined in accordance with the Cash Value provision. Extended term insurance under Option (b) of the Options on Lapse provision has no loan value. A loan will have a permanent effect on the Variable Adjustment Amount, Death Benefit and cash value under this policy whether or not the indebtedness created thereby is repaid in whole or in part. The following will apply: 1. Except when used to pay premiums, a loan will not be permitted unless it is at least $100 more than the existing indebtedness. 2. Interest on a loan will accrue daily at the effective rate of 5% per year, will become part of the indebtedness as it accrues and will be compounded on policy anniversaries. 3. Whenever the indebtedness under this policy exceeds the cash value, EVLICO will mail to the Owner and any assignee of record at their last known addresses a notice that the policy will terminate if the excess indebtedness is not repaid within 31 days after the date of mailing of such notice. 4. Any indebtedness may be repaid, in whole or in part, while the Insured is living and the policy is in force, except that if the policy is being continued under one of the options on lapse, any indebtedness which was deducted in determining the benefit on lapse may not be repaid unless the policy is reinstated. Indebtedness will be deducted in a single sum in any settlement. REINSTATEMENT If premiums are in default and if this policy has not been terminated by payment of its cash value, it may be reinstated within five years from the date of default upon production of evidence of insurability satisfactory to EVLICO and the payment of the larger of (a) all overdue premiums with interest at 6% compounded annually and (b) 110% of the difference between (i) and (ii), where (i) is the excess of the cash value immediately following reinstatement over the cash value immediately preceding reinstatement, and (ii) is any indebtedness in effect at the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement. Upon reinstatement this policy will have the same benefit base and the same Variable Adjustment Amount (as these are determined in the Variable Adjustment Amount provision on page seven) as if default had not occurred. Also upon reinstatement this policy will have indebtedness equal to the sum of (i) and (ii), where (i) is any indebtedness in effect at the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement, and (ii) is any indebtedness arising subsequent to the date any option on lapse became effective, with interest at 5% compounded annually to the date of reinstatement. --------- V2-05 Page Five Page Six -------- SEPARATE ACCOUNT I Separate Account I is an account established and maintained by EVLICO pursuant to the laws of the State of New York under which income, gains and losses, whether or not realized, from assets allocated to such account, are credited to or charged against such account without regard to other income, gains, or losses of EVLICO. Assets will be allocated to Separate Account I to support the operation of this policy and certain other variable life insurance policies. Assets may also be allocated to Separate Account I for other purposes, but not to support the operation of any contracts or policies other than variable life insurance. It is contemplated that investments in Separate Account I will, at most times, consist primarily of common stocks and other equity-type investments. However, EVLICO may, in its discretion, invest the assets of Separate Account I in any investments permitted by applicable law. EVLICO may rely conclusively on the opinion of counsel (including attorneys in its employ) as to what investments it is permitted by law to make. In lieu of making such investments directly, to the extent permitted by applicable laws and regulations EVLICO reserves the right to operate Separate Account I as a unit investment trust, or other form, investing all or part of its assets in shares or units of a fund, the investment adviser of which would be EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States. The assets of such a fund would be invested as provided herein with respect to Separate Account I. The assets of Separate Account I are the property of EVLICO. However, the portion of the assets of Separate Account I equal to the reserves and other policy liabilities with respect to Separate Account I will not be chargeable with liabilities arising out of any other business EVLICO may conduct. EVLICO reserves the right to transfer assets of Separate Account I in excess of such reserves and policy liabilities to the general account of EVLICO. The assets of Separate Account I shall be valued on each business day. EVLICO reserves the right to withdraw from Separate Account I and allocate to another separate account assets determined by EVLICO to be associated with the class of policies to which this policy belongs. In any such event, to the extent practicable and permissible under applicable laws and regulations, the withdrawal shall be made by withdrawing the same percentage of each investment in Separate Account I, with appropriate adjustments to avoid odd lots and fractions. On and after the date of such withdrawal the term "Separate Account I" in this policy shall mean such other separate account to which the withdrawn assets were allocated. EVLICO reserves the right to the extent permitted by applicable laws and regulations (including any order of the Securities and Exchange Commission): (a) to cause the registration or deregistration of Separate Account I under the Investment Company Act of 1940; (b) to operate Separate Account I under the general supervision of a Committee any or all of the members of which may, but need not, be interested persons of EVLICO, an affiliate, or The Equitable Life Assurance Society of the United States, or to discharge such Committee at any time; or (c) to eliminate or restrict any voting rights of policyholders or other persons having such voting rights in respect of Separate Account I. CHANGES IN INVESTMENT ADVISER OR INVESTMENT POLICY OF SEPARATE ACCOUNT I. Unless otherwise required by applicable law, the investment adviser or any investment policy of Separate Account I may not be changed without the consent of EVLICO. If required by applicable laws and regulations, the investment policy of Separate Account I will not be changed unless approved by the Superintendent of Insurance of the State of New York or deemed approved in accordance with such laws and regulations. If so required, the process for obtaining such approval will be filed with the insurance supervisory official of the state in which this policy is delivered. SEPARATE ACCOUNT INDEX The Separate Account Index for the valuation period which included the first day on which there were assets in Separate Account I was 100. The Separate Account Index for each subsequent valuation period is the Separate Account Index for the immediately preceding valuation period multiplied by the Net Investment Factor for such subsequent valuation period. The Separate Account Index for a valuation period applies to each day in that period. VALUATION PERIOD. Each business day together with any non-business day or consecutive non-business days immediately preceding such business day will constitute a valuation period. A business day is any day on which the New York Stock Exchange is open for trading. NET INVESTMENT FACTOR. The Net Investment Factor for a valuation period is (a) divided by (b), minus (c), where (a) is (1) the value of the assets in Separate Account I at the close of business of the preceding valuation period, plus (2) the investment income and the capital gains, realized or unrealized, credited to the assets of Separate Account I in the valuation period for which the Net Investment Factor is being determined, minus (3) the capital losses, realized or unrealized, charged against such assets in such valuation period, minus (4) any amount charged against Separate Account I in such valuation period for taxes or for amounts set aside by EVLICO as a reserve for taxes attributable to the maintenance or operation of Separate Account I; (b) is the value of the assets in Separate Account I at the close of business of the preceding valuation period; and (c) is a charge not exceeding .00002063 for each day in the valuation period, corresponding to the sum of (i) a charge not exceeding .25% per year for investment management expense, and (ii) a charge not exceeding .50% per year for mortality and expense risks and other contingencies. The value of the assets in Separate Account I shall be taken at their fair market value or, where there is no readily available market, their fair value determined in accordance with accepted accounting practices and applicable laws and regulations. -------- V2-06 Page Six Page Seven ---------- ACTUAL AND BASE NET RATES OF RETURN ACTUAL NET RATE OF RETURN. The Actual Net Rate of Return for a policy year is equal to the change in the Separate Account Index from the first day of such policy year to the first day of the next policy year, divided by the Separate Account Index for the first day of such policy year. The Actual Net Rate of Return for a policy year is negative if the Separate Account Index decreased over the year. The Actual Net Rate of Return for a period less than a year is determined on a corresponding basis. BASE NET RATE OF RETURN. The Base Net Rate of Return for this policy is .04 (4%) per year. (For a period less than a year, it is a pro-rata part of the annual rate.) Provided premiums are duly paid, if the Actual Net Rate of Return for each policy year equals the Base Net Rate of Return, the Death Benefit in each policy year will equal the face amount for that policy year and the cash value at the end of each policy year will equal the tabular cash value as shown on page three-A. "The difference between the Actual and Base Net Rates of Return" as used in this policy is positive if the Actual Net Rate of Return is greater than the Base Net Rate of Return, and is negative if the Actual Net Rate of Return is less than the Base Net Rate of Return. DEATH BENEFIT A. PROVIDED PREMIUMS ARE DULY PAID, the Death Benefit shall equal the face amount plus the Variable Adjustment Amount for the policy year in which death occurs; except that if the Variable Adjustment Amount is negative, the Death Benefit shall equal the face amount. In no event, however, will the net insurance benefit as of the date of death be less than the net cash value on such date divided by the net single premium on such date for $1.00 of paid up whole life insurance. For this purpose, the "net insurance benefit" will equal the Death Benefit otherwise determined, decreased by any indebtedness and increased by any pro-rata portion of premiums returned on death, all determined as of the date of death. B. UPON DEFAULT IN PAYMENT OF A PREMIUM, the Death Benefit shall be as provided in the Grace and Options on Lapse provisions. VARIABLE ADJUSTMENT AMOUNT Provided premiums are duly paid, EVLICO will determine on each policy anniversary the Variable Adjustment Amount for the policy year beginning on that policy anniversary to take into account the investment experience of Separate Account I for the preceding policy year. The Variable Adjustment Amount is zero during the first policy year, and thereafter it may be positive or neqative. As long as premiums are duly paid, the Variable Adjustment Amount remains at a constant amount during a policy year. The Variable Adjustment Amount during the policy year will equal the sum of the VAA Change Amount determined on the policy anniversary at the beginning of such policy year and the Variable Adjustment Amount for the preceding policy year. A. IF DURING THE PRECEDING POLICY YEAR NO LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will be positive or negative depending on whether the Actual Net Rate of Return for the preceding policy year is greater or less than the Base Net Rate of Return, and will equal the product of (a) and (b), divided by (c), where (a) is the difference between such Actual and Base Net Rates of Return; (b) is the benefit base defined below; and (c) is the net single premium on the current policy anniversary for $1.00 of Variable Adjustment Amount. In determining the VAA Change Amount on the first policy anniversary the benefit base will be the net annual premium applicable at the beginning of the first policy year. In determining the VAA Change Amount on a policy anniversary after the first the benefit base will be the sum of (a) the tabular cash value on the previous policy anniversary, (b) the net single premium for the Variable Adjustment Amount on the previous anniversary, and (c) the net annual premium for such previous policy anniversary, less the indebtedness, if any, as of such previous policy anniversary. The net annual premium is determined from the table on page three and the tabular cash value from the table on page three-A. The net single premium for the Variable Adjustment Amount is determined from the table on page three-B. If the Variable Adjustment Amount is negative, the net single premium for it is negative. B. IF DURING THE PRECEDING POLICY YEAR A LOAN HAS BEEN MADE OR INDEBTEDNESS REPAID, then the VAA Change Amount on a policy anniversary will equal the VAA Change Amount as calculated in Section A above, plus the Repayment Adjustment Amounts on such policy anniversary, if any, less the Loan Adjustment Amounts on such policy anniversary, if any. The Repayment Adjustment Amount and Loan Adjustment Amount are defined as follows: (i) For each such repayment, the Repayment Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the repayment to the policy anniversary following such repayment; (b) is the amount of the repayment; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. (ii) For each such loan, the Loan Adjustment Amount on a policy anniversary will equal the product of (a) and (b), divided by (c), where (a) is the difference between the Actual and Base Net Rates of Return for the period from the date of the loan to the policy anniversary following such loan; (b) is the amount of the loan; and (c) is the net single premium on such policy anniversary for $1.00 of Variable Adjustment Amount. ---------- V2-07 Page Seven Page Eight ---------- CASH VALUE The Owner may surrender this policy for its net cash value at any time. The net cash value is the cash value as defined below less any indebtedness, and will be determined as of the date the signed request for surrender is received by EVLICO at its Administrative Office. Surrender will take effect as of the date the policy and request are transmitted to EVLICO. The cash value is defined as follows: A. If no premium is in default, the cash value on any date DURING THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the Register Date to such date and (ii) is the net annual premium applicable at the beginning of the first policy year. B. If no premium is in default, the cash value on any date AFTER THE FIRST POLICY YEAR is equal to the sum of (1) the tabular cash value on such date and (2) the net single premium on such date for the Variable Adjustment Amount, and (3) if such date is not a policy anniversary, the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period from the last policy anniversary to such date and (ii) is the benefit base on the previous policy anniversary (as determined in the Variable Adjustment Amount provision). C. If a premium is in default, then within three months after the date of default, the cash value is equal to the sum of (1) the cash value as of the date to which premiums have been paid, and (2) the product of (i) and (ii), where (i) is the difference between the Actual and Base Net Rates of Return for the period of default and (ii) is the cash value as of the date to which premiums have been paid less the indebtedness, if any, as of the date to which premiums have been paid. Account will be taken of any loans or repayment of indebtedness in calculating the cash value in paragraphs A., B. and C. above. D. More than three months after the date of default, if this policy is continued under Option (b) or Option (c) of the Options on Lapse provision, the cash value on any date is equal to the reserve for the policy as of such date, provided that the cash value within 30 days after a policy anniversary will not be less than on that anniversary. TABULAR CASH VALUE DURING FIRST POLICY YEAR. The tabular cash value during the first policy year will be determined by EVLICO based on the first year interim tabular cash value, with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. First year interim tabular cash values are determined in accordance with the table on page three-A which shows values at the ends of policy months assuming premiums have been duly paid to the end of such policy months. TABULAR CASH VALUE AFTER THE FIRST POLICY YEAR. The tabular cash value after the first policy year is determined in accordance with the table on page three-A which shows values applicable at the ends of policy years, provided premiums are duly paid. Values not shown will be furnished on request. Where an age is shown, the values are those applicable at the end of the policy year nearest the birthday on which the Insured attains such age. The tabular cash value during a policy year will be determined by EVLICO with allowance for the time elapsed and for any portion of the year for which premiums due have been paid. OPTIONS ON LAPSE Upon default in the payment of a premium while this policy has a net cash value, the Owner may elect by written notice to continue insurance on the Insured under one of the following options if he does not elect to surrender the policy for its net cash value. OPTION (a). REDUCED PAID-UP FIXED BENEFIT LIFE INSURANCE for a fixed amount of insurance equal to the net cash value as of the date the option becomes effective divided by the net single premium on the date of default for $1.00 of paid-up whole life insurance. OPTION (b). EXTENDED FIXED BENEFIT TERM INSURANCE for a fixed amount of insurance equal to the Death Benefit less any indebtedness as of the date the option becomes effective (determined as if default had not occurred) and for the period from the date of default which the net cash value as of the date the option becomes effective will purchase as a net single premium at the Insured's current age on the date of default. SEE PAGE THREE FOR ANY RESTRICTIONS UNDER THIS POLICY AS TO AVAILABILITY OF OPTION (b). The following will apply: 1. The election of an option made within three months after the date of default will become effective on the date written notice is received by EVLICO at its Administrative Office. 2. If an option has not been elected within three months after the date of default, Option (b) will take effect automatically at the end of such three month period. 3. Option (a) will replace Option (b) if Option (b) is not available under this policy or if Option (a) provides an equal or greater amount of insurance at the date the option becomes effective. 4. If the Insured dies after the grace period but within three months from the date of default, and if the policy has not been surrendered for its net cash value, Option (b) will apply notwithstanding any restrictions stated on page three as to the availability of Option (b) under this policy, provided that the net cash value as of the date of death (determined as if death had not occurred) will purchase extended term insurance for a period from the date of default to at least the date of death. In that event, any election of Option (a) will be automatically cancelled. EXCHANGE OF POLICY Within 18 months after the Date of Issue shown on page three, provided premiums are duly paid, the Owner may exchange this policy, without evidence of insurability, for a policy of permanent fixed benefit life insurance (as described below) on the life of the Insured. The exchange will take effect as of the date this policy and the signed request on EVLICO's form for such ---------- V2-08 Page Eight Page Nine --------- exchange are transmitted to EVLICO, or as of the date any amounts required to be paid for such exchange by the Owner are received by EVLICO at its Administrative Office, whichever is later. The new policy will be the form of policy being offered by The Equitable Assurance Society of the United States (Equitable) on the Date of Issue of this policy, known as the "Executive Policy." The new policy will have a face amount of life insurance equal to the initial face amount of this policy and will have the same Register Date, Date of Issue and Issue Age as shown on page three of this policy. Premiums for the new policy will be based on Equitable's premium rates for such policy in effect at such Register Date for the same classification of risk as under this policy. The exchange will be subject to a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the state in which this policy is delivered. Any indebtedness under this policy must be repaid on the date of the exchange. Any additional benefit provisions included under this policy will be included with the new policy only to the extent that such provisions were being offered with the new policy on the Date of Issue. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. All statements made in the application shall be deemed representations and not warranties. No statement shall avoid this policy or be used in defense of a claim unless contained in the application. This policy may not be modified, nor may any of the rights or requirements of EVLICO be waived, except in writing signed by the President, a Vice President, the Secretary or the Treasurer of EVLICO. All sums payable by EVLICO under this policy are payable at its Administrative Office. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, and policy anniversaries are measured from the Register Date shown on page three. Each policy month begins on the same day in each calendar month as that specified in the Register Date. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be such as the premium paid would have purchased at the correct age and sex. SUICIDE. In the event of the suicide of the Insured, sane or insane, within two years from the Date of Issue shown on page three, the liability of EVLICO will be limited to the payment to the beneficiary of a single sum equal to the premiums paid less any indebtedness. INCONTESTABILITY. Except as to any disability provision, this policy will be incontestable, except for non-payment of premiums, after it has been in force during the lifetime of the Insured for two years from the Date of Issue shown on page three. POLICY CHANGES. The Owner, with the consent of EVLICO, may change this policy to another form, kind or plan of insurance or make any other change permitted by EVLICO. REPORTS TO OWNER. Except while this policy is continued under the Options on Lapse provision, a statement will be sent to the Owner setting forth the Death Benefit and the cash value as of the first day of such year and, if there is existing indebtedness, the amount of such indebtedness as of the first day of such year and the accrued interest for the previous policy year. Other reports will be furnished to the Owner as required by law. BASIS OF COMPUTATION. All cash values, reserves and net single premiums referred to in this policy are based on the Commissioners 1958 Standard Ordinary Mortality Table, except that for any extended term insurance they are based on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used and interest is assumed at a rate of 4% compounded annually. The cash values and paid-up insurance benefits are equal to or greater than those required by the state in which this policy is delivered. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of that state. Tabular cash values at the end of each policy year are equal to reserves, which are not less than reserves determined according to the Commissioners Reserve Valuation Method. Expense and mortality results of EVLICO shall not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. If no premium is in default more than three months, then, except as provided below, EVLICO will (1) make payment of the cash value within seven days after receipt by EVLICO at its Administrative Office of the policy and a signed request for its surrender: (2) make payment of any loan within seven days after receipt by EVLICO at its Administrative Office of a request for loan: and (3) subject to the provisions of this policy, make payment of the Death Benefit within seven days after receipt by EVLICO at its Administrative Office of this policy, due proof of the death of the Insured, and all other requirements deemed necessary before such payment may be made. During any period when (i) the sale of securities or the determination of the Separate Account Index is not reasonably practicable because the New York Stock Exchange is closed or conditions are such that, under rules and regulations adopted by the Securities and Exchange Commission, trading is deemed to be restricted or an emergency is deemed to exist, or (ii) the Commission by order permits postponement for the protection of EVLICO policyholders, EVLICO reserves the right: (a) to defer determination of cash values and payment of the cash value; (b) to defer payment of a loan; (c) to defer determination of a change in Variable Adjustment Amount and, if such determination has been deferred, to defer payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; and (d) if payment of all or part of the Death Benefit is deferred, to defer application of the Death Benefit under the Optional Modes of Settlement provision. DEFERMENT UNDER OPTION (a) OR OPTION (b) OF THE OPTIONS ON LAPSE PROVISION. The payment of the cash value under Option (a) or Option (b) of the Options on Lapse provision and the making of a loan under Option (a) may be deferred by EVLICO for up to six months after the receipt of request. Interest at the rate of 3% per year will be allowed on such cash payment deferred for 30 days or more. --------- V2-09 Page Nine Page Ten -------- OPTIONAL MODES OF SETTLEMENT A. ELECTIONS In lieu of payment in one sum, an election may be made to apply the whole or any part of the proceeds under the following options. An election for the benefit of a payee who is not a natural person or who is acting in a fiduciary capacity, or which includes more than one of the options, may be made only with the approval of EVLICO. ELECTION AS TO DEATH BENEFIT. During the lifetime of the Insured, the Owner may make an election for the benefit of the beneficiary and may change or revoke a previous election. A change of beneficiary revokes any previous election. An election in effect at the death of the Insured may not be changed or revoked by an election made after the death of the Insured. If no election is effective at the death of the Insured, the beneficiary may then make an election for his own benefit, or in the case of Option 5, for the benefit of two persons, one of whom must be the beneficiary. ELECTION AS TO CASH VALUE. Upon surrender of this policy for its net cash value, the Owner may make an election for the benefit of the Owner or the Insured, or in the case of Option 5 for the benefit of two persons, one of whom must be the Owner or the Insured. B. OPTIONS 1. DEPOSIT OPTION: Left on deposit with EVLICO with interest payable at a rate of 3% per year. The deposit period and withdrawal rights and rights to change to another option will be as approved by EVLICO at the time of election. 2. INSTALMENT OPTION, FIXED PERIOD: Payable in equal instalments for the number of years elected (not more than 30) in an amount determined by the Table of Instalments. Rights of commutation of unpaid instalments (based on interest of 3-1/2% per year compounded annually) will be as approved by EVLICO at the time of election. 3. LIFE INCOME OPTIONS: A. 10 or 20 Years Certain. Payable in instalments for the certain period elected, and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. B. Refund Certain. Payable in instalments until the total amount paid equals the proceeds applied under this option and continuing thereafter for the remaining lifetime of the person upon whose life the income depends. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly Instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. 4. INSTALMENT OPTION, FIXED AMOUNT: Payable in instalments until the proceeds applied, together with interest on the unpaid balance at the effective rate of 3-1/2% per year, are exhausted. Amounts of instalments and withdrawal rights will be as approved by EVLICO at the time of election. 5. JOINT AND SURVIVOR OPTION, 10 YEARS CERTAIN: Payable in instalments for ten years, and continuing thereafter while either of two persons upon whose lives the income depends is surviving. The amount of each instalment will be determined by EVLICO at the time of payment of the first instalment but will not be less per $1,000 of proceeds than the Minimum Monthly Instalment shown in the Table of Instalments. Instalments shall be without the right of commutation. C. GENERAL PROVISIONS Interest under Option 1 and instalments under Options 2 and 4 will be paid annually, semi-annually, quarterly or monthly, in accordance with the election. Instalments under Options 3 and 5 will be paid monthly. Deposit years under Option 1 and instalment years under the other options are measured from the date the option becomes operative, and the first instalment under the other options will be due on such date. Excess interest may be allowed under Options 1, 2 and 4 as determined annually by EVLICO. Any such excess interest will be applied to increase the payments under Option 1, the payment at the end of each instalment year under Option 2, and the unpaid balance at the end of each instalment year under Option 4. If at the death of any payee there is no designated person living entitled to receive any remaining payments, EVLICO will pay in a single sum to such payee's executors or administrators: (a) any balance left with EVLICO under Option 1 or 4, or (b) the commuted value of any remaining instalments under Option 2 on the basis of compound interest of 3-1/2% per year, or Option 3 or 5 on the basis of compound interest of 3% per year, except that if the amount of instalments under Option 3 or 5 is greater than the amount determined in accordance with the Table of Instalments, the commutation interest rate will be that associated with the more favorable amount. The payee for whose benefit an option is operative may designate (with the right to change such designation) a person or persons to receive any amount which would otherwise become payable to such payee's executors or administrators. Any election, change, revocation or designation shall be made, and will take effect, in the same manner as a change of beneficiary. If Option 3 or 5 is elected, EVLICO will require satisfactory evidence of the age of any person upon whose life the income depends. Instalments under Option 3 or 5 terminate with the last instalment due before the death of the person upon whose life the income depends or the end of the certain period, whichever is later. EVLICO will require satisfactory evidence of survival whenever a payment depends upon the survival of any person. If instalments or interest payments to any payee would amount to less than $25 each, EVLICO may change the interval of payment so that the payments will amount to at least $25 each. If the amount to be applied under an option with respect to a payee is less than $2,000, EVLICO may pay the amount to the payee in a single sum instead of applying it under the option. No sum payable under any option elected by the Owner for the benefit of a payee other than the Owner may be assigned or encumbered by such payee and, to the extent permitted by law, no such sum shall in any way be subject to any legal process to subject the same to the payment of any claim against such payee. If a withdrawal or commutation right under an option is exercised, EVLICO may defer payment for up to six months from the receipt of request. ---------- V2-10 Page Ten
Page Eleven ----------- TABLE OF INSTALMENTS UNDER OPTIONAL MODES OF SETTLEMENT FOR EACH $1,000 OF PROCEEDS Instalment amounts for Options 3 and 5 are based on age nearest birthday on the due date of the first instalment. Option 5 instal- ment amounts for ages not shown, or for two males or two females, will be furnished on request. - ------------------------------------------------------------------------------------------------------------------------------------ OPTION 2 OPTION 3 -- LIFE INCOME (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Number 10 20 10 20 of Years' Monthly Annual Years Certain Years Certain Refund Certain Years Certain Years Certain Refund Certain Instal- Instal- Instal- -------------- ------------- -------------- ------------- ------------- -------------- ments ment ment AGE Male Female Male Female Male Female AGE Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ 1 $84.70 $1000.00 5 & under $2.86 $2.76 $2.85 $2.76 $2.85 $2.76 45 $4.13 $3.69 $3.99 $3.65 $3.98 $3.62 2 43.08 508.60 6 2.87 2.77 2.86 2.77 2.86 2.77 46 4.20 3.74 4.05 3.69 4.03 3.67 3 29.21 344.86 7 2.88 2.78 2.88 2.78 2.87 2.78 47 4.27 3.79 4.10 3.74 4.09 3.72 4 22.28 263.04 8 2.90 2.79 2.89 2.79 2.88 2.79 48 4.34 3.84 4.15 3.78 4.15 3.77 5 18.12 213.99 9 2.91 2.81 2.90 2.80 2.90 2.80 49 4.42 3.90 4.21 3.84 4.22 3.82 6 15.36 181.32 10 2.92 2.82 2.92 2.81 2.91 2.81 50 4.50 3.96 4.27 3.89 4.28 3.87 7 13.38 158.01 11 2.94 2.83 2.93 2.83 2.93 2.82 51 4.58 4.02 4.32 3.94 4.35 3.93 8 11.91 140.56 12 2.96 2.84 2.95 2.84 2.94 2.83 52 4.67 4.09 4.38 4.00 4.42 3.99 9 10.76 127.00 13 2.97 2.85 2.97 2.85 2.96 2.85 53 4.75 4.16 4.44 4.06 4.50 4.05 10 9.84 116.18 14 2.99 2.87 2.98 2.86 2.98 2.86 54 4.85 4.24 4.50 4.12 4.58 4.11 11 9.09 107.34 15 3.01 2.88 3.00 2.88 2.99 2.87 55 4.94 4.32 4.56 4.18 4.66 4.18 12 8.47 99.98 16 3.03 2.89 3.02 2.89 3.01 2.89 56 5.04 4.40 4.62 4.24 4.74 4.25 13 7.94 93.78 17 3.05 2.91 3.04 2.91 3.03 2.90 57 5.15 4.49 4.68 4.31 4.83 4.33 14 7.49 88.47 18 3.07 2.92 3.06 2.92 3.05 2.91 58 5.26 4.58 4.74 4.38 4.93 4.41 15 7.11 83.89 19 3.09 2.94 3.08 2.94 3.07 2.93 59 5.37 4.68 4.81 4.45 5.03 4.49 16 6.77 79.89 20 3.11 2.96 3.10 2.95 3.09 2.95 60 5.49 4.78 4.86 4.52 5.13 4.58 17 6.47 76.37 21 3.13 2.97 3.12 2.97 3.11 2.96 61 5.62 4.89 4.92 4.59 5.24 4.67 18 6.20 73.25 22 3.16 2.99 3.15 2.99 3.13 2.98 62 5.75 5.00 4.98 4.66 5.35 4.77 19 5.97 70.47 23 3.18 3.01 3.17 3.00 3.16 3.00 63 5.88 5.12 5.04 4.73 5.48 4.88 20 5.76 67.98 24 3.21 3.03 3.19 3.02 3.18 3.01 64 6.03 5.25 5.09 4.80 5.60 4.99 21 5.57 65.74 25 3.23 3.05 3.22 3.04 3.21 3.03 65 6.17 5.39 5.14 4.88 5.74 5.10 22 5.40 63.70 26 3.26 3.07 3.25 3.06 3.23 3.05 66 6.32 5.53 5.19 4.95 5.88 5.22 23 5.24 61.85 27 3.29 3.09 3.28 3.08 3.26 3.07 67 6.48 5.68 5.24 5.01 6.03 5.35 24 5.10 60.17 28 3.32 3.11 3.30 3.11 3.29 3.09 68 6.64 5.83 5.28 5.08 6.18 5.49 25 4.97 58.62 29 3.36 3.14 3.34 3.13 3.32 3.12 69 6.80 6.00 5.32 5.14 6.35 5.64 26 4.84 57.20 30 3.39 3.16 3.37 3.15 3.35 3.14 70 6.97 6.17 5.35 5.20 6.53 5.79 27 4.73 55.90 31 3.42 3.19 3.40 3.18 3.38 3.16 71 7.15 6.34 5.38 5.26 6.71 5.96 28 4.63 54.69 32 3.46 3.21 3.43 3.20 3.41 3.19 72 7.32 6.53 5.41 5.30 6.91 6.13 29 4.54 53.57 33 3.50 3.24 3.47 3.23 3.44 3.21 73 7.50 6.72 5.43 5.35 7.12 6.32 30 4.45 52.53 34 3.54 3.27 3.50 3.26 3.48 3.24 74 7.67 6.92 5.45 5.38 7.34 6.52 - ---------------------------- 35 3.58 3.30 3.54 3.28 3.52 3.27 75 7.85 7.12 5.47 5.42 7.58 6.73 Quarterly instalments 36 3.63 3.33 3.58 3.31 3.55 3.30 76 8.02 7.32 5.48 5.44 7.82 6.96 are 25.32% of the 37 3.67 3.37 3.62 3.35 3.59 3.33 77 8.19 7.53 5.49 5.46 8.09 7.21 annual instalments. 38 3.72 3.40 3.66 3.38 3.64 3.36 78 8.36 7.75 5.50 5.48 8.38 7.47 39 3.77 3.44 3.71 3.41 3.68 3.39 79 8.52 7.96 5.50 5.49 8.67 7.75 Semi-annual 40 3.83 3.47 3.75 3.45 3.72 3.43 80 8.67 8.16 5.51 5.50 9.00 8.05 instalments are 41 3.88 3.51 3.80 3.48 3.77 3.46 81 8.81 8.36 5.51 5.51 9.34 8.39 50.43% of the annual 42 3.94 3.55 3.84 3.52 3.82 3.50 82 8.94 8.55 5.51 5.51 9.70 8.73 instalments. 43 4.00 3.60 3.89 3.56 3.87 3.54 83 9.06 8.73 5.51 5.51 10.10 9.12 44 4.06 3.64 3.94 3.60 3.92 3.58 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
- ------------------------------------------------------------------------------------------------------------------------------------ OPTION 5 -- JOINT AND SURVIVOR, 10 YEARS CERTAIN (Minimum Monthly Instalment) - ------------------------------------------------------------------------------------------------------------------------------------ Female Age Male ----------------------------------------------------------------------------------------------------------------------------- Age 45 50 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 75 - ------------------------------------------------------------------------------------------------------------------------------------ 45 $3.47 $3.60 $3.72 $3.75 $3.77 $3.79 $3.81 $3.84 $3.86 $3.88 $3.90 $3.91 $3.93 $3.95 $3.97 $3.98 $4.00 $4.01 $4.06 50 3.53 3.70 3.86 3.90 3.93 3.96 4.00 4.03 4.06 4.09 4.12 4.15 4.17 4.20 4.23 4.25 4.27 4.29 4.39 55 3.58 3.78 3.99 4.04 4.08 4.12 4.17 4.21 4.26 4.30 4.34 4.38 4.43 4.47 4.50 4.54 4.58 4.61 4.76 56 3.59 3.79 4.01 4.06 4.11 4.15 4.20 4.25 4.29 4.34 4.39 4.43 4.48 4.52 4.56 4.60 4.64 4.68 4.84 57 3.60 3.80 4.04 4.08 4.13 4.18 4.23 4.28 4.33 4.38 4.43 4.48 4.53 4.57 4.62 4.66 4.70 4.75 4.92 58 3.60 3.82 4.06 4.11 4.16 4.21 4.26 4.32 4.37 4.42 4.47 4.53 4.58 4.63 4.68 4.72 4.77 4.81 5.01 59 3.61 3.83 4.08 4.13 4.18 4.24 4.29 4.35 4.40 4.46 4.52 4.57 4.63 4.68 4.73 4.78 4.83 4.88 5.09 60 3.62 3.84 4.10 4.15 4.21 4.26 4.32 4.38 4.44 4.50 4.56 4.62 4.67 4.73 4.79 4.84 4.90 4.95 5.18 61 3.62 3.85 4.11 4.17 4.23 4.29 4.35 4.41 4.47 4.54 4.60 4.66 4.72 4.78 4.85 4.91 4.96 5.02 5.27 62 3.63 3.86 4.13 4.19 4.25 4.31 4.38 4.44 4.51 4.57 4.64 4.70 4.77 4.84 4.90 4.97 5.03 5.09 5.37 63 3.64 3.87 4.15 4.21 4.27 4.34 4.40 4.47 4.54 4.61 4.68 4.75 4.82 4.89 4.96 5.02 5.09 5.16 5.46 64 3.64 3.88 4.16 4.23 4.29 4.36 4.43 4.50 4.57 4.64 4.71 4.79 4.86 4.93 5.01 5.08 5.16 5.23 5.55 65 3.65 3.89 4.18 4.24 4.31 4.38 4.45 4.52 4.60 4.67 4.75 4.83 4.90 4.98 5.06 5.14 5.22 5.29 5.65 66 3.65 3.89 4.19 4.26 4.33 4.40 4.47 4.55 4.62 4.70 4.78 4.86 4.95 5.03 5.11 5.20 5.28 5.36 5.75 67 3.65 3.90 4.20 4.27 4.34 4.42 4.49 4.57 4.65 4.73 4.81 4.90 4.99 5.07 5.16 5.25 5.34 5.43 5.84 68 3.66 3.91 4.22 4.29 4.36 4.43 4.51 4.59 4.67 4.76 4.84 4.93 5.02 5.12 5.21 5.30 5.40 5.49 5.94 69 3.66 3.91 4.23 4.30 4.37 4.45 4.53 4.61 4.70 4.78 4.87 4.97 5.06 5.16 5.25 5.35 5.45 5.55 6.03 70 3.66 3.92 4.24 4.31 4.38 4.46 4.54 4.63 4.72 4.81 4.90 5.00 5.09 5.19 5.30 5.40 5.50 5.61 6.12 75 3.68 3.94 4.28 4.35 4.43 4.52 4.61 4.70 4.80 4.90 5.01 5.12 5.23 5.35 5.47 5.60 5.73 5.86 6.54 - ------------------------------------------------------------------------------------------------------------------------------------
----------- No. 79-02 Page Eleven ******************************************************************************** VARIABLE LIFE INSURANCE POLICY EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) WHOLE LIFE -- INCREASING FACE AMOUNT. Variable Insurance Payable In Event of Death. Guaranteed Minimum Death Benefit If Premiums Duly Paid. Face Amount Increases Annually to 150% of Initial Face Amount. Fixed Premiums Payable For Life. Non-Participating. Investment Experience Reflected in Benefits. ******************************************************************************** No. 79-02 EX-99.1A5AVPOLICY 8 POLICY 81-01-EVLICO THE INSURED RICHARD ROE VARIABLE POLICY OWNER RICHARD ROE LIFE INSURANCE FACE AMOUNT $100,000 POLICY POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. Premiums are shown on page 3 and are fixed as to amount. They will not vary with separate account investment experience. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN Secretary SPECIMEN President Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for Premium Period shown on page 3 or until earlier death. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No.81-01 [EVLICO LOGO] 1285 Avenue of the Americas, New York, NY 10019 Contents Insurance benefits 2 Policy owner and beneficiary 4 Premiums, grace, lapse, reinstatement 4 Death Benefit 5 Cash Value 5 Loans 5 The Separate Accounts 6 Investment Options, allocations, transfers 6 Options on Lapse 7 Exchange of Policy 7 General Provisions 8 Payment Options 9 Basis of Values 11 (Net rates of return, variable adjustment amount, benefit base, calculation of cash values) Any additional benefit riders and a copy of the application are included in this policy after page 12. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send premiums and requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the Insured's death include: o the Death Benefit described on page 5; o plus any additional benefits due from riders to this policy; o plus or minus any adjustment for the last premium; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 9. We will pay these benefits only if premiums have been paid as called for by this policy. However, even if premiums have been discontinued we may still pay certain benefits. See Options on Lapse, page 7. Payment of these benefits may also be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 8. Special exclusions or limitations (if any) are listed on page 3 No. 81-01 Page 2 THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981 POLICY OWNER RICHARD ROE DATE OF ISSUE JUN 1, 1981 FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE ********************** BENEFITS AND PREMIUMS TABLE ***************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $1,659.00 40 YEARS THE FIRST PREMIUM IS $1,659.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON JUN 01, 1982 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. ********************** TABLE OF NET ANNUAL PREMIUMS **************************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $ 752.00 2 - 4 1,455.00 5 - 40 1,526.00 ********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS *************** SEPARATE ACCOUNT I 50% SEPARATE ACCOUNT II 50% ******ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY ********* SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V81-01-3 PAGE 3 THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981 FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1981 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE ************************* TABULAR CASH VALUES ********************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE 5 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $ 0 5 $ 0 9 $278 2 0 6 16 10 366 3 0 7 104 11 452 4 0 8 192 12 540
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 540 9 $12,069 17 $26,057 2 1,808 10 13,701 18 27,941 3 3,114 11 15,368 19 29,851 4 4,456 12 17,070 20 31,788 5 5,907 13 18,806 AGE 60 41,808 6 7,393 14 20,574 AGE 62 45,947 7 8,916 15 22,373 AGE 65 52,277 8 10,474 16 24,201 AGE 70 63,165 * VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
V81-01-3A PAGE 3A TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $.81560 2 .09871 22 .17890 42 .33918 62 .58929 82 .82496 3 .10126 23 .18450 43 .34995 63 .60272 83 .83394 4 .10397 24 .19031 44 .36096 64 .61610 84 .84259 5 .10685 25 .19635 45 .37222 65 .62940 85 .85096 6 .10990 26 .20263 46 .38370 66 .64260 86 .85909 7 .11312 27 .20915 47 .39541 67 .65565 87 .86704 8 .11650 28 .21591 48 .40733 68 .66851 88 .87488 9 .12005 29 .22293 49 .41945 69 .68114 89 .88268 10 .12377 30 .23021 50 .43176 70 .69350 90 .89050 11 .12764 31 .23775 51 .44424 71 .70559 91 .89841 12 .13166 32 .24556 52 .45688 72 .71744 92 .90648 13 .13581 33 .25366 53 .46968 73 .72908 93 .91479 14 .14008 34 .26205 54 .48261 74 .74057 94 .92350 15 .14447 35 .27073 55 .49568 75 .75194 95 .93291 16 .14897 36 .27970 56 .50886 76 .76319 96 .94339 17 .15360 37 .28896 57 .52214 77 .77427 97 .95520 18 .15835 38 .29850 58 .53550 78 .78512 98 .96810 19 .16323 39 .30830 59 .54892 79 .79566 99 .98063 20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
FEMALE INSURED -------------- 1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $.77427 2 .08774 22 .15835 42 .29850 62 .53550 82 .78512 3 .08993 23 .16323 43 .30830 63 .54892 83 .79566 4 .09228 24 .16828 44 .31835 64 .56237 84 .80583 5 .09478 25 .17350 45 .32865 65 .57583 85 .81560 6 .09743 26 .17890 46 .33918 66 .58929 86 .82496 7 .10023 27 .18450 47 .34995 67 .60272 87 .83394 8 .10318 28 .19031 48 .36096 68 .61610 88 .84259 9 .10629 29 .19635 49 .37222 69 .62940 89 .85096 10 .10953 30 .20263 50 .38370 70 .64260 90 .85909 11 .11290 31 .20915 51 .39541 71 .65565 91 .86704 12 .11641 32 .21591 52 .40733 72 .66851 92 .87488 13 .12004 33 .22293 53 .41945 73 .68114 93 .88268 14 .12379 34 .23021 54 .43176 74 .69350 94 .89050 15 .12764 35 .23775 55 .44424 75 .70559 95 .89841 16 .13166 36 .24556 56 .45688 76 .71744 96 .90648 17 .13581 37 .25366 57 .46968 77 .72908 97 .91479 18 .14008 38 .26205 58 .48261 78 .74057 98 .92350 19 .14447 39 .27073 59 .49568 79 .75194 99 .93291 20 .14897 40 .27970 60 .50886 80 .76319 100 .94339 101 .95520 102 .96810 103 .98063 104 1.00000
V81-01-3B Page 3B POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 9 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. PREMIUMS AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and the period for which they are to be paid. Each premium is payable on or before its due date at our Administrative Office. You may write and ask us to change the frequency of premium payment. If we approve the change, the new premium will be determined on the rate scale for this policy. GRACE PERIOD. We allow a grace period of 31 days for payment of each premium, after the first premium. The insurance will continue during the grace period. If a premium is paid during the grace period, then all benefits under this policy will be the same as if such premium had been paid on its due date. LAPSE. If a premium is not paid by the end of its grace period, the policy will lapse as of the premium due date. If this occurs, all insurance ends, except as stated in Options on Lapse on page 7. Additional benefit riders do not continue beyond the grace period of an unpaid premium. REINSTATEMENT. You may reinstate this policy within five years after lapse if: (1) the policy has not been given up for its net cash value; (2) you provide evidence of insurability satisfactory to us; and (3) you pay the larger of: (a) all overdue premiums with interest at 6% per year compounded annually; or (b) 110% of the difference between the following Items (i) and (ii). Item (i) is the excess of the cash value immediately after reinstatement over the cash value immediately before reinstatement. Item (ii) is any policy loan, and accrued loan interest, in effect when any option on lapse became effective, with loan interest to the date of reinstatement. Upon reinstatement this policy will have the same Benefit Base and the same Variable Adjustment Amount as to each separate account (as these are determined in the Variable Adjustment Amount provision on page 11) as if default had not occurred. Also, upon reinstatement this policy will have a loan equal to the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued loan interest, in effect at the date any option on lapse became effective, with loan interest to the date of reinstatement. Item (ii) is any loan arising after the date any option on lapse became effective, with loan interest to the date of reinstatement. PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last premium paid that applies to a period beyond the policy month in which the Insured dies. If the Insured dies during the grace period of an unpaid premium, we will deduct from the benefits the part of the overdue premium for one policy month. V81-013-B Page 4 DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3; o plus the sum, if positive, of the Variable Adjustment Amounts, for each separate account under this policy in which you have a cash value, for the policy year in which the Insured dies. A description of how the Variable Adjustment Amount for each separate account is determined is on page 11. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The cash value of the policy will vary daily with the performance of the separate accounts under this policy in which you have a cash value. See page 12 for a description of how cash values are determined. LOANS You may get a loan on this policy while it has a loan value and it is not being continued as extended term insurance under the Options on Lapse on page 7. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. Except when used to pay premiums, a loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. We may also deduct any unpaid premium then due. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit and cash value under this policy. It will have no effect on the amount of the premiums payable under this policy. We will allocate loans to the separate accounts based on your net cash value in each separate account as of the dates the loans are made. We will allocate loan repayments to the separate accounts based on the amount of your outstanding loans as to each separate account as of the dates the repayments are made. See page 12 for a description of how the cash value in each separate account is determined. LOAN VALUE. If this policy has not lapsed; the loan value is 75% of the policy's cash value. If this policy has lapsed and is being continued as Reduced Paid-up Insurance under the Options on Lapse on page 7, the loan value is the cash value on the next policy anniversary, minus interest at the loan rate to that date. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. However, if this policy has lapsed and you are continuing insurance under one of the Options on Lapse on page 7, any loan that was deducted in determining the benefit on lapse may not be repaid unless this policy is reinstated. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. V81-01-5 Page 5 THE SEPARATE ACCOUNTS We established and we maintain Separate Accounts I and II under the laws of New York State. Realized and unrealized gains and losses from the assets of Separate Accounts I and II are credited or charged against such accounts without regard to our other income, gains, or losses. Assets are put in Separate Accounts I and II to support this policy and other variable life insurance policies. Assets may be put in Separate Accounts I and II for other purposes, but not to support contracts or policies other than variable life insurance. We expect the investments in Separate Account I will be, primarily, common stocks and other equity-type investments. We expect the investments in Separate Account II will be, primarily, short-term (not to exceed one year) money market instruments, such as: United States (U.S.) government and U.S. government agency securities; bank money instruments; time deposits; certificates of deposit; high grade commercial paper, including master demand notes; and repurchase agreements covering U.S. government obligations and certificates of deposit. But, we may invest the assets of Separate Accounts I and II in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Instead of making direct investments, we may also operate either Separate Account I or II as a unit investment trust, or other form. We would invest all or part of such account's assets in shares or units of a fund. We, an affiliate, or The Equitable Life Assurance Society of the United States would be the investment adviser and would invest the assets of the fund as above. The assets of Separate Accounts I and II are our property. The portion of the assets of Separate Accounts I and II equal to the reserves and other policy liabilities with respect to such separate accounts will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of such separate accounts in excess of such reserves and liabilities to our general account. We will value the assets of Separate Accounts I and II on each business day. A business day is any day on which the New York Stock Exchange is open for trading. We have the right to create new separate accounts. We have the right to withdraw assets of a class of policies to which this policy belongs from either separate account and put them in another separate account. If we do this, we will withdraw the same percentage of each investment in such separate account, but will avoid odd lots and fractions. We also have the right to combine any two or more separate accounts. The term "Separate Account I" or "Separate Account II" in this policy shall then refer to any other separate account in which the assets of a class of policies to which this policy belongs were placed. We have the right to: 1. register or deregister either separate account under the Investment Company Act of 1940; 2. run either separate account under the direction of a committee, and to discharge such committee at any time; and 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to either separate account. CHANCES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment adviser or any investment policy may not be changed without our consent. If required by law or regulation, the investment policy of either separate account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate to each separate account at the beginning of each policy year a percentage of the Net Annual Premium shown on page 3 for that year. Such allocations will be based on the allocation percentages then in effect. The allocation percentages for the first policy year are as designated in the application for this policy. Unless you change them, such percentages shall also apply in later years. V81-01-5 Page 6 INVESTMENT OPTIONS CONTINUED You may change the allocation percentages for policy years after the first by notifying us in writing of the new percentages. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash value in one of the separate accounts to the other. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. OPTIONS ON LAPSE You have a number of options if the policy lapses. You may apply for reinstatement. If there is a net cash value, you may withdraw it and give up the policy. Or, you may continue insurance under one of the following options: REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's lifetime and for the amount that the net cash value will buy. EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan interest. The insurance will continue from the date of lapse for as long a term period as the net cash value will buy. In no event, however, will this period be less than 90 days if premiums have been paid for at least three months before lapse and there is no loan on this policy. This option is not available if so stated on page 3. An Option on Lapse will become effective on the date your written request for it is received at our Administrative Office. If your request is not received within three months after the date of lapse, extended term insurance will become effective automatically at the end of such three month period. Reduced paid-up insurance will apply instead if the extended term insurance option is not available. If the Insured dies after the grace period but within three months from the date of lapse, the greater of the benefit under reduced paid-up or extended term insurance will apply. In this case, any restriction on page 3 as to extended term insurance will not apply. We will determine the amounts of these options as of the date the option becomes effective. We will use net cash values as of the date the option becomes effective, adjusted for any loan transaction on or after that date. A term period will begin as of the date of lapse (the due date of the unpaid premium). We will use net single premiums for the Insured's age as of the date of lapse. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 18 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange with all premiums due having been paid; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. The new policy will have the same face amount, Register Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Any additional benefit riders in this policy will be included in the new policy only if Equitable was offering them with the new policy as of its Date of Issue. V81-01-7 Page 7 EXCHANGE OF POLICY CONTINUED Upon request you will be told the amount of the first premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. See any additional benefit riders for modifications that apply to them. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premiums paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy anniversaries and premium periods are measured from the Register Date. Each policy month begins on the same day in each calendar month as in the Register Date. If the end of a premium period or policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. POLICY CHANGES. You may change this policy to another plan of insurance or add additional benefit riders or make other changes, subject to our rules at the time of change. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. No such reports will be given while this policy is lapsed. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term insurance, they are based instead on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used with interest compounded annually at 4%. The cash values and paid-up insurance benefits are equal to or more than those required by law. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. The tabular cash value at the end of each policy year equals the reserve. Reserves referred to in this policy are not less than reserves determined according to the Commissioners Reserve Valuation Method. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not being continued under one of the Options on Lapse, we will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. V81-01-7 Page 8 GENERAL PROVISIONS CONTINUED We may not be able to sell securities or determine the value of the assets of the separate accounts if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy Owners. During such times we may defer: 1. Determination and payment of cash values; 2. Payment of loans; 3. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 4. Any requested transfer of cash value; and 5. Use of Insurance Benefits under the Payment Options. DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the making of a loan for up to six months after we receive a request at our Administrative Office if this policy is being continued under one of the Options on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash value payment we defer for 30 days or more. PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any separate account after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part (if at least $2,500). If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 10. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 10. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. We reserve the right to change how often we make payments, so that each payment is for at least $25. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (such as a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include withdrawal or commutation rights, designation of payees and successor payees, and evidence of age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V8l-01-9 Page 9 TABLE OF GUARANTEED PAYMENTS (MINIMUM AMOUNT FOR EACH $1,000 APPLIED) OPTION 2A FIXED PERIOD INSTALMENTS ------------------------ Number Monthly Annual of Years Instal- Instal- Instalments ment ment ----------- ------- --------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If instalments are paid each 3 months, they will be 25.32% of the annual instalments. If they are paid each 6 months, they will be 50.43% of the annual instalments. OPTION 3 MONTHLY LIFE INCOME ------------------- 10 Years Certain 10 Years Certain Refund Certain ---------------- ---------------- -------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97 Income amounts for Life Income Options are based on age nearest birthday when income starts. Income amounts for ages not shown will be furnished on request. V81-01-9 Page 10 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual Net Rate of Return for a policy year reflects the account's: o investment income; o plus realized and unrealized capital gains; o minus realized and unrealized capital losses; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .25% per year for investment management expenses; and o minus a charge not exceeding .50% per year for mortality, expenses and other risks. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all separate accounts always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Cash Value at the end of each policy year will equal the tabular cash value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each separate account, taking into account the Actual NRR for the last policy year. For the first policy year the VAA for each separate account is zero. For later policy years, the VAA for each separate account will equal the VAA for that account for the last policy year, plus the VAA Change Amount for that account. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each separate account may be positive or negative. It will equal the product of the following Items (a) and (b), divided by Item (c). (a) The Actual NRR for the separate account minus the Base NRR for that policy year. (b) The Benefit Base for the separate account as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each separate account, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Annual Premium for the first policy year. On policy anniversaries, the Benefit Base for a separate account is the sum of the following Items (1) and (2): (1) The allocation percentage for that anniversary, multiplied by the sum of the following Items (a) and (b): (a) The Tabular Cash Value on that anniversary. (b) The Net Annual Premium for that anniversary. (2) The Net Single Premium for the VAA for that separate account on that anniversary. The Net Annual Premiums, Tabular Cash Values and Net Single Premiums are shown on pages 3, 3A and 3B, respectively. For each separate account, the VAA Change Amount will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; V81-01-11 Page 11 BASIS OF VALUES CONTINUED 2. All new policy loans and repayments during the previous policy year; and 3. All transfers of cash value to or from that separate account during the previous policy year. In addition, if you have changed the allocation percentages, we will reallocate the VAA's among the separate accounts. CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum of your cash values in each separate account on that date. If no premium is due and unpaid, your cash value in each separate account on any date is the sum of the following Items (1), (2) and (3): (1) The tabular cash value on that date, multiplied by the allocation percentage for that separate account in effect on the last policy anniversary. (2) The Net Single Premium on that date for the current VAA for that separate account. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for the separate account minus the Base NRR for the time elapsed since the last policy anniversary. (b) The Benefit Base for the separate account on the last policy anniversary. If a premium is due and unpaid, then within three months after the due date your cash value in each separate account is the sum of the following Items (1) and (2): (1) Your cash value in that separate account as of the due date of the unpaid premium. (2) The product of the following Items (a) and (b): (a) The Actual NRR for the separate account minus the Net NRR for the time elapsed since such due date. (b) The cash value on such due date. For each Separate account, the cash value will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; 2. All new policy loans and repayments since the last policy anniversary; and 3. All transfers of cash value to or from that separate account since the last policy anniversary. More than three months after the due date of an unpaid premium, if you continue the policy under one of the options on lapse, your cash value will equal the reserve for the policy. In such case, the cash value within 30 days after a policy anniversary will never be less than the cash value on that anniversary. If at any time you have a policy loan allocated to a separate account and your net cash value in that separate account is zero, we will cancel the VAA and the policy loan as to such separate account and reallocate them to the other separate account. Also, the premium allocation percentage for such separate account will be reduced to zero and the percentage for the other separate account will be increased to 100%. TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at the end of each month in the first policy year and at the end of later policy years. We will determine the TCV on other dates in a consistent manner with allowance for time elapsed and premiums paid. Any TCV's not shown will be furnished on request. V81-01-ll Page 12 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] VARIABLE LIFE INSURANCE Home Office: 1285 Avenue of the Americas, New York, New York 10019 POLICY Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for Premium Period shown on page 3 or until earlier death. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 81-01 SPECIMEN POLICY NOTE -- Because of variations in state policy form requirements, the policy as actually issued may differ somewhat from this specimen policy. EX-99.1A5AVIPOLICY 9 POLICY 81-02-EVLICO THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY POLICY OWNER RICHARD ROE EQUITABLE VARIABLE LIFE INSURANCE COMPANY INITIAL FACE AMOUNT $100,000 [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. As shown on page 3, the face amount increases at the beginning of each policy year from the second to the fifteenth. It is constant thereafter at 150% of the initial face amount. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE INITIAL FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN WHICH THE INSURED DIES. THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. Premiums are shown on page 3 and are fixed as to amount. They will not vary with separate account investment experience. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN Secretary SPECIMEN President Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Face amount increases annually to 150% of initial face amount. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 81-02 [EVLICO LOGO] 1285 Avenue of the Americas, New York CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Premiums, grace, lapse, reinstatement 4 Death Benefit 5 Cash Value 5 Loans 5 The Separate Accounts 6 Investment Options, allocations, transfers 6 Options on Lapse 7 Exchange of Policy 7 General Provisions 8 Payment Options 9 Basis of Values 11 (Net rates of return, variable adjustment amount, benefit base, calculation of cash values) Any additional benefit riders and a copy of the application are included in this policy after page 12. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send premiums and requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the Insured's death include: o the Death Benefit described on page 5; o plus any additional benefits due from riders to this policy; o plus or minus any adjustment for the last premium; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 9. We will pay these benefits only if premiums have been paid as called for by this policy. However, even if premiums have been discontinued we may still pay certain benefits. See Options on Lapse, page 7. Payment of these benefits may also be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 8. Special exclusions or limitations (if any) are listed on page 3. No.81-02 Page 2 THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981 POLICY OWNER RICHARD ROE DATE OF ISSUE JUN 1, 1981 INITIAL FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE *************************BENEFITS AND PREMIUMS TABLE**************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $2,320.00 FOR LIFE THE FIRST PREMIUM IS $2,320.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON JUN 1, 1982 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. ****************************TABLE OF FACE AMOUNTS*******************************
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT 1 $100,000 6 $115,900 11 $134,400 2 $103,000 7 $119,400 12 $138,400 3 $106,100 8 $123,000 13 $142,600 4 $109,300 9 $126,700 14 $146,900 5 $112,600 10 $130,500 15 AND OVER $150,000
**************************** TABLE OF NET ANNUAL PREMIUMS*********************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $1,259.00 2 - 4 2,045.00 5 AND LATER 2,145.00 *********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS*************** SEPARATE ACCOUNT I 50% SEPARATE ACCOUNT II 50% ***********ADMINISTRATIVE OFFICE: EQUITABLE LIFE INSURANCE COMPANY************* SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V81-02-3 PAGE 3 THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1981 INITIAL FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1981 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE *************************TABULAR CASH VALUES************************************ THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE 5 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $ 0 5 $146 9 $ 668 2 0 6 275 10 801 3 0 7 407 11 929 4 14 8 540 12 1062
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 1,062 9 $18,221 17 $38,251 2 2,959 10 20,622 18 40,884 3 4,912 11 23,062 19 43,546 4 6,917 12 25,534 20 46,235 5 9,077 13 28,033 AGE 60 59,960 6 11,290 14 30,548 AGE 62 65,499 7 13,552 15 33,081 AGE 65 73,755 8 15,864 16 35,650 AGE 70 86,944 * VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST.
V81-02-3A PAGE 3A TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560 2 .09871 22 .17890 42 .33918 62 .58929 82 .82496 3 .10126 23 .18450 43 .34995 63 .60272 83 .83394 4 .10397 24 .19031 44 .36096 64 .61610 84 .84259 5 .10685 25 .19635 45 .37222 65 .62940 85 .85096 6 .10990 26 .20263 46 .38370 66 .64260 86 .85909 7 .11312 27 .20915 47 .39541 67 .65565 87 .86704 8 .11650 28 .21591 48 .40733 68 .66851 88 .87488 9 .12005 29 .22293 49 .41945 69 .68114 89 .88268 10 .12377 30 .23021 50 .43176 70 .69350 90 .89050 11 .12764 31 .23775 51 .44424 71 .70559 91 .89841 12 .13166 32 .24556 52 .45688 72 .71744 92 .90648 13 .13581 33 .25366 53 .46968 73 .72908 93 .91479 14 .14008 34 .26205 54 .48261 74 .74057 94 .92350 15 .14447 35 .27073 55 .49568 75 .75194 95 .93291 16 .14897 36 .27970 56 .50886 76 .76319 96 .94339 17 .15360 37 .28896 57 .52214 77 .77427 97 .95520 18 .15835 38 .29850 58 .53550 78 .78512 98 .96810 19 .16323 39 .30830 59 .54892 79 .79566 99 .98063 20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
FEMALE INSURED -------------- 1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $ .77427 2 .08774 22 .15835 42 .29850 62 .53550 82 .78512 3 .08993 23 .16323 43 .30830 63 .54892 83 .79566 4 .09228 24 .16828 44 .31835 64 .56237 84 .80583 5 .09478 25 .17350 45 .32865 65 .57583 85 .81560 6 .09743 26 .17890 46 .33918 66 .58929 86 .82496 7 .10023 27 .18450 47 .34995 67 .60272 87 .83394 8 .10318 28 .19031 48 .36096 68 .61610 88 .84259 9 .10629 29 .19635 49 .37222 69 .62940 89 .85096 10 .10953 30 .20263 50 .38370 70 .64260 90 .85909 11 .11290 31 .20915 51 .39541 71 .65565 91 .86704 12 .11641 32 .21591 52 .40733 72 .66851 92 .87488 13 .12004 33 .22293 53 .41945 73 .68114 93 .88268 14 .12379 34 .23021 54 .43176 74 .69350 94 .89050 15 .12764 35 .23775 55 .44424 75 .70559 95 .89841 16 .13166 36 .24556 56 .45688 76 .71744 96 .90648 17 .13581 37 .25366 57 .46968 77 .72908 97 .91479 18 .14008 38 .26205 58 .48261 78 .74057 98 .92350 19 .14447 39 .27073 59 .49568 79 .75194 99 .93291 20 .14897 40 .27970 60 .50886 80 .76319 100 .94339 101 .95520 102 .96810 103 .98063 104 1.00000
V81-02-3B Page 3B POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 9 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. PREMIUMS AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and the period for which they are to be paid. Each premium is payable on or before its due date at our Administrative Office. You may write and ask us to change the frequency of premium payment. If we approve the change, the new premium will be determined on the rate scale for this policy. GRACE PERIOD. We allow a grace period of 31 days for payment of each premium, after the first premium. The insurance will continue during the grace period. If a premium is paid during the grace period, then all benefits under this policy will be the same as if such premium had been paid on its due date. LAPSE. If a premium is not paid by the end of its grace period, the policy will lapse as of the premium due date. If this occurs, all insurance ends, except as stated in Options on Lapse on page 7. Additional benefit riders do not continue beyond the grace period of an unpaid premium. REINSTATEMENT. You may reinstate this policy within five years after lapse if: (1) the policy has not been given up for its net cash value; (2) you provide evidence of insurability satisfactory to us; and (3) you pay the larger of: (a) all overdue premiums with interest at 6% per year compounded annually; or (b) 110% of the difference between the following Items (i) and (ii). Item (i) is the excess of the cash value immediately after reinstatement over the cash value immediately before reinstatement. Item (ii) is any policy loan, and accrued loan interest, in effect when any option on lapse became effective, with loan interest to the date of reinstatement. Upon reinstatement this policy will have the same Benefit Base and the same Variable Adjustment Amount as to each separate account (as these are determined in the Variable Adjustment Amount provision on page 11) as if default had not occurred. Also, upon reinstatement this policy will have a loan equal to the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued loan interest, in effect at the date any option on lapse became effective, with loan interest to the date of reinstatement. Item (ii) is any loan arising after the date any option on lapse became effective, with loan interest to the date of reinstatement. PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last premium paid that applies to a period beyond the policy month in which the Insured dies. If the Insured dies during the grace period of an unpaid premium, we will deduct from the benefits the part of the overdue premium for one policy month. V81-02-3B Page 4 DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3 for the policy year in which the Insured dies; o plus the sum, if positive, of the Variable Adjustment Amounts, for each separate account under this policy in which you have a cash value, for the policy year in which the Insured dies. A description of how the Variable Adjustment Amount for each separate account is determined is on page 11. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The cash value of the policy will vary daily with the performance of the separate accounts under this policy in which you have a cash value. See page 12 for a description of how cash values are determined. LOANS You may get a loan on this policy while it has a loan value and it is not being continued as extended term insurance under the Options on Lapse on page 7. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. Except when used to pay premiums, a loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. We may also deduct any unpaid premium then due. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit and cash value under this policy. It will have no effect on the amount of the premiums payable under this policy. We will allocate loans to the separate accounts based on your net cash value in each separate account as of the dates the loans are made. We will allocate loan repayments to the separate accounts based on the amount of your outstanding loans as to each separate account as of the dates the repayments are made. See page 12 for a description of how the cash value in each separate account is determined. LOAN VALUE. If this policy has not lapsed, the loan value is 75% of the policy's cash value. If this policy has lapsed and is being continued as Reduced Paid-up Insurance under the Options on Lapse on page 7, the loan value is the cash value on the next policy anniversary, minus interest at the loan rate to that date. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. However, if this policy has lapsed and you are continuing insurance under one of the Options on Lapse on page 7, any loan that was deducted in determining the benefit on lapse may not be repaid unless this policy is reinstated. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. V81-02-5 Page 5 THE SEPARATE ACCOUNTS We established and we maintain Separate Accounts I and II under the laws of New York State. Realized and unrealized gains and losses from the assets of Separate Accounts I and II are credited or charged against such accounts without regard to our other income, gains, or losses. Assets are put in Separate Accounts I and II to support this policy and other variable life insurance policies. Assets may be put in Separate Accounts I and II for other purposes, but not to support contracts or policies other than variable life insurance. We expect the investments in Separate Account I will be, primarily, common stocks and other equity-type investments. We expect the investments in Separate Account II will be, primarily, short-term (not to exceed one year) money market instruments, such as: United States (U.S.) government and U.S. government agency securities; bank money instruments; time deposits; certificates of deposit; high grade commercial paper, including master demand notes; and repurchase agreements covering U.S. government obligations and certificates of deposit. But we may invest the assets of Separate Accounts I and II in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Instead of making direct investments, we may also operate either Separate Account I or II as a unit investment trust, or other form. We would invest all or part of such account's assets in shares or units of a fund. We, an affiliate, or The Equitable Life Assurance Society of the United States would be the investment adviser and would invest the assets of the fund as above. The assets of Separate Accounts I and II are our property. The portion of the assets of Separate Accounts I and II equal to the reserves and other policy liabilities with respect to such separate accounts will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of such separate accounts in excess of such reserves and liabilities to our general account. We will value the assets of Separate Accounts I and II on each business day. A business day is any day on which the New York Stock Exchange is open for trading. We have the right to create new separate accounts. We have the right to withdraw assets of a class of policies to which this policy belongs from either separate account and put them in another separate account. If we do this, we will withdraw the same percentage of each investment in such separate account, but will avoid odd lots and fractions. We also have the right to combine any two or more separate accounts. The term "Separate Account I" or "Separate Account II" in this policy shall then refer to any other separate account in which the assets of a class of policies to which this policy belongs were placed. We have the right to: 1. register or deregister either separate account under the Investment Company Act of 1940; 2. run either separate account under the direction of a committee, and to discharge such committee at any time; and 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to either separate account. CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment adviser or any investment policy may not be changed without our consent. If required by law or regulation, the investment policy of either separate account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate to each separate account at the beginning of each policy year a percentage of the Net Annual Premium shown on page 3 for that year. Such allocations will be based on the allocation percentages then in effect. The allocation percentages for the first policy year are as designated in the application for this policy. Unless you change them, such percentages shall also apply in later years. V81-02-5 Page 6 INVESTMENT OPTIONS CONTINUED You may change the allocation percentages for policy years after the first by notifying us in writing of the new percentages. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash value in one of the separate accounts to the other. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. OPTIONS ON LAPSE You have a number of options if the policy lapses. You may apply for reinstatement. If there is a net cash value, you may withdraw it and give up the policy. Or, you may continue insurance under one of the following options: REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's lifetime and for the amount that the net cash value will buy. EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan interest. The insurance will continue from the date of lapse for as long a term period as the net cash value will buy. In no event, however, will this period be less than 90 days if premiums have been paid for at least three months before lapse and there is no loan on this policy. This option is not available if so stated on page 3. An Option on Lapse will become effective on the date your written request for it is received at our Administrative Office. If your request is not received within three months after the date of lapse, extended term insurance will become effective automatically at the end of such three month period. Reduced paid-up insurance will apply instead if the extended term insurance option is not available. If the Insured dies after the grace period but within three months from the date of lapse, the greater of the benefit under reduced paid-up or extended term insurance will apply. In this case, any restriction on page 3 as to extended term insurance will not apply. We will determine the amounts of these options as of the date the option becomes effective. We will use net cash values as of the date the option becomes effective, adjusted for any loan transaction on or after that date. A term period will begin as of the date of lapse (the due date of the unpaid premium). We will use net single premiums for the Insured's age as of the date of lapse. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 18 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange with all premiums due having been paid; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. The new policy will have a face amount equal to the initial face amount of this policy. It will have the same Register Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Any additional benefit riders in this policy will be included in the new policy only if Equitable was offering them with the new policy as of its Date of Issue. V81-02-7 Page 7 EXCHANGE OF POLICY CONTINUED Upon request you will be told the amount of the first premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. See any additional benefit riders for modifications that apply to them. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premiums paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy anniversaries and premium periods are measured from the Register Date. Each policy month begins on the same day in each calendar month as in the Register Date. If the end of a premium period or policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. POLICY CHANGES. You may change this policy to another plan of insurance or add additional benefit riders or make other changes, subject to our rules at the time of change. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. No such reports will be given while this policy is lapsed. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term insurance, they are based instead on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used with interest compounded annually at 4%. The cash values and paid-up insurance benefits are equal to or more than those required by law. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. The tabular cash value at the end of each policy year equals the reserve. Reserves referred to in this policy are not less than reserves determined according to the Commissioners Reserve Valuation Method. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not being continued under one of the Options on Lapse, we will make payments under this policy as follows; o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. V81-02-7 Page 8 GENERAL PROVISIONS CONTINUED We may not be able to sell securities or determine the value of the assets of the separate accounts if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy Owners. During such times we may defer: 1. Determination and payment of cash values; 2. Payment of loans; 3. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 4. Any requested transfer of cash value; and 5. Use of Insurance Benefits under the Payment Options. DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the making of a loan for up to six months after we receive a request at our Administrative Office if this policy is being continued under one of the Options on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash value payment we defer for 30 days or more. PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any separate account after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part (if at least $2,500). If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 10. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 10. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. We reserve the right to change how often we make payments, so that each payment is for at least $25. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (such as a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include withdrawal or commutation rights, designation of payees and successor payees, and evidence of age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V81-02-9 Page 9 TABLE OF GUARANTEED PAYMENTS (MINIMUM AMOUNT FOR EACH $1,000 APPLIED) OPTION 2A FIXED PERIOD INSTALMENTS ------------------------ Number of Years' Monthly Annual Instalments Instalment Instalment ----------- ---------- ---------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If instalments are paid each 3 months, they will be 25.32% of the annual instalments. If they are paid each 6 months, they will be 50.43% of the annual instalments. OPTION 3 MONTHLY LIFE INCOME -------------------
10 Years Certain 20 Years Certain Refund Certain ---------------- ---------------- -------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Income amounts for Life Income Options are based on age nearest birthday when income starts. Income amounts for ages not shown will be furnished on request. V81-02-9 Page 10 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual Net Rate of Return for a policy year reflects the account's: o investment income; o plus realized and unrealized capital gains; o minus realized and unrealized capital losses; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .25% per year for investment management expenses; and o minus a charge not exceeding .50% per year for mortality, expenses and other risks. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all separate accounts always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Cash Value at the end of each policy year will equal the tabular cash value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each separate account, taking into account the Actual NRR for the last policy year. For the first policy year the VAA for each separate account is zero. For later policy years, the VAA for each separate account will equal the VAA for that account for the last policy year, plus the VAA Change Amount for that account. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each separate account may be positive or negative. It will equal the product of the following Items (a) and (b), divided by Item (c). (a) The Actual NRR for the separate account minus the Base NRR for that policy year. (b) The Benefit Base for the separate account as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each separate account, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Annual Premium for the first policy year. On policy anniversaries, the Benefit Base for a separate account is the sum of the following Items (1) and (2): (1) The allocation percentage for that anniversary, multiplied by the sum of the following Items (a) and (b): (a) The Tabular Cash Value on that anniversary. (b) The Net Annual Premium for that anniversary. (2) The Net Single Premium for the VAA for that separate account on that anniversary. The Net Annual Premiums, Tabular Cash Values and Net Single Premiums are shown on pages 3, 3A and 3B, respectively. For each separate account, the VAA Change Amount will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; V81-02-11 Page 11 BASIS OF VALUES CONTINUED 2. All new policy loans and repayments during the previous policy year; and 3. All transfers of cash value to or from that separate account during the previous policy year. In addition, if you have changed the allocation percentages, we will reallocate the VAA's among the separate accounts. CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum of your cash values in each separate account on that date. If no premium is due and unpaid, your cash value in each separate account on any date is the sum of the following Items (1), (2) and (3): (1) The tabular cash value on that date, multiplied by the allocation percentage for that separate account in effect on the last policy anniversary. (2) The Net Single Premium on that date for the current VAA for that separate account. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for the separate account minus the Base NRR for the time elapsed since the last policy anniversary. (b) The Benefit Base for the separate account on the last policy anniversary. If a premium is due and unpaid, then within three months after the due date your cash value in each separate account is the sum of the following Items (1) and (2): (1) Your cash value in that separate account as of the due date of the unpaid premium. (2) The product of the following Items (a) and (b): (a) The Actual NRR for the separate account minus the Net NRR for the time elapsed since such due date. (b) The cash value on such due date. For each separate account, the cash value will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; 2. All new policy loans and repayments since the last policy anniversary; and 3. All transfers of cash value to or from that separate account since the last policy anniversary. More than three months after the due date of an unpaid premium, if you continue the policy under one of the options on lapse, your cash value will equal the reserve for the policy. In such case, the cash value within 30 days after a policy anniversary will never be less than the cash value on that anniversary. If at any time you have a policy loan allocated to a separate account and your net cash value in that separate account is zero, we will cancel the VAA and the policy loan as to such separate account and reallocate them to the other separate account. Also, the premium allocation percentage for such separate account will be reduced to zero and the percentage for the other separate account will be increased to 100%. TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at the end of each month in the first policy year and at the end of later policy years. We will determine the TCV on other dates in a consistent manner with allowance for time elapsed and premiums paid. Any TCV's not shown will be furnished on request. V81-02-11 Page 12 VARIABLE EQUITABLE LIFE VARIABLE LIFE INSURANCE COMPANY INSURANCE [EVLICO LOGO] POLICY Home Office: 1285 Avenue of the Americas, New York, New York 10019 Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Face amount increases annually to 150% of initial face amount. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 81-02 SPECIMEN POLICY NOTE -- Because of variations in state policy form requirements, the policy as actually issued may differ somewhat from this specimen policy. EX-99.1A5AVIIPOLICY 10 POLICY 83-10 -- EVLICO THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY OWNER RICHARD ROE POLICY INITIAL EQUITABLE FACE AMOUNT $100,000 VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. The face amount increases at the rate of 3% at the beginning of each policy year after the first. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE INITIAL FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 4 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN WHICH THE INSURED DIES. THE ACCOUNT VALUE AND THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. THEY MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. The amount of the single premium for this policy is shown on page 3. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Donald J. Mooney President Single Premium Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Face amount increases annually by 3% at the beginning of each policy year after the first. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 83-10 [EVLICO LOGO] 1285 Avenue of the Americas, New York, 10019 CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Death Benefit 4 Account Value 4 Cash Value 4 Loans 5 The Separate Accounts 5 Investment Options, allocations, transfers 6 Exchange of Policy 6 General Provisions 7 Payment Options 8 Basis of Values 10 (Net rates of return, variable adjustment amount, benefit base, calculation of Account Values) A copy of the application for this policy is at the back of the policy. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the insured's death include: o the Death Benefit described on page 4; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 8. Payment of these benefits may be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 7. Special exclusions or limitations (if any ) are listed on page 3. No. 83-10 Page 2 THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1983 POLICY OWNER RICHARD ROE DATE OF ISSUE JUN 1, 1983 INITIAL FACE AMOUNT $100,000 ISSUE AGE, SEX 35 MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE STATE OF RESIDENCE SPECIMEN STATE ************************** BENEFITS AND PREMIUMS TABLE ************************* BENEFITS SINGLE PREMIUM FOR THIS POLICY LIFE INSURANCE - VARIABLE $71,280.61 THE SINGLE PREMIUM IS $71,280.61 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. THE FOLLOWING DEDUCTIONS ARE MADE FROM THE SINGLE PREMIUM: ADMINISTRATIVE EXPENSE: $ 200.00 STATE PREMIUM TAX: 1,425.61 THE NET SINGLE PREMIUM AMOUNT ALLOCATED TO THE SEPARATE ACCOUNT(S) IS $69,655.00. *************** INVESTMENT ALLOCATION OF NET SINGLE PREMIUM AMOUNT************** SEPARATE ACCOUNT I 50% SEPARATE ACCOUNT II 50% ****************************TABLE OF FACE AMOUNTS *****************************
POLICY FACE POLICY FACE POLICY FACE YEAR AMOUNT YEAR AMOUNT YEAR AMOUNT 1 $100,000 9 $126,678 17 $160,472 2 103,000 10 130,478 18 165,286 3 106,090 11 134,392 19 170,245 4 109,273 12 138,424 20 175,352 5 112,551 13 142,577 AGE 60 209,379 6 115,928 14 146,854 AGE 62 222,130 7 119,406 15 151,260 AGE 65 242,728 8 122,988 16 155,798 AGE 70 281,388
******* ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY ******* SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V83-10-3 PAGE 3 0030L/Pg.28 THE INSURED RICHARD ROE REGISTER DATE JUN 1, 1983 INITIAL FACE AMOUNT $100,000 DATE OF ISSUE JUN 1, 1983 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35 MALE ******************************* TABULAR VALUES ********************************* THE ACCOUNT VALUE AND CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT SEE PAGE 4 FOR ACCOUNT VALUE AND CASH VALUE PROVISIONS TABULAR VALUES AT ENDS OF POLICY YEARS END OF TABULAR TABULAR POLICY YEAR ACCOUNT VALUES CASH VALUES 1 $ 72,366 $ 66,509 2 75,182 69,740 3 78,105 73,127 4 81,138 76,677 5 84,285 80,398 6 87,548 84,296 7 90,931 88,380 8 94,439 92,660 9 98,076 97,145 10 101,845 101,845 11 105,752 105,752 12 109,799 109,799 13 113,991 113,991 14 118,332 118,332 15 122,826 122,826 16 127,478 127,478 17 132,291 132,291 18 137,271 137,271 19 142,422 142,422 20 147,749 147,749 AGE 60 177,186 177,186 AGE 62 190,354 190,354 AGE 65 211,722 211,722 AGE 70 251,930 251,930 THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V83-10-3A PAGE 3A ak/0177L TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Increasing Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - ---------- ------- --------- ------- --------- ------- --------- -------- --------- ------- MALE INSURED ------------ 1 $.51971 21 $.61724 41 $.73320 61 $.85165 81 $ .93500 2 .52393 22 .62256 42 .73935 62 .85696 82 .93783 3 52832 23 .62793 43 .74551 63 .86215 83 .94052 4 .53278 24 .63335 44 .75167 64 .86727 84 .94309 5 53732 25 .63883 45 .75782 65 .87226 85 .94556 6 .54193 26 .64436 46 .76397 66 .87715 86 .94793 7 .54662 27 .64995 47 .77011 67 .88190 87 .95023 8 .55137 28 .65560 48 .77622 68 .88652 88 .95248 9 .55619 29 .66129 49 .78231 69 .89099 89 .95470 10 .56107 30 .66704 50 .78838 70 .89532 90 .95690 11 .56600 31 .67284 51 .79440 71 .89950 91 .95910 12 .57098 32 .67869 52 .80039 72 .90354 92 .96133 13 .57601 33 .68460 53 .80632 73 .90746 93 .96360 14 .58106 34 .69055 54 .81222 74 .91128 94 .96595 15 .58614 35 .69655 55 .81805 75 .91501 95 .96845 16 .59125 36 .70259 56 .82383 76 .91864 96 .97119 17 .59638 37 .70867 57 .82955 77 .92218 97 .97423 18 .60154 38 .71477 58 .83519 78 .92560 98 .97751 19 .60673 39 .72090 59 .84076 79 .92888 99 .98064 20 .61196 40 .72705 60 .84625 80 .93202 100 1.00000
FEMALE INSURED -------------- 1 $.49309 21 $.58614 41 $.69655 61 $.81805 81 $ .91501 2 .49707 22 .59125 42 .70259 62 .82383 82 .91864 3 .50122 23 .59638 43 .70867 63 .82955 83 .92218 4 .50544 24 .60154 44 .71477 64 .83519 84 .92560 5 .50975 25 .60673 45 .72090 65 .84076 85 .92888 6 .51412 26 .61196 46 .72705 66 .84625 86 .93202 7 .51856 27 .61724 47 .73320 67 .85165 87 .93500 8 .52307 28 .62256 48 .73935 68 .85696 88 .93783 9 .52765 29 .62793 49 .74551 69 .86216 89 .94052 10 .53228 30 .63335 50 .75167 70 .86727 80 .94309 11 .53696 31 .63883 51 .75782 71 .87226 91 .94556 12 .54168 32 .64436 52 .76397 72 .87715 92 .94793 13 .54645 33 .64995 53 .77011 73 .88190 93 .95023 14 .55127 34 .65560 54 .77622 74 .88652 94 .95248 15 .55614 35 .66129 55 .78231 75 .89099 95 .95470 16 .56105 36 .66704 56 .78838 76 .89532 96 .95690 17 .56600 37 .67284 57 .79440 77 .89950 97 .95910 18 .57098 38 .67869 58 .80039 78 .90354 98 .96133 19 .57601 39 .68460 59 .80632 79 .90746 99 .96360 20 .58106 40 .69055 60 .81222 80 .91128 100 .96595 101 .96845 102 .97119 103 .97423 104 .97751 105 .98064 106 1.00000
V83-10-3B Page 3B POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 8 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3 for the policy year in which the Insured dies. o plus the sum, if positive, of the Variable Adjustment Amounts, for each separate account under this policy in which you have a cash value, for the policy year in which the Insured dies. However, the Death Benefit will in no event be less than the amount of Paid-up Whole Life Increasing Insurance that could be purchased by the Account Value at the Insured's death on the basis of the Table of Net Single Premiums on page 3B. See page 10 for a description of how the Variable Adjustment Amount for each separate account is determined. ACCOUNT VALUE The policy's Account Value will vary daily with the performance of the separate accounts in which you have an Account Value under this policy. See page 11 for a description of how the Account Value is determined. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The policy's cash value will vary daily with the performance of the separate accounts in which you have a cash value under this policy. During the first ten policy years the cash value on any date will be equal to the product of (1) and (2), where: (1) is the Account Value on that date; and (2) is the Tabular Cash Value divided by the Tabular Account Value for that date. Tabular Account Values and Tabular Cash Values are shown on page 3A. After the tenth policy year, the cash value will equal the Account Value. V83-10-3B Page 4 LOANS You may get a loan on this policy while it has a loan value. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. A loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit, Account Value and cash value under this policy. We will allocate loans to the separate accounts based on your net cash value in each separate account as of the dates the loans are made. we will allocate loan repayments to the separate accounts based on the amount of your outstanding loans as to each separate account as of the dates the repayments are made. LOAN VALUE. The loan value is 90% of the policy's cash value. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. THE SEPARATE ACCOUNTS We established and we maintain Separate Accounts I and II under the laws of New York State. Realized and unrealized gains and losses from the assets of Separate Accounts I and II are credited or charged against such accounts without regard to our other income, gains, or losses. Assets are put in Separate Accounts I and II to support this policy and other variable life insurance policies. Assets may be put in Separate Accounts I and II for other purposes, but not to support contracts or policies other than variable life insurance. We expect the investments in Separate Account I will be, primarily, common stocks and other equity-type investments. We expect the investments in Separate Account II will be, primarily, short-term (not to exceed one year) money market instruments, such as: United States (U.S.) government and U.S. government agency securities; bank money instruments; time deposits; certificates of deposit; high grade commercial paper, including master demand notes; and repurchase agreements covering U.S. government obligations and certificates of deposit. But, we may invest the assets of Separate Accounts I and II in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Instead of making direct investments, we may also operate either Separate Account I or II as a unit investment trust, or other form. We would invest all or part of such account's assets in shares or units of a fund. We, an affiliate, or The Equitable Life Assurance Society of the United States would be the investment adviser and would invest the assets of the fund as above. The assets of Separate Accounts I and II are our property. The portion of the assets of Separate Accounts I and II equal to the reserves and other policy liabilities with respect to such separate accounts will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of such separate accounts in excess of such reserves and liabilities to our general account. We will value the assets of Separate Accounts I and II on each business day. A business day is any day on which the New York Stock Exchange is open for trading. We have the right to create new separate accounts. We have the right to withdraw assets of a class of policies to which this policy belongs from either V83-10-5 Page 5 THE SEPARATE ACCOUNTS CONTINUED separate account and put them in another separate account. If we do this, we will withdraw the same percentage of each investment in such separate account, but will avoid odd lots and fractions. We also have the right to combine any two or more separate accounts. The term "Separate Account I" or "Separate Account II" in this policy shall then refer to any other separate account in which the assets of a class of policies to which this policy belongs were placed. We have the right to: 1. register or deregister either separate account under the Investment Company Act of 1940; 2. run either separate account under the direction of a committee, and to discharge such committee at any time; and 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to either separate account. CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment adviser or any investment policy may not be changed without our consent. If required by law or regulation, the investment policy of either separate account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, we have filed the process for getting such approval with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET SINGLE PREMIUM. We will allocate to each separate account as of the Register Date a percentage of the Net Single Premium Amount shown on page 3. Such allocation will be based on the allocation percentages designated in the application for this policy. TRANSFER OF ACCOUNT VALUES. You may ask us to transfer all or part of your Account Value in one of the separate accounts to the other. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 18 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Single Premium Life Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. The new policy will have a face amount equal to the initial face amount of this policy. It will have the same Register Date, Date of Issue, and Issue Age as this policy. The single premium for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Upon request you will be told the amount of the single premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. If so required, we have filed a detailed statement of the method of computing such an adjustment with the insurance supervisory official of the jurisdiction in which this policy is delivered. V83-10-5 Page 6 GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the single premium for this policy shown on page 3. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premium paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years and policy anniversaries are measured from the Register Date. If the end of a policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit, the Account Value and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Account Values, reserves and net single premiums are based on the Commissioners 1958 Standard Ordinary Mortality Table. Continuous functions are used with interest compounded annually at 4%. The cash values are equal to or more than those required by law. If so required, we have filed a detailed statement of the method of computing cash values with the insurance supervisory official of the jurisdiction in which this policy is delivered. The Tabular Account Value at the end of each policy year equals the tabular reserve. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or Account Values or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. We will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. We may not be able to sell securities or determine the value of the assets of the separate accounts if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy owners. During such times we may defer: 1. Determination of Account Values; 2. Determination and payment of cash values; 3. Payment of loans; 4. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 5. Any requested transfer of Account Value; and 6. Use of insurance benefits under the Payment Options. V83-10-7 Page 7 PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any separate account after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part of them. If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 9. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 9. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. 4. OTHER: We will apply the sum under any other option requested that we make available at time of the Insured's death or net cash value withdrawal. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (for example, a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include rules on: the minimum amount we will apply under an option and minimum amounts for installment payments; withdrawal or commutation rights; naming payees and successor payees; and proving age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V83-10-7 Page 8 TABLE OF GUARANTEED PAYMENTS MINIMUM AMOUNT FOR EACH $1,000 OF ORIGINAL SUM OPTION 2 FIXED PERIOD INSTALLMENTS ------------------------- Number of Years' Monthly Annual Installments Instalment Instalment ------------ ---------- ---------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If installments are paid every 3 months, they will be 25.32% of the annual installments. If they are paid every 6 months, they will be 50.43% of the annual installments. OPTION 3 MONTHLY LIFE INCOME -------------------
10 Years Certain 20 Years Certain Refund Certain ---------------- ---------------- -------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Amounts for Monthly Life Income are based on age nearest birthday when income starts. Amounts for ages not shown will be furnished on request. V83-10-9 Page 9 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual Net Rate of Return for a policy year reflects the account's: o investment income; o plus realized and unrealized capital gains; o minus realized and unrealized capital losses; o minus any charge for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .25% per year for investment management expenses; and o minus a charge not exceeding .50% per year for mortality, expenses and other risks. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all separate accounts always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Account Value at the end of each policy year will equal the Tabular Account Value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each separate account, taking into account the Actual NRR for the last policy year. For the first policy year the VAA for each separate account is zero. For later policy years, the VAA for each separate account will equal the sum of the VAA Change Amounts for all prior policy years, including the current year, increased at 3% compound interest from the Register Date to the current policy anniversary. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each separate account may be positive or negative. It will equal the product of the following Items (a) and (b) divided by the product of Items (c) and (d). (a) The Actual NRR for the separate account minus the Base NRR for that policy year. (b) The Benefit Base for the separate account as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. (d) The sum to which One Dollar will increase at 3% compound interest from the Register Date to the current policy anniversary. BENEFIT BASE. For each separate account, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Single Premium Amount shown on page 3. On policy anniversaries, the Benefit Base for a separate account is the sum of the following Items (1) and (2), minus Item (3): (1) The Tabular Account Value on that anniversary, multiplied by the following amount immediately before that anniversary: The Benefit Base in that separate account divided by the sum of the Benefit Bases for all separate accounts in which you have an Account Value. (2) The Net Single Premium for the VAA for that separate account on that anniversary. (3) Any outstanding loan, plus interest for the separate account as of that policy anniversary. V83-10-9 Page 10 BASIS OF VALUES (CONTINUED) The Net Single Premium Amount, Tabular Account and Cash Values and Net Single Premiums for the VAA are shown on pages 3, 3A and 3B, respectively. For each separate account, the VAA Change Amount will also reflect the effect of: 1. All new policy loans and repayments during the previous policy year; and 2. All transfers of Account Value to or from that separate account during the previous policy year. CALCULATION OF ACCOUNT VALUES. The Account Value of this policy on the Register Date is the net single premium shown on page 3. The Account Value of this policy on any date after the Register Date is the sum of your Account Values in each separate account on that date. Your Account Value in each separate account on any date is the sum of the following Items (1), (2) and (3): (1) The Tabular Account Value on that date, multiplied by the following amount immediately before that date: The Account Value in that separate account divided by the sum of your Account Values in all of the separate accounts. (2) The Net Single Premium on that date for the current VAA for that separate account. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for that separate account minus the Base NRR for the time elapsed since the last policy anniversary. (b) The Benefit Base for that separate account on the last policy anniversary. For each separate account, the Account Value will also reflect the effect of: 1. All new policy loans and repayments since the last policy anniversary; and 2. All transfers of Account Value to or from that separate account since the last policy anniversary. If for any reason the Account Value in a separate account is zero, we will cancel the VAA and any policy loan as to such separate account and reallocate them to the other separate account. TABULAR ACCOUNT AND CASH VALUES (TAV and TCV). The tables of TAV's and TCV's on page 3A show them at the end of the first 20 policy years and at certain attained ages. We will determine the TAV and TCV on other dates in a consistent manner with allowance for time elapsed. Any TAV's and TCV's not shown will be furnished on request. No. 83-10 Page 11 ________________________________________________________________________________ EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] Home Office: 1285 Avenue of the Americas, New York, New York 10019 VARIABLE LIFE INSURANCE POLICY Single Premium Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Face amount increases annually by 3% at the beginning of each policy year after the first. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 83-10 EX-99.1A5AVIIIPOLCY 11 POLICY 83-09-EVLICO THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY OWNER RICHARD ROE POLICY EQUITABLE FACE AMOUNT $100,000 VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 4 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. THE ACCOUNT VALUE AND THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. THEY MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. The amount of the single premium for this policy is shown on page 3. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Donald J. Mooney President Single Premium Whole Life Plan -- Level Face Amount. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 83-09 [EVLICO LOGO] 1285 Avenue of the Americas, New York, CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Death Benefit 4 Account Value 4 Cash Value 4 Loans 5 The Separate Accounts 5 Investment Options, allocations, transfers 6 Exchange of Policy 6 General Provisions 7 Payment Options 8 Basis of Values 10 (Net rates of return, variable adjustment amount, benefit base, calculation of Account Values) A copy of the application for this policy is at the back of the policy. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the insured's death include: o the Death Benefit described on page 4; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 8. Payment of these benefits may be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 7. Special exclusions or limitations (if any ) are listed on page 3. No. 83-09 Page 2 THE INSURED RICHARD ROE REGISTER DATE JAN 1, 1984 POLICY OWNER RICHARD ROE DATE OF ISSUE JAN 1, 1984 FACE AMOUNT $100,000 ISSUE AGE, SEX 35 MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE STATE OF RESIDENCE SPECIMEN STATE ************************* BENEFITS AND PREMIUMS TABLE ************************** BENEFITS SINGLE PREMIUM FOR THIS POLICY LIFE INSURANCE - VARIABLE $25,890.82 THE SINGLE PREMIUM IS $25,890.82 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. THE FOLLOWING DEDUCTIONS ARE MADE FROM THE SINGLE PREMIUM: ADMINISTRATIVE EXPENSE: $200.00 STATE PREMIUM TAX: 517.82 THE NET SINGLE PREMIUM AMOUNT ALLOCATED TO THE SEPARATE ACCOUNT(S) IS $25,173.00. ************** INVESTMENT ALLOCATION OF NET SINGLE PREMIUM AMOUNT************** SEPARATE ACCOUNT I 50% SEPARATE ACCOUNT II 50% ******* ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY ******* SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V83-09-3 Page 3 THE INSURED RICHARD ROE REGISTER DATE JAN 1, 1984 FACE AMOUNT $100,000 DATE OF ISSUE JAN 1, 1984 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35 MALE ******************************** TABULAR VALUES ******************************** THE ACCOUNT VALUE AND CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT SEE PAGE 4 FOR ACCOUNT VALUE AND CASH VALUE PROVISIONS TABULAR VALUES AT ENDS OF POLICY YEARS
END OF TABULAR TABULAR POLICY YEAR ACCOUNT VALUES CASH VALUES 1 $26,019 $23,960 2 26,892 24,984 3 27,790 26,050 4 28,712 27,158 5 29,659 28,309 6 30,630 29,504 7 31,623 30,743 8 32,641 32,030 9 33,683 33,364 10 34,748 34,748 11 35,837 35,837 12 36,951 36,951 13 38,089 38,089 14 39,252 39,252 15 40,440 40,440 16 41,653 41,653 17 42,888 42,888 18 44,143 44,143 19 45,416 45,416 20 46,704 46,704 AGE 60 53,364 53,364 AGE 62 56,124 56,124 AGE 65 60,301 60,301 AGE 70 67,206 67,206
THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V83-09-3A Page 3A TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Level Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.08655 21 $.16103 41 $.30630 61 $.54739 81 $ .80702 2 .08901 22 .16584 42 .31623 62 .56124 82 .81756 3 .09165 23 .17087 43 .32641 63 .57516 83 .82774 4 .09441 24 .17613 44 .33683 64 .58909 84 .83745 5 .09731 25 .18165 45 .34748 65 .60301 85 .84665 6 .10038 26 .18744 46 .35837 66 .61689 86 .85536 7 .10361 27 .19351 47 .36951 67 .63072 87 .86362 8 .10702 28 .19985 48 .38089 68 .64453 88 .87153 9 .11061 29 .20646 49 .39252 69 .65831 89 .87920 10 .11436 30 .21334 50 .40440 70 .67206 90 .88679 11 .11828 31 .22049 51 .41653 71 .68574 91 .89444 12 .12232 32 .22790 52 .42888 72 .69929 92 .90237 13 .12645 33 .23558 53 .44143 73 .71262 93 91083 14 .13063 34 .24352 54 .45416 74 .72564 94 .92013 15 .13484 35 .25173 55 .46704 75 .73828 95 .93048 16 .13906 36 .26019 56 .48007 76 .75052 96 .94201 17 .14330 37 .26892 57 .49324 77 .76238 97 .95459 18 .14757 38 .27790 58 .50655 78 .77391 98 .96774 19 .15193 39 .28712 59 .52002 79 .78517 99 .98064 20 .15640 40 .29659 60 .53364 80 .79621 100 1.00000 FEMALE INSURED -------------- 1 $.07178 21 $.13538 41 $.26197 61 $.47686 81 $ .77229 2 .07383 22 .13985 42 .27047 62 .49058 82 .78597 3 .07602 23 .14449 43 .27917 63 .50455 83 .79922 4 .07831 24 .14930 44 .28807 64 .51871 84 .81195 5 .08072 25 .15429 45 .29719 65 .53301 85 .82411 6 .08324 26 .15946 46 .30654 66 .54743 86 .83569 7 .08589 27 .16482 47 .31613 67 .56201 87 .84673 8 .08865 28 .17038 48 .32597 68 .57676 88 .85730 9 .09155 29 .17613 49 .33604 69 .59177 89 .86749 10 .09457 30 .18209 50 .34637 70 .60703 90 .87741 11 .09773 31 .18825 51 .35693 71 .62253 91 .88720 12 .10100 32 .19462 52 .36775 72 .63818 92 .89704 13 .10438 33 .20122 53 .37880 73 .65388 93 .90712 14 .10788 34 .20805 54 .39008 74 .66948 94 .91771 15 .11146 35 .21510 55 .40160 75 .68489 95 .92905 16 .11515 36 .22239 56 .41336 76 .70006 96 .94128 17 .11895 37 .22990 57 .42540 77 .71496 97 .95429 18 .12285 38 .23761 58 .43774 78 .72961 98 .96766 19 .12689 39 .24554 59 .45042 79 .74406 99 .98064 20 .13106 40 .25366 60 .46347 80 .75830 100 1.00000
V83-09-3B Page 3B POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 8 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3; o plus the sum, if positive, of the Variable Adjustment Amounts, for each separate account under this policy in which you have a cash value, for the policy year in which the Insured dies. However, the Death Benefit will in no event be less than the amount of Paid-up Whole Life Level Insurance that could be purchased by the Account Value at the Insured's death on the basis of the Table of Net Single Premiums on page 3B. See page 10 for a description of how the Variable Adjustment Amount for each separate account is determined. ACCOUNT VALUE The policy's Account Value will vary daily with the performance of the separate accounts in which you have an Account Value under this policy. See page 11 for a description of how the Account Value is determined. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The policy's cash value will vary daily with the performance of the separate accounts in which you have a cash value under this policy. During the first ten policy years the cash value on any date will be equal to the product of (1) and (2), where: (1) is the Account Value on that date; and (2) is the Tabular Cash Value divided by the Tabular Account Value for that date. Whenever the difference between the Account Value and cash value exceeds 9% of the single premium for this policy, we will increase the cash value by the amount of such excess. Tabular Account Values and Tabular Cash Values are shown on page 3A. After the tenth policy year, the cash value will equal the Account Value. V83-09-3B Page 4 LOANS You may get a loan on this policy while it has a loan value. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. A loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit, Account Value and cash value under this policy. We will allocate loans to the separate accounts based on your net cash value in each separate account as of the dates the loans are made. We will allocate loan repayments to the separate accounts based on the amount of your outstanding loans as to each separate account as of the dates the repayments are made. LOAN VALUE. The loan value is 90% of the policy's cash value. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. THE SEPARATE ACCOUNTS We established and we maintain Separate Accounts I and II under the laws of New York State. Realized and unrealized gains and losses from the assets of Separate Accounts I and II are credited or charged against such accounts without regard to our other income, gains, or losses. Assets are put in Separate Accounts I and II to support this policy and other variable life insurance policies. Assets may be put in Separate Accounts I and II for other purposes, but not to support contracts or policies other than variable life insurance. We expect the investments in Separate Account I will be, primarily, common stocks and other equity-type investments. We expect the investments in Separate Account II will be, primarily, short-term (not to exceed one year) money market instruments, such as: United States (U.S.) government and U.S. government agency securities; bank money instruments; time deposits; certificates of deposit; high grade commercial paper, including master demand notes; and repurchase agreements covering U.S. government obligations and certificates of deposit. But, we may invest the assets of Separate Accounts I and II in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Instead of making direct investments, we may also operate either Separate Account I or II as a unit investment trust, or other form. We would invest all or part of such account's assets in shares or units of a fund. We, an affiliate, or The Equitable Life Assurance Society of the United States would be the investment adviser and would invest the assets of the fund as above. The assets of Separate Accounts I and II are our property. The portion of the assets of Separate Accounts I and II equal to the reserves and other policy liabilities with respect to such separate accounts will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of such separate accounts in excess of such reserves and liabilities to our general account. We will value the assets of Separate Accounts I and II on each business day. A business day is any day on which the New York Stock Exchange is open for trading. We have the right to create new separate accounts. We have the right to withdraw assets of a class of policies to which this policy belongs from either V83-09-5 Page 5 THE SEPARATE ACCOUNTS CONTINUED separate account and put them in another separate account. If we do this, we will withdraw the same percentage of each investment in such separate account, but will avoid odd lots and fractions. We also have the right to combine any two or more separate accounts. The term "Separate Account I" or "Separate Account II" in this policy shall then refer to any other separate account in which the assets of a class of policies to which this policy belongs were placed. We have the right to: 1. register or deregister either separate account under the Investment Company Act of 1940; 2. run either separate account under the direction of a committee, and to discharge such committee at any time; and 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to either separate account. CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment adviser or any investment policy may not be changed without our consent. If required by law or regulation, the investment policy of either separate account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, we have filed the process for getting such approval with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET SINGLE PREMIUM. We will allocate to each separate account as of the Register Date a percentage of the Net Single Premium Amount shown on page 3. Such allocation will be based on the allocation percentages designated in the application for this policy. TRANSFER OF ACCOUNT VALUES. You may ask us to transfer all or part of your Account Value in one of the separate accounts to the other. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 24 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Single Premium Life Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. It will have the same face amount, Register Date, Date of Issue, and Issue Age as this policy. The single premium for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Upon request you will be told the amount of the single premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. If so required, we have filed a detailed statement of the method of computing such an adjustment with the insurance supervisory official of the jurisdiction in which this policy is delivered. V83-09-5 Page 6 GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the single premium for this policy shown on page 3. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premium paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years and policy anniversaries are measured from the Register Date. If the end of a policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit, the Account Value and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Account Values, reserves and net single premiums are based on the Commissioners 1980 Standard Ordinary Mortality Table. Continuous functions are used with interest compounded annually at 4%. The cash values are equal to or more than those required by law. If so required, we have filed a detailed statement of the method of computing cash values with the insurance supervisory official of the jurisdiction in which this policy is delivered. The Tabular Account Value at the end of each policy year equals the tabular reserve. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or Account Values or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. We will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. We may not be able to sell securities or determine the value of the assets of the separate accounts if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy owners. During such times we may defer: 1. Determination of Account Values; 2. Determination and payment of cash values; 3. Payment of loans; 4. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 5. Any requested transfer of Account Value; and 6. Use of insurance benefits under the Payment Options. V83-09-7 Page 7 PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any separate account after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part of them. If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 9. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 9. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. 4. OTHER: We will apply the sum under any other option requested that we make available at the time of the Insured's death or net cash value withdrawal. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (for example, a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include rules on: the minimum amount we will apply under an option and minimum amounts for installment payments; withdrawal or commutation rights; naming payees and successor payees; and proving age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V83-09-7 Page 8 TABLE OF GUARANTEED PAYMENTS MINIMUM AMOUNT FOR EACH $1,000 OF ORIGINAL SUM OPTION 2 FIXED PERIOD INSTALLMENTS ------------------------- Number of Years' Monthly Annual Instalments Instalment Instalment ------------ ----------- ----------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If installments are paid every 3 months, they will be 25.32% of the annual installments. If they are paid every 6 months, they will be 50.43% of the annual installments. OPTION 3 MONTHLY LIFE INCOME -------------------
10 Years Certain 20 Years Certain Refund Certain ---------------- ---------------- -------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Amounts for Monthly Life Income are based on age nearest birthday when income starts. Amounts for ages not shown will be furnished on request. V83-09-9 Page 9 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each separate account, the Actual Net Rate of Return for a policy year reflects the account's: o investment income; o plus realized and unrealized capital gains; o minus realized and unrealized capital losses; o minus any charge for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .25% per year for investment management expenses; and o minus a charge not exceeding .50% per year for mortality, expenses and other risks. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all separate accounts always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Account Value at the end of each policy year will equal the Tabular Account Value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each separate account, taking into account the Actual NRR for the last policy year. For the first policy year the VAA for each separate account is zero. For later policy years, the VAA for each separate account will equal the sum of the VAA Change Amounts for all prior policy years, including the current year. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each separate account may be positive or negative. It will equal the product of the following Items (a) and (b) divided by Item (c). (a) The Actual NRR for the separate account minus the Base NRR for that policy year. (b) The Benefit Base for the separate account as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each separate account, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Single Premium Amount shown on page 3. On policy anniversaries, the Benefit Base for a separate account is the sum of the following Items (1) and (2), minus Item (3): (1) The Tabular Account Value on that anniversary, multiplied by the following amount immediately before that anniversary: The Benefit Base in that separate account divided by the sum of the Benefit Bases for all separate accounts in which you have an Account Value. (2) The Net Single Premium for the VAA for that separate account on that anniversary. (3) Any outstanding loan, plus interest for the separate account as of that policy anniversary. The Net Single Premium Amount, Tabular Account and Cash Values and Net Single Premiums for the VAA are shown on pages 3, 3A and 3B, respectively. V83-09-9 Page 10 BASIS OF VALUES CONTINUED For each separate account, the VAA Change Amount will also reflect the effect of: 1. All new policy loans and repayments during the previous policy year; and 2. All transfers of Account Value to or from that separate account during the previous policy year. CALCULATION OF ACCOUNT VALUES. The Account Value of this policy on the Register Date is the net single premium shown on page 3. The Account Value of this policy on any date after the Register Date is the sum of your Account Values in each separate account on that date. Your Account Value in each separate account on any date is the sum of the following Items (1), (2) and (3): (1) The Tabular Account Value on that date, multiplied by the following amount immediately before that date: The Account Value in that separate account divided by the sum of your Account Values in all of the separate accounts. (2) The Net Single Premium on that date for the current VAA for that separate account. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for that separate account minus the Base NRR for the time elapsed since the last policy anniversary. (b) The Benefit Base for that separate account on the last policy anniversary. For each separate account, the Account Value will also reflect the effect of: 1. All new policy loans and repayments since the last policy anniversary; and 2. All transfers of Account Value to or from that separate account since the last policy anniversary. If for any reason the Account Value in a separate account is zero, we will cancel the VAA and any policy loan as to such separate account and reallocate them to the other separate account. TABULAR ACCOUNT AND CASH VALUES (TAV and TCV). The tables of TAV's and TCV's on page 3A show them at the end of the first 20 policy years and at certain attained ages. We will determine the TAV and TCV on other dates in a consistent manner with allowance for time elapsed. Any TAV's and TCV's not shown will be furnished on request. V83-09-11 Page 11 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] Home Office: 1285 Avenue of the Americas, New York, New York 10019 VARIABLE LIFE INSURANCE POLICY Single Premium Whole Life Plan--Level Face Amount. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 83-09 EX-99.1A5AIXPOLICY 12 POLICY 84-11 (EVLICO) (SEP ACCT I) THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY POLICY OWNER RICHARD ROE EQUITABLE VARIABLE LIFE INSURANCE COMPANY FACE AMOUNT $100,000 [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING UPON SEPARATE ACCOUNT INVESTMENT EXPERIENCE. Premiums are shown on page 3 and are fixed as to amount. They will not vary with separate account investment experience. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Donald J. Mooney President Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on pages 6 and 7. No. 84-11 [EVLICO LOGO] 1285 Avenue of the Americas, New York, New York CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Premiums, grace, lapse, reinstatement 4 Death Benefit 5 Cash Value 5 Loans 5 The Separate Accounts 6 Investment Options, allocations, transfers 6 Options on Lapse 7 Exchange of Policy 8 General Provisions 8 Payment Options 10 Basis of Values 12 (Net rates of return, variable adjustment amount, benefit base, calculation of cash values) Any additional benefit riders and a copy of the application are at the back of the policy. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send premiums and requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the Insured's death include: o the Death Benefit described on page 5; o plus any additional benefits due from riders to this policy; o plus or minus any adjustment for the last premium; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 10. We will pay these benefits only if premiums have been paid as called for by this policy. However, even if premiums have been discontinued we may still pay certain benefits. See Options on Lapse, page 7. Payment of these benefits may also be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability, and Age and Sex clauses on page 8. Special exclusions or limitations (if any) are listed on page 3. No. 84-11 Page 2 THE INSURED RICHARD ROE REGISTER DATE FEB 1, 1984 POLICY OWNER RICHARD ROE DATE OF ISSUE FEB 1, 1984 FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE *************************BENEFITS AND PREMIUMS TABLE**************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $1369.00 FOR LIFE THE FIRST PREMIUM IS $1369.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON FEB 01, 1985 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. **************************** TABLE OF NET ANNUAL PREMIUMS*********************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $ 910.00 2 AND LATER 1210.00 *********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS*************** SEPARATE ACCOUNT I 50% SEPARATE ACCOUNT II 50% ************ADMINISTRATIVE OFFICE: EQUITABLE LIFE INSURANCE COMPANY************ SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V84-11-3 STANDARD PAGE 3 THE INSURED RICHARD ROE REGISTER DATE FEB 1, 1984 FACE AMOUNT $100,000 DATE OF ISSUE FEB 1, 1984 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE ********************************TABULAR VALUES********************************** TABULAR ACCOUNT VALUES AT ENDS OF POLICY YEARS* END OF TABULAR END OF TABULAR END OF TABULAR POLICY ACCOUNT POLICY ACCOUNT POLICY ACCOUNT YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 741 9 $10,269 17 $22,017 2 1,812 10 11,613 18 23,642 3 2,919 11 12,990 19 25,294 4 4,059 12 14,404 20 26,970 5 5,234 13 15,854 AGE 60 35,717 6 6,442 14 17,341 AGE 62 39,379 7 7,683 15 18,864 AGE 65 44,956 8 8,959 16 20,424 AGE 70 54,270 ******************************* TABULAR CASH VALUES **************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN AND IS NOT GUARANTEED AS TO DOLLAR AMOUNT SEE PAGE 5 FOR CASH VALUE PROVISION
INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR* INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $0 5 $ 9 9 $257 2 0 6 71 10 318 3 0 7 133 11 380 4 0 8 195 12 442
TABULAR CASH VALUES AT ENDS OF POLICY YEARS* END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES 1 $ 442 6 $ 5,724 2 1,413 7 6,939 3 2,421 8 8,321 4 3,474 9 9,910 5 4,569 10 11,613 FOR YEARS 11 AND LATER THE TABULAR CASH VALUE IS THE SAME AS THE TABULAR ACCOUNT VALUE. * THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V84-11-3-A PAGE 3A TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.06793 21 $.13298 41 $.26960 61 $.51232 81 $ .78748 2 .06996 22 .13727 42 .27929 62 .52668 82 .79890 3 .07217 23 .14178 43 .28925 63 .54114 83 .80994 4 .07449 24 .14654 44 .29947 64 .55567 84 .82051 5 .07695 25 .15154 45 .30996 65 .57021 85 .83053 6 .07956 26 .15683 46 .32071 66 .58475 86 .84002 7 .08233 27 .16240 47 .33175 67 .59928 87 .84903 8 .08529 28 .16825 48 .34306 68 .61381 88 .85767 9 .08841 29 .17438 49 .35467 69 .62836 89 .86607 10 .09170 30 .18079 50 .36656 70 .64291 90 .87437 11 .09515 31 .18748 51 .37873 71 .65742 91 .88276 12 .09873 32 .19444 52 .39117 72 .67183 92 .89147 13 .10239 33 .20169 53 .40385 73 .68604 93 .90078 14 .10609 34 .20921 54 .41675 74 .69994 94 .91103 15 .10981 35 .21702 55 .42983 75 .71346 95 .92248 16 .11354 36 .22510 56 .44311 76 .72658 96 .93527 17 .11729 37 .23346 57 .45657 77 .73932 97 .94925 18 .12106 38 .24210 58 .47022 78 .75171 98 .96390 19 .12491 39 .25100 59 .48406 79 .76385 99 .97831 20 .12887 40 .26017 60 .49810 80 .77578 100 1.00000
FEMALE INSURED -------------- 1 $.05530 21 $.10974 41 $.22687 61 $.43933 81 $ .74977 2 .05695 22 .11370 42 .23500 62 .45334 82 .76454 3 .05873 23 .11784 43 .24334 63 .46766 83 .77888 4 .06061 24 .12214 44 .25191 64 .48221 84 .79268 5 .06260 25 .12661 45 .26072 65 .49695 85 .80588 6 .06469 26 .13128 46 .26977 66 .51186 86 .81848 7 .06690 27 .13613 47 .27909 67 .52697 87 .83051 8 .06923 28 .14118 48 .28868 68 .54232 88 .84204 9 .07168 29 .14643 49 .29853 69 .55797 89 .85318 10 .07425 30 .15189 50 .30866 70 .57395 90 .86404 11 .07695 31 .15756 51 .31906 71 .59022 91 .87477 12 .07976 32 .16344 52 .32974 72 .60671 92 .88557 13 .08267 33 .16956 53 .34070 73 .62329 93 .89667 14 .08569 34 .17592 54 .35191 74 .63983 94 .90835 15 .08880 35 .18251 55 .36339 75 .65619 95 .92090 16 .09200 36 .18935 56 .37515 76 .67234 96 .93445 17 .09531 37 .19642 57 .38722 77 .68824 97 .94891 18 .09872 38 .20371 58 .39965 78 .70391 98 .96381 19 .10226 39 .21122 59 .41247 79 .71940 99 .97831 20 .10593 40 .21895 60 .42569 80 .73470 100 1.00000
V84-11-3B Page 3B POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 10 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. PREMIUMS AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and the period for which they are to be paid. Each premium is payable on or before its due date at our Administrative Office. You may write and ask us to change the frequency of premium payment. If we approve the change, the new premium will be determined on the rate scale for this policy. GRACE PERIOD. We allow a grace period of 31 days for payment of each premium, after the first premium. The insurance will continue during the grace period. If a premium is paid during the grace period, then all benefits under this policy will be the same as if such premium had been paid on its due date. LAPSE. If a premium is not paid by the end of its grace period, the policy will lapse as of the premium due date. If this occurs, all insurance ends, except as stated in Options on Lapse on page 7. Additional benefit riders do not continue beyond the grace period of an unpaid premium. REINSTATEMENT. You may reinstate this policy within five years after lapse if: (1) the policy has not been given up for its net cash value; (2) you provide evidence of insurability satisfactory to us; and (3) you pay the larger of: (a) all overdue premiums with interest at 6% per year compounded annually; or (b) 110% of the difference between the following Items (i) and (ii). Item (i) is the excess of the cash value immediately after reinstatement over the cash value immediately before reinstatement. Item (ii) is any policy loan, and accrued loan interest, in effect when any option on lapse became effective, with loan interest to the date of reinstatement. A reinstatement will take effect as of the date we approve it. Upon reinstatement this policy will have the same Benefit Base and the same Variable Adjustment Amount as to each separate account (as these are determined in the Variable Adjustment Amount provision on page 12) as if default had not occurred. Also, upon reinstatement this policy will have a loan equal to the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued loan interest, in effect at the date any option on lapse became effective, with loan interest to the date of reinstatement. Item (ii) is any loan arising after the date any option on lapse became effective, with loan interest to the date of reinstatement. PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last premium paid that applies to a period beyond the policy month in which the Insured dies. If the Insured dies during the grace period of an unpaid premium, we will deduct from the benefits the part of the overdue premium for one policy month. V84-11-3B Page 4 DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3; o plus the sum, if positive, of the Variable Adjustment Amounts, for each separate account in which you have a cash value, for the policy year in which the Insured dies. However, the Death Benefit will in no event be less than the amount of Paid-up Whole Life Insurance that could be bought by the cash value plus the difference if any between the Tabular Account Value and the Tabular Cash Value at the Insured's death on the basis of the Table of Net Single Premiums on page 3B. A description of how the Variable Adjustment Amount for each separate account is determined is on page 12. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The cash value of the policy will vary daily with the performance of the separate accounts in which you have a cash value. See page 13 for a description of how cash values are determined. LOANS You may get a loan on this policy while it has a loan value and it is not being continued as Fixed Extended Term Insurance under the Options on Lapse on page 7. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. Except when used to pay premiums, a loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. We may also deduct any unpaid premium then due. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit and cash value under this policy. It will have no effect on the amount of the premiums payable under this policy. We will allocate loans to the separate accounts based on your net cash value in each separate account as of the dates the loans are made. We will allocate loan repayments to the separate accounts based on the amount of your outstanding loans as to each separate account as of the dates the repayments are made. See page 13 for a description of how the cash value in each separate account is determined. LOAN VALUE. The loan value is a percentage of the cash value on the next premium due date (or the next policy anniversary if this has become a paid-up policy) assuming that the Actual Net Rate of Return (see page 12) is exactly 4-1/2% a year from the date of the loan to such due date or anniversary, discounted at 5- 1/2% a year from the date of the loan to such due date or anniversary. Such percentage is: (a) 90% during the first ten policy years while the policy is not lapsed; and (b) 100% after the tenth policy year, and at any time during the first ten policy years while the policy is lapsed and is being continued under the Variable or Fixed Reduced Paid-Up Insurance Option. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5-1/2%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. However, if this policy has lapsed and you are continuing insurance under one of the Options on Lapse on page 7, any loan that was deducted in determining the benefit on lapse may not be repaid unless this policy is reinstated. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. V84-11-5 Page 5 THE SEPARATE ACCOUNTS We established and we maintain Separate Accounts I and II under the laws of New York State. Realized and unrealized gains and losses from the assets of Separate Accounts I and II are credited or charged against such accounts without regard to our other income, gains, or losses. Assets are put in Separate Accounts I and II to support this policy and other variable life insurance policies. Assets may be put in Separate Accounts I and II for other purposes, but not to support contracts or policies other than variable life insurance. We expect the investments in Separate Account I will be, primarily, common stocks and other equity-type investments. We expect the investments in Separate Account II will be, primarily, short-term (not to exceed one year) money market instruments, such as: United States (U.S.) government and U.S. government agency securities; bank money instruments; time deposits; certificates of deposit; high grade commercial paper, including master demand notes; and repurchase agreements covering U.S. government obligations and certificates of deposit. But we may invest the assets of Separate Accounts I and II in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Instead of making direct investments, we may also operate either Separate Account I or II as a unit investment trust, or other form. We would invest all or part of such account's assets in shares or units of a fund. We, an affiliate, or The Equitable Life Assurance Society of the United States would be the investment adviser and would invest the assets of the fund as above. The assets of Separate Accounts I and II are our property. The portion of the assets of Separate Accounts I and II equal to the reserves and other policy liabilities with respect to such separate accounts will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of such separate accounts in excess of such reserves and liabilities to our general account. We will value the assets of Separate Accounts I and II on each business day. A business day is any day on which the New York Stock Exchange is open for trading. We have the right to create new separate accounts. We have the right to withdraw assets of a class of policies to which this policy belongs from either separate account and put them in another separate account. If we do this, we will withdraw the same percentage of each investment in such separate account, but will avoid odd lots and fractions. We also have the right to combine any two or more separate accounts. The term "Separate Account I" or "Separate Account II" in this policy shall then refer to any other separate account in which the assets of a class of policies to which this policy belongs were placed. We have the right to: 1. register or deregister either separate account under the Investment Company Act of 1940; 2. run either separate account under the direction of a committee, and to discharge such committee at any time; and 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to either separate account. CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment adviser or any investment policy may not be changed without our consent. If required by law or regulation, the investment policy of either separate account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate to each separate account at the beginning of each policy year a percentage of the Net Annual Premium shown on page 3 for that year. Such allocations will be based on the allocation percentages then in effect. The allocation percentages for the first policy year are as designated in the application for this policy. Unless you change them, such percentages shall also apply in later years. V84-11-5 Page 6 INVESTMENT OPTIONS (CONTINUED) You may change the allocation percentages for policy years after the first by notifying us in writing of the new percentages. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF BENEFIT BASE. You may ask us to transfer all or part of your Benefit Base (defined on page 12) in one of the separate accounts to the other. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. OPTIONS ON LAPSE You have a number of options if the policy lapses. You may apply for reinstatement. If there is a net cash value, you may withdraw it and give up the policy. Or, you may continue insurance under one of the following options: FIXED REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's lifetime and for the amount that the net cash value will buy. VARIABLE REDUCED PAID-UP INSURANCE. This is variable benefit insurance for the Insured's lifetime that you may choose if the net cash value is at least $5,000. The amount of insurance for the policy year in which lapse occurs (the Variable Reduced Paid-Up Face Amount) is the amount that the net cash value will buy on the basis of the Table of Net Single Premiums on page 3B. Thereafter, the amount of insurance equals the amount for the policy year in which lapse occurs plus or minus the sum of the Variable Adjustment Amounts (whether positive or negative) for each separate account under this policy in which you have a cash value, for the policy year in which the Insured dies. However, the amount of insurance will in no event be less than the amount of Paid-up Whole Life Insurance that could be bought on the basis of the Table of Net Single Premiums on page 3B by the cash value at the Insured's death. FIXED EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan interest. The insurance will continue from the date of lapse for as long a term period as the net cash value will buy. In no event, however, will this period be less than 90 days if premiums have been paid for at least three months before lapse and there is no loan on this policy. This option is not available if so stated on page 3. An Option on Lapse will become effective on the date your written request for it is received at our Administrative Office. If your request is not received within three months after the date of lapse, Fixed Extended Term Insurance will become effective automatically at the end of such three month period. Fixed Reduced Paid-Up Insurance will apply instead if the Fixed Extended Term Insurance option is not available. If the Insured dies after the grace period but within three months after the date of lapse and before an Option on Lapse becomes effective, the greater of the benefit under Fixed Reduced Paid-Up or Fixed Extended Term Insurance will apply. In this case, any restriction on page 3 as to the availability of Fixed Extended Term Insurance will not apply. We will determine the amounts of these options as of the date the option becomes effective. We will use net cash values as of the date the option becomes effective. A term period will begin as of the date of lapse (the due date of the unpaid premium). We will use net single premiums for the Insured's age as of the date of lapse. We will deduct any unpaid loan and loan interest from any benefits we pay at the Insured's death if a loan is made while the policy is being continued as Variable or Fixed Reduced Paid-Up Insurance. V84-11-7 Page 7 EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 24 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange with all premiums due having been paid; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be our Adjustable Life Plan, and will be on a level premium whole life plan (with premiums payable for life), subject to our rules in effect on the date of exchange. It will have an insurance amount equal to the face amount of this policy. The new policy will have the same Register Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy will be based on our rates in effect on its Register Date for the same class of risk as under this policy. Any additional benefit riders in this policy will be included in the new policy only if we were offering them with the new policy as of its Date of Issue. Upon request you will be told the amount of the first premium for the new policy, and of any extra sum required or allowance to be made for a premium, cash value or policy account adjustment that takes appropriate account of the premiums, cash and policy account values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed, if required, with the insurance supervisory official of the jurisdiction in which this policy is delivered. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. See any additional benefit riders for modifications that apply to them. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premiums paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy anniversaries and premium periods are measured from the Register Date. Each policy month begins on the same day in each calendar month as in the Register Date. If the end of a premium period or policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. POLICY CHANGES. You may change this policy to another plan of insurance or add additional benefit riders or make other changes, subject to our rules at the time of change. V84-11-7 Page 8 GENERAL PROVISIONS (CONTINUED) REPORTS. Each policy year after the first we will give you a report showing the Death Benefit and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. No such reports will be given while this policy is lapsed except when it is being continued as Variable Reduced Paid-Up Insurance. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on the Commissioners 1980 Standard Ordinary Mortality Table. For any extended term insurance, they are based instead on the Commissioners 1980 Extended Term Insurance Table. Continuous functions are used with interest compounded annually at 4-1/2%. The cash values and paid-up insurance benefits are equal to or more than those required by law. If so required, we have filed a detailed statement of the method of computing values and benefits with the insurance supervisory official of the jurisdiction in which this policy is delivered. The tabular cash value at the end of each policy year after the tenth policy year equals the reserve. Reserves referred to in this policy are not less than reserves determined according to the Commissioners Reserve Valuation Method. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not being continued under one of the fixed benefit Options on Lapse, we will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. We may not be able to sell securities or determine the value of the assets of the separate accounts if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy Owners. During such times we may defer: 1. Determination and payment of cash values; 2. Payment of loans; 3. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 4. Any requested transfer of Benefit Base; 5. Use of insurance benefits under the Payment Options; and 6. Determination and payment of any Variable Reduced Paid-Up Insurance. DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the making of a loan for up to six months after we receive a request at our Administrative Office if this policy is being continued under one of the fixed benefit Options on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash value payment we defer for 30 days or more. V84-11-9 Page 9 PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any separate account after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part of them. If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 11. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 11. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. 4. OTHER: We will apply the sum under any other option requested that we make available at the time of the Insured's death or net cash value withdrawal. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (for example, a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include rules on: the minimum amount we will apply under an option and minimum amounts for instalment payments; withdrawal or commutation rights; naming payees and successor payees; and proving age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V84-11-9 Page 10 TABLE OF GUARANTEED PAYMENTS (MINIMUM AMOUNT FOR EACH $1,000 APPLIED) OPTION 2A FIXED PERIOD INSTALMENTS ------------------------ Number of Years Monthly Annual Instalments Instalment Instalment ---------- ----------- ---------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If instalments are paid each 3 months, they will be 25.32% of the annual instalments. If they are paid each 6 months, they will be 50.43% of the annual instalments.
OPTION 3 MONTHLY LIFE INCOME ------------------- 10 Years Certain 20 Years Certain Refund Certain --------------------------------- ---------------------------------- ---------------------------------- AGE Male Female Male Female Male Female -------------- ---------------- ---------------- ----------------- ---------------- ---------------- ----------------- 50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Amounts for Monthly Life Income are based on age nearest birthday when income starts. Amounts for ages not shown will be furnished on request. V84-11-11 Page 11 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR.) For each separate account, the Actual Net Rate of Return for a policy year reflects the account's: o investment income; o plus realized and unrealized capital gains; o minus realized and unrealized capital losses; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .25% per year for investment management expenses; and o minus a charge not exceeding .50% per year for mortality, expenses and other risks. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4-1/2% per year. (It is a pro-rata part of 4-1/2% for periods of less than a year.) If the Actual NRR for all separate accounts always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the cash value at the end of each policy year will equal the tabular cash value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each separate account, taking into account the Actual NRR for the last policy year. The VAA for each separate account is zero for the first policy year and, if the policy lapses and the Variable Reduced Paid-Up Insurance option takes effect, for the remainder of the policy year in which lapse occurs. For other policy years, the VAA for each separate account will equal the VAA for that account for the last policy year, plus the VAA Change Amount for that account. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each separate account may be positive or negative. It will equal the product of the following Items (1) and (2), divided by Item (3). (1) The Actual NRR for the separate account minus the Base NRR for that policy year, or for the part of the policy year since lapse during which the Variable Reduced Paid-Up Insurance option takes effect. (2) The Benefit Base for the separate account as of the last policy anniversary. (For the policy year immediately following a lapse of the policy where the Variable Reduced Paid-Up Insurance option is in effect, use instead the net cash value as of the date of lapse.) (3) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each separate account, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Annual Premium for the first policy year. If the policy has not lapsed, on policy anniversaries the Benefit Base for a separate account is the sum of the following Items (1) and (2), minus item (3): (1) The allocation percentage for that anniversary, multiplied by the sum of the following Items (a) and (b): (a) The Tabular Account Value on that anniversary. (b) The Net Annual Premium for that anniversary. (2) The Net Single Premium for the VAA for that separate account on that anniversary. (3) Any outstanding loan, plus loan interest, for the separate account as of that policy anniversary. V84-11-11 Page 12 BASIS OF VALUES (CONTINUED) If the policy has lapsed and the Variable Reduced Paid-Up Insurance option has taken effect, on policy anniversaries the Benefit Base for a separate account is the following Item (1) minus Item (2): (1) The cash value in the separate account on that policy anniversary. (2) Any outstanding loan, plus loan interest, for the separate account as of that policy anniversary. The Net Annual Premiums, Tabular Account Values and Net Single Premiums are shown on pages 3, 3A and 3B, respectively. For each separate account, the VAA Change Amount will also reflect the effect of: 1. All new policy loans and repayments during the previous policy year; and 2. All transfers of Benefit Base to or from that separate account during the previous policy year. In addition, if you have changed the allocation percentages, we will reallocate the VAA's among the separate accounts. CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum of your cash values in each separate account on that date. Your cash value in each separate account on any date is determined as follows: (1) While the policy is not lapsed, the sum of the immediately following Items (a), (c) and (d). (2) More than three months after the policy has lapsed and while it is being continued under the Variable Reduced Paid-Up Insurance option, the sum of the immediately following Items (b), (c) and (d). (a) the tabular cash value on that date, multiplied by the allocation percentage for that separate account in effect on the last policy anniversary. (b) The product of the following Items (i) and (ii): (i) The product of the Net Single Premium on that date per $1.00 of Paid-Up Whole Life Insurance as shown on page 3B, and the Variable Reduced Paid-Up Face Amount defined on page 7. (ii) The following amount immediately before the date on which the cash value is being determined: The cash value in that separate account, divided by the total cash value in this policy. (c) The Net Single Premium on that date for the current VAA for that separate account. (d) If the date is not a policy anniversary, the product of the following Items (i) and (ii): (i) The Actual NRR for the separate account minus the Base NRR for the time elapsed since the last policy anniversary. (ii) The Benefit Base for the separate account on the last policy anniversary. If a premium is due and unpaid, then within three months after the due date your cash value in each separate account is the sum of the following Items (1) and (2): (1) Your cash value in that separate account as of the due date of the unpaid premium. (2) The product of the following Items (a) and (b): (a) The Actual NRR for the separate account minus the Base NRR for the time elapsed since such due date. (b) The cash value in that separate account on such due date. For each separate account, the cash value will also reflect the effect of: 1. All new policy loans and repayments since the last policy anniversary; and 2. All transfers of Benefit Base to or from that separate account since the last policy anniversary. V84-11-13 Page 13 BASIS OF VALUES (CONTINUED) More than three months after the due date of an unpaid premium, if you continue the policy under one of the fixed benefit Options on Lapse, your cash value will equal the reserve for the policy. In such case, the cash value within 30 days after a policy anniversary will never be less than the cash value on that anniversary. If you transfer all of the Benefit Base in a separate account to the other separate account or if you have a policy loan allocated to a separate account and your Benefit Base in that separate account is zero, we will cancel the VAA and any policy loan as to such separate account and reallocate them to the other separate account. Also, the premium allocation percentage for such separate account will be reduced to zero and the percentage for the other separate account will be increased to 100%. TABULAR CASH AND ACCOUNT VALUES (TCV AND TAV). The tables on page 3A show interim TCV's at the end of each month in the first policy year, and TCV's at the end of policy years. We will determine the TCV and TAV on other dates in a consistent manner with allowance for time elapsed and premiums paid. Any TCV's and TAV's not shown will be furnished on request. V84-11-13 Page 14 VARIABLE LIFE INSURANCE POLICY EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] Home Office: 1285 Avenue of the Americas, New York, New York 10019 Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on pages 6 and 7. No. 84-11 SPECIMEN POLICY NOTE -- Because of variations in state policy form requirements, the policy as actually issued may differ somewhat from this specimen policy. EX-99.1A5AXPOLICY 13 POLICY 85-11-EVLICO THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY POLICY OWNER RICHARD ROE EQUITABLE VARIABLE LIFE INSURANCE COMPANY FACE AMOUNT $100,000 [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY. Premiums are shown on page 3 and are fixed as to amount. They will not vary with the investment experience of this policy. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Franklin Maisano President Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-11 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] 1285 Avenue of the Americas, New York CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Premiums, grace, lapse, reinstatement 4 Death Benefit 5 Cash Value 5 Loans 5 The Separate Account 6 Investment Options, allocations, transfers 6 Options on Lapse 7 Exchange of Policy 8 General Provisions 8 Payment Options 10 Basis of Values 12 (Net rates of return, variable adjustment amount, benefit base, calculation of cash values) Any additional benefit riders and a copy of the application are at the back of the policy. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send premiums and requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the Insured's death include: o the Death Benefit described on page 5; o plus any additional benefits due from riders to this policy; o plus or minus any adjustment for the last premium; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 10. We will pay these benefits only if premiums have been paid as called for by this policy. However, even if premiums have been discontinued we may still pay certain benefits. See Options on Lapse, page 7. Payment of these benefits may also be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability, and Age and Sex clauses on page 8. Special exclusions or limitations (if any) are listed on page 3. No. 85-11 Page 2 POLICY INFORMATION THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985 FACE AMOUNT $100,000 ISSUE AGE, SEX 35 MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE ************************* BENEFITS AND PREMIUMS TABLE ************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $1369.00 FOR LIFE THE FIRST PREMIUM IS $1369.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON MAR 01, 1986 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. **************************** TABLE OF NET ANNUAL PREMIUMS ********************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $ 910.00 2 AND LATER 1210.00 ********************* INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS ************* INVESTMENT DIVISIONS: COMMON STOCK 50% MONEY MARKET 50% ****ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY *********** SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V85-11-3 STANDARD Page 3 POLICY INFORMATION CONTINUED THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35 MALE
******************************************* TABULAR VALUES ******************************************** TABULAR ACCOUNT VALUES AT ENDS OF POLICY YEARS* END OF TABULAR END OF TABULAR END OF TABULAR POLICY ACCOUNT POLICY ACCOUNT POLICY ACCOUNT YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 741 9 $10,269 17 $22,017 2 1,812 10 11,613 18 23,642 3 2,919 11 12,990 19 25,294 4 4,059 12 14,404 20 26,970 5 5,234 13 15,854 AGE 60 35,717 6 6,442 14 17,341 AGE 62 39,379 7 7,683 15 18,864 AGE 65 44,956 8 8,959 16 20,424 AGE 70 54,270
****************************************** TABULAR CASH VALUES **************************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN AND IS NOT GUARANTEED AS TO DOLLAR AMOUNT SEE PAGE 5 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR* INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $0 5 $ 9 9 $257 2 0 6 71 10 318 3 0 7 133 11 380 4 0 8 195 12 442
TABULAR CASH VALUES AT ENDS OF POLICY YEARS* INTERIM INTERIM END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES 1 $ 442 6 $ 5,724 2 1,413 7 6,939 3 2,421 8 8,321 4 3,474 9 9,910 5 4,569 10 11,613 FOR YEARS 11 AND LATER THE TABULAR CASH VALUE IS THE SAME AS THE TABULAR ACCOUNT VALUE. *THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V85-11-3-A PAGE 3A POLICY INFORMATION CONTINUED TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.06793 21 $.13298 41 $.26960 61 $.51232 81 $ .78748 2 .06996 22 .13727 42 .27929 62 .52668 82 .79890 3 .07217 23 .14178 43 .28925 63 .54114 83 .80994 4 .07449 24 .14654 44 .29947 64 .55567 84 .82051 5 .07695 25 .15154 45 .30996 65 .57021 85 .83053 6 .07956 26 .15683 46 .32071 66 .58475 86 .84002 7 .08233 27 .16240 47 .33175 67 .59928 87 .84903 8 .08529 28 .16825 48 .34306 68 .61381 88 .85767 9 .08841 29 .17438 49 .35467 69 .62836 89 .86607 10 .09170 30 .18079 50 .36656 70 .64291 90 .87437 11 .09515 31 .18748 51 .37873 71 .65742 91 .88276 12 .09873 32 .19444 52 .39117 72 .67183 92 .89147 13 .10239 33 .20169 53 .40385 73 .68604 93 .90078 14 .10609 34 .20921 54 .41675 74 .69994 94 .91103 15 .10981 35 .21702 55 .42983 75 .71346 95 .92248 16 .11354 36 .22510 56 .44311 76 .72658 96 .93527 17 .11729 37 .23346 57 .45657 77 .73932 97 .94925 18 .12106 38 .24210 58 .47022 78 .75171 98 .96390 19 .12491 39 .25100 59 .48406 79 .76385 99 .97831 20 .12887 40 .26017 60 .49810 80 .77578 100 1.00000 FEMALE INSURED -------------- 1 $.05530 21 $.10974 41 $.22687 61 $.43933 81 $ .74977 2 .05695 22 .11370 42 .23500 62 .45334 82 .76454 3 .05873 23 .11784 43 .24334 63 .46766 83 .77888 4 .06061 24 .12214 44 .25191 64 .48221 84 .79268 5 .06260 25 .12661 45 .26072 65 .49695 85 .80588 6 .06469 26 .13128 46 .26977 66 .51186 86 .81848 7 .06690 27 .13613 47 .27909 67 .52697 87 .83051 8 .06923 28 .14118 48 .28868 68 .54232 88 .84204 9 .07168 29 .14643 49 .29853 69 .55797 89 .85318 10 .07425 30 .15189 50 .30866 70 .57395 90 .86404 11 .07695 31 .15756 51 .31906 71 .59022 91 .87477 12 .07976 32 .16344 52 .32974 72 .60671 92 .88557 13 .08267 33 .16956 53 .34070 73 .62329 93 .89667 14 .08569 34 .17592 54 .35191 74 .63983 94 .90835 15 .08880 35 .18251 55 .36339 75 .65619 95 .92090 16 .09200 36 .18935 56 .37515 76 .67234 96 .93445 17 .09531 37 .19642 57 .38722 77 .68824 97 .94891 18 .09872 38 .20371 58 .39965 78 .70391 98 .96381 19 .10226 39 .21122 59 .41247 79 .71940 99 .97831 20 .10593 40 .21895 60 .42569 80 .73470 100 1.00000
V85-11-3B Page 3B POLICY INFORMATION CONTINUED DESCRIPTION OF INVESTMENT DIVISIONS THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS (OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC. COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE INVEST- MENTS. MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.) GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S. GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT. INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES. PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS. V85-11-3C PAGE 3C POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 10 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. PREMIUMS AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and the period for which they are to be paid. Each premium is payable on or before its due date at our Administrative Office. You may write and ask us to change the frequency of premium payment. If we approve the change, the new premium will be determined on the rate scale for this policy. GRACE PERIOD. We allow a grace period of 31 days for payment of each premium, after the first premium. The insurance will continue during the grace period. If a premium is paid during the grace period, then all benefits under this policy will be the same as if such premium had been paid on its due date. LAPSE. If a premium is not paid by the end of its grace period, the policy will lapse as of the premium due date. If this occurs, all insurance ends, except as stated in Options on Lapse on page 7. Additional benefit riders do not continue beyond the grace period of an unpaid premium. REINSTATEMENT. You may reinstate this policy within five years after lapse if: (1) the policy has not been given up for its net cash value; (2) you provide evidence of insurability satisfactory to us; and (3) you pay the larger of: (a) all overdue premiums with interest at 6% per year compounded annually; or (b) 110% of the difference between the following Items (i) and (ii). Item (i) is the excess of the cash value immediately after reinstatement over the cash value immediately before reinstatement. Item (ii) is any policy loan, and accrued loan interest, in effect when any option on lapse became effective, with loan interest to the date of reinstatement. A reinstatement will take effect as of the date we approve it. Upon reinstatement this policy will have the same Benefit Base and the same Variable Adjustment Amount as to each investment division (as these are determined in the Variable Adjustment Amount provision on page 12) as if default had not occurred. Also, upon reinstatement this policy will have a loan equal to the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued loan interest, in effect at the date any option on lapse became effective, with loan interest to the date of reinstatement. Item (ii) is any loan arising after the date any option on lapse became effective, with loan interest to the date of reinstatement. PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last premium paid that applies to a period beyond the policy month in which the Insured dies. If the Insured dies during the grace period of an unpaid premium, we will deduct from the benefits the part of the overdue premium for one policy month. V85-11-4 Page 4 DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3; o plus the sum, if positive, of the Variable Adjustment Amounts, for each investment division in which you have a cash value, for the policy year in which the Insured dies. However, the Death Benefit will in no event be less than the amount of Paid-up Whole Life Insurance that could be bought by the cash value plus the difference if any between the Tabular Account Value and the Tabular Cash Value at the Insured's death on the basis of the Table of Net Single Premiums on page 3B. A description of how the Variable Adjustment Amount for each investment division is determined is on page 12. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The cash value of the policy will vary daily with the performance of the investment divisions in which you have a cash value. See page 13 for a description of how cash values are determined. LOANS You may get a loan on this policy while it has a loan value and it is not being continued as Fixed Extended Term Insurance under the Options on Lapse on page 7. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. Except when used to pay premiums, a loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. We may also deduct any unpaid premium then due. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustable Amounts, Death Benefit and cash value under this policy. It will have no effect on the amount of the premiums payable under this policy. We will allocate loans to the investment divisions based on your net cash value in each investment division as of the dates the loans are made. We will allocate loan repayments to the investment divisions based on the amount of your outstanding loans as to each investment division as of the dates repayments are made. See page 13 for a description of how the cash value in each investment division is determined. LOAN VALUE. The loan value is a percentage of the cash value on the next premium due date (or the next policy anniversary if this has become a paid-up policy) assuming that the Actual Net Rate of Return (see page 12) is exactly 4-1/2% a year from the date of the loan to such due date or anniversary, discounted at 5-1/2% a year from the date of the loan to such due date or anniversary. Such percentage is: (a) 90% during the first ten policy years while the policy is not lapsed; and (b) 100% after the tenth policy year, and at any time during the first ten policy years while the policy is lapsed and is being continued under the Variable or Fixed Reduced Paid-Up Insurance Option. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5-1/2%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. However, if this policy has lapsed and you are continuing insurance under one of the Options on Lapse on page 7, any loan that was deducted in determining the benefit on lapse may not be repaid unless this policy is reinstated. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. V85-11-4 Page 5 THE SEPARATE ACCOUNT The Separate Account is our Separate Account I (in unit investment trust form). We established and we maintain it under the laws of New York State. Realized and unrealized gains and losses from the assets of the Separate Account are credited or charged against it without regard to our other income, gains, or losses. Assets are put in the Separate Account to support this policy and other variable life insurance policies. Assets may be put in the Separate Account for other purposes, but not to support contracts or policies other than variable life insurance. The assets of the Separate Account are our property. The portion of its assets equal to the reserves and other policy liabilities with respect to the Separate Account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of the Separate Account in excess of such reserves and liabilities to our general account. We may transfer assets of an investment division in excess of the reserves and other liabilities with respect to that division to another investment division or to our general account. We will value the assets of each investment division on each business day. A business day is generally any day on which the New York Stock Exchange is open for trading. INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions". Each division may invest its assets in a separate class (or series) of shares of a designated investment company. Each class represents a separate portfolio in the investment company. The investment divisions available on the Register Date are described on page 3C. If we add or remove investment divisions, we will send you a new Page 3C reflecting this. We have the right to change designated investment companies. We have the right to add or remove investment divisions. We have the right to withdraw assets of a class of policies to which this policy belongs from an investment division and put them in another investment division. We also have the right to combine any two or more investment divisions. The term "investment division" in this policy shall then refer to any other investment division in which the assets of a class of policies to which this policy belongs were placed. If we make any such change we will send you a new Page 3C reflecting it. We have the right to: 1. register or deregister the Separate Account under the Investment Company Act of 1940; 2. run the Separate Account under the direction of a committee, and to discharge such committee at any time; 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to the Separate Account; and 4. operate the Separate Account by making direct investments or in any other form. If we do so, we may invest the assets of the Separate Account in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Also, unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without our consent. CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material change in an investment objective or policy of any investment company that is invested in by an investment division to which net premiums have been allocated under this policy. If required by law or regulation, the investment policy of the Separate Account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate to each investment division at the beginning of each policy year a percentage of the Net Annual Premium shown on page 3 for that year. Such allocations will be based on the allocation percentages then in effect. The allocation percentages for the first policy year are as designated in the application for this policy. Unless you change them, such percentages shall also apply in later years. V85-11-6 Page 6 INVESTMENT OPTIONS CONTINUED You may change the allocation percentages for policy years after the first by notifying us in writing of the new percentages. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF BENEFIT BASE. You may ask us to transfer all or part of your Benefit Base (defined on page 12) in one investment division to another. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. OPTIONS ON LAPSE You have a number of options if the policy lapses. You may apply for reinstatement. If there is a net cash value, you may withdraw it and give up the policy. Or, you may continue insurance under one of the following options: FIXED REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's lifetime and for the amount that the net cash value will buy. VARIABLE REDUCED PAID-UP INSURANCE. This is variable benefit insurance for the Insured's lifetime that you may choose if the net cash value is at least $5,000. The amount of insurance for the policy year in which lapse occurs (the Variable Reduced Paid-Up Face Amount) is the amount that the net cash value will buy on the basis of the Table of Net Single Premiums on page 3B. Thereafter, the amount of insurance equals the amount for the policy year in which lapse occurs plus or minus the sum of the Variable Adjustment Amounts (whether positive or negative) for each investment division under this policy in which you have a cash value, for the policy year in which the Insured dies. However, the amount of insurance will in no event be less than the amount of Paid-up Whole Life Insurance that could be bought on the basis of the Table of Net Single Premiums on page 3B by the cash value at the Insured's death. FIXED EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan interest. The insurance will continue from the date of lapse for as long a term period as the net cash value will buy. In no event, however, will this period be less than 90 days if premiums have been paid for at least three months before lapse and there is no loan on this policy. This option is not available if so stated on page 3. An Option on Lapse will become effective on the date your written request for it is received at our Administrative Office. If your request is not received within three months after the date of lapse, Fixed Extended Term Insurance will become effective automatically at the end of such three month period. Fixed Reduced Paid-Up Insurance will apply instead if the Fixed Extended Term Insurance option is not available. If the Insured dies after the grace period but within three months after the date of lapse and before an Option on Lapse becomes effective, the greater of the benefit under Fixed Reduced Paid-Up or Fixed Extended Term Insurance will apply. In this case, any restriction on page 3 as to the availability of Fixed Extended Term Insurance will not apply. We will determine the amounts of these options as of the date the option becomes effective. We will use net cash values as of the date the option becomes effective. A term period will begin as of the date of lapse (the due date of the unpaid premium). We will use net single premiums for the Insured's age as of the date of lapse. We will deduct any unpaid loan and loan interest from any benefits we pay at the Insured's death if a loan is made while the policy is being continued as Variable or Fixed Reduced Paid-Up Insurance. V85-11-6 Page 7 EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 24 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange with all premiums due having been paid; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be our Adjustable Life Plan, and will be on a level premium whole life plan (with premiums payable for life), subject to our rules in effect on the date of exchange. It will have an insurance amount equal to the face amount of this policy. The new policy will have the same Register Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy will be based on our rates in effect on its Register Date for the same class of risk as under this policy. Any additional benefit riders in this policy will be included in the new policy only if we were offering them with the new policy as of its Date of Issue. Upon request you will be told the amount of the first premium for the new policy, and of any extra sum required or allowance to be made for a premium, cash value or policy account adjustment that takes appropriate account of the premiums, cash and policy account values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed, if required, with the insurance supervisory official of the jurisdiction in which this policy is delivered. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. No statement shall be used to contest a claim unless contained in the application. See any additional benefit riders for modifications of this provision that apply to them. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premiums paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy anniversaries and premium periods are measured from the Register Date. Each policy month begins on the same day in each calendar month as in the Register Date. If the end of a premium period or policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. POLICY CHANGES. You may change this policy to another plan of insurance or add additional benefit riders or make other changes, subject to our rules at the time of change. V85-11-8 PAGE 8 GENERAL PROVISIONS CONTINUED REPORTS. Each policy year after the first we will give you a report showing the Death Benefit and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. No such reports will be given while this policy is lapsed except when it is being continued as Variable Reduced Paid-Up Insurance. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on the Commissioners 1980 Standard Ordinary Mortality Table. For any extended term insurance, they are based instead on the Commissioners 1980 Extended Term Insurance Table. Continuous functions are used with interest compounded annually at 4-1/2%. The cash values and paid-up insurance benefits are equal to or more than those required by law. If so required, we have filed a detailed statement of the method of computing values and benefits with the insurance supervisory official of the jurisdiction in which this policy is delivered. The tabular cash value at the end of each policy year after the tenth policy year equals the reserve. Reserves referred to in this policy are not less than reserves determined according to the Commissioners Reserve Valuation Method. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not being continued under one of the fixed benefit Options on Lapse, we will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. We may not be able to determine the value of the assets of the investment divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy Owners. During such times we may defer: 1. Determination and payment of cash values; 2. Payment of loans; 3. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 4. Any requested transfer of Benefit Base; 5. Use of insurance benefits under the Payment Options; and 6. Determination and payment of any Variable Reduced Paid-Up Insurance. DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the making of a loan for up to six months after we receive a request at our Administrative Office if this policy is being continued under one of the fixed benefit Options on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash value payment we defer for 30 days or more. V85-11-8 PAGE 9 PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any investment division after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part of them. If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 11. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 11. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. 4. OTHER: We will apply the sum under any other option requested that we make available at the time of the Insured's death or net cash value withdrawal. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (for example, a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include rules on: the minimum amount we will apply under an option and minimum amounts for instalment payments; withdrawal or commutation rights; naming payees and successor payees; and proving age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V85-11-10 Page 10 TABLE OF GUARANTEED PAYMENTS (MINIMUM AMOUNT FOR EACH $1,000 APPLIED) OPTION 2A FIXED PERIOD INSTALMENTS ------------------------ Number of Years' Monthly Annual Instalments Instalment Instalment ----------- ---------- ---------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If instalments are paid each 3 months, they will be 25.32% of the annual instalments. If they are paid each 6 months, they will be 50.43% of the annual instalments.
OPTION 3 MONTHLY LIFE INCOME ------------------- 10 Years Certain 20 Years Certain Refund Certain ---------------------- ----------------------- ---------------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Amounts for Monthly Life Income are based on age nearest birthday when income starts. Amounts for ages not shown will be furnished on request. V85-11-10 PAGE 11 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each investment division, the Actual NRR for a policy year reflects the division's: o dividends received from the investment company; o plus realized and unrealized capital gains of the division's investment in the investment company; o minus realized and unrealized capital losses of the division's investment in the investment company; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .50% per year for mortality and expense risks. The Actual NRR for each investment division will be increased to the extent that expenses of the investment division exceed the charges for securities brokers' commissions, transfer taxes, and other fees relating to securities transactions and a charge for investment management expenses of .25% per year. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4-1/2% per year. (It is a pro-rata part of 4-1/2% for periods of less than a year.) If the Actual NRR for all investment divisions always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the cash value at the end of each policy year will equal the tabular cash value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each investment division, taking into account the Actual NRR for the last policy year. The VAA for each investment division is zero for the first policy year and, if the policy lapses and the Variable Reduced Paid-Up Insurance option takes effect, for the remainder of the policy year in which lapse occurs. For other policy years, the VAA for each investment division will equal the VAA for that account for the last policy year, plus the VAA Change Amount for that division. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each investment division may be positive or negative. It will equal the product of the following Items (1) and (2), divided by Item (3). (1) The Actual NRR for the investment division minus the Base NRR for that policy year, or for the part of the policy year since lapse during which the Variable Reduced Paid-Up Insurance option takes effect. (2) The Benefit Base for the investment division as of the last policy anniversary. (For the policy year immediately following a lapse of the policy where the Variable Reduced Paid-Up Insurance option is in effect, use instead the net cash value as of the date of lapse.) (3) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each investment division, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Annual Premium for the first policy year. If the policy has not lapsed, on policy anniversaries the Benefit Base for an investment division is the sum of the following Items (1) and (2), minus item (3): (1) The allocation percentage for that anniversary, multiplied by the sum of the following Items (a) and (b): (a) The Tabular Account Value on that anniversary. (b) The Net Annual Premium for that anniversary. V85-11-12 Page 12 BASIS OF VALUES CONTINUED (2) The Net Single Premium for the VAA for that investment division on that anniversary. (3) Any outstanding loan, plus loan interest, for the investment division as of that policy anniversary. If the policy has lapsed and the Variable Reduced Paid-Up Insurance option has taken effect, on policy anniversaries the Benefit Base for an investment division is the following Item (1) minus Item (2): (1) The cash value in the investment division on that policy anniversary. (2) Any outstanding loan, plus loan interest, for the investment division as of that policy anniversary. The Net Annual Premiums, Tabular Account Values and Net Single Premiums are shown on pages 3, 3A and 3B, respectively. For each investment division, the VAA Change Amount will also reflect the effect of: 1. All new policy loans and repayments during the previous policy year; and 2. All transfers of Benefit Base to or from that investment division during the previous policy year. In addition, if you have changed the allocation percentages, we will reallocate the VAA's among the investment divisions. CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum of your cash values in each investment division on that date. Your cash value in each investment division on any date is determined as follows: (1) While the policy is not lapsed, the sum of the immediately following Items (a), (c) and (d). (2) More than three months after the policy has lapsed and while it is being continued under the Variable Reduced Paid-Up Insurance option, the sum of the immediately following Items (b), (c) and (d). (a) The tabular cash value on that date, multiplied by the allocation percentage for that investment division in effect on the last policy anniversary. (b) The product of the following Items (i) and (ii): (i) The product of the Net Single Premium on that date per $1.00 of Paid-Up Whole Life Insurance as shown on page 3B, and the Variable Reduced Paid-Up Face Amount defined on page 7. (ii) The following amount immediately before the date on which the cash value is being determined: The cash value in that investment division, divided by the total cash value in this policy. (c) The Net Single Premium on that date for the current VAA for that investment division. (d) If the date is not a policy anniversary, the product of the following Items (i) and (ii): (i) The Actual NRR for the investment division minus the Base NRR for the time elapsed since the last policy anniversary. (ii) The Benefit Base for the investment division on the last policy anniversary. If a premium is due and unpaid, then within three months after the due date your cash value in each investment division is the sum of the following Items (1) and (2): (1) Your cash value in that investment division as of the due date of the unpaid premium. (2) The product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Base NRR for the time elapsed since such due date. (b) The cash value in that investment division on such due date. For each investment division, the cash value will also reflect the effect of: 1. All new policy loans and repayments since the last policy anniversary; and 2. All transfers of Benefit Base to or from that investment division since the last policy anniversary. V85-11-12 Page 13 BASIS OF VALUES CONTINUED More than three months after the due date of an unpaid premium, if you continue the policy under one of the fixed benefit Options on Lapse, your cash value will equal the reserve for the policy. In such case, the cash value within 30 days after a policy anniversary will never be less than the cash value on that anniversary. If you transfer all of the Benefit Base in an investment division to another investment division or if you have a policy loan allocated to an investment division and your Benefit Base in that investment division is zero, we will cancel the VAA and any policy loan as to such investment division and reallocate them to each other investment division proportionately. Also, the premium allocation percentage for such investment division will be reduced to zero and the percentage for each other investment division will be increased proportionately. TABULAR CASH AND ACCOUNT VALUES (TCV AND TAV). The tables on page 3A show interim TCV's at the end of each month in the first policy year, and TCV's at the end of policy years. We will determine the TCV and TAV on other dates in a consistent manner with allowance for time elapsed and premiums paid. Any TCV's and TAV's not shown will be furnished on request. V85-11-14 Page 14 VARIABLE EQUITABLE LIFE VARIABLE LIFE INSURANCE COMPANY INSURANCE [EVLICO LOGO] POLICY Home Office: 1285 Avenue of the Americas, New York, New York 10019 Whole Life Plan. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-11 EX-99.1A5AXIPOLICY 14 POLICY 85-09--EVLICO THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY OWNER RICHARD ROE POLICY FACE AMOUNT $100,000 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 4 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. THE ACCOUNT VALUE AND THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. THEY MAY INCREASE OR DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY. The amount of the single premium for this policy is shown on page 3. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Franklin Maisano President Single Premium Whole Life Plan -- Level Face Amount. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-09 VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] 1285 Avenue of the Americas, New York, New York 10019 CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Death Benefit 4 Account Value 4 Cash Value 4 Loans 5 The Separate Account 5 Investment Options, allocations, transfers 6 Exchange of Policy 6 General Provisions 7 Payment Options 8 Basis of Values 10 (Net rates of return, variable adjustment amount, benefit base, calculation of Account Values) A copy of the application for this policy is at the back of the policy. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the insured's death include: o the Death Benefit described on page 4; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 8. Payment of these benefits may be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 7. Special exclusions or limitations (if any) are listed on page 3. No. 85-09 Page 2 POLICY INFORMATION THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985 FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE STATE OF RESIDENCE SPECIMEN STATE ************************** BENEFITS AND PREMIUMS TABLE ************************* BENEFITS SINGLE PREMIUM FOR THIS POLICY LIFE INSURANCE - VARIABLE $25,890.82 THE SINGLE PREMIUM IS $25,890.82 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. THE FOLLOWING DEDUCTIONS ARE MADE FROM THE SINGLE PREMIUM: ADMINISTRATIVE EXPENSE: $200.00 STATE PREMIUM TAX: 517.82 THE NET SINGLE PREMIUM AMOUNT ALLOCATED TO THE SEPARATE ACCOUNT IS $25,173.00. ************** INVESTMENT ALLOCATION OF NET SINGLE PREMIUM AMOUNT ************** INVESTMENT DIVISIONS: COMMON STOCK 50% MONEY MARKET 50% ******* ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY ******* SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V85-09-3 Page 3 POLICY INFORMATION CONTINUED THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE ********************************** TABULAR VALUES ***************************** THE ACCOUNT VALUE AND CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT SEE PAGE 4 FOR ACCOUNT VALUE AND CASH VALUE PROVISIONS TABULAR VALUES AT ENDS OF POLICY YEARS END OF TABULAR TABULAR POLICY YEAR ACCOUNT VALUES CASH VALUES 1 $26,019 $23,960 2 26,892 24,984 3 27,790 26,050 4 28,712 27,158 5 29,659 28,309 6 30,630 29,504 7 31,623 30,743 8 32,641 32,030 9 33,683 33,364 10 34,748 34,748 11 35,837 35,837 12 36,951 36,951 13 38,089 38,089 14 39,252 39,252 15 40,440 40,440 16 41,653 41,653 17 42,888 42,888 18 44,143 44,143 19 45,416 45,416 20 46,704 46,704 AGE 60 53,364 53,364 AGE 62 56,124 56,124 AGE 65 60,301 60,301 AGE 70 67,206 67,206 THESE VALUES DO NOT REFLECT LOANS. VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V85-09-3A Page 3A POLICY INFORMATION CONTINUED TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Level Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.08655 21 $.16103 41 $.30630 61 $.54739 81 $ .80702 2 .08901 22 .16584 42 .31623 62 .56124 82 .81756 3 .09165 23 .17087 43 .32641 63 .57516 83 .82774 4 .09441 24 .17613 44 .33683 64 .58909 84 .83745 5 .09731 25 .18165 45 .34748 65 .60301 85 .84665 6 .10038 26 .18744 46 .35837 66 .61689 86 .85536 7 .10361 27 .19351 47 .36951 67 .63072 87 .86362 8 .10702 28 .19985 48 .38089 68 .64453 88 .87153 9 .11061 29 .20646 49 .39252 69 .65831 89 .87920 10 .11436 30 .21334 50 .40440 70 .67206 90 .88679 11 .11828 31 .22049 51 .41653 71 .68574 91 .89444 12 .12232 32 .22790 52 .42888 72 .69929 92 .90237 13 .12645 33 .23558 53 .44143 73 .71262 93 .91083 14 .13063 34 .24352 54 .45416 74 .72564 94 .92013 15 .13484 35 .25173 55 .46704 75 .73828 95 .93048 16 .13906 36 .26019 56 .48007 76 .75052 96 .94201 17 .14330 37 .26892 57 .49324 77 .76238 97 .95459 18 .14757 38 .27790 58 .50655 78 .77391 98 .96774 19 .15193 39 .28712 59 .52002 79 .78517 99 .98064 20 .15640 40 .29659 60 .53364 80 .79621 100 1.00000
FEMALE INSURED -------------- 1 $.07178 21 $.13538 41 $.26197 61 $.47686 81 $ .77229 2 .07383 22 .13985 42 .27047 62 .49058 82 .78597 3 .07602 23 .14449 43 .27917 63 .50455 83 .79922 4 .07831 24 .14930 44 .28807 64 .51871 84 .81195 5 .08072 25 .15429 45 .29719 65 .53301 85 .82411 6 .08324 26 .15946 46 .30654 66 .54743 86 .83569 7 .08589 27 .16482 47 .31613 67 .56201 87 .84673 8 .08865 28 .17038 48 .32597 68 .57676 88 .85730 9 .09155 29 .17613 49 .33604 69 .59177 89 .86749 10 .09457 30 .18209 50 .34637 70 .60703 90 .87741 11 .09773 31 .18825 51 .35693 71 .62253 91 .88720 12 .10100 32 .19462 52 .36775 72 .63818 92 .89704 13 .10438 33 .20122 53 .37880 73 .65388 93 .90712 14 .10788 34 .20805 54 .39008 74 .66948 94 .91771 15 .11146 35 .21510 55 .40160 75 .68489 95 .92905 16 .11515 36 .22239 56 .41336 76 .70006 96 .94128 17 .11895 37 .22990 57 .42540 77 .71496 97 .95429 18 .12285 38 .23761 58 .43774 78 .72961 98 .96766 19 .12689 39 .24554 59 .45042 79 .74406 99 .98064 20 .13106 40 .25366 60 .46347 80 .75830 100 1.00000
V85-09-3B Page 3B POLICY INFORMATION CONTINUED DESCRIPTION OF INVESTMENT DIVISIONS THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS (OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC. COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE INVESTMENTS. MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.) GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S. GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT. INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES. PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS. V85-09-3C Page 3C POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 8 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3; o plus the sum, if positive, of the Variable Adjustment Amounts, for each investment division under this policy in which you have a cash value, for the policy year in which the Insured dies. However, the Death Benefit will in no event be less than the amount of Paid-up Whole Life Level Insurance that could be purchased by the Account Value at the Insured's death on the basis of the Table of Net Single Premiums on page 3B. See page 10 for a description of how the Variable Adjustment Amount for each investment division is determined. ACCOUNT VALUE The policy's Account Value will vary daily with the performance of the investment divisions in which you have Account Value under this policy. See page 11 for a description of how the Account Value is determined. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The policy's cash value will vary daily with the performance of the investment divisions in which you have a cash value under this policy. During the first ten policy years the cash value on any date will be equal to the product of (1) and (2), where: (1) is the Account Value on that date; and (2) is the Tabular Cash Value divided by the Tabular Account Value for that date. Whenever the difference between the Account Value and cash value exceeds 9% of the single premium for this policy, we will increase the cash value by the amount of such excess. Tabular Account Values and Tabular Cash Values are shown on page 3A. After the tenth policy year, the cash value will equal the Account Value. V85-09-4 Page 4 LOANS You may get a loan on this policy while it has a loan value. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. A loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit, Account Value and cash value under this policy. We will allocate loans to the investment divisions based on your net cash value in each investment division as of the dates the loans are made. We will allocate loan repayments to the investment divisions based on the amount of your outstanding loans as to each investment division as of the dates the repayments are made. LOAN VALUE. The loan value is 90% of the policy's cash value. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. THE SEPARATE ACCOUNT The Separate Account is our Separate Account I (in unit investment trust form). We established and we maintain it under the laws of New York State. Realized and unrealized gains and losses from the assets of the Separate Account are credited or charged against it without regard to our other income, gains, or losses. Assets are put in the Separate Account to support this policy and other variable life insurance policies. Assets may be put in the Separate Account for other purposes, but not to support contracts or policies other than variable life insurance. The assets of the Separate Account are our property. The portion of its assets equal to the reserves and other policy liabilities with respect to the Separate Account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of the Separate Account in excess of such reserves and liabilities to our general account. We may transfer assets of an investment division in excess of the reserves and other liabilities with respect to that division to another investment division or to our general account. We will value the assets of each investment division on each business day. A business day is generally any day on which the New York Stock Exchange is open for trading. INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions". Each division may invest its assets in a separate class (or series) of shares of a designated investment company. Each class represents a separate portfolio in the investment company. The investment divisions available on the Register Date are described on Page 3C. If we add or remove investment divisions, we will send you a new Page 3C reflecting this. We have the right to change designated investment companies. We have the right to add or remove investment divisions. We have the right to withdraw assets of a class of policies to which this policy belongs from an investment division and put them in another investment division. We also have the right to combine any two or more investment divisions. The term "investment division" in this policy shall then refer to any other investment division in which the assets of a class of policies to which this policy belongs were placed. If we make any such change we will send you a new Page 3C reflecting it. V85-09-4 Page 5 THE SEPARATE ACCOUNT CONTINUED We have the right to: 1. register or deregister either Separate Account under the Investment Company Act of 1940; 2. run the Separate Account under the direction of a committee, and to discharge such committee at any time; 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to the Separate Account; and 4. operate the Separate Account by making direct investments or in any other form. If we do so, we may invest the assets of the Separate Account in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Also, unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without our consent. CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material change in an investment objective or policy of any investment company that is invested in by an investment division to which net premiums have been allocated under this policy. If required by law or regulation, the investment policy of the Separate Account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET SINGLE PREMIUM. We will allocate to each investment division as of the Register Date a percentage of the Net Single Premium Amount shown on page 3. Such allocation will be based on the allocation percentages designated in the application for this policy. TRANSFER OF ACCOUNT VALUES. You may ask us to transfer all or part of your Account Value in one investment division to another. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 24 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form of such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Single Premium Life Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. It will have the same face amount, Register Date, Date of Issue, and Issue Age as this policy. The single premium for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Upon request you will be told the amount of the single premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. If so required, we have filed a detailed statement of the method of computing such an adjustment with the insurance supervisory official of the jurisdiction in which this policy is delivered. V85-09-6 Page 6 GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the single premium for this policy shown on page 3. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. No statement shall be used to contest a claim unless contained in the application. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premium paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years and policy anniversaries are measured from the Register Date. If the end of a policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit, the Account Value and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Account Values, reserves and net single premiums are based on the Commissioners 1980 Standard Ordinary Mortality Table. Continuous functions are used with interest compounded annually at 4%. The cash values are equal to or more than those required by law. If so required, we have filed a detailed statement of the method of computing cash values with the insurance supervisory official of the jurisdiction in which this policy is delivered. The Tabular Account Value at the end of each policy year equals the tabular reserve. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or Account Values or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. We will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. We may not be able to determine the value of the assets of the investment divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy owners. During such times we may defer: 1. Determination of Account Values; 2. Determination and payment of cash values; 3. Payment of loans; 4. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 5. Any requested transfer of Account Value; and 6. Use of insurance benefits under the Payment Options. V85-09-6 Page 7 PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any investment division after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part of them. If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 9. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 9. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. 4. OTHER: We will apply the sum under any other option requested that we make available at the time of the Insured's death or net cash value withdrawal. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (for example, a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include rules on: the minimum amount we will apply under an option and minimum amounts for installment payments; withdrawal or commutation rights; naming payees and successor payees; and proving age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V85-09-8 Page 8 TABLE OF GUARANTEED PAYMENTS MINIMUM AMOUNT FOR EACH $1,000 OF ORIGINAL SUM OPTION 2 FIXED PERIOD INSTALLMENTS ------------------------- Number Monthly Annual of Years' Instal- Instal- Installments ment ment ------------ -------- --------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If installments are paid every 3 months, they will be 25.32% of the annual installments. If they are paid every 6 months, they will be 50.43% of the annual installments.
OPTION 3 MONTHLY LIFE INCOME ------------------- 10 Years Certain 20 Years Certain Refund Certain ---------------- ---------------- -------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Amounts for Monthly Life Income are based on age nearest birthday when income starts. Amounts for ages not shown will be furnished on request. V85-09-8 Page 9 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each investment division, the Actual NRR for a policy year reflects the division's: o dividends received from the investment company; o plus realized and unrealized capital gains of the division's investment in the investment company; o minus realized and unrealized capital losses of the division's investment in the investment company; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .50% per year for mortality and expense risks. The Actual NRR for each investment division will be increased to the extent that expenses of the investment division exceed the charges for securities brokers' commissions, transfer taxes, and other fees relating to securities transactions and a charge for investment management expenses of .25% per year. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all investment divisions always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Account Value at the end of each policy year will equal the Tabular Account Value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each investment division, taking into account the Actual NRR for the last policy year. For the first policy year the VAA for each investment division is zero. For later policy years, the VAA for each investment division will equal the sum of the VAA Change Amounts for all prior policy years, including the current year. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each investment division may be positive or negative. It will equal the product of the following Items (a) and (b) divided by Item (c). (a) The Actual NRR for the investment division minus the Base NRR for that policy year. (b) The Benefit Base for the investment division as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each investment division, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Single Premium Amount shown on page 3. On policy anniversaries, the Benefit Base for an investment division is the sum of the following Items (1) and (2), minus Item (3): (1) The Tabular Account Value on that anniversary, multiplied by the following amount immediately before that anniversary: The Benefit Base in that investment division divided by the sum of the Benefit Bases for all investment divisions in which you have an Account Value. (2) The Net Single Premium for the VAA for that investment division on that anniversary. (3) Any outstanding loan, plus interest for the investment division as of that policy anniversary. The Net Single Premium Amount, Tabular Account and Cash Values and Net Single Premiums for the VAA are shown on pages 3, 3A and 3B, respectively. V85-09-10 Page 10 BASIS OF VALUES (CONTINUED) For each investment division, the VAA Change Amount will also reflect the effect of: 1. All new policy loans and repayments during the previous policy year; and 2. All transfers of Account Value to or from that investment division during the previous policy year. CALCULATION OF ACCOUNT VALUES. The Account Value of this policy on the Register Date is the net single premium shown on page 3. The Account Value of this policy on any date after the Register Date is the sum of your Account Values in each investment division on that date. Your Account Value in each investment division on any date is the sum of the following Items (1), (2) and (3): (1) The tabular cash value on that date, multiplied by the following amount immediately before that date: The Account Value in that investment division divided by the sum of your Account Values in all of the investment divisions. (2) The Net Single Premium on that date for the current VAA for that investment division. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Base NRR for the time elapsed since the last policy anniversary. (b) The Benefit Base for that investment division on the last policy anniversary. For each investment division, the Account Value will also reflect the effect of: 1. All new policy loans and repayments since the last policy anniversary; and 2. All transfers of Account Value to or from that investment division since the last policy anniversary. If for any reason the Account Value in an investment division is zero, we will cancel the VAA and any policy loan as to such investment division and reallocate them to each other investment division proportionately. TABULAR ACCOUNT AND CASH VALUES (TAV AND TCV). The tables of TAV's and TCV's on page 3A show them at the end of the first 20 policy years and at certain attained ages. We will determine the TAV and TCV on other dates in a consistent manner with allowance for time elapsed. Any TAV's and TCV's not shown will be furnished on request. V85-09 Page 11 - -------------------------------------------------------------------------------- PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV. EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI - -------------------------------------------------------------------------------- 1. PROPOSED INSURED a. Print name as it is to appear on policy. _______RICHARD___________________________ROE____________________________________ First Middle Initial Last b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________ c. List all current occupations -- Give Title(s) and Duties _____________CORPORATE ATTORNEY_________________________________________________ ________________________________________________________________________________ d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__ e. Age Nearest Birthday: ___35___ f. Place of Birth: State of ___NEW YORK___ g. Residence: State of ___NEW YORK___ h. |X| Male |_| Female 2. PLAN INITIAL FACE AMOUNT ____SINGLE PREMIUM VARIABLE LIFE______________________ $______________ If Flexible Prem., will the Death Benefit include the value of the Account? |_| No (Option A) |_| Yes (Option B) INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY) Common Stock __50%__ _________________ ___________% Money Market __50___ _________________ ___________ _______________ _______ _________________ ___________ _______________ _______ _________________ ___________ _______________ _______ _________________ ___________ _______________ _______ _________________ ___________ 100% 3. OPTIONAL BENEFITS |_| Accidental Death Benefit* (Specify Amount): $____________ |_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________ |_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.* |_| Waive Cost of Insurance |_| Credit $_____________ per _____________ Term Riders: Decreasing Term Per Month |_| Family Income: ______Years $____________ |_| Mortgage Prot.: ______Years Initial Amt.: $____________ Renewable Term Yearly 10 Yr. |_| On Insured: |_| |_| $____________ |_| On Add'l. Insured (See page 2): |_| |_| $____________ |_| Increasing Term |_| Children's Term (See page 2): $__________Units______________ *If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2. 4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL NAME and RELATIONSHIP to Proposed Insured. ____________________________MARGARET H. ROE, WIFE__________________________ ____________________________________________________________________________ Unless otherwise requested, the contingent beneficiary will be the surviving children of the Insured, in equal shares. If none survive, payment will be made to the Insured's estate. THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or on a Child will be as stated in those riders, unless otherwise designated in Special Instructions. 5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| | The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.) |_| Other (Give Full Name): ____________________________________________________________________________ If "Other," complete the following: |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________ Relationship to Insured_____________________________________________________ Specify a successor Owner if desired ____________________________________________________________________________ If the Proposed Insured or the Applicant for a Child is not the Owner and if all persons designated die before the Insured, the Owner will be the estate of the last of such persons to die except where the Insured is a Child (see Note in 10.c.). 6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence |1|0|0|_|S|P|E|C|M|E|N|_|S|T|.|_|_|_|_|_|_|_|_|_|0|9|_|_| No. Street Apt. |N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| City |N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1| State Zip 7. PREMIUM PAYMENT PLAN Check mode, and if Flexible Premium complete the following: Initial Prem. Payment $ _______________________________ Planned Periodic Prems. $ _____________________________ |_| Do not send premium reminder notices | | Annual |_| Semi-Annual |_|Quarterly |_| Monthly |_| System-Matic (Attach S-M Form) |X| Single |_| Military Allotment: Branch __________________________ Register Date_____________________ |_| Salary Allotment: Register Date_____________________ Unit Name______________________________________________ Unit/Sub-Unit No. if established: |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| Divisible by |_| 2 |_| 4 Payroll No.________________ |_| Hold Premium $______________________ 8. SUITABILITY a. Have you the Proposed Insured and the Purchaser if other than the Proposed Insured received: (i) a Prospectus for the policy applied for? |_|Yes |_| No Date of Prospectus _________________________________________ Date of any supplement _____________________________________ (ii) a Prospectus for The Hudson River Fund, Inc. |_|Yes |_| No Date of Prospectus _________________________________________ Date of any supplement _____________________________________ b. Do you understand that, under the policy applied for (exclusive of any optional benefits), the amount of the death benefit and the cash surender value may increase or decrease depending upon investment experience (if the policy has a guaranteed minimum death benefit or cash surrender value it is only the amount above such minimum that may increase or decrease)? |_| Yes |_| No c. With this in mind, is the policy in accord with your insurance objectives and your anticipated financial needs? |_| Yes |_| No 9. SPECIAL INSTRUCTIONS a. |_| Preliminary Term (PT) period of ________ days ending _______________ . PT Premium $_______ Mo. Day Yr. b. |_| Date to save insurance age: _____________ c. |_| Check here to request an adjustable policy loan interest rate (if available) instead of a fixed rate. d. Other: _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ - -------------------------------------------------------------------------------- NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM. - -------------------------------------------------------------------------------- EV4-200Q 1 10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14). a. Will there be more life insurance in effect on the Child than on any older child in the family? |_| Yes |_| No If yes, explain: ___________________________________________ _____________________________________________________________ b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD. i. _________________________________________________________ First Name Middle Initial Last Name ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______ iii. Date of Birth___________________________________19____ Month Day Year iv. |_| Male |_| Female v. Relationship to Child:___________________________________ vi. Total Life Insurance now in effect: $ _________________ c. OWNER. If the Applicant is to be the Owner, after the Applicant's death the Child will be the Owner unless otherwise designated in Special Instructions (in any such designation include Owner's FULL NAME, RELATIONSHIP to Child, and Social Security or Tax Number). NOTE: Consider designating an adult secondary Owner to reduce the chance of a minor Child becoming the Owner. If all persons designated die before the Child, the Owner will be the Child. d. OPTIONAL BENEFIT ON APPLICANT. |_| Supplemental Protective Benefit. Give Applicant's: i. Age Nearest ii. Place of Birthday ______________ Birth_____________ State iii. Height______Ft.____In. Weight______lbs. iv. Occupations-Give Title(s) and Duties:__________________________________ ________________________________________________________________________ ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT. e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit is applied for on the Child, the benefit is payable only if the Child dies after the Child's first birthday. If the Disability Premium Waiver Benefit is applied for on the Child, the benefit is effective only if the Child becomes totally disabled on or after the Child's 5th birthday. - -------------------------------------------------------------------------------- 11. COMPLETE FOR CHILDREN'S TERM RIDER. Give Names of Children below and answer the Questions on page 3 as to each Child. CHILDREN PROPOSED FOR INSURANCE: NOTE: To be eligible, children (including stepchildren and legally adopted children) must not yet have reached their 18th birthday. Coverage does not begin until a child is 15 days old. DATE OF BIRTH - -------------------------------------------------------------------------------- First Name Middle Initial Last Name |SEX| MO.| DAY| YR. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED. Complete below and answer the Questions on page 3 as to the Additional Insured. PROPOSED ADDITIONAL INSURED a. Print name as it is to appear on the Policy. ________________________________________________________________________________ First Middle Initial Last b. List all current occupations -- Give Title(s) and Duties. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ c. Date of Birth: Mo.__________ Day________ Yr. 19____ d. Age Nearest Birthday _______________________________ e. Place of Birth: State of __________________________ f. Residence: State of________________________________ g. |_| Male |_| Female h. Owner's Relationship to Additional Insured:_________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- 13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE. i. Existing Individual Policy No. _________________________ ii. Option Date_______ iii. Option Amount: $______________ iv. |_| Regular Option or |_| Option on Birth or Adoption of Child Child's Name _______________________________________ Date of Birth or Adoption___________________________ v. If applying for Disability Premium Waiver, is Proposed Insured now totally disabled as defined in the Disability Premium Waiver provision of the above policy? |_| Yes |_| No This application is made under a provision in the policy indicated above permitting the purchase of individual life insurance (the "Option Provision"). If this application is made within the time allowed and in accordance with the other terms in the Option Provision, including timely payment of the full first premium for the option insurance, then the option insurance shall take effect upon the terms of the policy EVLICO would issue. Otherwise, the option insurance shall not take effect. Answer the Questions on page 3 only if evidence of insurability is required in connection with an optional benefit or any excess of the insurance amount applied for over the insurance amount permitted by the Option Provision (the option insurance). EV4-200Q 2 OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE: 14.a. Ever had a driver's license suspended or revoked or, within the last three years, been convicted of two or more moving violations or driving under the influence of alcohol or drugs? (Give full details -- including dates, types of violation, and reason for license suspension or revocation.) |_| Yes |X| No b. Any plan to travel or reside outside the U.S.? (Give full details.) |_| Yes |X| No c. Any other life insurance now in effect or application now pending? (State companies and amounts.) |_| Yes |X| No d. Smoked cigarettes within the last 12 months? |_| Yes |X| No 15.a. In the last year flown other than as a passenger or plan to do so? |_| Yes |X| No If yes: Total flying time at present________________ Hours; Last 12 mos.________Hours; Next 12 mos._________Est. Hours. (Complete Aviation Supplement for pilot instruction; competitive, test, stunt or military flying; or crop dusting.) b. Engaged within the last year, or any plan to engage in motor racing on land or water, underwater diving, sky diving, ballooning, hang-gliding or parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No c. Ever had an application for life or health insurance declined, that required an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No d. Replaced or changed any existing insurance or annuity (or any plan to do so) assuming the insurance applied for will be issued? (State companies, plans and amounts.) |_| Yes |X| No ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL. 16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs. Additional Insured:________Height________Ft._________In. Weight_______lbs. HAS ANY PERSON PROPOSED FOR INSURANCE: 17.a. Ever been treated for or had any indication of heart trouble, stroke, high blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.) |_| Yes |X| No b. In the last 5 years, consulted a physician, or been examined or treated at a hospital or other medical facility? (Include medical check-ups in the last 2 years. Do not include colds, minor virus infections, minor injuries, or normal pregnancy.) (Give full details.) |_| Yes |X| No 18.a. In the last 10 years used barbiturates, amphetamines, hallucinatory drugs or narcotics? (Give full details.) |_| Yes |X| No b. In the last 10 years received counseling or treatment regarding the use of alcohol or drugs? (Give full details.) |_| Yes |X|No 19. DETAILS. For each yes answer give Question number, name of person(s) affected and full details. For 17 and 18 also include conditions, dates, durations, treatment and results, and names and addresses of physicians and medical facilities. No. Name of Person Affected Details ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED: Have the undersigned read and do they agree to the conditions of EVLICO's Temporary Insurance Agreement, including (i) the requirement that all of the conditions in that Agreement must be met before any insurance takes effect, and (ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a premium may not be paid before the policy is delivered.) AMOUNT PAID: $___________. (Draw checks to order of EVLICO.) AGREEMENT. Each signer of this application agrees that: (1) The statements and answers in all parts of this application are true and complete to the best of my knowledge and belief. EVLICO may rely on them in acting on this application. (2) EVLICO's Temporary Insurance Agreement states the conditions that must be met before any insurance takes effect, if the full first premium for the policy applied for is paid before the policy is delivered. (3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B) BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID. (4) No agent or medical examiner has authority to modify this Agreement or the Temporary Insurance Agreement, nor to waive any of EVLICO's rights or requirements. EVLICO shall not be bound by any information unless it is stated in application Part 1, 1A or 2. - -------------------------------------------------------------------------------- Signature of Agent________/s/ John Q. Agent_____________________________________ IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH MINIMUM THAT MAY INCREASE OR DECREASE). Dated at __NEW YORK_____NY__________________on___3/1_____19__85__ City State (X)___/s/ Richard Roe___________________________________________________________ Signature of Proposed Insured or of Applicant if Proposed Insured is a Child, Issue Age 0-14. ________________________________________________________________________________ Signature of Additional Insured if required. ________________________________________________________________________________ Signature of Purchaser if not Proposed Insured or Applicant. (If corp. show firm's name and signature of authorized officer.) EV4-200Q 3 VARIABLE LIFE INSURANCE POLICY EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] Home Office: 1285 Avenue of the Americas, New York, New York 10019 Single Premium Whole Life Plan -- Level Face Amount. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-09 EX-99.1A5AXIIPOLICY 15 POLICY 85-01 (EVLICO) (SEP ACCT I) THE INSURED RICHARD ROE VARIABLE LIFE INSURANCE POLICY OWNER RICHARD ROE POLICY EQUITABLE FACE AMOUNT $100,000 VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT. THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY. Premiums are shown on page 3 and are fixed as to amount. They will not vary with the investment experience of this policy. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Franklin Maisano President Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for Premium Period shown on page 3 or until earlier death. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-01 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] 1285 Avenue of the Americas, New York, New York 10019 - ---------- CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Premiums, grace, lapse, reinstatement 4 Death Benefit 5 Cash Value 5 Loans 5 The Separate Account 6 Investment Options, allocations, transfers 6 Options on Lapse 7 Exchange of Policy 7 General Provisions 8 Payment Options 9 Basis of Values 11 (Net rates of return, variable adjustment amount, benefit base, calculation of cash values) Any additional benefit riders and a copy of the application are included in this policy after page 12. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send premiums and requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the Insured's death include: o the Death Benefit described on page 5; o plus any additional benefits due from riders to this policy; o plus or minus any adjustment for the last premium; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 9. We will pay these benefits only if premiums have been paid as called for by this policy. However, even if premiums have been discontinued we may still pay certain benefits. See Options on Lapse, page 7. Payment of these benefits may also be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability and Age and Sex clauses on page 8. Special exclusions or limitations (if any) are listed on page 3. No. 85-01 Page 2 POLICY INFORMATION THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985 FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE *************************** BENEFITS AND PREMIUMS TABLE ************************ BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $1,659.00 40 YEARS THE FIRST PREMIUM IS $1,659.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON MAR 1, 1986 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. ************************** TABLE OF NET ANNUAL PREMIUMS ************************ BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $ 752.00 2 - 4 1,455.00 5 - 40 1,526.00 ****************** INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS **************** INVESTMENT DIVISIONS: COMMON STOCK 50% MONEY MARKET 50% *****ADMINISTRATIVE OFFICE: EQUITABLE VARIABLE LIFE INSURANCE COMPANY*********** SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V85-01-3 Page 3 POLICY INFORMATION CONTINUED THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE ****************************** TABULAR CASH VALUES ***************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE 5 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $0 5 $ 0 9 $278 2 0 6 16 10 366 3 0 7 104 11 452 4 0 8 192 12 540 TABULAR CASH VALUES AT ENDS OF POLICY YEARS* END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 540 9 $12,069 17 $26,057 2 1,808 10 13,701 18 27,941 3 3,114 11 15,368 19 29,851 4 4,456 12 17,070 20 31,788 5 5,907 13 18,806 AGE 60 41,808 6 7,393 14 20,574 AGE 62 45,947 7 8,916 15 22,373 AGE 65 52,277 8 10,474 16 24,201 AGE 70 63,165 *VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V85-01-3A Page 3A POLICY INFORMATION CONTINUED TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560 2 .09871 22 .17890 42 .33918 62 .58929 82 .82496 3 .10126 23 .18450 43 .34995 63 .60272 83 .83394 4 .10397 24 .19031 44 .36096 64 .61610 84 .84259 5 .10685 25 .19635 45 .37222 65 .62940 85 .85096 6 .10990 26 .20263 46 .38370 66 .64260 86 .85909 7 .11312 27 .20915 47 .39541 67 .65565 87 .86704 8 .11650 28 .21591 48 .40733 68 .66851 88 .87488 9 .12005 29 .22293 49 .41945 69 .68114 89 .88268 10 .12377 30 .23021 50 .43176 70 .69350 90 .89050 11 .12764 31 .23775 51 .44424 71 .70559 91 .89841 12 .13166 32 .24556 52 .45688 72 .71744 92 .90648 13 .13581 33 .25366 53 .46968 73 .72908 93 .91479 14 .14008 34 .26205 54 .48261 74 .74057 94 .92350 15 .14447 35 .27073 55 .49568 75 .75194 95 .93291 16 .14897 36 .27970 56 .50886 76 .76319 96 .94339 17 .15360 37 .28896 57 .52214 77 .77427 97 .95520 18 .15835 38 .29850 58 .53550 78 .78512 98 .96810 19 .16323 39 .30830 59 .54892 79 .79566 99 .98063 20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000 FEMALE INSURED -------------- 1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $ .77427 2 .08774 22 .15835 42 .29850 62 .53550 82 .78512 3 .08993 23 .16323 43 .30830 63 .54892 83 .79566 4 .09228 24 .16828 44 .31835 64 .56237 84 .80583 5 .09478 25 .17350 45 .32865 65 .57583 85 .81560 6 .09743 26 .17890 46 .33918 66 .58929 86 .82496 7 .10023 27 .18450 47 .34995 67 .60272 87 .83394 8 .10318 28 .19031 48 .36096 68 .61610 88 .84259 9 .10629 29 .19635 49 .37222 69 .62940 89 .85096 10 .10953 30 .20263 50 .38370 70 .64260 90 .85909 11 .11290 31 .20915 51 .39541 71 .65565 91 .86704 12 .11641 32 .21591 52 .40733 72 .66851 92 .87488 13 .12004 33 .22293 53 .41945 73 .68114 93 .88268 14 .12379 34 .23021 54 .43176 74 .69350 94 .89050 15 .12764 35 .23775 55 .44424 75 .70559 95 .89841 16 .13166 36 .24556 56 .45688 76 .71744 96 .90648 17 .13581 37 .25366 57 .46968 77 .72908 97 .91479 18 .14008 38 .26205 58 .48261 78 .74057 98 .92350 19 .14447 39 .27073 59 .49568 79 .75194 99 .93291 20 .14897 40 .27970 60 .50886 80 .76319 100 .94339 101 .95520 102 .96810 103 .98063 104 1.00000
V85-01-3B Page 3B POLICY INFORMATION CONTINUED DESCRIPTION OF INVESTMENT DIVISIONS THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS (OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC. COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE INVESTMENTS. MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.) GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S. GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT. INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES. PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS. V85-01-3C Page 3C POLICY OWNER AND BENEFICIARY OWNER. The Owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 9 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. we assume no responsibility for the validity of any assignment. PREMIUMS AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and the period for which they are to be paid. Each premium is payable on or before its due date at our Administrative Office. You may write and ask us to change the frequency of premium payment. If we approve the change, the new premium will be determined on the rate scale for this policy. GRACE PERIOD. We allow a grace period of 31 days for payment of each premium, after the first premium. The insurance will continue during the grace period. If a premium is paid during the grace period, then all benefits under this policy will be the same as if such premium had been paid on its due date. LAPSE. If a premium is not paid by the end of its grace period, the policy will lapse as the premium due date. If this occurs, all insurance ends, except as stated in Options on Lapse on page 7. Additional benefit riders do not continue beyond the grace period of an unpaid premium. REINSTATEMENT. You may reinstate this policy within five years after lapse if: (1) the policy has not been given up for its net cash value; (2) you provide evidence of insurability satisfactory to us; and (3) you pay the larger of: (a) all overdue premiums with interest at 6% per year compounded annually; or (b) 110% of difference between the following Items (i) and (ii). Item (i) is the excess of the cash value immediately after reinstatement over the cash value immediately before reinstatement. Item (ii) is any policy loan, and accrued loan interest, in effect when any option on lapse became effective, with loan interest to the date of reinstatement. Upon reinstatement this policy will have the same Benefit Base and the same Variable Adjustment Amount as to each investment division (as these are determined in the Variable Adjustment Amount provision on page 11) as if default had not occurred. Also, upon reinstatement this policy will have a loan equal to the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued loan interest, in effect at the date any option on lapse became effective, with loan interest to the date of reinstatement. Item (ii) is any loan arising after the date any option on lapse became effective, with loan interest to the date of reinstatement. PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last premium paid that applies to a period beyond the policy month in which the Insured dies. If the Insured dies during the grace period of an unpaid premium, we will deduct from the benefits the part of the overdue premium for one policy month. V85-01-4 Page 4 DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3; o plus the sum, if positive, of the Variable Adjustment Amounts, for each investment division under this policy in which you have a cash value, for the policy year in which the Insured dies. A description of how the Variable Adjustment Amount for each investment division is determined is on page 11. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The cash value of the policy will vary daily with the performance of the investment divisions under this policy in which you have a cash value. See page 12 for a description of how cash values are determined. LOANS You may get a loan on this policy while it has a loan value and it is not being continued as extended term insurance under the Options on Lapse on page 7. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. Except when used to pay premiums, a loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. We may also deduct any unpaid premium then due. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit and cash value under this policy. It will have no effect on the amount of the premiums payable under this policy. We will allocate loans to the investment divisions based on your net cash value in each investment division as of the dates the loans are made. We will allocate loan repayments to the investment divisions based on the amount of your outstanding loans as to each investment division as of the dates the repayments are made. See page 12 for a description of how the cash value in each investment division is determined. LOAN VALUE. If this policy has not lapsed, the loan value is 90% of the policy's cash value. If this policy has lapsed and is being continued as Reduced Paid-up Insurance under the Options on Lapse on page 7, the loan value is the cash value on the next policy anniversary, minus interest at the loan rate to that date. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. However, if this policy has lapsed and you are continuing insurance under one of the Options on Lapse on page 7, any loan that was deducted in determining the benefit on lapse may not be repaid unless this policy is reinstated. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. V85-01-4 Page 5 THE SEPARATE ACCOUNT The Separate Account is our Separate Account I (in unit investment trust form). We established and we maintain it under the laws of New York State. Realized and unrealized gains and losses from the assets of the Separate Account are credited or charged against it without regard to our other income, gains, or losses. Assets are put in the Separate Account to support this policy and other variable life insurance policies. Assets may be put in the Separate Account for other purposes, but not to support contracts or policies other than variable life insurance. The assets of the Separate Account are our property. The portion of its assets equal to the reserves and other policy liabilities with respect to the Separate Account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of the Separate Account in excess of such reserves and liabilities to our general account. We may transfer assets of an investment division in excess of the reserves and other liabilities with respect to that division to another investment division or to our general account. We will value the assets of each investment division on each business day. A business day is generally any day on which the New York Stock Exchange is open for trading. INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions." Each division may invest its assets in a separate class (or series) of shares of a designated investment company. Each class represents a separate portfolio in the investment company. The investment divisions available on the Register Date are described on Page 3C. If we add or remove investment divisions, we will send you a new Page 3C reflecting this. We have the right to change designated investment companies. We have the right to add or remove investment divisions. We have the right to withdraw assets of a class of policies to which this policy belongs from an investment division and put them in another investment division. We also have the right to combine any two or more investment divisions. The term "investment division" in this policy shall refer to any other investment division in which the assets of a class of policies to which this policy belongs were placed. If we make any such change we will send you a new Page 3C reflecting it. We have the right to: 1. register or deregister the Separate Account under the Investment Company Act of 1940; 2. run the Separate Account under the direction of a committee, and to discharge such committee, at any time; 3. restrict or eliminate any voting rights of policy owners, or other persons who have voting rights as to the Separate Account; and 4. operate the Separate Account by making direct investments or in any other form. If we do so, we may invest the assets of the Separate Account in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Also, unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without our consent. CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material change in an investment objective or policy of any investment company that is invested in by an investment division to which net premiums have been allocated under this policy. If required by law or regulation, the investment policy of the separate Account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate to each investment division at the beginning of each policy year a percentage of the Net Annual Premium shown on page 3 for that year. Such allocations will be based on the allocation percentages then in effect. The allocation percentages for the first policy year are as designated in the application for this policy. Unless you change them, such percentages shall also apply in later years. V85-01-6 Page 6 INVESTMENT OPTIONS CONTINUED You may change the allocation percentages for policy years after the first by notifying us in writing of the new percentages. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash value in one investment division to another. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. OPTIONS ON LAPSE You have a number of options if the policy lapses. You may apply for reinstatement. If there is a net cash value, you may withdraw it and give up the policy. Or, you may continue insurance under one of the following options: REDUCED PAID-UP INSURANCE. This fixed benefit insurance for the Insured's lifetime and for the amount that the net cash value will buy. EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan interest. The insurance will continue from the date of lapse for as long a term period as the net cash value will buy. In no event, however, will this period be less than 90 days if premiums have been paid for at least three months before lapse and there is no loan on this policy. This option is not available if so stated on page 3. An Option on Lapse will become effective on the date your written request for it is received at our Administrative Office. If your request is not received within three months after the date of lapse, extended term insurance will become effective automatically at the end of such three month period. Reduced paid-up insurance will apply instead if the extended term insurance option is not available. If the Insured dies after the grace period but within three months from the date of lapse, the greater of the benefit under reduced paid-up or extended term insurance will apply. In this case, any restriction on page 3 as to extended term insurance will not apply. We will determine the amounts of these options as of the date the option becomes effective. We will use net cash values as of the date the option becomes effective, adjusted for any loan transaction on or after that date. A term period will begin as of the date of lapse (the due date of the unpaid premium). We will use net single premiums for the Insured's age as of the date of lapse. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 18 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange with all premiums due having been paid; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form of such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. The new policy will have the same face amount, Register Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Any additional benefit riders in this policy will be included in the new policy only if Equitable was offering them with the new policy as of its Date of Issue. V85-01-6 Page 7 EXCHANGE OF POLICY CONTINUED Upon request you will be told the amount of the first premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such and adjustment has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. No statement shall be used to contest a claim unless contained in the application. See any additional benefit riders for modifications of this provision that apply to them. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premiums paid minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy anniversaries and premium periods are measured from the Register Date. Each policy month begins on the same day in each calendar month as in the Register Date. If the end of a premium period or policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. POLICY CHANGES. You may change this policy to another plan of insurance or add additional benefit riders or make other changes, subject to our rules at the time of change. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. No such reports will be given while this policy is lapsed. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term insurance, they are based instead on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used with interest compounded annually at 4%. The cash values and paid-up insurance benefits are equal to or more than those required by law. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. The tabular cash value at the end of each policy year equals the reserve. Reserves referred to in this policy are not less than reserves determined according to the Commissioners Reserve Valuation Method. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not being continued under one of the Options on Lapse, we will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; and o A loan will be paid within 7 days after we receive your request at our Administrative Office; and V85-01-8 Page 8 GENERAL PROVISIONS CONTINUED o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. We may not be able to determine the value of the assets of the investment divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to be restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy Owners. During such times we may defer: 1. Determination and payment of cash values; 2. Payment of loans; 3. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 4. Any requested transfer of cash value; and 5. Use of Insurance Benefits under the Payment Options. DEFERMENT UNDER OPTIONS ON LAPSE. We may defer payment of a cash value and the making of a loan for up to six months after we receive a request at our Administrative Office if this policy is being continued under one of the Options on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash value payment we defer for 30 days or more. PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any investment division after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment of all or part (if at least $2,500). If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 10. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 10. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. We reserve the right to change how often we make payments, so that each payment is for at least $25. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (such as a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time the arrangement takes effect. These include withdrawal or commutation rights, designation of payees and successor payees, and evidence of age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V85-01-8 Page 9 TABLE OF GUARANTEED PAYMENTS (MINIMUM AMOUNT FOR EACH $1,000 APPLIED) OPTION 2A FIXED PERIOD INSTALMENTS ------------------------ Number of Years' Monthly Annual Instalments Instalment Instalment ------------ ----------- ----------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If instalments are paid each 3 months, they will be 25.32% of the annual instalments. If they are paid each 6 months, they will be 50.43% of the annual instalments. OPTION 3 MONTHLY LIFE INCOME -------------------
10 Years Certain 20 Years Certain Refund Certain ---------------- ---------------- -------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Income amounts for Life Income Options are based on age nearest birthday when income starts. Income amounts for ages not shown will be furnished on request. V85-01-10 Page 10 BASIS OF VALUES ACTUAL NET RATE OF RETURN (Actual NRR). For each investment division, the Actual NRR for a policy year reflects the division's: o dividends received from the investment company; o plus realized and unrealized capital gains of the division's investment in the investment company; o minus realized and unrealized capital losses of the division's investment in the investment company; o minus any charge for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .50% per year for mortality and expense risks. The Actual NRR for each investment division will be increased to the extent that expenses of the investment division exceed the charges for securities brokers' commissions, transfer taxes, and other fees relating to securities transactions and a charge for investment management expenses of .25% per year. The actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all investment divisions always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Cash Value at the end of each policy year will equal the tabular cash value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each investment division, taking into account the Actual NRR for the first policy year. For the first policy year the VAA for each investment division is zero. For later policy years, the VAA for each investment division will equal the VAA for that division for the last policy year, plus the VAA Change Amount for that division. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each investment division may be positive or negative. It will equal the product of the following Items (a) and (b) divided by Item (c). (a) The Actual NRR for the investment division minus the Base NRR for that policy year. (b) The Benefit Base for the investment division as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each investment division, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Annual Premium for the first policy year. On policy anniversaries, the Benefit Base for an investment division is the sum of the following Items (1) and (2): (1) The allocation percentage for that anniversary, multiplied by the sum of the following Items (a) and (b) (a) The Tabular Cash Value on that anniversary. (b) The Net Annual Premium for that anniversary. (2) The Net Single Premium for the VAA for that investment division on that anniversary. V85-01-10 Page 11 BASIS OF VALUES CONTINUED The Net Annual Premium, Tabular Cash Values and Net Single Premiums are shown on pages 3, 3A and 3B, respectively. For each investment division, the VAA Change Amount will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; 2. All new policy loans and repayments during the previous policy year; and 3. All transfers of cash value to or from that investment division during the previous policy year. In addition, if you have changed the allocation percentages, we will reallocate the VAA's among the investment divisions. CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum of your cash values in each investment division on that date. If no premium is due and unpaid, your cash value in each investment division on any date is the sum of the following Items (1), (2) and (3): (1) The tabular cash value on that date, multiplied by the allocation percentage for that investment division in effect on the last policy anniversary. (2) The Net Single Premium on that date for the current VAA for that investment division. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Base NRR for the time lapsed since the last policy anniversary. (b) The Benefit Base for the investment division on the last policy anniversary. If a premium is due and unpaid, then within three months after the due date your cash value in each investment division is the sum of the following Items (1) and (2): (1) Your cash value in that investment division as of the due date of the unpaid premium. (2) The product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Net NRR for the time elapsed since such due date. (b) The cash value on such due date. For each investment division, the cash value will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; 2. All new policy loans and repayments since the last policy anniversary; and 3. All transfers of cash value to or from that investment division since the last policy anniversary. More than three months after the due date of an unpaid premium, if you continue the policy under one of the options on lapse, your cash value will equal the reserve for the policy. In such case, the cash value within 30 days after a policy anniversary will never be less than the cash value on that anniversary. If at any time you have a policy loan allocated to an investment division and your net cash value in that investment division is zero, we will cancel the VAA and the policy loan as to such investment division and reallocate them to each other investment division proportionately. Also, the premium allocation percentage for such investment division will be reduced to zero and the percentage for each other investment division will be increased proportionately. TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at the end of each month in the first policy year and at the end of later policy years. We will determine the TCV on other dates in a consistent manner with allowance for time elapsed and premiums paid. Any TCV's not shown will be furnished on request. V85-01-12 Page 12 - -------------------------------------------------------------------------------- PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV. EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI - -------------------------------------------------------------------------------- 1. PROPOSED INSURED a. Print name as it is to appear on policy. _______RICHARD___________________________ROE____________________________________ First Middle Initial Last b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________ c. List all current occupations -- Give Titles(s) and Duties _____________CORPORATE ATTORNEY_________________________________________________ ________________________________________________________________________________ d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__ e. Age Nearest Birthday: ___35___ f. Place of Birth: State of ___NEW YORK___ g. Residence: State of ___NEW YORK___ h. |X| Male |_| Female 2. PLAN INITIAL FACE AMOUNT ____WHOLE LIFE LEVEL FACE AMOUNT________________________________ $__100,000_____ If Flexible Prem., will the Death Benefit include the value of the Account? |_| No (Option A) |_| Yes (Option B) INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY) Common Stock __50%__ _________________ ______________% Money Market __50___ _________________ ______________ ____________ _______ _________________ ______________ ____________ _______ _________________ ______________ ____________ _______ _________________ ______________ ____________ _______ _________________ ______________ 100% 3. OPTIONAL BENEFITS |_| Accidental Death Benefit* (Specify Amount): $____________ |_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________ |_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.* |_| Waive Cost of Insurance |_| Credit $_____________ per _____________ Term Riders: Decreasing Term Per Month |_| Family Income: ______Years $____________ |_| Mortgage Prot.: ______Years Initial Amt.: $____________ Renewable Term Yearly 10 Yr. |_| On Insured: |_| |_| $____________ |_| On Add'l. Insured (See page 2): |_| |_| $____________ |_| Increasing Term |_| Children's Term (See page 2): $__________Units______________ *If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2. 4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL NAME and RELATIONSHIP to Proposed Insured. __________________________MARGARET H. ROE, WIFE_____________________________ ____________________________________________________________________________ Unless otherwise requested, the contingent beneficiary will be the surviving children of the Insured, in equal shares. If none survive, payment will be made to the Insured's estate. THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or on a Child will be as stated in those riders, unless otherwise designated in Special Instructions. 5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| | The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.) |_| Other (Give Full Name): ____________________________________________________________________________ If "Other," complete the following: |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________ Relationship to Insured_____________________________________________________ Specify a successor Owner if desired ____________________________________________________________________________ If the Proposed Insured or the Applicant for a Child is not the Owner and if all persons designated die before the Insured, the Owner will be the estate of the last of such persons to die except where the Insured is a Child (see Note in 10.c.). 6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence |1|0|0|_|S|P|E|C|M|E|N|_|S|T|.|_|_|_|_|_|_|_|_|_|0|1|_|_| No. Street Apt. |N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| City |N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1| State Zip 7. PREMIUM PAYMENT PLAN Check mode, and if Flexible Premium complete the following: Initial Prem. Payment $ _______________________________ Planned Periodic Prems. $ _____________________________ |_| Do not send premium reminder notices |x| Annual |_| Semi-Annual |_|Quarterly |_| Monthly |_| System-Matic (Attach S-M Form) |_| Single |_| Military Allotment: Branch ______________________ Register Date_________________ |_| Salary Allotment: Register Date_________________ Unit Name__________________________________________ Unit/Sub-Unit No. if established: |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| Divisible by |_| 2 |_| 4 Payroll No.________________ |_| Hold Premium $______________________ 8. SUITABILITY a. Have you the Proposed Insured and the Purchaser if other than the Proposed Insured received: (i) a Prospectus for the policy applied for? Yes |x| No |_| Date of Prospectus ______SPECIMEN____________________________ Date of any supplement ______SPECIMEN________________________ (ii) a Prospectus for The Hudson River Fund, Inc. Yes |x| No |_| Date of Prospectus ______SPECIMEN____________________________ Date of any supplement ______SPECIMEN________________________ b. Do you understand that, under the policy applied for (exclusive of any optional benefits), the amount of the death benefit and the cash surender value may increase or decrease depending upon investment experience (if the policy has a guaranteed minimum death benefit or cash surrender value it is only the amount above such minimum that may increase or decrease)? |X| Yes |_| No c. With this in mind, is the policy in accord with your insurance objectives and your anticipated financial needs? |X| Yes |_| No 9. SPECIAL INSTRUCTIONS a. |_| Preliminary Term (PT) period of ________ days ending _______________ . PT Premium $_______ Mo. Day Yr. b. |_| Date to save insurance age: _____________ c. |_| Check here to request an adjustable policy loan interest rate (if available) instead of a fixed rate. d. Other: ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM. - -------------------------------------------------------------------------------- EV4-200Q 1 10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14). a. Will there be more life insurance in effect on the Child than on any older child in the family? |_| Yes |_| No If yes, explain: ___________________________________________ _____________________________________________________________ b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD. i. _________________________________________________________ First Name Middle Initial Last Name ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______ iii. Date of Birth___________________________________19____ Month Day Year iv. |_| Male |_| Female v. Relationship to Child:___________________________________ vi. Total Life Insurance now in effect: $ _________________ c. OWNER. If the Applicant is to be the Owner, after the Applicant's death the Child will be the Owner unless otherwise designated in Special Instructions (in any such designation include Owner's FULL NAME, RELATIONSHIP to Child, and Social Security or Tax Number). NOTE: Consider designating an adult secondary Owner to reduce the chance of a minor Child becoming the Owner. If all persons designated die before the Child, the Owner will be the Child. d. OPTIONAL BENEFIT ON APPLICANT. |_| Supplemental Protective Benefit. Give Applicant's: i. Age Nearest ii. Place of Birthday ______________ Birth_____________ State iii. Height______Ft.____In. Weight______lbs. iv. Occupations-Give Title(s) and Duties:_________________________________ ________________________________________________________________________ ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT. e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit is applied for on the Child, the benefit is payable only if the Child dies after the Child's first birthday. If the Disability Premium Waiver Benefit is applied for on the Child, the benefit is effective only if the Child becomes totally disabled on or after the Child's 5th birthday. - -------------------------------------------------------------------------------- 11. COMPLETE FOR CHILDREN'S TERM RIDER. Give Names of Children below and answer the Questions on page 3 as to each Child. CHILDREN PROPOSED FOR INSURANCE: NOTE: To be eligible, children (including stepchildren and legally adopted children) must not yet have reached their 18th birthday. Coverage does not begin until a child is 15 days old. DATE OF BIRTH First Name Middle Initial Last Name |SEX| MO.| DAY| YR. - -------------------------------------------------------------------------------- ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED. Complete below and answer the Questions on page 3 as to the Additional Insured. PROPOSED ADDITIONAL INSURED a. Print name as it is to appear on the Policy. ________________________________________________________________________________ First Middle Initial Last b. List all current occupations -- Give Title(s) and Duties. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ c. Date of Birth: Mo.__________ Day________ Yr. 19____ d. Age Nearest Birthday _______________________________ e. Place of Birth: State of __________________________ f. Residence: State of________________________________ g. |_| Male |_| Female h. Owner's Relationship to Additional Insured:_________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- 13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE. i. Existing Individual Policy No. _________________________ ii. Option Date_______ iii. Option Amount: $______________ iv. |_| Regular Option or |_| Option on Birth or Adoption of Child Child's Name _______________________________________ Date of Birth or Adoption___________________________ v. If applying for Disability Premium Waiver, is Proposed Insured now totally disabled as defined in the Disability Premium Waiver provision of the above policy? |_| Yes |_| No This application is made under a provision in the policy indicated above permitting the purchase of individual life insurance (the "Option Provision"). If this application is made within the time allowed and in accordance with the other terms in the Option Provision, including timely payment of the full first premium for the option insurance, then the option insurance shall take effect upon the terms of the policy EVLICO would issue. Otherwise, the option insurance shall not take effect. Answer the Questions on page 3 only if evidence of insurability is required in connection with an optional benefit or any excess of the insurance amount applied for over the insurance amount permitted by the Option Provision (the option insurance). EV4-200Q 2 OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE: 14.a. Ever had a driver's license suspended or revoked or, within the last three years, been convicted of two or more moving violations or driving under the influence of alcohol or drugs? (Give full details -- including dates, types of violation, and reason for license suspension or revocation.) |_| Yes |X| No b. Any plan to travel or reside outside the U.S.? (Give full details.) |_| Yes |X| No c. Any other life insurance now in effect or application now pending? (State companies and amounts.) |_| Yes |X| No d. Smoked cigarettes within the last 12 months? |_| Yes |X| No 15.a. In the last year flown other than as a passenger or plan to do so? |_| Yes |X| No If yes: Total flying time at present________________ Hours; Last 12 mos.________Hours; Next 12 mos._________Est. Hours. (Complete Aviation Supplement for pilot instruction; competitive, test, stunt or military flying; or crop dusting.) b. Engaged within the last year, or any plan to engage in motor racing on land or water, underwater diving, sky diving, ballooning, hang-gliding or parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No c. Ever had an application for life or health insurance declined, that required an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No d. Replaced or changed any existing insurance or annuity (or any plan to do so) assuming the insurance applied for will be issued? (State companies, plans and amounts.) |_| Yes |X| No ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL. 16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs. Additional Insured:________Height________Ft._________In. Weight_______lbs. HAS ANY PERSON PROPOSED FOR INSURANCE: 17.a. Ever been treated for or had any indication of heart trouble, stroke, high blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.) |_| Yes |X| No b. In the last 5 years, consulted a physician, or been examined or treated at a hospital or other medical facility? (Include medical check-ups in the last 2 years. Do not include colds, minor virus infections, minor injuries, or normal pregnancy.) (Give full details.) |_| Yes |X| No 18.a. In the last ten years used barbiturates, amphetamines, hallucinatory drugs or narcotics? (Give full details.) |_| Yes |X| No b. In the last ten years received counseling or treatment for the use of alcohol or drugs? (Give full details.) |_| Yes |X|No 19. DETAILS. For each yes answer give Question number, name of person(s) affected and full details. For 17 and 18 also include conditions, dates, durations, treatment and results, and names and addresses of physicians and medical facilities. No. Name of Person Affected Details ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED: Have the undersigned read and do they agree to the conditions of EVLICO's Temporary Insurance Agreement, including (i) the requirement that all of the conditions in that Agreement must be met before any insurance takes effect, and (ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a premium may not be paid before the policy is delivered.) AMOUNT PAID: $___________. (Draw checks to order of EVLICO.) AGREEMENT. Each signer of this application agrees that: (1) The statements and answers in all parts of this application are true and complete to the best of my knowledge and belief. EVLICO may rely on them in acting on this application. (2) EVLICO's Temporary Insurance Agreement states the conditions that must be met before any insurance takes effect, if the full first premium for the policy applied for is paid before the policy is delivered. (3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B) BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID. (4) No agent or medical examiner has authority to modify this Agreement or the Temporary Insurance Agreement, nor to waive any of EVLICO's rights or requirements. EVLICO shall not be bound by any information unless it is stated in application Part 1, 1A or 2. - -------------------------------------------------------------------------------- Signature of Agent________/s/ John Q. Agent_____________________________________ IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH MINIMUM THAT MAY INCREASE OR DECREASE). Dated at __NEW YORK_____NY__________________on___3/1_____19__85__ City State (X)___/s/ Richard Roe___________________________________________________________ Signature of Proposed Insured or of Applicant if Proposed Insured is a Child, Issue Age 0-14. ________________________________________________________________________________ Signature of Additional Insured if required. ________________________________________________________________________________ Signature of Purchaser if not Proposed Insured or Applicant. (If corp. show firm's name and signature of authorized officer.) EV4-200Q 3 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] Home Office: 1285 Avenue of the Americas, New York, New York 10019 VARIABLE LIFE INSURANCE POLICY Limited Payment Life Plan -- LEVEL FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Fixed premiums payable for Premium Period shown on page 3 or until earlier death. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-01 EX-99.1A5AXIIIPOLCY 16 POLICY 85-02 (EVLICO) (SEP ACCT I) VARIABLE LIFE INSURANCE POLICY EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] THE INSURED RICHARD ROE POLICY OWNER RICHARD ROE INITIAL FACE AMOUNT $100,000 POLICY NUMBER SPECIMEN EQUITABLE VARIABLE LIFE INSURANCE COMPANY A Stock Life Insurance Company Agrees o To pay the insurance benefits of this policy to the Beneficiary upon receiving proof of the Insured's death; and o To provide you (the policy Owner) with the other rights and benefits of this policy. These agreements are subject to the provisions of this policy. As shown on page 3, the face amount increases at the beginning of each policy year from the second to the fifteenth. It is constant thereafter at 150% of the initial face amount. THE DEATH BENEFIT OF THIS POLICY DURING THE FIRST POLICY YEAR WILL EQUAL THE FACE AMOUNT SHOWN ON PAGE 3. THEREAFTER, IT MAY INCREASE OR DECREASE EACH YEAR AS DESCRIBED ON PAGE 5 DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY, BUT SHALL NEVER BE LESS THAN THE FACE AMOUNT FOR THE POLICY YEAR IN WHICH THE INSURED DIES. THE CASH VALUE OF THIS POLICY WILL VARY FROM DAY TO DAY. IT MAY INCREASE OR DECREASE DEPENDING UPON THE INVESTMENT EXPERIENCE OF THIS POLICY. Premiums are shown on page 3 and are fixed as to amount. They will not vary with the investment experience of this policy. RIGHT TO EXAMINE POLICY. You may examine this policy and if for any reason you are not satisfied with it, you may cancel it by returning the policy with a written request for cancellation to our Administrative Office by the later of: (a) the 10th day after you receive it; or (b) the 45th day after Part 1 of the application was signed. If you do this, we will refund the premium that was paid. SPECIMEN SPECIMEN Kevin Keefe Secretary Franklin Maisano President Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Face amount increases annually to 150% of initial face amount. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on pages 6. No. 85-02 EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] 1285 Avenue of the Americas, New York CONTENTS Insurance benefits 2 Policy owner and beneficiary 4 Premiums, grace, lapse, reinstatement 4 Death Benefit 5 Cash Value 5 Loans 5 The Separate Account 6 Investment Options, allocations, transfers 6 Options on Lapse 7 Exchange of Policy 7 General Provisions 8 Payment Options 9 Basis of Values 11 (Net rates of return, variable adjustment amount, benefit base, calculation of cash values) Any additional benefit riders and a copy of the application are at the back of the policy after page 12. IN THIS POLICY: "We," "our" and "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. ADMINISTRATIVE OFFICE The address of our Administrative Office is shown on page 3. You should send premiums and requests to that address unless instructed otherwise. INSURANCE BENEFITS The insurance benefits we pay at the Insured's death include: o the Death Benefit described on page 5; o plus any additional benefits due from riders to this policy; o plus or minus any adjustment for the last premium; o minus any loan (and loan interest) on the policy. We will add interest to the resulting amount for the period from the date of death to the date of payment. It will be computed at the interest rate we are then paying under the Deposit Option on page 9. We will pay these benefits only if premiums have been paid as called for by this policy. However, even if premiums have been discontinued we may still pay certain benefits. See Options on Lapse, page 7. Payment of these benefits may also be affected by other provisions of this policy. See the Suicide Exclusion, Incontestability, and Age and Sex clauses on page 8. Special exclusions or limitations (if any) are listed on page 3. No. 85-02 Page 2 POLICY INFORMATION THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 POLICY OWNER RICHARD ROE DATE OF ISSUE MAR 1, 1985 INITIAL FACE AMOUNT $100,000 ISSUE AGE, SEX 35, MALE POLICY NUMBER SPECIMEN BENEFICIARY MARGARET H. ROE **************************BENEFITS AND PREMIUMS TABLE*************************** BENEFITS ANNUAL PREMIUM PREMIUM PERIOD LIFE INSURANCE - VARIABLE $2,320.00 FOR LIFE THE FIRST PREMIUM IS $2,320.00 AND IS DUE ON OR BEFORE DELIVERY OF THE POLICY. SUBSEQUENT PREMIUMS ARE DUE ON MAR 1, 1986 AND EVERY 12 MONTHS THEREAFTER DURING THE PREMIUM PERIOD IN ACCORDANCE WITH THE ABOVE PREMIUM TABLE. *****************************TABLE OF FACE AMOUNTS******************************
POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT POLICY YEAR FACE AMOUNT 1 $100,000 6 $115,900 11 $134,400 2 $103,000 7 $119,400 12 $138,400 3 $106,100 8 $123,000 13 $142,600 4 $109,300 9 $126,700 14 $146,900 5 $112,600 10 $130,500 15 AND OVER $150,000
**************************** TABLE OF NET ANNUAL PREMIUMS*********************** BEGINNING OF NET ANNUAL POLICY YEAR PREMIUM 1 $1,259.00 2 - 5 2,045.00 5 AND LATER 2,145.00 *********************INVESTMENT ALLOCATION OF NET ANNUAL PREMIUMS*************** INVESTMENT DIVISIONS: COMMON STOCK 50% MONEY MARKET 50% ***********ADMINISTRATIVE OFFICE: EQUITABLE LIFE INSURANCE COMPANY************** SPECIMEN REGIONAL SERVICE CENTER 100 SPECIMEN ST. CITY, STATE 10001 V85-02-3 Page 3 POLICY INFORMATION CONTINUED THE INSURED RICHARD ROE REGISTER DATE MAR 1, 1985 INITIAL FACE AMOUNT $100,000 DATE OF ISSUE MAR 1, 1985 POLICY NUMBER SPECIMEN ISSUE AGE, SEX 35, MALE ******************************* TABULAR CASH VALUES **************************** THE CASH VALUE OF THIS POLICY MAY BE GREATER OR LESS THAN AMOUNTS SHOWN SEE PAGE 5 FOR CASH VALUE PROVISION INTERIM TABULAR CASH VALUES IN FIRST POLICY YEAR
INTERIM INTERIM INTERIM END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH MONTH VALUES MONTH VALUES MONTH VALUES 1 $ 0 5 $146 9 $ 668 2 0 6 275 10 801 3 0 7 407 11 929 4 14 8 540 12 1062
TABULAR CASH VALUES AT ENDS OF POLICY YEARS*
END OF TABULAR END OF TABULAR END OF TABULAR POLICY CASH POLICY CASH POLICY CASH YEAR VALUES YEAR VALUES YEAR VALUES 1 $ 1,062 9 $18,221 17 $38,251 2 2,959 10 20,622 18 40,884 3 4,912 11 23,062 19 43,546 4 6,917 12 25,534 20 46,235 5 9,077 13 28,033 AGE 60 59,960 6 11,290 14 30,548 AGE 62 65,499 7 13,552 15 33,081 AGE 65 86,944
*VALUES NOT SHOWN WILL BE FURNISHED ON REQUEST. V85-02-3A PAGE 3A POLICY INFORMATION CONTINUED TABLE OF NET SINGLE PREMIUMS For $1.00 of Variable Adjustment Amount or Paid-Up Whole Life Insurance. Values shown are applicable on policy anniversaries. The net single premium as of a date during a policy year shall be determined by interpolation between the values applicable on the immediately preceding and immediately following anniversaries.
Age of Age of Age of Age of Age of Insured Net Insured Net Insured Net Insured Net Insured Net (Nearest Single (Nearest Single (Nearest Single (Nearest Single (Nearest Single Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium Birthday) Premium - --------- ------- --------- ------- --------- ------- --------- ------- --------- ------- MALE INSURED ------------ 1 $.09647 21 $.17350 41 $.32865 61 $.57583 81 $ .81560 2 .09871 22 .17890 42 .33918 62 .58929 82 .82496 3 .10126 23 .18450 43 .34995 63 .60272 83 .83394 4 .10397 24 .19031 44 .36096 64 .61610 84 .84259 5 .10685 25 .19635 45 .37222 65 .62940 85 .85096 6 .10990 26 .20263 46 .38370 66 .64260 86 .85909 7 .11312 27 .20915 47 .39541 67 .65565 87 .86704 8 .11650 28 .21591 48 .40733 68 .66851 88 .87488 9 .12005 29 .22293 49 .41945 69 .68114 89 .88268 10 .12377 30 .23021 50 .43176 70 .69350 90 .89050 11 .12764 31 .23775 51 .44424 71 .70559 91 .89841 12 .13166 32 .24556 52 .45688 72 .71744 92 .90648 13 .13581 33 .25366 53 .46968 73 .72908 93 .91479 14 .14008 34 .26205 54 .48261 74 .74057 94 .92350 15 .14447 35 .27073 55 .49568 75 .75194 95 .93291 16 .14897 36 .27970 56 .50886 76 .76319 96 .94339 17 .15360 37 .28896 57 .52214 77 .77427 97 .95520 18 .15835 38 .29850 58 .53550 78 .78512 98 .96810 19 .16323 39 .30830 59 .54892 79 .79566 99 .98063 20 .16828 40 .31835 60 .56237 80 .80583 100 1.00000
FEMALE INSURED -------------- 1 $.08586 21 $.15360 41 $.28896 61 $.52214 81 $ .77427 2 .08774 22 .15835 42 .29850 62 .53550 82 .78512 3 .08993 23 .16323 43 .30830 63 .54892 83 .79566 4 .09228 24 .16828 44 .31835 64 .56237 84 .80583 5 .09478 25 .17350 45 .32865 65 .57583 85 .81560 6 .09743 26 .17890 46 .33918 66 .58929 86 .82496 7 .10023 27 .18450 47 .34995 67 .60272 87 .83394 8 .10318 28 .19031 48 .36096 68 .61610 88 .84259 9 .10629 29 .19635 49 .37222 69 .62940 89 .85096 10 .10953 30 .20263 50 .38370 70 .64260 90 .85909 11 .11290 31 .20915 51 .39541 71 .65565 91 .86704 12 .11641 32 .21591 52 .40733 72 .66851 92 .87488 13 .12004 33 .22293 53 .41945 73 .68114 93 .88268 14 .12379 34 .23021 54 .43176 74 .69350 94 .89050 15 .12764 35 .23775 55 .44424 75 .70559 95 .89841 16 .13166 36 .24556 56 .45688 76 .71744 96 .90648 17 .13581 37 .25366 57 .46968 77 .72908 97 .91479 18 .14008 38 .26205 58 .48261 78 .74057 98 .92350 19 .14447 39 .27073 59 .49568 79 .75194 99 .93291 20 .14897 40 .27970 60 .50886 80 .76319 100 .94339 101 .95520 102 .96810 103 .98063 104 1.00000
V85-02-3B Page 3B POLICY INFORMATION CONTINUED DESCRIPTION OF INVESTMENT DIVISIONS THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS (OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC. COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE INVESTMENTS. MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.) GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S. GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT. INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES. PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS. V85-02-3C PAGE 3C POLICY OWNER AND BENEFICIARY OWNER. The owner of this policy is the Insured unless otherwise stated in the application, or later changed. As Owner, you can exercise all the rights in this policy while the Insured is living. You do not need the consent of anyone who has only a conditional or future ownership interest in this policy. BENEFICIARY. The Beneficiary is as stated in the application, unless later changed. If two or more persons are named, those surviving the Insured will share equally unless otherwise stated. We will pay any benefit for which there is no stated Beneficiary living at the death of the Insured to the children of the Insured who then survive, in equal shares. If none survive, we will pay the estate of the Insured. CHANGES. While the Insured is living, you may change the Owner or Beneficiary by written notice in a form satisfactory to us. The change will take effect on the date you sign the notice, except that it will not apply to any payment we make or other action we take before we receive the notice at our Administrative Office. If you change the Beneficiary, any previous arrangement you made under the Payment Options provision on page 9 is cancelled. ASSIGNMENT. You may assign this policy, but we will not be bound by an assignment unless it is in writing and we have received it at our Administrative Office. Your rights and those of any other person referred to in this policy will be subject to the assignment. We assume no responsibility for the validity of any assignment. PREMIUMS AMOUNTS AND DUE DATES. Page 3 shows the amounts and due dates of premiums and the period for which they are to be paid. Each premium is payable on or before its due date at our Administrative Office. You may write and ask us to change the frequency of premium payment. If we approve the change, the new premium will be determined on the rate scale for this policy. GRACE PERIOD. We allow a grace period of 31 days for payment of each premium, after the first premium. The insurance will continue during the grace period. If a premium is paid during the grace period, then all benefits under this policy will be the same as if such premium had been paid on its due date. LAPSE. If a premium is not paid by the end of its grace period, the policy will lapse as of the premium due date. If this occurs, all insurance ends, except as stated in Options on Lapse on page 7. Additional benefit riders do not continue beyond the grace period of an unpaid premium. REINSTATEMENT. You may reinstate this policy within five years after lapse if: (1) the policy has not been given up for its net cash value; (2) you provide evidence of insurability satisfactory to us; and (3) you pay the larger of: (a) all overdue premiums with interest at 6% per year compounded annually; or (b) 100% of the difference between the following Items (i) and (ii). Item (i) is the excess of the cash value immediately after reinstatement over the cash value immediately before reinstatement. Item (ii) is any policy loan, and accrued loan interest, in effect when any option on lapse became effective, with loan interest to the date of reinstatement. Upon reinstatement this policy will have the same Benefit Base and the same Variable Adjustment Amount as to each investment division (as these are determined in the Variable Adjustment Amount provision on page 11) as if default had not occurred. Also, upon reinstatement this policy will have a loan equal to the sum of the following Items (i) and (ii). Item (i) is any loan, and accrued loan interest, in effect at the date any option on lapse became effective, with loan interest to the date of reinstatement. Item (ii) is any loan arising after the date any option on lapse became effective, with loan interest to the date of reinstatement. PREMIUM ADJUSTMENT. We will add to the insurance benefits any part of the last premium paid that applies to a period beyond the policy month in which the Insured dies. If the Insured dies during the grace period of an unpaid premium, we will deduct from the benefits the part of the overdue premium for one policy month. V85-02-4 Page 4 DEATH BENEFIT The Death Benefit equals: o the face amount shown on page 3 for the policy year in which the Insured dies; o plus the sum, if positive, of the Variable Adjustment Amounts, for each investment division under this policy in which you have a cash value, of the policy year in which the Insured dies. A description of how the Variable Adjustment Amount for each investment division is determined is on page 11. CASH VALUE You may give up this policy for its net cash value at any time while the Insured is living. The net cash value is the cash value minus any loan and loan interest. We will determine the net cash value on the date we receive your signed request for it at our Administrative Office. The policy will terminate on the date you send the policy and the request to us. CASH VALUE. The cash value of the policy will vary daily with the performance of the investment divisions under this policy in which you have a cash value. See page 12 for a description of how cash values are determined. LOANS You may get a loan on this policy while it has a loan value and it is not being continued as extended term insurance under the Options on Lapse on page 7. This policy will be the sole security for the loan. The amount of the loan may not be more than the loan value. Except when used to pay premiums, a loan must be at least $100 more than any existing loan and loan interest. Any existing loan and loan interest will be deducted from the new loan. We may also deduct any unpaid premium then due. A loan, whether you repay it or not, will have a permanent effect on the Variable Adjustment Amounts, Death Benefit and cash value under this policy. It will have no effect on the amount of the premiums payable under this policy. We will allocate loans to the investment division based on your net cash value in each investment division as of the dates the loans are made. We will allocate loan repayments to the investment divisions based on the amount of your outstanding loans as to each investment division as of the dates the repayments are made. See page 12 for a description of how the cash value in each investment division is determined. LOAN VALUE. If this policy has not lapsed, the loan value is 90% of the policy's cash value. If this policy has lapsed and is being continued as Reduced Paid-up Insurance under the Options on Lapse on page 7, the loan value is the cash value on the next policy anniversary, minus interest at the loan rate to that date. LOAN INTEREST. Interest on a loan accrues daily, at an annual rate of 5%. Interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mailed such notice. REPAYMENT. You may repay a loan and loan interest in whole or in part at any time while the Insured is living and this policy is in effect. However, if this policy has lapsed and you are continuing insurance under one of the Options on Lapse on page 7, any loan that was deducted in determining the benefit on lapse may not be repaid unless this policy is reinstated. We will deduct any existing loan and loan interest from any benefits we pay at the Insured's death. V85-02-4 Page 5 THE SEPARATE ACCOUNT The Separate Account is our Separate Account I (in unit investment trust form). We established and we maintain it under the laws of New York State. Realized and unrealized gains and losses from the assets of the Separate Account are credited or charged against it without regard to our other income, gains, or losses. Assets are put in the Separate Account to support this policy and other variable life insurance policies. Assets may be put in Separate Account for other purposes, but not to support contracts or policies other than variable life insurance. The assets of the Separate Account are our property. The portion of its assets equal to the reserves and other policy liabilities with respect to the Separate Account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of the Separate Account in excess of such reserves and liabilities to our general account. We may transfer assets of an investment division in excess of the reserves and other liabilities with respect to that division to another investment division or to our general account. We will value the assets of investment division on each business day. A business day is generally any day on which the New York Stock Exchange is open for trading. INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions." Each division may invest its assets in a separate class (or series) of shares of a designated investment company. Each class represents a separate portfolio in the investment company. The investment divisions available on the Register Date are described on page 3C. If we add or remove investment divisions, we will send you a new Page 3C reflecting this. We have the right to change designated investment companies. We have the right to add or remove investment divisions. We have the right to withdraw assets of a class of policies to which this policy belongs from an investment division and put them in another investment division. We also have the right to combine any two or more investment divisions. The term "investment division" in this policy shall then refer to any other investment division in which the assets of a class of policies to which this policy belongs were placed. If we make any such change we will send you a new Page 3C reflecting it. We have the right to: 1. register or deregister the Separate Account under the Investment Company Act of 1940; 2. run the Separate Account under the direction of a committee, and to discharge such committee at any time; 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to the Separate Account; and 4. operate the Separate Account by making direct investments or in any other form. If we do so, we may invest the assets of the Separate Account in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Also, unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without our consent. CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material change in an investment objective or policy of any investment company that is invested in by an investment division to which net premiums have been allocated under this policy. If required by law or regulation, the investment policy of the Separate Account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. If premiums are duly paid, we will allocate to each investment division at the beginning of each policy year a percentage of the Net Annual Premium shown on page 3 for that year. Such allocations will be based on the allocation percentages then in effect. The allocation percentages for the first policy year are as designated in the application for this policy. Unless you change them, such percentages shall also apply in later years. V85-02-6 Page 6 INVESTMENT OPTIONS CONTINUED You may change the allocation percentages for policy years after the first by notifying us in writing of the new percentage. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF CASH VALUES. You may ask us to transfer all or a part of your cash value in one investment division to another. Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. OPTIONS ON LAPSE You have a number of options if the policy lapses. You may apply for reinstatement. If there is a net cash value, you may withdraw it and give up the policy. Or, you may continue insurance under one of the following options: REDUCED PAID-UP INSURANCE. This is fixed benefit insurance for the Insured's lifetime and for the amount that the net cash value will buy. EXTENDED TERM INSURANCE. This is fixed benefit term insurance for an amount equal to the Death Benefit on the date of lapse, minus any unpaid loan and loan interest. The insurance will continue from the date of lapse for as long a term period as the net cash value will buy. In no event, however, will this period be less than 90 days if premiums have been paid for at least three months before lapse and there is no loan on this policy. This option is not available if so stated on page 3. An Option on Lapse will become effective on the date your written request for it is received at our Administrative Office. If your request is not received within three months after the date of lapse, extended term insurance will become effective automatically at the end of such three month period. Reduced paid-up insurance will apply instead if the extended term insurance option is not available. If the Insured dies after the grace period but within three months from the date of lapse, the greater of the benefit under reduced paid-up or extended term insurance will apply. In this case, any restriction on page 3 as to extended term insurance will not apply. We will determine the amounts of these options as of the date the option becomes effective. We will use net cash values as of the date the option becomes effective, adjusted for any loan transaction on or after that date. A term period will begin as of the date of lapse (the due date of the unpaid premium). We will use net single premiums for the Insured's age as of the date of lapse. EXCHANGE OF POLICY You may exchange this policy for a policy of permanent fixed benefit insurance on the life of the Insured. You may make such an exchange within 18 months after the Date of Issue shown on page 3. We will not require evidence of insurability. We will require: 1. That this policy be in effect on the date of exchange with all premiums due having been paid; and 2. Repayment of any loan and loan interest on this policy. The date of exchange will be the later of: (a) the date you send us this policy and the signed request on our form for such exchange; or (b) the date we receive at our Administrative Office any sum due to be paid for such exchange. THE NEW POLICY. The new policy will be the "Executive Plan" policy being offered by The Equitable Life Assurance Society of the United States (Equitable) on the Date of Issue of this policy. It is a policy of permanent fixed benefit life insurance. The new policy will have a face amount equal to the initial face amount of this policy. It will have the same Register Date, Date of Issue, and Issue Age as this policy. Premiums for the new policy will be based on Equitable's rates in effect on its Register Date for the same class of risk as under this policy. Any additional benefit riders in this policy will be included in the new policy only if Equitable was offering them with the new policy as of its Date of Issue. V85-02-6 Page 7 EXCHANGE OF POLICY CONTINUED Upon request you will be told the amount of the first premium for the new policy, and of any extra sum required or allowance to be made for a premium or cash value adjustment that takes appropriate account of the premiums and cash values under this policy and under the new policy. A detailed statement of the method of computing such an adjustment has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. GENERAL PROVISIONS THE CONTRACT. This insurance is granted in consideration of payment of the required premiums. This policy and the application (a copy of which is attached at issue) constitute the entire contract. The rights conferred by this policy are in addition to those provided by applicable Federal and State laws and regulations. The contract may not be modified, nor may any of our rights or requirements be waived, except in writing signed by our President, one of our Vice Presidents, or by our Secretary or Treasurer. INCONTESTABILITY. All statements made in the application are representations and not warranties. We have the right to contest the validity of this policy based on material misstatements made in the application. However, this policy will become incontestable after it has been in effect during the lifetime of the Insured for two years from the Date of Issue shown on page 3. No statement shall be used to contest a claim unless contained in the application. See any additional benefit riders for modifications of this provision that apply to them. AGE AND SEX. If the Insured's age or sex has been misstated, any benefits will be those that the premium paid would have purchased at the correct age and sex. SUICIDE EXCLUSION. If the Insured commits suicide, while sane or insane, within two years after the Date of Issue shown on page 3, our liability will be limited to the payment of a single sum equal to the premiums paid, minus any loan and loan interest. POLICY PERIODS AND ANNIVERSARIES. Policy years, policy months, policy anniversaries and premium periods are measured from the Register Date. Each policy month begins on the same day in each calendar month as in the Register Date. If the end of a premium period or policy year is indicated by an age, it ends on the policy anniversary nearest the birthday on which the Insured reaches that age. POLICY CHANGES. You may change this policy to another plan of insurance or add additional benefit riders or make other changes, subject to our rules at the time of change. REPORTS. Each policy year after the first we will give you a report showing the Death Benefit and the cash value as of the first day of such year. The amount of any existing loan and the accrued loan interest for the previous policy year will also be shown. No such reports will be given while this policy is lapsed. We will also give you such other reports as may be required by law. BASIS OF COMPUTATION. Cash values, reserves and net single premiums are based on the Commissioners 1958 Standard Ordinary Mortality Table. For any extended term insurance, they are based instead on the Commissioners 1958 Extended Term Insurance Table. Continuous functions are used with interest compounded annually at 4%. The cash values and paid-up insurance benefits are equal to or more than those required by law. A detailed statement of the method of computing values and benefits has been filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. The tabular cash value at the end of each policy year equals the reserve. Reserves referred to in this policy are not less than reserves determined according to the Commissioners Reserve Valuation Method. Our expense and mortality results will not adversely affect the dollar amount of insurance benefits or cash values. DETERMINATION AND PAYMENT OF VARIABLE BENEFITS. As long as this policy is not being continued under one of the Options on Lapse, we will make payments under this policy as follows: o A cash value will be paid within 7 days after we receive your policy and request at our Administrative Office; o A loan will be paid within 7 days after we receive your request at our Administrative Office; and o The insurance benefits will be paid within 7 days after we receive at our Administrative Office proof of the Insured's death and all other requirements deemed necessary before such payment may be made. V85-02-8 Page 8 GENERAL PROVISIONS CONTINUED We may not be able to determine the value of the assets of the investment divisions if: (1) the New York Stock Exchange is closed; (2) the Securities and Exchange Commission requires trading to restricted or declares an emergency; or (3) the Securities and Exchange Commission by order permits us to defer payments for the protection of our policy Owners. During such times we may defer: 1. Determination and payment of cash values; 2. Payment of loans; 3. Determination of a change in a Variable Adjustment Amount, and payment of any portion of the Death Benefit equal to the Variable Adjustment Amount; 4. Any requested transfer of cash value; and 5. Use of Insurance Benefits under the Payment Options. DEFERMENT UNDER OPTIONS OF LAPSE. We may defer payments of a cash value and the making of a loan for up to six months after we receive a request at our Administrative Office if this policy is being continued under one of the Options on Lapse. We will allow interest, at a rate of at least 3% a year, on any cash value payment we defer for 30 days or more. PAYMENT OPTIONS Payments under these options will not be affected by the investment experience of any investment division after proceeds are applied under such options. Instead of having the insurance benefits or net cash value paid immediately in one sum, you can choose another form of payment for all or part(if at least $2,500). If you do not arrange for this before the Insured dies, the Beneficiary will have this right when the Insured dies. Arrangements you make, however, cannot be changed by the Beneficiary after the Insured's death. The options are: 1. DEPOSIT OPTION: Left on deposit for a period mutually agreed upon, with interest paid at the end of each month, each 3 months, each 6 months or each 12 months, as chosen. 2. INSTALMENT OPTIONS: A. FIXED PERIOD: Paid in equal instalments for a specified number of years (not more than 30). The instalments will not be less than those shown in the Table of Guaranteed Payments on page 10. B. FIXED AMOUNT: Paid in instalments as mutually agreed upon until the amount applied, together with interest on the unpaid balance, is used up. 3. LIFE INCOME OPTIONS: Paid as a monthly income for life in an amount we determine but not less than shown in the Table of Guaranteed Payments on page 10. We guarantee payments for life and in any event for 10 years, 20 years, or until the payments we make equal the amount applied (called "refund certain"), according to the "certain" period chosen. We guarantee interest under Option 1 at the rate of 3% a year and under Option 2 at 3-1/2% a year, or such higher rates as we may determine. We may allow excess interest under Options 1 and 2. We reserve the right to change how often we make payments, so that each payment is for at least $25. The payee under an option may name and change a successor payee for any amount we would otherwise pay the payee's estate. Any arrangements involving more than one of the options, or a payee who is not a natural person (such as a corporation) or who is a fiduciary, must have our approval. Also, details of all arrangements will be subject to our rules at the time arrangement takes effect. These include withdrawal or commutation rights, designation of payees and successor payees, and evidence of age and survival. Choices (or any later changes) under these options will be made and will take effect in the same way as a change of Beneficiary. Amounts applied under these options will not be subject to the claims of creditors or to legal process, to the extent permitted by law. V85-02-8 Page 9 TABLE OF GUARANTEED PAYMENTS (MINIMUM AMOUNT FOR EACH $1,000 APPLIED) OPTION 2A FIXED PERIOD INSTALMENTS ------------------------ Number of Years' Monthly Annual Instalments Instalment Instalment ----------- ---------- ---------- 1 $84.70 $1000.00 2 43.08 508.60 3 29.21 344.86 4 22.28 263.04 5 18.12 213.99 6 15.36 181.32 7 13.38 158.01 8 11.91 140.56 9 10.76 127.00 10 9.84 116.18 11 9.09 107.34 12 8.47 99.98 13 7.94 93.78 14 7.49 88.47 15 7.11 83.89 16 6.77 79.89 17 6.47 76.37 18 6.20 73.25 19 5.97 70.47 20 5.76 67.98 21 5.57 65.74 22 5.40 63.70 23 5.24 61.85 24 5.10 60.17 25 4.97 58.62 26 4.84 57.20 27 4.73 55.90 28 4.63 54.69 29 4.54 53.57 30 4.45 52.53 If instalments are paid each 3 months, they will be 25.32% of the annual instalments. If they are paid each 6 months, they will be 50.43% of the annual instalments.
OPTION 3 MONTHLY LIFE INCOME ------------------- 10 Years Certain 20 Years Certain Refund Certain ---------------------- ---------------------- ----------------------- AGE Male Female Male Female Male Female --- ---- ------ ---- ------ ---- ------ 50 $4.50 $3.96 $4.27 $3.89 $ 4.28 $3.87 51 4.58 4.02 4.32 3.94 4.35 3.93 52 4.67 4.09 4.38 4.00 4.42 3.99 53 4.75 4.16 4.44 4.06 4.50 4.05 54 4.85 4.24 4.50 4.12 4.58 4.11 55 4.94 4.32 4.56 4.18 4.66 4.18 56 5.04 4.40 4.62 4.24 4.74 4.25 57 5.15 4.49 4.68 4.31 4.83 4.33 58 5.26 4.58 4.74 4.38 4.93 4.41 59 5.37 4.68 4.81 4.45 5.03 4.49 60 5.49 4.78 4.86 4.52 5.13 4.58 61 5.62 4.89 4.92 4.59 5.24 4.67 62 5.75 5.00 4.98 4.66 5.35 4.77 63 5.88 5.12 5.04 4.73 5.48 4.88 64 6.03 5.25 5.09 4.80 5.60 4.99 65 6.17 5.39 5.14 4.88 5.74 5.10 66 6.32 5.53 5.19 4.95 5.88 5.22 67 6.48 5.68 5.24 5.01 6.03 5.35 68 6.64 5.83 5.28 5.08 6.18 5.49 69 6.80 6.00 5.32 5.14 6.35 5.64 70 6.97 6.17 5.35 5.20 6.53 5.79 71 7.15 6.34 5.38 5.26 6.71 5.96 72 7.32 6.53 5.41 5.30 6.91 6.13 73 7.50 6.72 5.43 5.35 7.12 6.32 74 7.67 6.92 5.45 5.38 7.34 6.52 75 7.85 7.12 5.47 5.42 7.58 6.73 76 8.02 7.32 5.48 5.44 7.82 6.96 77 8.19 7.53 5.49 5.46 8.09 7.21 78 8.36 7.75 5.50 5.48 8.38 7.47 79 8.52 7.96 5.50 5.49 8.67 7.75 80 8.67 8.16 5.51 5.50 9.00 8.05 81 8.81 8.36 5.51 5.51 9.34 8.39 82 8.94 8.55 5.51 5.51 9.70 8.73 83 9.06 8.73 5.51 5.51 10.10 9.12 84 9.16 8.90 5.51 5.51 10.52 9.53 85 & over 9.26 9.05 5.51 5.51 10.96 9.97
Income amounts for Life Income Options are based on age nearest birthday when income starts. Income amounts for ages not shown will be furnished on request. V85-02-10 PAGE 10 BASIS OF VALUES ACTUAL NET RATE OF RETURN (ACTUAL NRR.) For each investment division, the Actual NRR for a policy year reflects the division's: o dividends received from the investment company; o plus realized and unrealized capital gains of the division's investment in the investment company; o minus realized and unrealized capital losses of the division's investment in the investment company; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .50% per year for mortality and expense risks. The Actual NRR for each investment division will be increased to the extent that expenses of the investment division exceed the charges for securities brokers' commissions, transfer taxes, and other fees relating to securities transactions and a charge for investment management expenses of .25% per year. The Actual NRR for a period less than a year will be calculated in a consistent manner. BASE NET RATE OF RETURN (BASE NRR). The Base NRR is 4% per year. (It is a pro-rata part of 4% for periods of less than a year.) If the Actual NRR for all investment divisions always equals the Base NRR, then: o the Death Benefit will always equal the Face Amount; and o the Cash Value at the end of each policy year will equal the tabular cash value shown on page 3A. VARIABLE ADJUSTMENT AMOUNT (VAA). The VAA for a policy year is the amount of insurance in effect for that policy year due to investment performance in past years. On each policy anniversary we will determine a new VAA for the next policy year. We will do this independently for each investment division, taking into account the Actual NRR for the last policy year. For the first policy year the VAA for each investment division is zero. For later policy years, the VAA for each investment division will equal the VAA for that division for the last policy year, plus the VAA Change Amount for that division. A VAA does not change during a policy year. VAA CHANGE AMOUNT. For each policy year after the first, the VAA Change Amount for each investment division may be positive or negative. It will equal the product of the following Items (a) and (b), divided by Item (c). (a) The Actual NRR for the investment division minus the Base NRR for that policy year. (b) The Benefit Base for the investment division as of the last policy anniversary. (c) The Net Single Premium per $1.00 of VAA for the current policy anniversary as shown on page 3B. BENEFIT BASE. For each investment division, the Benefit Base on the Register Date is the product of the following Items (1) and (2): (1) The Allocation Percentage designated in the application for this policy. (2) The Net Annual Premium for the first policy year. On policy anniversaries, the Benefit Base for an investment division is the sum of the following Items (1) and (2): (1) The allocation percentage for that anniversary, multiplied by the sum of the following Items (a) and (b): (a) The Tabular Cash Value on that anniversary. (b) The Net Annual Premium for that anniversary. (2) The Net Single Premium for the VAA for that investment division on that anniversary. The Net Annual Premiums, Tabular Cash Values and Net Single Premiums are shown on pages 3, 3A and 3B, respectively. V85-02-10 Page 11 BASIS OF VALUES CONTINUED For each investment division, the VAA Change Amount will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; 2. All new policy loans and repayments during the previous policy year; and 3. All transfers of cash value to or from that investment division during the previous policy year. In addition, if you have changed the allocation percentages, we will reallocate the VAA's among the investment divisions. CALCULATION OF CASH VALUES. The cash value of this policy on any date is the sum of your cash values in each investment division on that date. If no premium is due and unpaid, your cash value in each investment division on any date is the sum of the following Items (1), (2) and (3): (1) The tabular cash value on that date, multiplied by the allocation percentage for that investment division in effect on the last policy anniversary. (2) The Net single Premium on that date for the current VAA for that investment division. (3) If the date is not a policy anniversary, the product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Base NRR for the time elapsed since the last policy anniversary. (b) The Benefit Base for the investment division on the last policy anniversary. If a premium is due and unpaid, then within three months after the due date your cash value in each investment division is the sum of the following Items (1) and (2): (1) Your cash value in that investment division as of the due date of the unpaid premium. (2) The product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Net NRR for the time elapsed since such due date. (b) The cash value on such due date. For each investment division, the cash value will also reflect the effect of: 1. Any policy loans in effect on the last policy anniversary; 2. All new policy loans and repayments since the last policy anniversary; and 3. All transfers of cash value to or from that investment division since the last policy anniversary. More than three months after the due date of an unpaid premium, if you continue the policy under one of the options on lapse, your cash value will equal the reserve for the policy. In such case, the cash value within 30 days after a policy anniversary will never be less than the cash value on that anniversary. If at any time you have a policy loan allocated to an investment division and your net cash value in that investment division is zero, we will cancel the VAA and the policy loan as to such investment division and reallocate them to each other investment division proportionately. Also, the premium allocation percentage for such investment division will be reduced to zero and the percentage for each other investment division will be increased proportionately. TABULAR CASH VALUE (TCV). The tables of TCV's on page 3A show interim TCV's at the end of each month in the first policy year and at the end of later policy years. We will determine the TCV on other dates in a consistent manner with allowance for time elapsed and premiums paid. Any TCV's not shown will be furnished on request. V85-02-12 Page 12 VARIABLE LIFE INSURANCE POLICY EQUITABLE VARIABLE LIFE INSURANCE COMPANY [EVLICO LOGO] Home Office: 1285 Avenue of the Americas, New York New York 10019 Whole Life Plan -- INCREASING FACE AMOUNT. Variable insurance payable upon death. Guaranteed Minimum Death Benefit. Face amount increases annually to 150% of initial face amount. Fixed premiums payable for life. Non-Participating. Investment experience reflected in benefits. Investment options described on page 6. No. 85-02 EX-99.1A5BRIDER 17 RIDER R81-100 SEPARATE ACCOUNT II In this rider, "we," "our" and RIDER "us" mean Equitable Variable Life Insurance Company. "You" and "your" mean the Owner of the policy at the time an Owner's right is exercised. - -------------------------------------------------------------------------------- This rider is made part of your policy as of the date of issue of this rider. It should be attached to and kept with your policy. Date of Issue of this Rider: 1. Net Annual Premiums for policy years beginning on and after the Date of Issue of this Rider will be allocated to Separate Account I or to Separate Account II, or will be divided between the two accounts, in accordance with the Investment Options provision in this Rider. 2. The policy's net cash value will equal the sum of your net cash values in each separate account. The Death Benefit will equal the sum of the following amounts for the policy year in which the Insured dies: o the face amount; o plus the sum, if positive, of the Variable Adjustment Amounts for each separate account in which you have a cash value. 3. The following provisions are added to your policy: SEPARATE ACCOUNT II We established and we maintain Separate Account II under the laws of New York State. Realized and unrealized gains and losses from the assets of Separate Account II are credited or charged against such account without regard to our other income, gains, or losses. Assets are put in Separate Account II to support this policy and other variable life insurance policies. Assets may be put in Separate Account II for other purposes, but not to support contracts or policies other than variable life insurance. We expect the investments in Separate Account II will be, primarily, short-term (not to exceed one year) money market instruments, such as: United States (U.S.) government and U.S. government agency securities; bank money instruments; time deposits; certificates of deposit; high grade commercial paper, including master demand notes; and repurchase agreements covering U.S. government obligations and certificates of deposit. But, we may invest the assets of Separate Account II in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Instead of making direct investments, we may also operate Separate Account II as a unit investment trust, or other form. We would invest all or part of such account's assets in shares or units of a fund. We, an affiliate, or The Equitable Life Assurance Society of the United States would be the investment adviser and would invest the assets of the fund as above. The assets of Separate Account II are our property. The portion of the assets of Separate Account II equal to the reserves and other policy liabilities with respect to such separate account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of such separate account in excess of such reserves and liabilities to our general account. We will value the assets of Separate Account II on each business day. A business day is any day on which the New York Stock Exchange is open for trading. We have the right to withdraw assets of a class of policies to which this policy belongs from any separate account and put them in another separate account. If we do this, we will withdraw the same percentage of each investment in such separate account, but will avoid odd lots and fractions. The term "Separate Account II" in this policy shall then refer to any other separate account in which the assets of a class of policies to which this policy belongs were placed. We have the right to: 1. register or deregister Separate Account II under the investment Company Act of 1940; (Continued on Back) R81-100 2. run Separate Account II under the direction of a committee, and to discharge such committee at any time; and 3. restrict or eliminate any voting rights of policyowners, or other persons who have voting rights as to Separate Account II. CHANGES OF INVESTMENT ADVISER OR INVESTMENT POLICY. Unless otherwise required by law or regulation, the investment adviser or any investment policy may not be changed without our consent. If required by law or regulation, the investment policy of Separate Account II will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. INVESTMENT OPTIONS ALLOCATION OF NET ANNUAL PREMIUMS. At the beginning of each policy year that starts on or after the Date of Issue of this Rider, we will allocate that year's Net Annual Premium shown on Page Three to either or both separate accounts based on the allocation percentages then in effect. We will only make such allocations if premiums are duly paid. The allocation percentages for the policy year in which such Date of Issue falls are 100% to Separate Account I and 0% to Separate Account II. Unless you change them, such percentages shall also apply in later years. You may change the allocation percentages for later policy years by notifying us in writing of the new percentages. Each allocation percentage greater than zero must be a whole number of not more than 100%. The sum of the percentages must equal 100%. A change will take effect on the next policy anniversary if we receive the notice at our Administrative Office at least 7 days before such anniversary. TRANSFER OF CASH VALUES. You may ask us to transfer all or part of your cash value in one of the separate accounts to the other. (This also applies to your cash value in Separate Account I on the Date of Issue of this Rider.) Only two such transfers may be made in a policy year. We will make the transfer as of the date we receive your written request for it at our Administrative Office. LOAN ALLOCATIONS AND REPAYMENTS. We will allocate loans to the separate accounts based on your net cash value in each separate account as of the dates the loans are made. We will allocate loan repayments to the separate accounts based on the amount of your outstanding loans as to each separate account as of the dates the repayments are made. 4. References in the policy to Separate Account I shall hereafter mean both Separate Accounts I and II, except that: a. The provision "Separate Account I" shall apply only to Separate Account I; and b. The following provisions shall be read separately as to each separate account: Separate Account Index Actual and Base Net Rates of Return Variable Adjustment Amount (VAA) Cash Value (In determining the cash value as to a separate account, the tabular cash value will be multiplied by the allocation percentage for that separate account in effect on the last policy anniversary. If at any time you have a policy loan allocated to a separate account and your net cash value in that separate account is zero, we will cancel the VAA and the policy loan as to such separate account and reallocate them to the other separate account. Also, the premium allocation percentage for such separate account will be reduced to zero and the percentage for the other separate account will be increased to 100%.) EQUITABLE VARIABLE LIFE INSURANCE COMPANY /s/ Kevin Keefe /s/ Donald J. Mooney --------------- -------------------- Kevin Keefe Secretary Donald J. Mooney President R81-100 EX-99.1A5CRIDER 18 S. 83-23 ENDORSEMENT - EVLICO EQUITABLE VARIABLE LIFE INSURANCE COMPANY The policy to which this endorsement is attached is amended as follows: The first sentence of the "Loan Value" provision is changed to read: If this policy has not lapsed, the loan value is 90% of the policy's cash value. EQUITABLE VARIABLE LIFE INSURANCE COMPANY SPECIMEN SPECIMEN Kevin Keefe Secretary Donald J. Mooney President S.83-23 EX-99.1A5DRIDER 19 S. 83-41 ENDORSEMENT - EVLICO EQUITABLE VARIABLE LIFE INSURANCE COMPANY ENDORSED ON THIS POLICY ON ITS DATE OF ISSUE: Whenever the difference between the policy's Account Value and cash value exceeds 9% of the single premium for the policy, we will increase the cash value by the amount of such excess. /s/ Kevin Keefe /s/ Donald J. Mooney Kevin Keefe Secretary Donald J. Mooney President S.83-41 EX-99.1A5ERIDER 20 S.83-61 ENDORSEMENT-EVLICO EQUITABLE VARIABLE LIFE INSURANCE COMPANY The policy to which this endorsement is attached is amended as follows: The second sentence in the second paragraph of the "Loans" provision is changed to read: The loan value of this policy, if no premium is in default beyond the grace period, is an amount equal to 90% of the cash value determined in accordance with the Cash Value provision on page eight. EQUITABLE VARIABLE LIFE INSURANCE COMPANY SPECIMEN SPECIMEN Kevin Keefe Secretary Donald J. Mooney President S.83-61 EX-99.1A5FRIDER 21 S.84-81 ENDORSEMENT-EVLICOS EQUITABLE VARIABLE LIFE INSURANCE COMPANY THE INSURED RICHARD ROE SPECIMEN POLICY NUMBER REGISTER DATE APRIL 1, 1984 MAY 1, 1984 VARIABILITY EFFECTIVE DATE Endorsed on this policy on its Date of Issue: 1. For purposes of determining the VAA Change Amount for each separate account on the first policy anniversary of this policy, Items (1) and (2) of "VAA Change Amount" on page 12 are changed to read as follows: (1) The Actual NRR for the separate account from the Variability Effective Date to the first policy anniversary, minus the pro-rated portion of the Base NRR covering the same period. Or, if the Variable Reduced Paid-Up Insurance option is elected in the first policy year, the Actual NRR for the separate account from the date that such option takes effect, minus the pro-rated portion of the Base NRR covering the same period. (2) The Benefit Base for the separate account as of the Register Date. (If the Variable Reduced Paid-Up Insurance option has been elected in the first policy year, the Benefit Base is the net cash value as of the date of lapse.) 2. For purposes of determining the cash value on any date during the first policy year, the first paragraph of "Calculation of Cash Values" on page 13 is changed to read as follows: The cash value of this policy on any date is the sum of your cash values in each separate account on that date. Your cash value in each separate account on any date during the first policy year is determined as follows: (1) While the policy is not lapsed, the sum of the immediately following Items (a), (c) and (d). (2) More than three months after the policy has lapsed and while it is being continued under the Variable Reduced Paid-Up Insurance option, the sum of the immediately following Items (b), (c) and (d). (a) The tabular cash value on that date, multiplied by the allocation percentage for that separate account in effect on the Register Date. (b) The product of the following Items (i) and (ii): (i) The product of the Net Single Premium on that date per $1,000 of Paid-Up Whole Life Insurance as shown on page 3B, and the Variable Reduced Paid-Up Face Amount defined on page 7. (ii) The following amount immediately before the date on which the cash value is being determined: The cash value in that separate account, divided by the total cash value in this policy. (c) The Net Single Premium on that date for the current VAA for that separate account. (d) If the date is not a policy anniversary, the product of the following Items (i) and (ii): (i) The Actual NRR for the separate account for the time elapsed since the Variability Effective Date minus the Base NRR for the same period. (ii) The Benefit Base for the separate account on the Register Date. SPECIMEN SPECIMEN Kevin Keefe Secretary Donald J. Mooney President S84-81 EX-99.1A5GRIDER 22 S.85-99 ENDORSEMENT-EVLICO UNIT INVESTMENT TRUST ENDORSEMENT In this endorsement, "we" and "our" mean Equitable Variable Life Insurance Company. "You" means the owner of the policy at the time an owner's right is exercised. - -------------------------------------------------------------------------------- EFFECTIVE DATE: [FEBRUARY 15, 1985] This endorsement is made part of your policy as of its Effective Date. It should be attached to and kept with your policy. On the Effective Date of this endorsement we exercised our right under the policy to operate Separate Accounts I and II as a unit investment trust. As a result, the assets in Separate Account II have been transferred to Separate Account I by merger, and Separate Account II is ended. Separate Account I is now operating in unit investment trust form. It is referred to herein as "the Separate Account." It is made up of investment divisions. The investment assets of the former Separate Account I have been exchanged for shares of the common stock portfolio of The Hudson River Fund, Inc., "the investment company." Those shares are in the common stock investment division of the Separate Account. The investment assets of the former Separate Account II have been exchanged for shares of the money market portfolio of the investment company. Those shares are in the money market investment division of the Separate Account. Future allocations of Net Annual Premiums will be on the basis of the allocation percentages in effect immediately before the Effective Date of this endorsement unless you change them. That is, premiums that would otherwise have been allocated to the former Separate Account I will be allocated to the common stock investment division. Premiums that would otherwise have been allocated to the former Separate Account II will be allocated to the money market investment division. Any policy loan outstanding on the Effective Date of this endorsement will be allocated as it had been allocated between the former Separate Accounts I and II. As a result of this change in operations, as of the Effective Date of this endorsement, the policy to which this endorsement is attached is amended as follows: 1. The phrase "separate account investment experience" wherever it appears on the first page of the policy is replaced by the phrase "the investment experience of this policy." 2. The terms "Separate Account I" and Separate Account II" in the Investment Allocation section on Page 3 of the policy are changed to "Common Stock Division" and "Money Market Division," respectively. 3. All other references in the policy, and in any other endorsement to the policy, to Separate Account I or II and to the Separate Accounts are changed to "the Separate Account." 4. References in the policy, and in any other endorsement to the policy, to "the separate accounts," "a separate account" and "each separate account" are changed to "the investment divisions," "an investment division" and "each investment division," respectively. 5. The section entitled "The Separate Accounts" is replaced by the following: THE SEPARATE ACCOUNT The Separate Account is our Separate Account I (in unit investment trust form). We established and we maintain it under the laws of New York State. Realized and unrealized gains and losses from the assets of the Separate Account are credited or charged against it without regard to our other income, gains, or losses. Assets are put in the Separate Account to support this policy and other variable life insurance policies. Assets may be put in the Separate Account for other purposes, but not to support contracts or policies other than variable life insurance. The assets of the Separate Account are our property. The portion of its assets equal to the reserves and other policy liabilities with respect to the Separate Account will not be chargeable with liabilities arising out of any other business we conduct. We may transfer assets of the Separate Account in excess of such reserves and liabilities to our general account. We may transfer assets of an investment division in excess of the reserves and other liabilities with respect to that division to another investment division or to our general account. We will value the assets of each investment division on each business day. A business day is any day on which the New York Stock Exchange is open for trading. INVESTMENT DIVISIONS. The Separate Account consists of "investment divisions." Each division may invest its assets in separate class (or series) of shares of a designated investment company. Each class represents a separate portfolio in the investment company. The investment divisions available on the Effective Date of this endorsement are described on Page 3 of this endorsement. If we add or remove investment divisions, we will send you a new page reflecting this. We have the right to change designated investment companies. We have the right to add or remove investment divisions. We S.85-99 Unit Investment Trust Endorsement Page 1 have the right to withdraw assets of a class of policies to which this policy belongs from an investment division and put them in another investment division. We also have the right to combine any two or more investment divisions. The term "investment division" in this policy shall then refer to any other investment division in which the assets of a class of policies to which this policy belongs were placed. If we make any such change we will send you a new Page 3 for this endorsement reflecting it. We have the right to: 1. register or deregister the Separate Account under the Investment Company Act of 1940; 2. run the Separate Account under the direction of a committee, and to discharge such committee at any time; 3. restrict or eliminate any voting rights of policy owners, or other persons who have voting rights as to the Separate Account; and 4. operate the Separate Account by making direct investments or in any other form. If we do so, we may invest the assets of the Separate Account in any legal investments. We will rely upon our own and outside counsel for advice in this regard. Also, unless otherwise required by law or regulation, the investment advisor or any investment policy may not be changed without our consent. CHANGE IN INVESTMENT OBJECTIVE OR POLICY. We will notify you of any material change in an investment objective or policy of any investment company that is invested in by an investment division to which net premiums have been allocated under this policy. If required by law or regulation, the investment policy of the Separate Account will not be changed unless approved by the Superintendent of Insurance of New York State or deemed approved in accordance with such law or regulation. If so required, the process for getting such approval is filed with the insurance supervisory official of the jurisdiction in which this policy is delivered. 6. On Page 7 of the policy, the phrase "to the other" in the third line on the right side of the page is changed to "to another." 7. The section entitled "Actual Net Rate of Return" is replaced by the following: ACTUAL NET RATE OF RETURN (ACTUAL NRR). For each investment division, the Actual NRR for a policy year reflects the division's: o dividends received from the investment company; o plus realized and unrealized capital gains of the division's investment in the investment company; o minus realized and unrealized capital losses of the division's investment in the investment company; o minus any charges for taxes or amounts set aside as a reserve for taxes; o minus a charge not exceeding .50% per year for mortality and expense risks. The Actual NRR for each investment division will be increased to the extent that expenses of the investment division exceed the charges for securities brokers' commissions, transfer taxes, and other fees relating to securities transactions and a charge for investment management expenses of .25% per year. The Actual NRR for a period less than a year will be calculated in a consistent manner. 8. In the last paragraph of the section entitled "Calculation of Cash Values": a. The phrase "to the other separate account" appearing at the end of the first sentence is replaced by "to each other investment division proportionately." b. The second sentence is replaced by the following: Also, the premium allocation percentage for such investment division will be reduced to zero and the percentage for each other investment division will be increased proportionately. EQUITABLE VARIABLE LIFE INSURANCE COMPANY SPECIMEN Secretary SPECIMEN President Kevin Keefe Franklin Maisano S.85-99 Unit Investment Trust Endorsement Page 2 DESCRIPTION OF INVESTMENT DIVISIONS THE ASSETS IN EACH INVESTMENT DIVISION ARE INVESTED IN SHARES OF A DESIGNATED PORTFOLIO OF AN INVESTMENT COMPANY. EACH PORTFOLIO REPRESENTS A DIFFERENT CLASS (OR SERIES) OF SHARES ISSUED BY THE HUDSON RIVER FUND, INC. COMMON STOCK DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, COMMON STOCKS AND OTHER EQUITY-TYPE INVESTMENTS. MONEY MARKET DIVISION - WE EXPECT THE INVESTMENTS IN THIS PORTFOLIO WILL BE, PRIMARILY, SHORT-TERM (NOT TO EXCEED ONE YEAR) MONEY MARKET INSTRUMENTS, SUCH AS: UNITED STATES (U.S.) GOVERNMENT AND U.S. GOVERNMENT AGENCY SECURITIES; BANK MONEY INSTRUMENTS; TIME DEPOSITS; CERTIFICATES OF DEPOSIT; HIGH GRADE COMMERCIAL PAPER, INCLUDING MASTER DEMAND NOTES; AND REPURCHASE AGREEMENTS COVERING U.S. GOVERNMENT OBLIGATIONS AND CERTIFICATES OF DEPOSIT. INVESTMENT RESULTS WILL REFLECT FLUCTUATIONS IN MARKET VALUES OF SECURITIES. PLEASE REFER TO THE CURRENT PROSPECTUS FOR THE HUDSON RIVER FUND, INC. FOR A COMPLETE DESCRIPTION OF THE FUND AND THE DESIGNATED PORTFOLIOS. S.85-99 Page 3 EX-99.1A5HENDORS 23 S.85-81 ENDORSEMENT-EVLICO EQUITABLE VARIABLE LIFE INSURANCE COMPANY ENDORSEMENT THE INSURED POLICY NUMBER REGISTER DATE VARIABILITY EFFECTIVE DATE Endorsed on this policy on its Date of Issue: 1. For purposes of determining the VAA Change Amount for each investment division on the first policy anniversary of this policy, Items (1) and (2) of the section entitled "VAA Change Amount" are changed to read as follows: (1) The Actual NRR for the investment division from the Variability Effective Date to the first policy anniversary, minus the pro-rated portion of the Base NRR covering the same period. Or, if the Variable Reduced Paid-Up Insurance option is elected in the first policy year, the Actual NRR for the investment division from the date that such option takes effect, minus the pro-rated portion of the Base NRR covering the same period. (2) The Benefit Base for the investment division as of the Register Date. (If the Variable Reduced Paid-Up Insurance option has been elected in the first policy year, the Benefit Base is the net cash value as of the date of lapse.) 2. For purposes of determining the cash value on any date during the first policy year, the first paragraph of the section entitled "Calculation of Cash Values" is changed to read as follows: The cash value of this policy on any date is the sum of your cash values in each investment division on that date. Your cash value in each investment division on any date during the first policy year is determined as follows: (1) While the policy is not lapsed, the sum of the immediately following Items (a), (c) and (d). (2) More than three months after the policy has lapsed and while it is being continued under the Variable Reduced Paid-Up Insurance option, the sum of the immediately following Items (b), (c) and (d). (a) The tabular cash value on that date, multiplied by the allocation percentage for that investment division in effect on the Register Date. (b) The product of the following Items (i) and (ii): (i) The product of the Net Single Premium on that date per $1,000 of Paid-Up Whole Life Insurance as shown on page 3B, and the Variable Reduced Paid-Up Face Amount defined in the provision entitled "Options on Lapse". (ii) The following amount immediately before the date on which the cash value is being determined: The cash value in that investment division, divided by the total cash value in this policy. (c) The Net Single Premium on that date for the current VAA for that investment division. (d) If the date is not a policy anniversary, the product of the following Items (i) and (ii): (i) The Actual NRR for the investment division for the time elapsed since the Variability Effective Date minus the Base NRR for the same period. (ii) The Benefit Base for the investment division on the Register Date. SPECIMEN SPECIMEN Kevin Keefe Secretary Franklin Maisano President S.85-81 EX-99.1A5IENDORS 24 S.85-83 ENDORSEMENT-EVLICO ADJUSTMENT LOAN INTEREST RATE In this endorsement "we" means Equitable Variable Life Insurance Company. "You" means the owner of the policy at the time an owner's right is exercised. - -------------------------------------------------------------------------------- The policy to which this endorsement is attached is amended as follows: 1. The "Loan Interest" provision is changed to read: LOAN INTEREST. Interest on a loan accrues daily at an adjustable loan interest rate. A rate will be determined in accordance with the following paragraphs as of the beginning of each policy year and it will apply to any new or outstanding loan under the policy during that policy year. However, if this endorsement is added to the policy after the policy has been issued, this provision will apply only as to policy years that begin after this endorsement is added. Subject to the following paragraph, the loan interest rate for a policy year shall be the greater of: (1) The "Published Monthly Average", as defined below, for the calendar month that ends two months before the beginning of that policy year; or (2) the interest rate used to compute Tabular Account Values for this policy for that policy year plus 1% a year. "Published Monthly Average" means the Monthly Average Corporates yield shown in Moody's Corporate Bond Yield Averages published by Moody's Investors Service, Inc., or any successor thereto. If such averages are no longer published, we will use such other averages as may be established by regulation by the insurance supervisory official of the jurisdiction in which the policy is delivered. However, the loan interest rate for a policy year after the first will be the same as it was for the immediately preceding policy year if the formula in the above paragraph would produce a change of less than 1/2 of 1% from the rate for such preceding year. We will notify you of the initial loan interest rate when you make a loan. We will also give you advance written notice of any increase in the interest rate on any outstanding loan. Loan interest is due on each policy anniversary. If the interest is not paid when due, it will be added to the loan and bear interest at the loan rate. When a loan plus loan interest first equals or exceeds the cash value, we will mail to you and any assignee of record at last known addresses a notice that the policy will terminate if such excess amount is not repaid within 31 days after we mail such notice. 2. The "Basis of Values" section of the policy is changed as follows: a. The following provision is added: ACTUAL LOAN NET RATE OF RETURN (Actual Loan NRR). For each investment division, the Actual Loan Net Rate of Return for a policy year is: o the loan interest rate for that policy year; o minus a charge not exceeding .75% per year for expenses of processing and administering policy loans, and for mortality and expense risks; and o minus any charges for taxes or amounts set aside as a reserve for taxes. The Actual Loan NRR for a period less than a year will be calculated in a consistent manner. b. The "VAA Change Amount" provision is changed to read: For each policy year after the first, the VAA Change Amount for each investment division may be positive or negative. It will equal the sum of the following Items (1) and (2), divided by Item (3). Item (1) applies to the unloaned amount in the investment division, and Item (2) applies to any loaned amount in the investment division. S.85-83 Adjustable Loan Interest Rate (continue on back) (1) The product of the following Items (a) and (b): (a) The Actual NRR for the investment division minus the Base NRR for that policy year, or for the part of the policy year since lapse during which the Variable Reduced Paid-Up Insurance option takes effect. (b) The Benefit Base for the investment division as of the last policy anniversary. (For the policy year immediately following a lapse of the policy where the Variable Reduced-Up Insurance option takes effect, use instead the net cash value as of the date of lapse.) (2) The product of the following Items (a) and (b): (a) The Actual Loan NRR minus the Base NRR for that policy year. (b) Any outstanding loan allocated to the investment division as of the last policy anniversary. (For any policy year in which lapse occurs and the Variable Reduced Paid-Up Insurance Option takes effect, this amount is taken as zero whether or not there was an outstanding loan allocated to the investment division as of the last policy anniversary.) (3) The Net Single Premium for $1.00 of VAA for the current policy anniversary as shown on page 3B. EQUITABLE VARIABLE LIFE INSURANCE COMPANY SPECIMEN SPECIMEN Kevin Keefe Secretary Franklin Maisano President S.85-83 EX-99.1A5JRIDER 25 RIDER 94-102-EVLICO ACCELERATED DEATH BENEFIT RIDER DISCLOSURE. THE RECEIPT OF THE ACCELERATED DEATH BENEFIT AMOUNT MAY BE TAXABLE. YOU SHOULD SEEK ASSISTANCE FROM YOUR PERSONAL TAX ADVISOR PRIOR TO ELECTING THE BENEFIT. In this rider "we, "our" and "us" mean Equitable Variable Life Insurance Company. "You" means the Owner of the policy at the time an Owner's right is exercised. "This Policy" means the policy to which this rider is attached. POLICY NUMBER: - -------------------------------------------------------------------------------- THIS RIDER'S BENEFIT. We will pay an accelerated death benefit in the amount requested by the Owner, if the Insured is terminally ill, subject to the provisions of this rider. We will pay an accelerated death benefit under this policy only once and in one lump sum. The maximum accelerated death benefit you may receive is the lesser of: 1. 75% of the death benefit payable under this policy, less any policy loan and loan interest, and 2. $500,000. The maximum aggregate amount of Accelerated Death Benefit payments that will be paid under all policies issued by us on the life of the Insured is $500,000. For purposes of this benefit, the death benefit does not include any accidental death benefits, non-convertible term riders or convertible term riders not in their conversion period or any benefits payable because of the death of any person other than the Insured. There is no premium or cost of insurance charge for this rider. We reserve the right to deduct a processing charge of up to $250.00 per policy from the accelerated death benefit payment. We reserve the right to set a minimum of $5,000 on the amount you may receive under this rider. To be eligible for this benefit you must provide satisfactory evidence to us that the Insured's life expectancy is six months or less. This evidence must include, but is not limited to, certification by a physician licensed to practice medicine in the United States or Canada and who is acting within the scope of such license. A physician does not include the Owner, the Insured or a member of either's family. HOW THIS RIDER RELATES TO THE POLICY. This rider is a part of the policy. Its benefits are subject to all the terms of this rider and the policy. This rider has no cash or loan value. This rider is non-participating. INTEREST. Interest will be charged on the amount of the Accelerated Death Benefit and on any unpaid premium we advance after the payment of an Accelerated Death Benefit. The interest rate at the time the Accelerated Death Benefit payment is made will not exceed the greater of the following on such date: 1. the yield on a 90-day treasury bill; or 2. the maximum adjustable policy loan interest rate permitted in the state in which this policy is delivered. EFFECT OF ACCELERATED DEATH BENEFIT PAYMENT ON THE POLICY. The Accelerated Death Benefit payment, plus any accrued interest will be treated as a lien against the policy values. The amount of the lien will be pro-rated against the policy's net cash surrender value, if any, and the net amount at risk. (The net amount at risk is defined as the death benefit of the policy minus the cash surrender value, if any.) For variable life policies, the portion of the cash surrender value that is on lien and is allocated to investment divisions of the Separate Account will be transferred to and maintained as a part of the unloaned Guaranteed Investment Division (GID). You may tell us how much of the accelerated payment is to be transferred from each investment division. Units will be redeemed from each investment division sufficient to cover the amount that is on lien and transferred to the unloaned portion of the GID. If you do not tell us how to allocate the payment, we will allocate it based on our rules then in effect. For variable life policies that do not have a GID, the portion of the cash surrender value that is on lien will be transferred to and maintained in the Money Market Division of our Separate Account. Such transfers will occur as of the date we approve an Accelerated Death Benefit payment. The amount payable at death under the policy will be reduced by the full amount of the lien and any other indebtedness outstanding under the policy. The Owner's access to the policy's cash surrender value will be limited to the excess of the policy's cash surrender value over the amount of the lien secured against the cash surrender value and any other outstanding policy loans and loan interest. R94-102 Accelerated Death Benefit Rider If premiums are required to be paid under the policy, they will continue to be due after the payment of the accelerated payment. If any premium is not paid when due, the amount of the unpaid premium will be added to the lien. If the policy is a flexible premium life policy, and the net cash surrender value is not large enough to cover a monthly deduction, Equitable Variable will advance a premium sufficient enough to keep the policy in force for up to six months following the date we approve an Accelerated Death Benefit payment. This premium advance will be added to the lien. If a Disability Premium Waiver Rider is in effect under the policy, this policy's premiums or monthly deductions will be waived as of the date we approve an Accelerated Death Benefit payment. RIDER LIMITATIONS. Your right to be paid under the Accelerated Death Benefit Rider is subject to the following conditions: 1. The policy must be in force other than as extended term insurance. 2. For term insurance policies, there must be at least one year left before the final term expiry date. 3. For adjustable life policies (Equitable Life Account), if policy is term insurance or paid-up extended term insurance, there must be at least one year left before the final term expiry date. 4. You must make a claim in writing in a form that is satisfactory to us. 5. If the policy is collaterally assigned, except to us as security for a policy loan or an Accelerated Death Benefit lien, we must receive a full release of this assignment for the election of this benefit. 6. An Accelerated Death Benefit payment must be approved in writing by any irrevocable beneficiary. 7. For joint last to die policies, a claim may be made under the rider only after the death of the first of the Insureds to die. 8. You may not be eligible for the Accelerated Death benefit if we are notified that: a) you are required by law to elect this rider's benefit in order to meet the claims of creditors, whether in bankruptcy or otherwise; or b) you are required by a government agency to elect this rider's benefit in order to apply for, obtain, or keep a government benefit or entitlement. 9. You may request only one Accelerated Death Benefit Amount to be paid per policy. 10. We may require examination of the Insured by our medial representatives at our expense as part of any proof to establish eligibility for benefits under this rider. WHEN THIS RIDER WILL TERMINATE. You may terminate this rider by asking us in writing in a form satisfactory to us and by sending the rider to our Administrative Office. The effective date of the termination will be the beginning of the policy month which coincides with or next follows the date we receive your request. Once this rider has been terminated, another Accelerated Death Benefit rider cannot be attached to the policy. This rider will terminate when the policy terminates. If at any time the amount of the lien equals the total death benefit the policy will terminate. Termination will occur 31 days after we have mailed notice to the last known address of the Owner, unless the full amount of the lien is repaid within 31 days of the notice. EQUITABLE VARIABLE LIFE INSURANCE COMPANY /s/ Molly K. Heines /s/ Joseph J. Melone - ------------------- -------------------- Molly K. Heines Joseph J. Melone Vice President & Secretary Chairman & Chief Executive Officer R94-102 Accelerated Death Benefit Rider EX-99.1A5KENDORS 26 ENDORSEMENT S.97-1 (IL PLUS) NAME CHANGE ENDORSEMENT In this endorsement, "your" means the Owner of the policy at the time an Owner's right is exercised. - -------------------------------------------------------------------------------- EFFECTIVE DATE: JANUARY 1, 1997 This endorsement is made part of your policy as of its Effective Date. It should be attached to and kept with your policy. Effective January 1, 1997, Equitable Variable Life Insurance Company merged into The Equitable Life Assurance Society of the United States. The Equitable Life Assurance Society of the United States is now responsible for all the liabilities and obligations of Equitable Variable Life Insurance Company under this policy. Wherever the name Equitable Variable Life Insurance Company appears in this policy, the name The Equitable Life Assurance Society of the United States is hereby substituted. In all other respects, the terms and provisions of this policy remain unchanged and in full force and effect. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES /s/ Pauline Sherman /s/ James M. Benson Pauline Sherman, James M. Benson, Vice President & Secretary President & Chief Executive Officer S.97-1 EX-99.1A6ACHARTER 27 RESTATED CHARTER OF ELAS RESTATED CHARTER OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Under Sections 1206 and 7103 of the New York Insurance Law and Section 807 of the New York Business Corporation Law ---------------------------------------- The undersigned, being the President and Secretary, respectively, of The Equitable Life Assurance Society of the United States (the "Corporation"), a New York corporation, hereby certify as follows: 1. The name of the Corporation is The Equitable Life Assurance Society of the United States. 2. The Charter of the Corporation was filed in the office of the Superintendent of Insurance of the State of New York on May 10, 1859. 3. The Charter of the Corporation, as restated and amended prior to the date hereof (the "Charter"), is hereby further amended, as authorized by Sections 1206 and 7103 of the New York Insurance Law and Section 807 of the New York Business Corporation Law, in connection with the Agreement and Plan of Merger (the "Merger Agreement"), dated as of September 19, 1996, by and between the Corporation and Equitable Variable Life Insurance Company ("EVLICO"), to (i) revise the provision of the Charter relating to the definition of "Life Insurance" to be in accordance with Section 1113 (a) (1) of the New York Insurance Law and (ii) delete the third sentence in paragraph (a) of Article VI relating to the Board of Directors of the Corporation. 4. The text of the Charter, as amended by the filing of this Restated Charter, is hereby amended and restated to read in full as follows: RESTATED CHARTER OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ARTICLE I The name of the corporation shall continue to be The Equitable Life Assurance Society of the United States. ARTICLE II The principal office of the corporation shall be located in the City of New York, County of New York, State of New York. ARTICLE III (a) The business to be transacted by the corporation shall be the kinds of insurance business specified in Paragraphs 1, 2 and 3 of Subsection (a) of Section 1113 of the Insurance Law of the State of New York, as follows: (1) "Life insurance": every insurance upon the lives of human beings, and every insurance appertaining thereto, including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, accelerated payments of part or all of the death benefit or a special surrender value upon diagnosis (A) of terminal illness defined as a life expectancy of twelve months or less, or (B) of a medical condition requiring extraordinary medical care or treatment regardless of life expectancy, or provide a special surrender value, upon total and permanent disability of the insured, and optional modes of settlement of proceeds. "Life insurance" also includes additional benefits to safeguard the contract against lapse in the event of unemployment of the insured. Amounts paid the insurer for life insurance and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer -2- to one or more separate accounts pursuant to section four thousand two hundred forty of the Insurance Law of the State of New York; (2) "Annuities": all agreements to make periodical payments for a period certain or where the making or continuance of all or some of a series of such payments, or the amount of any such payment, depends upon the continuance of human life, except payments made under the authority of paragraph (1) above. Amounts paid the insurer to provide annuities and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of the Insurance Law of the State of New York; (3) "Accident and health insurance": (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits pursuant to article nine of the workers' compensation law, except as specified in item (ii) hereof; and (ii) non-cancellable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date; and any amendments to such paragraphs or provisions in substitution therefor which may be hereafter adopted; such other kind or kinds of business now or hereafter authorized by the laws of the State of New York to stock life insurance companies; and such other kind or kinds of business to the extent necessarily or properly incidental to the kind or kinds of insurance business which the corporation is authorized to do. (b) The corporation shall also have all other rights, powers, and privileges now or hereafter authorized or granted by the Insurance Law of the State of New York or any other law or laws of the State of New York to stock life insurance companies having power to do the kind or kinds of business hereinabove referred to and any and all other rights, powers, and privileges of a corporation now or hereafter granted by the laws of the State of New York and not prohibited to such stock life insurance companies. -3- ARTICLE IV The business of the corporation shall be managed under the direction of the Board of Directors. ARTICLE V (a) The Board of Directors shall consist of not less than 13 (except for vacancies temporarily unfilled) nor more than 36 Directors, as may be determined from time to time by a vote of a majority of the entire Board of Directors. No decrease in the number of Directors shall shorten the term of any incumbent Director. (b) The Board of Directors shall have the power to adopt from time to time such By-Laws, rules and regulations for the governance of the officers, employees and agents and for the management of the business and affairs of the corporation, not inconsistent with this Charter and the laws of the State of New York, as may be expedient, and to amend or repeal such by-laws, rules and regulations, except as provided in the By-Laws. (c) Any or all of the Directors may be removed at any time, either for or without cause, by vote of the shareholders. (d) No Director shall be personally liable to the corporation or any of its shareholders for damages for any breach of duty as a Director; provided, however, that the foregoing provision shall not eliminate or limit (i) the liability of a Director if a judgment or other final adjudication adverse to him or her establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled, or were acts or omissions which (a) he or she knew or reasonably should have known violated the Insurance Law of the State of New York or (b) violated a specific standard of care imposed on Directors directly, and not by reference, by a provision of the Insurance Law of the State of New York (or any regulations promulgated thereunder) or (c) constituted a knowing violation of any other law; or (ii) the liability of a Director for any act or omission prior to September 21, 1989. -4- ARTICLE VI (a) The Directors of the corporation shall be elected at each annual meeting of shareholders of the corporation in the manner prescribed by law. The annual meeting of shareholders shall be held at such place, within or without the State of New York, and at such time as may be fixed by or under the By-Laws. At each annual meeting of shareholders, directors shall be elected to hold office for a term expiring at the next annual meeting of shareholders. (b) Newly created directorships resulting from an increase in the number of Directors and vacancies occurring in the Board of Directors shall be filled by vote of the shareholders. (c) Each Director shall be at least twenty-one years of age, and at all times a majority of the Directors shall be citizens and residents of the United States, and not less than three of the Directors shall be residents of the State of New York. (d) The Board of Directors shall elect such officers as are provided for in the By-Laws at the first meeting of the Board of Directors following each annual meeting of the shareholders. In the event of the failure to elect officers at such meeting, officers may be elected at any regular or special meeting of the Board of Directors. A vacancy in any office may be filled by the Board of Directors at any regular or special meeting. ARTICLE VII The duration of the corporate existence of the corporation shall be perpetual. ARTICLE VIII The amount of the capital of the corporation shall be $2,500,000, and shall consist of 2,000,000 Common Shares, par value $1.25 per share. -5- 5. The Merger Agreement and the foregoing amendments and restatement of the Charter were duly authorized, adopted and approved at a meeting duly called and held on September 19, 1996 by the board of directors of the Corporation, followed by the written consent of the sole shareholder of the Corporation, and the Merger Agreement was duly authorized, adopted and approved by the unanimous written consent dated September 19, 1996 of the board of directors of EVLICO followed by the written consent of the sole shareholder of EVLICO. IN WITNESS WHEREOF, the undersigned have executed this Restated Charter on the 19th day of September, 1996. /s/ James M. Benson -------------------------- James M. Benson President /s/ Pauline Sherman -------------------------- Pauline Sherman Secretary -6- STATE OF NEW YORK ) ) SS.: COUNTY OF NEW YORK ) On this 19th day of September, 1996, before me personally came James M. Benson, to me personally known to me to be one of the persons who executed the foregoing instrument, and he duly acknowledged to me that he executed the same. /s/ Edra F Bloom -------------------------- Notary Public EDRA F. BLOOM Notary Public, State of New York No. 31-4962102 Qualified in New York County Commission Expires February 12th, 1998 STATE OF NEW YORK ) ) SS.: COUNTY OF NEW YORK ) On this 19th day of September, 1996, before me personally came Pauline Sherman, to me personally known to me to be one of the persons who executed the foregoing instrument, and she duly acknowledged to me that she executed the same. /s/ Edra F Bloom -------------------------- Notary Public EDRA F. BLOOM Notary Public, State of New York No. 31-4962102 Qualified in New York County Commission Expires February 12th, 1998 44606-1.DOC -7- EX-99.1A6BBYLAWS 28 EQUITABLE'S BY-LAWS AS AMENDED THRU JULY 22, 1992 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES BY-LAWS As Amended July 22, 1992 THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES Table of Contents ----------------- ARTICLE I SHAREHOLDERS 1 Section 1.1 Annual Meetings 1 Section 1.2 Notice of Meetings; Waiver 1 Section 1.3 Organization; Procedure 1 Section 1.4 Action Without a Meeting 2 ARTICLE II BOARD OF DIRECTORS 2 Section 2.1 Regular Meetings 2 Section 2.2 Special Meetings 2 Section 2.3 Independent Directors; Quorum 2 Section 2.4 Notice of Meetings 2 Section 2.5 Newly Created Directorships; Vacancies 3 Section 2.6 Presiding Officer 3 Section 2.7 Telephone Participation in Meetings; Action by Consent Without Meeting 3 ARTICLE III COMMITTEES 3 Section 3.1 Committees 3 Section 3.2 Authority of Committees 4 Section 3.3 Quorum and Manner of Acting 5 Section 3.4 Removal of Members 5 Section 3.5 Vacancies 5 Section 3.6 Subcommittees 5 Section 3.7 Alternate Members of Committees 5 Section 3.8 Attendance of Other Directors 5 ARTICLE IV OFFICERS 5 Section 4.1 Chairman of the Board 5 Section 4.2 Vice-Chairman of the Board 6 Section 4.3 President 6 Section 4.4 Chief Executive Officer 6 Section 4.5 Secretary 6 Section 4.6 Other Officers 6 i ARTICLE V CAPITAL STOCK 7 Section 5.1 Transfers of Stock; Registered Shareholders 7 Section 5.2 Transfer Agent and Registrar 7 ARTICLE VI EXECUTION OF INSTRUMENTS 7 Section 6.1 Execution of Instruments 7 Section 6.2 Facsimile Signature of Former Officers 8 Section 6.3 Meaning of Term "Instruments" 8 ARTICLE VII GENERAL 8 Section 7.1 Reports of Committees 8 Section 7.2 Financial Statements and Reports, etc. 8 Section 7.3 Independent Certified Public Accountants 9 Section 7.4 Directors' Fees 9 Section 7.5 Indemnification of Directors, Officers and Employees 9 Section 7.6 Waiver of Notice 9 Section 7.7 Company 10 ARTICLE VIII AMENDMENT OF BY-LAWS 10 Section 8.1 Amendment of By-laws 10 ii BY-LAWS OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ARTICLE I --------- SHAREHOLDERS ------------ Section 1.1. Annual Meetings. The annual meeting of the shareholders of the Company for the election of Directors and for the transaction of such other business as properly may come before such meeting shall be held at the principal office of the Company on the third Wednesday in the month of May at 3:00 P.M. or at such other hour as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting. [Business Corporation Law Sec. 602 (a), (b)]* Section 1.2. Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the shareholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called and by or at whose direction such notice is being issued, to be given, personally or by first class mail, not fewer than ten nor more than fifty days before the date of the meeting to each shareholder of record entitled to vote at such meeting. No notice of any meeting of shareholders need be given to any shareholder who submits a signed waiver of notice, in person or by proxy, whether before or after the meeting or who attends the meeting, in person or by proxy, without protesting prior to its conclusion the lack of notice of such meeting. [Business Corporation Law Sec. 605, 606] Section 1.3. Organization; Procedure. At every meeting of shareholders the presiding officer shall be the Chairman of the Board or, in the event of his or her absence or disability, the President or, in his or her absence, any officer of the Company designated by the shareholders. The order of business and all other matters of procedure at every meeting of shareholders may be determined by such presiding officer. The Secretary, or in the event of his or her absence or disability, an Assistant Secretary or, in his or her absence, an appointee of the presiding officer shall act as Secretary of the meeting. - ------------------------------------ * Citations are to the Business Corporation Law and Insurance Law of the State of New York, as in effect on [date of adoption], and are inserted for reference only, and do not constitute a part of the By-Laws. 1 Section 1.4. Action Without a Meeting. Any action required or permitted to be taken by shareholders may be taken without a meeting on written consent signed by the holders of all the outstanding shares entitled to vote on such action. [Business Corporation Law Sec. 615] ARTICLE II BOARD OF DIRECTORS Section 2.1. Regular Meetings. Regular meetings of the Board of Directors shall be held at the principal office of the Company on the third Thursday of each month, except January and August, unless a change in place or date is ordered by the Board of Directors. The first regular meeting of the Board of Directors following the annual meeting of the shareholders of the Company is designated as the Annual Meeting. [Business Corporation Law Sec. 710] Section 2.2. Special Meetings. Special meetings of the Board of Directors may be called at any time by the Chairman of the Board, the President, or two directors. [Business Corporation Law Sec. 710] Section 2.3. Independent Directors; Quorum. Not less than one-third of the Board of Directors shall be persons who are not officers or employees of the Company or of any entity controlling, controlled by, or under common control with the Company and who are not beneficial owners of a controlling interest in the voting stock of the Company or of any such entity. A majority of the entire Board of Directors, including at least one Director who is not an officer or employee of the Company or of any entity controlling, controlled by, or under common control with the Company and who is not a beneficial owner of a controlling interest in the voting stock of the Company or of any such entity, shall constitute a quorum for the transaction of business at any regular or special meeting of the Board of Directors, except as otherwise prescribed by these By-Laws. Except as otherwise prescribed by law, the Charter of the Company, or these By-Laws, the vote of a majority of the Directors present at the time of the vote, if a quorum is present at such time, shall be the act of the Board of Directors. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting from time to time and from place to place. As used in these By-Laws "entire Board of Directors" means the total number of directors which the Company would have if there were no vacancies. [Business Corporation Law Sec. 707, 708; Insurance Law Sec. 1202] Section 2.4. Notice of Meetings. Notice of a regular meeting of the Board of Directors need not be given. Notice of a change in the time or place of a regular meeting of the Board of Directors shall be given to each Director at least ten days in advance thereof in writing and by telephone or telecopy. Notice of each special meeting of the Board of Directors shall be given to each Director at least two days in advance thereof in 2 writing and by telephone or telecopy, and shall state in general terms the purpose or purposes of the meeting. Any such notice for a regular or special meeting not specifically required by this Section 2.4 to be given by telephone or telecopy shall be deemed given to a director when sent by mail, telegram, cablegram or radiogram addressed to such director at his or her address furnished to the Secretary. Notice of an adjourned regular or special meeting of the Board of Directors shall be given if and as determined by a majority of the directors present at the time of the adjournment, whether or not a quorum is present. [Business Corporation Law Sec. 711] Section 2.5. Newly Created Directorships; Vacancies. Any newly created directorships resulting from an increase in the number of Directors and vacancies occurring in the Board of Directors for any reasons (including vacancies resulting from the removal of a Director without cause) shall be filled by the shareholders of the Company. [Business Corporation Law Sec. 705; Insurance Law Sec. 4211] Section 2.6. Presiding Officer. In the absence or inability to act of the Chairman of the Board at any regular or special meeting of the Board of Directors, any Vice-Chairman of the Board, or the President, as designated by the chief executive officer, shall preside at such meeting. In the absence or inability to act of all of such officers, the Board of Directors shall select from among their number present a presiding officer. Section 2.7. Telephone Participation in Meetings; Action by Consent Without Meeting. Any Director may participate in a meeting of the Board or any committee thereof by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and such participation shall constitute presence in person at such meeting; provided that one meeting of the Board each year shall be held without the use of such conference telephone or similar communication equipment. When time is of the essence, but not in lieu of a regularly scheduled meeting of the Board of Directors, any action required or permitted to be taken by the Board or any committee thereof may be taken without a meeting if all members of the Board or such committee, as the case may be, consent in writing to the adoption of a resolution authorizing the action and such written consents and resolution are filed with the minutes of the Board or such committee, as the case may be. [Business Corporation Law Sec. 708]. ARTICLE III COMMITTEES Section 3.1. Committees. (a) The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may establish from among its members an Executive Committee of the Board composed of five or more Directors. Not less than one-third of the members of such committee shall be persons who are not officers or employees of the Company or of any entity controlling, controlled by, or under common 3 control with the Company and who are not beneficial owners of a controlling interest in the voting stock of the Company or of any such entity. (b) The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, shall establish from among its members one or more committees with authority to discharge the responsibilities enumerated in this subsection (b). Each such committee shall be composed of five or more Directors and shall be comprised solely of Directors who are not officers or employees of the Company or of any entity controlling, controlled by, or under common control with the Company and who are not beneficial owners of a controlling interest in the voting stock of the Company or of any such entity. Such committee or committees shall have responsibility for: (i) Recommending to the Board of Directors candidates for nomination for election by the shareholders to the Board of Directors; (ii) Evaluating the performance of officers deemed by any such committee to be principal officers of the Company and recommending their selection and compensation; (iii) Recommending the selection of independent certified public accountants; (iv) Reviewing the scope and results of the independent audit and of any internal audit; and (v) Reviewing the Company's financial condition. (c) The Board of Directors, by resolution adopted from time to time by a majority of the entire Board of Directors, may establish from among its members one or more additional committees of the Board, each composed of five or more Directors. Not less than one-third of the members of each such committee shall be persons who are not officers or employees of the Company or of any entity controlling, controlled by, or under common control with the Company and who are not beneficial owners of a controlling interest in the voting stock of the Company or of any such entity. [Business Corporation Law Sec. 712; Insurance Law Sec. 1202] Section 3.2. Authority of Committees. Each committee shall have all the authority of the Board of Directors, to the extent permitted by law and provided in the resolution creating such committee, provided, however, that no committee shall have the authority of the Board of Directors contained in Sections 1.1, 1.3, 2.1, 3.1, 3.2, 3.3, 3.4, 3.5, 3.7, 3.8, 4.1, 4.2, 4.3, 4.4. 4.5, 4.6, 5.1, 5.2, 7.1, 7.3, 7.4, 7.5 or 8.1 or these By-Laws, nor shall any committee have authority to amend or repeal any resolution of the Board of Directors. [Business Corporation Law Sec. 712] 4 Section 3.3. Quorum and Manner of Acting. A majority of the total membership that a committee would have if there were no vacancies (including at least one Director who is not an officer or employee of the Company or of any entity controlling, controlled by, or under common control with the Company and who is not a beneficial owner of a controlling interest in the voting stock of the Company or of any such entity) shall constitute a quorum for the transaction of business. The vote of a majority of the members present at the time of the vote, if a quorum is present at such time, shall be the act of such committee. Except as otherwise prescribed by these By-Laws or by the Board of Directors, each committee may elect a chairman from among its members, fix the times and dates of its meeting, and adopt other rules of procedure. Section 3.4. Removal of Members. Any member (and any alternate member) of a committee may be removed by vote of a majority of the entire Board of Directors. Section 3.5. Vacancies. Any vacancy occurring in any committee for any reason may be filled by vote of a majority of the entire Board of Directors. Section 3.6. Subcommittees. Any committee may appoint one or more subcommittees from its members. Any such subcommittee may be charged with the duty of considering and reporting to the appointing committee on any matter within the responsibility of the committee appointing such subcommittee but cannot act in place of the appointing committee. Section 3.7. Alternate Members of Committees. The Board of Directors may designate, by resolution adopted by a majority of the entire Board of Directors, one or more directors as alternate members of any committee who may replace any absent member or members at a meeting of such committee. [Business Corporation Law Sec. 712] Section 3.8. Attendance of Other Directors. Except as otherwise prescribed by the Board of Directors, members of the Board of Directors may attend any meeting of any committee. ARTICLE IV OFFICERS Section 4.1. Chairman of the Board. The Board of Directors may at a regular or special meeting elect from among their number a Chairman of the Board who shall hold office, at the pleasure of the Board of Directors, until the next Annual Meeting. The Chairman of the Board shall preside at all meetings of the Board of Directors and also shall exercise such powers and perform such duties as may be delegated or assigned to or required of him or her by these By-Laws or by or pursuant to authorization of the Board of Directors. 5 Section 4.2. Vice-Chairman of the Board. The Board of Directors may at a regular or special meeting elect from among their number one or more Vice-Chairmen of the Board who shall hold office, at the pleasure of the Board of Directors, until the next Annual Meeting. The Vice-Chairman of the Board shall exercise such powers and perform such duties as may be delegated or assigned to or required of them by these By-Laws or by or pursuant to authorization of the Board of Directors or by the Chairman of the Board. Section 4.3. President. The Board of Directors shall at a regular or special meeting elect from among their number a President who shall hold office, at the pleasure of the Board of Directors, until the next Annual Meeting and until the election of his or her successor. The President shall exercise such powers and perform such duties as may be delegated or assigned to or required of him or her by these By-Laws or by or pursuant to authorization of the Board of Directors or (if the President is not the chief executive officer) by the chief executive officer. The President and Secretary may not be the same person. Section 4.4. Chief Executive Officer. The Chairman of the Board or the President shall be the chief executive officer of the Company as the Board of Directors from time to time shall determine, and the Board of Directors from time to time may determine who shall act as chief executive officer in the absence or inability to act of the then incumbent. Subject to the control of the Board of Directors, and to the extent not otherwise prescribed by these By-Laws, the chief executive officer shall have plenary power over all departments, officers, employees, and agents of the Company, and shall be responsible for the general management and direction of all the business and affairs of the Company. Section 4.5. Secretary. The Board of Directors shall at a regular or special meeting elect a Secretary who shall hold office, at the pleasure of the Board of Directors, until the next Annual Meeting and until the election of his or her successor. The Secretary shall issue notices of the meeting of the shareholders and the Board of Directors and its committees, shall keep the minutes of the meetings of the shareholders and the Board of Directors and its committees and shall have custody of the Company's corporate seal and records. The Secretary shall exercise such powers and perform such other duties as relate to the office of the Secretary, and also such powers and duties as may be delegated or assigned to or required of him or her by or pursuant to authorization of the Board of Directors or by the Chairman of the Board or (if the Chairman of the Board is not the chief executive officer) the chief executive officer. Section 4.6. Other Offices. The Board of Directors may elect such other officers as may be deemed necessary for the conduct of the business of the Company. Each such 6 officer elected by the Board of Directors shall exercise such powers and perform such duties as may be delegated or assigned to or required of him or her by the Board of Directors of the chief executive officer, and shall hold office until the next Annual Meeting, but at any time may be suspended by the chief executive officer or by the Board of Directors, or removed by the Board of Directors. [Business Corporation Law Sec. 715, 716] ARTICLE V CAPITAL STOCK Section 5.1. Transfers of Stock; Registered Shareholders. (a) Shares of stock of the Company shall be transferable only upon the books of the Company kept for such purpose upon surrender to the Company or its transfer agent or agents of a certificate (unless such shares shall be uncertificated shares) representing shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer. Within a reasonable time after the transfer of uncertificated shares, the Company shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates. (b) Except as otherwise prescribed by law, the Board of Directors may make such rules, regulations and conditions as it may deem expedient concerning the subscription for, issue, transfer and registration of, shares of stock. Except as otherwise prescribed by law, the Company, prior to due presentment for registration of transfer, may treat the registered owner of shares as the person exclusively entitled to vote, to receive notification, and otherwise to exercise all the rights and powers of an owner. [Business Corporation Law Sec.508(d), (f); Insurance Law Sec. 4203] Section 5.2. Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and one or more registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars. The same person may act as transfer agent and registrar for the Company. ARTICLE VI EXECUTION OF INSTRUMENTS Section 6.1. Execution of Instruments. (a) Any one of the following, namely, the Chairman of the Board, any Vice-Chairman of the Board, the President, any Vice-President (including a Deputy or Assistant Vice-President or any other Vice-President designated by a number or a word or words added before or after the title Vice-President to indicate his or her rank or responsibilities), the Secretary, or the Treasurer, or any officer, employee or agent designated by or pursuant to authorization of the Board of Directors or any committee created under these By-Laws, shall have power in the ordinary course of business to enter into contracts or execute instruments on behalf of the 7 Company (other than checks, drafts and other orders drawn on funds of the Company deposited in its name in banks) and to affix the corporate seal. If any such instrument is to be executed on behalf of the Company by more than one person, any two or more of the foregoing or any one or more of the foregoing with an Assistant Secretary or an Assistant Treasurer shall have power to execute such instrument and affix the corporate seal. (b) The signature of any officer may be in facsimile on any such instrument if it shall also bear the actual signature, or personally inscribed initials, of an officer, employee or agent empowered by or pursuant to the first sentence of this Section to execute such instrument, provided that the Board of Directors or a committee thereof may authorize the issuance of insurance contracts and annuity contracts on behalf of the Company bearing the facsimile signature of an officer without the actual signature or personally inscribed initials of any person. (c) All checks, drafts and other orders drawn on funds of the Company deposited in its name in banks shall be signed only pursuant to authorization of and in accordance with rules prescribed from time to time by the Board of Directors or a committee thereof , which rules may permit the use of facsimile signatures. Section 6.2. Facsimile Signatures of Former Officers. If any officer whose facsimile signature has been placed upon any instrument shall have ceased to be such officer before such instrument is issued, it may be issued with the same effect as if he or she had been such officer at the time of its issue. Section 6.3. Meaning of Term "Instruments". As used in this Article VI, the term "instruments" includes, but is not limited to, contracts and agreements, checks, drafts and other orders for the payment of money, transfers of bonds, stocks, notes and other securities, and powers of attorney, deeds, leases, releases of mortgages, satisfactions and all other instruments entitled to be recorded in any jurisdiction. ARTICLE VII GENERAL Section 7.1. Reports of Committees. Reports of any committee charged with responsibility for supervising or making investments shall be submitted at the next meeting of the Board of Directors. Reports of other committees of the Board of Directors shall be submitted at a regular meeting of the Board of Directors as soon as practicable, unless otherwise directed by the Board of Directors. Section 7.2. Financial Statements and Reports, etc. At the meeting of the Board of Directors falling on the third Thursday of February, the Annual Statement and audited financial statements of the Company for the preceding year, together with an opinion with respect to such audited financial statements by such independent certified public accountants as may have been selected by the Board of Directors, shall be submitted. 8 Interim reports on the financial condition of the Company shall be submitted at a regular meeting of the Board of Directors as soon as practicable following the end of each of the first three quarterly financial periods in each year. All such financial statements and interim reports shall be filed with the records of the Board of Directors and a note of such submission shall be spread upon the minutes. Section 7.3. Independent Certified Public Accountants. The books and accounts of the Company shall be audited throughout each year by such independent certified public accountants as shall be selected by the Board of Directors. Section 7.4. Directors' Fees. The Directors shall be paid such fees for their services in any capacity as may have been authorized by the Board of Directors. No Director who is a salaried officer of the Company shall receive any fees for serving as a Director of the Company. [Business Corporation Law Sec. 713(e)] Section 7.5. Indemnification of Directors, Officers and Employees. (a) To the extent permitted by the law of the State of New York and subject to all applicable requirements thereof: (i) any person made or threatened to be made a party to any action or proceeding, whether civil or criminal, by reason of the fact that he or she, or his or her testator or intestate, is or was a director, officer or employee of the Company shall be indemnified by the Company; (ii) any person made or threatened to be made a party to any action or proceeding , whether civil or criminal, by reason of the fact that he or she, or his or her testator or intestate serves or served any other organization in any capacity at the request of the Company may be indemnified by the Company; and (iii) the related expenses of any such person in any of said categories may be advanced by the Company. (b) To the extent permitted by the law of the State of New York, the Company may provide for further indemnification or advancement of expenses by resolution of shareholders of the Company or the Board of Directors, by amendment of these By-Laws, or by agreement. [Business Corporation Law Sec. 721-726; Insurance Law Sec. 1216] Section 7.6. Waiver of Notice. Notice of any meeting of the Board of Directors or any committee thereof shall not be required to be given to any Director who submits a signed waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior to or at its commencement, the lack of notice to him. [Business Corporation Law Sec. 711(c)] 9 Section 7.7. Company. The term "Company" in these By-Laws means The Equitable Life Assurance Society of the United States. ARTICLE VIII AMENDMENT OF BY-LAWS Section 8.1. Amendment of By-Laws. Subject to Section 1210 of the Insurance Law of the State of New York, these By-Laws (other than Sections 1.4, 2.2, 2.3, 2.4, 2.5, 3.1, 3.2 and 8.1 (the "Governance By-Laws") and all By-Laws adopted by vote of the shareholders of the Company) may be amended or repealed and new By-Laws, consistent with the Governance By-Laws and with all By-Laws adopted by the shareholders of the Company, may be adopted at a regular or special meeting of the Board of Directors, provided that a notice, given not less than ten days before the meeting in writing and by telephone or telecopy, shall set forth the amendment or repeal or new By-Laws proposed to be acted upon at such meeting. [Business Corporation Law Sec. 601; Insurance Law Sec. 1210] 10 EX-99.1A8DISTAGR 29 DISTRIBUTION AND SERVICING AGREEMENT DISTRIBUTION AND SERVICING AGREEMENT This DISTRIBUTION AND SERVICING AGREEMENT, dated as of May 1, 1994, is made by and among Equico Securities, Inc. ("Equico"), The Equitable Life Assurance Society of the United States ("Equitable") and Equitable Variable Life Insurance Company ("Equitable Variable"), as follows: WHEREAS, pursuant to a Distribution Agreement, dated as of May 1, 1994, Equico is the principal underwriter of The Hudson River Trust ("Trust"), a series mutual fund registered under the Investment Company Act of 1940 ("1940 Act") whose shareholders are separate accounts of Equitable and Equitable Variable and of other insurance companies; WHEREAS, both Equitable and Equitable Variable issue variable insurance contracts ("Variable Contracts") whose net premiums or considerations are allocated in whole or in part to the respective separate accounts of Equitable and Equitable Variable for investment in the Trust, for direct investment or for investment in other funding media ("Separate Accounts"); WHEREAS, units of interest in the Separate Accounts are registered under the Securities Act of 1933 ("1933 Act") to the extent such registration is required; WHEREAS, Equitable and Equitable Variable are each broker-dealers registered under the Securities Exchange Act of 1934, as amended ("1934 Act"), and each is a member of the National Association of Securities Dealers, Inc. ("NASD"); -2- WHEREAS, the Variable Contracts (including all Variable Contracts issued by Equitable Variable) are offered and sold by members of Equitable's agency force, or by insurance brokers under contract with Equitable, who are also registered representatives of Equico and of Equitable ("Agents"); WHEREAS, Equitable and Equitable Variable each desire to engage Equico, a wholly-owned subsidiary of Equitable which is a registered broker-dealer under the 1934 Act and a member of the NASD, to assume the responsibilities set forth in this Agreement with respect to the distribution of the Variable Contracts, including in particular the responsibility for compliance with broker-dealer requirements under federal and any applicable state or foreign securities laws and the NASD Rules of Fair Practice ("NASD Rules") with respect to the offering of the Variable Contracts, and Equico desires to assume such responsibilities; WHEREAS, Equico desires to utilize Equitable's services and personnel in carrying out certain of its responsibilities under this Agreement, and Equitable is willing to furnish the same on the terms and conditions hereinafter set forth; NOW, THEREFORE, the parties hereto agree as follows: -3- ARTICLE I Distribution Responsibility for the Variable Contracts Sec. 1.1 Equitable and Equitable Variable authorize Equico to act, and Equico agrees to serve, as broker-dealer in connection with the distribution of their respective Variable Contracts to the extent provided in this Agreement. Equico shall be fully responsible for carrying out all compliance and supervisory obligations in connection with the distribution of the Variable Contracts, as required by the NASD Rules and by federal and any applicable state or foreign securities laws. Equitable shall be fully responsible for compensating the Agents for their sales of Variable Contracts, as provided in Section 1.4. Sec. 1.2 Without limiting the generality of Section 1.1, Equico agrees that it shall be fully responsible for: (A) Requiring that each person who is authorized to offer and sell the Variable Contracts is duly registered as a representative of Equico and is appropriately licensed, registered or otherwise qualified to offer and sell the Variable Contracts under the federal securities laws and any applicable securities laws of each state or other jurisdiction in which the Variable Contracts offered by such person may be lawfully sold; (B) Training, supervising and directing the Agents for purposes of complying on a continuous basis with the NASD Rules and with federal and state securities laws applicable in connection with the offer and sale of the Variable Contracts. In this connection, Equico shall: -4- (i) Establish and implement reasonable written procedures which provide for diligent supervision of sales practices of the Agents; (ii) Require that Agents shall recommend the purchase of Variable Contracts only upon reasonable grounds to believe that the purchase is suitable for each prospective purchaser, and verify their compliance with such requirement; (iii) Provide a sufficient number of registered principals and an adequate compliance staff to carry out the responsibilities set forth herein; and (iv) Impose disciplinary measures on the Agents. (C) Oversight of the securities activities of all persons engaged directly or indirectly in operations of Equico, Equitable and Equitable Variable related to the offer or sale of the Variable Products, each of whom shall be considered a "person associated" with Equico, as defined in Section 3(a)(18) of the 1934 Act. Equico shall have full responsibility for each such person with regard to his or her training, supervision and control, as contemplated by Section 15 of the 1934 Act, and, in that connection, shall have the authority to require that disciplinary action be taken with respect to such persons. Sec. 1.3 Equico represents that it is a broker-dealer duly registered under the 1934 Act and is a member in good standing of the NASD and, to the extent necessary to perform the activities contemplated hereunder, is duly registered, or otherwise qualified, under the securities laws of every state or other jurisdiction in -5- which the Variable Contracts are available for sale, and Equico agrees to maintain such status. Consistent with its designation as distributor of the Variable Contracts, as provided in Section 1.1 of this Agreement, Equico acknowledges that it may be deemed to be an "underwriter" or a "principal underwriter" of the Separate Accounts under the federal securities laws. Sec. 1.4 Equitable shall have exclusive responsibility for the payment of commissions or other fees in accordance with the applicable agreements between each Agent and Equitable relating to the Variable Contracts. All compensation paid by Equitable to the Agents with respect to sales of the Variable Contracts shall be paid by Equitable on its own behalf or on behalf of Equitable Variable (with respect to sales of Variable Contracts issued by Equitable Variable), and shall be reflected on the books and records of Equitable and, to the extent related to Variable Contracts issued by Equitable Variable, on the books and records of Equitable Variable. The responsibility of Equitable shall include the performance of all activities necessary in order that the payment of compensation hereunder complies with all applicable federal securities laws and state securities and insurance laws. Equitable and Equitable Variable retain the ultimate right to determine the rates of commission and other fees to be paid to the Agents in connection with their respective Variable Contracts. Nothing contained in this Agreement shall obligate Equico to pay any commissions or other fees to Agents or to reimburse any Agents for expenses incurred by them, nor shall Equico have any responsibility for the adequacy or accuracy of any amount paid to an Agent in connection with the sale of the Variable Contracts. Equico shall have no right or interest whatsoever in any commissions or other fees payable to Agents by Equitable or by Equitable Variable. -6- Sec. 1.5 Equitable represents that it is a broker-dealer duly registered under the 1934 Act and is a member in good standing of the NASD. If Equitable shall determine, in its sole judgment, that such status is not required for the purpose of properly discharging its responsibility under Section 1.4 of this Agreement, Equitable may terminate its status as a registered broker-dealer without notice to the other parties hereto. Sec. 1.6 Equitable Variable agrees to cooperate fully with Equico and with Equitable in the proper discharge of the responsibilities allocated to them under this Article I. While undertaking to provide such cooperation and to perform various activities on its own behalf hereunder, Equitable Variable assumes no duties or responsibilities under this Agreement in its capacity as a registered broker-dealer and, accordingly, shall be under no obligation to maintain such status. Sec. 1.7 Equico, Equitable and Equitable Variable shall each cause to be maintained and preserved such accounts, books and other documents as are required by the 1934 Act and 1940 Act and any other applicable laws and regulations. In particular, without limiting the foregoing, Equico shall cause all the books and records in connection with the offer and sale of the Variable Contracts to be maintained and preserved in conformity with the requirements of Rules 17a-3 and 17a-4 under the 1934 Act, to the extent that such requirements are applicable to the Variable Contracts. The payment of premiums, purchase payments, commissions and other fees and payments in connection with the Variable Contracts shall be reflected on the books and records of Equitable and of Equitable Variable, as provided in Section 1.4 hereof and as may otherwise be -7- required under applicable NASD regulations and federal and applicable state securities laws requirements. Sec. 1.8 Equico, Equitable and Equitable Variable shall each submit to all regulators and administrative bodies having jurisdiction over the sales of the Variable Contracts, present or future, any information, reports, or other material that any such body by reason of this Agreement may request or require pursuant to applicable laws or regulations. In particular, without limiting the foregoing, Equitable and Equitable Variable agree that any books and records which they maintain pursuant to Section 1.5 of this Agreement which are required to be maintained under Rule 17a-3 or 17a-4 of the 1934 Act shall be subject to inspection by the SEC in accordance with Section 17(a) of the 1934 Act. Sec. 1.9 Equico and Equitable each agree and understand that all documents, reports, records, books, files and other materials required under applicable NASD regulations and federal and state securities laws relative to the sale of Variable Contracts shall be the property of Equico, with the exception of those books and records maintained by Equitable pursuant to Section 1.4 which relate to sales compensation and shall be the joint property of Equitable and Equico. If, however, such documents, reports, records, books, files and other materials which are the property of Equico are required by applicable regulation or law to be maintained also by Equitable or by Equitable Variable, such material shall be the joint property of Equico, Equitable or Equitable Variable. All other documents, reports, records, books, files and other materials maintained relative to this Agreement shall be the property of Equitable or of Equitable Variable, depending upon the identity of the issuer of the Variable Contracts involved. Upon the -8- termination of this Agreement, all such material shall be returned to the applicable party. Sec. 1.10 Equico, Equitable and Equitable Variable from time to time during the term of this Agreement, shall allocate among themselves, subject to a right of further delegation, the administrative responsibility for maintaining and preserving the books, records and accounts kept in connection with the Variable Contracts; provided, however, in the case of books, records and accounts kept pursuant to a requirement of applicable law or regulation, the ultimate responsibility for maintaining and preserving such books, records and accounts shall be that of the party which is required to maintain or preserve such books, records and accounts under the applicable law or regulation, and such books, records and accounts shall be maintained and preserved under the supervision of that party. Equico, Equitable and Equitable Variable shall cause each other to be furnished with such reports as each may reasonably request for the purpose of meeting its respective reporting and recordkeeping requirements under such regulations and laws and under the insurance laws of the State of New York and any other applicable states or jurisdictions. ARTICLE II Procedures for Sale of Variable Contracts Sec. 2.1 Equitable and Equitable Variable each represent and warrant that units of interest of their respective Separate Accounts offered under the Variable Contracts are registered under the 1933 Act to the extent such registration is required, that the Separate Accounts are registered under the 1940 Act unless -9- exempt from such registration, and that the Variable Contracts are qualified to be sold under the insurance laws and any applicable securities laws of all states and other jurisdictions in which the Variable Contracts are authorized for sale. Equitable and Equitable Variable each further represent and warrant that each of them is a life insurance company duly organized under the laws of the State of New York and in good standing and authorized to conduct business under the laws of each state in which the Variable Contracts are offered and sold. Sec. 2.2 Equico will require that the Agents use only the effective prospectuses, statements of additional information ("SAIs") and other authorized materials in soliciting and selling the Variable Contracts. Equico is not authorized to give any information or to make any representations concerning the Variable Contracts other than those contained in the current prospectus or SAI therefor filed with the SEC or in such materials as may be authorized by Equitable or by Equitable Variable. Sec. 2.3 All applications for Variable Contracts shall be made on application forms supplied by Equitable or by Equitable Variable, as appropriate, and all payments collected by Equico shall be remitted by Equico promptly in full, together with such application or enrollment forms and any other required documentation, directly to Equitable or to Equitable Variable, as appropriate, at the address indicated on such application or to such other address as Equitable or Equitable Variable may, from time to time, designate in writing. Equico shall review all such applications for suitability. Checks or money orders in payment on any Variable Contract shall be drawn to the order of "The Equitable Life Assurance Society of the United States" or "Equitable Variable Life Insurance Company", as appropriate. All applications for Variable Contracts shall be subject to -10- acceptance or rejection by Equitable or by Equitable Variable at their respective discretion. Sec. 2.4 All money payable in connection with any of the Variable Contracts, whether as premiums, purchase payments or otherwise, and whether paid by, or on behalf of any applicant or contractowner, is the property of Equitable or of Equitable Variable and shall be transmitted promptly in accordance with the administrative procedures of Equitable and Equitable Variable without any deduction or offset for any reason, including by example but not limitation, any deduction or offset for compensation claimed by Equico or payable to the Agents. No cash payments shall be accepted by Equico in connection with the Variable Contracts. Sec. 2.5 Equitable and Equitable Variable shall be responsible for payment of the costs of printing the prospectuses, SAIs and sales material used in connection with the solicitation of applications for the Variable Contracts and to allocate such costs between themselves. Equitable and Equitable Variable shall provide to Equico copies of such prospectuses, SAIs and sales material in such number as Equico shall reasonably request. Equitable and Equitable Variable shall make available to Equico copies of all financial statements and other documents that Equico shall reasonably request for use in connection with the distribution of the Variable Contracts. Sec. 2.6 Notwithstanding anything in this Agreement to the contrary, Equico may enter into sales agreements with independent broker-dealers for the sale of the Variable Contracts, subject to the prior written approval of Equitable and of Equitable Variable of each such sales agreement and the terms thereof. All such -11- sales agreements entered into by Equico shall provide that each independent broker-dealer will assume full responsibility for continued compliance by itself and its associated persons with the NASD Rules and applicable federal and state securities and insurance laws. All associated persons of such independent broker-dealer soliciting applications for the Variable Contracts shall be duly and appropriately licensed or appointed for the sale of the Variable Contracts under the NASD Rules and federal and state securities and insurance laws in which such person shall offer or sell the Variable Contracts. Sec. 2.7 Equitable shall apply for and maintain the proper insurance licenses for each of the Agents selling the Variable Contracts in all states or jurisdictions in which the Variable Contracts are offered for sale by such Agent. Equitable and Equitable Variable reserve the right to refuse to appoint any proposed agent, or independent broker-dealer, and to terminate an Agent or independent broker-dealer once appointed. Equitable and Equitable Variable shall promptly notify Equico of each such termination. Equitable agrees to be responsible for all licensing or other fees required under pertinent state insurance laws to properly authorize Agents for the sale of the Variable Contracts; however, the foregoing shall not limit Equitable's right to collect such amount from any person or entity other than Equico. Sec. 2.8 The parties hereto recognize that any person selling the Variable Contracts as contemplated by this Agreement shall be acting as an insurance agent of Equitable or of Equitable Variable or as an insurance broker, and that the rights of Equico to supervise such persons shall be limited to the extent specifically described herein or required under applicable federal or state securities laws or NASD regulations. Such persons shall not be considered employees of Equico and -12- shall be considered agents of Equico only as and to the extent required by such laws and regulations. Further, it is intended by the parties hereto that such persons are and shall continue to be considered to have a common law independent contractor relationship with Equitable and Equitable Variable and not to be common law employees of Equitable or of Equitable Variable, unless any contract between Equitable and any person selling the Variable Contracts specifically provides otherwise. Sec. 2.9 Consistent with the responsibility of Equico to discharge all compliance and supervisory obligations relating to the distribution of the Variable Contracts as provided in this Agreement and consistent with the authority given to Equico hereunder, Equitable and Equitable Variable shall retain the ultimate right of control over, and responsibility for, the issuance, servicing and marketing of their respective Variable Contracts. In that connection, Equitable and Equitable Variable shall review and approve all advertising concerning the Variable Contracts issued by each of them; however, Equico shall be responsible for filing such materials, as required, with the NASD and with state securities regulators and for obtaining such approvals as may be necessary. Sec. 2.10 Unless otherwise agreed in writing by Equitable or by Equitable Variable, neither Equico nor any Agent nor any independent broker-dealer shall have an interest in any surrender charges, deductions or other fees payable to Equitable or to Equitable Variable. -13- ARTICLE III Services and Personnel Provided by Equitable Sec. 3.1 Equitable agrees to furnish compliance and related support services, including personnel, to assist Equico in the performance of the services which Equico is required to provide hereunder. In furnishing such services, all personnel of Equitable shall be subject at all times to the supervision and control of Equico. ARTICLE IV Compensation and Expenses Sec. 4.1 Equico shall be compensated, not less frequently than quarterly, by Equitable and by Equitable Variable for its services under this Agreement in an aggregate annual amount which shall be equal to the actual expenses incurred by Equico to provide compliance and related support services, plus a percentage of such expenses which shall approximate the annual rate of profit earned by Equico from its performance of comparable services for unaffiliated clients. Sec. 4.2 Equico shall pay the costs and expenses, direct and indirect, incurred by Equitable in furnishing services and personnel, pursuant to Article III of this Agreement. In determining the basis for the apportionment of expenses, specific identification or estimates based on time, company assets, square footage or any other mutually agreeable method providing for a fair and reasonable allocation of cost may be used, provided such method is in conformity with the requirements of Section 1712 of the New York Insurance Law and New York Insurance -14- Department Regulation No. 33. The charge to Equico for such apportioned expenses shall be at cost as described in this Section 4.2. Sec. 4.3 Within 45 days after the end of each calendar quarter, and more often if desired, Equitable shall submit to Equico a statement of apportioned expenses showing the basis for such apportionment; and settlement shall be made within 15 days thereafter. The statement of apportioned expenses shall set forth in reasonable detail the nature of the expenses being apportioned and other relevant information to support the charge. Sec. 4.4 To enable Equitable to compensate Agents for the sale of Variable Contracts issued by Equitable Variable, Equitable Variable shall furnish Equitable with a schedule of the commissions and other fees payable with respect to each form of Variable Contract issued by it, together with a list of rules and procedures applicable to the payment of such compensation. Equitable Variable agrees to reimburse Equitable for commissions and service fees (not in excess of the amounts specified by Equitable Variable) paid to the Agents for the sale of its Variable Contracts pursuant to Section 1.4 of this Agreement. ARTICLE V Term of Agreement Sec. 5.1 Subject to termination as herein provided, this Agreement shall remain in full force and effect for a two-year period commencing on the date first above written, and this Agreement shall continue in full force and effect from year to year thereafter, until terminated as herein provided. -15- Sec. 5.2 This Agreement may be terminated by any party hereto on not less than 60 days' prior written notice to the other parties or by an agreement in writing signed by all of the parties hereto, except that data processing services may not be terminated on less than 180 days' prior written notice, if requested by Equico in writing promptly following its receipt of written notice of termination of this Agreement. This Agreement shall automatically be terminated in the event of its assignment. Sec. 5.3 Upon termination of this Agreement, all authorizations, rights, and obligations shall cease except the obligations to settle accounts hereunder, including the settlement of monies due in connection with Variable Contracts in effect at the time of termination or issued pursuant to applications received by Equitable or by Equitable Variable prior to termination. ARTICLE VI Miscellaneous Sec. 6.1 Should an irreconcilable difference of opinion arise between or among the parties to this Agreement as to the interpretation of any matter respecting this Agreement, it is hereby mutually agreed that such differences shall be submitted to arbitration as the sole remedy available to the parties. Such arbitration shall be in accordance with the rules of the American Arbitration Association, the arbitrators shall have extensive experience in the insurance industry, and the arbitration shall take place in New York, New York. -16- Sec. 6.2 For purposes of this Agreement, the term "Variable Contracts" shall not include any variable insurance contract issued by Equitable which is not offered and sold by employees or agents of Equitable. Sec. 6.3 This Agreement replaces the Sales Agreement, dated December 23, 1985, as amended, between Equitable Variable and Equitable, which shall terminate on the effective date hereof. Sec. 6.4 If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby. Sec. 6.5 This Agreement constitutes the entire agreement between the parties hereto and may not be modified except in a written instrument executed by all parties hereto. Sec. 6.6 This Agreement shall be subject to the provisions of the 1934 Act and, to the extent applicable, the 1940 Act and the rules, regulations and rulings thereunder and of the NASD, from time to time in effect, including such exemptions from the 1940 Act as the SEC may grant, and the terms hereof shall be interpreted and construed in accordance therewith. Sec. 6.7 This Agreement shall be interpreted in accordance with the laws of the State of New York. -17- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective officials thereunto duly authorized, as of the day and year first above written. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/Joseph J. Melone ------------------- Joseph J. Melone Chairman and Chief Executive Officer EQUITABLE VARIABLE LIFE INSURANCE COMPANY By: /s/Samuel B. Shlesinger ----------------------- Samuel B. Shlesinger Senior Vice President EQUICO SECURITIES, INC. By: /s/Richard V. Silver -------------------- Richard V. Silver President and Chief Operating Officer 5292/430_1.DOC EX-99.1A8ISCHEDCOM 30 SEP ACCT I SCHEDULE OF COMMISSIONS SCHEDULE OF COMMISSIONS A. For Policies issued with a register date September 20, 1978 or before: Policy Year Percent of Annualized Premium 1st 40% 2nd 10% 3rd through 10th 8% 11th and later (service fees) 2% B. For annual premium Policies issued with a register date September 21, 1978 or after: Policy Year Percent of Annualized Premium 1st 50% 2nd 10% 3rd through 5th 8% 6th through 10th 5% 11th and later (service fees) 2% C. For single premium Policies: 3%. 1. For servicing life insurance policies and annuity contracts (including Policies) issued by Equitable for which there is no soliciting agent assigned, Equitable may compensate its agents who have met production and persistency standard specified by it through participation in a service compensation pool. The operation of the pool and participation therein by agents will be governed solely by rules established by Equitable. Subject to minimum funding requirements established by Equitable. Equitable will fund the pool by transferring into it from time to time amounts equal to 1-1/2% of the renewal premiums paid under life insurance policies and annuity contracts (including Policies) issued by Equitable for which there is no soliciting agent assigned. 2. Equitable may pay its soliciting agents who have met production and persistency standards specified by it an additional 5% of the renewal premiums paid under Policies for the 4th Policy year. 3. Equitable may pay its soliciting agents who have met production standards specified by it an additional 1% of the renewal premiums paid under Policies for each Policy year after the 10th Policy year. EX-99.1A9AMERGAGR 31 MERGER AGREEMENT AGREEMENT AND PLAN OF MERGER OF EQUITABLE VARIABLE LIFE INSURANCE COMPANY WITH AND INTO THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES -------------------------------------- THIS AGREEMENT AND PLAN OF MERGER (this "Agreement and Plan of Merger"), dated as of September 19, 1996, is by and between The Equitable Life Assurance Society of the United States, a New York corporation having its principal place of business at 787 Seventh Avenue, New York, New York 10019 ("Equitable Life"), and Equitable Variable Life Insurance Company, a New York corporation having its principal place of business at 787 Seventh Avenue, New York, New York 10019 ("EVLICO") (the foregoing corporations hereinafter sometimes referred to as the "Constituent Companies"). WHEREAS, Equitable Life and EVLICO are corporations duly organized and validly existing under the laws of the State of New York and duly licensed as stock life insurance companies under the New York Insurance Law (the "Insurance Law"); WHEREAS, EVLICO has authorized capital stock consisting of 5 million shares of Common Stock (the "EVLICO Common Stock"), $1.00 par value, of which at the date hereof 1.5 million shares are issued and outstanding and owned by Equitable Life and are the only shares of stock of EVLICO entitled to vote on this Agreement and Plan of Merger; WHEREAS, Equitable Life has authorized capital stock consisting of 2 million shares of Common Stock (the "Equitable Common Stock"), $1.25 par value, all of which shares on the date hereof are issued and outstanding and owned by The Equitable Companies Incorporated, a Delaware corporation having its principal place of business at 787 Seventh Avenue, New York, New York, 10019. The issued and outstanding shares of Equitable Common Stock are the only shares of stock of Equitable Life entitled to vote on this Agreement and Plan of Merger; and WHEREAS, the Boards of Directors of Equitable Life and EVLICO deem it advisable and in the best interest of the policyholders and contract holders of their respective companies to effect the merger (the "Merger") of EVLICO and Equitable Life with and into Equitable Life as the surviving company, and the Board of Directors and sole stockholder, respectively, of each of Equitable Life and EVLICO have duly approved and adopted this Agreement and Plan of Merger. -2- NOW THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, it is hereby agreed by and between the parties hereto that EVLICO shall be merged with and into Equitable Life pursuant to Article 71 of the Insurance Law and in accordance with this Agreement and Plan of Merger. ARTICLE 1 --------- Surviving Company ----------------- Section 1.1 The Surviving Company. The surviving company of the Merger (the "Surviving Company") shall be Equitable Life. Section 1.2 Charter. The proposed Restated Charter of the Surviving Company is annexed hereto as Exhibit A. Section 1.3 By-Laws. The By-Laws of Equitable Life in effect at the Effective Time of the Merger (as hereinafter defined) shall be the By-Laws of the Surviving Company. ARTICLE 2 --------- Terms and Conditions of the Merger and Mode of Carrying the Merger into Effect - ------------------------------------------------------------------------------ Section 2.1 General. Subject to and upon the terms and conditions of this Agreement and Plan of Merger, upon the Effective Time of the Merger, EVLICO shall be merged with and into Equitable Life and Equitable Life shall continue as the Surviving Company as permitted and provided by Section 7102 of the Insurance Law. All of the EVLICO Common Stock issued and outstanding immediately prior to the Effective Time of the Merger shall, at the Effective Time of the Merger, be cancelled. All of the Equitable Common Stock issued and outstanding immediately prior to the Effective Time of the Merger shall remain unchanged. Section 2.2 Consents, Approvals, Etc. to be Obtained by the Parties to the Merger. Equitable Life and EVLICO shall each obtain all necessary consents and approvals of, permits from, and assurances of no objection to the Merger or other rulings from, the appropriate governmental authorities, including the following: (a) approval by the New York Insurance Department to consummate the Merger pursuant to Section 7105 of the Insurance Law; and (b) approval by the New York Insurance Department of one or more plans of operation of Equitable Life separate accounts which will continue the operations of EVLICO separate -3- accounts in operation at the Effective Time of the Merger as separate accounts of Equitable Life. Section 2.3 Effective Time of the Merger. This Agreement and Plan of Merger shall be duly executed and attested and a certified copy thereof, together with certificates of its adoption as provided for in the Insurance Law and certificates as to fees, commissions or other compensations or valuable considerations paid or to be paid in connection with the Merger, shall be submitted for approval to the Superintendent of Insurance of the State of New York (the "Superintendent"). Following the receipt of such approval from the Superintendent and the fulfillment of the conditions set forth herein, a certified copy of this Agreement and Plan of Merger, with evidence of the approval of the Superintendent endorsed thereon, shall be filed in the office of the Clerk of the County of New York, where the principal office of each of Equitable Life and EVLICO is located. Subject to the foregoing, the Merger shall become effective at 12:01 a.m. on January 1, 1997 (the "Effective Time of the Merger"). ARTICLE 3 --------- Other Provisions with Respect to the Merger ------------------------------------------- Section 3.1. Effect of the Merger. At the Effective Time of the Merger, the separate existence of EVLICO shall cease and, in accordance with the provisions of this Agreement and Plan of Merger, EVLICO shall be merged with and into Equitable Life, and Equitable Life shall survive the Merger and shall continue in existence and shall possess all the rights, privileges, immunities, powers and purposes of each of the Constituent Companies. All the rights, franchises and interests in and to every species of property, real, personal, and mixed, including things in action, causes of action and every other asset of the Constituent Companies, shall vest in the Surviving Company without further act or deed, except that if the Surviving Company shall at any time deem it desirable that any further assignment or assurance shall be given to fully accomplish the purposes of the Merger, the directors and officers of EVLICO shall do all things necessary, including the execution of any and all relevant documents, to carry out the intent and purposes of this Agreement and Plan of Merger. No liability or obligation due or to become due, or claim or demand for any cause existing against either Constituent Company, or any policyholder, shareholder, officer, or director thereof, shall be released or impaired by the Merger. No action or proceeding, civil or criminal, then pending by or against either Constituent Company, or any policyholder, shareholder, officer, or director thereof, shall be abated or discontinued by the Merger, but may be enforced, prosecuted, settled or compromised as if the Merger had not occurred, or Equitable Life, as the Surviving Company, may be substituted in place of EVLICO by order of the court in which the action or proceeding may be pending. From and after the Effective Time of the Merger, Equitable Life shall be liable in place of EVLICO for all the liabilities and obligations of EVLICO, including liabilities under policies and contracts issued by EVLICO. -4- Section 3.2. Abandonment of the Merger. If, at any time prior to the Effective Time of the Merger, events or circumstances occur which, in the opinion of a majority of the Board of Directors of either of the Constituent Companies, render it inadvisable to consummate the Merger, this Agreement and Plan of Merger shall not become effective even though previously approved and adopted by the Board of Directors and sole shareholder, respectively, of each of Equitable Life and EVLICO. Section 3.3. Expenses of the Merger. Equitable Life shall pay all the expenses of carrying this Agreement and Plan of Merger into effect and of accomplishing the Merger. Section 3.4. Counterparts. For the convenience of the parties and to facilitate approval of this Agreement and Plan of Merger, any number of counterparts hereof may be executed, and each such executed counterpart shall be deemed to be an original instrument. Section 3.5. Governing Law. This Agreement and Plan of Merger has been executed in and shall be governed by and construed under the laws of the State of New York. IN WITNESS WHEREOF, this Agreement and Plan of Merger has been duly executed and delivered by the duly authorized officers of Equitable Life and EVLICO on the date first above written. THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES [Seal] Attest: /s/ Pauline Sherman /s/ James M. Benson - -------------------------- By:------------------------------------ Secretary President and Chief Executive Officer EQUITABLE VARIABLE LIFE INSURANCE COMPANY [Seal] Attest: /s/ Pauline Sherman /s/ James M. Benson - -------------------------- By:------------------------------------ Secretary President and Chief Executive Officer 28903 Exhibit A RESTATED CHARTER OF THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ARTICLE I The name of the corporation shall continue to be The Equitable Life Assurance Society of the United States. ARTICLE II The principal office of the corporation shall be located in the City of New York, County of New York, State of New York. ARTICLE III (a) The business to be transacted by the corporation shall be the kinds of insurance business specified in Paragraphs 1, 2 and 3 of Subsection (a) of Section 1113 of the Insurance Law of the State of New York, as follows: (1) "Life insurance": every insurance upon the lives of human beings, and every insurance appertaining thereto, including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, accelerated payments of part or all of the death benefit or a special surrender value upon diagnosis (A) of terminal illness defined as a life expectancy of twelve months or less, or (B) of a medical condition requiring extraordinary medical care or treatment regardless of life expectancy, or provide a special surrender value, upon total and permanent disability of the insured, and optional modes of settlement of proceeds. "Life insurance" also includes additional benefits to safeguard the contract against lapse in the event of unemployment of the insured. Amounts paid the insurer for life insurance and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of the Insurance Law of the State of New York; (2) "Annuities": all agreements to make periodical payments for a period certain or where the making or continuance of all or some of a series of such payments, or the amount of any such payment, depends upon the continuance of human life, except payments made under the authority of paragraph (1) above. Amounts paid the insurer to provide annuities and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of the Insurance Law of the State of New York; (3) "Accident and health insurance": (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits pursuant to article nine of the workers' compensation law, except as specified in item (ii) hereof; and (ii) non-cancellable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date; and any amendments to such paragraphs or provisions in substitution therefor which may be hereafter adopted; such other kind or kinds of business now or hereafter authorized by the laws of the State of New York to stock life insurance companies; and such other kind or kinds of business to the extent necessarily or properly incidental to the kind or kinds of insurance business which the corporation is authorized to do. (b) The corporation shall also have all other rights, powers, and privileges now or hereafter authorized or granted by the Insurance Law of the State of New York or any other law or laws of the State of New York to stock life insurance companies having power to do the kind or kinds of business hereinabove referred to and any and all other rights, powers, and privileges of a corporation now or hereafter granted by the laws of the State of New York and not prohibited to such stock life insurance companies. -2- ARTICLE IV The business of the corporation shall be managed under the direction of the Board of Directors. ARTICLE V (a) The Board of Directors shall consist of not less than 13 (except for vacancies temporarily unfilled) nor more than 36 Directors, as may be determined from time to time by a vote of a majority of the entire Board of Directors. No decrease in the number of Directors shall shorten the term of any incumbent Director. (b) The Board of Directors shall have the power to adopt from time to time such By-Laws, rules and regulations for the governance of the officers, employees and agents and for the management of the business and affairs of the corporation, not inconsistent with this Charter and the laws of the State of New York, as may be expedient, and to amend or repeal such by-laws, rules and regulations, except as provided in the By-Laws. (c) Any or all of the Directors may be removed at any time, either for or without cause, by vote of the shareholders. (d) No Director shall be personally liable to the corporation or any of its shareholders for damages for any breach of duty as a Director; provided, however, that the foregoing provision shall not eliminate or limit (i) the liability of a Director if a judgment or other final adjudication adverse to him or her establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled, or were acts or omissions which (a) he or she knew or reasonably should have known violated the Insurance Law of the State of New York or (b) violated a specific standard of care imposed on Directors directly, and not by reference, by a provision of the Insurance Law of the State of New York (or any regulations promulgated thereunder) or (c) constituted a knowing violation of any other law; or (ii) the liability of a Director for any act or omission prior to September 21, 1989. -3- ARTICLE VI (a) The Directors of the corporation shall be elected at each annual meeting of shareholders of the corporation in the manner prescribed by law. The annual meeting of shareholders shall be held at such place, within or without the State of New York, and at such time as may be fixed by or under the By-Laws. At each annual meeting of shareholders, directors shall be elected to hold office for a term expiring at the next annual meeting of shareholders. (b) Newly created directorships resulting from an increase in the number of Directors and vacancies occurring in the Board of Directors shall be filled by vote of the shareholders. (c) Each Director shall be at least twenty-one years of age, and at all times a majority of the Directors shall be citizens and residents of the United States, and not less than three of the Directors shall be residents of the State of New York. (d) The Board of Directors shall elect such officers as are provided for in the By-Laws at the first meeting of the Board of Directors following each annual meeting of the shareholders. In the event of the failure to elect officers at such meeting, officers may be elected at any regular or special meeting of the Board of Directors. A vacancy in any office may be filled by the Board of Directors at any regular or special meeting. ARTICLE VII The duration of the corporate existence of the corporation shall be perpetual. ARTICLE VIII The amount of the capital of the corporation shall be $2,500,000, and shall consist of 2,000,000 Common Shares, par value $1.25 per share. 44859-1.DOC -4- EX-99.1A10AAPPLIC 32 APPLICATION FORM EV4-200N - -------------------------------------------------------------------------------- PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV. EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI - -------------------------------------------------------------------------------- 1. PROPOSED INSURED a. Print name as it is to appear on policy. _______RICHARD_____________________________ROE__________________________________ First Middle Initial Last b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______________ c. List all current occupations -- Give Titles(s) and Duties _______________VICE PRESIDENT -- HEAD OF________________________________________ _______________ACCOUNTING DEPT__________________________________________________ d. Date of Birth 5 1 1948 ---------------------- ---- Month Day Year e. Age Nearest Birthday ___35___ f. Place of Birth: State of ___NEW YORK___ g. Residence: State of ___NEW YORK___ h. |X| Male |_| Female 2. PLAN* INITIAL FACE AMOUNT |_| Variable Whole Life |_| Variable Increasing Protection Life ___$ 100,000____ INVESTMENT ALLOCATION (WHOLE NUMBERS ONLY) Separate Account I Separate Account II 50% + 50% = 100% ________________________ _________________ 3. OPTIONAL BENEFITS |_| Accidental Death Benefit* (Specify Amount): $____________ |_| Disability Premium Waiver* |_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________ Term Riders: Decreasing Term Per Month |_| Family Income: ______Years $____________ |_| Mortgage Prot.: ______Years Initial Amt.: $____________ Level Term -- Yearly Renewable |_| On Insured: $____________ |_| On Additional Insured (See page 2): $____________ |_| Increasing Term |_| Children's Term (See page 2): $__________Units_______________ *If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2. 4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL NAME and RELATIONSHIP to Proposed Insured. MARGARET ROE -- WIFE ________________________________________________________________________________ ________________________________________________________________________________ Unless otherwise requested, the contingent beneficiary will be the surviving children of the Insured, in equal shares. If none survive, payment will be made to the Insured's estate. THE BENEFICIARY UNDER ANY TERM INSURANCE on an Additional Insured or on a Child will be as stated in the riders for those benefits, unless otherwise designated in Special Instructions. 5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| | The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.) |_| Other (Give Full Name): ____________________________________________________________________________ If "Other", complete the following: |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_____________ Relationship to Insured_____________________________________________________ Specify a successor Owner if desired ____________________________________________________________________________ If the Proposed Insured or the Applicant for a Child is not the Owner and if all persons designated die before the Insured, the Owner will be the estate of the last of such persons to die except where the Insured is a Child (see Note in 10.c.). 6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence |1|0|0| |S|P|E|C|M|E|N| |A|V|E| | | | | | | | | | | | | | | | | -------------------------------------------------------------- No. Street Apt. |N|E|W| |Y|O|R|K| | | | | | | | | | | | | | | | | | | | | | | | -------------------------------------------------------------- City |N|E|W| |Y|O|R|K| | | | | | | | | | | | | | | | | | |1|0|0|0|1| -------------------------------------------------------------- State Zip 7. *PREMIUM PAYMENT PLAN |_| Annual |_| Semi-Annual |_|Quarterly |_| Monthly |_| System-Matic (Attach S-M Form) |_| Military Allotment: Branch _____________________________ Register Date________________________ |_| Salary Allotment: Register Date__________________________ Unit Name_____________________________________________________ Unit/Sub-Unit No. if established: |_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| Divisible by |_| 2 |_| 4 |_| Hold Premium $________________ Payroll No._________________ 8. SUITABILITY a. Have you the Proposed Insured and the Purchaser if other than the Proposed Insured received a Prospectus for the policy applied for? Yes |x| No |_| Date of Prospectus ______SPECIMEN______ Date of any supplement ______SPECIMEN______ b. Do you understand that, under the policy applied for (exclusive of any optional benefits), the amount of death benefit above the guaranteed minimum death benefit and the entire amount of the cash value may increase or decrease depending upon investment experience? |X| Yes |_| No c. With this in mind, is the policy in accord with your insurance objectives and your anticipated financial needs? |X| Yes |_| No 9. SPECIAL INSTRUCTIONS a. |_| Preliminary Term (PT) period of _______ days ending ___________________ . PT Premium $______ Mo. Day. Yr. b. |_| Date to save insurance age: _____________ c. |_| Other: * ISSUE VARIABLE _________________________________________ SINGLE PREMIUM WHOLE LIFE PLAN. _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ - -------------------------------------------------------------------------------- NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM. - -------------------------------------------------------------------------------- EV4-200N 1 10.COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14). a. Will there be more life insurance in effect on the Child than on any older child in the family? |_| Yes |_| No If yes, explain: ___________________________________________ _____________________________________________________________ b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD. i. _________________________________________________________ First Name Middle Initial Last Name ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______ iii.Date of Birth___________________________________19____ Month Day Year iv. |_| Male |_| Female v. Relationship to Child:___________________________________ vi. Total Life Insurance now in effect: $ _________________ c. OWNER. If the Applicant is to be the Owner, after the Applicant's death the Child will be the Owner unless otherwise designated in Special Instructions (in any such designation include Owner's FULL NAME, RELATIONSHIP to Child, and Social Security or Tax Number). NOTE: Consider designating an adult secondary Owner to reduce the chance of a minor Child becoming the Owner. If all persons designated die before the Child, the Owner will be the Child. d. OPTIONAL BENEFIT ON APPLICANT. |_| Supplemental Protective Benefit. Give Applicant's: i. Age Nearest ii. Place of Birthday ____________________ Birth____________________ State iii.Height______Ft.____In. Weight______lbs. iv. Occupations-Give Title(s) and Duties:___________________________________ ____________________________________________________________________________ ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT. e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit is applied for on the Child, the benefit is payable only if the Child dies after the Child's first birthday. If the Disability Premium Waiver Benefit is applied for on the Child, the benefit is effective only if the Child becomes totally disabled on or after the Child's 5th birthday. - -------------------------------------------------------------------------------- 11. COMPLETE FOR CHILDREN'S TERM RIDER. Give Names of Children below and answer the Questions on page 3 as to each Child. CHILDREN PROPOSED FOR INSURANCE: NOTE: To be eligible, children (including stepchildren and legally adopted children) must not yet have reached their 18th birthday. Coverage does not begin until a child is 15 days old. DATE OF BIRTH |Sex| Mo.| Day| Yr. ________________________________________________________________________________ First Name Middle Initial Last Name ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 12. COMPLETE FOR LEVEL TERM YEARLY RENEWABLE RIDER ON ADDITIONAL INSURED. Complete below and answer the Questions on page 3 as to the Additional Insured. PROPOSED ADDITIONAL INSURED a. Print name as it is to appear on the Policy. ________________________________________________________________________________ First Middle Initial Last b. List all current occupations -- Give Title(s) and Duties. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ c. Date of Birth: Mo.____________ Day___________ Yr. 19_______ d. Age Nearest Birthday _______________________________________ e. Place of Birth: State of __________________________________ f. Residence: State of________________________________________ g. |_| Male |_| Female h. Owner's Relationship to Additional Insured:_________________ ________________________________________________________________ - -------------------------------------------------------------------------------- 13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE. i. Existing Individual Policy No. _____________________________ ii. Option Date__________ iii. Option Amount: $________________ iv. |_| Regular Option or |_| Option on Birth or Adoption of Child Child's Name___________________________________________ Date of Birth or Adoption______________________________ v. If applying for Disability Premium Waiver, is Proposed Insured now totally disabled as defined in the Disability Premium Waiver provision of the above policy? |_| Yes |_| No This application is made under a provision in the policy indicated above permitting the purchase of individual life insurance (the "Option Provision"). If this application is made within the time allowed and in accordance with the other terms in the Option Provision, including timely payment of the full first premium for the option insurance, then the option insurance shall take effect upon the terms of the policy EVLICO would issue. Otherwise, the option insurance shall not take effect. Answer the Questions on page 3 only if evidence of insurability is required in connection with an optional benefit or any excess of the insurance amount applied for over the insurance amount permitted by the Option Provision (the option insurance). ________________________________________________________________________________ EV4-200N NO. SPECIMEN 2 OTHER INFORMATION -- AS TO EACH PERSON PROPOSED FOR INSURANCE, ANSWER QUESTIONS 14 AND 15. ALSO ANSWER QUESTIONS 16, 17 AND 18 IF NON-MEDICAL. 14. HAS ANY PERSON PROPOSED FOR INSURANCE: a. Within the last two years, been convicted of two or more moving violations or driving under the influence of alcohol or drugs, or had a driver's license suspended or revoked? (Give full details -- including dates, types of violation, and reason for license suspension or revocation.) |_| Yes |X| No b. Any plan to travel or reside outside the U.S.? (Give full details.) |_| Yes |X| No c. Any other life insurance now in effect or application now pending? (State companies and amounts.) |_| Yes |X| No 15. HAS ANY PERSON PROPOSED FOR INSURANCE: a. Within the last year flown other than as a passenger or plan to do so? |_| Yes |X| No If yes: Total flying time at present__________ Hours; Last 12 mos.________Hours; Next 12 mos._______Est. Hours. (Complete Aviation Supplement for competitive, test, stunt or military flying, or crop dusting.) b. Engaged within the last year, or any plan to engage in motor racing on land or water, underwater diving, sky diving, ballooning, hang-gliding or parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X} No c. Ever had an application for life or health insurance declined, that required an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No d. Replaced or changed any existing insurance or annuity (or any plan to do so) assuming the insurance applied for will be issued? (State companies, plans and amts.) |_| Yes |X| No 16. Proposed Insured: Height 6 Ft. 1 In. Weight 185 lbs. _______ ________ ______ Additional Insured: Height Ft. In. Weight lbs. _______ ________ ______ 17. HAS ANY PERSON PROPOSED FOR INSURANCE: a. Ever been treated for or had any indication of heart trouble, stroke, high blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.) |_| Yes |X| No b. Within the last 5 years, consulted a physician, or been examined or treated at a hospital or other medical facility? (Include medical check-ups in the last 2 years. Do not include colds, minor virus infections, minor injuries, or normal pregnancy.) (Give full details.) |X| Yes |_| No 18. HAS ANY PERSON PROPOSED FOR INSURANCE: a. Within the last ten years repeatedly used barbiturates, amphetamines, hallucinatory drugs or narcotics? (Give full details.) |_| Yes |X| No b. Within the last ten years received counseling or treatment regarding the use of alcohol or drugs? (Give full details.) |_| Yes |X|No 19. DETAILS. For each yes answer give Question number, name of person(s) affected and full details. For 17 and 18 also include conditions, dates, durations, treatment and results, and names and addresses of physicians and medical facilities. No. Name of Person Affected Details ________________________________________________________________________________ - -------------------------------------------------------------------------------- 17.b. |RICHARD ROE MEDICAL CHECK-UP 4/1/82 NORMAL. ________________________________________________________________________________ DR. JOHN JONES 100 SPECIMEN ST. NEW YORK, N.Y. 10001 _______________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED: Have the undersigned read and do they agree to the conditions of EVLICO's Temporary Insurance Agreement, including (i) the requirement that all of the conditions in that Agreement must be met before any insurance takes effect, and (ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a premium may not be paid before the policy is delivered.) AMOUNT PAID: $___________. (Draw checks to order of EVLICO.) AGREEMENT. The signers of this application agree that: (1) The statements and answers in all parts of this application are true and complete to the best of my knowledge and belief. EVLICO may rely on them in acting on this application. (2) EVLICO's Temporary Insurance Agreement states the conditions that must be met before any insurance takes effect, if the full first premium for the policy applied for is paid before the policy is delivered. (3) Except as stated in the Temporary Insurance Agreement, no insurance shall take effect on this application: (a) until a policy is delivered and the full first premium for it is paid while the Proposed Insured is living; (b) before any Register Date specified in this application; and (c) unless to the best of my knowledge and belief the statements and answers in all parts of this application continue to be true and complete, without material change, as of the time such premium is paid. (4) No agent or medical examiner has authority to modify this Agreement or the Temporary Insurance Agreement, nor to waive any EVLICO's rights or requirements. EVLICO shall not be bound by any information unless it is stated in application Part 1, 1A or 2. - --------------------------------------------------------------------------- SIGNATURE OF AGENT ______/s/ John Q. Agent______ IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL BENEFITS) THE AMOUNT OF THE DEATH BENEFIT ABOVE THE FACE AMOUNT, AND THE CASH VALUE, MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. Dated at ______NEW YORK,____N.Y.____________on____6/1_____19__83__ City State __X /s/ Richard Roe_____________________________________________________________ Signature of Proposed Insured or of Applicant if Proposed Insured is a Child, Issue Age 0-14. ________________________________________________________________________________ Signature of Additional Insured if required. ________________________________________________________________________________ Signature of Purchaser if not Proposed Insured or Applicant. (If corp. show firm's name and signature of authorized officer.) EV4-200N 3 EX-99.1A10BAPPLIC 33 APPLICATION FORM EV4-200P - -------------------------------------------------------------------------------- PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV. EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI - -------------------------------------------------------------------------------- 1. PROPOSED INSURED a. Print name to appear on policy. RICHARD ROE - -------------------------------------------------------------------------------- First Middle Initial Last b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________ c. List all current occupations-- Give Titles(s) and Duties VICE PRESIDENT - HEAD OF - -------------------------------------------------------------------------------- ACCOUNTING DEPT. - -------------------------------------------------------------------------------- d. Date of Birth 12 1 1948 --------------------------- Month Day Year e. Age Nearest Birthday 35 -------------- f. Place of Birth: State of NEW YORK --------- g. Residence: State of NEW YORK --------- h. |X| Male |_| Female i. Are you associated with or employed by a member of National Association of Securities Dealers, Inc. (NASD)? |_| Yes |X| No 2. PLAN* INITIAL FACE AMOUNT Single Premium Whole Life-Level Face Amt. $ 100,000 INVESTMENT ALLOCATION (WHOLE NUMBERS ONLY) Separate Account I Separate Account II 50% + 50% = 100% ------------------------ ----------------- 3. OPTIONAL BENEFITS |_| Accidental Death Benefit* (Specify Amount): $____________ |_| Disability Premium Waiver* |_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________ Term Riders: Decreasing Term Per Month |_| Family Income: ______Years $____________ |_| Mortgage Prot.: ______Years Initial Amt.: $____________ Renewable Term Yearly 10 Yr. |_| On Insured: $____________ |_| On Add'l. Insured (See page 2): $____________ |_| Increasing Term |_| Children's Term (See page 2): $__________Units______________ *If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2. 4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL NAME and RELATIONSHIP to Proposed Insured. MARGARET ROE-WIFE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Unless otherwise requested, the contingent beneficiary will be the surviving children of the Insured, in equal shares. If none survive, payment will be made to the Insured's estate. THE BENEFICIARY UNDER ANY TERM INSURANCE on an Additional Insured or on a Child will be as stated in the riders, for those benefits, unless otherwise designated in Special Instructions. 5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| | The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.) |_| Other (Give Full Name): ----------------------------------------------------------------- If "Other" complete the following: |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title ----------- Relationship to Insured -------------------------------------------------- Specify a successor Owner if desired -------------------------------------------------------------------------- If the Proposed Insured or the Applicant for a Child is not the Owner and if all persons designated die before the Insured, the Owner will be the estate of the last of such persons to die except where the Insured is a Child (see Note in 10.c.). 6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence |1|0|0| |S|P|E|C|M|E|N| |A|V|E| | | | | | | | -------------------------------------------------- No. Street Apt. |N|E|W| |Y|O|R|K| | | | | | | | | | | | | | | | | | | | | -------------------------------------------------- City |N|E|W| |Y|O|R|K| | | | | | | | |1|0|0|0|1| -------------------------------------------------- State Zip 7. *PREMIUM PAYMENT PLAN |_| Annual |_| Semi-Annual |_|Quarterly |_| Monthly |_| System-Matic (Attach S-M Form) |x| Single |_| Military Allotment: Branch _______________ Register Date____________ |_| Salary Allotment: Register Date_____________ Unit Name________________________________ Unit/Sub-Unit No. if established: |__|__|__|__|__|__|__|__|__|__|__|__|__|_|_|_| Divisible by |_| 2 |_| 4 Payroll No.________________ |_| Hold Premium $______________________ 8. SUITABILITY a. Have you the Proposed Insured and the Purchaser if other than the Proposed Insured received a Prospectus for the policy applied for? Yes |x| No |_| Date of Prospectus SPECIMEN ---------------------------- Date of any supplement SPECIMEN ---------------------------- b. Do you understand that, under the policy applied for (exclusive of any optional benefits), the amount of death benefit above the guaranteed minimum death benefit and the entire amount of the cash value may increase or decrease depending upon investment experience? |X| Yes |_| NO c. With this in mind, is the policy in accord with your insurance objectives and your anticipated financial needs? |X| Yes |_| NO 9. SPECIAL INSTRUCTIONS a. |_| Preliminary Term (PT) period of _____ days ending ____________ . PT Premium $______ Mo. Day. Yr. b. |_| Date to save insurance age: _____________ c. |_| Check here to request an adjustable policy loan interest rate (if available) instead of a fixed rate of 5%. d. Other: ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- ----------------------------------------- - -------------------------------------------------------------------------------- NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM. - -------------------------------------------------------------------------------- EV4-200P 1 10 COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14). a. Will there be more life insurance in effect on the Child than on any older child in the family? |_| Yes |_| No If yes, explain: ___________________________________________ _____________________________________________________________ b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD. i. _________________________________________________________ First Name Middle Initial Last Name ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______ iii.Date of Birth___________________________________19____ Month Day Year iv. |_| Male |_| Female v. Relationship to Child:___________________________________ vi. Total Life Insurance now in effect: $ _________________ c. OWNER. If the Applicant is to be the Owner, after the Applicant's death the Child will be the Owner unless otherwise designated in Special Instructions (in any such designation include Owner's FULL NAME, RELATIONSHIP to Child, and Social Security or Tax Number). NOTE: Consider designating an adult secondary Owner to reduce the chance of a minor Child becoming the Owner. If all persons designated die before the Child, the Owner will be the Child. d. OPTIONAL BENEFIT ON APPLICANT. |_| Supplemental Protective Benefit. Give Applicant's: i. Age Nearest ii. Place of Birthday ______________ Birth_____________ State iii.Height______Ft____In. Weight______lbs. iv. Occupations-Give Title(s) and Duties:__________ ----------------------------------------------------- ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT. e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit is applied for on the Child, the benefit is payable only if the Child dies after the Child's first birthday. If the Disability Premium Waiver Benefit is applied for on the Child, the benefit is effective only if the Child becomes totally disabled on or after the Child's 5th birthday. - -------------------------------------------------------------------------------- 11. COMPLETE FOR CHILDREN'S TERM RIDER. Give Names of Children below and answer the Questions on page 3 as to each Child. CHILDREN PROPOSED FOR INSURANCE: NOTE: To be eligible, children (including stepchildren and legally adopted children) must not yet have reached their 18th birthday. Coverage does not begin until a child is 15 days old. DATE OF BIRTH |Sex| Mo.| Day| Yr. - -------------------------------------------------------------------------------- First Name Middle Initial Last Name - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 12. COMPLETE FOR LEVEL TERM YEARLY RENEWABLE RIDER ON ADDITIONAL INSURED. Complete below and answer the Questions on page 3 as to the Additional Insured. PROPOSED ADDITIONAL INSURED a. Print name as it is to appear on the Policy. - -------------------------------------------------------------------------------- First Middle Initial Last b. List all current occupations--Give Title(s) and Duties. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- c. Date of Birth: Mo.__________ Day________ Yr. 19____ d. Age Nearest Birthday _____________________________ e. Place of Birth: State of ____________________________ f. Residence: State of_______________________________ g. |_| Male |_| Female h. Owner's Relationship to Additional Insured:____________ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE. i. Existing Individual Policy No. ________________________ ii. Option Date_______iii. Option Amount: $______________ iv. |_| Regular Option or |_| Option on Birth or Adoption of Child Date of Birth or Adoption___________________________ v. If applying for Disability Premium Waiver, is Proposed Insured now totally disabled as defined in the Disability Premium Waiver provision of the above policy? |_| Yes |_| No This application is made under a provision in the policy indicated above permitting the purchase of individual life insurance (the "Option Provision"). If this application is made within the time allowed and in accordance with the other terms in the Option Provision, including timely payment of the full first premium for the option insurance then the option insurance shall take effect upon the terms of the policy EVLICO would issue. Otherwise, the option insurance shall not take effect. Answer the Questions on page 3 only if evidence of insurability is required in connection with an optional benefit or any excess of the insurance amount applied for over the insurance amount permitted by the Option Provision (the option insurance). EV4-200P NO. SPECIMEN 2 OTHER INFORMATION -- AS TO EACH PERSON PROPOSED FOR INSURANCE, ANSWER QUESTIONS 14 AND 15. ALSO ANSWER QUESTIONS 16, 17 AND 18 IF NON-MEDICAL. 14. HAS ANY PERSON PROPOSED FOR INSURANCE: a. Within the last two years, been convicted of two or more moving violations or driving under the influence of alcohol or drugs, or had a driver's license suspended or revoked? (Give full details--including dates, types of violation, and reason for license suspension or revocation.) |_| Yes |X| No b. Any plan to travel or reside outside the U.S.? (Give full details.) |_| Yes |X| No c. Any other life insurance now in effect or application now pending? (State companies and amounts.) |_| Yes |X| No 15.a.Within the last year flown other than as a passenger or plan to do so? |_| Yes |X| No If yes: Total flying time at present__________ Hours; Last 12 mos.________Hours; Next 12 mos._______Est. Hours. (Complete Aviation Supplement for competitive, test, stunt or military flying, or crop dusting.) b. Engaged within the last year, or any plan to engage in motor racing on land or water, underwater diving, sky diving, ballooning, hang-gliding or parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X} No c. Ever had an application for life or health insurance declined, that required an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No d. Replaced or changed any existing insurance or annuity (or any plan to do so) assuming the insurance applied for will be issued? (State companies, plans and amounts.) |_| Yes |X| No ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL 16. Proposed Insured: Height 6 Ft. 1 In. Weight 185 lbs. ------------------------------------------------------ Additional Insured: Height Ft. In. Weight lbs. ------------------------------------------------------- 17. HAS ANY PERSON PROPOSED FOR INSURANCE: a. Ever been treated for or had any indication of heart trouble, stroke, high blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.) |_| Yes |X| No b. Within the last 5 years, consulted a physician, or been examined or treated at a hospital or other medical facility? (Include medical check-ups in the last 2 years. Do not include colds, minor virus infections, minor injuries, or normal pregnancy.) (Give full details.) |X| Yes |_| No 18.a.Within the last ten years repeatedly used barbiturates, amphetamines, hallucinatory drugs or narcotics? (Give full details.) |_| Yes |X| No b. Within the last ten years received counseling or treatment regarding the use of alcohol or drugs? (Give full details.) |_| Yes |X|No 19. DETAILS. For each yes answer give Question number, name of person(s) affected and full details. For 17 and 18 also include conditions, dates, durations, treatment and results, and names and addresses of physicians and medical facilities. No. Name of Person Affected Details - -------------------------------------------------------------------------------- 17.B. |RICHARD ROE MEDICAL CHECK-UP 11/1/82 NORMAL - -------------------------------------------------------------------------------- DR. JOHN JONES 100 SPECIMEN ST. NEW YORK, N.Y. 10001 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 20.COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED: Have the undersigned read and do they agree to the conditions of EVLICO's Temporary Insurance Agreement, including (i) the requirement that all of the conditions in that Agreement must be met before any insurance takes effect, and (ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a premium may not be paid before the policy is delivered.) AMOUNT PAID: $___________. (Draw checks to order of EVLICO.) AGREEMENT. The signers of this application agree that: (1) The statements and answers in all parts of this application are true and complete to the best of my knowledge and belief. EVLICO may rely on them in acting on this application. (2) EVLICO's Temporary Insurance Agreement states the conditions that must be met before any insurance takes effect, if the full first premium for the policy applied for is paid before the policy is delivered. (3) Except as stated in the Temporary Insurance Agreement, no insurance shall take effect on this application: (a) until a policy is delivered and the full first premium for it is paid while the Proposed Insured is living; (b) before any Register Date specified in this application; and (c) unless to the best of my knowledge and belief the statements and answers in all parts of this application continue to be true and complete, without material change, as of the time such premium is paid. (4) No agent or medical examiner has authority to modify this Agreement or the Temporary Insurance Agreement, nor to waive any EVLICO's rights or requirements. EVLICO shall not be bound by any information unless it is stated in application Part 1, 1A or 2. - --------------------------------------------------------------------------- Signature of Agent /s/ John Q. Agent ----------------- IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL BENEFITS) THE AMOUNT OF THE DEATH BENEFIT ABOVE THE FACE AMOUNT, AND THE CASH VALUE, MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. Dated at NEW YORK, N.Y. on 6/1 19 83 ----------------------------------------------------------------------- City State (X) /s/ Richard Roe - -------------------------------------------------------------------------------- Signature of Proposed Insured or of Applicant if Proposed Insured is a Child, Issue Age 0-14. (X) Richard Roe - -------------------------------------------- Signature of Additional Insured if required. - ------------------------------------------------------------ Signature of Purchaser if not Proposed Insured or Applicant. (If corp. show firm's name and signature of authorized officer) EV4-200P 3 EX-99.1A10CAPPLIC 34 APPLICATION FORM EV4-200Q - -------------------------------------------------------------------------------- PART 1 OF AN APPLICATION FOR INDIVIDUAL VARIABLE LIFE INSURANCE TO |_|JUV. EQUITABLE VARIABLE LIFE INSURANCE COMPANY (EVLICO) |_|OPAI - -------------------------------------------------------------------------------- 1. PROPOSED INSURED a. Print name as it is to appear on policy. _______RICHARD___________________________ROE____________________________________ First Middle Initial Last b. |X| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title___________ c. List all current occupations -- Give Titles(s) and Duties _____________CORPORATE ATTORNEY_________________________________________________ ________________________________________________________________________________ d. Date of Birth: Mo.__3__ Day__1__ Yr. 19__50__ e. Age Nearest Birthday: ___35___ f. Place of Birth: State of ___NEW YORK___ g. Residence: State of ___NEW YORK___ h. |X| Male |_| Female 2. PLAN INITIAL FACE AMOUNT ____VARIABLE WHOLE LIFE________________________________________ $__100,000_____ If Flexible Prem., will the Death Benefit include the value of the Account? |_| No (Option A) |_| Yes (Option B) INVESTMENT DIVISION ALLOCATION (WHOLE NUMBERS ONLY) Common Stock __50%__ _________________ ______________% Money Market __50___ _________________ ______________ ____________ _______ _________________ ______________ ____________ _______ _________________ ______________ ____________ _______ _________________ ______________ ____________ _______ _________________ ______________ 100% 3. OPTIONAL BENEFITS |_| Accidental Death Benefit* (Specify Amount): $____________ |_| Option to Purchase Add'l Ins. (Issue ages to 37 only): $____________ |_| Disability Premium Waiver* |_| Disability Benefit-Flexible Prem. Pol.* |_| Waive Cost of Insurance |_| Credit $ _______ per _________________ Term Riders: Decreasing Term Per Month |_| Family Income: ______Years $____________ |_| Mortgage Prot.: ______Years Initial Amt.: $____________ Renewable Term Yearly 10 Yr. |_| On Insured: |_| |_| $____________ |_| On Add'l. Insured (See page 2): |_| |_| $____________ |_| Increasing Term |_| Children's Term (See page 2): $__________Units______________ *If Proposed Insured is a Child (Issue Age 0-14) see Limitations on p.2. 4. BENEFICIARY FOR INSURANCE ON PROPOSED INSURED. Include FULL NAME and RELATIONSHIP to Proposed Insured. __________________________MARGARET H. ROE, WIFE_____________________________ ____________________________________________________________________________ Unless otherwise requested, the contingent beneficiary will be the surviving children of the Insured, in equal shares. If none survive, payment will be made to the Insured's estate. THE BENEFICIARY UNDER ANY TERM INSURANCE RIDER on an Additional Insured or on a Child will be as stated in those riders, unless otherwise designated in Special Instructions. 5. OWNER Owner's Soc. Sec. or Tax No. |0|0|0|0|0|0|0|0|0| | The Owner is |X| Proposed Insured |_| Applicant for Child (See 10.c.) |_| Other (Give Full Name): ____________________________________________________________________________ If "Other," complete the following: |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title________________ Relationship to Insured_____________________________________________________ Specify a successor Owner if desired ____________________________________________________________________________ If the Proposed Insured or the Applicant for a Child is not the Owner and if all persons designated die before the Insured, the Owner will be the estate of the last of such persons to die except where the Insured is a Child (see Note in 10.c.). 6. MAILING ADDRESS |_| Business (Give Full Name) |x| Residence |1|0|0|_|S|P|E|C|M|E|N|_|S|T|R|E|E|T|_|_|_|_|_|1|F|_|_|_| No. Street Apt. |N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_|_| City |N|E|W| |Y|O|R|K|_|_|_|_|_|_|_|_|_|_|_|1|0|0|0|1| State Zip 7. PREMIUM PAYMENT PLAN Check mode, and if Flexible Premium complete the following: Initial Prem. Payment $ _________________________________ Planned Periodic Prems. $ _______________________________ |_| Do not send premium reminder notices |x| Annual |_| Semi-Annual |_|Quarterly |_| Monthly |_| System-Matic (Attach S-M Form) |_| Single |_| Military Allotment: Branch __________________________ Register Date_____________________ |_| Salary Allotment: Register Date_____________________ Unit Name______________________________________________ Unit/Sub-Unit No. if established: |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__|__| Divisible by |_| 2 |_| 4 Payroll No.________________ |_| Hold Premium $______________________ 8. SUITABILITY a. Have you the Proposed Insured and the Purchaser if other than the Proposed Insured received: (i) a Prospectus for the policy applied for? |X| Yes |_| No Date of Prospectus ______SPECIMEN____________________________ Date of any supplement ______SPECIMEN________________________ (ii) a Prospectus for The Hudson River Fund, Inc. |X| Yes |_| No Date of Prospectus ______SPECIMEN____________________________ Date of any supplement ______SPECIMEN________________________ b. Do you understand that, under the policy applied for (exclusive of any optional benefits), the amount of the death benefit and the cash surender value may increase or decrease depending upon investment experience (if the policy has a guaranteed minimum death benefit or cash surrender value it is only the amount above such minimum that may increase or decrease)? |X| Yes |_| No c. With this in mind, is the policy in accord with your insurance objectives and your anticipated financial needs? |X| Yes |_| No 9. SPECIAL INSTRUCTIONS a. |_| Preliminary Term (PT) period of ________ days ending _______________ . PT Premium $_______ Mo. Day Yr. b. |_| Date to save insurance age: _____________ c. |_| Check here to request an adjustable policy loan interest rate (if available) instead of a fixed rate. d. Other: _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ - -------------------------------------------------------------------------------- NOTE: UPON REQUEST, WE WILL FURNISH ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS AND CASH VALUES, FOR (A) THE VARIABLE LIFE INSURANCE POLICY APPLIED FOR AND (B) A FIXED BENEFIT LIFE INSURANCE POLICY FOR THE SAME PREMIUM. - -------------------------------------------------------------------------------- EV4-200Q 1 10. COMPLETE IF PROPOSED INSURED IS A CHILD (ISSUE AGES 0-14). a. Will there be more life insurance in effect on the Child than on any older child in the family? |_| Yes |_| No If yes, explain: ___________________________________________ _____________________________________________________________ b. APPLICANT-COMPLETE IF OTHER THAN THE CHILD. i. _________________________________________________________ First Name Middle Initial Last Name ii. |_| Mr. |_| Miss |_| Mrs. |_| Ms. |_| Other Title_______ iii. Date of Birth___________________________________19____ Month Day Year iv. |_| Male |_| Female v. Relationship to Child:___________________________________ vi. Total Life Insurance now in effect: $ _________________ c. OWNER. If the Applicant is to be the Owner, after the Applicant's death the Child will be the Owner unless otherwise designated in Special Instructions (in any such designation include Owner's FULL NAME, RELATIONSHIP to Child, and Social Security or Tax Number). NOTE: Consider designating an adult secondary Owner to reduce the chance of a minor Child becoming the Owner. If all persons designated die before the Child, the Owner will be the Child. d. OPTIONAL BENEFIT ON APPLICANT. |_| Supplemental Protective Benefit. Give Applicant's: i. Age Nearest ii. Place of Birthday ______________ Birth_____________ State iii. Height______Ft.____In. Weight______lbs. iv. Occupations-Give Title(s) and Duties:_________________________________ ________________________________________________________________________ ALSO ANSWER QUESTIONS ON PAGE 3 AS TO APPLICANT. e. LIMITATIONS ON CHILD'S ADB AND DPW BENEFITS. If the Accidental Death Benefit is applied for on the Child, the benefit is payable only if the Child dies after the Child's first birthday. If the Disability Premium Waiver Benefit is applied for on the Child, the benefit is effective only if the Child becomes totally disabled on or after the Child's 5th birthday. - -------------------------------------------------------------------------------- 11. COMPLETE FOR CHILDREN'S TERM RIDER. Give Names of Children below and answer the Questions on page 3 as to each Child. CHILDREN PROPOSED FOR INSURANCE: NOTE: To be eligible, children (including stepchildren and legally adopted children) must not yet have reached their 18th birthday. Coverage does not begin until a child is 15 days old. DATE OF BIRTH First Name Middle Initial Last Name |SEX| MO.| DAY| YR. - -------------------------------------------------------------------------------- ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 12. COMPLETE FOR RENEWABLE TERM RIDER ON ADDITIONAL INSURED. Complete below and answer the Questions on page 3 as to the Additional Insured. PROPOSED ADDITIONAL INSURED a. Print name as it is to appear on the Policy. ________________________________________________________________________________ First Middle Initial Last b. List all current occupations -- Give Title(s) and Duties. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ c. Date of Birth: Mo.__________ Day________ Yr. 19____ d. Age Nearest Birthday _______________________________ e. Place of Birth: State of __________________________ f. Residence: State of________________________________ g. |_| Male |_| Female h. Owner's Relationship to Additional Insured:_________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- 13. COMPLETE IF USING EXISTING OPTION TO PURCHASE INSURANCE. i. Existing Individual Policy No. _________________________ ii. Option Date_______ iii. Option Amount: $______________ iv. |_| Regular Option or |_| Option on Birth or Adoption of Child Child's Name _______________________________________ Date of Birth or Adoption___________________________ v. If applying for Disability Premium Waiver, is Proposed Insured now totally disabled as defined in the Disability Premium Waiver provision of the above policy? |_| Yes |_| No This application is made under a provision in the policy indicated above permitting the purchase of individual life insurance (the "Option Provision"). If this application is made within the time allowed and in accordance with the other terms in the Option Provision, including timely payment of the full first premium for the option insurance, then the option insurance shall take effect upon the terms of the policy EVLICO would issue. Otherwise, the option insurance shall not take effect. Answer the Questions on page 3 only if evidence of insurability is required in connection with an optional benefit or any excess of the insurance amount applied for over the insurance amount permitted by the Option Provision (the option insurance). EV4-200Q 2 OTHER INFORMATION -- HAS ANY PERSON PROPOSED FOR INSURANCE: 14.a. Ever had a driver's license suspended or revoked or, within the last three years, been convicted of two or more moving violations or driving under the influence of alcohol or drugs? (Give full details -- including dates, types of violation, and reason for license suspension or revocation.) |_| Yes |X| No b. Any plan to travel or reside outside the U.S.? (Give full details.) |_| Yes |X| No c. Any other life insurance now in effect or application now pending? (State companies and amounts.) |_| Yes |X| No d. Smoked cigarettes within the last 12 months? |_| Yes |X| No 15.a. Within the last year flown other than as a passenger or plan to do so? |_| Yes |X| No If yes: Total flying time at present________________ Hours; Last 12 mos.________Hours; Next 12 mos._________Est. Hours. (Complete Aviation Supplement for pilot instruction; competitive, test, stunt or military flying; or crop dusting.) b. Engaged within the last year, or any plan to engage in motor racing on land or water, underwater diving, sky diving, ballooning, hang-gliding or parachuting? (If yes, complete Avocation Supplement.) |_| Yes |X| No c. Ever had an application for life or health insurance declined, that required an extra premium or was otherwise modified? (Give full details.) |_| Yes |X| No d. Replaced or changed any existing insurance or annuity (or any plan to do so) assuming the insurance applied for will be issued? (State companies, plans and amounts.) |_| Yes |X| No ANSWER QUESTIONS 16, 17 AND 18 ONLY IF NON-MEDICAL. 16. Proposed Insured:__________Height___6____Ft.____1____In. Weight__185__lbs. Additional Insured:________Height________Ft._________In. Weight_______lbs. HAS ANY PERSON PROPOSED FOR INSURANCE: 17.a. Ever been treated for or had any indication of heart trouble, stroke, high blood pressure, chest pain, diabetes, tumor or cancer? (Give full details.) |_| Yes |X| No b. In the last 5 years, consulted a physician, or been examined or treated at a hospital or other medical facility? (Include medical check-ups in the last 2 years. Do not include colds, minor virus infections, minor injuries, or normal pregnancy.) (Give full details.) |_| Yes |X| No 18.a. In the last ten years used barbiturates, amphetamines, hallucinatory drugs or narcotics? (Give full details.) |_| Yes |X| No b. In the last ten years received counseling or treatment for the use of alcohol or drugs? (Give full details.) |_| Yes |X| No 19. DETAILS. For each yes answer give Question number, name of person(s) affected and full details. For 17 and 18 also include conditions, dates, durations, treatment and results, and names and addresses of physicians and medical facilities. No. Name of Person Affected Details ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ 20. COMPLETE IF FIRST PREMIUM IS PAID BEFORE THE POLICY IS DELIVERED: Have the undersigned read and do they agree to the conditions of EVLICO's Temporary Insurance Agreement, including (i) the requirement that all of the conditions in that Agreement must be met before any insurance takes effect, and (ii) the $250,000 insurance amount limitation? |_| YES |_| NO (If "No," a premium may not be paid before the policy is delivered.) AMOUNT PAID: $___________. (Draw checks to order of EVLICO.) AGREEMENT. Each signer of this application agrees that: (1) The statements and answers in all parts of this application are true and complete to the best of my knowledge and belief. EVLICO may rely on them in acting on this application. (2) EVLICO's Temporary Insurance Agreement states the conditions that must be met before any insurance takes effect, if the full first premium for the policy applied for is paid before the policy is delivered. (3) EXCEPT AS STATED IN THE TEMPORARY INSURANCE AGREEMENT, NO INSURANCE SHALL TAKE EFFECT ON THIS APPLICATION: (A) UNTIL A POLICY IS DELIVERED AND THE FULL FIRST PREMIUM FOR IT IS PAID WHILE THE PROPOSED INSURED IS LIVING; (B) BEFORE ANY REGISTER DATE SPECIFIED IN THIS APPLICATION; AND (C) UNLESS TO THE BEST OF MY KNOWLEDGE AND BELIEF THE STATEMENTS AND ANSWERS IN ALL PARTS OF THIS APPLICATION CONTINUE TO BE TRUE AND COMPLETE, WITHOUT MATERIAL CHANGE, AS OF THE TIME SUCH PREMIUM IS PAID. (4) No agent or medical examiner has authority to modify this Agreement or the Temporary Insurance Agreement, nor to waive any of EVLICO's rights or requirements. EVLICO shall not be bound by any information unless it is stated in application Part 1, 1A or 2. - -------------------------------------------------------------------------------- Signature of Agent________/s/ John Q. Agent_____________________________________ IT IS UNDERSTOOD THAT UNDER THE POLICY APPLIED FOR (EXCLUSIVE OF ANY OPTIONAL BENEFITS) THE AMOUNT OF THE DEATH BENEFIT AND THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT (IF THE POLICY HAS A GUARANTEED MINIMUM DEATH BENEFIT OR CASH SURRENDER VALUE IT IS ONLY THE AMOUNT ABOVE SUCH MINIMUM THAT MAY INCREASE OR DECREASE). Dated at __NEW YORK_____NY__________________on___3/1_____19__85__ City State (X)___/s/ Richard Roe___________________________________________________________ Signature of Proposed Insured or of Applicant if Proposed Insured is a Child, Issue Age 0-14. ________________________________________________________________________________ Signature of Additional Insured if required. ________________________________________________________________________________ Signature of Purchaser if not Proposed Insured or Applicant. (If corp. show firm's name and signature of authorized officer.) EV4-200Q 3 EX-99.2ALEGOPIN 35 LEGAL OPINION & CONSENT (SA I) [Equitable Logo] MARY P. BREEN Vice President and Associate General Counsel (212) 554-3841 Fax: (212) 554-1266 December 9, 1996 The Equitable Life Assurance Society of the United States 1290 Avenue of the Americas New York, NY 10104 Dear Sirs: This opinion is furnished in connection with the filing of a Registration Statement on Form S-6 ("Registration Statement") of Separate Account I ("Separate Account I") of The Equitable Life Assurance Society of the United States ("Equitable"). The Registration Statement covers an indefinite amount of interests ("Interests") to be issued under variable life insurance policies ("Policies") issued by Equitable Variable Life Insurance Company ("Equitable Variable"). Equitable Variable, a wholly-owned subsidiary of Equitable, is expected to be merged with and into Equitable on January 1, 1997. Upon consummation of the merger, Policies issued prior thereto by Equitable Variable will become obligations of Equitable. This opinion assumes consummation of the merger and compliance with regulatory requirements relating thereto. Although the Policies are no longer being offered for sale, Equitable will continue to collect premiums under the Policies. Net premiums received under the Policies will be allocated by Equitable to Separate Account I to the extent directed by owners of the Policies. I have examined all such corporate records of Equitable and such other documents and laws as I consider appropriate as a basis for the opinion hereinafter expressed. On the basis of such examination, it is my opinion that: 1. Equitable is a corporation duly organized and validly existing under the laws of the State of New York. 2. Separate Account I has been duly established by Equitable pursuant to the laws of the State of New York, under which income, gains and losses, whether or not realized, from assets allocated to Separate Account I, are to be, in accordance with the Policies, credited to or charged against Separate Account I without regard to other income, gains or losses of Equitable. 3. Assets allocated to Separate Account I will be owned by Equitable; Equitable will not be a trustee with respect thereto. The Policies provide that the portion of the assets of Separate Account I equal to the reserves and other Policy liabilities with respect to Separate Account I will not be chargeable with liabilities arising out of any other business Equitable may conduct. Equitable reserves the right to transfer assets of Separate Account I in excess of such reserves and other Policy liabilities to the general account of Equitable. 4. Upon consummation of the merger, the Policies (including any Interests duly credited thereunder) will be duly authorized and will constitute validly issued and binding obligations of Equitable in accordance with their terms. I hereby consent to the use of this opinion as an exhibit to the Registration Statement. Very truly yours, /s/ Mary P. Breen ----------------- Mary P. Breen 45238-1 -2- EX-99.2BIOPIN 36 NORTH OPINION DATED 3-25-85 #1 EQUITABLE VARIABLE LIFE INSURANCE COMPANY 2 Penn Plaza, Area 21-F New York, New York 10121 EQUITABLE VARIABLE LIFE INSURANCE COMPANY NEW YORK, N.Y. (EVLICO LOGO) JOSEPH O. NORTH, JR., FSA, MAAA Vice President and Actuary March 25, 1985 Equitable Variable Life Insurance Company 1285 Avenue of the Americas New York, NY 10019 The opinion is furnished in connection with the filing of a Post-Effective Amendment No. 26 to Registration Statement No. 2-54015 on Form S-6 ("Post-Effective Amendment No. 26") by Separate Account I of Equitable Variable Life Insurance Company ("Separate Account") and Equitable Variable Life Insurance Company ("EVLICO") covering an indefinite amount of premiums to be received under EVLICO's Single Premium Variable Whole Life Insurance Policies ("Policies") to be offered by EVLICO. Under the Policies, amounts will be allocated by EVLICO to Separate Account I of EVLICO as described in the prospectus included in Post-Effective Amendment No. 26 ("Prospectus"). I participated in the preparation of the Policies and I am familiar with their provisions. I am also familiar with the description contained in the Prospectus. In my opinion: 1. The illustrations of death benefits, account values, cash surrender values and accumulated premiums for the Policies on pages 23 through 30, based on the assumptions stated in the illustrations, are consistent with the provisions of the Policies. The rate structure of the Policies has not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear to be correspondingly more favorable to a prospective purchaser of Policies for male and female ages 5, 25, 40 or 55 than to prospective purchasers of Policies for a male or female at other ages. 2. The information with respect to the Policies contained in i) the illustration of amounts allocated to the Separate Account on page 11 of the Prospectus and ii) the illustration of changes in death benefit on page 18 of the Prospectus, based on the assumptions stated in the illustrations, is consistent with the provisions of the policies. 3. The table of illustrative premium rates with respect to the Policies on page 32 of the Prospectus contains the premium rates to be charged by EVLICO for Policies with initial face amounts, issue ages and sex, and state premium tax shown in the table. 4. The examples of death benefits, account values and cash surrender values for the Policies on pages 7 and 8 of the Prospectus, based on the Net Returns of the Common Stock Division and the Money Market Divisions of the Separate Account and the assumptions stated with the examples, are consistent with the provisions of the Policies. The rate structure of the Policies has not been designed so as to make the relationship between premiums and benefits, as shown in the examples, appear to be correspondingly more favorable to a prospective purchaser of Policies for a male at other ages or for a female. I hereby consent to the use of this opinion as an exhibit to Post-Effective Amendment No. 26 and to the reference to my name under the heading "Financial and Actuarial Experts" in the Prospectus. Very truly yours, /s/ Joseph O. North, Jr. ------------------------ Joseph O. North, Jr. Vice President and Actuary EX-99.2BIIOPIN 37 NORTH OPINION DATED 3-25-85 #2 EQUITABLE VARIABLE LIFE INSURANCE COMPANY 2 Penn Plaza, Area 21-F New York, New York 10121 EQUITABLE VARIABLE LIFE INSURANCE COMPANY NEW YORK, N.Y. (EVLICO LOGO) JOSEPH O. NORTH, JR., FSA, MAAA Vice President and Actuary March 25, 1985 Equitable Variable Life Insurance Company 1285 Avenue of the Americas New York, NY 10019 Gentlemen: This opinion is furnished in connection with the filing of a Post-Effective Amendment No. 26 to Registration Statement No. 2-54015 on Form S-6 ("Post-Effective Amendment No. 26) by Separate Account I of Equitable Variable Life Insurance Company ("Separate Account") and Equitable Variable Life Insurance Company ("EVLICO") covering an indefinite amount of premiums to be received under EVLICO's Periodic Premium Variable Whole Life Insurance Policies ("Policies") to be offered by EVLICO. Under the Policies, amounts will be allocated by EVLICO to Separate Account I of EVLICO as described in the prospectuses included in Post-Effective Amendment No. 26 ("Prospectuses"). I participated in the preparation of the Policies and I am familiar with their provisions. I am also familiar with the description contained in the Prospectus. In my opinion: 1. The illustrations of death benefits, account values, and/or cash surrender values and accumulated premiums for the Policies on pages 25 through 36 for The Champion(TM) policy and pages 23 through 34 for the Basic and Expanded policies, based on the assumptions stated in the illustrations, are consistent with the provisions of the Policies. The rate structures of the Policies has not been designed so as to make the relationship between premiums and benefits, as shown in the illustrations, appear to be correspondingly more favorable to a prospective purchaser of Policies for male and female ages 10, 25 or 40 than to prospective purchasers of Policies for a male or female at other ages. 2. The information with respect to the Policies contained in i) the illustration of amounts allocated to the Separate Account on page 12 of the Prospectus for the Champion policy and page 10 for the Basic and Expanded Policies and ii) the illustration of changes in death benefits on page 19 of the Prospectus for the Champion policy and page 17 for the Basic and Expanded policies, based on the assumptions stated in the illustrations, is consistent with the provisions of the Policies. 3. The tables of illustrative premium rates with respect to the Policies on page 40 of the Prospectus for the Champion policy and on page 38 for the Basic and Expanded policies contain the premium rates to be charged by EVLICO for Policies with initial face amounts, premium frequencies, issue ages, sex and risk classifications shown in the tables. 4. The examples of insurance coverage provided by the options on lapse with respect to the Policies on Page 41 of the Prospectus for the Champion policy and on page 40 for the Basic and Expanded policies based on the assumptions stated in the examples, are consistent with the provisions of the Policies. 5. The examples of insurance death benefits, account values and/or cash surrender values for the Policies on pages 7 and 8 of the Prospectus for the Champion policy and on page 6 for the Basic and Expanded policies, based on the Net Returns of the Common Stock Division and the Money Market Division of the Separate Account and the assumptions stated with the examples, are consistent with the provisions of the Policies. The rate structure of the Policies has not been designed so as to make the relationship between premiums and benefits, as shown in the examples, appear to be correspondingly more favorable to a prospective purchaser of Policies for males age 25 than to prospective purchasers of Policies for a male at other ages or for a female. I hereby consent to the use of this opinion as an exhibit to Post-Effective Amendment No. 26 and to the reference to my name under the heading "Financial and Actuarial Experts" in the Prospectus. Very truly yours, /s/ Joseph O. North, Jr. ------------------------ Joseph O. North, Jr. Vice President and Actuary 0325D EX-99.2BIIIACTOPIN 38 ACTUARIAL CONSENT TO PRIOR OPINION December 9, 1996 The Equitable Life Assurance Society of the United States 1290 Avenue of the Americas New York, New York 10104 This consent is furnished in connection with the filing of the Registration Statement on Form S-6 ("Registration Statement") of Separate Account I ("Separate Account I") of The Equitable Life Assurance Society of the United States ("Equitable") covering an indefinite amount of premiums to be received under Single Premium Variable Whole Life Insurance Policies and Periodic Premium Variable Whole Life Insurance Policies (collectively, the "Policies") which were originally offered and issued by Equitable Variable Life Insurance Company ("Equitable Variable"), a wholly-owned subsidiary of Equitable, most recently pursuant to the Prospectuses filed in the Registration Statement. Equitable Variable is to be merged into Equitable on January 1, 1997 and on such date, Equitable will assume Equitable Variable's obligations under the Policies. The Policies are no longer offered for sale, although Equitable will continue to collect premiums under the Policies. I hereby consent to the filing of my opinions dated March 25, 1985 (the "Opinions") (originally filed as exhibits to Post-Effective Amendment No. 26 to Equitable Variable's Registration Statement on Form S-6, File No. 2-54015) as exhibits to Equitable's Registration Statement and to the reference to my name under the heading "Accounting and Actuarial Experts" in the Prospectuses. The references to "Prospectuses" in the Opinions and in this consent are the same Prospectuses being filed in Equitable's Registration Statement, and the Opinions speak as of their date. Very truly yours, /s/ Joseph O. North, Jr. ------------------------------- Joseph O. North, Jr., F.S.A., M.A.A.A. Vice President and Senior Actuary The Equitable Life Assurance Society of the United States 44946-1 EX-99.6CONSENT 39 ACCOUNTANT'S CONSENT CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in the Registration Statement on Form S-6 (the "Registration Statement") of our report dated February 7, 1996, relating to the consolidated financial statements of The Equitable Life Assurance Society of the United States, and our report dated February 7, 1996, except as to Note * which is as of September 19, 1996, relating to the financial statements of Equitable Variable Life Insurance Company Separate Account I and to the incorporation by reference of our reports into the Prospectus Supplement which constitute part of this Registration Statement. We also consent to the references to us under the heading "Financial Statements" in the Prospectus Supplement. /s/ Price Waterhouse LLP Price Waterhouse LLP New York, New York December 9, 1996 EX-99.7POWATTY 40 ELAS POWERS OF ATTORNEY POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Claude Bebear ----------------- 1 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ James M. Benson ------------------- 2 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 30th day of September, 1996 /s/ Christopher J. Brockson --------------------------- 3 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 30th day of September, 1996 /s/ Francoise Colloc'h ---------------------- 4 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 20th day of September, 1996 /s/ Henri de Castries --------------------- 5 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Joseph L. Dionne -------------------- 6 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ William T. Esrey -------------------- 7 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Jean-Rene Fourou -------------------- 8 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Norman C. Francis --------------------- 9 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Donald J. Greene -------------------- 10 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 18th day of September, 1996 /s/ John T. Hartley ------------------- 11 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 13th day of September, 1996 /s/ John H.F. Haskell, Jr. -------------------------- 12 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ W. Edwin Jarmain -------------------- 13 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ G. Donald Johnston, Jr. --------------------------- 14 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 30th day of September, 1996 /s/ Winthrop Knowlton --------------------- 15 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Arthur L. Liman ------------------- 16 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ George T. Lowy ------------------ 17 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ William T. McCaffrey ------------------------ 18 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 12th day of September, 1996 /s/ Joseph J. Melone -------------------- 19 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Didier Pineau-Valencienne ----------------------------- 20 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ George J. Sella Jr. ----------------------- 21 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, Maureen K. Wolfson, Pauline Sherman, Donald R. Kaplan, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 19th day of September, 1996 /s/ Dave H. Williams -------------------- 22 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Jonathan E. Gaines, Jerome S. Golden, James D. Goodwin, Molly K. Heines, David J. Hughes, Naomi J. Weinstein, Charles Wilder, and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any annuity contracts or other agreements, or interests thereunder, providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts or providing for market value adjustments: registration statements on any form or forms under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 and reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 17th day of November, 1994 /s/ J. M. de St. Paer --------------------- 23 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officer or director of The Equitable Life Assurance Society of the United States (the "Company"), a New York stock life insurance company, hereby constitutes and appoints Gordon G. Dinsmore, Samuel B. Shlesinger, James D. Goodwin, Pauline Sherman, Michael F. McNelis, Naomi J. Weinstein, Mildred Oliver and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution to each, for him or her and on his or her behalf and in his or her name, place and stead, to execute and file any of the documents referred to below relating to registrations under the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 with respect to any insurance or annuity contracts or other agreements providing for allocation of amounts to Separate Accounts of the Company, and related units or interests in Separate Accounts: registration statements on any form or forms under the Securities Act of 1933 and the Investment Company Act of 1940 and annual reports on any form or forms under the Securities Exchange Act of 1934, and any and all amendments and supplements thereto, with all exhibits and all instruments necessary or appropriate in connection therewith, each of said attorneys-in-fact and agents and his, her or their substitutes being empowered to act with or without the others or other, and to have full power and authority to do or cause to be done in the name and on behalf of the undersigned each and every act and thing requisite and necessary or appropriate with respect thereto to be done in and about the premises in order to effectuate the same, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 21st day of May, 1996 /s/ Stanley B. Tulin -------------------- 24 EX-99.8DESCPROC 41 EXHIBIT NO. 8 Exhibit 8 Amended and Restated Description of Equitable's Issuance, Transfer and Redemption Procedures for Policies Pursuant to Rule 6e-2(b)(12)(ii) January 1, 1997 Set forth below is the information called for under Rule 6e-2(b)(12)(ii) under the Investment Company Act of 1940 ("1940 Act"). That rule provides an exemption for separate accounts, their investment advisers, principal underwriters and sponsoring insurance company from Sections 22(d), 22(e), and 27(c)(1) of the 1940 Act, and Rule 22(c)-1 promulgated thereunder, for issuance, transfer and redemption procedures under variable life insurance policies to the extent necessary to comply with Rule 6e-2, state administrative law or established administrative procedures of the life insurance company. In order to qualify for the exemption, procedures must be reasonable, fair and not discriminatory and they must be disclosed in the registration statement filed by the separate account. Equitable's Separate Account I is registered under the 1940 Act. Within the Separate Account are the following investment funds: The High Yield Fund, the Aggressive Stock Fund, the Common Stock Fund, the Balanced Fund, the Money Market Fund and the Intermediate Government Securities Fund. Procedures apply equally to each of the Funds and for purposes of this description are defined in terms of the Account, except where a discussion of each is necessary. Each Fund invests in shares of a corresponding investment portfolio of The Hudson River Trust ("the Trust"), a "series" type of mutual fund registered under the 1940 Act. The investment experience of the Separate Account Funds depends on the performance of the corresponding Trust portfolios. Equitable believes its procedures meet the requirements of Rule 6e-2(b)(12)(ii) and states the following: 1. Because of the insurance nature of Equitable's variable life insurance policies ("policies") and due to the requirements of state insurance laws, the procedures necessarily differ in significant respects from procedures for mutual funds and contractual plans for which the 1940 Act was designed. 2. Many of the procedures used by Equitable have been adopted from its established procedures for its fixed benefit life insurance policies. - --------------------------- *Subsequent to the most recent amendments to Rule 6e-2, Congress has amended the 1940 Act to make Section 27(c)(1) inapplicable to the Policies, although the substance of that provision was retained in a new Section 27(i)(2)(A). On the assumption that the references to Section 27(c)(1) in Rule 6e-2(b)(12)(ii) may now be interpreted to refer to Section 27(i)(2)(A), this Exhibit continues to refer to Section 27(c)(1). - 2 - 3. In structuring its procedures to comply with Rule 6e-2, state insurance laws and its administrative procedures, Equitable has attempted to comply with the intendment of the 1940 Act, to the extent deemed feasible. 4. In general, state insurance laws require that Equitable's procedures be reasonable, fair and not discriminatory. 5. Because of the nature of the insurance product, it is often difficult to determine precisely when Equitable's procedures deviate from those required under Sections 22(d), 22(e) or 27(c)(1) of the 1940 Act or rule 22c-1 thereunder. Accordingly, set out below is a summary of the principal policy provisions and procedures which may be deemed to constitute, either directly or indirectly, such a deviation. The summary, while comprehensive, does not attempt to treat each and every procedure or variation which might occur and does include certain procedural steps which do not constitute deviations from the above-cited sections or rule. I. "Redemption Procedures": Surrender and Related Transactions --------------------------------- This section will outline those procedures which differ in certain significant respects from redemption procedures for mutual funds and contractual plans. Equitable's policies provide for the payment of monies to a policyowner or beneficiary upon presentation of a policy. The principal difference between Equitable's "redemption" procedures and those in a mutual fund or contractual plan context is that the payee will not receive a pro rata or proportionate share of the Account's assets within the meaning of the 1940 Act. The amount received by the payee will depend upon the particular benefit for which the policy is presented, including, for example, the cash surrender value or death benefit. There are also certain policy provisions -- such as options on lapse and the loan privilege -- under which the policy will not be presented to Equitable but which will affect the policyowner's benefits and may involve a transfer of the assets supporting the policy reserve out of the Account. Finally, state insurance law may require that certain requirements be met before Equitable is permitted to make payments to the payee. - 3 - a. Surrender for Cash Values ------------------------- Unless premiums are in default for more than three months, (1) Equitable will pay the cash surrender value within seven days after receipt, at its Administrative Office, of the policy or proof of loss and a signed request for surrender and any other requirements dictated by state law. Computations with respect to the investment experience of the Account will be made at the end of each business day. Generally, a business day is any day we are open and the New York Stock Exchange is open for trading. However, we are closed on Martin Luther King Day and the Friday after Thanksgiving Day. This will enable Equitable to pay a cash value on surrender based on the next computed value after a request is received. The surrender is effective on the date the request is received at Equitable's Administrative Office. The cash value at the end of a policy year is equal to the reserve for a standard mortality risk policy. (For "SP-1"(TM) and "The Champion"(TM), this is the Account Value.) The cash value between policy anniversaries may increase or decrease from day to day depending on the investment experience of the Account, based on the relationship of the assumed rate of investment return to the actual rate of return in accordance with the policy. No minimum amount of cash value is guaranteed. Except for single premium policies, calculation of cash value (for purposes of policy surrenders) for any day during a given policy year (i.e., fractional durations) will take into account the extent to which premiums are paid beyond that day. Accordingly, all other things being equal, a cash value will be higher at fractional durations where premiums are paid on an annual, rather than a more frequent, basis (although the cash values will be identical on the anniversary date). The formula for determining the cash value during the first policy year is designed to cover, as far as possible, a deduction for administrative expenses incurred before the policy is issued. The formula for calculating the cash value will have the effect of charging for the cost of insurance on a pro rata basis over the policy year and for administrative charges and state premium taxes. For the "Basic" and "Expanded" policies, this formula will have the effect of charging certain maximum percentage deductions from premiums for "sales load" (20% of the basic annual premium for the first policy year; 14.5% for the second through fourth policy years; and 7.25% after the fourth policy year). - ---------- (1) Under such circumstances, the assets supporting the cash value would be held in Equitable's general account rather than in the Account. - 4 - For the "SP-1" (single premium) policies, a "contingent deferred sales load" at a maximum of 9% of the single premium, reducing to zero after 10 years, will be deducted from the Account Value to produce the cash surrender value. And for The Champion(TM) policies, a "contingent deferred sales load" will also be deducted (22.5% of the basic annual premium for the first policy year, 15% for the second year and decreasing until it reaches zero after 10 years). Equitable will make the payment of cash surrender value out of its general account and, at the same time, transfer assets from the Account to the general account in an amount equal to the policy reserves in the Account. In lieu of payment of the cash value in a single sum upon surrender of a policy, an election may be made to apply all or a portion of the proceeds under one of the fixed benefit payment options described in the policies or, with the approval of Equitable, a combination of options. The election may be made by the policyowner during his lifetime, or, if no election is in effect at his death, by the beneficiary. An option in effect at death may not be changed to another form of benefit after death. An option is available only if the proceeds to be applied are $2,500 or more and would result in periodic payments of at least $25.(2) The settlement options are subject to the restrictions and limitations set forth in the policies. Equitable's policies do not contain a partial surrender feature. Instead, as an administrative accommodation, Equitable permits a policy to be "split" and one of the post-split policies to be surrendered. The continuing policy must meet minimum face amount or premium requirements. For post-split surrenders of "SP-1 or "Champion" policies, any applicable contingent deferred sales load will be charged. b. Death Claims ------------ Equitable will pay a death benefit to the beneficiary within seven days after receipt, at its regional Life Insurance Center, of the policy, due proof of death of insured, and all other requirements necessary(3) to make payment. - ---------- (2)Older series of policies require that the proceeds be $2,000 or more and result in periodic payments of at least $20. (3)State insurance laws impose various requirements, such as receipt of a tax waiver, before payment of the death benefit may be made. In addition, payment of the death benefit is subject to the provisions of the policies regarding suicide and incontestability. - 5 - On each policy anniversary to which premiums have been duly paid, Equitable will determine the "variable adjustment amount" to take account of investment experience of the Account for the previous year. Provided premiums are duly paid, the death benefit during a policy year will equal the sum of (i) the face amount and (ii) the "variable adjustment amount" (established at the beginning of the policy year) if positive. The amount of the death benefit determined at the beginning of the policy year is guaranteed not to go below that amount for the entire policy year; conversely it will not be adjusted upward during that period.(4) The proceeds payable to the beneficiary will be adjusted to reflect any premiums paid past the end of the policy month in which death occurs, any outstanding indebtedness and any premium due if death occurs during the grace period. The proceeds payable on death also reflect interest from the date of death to the date of payment. Equitable will make payment of the death benefit out of its general account, and will transfer assets from the Account to the general account in an amount equal to the reserve in that Account determined without regard to the guaranteed minimum death benefit. The excess, if any, of the face amount over the amount transferred will be paid out of the general account reserve maintained for that purpose. In lieu of payment of the death benefit in a single sum, a settlement option may be selected as described immediately above with respect to cash surrender values. c. Exchange of Policy ------------------ Equitable's policies provide that the policyowner, within 18 months of issuance, may exchange the policy, without submission of new evidence of insurability, for a permanent fixed benefit insurance policy if any outstanding loan plus accrued interest is repaid.(5) The new policy will have a fixed amount of coverage equal to the initial face amount of the policy. This exchange privilege is designed to permit the policyowner to change his mind ab initio and obtain a - ---------- (4)Older series of policies provide that the death benefit in no event will be less than the amount of insurance under the reduced paid-up fixed benefit option on lapse, assuming that premiums had been paid to the date of death and such option had become effective on such date. The purpose of this provision is to cover a remote contingency, under a policy in force for many years, where there has been an abnormally sharp rise in the value of the Account's assets during the policy year of death. "SP-1". and "The Champion" have a similar provision. (5) For one Series of "SP-1" and for "The Champion," the period is 24 months. - 6 - fixed benefit policy based on the original issue age for the policy -- just as if the policyowner had originally decided to buy fixed benefit insurance. Certain adjustments will be made to achieve this result. If the exchange is made from the "Basic," "SP-1" (as issued starting in 1984) and "The Champion" Policies, the policyowner will be required to pay the difference in premiums between the variable and fixed policies. If the exchange is made from the "Expanded" and "SP-1" (as issued in 1983) Policies, the policyowner will receive a refund of the difference in premiums, not to exceed the difference in tabular cash values.(6) Furthermore, any difference between the total cash value and tabular cash value of the policy (arising from investment experience in the Account different from the assumed rate of investment return) will be paid to the policyowner if positive, or by the policyowner if negative. For "The Champion" Policy, this adjustment also reflects the declared rate of return on the fixed Policy. Therefore, favorable investment experience in the Account may be used to reduce the payment by the policyowner on exchange; unfavorable investment experience could require a payment by the policyowner. The cash value used for this purpose will be that next computed after receipt, at Equitable's Regional Life Insurance Center, of the policy and a signed request for exchange. Once the exchange takes effect, Equitable will transfer assets from the Account to the general account in an amount equal to the policy reserve in the Account. d. Default and Options on Lapse ---------------------------- A premium not paid on or before its due date is in default. Equitable Variable's policies provide, however, for a grace period of 31 days for the payment of each premium after the first. The insurance continues in force during the grace period, but, if the policyowner dies during the grace period, the portion of the premium which is applicable to the period from the premium due date to the end of the policy month in which death occurs is deducted from the death benefit. Within three months after the date of default, if a policy is not surrendered, the cash surrender value, less any indebtedness, may be applied under one of the options on lapse for continued insurance not requiring payment of premiums. These options provide for (i) reduced paid-up whole life insurance or (ii) fixed - ---------- (6)This procedure is designed to avoid discrimination by preventing a policyowner from utilizing the exchange privilege in order to obtain lower premiums for fixed benefit insurance, or higher cash surrender values under the policies, than otherwise would be available. - 7 - benefit extended term insurance. The cash value applied under an option will be that at the next computed value on the date on which the option takes effect (on the date of lapse for the variable reduced paid-up option). Equitable simultaneously will transfer assets from the Account to the general account in an amount equal to the policy reserve held in that Account (except for the variable reduced paid-up option). Except as stated below, under a policy issued at other than standard rates, the policyowner may not elect the extended term insurance option, and the fixed reduced paid-up whole life insurance option will become effective at the end of the three-month period. The reduced paid-up whole life insurance option provides for a fixed amount of paid-up whole life insurance which the cash surrender value of the policy, less any indebtedness on the date the option becomes effective, will provide. "The Champion" has the additional option of variable reduced paid-up insurance. Once determined, it will vary with the investment experience of the Account, without any guaranteed minimum. The extended term insurance option provides for a fixed amount of insurance equal to the death benefit, less any indebtedness, as of the date of lapse (determined as if default had not occurred). The insurance continues for as long a period as the cash value of the policy, less any indebtedness on such date, will purchase. If the policyowner has not elected reduced paid-up whole life insurance within three months after the date of default, the extended term insurance option will automatically apply thereafter. Fixed reduced paid-up insurance will apply instead if the extended term insurance option is not available. However, if the policyowner dies after the grace period but within three months after the date of default, the greater of the benefit under the fixed reduced paid-up or extended term insurance will apply even though such extended term insurance option is not otherwise available and notwithstanding any election for a reduced paid-up whole life insurance option.(7) e. Policy Loan ----------- Equitable policies provide that a policyowner, if no premium is in default beyond the grace period,(8) may take a loan of up to 90% of the cash value upon - ---------- (7)Older policies differ slightly. (8)The policy also provides for a loan value while premiums are in default and the policy is in effect under the option on lapse for reduced paid-up whole life insurance, but not the option on lapse for extended term insurance. - 8 - assignment to Equitable of the policy as sole security.(9) The cash value for this purpose will be that next computed after receipt, at Equitable's Administrative Office, of a signed loan request or, under certain circumstances and up to a specified maximum amount, a verbal request. Payment of the loan out of Equitable's general account will be made to the policyowner within seven days after such receipt. Interest on a loan accrues daily at an effective annual rate of 5% and is compounded on each policy anniversary.(10) Policyowners (except for "SP-1") may elect (in writing) an interest rate which is adjustable on a periodic basis. A rate will be determined as of the beginning of each policy year and will apply to a new or outstanding loan during that policy year. The annual loan interest rate for a policy year will be the greater of 5% (5-1/2% for "The Champion") or the monthly Average Composite Yield on a seasoned Corporate Bonds published by Moody's Investors Service, Inc., for the month ending two months before the beginning of the policy year. The loan interest rate for a policy year after the first will be the same as it was for the immediately preceding policy year if the formula above would produce a change of less than 1/2 of 1% from the rate for the preceding year. Election or re-election, where permitted by state law, of the adjustable loan rate will not take effect until a policyowner's next policy anniversary. The amount of any outstanding loan plus accrued interest is called an "indebtedness". Except when used to pay premiums, a loan will not be permitted unless it is at least $100 more than the existing indebtedness, if any. A loan does not affect the amount of the premiums due. When a loan is made, the portion of the assets in the Account (which is a portion of the cash value and which also constitutes a portion of the reserves for the death benefit) equal to the indebtedness created thereby is transferred by Equitable from the Account to the general account. Allocation of the loan between the Accounts will be proportionate to the net cash value in each Account on the date the loan is made. Where the fixed interest rate applies, Equitable credits the policy with a 4% rate of return (4-1/2% for "The Champion"). Where the Adjustable Loan Interest Rate applies, Equitable credits the policy with a rate of return which is.75% below the interest rate charged, minus any charges for taxes or reserves for taxes. Because of the transfer, a portion of the policy is not variable during the loan period (except in accordance with the Adjustable Loan Interest Rate) and, - ---------- (9)For "The Champion", the loan value is somewhat higher. (10)Interest rates on older policies differ and the interest rate for "The Champion" is 5-1/2% year. -9- therefore, the death benefit above the guaranteed minimum amount and the cash value are permanently affected by any indebtedness, whether or not repaid in whole or in part. The guaranteed minimum death benefit is not affected by an indebtedness if premiums are duly paid. However, on settlement, the amount of any outstanding indebtedness is subtracted from the death benefit. Whenever the then outstanding indebtedness under a policy attributed to a Fund equals or exceeds the cash value allocated to that Fund, that Fund will become inactive for a policy and the benefit base and loan balance will be transferred to the other Funds based on the proportions that the unloaned amounts in each of the other Funds bears to the unloaned amount of the total cash value. In addition, the premium allocation for that Fund is reduced to zero. If the total outstanding indebtedness exceeds the total cash value, the policy terminates 31 days after a notice has been mailed by Equitable to the policyowner and any assignee of record at their last known addresses, unless a repayment is made within that period. f. Transfers among Funds --------------------- An owner may transfer the benefit base among the Funds up to four times in a policy year. Transfers go into effect upon receipt of the written request at their next computed cash value and there is no charge. (Benefit base equals cash value for "Basic" and "Expanded" policies or account value for "SP-1" and "Champion" policies, in each case plus any unearned net annual premium.) g. Right of Withdrawal Procedures ------------------------------ Equitable's policies provide that the policyowner, within 10 days after receipt of the policy, may return the policy and receive a full refund of any premium paid.(11) Such a provision is required under the insurance laws of a number of states. - ---------- (11)The postmark date on the envelope containing the policy will determine whether a certificate has been surrendered within Equitable's withdrawal period. - 10 - II. "Public Offering Price": Purchase and Related Transactions -- Section 22(d) and Rule 22c-1 -------------------------------------------- This section outlines those principal policy provisions and administrative procedures which might be deemed to constitute, either directly or indirectly, a "purchase" transaction. Because of the insurance nature of the policies, the procedures involved necessarily differ in certain significant respects from the purchase procedures for mutual funds and contractual plans. The chief differences revolve around the premium rate structure, the insurance underwriting (i.e., evaluation of risk) process and Equitable's advancement of the "net annual premium" whether or not a premium has been paid. There are also certain policy provisions -- such as reinstatement and loan repayment -- which do not result in the issuance of a policy but which require certain payments by the policyowner and involve a transfer of assets supporting the policy reserve into the Account. a. Premium Schedules and Underwriting Standards -------------------------------------------- Premiums for Equitable's policies will not be the same for all policyowners. The chief reason is that the principle of pooling and distribution of mortality risks is based upon the assumption that each policyowner pays a premium commensurate with the Insured's mortality risk which is actuarially determined based upon factors such as age, sex, health and occupation. In the context of life insurance, a uniform premium (or "public offering price") for all Insureds would discriminate unfairly in favor of those Insureds representing greater mortality risks to the disadvantage of those representing lesser risks. Accordingly, although there will be no uniform "public offering price" for all policyowners, there will be a single "price" for all policyowners in a given actuarial category. The policies will be offered and sold pursuant to established premium schedules(12) and underwriting standards and in accordance with state insurance laws. Such laws prohibit unfair discrimination among Insureds, but recognize that premiums must be based upon factors such as age, sex, health and occupation. Premiums and the manner in which they are determined will be described in the Account's and Equitable's 1993 Act prospectuses. The prospectuses also will specify premiums for illustrative ages and offer to furnish premium information applicable to any proposed Insured upon request. In addition, an illustration showing the premiums to be paid by a policyowner will be delivered along with the policy. - ---------- (12)In accordance with industry practice, Equitable will establish procedures to handle errors in initial and subsequent premium payments, to refund overpayments and to collect underpayments, except for the minimis amounts. - 11 - Upon receipt of a completed application from a proposed policyowner, Equitable will follow certain insurance underwriting (i.e., evaluation of risks) procedures designed to determine whether the proposed Insured is insurable. This process may involve such verification procedures as medical examinations and may require that further information be provided by the proposed policyowner before a determination can be made. A policy cannot be issued, i.e., physically issued through Equitable's computerized issue system, until this underwriting procedure has been completed. The date on which a policy is issued is referred to as the "issue date". It represents the commencement of the suicide and contestable periods for purposes of the policies. The date as of which the insurance age of the proposed Insured is determined is referred to as the "register date". It represents the first day of the policy year and therefore determines the policy anniversary. It marks the commencement of the variability of benefits, except as noted below. These processing procedures are designed to provide immediate benefits to the proposed policyowner in connection with payment of the initial premium and will not dilute any benefit payable to any existing policyowner. Although a policy cannot be issued until after the underwriting process has been completed, the proposed policyowner will receive immediate insurance coverage, if he has paid his first premium and proves to be insurable. If the full first premium is paid with the application, and no medical evidence is required, the register date will be the application date, so that variability of benefits will commence as of that date. If the full first premium is not paid with the application, the register date will be the date we receive the latest of the application, the full first premium and any required medical evidence. Except for "SP-1", there are two principal variations in the foregoing procedure. First, if the policyowner wishes that his permanent insurance protection and variability of benefits commence at a future date, he can select a period of preliminary term insurance of up to 120 days. The register date then will be at the end of the preliminary term period. Second, subject to state insurance laws, the proposed policyowner may backdate the policy up to six months, so that the premiums are based on a lower issue age. In this situation, Equitable will attach a rider to the policy so that the variability of benefits will not - ---------- (13)For "SP-1" policies, if the premium is not received at the Administrative Office within 10 days of the application date, variability will commence as of the date of receipt. - 12 - commence on the earlier register date, but on the date of completion of the application if the initial premium is paid with the application or, if the first premium is not paid with the application, the issue date. Equitable will require that the policy be delivered with a specific delivery period to protect itself against anti-selection by the proposed policyowner resulting from a deterioration of his health. Generally, the period will not exceed the shorter of 30 days from the date the policy is issued and 75 days from the date of Part 2 of the Application. Equitable will transfer the policy's first year "net annual premium" from its general account to the Account on the date the initial premium is reported paid, unless, as noted above, the policyowner selects a period of preliminary term insurance in which case the first year "net annual premium" will be transferred to the Account on the register date. This differs slightly for single premium policies. c. Anniversary and Premium Processing ---------------------------------- Except for "SP-1", at each policy anniversary (so long as premiums have been paid to that date), Equitable will transfer from the general account to the Funds the portion of the "net annual premium" allocated to each Fund by the policyowner, irrespective of whether premiums are due annually, semi-annually, quarterly or monthly. This procedure will sometimes result in Equitable's advancing monies prior to receipt of premiums. The amount of the "net annual premium" will depend upon such factors as the plan of insurance, the policyowner's age, sex and risk classification, the policy's face amount, and the period for which the policy has been in force. The amount of the "net annual premium" for the second, third and fourth policy years will be at least equal to the "net annual premium" for the first policy year, and the "net annual premium" for subsequent policy years will be at least equal to that for prior years. Premiums payable on an annual basis, which correspond to Equitable's transfer of the "net annual premium" to the Account, are based upon the assumption that, on the average, they will be paid on the anniversary, although some may be paid before and some later in the grace period. Premiums payable other than annually are based on the assumption that they will be paid on their due dates. Until such premiums are paid, Equitable will suffer a loss of interest from having advanced the "net annual premium" for the policy on the anniversary date. In order to reimburse Equitable for this loss of - 13 - interest, premiums include a charge based on an assumed annual interest rate. All premiums include a charge to reimburse Equitable for the increased costs incurred in billing and collecting. This charge is part of the administrative annual policy fee which is reflected in the premiums. d. Reinstatement ------------- If premiums are in default and if the policy has not been terminated by payment of its cash surrender value, the policy may be reinstated within five years from the date of default, upon production of evidence of insurability satisfactory to Equitable and payment of the greater of (a) all overdue premiums with interest at 6% compounded annually or (b) 110% of the difference between (i) the excess of the cash surrender value immediately following reinstatement over the cash value immediately preceding reinstatement and (ii) any indebtedness in effect at the date any option on lapse became effective, with interest at 5% (5-1/2% for The Champion), compounded annually to the date of reinstatement and any other requirements dictated by state law. Upon reinstatement the policy will have the same death benefit, cash value and indebtedness, if any, as if default had not occurred. This reinstatement provision is designed to comply with the insurance law of a number of states. e. Repayment of Loan ----------------- A loan made under Equitable's Policies may be repaid with an amount equal to the monies borrowed with interest at the 5% fixed rate (5-1/2% for The Champion) or applicable Adjustable Loan Interest Rate.(14) When a loan is made, Equitable will transfer from the Account to the general account a proportionate amount of each Division's cash surrender value totaling the loan amount. Since Equitable will credit these assets with interest at the rate of 4% (4-1/2% for The Champion), where the fixed loan rate is 5% (or 5-1/2%), or a rate of return which is .75% below the Adjustable Loan Interest Rate (minus any charges for taxes or reserves for taxes), Equitable will realize the difference between these rates and the loan rates in order to cover certain expenses and contingencies. Upon repayment of indebtedness, Equitable will reduce its general account policy loan asset and transfer assets supporting corresponding reserves to the Funds in proportion to the loan balance in each Fund. - ---------- (14)Interest rates on older policies differ. - 14 - f. Correction of Misstatement of Age or Sex ------------- If Equitable discovers that the age or sex of the Insured has been misstated, Equitable will reconstruct the policy by determining what benefits the premium paid would have purchased at the correct age or sex. Special adjustments may have to be made if the resultant face amount is below Equitable's minimum size policy. Once benefits are redetermined, Equitable will make any necessary transfers of assets into or out of the Account to reflect the reserve for the redetermined benefits and the correct age and sex of the Insured. Any amounts transferred to the general account will be treated as surplus available generally for policy benefits, expenses and other liabilities of Equitable. g. Reduction in Premium Rate Classification -------------- By administrative practice, Equitable will reduce the premium rate classification for an outstanding policy if new evidence of insurability demonstrates that the policyowner qualifies for a lower premium classification. After the reduced rating is determined, the policyowner will pay a lower premium thereafter, and Equitable will make any necessary transfers of assets into or out of the Account to reflect the reserve for benefits at the proper rating. Any amount transferred to the general account will be treated as surplus available generally for policy benefits, expenses and other liabilities of Equitable. Where applicable a similar change may be made for insureds who stop smoking. h. Annual Calculation of Death Benefit -- Rule 22c-1 --------------------- The method of calculating the death benefit under Equitable's policies is described under I.b. above. The calculation will be made on each policy's anniversary date (so long as premiums have been paid to that date), and the death benefit will remain constant during the policy year provided premiums are paid for such year. 44300 EX-99.9SCHEDULE 42 SCHEDULE RE: EVLICO'S SEPARATE ACCOUNT I Exhibit 9 --------- SCHEDULE REGARDING EQUITABLE VARIABLE'S VARIABLE LIFE INSURANCE POLICIES FUNDED BY SEPARATE ACCOUNT I AND RELATED POST-EFFECTIVE AMENDMENTS MAY 1, 1996 -------------------------------------------- Equitable Variable Life Insurance Company ("Equitable Variable") registers the interests of Separate Account I on Form S-6 in File No. 2-54015. Separate Account I funds the following policies: 1. "SP-1(TM)." This policy, offered from 1984 to 1990, is a single-premium policy with a contingent deferred sales load and a level face amount. (Equitable Variable continues to collect premiums and permit transfers of accumulated amounts under each of two series of these policies.) 2. The "Champion(TM)." This policy, offered from 1984 to 1990, is a periodic-premium policy with a contingent deferred sales load and a level face amount. (Equitable Variable continues to collect premiums and permit transfers of accumulated amounts under this policy.) 3. Basic & Expanded. These policies, offered from 1976 to 1987, are periodic-premium policies with a front-end sales load. (Equitable Variable continues to collect premiums and permit transfers of accumulated amounts under each of three series of these policies.) The polices referred to above were the subject of post-effective amendments filed with the Commission as set out below. The abbreviation "P.E." refers to a post-effective amendment. The abbreviation ("I") refers to Equitable Variable Separate Account I (File No. 811-2581), and the abbreviation ("II") refers to Separate Account II (File No. 811-3182). 1. Variable Life Insurance Policy, Level Face Amount ("Basic"), and ---------------------------------------------------------------- Variable Life Insurance Policy, Increasing Face Amount ------------------------------------------------------ ("Expanded") (Files No. 2-48988, 2-54015 and 2-72201). ------------------------------------------------------ The Basic Policy was originally registered under File No. 2-48988, and the Expanded Policy was originally registered under File No. 2-54015. The registration statements were declared effective on December 17 and December 23, 1975, respectively. The registration statements were amended separately until 1981. Beginning in 1981, the registration statements for both policies funded through Separate Account I were amended under File No. 2-54015 and, by reference pursuant to Rule 429 under the Securities Act of 1933, to File No. 2-48988. Both policies funded through Separate Account II were originally registered under File No. 2-72201, and the registration statement was amended under the same file number. On March 22, 1985 Separate Account I was combined with Separate Account II. All subsequent amendments have been filed only under File No. 2-54015. Equitable Variable discontinued its offer to sell Basic and Expanded policies in January, 1987. First Series (Basic and Expanded) - --------------------------------- P.E. No. 1(I) 6-17-76 Update (Basic; later filing for Expanded) P.E. No. 1(I) 6-22-76 Update (Expanded; earlier filing for Basic) P.E. No. 2(I) 9-3-76 Update (Each policy) P.E. No. 3(I) 3-31-77 Update (Each policy) P.E. No. 4(I) 2-16-78 Update (Each policy) P.E. No. 5(I) 4-26-78 Update (Each policy) P.E. No. 12(I) 7-29-81 Policy rider to permit funding through Separate Account II (Each policy)
Second Series (Basic and Expanded) - ---------------------------------- P.E. No. 6(I) 11-21-78 New series of policy (Specimen filed) (Each policy) P.E. No. 7(I) 12-5-78 Respond to comments on P.E. No. 6(I) (Each policy) P.E. No. 8(I) 4-27-79 Update (and first of annual supplements for preceding series) (Each policy) P.E. No. 9(I) 3-31-80 Update (Each policy) P.E. No. 10(I) 1-14-81 Supplement: additional illustrations of death benefits (Each policy) P.E. No. 11(I) 4-15-81 Update (Each policy) P.E. No. 12(I) 7-29-81 Policy rider to permit funding through Separate Account II (Each policy)
Third Series (Basic and Expanded) - --------------------------------- P.E. No. 12(I) 7-29-81 New series of policy to permit funding through Separate Account II, a registered money market account (specimens filed, on May 8, 1981, as exhibits to Form N-1 registration statement of Separate Account II) P.E. No. 13(I)& P.E. No. 1(II) 3-18-82 Update and revise prospectus disclosure format P.E. No. 14(I)& P.E. No. 2(II) 12-7-82 Supplement: revised loan provisions and reduced premiums for non-smokers and possible sale through independent broker-dealers
2 P.E. No. 15(I) & P.E. No. 3 (II) 4-26-83 Update P.E. No. 21(I) & P.E. No. 9(II) 3-9-84 Update P.E. No. 24 12-19-84 Revision to reflect proposed reorganization P.E. No. 25 3-13-85 Respond to comments on P.E. No. 24 P.E. No. 26 3-26-85 Reflect completion of reorganization and update P.E. No. 27 4-30-86 Update P.E. No. 28 9-29-86 Supplement: Update and add new investment divisions P.E. No. 29 12-18-86 Change effective date of P.E. No. 28 to 12-18-86 P.E. No. 30 2-27-87 Supplement: Update P.E. No. 31 4-29-88 Supplement: Update P.E. No. 32 5-1-89 Supplement: Update P.E. No. 33 5-1-90 Supplement: Update P.E. No. 34 2-26-91 Supplement: New Separate Account Divisions P.E. No. 35 2-26-91 Supplement: Update P.E. No. 36 4-27-92 Supplement: Update P.E. No. 37 7-23-92 Supplement: Conversion from a Mutual Life Insurance Company to a Stock Life Insurance Company P.E. No. 38 4-28-93 Supplement: Update P.E. No. 39 2-11-94 Supplement: Update P.E. No. 40 4-28-94 Supplement: Update P.E. No. 41 4-25-95 Supplement: Update
2. Single Premium Variable Life Insurance Policy ("SP-1"). ------------------------------------------------------- The original SP-1(TM) Policy, with an increasing face amount, was originally registered on Post-Effective Amendment No. 16(I) under File No. 2-54015 and on Post-Effective Amendment No. 4(II) under File No. 2-72201. Equitable Variable discontinued its offer to sell such Policy in December, 1983. The second series SP-1 Policy, with a level face amount, was registered on Post-Effective Amendment No. 23(I) under File No. 2-54015 and on Post-Effective Amendment No. 11(II) under File No. 2-72201. On March 22, 1985 Separate Account I was combined with Separate Account II. All subsequent amendments have been filed only under File No. 2-54015. Equitable Variable discontinued its offer to sell the SP-1 Policy in April, 1990. First Series (SP-1) - ------------------- P.E. No. 16(I) & P.E. No. 4(II) 7-14-83 New policy (specimen filed) P.E. No. 17(I) & P.E. No. 5(II) 8-17-83 New policy P.E. No. 18(I) & P.E. No. 6(II) 10-18-83 Supplement: sale through independent brokers
3 Second Series (SP-1) - -------------------- P.E. No. 23(I) & P.E. No. 11(II) 5-14-84 New series of policy (specimen filed) P.E. No. 24 12-19-84 Revision to reflect proposed reorganization P.E. No. 25 3-13-85 Respond to comments on P.E. No. 24 P.E. No. 26 3-26-85 Reflect completion of reorganization and update P.E. No. 27 4-30-86 Update P.E. No. 28 9-29-86 Supplement: Update and add new investment divisions P.E. No. 29 12-18-86 Change effective date of P.E. No. 28 to 12-18-86 P.E. No. 30 2-27-87 Supplement: Update P.E. No. 31 4-29-88 Supplement: Update P.E. No. 32 5-1-89 Supplement: Update P.E. No. 33 5-1-90 Supplement: Update P.E. No. 34 2-26-91 Supplement: New Separate Account Divisions P.E. No. 35 2-26-91 Supplement: Update P.E. No. 36 4-27-92 Supplement: Update P.E. No. 37 7-23-92 Supplement: Conversion from a Mutual Life Insurance Company to a Stock Life Insurance Company P.E. No. 38 4-28-93 Supplement: Update P.E. No. 39 2-11-94 Supplement: Update P.E. No. 40 4-28-94 Supplement: Update P.E. No. 41 4-25-95 Supplement: Update P.E. No. 42 4-26-96 Supplement: Update
3. Periodic Premium Variable Life Insurance Policy with Contingent --------------------------------------------------------------- Deferred Sales Load (The "Champion"). - ------------------------------------- The Champion(TM) Policy was originally registered on Post-Effective Amendment No. 19 (I) under File No. 2-54015 and on Post-Effective Amendment No. 7(II) under File No. 2-72201. On March 22, 1985 Separate Account I was combined with Separate Account II. All subsequent amendments have been filed only under File No. 2-54015. Equitable Variable discontinued its offer to sell The Champion Policy in April, 1990. P.E. No. 19(I) & P.E. No. 7(II) 12-27-83 New policy (specimen filed) P.E. No. 20(I) & P.E. No. 8(II) 2-27-84 Cancel automatic effectiveness of P.E. No. 19(I) & P.E. No. 7(II) P.E. No. 22(I) & P.E. No. 10 (II) 5-7-84 Respond to comments on P.E. No. 19(I) & P.E. No. 7(II) P.E. No. 24 12-19-84 Revision to reflect proposed reorganization
4 P.E. No. 25 3-13-85 Respond to comments on P.E. No. 24 P.E. No. 26 3-26-85 Reflect completion of reorganization and update P.E. No. 27 4-30-86 Update P.E. No. 28 9-29-86 Reorganize prospectus presentation, update, and add new investment divisions P.E. No. 29 12-18-86 Change effective date of P.E. No. 28 to 12-18-86 P.E. No. 30 2-27-87 Supplement: Update P.E. No. 31 4-29-88 Supplement: Update P.E. No. 32 5-1-89 Supplement: Update P.E. No. 33 5-1-90 Supplement: Update P.E. No. 34 2-26-91 Supplement: New Separate Account Divisions P.E. No. 35 2-26-91 Supplement: Update P.E. No. 36 4-27-92 Supplement: Update P.E. No. 37 7-23-92 Supplement: Conversion from a Mutual Life Insurance Company to a Stock Life Insurance Company P.E. No. 38 4-28-93 Supplement: Update P.E. No. 39 2-11-94 Supplement: Update P.E. No. 40 4-28-94 Supplement: Update P.E. No. 41 4-25-95 Supplement: Update P.E. No. 42 4-26-96 Supplement: Update
1813 5 EX-27 43 I 09/96 FDS (COMMON STOCK)
6 0000312576 Sep Acct I EVLICO 02 Common Stock Division 1 U. S. Dollars 9-MOS Dec-31-1996 Jan-01-1996 Sep-30-1996 1 288,721,133 505,143,180 103,275 0 0 505,246,455 0 0 11,684,138 11,684,138 0 0 0 0 0 0 0 0 0 493,562,317 3,185,919 0 0 1,776,617 1,409,302 22,394,263 38,782,344 62,585,909 0 1,409,302 61,176,607 (25,088,507) 0 0 0 37,468,856 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
EX-27 44 I 09/96 FDS (MONEY MARKET)
6 0000312576 Sep Acct I EVLICO 03 Money Market Division 1 U. S. Dollars 9-MOS Dec-31-1996 Jan-01-1996 Sep-30-1996 1 65,816,081 66,797,368 36,680 0 0 66,834,048 0 0 1,212,073 1,212,073 0 0 0 0 0 0 0 0 0 65,621,975 2,623,766 0 0 252,854 2,370,912 78,613 (86,731) 2,362,794 0 2,370,912 (8,118) (5,493,725) 0 0 0 (3,282,711) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
EX-27 45 I 09/96 FDS (AGGR STOCK)
6 0000312576 Sep Acct I EVLICO 04 Aggressive Stock Division 1 U. S. Dollars 9-MOS Dec-31-1996 Jan-01-1996 Sep-30-1996 1 19,055,900 29,473,001 16,684 0 0 29,489,685 0 0 1,041,643 1,041,643 0 0 0 0 0 0 0 0 0 28,448,042 44,822 0 0 97,706 (52,884) 3,375,023 1,318,376 4,640,515 0 (52,884) 4,693,399 707,106 0 0 0 5,229,240 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
EX-27 46 I 09/96 FDS (BALANCED)
6 0000312576 Sep Acct I EVLICO 05 Balanced Division 1 U. S. Dollars 9-MOS Dec-31-1996 Jan-01-1996 Sep-30-1996 1 33,507,147 38,786,778 16,961 0 0 38,803,739 0 0 1,205,075 1,205,075 0 0 0 0 0 0 0 0 0 37,598,664 898,355 0 0 139,177 759,178 2,427,804 (904,253) 2,282,729 0 759,178 1,523,551 (380,674) 0 0 0 1,756,146 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
EX-27 47 I 09/96 FDS (HIGH YIELD)
6 0000312576 Sep Acct I EVLICO 06 High Yield Division 1 U. S. Dollars 9-MOS Dec-31-1996 Jan-01-1996 Sep-30-1996 1 9,021,262 10,364,008 3,893 0 0 10,367,901 0 0 867,590 867,590 0 0 0 0 0 0 0 0 0 9,500,311 678,192 0 0 32,611 645,581 377,739 575,353 1,598,673 0 645,581 953,092 (171,899) 0 0 0 1,266,476 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
EX-27 48 I 09/96 FDS (INT GOVT SEC)
6 0000312576 Sep Acct I EVLICO 08 Intermed Gov Securities Div 1 U. S. Dollars 9-MOS Dec-31-1996 Jan-01-1996 Sep-30-1996 1 2,402,918 2,377,040 0 0 0 2,377,040 19 0 192,109 192,128 0 0 0 0 0 0 0 0 0 2,184,912 99,545 0 0 7,941 91,604 (40,532) (17,991) 33,081 0 91,604 (58,523) 18,377 0 0 0 22,847 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----