-----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, Il+xscK0X5cPpSXFhuXg5KgsjCQDWgryAMc3gs9LkWs1BaojTqjcC7ysbG8Tkgp6 hs2WJ1HTB93p76q7bwpY0w== 0000950146-96-000216.txt : 19960216 0000950146-96-000216.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950146-96-000216 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960213 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT /CT/ CENTRAL INDEX KEY: 0000796154 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-23251 FILM NUMBER: 96517741 BUSINESS ADDRESS: STREET 1: ONE AMERICAN ROW CITY: HARTFORD STATE: CT ZIP: 06115 BUSINESS PHONE: 2032531945 MAIL ADDRESS: STREET 1: ONE AMERICAN ROW STREET 2: ONE AMERICAN ROW CITY: HARTFORD STATE: CT ZIP: 06115 FORMER COMPANY: FORMER CONFORMED NAME: PHOENIX MUTUAL VARIABLE UNIVERSAL LIFE ACCOUNT DATE OF NAME CHANGE: 19920703 485APOS 1 February 13, 1996 Office of Insurance Products Division of Investment Management Securities and Exchange Commission 450 Fifth Street NW Washington, DC 20549 Re: Phoenix Home Life Mutual Insurance Company Phoenix Home Life Variable Universal Life Account Form S-6 Registration Statement Post-Effective Amendment No. 12 Rule 485(a) Filing VIA EDGAR To the Commission Staff: You will shortly receive one hard copy of the above-captioned post-effective amendment, which was filed today. It will be marked to show changes from Post-Effective Amendment No. 10, Amendment No. 11 having been withdrawn. This filing contains an additional Policy, Flex Edge Success, and an additional Prospectus. Flex Edge Success will replace, and is an enhanced version of, Flex Edge, a current policy. Phoenix Home Life Mutual Insurance Company (the "Company") wishes to begin sales of Flex Edge Success on May 1, 1996, subject to this amendment's becoming effective and to state regulatory clearances. Following a short transition period, the Company will discontinue sales of Flex Edge, although it will continue to accept premium payments on existing Flex Edge policies. Flex Edge has been included in this registration statement since 1988. As an enhanced version of that policy, Flex Edge Success is being filed within the same registration statement in reliance on the Staff's comment regarding policy enhancements in its November 1995 Generic Comment Letter. The Company covers its currently offered single life variable policy in the same Prospectus as Joint Edge, its multi-life variable policy. Therefore, the current Prospectus covers Flex Edge and Joint Edge. As Flex Edge Success will replace Flex Edge, the current post-effective amendment combines in one Prospectus the descriptions of Joint Edge and Flex Edge Success. Flex Edge will be covered in a second Prospectus, also filed in this amendment. That Prospectus will soon be made available only to existing policyholders, as it will not be needed for new policy sales. The new Policy's design and load structure encourages policyholders to maintain their policies for long periods of time. It has more features and options than the old Policy. Charges are somewhat higher in the early years and lower thereafter, the combined effect of which eventually produces higher cash values and higher death benefits. The new Policy has the same cost of insurance charge guarantees as the old Policy, and an improved death benefit option. A detailed discussion follows. 1. Sales Load; 6e-3(T) Testing For Flex Edge Success: The contingent deferred sales charge is equal to 75% of one guideline premium in Policy Years one through five.In the sixth through eighth Policy Years, it decreases by 0.75% per month to 48% of one guideline annual premium. In the ninth and tenth Policy Years, it decreases by 2% per month to zero at the end of the tenth Policy Year. In addition, the contingent deferred sales charge for Flex Edge Success is capped in the first two Policy Years at 28.5% of premiums paid up to one guideline annual premium, plus 8.5% of premiums paid between one and two guideline annual premiums, plus 7.5% of premiums paid in excess of two guideline annual premiums. For Flex Edge: The contingent deferred sales charge is equal to 50% of one guideline premium in Policy Years one through five. In the sixth and seventh Policy Years it decreases by .5% per month to 38% of one guideline annual premium. In the eighth and ninth Policy Years it decreases by .76% per month to 19.76% of one guideline annual premium. In the tenth Policy Year it decreases by one-twelfth of 19.76% each month to zero at the end of the tenth Policy Year. In addition, the contingent deferred sales charge for Flex Edge is capped in the first two Policy Years at 30% of premiums paid up to one guideline annual premium, plus 10% of premiums paid between one and two guideline annual premiums, plus 9% of premiums paid in excess of two guideline annual premiums. DAC Tax Premium Charge - Flex Edge Success Only: There is a deduction from premiums of 1.5% for the DAC Tax. This deduction, for the purpose of testing compliance with Rule 6e-3(T)(b)(13)(i)(A) and 6e-3(T)(b)(13)(v)(A), is considered "sales load" and no exemptive application for the DAC Tax is considered necessary. 2 2. Mortality and Expense Risk Charges In both Flex Edge and Flex Edge Success, the annualized mortality and expense risk charge during the first fifteen Policy Years is .80%. After the fifteenth Policy Year, the charge drops in Flex Edge Success to .25%, whereas it remains .80% in Flex Edge. 3. Other Aspects of Charges For Flex Edge Success, the Company will assess a uniform state premium tax load rather than, as in Flex Edge, vary by state of issuance. Net policy loan rates are lower in Flex Edge by 1/2% per year after 15 Policy Years. Administrative charges are slightly, but not materially, different for Flex Edge Success. All administrative charges go only to recover the Company's costs. 4. Improved Flex Edge Success Policy Features (Compared to Flex Edge) Apart from Charges a. Lifetime Option 2 Death Benefit: In Flex Edge, the Option 2 Death Benefit (face amount plus cash value) only applies to age 65, then reverts to Option 1 (face amount only). In Flex Edge Success, the Option 2 Death Benefit is a lifetime benefit. This change allows greater death benefit protection after age 65, and is consistent with the way many other companies' Option 2 death benefit operates. b. Elimination of Maturity Date: In Flex Edge, the policy "matures" when the insured reaches age 95, requiring the payment of the policy value to the owner, a taxable event. In Flex Edge Success, there is no maturity date, giving the owner the opportunity to continue the policy until the death of the insured, although premiums need not be paid beyond the insured's 100th birthday. c. Preferred Risk Class: For underwriting purposes, a new "top of the line" risk class has been created for Flex Edge Success, allowing lower cost of insurance rates where the insured qualifies as a Preferred Risk. This new underwriting class is appropriate for the best risks. The Company believes it has been increasingly used by insurers in recent years. d. Cash Value Accumulation Test Rider: This optional rider, available in Flex Edge Success and not in Flex Edge, allows the policyholder to pay more premiums in the early Policy Years and provides a higher minimum death benefit per dollar of account value. 3 In view of the foregoing, the two prospectuses have been filed as part of a single registration statement under Rule 485(a), with a requested effective date of May 1, 1996. A Rule 485(b) filing adding year-end 1995 financial statements, financial data schedules and other matters permitted to be filed under Rule 485(b) will be filed in April 1996 for concurrent effectiveness with the present post-effective amendment. If you have any questions, please contact the undersigned at (860)275-5788 or the Company's Washington counsel, James Bernstein of Jorden Burt Berenson & Johnson LLP, at (202)965-8175. Sincerely, /s/Richard J. Wirth - -------------------- Richard J. Wirth, Counsel 4 As filed with the Securities and Exchange Commission on February 13, 1996 Registration No. 33-23251 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- Post-Effective Amendment No. 12 to FORM S-6 -------------- FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8 B-2 -------------- Phoenix Home Life Variable Universal Life Account (Exact Name of Trust) Phoenix Home Life Mutual Insurance Company (Name of Depositor) -------------- One American Row Hartford, Connecticut 06115 (Complete address of Depositor's principal executive offices) Dona D. Young, Esquire Executive Vice President and General Counsel Phoenix Home Life Mutual Insurance Company One American Row Hartford, Connecticut 06115 (Name and complete address of agent for service) -------------- Copies to: Michael Berenson, Esq. Richard J. Wirth, Esq. Jorden Burt Berenson & Johnson, LLP Counsel 1025 Thomas Jefferson St. N.W. Phoenix Home Life Mutual Insurance Company Suite 400 East One American Row Washington, D.C. 20007-0805 Hartford, Connecticut 06115 -------------- Declaration Required By Rule 24f-2 Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant has chosen to register an indefinite amount of securities being offered. On February 28, 1995, the Registrant filed its Rule 24f-2 Notice for the Registrant's 1994 fiscal year. Form 24f-2 will be filed by February 29, 1996 for Registrant's fiscal year ended December 31, 1995. -------------- It is proposed that this filing will become effective: [ ] immediately upon filing pursuant to paragraph (b); [ ] on pursuant to paragraph (b); [ ] 60 days after filing pursuant to paragraph (a)(i); or [X] on May 1, 1996 pursuant to paragraph (a)(i) of Rule 485. [ ] this Post-Effective Amendment designates a new effective date for a previously filed post-effective amendment. -------------- Registrant is relying on the exemptive relief provided by Rule 6e-3(T) under the Investment Company Act of 1940 and elects to be governed by subparagraph (b)(13)(i)(A) of that Rule. - -------------------------------------------------------------------------------- CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-8B-2 N-8B-2 Item Caption in Prospectus 1 The VUL Account 2 Phoenix Home Life Mutual Insurance Company 3 Not Applicable 4 Sales of Policies 5 The VUL Account 6 The VUL Account 7 Not Applicable 8 Not Applicable 9 Legal Proceedings 10 The Policy 11 Investments of the VUL Account 12 Investments of the VUL Account 13 Charges and Deductions; Investments of the VUL Account 14 Premium Payment; Allocation of Issue Premium; Right to Cancel Period 15 Allocation of Issue Premium; Transfer of Policy Value 16 Investments of the VUL Account 17 Surrenders 18 Allocation of Issue Premium; Transfer of Policy Value; Reinvestment and Redemption 19 Voting Rights; Reports 20 Not Applicable 21 Policy Loans 22 Not Applicable 23 Safekeeping of the VUL Account's Assets 24 Not Applicable 25 Phoenix Home Life Mutual Insurance Company 26 Charges and Other Deductions; Investments of the VUL Account 27 Phoenix Home Life Mutual Insurance Company 28 Phoenix Home Life Mutual Insurance Company; The Directors and Executive Officers of Phoenix Home Life 29 Not Applicable 30 Not Applicable 31 Not Applicable 32 Not Applicable 33 Not Applicable 34 Not Applicable 35 Phoenix Home Life Mutual Insurance Company 36 Not Applicable 37 Not Applicable 38 Sales of Policies 39 Sales of Policies 40 Not Applicable 41 Sales of Policies 42 Not Applicable 43 Not Applicable 44 Determination of Sub-Account Values 45 Not Applicable 46 Determination of Sub-Account Values 47 Allocation of Issue Premium; Determination of Sub-Account Values 48 Not Applicable 49 Not Applicable 50 Not Applicable N-8B-2 Item Caption in Prospectus 51 Phoenix Home Life Mutual Insurance Company; The Policy; Charges and Deductions 52 Investments of the VUL Account 53 Federal Tax Considerations 54 Not Applicable 55 Not Applicable 56 Not Applicable 57 Not Applicable 58 Not Applicable 59 Not Applicable Single Life Policies and the features available under these Policies may not yet be available in your state. Please contact your Registered Representative. Version A VARIABLE LIFE INSURANCE POLICY Issued By: Phoenix Home Life Mutual Insurance Company 101 Munson Street P.O. Box 810 Greenfield, Massachusetts 01302-0810 Telephone: (800) 892-4885 PROSPECTUS May 1, 1996 This prospectus describes Flexible Premium Variable Life Insurance Policies (the "Policies"), offered by Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life"). An applicant chooses the amount of Issue Premium desired and it is then shown in the Policy. Generally, the minimum Issue Premium Phoenix Home Life will accept is the greater of $50 or 1/6 of the Planned Annual Premium. Phoenix Home Life may in some cases accept less than that amount. The amount and payment frequency of planned premiums are as shown in the Policy. If too much is paid in premium in the early Policy Years, the Policy could become a "modified endowment contract". This would cause loans and other amounts received under the Policy to be subject to tax and/or penalties. Currently, Phoenix Home Life notifies a Policyowner when a Policy becomes a modified endowment contract. Premium payments are allocated to one or more of the sub-accounts of the Phoenix Home Life Variable Universal Life Account (the "VUL Account") or to the Guaranteed Interest Account ("GIA"), as specified in the applicant's application for insurance. The VUL Account is divided into Sub-accounts, each of which invests in a corresponding series of The Phoenix Edge Series Fund or Wanger Advisor's Trust (the "Funds"). For certain Policyowners, the Issue Premium is first allocated to the Money Market Sub-account before being allocated according to the instructions in the application. There is no guaranteed minimum Policy Value except for that portion of Policy Value invested in the GIA, which has a 4% minimum interest rate guarantee. The Policy Value not invested in the GIA will vary to reflect the investment experience of the Sub-accounts of the VUL Account to which premiums have been allocated. A Policyowner bears the investment risk for all amounts so allocated. The Policy will remain in effect so long as the Policy Value or Cash Surrender Value is sufficient to pay certain monthly charges imposed in connection with the Policy. The death benefit under the Policy equals the Policy's face amount on the date of the Insured's death or, if greater, the Policy Value on the date of death increased by the applicable percentage set forth in the Policy. Other death benefit options are also available. A Policyowner may cancel the Policy within 10 days (or longer in some states), after the Policyowner receives it or 10 days after Phoenix Home Life mails or delivers a written notice of withdrawal right to the Policyowner, or within 45 days of completing the application, whichever is latest. It may not be advantageous to purchase a Policy as a replacement for your current life insurance or to supplement an existing life insurance policy. This prospectus is valid only if accompanied by or preceded by current prospectuses for the Funds. This prospectus and the prospectuses for the Funds should be read and retained for future reference. 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. 1 TABLE OF CONTENTS Page - ------------------------------------------------- VARIABLE LIFE INSURANCE POLICY 1 TABLE OF CONTENTS 2 FINANCIAL HIGHLIGHTS 3 SPECIAL TERMS 7 SUMMARY 8 PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT 10 Phoenix Home Life Mutual Insurance Company 10 The VUL Account 10 The Guaranteed Interest Account 10 THE POLICY 11 Introduction 11 Eligible Purchasers 11 Premium Payment 11 Allocation of Issue Premium 12 Right to Cancel Period 12 Temporary Insurance Coverage 12 Transfer of Policy Value 12 Determination of Sub-account Values 13 Death Benefit 13 Surrenders 14 Policy Loans 14 Lapse 15 Payment of Premiums During Period of Disability 16 Additional Insurance Options 16 Additional Rider Benefits 16 INVESTMENTS OF THE VUL ACCOUNT 17 Participating Mutual Fund 17 Investment Adviser to The Phoenix Edge Series Fund 18 Investment Adviser to The Wanger Advisors Trust 18 Reinvestment and Redemption 18 Substitution of Investments 18 Performance History 19 CHARGES AND DEDUCTIONS 20 Monthly Deduction 20 Premium Taxes 21 Federal Tax Charge 21 Mortality and Expense Risk Charge 21 Investment Management Charge 21 Other Charges 21 GENERAL PROVISIONS 23 Postponement of Payments 23 Payment by Check 23 The Contract 23 Suicide 23 Incontestability 23 Change of Owner or Beneficiary 23 Assignment 23 Misstatement of Age or Sex 23 Surplus 23 Page - ------------------------------------------------- PAYMENT OF PROCEEDS 23 Surrender and Death Benefit Proceeds 23 Payment Options 24 FEDERAL TAX CONSIDERATIONS 24 Introduction 24 Phoenix Home Life's Tax Status 25 Policy Proceeds 25 Other Taxes 26 Modified Endowment Contracts 26 Limitations on Unreasonable Mortality and Expense Charges 26 Qualified Plans 26 Diversification Standards 27 Change of Ownership or Insured or Assignment 27 VOTING RIGHTS 27 The Fund 27 Phoenix Home Life 27 THE DIRECTORS AND EXECUTIVE OFFICERS OF PHOENIX HOME LIFE 28 SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS 29 SALES OF POLICIES 29 STATE REGULATION 29 REPORTS 29 LEGAL PROCEEDINGS 29 LEGAL MATTERS 29 REGISTRATION STATEMENT 29 FINANCIAL STATEMENTS 29 APPENDIX A 32 APPENDIX B 33 THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. 2 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) Following are the unaudited Financial Highlights for the periods indicated: Money Market Sub-account ------------------------------------ Net asset value, beginning of period .... Income from investment operations Net investment income .................. Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Growth Sub-account ------------------------------------ Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss). Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. (1) Annualized 3 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) Bond Sub-account ------------------------------------ Net asset value, beginning of period ..... Income from investment operations Net investment income ................... Net realized and unrealized gain (loss) . Total from investment operations ....... Change in net asset value ................ Net asset value, end of period .... [To be filed by amendment] Total return ............................. Ratios/supplemental data: Net assets, end of period (000) ......... Ratio to average net assets of: Total expenses .......................... Net investment income ................... Portfolio turnover ....................... Total Return Sub-account ------------------------------------ Net asset value, beginning of period ..... Income from investment operations Net investment income ................... Net realized and unrealized gain (loss) . Total from investment operations ....... Change in net asset value ................ Net asset value, end of period .... [To be filed by amendment] Total return ............................. Ratios/supplemental data: Net assets, end of period (000) ......... Ratio to average net assets of: Total expenses .......................... Net investment income ................... Portfolio turnover ....................... (1) Annualized 4 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) International Sub-account ------------------------------------ Net asset value, beginning of period ..... Income from investment operations Net investment income ................... Net realized and unrealized gain (loss) . Total from investment operations ....... Change in net asset value ................ Net asset value, end of period .... [To be filed by amendment] Total return ............................. Ratios/supplemental data: Net assets, end of period (000) ......... Ratio to average net assets of: Total expenses .......................... Net investment income ................... Portfolio turnover ....................... Balanced Sub-account ------------------------------------ Net asset value, beginning of period ..... Income from investment operations Net investment income ................... Net realized and unrealized gain (loss) . Total from investment operations ....... Change in net asset value ................ Net asset value, end of period .... [To be filed by amendment] Total return ............................. Ratios/supplemental data: Net assets, end of period (000) ......... Ratio to average net assets of: Total expenses .......................... Net investment income ................... Portfolio turnover ....................... (1) Annualized 5 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) Real Estate Sub-account ------------------------------------ Net asset value, beginning of period ..... Income from investment operations Net investment income ................... Net realized and unrealized gain (loss) . Total from investment operations ....... Change in net asset value ................ Net asset value, end of period .... [To be filed by amendment] Total return ............................. Ratios/supplemental data: Net assets, end of period (000) ......... Ratio to average net assets of: Total expenses .......................... Net investment income ................... Portfolio turnover ....................... (1) Annualized STRATEGIC THEME SUB-ACCOUNT WANGER U.S. SMALL CAP SUB-ACCOUNT WANGER INTERNATIONAL SMALL CAP SUB-ACCOUNT These Sub-accounts commenced operations as of the date of this prospectus; accordingly, financials for these Sub-accounts are not yet available. 6 SPECIAL TERMS As used in this Prospectus, the following terms have the indicated meanings: Attained Age: The age of the Insured on the birthday nearest the most recent Policy Anniversary. Beneficiary: The person or persons specified by the Policyowner as entitled to receive the death benefits under a Policy. Cash Surrender Value: The Policy Value less any surrender charge that would apply on the date of surrender and less any Debt. Death Benefit Guarantee: An additional benefit rider available with the Policy that guarantees a death benefit equal to the initial face amount or the face amount as later increased or decreased, provided that Minimum Required Premiums are paid. See "Additional Rider Benefits." Debt: Outstanding loans against a Policy, plus accrued interest. General Account: The general asset account of Phoenix Home Life. Guaranteed Interest Account (GIA): An allocation option under which amounts deposited are guaranteed to earn a fixed rate of interest. Excess interest may also be credited, in the sole discretion of Phoenix Home Life. In Force: Conditions under which the coverage under a Policy is in effect and the Insured's life remains insured. Insured: The person upon whose life the Policy is issued. In Writing (Written Request): In a written form satisfactory to Phoenix Home Life and delivered to Variable and Universal Life Administration. Issue Premium: The premium payment made in connection with the issue of the Policy. Minimum Required Premium: The required premium as specified in the Policy. An increase or decrease in the face amount of the policy will change the Minimum Required Premium amount. Monthly Calculation Day: The first Monthly Calculation Day is the same day as the Policy Date. Subsequent Monthly Calculation Days are the same day of each month thereafter or, if such day does not fall within a given month, the last day of that month will be the Monthly Calculation Day. Multiple Life Policy: A Policy under which the number of Insureds is greater than one (1) but no more than five (5), and under which the death benefit is paid upon the death of the first insured to die. Payment Date: The Valuation Date on which a premium payment or loan repayment is received at Phoenix Home Life, unless it is received after the close of the New York Stock Exchange, in which case it will be the next Valuation Date. Phoenix Home Life: Phoenix Home Life Mutual Insurance Company, Hartford, Connecticut. Planned Annual Premium: The premium amount that the Policyowner agrees to pay each Policy Year. It must be at least equal to the minimum premium required for the face amount of insurance selected and must be no greater than the maximum premium allowed for the face amount selected. Policy Anniversary: Each anniversary of the Policy Date. Policy Date: The Policy Date as shown on the Schedule Page of the Policy. It is the date from which Policy Years and Policy Anniversaries are measured. Policy Month: The period from one Monthly Calculation Day up to but not including the next Monthly Calculation Day. Policyowner (Owner): The owner of a Policy. Policy Value: The sum of a Policy's share in the values of each Sub-account of the VUL Account plus the Policy's share in the values of the Guaranteed Interest Account. Policy Year: The first Policy Year is the one-year period from the Policy Date up to, but not including, the first Policy anniversary. Each succeeding Policy Year is the one-year period from the Policy anniversary up to but not including the next Policy Anniversary. Proportionate: Amounts allocated to Sub-accounts on a proportionate basis are allocated by increasing (or decreasing) a Policy's share in the value of the affected Sub-accounts so that such shares maintain the same ratio to each other before and after the allocation. Single Life Policy: A Policy that covers the life of one (1) Insured. Sub-accounts: Accounts within the VUL Account to which non-loaned assets under a Policy are allocated. Unit: A standard of measurement used in determining the value of a Policy. The value of a Unit for each Sub-account will reflect the investment performance of that Sub-account and will vary in dollar amount. Valuation Date: For any Sub-account, each date on which the net asset value of the Fund is determined. Valuation Period: For any Sub-account, the period in days from the end of one Valuation Date through the next. Variable and Universal Life Administration: Variable and Universal Life Administration Division of Phoenix Home Life Mutual Insurance Company. VUL Account: Phoenix Home Life Variable Universal Life Account. 7 SUMMARY 1. What is the Difference Between the Policy and a Conventional Fixed Benefit Life Insurance Policy? Like conventional fixed-benefit life insurance, so long as the Policy remains In Force, the Policy will provide for: (1) the payment of a death benefit to a Beneficiary upon the Insured's death; (2) the accumulation of cash value; and (3) surrender rights and Policy loan privileges. The Policy differs from conventional fixed-benefit life insurance by allowing Policyowners to allocate premiums to one or more Sub-accounts of the VUL Account or to the Guaranteed Interest Account. Each Sub-account invests exclusively in a designated portfolio of the Fund. Also, under the Policy, the Policy Value invested in the VUL Account is not guaranteed and may increase or decrease depending upon the investment experience of the Sub-accounts of the VUL Account. Accordingly, the Policyowner bears the investment risk of any depreciation in value of the underlying assets but reaps the benefits of any appreciation in value. See "Policy Value." In addition, unlike conventional fixed benefit life insurance, a Policyowner also has the flexibility to make additional premium payments and to thereby adjust the Policy Value. However, unlike conventional fixed-benefit life insurance, the Policy does not require a Policyowner to adhere to a fixed premium payment schedule. Moreover, after the payment of the Issue Premium, the failure to make additional premium payments will not in itself cause the Policy to lapse. Conversely, the payment of additional premiums will not guarantee that the Policy will remain In Force. Generally, lapse will occur when the Cash Surrender Value is insufficient to pay certain charges deducted on the Monthly Calculation Day, and a grace period expires without payment of the additional amount required. See "Lapse." If a Whole Life Exchange Option Rider is attached to the Policy, the Policy may be exchanged for a fixed-benefit whole life policy. (See "Additional Rider Benefits"). 2. Is There a Guaranteed Account Option? Yes. A Policyowner may elect to have premium payments allocated to the Guaranteed Interest Account. Amounts allocated to the GIA earn a fixed rate of interest and Phoenix Home Life may also, in its sole discretion, credit excess interest. (See Appendix A) 3. What Is the Death Benefit under the Policy? The Policy provides for the payment of benefits upon the death of the Insured. Upon application for a Policy, an applicant designates an Issue Premium. The Policy indicates the face amount of insurance. The death benefit will equal the face amount on the date of the Insured's death or, if greater, the Policy Value on the date of the Insured's death increased by the applicable percentage set forth in the Policy. If the increased death benefit option is selected, the death benefit will equal the face amount on the date of the Insured's death plus the Policy Value or, if greater, the Policy Value on the date of the Insured's death increased by the applicable percentage set forth in the Policy. Guaranteed death benefit and living benefits riders are also available. See "Death Benefit." 4. How Long Will the Policy Remain In Force? The Policy will only lapse when the Cash Surrender Value is insufficient to pay the monthly deduction (see "Charges and Deductions -- Monthly Deductions"), and a grace period expires without payment of the additional amount required. In this respect, the Policy differs in two important respects from a conventional life insurance Policy. First, the failure to pay additional premiums will not automatically cause the Policy to lapse. Second, the payment of premiums of any pre-specified amount does not guarantee that the Policy will remain In Force. A rider is available to ensure that premium payments will continue during a period of disability. 5. What Charges are There in Connection With the Policy? Monthly Deduction: A deduction is made each Policy Month from the Policy Value (excluding the value of the loaned portion of the Guaranteed Interest Account) to pay the cost of insurance provided under the Policy; the cost of any rider benefits provided; any unpaid balance of the Issue Expense Charge; and an administrative charge as shown on the schedule page of the Policy. The administrative charge may vary but in no event will it exceed $10 per month. Currently, the administrative charge is $5.00 per month. The administrative charge is set at a level designed to recover actual costs and is not designed to result in any profit to Phoenix Home Life. See "Charges and Deductions." Other Charges: A fee equal to the lesser of $25 or 2% of the partial surrender amount paid is deducted from the Policy Value for each partial surrender. A partial surrender charge equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender, determined by applying a formula, is also assessed against the VUL Account Sub-accounts or the Guaranteed Interest Account when a partial surrender is made. No charges are currently made from the VUL Account or the Guaranteed Interest Account for federal or state income taxes. If Phoenix Home Life determines that such taxes may be imposed, it may make deductions from the VUL Account to pay these taxes. Phoenix Home Life charges each Sub-account of the VUL Account the daily equivalent of 0.80% for the first 15 years and then 0.25% on an annual basis of the current value of the Sub-account's net assets for its assumption of certain mortality and expense risks incurred in connection with Single Life Policies and 0.80% on an annual basis for Multiple Life Policies. Premium amounts are also reduced by any applicable premium tax, a Federal Tax Charge of 1.50% on Single Life Policies and, for payments made during a grace period, by the amount needed to cover any monthly deductions made during the grace period. 8 Investment advisory charges are imposed on an annual basis based on the average daily net assets of the Series of the Fund as follows: Phoenix Investment Counsel, Inc. Rate for First Rate for Next Rate for Excess Series $250,000,000 $250,000,000 Over $500,000,000 - ------ ------------ ------------ ----------------- Money Market .40% .35% .30% Bond....... .50% .45% .40% Balanced... .55% .50% .45% Total Return .60% .55% .50% Growth..... .70% .65% .60% International .75% .70% .65% Strategic .75% .70% .65% Theme...... Phoenix Realty Securities, Inc. Rate for First Rate for Next Rate for Excess Series $1,000,000,000 $1,000,000,000 Over $2,000,000,000 - ------ -------------- -------------- ------------------- Real Estate .75% .70% .65% Wanger Asset Management, L.P. Rate for First Rate for Next Rate for Excess Series $1,000,000,000 $1,000,000,000 Over $2,000,000,000 - ------ -------------- -------------- ------------------- U.S. Small .98% .95% .90% Cap International 1.27% 1.20% 1.10% Small Cap In addition, each Series pays a portion or all of its other operating expenses other than the management fees; the Growth, Bond, Total Return, Money Market and Balance Series will pay up to .15%; the Real Estate and Strategic Theme Series will pay up to .25%; the International Series will pay up to .40%; the Wanger U.S. Small Cap Series will pay up to .17%; and the Wanger International Small Cap Series will pay up to .27% of its total net assets. See "Charges and Deductions." 6. Is there a Right to Cancel Period? Yes. The Policyowner may cancel the Policy within 10 days after the Policyowner receives it (or longer in some states), or 10 days after Phoenix Home Life mails or delivers a written notice of withdrawal right to the Policyowner, or within 45 days of completing the application, whichever is latest. 7. How are Premiums Allocated? If the applicant elects the Temporary Money Market Allocation Amendment in the application, Phoenix Home Life will allocate the entire Issue Premium, less applicable charges, to the Money Market Sub-account of the VUL Account. Phoenix Home Life requires this election for all applicants in certain states and for applicants in certain states who indicate on their application that they intend the Policy to replace existing insurance. At the expiration of the Right to Cancel Period for such Policyowners, the Policy Value will be allocated among the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in accordance with the Policyowner's allocation instructions in the application for insurance. All other Policyowners will have their Issue Premium less applicable charges allocated according to the instructions in the application on the date it is received without first having the premium placed in the Money Market Sub-account. The Policy Value may be allocated among the available Sub-accounts of the VUL Account, each of which invests in shares of a designated portfolio of the Fund, or to the Guaranteed Interest Account. 8. After the Initial Allocation, May I Change the Allocation of Policy Value? Yes. A Policyowner may transfer amounts among the Sub-accounts of the VUL Account or the Guaranteed Interest Account. Only one transfer per Policy Year is permitted from the unloaned portion of the Guaranteed Interest Account. The amount of that transfer is limited to the higher of $1,000 or 25% of the value of the Policy in the unloaned portion of the Guaranteed Interest Account. Also, Phoenix Home Life reserves the right to require that transfers be made by written request. Phoenix Home Life further reserves the right to permit transfers of less than $500 only if the entire balance in the Sub-account of the VUL Account or the Guaranteed Interest Account is transferred. A systematic transfer program is also available. See "Transfer of Policy Value." 9. May the Policy be Surrendered? Yes. A Policyowner may totally surrender the Policy at any time and receive the Cash Surrender Value. Subject to certain limitations, the Policyowner may also partially surrender the Policy at any time prior to the Maturity Date. In the future, Phoenix Home Life may set a minimum partial surrender amount, not to exceed $500. See "Surrenders -- Partial Surrenders." A partial surrender will result in a decrease in the death benefit under the Policy. See "Death Benefit." If the Policy is totally or partially surrendered during the first ten Policy Years, a Surrender Charge will apply. See "Surrender Charge." In addition, there may be certain tax consequences as the result of a surrender. For example, a Policy may be a "modified endowment contract" if the amount of premium paid during the first seven Policy Years is more than the amount that would have been paid if the Policy had provided for paid-up benefits after the payment of seven level annual premiums. Distributions such as loans and full or partial surrenders under a modified endowment contract may be taxable income to the extent they exceed the premiums paid. If such income is distributed before the Policyowner attains age 59 1/2, a 10% penalty tax may be imposed. See "Federal Tax Considerations." 10. What is the Policy's Loan Privilege? A Policyowner may obtain Policy loans in an amount up to 90% of the result of subtracting the remaining surrender charge from the Policy Value. The interest rate on a loan is at an effective annual rate as stated in the Policy, compounded daily and payable on each Policy Anniversary in arrears. The requested loan amount is transferred from the VUL Account to the loaned portion of the Guaranteed Interest Account and is credited with interest at an effective annual rate as stated in the Policy. Phoenix Home Life 9 reserves the right not to allow loans of less than $200 unless the loans are to pay premiums on another policy issued by Phoenix Home Life. See "The Policy -- Policy Loans." The proceeds of Policy loans may be subject to Federal income tax under certain circumstances. See "Federal Tax Considerations." 11. How are Insurance Benefits Paid? Surrender and death benefits under the Policy may be paid in a lump sum or under one of the payment options set forth in the Policy. See "Payment Options." PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT Phoenix Home Life Mutual Insurance Company Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life") is a mutual life insurance company originally chartered in Connecticut in 1851. Its executive office is at One American Row, Hartford, Connecticut 06115 and its main administrative office is at 100 Bright Meadow Boulevard, Enfield, Connecticut 06083-1900. Its New York principal office is at 99 Troy Road, East Greenbush, New York 12061. Phoenix Home Life is the nation's 13th largest mutual life insurance company and has admitted assets of approximately $12 billion. Phoenix Home Life sells insurance policies and annuity contracts through its own field force of full time agents and through brokers. Its operations are conducted in all 50 states, the District of Columbia, Canada and Puerto Rico. The VUL Account The VUL Account is a separate account of Phoenix Home Life registered as a unit investment trust under the Investment Company Act of 1940, as amended, and it meets the definition of a "separate account" under that Act. Such registration does not involve supervision of the management of the VUL Account or Phoenix Home Life by the Securities and Exchange Commission. The VUL Account currently has ten Sub-accounts available for allocation of Policy Value. If in the future Phoenix Home Life determines that marketing needs and investment conditions warrant, Phoenix Home Life may establish additional Sub-accounts, which will be made available to existing Policyowners to the extent and on a basis determined by Phoenix Home Life. Each Sub-account will invest solely in shares of the Funds allocable to one of ten portfolios, each having the specified investment objective set forth under "Investments of the VUL Account -- Participating Mutual Funds." Phoenix Home Life does not guarantee the investment performance of the VUL Account or any of its Sub-accounts. The Policy Value allocated to the VUL Account depends on the investment performance of the Fund. Thus, the Policyowner bears the full investment risk for all monies invested in the VUL Account. The VUL Account may include in advertisements, sale literature and other communications information about and Series or Adviser's current investment strategies and management style. Current strategies and style may change to allow any Series to respond quickly to changing market and economic conditions. From time to time the VUL Account may include specific portfolio holdings or industries in such communications. To illustrate components of overall performance, the Funds may separate their cumulative and average annual returns into income and capital gains components; or cite separately as a return figure the equity or bond return figure to well-known indices of market performance, including, but not limited to: the S&P 500 Index, Dow Jones Industrial Average, First Boston High Yield Index and Salomon Brothers Corporate and Government Bond Indices. The VUL Account may from time to time include in advertisements containing total return the ranking of those performance figures relative to such figures for groups of sub-accounts having similar investment objectives as categorized by ranking services such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc. Additionally, the Funds may compare a Series performance results to other investment or savings vehicles (such as certificates of deposit) and may refer to results published in various publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business Week and Investor's Daily, The Stanger Register, Stanger's Investment Adviser, The Wall Street Journal, The New York Times, Consumer Reports, Registered Representative, Financial Planning, Financial Services Weekly, Financial World, U.S. News and Work Report, Standard & Poor's The Outlook, and Personal Investor. The Funds may from time to time illustrate the benefits of tax deferral by comparing taxable investments to investments made through tax-deferred retirement plans. The total return may also be used to compare the performance of a Series against certain widely acknowledged outside standards or indices for stock and bond market performance, such as the Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones Industrial Average, Europe Australia Far East Index (EAFE), Consumer's Price Index, Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P 500 is a commonly quoted market value-weighted and unmanaged index showing the changes in the aggregate market value of 500 common stocks relative to the base period 1940-43. The S&P is composed almost entirely of common stocks of companies listed on the New York Stock Exchange, although the common stocks of a few companies listed on the American Stock Exchange or traded over the counter are included. The 500 companies represented include 400 industrial, 60 transportation and 40 financial services concerns. The S&P represents about 80% of the market value of all issues traded on the New York Stock Exchange. The VUL Account is administered and accounted for as part of the general business of Phoenix Home Life, but the income, gains, or losses of the VUL Account are credited to or charged against the assets held in the VUL Account, without regard to other income, gains, or losses of any other business Phoenix Home Life may conduct. Under New York law, the assets of the VUL Account are not chargeable with liabilities arising out of any other business Phoenix Home Life may conduct. Nevertheless all obligations arising under the Policy are general corporate obligations of Phoenix Home Life. The Guaranteed Interest Account The Guaranteed Interest Account is not part of the VUL Account. It is accounted for as part of the General Account. Phoenix Home Life reserves the right to limit cumulative deposits, including transfers, to the unloaned portion of the Guaran- 10 teed Interest Account to no more than $250,000 during any one-week period. Phoenix Home Life will credit interest daily on the amounts allocated under the Policy to the Guaranteed Interest Account. The credited rate will be uniform by class. The loaned portion of the Guaranteed Interest Account will be credited interest at an effective annual fixed rate of 2% for Single Life Policies and 6% for Multiple Life Policies. Interest on the unloaned portion of the Guaranteed Interest Account will be credited at an effective annual rate of not less than 4%. Twice each calendar month Phoenix Home Life sets the interest rate that will apply to any net premium or transferred amounts deposited to the unloaned portion of the Guaranteed Interest Account. That rate will remain in effect for such deposits for an initial guarantee period of one full year from the date of deposit. Upon expiration of the initial one-year guarantee period (and each subsequent one-year guarantee period thereafter), the rate to be applied to any deposits whose guarantee period has just ended shall be the same rate as is applied to new deposits allocated to the Guaranteed Interest Account at the time that the guarantee period expired. This rate will likewise remain in effect for a guarantee period of one full year from the date the new rate is applied. For more complete information concerning the Guaranteed Interest Account, see Appendix A. THE POLICY Introduction The Policy is a variable life insurance policy. The Policy has a death benefit, Cash Surrender Value, and loan privilege such as is associated with a traditional fixed benefit whole life policy. The Policy differs from a fixed benefit whole life policy, however, because the Policyowner specifies into which of several Sub-accounts of the VUL Account or the Guaranteed Interest Account net premium is to be allocated. Each Sub-account of the VUL Account, in turn, invests its assets exclusively in a portfolio of the Fund. The Policy Value varies according to the investment performance of the Series to which Policy Value has been allocated. Eligible Purchasers Any person up to the age of 75 is eligible to be insured under a newly purchased Policy after providing acceptable evidence of insurability. A person can purchase a Policy to insure the life of another person provided that the Policyowner has an insurable interest in the life of the Insured, and the Insured consents. A policy can also be purchased to cover from two to five lives under one Policy, for any person up to the age of 80. Under such a Multiple Life Policy, the death benefit is paid upon the first death under the Policy; the Policy then terminates. Such a Policy could be purchased on the lives of spouses, family members, business partners or other related groups. Premium Payment The minimum Issue Premium for a Policy is generally the greater of $50 or 1/6 of the Planned Annual Premium. The Issue Premium is due on the Policy Date. The Insured must be alive when the Issue Premium is paid. Thereafter, the amount and payment frequency of planned premiums are as shown on the schedule page of the Policy. All premiums are payable at Variable and Universal Life Administration, except that the Issue Premium may be paid to an authorized agent of Phoenix Home Life for forwarding to the Underwriting Department of Phoenix Home Life. Any premium payments will be reduced by the applicable premium tax and on Single Life Policies will also be reduced by a Federal Tax Charge of 1.50%. The Issue Premium will also be reduced by the Issue Expense Charge on a pro rata basis in equal monthly installments over a 12 month period. Any unpaid balance of the Issue Expense Charge will be paid to Phoenix Home Life upon Policy Lapse or termination. Premium payments received during a grace period will also be reduced by the amount needed to cover any monthly deductions during the grace period. The remainder will be applied on the Payment Date to the various Sub-accounts of the VUL Account or to the Guaranteed Interest Account, based on the premium allocation schedule elected in the application for the Policy or as later changed. The allocation schedule for premium payments may be changed by calling or writing to Variable and Universal Life Administration. Allocations to the VUL Account Sub-accounts or to the Guaranteed Interest Account must be expressed in terms of whole percentages. The number of units credited to a Sub-account of the VUL Account will be determined by dividing the portion of the net premium applied to that Sub-account by the unit value of the Sub-account on the Payment Date. A Policyowner may increase or decrease the planned premium amount or payment frequency at any time by written notice to Variable and Universal Life Administration. Phoenix Home Life reserves the right to limit increases to such maximums as may be established from time to time. Additional premium payments may be made at any time. Each premium payment must at least equal $25 or, if made during a grace period, the payment must equal the amount needed to prevent lapse of the Policy. A Policyholder may also elect a Waiver of Premium Rider. This rider provides for the waiver of certain premium payments under the Policy under certain conditions during a period of total disability of the Insured. Under its terms, the specified premium will be waived upon Phoenix Home Life's receipt of proof that the Insured is totally disabled and that the disability occurred while the rider was In Force. The Policy contains a total premium limit as shown on the Schedule Page. This limit is applied to the sum of all premiums paid under the Policy. If the total premium limit is exceeded, the Policyowner will receive the excess, with interest at an annual rate of not less than 4%, not later than 60 days after the end of the Policy Year in which the limit was exceeded. The Policy Value will then be adjusted to reflect the refund. The amount to be taken from each Sub-account or the Guaranteed Interest Account will be allocated in the same manner as provided for monthly deductions unless the Policyowner requests otherwise in writing. The total premium limit may be exceeded if additional premium is needed to prevent lapse or if Phoenix Home Life determines that additional premium would be permitted by Federal laws or regulations. A Policyowner may authorize his bank to draw $25 or more from his personal checking account monthly to purchase Units in 11 any available Sub-account. The amount the Policyowner designates will be automatically invested in the Sub-account of his choice on the date the bank draws on his account. Policies sold to officers, directors and employees of Phoenix Home Life (and their spouses and children) will be credited with an amount equal to the first-year commission that would apply on the amount of premium contributed. This option is also available to career agents of Phoenix Home Life (and their spouses and children). Allocation of Issue Premium Within 7 business days after the later of receipt of the Issue Premium and Phoenix Home Life's approval of a completed application for processing, Phoenix Home Life will allocate the Issue Premium less applicable charges to the VUL Account or to the Guaranteed Interest Account. Generally, the Issue Premium less applicable charges is directly allocated in accordance with the allocation instructions in the application for a Policy. However, Policies issued in certain states, and Policies issued in certain states pursuant to applications which state the Policy is intended to replace existing insurance, are issued with a Temporary Money Market Allocation Amendment. Under this Amendment, Phoenix Home Life temporarily allocates the entire Issue Premium paid less applicable charges (along with any other premiums paid during the Right to Cancel Period) to the Money Market Sub-account of the VUL Account, and, at the expiration of the Right to Cancel Period, the Policy Value of the Money Market Sub-account is allocated among the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in accordance with the applicant's allocation instructions in the application for insurance. Right to Cancel Period A Policy may be returned by mailing or delivering it to Phoenix Home Life within ten days after the Policyowner receives it (or longer in some states); within ten days after Phoenix Home Life mails or delivers a written notice of withdrawal right to the Policyowner; or within 45 days after the applicant signs the application for insurance, whichever occurs latest (the "Right to Cancel Period"). The returned Policy is treated as if Phoenix Home Life never issued the Policy and, except for Policies issued with a Temporary Money Market Allocation Amendment, Phoenix Home Life will return the sum of the following as of the date Phoenix Home Life receives the returned Policy: (i) the then current Policy Value less any unpaid loans and loan interest; plus (ii) any monthly deductions, partial surrender fees, and other charges made under the Policy, including investment advisory fees, or any Fund expenses deducted. The amount returned for Policies issued with the Amendment will equal any premiums paid less any unrepaid loans and loan interest, and less any partial surrender amounts paid. Phoenix Home Life reserves the right to disapprove an application for processing within 7 days of receipt at Phoenix Home Life of the completed application for insurance, in which event Phoenix Home Life will return the premium paid. Even after approval of the application for processing, Phoenix Home Life reserves the right to decline issuance of the Policy, in which event Phoenix Home Life will refund the applicant the same amount as would have been refunded under the Policy had it been issued but returned for refund during the Right to Cancel Period. Temporary Insurance Coverage On the date the application for a Policy is signed and submitted with the Issue Premium, Phoenix Home Life issues a Temporary Insurance Receipt in connection with the application. Under the Temporary Insurance Receipt, the insurance protection applied for (subject to the limits of liability and in accordance with the terms set forth in the Policy and in the Receipt) takes effect on the date of the application. Transfer of Policy Value Systematic Transfer Program A Policyowner may elect to transfer funds automatically among the Sub-accounts or the unloaned portion of the Guaranteed Interest Account ("GIA") on a monthly, quarterly, semi-annual or annual basis under the Systematic Transfer Program for Dollar Cost Averaging ("Systematic Transfer Program"). Under this Systematic Transfer Program, the minimum initial and subsequent transfer amounts are $25 monthly, $75 quarterly, $150 semi-annually, or $300 annually. A Policyowner must have an initial value of $1,000 in the GIA or the Sub-account that funds will be transferred from and if the value in that Sub-account or the GIA drops below the elected transfer amount, the entire remaining balance will be transferred and no more systematic transfers will be processed. Funds may be transferred from only one Sub-account or the GIA, but may be allocated to multiple Sub-accounts. Under the Systematic Transfer Program, Policyowners may make more than one transfer per Policy Year from the GIA, in approximately equal amounts over a minimum 18 month period. All transfers under the Systematic Transfer Program will be executed on the basis of the respective values as of the first of the month following receipt of the transfer request. If the first of the month falls on a holiday or weekend, then the transfer will be processed on the next succeeding business day. Non-Systematic Transfers Transfers among available Sub-accounts or the GIA and changes in premium payment allocations may be requested in writing or by calling 1-800-892-4885, between the hours of 8:30 AM and 4:00 PM Eastern Standard Time and will be executed on the date the request is received at Variable and Universal Life Administration, except as noted below. Unless the Policyowner elects in writing not to authorize telephone transfers or allocation changes, telephone transfer orders and allocation changes will also be accepted on behalf of the Policyowner from his or her registered representative. Phoenix Home Life and Phoenix Equity Planning Corporation ("PEPCO") will employ reasonable procedures to confirm that telephone instructions are genuine. They will require account and request verification and will record telephone instructions on tape. All telephone transfers will be confirmed in writing to the Policyowner. To the extent that procedures reasonably designed to prevent unauthorized transfers are not followed, Phoenix Home Life and PEPCO may be liable for following telephone instructions for transfers that prove to be fraudulent. 12 However, the Policyowner would bear the risk of loss resulting from instructions entered by an unauthorized third party that Phoenix Home Life and PEPCO reasonably believe to be genuine. These telephone privileges may be modified or terminated at any time and during times of extreme market volatility, may be difficult to exercise. In such cases, the Policyowner should submit a written request. Phoenix Home Life reserves the right to permit transfers of less than $500 only if the entire balance in the Sub-account or the GIA is transferred or if the Systematic Transfer Program has been elected. Phoenix Home Life reserves the right to prohibit a transfer to any Sub-account of the VUL Account where the resultant value of the Policy's share in that Sub-account immediately after the transfer would be less than $500. It further reserves the right to require that the entire balance of a Sub-account or the GIA be transferred if the share of the Policy in the value of that Sub-account would, immediately after the transfer, be less than $500. Unless Phoenix Home Life agrees otherwise or the Systematic Transfer Program has been elected, a Policyowner may make only one transfer per Policy Year from the unloaned portion of the GIA and the amount that may be transferred cannot exceed the greater of $1,000 or 25% of the value of the Policy in the unloaned portion of the GIA at the time of the transfer. Non-systematic transfers from the unloaned portion of the GIA will be effectuated on the date of receipt by Variable and Universal Life Administration except as otherwise may be requested by the Policyowner. For policies issued with the Temporary Money Market Allocation Amendment, transfers may not be made until termination of the Right to Cancel Period. Determination of Sub-account Values The unit value of each Sub-account of the VUL Account was set by Phoenix Home Life on the first valuation date of each such Sub-account. The unit value of a Sub-account of the VUL Account on any other Valuation Date is determined by multiplying the unit value of that Sub-account on the just prior Valuation Date by the Net Investment Factor for that Sub-account for the then current Valuation Period. The unit value of each Sub-account of the VUL Account on a day other than a Valuation Date is the unit value on the next Valuation Date. Unit values are carried to 6 decimal places. The unit value of each Sub-account of the VUL Account on a Valuation Date is determined at the end of that day. The Net Investment Factor for each Sub-account of the VUL Account is determined by the investment performance of the assets held by the Sub-account during the Valuation Period. Each valuation will follow applicable law and accepted procedures. The Net Investment Factor is equal to item (D) below subtracted from the result of dividing the sum of items (A) and (B) by item (C). (A) The value of the assets in the Sub-account on the current Valuation Date, including accrued net investment income and realized and unrealized capital gains and losses, but excluding the net value of any transactions during the current Valuation Period. (B) The amount of any dividend (or, if applicable, any capital gain distribution) received by the Sub-account if the "ex-dividend" date for shares of the Fund occurs during the current Valuation Period. (C) The value of the assets in the Sub-account as of the just prior Valuation Date, including accrued net investment income and realized and unrealized capital gains and losses, and including the net value of all transactions during the Valuation Period ending on that date. (D) The sum of the following daily charges multiplied by the number of days in the current Valuation Period: 1. the mortality and expense risk charge; and 2. the charge, if any, for taxes and reserves for taxes on investment income, and realized and unrealized capital gains. Death Benefit General The death benefit (under Option 1) equals the Policy's face amount on the date of the Insured's death or, if greater, the minimum death benefit on the date of death. On Single Life Policies, under Option 2, the death benefit equals the Policy's face amount on the date of the Insured's death plus the Policy Value. On Multiple Life Policies, under Option 2, the death benefit equals the Policy's face amount on the date of the first insured's death plus the Policy Value to the later of the tenth policy anniversary or policy anniversary nearest the oldest insured's age 65. Under either Option, the minimum death benefit is the Policy Value on the date of death of the Insured increased by the applicable percentage from the table contained in the Policy, based on the Insured's attained age at the beginning of the Policy Year in which the death occurs. If no option is elected, Option 1 will apply. Guaranteed Death Benefit Option For Policies with a face amount of at least $50,000, a guaranteed death benefit rider may be purchased. Under this Policy rider, if a Policyowner pays the required premium each year as specified in the rider, the death benefit selected will be guaranteed for a certain specified number of years, regardless of the investment performance of the Policy, and will equal either the initial face amount or the face amount as later changed by increases or decreases. In order to keep this guaranteed death benefit In Force, there may be limitations on the amount of partial surrenders or decreases in face amount permitted. Living Benefits Option In the event of a terminal illness of the Insured, an accelerated payment of up to 75% of the Policy's death benefit (up to a maximum of $250,000) is available if a Living Benefits Rider has been 13 purchased. The minimum face amount of the Policy after any such accelerated benefit payment is $10,000. Partial Surrender and Decreases in Face Amount: Effect on Death Benefit A partial surrender or a decrease in face amount generally decreases the death benefit. Upon a decrease in face amount or partial surrender, a partial surrender charge will be deducted from Policy Value based on the amount of the decrease or partial surrender. With a decrease in face amount, the death benefit under a Policy would be reduced on the next Monthly Calculation Day. With a partial surrender, the death benefit under a Policy would be reduced immediately. A decrease in the death benefit may have certain tax consequences. See "Federal Tax Considerations." Requests for Decrease in Face Amount A Policyowner may request a decrease in face amount at any time after the first Policy Year. Unless Phoenix Home Life agrees otherwise, the decrease must at least equal $10,000 and the face amount remaining after the decrease must at least equal $25,000. All face amount decrease requests must be in writing and will be effective on the first Monthly Calculation Day following the date Phoenix Home Life approves the request. A partial surrender charge will be deducted from the Policy Value based on the amount of the decrease. The charge will equal the applicable surrender charge that would apply to a full surrender multiplied by a fraction (the decrease in face amount divided by the face amount of the Policy before the decrease). Surrenders General At any time during the lifetime of the Insured and while the Policy is In Force, the Policyowner may partially or fully surrender the Policy by sending a written release and surrender in a form satisfactory to Phoenix Home Life to Variable and Universal Life Administration, along with the Policy if Phoenix Home Life so requires. The amount available for surrender is the Cash Surrender Value at the end of the Valuation Period during which the surrender request is received at Variable and Universal Life Administration. Upon partial or full surrender, Phoenix Home Life generally will pay the amount surrendered to the Policyowner within seven days after Phoenix Home Life receives the Written Request for the surrender. Under certain circumstances, the surrender payment may be postponed. See "General Provisions -- Postponement of Payments." For the Federal tax effects of partial and full surrenders, see "Federal Tax Considerations." Full Surrenders If the Policy is being fully surrendered, the Policy itself must be returned to Variable and Universal Life Administration, along with the written release and surrender of all claims in a form satisfactory to Phoenix Home Life. A Policyowner may elect to have the amount paid in a lump sum or under a payment option. See "Surrender Charge" and "Payment Options." Partial Surrenders A Policyowner may obtain a partial surrender of the Policy by requesting that part of the Policy's Cash Surrender Value be paid. The Policyowner may do this at any time during the lifetime of the Insured while the Policy is In Force with a Written Request to Variable and Universal Life Administration. Phoenix Home Life reserves the right to require that the Policy be returned before payment is made. A partial surrender will be effective on the date the Written Request is received or, if required, the date the Policy is received. Surrender proceeds may be applied under any of the payment options described under "Payment of Proceeds -- Payment Options." Phoenix Home Life reserves the right not to allow partial surrenders of less than $500. In addition, if the share of the Policy Value in any Sub-account or in the Guaranteed Interest Account that would be reduced as a result of a partial surrender would, immediately after the partial surrender, be less than $500, Phoenix Home Life reserves the right to require that as part of any partial surrender, the entire remaining balance in that Sub-account or the Guaranteed Interest Account be surrendered. Upon a partial surrender the Policy Value will be reduced by the sum of the following: (i) The Partial Surrender Amount Paid. This amount comes from a reduction in the Policy's share in the value of each Sub-account or the Guaranteed Interest Account based on the allocation requested at the time of the partial surrender. If no allocation request is made, the assessment to each Sub-account will be made in the same manner as that provided for monthly deductions. (ii) The Partial Surrender Fee. This fee is the lesser of $25 or 2% of the partial surrender amount paid. The assessment to each Sub-account or the Guaranteed Interest Account will be made in the same manner as provided for the partial surrender amount paid. (iii) A Partial Surrender Charge. This charge is equal to a pro- rata portion of the applicable surrender charge that would apply to a full surrender, determined by multiplying the applicable surrender charge by a fraction (equal to the partial surrender amount payable divided by the result of subtracting the applicable surrender charge from the Policy Value). This amount is assessed against the Sub-account or the Guaranteed Interest Account in the same manner as provided for the partial surrender amount paid. The Cash Surrender Value will be reduced by the partial surrender amount paid plus the partial surrender fee. The Face Amount of the Policy will also be reduced by the same amount as the Policy Value is reduced as described above. Policy Loans While the Policy is In Force, a loan may be obtained against the Policy up to the available loan value. The loan value on any day is 90% of the result of subtracting the then remaining surrender charge from the Policy Value. The available loan value is the loan value on the current day less any outstanding Debt. 14 The amount of any loan will be added to the loaned portion of the Guaranteed Interest Account and subtracted from the Policy's share of the Sub-accounts or the unloaned portion of the Guaranteed Interest Account, based on the allocation requested at the time of the loan. The total reduction will equal the amount added to the loaned portion of the Guaranteed Interest Account. Allocations must generally be expressed in terms of whole percentages. If no allocation request is made, the amount subtracted from the share of each Sub-account or the unloaned portion of the Guaranteed Interest Account will be determined in the same manner as provided for monthly deductions. Interest will be credited and the loaned portion of the GIA will increase at an effective annual rate of 2.00% on Single Life Policies and 6% on Multiple Life Policies, compounded daily and payable in arrears. At the end of each Policy Year and at the time of any Debt repayment, interest credited to the loaned portion of the GIA will be transferred to the unloaned portion of the GIA. Debt may be repaid at any time during the lifetime of the Insured while the Policy is In Force. Any Debt repayment received by Phoenix Home Life during a grace period will be reduced to cover any overdue monthly deductions and only the balance will be applied to reduce the Debt. Such balance, in excess of any outstanding accrued loan interest, will be applied to reduce the loaned portion of the Guaranteed Interest Account and will be transferred to the unloaned portion of the Guaranteed Interest Account to the extent that loaned amounts taken from such Account have not previously been repaid. Otherwise, such balance will be transferred among the Sub-accounts as the Policyowner requests upon repayment and, if no allocation request is made, according to the most recent premium allocation schedule on file. While there is outstanding Debt on the Policy, any payments received by Phoenix Home Life for the Policy will be applied directly to reduce the Debt unless specified as a premium payment by the Policyowner. Until the Debt is fully repaid, additional Debt repayments may be made at any time during the lifetime of the Insured while the Policy is In Force. Failure to repay a policy loan or to pay loan interest will not terminate the Policy except as otherwise provided under the terms of the Policy concerning the grace period and lapse. The proceeds of Policy loans may be subject to Federal income tax under certain circumstances. See "Federal Tax Considerations." In the future, Phoenix Home Life may set a minimum Policy loan amount not to exceed $200. However, any such minimum loan amount will not apply to any loan, the proceeds of which are used to pay a premium due on another policy issued by Phoenix Home Life. The Policyowner will pay interest on the loan at an effective annual rate, compounded daily and payable in arrears. For the first ten Policy Years or until the Policyowner reaches age 65, whichever occurs first, the rate will be 4.00% on Single Life Policies and 8% on Multiple Life Policies. The loan interest rate in subsequent years will be 3% for five years, then 21/2% thereafter for Single Life Policies and 7% thereafter for Multiple Life Policies. At the end of each Policy Year, any interest due on the Debt will be treated as a loan and will be offset by a transfer from the Policyowner's values to the value of the loaned portion of the Guaranteed Interest Account. A Policy loan, whether or not repaid, has a permanent effect on the Policy Value because the investment results of the Sub-accounts or unloaned portion of the Guaranteed Interest Account will apply only to the amount remaining in the Sub-accounts or the unloaned portion of the Guaranteed Interest Account. The longer a loan is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable. If the Sub-accounts or the unloaned portion of the Guaranteed Interest Account earn more than the annual interest rate for funds held in the loaned portion of the Guaranteed Interest Account, Policy Value does not increase as rapidly as it would have had no loan been made. If the Sub-accounts or the Guaranteed Interest Account earn less than the annual interest rate for funds held in the loaned portion of the Guaranteed Interest Account, Policy Value is greater than it would have been had no loan been made. A Policy loan, whether or not repaid, also has an effect on the Policy's Death Benefit due to any resulting differences in Cash Surrender Value. Lapse Unlike conventional life insurance policies, the payment of the Issue Premium, no matter how large, or the payment of additional premiums will not necessarily continue the Policy In Force to its Maturity Date. Policy Value must remain positive to avoid lapse. Beginning in the third Policy Year, the Cash Surrender Value must also be positive to avoid lapse. However, until the Cash Surrender Value becomes positive for the first time, the Policy will not lapse as long as all premiums planned at issue have been paid. Subject to the foregoing, lapse will occur when the Cash Surrender Value is insufficient to cover the monthly deduction, and a grace period expires without payment of the additional amount required. If the Cash Surrender Value is insufficient to cover the monthly deduction, the Policyowner must pay during the grace period the amount needed to equal three times the required monthly deduction. See "Charges and Deductions." If on any Monthly Calculation Day during the first two Policy Years, the Policy Value is insufficient to cover the monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. If on any Monthly Calculation Day during any subsequent Policy Year, the Cash Surrender Value (which has become positive) is less than the required monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. The Policy will continue In Force during any such grace period although, Sub-account transfers, loans, partial or full surrenders will not be permitted. Failure to pay the additional amount within the grace period will result in lapse of the Policy, but not before 30 days have elapsed since Phoenix Home Life mailed written notice to the Policyowner. If a premium payment for the additional amount is received by Phoenix Home Life during the grace period, any amount of premium over what is required to prevent lapse will be allocated among the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in accordance with the then current premium allocation schedule. In determining the amount of "excess" premium to be 15 applied to the Sub-accounts or the Guaranteed Interest Account, Phoenix Home Life will deduct the premium tax and the amount needed to cover any monthly deductions made during the grace period. If the Insured dies during the grace period, the death benefit will equal the amount of the death benefit immediately prior to the commencement of the grace period. Payment of Premiums During Period of Disability A Policyholder may also elect a Waiver of Premium Rider. This rider provides for the waiver of certain premium payments under the Policy under certain conditions during a period of total disability of the Insured. Under its terms, the specified premium will be waived upon Phoenix Home Life's receipt of proof that the Insured is totally disabled and that the disability occurred while the rider was In Force. The terms of this rider may vary by state. Additional Insurance Options While the Policy is In Force and the Policyowner is insurable, the Policyowner will have the option to purchase additional insurance on the same Insured with the same guaranteed rates as the Policy without being assessed an Issue Expense Charge. Phoenix Home Life will require evidence of insurability and charges will be adjusted for the Insured's new attained age and any change in risk classification. However, if elected on the application, the Policyowners may, at predetermined future dates, purchase additional insurance protection on the same Insured without evidence of insurability (See "Purchase Protection Plan Riders"). In addition, once each Policy Year, for Single Life Policies only, a Policyowner may request an increase in face amount. This request should be made within 90 days prior to the Policy Anniversary and is subject to an issue expense charge of $1.50 per $1,000 of increase in face amount, up to a maximum of $600, and to Phoenix Home Life's receipt of adequate evidence of insurability. A Right to Cancel Period as described in "The Policy" section of this Prospectus applies to each increase in face amount. Additional Rider Benefits A Policyowner may purchase additional benefits under a Policy. These benefits are cancellable by the Policyowner at any time. A charge will be deducted monthly from your Policy Value for each additional rider benefit you choose except where noted below. More details will be included in the form of a rider to your Policy if you choose any of these benefits. The following benefits are currently available; however, additional riders may be available as described in the Policy. Single Life Policies: (bullet) Disability Waiver of Specified Premium Rider Phoenix Home Life waives the specified premium if the Insured becomes totally disabled and the disability continues for at least six months. Premiums will be waived to the Policy Anniversary nearest the Insured's 65th birthday (provided that the disability continues), unless premiums have been waived continuously during the entire five years prior to such date in which case the waiver will continue beyond that date. The premium will be waived upon Phoenix Home Life's receipt that the Insured is totally disabled and that the disability occurred while the rider was In Force. The terms vary in New York. (bullet) Accidental Death Benefit Rider An additional death benefit will be paid if the Insured dies from bodily injury that results from an accident if the Insured dies no later than 90 days after injury; and before the Policy Anniversary nearest the Insured's 75th birthday. (bullet) Death Benefit Protection Rider The purchase of this rider provides that the death benefit will be guaranteed. The amount of the guaranteed death benefit is equal to the initial face amount, or the face amount that may later be increased or decreased by the Policyholder provided that certain minimum premiums are paid. Unless Phoenix Home Life agrees otherwise, the initial face amount and the face amount remaining after any decrease must at least equal $50,000 and the minimum issue age of the Insured is 20. Three (3) death benefit guarantee periods are available in all States except New York. The minimum premium required to maintain the guaranteed death benefit is based on the length of the guarantee period as elected on the application. The 3 available guarantee periods are: Level: Expiry Date of Death Benefit Guaranteed, the later of: 1 The Policy Anniversary nearest the Insured's 70th birthday or the 7th Policy Year 2 The Policy Anniversary nearest the Insured's 80th birthday or the 10th Policy Year 3 The Policy Anniversary nearest the Insured's 95th birthday. Level 1 or 2 guarantees may be extended provided that the Policy's Cash Surrender Value is sufficient and the Policyowner pays the new Minimum Required Premium. For Policies issued in New York, two guarantee periods are available: 1 The Policy Anniversary nearest the Insured's 75th birthday or the 10th Policy Year 2 The Policy Anniversary nearest the Insured's 95th birthday. (bullet) Face Amount of Insurance Increase Rider Under the terms of this rider, any time after the first Policy Anniversary, a Policyholder may request an increase in the face amount of insurance provided under the Policy. Requests for face amount increases must be made in writing, and Phoenix Home Life requires additional evidence of insurability. The effective date of the increase will generally be the Policy Anniversary following approval of the increase. The increase may not be less than $25,000 and no increase will be permitted after the Insured's age 75. The charge for the increase is $1.50 per thousand of face 16 amount increase requested subject to a maximum of $600. No additional monthly administration charge will be assessed for face amount increases. Phoenix Home Life will deduct any charges associated with the increase (the increases in cost of insurance charges), from the Policy Value, whether or not the Policyowner pays an additional premium in connection with the increase. The surrender charge applicable to the Policy will also increase. At the time of the increase, the Cash Surrender Value must be sufficient to pay the monthly deduction on that date, or additional premiums will be required to be paid on or before the effective date. Also, a new Right to Cancel period (see "The Policy -- Right to Cancel Period") will be established for the amount of the increase. For a discussion of possible implications of a material change in the Policy resulting from the increase, see "Material Change Rules." There is no charge for this rider. (bullet) Whole Life Exchange Option Rider This rider permits the Policyowner to exchange his Policy for a fixed-benefit whole life policy at the later of age 65 or Policy Year 15. There is no charge for this rider. (bullet) Purchase Protection Plan Rider Under this rider a Policyowner may, at pre-determined future dates, purchase additional insurance protection without evidence of insurability. (bullet) Living Benefits Rider Under certain conditions, in the event of the terminal illness of the Insured, an accelerated payment of up to 75% of the Policy's death benefit (up to a maximum of $250,000) is available. The minimum face amount of the Policy after any such accelerated benefit payment is $10,000. There is no charge for this rider. (bullet) Cash Value Accumulation Rider This rider generally permits a Policyowner to pay more in premium than would otherwise be permitted. This rider must be elected before the Policy is issued. There is no charge for this rider. Multiple Life Policies: (bullet) Disability Benefit Rider In the case of disability of the Insured, a specified monthly amount may be credited to the Policy and the monthly deductions will be waived. A Disability Benefit Rider may be provided on any or all eligible Insureds. The specified amount selected must be the same for all who elect coverage. (bullet) Survivor Purchase Option Rider The survivor(s) may purchase a new Multiple Life Policy for a face amount equal to that of the original Policy upon the first death. The new Policy will be based upon attained age rates. (bullet) Term Insurance Rider The Term Insurance Rider enables the face amount of coverage on each life to be individually specified. A rider is available for each Insured and the face amount of coverage under the rider may differ for each Insured. Based upon the Policyowner's election at issue, the rider will provide coverage for all Insureds to either age 70 or maturity of the Policy. The termination age specified must be the same for all Insureds. (bullet) Policy Exchange Option Rider The Multiple Life Policy may be exchanged for Single Life Policies where the total face amount under the Policies is no greater than that under the original Policy. There is no charge for this rider. INVESTMENTS OF THE VUL ACCOUNT Participating Mutual Funds THE PHOENIX EDGE SERIES FUND Certain Sub-accounts of the VUL Account invest in corresponding Series of The Phoenix Edge Series Fund. The fund currently has the following Series available through the Policies: Money Market Series: The investment objective of the Money Market Series is to provide maximum current income consistent with capital preservation and liquidity. Growth Series: The investment objective of the Growth Series is to achieve intermediate and long-term growth of capital, with income as a secondary consideration. Bond Series: The investment objective of the Bond Series is to seek long-term total return by investing in a diversified portfolio of high yield (high risk) and high quality fixed income securities. For a discussion of the risks associated with investing in high yield bonds, please see the accompanying Fund prospectus. Total Return Series: The investment objective of the Total Return Series is to realize as high a level of total rate of return over an extended period of time as is considered consistent with prudent investment risk (total rate of return consists of capital appreciation, current income, including dividends and interest, possible premiums and short-term gains from purchasing and selling options and financial futures). International Series: The investment objective of the International Series is to seek a high total return consistent with reasonable risk. The International Series intends to invest primarily in an internationally diversified portfolio of equity securities. It intends to reduce its risk by engaging in hedging transactions involving options, futures contracts and foreign currency transactions. The International Series provides a means for investors to invest a portion of their assets outside the United States. Balanced Series: The investment objective of the Balanced Series is to seek reasonable income, long-term capital growth and conservation of capital. The Balanced Series intends to invest based on combined considerations of risk, income, capital enhancement and protection of capital value. Real Estate Series: The investment objective of the Real Estate Securities Series is to seek capital appreciation and 17 income with approximately equal emphasis. It intends under normal circumstances to invest in marketable securities of publicly traded real estate investment trusts (REITs) and companies that operate, develop, manage and/or invest in real estate located primarily in the United States. Strategic Theme Series: The investment objective of the Strategic Theme Series is to seek long-term appreciation of capital by identifying securities benefiting from long-term trends present in the United States and abroad. The Strategic Theme Series intends to invest primarily in common stocks believed to have substantial potential for capital growth. WANGER ADVISOR'S TRUST Certain Sub-accounts of the VUL Account invest in corresponding Series of the Wanger Advisors Trust. The available Series and their fundamental objectives are as follows: Wanger U.S. Small Cap ("U.S. Small Cap") Series: The investment objective of the U.S. Small Cap Series is to provide long-term growth. The U.S. Small Cap will invest primarily in securities of U.S. companies with total common stock market capitalization of less than $1 billion. Wanger International Small Cap ("International Small Cap") Series: The investment objective of the International Small Cap Series is to provide long-term growth. The International Small Cap will invest primarily in securities of non-U.S. companies with total common stock market capitalization of less than $1 billion. Each Series will be subject to the market fluctuations and risks inherent in the ownership of any security and there can be no assurance that any Series' stated investment objective will be realized. In addition to being sold to the VUL Account, shares of the Funds are also sold to the Phoenix Home Life Variable Accumulation Account, a separate account utilized by Phoenix Home Life to receive and invest premiums paid under certain variable annuity contracts issued by Phoenix Home Life. Shares of the Fund may also be sold to other separate accounts of Phoenix Home Life or its affiliates or of other insurance companies. It is conceivable that in the future it may be disadvantageous for variable life insurance separate accounts and variable annuity separate accounts to invest in the Fund simultaneously. Although neither Phoenix Home Life nor the Fund currently foresees any such disadvantages either to variable life insurance Policyowners or to variable annuity Contractowners, the Fund's Trustees intend to monitor events in order to identify any material conflicts between variable life insurance Policyowners and variable annuity Contractowners and to determine what action, if any, should be taken in response thereto. Material conflicts could result from, for example, (1) changes in state insurance laws, (2) changes in Federal income tax laws, (3) changes in the investment management of any portfolio of the Fund, or (4) differences in voting instructions between those given by variable life insurance Policyowners and those given by variable annuity Contract- owners. Phoenix Home Life will, at its own expense, remedy such material conflict including, if necessary, segregating the assets underlying the variable life insurance policies and the variable annuity contracts and establishing a new registered investment company. Investment Advisers to The Phoenix Edge Series Fund The Phoenix Edge Series Fund's investment advisers are Phoenix Investment Counsel, Inc. ("PIC") and Phoenix Realty Securities, Inc. ("PRS") (the "Advisers"), both of which are located at One American Row, Hartford, Connecticut 06115. PIC was originally organized in 1932 as John P. Chase, Inc. In addition to the Fund, it also serves as investment adviser to the Phoenix Series Fund, Phoenix Total Return Fund, Inc. and Phoenix Multi-Portfolio Fund and as sub-adviser to American Skandia, Chubb America Fund, Inc., Sun America Series Trust and JNL Series Trust. PRS was formed in 1994 as an indirect subsidiary of Phoenix Home Life. In addition to the Fund, it also serves as investment adviser to the Real Estate Portfolio of the Phoenix Multi Portfolio Fund. ABKB/LaSalle Securities Limited Partnership (ABKB), a subsidiary of LaSalle Partners, serves as sub-adviser to the Real Estate Series. ABKB's principal place of business is located at 100 East Pratt Street, Baltimore, Maryland 21202. ABKB has been a registered investment adviser since 1979. All of the outstanding stock of PIC is owned by Phoenix Equity Planning Corporation ("PEPCO"), an indirect subsidiary of Phoenix Home Life. PEPCO also performs bookkeeping and pricing and administrative services for the Fund. PEPCO is registered as a broker-dealer in fifty states. The executive offices of Phoenix Home Life are located at One American Row, Hartford, Connecticut 06115 and the principal offices of PEPCO are located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200. Investment Advisers to the Wanger Advisor's Trust The investment advisor to the Wanger Advisors Trust is Wanger Asset Management, L.P. Wanger's principal place of business is located at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. The Advisers furnish continuously an investment program for each Series and manage the investment and reinvestment of the assets of each Series subject at all times to the authority and supervision of the Trustees. A more detailed discussion of the Advisers and the Investment Advisory Agreements is contained in the accompanying prospectus for the Fund. Reinvestment and Redemption All dividend distributions of the Fund are automatically reinvested in shares of the Fund at their net asset value on the date of distribution; all capital gains distributions of the Fund, if any, are likewise reinvested at the net asset value on the record date. Phoenix Home Life redeems Fund shares at their net asset value to the extent necessary to make payments under the Policy. Substitution of Investments Phoenix Home Life reserves the right, subject to compliance with the law as currently applicable or subsequently changed, to make additions to, deletions from, or substitutions for the investments held by the VUL Account. In the future Phoenix Home Life may establish additional Sub-accounts within the VUL Account, 18 each of which will invest in shares of a designated portfolio of the Fund with a specified investment objective. These portfolios will be established if, and when, in the sole discretion of Phoenix Home Life, marketing needs and investment conditions warrant, and will be made available under existing Policies to the extent and on a basis to be determined by Phoenix Home Life. If shares of any of the portfolios of the Fund should no longer be available for investment, or if in the judgment of Phoenix Home Life's management further investment in shares of any of the portfolios should become inappropriate in view of the objectives of the Policy, then Phoenix Home Life may substitute shares of another mutual fund for shares already purchased, or to be purchased in the future, under the Policy. No substitution of mutual fund shares held by the VUL Account may take place without prior approval of the Securities and Exchange Commission and prior notice to the Policyowner. In the event of a substitution, the Policyowner will be given the option of transferring the Policy Value of the Sub-account in which the substitution is to occur to another Sub-account. Performance History From time to time the VUL Account may include the performance history of any or all Sub-accounts, in advertisements, sales literature or reports. Performance information about each Sub-account is based on past performance only and is not an indication of future performance. Performance information may be expressed as yield and effective yield of the Money Market Sub-account, as yield of the Bond Sub-account and as total return of any Sub-account. Current yield for the Money Market Sub-account will be based on the income earned by the Sub-account over a given 7-day period (less a hypothetical charge reflecting deductions for expenses taken during the period) and then annualized, i.e., the income earned in the period is assumed to be earned every seven days over a 52-week period and is stated in terms of an annual percentage return on the investment. Effective yield is calculated similarly but reflects the compounding effect of earnings on reinvested dividends. Yield and effective yield reflect the recurring charges on the Account level including the monthly administrative charge. Yield calculations of the Money Market Sub-account used for illustration purposes are based on the consideration of a hypothetical participant's account having a balance of exactly one Unit at the beginning of a seven day period, which period will end on the date of the most recent financial statements. The yield for the Sub-account during this seven day period will be the change in the value of the hypothetical participant's account's original Unit. The following is an example of this yield calculation for the Money Market Sub-account based on a seven day period ending December 31, 1995. Example: Assumptions: Value of hypothetical pre-existing account with exactly one unit at the beginning of the period:...................... * Value of the same account (excluding capital changes) at the end of the seven day period: * Calculation: Ending account value ......................... * Less beginning account value ................. * Net change in account value .................. * Base period return: (adjusted change/beginning account value) .... * Current yield = return x (365/7)= ........... * Effective yield = [( 1 + return)365/7] - 1 = * *[To be filed by Amendment] The current yield and effective yield information will fluctuate, and publication of yield information may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies, due to charges which will be deducted on the Account level. For the Bond Sub-account, quotations of yield will be based on all investment income per unit earned during a given 30-day period (including dividends and interest), less expenses accrued during the period ("net investment income"), and are computed by dividing net investment income by the maximum offering price per unit on the last day of the period. When a Sub-account advertises its total return, it will usually be calculated for one year, five years, and ten years or since inception if the Sub-account has not been in existence for at least ten years. Total return is measured by comparing the value of a hypothetical $10,000 investment in the Sub-account at the beginning of the relevant period to the value of the investment at the end of the period, assuming the reinvestment of all distributions at net asset value and the deduction of applicable Policy charges except for the cost of insurance and any surrender charges and premium taxes (which vary by Insured and state). For those Sub-accounts within the VUL Account that have not been available for one of the quoted periods, the standardized average annual total return quotations will show the investment performance such Sub-account would have achieved (reduced by the applicable charges) had it been available to invest in shares of the Fund for the period quoted. Below are quotations of standardized average annual total return of Series of the Phoenix Edge Series Fund. Policy charges are not reflected. Average Annual Total Return For the period Ended 12/31/94 Series Commencement Date 1 Year 5 Years 10 Years Life of Fund - -------- -------- ------ ------- -------- ------------ Bond ........ 01/01/83 Balanced .... 05/01/92 [To be filed by Amendment] Total Return ..... 09/17/84 Growth ...... 01/01/83 International 05/01/90 Real Estate ..... 05/01/95 Annual Total Returns Total Year Bond Balanced Return Growth International - --------- ----- ------ ------ ----- ------------ 1983...... 5.1% N/A N/A 31.7% N/A 1984...... 10.3% N/A -1.4% 9.7% N/A 19 Annual Total Returns Total Year Bond Balanced Return Growth International - -------- ---- ------ ----- ------ ------------- 1985...... 19.5% N/A 26.2% 33.7% N/A 1986...... 18.2% N/A 14.7% 19.4% N/A 1987...... 0.2% N/A 11.6% 6.0% N/A 1988...... 9.5% N/A 1.4% 3.0% N/A 1989...... 6.9% N/A 18.4% 34.4% N/A 1990...... 4.4% N/A 5.1% 3.2% -8.9% 1991...... 18.5% N/A 28.1% 41.5% 18.7% 1992...... 9.1% 8.8% 9.7% 9.3% -13.6% 1993...... 15.0% 7.8% 10.1% 18.8% 37.3% 1994...... -6.2% -3.6% -2.2% 0.7% -0.7% 1995...... [To be filed by Amendment] Annual Total Returns Real Wanger Wanger Strategic Year Estate US Small Cap Int'l Small Cap Theme - ------ ------- ------- ---------- ----- 1983.... N/A N/A N/A N/A 1984.... N/A N/A N/A N/A 1985.... N/A N/A N/A N/A 1986.... N/A N/A N/A N/A 1987.... N/A N/A N/A N/A 1988.... N/A N/A N/A N/A 1989.... N/A N/A N/A N/A 1990.... N/A N/A N/A N/A 1991.... N/A N/A N/A N/A 1992.... N/A N/A N/A N/A 1993.... N/A N/A N/A N/A 1994.... N/A N/A N/A N/A 1995.... [To be filed by Amendment] N/A THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE. THEY DO NOT ILLUSTRATE HOW ACTUAL PERFORMANCE WILL AFFECT THE BENEFITS UNDER A POLICY; FOR THIS INFORMATION SEE APPENDIX B "ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES." The Fund's Annual Report, available upon request and without charge, contains a discussion of the performance of the Fund and a comparison of that performance to a securities market index. CHARGES AND DEDUCTIONS Charges are deducted in connection with the Policy to compensate Phoenix Home Life for: (1) incurring expenses in distributing the Policy; (2) issuing the Policy; (3) premium and Federal Taxes incurred on premiums received; (4) providing the insurance benefits set forth in the Policy; and (5) assuming certain risks in connection with the Policy. The nature and amount of these charges are described more fully below. 1. Monthly Deduction A charge is deducted monthly from the Policy Value under a Policy ("monthly deduction") to pay: the cost of insurance provided under the Policy, the cost of any rider benefits provided, any unpaid balance of the issue expense charge, and an administrative charge. This administrative charge is currently set at $5.00 per month but it is guaranteed not to exceed $10.00 per month. The monthly deduction is deducted on each Monthly Calculation Day. It is allocated among the Sub-accounts of the VUL Account and the unloaned portion of the Guaranteed Interest Account based on the allocation schedule for monthly deductions specified by the applicant in the application for a Policy or as later changed by the Policyowner. In the event that the Policy's share in the value of the Sub-accounts or the unloaned portion of the Guaranteed Interest Account is insufficient to permit the withdrawal of the full monthly deduction, the remainder will be taken on a proportionate basis from the Policy's share of each of the other Sub-accounts and the unloaned portion of the Guaranteed Interest Account. The number of units deducted will be determined by dividing the portion of the monthly deduction allocated to each Sub-account or to the unloaned portion of the Guaranteed Interest Account by the unit value on the Monthly Calculation Day. Because portions of the monthly deduction, such as the cost of insurance, can vary from month to month, the monthly deduction itself may vary in amount from month to month. (a) Issue Expense Charge. A cost-based issue administration charge is assessed on a pro rata basis in equal monthly installments over a 12 month period to compensate Phoenix Home Life for underwriting and start-up expenses in connection with issuing a Policy. For Multiple Life Policies, the issue administrative charge is $150. For Single Life Policies, the issue administrative charge is $1.50 per $1,000 of face amount, up to a maximum charge of $600. Phoenix Home Life may reduce or eliminate the Issue Expense Charge for Policies issued under group or sponsored arrangements. Generally, administrative costs per Policy vary with the size of the group or sponsored arrangement, its stability as indicated by its term of existence and certain characteristics of its members, the purposes for which the Policies are purchased and other factors. The amounts of any reductions will be considered on a case-by-case basis and will reflect the reduced administration costs expected as a result of sales to a particular group or sponsored arrangement. (b) Cost of Insurance. In order to calculate the cost of insurance charge, Phoenix Home Life multiplies the applicable cost of insurance rate by the difference between the death benefit selected (death benefit Option 1 if no selection is made) and the Policy Value. Generally, cost of insurance rates are based on the sex, attained age and risk class of the Insured. However, in certain states and for policies issued in conjunction with certain qualified plans, cost of insurance rates are not based on sex. The actual monthly cost of insurance rates are based on Phoenix Home Life's expectations of future experience. They will not, however, be greater than the guaranteed cost of insurance rates set forth in the Policy. These guaranteed maximum rates are equal to 100% of the 1980 Commissioner's Standard Ordinary ("CSO") Mortality Table, with appropriate adjustment for the Insured's risk classification. Any change in the cost of insurance rates will apply to all persons of the same sex, insurance age and risk class whose 20 Policies have been In Force for the same length of time. The risk class of an Insured may affect the cost of insurance rate. Phoenix Home Life currently places Insureds into a preferred or standard risk class or a risk class involving a higher mortality risk, depending upon the health of the Insured as determined by medical information that Phoenix Home Life requests. In an otherwise identical Policy, Insureds in the preferred or standard risk class will have a lower cost of insurance than those in the risk class with the higher mortality risk. The standard risk class is also divided into categories: smokers, nonsmokers and those who have never smoked. Non-smokers will generally incur a lower cost of insurance than similarly situated Insureds who smoke. A blended cost of insurance rate is applied under Multiple Life Policies. 2. Premium Taxes Various states and subdivisions impose a tax on premiums received by insurance companies. Premium taxes vary from state to state. Currently, the taxes imposed by states on premiums range from 0.75% to 4% of premiums paid. Moreover, certain municipalities in Louisiana, Kentucky and South Carolina also impose taxes on premiums paid, in addition to the state taxes imposed. The premium tax charge represents an amount Phoenix Home Life considers necessary to pay all premium taxes imposed by such states and any subdivisions thereof, and Phoenix Home Life does not expect to derive a profit from this charge. These taxes are deducted from the Issue Premium, and from each subsequent premium payment. 3. Federal Tax Charge On Single Life Policies, a charge equal to 1.50% of each premium will be deducted from each premium payment to cover the estimated cost to Phoenix Home Life of the Federal Income Tax treatment of deferred acquisition costs. The SEC maximum sales load has been reduced to reflect this charge. 4. Mortality and Expense Risk Charge Phoenix Home Life will deduct a daily charge from the VUL Account at an annual rate of 0.80% of the average daily net assets of the VUL Account to compensate for certain risks assumed in connection with the Policy. For Single Life Policies, a reduced annual rate of .25% will apply after the 15th Policy Year. This charge is not deducted from the Guaranteed Interest Account. The mortality risk assumed by Phoenix Home Life is that Insureds may live for a shorter time than projected because of inaccuracies in that projecting process and, accordingly, that an aggregate amount of death benefits greater than that projected will be payable. The expense risk assumed is that expenses incurred in issuing the Policies may exceed the limits on administrative charges set in the Policies. If the expenses do not increase to an amount in excess of the limits, or if the mortality projecting process proves to be accurate, Phoenix Home Life may profit from this charge. Phoenix Home Life also assumes risks with respect to other contingencies including the incidence of Policy loans, which may cause Phoenix Home Life to incur greater costs than anticipated when designing the Policies. To the extent Phoenix Home Life profits from this charge, it may use those profits for any proper purpose, including the payment of sales expenses or any other expenses that may exceed income in a given year. 5. Investment Management Charge As compensation for investment management services to the Funds, the Advisers are entitled to fees, payable monthly and based on an annual percentage of the average aggregate daily net asset values of each Series as summarized in the following table: Phoenix Investment Counsel, Inc. -------------------------------- Rate for First Rate for Next Rate for Excess Over Series $250,000,000 $250,000,000 $500,000,000 - ------ ------------ ------------ ------------ Money Market .40% .35% .30% Bond .50% .45% .40% Balanced .55% .50% .45% Total Return .60% .55% .50% Growth .70% .65% .60% International .75% .70% .65% Strategic Theme .75% .70% .65% Phoenix Realty Securities, Inc. Rate for First Rate for Next Rate for Excess Over Series $1,000,000,000 $1,000,000,000 $2,000,000,000 - ------ -------------- -------------- -------------- Real Estate .75% .70% .65% Wanger Asset Management, L.P. Rate for First Rate for Next Rate for Excess Over Series $1,000,000,000 $1,000,000,000 $2,000,000,000 - ------ -------------- -------------- -------------- U.S. Small .98% .95% .90% Cap International 1.27% 1.20% 1.10% Small Cap In addition, each Series pays a portion or all of its other operating expenses other than the management fees; the Growth, Bond, Total Return, Money Market and Balance Series will pay up to .15%; the Real Estate and Strategic Theme Series will pay up to .25%; the International Series will pay up to .40%; the Wanger U.S. Small Cap Series will pay up to .17%; and the Wanger International Small Cap Series will pay up to .27% of its total net assets. See "Charges and Deductions." 6. Other Charges Surrender Charge During the first ten years, there is a difference between the amount of Policy Value and the amount of Cash Surrender Value of the Policy. This difference is the surrender charge, consisting of a contingent deferred sales charge designed to recover expenses for the distribution of Policies that are terminated by surrender 21 before distribution expenses have been recouped, and a contingent deferred issue charge designed to recover expenses for the administration of Policies that are terminated by surrender before administrative expenses have been recouped. These are contingent charges because they are paid only if the Policy is surrendered (or the Face Amount is reduced or the Policy lapses) during this period. They are deferred charges because they are not deducted from premiums. The contingent deferred issue charge is set at a level designed to recover actual costs and is not designed to result in any profit to Phoenix Home Life. During the first ten Policy years, the full Surrender Charge as described below will apply if the Policyowner either surrenders the Policy for its Cash Surrender Value or lets the Policy lapse. The applicable Surrender Charge in any Policy Month is the full Surrender Charge minus any surrender charges that have been previously paid. There is no Surrender Charge after the 10th Policy Year. During the first two Policy Years, on Single Life Policies and during the first ten Policy Years on Multiple Life Policies, the maximum Surrender Charge that a Policyowner could pay while he or she owns the Policy is equal to either A plus B (as defined below) or the amount shown in the Policies Surrender Charge Schedule, whichever is less. After the first two Policy Years on Single Life Policies, the maximum Surrender Charge that a Policyowner could pay is based on the amount shown in the Policy's Surrender Charge Schedule. A (the contingent deferred sales charge) is equal to: 1) 30% of all premiums paid (up to and including the amount stated in the Policy's Surrender Charge Schedule, which is calculated according to a formula contained in a Securities and Exchange Commission rule); plus 2) 10% of all premiums paid in excess of this amount but not greater than twice this amount; plus 3) 9% of all premiums paid in excess of twice this amount. B (the contingent deferred issue charge) is equal to: $5.00 per $1,000 of initial Face Amount. As an example, the following illustrates the maximum Surrender Charge on a $100,000 Single Life Policy for a male age 35 who has never smoked, who has paid $3,000 in premium payments, and who surrenders the Policy in the 70th Policy Month. The Policy's Surrender Charge Schedule would show that the maximum Surrender Charge to be paid would be equal to either A plus B (shown below) or the amount shown in the chart in the Policy (also shown below), whichever is less: Example: If this policyowner surrenders his policy in the 70th policy month his surcharge will be $1,186.78, as given in the table. Example: If this policyowner surrenders his policy in the first two years he may be eligible to receive a refund of a portion of the surrender charge, depending on the amount of premium paid, or in other words his surrender charge may be reduced. The surrender charge in the first 2 years would be equal to the lesser of the amount in the surrender charge table and the sum of the following: 1) 28.5% of premiums paid up to $1,076.72, plus 2) 8.5% of premiums paid in excess of $1,076.72 but not greater than $2,153.43, plus 3) 7.5% of premiums paid in excess of $2,153.43, plus $500 If this policyowner surrendered his policy in the 2nd year after paying $2,000 of premiums his surrender charge would be the lesser of $1,307.54 from the table, and $385.34, thus equaling $385.34. Thus, in this case, the policyowner would pay less surrender charge if he surrenders his policy in the first 2 policy years. SURRENDER CHARGE TABLE Policy Surrender Policy Surrender Policy Surrender Month Charge Month Charge Month Charge - ------ ------ ------ ------- ------- ------ 1-60 1307.54 80 1066.03 100 727.09 61 1295.46 81 1053.95 101 690.65 62 1283.39 82 1041.88 102 654.22 63 1271.31 83 1029.80 103 617.78 64 1259.24 84 1017.73 104 581.35 65 1247.16 85 1005.65 105 544.91 66 1235.08 86 993.58 106 508.48 67 1223.01 87 981.50 107 472.05 68 1210.93 88 969.43 108 435.61 69 1198.86 89 957.35 109 399.18 70 1186.78 90 945.28 110 362.74 71 1174.71 91 933.20 111 326.31 72 1162.63 92 921.13 112 289.97 73 1150.56 93 909.05 113 253.44 74 1138.48 94 896.97 114 217.01 75 1126.41 95 884.90 115 180.57 76 1114.33 96 872.82 116 144.14 77 1102.26 97 836.39 117 107.70 78 1090.18 98 799.95 118 71.27 79 1078.10 99 763.52 119 34.83 120 .00 Phoenix Home Life may reduce the Surrender Charge for Policies issued under group or sponsored arrangements. The amount of reduction will be considered on a case-by-case basis and will reflect the reduced costs to Phoenix Home Life expected as a result of sales to a particular group or sponsored arrangement. Partial Surrender Fee A fee equal to the lesser of $25 or 2% of the amount withdrawn from the Policy is deducted from the Policy Value upon a partial surrender of the Policy to recover the actual costs of processing the partial surrender request. The assessment to each Sub-account or to the Guaranteed Interest Account will be made in the same manner as provided for the partial surrender amount paid. That is, that the Policy's share in the value of each Sub-account or the Guaranteed Interest Account will be reduced based on the allocation made at the time of the partial surrender. 22 If no allocation request is made, the assessment to each Sub-account and to the Guaranteed Interest Account will be made in the same manner as provided for monthly deductions. Partial Surrender Charge A charge as described below is deducted from the Policy Value upon a partial surrender of the Policy. The charge is equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender, determined by multiplying the applicable surrender charge by a fraction (equal to the partial surrender amount payable divided by the result of subtracting the applicable surrender charge from the Policy Value). This amount is assessed against the Sub-accounts or the Guaranteed Interest Account in the same manner as provided for with respect to the partial surrender amount paid. A partial surrender charge is also deducted from Policy Value upon a decrease in Face Amount. The charge is equal to the applicable surrender charge multiplied by a fraction (equal to the decrease in Face Amount divided by the Face Amount of the Policy prior to the decrease). Taxes Currently no charge is made to the VUL Account for Federal income taxes that may be attributable to the VUL Account. Phoenix Home Life may, however, make such a charge in the future. Charges for other taxes, if any, attributable to the VUL Account may also be made. See "Charges and Deductions -- Other Charges." GENERAL PROVISIONS Postponement of Payments General Payment of any amount upon complete or partial surrender, Policy loan, or benefits payable at death (in excess of the initial face amount) or maturity may be postponed: (i) for up to six months from the date of the request, for any transactions dependent upon the value of the GIA; (ii) whenever the New York Stock Exchange is closed other than for customary weekend and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission; or (iii) whenever an emergency exists, as determined by the Commission as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the VUL Account's net assets. Transfers may also be postponed under these circumstances. Payment by Check Payments under the Policy of any amounts derived from premiums paid by check may be delayed until such time as the check has cleared the Policyowner's bank. The Contract The Policy and attached copy of the application are the entire contract. Only statements in the application can be used to void the Policy. The statements are considered representations and not warranties. Only an executive officer of Phoenix Home Life can agree to change or waive any provisions of the Policy. Suicide If the Insured commits suicide within two years after the Policy's Date of Issue, Phoenix Home Life will pay only the Policy Value adjusted by the addition of any monthly deductions and other fees and charges made under the Policy and the subtraction of any Debt owed to Phoenix Home Life under the Policy. Incontestability Phoenix Home Life cannot contest this Policy or any attached rider after it has been In Force during the lifetime of the Insured for two years from the Policy Date. Change of Owner or Beneficiary The Beneficiary, as named in the Policy application or subsequently changed, will receive the Policy benefits at the Insured's death. If the named Beneficiary dies before the Insured, the contingent Beneficiary, if named, becomes the Beneficiary. If no Beneficiary survives the Policyowner, the benefits payable at the Insured's death will be paid to the Policyowner's estate. As long as the Policy is In Force, the Policyowner and the Beneficiary may be changed by Written Request, satisfactory to Phoenix Home Life. A change in Beneficiary will take effect as of the date the notice is signed, whether or not the Insured is living when the notice is received by Phoenix Home Life. Phoenix Home Life will not, however, be liable for any payment made or action taken before receipt of the notice. Assignment The Policy may be assigned. Phoenix Home Life will not be bound by the assignment until a written copy has been received and will not be liable with respect to any payment made prior to receipt. Phoenix Home Life assumes no responsibility for determining whether an assignment is valid. Misstatement of Age or Sex If the age or sex of the Insured has been misstated, the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the correct age and sex. Surplus Policyowners may share in divisible surplus of Phoenix Home Life to the extent determined annually by the Phoenix Home Life Board of Directors. However, it is not currently anticipated that the Board will authorize these payments since Policyowners will be participating directly in investment results. PAYMENT OF PROCEEDS Surrender and Death Benefit Proceeds Proceeds of full or partial surrenders and the death proceeds will usually be paid in one lump sum within seven days after Phoenix Home Life receives the request for surrender and due proof of death, unless another payment option has been elected. Payment 23 of the death proceeds, however, may be delayed if the claim for payment of the death proceeds needs to be investigated; e.g., to ensure payment of the proper amount to the proper payee. Any such delay will not be beyond that reasonably necessary to investigate such claims consistent with insurance practices customary in the life insurance industry. Under a Policy covering multiple lives, the death proceeds will be paid upon the first death under the Policy. In addition, under certain conditions, in the event of the terminal illness of the Insured, an accelerated payment of up to 75% of the Policy's Death Benefit (up to maximum of $250,000), is available under the Living Benefits Rider. The minimum face amount remaining after any such accelerated benefit payment is $10,000. While the Insured is living, the Policyowner may elect a payment option for payment of the death proceeds to the Beneficiary. The Policyowner may revoke or change a prior election, unless such right has been waived. The Beneficiary may make or change an election prior to payment of the death proceeds, unless the Policyowner has made an election which does not permit such further election or changes by the Beneficiary. A written form satisfactory to Phoenix Home Life is required to elect, change, or revoke a payment option. The minimum amount of surrender or death proceeds that may be applied under any income option is $1,000. If the Policy is assigned as collateral security, Phoenix Home Life will pay any amount due the assignee in one lump sum. Any remaining proceeds will remain under the option elected. Payment Options All or part of the surrender or death proceeds of a Policy may be applied under one or more of the following payment options or such other payment options or alternative versions of the options listed as Phoenix Home Life may choose to make available in the future. Option 1 -- Lump sum. Payment in one lump sum. Option 2 -- Left to earn interest. A payment of interest during the payee's lifetime on the amount payable as a principal sum. Interest rates are guaranteed to be at least 3 percent per year. Option 3 -- Payment for a specific period. Equal income installments are paid for a specified period of years whether the payee lives or dies. The first payment will be on the date of settlement. The assumed interest rate on the unpaid balance is guaranteed not to be less than 3 percent per year. Option 4 -- Life annuity with specified period certain. Equal installments are paid until the later of: (A) The death of the payee; (B) The end of the period certain. The first payment will be on the date of settlement. The period certain must be chosen at the time this option is elected. The periods certain that may be chosen are as follows: (A) Ten years; (B) Twenty years; (C) Until the installments paid refund the amount applied under this option; and if the payee is not living when the final payment falls due, that payment will be limited to the amount which needs to be added to the payments already made to equal the amount applied under this option. If, for the age of the payee, a period certain is chosen that is shorter than another period certain paying the same installment amount, Phoenix Home Life will deem the longer period certain as having been elected. Any life annuity provided under Option 4 is calculated using an interest rate guaranteed to be no less than 3 3/8% per year, except that any life annuity providing a period certain of 20 years or more is calculated using an interest rate guaranteed to be no less than 3 1/4% per year. Option 5 -- Life annuity. Equal installments are paid only during the lifetime of the payee. The first payment will be on the date of settlement. Any life annuity as may be provided under Option 5 is calculated using an interest rate guaranteed to be no less than 3 1/2% per year. Option 6 -- Payments of a specified amount. Equal installments of a specified amount, out of the principal sum and interest on that sum, are paid until the principal sum remaining is less than the amount of the installment. When that happens, the principal sum remaining with accrued interest will be paid as a final payment. The first payment will be on the date of settlement. The payments will include interest on the principal sum remaining at a rate guaranteed to at least equal 3 percent per year. This interest will be credited at the end of each year. If the amount of interest credited at the end of the year exceeds the income payments made in the last 12 months, that excess will be paid in one sum on the date credited. Option 7 -- Joint survivorship annuity with 10-year period certain. The first payment will be on the date of settlement. Equal income installments are paid until the latest of: (A) The end of the 10-year period certain; (B) The death of the Insured; (C) The death of the other named annuitant. The other annuitant must be named at the time this option is elected and cannot later be changed. The other annuitant must have an attained age of at least 40. Any joint survivorship annuity as may be provided under this option is calculated using an interest rate guaranteed to be no less than 3 3/8% per year. For additional information concerning the above payment options, see the Policy. FEDERAL TAX CONSIDERATIONS Introduction The ultimate effect of Federal income taxes on values under the VUL Account and on the economic benefit to the Policyowner or Beneficiary depends on Phoenix Home Life's tax status and upon the tax status of the individual concerned. The discussion contained herein is general in nature and is not intended as tax advice. For complete information on Federal and state tax considerations, a qualified tax adviser should be consulted. No attempt is made to consider any estate and inheritance taxes, or any state, local or 24 other tax laws. Because the discussion herein is based upon Phoenix Home Life's understanding of Federal income tax laws as they are currently interpreted, Phoenix Home Life cannot guarantee the tax status of any Policy. No representation is made regarding the likelihood of continuation of current Federal income tax laws, Treasury regulations, or of the current interpretations by the Internal Revenue Service. Phoenix Home Life reserves the right to make changes to the Policy in order to assure that it will continue to qualify as life insurance for tax purposes. Phoenix Home Life's Tax Status Phoenix Home Life is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). For Federal income tax purposes, neither the VUL Account nor the Guaranteed Interest Account is a separate entity from Phoenix Home Life and their operations form a part of Phoenix Home Life. Investment income and realized capital gains on the assets of the VUL Account are reinvested and taken into account in determining the Cash Value of the VUL Account. Investment income of the VUL Account, including realized net capital gains, is not taxed to Phoenix Home Life. Due to Phoenix Home Life's tax status under current provisions of the Code, no charge will currently be made to the VUL Account for Phoenix Home Life's Federal income taxes which may be attributable to the VUL Account. Phoenix Home Life will periodically review the question of a charge to the VUL Account for Phoenix Home Life's income taxes. Phoenix Home Life reserves the right to make a deduction for taxes should they be imposed with respect to such items in the future. A future charge may be imposed if the Federal tax treatment of Phoenix Home Life is determined to be other than what Phoenix Home Life currently believes it to be, if changes are made affecting the tax treatment to Phoenix Home Life of variable life insurance contracts, or if changes occur in Phoenix Home Life's tax status. If imposed, such charge would be equal to the Federal income taxes attributable to the investment results of the VUL Account. Policy Proceeds Death Benefit Proceeds. The Policy, whether or not it is a "modified endowment contract" (see the discussion on modified endowment contracts below), should be treated as meeting the definition of life insurance for Federal income tax purposes, under Section 7702 of the Code. As such, the death benefit proceeds thereunder should be excludable from the gross income of the Beneficiary under Code Section 101(a)(1). Also, the Policyowner should not be deemed to be in constructive receipt of the Cash Value, including increments thereon. See, however, the sections below on possible taxation of amounts received under the Policy, via full surrender, partial surrender or loan. In addition, a benefit paid under a Living Benefit Rider may be taxable as income in the year of receipt. Code Section 7702 imposes certain conditions with respect to premiums received under a Policy. Phoenix Home Life intends to monitor the premiums to assure compliance with such conditions. However, in the event that the premium limitation is exceeded during the year, Phoenix Home Life may return the excess premium, with interest, to the Policyowner within 60 days after the end of the Policy Year, and maintain the qualification of the Policy as life insurance for Federal income tax purposes. Full Surrender. Upon full surrender of a Policy for its Cash Value, the excess, if any, of the Cash Value (unreduced by any outstanding indebtedness) over the premiums paid will be treated as ordinary income for Federal income tax purposes. The full surrender of a Policy which is a "modified endowment contract" may result in the imposition of an additional 10 percent tax on any income received. Partial Surrender. If the Policy is a "modified endowment contract," partial surrenders are fully taxable to the extent of income in the Policy and are possibly subject to an additional 10 percent tax. See the discussion on "modified endowment contracts" below. If the Policy is not a "modified endowment contract," partial surrenders may still be taxable, as follows. Code Section 7702(f)(7) provides that where a reduction in death benefits occurs during the first 15 years after a Policy is issued and there is a cash distribution associated with that reduction, the Policyowner may be taxed on all or a part of the amount distributed. A reduction in death benefits may result from a partial surrender. After 15 years, the proceeds will not be subject to tax, except to the extent such proceeds exceed the total amount of premiums paid but not previously recovered. Phoenix Home Life suggests you consult with your tax adviser in advance of a proposed decrease in death benefits or a partial surrender as to the portion, if any, which would be subject to tax, and in addition as to the impact such partial surrender might have under the new rules affecting "modified endowment contracts." The benefit payment under the Living Benefits Rider is not considered a partial surrender. Loans. Phoenix Home Life believes that any loan received under a Policy will be treated as indebtedness of the Policyowner. If the Policy is a "modified endowment contract," loans are fully taxable to the extent of income in the Policy and are possibly subject to an additional 10 percent tax. See the discussion on "modified endowment contracts" below. If the Policy is not a "modified endowment contract," Phoenix Home Life believes that no part of any loan under a Policy will constitute income to the Policyowner. The deductibility by the Policyowner of loan interest under a Policy may be limited under Code Section 264, depending on the circumstances. Any Policyowner intending to fund premium payments through borrowing should consult a tax adviser with respect to the tax consequences thereof. Under the "personal" interest limitation provisions of the Code, interest on Policy loans used for personal purposes is not tax deductible. Other rules may apply to allow all or part of the interest expense as a deduction if the loan proceeds are used for "trade or business" or "investment" purposes. See your tax adviser for further guidance. If the Policy is owned by a business or a corporation, the Code may impose additional restrictions. The Code limits the interest deduction on business-owned Policy loans and may impose tax upon the inside build-up of corporate-owned life insurance policies through the corporate alternative minimum tax. 25 Other Taxes Federal estate tax, state and local estate, inheritance and other tax consequences of ownership, or receipt of Policy proceeds depend on the circumstances of each Policyowner or Beneficiary. Phoenix Home Life does not make any representations or guarantees regarding the tax consequences of any Policy with respect to these types of taxes. Modified Endowment Contracts General. Pursuant to Code section 72(e), loans and other amounts received under "modified endowment contracts" will in general be taxed to the extent of accumulated income (generally, the excess of Cash Value over premiums paid). Policies are "modified endowment contracts" if they meet the definition of life insurance, but fail the "7-pay test." This test essentially provides that the cumulative premiums paid under the Policy at any time during the Policy's first 7 years cannot exceed the sum of the net level premiums that would have been paid on or before that time had the Policy provided for paid-up future benefits after the payment of 7 level annual premiums. In addition, a modified endowment contract includes any life insurance contract that is received in exchange for a modified endowment contract. Premiums paid during a Policy Year that are returned by Phoenix Home Life (with interest) within 60 days after the end of the Policy Year will not cause the Policy to fail the 7-pay test. Reduction in Benefits During the First 7 Years. If there is a reduction in benefits during the first 7 Policy Years, the premiums are redetermined for purposes of the 7-pay test as if the Policy had originally been issued at the reduced death benefit level and the new limitation is applied to the cumulative amount paid for each of the first 7 Policy Years. Distributions Affected. If a Policy fails to meet the 7-pay test, it is considered a modified endowment contract only as to distributions in the year in which the death benefit reduction takes effect and all subsequent Policy Years. However, distributions made in anticipation of such failure (there is a presumption that distributions made within two years prior to such failure were "made in anticipation") also are considered distributions under a modified endowment contract. If the Policy satisfies the "7-pay test" for 7 years, distributions and loans will generally not be subject to the new tax rules. Penalty Tax. Any amounts taxable under the modified endowment contract rule will be subject to an additional 10 percent excise tax, with certain exceptions. This additional tax will not apply in the case of distributions: (i) made on or after the taxpayer attains age 59 1/2; (ii) which are attributable to the taxpayer's disability (within the meaning of Code Section 72(m)(7)); or (iii) which are part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or life expectancies) of the taxpayer and his Beneficiary. Material Change Rules. Any determination of whether the Policy meets the "7-pay test" will begin again any time the Policy undergoes a "material change," which includes any increase in death benefits or any increase in or addition of a qualified additional benefit, with the following two exceptions. First, if an increase is attributable to premiums paid "necessary to fund" the lowest death benefit and qualified additional benefits payable in the first 7 Policy Years or to the crediting of interest or dividends with respect to these premiums, the "increase" does not constitute a material change. Second, to the extent provided in regulations, if the death benefit or qualified additional benefit increases as a result of a cost-of-living adjustment based on an established broad-based index specified in the Policy, this does not constitute a material change if (1) the cost-of-living determination period does not exceed the remaining premium payment period under the Policy, and (2) the cost-of-living increase is funded ratably over the remaining premium payment period of the Policy. A reduction in death benefits is not considered a material change unless accompanied by a reduction in premium payments. A material change may occur at any time during the life of the Policy (within the first 7 years or thereafter), and future taxation of distributions or loans would turn on whether the Policy satisfied the applicable "7-pay test" from the time of the material change. An exchange of policies is considered to be a material change for all purposes. Serial Purchase of Modified Endowment Contracts. All modified endowment contracts issued by the same insurer (or affiliated companies of the insurer) to the same Policyowner within the same calendar year will be treated as one modified endowment contract in determining the taxable portion of any loans or distributions made to the Policyowner. The Treasury has been given specific legislative authority to issue regulations to prevent the avoidance of the new distribution rules for modified endowment contracts. A qualified tax adviser should be consulted about the tax consequences of the purchase of more than one modified endowment contract within any calendar year. Limitations on Unreasonable Mortality and Expense Charges The Code imposes limitations on unreasonable mortality and expense charges for purposes of ensuring that a Policy qualifies as life insurance. The mortality charges taken into account to calculate permissible premium levels may not exceed those charges required to be used in determining the Federal income tax reserve for the Policy, unless Treasury regulations prescribe a higher level of charge. In addition, the expense charges taken into account under the guideline premium test are required to be reasonable, as defined by the Treasury regulations. Phoenix Home Life intends to comply with the limitations in calculating the premium it is permitted to receive from the Policyowner. Qualified Plans A Policy may be used in conjunction with certain qualified plans. Such policies are issued using unisex cost of insurance rates. Since the rules governing such use are complex, a purchaser should not use the Policy in conjunction with a qualified plan until he has consulted a competent pension consultant or tax adviser. 26 Diversification Standards To comply with the diversification regulations under Code Section 817(h), ("Diversification Regulations") each Portfolio of the Fund is required to diversify its investments. The Diversification Regulations generally require that on the last day of each quarter of a calendar year no more than 55 percent of the value of the Fund's assets is represented by any one investment, no more than 70 percent is represented by any two investments, no more than 80 percent is represented by any three investments, and no more than 90 percent is represented by any four investments. A "look-through" rule applies to treat a pro-rata portion of each asset of the Fund as an asset of the VUL Account; therefore, each Series of the Fund will be tested for compliance with the percentage limitations. For purposes of these diversification rules, all securities of the same issuer are treated as a single investment, but each United States Government agency or instrumentality is treated as a separate issuer. The general diversification requirements are modified if any of the assets of the VUL Account are direct obligations of the United States Treasury. In this case, there is no limit on the investment that may be made in United States Treasury securities, and for purposes of determining whether assets other than United States Treasury securities are adequately diversified, the generally applicable percentage limitations are increased based on the value of the VUL Account's investment in United States Treasury securities. Notwithstanding this modification of the general diversification requirements, the portfolios of the Fund will be structured to comply with the general diversification standards because they serve as an investment vehicle for certain variable annuity contracts which must comply with these standards. In connection with the issuance of the Diversification Regulations, the Treasury announced that such regulations do not provide guidance concerning the extent to which policyowners may direct their investments to particular divisions of a separate account. It is possible that a revenue ruling or other form of administrative pronouncement in this regard may be issued in the near future. It is not clear, at this time, what such a revenue ruling or other pronouncement will provide. It is possible that the Policy may need to be modified to comply with such future Treasury announcements. For these reasons, Phoenix Home Life reserves the right to modify the Policy, as necessary, to prevent the Policyowner from being considered the owner of the assets of the VUL Account. Phoenix Home Life intends to comply with the Diversification Regulations to assure that the Policies continue to qualify as variable life insurance for Federal income tax purposes. Change of Ownership or Insured or Assignment Changing the Policyowner or the Insured or an exchange or assignment of the Policy may have tax consequences depending on the circumstances. Code Section 1035 provides that a life insurance contract can be exchanged for another life insurance contract, without recognition of gain or loss, assuming that no money or other property is received in the exchange, and that the policies relate to the same Insured. If the surrendered policy is subject to a policy loan, this may be treated as the receipt of money on the exchange. Phoenix Home Life recommends that any person contemplating such changes, exchanges, or assignment seek the advice of a qualified tax consultant. VOTING RIGHTS The Fund Phoenix Home Life will vote the Fund shares held by the Sub-accounts of the VUL Account at any regular and special meetings of shareholders of the Fund, a Massachusetts business trust. To the extent required by law, such voting will be in accordance with instructions received from the Policyowner. However, if the Investment Company Act of 1940 or any regulation thereunder should be amended or if the present interpretation thereof should change, and as a result Phoenix Home Life determines that it is permitted to vote the Fund shares at its own discretion, it may elect to do so. The number of votes that a Policyowner has the right to cast will be determined by applying the Policyowner's percentage interest in a Sub-account to the total number of votes attributable to the Sub-account. In determining the number of votes, fractional shares will be recognized. Fund shares held in a Sub-account for which no timely instructions are received, and Fund shares which are not otherwise attributable to Policyowners, will be voted by Phoenix Home Life in proportion to the voting instructions that are received with respect to all Policies participating in that Sub-account. Voting instructions to abstain on any item to be voted upon will be applied to reduce the votes eligible to be cast by Phoenix Home Life. Each Policyowner will receive proxy materials, reports, and other materials relating to the Fund. Phoenix Home Life may, when required by state insurance regulatory authorities, disregard voting instructions if the instructions require that the shares be voted so as to cause a change in the sub-classification or investment objective of one or more of the portfolios of the Fund or to approve or disapprove an investment advisory contract for the Fund. In addition, Phoenix Home Life itself may disregard voting instructions in favor of changes initiated by a Policyowner in the investment policies or the Investment Adviser of the Fund if Phoenix Home Life reasonably disapproves of such changes. A change would be disapproved only if the proposed change is contrary to state law or prohibited by state regulatory authorities or Phoenix Home Life determined that the change would have an adverse effect on the General Account because the proposed investment policy for a portfolio may result in overly speculative or unsound investments. In the event Phoenix Home Life does disregard voting instructions, a summary of that action and the reasons for such action will be included in the next periodic report to Policyowners. Phoenix Home Life A Policyowner (or the payee entitled to payment under a payment option if a different person) will have the right to vote at annual meetings of all Phoenix Home Life Policyholders for the 27 election of members of the Board of Directors of Phoenix Home Life and on other corporate matters, if any, where a Policyholder's vote is taken. At meetings of all of the Phoenix Home Life Policyholders, a Policyholder (or payee) may cast only one vote as the holder of a Policy, irrespective of Policy Value or the number of the Policies held. THE DIRECTORS AND EXECUTIVE OFFICERS OF PHOENIX HOME LIFE Phoenix Home Life is managed by its Board of Directors, the members of which are elected by its Policyholders, including Owners of the Policies. See "Voting Rights." The following are the Directors and Executive Officers of Phoenix Home Life: Directors Principal Occupation - --------- -------------------- Sal H. Alfiero Chairman and Chief Executive Officer, Mark IV Industries, Inc. Amherst, New York J. Carter Bacot Chairman and Chief Executive Officer, The Bank of New York New York, New York Carol H. Baldi President, Carol H. Baldi, Inc. New York, New York Peter C. Browning Executive Vice President, Sonoco Products Company Hartsville, South Carolina Richard N. Cooper Chairman, National Intelligence Council, Central Intelligence Agency McLean, Virginia Gordon J. Davis, Partner, LeBoeuf, Lamb, Esq. Greene & MacRae New York, New York Robert W. Chairman of the Board, Fiondella President and Chief Executive Officer, Phoenix Home Life Mutual Insurance Company Hartford, Connecticut Jerry J. President, National Jasinowski Association of Manufacturers Washington, DC John W. Johnstone Chairman, President and Chief Executive Officer, Olin Corporation Norwalk, Connecticut Marilyn E. General Partner, Lazard LaMarche Freres & Company New York, New York Edward P. Lyons Former Vice-Chairman, Olin Corporation Norwalk, Connecticut Directors Principal Occupation - --------- -------------------- Philip R. Executive Vice McLoughlin President and Chief Investment Officer, Phoenix Home Life Mutual Insurance Company Hartford, Connecticut Charles J. Paydos Executive Vice President, Phoenix Home Life Mutual Insurance Company Hartford, Connecticut Herbert Roth, Jr. Former Chairman, LFE Corporation Clinton, Massachusetts Robert F. Vizza President and Chief Executive Officer, St. Francis Hospital Roslyn, New York Wilson Wilde Chairman, Executive Committee, Hartford Steam Boiler Inspection and Insurance Company Hartford, Connecticut Robert G. Wilson Former General Partner, Goldman Sachs New York, New York Executive Officers Principal Occupation - --------- ---------------------- Robert W. Chairman of the Board, Fiondella President and Chief Executive Officer Richard H. Booth Executive Vice President, Strategic Development Philip R. Executive Vice McLoughlin President and Chief Investment Officer Charles J. Paydos Executive Vice President David W. Searfoss Executive Vice President and Chief Financial Officer Dona D. Young Executive Vice President, Individual Insurance and General Counsel Kelly J. Carlson Senior Vice President, Career Organization Carl T. Chadburn Senior Vice President Robert G. Chipkin Senior Vice President and Corporate Actuary Randall C. Senior Vice President, Giangiulio Group Sales Joan E. Herman Senior Vice President Edward P. Senior Vice President, Hourihan Information Systems Joseph E. Senior Vice President Kelleher Gary J. Senior Vice President Laughinghouse Robert G. Senior Vice President Lautensack, Jr. 28 Executive Principal Occupation Officers - -------- -------------------- Scott C. Noble Senior Vice President, Real Estate Frederick W. Senior Vice President Sawyer, III Richard C. Shaw Senior Vice President, International and Corporate Development Simon Y. Tan Senior Vice President, Individual Market Development SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS The assets of the VUL Account are held by Phoenix Home Life. The assets of the VUL Account are kept physically segregated and held separate and apart from the general account of Phoenix Home Life. Phoenix Home Life maintains records of all purchases and redemptions of shares of the Fund. SALES OF POLICIES Policies may be purchased from registered representatives of W.S. Griffith & Co., Inc. ("W. S. Griffith") licensed to sell Phoenix Home Life insurance policies. W. S. Griffith, an indirect subsidiary of Phoenix Home Life, is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. Policies may also be purchased from other broker-dealers registered under the Securities Exchange Act of 1934 whose representatives are authorized by applicable law to sell Policies under terms of agreements provided by PEPCO. Sales commissions will be paid to registered representatives on purchase payments received by Phoenix Home Life under these Policies. Total sales commission of a maximum of 50 percent of premiums will be made by Phoenix Home Life to PEPCO. To the extent that the sales charge under the Policies is less than the sales commissions paid with respect to the Policies, Phoenix Home Life will pay the shortfall from its general account assets, which will include any profits it may derive under the Policies. PEPCO will sponsor sales contests, training and educational meetings and provide to all qualifying dealers, from its own profits and resources, additional compensation in the form of trips, merchandise or expense reimbursement. Brokers and dealers other than PEPCO may also make customary additional charges for their services in effecting purchases, if they notify the Fund of their intention to do so. STATE REGULATION Phoenix Home Life is subject to the provisions of the New York insurance laws applicable to mutual life insurance companies and to regulation and supervision by the New York Superintendent of Insurance. Phoenix Home Life is also subject to the applicable insurance laws of all the other states and jurisdictions in which it does an insurance business. State regulation of Phoenix Home Life includes certain limitations on the investments which it may make, including investments for the VUL Account and the Guaranteed Interest Account. It does not include, however, any supervision over the investment policies of the VUL Account. REPORTS All Policyowners will be furnished with those reports required by the Investment Company Act of 1940 and regulations promulgated thereunder, or under any other applicable law or regulation. LEGAL PROCEEDINGS The VUL Account is not engaged in any litigation. Phoenix Home Life is not involved in any litigation that would have a material adverse effect on the ability of Phoenix Home Life to meet its obligations under the Policies. LEGAL MATTERS The organization of Phoenix Home Life, its authority to issue variable life insurance Policies, and the validity of the Policy have been passed upon by Patricia O. McLaughlin, Counsel, Phoenix Home Life. Legal matters relating to the Federal securities and income tax laws have been passed upon for Phoenix Home Life by Jorden Burt Berenson & Johnson, LLP. REGISTRATION STATEMENT A Registration Statement has been filed with the Securities and Exchange Commission, under the Securities Act of 1933 as amended, with respect to the securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement and amendments thereto and exhibits filed as a part thereof, to all of which reference is made for further information concerning the VUL Account, Phoenix Home Life and the Policy. Statements contained in this Prospectus as to the content of the Policy and other legal instruments are summaries. For a complete statement of the terms thereof, reference is made to such instruments as filed. FINANCIAL STATEMENTS The consolidated financial statements of Phoenix Home Life as contained herein should be considered only as bearing upon Phoenix Home Life's ability to meet its obligations under the Policy, and they should not be considered as bearing on the investment performance of the VUL Account. No interim financial statements of Phoenix Home Life are presented in this Prospectus because no such financial statements have been prepared by Phoenix Home Life for any other purpose as of the date of this Prospectus. The financial statements of the VUL Account are for the Sub-accounts available as of the period ended December 31, 1995. No interim financial statements for the VUL Account are presented because no such statements have been prepared for any other purpose as of the date of this Prospectus. 29 Phoenix Home Life Mutual Insurance Company Consolidated Financial Statements December 31, 1995 and 1994 [To be filed by Amendment] 30 Phoenix Home Life Variable Universal Life Account Financial Statements December 31, 1995 and 1994 [To be filed by Amendment] 31 APPENDIX A THE GUARANTEED INTEREST ACCOUNT Contributions to the Guaranteed Interest Account ("GIA") under the Policy and transfers to the GIA become part of the general account of Phoenix Home Life (the "General Account"), which supports insurance and annuity obligations. Because of exemptive and exclusionary provisions, interest in the General Account has not been registered under the Securities Act of 1933 ("1933 Act") nor is the General Account registered as an investment company under the Investment Company Act of 1940 ("1940 Act"). Accordingly, neither the General Account nor any interest therein is specifically subject to the provisions of the 1933 or 1940 Acts and the staff of the Securities and Exchange Commission has not reviewed the disclosures in this Prospectus concerning the GIA. Disclosures regarding the GIA and the General Account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. The General Account is made up of all of the general assets of Phoenix Home Life other than those allocated to any separate account. Premium payments will be allocated to the GIA and, therefore, the General Account, as elected by the Policyowner at the time of purchase or as subsequently changed. Phoenix Home Life will invest the assets of the General Account in assets chosen by it and allowed by applicable law. Investment income from General Account assets is allocated between Phoenix Home Life and the contracts participating in the General Account, in accordance with the terms of such contracts. Investment income from the General Account allocated to Phoenix Home Life includes compensation for mortality and expense risks borne by it in connection with General Account contracts. The amount of investment income allocated to the Policies will vary from year to year in the sole discretion of Phoenix Home Life. However, Phoenix Home Life guarantees that it will credit interest at a rate of not less than 4% per year, compounded annually, to amounts allocated to the unloaned portion of the GIA. The loaned portion of the GIA will be credited interest at an effective annual rate of 6%. Phoenix Home Life may credit interest at a rate in excess of 4% per year; however, it is not obligated to credit any interest in excess of 4% per year. Twice each calendar month, Phoenix Home Life will set the excess interest rate, if any, that will apply to amounts deposited to the GIA. That rate will remain in effect for such deposits for an initial guarantee period of one full year from the date of deposit. Upon expiration of the initial one-year guarantee period (and each subsequent one-year guarantee period thereafter), the rate to be applied to any deposits whose guaranteed period has just ended will be the same rate as is applied to new deposits allocated at that time to the GIA. This rate will likewise remain in effect for a guarantee period of one full year from the date the new rate is applied. Excess interest, if any, will be determined by Phoenix Home Life based on information as to expected investment yields. Some of the factors that Phoenix Home Life may consider in determining whether to credit interest to amounts allocated to the GIA and the amount thereof, are general economic trends, rates of return currently available and anticipated on investments, regulatory and tax requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE GIA IN EXCESS OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF PHOENIX HOME LIFE AND WITHOUT REGARD TO ANY SPECIFIC FORMULA. THE CONTRACT OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO GIA ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR. Phoenix Home Life is aware of no statutory limitations on the maximum amount of interest it may credit, and the Board of Directors has set no limitations. However, inherent in Phoenix Home Life's exercise of discretion in this regard is the equitable allocation of distributable earnings and surplus among its various policyholders and contract owners. Excess interest, if any, will be credited on the GIA Policy Value. Phoenix Home Life guarantees that, at any time, the GIA Policy Value will not be less than the amount of premium payments allocated to the GIA, plus interest at the rate of 4% per year, compounded annually, plus any additional interest which Phoenix Home Life may, in its discretion, credit to the GIA, less the sum of all annual administrative or surrender charges, any applicable premium taxes, and less any amounts surrendered or loaned. If the Policyowner surrenders the Policy, the amount available from the GIA will be reduced by any applicable surrender charge and annual administration charge (see "Deductions and Charges"). IN GENERAL, ONE TRANSFER PER CONTRACT YEAR IS ALLOWED FROM THE GUARANTEED INTEREST ACCOUNT. THE AMOUNT WHICH CAN BE TRANSFERRED IS LIMITED TO THE GREATER OF $1,000 OR 25% OF THE CONTRACT VALUE IN THE GUARANTEED INTEREST ACCOUNT AS OF THE LAST CONTRACT ANNIVERSARY. UNDER THE SYSTEMATIC TRANSFER PROGRAM, TRANSFERS OF APPROXIMATELY EQUAL AMOUNTS MAY BE MADE OVER A MINIMUM 18 MONTH PERIOD. NON-SYSTEMATIC TRANSFERS FROM THE GUARANTEED INTEREST ACCOUNT WILL BE EFFECTUATED ON THE DATE OF RECEIPT BY VARIABLE PRODUCTS OPERATIONS, UNLESS OTHERWISE REQUESTED BY THE CONTRACT OWNER. 32 APPENDIX B Illustrations of Death Benefits, Policy Values ("Account Values"), and Cash Surrender Values. The tables on the following pages illustrate how a Policy's Death Benefits, Account Values and Cash Surrender Value could vary over time assuming constant hypothetical gross (after tax) annual investment returns of 0% and 12%. The Policy benefits will differ from those shown in the tables if the annual investment returns are not absolutely constant. That is, the figures will be different if the returns averaged 0% or 12% over a period of years but went above or below those figures in individual Policy Years. The Policy benefits will also differ, depending on your premium allocations to each Sub-account of the VUL Account, if the overall actual rates of return averaged 0% or 12%, but went above or below those figures for the individual Sub-accounts. The tables are for standard risk males and females who have never smoked. In states where cost of insurance rates are not based on the insured's sex, the tables designated "male" apply to all standard risk insureds who have never smoked. Account Values and Cash Surrender Values may be lower for smokers or former smokers or for risk classes involving higher mortality risk. Planned premium payments are assumed to be paid at the beginning of each Policy Year. The difference between the Policy Value and the Cash Surrender Value in the first ten years is the Surrender Charge. For each age illustrated, tables are included for death benefit Option 1 and Option 2. Tables are also included to reflect the blended cost of insurance charge applied under multiple lives Policies. The Death Benefit, Account Value, and Cash Surrender Value amounts reflect the following current charges: 1. Issue Charge of $150. 2. Monthly Administrative Charge of $5.00 per month ($10 per month guaranteed maximum). 3. Premium Tax Charge of 2.25% (will vary from state to state on Multiple Life Policies). 4. A Federal Tax Charge of 1.5% (for Single Life Policies only). 5. Cost of Insurance Charge. For each age, the tables illustrate cost of insurance at both the current rates and at the maximum rates guaranteed in the Policies. (See "Charges and Deductions -- Cost of Insurance.") 6. Mortality and Expense Risk Charge, which is a daily charge equivalent to .80% on an annual basis (or for Single Life Policies, .25% on an annual basis after the 15th Policy Year), against the VUL Account for mortality and expense risks. (See "Charges and Deductions -- Mortality and Expense Risk Charge.") These illustrations also assume an average investment advisory fee of .58% on an annual basis, of the average daily net asset value of each of the Series of the Fund. These illustrations also assume other ongoing average Fund expenses of .18%. Management may decide to limit the amount of expense reimbursement in the future. If expense reimbursement had not been in place for the fiscal year ended December 31, 1994, total operating expenses for the Money Market Series, Growth Series, Bond Series, Total Return Series, Balanced Series and International Series would have been approximately 0.58%, 0.80%, 0.72%, 0.75%, 0.70% and 1.10% respectively, of the average net assets of the Series. (See "Charges and Deductions -- Investment Management Charge.") Taking into account the Mortality and Expense Risk Charge and the investment advisory fees and expenses, the gross annual investment return rates of 0% and 12% on the Fund's assets are equivalent to net annual investment return rates of approximately - 1.55% and 10.35%, respectively. For individual illustrations, interest rates ranging between 0% and 12% may be selected in place of the 12% rate. The hypothetical returns shown in the tables are without any tax charges that may be attributable to the VUL Account in the future. If such Tax Charges are imposed in the future, then in order to produce after tax returns equal to those illustrated for 0% and 12%, a sufficiently higher amount in excess of the hypothetical interest rates would have to be earned. (See "Charges and Deductions -- Other Charges -- Taxes.") The second column of each table shows the amount that would accumulate if an amount equal to the premiums paid were invested to earn interest, after taxes, at 5% compounded annually. These tables show that if a Policy is returned in its very early years for payment of its Cash Surrender Value, that Cash Surrender Value may be low in comparison to the amount of the premiums accumulated with interest. Thus, the cost of owning a Policy for a relatively short time may be high. On request, we will furnish the Policyowner with a comparable illustration based on the age and sex of the proposed insured person(s), standard risk assumptions and the initial face amount and planned premium chosen. 33 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE SUCCESS -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
Assuming -------------------------------------------------- Current Charges Guaranteed Charges ------------------------ ------------------------ Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------- ------ ------ ------- 1 1,000 1,050 667 0 100,000 514 0 100,000 2 1,000 2,153 1,555 593 100,000 1,161 199 100,000 3 1,000 3,310 2,525 1,339 100,000 1,789 602 100,000 4 1,000 4,526 3,586 2,279 100,000 2,396 1,089 100,000 5 1,000 5,802 4,745 3,438 100,000 2,982 1,675 100,000 5 5,000 5,802 4,745 3,438 100,000 2,982 1,675 100,000 6 1,000 7,142 6,012 4,850 100,000 3,546 2,384 100,000 7 1,000 8,549 7,396 6,379 100,000 4,085 3,068 100,000 8 1,000 10,027 8,911 8,038 100,000 4,600 3,728 100,000 9 1,000 11,578 10,566 10,131 100,000 5,089 4,654 100,000 10 1,000 13,207 12,380 12,380 100,000 5,552 5,552 100,000 10 10,000 13,207 12,380 12,380 100,000 5,552 5,552 100,000 11 1,000 14,917 14,372 14,372 100,000 5,986 5,986 100,000 12 1,000 16,713 16,562 16,562 100,000 6,389 6,389 100,000 13 1,000 18,599 18,972 18,972 100,000 6,761 6,761 100,000 14 1,000 20,579 21,626 21,626 100,000 7,100 7,100 100,000 15 1,000 22,657 24,549 24,549 100,000 7,403 7,403 100,000 15 15,000 22,657 24,549 24,549 100,000 7,403 7,403 100,000 16 1,000 24,840 27,927 27,927 100,000 7,713 7,713 100,000 17 1,000 27,132 31,674 31,674 100,000 7,981 7,981 100,000 18 1,000 29,539 35,830 35,830 100,000 8,202 8,202 100,000 19 1,000 32,066 40,445 40,445 100,000 8,369 8,369 100,000 20 1,000 34,719 45,570 45,570 100,000 8,476 8,476 100,000 20 20,000 34,719 45,570 45,570 100,000 8,476 8,476 100,000 @ 62 27,000 79,064 101,732 101,732 130,218 6,957 6,957 100,000 @ 65 30,000 94,836 141,251 141,251 172,327 4,459 4,459 100,000
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 34. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% for fifteen years, then 0.25% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 34 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York FEMALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE SUCCESS-- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
Assuming --------------------------------------------------------- Current Charges Guaranteed Charges ------------------------------ ------------------------- Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @0.0% @.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 696 0 100,000 535 0 100,000 2 1,000 2,153 1,615 686 100,000 1,203 274 100,000 3 1,000 3,310 2,619 1,465 100,000 1,850 697 100,000 4 1,000 4,526 3,718 2,523 100,000 2,478 1,282 100,000 5 1,000 5,802 4,920 3,725 100,000 3,083 1,887 100,000 5 5,000 5,802 4,920 3,725 100,000 3,083 1,887 100,000 6 1,000 7,142 6,234 5,170 100,000 3,665 2,601 100,000 7 1,000 8,549 7,671 6,739 100,000 4,223 3,290 100,000 8 1,000 10,027 9,244 8,443 100,000 4,756 3,955 100,000 9 1,000 11,578 10,967 10,567 100,000 5,265 4,866 100,000 10 1,000 13,207 12,858 12,858 100,000 5,751 5,751 100,000 10 10,000 13,207 12,858 12,858 100,000 5,751 5,751 100,000 11 1,000 14,917 14,940 14,940 100,000 6,213 6,213 100,000 12 1,000 16,713 17,235 17,235 100,000 6,651 6,651 100,000 13 1,000 18,599 19,765 19,765 100,000 7,063 7,063 100,000 14 1,000 20,579 22,554 22,554 100,000 7,448 7,448 100,000 15 1,000 22,657 25,633 25,633 100,000 7,806 7,806 100,000 15 15,000 22,657 25,633 25,633 100,000 7,806 7,806 100,000 16 1,000 24,840 53,866 53,866 100,000 8,179 8,179 100,000 17 1,000 27,132 60,581 60,581 100,000 8,522 8,522 100,000 18 1,000 29,539 68,059 68,059 100,000 8,832 8,832 100,000 19 1,000 32,066 76,386 76,386 105,413 9,103 9,103 100,000 20 1,000 34,719 85,624 85,624 114,737 9,334 9,334 100,000 20 20,000 34,719 85,624 85,624 114,737 9,334 9,334 100,000 @ 62 27,000 79,064 107,214 107,214 137,235 9,762 9,762 100,000 @ 65 30,000 94,836 149,125 149,125 181,933 8,995 8,995 100,000
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 39. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% for fifteen years, then 0.25% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 35 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE SUCCESS -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
Assuming --------------------------------------------------------- Current Charges Guaranteed Charges ------------------------------ ------------------------- Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 666 0 100,666 512 0 100,513 2 1,000 2,153 1,550 589 101,551 1,157 196 101,158 3 1,000 3,310 2,516 1,329 102,516 1,782 595 101,782 4 1,000 4,526 3,568 2,261 103,569 2,384 1,077 102,385 5 1,000 5,802 4,715 3,408 104,716 2,964 1,657 102,964 5 5,000 5,802 4,715 3,408 104,716 2,964 1,657 102,964 6 1,000 7,142 5,965 4,803 105,966 3,519 2,357 103,520 7 1,000 8,549 7,326 6,309 107,327 4,048 3,031 104,049 8 1,000 10,027 8,810 7,937 108,810 4,552 3,679 104,552 9 1,000 11,578 10,425 9,990 110,425 5,026 4,591 105,026 10 1,000 13,207 12,186 12,186 112,186 5,472 5,472 105,473 10 10,000 13,207 12,186 12,186 112,186 5,472 5,472 105,473 11 1,000 14,917 14,111 14,111 114,112 5,887 5,887 105,887 12 1,000 16,713 16,219 16,219 116,219 6,268 6,268 106,268 13 1,000 18,599 18,526 18,526 118,526 6,614 6,614 106,615 14 1,000 20,579 21,053 21,053 121,053 6,925 6,925 106,925 15 1,000 22,657 23,820 23,820 123,821 7,196 7,196 107,196 15 15,000 22,657 23,820 23,820 123,821 7,196 7,196 107,196 16 1,000 24,840 27,004 27,004 127,004 7,468 7,468 107,469 17 1,000 27,132 30,511 30,511 130,511 7,694 7,694 107,695 18 1,000 29,539 34,374 34,374 134,375 7,867 7,867 107,868 19 1,000 32,066 38,631 38,631 138,631 7,982 7,982 107,982 20 1,000 34,719 43,319 43,319 143,319 8,030 8,030 108,030 20 20,000 34,719 43,319 43,319 143,319 8,030 8,030 108,030 @ 62 27,000 79,064 92,590 92,590 192,591 5,927 5,927 105,928 @ 65 30,000 94,836 126,018 126,018 226,018 3,139 3,139 103,139
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 33. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% for fifteen years, then 0.25% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 36 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York FEMALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM:$1,000
THE FLEX EDGE SUCCESS -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2 Assuming --------------------------------------------------------- Current Charges Guaranteed Charges ------------------------------ ------------------------- Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 695 0 100,695 534 0 100,535 2 1,000 2,153 1,611 682 101,611 1,200 271 101,200 3 1,000 3,310 2,611 1,457 102,611 1,844 690 101,845 4 1,000 4,526 3,702 2,507 103,703 2,467 1,271 102,467 5 1,000 5,802 4,893 3,698 104,894 3,066 1,870 103,066 5 5,000 5,802 4,893 3,698 104,894 3,066 1,870 103,066 6 1,000 7,142 6,192 5,129 106,193 3,640 2,577 103,641 7 1,000 8,549 7,608 6,676 107,609 4,189 3,256 104,189 8 1,000 10,027 9,153 8,352 109,153 4,710 3,909 104,711 9 1,000 11,578 10,840 10,440 110,840 5,206 4,806 105,207 10 1,000 13,207 12,683 12,683 112,684 5,676 5,676 105,677 10 10,000 13,207 12,683 12,683 112,684 5,676 5,676 105,677 11 1,000 14,917 14,706 14,706 114,707 6,120 6,120 106,121 12 1,000 16,713 16,927 16,927 116,927 6,538 6,538 106,538 13 1,000 18,599 19,365 19,365 119,366 6,927 6,927 106,927 14 1,000 20,579 22,044 22,044 122,044 7,286 7,286 107,286 15 1,000 22,657 24,986 24,986 124,987 7,614 7,614 107,615 15 15,000 22,657 24,986 24,986 124,987 7,614 7,614 107,615 16 1,000 24,840 28,376 28,376 128,376 7,954 7,954 107,955 17 1,000 27,132 32,122 32,122 132,123 8,260 8,260 108,261 18 1,000 29,539 36,263 36,263 136,263 8,528 8,528 108,528 19 1,000 32,066 40,837 40,837 140,838 8,752 8,752 108,753 20 1,000 34,719 45,895 45,895 145,896 8,933 8,933 108,933 20 20,000 34,719 45,895 45,895 116,344 8,933 8,933 108,933 @ 62 27,000 79,064 100,073 100,073 200,073 8,863 8,863 108,863 @ 65 30,000 94,836 137,710 137,710 237,710 7,797 7,797 107,798
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 38. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% for fifteen years, then 0.25% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 37 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE BASE FACE AMOUNT: $100,000 FEMALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000 JOINT EDGE -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
Assuming --------------------------------------------------------- Current Charges Guaranteed Charges ------------------------------ ------------------------- Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 598 0 100,000 383 0 100,000 2 1,000 2,153 1,406 423 100,000 894 0 100,000 3 1,000 3,310 2,287 1,206 100,000 1,377 295 100,000 4 1,000 4,526 3,248 2,076 100,000 1,831 659 100,000 5 1,000 5,802 4,296 3,087 100,000 2,252 1,044 100,000 5 5,000 5,802 4,296 3,087 100,000 2,252 1,044 100,000 6 1,000 7,142 5,438 4,374 100,000 2,639 1,576 100,000 7 1,000 8,549 6,684 5,766 100,000 2,988 2,069 100,000 8 1,000 10,027 8,043 7,345 100,000 3,298 2,600 100,000 9 1,000 11,578 9,530 9,052 100,000 3,567 3,090 100,000 10 1,000 13,207 11,154 11,154 100,000 3,797 3,797 100,000 10 10,000 13,207 11,154 11,154 100,000 3,797 3,797 100,000 11 1,000 14,917 12,928 12,928 100,000 3,983 3,983 100,000 12 1,000 16,713 14,862 14,862 100,000 4,122 4,122 100,000 13 1,000 18,599 16,970 16,970 100,000 4,212 4,212 100,000 14 1,000 20,579 19,272 19,272 100,000 4,249 4,249 100,000 15 1,000 22,657 21,787 21,787 100,000 4,229 4,229 100,000 15 15,000 22,657 21,787 21,787 100,000 4,229 4,229 100,000 16 1,000 24,840 24,538 24,538 100,000 4,147 4,147 100,000 17 1,000 27,132 27,555 27,555 100,000 3,995 3,995 100,000 18 1,000 29,539 30,865 30,865 100,000 3,761 3,761 100,000 19 1,000 32,066 34,501 34,501 100,000 3,436 3,436 100,000 20 1,000 34,719 38,500 38,500 100,000 3,009 3,009 100,000 20 20,000 34,719 38,500 38,500 100,000 3,009 3,009 100,000 @ 62 27,000 79,064 81,068 81,068 103,768 0 0 0 @ 65 30,000 94,836 110,698 110,698 135,052 0 0 0
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 25. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.59% (includes mortality and expense risk charge of 0.8% and average fund operating expenses of 0.79% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 38 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE BASE FACE AMOUNT: $100,000 FEMALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000 JOINT EDGE -- A FLEXIBLE PREMIUM JOINT UNIVERSAL LIFE INSURANCE POLICY OPTION 2
Assuming --------------------------------------------------------- Current Charges Guaranteed Charges ------------------------------ ------------------------- Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 596 0 100,597 381 0 100,382 2 1,000 2,153 1,400 417 101,401 889 0 100,889 3 1,000 3,310 2,274 1,192 102,274 1,366 284 101,366 4 1,000 4,526 3,223 2,052 103,224 1,812 640 101,813 5 1,000 5,802 4,255 3,047 104,256 2,223 1,015 102,224 5 5,000 5,802 4,255 3,047 104,256 2,223 1,015 102,224 6 1,000 7,142 5,375 4,312 105,376 2,599 1,535 102,599 7 1,000 8,549 6,592 5,674 106,593 2,932 2,014 102,933 8 1,000 10,027 7,913 7,215 107,913 3,225 2,527 103,226 9 1,000 11,578 9,350 8,872 109,350 3,475 2,997 103,475 10 1,000 13,207 10,909 10,909 110,910 3,682 3,682 103,682 10 10,000 13,207 10,909 10,909 110,910 3,682 3,682 103,682 11 1,000 14,917 12,603 12,603 112,603 3,842 3,842 103,842 12 1,000 16,713 14,433 14,433 114,434 3,953 3,953 103,954 13 1,000 18,599 16,412 16,412 116,412 4,013 4,013 104,013 14 1,000 20,579 18,550 18,550 118,551 4,016 4,016 104,017 15 1,000 22,657 20,861 20,861 120,862 3,961 3,961 103,962 15 15,000 22,657 20,861 20,861 120,862 3,961 3,961 103,962 16 1,000 24,840 23,359 23,359 123,360 3,841 3,841 103,842 17 1,000 27,132 26,064 26,064 126,064 3,650 3,650 103,650 18 1,000 29,539 28,989 28,989 128,990 3,376 3,376 103,377 19 1,000 32,066 32,154 32,154 132,155 3,010 3,010 103,011 20 1,000 34,719 35,574 35,574 135,575 2,544 2,544 102,544 20 20,000 34,719 35,574 35,574 135,575 2,544 2,544 102,544 @ 62 27,000 79,064 68,238 68,238 168,239 0 0 0 @ 65 30,000 94,836 88,253 88,253 188,253 0 0 0
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 24. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.59% (includes mortality and expense risk charge of 0.8% and average fund operating expenses of 0.79% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 39 VERSION B VARIABLE LIFE INSURANCE POLICY Issued By: Phoenix Home Life Mutual Insurance Company 101 Munson Street P.O. Box 810 Greenfield, Massachusetts 01302-0810 Telephone: (800) 892-4885 PROSPECTUS May 1, 1996 This prospectus describes a Flexible Premium Variable Life Insurance Policy (the "Policy"), offered by Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life"). An applicant chooses the amount of Issue Premium desired and it is then shown in the Policy. Generally, the minimum Issue Premium Phoenix Home Life will accept is the greater of $50 or 1/6 of the Planned Annual Premium. Phoenix Home Life may in some cases accept less than that amount. The amount and payment frequency of planned premiums are as shown in the Policy. If too much is paid in premium in the early Policy Years, the Policy could become a "modified endowment contract". This would cause loans and other amounts received under the Policy to be subject to tax and/or penalties. Currently, Phoenix Home Life notifies a Policyowner when a Policy becomes a modified endowment contract. Premium payments are allocated to one or more of the sub-accounts of the Phoenix Home Life Variable Universal Life Account (the "VUL Account") or to the Guaranteed Interest Account ("GIA"), as specified in the applicant's application for insurance. Each Sub-account of the VUL Account invests exclusively in a portfolio of The Phoenix Edge Series Fund (the "Fund"). The available portfolios of the Fund currently include the Money Market Series; Growth Series; Bond Series; Total Return Series; Balanced Series, International, Real Estate and Strategic Theme Series. For certain Policyowners, the Issue Premium is first allocated to the Money Market Sub-account before being allocated according to the instructions in the application. There is no guaranteed minimum Policy Value except for that portion of Policy Value invested in the GIA, which has a 4% minimum interest rate guarantee. The Policy Value not invested in the GIA will vary to reflect the investment experience of the Sub-accounts of the VUL Account to which premiums have been allocated. A Policyowner bears the investment risk for all amounts so allocated. The Policy will remain in effect so long as the Policy Value or Cash Surrender Value is sufficient to pay certain monthly charges imposed in connection with the Policy. The death benefit under the Policy equals the Policy's face amount on the date of the Insured's death or, if greater, the Policy Value on the date of death increased by the applicable percentage set forth in the Policy. Other death benefit options are also available. A Policyowner may cancel the Policy within 10 days (or longer in some states), after the Policyowner receives it or 10 days after Phoenix Home Life mails or delivers a written notice of withdrawal right to the Policyowner, or within 45 days of completing the application, whichever is latest. It may not be advantageous to purchase a Policy as a replacement for your current life insurance or to supplement an existing life insurance policy. This prospectus is valid only if accompanied by or preceded by a current prospectus for The Phoenix Edge Series Fund. This prospectus and the prospectus for the Fund should be read and retained for future reference. 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. 1 TABLE OF CONTENTS Page - -------------------------------------------------- VARIABLE LIFE INSURANCE POLICY 1 TABLE OF CONTENTS 2 FINANCIAL HIGHLIGHTS 3 SPECIAL TERMS 7 SUMMARY 7 PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT 9 Phoenix Home Life Mutual Insurance Company 9 The VUL Account 9 The Guaranteed Interest Account 10 THE POLICY 10 Introduction 10 Eligible Purchasers 10 Premium Payment 10 Allocation of Issue Premium 11 Right to Cancel Period 11 Temporary Insurance Coverage 12 Transfer of Policy Value 12 Determination of Sub-account Values 12 Death Benefit 13 Surrenders 13 Policy Loans 14 Lapse 15 Payment of Premiums During Period of Disability 15 Additional Insurance Options 15 Additional Rider Benefits 15 INVESTMENTS OF THE VUL ACCOUNT 16 Participating Mutual Fund 16 Investment Adviser to The Phoenix Edge Series Fund 17 Reinvestment and Redemption 17 Substitution of Investments 17 Performance History 18 CHARGES AND DEDUCTIONS 19 Monthly Deduction 19 Premium Taxes 19 Mortality and Expense Risk Charge 20 Investment Management Charge 20 Other Charges 20 GENERAL PROVISIONS 21 Postponement of Payments 21 Payment by Check 21 The Contract 22 Suicide 22 Incontestability 22 Change of Owner or Beneficiary 22 Assignment 22 Misstatement of Age or Sex 22 Surplus 22 Page - -------------------------------------------------- PAYMENT OF PROCEEDS 22 Surrender and Death Benefit Proceeds 22 Payment Options 22 FEDERAL TAX CONSIDERATIONS 23 Introduction 23 Phoenix Home Life's Tax Status 23 Policy Proceeds 23 Other Taxes 24 Modified Endowment Contracts 24 Limitations on Unreasonable Mortality and Expense Charges 25 Qualified Plans 25 Diversification Standards 25 Change of Ownership or Insured or Assignment 26 VOTING RIGHTS 26 The Fund 26 Phoenix Home Life 26 THE DIRECTORS AND EXECUTIVE OFFICERS OF PHOENIX HOME LIFE 26 SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS 27 SALES OF POLICIES 27 STATE REGULATION 28 REPORTS 28 LEGAL PROCEEDINGS 28 LEGAL MATTERS 28 REGISTRATION STATEMENT 28 FINANCIAL STATEMENTS 28 APPENDIX A 31 APPENDIX B 32 THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. The Policy is not available in all States. 2 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) Following are the Financial Highlights for the periods indicated: Money Market Sub-account ------------------------------------ Net asset value, beginning of period .... Income from investment operations Net investment income .................. Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... (1) Net investment income .................. (1) Growth Sub-account ------------------------------------ Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss). Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Portfolio turnover ...................... (1) Annualized 3 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) Bond Sub-account ------------------------------------- Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss) Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Portfolio turnover ...................... Total Return Sub-account ------------------------------------- Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss) Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Portfolio turnover ...................... (1) Annualized 4 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) International Sub-account ------------------------------------- Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss) Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Portfolio turnover ...................... Balanced Sub-account ------------------------------------- Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss) Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Portfolio turnover ...................... (1) Annualized 5 FINANCIAL HIGHLIGHTS (Selected data for a unit outstanding throughout the indicated period) Real Estate Sub-account ------------------------------------- Net asset value, beginning of period .... Income from investment operations Net investment income .................. Net realized and unrealized gain (loss) Total from investment operations ...... Change in net asset value ............... [To be filed by amendment] Net asset value, end of period .......... Total return ............................ Ratios/supplemental data: Net assets, end of period (000) ........ Ratio to average net assets of: Total expenses ......................... Net investment income .................. Portfolio turnover ...................... (1) Annualized STRATEGIC THEME SUB-ACCOUNT This Sub-account commenced operations as of the date of this prospectus; accordingly financials for this Sub-account are not yet available. 6 SPECIAL TERMS As used in this Prospectus, the following terms have the indicated meanings: Attained Age: The age of the Insured on the birthday nearest the most recent Policy Anniversary. Beneficiary: The person or persons specified by the Policyowner as entitled to receive the death benefits under a Policy. Cash Surrender Value: The Policy Value less any surrender charge that would apply on the date of surrender and less any Debt. Death Benefit Guarantee: An additional benefit rider available with the Policy that guarantees a death benefit equal to the initial face amount or the face amount as later increased or decreased, provided that Minimum Required Premiums are paid. See "Additional Rider Benefits." Debt: Outstanding loans against a Policy, plus accrued interest. General Account: The general asset account of Phoenix Home Life. Guaranteed Interest Account (GIA): An allocation option under which amounts deposited are guaranteed to earn a fixed rate of interest. Excess interest may also be credited, in the sole discretion of Phoenix Home Life. In Force: Condition under which the coverage under a Policy is in effect and the Insured's life remains insured. Insured: The person upon whose life the Policy is issued. In Writing (Written Request): In a written form satisfactory to Phoenix Home Life and delivered to Variable and Universal Life Administration. Issue Premium: The premium payment made in connection with the issue of the Policy. Maturity Date: The latest date that the Policy will terminate. Minimum Required Premium: The required premium as specified in the Policy. An increase or decrease in the face amount of the policy will change the Minimum Required Premium amount. Monthly Calculation Day: The first Monthly Calculation Day is the same day as the Policy Date. Subsequent Monthly Calculation Days are the same day of each month thereafter or, if such day does not fall within a given month, the last day of that month will be the Monthly Calculation Day. Payment Date: The Valuation Date on which a premium payment or loan repayment is received at Phoenix Home Life, unless it is received after the close of the New York Stock Exchange, in which case it will be the next Valuation Date. Phoenix Home Life: Phoenix Home Life Mutual Insurance Company, Hartford, Connecticut. Planned Annual Premium: The premium amount that the Policyowner agrees to pay each Policy Year. It must be at least equal to the minimum premium required for the face amount of insurance selected and must be no greater than the maximum premium allowed for the face amount selected. Policy Anniversary: Each anniversary of the Policy Date. Policy Date: The Policy Date as shown on the Schedule Page of the Policy. It is the date from which Policy Years and Policy Anniversaries are measured. Policy Month: The period from one Monthly Calculation Day up to but not including the next Monthly Calculation Day. Policyowner (Owner): The owner of a Policy. Policy Value: The sum of a Policy's share in the values of each Sub-account of the VUL Account plus the Policy's share in the values of the Guaranteed Interest Account. Policy Year: The first Policy Year is the one-year period from the Policy Date up to, but not including, the first Policy anniversary. Each succeeding Policy Year is the one-year period from the Policy anniversary up to but not including the next Policy Anniversary. Proportionate: Amounts allocated to Sub-accounts on a proportionate basis are allocated by increasing (or decreasing) a Policy's share in the value of the affected Sub-accounts so that such shares maintain the same ratio to each other before and after the allocation. Sub-accounts: Accounts within the VUL Account to which non-loaned assets under a Policy are allocated. Unit: A standard of measurement used in determining the value of a Policy. The value of a Unit for each Sub-account will reflect the investment performance of that Sub-account and will vary in dollar amount. Valuation Date: For any Sub-account, each date on which the net asset value of the Fund is determined. Valuation Period: For any Sub-account, the period in days from the end of one Valuation Date through the next. Variable and Universal Life Administration: Variable and Universal Life Administration Division of Phoenix Home Life Mutual Insurance Company. VUL Account: Phoenix Home Life Variable Universal Life Account. SUMMARY 1. What is the Difference Between the Policy and a Conventional Fixed Benefit Life Insurance Policy? Like conventional fixed-benefit life insurance, so long as the Policy remains In Force, the Policy will provide for: (1) the payment of a death benefit to a Beneficiary upon the Insured's death; (2) the accumulation of cash value; and (3) surrender rights and Policy loan privileges. The Policy differs from conventional fixed-benefit life insurance by allowing Policyowners to allocate premiums to one or more Sub-accounts of the VUL Account or to the Guaranteed Interest Account. Each Sub-account invests exclusively in a designated 7 portfolio of the Fund. Also, under the Policy, the Policy Value invested in the VUL Account is not guaranteed and may increase or decrease depending upon the investment experience of the Sub-accounts of the VUL Account. Accordingly, the Policyowner bears the investment risk of any depreciation in value of the underlying assets but reaps the benefits of any appreciation in value. See "Policy Value." In addition, unlike conventional fixed benefit life insurance, a Policyowner also has the flexibility to make additional premium payments and to thereby adjust the Policy Value. However, unlike conventional fixed-benefit life insurance, the Policy does not require a Policyowner to adhere to a fixed premium payment schedule. Moreover, after the payment of the Issue Premium, the failure to make additional premium payments will not in itself cause the Policy to lapse. Conversely, the payment of additional premiums will not guarantee that the Policy will remain In Force. Generally, lapse will occur when the Cash Surrender Value is insufficient to pay certain charges deducted on the Monthly Calculation Day, and a grace period expires without payment of the additional amount required. See "Lapse." If a Whole Life Exchange Option Rider is attached to the Policy, the Policy may be exchanged for a fixed-benefit whole life policy. (See "Additional Rider Benefits"). 2. Is There a Guaranteed Account Option? Yes. A Policyowner may elect to have premium payments allocated to the Guaranteed Interest Account. Amounts allocated to the GIA earn a fixed rate of interest and Phoenix Home Life may also, in its sole discretion, credit excess interest. (See Appendix A) 3. What Is the Death Benefit under the Policy? The Policy provides for the payment of benefits upon the death of the Insured. Upon application for a Policy, an applicant designates an Issue Premium. The Policy indicates the face amount of insurance. The death benefit will equal the face amount on the date of the Insured's death or, if greater, the Policy Value on the date of the Insured's death increased by the applicable percentage set forth in the Policy. If the enhanced death benefit option is selected, the death benefit will equal the face amount on the date of the Insured's death plus the Policy Value or, if greater, the Policy Value on the date of the Insured's death increased by the applicable percentage set forth in the Policy. Guaranteed death benefit and living benefits riders are also available. See "Death Benefit." 4. How Long Will the Policy Remain In Force? The Policy will only lapse when the Cash Surrender Value is insufficient to pay the monthly deduction (see "Charges and Deductions -- Monthly Deductions"), and a grace period expires without payment of the additional amount required. In this respect, the Policy differs in two important respects from a conventional life insurance Policy. First, the failure to pay additional premiums will not automatically cause the Policy to lapse. Second, the payment of premiums of any pre-specified amount does not guarantee that the Policy will remain In Force until the Maturity Date. A rider is available to ensure that premium payments will continue during a period of disability. 5. What Charges are There in Connection With the Policy? Monthly Deduction: A deduction is made each Policy Month from the Policy Value (excluding the value of the loaned portion of the Guaranteed Interest Account) to pay the cost of insurance provided under the Policy; the cost of any rider benefits provided; any unpaid balance of the $150 Issue Expense Charge; and an administrative charge as shown on the schedule page of the Policy. The administrative charge may vary but in no event will it exceed $10 per month. Currently, the administrative charge is $5.00 per month. The administrative charge is set at a level designed to recover actual costs and is not designed to result in any profit to Phoenix Home Life. See "Charges and Deductions." Other Charges: A fee equal to the lesser of $25 or 2% of the partial surrender amount paid is deducted from the Policy Value for each partial surrender. A partial surrender charge equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender, determined by applying a formula, is also assessed against the VUL Account Sub-accounts or the Guaranteed Interest Account when a partial surrender is made. No charges are currently made from the VUL Account or the Guaranteed Interest Account for federal or state income taxes. If Phoenix Home Life determines that such taxes may be imposed, it may make deductions from the VUL Account to pay these taxes. Phoenix Home Life charges each Sub-account of the VUL Account the daily equivalent of 0.80% on an annual basis of the current value of the Sub-account's net assets for its assumption of certain mortality and expense risks incurred in connection with the Policy. Premium amounts are also reduced by any applicable state premium tax based on the Policyowner's last known address on record with Variable and Universal Life Administration and, for payments made during a grace period, by the amount needed to cover any monthly deductions made during the grace period. Investment advisory charges are imposed on an annual basis based on the average daily net assets of the Series of the Fund as follows: Rate for First Rate for Next Rate for Excess Series $250,000,000 $250,000,000 Over $500,000,000 - ------ ------------ ------------ ----------------- Money Market .40% .35% .30% Bond....... .50% .45% .40% Balanced... .55% .50% .45% Total Return .60% .55% .50% Growth..... .70% .65% .60% International .75% .70% .65% Strategic Theme...... .75% .70% .65% Phoenix Realty Securities, Inc. Rate for First Rate for Next Rate for Excess Series $1,000,000,000 $1,000,000,000 Over $2,000,000,000 - ------ -------------- -------------- ------------------- Real Estate .75% .70% .65% In addition, each Series (except the International, Real Estate and Strategic Theme Series) pays a portion or all of its other operating expenses, up to .15% of its total net assets. The International, Real Estate and Strategic Theme Series pay other operating 8 expenses up to .40%, .25% and .25%, respectively, of its total net assets. See "Charges and Deductions." 6. Is there a Right to Cancel Period? Yes. The Policyowner may cancel the Policy within 10 days after the Policyowner receives it (or longer in some states), or 10 days after Phoenix Home Life mails or delivers a written notice of withdrawal right to the Policyowner, or within 45 days of completing the application, whichever is latest. 7. How are Premiums Allocated? If the applicant elects the Temporary Money Market Allocation Amendment in the application, Phoenix Home Life will allocate the entire Issue Premium less any applicable charges to the Money Market Sub-account of the VUL Account. Phoenix Home Life requires this election for all applicants in certain states and for applicants in certain states who indicate on their application that they intend the Policy to replace existing insurance. At the expiration of the Right to Cancel Period for such Policyowners, the Policy Value will be allocated among the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in accordance with the Policyowner's allocation instructions in the application for insurance. All other Policyowners will have their Issue Premium less any applicable charges allocated according to the instructions in the application on the date it is received without first having the premium placed in the Money Market Sub-account. The Policy Value may be allocated among the available Sub-accounts of the VUL Account, each of which invests in shares of a designated portfolio of the Fund, or to the Guaranteed Interest Account. The eight portfolios of the Fund currently available are: Money Market Series, Growth Series, Bond Series, Total Return Series, Balanced Series, International Series, Strategic Theme Series and Real Estate Series. See "Investments of the VUL Account." 8. After the Initial Allocation, May I Change the Allocation of Policy Value? Yes. A Policyowner may transfer amounts among the Sub- accounts of the VUL Account or the Guaranteed Interest Account. Only one transfer per Policy Year is permitted from the unloaned portion of the Guaranteed Interest Account. The amount of that transfer is limited to the higher of $1,000 or 25% of the value of the Policy in the unloaned portion of the Guaranteed Interest Account. Also, Phoenix Home Life reserves the right to require that transfers be made by written request. Phoenix Home Life further reserves the right to permit transfers of less than $500 only if the entire balance in the Sub-account of the VUL Account or the Guaranteed Interest Account is transferred. A systematic transfer program is also available. See "Transfer of Policy Value." 9. May the Policy be Surrendered? Yes. A Policyowner may totally surrender the Policy at any time and receive the Cash Surrender Value. Subject to certain limitations, the Policyowner may also partially surrender the Policy at any time prior to the Maturity Date. In the future, Phoenix Home Life may set a minimum partial surrender amount, not to exceed $500. See "Surrenders -- Partial Surrenders." A partial surrender will result in a decrease in the death benefit under the Policy. See "Death Benefit." If the Policy is totally or partially surrendered during the first ten Policy Years, a Surrender Charge will apply. See "Surrender Charge." In addition, there may be certain tax consequences as the result of a surrender. For example, a Policy may be a "modified endowment contract" if the amount of premium paid during the first seven Policy Years is more than the amount that would have been paid if the Policy had provided for paid-up benefits after the payment of seven level annual premiums. Distributions such as loans and full or partial surrenders under a modified endowment contract may be taxable income to the extent they exceed the premiums paid. If such income is distributed before the Policyowner attains age 591/2, a 10% penalty tax may be imposed. See "Federal Tax Considerations." 10. What is the Policy's Loan Privilege? A Policyowner may obtain Policy loans in an amount up to 90% of the result of subtracting the remaining surrender charge from the Policy Value. The interest rate on a loan is at an effective annual rate as stated in the Policy, compounded daily and payable on each Policy Anniversary in arrears. The requested loan amount is transferred from the VUL Account to the loaned portion of the Guaranteed Interest Account and is credited with interest at an effective annual rate as stated in the Policy. Phoenix Home Life reserves the right not to allow loans of less than $200 unless the loans are to pay premiums on another policy issued by Phoenix Home Life. See "The Policy -- Policy Loans." The proceeds of Policy loans may be subject to Federal income tax under certain circumstances. See "Federal Tax Considerations." 11. How are Insurance Benefits Paid? Surrender and death benefits under the Policy may be paid in a lump sum or under one of the payment options set forth in the Policy. See "Payment Options." PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT Phoenix Home Life Mutual Insurance Company Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life") is a mutual life insurance company originally chartered in Connecticut in 1851. Its executive office is at One American Row, Hartford, Connecticut 06115 and its main administrative office is at 100 Bright Meadow Boulevard, Enfield, Connecticut 06083-1900. Its New York principal office is at 99 Troy Road, East Greenbush, New York 12061. Phoenix Home Life is the nation's 13th largest mutual life insurance company and has admitted assets of approximately $12 billion. Phoenix Home Life sells insurance policies and annuity contracts through its own field force of full time agents and through brokers. Its operations are conducted in all 50 states, the District of Columbia, Canada and Puerto Rico. The VUL Account The VUL Account is a separate account of Phoenix Home Life registered as a unit investment trust under the Investment Company Act of 1940, as amended, and it meets the definition of a "separate account" under that Act. Such registration does not involve supervision of the management of the VUL Account or Phoenix Home Life by the Securities and Exchange Commission. 9 The VUL Account currently has eight Sub-accounts available for allocation of Policy Value. If in the future Phoenix Home Life determines that marketing needs and investment conditions warrant, Phoenix Home Life may establish additional Sub-accounts, which will be made available to existing Policyowners to the extent and on a basis determined by Phoenix Home Life. Each Sub-account will invest solely in shares of the Fund allocable to one of eight portfolios, each having the specified investment objective set forth under "Investments of the VUL Account -- Participating Mutual Fund." Phoenix Home Life does not guarantee the investment performance of the VUL Account or any of its Sub-accounts. The Policy Value allocated to the VUL Account depends on the investment performance of the Fund. Thus, the Policyowner bears the full investment risk for all monies invested in the VUL Account. The VUL Account may from time to time include in advertisements containing total return the ranking of those performance figures relative to such figures for groups of sub-accounts having similar investment objectives as categorized by ranking services such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc. Additionally, the Funds may compare a Series performance results to other investment or savings vehicles (such as certificates of deposit) and may refer to results published in various publications such as Changing Times, Forbes, Fortune, Money, Barrons, Business Week and Investor's Daily, The Stanger Register, Stanger's Investment Adviser, The Wall Street Journal, The New York Times, Consumer Reports, Registered Representative, Financial Planning, Financial Services Weekly, Financial World, U.S. News and Work Report, Standard & Poor's The Outlook, and Personal Investor. The Funds may from time to time illustrate the benefits of tax deferral by comparing taxable investments to investments made through tax-deferred retirement plans. The total return may also be used to compare the performance of a Series against certain widely acknowledged outside standards or indices for stock and bond market performance, such as the Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones Industrial Average, Europe Australia Far East Index (EAFE), Consumer's Price Index, Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P 500 is a commonly quoted market value-weighted and unmanaged index showing the changes in the aggregate market value of 500 common stocks relative to the base period 1940-43. The S&P is composed almost entirely of common stocks of companies listed on the New York Stock Exchange, although the common stocks of a few companies listed on the American Stock Exchange or traded over the counter are included. The 500 companies represented include 400 industrial, 60 transportation and 40 financial services concerns. The S&P represents about 80% of the market value of all issues traded on the New York Stock Exchange. The VUL Account is administered and accounted for as part of the general business of Phoenix Home Life, but the income, gains, or losses of the VUL Account are credited to or charged against the assets held in the VUL Account, without regard to other income, gains, or losses of any other business Phoenix Home Life may conduct. Under New York law, the assets of the VUL Account are not chargeable with liabilities arising out of any other business Phoenix Home Life may conduct. Nevertheless all obligations arising under the Policy are general corporate obligations of Phoenix Home Life. The Guaranteed Interest Account The Guaranteed Interest Account is not part of the VUL Account. It is accounted for as part of the General Account. Phoenix Home Life reserves the right to limit cumulative deposits, including transfers, to the unloaned portion of the Guaranteed Interest Account to no more than $250,000 during any one-week period. Phoenix Home Life will credit interest daily on the amounts allocated under the Policy to the Guaranteed Interest Account. The credited rate will be uniform by class. The loaned portion of the Guaranteed Interest Account will be credited interest at an effective annual fixed rate of 6%. Interest on the unloaned portion of the Guaranteed Interest Account will be credited at an effective annual rate of not less than 4%. Twice each calendar month Phoenix Home Life sets the interest rate that will apply to any net premium or transferred amounts deposited to the unloaned portion of the Guaranteed Interest Account. That rate will remain in effect for such deposits for an initial guarantee period of one full year from the date of deposit. Upon expiration of the initial one-year guarantee period (and each subsequent one-year guarantee period thereafter), the rate to be applied to any deposits whose guarantee period has just ended shall be the same rate as is applied to new deposits allocated to the Guaranteed Interest Account at the time that the guarantee period expired. This rate will likewise remain in effect for a guarantee period of one full year from the date the new rate is applied. For more complete information concerning the Guaranteed Interest Account, see Appendix A. THE POLICY Introduction The Policy is a variable life insurance policy. The Policy has a death benefit, Cash Surrender Value, and loan privilege such as is associated with a traditional fixed benefit whole life policy. The Policy differs from a fixed benefit whole life policy, however, because the Policyowner specifies into which of several Sub- accounts of the VUL Account or the Guaranteed Interest Account net premium is to be allocated. Each Sub-account of the VUL Account, in turn, invests its assets exclusively in a portfolio of the Fund. The Policy Value varies according to the investment performance of the Series to which Policy Value has been allocated. Eligible Purchasers Any person up to the age of 75 is eligible to be insured under a newly purchased Policy after providing acceptable evidence of insurability. A person can purchase a Policy to insure the life of another person provided that the Policyowner has an insurable interest in the life of the Insured, and the Insured consents. Premium Payment The minimum Issue Premium for a Policy is generally the greater of $50 or 1/6 of the Planned Annual Premium. The Issue Premium is due on the Policy Date. The Insured must be alive when the Issue Premium is paid. Thereafter, the amount and payment fre- 10 quency of planned premiums are as shown on the schedule page of the Policy. All premiums are payable in advance at Variable and Universal Life Administration, except that the Issue Premium may be paid to an authorized agent of Phoenix Home Life for forwarding to the Underwriting Department of Phoenix Home Life. Any premium payments will be reduced by the premium tax charge applicable in the state of the Policyowner's last known address on record with Variable and Universal Life Administration. The Issue Premium will also be reduced by the Issue Expense Charge of $150 on a pro rata basis in equal monthly installments over a 12 month period. Any unpaid balance of the Issue Expense Charge will be paid to Phoenix Home Life upon Policy Lapse or termination. Premium payments received during a grace period will also be reduced by the amount needed to cover any monthly deductions during the grace period. The remainder will be applied on the Payment Date to the various Sub-accounts of the VUL Account or to the Guaranteed Interest Account, based on the premium allocation schedule elected in the application for the Policy or as later changed. The allocation schedule for premium payments may be changed by calling or writing to Variable and Universal Life Administration. Allocations to the VUL Account Sub-accounts or to the Guaranteed Interest Account must be expressed in terms of whole percentages. The number of units credited to a Sub-account of the VUL Account will be determined by dividing the portion of the net premium applied to that Sub-account by the unit value of the Sub-account on the Payment Date. A Policyowner may increase or decrease the planned premium amount or payment frequency at any time by written notice to Variable and Universal Life Administration. Phoenix Home Life reserves the right to limit increases to such maximums as may be established from time to time. Additional premium payments may be made at any time. Each premium payment must at least equal $25 or, if made during a grace period, the payment must equal the amount needed to prevent lapse of the Policy. A Policyholder may also elect a Waiver of Premium Rider. This rider provides for the waiver of certain premium payments under the Policy under certain conditions during a period of total disability of the Insured. Under its terms, the specified premium will be waived upon Phoenix Home Life's receipt of proof that the Insured is totally disabled and that the disability occurred while the rider was In Force. The Policy contains a total premium limit as shown on the Schedule Page. This limit is applied to the sum of all premiums paid under the Policy. If the total premium limit is exceeded, the Policyowner will receive the excess, with interest at an annual rate of not less than 4%, not later than 60 days after the end of the Policy Year in which the limit was exceeded. The Policy Value will then be adjusted to reflect the refund. The amount to be taken from each Sub-account or the Guaranteed Interest Account will be allocated in the same manner as provided for monthly deductions unless the Policyowner requests otherwise in writing. The total premium limit may be exceeded if additional premium is needed to prevent lapse or if Phoenix Home Life determines that additional premium would be permitted by Federal laws or regulations. A Policyowner may authorize his bank to draw $25 or more from his personal checking account monthly to purchase Units in any available Sub-account. The amount the Policyowner designates will be automatically invested in the Sub-account of his choice on the date the bank draws on his account. Policies sold to officers, directors and employees of Phoenix Home Life (and their spouses and children) will be credited with an amount equal to the first-year commission that would apply on the amount of premium contributed. This option is also available to career agents of Phoenix Home Life (and their spouses and children). Allocation of Issue Premium Within 7 business days after the later of receipt of the Issue Premium and Phoenix Home Life's approval of a completed application for processing, Phoenix Home Life will allocate the Issue Premium less applicable charges to the VUL Account or to the Guaranteed Interest Account. Generally, the Issue Premium less applicable charges is directly allocated in accordance with the allocation instructions in the application for a Policy. However, Policies issued in certain states, and Policies issued in certain states pursuant to applications which state the Policy is intended to replace existing insurance, are issued with a Temporary Money Market Allocation Amendment. Under this Amendment, Phoenix Home Life temporarily allocates the entire Issue Premium paid less applicable charges (along with any other premiums paid during the Right to Cancel Period) to the Money Market Sub-account of the VUL Account, and, at the expiration of the Right to Cancel Period, the Policy Value of the Money Market Sub-account is allocated among the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in accordance with the applicant's allocation instructions in the application for insurance. Right to Cancel Period A Policy may be returned by mailing or delivering it to Phoenix Home Life within ten days after the Policyowner receives it (or longer in some states); within ten days after Phoenix Home Life mails or delivers a written notice of withdrawal right to the Policyowner; or within 45 days after the applicant signs the application for insurance, whichever occurs latest (the "Right to Cancel Period"). The returned Policy is treated as if Phoenix Home Life never issued the Policy and, except for Policies issued with a Temporary Money Market Allocation Amendment, Phoenix Home Life will return the sum of the following as of the date Phoenix Home Life receives the returned Policy: (i) the then current Policy Value less any unpaid loans and loan interest; plus (ii) any monthly deductions, partial surrender fees, and other charges made under the Policy, including investment advisory fees, or any Fund expenses deducted. The amount returned for Policies issued with the Amendment will equal any premiums paid less any unrepaid loans and loan interest, and less any partial surrender amounts paid. Phoenix Home Life reserves the right to disapprove an application for processing within 7 days of receipt at Phoenix Home Life of the completed application for insurance, in which event Phoenix Home Life will return the premium paid. Even after approval of the application for processing, Phoenix Home Life reserves the right to decline issuance of the Policy, in which event Phoenix Home Life 11 will refund the applicant the same amount as would have been refunded under the Policy had it been issued but returned for refund during the Right to Cancel Period. Temporary Insurance Coverage On the date the application for a Policy is signed and submitted with the Issue Premium, Phoenix Home Life issues a Temporary Insurance Receipt in connection with the application. Under the Temporary Insurance Receipt, the insurance protection applied for (subject to the limits of liability and in accordance with the terms set forth in the Policy and in the Receipt) takes effect on the date of the application. Transfer of Policy Value Systematic Transfer Program A Policyowner may elect to transfer funds automatically among the Sub-accounts or the unloaned portion of the Guaranteed Interest Account ("GIA") on a monthly, quarterly, semi-annual or annual basis under the Systematic Transfer Program for Dollar Cost Averaging ("Systematic Transfer Program"). Under this Systematic Transfer Program, the minimum initial and subsequent transfer amounts are $25 monthly, $75 quarterly, $150 semi-annually, or $300 annually. A Policyowner must have an initial value of $1,000 in the GIA or the Sub-account that funds will be transferred from and if the value in that Sub-account or the GIA drops below the elected transfer amount, the entire remaining balance will be transferred and no more systematic transfers will be processed. Funds may be transferred from only one Sub-account or the GIA, but may be allocated to multiple Sub-accounts. Under the Systematic Transfer Program, Policyowners may make more than one transfer per Policy Year from the GIA, in approximate equal amounts over a minimum 18 month period. All transfers under the Systematic Transfer Program will be executed on the basis of the respective values as of the first of the month following receipt of the transfer request. If the first of the month falls on a holiday or weekend, then the transfer will be processed on the next succeeding business day. Non-Systematic Transfers Transfers among available Sub-accounts or the GIA and changes in premium payment allocations may be requested in writing or by calling 1-800-892-4885, between the hours of 8:30 AM and 4:00 PM Eastern Standard Time and will be executed on the date the request is received at Variable and Universal Life Administration, except as noted below. Unless the Policyowner elects in writing not to authorize telephone transfers or allocation changes, telephone transfer orders and allocation changes will also be accepted on behalf of the Policyowner from his or her registered representative. Phoenix Home Life and Phoenix Equity Planning Corporation ("PEPCO") will employ reasonable procedures to confirm that telephone instructions are genuine. They will require account and request verification and will record telephone instructions on tape. All telephone transfers will be confirmed in writing to the Policyowner. To the extent that procedures reasonably designed to prevent unauthorized transfers are not followed, Phoenix Home Life and PEPCO may be liable for following telephone instructions for transfers that prove to be fraudulent. However, the Policyowner would bear the risk of loss resulting from instructions entered by an unauthorized third party that Phoenix Home Life and PEPCO reasonably believe to be genuine. These telephone privileges may be modified or terminated at any time and during times of extreme market volatility, may be difficult to exercise. In such cases, the Policyowner should submit a written request. Phoenix Home Life reserves the right to permit transfers of less than $500 only if the entire balance in the Sub-account or the GIA is transferred or if the Systematic Transfer Program has been elected. Phoenix Home Life reserves the right to prohibit a transfer to any Sub-account of the VUL Account where the resultant value of the Policy's share in that Sub-account immediately after the transfer would be less than $500. It further reserves the right to require that the entire balance of a Sub-account or the GIA be transferred if the share of the Policy in the value of that Sub-account would, immediately after the transfer, be less than $500. Unless Phoenix Home Life agrees otherwise or the Systematic Transfer Program has been elected, a Policyowner may make only one transfer per Policy Year from the unloaned portion of the GIA and the amount that may be transferred cannot exceed the greater of $1,000 or 25% of the value of the Policy in the unloaned portion of the GIA at the time of the transfer. Non-systematic transfers from the unloaned portion of the GIA will be effectuated on the date of receipt by Variable and Universal Life Administration except as otherwise may be requested by the Policyowner. For policies issued with the Temporary Money Market Allocation Amendment, transfers may not be made until termination of the Right to Cancel Period. Determination of Sub-account Values The unit value of each Sub-account of the VUL Account was set by Phoenix Home Life on the first valuation date of each such Sub-account. The unit value of a Sub-account of the VUL Account on any other Valuation Date is determined by multiplying the unit value of that Sub-account on the just prior Valuation Date by the Net Investment Factor for that Sub-account for the then current Valuation Period. The unit value of each Sub-account of the VUL Account on a day other than a Valuation Date is the unit value on the next Valuation Date. Unit values are carried to 6 decimal places. The unit value of each Sub-account of the VUL Account on a Valuation Date is determined at the end of that day. The Net Investment Factor for each Sub-account of the VUL Account is determined by the investment performance of the assets held by the Sub-account during the Valuation Period. Each valuation will follow applicable law and accepted procedures. The Net Investment Factor is equal to item (D) below subtracted from the result of dividing the sum of items (A) and (B) by item (C). (A) The value of the assets in the Sub-account on the current Valuation Date, including accrued net investment income and realized and unrealized capital gains and losses, but excluding the net value of any transactions during the current Valuation Period. 12 (B) The amount of any dividend (or, if applicable, any capital gain distribution) received by the Sub-account if the "ex-dividend" date for shares of the Fund occurs during the current Valuation Period. (C) The value of the assets in the Sub-account as of the just prior Valuation Date, including accrued net investment income and realized and unrealized capital gains and losses, and including the net value of all transactions during the Valuation Period ending on that date. (D) The sum of the following daily charges multiplied by the number of days in the current Valuation Period: 1. the mortality and expense risk charge; and 2. the charge, if any, for taxes and reserves for taxes on investment income, and realized and unrealized capital gains. Death Benefit General The death benefit (under Option 1) equals the Policy's face amount on the date of the Insured's death or, if greater, the minimum death benefit on the date of death. Under Option 2, the death benefit equals the Policy's face amount on the date of the Insured's death plus the Policy Value. Under either Option, the minimum death benefit is the Policy Value on the date of death of the Insured increased by the applicable percentage from the table contained in the Policy, based on the Insured's attained age at the beginning of the Policy Year in which the death occurs. If no option is elected, Option 1 will apply. Guaranteed Death Benefit Option For Policies with a face amount of at least $50,000, a guaranteed death benefit rider may be purchased. Under this Policy rider, if a Policyowner pays the required premium each year as specified in the rider, the death benefit selected will be guaranteed for a certain specified number of years, regardless of the investment performance of the Policy, and will equal either the initial face amount or the face amount as later changed by increases or decreases. In order to keep this guaranteed death benefit In Force, there may be limitations on the amount of partial surrenders or decreases in face amount permitted. Living Benefits Option In the event of a terminal illness of the Insured, an accelerated payment of up to 75% of the Policy's death benefit (up to a maximum of $250,000) is available. The minimum face amount of the Policy after any such accelerated benefit payment is $10,000. Partial Surrender and Decreases in Face Amount: Effect on Death Benefit A partial surrender or a decrease in face amount generally decreases the death benefit. Upon a decrease in face amount or partial surrender, a partial surrender charge will be deducted from Policy Value based on the amount of the decrease or partial surrender. With a decrease in face amount, the death benefit under a Policy would be reduced on the next Monthly Calculation Day. With a partial surrender, the death benefit under a Policy would be reduced immediately. A decrease in the death benefit may have certain tax consequences. See "Federal Tax Considerations." Requests for Decrease in Face Amount A Policyowner may request a decrease in face amount at any time after the first Policy Year. Unless Phoenix Home Life agrees otherwise, the decrease must at least equal $10,000 and the face amount remaining after the decrease must at least equal $25,000. All face amount decrease requests must be in writing and will be effective on the first Monthly Calculation Day following the date Phoenix Home Life approves the request. A partial surrender charge will be deducted from the Policy Value based on the amount of the decrease, upon a decrease in face amount. The charge will equal the applicable surrender charge that would apply to a full surrender multiplied by a fraction (the decrease in face amount divided by the face amount of the Policy before the decrease). Surrenders General At any time during the lifetime of the Insured and while the Policy is In Force, the Policyowner may partially or fully surrender the Policy by sending a written release and surrender in a form satisfactory to Phoenix Home Life to Variable and Universal Life Administration, along with the Policy if Phoenix Home Life so requires. The amount available for surrender is the Cash Surrender Value at the end of the Valuation Period during which the surrender request is received at Variable and Universal Life Administration. Upon partial or full surrender, Phoenix Home Life generally will pay the amount surrendered to the Policyowner within seven days after Phoenix Home Life receives the Written Request for the surrender. Under certain circumstances, the surrender payment may be postponed. See "General Provisions -- Postponement of Payments." For the Federal tax effects of partial and full surrenders, see "Federal Tax Considerations." Full Surrenders If the Policy is being fully surrendered, the Policy itself must be returned to Variable and Universal Life Administration, along with the written release and surrender of all claims in a form satisfactory to Phoenix Home Life. A Policyowner may elect to have the amount paid in a lump sum or under a payment option. See "Surrender Charge" and "Payment Options." Partial Surrenders A Policyowner may obtain a partial surrender of the Policy by requesting that part of the Policy's Cash Surrender Value be paid. The Policyowner may do this at any time during the lifetime of the Insured while the Policy is In Force with a Written Request to Variable and Universal Life Administration. Phoenix Home Life reserves the right to require that the Policy be returned before payment is made. A partial surrender will be effective on the date the Written Request is received or, if required, the date the Policy is received. Surrender proceeds may be applied under any of the payment 13 options described under "Payment of Proceeds -- Payment Options." Phoenix Home Life reserves the right not to allow partial surrenders of less than $500. In addition, if the share of the Policy Value in any Sub-account or in the Guaranteed Interest Account that would be reduced as a result of a partial surrender would, immediately after the partial surrender, be less than $500, Phoenix Home Life reserves the right to require that as part of any partial surrender, the entire remaining balance in that Sub-account or the Guaranteed Interest Account be surrendered. Upon a partial surrender the Policy Value will be reduced by the sum of the following: (i) The Partial Surrender Amount Paid. This amount comes from a reduction in the Policy's share in the value of each Sub-account or the Guaranteed Interest Account based on the allocation requested at the time of the partial surrender. If no allocation request is made, the assessment to each Sub-account will be made in the same manner as that provided for monthly deductions. (ii) The Partial Surrender Fee. This fee is the lesser of $25 or 2% of the partial surrender amount paid. The assessment to each Sub-account or the Guaranteed Interest Account will be made in the same manner as provided for the partial surrender amount paid. (iii) A Partial Surrender Charge. This charge is equal to a pro- rata portion of the applicable surrender charge that would apply to a full surrender, determined by multiplying the applicable surrender charge by a fraction (equal to the partial surrender amount payable divided by the result of subtracting the applicable surrender charge from the Policy Value). This amount is assessed against the Sub-account or the Guaranteed Interest Account in the same manner as provided for the partial surrender amount paid. The Cash Surrender Value will be reduced by the partial surrender amount paid plus the partial surrender fee. The Face Amount of the Policy will also be reduced by the same amount as the Policy Value is reduced as described above. The benefit payment under the Living Benefits Rider is not considered a partial surrender. Policy Loans While the Policy is In Force, a loan may be obtained against the Policy up to the available loan value. The loan value on any day is 90% of the result of subtracting the then remaining surrender charge from the Policy Value. The available loan value is the loan value on the current day less any outstanding Debt. The amount of any loan will be added to the loaned portion of the Guaranteed Interest Account and subtracted from the Policy's share of the Sub-accounts or the unloaned portion of the Guaranteed Interest Account, based on the allocation requested at the time of the loan. The total reduction will equal the amount added to the loaned portion of the Guaranteed Interest Account. Allocations must generally be expressed in terms of whole percentages. If no allocation request is made, the amount subtracted from the share of each Sub-account or the unloaned portion of the Guaranteed Interest Account will be determined in the same manner as provided for monthly deductions. Interest will be credited and the loaned portion of the GIA will increase at an effective annual rate of 6.00%, compounded daily and payable in arrears. At the end of each Policy Year and at the time of any Debt repayment, interest credited to the loaned portion of the GIA will be transferred to the unloaned portion of the GIA. Debt may be repaid at any time during the lifetime of the Insured while the Policy is In Force. Any Debt repayment received by Phoenix Home Life during a grace period will be reduced to cover any overdue monthly deductions and only the balance will be applied to reduce the Debt. Such balance, in excess of any outstanding accrued loan interest, will be applied to reduce the loaned portion of the Guaranteed Interest Account and will be transferred to the unloaned portion of the Guaranteed Interest Account to the extent that loaned amounts taken from such Account have not previously been repaid. Otherwise, such balance will be transferred among the Sub-accounts as the Policyowner requests upon repayment and, if no allocation request is made, according to the most recent premium allocation schedule on file. While there is outstanding Debt on the Policy, any payments received by Phoenix Home Life for the Policy will be applied directly to reduce the Debt unless specified as a premium payment by the Policyowner. Until the Debt is fully repaid, additional Debt repayments may be made at any time during the lifetime of the Insured while the Policy is In Force. Failure to repay a policy loan or to pay loan interest will not terminate the Policy except as otherwise provided under the terms of the Policy concerning the grace period and lapse. The proceeds of Policy loans may be subject to Federal income tax under certain circumstances. See "Federal Tax Considerations." In the future, Phoenix Home Life may set a minimum Policy loan amount not to exceed $200. However, any such minimum loan amount will not apply to any loan, the proceeds of which are used to pay a premium due on another policy issued by Phoenix Home Life. The Policyowner will pay interest on the loan at an effective annual rate, compounded daily and payable in arrears. For the first ten Policy Years or until the Policyowner reaches age 65, whichever occurs first, the rate will be 8.00% and thereafter the rate will be 7.00%. At the end of each Policy Year, any interest due on the Debt will be treated as a loan and will be offset by a transfer from the Policyowner's values to the value of the loaned portion of the Guaranteed Interest Account. A Policy loan, whether or not repaid, has a permanent effect on the Policy Value because the investment results of the Sub-accounts or unloaned portion of the Guaranteed Interest Account will apply only to the amount remaining in the Sub-accounts or the unloaned portion of the Guaranteed Interest Account. The longer a loan is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable. If the Sub-accounts or the unloaned portion of the Guaranteed Interest Account earn more than 6.00% per annum, which is the annual interest rate for funds held in the loaned portion of the Guaranteed Interest Account, Pol- 14 icy Value does not increase as rapidly as it would have had no loan been made. If the Sub-accounts or the Guaranteed Interest Account earn less than 6.00% per annum, Policy Value is greater than it would have been had no loan been made. A Policy loan, whether or not repaid, also has an effect on the Policy's Death Benefit due to any resulting differences in Cash Surrender Value. Lapse Unlike conventional life insurance policies, the payment of the Issue Premium, no matter how large, or the payment of additional premiums will not necessarily continue the Policy In Force to its Maturity Date. Policy Value must remain positive to avoid lapse. Beginning in the third Policy Year, the Cash Surrender Value must also be positive to avoid lapse. However, until the Cash Surrender Value becomes positive for the first time, the Policy will not lapse as long as all premiums planned at issue have been paid. Subject to the foregoing, lapse will occur when the Cash Surrender Value is insufficient to cover the monthly deduction, and a grace period expires without payment of the additional amount required. If the Cash Surrender Value is insufficient to cover the monthly deduction, the Policyowner must pay during the grace period the amount equal to three times the required monthly deduction. See "Charges and Deductions." If on any Monthly Calculation Day during the first two Policy Years, the Policy Value is insufficient to cover the monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. If on any Monthly Calculation Day during any subsequent Policy Year, the Cash Surrender Value (which has become positive) is less than the required monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. The Policy will continue In Force during any such grace period although, Sub-account transfers, loans, partial or full surrenders will not be permitted. Failure to pay the additional amount within the grace period will result in lapse of the Policy, but not before 30 days have elapsed since Phoenix Home Life mailed written notice to the Policyowner. If a premium payment for the additional amount is received by Phoenix Home Life during the grace period, any amount of premium over what is required to prevent lapse will be allocated among the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in accordance with the then current premium allocation schedule. In determining the amount of "excess" premium to be applied to the Sub-accounts or the Guaranteed Interest Account, Phoenix Home Life will deduct the premium tax and the amount needed to cover any monthly deductions made during the grace period. If the Insured dies during the grace period, the death benefit will equal the amount of the death benefit immediately prior to the commencement of the grace period. Payment of Premiums During Period of Disability A Policyholder may also elect a Waiver of Premium Rider. This rider provides for the waiver of certain premium payments under the Policy under certain conditions during a period of total disability of the Insured. Under its terms, the specified premium will be waived upon Phoenix Home Life's receipt of proof that the insured is totally disabled and that the disability occurred while the rider was In Force. The terms of this rider may vary by state. Additional Insurance Options While the Policy is In Force and the Policyowner is insurable, the Policyowner will have the option to purchase additional insurance on the same Insured with the same guaranteed rates as the Policy without being assessed an Issue Expense Charge. Phoenix Home Life will require evidence of insurability and charges will be adjusted for the Insured's new attained age and any change in risk classification. However, if elected on the application, the Policyowners may, at predetermined future dates, purchase additional insurance protection on the same Insured without evidence of insurability (See "Purchase Protection Plan Riders"). In addition, once each Policy Year, a Policyowner may request an increase in face amount. This request should be made within 90 days prior to the Policy Anniversary and is subject to an issue expense charge of $3.00 per $1,000 of increase in face amount, up to a maximum of $150, and to Phoenix Home Life's receipt of adequate evidence of insurability. A Right to Cancel Period as described in "The Policy" section of this Prospectus applies to each increase in face amount. Additional Rider Benefits A Policyowner may purchase additional benefits under a Policy. These benefits are cancellable by the Policyowner at any time. A charge will be deducted monthly from your Policy Value for each additional rider benefit you choose except where noted below. Riders listed below that specify "no charge" are automatically included in your policy. More details will be included in the form of a rider to your Policy if you choose any of these benefits. The following benefits are currently available; however, additional riders may be available as described in the Policy. (bullet) Disability Waiver of Specified Premium Rider Phoenix Home Life waives the specified premium if the Insured becomes totally disabled and the disability continues for at least six months. Premiums will be waived to the Policy Anniversary nearest the Insured's 65th birthday (provided that the disability continues), unless premiums have been waived continuously during the entire five years prior to such date in which case the waiver will continue beyond that date. The premium will be waived upon Phoenix Home Life's receipt that the Insured is totally disabled and that the disability occurred while the rider was In Force. The terms may vary by State. (bullet) Accidental Death Benefit Rider An additional death benefit will be paid if the Insured dies from bodily injury that results from an accident if the Insured dies no 15 later than 90 days after injury; and before the Policy Anniversary nearest the Insured's 75th birthday. (bullet) Death Benefit Protection Rider The purchase of this rider provides that the death benefit will be guaranteed. The amount of the guaranteed death benefit is equal to the initial face amount, or the face amount that may later be increased or decreased by the Policyholder provided that certain minimum premiums are paid. Unless Phoenix Home Life agrees otherwise, the initial face amount and the face amount remaining after any decrease must at least equal $50,000 and the minimum issue age of the Insured is 20. Three (3) death benefit guarantee periods are available in all States except New York. The minimum premium required to maintain the guaranteed death benefit is based on the length of the guarantee period as elected on the application. The 3 available guarantee periods are: Level: Expiry Date of Death Benefit Guaranteed, the later of: 1 The policy anniversary nearest the Insured's 70th birthday or the 7th Policy Year 2 The policy anniversary nearest the Insured's 80th birthday or the 10th Policy Year 3 The policy anniversary nearest the Insured's 95th birthday. Level 1 or 2 guarantees may be extended provided that the Policy's Cash Surrender Value is sufficient and the Policyowner pays the new Minimum Required Premium. For Policies issued in New York, 2 guarantee periods are available: 1 The policy anniversary nearest the Insured's 75th birthday or the 10th Policy Year 2 The policy anniversary nearest the Insured's 95th birthday. (bullet) Face Amount of Insurance Increase Rider Under the terms of this rider, any time after the first Policy Anniversary, a Policyholder may request an increase in the face amount of insurance provided under the Policy. Requests for face amount increases must be made in writing, and Phoenix Home Life requires additional evidence of insurability. The effective date of the increase will generally be the Policy Anniversary following approval of the increase. The increase may not be less than $25,000 and no increase will be permitted after the Insured's age 75. The charge for the increase is $3 per thousand of face amount increase requested subject to a maximum of $150. No additional monthly administration charge will be assessed for face amount increases. Phoenix Home Life will deduct any charges associated with the increase (the increases in cost of insurance charges), from the Policy Value, whether or not the Policyowner pays an additional premium in connection with the increase. The surrender charge applicable to the Policy will also increase. At the time of the increase, the Cash Surrender Value must be sufficient to pay the monthly deduction on that date, or additional premiums will be required to be paid on or before the effective date. Also, a new Right to Cancel period (see "The Policy -- Right to Cancel Period") will be established for the amount of the increase. For a discussion of possible implications of a material change in the Policy resulting from the increase, see "Material Change Rules." There is no charge for this rider. (bullet) Whole Life Exchange Option Rider This rider permits the Policyowner to exchange his Policy for a fixed-benefit whole life policy at the later of age 65 or Policy Year 15. There is no charge for this rider. (bullet) Purchase Protection Plan Rider Under this rider a Policyowner may, at pre-determined future dates, purchase additional insurance protection without evidence of insurability. (bullet) Living Benefits Rider Under certain conditions, in the event of the terminal illness of the Insured, an accelerated payment of up to 75% of the Policy's death benefit (up to a maximum of $250,000) is available. The minimum face amount of the Policy after any such accelerated benefit payment is $10,000. There is no charge for this rider. INVESTMENTS OF THE VUL ACCOUNT Participating Mutual Fund Each Sub-account of the VUL Account invests solely in shares of a corresponding portfolio of The Phoenix Edge Series Fund (the "Fund"), a Massachusetts business trust. The Fund currently has the following Series available through the Policies: Money Market Series: The investment objective of the Money Market Series is to provide maximum current income consistent with capital preservation and liquidity. Growth Series: The investment objective of the Growth Series is to achieve intermediate and long-term growth of capital, with income as a secondary consideration. Bond Series: The investment objective of the Bond Series is to seek long-term total return by investing in a diversified portfolio of high yield (high risk) and high quality fixed income securities. For a discussion of the risks associated with investing in high yield bonds, please see the accompanying Fund prospectus. Total Return Series: The investment objective of the Total Return Series is to realize as high a level of total rate of return over an extended period of time as is considered consistent with prudent investment risk (total rate of return consists of capital appreciation, current income, including dividends and interest, possible premiums and short-term gains from purchasing and selling options and financial futures). International Series: The investment objective of the International Series is to seek a high total return consistent with reasonable risk. The International Series intends to invest primarily in an internationally diversified portfolio of equity securities. It intends to reduce its risk by engaging in hedging transactions involving options, futures contracts and foreign currency transactions. The International Series provides a means for investors to invest a portion of their assets outside the United States. 16 Balanced Series: The investment objective of the Balanced Series is to seek reasonable income, long-term capital growth and conservation of capital. The Balanced Series intends to invest based on combined considerations of risk, income, capital enhancement and protection of capital value. Real Estate Series: The investment objective of the Real Estate Securities Series is to seek capital appreciation and income with approximately equal emphasis. It intends under normal circumstances to invest in marketable securities of publicly traded real estate investment trusts (REITs) and companies that operate, develop, manage and/or invest in real estate located primarily in the United States. Strategic Theme Series: The investment objective of the Strategic Theme Series is to seek long-term appreciation of capital by identifying securities benefiting from long-term trends present in the United States and abroad. The Strategic Theme Series intends to invest primarily in common stocks believed to have substantial potential for capital growth. Each Series will be subject to the market fluctuations and risks inherent in the ownership of any security and there can be no assurance that any Series' stated investment objective will be realized. In addition to being sold to the VUL Account, shares of the Fund are also sold to the Phoenix Home Life Variable Accumulation Account, a separate account utilized by Phoenix Home Life to receive and invest premiums paid under certain variable annuity contracts issued by Phoenix Home Life. Shares of the Fund may also be sold to other separate accounts of Phoenix Home Life or its affiliates or of other insurance companies. It is conceivable that in the future it may be disadvantageous for variable life insurance separate accounts and variable annuity separate accounts to invest in the Fund simultaneously. Although neither Phoenix Home Life nor the Fund currently foresees any such disadvantages either to variable life insurance Policyowners or to variable annuity Contractowners, the Fund's Trustees intend to monitor events in order to identify any material conflicts between variable life insurance Policyowners and variable annuity Contractowners and to determine what action, if any, should be taken in response thereto. Material conflicts could result from, for example, (1) changes in state insurance laws, (2) changes in Federal income tax laws, (3) changes in the investment management of any portfolio of the Fund, or (4) differences in voting instructions between those given by variable life insurance Policyowners and those given by variable annuity Contract- owners. Phoenix Home Life will, at its own expense, remedy such material conflict including, if necessary, segregating the assets underlying the variable life insurance policies and the variable annuity contracts and establishing a new registered investment company. Investment Adviser to The Phoenix Edge Series Fund The Fund's investment advisers are Phoenix Investment Counsel, Inc. ("PIC") and Phoenix Realty Securities, Inc. ("PRS") (the "Advisers"), which are located at 56 Prospect Street, Hartford, Connecticut 06115. PIC was originally organized in 1932 as John P. Chase, Inc. In addition to the services it provides to the Fund, PIC also serves as investment adviser to the Phoenix Series Fund, Phoenix Total Return Fund, Inc., and Phoenix Multi-Portfolio Fund and as sub-adviser to the Chubb America Fund, Inc., American Skandia Trust, SunAmerica Series Trust and JNL Series Trust. PRS was formed in 1994 as an indirect subsidiary of Phoenix Home Life. In addition to the Fund, it also serves as investment adviser to the Real Estate Portfolio of the Phoenix Multi Portfolio Fund. ABKB/LaSalle Securities Limited Partnership (ABKB), a subsidiary of LaSalle Partners, serves as sub-adviser to the Real Estate Series. ABKB's principal place of business is located at 100 East Pratt Street, Baltimore, Maryland 21202. ABKB has been a registered investment adviser since 1979. All of the outstanding stock of PIC is owned by Phoenix Equity Planning Corporation ("PEPCO"), an indirect subsidiary of Phoenix Home Life. PEPCO also performs bookkeeping and pricing and administrative services for the Fund. PEPCO is registered as a broker-dealer in fifty states. The executive offices of Phoenix Home Life are located at One American Row, Hartford, Connecticut 06115 and the principal offices of PEPCO are located at 100 Bright Meadow Boulevard, P.O. Box 2200, Enfield, Connecticut 06083-2200. Reinvestment and Redemption All dividend distributions of the Fund are automatically reinvested in shares of the Fund at their net asset value on the date of distribution; all capital gains distributions of the Fund, if any, are likewise reinvested at the net asset value on the record date. Phoenix Home Life redeems Fund shares at their net asset value to the extent necessary to make payments under the Policy. Substitution of Investments Phoenix Home Life reserves the right, subject to compliance with the law as currently applicable or subsequently changed, to make additions to, deletions from, or substitutions for the investments held by the VUL Account. In the future Phoenix Home Life may establish additional Sub-accounts within the VUL Account, each of which will invest solely in shares of a designated portfolio of the Fund with a specified investment objective. These portfolios will be established if, and when, in the sole discretion of Phoenix Home Life, marketing needs and investment conditions warrant, and will be made available under existing Policies to the extent and on a basis to be determined by Phoenix Home Life. If shares of any of the portfolios of the Fund should no longer be available for investment, or if in the judgment of Phoenix Home Life's management further investment in shares of any of the portfolios should become inappropriate in view of the objectives of the Policy, then Phoenix Home Life may substitute shares of another mutual fund for shares already purchased, or to be purchased in the future, under the Policy. No substitution of mutual fund shares held by the VUL Account may take place without prior approval of the Securities and Exchange Commission, and prior notice to the Policyowner. In the event of a substitution, the Policyowner will be given the option of transferring the Policy Value of the Sub-account in which the substitution is to occur to another Sub-account. 17 Performance History From time to time the VUL Account may include the performance history of any or all Sub-accounts, in advertisements, sales literature or reports. Performance information about each Sub-account is based on past performance only and is not an indication of future performance. Performance information may be expressed as yield and effective yield of the Money Market Sub-account, as yield of the Bond Sub-account and as total return of any Sub-account. Current yield for the Money Market Sub-account will be based on the income earned by the Sub-account over a given 7-day period (less a hypothetical charge reflecting deductions for expenses taken during the period) and then annualized, i.e., the income earned in the period is assumed to be earned every seven days over a 52-week period and is stated in terms of an annual percentage return on the investment. Effective yield is calculated similarly but reflects the compounding effect of earnings on reinvested dividends. Yield and effective yield reflect the recurring charges on the Account level including the monthly administrative charge. Yield calculations of the Money Market Sub-account used for illustration purposes are based on the consideration of a hypothetical participant's account having a balance of exactly one Unit at the beginning of a seven day period, which period will end on the date of the most recent financial statements. The yield for the Sub-account during this seven day period will be the change in the value of the hypothetical participant's account's original Unit. The following is an example of this yield calculation for the Money Market Sub-account based on a seven day period ending December 31, 1995. Example: Assumptions: Value of hypothetical pre-existing account with exactly one unit at the beginning of the period:..................... * Value of the same account (excluding capital changes) at the end of the seven day period: * Calculation: Ending account value ........................ * Less beginning account value ................ * Net change in account value ................. * Base period return: (adjusted change/beginning account value) ... * Current yield = return x (365/7)= .......... * Effective yield = [( 1 + return)365/7] - 1 = * *[To be filed by Amendment] The current yield and effective yield information will fluctuate, and publication of yield information may not provide a basis for comparison with bank deposits, other investments which are insured and/or pay a fixed yield for a stated period of time, or other investment companies, due to charges which will be deducted on the Account level. For the Bond Sub-account, quotations of yield will be based on all investment income per unit earned during a given 30-day period (including dividends and interest), less expenses accrued during the period ("net investment income"), and are computed by dividing net investment income by the maximum offering price per unit on the last day of the period. When a Sub-account advertises its total return, it will usually be calculated for one year, five years, and ten years or since inception if the Sub-account has not been in existence for at least ten years. Total return is measured by comparing the value of a hypothetical $10,000 investment in the Sub-account at the beginning of the relevant period to the value of the investment at the end of the period, assuming the reinvestment of all distributions at net asset value and the deduction of an applicable Policy charges except for cost of insurance and surrender charges (which vary by Insured) and premium taxes (which vary by state) at the beginning of the relevant period. For those Sub-accounts within the VUL Account that have not been available for one of the quoted periods, the standardized average annual total return quotations will show the investment performance such Sub-account would have achieved (reduced by the applicable charges) had it been available to invest in shares of the Fund for the period quoted. Below are quotations of standardized average annual total return calculated as described above. Average Annual Total Return For the period Ended 12/31/94 Sub- Commencement account Date 1 Year 5 Years 10 Years Life of Fund - -------- -------- ------ ------- -------- ------------ Bond ......... 01/01/83 Balanced ..... 05/01/92 [To be filed by Amendment] Total Return ..... 09/17/84 Growth ....... 01/01/83 International 05/01/90 Real Estate ..... 05/01/95 Annual Total Returns - -------------------- Total Year Bond Balanced Return Growth International - --------- ----- ------ ------ ----- ------------ 1983...... 5.1% N/A N/A 31.7% N/A 1984...... 10.3% N/A -1.4% 9.7% N/A 1985...... 19.5% N/A 26.2% 33.7% N/A 1986...... 18.2% N/A 14.7% 19.4% N/A 1987...... 0.2% N/A 11.6% 6.0% N/A 1988...... 9.5% N/A 1.4% 3.0% N/A 1989...... 6.9% N/A 18.4% 34.4% N/A 1990...... 4.4% N/A 5.1% 3.2% -8.9% 1991...... 18.5% N/A 28.1% 41.5% 18.7% 1992...... 9.1% 8.8% 9.7% 9.3% -13.6% 1993...... 15.0% 7.8% 10.1% 18.8% 37.3% 1994...... -6.2% -3.6% -2.2% 0.7% -0.7% 1995...... [To be filed by Amendment] Real Strategic Year Estate Theme - ------ ------- ----- 1983.... N/A N/A 1984.... N/A N/A 1985.... N/A N/A 1986.... N/A N/A 1987.... N/A N/A 18 Real Strategic Year Estate Theme - ------ ------- ----- 1988.... N/A N/A 1989.... N/A N/A 1990.... N/A N/A 1991.... N/A N/A 1992.... N/A N/A 1993.... N/A N/A 1994.... N/A N/A 1995.... [To be filed by Amendment] THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE PERFORMANCE. THEY DO NOT ILLUSTRATE HOW ACTUAL PERFORMANCE WILL AFFECT THE BENEFITS UNDER A POLICY; FOR THIS INFORMATION SEE APPENDIX B "ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES." The Fund's Annual Report, available upon request and without charge, contains a discussion of the performance of the Fund and a comparison of that performance to a securities market index. CHARGES AND DEDUCTIONS Charges are deducted in connection with the Policy to compensate Phoenix Home Life for: (1) incurring expenses in distributing the Policy; (2) issuing the Policy; (3) premium taxes incurred on premiums received; (4) providing the insurance benefits set forth in the Policy; and (5) assuming certain risks in connection with the Policy. The nature and amount of these charges are described more fully below. 1. Monthly Deduction A charge is deducted monthly from the Policy Value under a Policy ("monthly deduction") to pay: the cost of insurance provided under the Policy, the cost of any rider benefits provided, any unpaid balance of the issue expense charge, and an administrative charge. This administrative charge is currently set at $5.00 per month but it is guaranteed not to exceed $10.00 per month. The monthly deduction is deducted on each Monthly Calculation Day. It is allocated among the Sub-accounts of the VUL Account and the unloaned portion of the Guaranteed Interest Account based on the allocation schedule for monthly deductions specified by the applicant in the application for a Policy or as later changed by the Policyowner. In the event that the Policy's share in the value of the Sub-accounts or the unloaned portion of the Guaranteed Interest Account is insufficient to permit the withdrawal of the full monthly deduction, the remainder will be taken on a proportionate basis from the Policy's share of each of the other Sub-accounts and the unloaned portion of the Guaranteed Interest Account. The number of units deducted will be determined by dividing the portion of the monthly deduction allocated to each Sub-account or to the unloaned portion of the Guaranteed Interest Account by the unit value on the Monthly Calculation Day. Because portions of the monthly deduction, such as the cost of insurance, can vary from month to month, the monthly deduction itself may vary in amount from month to month. (a) Issue Expense Charge. A cost-based issue administration charge of $150 is assessed on a pro rata basis in equal monthly installments over a 12 month period to compensate Phoenix Home Life for underwriting and start-up expenses in connection with issuing a Policy. Phoenix Home Life may reduce or eliminate the Issue Expense Charge for Policies issued under group or sponsored arrangements. Generally, administrative costs per Policy vary with the size of the group or sponsored arrangement, its stability as indicated by its term of existence and certain characteristics of its members, the purposes for which the Policies are purchased and other factors. The amounts of any reductions will be considered on a case-by-case basis and will reflect the reduced administration costs expected as a result of sales to a particular group or sponsored arrangement. (b) Cost of Insurance. In order to calculate the cost of insurance charge, Phoenix Home Life multiplies the applicable cost of insurance rate by the difference between the death benefit selected (death benefit Option 1 if no selection is made) and the Policy Value. Generally, cost of insurance rates are based on the sex, attained age and risk class of the Insured. However, in certain states and for policies issued in conjunction with certain qualified plans, cost of insurance rates are not based on sex. The actual monthly cost of insurance rates are based on Phoenix Home Life's expectations of future experience. They will not, however, be greater than the guaranteed cost of insurance rates set forth in the Policy. These guaranteed maximum rates are equal to 100% of the 1980 Commissioner's Standard Ordinary ("CSO") Mortality Table, with appropriate adjustment for the Insured's risk classification. Any change in the cost of insurance rates will apply to all persons of the same sex, insurance age and risk class whose Policies have been In Force for the same length of time. The risk class of an Insured may affect the cost of insurance rate. Phoenix Home Life currently places Insureds into a standard risk class or a risk class involving a higher mortality risk, depending upon the health of the Insured as determined by medical information that Phoenix Home Life requests. In an otherwise identical Policy, Insureds in the standard risk class will have a lower cost of insurance than those in the risk class with the higher mortality risk. The standard risk class is also divided into three categories: smokers and nonsmokers and those who have never smoked. Non-smokers will generally incur a lower cost of insurance than similarly situated Insureds who smoke. 2. Premium Taxes. Various states and subdivisions impose a tax on premiums received by insurance companies. Premium taxes vary from state to state. The assessment made for each premium paid is equal to the tax assessed by the state in which the Policyowner resides according to Phoenix Home Life's records at the time of the payment. Currently, the taxes imposed by states on premiums range from 0.75% to 4% of premiums paid. Moreover, certain municipalities in Louisiana, Kentucky and South Carolina also impose taxes on premiums paid, in addition to the state taxes imposed by these states. The premium tax charge represents an 19 amount Phoenix Home Life considers necessary to pay all premium taxes imposed by such states and any subdivisions thereof, and Phoenix Home Life does not expect to derive a profit from this charge. These taxes are deducted from the Issue Premium, and from each subsequent premium payment. 3. Mortality and Expense Risk Charge Phoenix Home Life will deduct a daily charge from the VUL Account at an annual rate of 0.80% of the average daily net assets of the VUL Account to compensate for certain risks assumed in connection with the Policy. This charge is not deducted from the Guaranteed Interest Account. The mortality risk assumed by Phoenix Home Life is that Insureds may live for a shorter time than projected because of inaccuracies in that projecting process and, accordingly, that an aggregate amount of death benefits greater than that projected will be payable. The expense risk assumed is that expenses incurred in issuing the Policies may exceed the limits on administrative charges set in the Policies. If the expenses do not increase to an amount in excess of the limits, or if the mortality projecting process proves to be accurate, Phoenix Home Life may profit from this charge. Phoenix Home Life also assumes risks with respect to other contingencies including the incidence of Policy loans, which may cause Phoenix Home Life to incur greater costs than anticipated when designing the Policies. To the extent Phoenix Home Life profits from this charge, it may use those profits for any proper purpose, including the payment of sales expenses or any other expenses that may exceed income in a given year. 4. Investment Management Charge As compensation for their investment management services to the Fund, the Advisers are entitled to fees, payable monthly and based on an annual percentage of the average aggregate daily net asset values of each Series as summarized in the following tables: Phoenix Investment Counsel, Inc. -------------------------------- Rate for First Rate for Next Rate for Excess Over Series $250,000,000 $250,000,000 $500,000,000 - ------ ------------ ------------ ------------ Money Market .40% .35% .30% Bond .50% .45% .40% Balanced .55% .50% .45% Total Return .60% .55% .50% Growth .70% .65% .60% International .75% .70% .65% Strategic Theme .75% .70% .65% Phoenix Realty Securities, Inc. ------------------------------- Rate for First Rate for Next Rate for Excess Over Series $1,000,000,000 $1,000,000,000 $2,000,000,000 - ------ -------------- -------------- -------------- Real Estate .75% .70% .65% In addition, each Series pays a portion or all of its other operating expenses other than the management fees; the Growth, Bond, Total Return, Money Market and Balanced Series will pay up to .15%; the Real Estate and Strategic Theme Series will pay up to .25%; the International Series will pay up to .40%; the Wanger U.S. Small Cap Series will pay up to .17%; and the Wanger International Small Cap Series will pay up to .27% of its total net assets. 5. Other Charges Surrender Charge For the first ten Policy Years, there is a difference between the amount of Policy Value and the amount of Cash Surrender Value of the Policy. This difference is the surrender charge, consisting of a contingent deferred sales charge designed to recover expenses for the distribution of Policies that are terminated by surrender before distribution expenses have been recouped, and a contingent deferred issue charge designed to recover expenses for the administration of Policies that are terminated by surrender before administrative expenses have been recouped. These are contingent charges because they are paid only if the Policy is surrendered (or the Face Amount is reduced or the Policy lapses) during the first 10 Policy Years. They are deferred charges because they are not deducted from premiums. The contingent deferred issue charge is set at a level designed to recover actual costs and is not designed to result in any profit to Phoenix Home Life. In Policy Years one through ten the full Surrender Charge as described below will apply if the Policyowner either surrenders the Policy for its Cash Surrender Value or lets the Policy lapse. The applicable Surrender Charge in any Policy Month is the full Surrender Charge minus any surrender charges that have been previously paid. There is no Surrender Charge after the 10th Policy Year. The maximum Surrender Charge that a Policyowner could pay while he or she owns the Policy is equal to either A plus B (as defined below) or the amount shown in the table on Schedule Page 4 of the Policy, whichever is less. A (the contingent deferred sales charge) is equal to: 1) 30% of all premiums paid (up to and including the amount stated on Schedule Page 4 of the Policy, which is calculated according to a formula contained in a Securities and Exchange Commission rule); plus 2) 10% of all premiums paid in excess of this amount but not greater than twice this amount; plus 3) 9% of all premiums paid in excess of twice this amount. B (the contingent deferred issue charge) is equal to: $5.00 per $1,000 of initial Face Amount. As an example, the following illustrates the maximum Surrender Charge on a $100,000 Policy for a male age 35 who has never smoked who has paid $3,000 in premium payments, and who surrenders the Policy in the 70th Policy Month. Schedule Page 4 of the Policy would show that the maximum Surrender Charge to be paid would be equal to either A plus B (shown below) or the 20 amount shown in the chart in the Policy (also shown below), whichever is less: A is equal to: 1) 30% of all premiums paid, up to $1,058.45 (equals $317.54); plus 2) 10% of all premiums paid in excess of $1,058.45 but not greater than $2,116.90 (equals $105.83); plus 3) 9% of all premiums paid in excess of $2,116.90 (equals $79.48); plus B which is equal to $500. Therefore A plus B is equal to $1,002.87. The chart that would be shown in the Policy is reproduced below: MAXIMUM SURRENDER CHARGE TABLE Policy Surrender Policy Surrender Policy Surrender Month Charge Month Charge Month Charge - ------ ------- ------ ------- ------ ------- 1-60 $1029.22 80 $823.38 100 $531.90 61 1018.93 81 813.09 101 516.26 62 1008.64 82 802.80 102 500.61 63 998.35 83 792.50 103 484.97 64 988.06 84 782.21 104 469.33 65 977.76 85 766.57 105 453.68 66 967.47 86 750.92 106 438.04 67 957.18 87 735.28 107 422.39 68 946.89 88 719.63 108 406.75 69 936.59 89 703.99 109 372.85 70 926.30 90 688.35 110 338.96 71 916.01 91 672.70 111 305.06 72 905.72 92 657.06 112 271.17 73 895.43 93 641.41 113 237.27 74 885.13 94 625.77 114 203.37 75 874.84 95 610.12 115 169.48 76 864.55 96 594.48 116 135.58 77 854.26 97 578.84 117 101.69 78 843.96 98 563.19 118 67.79 79 833.67 99 547.55 119 33.90 120 .00 If the Surrender occurred in Policy Month 70, the Policyowner would pay the lesser of $1002.87 (as computed above) or $926.30 (amount in table above). This Policyowner would pay a Surrender Charge of $926.30. Phoenix Home Life may reduce the surrender charge for Policies issued under group or sponsored arrangements. The amounts of reductions will be considered on a case-by-case basis and will reflect the reduced costs to Phoenix Home Life expected as a result of sales to a particular group or sponsored arrangement. Partial Surrender Fee A fee equal to the lesser of $25 or 2% of the amount withdrawn from the Policy is deducted from the Policy Value upon a partial surrender of the Policy to recover the actual costs of processing the partial surrender request. The assessment to each Sub-account or to the Guaranteed Interest Account will be made in the same manner as provided for the partial surrender amount paid. That is, that the Policy's share in the value of each Sub-account or the Guaranteed Interest Account will be reduced based on the allocation made at the time of the partial surrender. If no allocation request is made, the assessment to each Sub-account and to the Guaranteed Interest Account will be made in the same manner as provided for monthly deductions. Partial Surrender Charge A charge as described below is deducted from the Policy Value upon a partial surrender of the Policy. The charge is equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender, determined by multiplying the applicable surrender charge by a fraction (equal to the partial surrender amount payable divided by the result of subtracting the applicable surrender charge from the Policy Value). This amount is assessed against the Sub-accounts or the Guaranteed Interest Account in the same manner as provided for with respect to the partial surrender amount paid. A partial surrender charge is also deducted from Policy Value upon a decrease in Face Amount. The charge is equal to the applicable surrender charge multiplied by a fraction (equal to the decrease in Face Amount divided by the Face Amount of the Policy prior to the decrease). Taxes Currently no charge is made to the VUL Account for Federal income taxes that may be attributable to the VUL Account. Phoenix Home Life may, however, make such a charge in the future. Charges for other taxes, if any, attributable to the VUL Account may also be made. See "Charges and Deductions -- Other Charges." GENERAL PROVISIONS Postponement of Payments General Payment of any amount upon complete or partial surrender, Policy loan, or benefits payable at death (in excess of the initial face amount) or maturity may be postponed: (i) for up to six months from the date of the request, for any transactions dependent upon the value of the GIA; (ii) whenever the New York Stock Exchange is closed other than for customary weekend and holiday closings, or trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission; or (iii) whenever an emergency exists, as determined by the Commission as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the VUL Account's net assets. Transfers may also be postponed under these circumstances. Payment by Check 21 Payments under the Policy of any amounts derived from premiums paid by check may be delayed until such time as the check has cleared the Policyowner's bank. The Contract The Policy and attached copy of the application are the entire contract. Only statements in the application can be used to void the Policy. The statements are considered representations and not warranties. Only an executive officer of Phoenix Home Life can agree to change or waive any provisions of the Policy. Suicide If the Insured commits suicide within two years after the Policy's Date of Issue, Phoenix Home Life will pay only the Policy Value adjusted by the addition of any monthly deductions and other fees and charges made under the Policy and the subtraction of any Debt owed to Phoenix Home Life under the Policy. Incontestability Phoenix Home Life cannot contest this Policy or any attached rider after it has been In Force during the lifetime of the Insured for two years from the Policy Date. Change of Owner or Beneficiary The Beneficiary, as named in the Policy application or subsequently changed, will receive the Policy benefits at the Insured's death. If the named Beneficiary dies before the Insured, the contingent Beneficiary, if named, becomes the Beneficiary. If no Beneficiary survives the Policyowner, the benefits payable at the Insured's death will be paid to the Policyowner's estate. As long as the Policy is In Force, the Policyowner and the Beneficiary may be changed by Written Request, satisfactory to Phoenix Home Life. A change in Beneficiary will take effect as of the date the notice is signed, whether or not the Insured is living when the notice is received by Phoenix Home Life. Phoenix Home Life will not, however, be liable for any payment made or action taken before receipt of the notice. Assignment The Policy may be assigned. Phoenix Home Life will not be bound by the assignment until a written copy has been received and will not be liable with respect to any payment made prior to receipt. Phoenix Home Life assumes no responsibility for determining whether an assignment is valid. Misstatement of Age or Sex If the age or sex of the Insured has been misstated, the death benefit will be adjusted based on what the cost of insurance charge for the most recent monthly deduction would have purchased based on the correct age and sex. Surplus Policyowners may share in divisible surplus of Phoenix Home Life to the extent determined annually by the Phoenix Home Life Board of Directors. However, it is not currently anticipated that the Board will authorize these payments since Policyowners will be participating directly in investment results. PAYMENT OF PROCEEDS Surrender and Death Benefit Proceeds Proceeds of full or partial surrenders and the death proceeds will usually be paid in one lump sum within seven days after Phoenix Home Life receives the request for surrender and due proof of death, unless another payment option has been elected. Payment of the death proceeds, however, may be delayed if the claim for payment of the death proceeds needs to be investigated; e.g., to ensure payment of the proper amount to the proper payee. Any such delay will not be beyond that reasonably necessary to investigate such claims consistent with insurance practices customary in the life insurance industry. In addition, under certain conditions, in the event of the terminal illness of the Insured, an accelerated payment of up to 75% of the Policy's Death Benefit (up to maximum of $250,000), is available under the Living Benefits Rider. The minimum face amount remaining after any such accelerated benefit payment is $10,000. While the Insured is living, the Policyowner may elect a payment option for payment of the death proceeds to the Beneficiary. The Policyowner may revoke or change a prior election, unless such right has been waived. The Beneficiary may make or change an election prior to payment of the death proceeds, unless the Policyowner has made an election which does not permit such further election or changes by the Beneficiary. A written form satisfactory to Phoenix Home Life is required to elect, change, or revoke a payment option. The minimum amount of surrender or death proceeds that may be applied under any income option is $1,000. If the Policy is assigned as collateral security, Phoenix Home Life will pay any amount due the assignee in one lump sum. Any remaining proceeds will remain under the option elected. Payment Options All or part of the surrender or death proceeds of a Policy may be applied under one or more of the following payment options or such other payment options or alternative versions of the options listed as Phoenix Home Life may choose to make available in the future. Option 1 -- Lump sum. Payment in one lump sum. Option 2 -- Left to earn interest. A payment of interest during the payee's lifetime on the amount payable as a principal sum. Interest rates are guaranteed to be at least 3 percent per year. Option 3 -- Payment for a specific period. Equal income installments are paid for a specified period of years whether the payee lives or dies. The first payment will be on 22 the date of settlement. The assumed interest rate on the unpaid balance is guaranteed not to be less than 3 percent per year. Option 4 -- Life annuity with specified period certain. Equal installments are paid until the later of: (A) The death of the payee; (B) The end of the period certain. The first payment will be on the date of settlement. The period certain must be chosen at the time this option is elected. The periods certain that may be chosen are as follows: (A) Ten years; (B) Twenty years; (C) Until the installments paid refund the amount applied under this option; and if the payee is not living when the final payment falls due, that payment will be limited to the amount which needs to be added to the payments already made to equal the amount applied under this option. If, for the age of the payee, a period certain is chosen that is shorter than another period certain paying the same installment amount, Phoenix Home Life will deem the longer period certain as having been elected. Any life annuity provided under Option 4 is calculated using an interest rate guaranteed to be no less than 3 3/8% per year, except that any life annuity providing a period certain of 20 years or more is calculated using an interest rate guaranteed to be no less than 3 1/4% per year. Option 5 -- Life annuity. Equal installments are paid only during the lifetime of the payee. The first payment will be on the date of settlement. Any life annuity as may be provided under Option 5 is calculated using an interest rate guaranteed to be no less than 3 1/2% per year. Option 6 -- Payments of a specified amount. Equal installments of a specified amount, out of the principal sum and interest on that sum, are paid until the principal sum remaining is less than the amount of the installment. When that happens, the principal sum remaining with accrued interest will be paid as a final payment. The first payment will be on the date of settlement. The payments will include interest on the principal sum remaining at a rate guaranteed to at least equal 3 percent per year. This interest will be credited at the end of each year. If the amount of interest credited at the end of the year exceeds the income payments made in the last 12 months, that excess will be paid in one sum on the date credited. Option 7 -- Joint survivorship annuity with 10-year period certain. The first payment will be on the date of settlement. Equal income installments are paid until the latest of: (A) The end of the 10-year period certain; (B) The death of the Insured; (C) The death of the other named annuitant. The other annuitant must be named at the time this option is elected and cannot later be changed. The other annuitant must have an attained age of at least 40. Any joint survivorship annuity as may be provided under this option is calculated using an interest rate guaranteed to be no less than 3 3/8% per year. For additional information concerning the above payment options, see the Policy. FEDERAL TAX CONSIDERATIONS Introduction The ultimate effect of Federal income taxes on values under the VUL Account and on the economic benefit to the Policyowner or Beneficiary depends on Phoenix Home Life's tax status and upon the tax status of the individual concerned. The discussion contained herein is general in nature and is not intended as tax advice. For complete information on Federal and state tax considerations, a qualified tax adviser should be consulted. No attempt is made to consider any estate and inheritance taxes, or any state, local or other tax laws. Because the discussion herein is based upon Phoenix Home Life's understanding of Federal income tax laws as they are currently interpreted, Phoenix Home Life cannot guarantee the tax status of any Policy. No representation is made regarding the likelihood of continuation of current Federal income tax laws, Treasury regulations, or of the current interpretations by the Internal Revenue Service. Phoenix Home Life reserves the right to make changes to the Policy in order to assure that it will continue to qualify as life insurance for tax purposes. Phoenix Home Life's Tax Status Phoenix Home Life is taxed as a life insurance company under the Internal Revenue Code of 1986, as amended (the "Code"). For Federal income tax purposes, neither the VUL Account nor the Guaranteed Interest Account is a separate entity from Phoenix Home Life and their operations form a part of Phoenix Home Life. Investment income and realized capital gains on the assets of the VUL Account are reinvested and taken into account in determining the Cash Value of the VUL Account. Investment income of the VUL Account, including realized net capital gains, is not taxed to Phoenix Home Life. Due to Phoenix Home Life's tax status under current provisions of the Code, no charge will currently be made to the VUL Account for Phoenix Home Life's Federal income taxes which may be attributable to the VUL Account. Phoenix Home Life will periodically review the question of a charge to the VUL Account for Phoenix Home Life's income taxes. Phoenix Home Life reserves the right to make a deduction for taxes should they be imposed with respect to such items in the future. A future charge may be imposed if the Federal tax treatment of Phoenix Home Life is determined to be other than what Phoenix Home Life currently believes it to be, if changes are made affecting the tax treatment to Phoenix Home Life of variable life insurance contracts, or if changes occur in Phoenix Home Life's tax status. If imposed, such charge would be equal to the Federal income taxes attributable to the investment results of the VUL Account. Policy Proceeds Death Benefit Proceeds. The Policy, whether or not it is a "modified endowment contract" (see the discussion on modified endowment contracts below), should be treated as meeting the definition of life insurance for Federal income purposes, under Section 7702 of the Code. As such, the death benefit proceeds thereunder should be excludable from the gross income of the 23 Beneficiary under Code Section 101(a)(1). Also, the Policyowner should not be deemed to be in constructive receipt of the Cash Value, including increments thereon. See, however, the sections below on possible taxation of amounts received under the Policy, via full surrender, partial surrender or loan. In addition, a benefit paid under a Living Benefit Rider may be taxable as income in the year of receipt. Code Section 7702 imposes certain conditions with respect to premiums received under a Policy. Phoenix Home Life intends to monitor the premiums to assure compliance with such conditions. However, in the event that the premium limitation is exceeded during the year, Phoenix Home Life may return the excess premium, with interest, to the Policyowner within 60 days after the end of the Policy Year, and maintain the qualification of the Policy as life insurance for Federal income tax purposes. Full Surrender. Upon full surrender of a Policy for its Cash Value, the excess, if any, of the Cash Value (unreduced by any outstanding indebtedness) over the premiums paid will be treated as ordinary income for Federal income tax purposes. The full surrender of a Policy which is a "modified endowment contract" may result in the imposition of an additional 10 percent tax on any income received. Partial Surrender. If the Policy is a "modified endowment contract," partial surrenders are fully taxable to the extent of income in the Policy and are possibly subject to an additional 10 percent tax. See the discussion on "modified endowment contracts" below. If the Policy is not a "modified endowment contract," partial surrenders may still be taxable, as follows. Code Section 7702(f)(7) provides that where a reduction in death benefits occurs during the first 15 years after a Policy is issued and there is a cash distribution associated with that reduction, the Policyowner may be taxed on all or a part of the amount distributed. A reduction in death benefits may result from a partial surrender. After 15 years, the proceeds will not be subject to tax, except to the extent such proceeds exceed the total amount of premiums paid but not previously recovered. Phoenix Home Life suggests you consult with your tax adviser in advance of a proposed decrease in death benefits or a partial surrender as to the portion, if any, which would be subject to tax, and in addition as to the impact such partial surrender might have under the new rules affecting "modified endowment contracts." Loans. Phoenix Home Life believes that any loan received under a Policy will be treated as indebtedness of the Policyowner. If the Policy is a "modified endowment contract," loans are fully taxable to the extent of income in the Policy and are possibly subject to an additional 10 percent tax. See the discussion on "modified endowment contracts" below. If the Policy is not a "modified endowment contract," Phoenix Home Life believes that no part of any loan under a Policy will constitute income to the Policyowner. The deductibility by the Policyowner of loan interest under a Policy may be limited under Code Section 264, depending on the circumstances. Any Policyowner intending to fund premium payments through borrowing should consult a tax adviser with respect to the tax consequences thereof. Under the "personal" interest limitation provisions of the Code, interest on Policy loans used for personal purposes is not tax deductible. Other rules may apply to allow all or part of the interest expense as a deduction if the loan proceeds are used for "trade or business" or "investment" purposes. See your tax adviser for further guidance. If the Policy is owned by a business or a corporation, the Code may impose additional restrictions. The Code limits the interest deduction on business-owned Policy loans and may impose tax upon the inside build-up of corporate-owned life insurance policies through the corporate alternative minimum tax. Other Taxes Federal estate tax, state and local estate, inheritance and other tax consequences of ownership, or receipt of Policy proceeds depend on the circumstances of each Policyowner or Beneficiary. Phoenix Home Life does not make any representations or guarantees regarding the tax consequences of any Policy with respect to these types of taxes. Modified Endowment Contracts General. Pursuant to Code Section 72(e), loans and other amounts received under "modified endowment contracts" will in general be taxed to the extent of accumulated income (generally, the excess of Cash Value over premiums paid). Policies are "modified endowment contracts" if they meet the definition of life insurance, but fail the "7-pay test." This test essentially provides that the cumulative premiums paid under the Policy at any time during the Policy's first 7 years cannot exceed the sum of the net level premiums that would have been paid on or before that time had the Policy provided for paid-up future benefits after the payment of 7 level annual premiums. In addition, a modified endowment contract includes any life insurance contract that is received in exchange for a modified endowment contract. Premiums paid during a Policy Year that are returned by Phoenix Home Life (with interest) within 60 days after the end of the Policy Year will not cause the Policy to fail the 7-pay test. Reduction in Benefits During the First 7 Years. If there is a reduction in benefits during the first 7 Policy Years, the premiums are redetermined for purposes of the 7-pay test as if the Policy had originally been issued at the reduced death benefit level and the new limitation is applied to the cumulative amount paid for each of the first 7 Policy Years. Distributions Affected. If a Policy fails to meet the 7-pay test, it is considered a modified endowment contract only as to distributions in the year in which the death benefit reduction takes effect and all subsequent Policy Years. However, distributions made in anticipation of such failure (there is a presumption that distributions made within two years prior to such failure were "made in anticipation") also are considered distributions under a modified endowment contract. If the Policy satisfies the "7-pay test" for 7 years, distributions and loans will generally not be subject to the new tax rules. 24 Penalty Tax. Any amounts taxable under the modified endowment contract rule will be subject to an additional 10 percent excise tax, with certain exceptions. This additional tax will not apply in the case of distributions: (i) made on or after the taxpayer attains age 591/2; (ii) which are attributable to the taxpayer's disability (within the meaning of Code Section 72(m)(7)); or (iii) which are part of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the taxpayer or the joint lives (or life expectancies) of the taxpayer and his Beneficiary. Material Change Rules. Any determination of whether the Policy meets the "7-pay test" will begin again any time the Policy undergoes a "material change," which includes any increase in death benefits or any increase in or addition of a qualified additional benefit, with the following two exceptions. First, if an increase is attributable to premiums paid "necessary to fund" the lowest death benefit and qualified additional benefits payable in the first 7 Policy Years or to the crediting of interest or dividends with respect to these premiums, the "increase" does not constitute a material change. Second, to the extent provided in regulations, if the death benefit or qualified additional benefit increases as a result of a cost-of-living adjustment based on an established broad-based index specified in the Policy, this does not constitute a material change if (1) the cost-of-living determination period does not exceed the remaining premium payment period under the Policy, and (2) the cost-of-living increase is funded ratably over the remaining premium payment period of the Policy. A reduction in death benefits is not considered a material change unless accompanied by a reduction in premium payments. A material change may occur at any time during the life of the Policy (within the first 7 years or thereafter), and future taxation of distributions or loans would turn on whether the Policy satisfied the applicable "7-pay test" from the time of the material change. An exchange of policies is considered to be a material change for all purposes. Serial Purchase of Modified Endowment Contracts. All modified endowment contracts issued by the same insurer (or affiliated companies of the insurer) to the same Policyowner within the same calendar year will be treated as one modified endowment contract in determining the taxable portion of any loans or distributions made to the Policyowner. The Treasury has been given specific legislative authority to issue regulations to prevent the avoidance of the new distribution rules for modified endowment contracts. A qualified tax adviser should be consulted about the tax consequences of the purchase of more than one modified endowment contract within any calendar year. Limitations on Unreasonable Mortality and Expense Charges The Code imposes limitations on unreasonable mortality and expense charges for purposes of ensuring that a Policy qualifies as life insurance. The mortality charges taken into account to calculate permissible premium levels may not exceed those charges required to be used in determining the Federal income tax reserve for the Policy, unless Treasury regulations prescribe a higher level of charge. In addition, the expense charges taken into account under the guideline premium test are required to be reasonable, as defined by the Treasury regulations. Phoenix Home Life intends to comply with the limitations in calculating the premium it is permitted to receive from the Policyowner. Qualified Plans A Policy may be used in conjunction with certain qualified plans. Such policies are issued using unisex cost of insurance rates. Since the rules governing such use are complex, a purchaser should not use the Policy in conjunction with a qualified plan until he has consulted a competent pension consultant or tax adviser. Diversification Standards To comply with the diversification regulations under Code Section 817(h), ("Diversification Regulations") each Portfolio of the Fund is required to diversify its investments. The Diversification Regulations generally require that on the last day of each quarter of a calendar year no more than 55 percent of the value of the Fund's assets is represented by any one investment, no more than 70 percent is represented by any two investments, no more than 80 percent is represented by any three investments, and no more than 90 percent is represented by any four investments. A "look-through" rule applies to treat a pro-rata portion of each asset of the Fund as an asset of the VUL Account; therefore, each Series of the Fund will be tested for compliance with the percentage limitations. For purposes of these diversification rules, all securities of the same issuer are treated as a single investment, but each United States Government agency or instrumentality is treated as a separate issuer. The general diversification requirements are modified if any of the assets of the VUL Account are direct obligations of the United States Treasury. In this case, there is no limit on the investment that may be made in United States Treasury securities, and for purposes of determining whether assets other than United States Treasury securities are adequately diversified, the generally applicable percentage limitations are increased based on the value of the VUL Account's investment in United States Treasury securities. Notwithstanding this modification of the general diversification requirements, the portfolios of the Fund will be structured to comply with the general diversification standards because they serve as an investment vehicle for certain variable annuity contracts which must comply with these standards. In connection with the issuance of the Diversification Regulations, the Treasury announced that such regulations do not provide guidance concerning the extent to which policyowners may direct their investments to particular divisions of a separate account. It is possible that a revenue ruling or other form of administrative pronouncement in this regard may be issued in the near future. It is not clear, at this time, what such a revenue ruling or other pronouncement will provide. It is possible that the Policy may need to be modified to comply with such future Treasury announcements. For these reasons, Phoenix Home Life reserves the right to modify the Policy, as necessary, to prevent the Policyowner from being considered the owner of the assets of the VUL Account. 25 Phoenix Home Life intends to comply with the Diversification Regulations to assure that the Policies continue to qualify as variable life insurance for Federal income tax purposes. Change of Ownership or Insured or Assignment Changing the Policyowner or the Insured or an exchange or assignment of the Policy may have tax consequences depending on the circumstances. Code Section 1035 provides that a life insurance contract can be exchanged for another life insurance contract, without recognition of gain or loss, assuming that no money or other property is received in the exchange, and that the policies relate to the same Insured. If the surrendered policy is subject to a policy loan, this may be treated as the receipt of money on the exchange. Phoenix Home Life recommends that any person contemplating such changes, exchanges, or assignment seek the advice of a qualified tax consultant. VOTING RIGHTS The Fund Phoenix Home Life will vote the Fund shares held by the Sub- accounts of the VUL Account at any regular and special meetings of shareholders of the Fund, a Massachusetts business trust. To the extent required by law, such voting will be in accordance with instructions received from the Policyowner. However, if the Investment Company Act of 1940 or any regulation thereunder should be amended or if the present interpretation thereof should change, and as a result Phoenix Home Life determines that it is permitted to vote the Fund shares at its own discretion, it may elect to do so. The number of votes that a Policyowner has the right to cast will be determined by applying the Policyowner's percentage interest in a Sub-account to the total number of votes attributable to the Sub-account. In determining the number of votes, fractional shares will be recognized. Fund shares held in a Sub-account for which no timely instructions are received, and Fund shares which are not otherwise attributable to Policyowners, will be voted by Phoenix Home Life in proportion to the voting instructions that are received with respect to all Policies participating in that Sub-account. Voting instructions to abstain on any item to be voted upon will be applied to reduce the votes eligible to be cast by Phoenix Home Life. Each Policyowner will receive proxy materials, reports, and other materials relating to the Fund. Phoenix Home Life may, when required by state insurance regulatory authorities, disregard voting instructions if the instructions require that the shares be voted so as to cause a change in the sub-classification or investment objective of one or more of the portfolios of the Fund or to approve or disapprove an investment advisory contract for the Fund. In addition, Phoenix Home Life itself may disregard voting instructions in favor of changes initiated by a Policyowner in the investment policies or the Investment Adviser of the Fund if Phoenix Home Life reasonably disapproves of such changes. A change would be disapproved only if the proposed change is contrary to state law or prohibited by state regulatory authorities or Phoenix Home Life determined that the change would have an adverse effect on the General Account because the proposed investment policy for a portfolio may result in overly speculative or unsound investments. In the event Phoenix Home Life does disregard voting instructions, a summary of that action and the reasons for such action will be included in the next periodic report to Policyowners. Phoenix Home Life A Policyowner (or the payee entitled to payment under a payment option if a different person) will have the right to vote at annual meetings of all Phoenix Home Life Policyholders for the election of members of the Board of Directors of Phoenix Home Life and on other corporate matters, if any, where a Policyholder's vote is taken. At meetings of all of the Phoenix Home Life Policyholders, a Policyholder (or payee) may cast only one vote as the holder of a Policy, irrespective of Policy Value or the number of the Policies held. THE DIRECTORS AND EXECUTIVE OFFICERS OF PHOENIX HOME LIFE Phoenix Home Life is managed by its Board of Directors, the members of which are elected by its Policyholders, including Owners of the Policies. See "Voting Rights." The following are the Directors and Executive Officers of Phoenix Home Life: Directors Principal Occupation - --------- -------------------- Sal H. Alfiero Chairman and Chief Executive Officer, Mark IV Industries, Inc. Amherst, New York J. Carter Bacot Chairman and Chief Executive Officer, The Bank of New York New York, New York Carol H. Baldi President, Carol H. Baldi, Inc. New York, New York Peter C. Browning Executive Vice President, Sonoco Products Company Hartsville, South Carolina Richard N. Cooper Chairman, National Intelligence Council, Central Intelligence Agency McLean, Virginia Gordon J. Davis, Partner, LeBoeuf, Lamb, Esq. Greene & MacRae New York, New York Robert W. Chairman of the Board, Fiondella President and Chief Executive Officer, Phoenix Home Life Mutual Insurance Company Hartford, Connecticut Jerry J. President, National Jasinowski Association of Manufacturers Washington, DC 26 Directors Principal Occupation - --------- -------------------- John W. Johnstone Chairman, President and Chief Executive Officer, Olin Corporation Norwalk, Connecticut Marilyn E. General Partner, Lazard LaMarche Freres & Company New York, New York Edward P. Lyons Former Vice-Chairman, Olin Corporation Norwalk, Connecticut Philip R. Executive Vice McLoughlin President and Chief Investment Officer, Phoenix Home Life Mutual Insurance Company Hartford, Connecticut Charles J. Paydos Executive Vice President, Phoenix Home Life Mutual Insurance Company Hartford, Connecticut Herbert Roth, Jr. Former Chairman, LFE Corporation Clinton, Massachusetts Robert F. Vizza President and Chief Executive Officer, St. Francis Hospital Roslyn, New York Wilson Wilde Chairman, Executive Committee, Hartford Steam Boiler Inspection and Insurance Company Hartford, Connecticut Robert G. Wilson Former General Partner, Goldman Sachs New York, New York Executive Officers Principal Occupation - -------- -------------------- Robert W. Chairman of the Board, Fiondella President and Chief Executive Officer Richard H. Booth Executive Vice President, Strategic Development Philip R. Executive Vice McLoughlin President and Chief Investment Officer Charles J. Paydos Executive Vice President David W. Searfoss Executive Vice President and Chief Financial Officer Dona D. Young Executive Vice President, Individual Insurance and General Counsel Kelly J. Carlson Senior Vice President, Career Organization Carl T. Chadburn Senior Vice President Executive Officers Principal Occupation - -------- -------------------- Robert G. Chipkin Senior Vice President and Corporate Actuary Randall C. Senior Vice President, Giangiulio Group Sales Joan E. Herman Senior Vice President Edward P. Senior Vice President, Hourihan Information Systems Joseph E. Senior Vice President Kelleher Gary J. Senior Vice President Laughinghouse Robert G. Senior Vice President Lautensack, Jr. Scott C. Noble Senior Vice President, Real Estate Frederick W. Senior Vice President Sawyer, III Richard C. Shaw Senior Vice President, International and Corporate Development Simon Y. Tan Senior Vice President, Individual Market Development SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS The assets of the VUL Account are held by Phoenix Home Life. The assets of the VUL Account are kept physically segregated and held separate and apart from the general account of Phoenix Home Life. Phoenix Home Life maintains records of all purchases and redemptions of shares of the Fund. SALES OF POLICIES Policies may be purchased from registered representatives of W.S. Griffith & Co., Inc. ("W. S. Griffith") licensed to sell Phoenix Home Life insurance policies. W. S. Griffith, an indirect subsidiary of Phoenix Home Life, is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. Policies may be purchased from other broker-dealers registered under the Securities Exchange Act of 1934 whose representatives are authorized by applicable law to sell Policies under terms of agreement provided by PEPCO. Sales commissions will be paid to registered representatives on purchase payments received by Phoenix Home Life under these Policies. Total sales commission of a maximum of 50 percent of premiums will be made by Phoenix Home Life to PEPCO. To the extent that the sales charge under the Policies is less than the sales commissions paid with respect to the Policies, Phoenix Home Life will pay the shortfall from its general account assets, which will include any profits it may derive under the Policies. PEPCO will sponsor sales contests, training and educational meetings and provide to all qualifying dealers, from its own profits and resources, additional compensation in the form of trips, merchandise or expense reimbursement. Brokers and 27 dealers other than PEPCO may also make customary additional charges for their services in effecting purchases, if they notify the Fund of their intention to do so. STATE REGULATION Phoenix Home Life is subject to the provisions of the New York insurance laws applicable to mutual life insurance companies and to regulation and supervision by the New York Superintendent of Insurance. Phoenix Home Life is also subject to the applicable insurance laws of all the other states and jurisdictions in which it does an insurance business. State regulation of Phoenix Home Life includes certain limitations on the investments which it may make, including investments for the VUL Account and the Guaranteed Interest Account. It does not include, however, any supervision over the investment policies of the VUL Account. REPORTS All Policyowners will be furnished with those reports required by the Investment Company Act of 1940 and regulations promulgated thereunder, or under any other applicable law or regulation. LEGAL PROCEEDINGS The VUL Account is not engaged in any litigation. Phoenix Home Life is not involved in any litigation that would have a material adverse effect on the ability of Phoenix Home Life to meet its obligations under the Policies. LEGAL MATTERS The organization of Phoenix Home Life, its authority to issue variable life insurance Policies, and the validity of the Policy have been passed upon by Patricia O. McLaughlin, Counsel, Phoenix Home Life. Legal matters relating to the Federal securities and income tax laws have been passed upon for Phoenix Home Life by Jorden Burt Berenson & Johnson LLP. REGISTRATION STATEMENT A Registration Statement has been filed with the Securities and Exchange Commission, under the Securities Act of 1933 as amended, with respect to the securities offered hereby. This Prospectus does not contain all the information set forth in the Registration Statement and amendments thereto and exhibits filed as a part thereof, to all of which reference is made for further information concerning the VUL Account, Phoenix Home Life and the Policy. Statements contained in this Prospectus as to the content of the Policy and other legal instruments are summaries. For a complete statement of the terms thereof, reference is made to such instruments as filed. FINANCIAL STATEMENTS The consolidated financial statements of Phoenix Home Life as contained herein should be considered only as bearing upon Phoenix Home Life's ability to meet its obligations under the Policy, and they should not be considered as bearing on the investment performance of the VUL Account. No interim financial statements of Phoenix Home Life are presented in this Prospectus because no such financial statements have been prepared by Phoenix Home Life for any other purpose as of the date of this Prospectus. The financial statements of the VUL Account are for the Sub-accounts available as of the period ended December 31, 1995. No interim financial statements for the VUL Account are presented because no such statements have been prepared for any other purpose as of the date of this Prospectus. 28 Phoenix Home Life Mutual Insurance Company Consolidated Financial Statements December 31, 1995 and 1994 [To be filed by Amendment] 29 Phoenix Home Life Variable Universal Life Account Financial Statements December 31, 1995 and 1994 [To be filed by Amendment] 30 APPENDIX A THE GUARANTEED INTEREST ACCOUNT Contributions to the Guaranteed Interest Account ("GIA") under the Policy and transfers to the GIA become part of the general account of Phoenix Home Life (the "General Account"), which supports insurance and annuity obligations. Because of exemptive and exclusionary provisions, interest in the General Account has not been registered under the Securities Act of 1933 ("1933 Act") nor is the General Account registered as an investment company under the Investment Company Act of 1940 ("1940 Act"). Accordingly, neither the General Account nor any interest therein is specifically subject to the provisions of the 1933 or 1940 Acts and the staff of the Securities and Exchange Commission has not reviewed the disclosures in this Prospectus concerning the GIA. Disclosures regarding the GIA and the General Account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. The General Account is made up of all of the general assets of Phoenix Home Life other than those allocated to any separate account. Premium payments will be allocated to the GIA and, therefore, the General Account, as elected by the Policyowner at the time of purchase or as subsequently changed. Phoenix Home Life will invest the assets of the General Account in assets chosen by it and allowed by applicable law. Investment income from General Account assets is allocated between Phoenix Home Life and the contracts participating in the General Account, in accordance with the terms of such contracts. Investment income from the General Account allocated to Phoenix Home Life includes compensation for mortality and expense risks borne by it in connection with General Account contracts. The amount of investment income allocated to the Policies will vary from year to year in the sole discretion of Phoenix Home Life. However, Phoenix Home Life guarantees that it will credit interest at a rate of not less than 4% per year, compounded annually, to amounts allocated to the unloaned portion of the GIA. The loaned portion of the GIA will be credited interest at an effective annual rate of 6%. Phoenix Home Life may credit interest at a rate in excess of 4% per year; however, it is not obligated to credit any interest in excess of 4% per year. Bi-weekly, Phoenix Home Life will set the excess interest rate, if any, that will apply to amounts deposited to the GIA. That rate will remain in effect for such deposits for an initial guarantee period of one full year from the date of deposit. Upon expiration of the initial one-year guarantee period (and each subsequent one-year guarantee period thereafter), the rate to be applied to any deposits whose guaranteed period has just ended will be the same rate as is applied to new deposits allocated at that time to the GIA. This rate will likewise remain in effect for a guarantee period of one full year from the date the new rate is applied. Excess interest, if any, will be determined by Phoenix Home Life based on information as to expected investment yields. Some of the factors that Phoenix Home Life may consider in determining whether to credit interest to amounts allocated to the GIA and the amount thereof, are general economic trends, rates of return currently available and anticipated on investments, regulatory and tax requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE GIA IN EXCESS OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF PHOENIX HOME LIFE AND WITHOUT REGARD TO ANY SPECIFIC FORMULA. THE CONTRACT OWNER ASSUMES THE RISK THAT INTEREST CREDITED TO GIA ALLOCATIONS MAY NOT EXCEED THE MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR. Phoenix Home Life is aware of no statutory limitations on the maximum amount of interest it may credit, and the Board of Directors has set no limitations. However, inherent in Phoenix Home Life's exercise of discretion in this regard is the equitable allocation of distributable earnings and surplus among its various policyholders and contract owners. Excess interest, if any, will be credited on the GIA Policy Value. Phoenix Home Life guarantees that, at any time, the GIA Policy Value will not be less than the amount of premium payments allocated to the GIA, plus interest at the rate of 4% per year, compounded annually, plus any additional interest which Phoenix Home Life may, in its discretion, credit to the GIA, less the sum of all annual administrative or surrender charges, any applicable premium taxes, and less any amounts surrendered or loaned. If the Policyowner surrenders the Policy, the amount available from the GIA will be reduced by any applicable surrender charge and annual administration charge (see "Deductions and Charges"). IN GENERAL, ONE TRANSFER PER YEAR IS ALLOWED FROM THE GUARANTEED INTEREST ACCOUNT. THE AMOUNT WHICH CAN BE TRANSFERRED IS LIMITED TO THE GREATER OF $1,000 OR 25% OF THE CONTRACT VALUE IN THE GUARANTEED INTEREST ACCOUNT AS OF THE LAST CONTRACT ANNIVERSARY. UNDER THE SYSTEMATIC TRANSFER PROGRAM, TRANSFERS OF APPROXIMATELY EQUAL AMOUNTS MAY BE MADE OVER A MINIMUM 18 MONTH PERIOD. NON-SYSTEMATIC TRANSFERS FROM THE GUARANTEED INTEREST ACCOUNT WILL BE EFFECTUATED ON THE DATE OF RECEIPT BY VARIABLE PRODUCTS OPERATIONS, UNLESS OTHERWISE REQUESTED BY THE CONTRACT OWNER. 31 APPENDIX B Illustrations of Death Benefits, Policy Values ("Account Values"), and Cash Surrender Values. The tables on the following pages illustrate how a Policy's Death Benefits, Account Values and Cash Surrender Value could vary over time assuming constant hypothetical gross (after tax) annual investment returns of 0% and 12%. The Policy benefits will differ from those shown in the tables if the annual investment returns are not absolutely constant. That is, the figures will be different if the returns averaged 0% or 12% over a period of years but went above or below those figures in individual Policy Years. The Policy benefits will also differ, depending on your premium allocations to each Sub-account of the VUL Account, if the overall actual rates of return averaged 0% or 12%, but went above or below those figures for the individual Sub-accounts. The tables are for standard risk males and females who have never smoked. In states where cost of insurance rates are not based on the insured's sex, the tables designated "male" apply to all standard risk insureds who have never smoked. Account Values and Cash Surrender Values may be lower for smokers or former smokers or for risk classes involving higher mortality risk. Planned premium payments are assumed to be paid at the beginning of each Policy Year. The difference between the Policy Value and the Cash Surrender Value in the first ten years is the Surrender Charge. For each age illustrated, tables are included for death benefit Option 1 and Option 2. Tables are also included to reflect the blended cost of insurance charge applied under multiple lives Policies. The Death Benefit, Account Value, and Cash Surrender Value amounts reflect the following current charges: 1. Issue Charge of $150. 2. Monthly Administrative Charge of $5.00 per month ($10 per month guaranteed maximum). 3. Premium Tax Charge of 2.25% (will vary from state to state). 4. Cost of Insurance Charge. For each age, the tables illustrate cost of insurance at both the current rates and at the maximum rates guaranteed in the Policies. (See "Charges and Deductions -- Cost of Insurance.") 5. Mortality and Expense Risk Charge, which is a daily charge equivalent to .80% on an annual basis against the VUL Account for mortality and expense risks. (See "Charges and Deductions -- Mortality and Expense Risk Charge.") These illustrations also assume an average investment advisory fee of .58% on an annual basis, of the average daily net asset value of each of the Series of the Fund. These illustrations also assume other ongoing average Fund expenses of .18%. Management may decide to limit the amount of expense reimbursement in the future. If expense reimbursement had not been in place for the fiscal year ended December 31, 1994, total operating expenses for the Money Market Series, Growth Series, Bond Series, Total Return Series, Balanced Series and International Series would have been approximately 0.58%, 0.82%, 0.72%, 0.75%, 0.70% and 1.10% respectively, of the average net assets of the Series. (See "Charges and Deductions -- Investment Management Charge.") Taking into account the Mortality and Expense Risk Charge and the investment advisory fees and expenses, the gross annual investment return rates of 0% and 12% on the Fund's assets are equivalent to net annual investment return rates of approximately - 1.55% and 10.35%, respectively. For individual illustrations, interest rates ranging between 0% and 12% may be selected in place of the 12% rate. The hypothetical returns shown in the tables are without any tax charges that may be attributable to the VUL Account in the future. If such Tax Charges are imposed in the future, then in order to produce after tax returns equal to those illustrated for 0% and 12%, a sufficiently higher amount in excess of the hypothetical interest rates would have to be earned. (See "Charges and Deductions -- Other Charges -- Taxes.") The second column of each table shows the amount that would accumulate if an amount equal to the premiums paid were invested to earn interest, after taxes, at 5% compounded annually. These tables show that if a Policy is returned in its very early years for payment of its Cash Surrender Value, that Cash Surrender Value may be low in comparison to the amount of the premiums accumulated with interest. Thus, the cost of owning a Policy for a relatively short time may be high. On request, we will furnish the Policyowner with a comparable illustration based on the age and sex of the proposed insured person(s), standard risk assumptions and the initial face amount and planned premium chosen. 32 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
Assuming ----------------------------------------------------- Current Charges Guaranteed Charges --------------------------- ------------------------ Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 705 0 100,000 528 0 100,000 2 1,000 2,153 1,637 724 100,000 1,190 278 100,000 3 1,000 3,310 2,659 1,656 100,000 1,831 828 100,000 4 1,000 4,526 3,781 2,751 100,000 2,452 1,422 100,000 5 1,000 5,802 5,013 3,982 100,000 3,051 2,021 100,000 5 5,000 5,802 5,013 3,982 100,000 3,051 2,021 100,000 6 1,000 7,142 6,365 5,458 100,000 3,628 2,721 100,000 7 1,000 8,549 7,847 7,064 100,000 4,180 3,396 100,000 8 1,000 10,027 9,472 8,877 100,000 4,707 4,112 100,000 9 1,000 11,578 11,255 10,847 100,000 5,207 4,800 100,000 10 1,000 13,207 13,213 13,213 100,000 5,682 5,682 100,000 10 10,000 13,207 13,213 13,213 100,000 5,682 5,682 100,000 11 1,000 14,917 15,363 15,363 100,000 6,127 6,127 100,000 12 1,000 16,713 17,721 17,721 100,000 6,542 6,542 100,000 13 1,000 18,599 20,308 20,308 100,000 6,924 6,924 100,000 14 1,000 20,579 23,148 23,148 100,000 7,274 7,274 100,000 15 1,000 22,657 26,268 26,268 100,000 7,588 7,588 100,000 15 15,000 22,657 26,268 26,268 100,000 7,588 7,588 100,000 16 1,000 24,840 29,697 29,697 100,000 7,864 7,864 100,000 17 1,000 27,132 33,471 33,471 100,000 8,097 8,097 100,000 18 1,000 29,539 37,625 37,625 100,000 8,282 8,282 100,000 19 1,000 32,066 42,202 42,202 100,000 8,413 8,413 100,000 20 1,000 34,719 47,249 47,249 100,000 8,483 8,483 100,000 20 20,000 34,719 47,249 47,249 100,000 8,483 8,483 100,000 @ 62 27,000 57,403 100,941 100,941 129,204 6,726 6,726 100,000 @ 65 30,000 69,761 137,663 137,663 167,950 4,163 4,163 100,000
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 33. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 33 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York FEMALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
Assuming ----------------------------------------------------- Current Charges Guaranteed Charges --------------------------- ------------------------ Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 722 0 100,000 550 0 100,000 2 1,000 2,153 1,670 789 100,000 1,232 350 100,000 3 1,000 3,310 2,710 1,752 100,000 1,893 935 100,000 4 1,000 4,526 3,851 2,893 100,000 2,533 1,576 100,000 5 1,000 5,802 5,102 4,145 100,000 3,152 2,194 100,000 5 5,000 5,802 5,102 4,145 100,000 3,152 2,194 100,000 6 1,000 7,142 6,476 5,634 100,000 3,747 2,904 100,000 7 1,000 8,549 7,987 7,259 100,000 4,317 3,589 100,000 8 1,000 10,027 9,647 9,094 100,000 4,862 4,309 100,000 9 1,000 11,578 11,477 11,098 100,000 5,383 5,005 100,000 10 1,000 13,207 13,488 13,488 100,000 5,881 5,881 100,000 10 10,000 13,207 13,488 13,488 100,000 5,881 5,881 100,000 11 1,000 14,917 15,700 15,700 100,000 6,354 6,354 100,000 12 1,000 16,713 18,132 18,132 100,000 6,803 6,803 100,000 13 1,000 18,599 20,805 20,805 100,000 7,225 7,225 100,000 14 1,000 20,579 23,747 23,747 100,000 7,621 7,621 100,000 15 1,000 22,657 26,984 26,984 100,000 7,989 7,989 100,000 15 15,000 22,657 26,984 26,984 100,000 7,989 7,989 100,000 16 1,000 24,840 30,550 30,550 100,000 8,326 8,326 100,000 17 1,000 27,132 34,482 34,482 100,000 8,632 8,632 100,000 18 1,000 29,539 38,820 38,820 100,000 8,902 8,902 100,000 19 1,000 32,066 43,609 43,609 100,000 9,132 9,132 100,000 20 1,000 34,719 48,898 48,898 100,000 9,323 9,323 100,000 20 20,000 34,719 48,898 48,898 100,000 9,323 9,323 100,000 @ 62 27,000 57,403 105,108 105,108 134,538 9,450 9,450 100,000 @ 65 30,000 69,761 143,601 143,601 175,193 8,561 8,561 100,000
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 39. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 34 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
Assuming ----------------------------------------------------- Current Charges Guaranteed Charges --------------------------- ------------------------ Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 704 0 100,704 527 0 100,527 2 1,000 2,153 1,633 720 101,633 1,186 274 101,187 3 1,000 3,310 2,650 1,647 102,651 1,824 821 101,825 4 1,000 4,526 3,765 2,735 103,766 2,440 1,410 102,441 5 1,000 5,802 4,986 3,956 104,987 3,032 2,002 103,033 5 5,000 5,802 4,986 3,956 104,987 3,032 2,002 103,033 6 1,000 7,142 6,323 5,417 106,324 3,601 2,694 103,601 7 1,000 8,549 7,786 7,003 107,786 4,142 3,359 104,142 8 1,000 10,027 9,385 8,789 109,385 4,657 4,062 104,657 9 1,000 11,578 11,133 10,726 111,134 5,143 4,736 105,143 10 1,000 13,207 13,047 13,047 113,047 5,600 5,600 105,601 10 10,000 13,207 13,047 13,047 113,047 5,600 5,600 105,601 11 1,000 14,917 15,140 15,140 115,141 6,025 6,025 106,026 12 1,000 16,713 17,426 17,426 117,426 6,417 6,417 106,418 13 1,000 18,599 19,920 19,920 119,920 6,774 6,774 106,775 14 1,000 20,579 22,643 22,643 122,644 7,095 7,095 107,095 15 1,000 22,657 25,615 25,615 125,616 7,376 7,376 107,376 15 15,000 22,657 25,615 25,615 125,616 7,376 7,376 107,376 16 1,000 24,840 28,859 28,859 128,860 7,615 7,615 107,616 17 1,000 27,132 32,402 32,402 132,403 7,807 7,807 107,808 18 1,000 29,539 36,270 36,270 136,270 7,946 7,946 107,946 19 1,000 32,066 40,491 40,491 140,491 8,026 8,026 108,026 20 1,000 34,719 45,094 45,094 145,094 8,039 8,039 108,039 20 20,000 34,719 45,094 45,094 145,094 8,039 8,039 108,039 @ 62 27,000 57,403 91,373 91,373 191,373 5,734 5,734 105,734 @ 65 30,000 69,761 121,627 121,627 221,627 2,913 2,913 102,913
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 33. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 35 PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1 Statutory Home Office: East Greenbush, New York MALE 35 NEVERSMOKE FACE AMOUNT: $100,000 INITIAL ANNUAL PREMIUM: $1,000 THE FLEX EDGE -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
Assuming ----------------------------------------------------- Current Charges Guaranteed Charges --------------------------- ------------------------ Assumed Cash Cash Annual Premium Account Surrender Death Account Surrender Death Premium Accum. Value Value Benefit Value Value Benefit Year Payments @ 5% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0% - ------ ------ ------ ------- ------- ------ ------- ------ ------- 1 1,000 1,050 720 0 100,721 549 0 100,549 2 1,000 2,153 1,666 785 101,667 1,228 347 101,229 3 1,000 3,310 2,702 1,744 102,702 1,886 929 101,887 4 1,000 4,526 3,836 2,878 103,836 2,522 1,565 102,523 5 1,000 5,802 5,078 4,120 105,078 3,134 2,177 103,135 5 5,000 5,802 5,078 4,120 105,078 3,134 2,177 103,135 6 1,000 7,142 6,438 5,595 106,438 3,722 2,879 103,722 7 1,000 8,549 7,930 7,202 107,930 4,282 3,554 104,282 8 1,000 10,027 9,566 9,013 109,567 4,815 4,262 104,816 9 1,000 11,578 11,365 10,987 111,365 5,323 4,944 105,323 10 1,000 13,207 13,337 13,337 113,338 5,804 5,804 105,805 10 10,000 13,207 13,337 13,337 113,338 5,804 5,804 105,805 11 1,000 14,917 15,499 15,499 115,499 6,259 6,259 106,259 12 1,000 16,713 17,867 17,867 117,867 6,687 6,687 106,687 13 1,000 18,599 20,460 20,460 120,461 7,086 7,086 107,086 14 1,000 20,579 23,301 23,301 123,301 7,455 7,455 107,455 15 1,000 22,657 26,413 26,413 126,413 7,794 7,794 107,794 15 15,000 22,657 26,413 26,413 126,413 7,794 7,794 107,794 16 1,000 24,840 29,823 29,823 129,823 8,098 8,098 108,098 17 1,000 27,132 33,563 33,563 133,564 8,367 8,367 108,367 18 1,000 29,539 37,668 37,668 137,668 8,597 8,597 108,597 19 1,000 32,066 42,172 42,172 142,172 8,782 8,782 108,783 20 1,000 34,719 47,114 47,114 147,115 8,923 8,923 108,924 20 20,000 34,719 47,114 47,114 147,115 8,923 8,923 108,924 @ 62 27,000 57,403 97,846 97,846 197,846 8,585 8,585 108,586 @ 65 30,000 69,761 131,661 131,661 231,662 7,426 7,426 107,427
Based on 0% interest rate and guaranteed charges, the policy will lapse in year 37. Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical gross interest rates shown, assume current and guaranteed charges and no policy loans or withdrawals, and are calculated at the end of the Policy Year. Assumed Premium Payments shown are assumed paid in full at the beginning of the Policy Year. Payment of premiums shown other than in full at the beginning of the Policy Year would reduce values and benefits below the hypothetical illustrated amounts shown. Values shown reflect an effective annual asset charge of 1.56% (includes mortality and expense risk charge of 0.8% and average fund operating expenses of 0.76% applicable to the investment sub-accounts of the VUL Separate Account). Hypothetical gross interest rates are presented for illustrative purposes only to illustrate funds allocated entirely to the investment sub-accounts of the VUL Separate Account and do not in any way represent actual results or suggest that such results will be achieved in the future. Actual values will differ from those shown whenever actual investment results differ from hypothetical gross interest rates illustrated. A Guaranteed Interest Account providing interest at a minimum guaranteed rate of 4% is also available under this product through the General Account. This illustration assumes a premium tax of 2.25%. 36 PART II. OTHER INFORMATION UNDERTAKING TO FILE REPORTS Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that Section. RULE 484 UNDERTAKING Section 723 of the New York Business Corporation Law, as made applicable to insurance companies by Section 108 of the New York Insurance Law, provides that a corporation may indemnify any director or officer of the corporation made, or threatened to be made, a party to an action or proceeding other than one by or in the right of the corporation to procure a judgment in its favor, whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, by reason of the fact that he, his testator or intestate, served such other corporation in any capacity at the request of the indemnifying corporation. Article VI Section 6.1 of the By-Laws of Phoenix Home Life provides that: "To the full extent permitted by the laws of the State of New York, the Company shall indemnify any person made or threatened to be made a party to any action, proceeding or investigation, whether civil or criminal, by reason of the fact that such person . . . is or was a Director or Officer of the Company; or . . . serves or served another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the Company, and also is or was a Director or Officer of the Company . . . The Company shall also indemnify any [such] person . . . by reason of the fact that such person or such person's testator or intestate is or was an employee or agent of the Company . . . ." 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 controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS PURSUANT TO PARAGRAPH (b)(13)(iii)(F) OF RULE 6e-3(T) UNDER THE INVESTMENT COMPANY ACT OF 1940. Registrant makes the following representations: (1) Section 6e-3(T)(b)(13)(iii)(F) is being relied upon. (2) The level of the mortality and expense risk charge is within the range of industry practice for comparable flexible or scheduled contracts. (3) Phoenix Home Life Mutual Insurance Company has concluded that there is a reasonable likelihood that the distribution financing arrangement of Phoenix Home Life Variable Universal Life Account (the "VUL Account") will benefit the VUL Account and Policyowners. (4) The VUL Account will invest only in management companies which have undertaken to have a board of directors, a majority of whom are not interested persons of the company, formulate and approve any plan under the Rule 12b-1 to finance distribution expenses. The methodology used to support the representation made in paragraph (2) above is based on an analysis of selected variable life insurance policies declared effective by the Commission which contain similar guarantees and are sold in similar markets. Registrant undertakes to keep and make available to the Commission on request the documents used to support the representation in paragraph (2) above and a memorandum setting forth the basis for the representation in paragraph (3) above. II-1 CONTENTS OF REGISTRATION STATEMENT This Post-Effective Amendment No. 12 to Form S-6 Registration Statement, File No. 33-23251, comprises the following papers and documents: The facing sheet. The cross-reference sheet to Form N-8B-2. The Prospectus describing Phoenix Home LIfe Policy Form 2667 and riders thereto ("Flex Edge"), consisting of 36 pages. The Prospectus describing Phoenix Home LIfe Policy Forms V601 and V603 and riders thereto ("Joint Edge" and "Flex Edge Success," respectively), consisting of 39 pages. The undertaking to file reports. The Rule 484 undertaking. Representations, Description and Undertakings Pursuant to Paragraph (b)(13)(iii)(F) of Rule 6e-3(T) under the Investment Company Act of 1940. The signature page. The powers of attorney. Written consents of the following persons (to be provided by amendment): (a) Richard J. Wirth, Esq. (b) Jorden Burt Berenson & Johnson, LLP (c) Price Waterhouse, LLP (d) M. Spencer Hamilton, F.S.A. The following exhibits: 1. The following exhibits correspond to those required by paragraph A to the instructions as to exhibits in Form N-8B-2: A. (1) Resolution of the Board of Directors of Depositor establishing the VUL Account.*** (2) Not Applicable. (3) Distribution of Policies: (a) Form of Underwriting Agreement between Depositor and Phoenix Equity Planning Corporation.* (b) Form of Agreement between Phoenix Equity Planning Corporation and Independent Brokers with respect to the sale of Policies.* (c) Not Applicable. (4) Not Applicable. (5) Specimen Policies with optional riders (a) Flexible Premium Variable Universal Life Insurance Policy Form Number 2667 of Depositor, together with Amendment Permitting Face Amount Increases VR01, Death Benefit Protection Rider VR02, Variable Life Policy Exchange Option Rider VR08, Death Benefit Option - Policy Amendment VR23, Temporary Money Market Allocation Amendment VR130, Accidental Death Benefit Rider VR147, Disability Payment of Specified Annual Premium Amount Rider VR148, Death Benefit Options - Policy Amendment VR149, Additional Purchase Option Rider VR150, and Accelerated Living Benefit Rider VR162. ("Flex Edge") (b) Flexible Premium Joint Variable Universal Life Policy Form Number V601 of Depositor, together with Temporary Money Market Allocation Amendment VR130, Survivor Insurance Purchase Option Rider VR03, Variable Joint Life Policy Exchange Option Rider VR04, Disability Benefit to Age 65 Rider VR05 and Term Insurance Rider VR06. ("Joint Edge") (c) Flexible Premium Variable Universal Life Insurance Policy Form Number V603 of Depositor, together with Temporary Money Market Allocation Amendment VR130, Accidental Death Benefit Rider VR147, Disability Payment of Specified Annual Premium Amount Rider VR148, Purchase Protector Rider VR150, Living Benefit Rider VR162, Whole Life Exchange Option Rider VR08, Cash Value Accumulation Test Rider VR11 and Death Benefit Protection Rider VR24. ("Flex Edge Success") II-2 (6) (a) Charter of Phoenix Home Life. (b) By-Laws of Phoenix Home Life. (7) Not Applicable. (8) Not Applicable. (9) Not Applicable (10) Forms of application for each of Flex Edge, Joint Edge and Flex Edge Success. [To be filed by Amendment] (11) Memorandum describing transfer and redemption procedures and method of computing adjustments in payments and cash values upon conversion to fixed benefit policies.** 2. See Exhibit 1.A(5). 3. Opinion of Richard J. Wirth, Esq., Counsel of Depositor as to the legality of the securities being registered. (See number 9 below). 4. Opinion of M. Spencer Hamilton, Actuary, as to Illustrations. (See number 10 below). 5. Not Applicable. No financial statement will be omitted from the Prospectus pursuant to Instruction 1(b) or (c) of Part I. 6. Not Applicable. 7. Consent of Jorden Burt Berenson & Johnson, LLP. [To be filed by Amendment] 8. Consent of Price Waterhouse, LLP. [To be filed by Amendment] 9. Consent of Richard J. Wirth, Esq. [To be filed by Amendment] 10. Consent of M. Spencer Hamilton, F.S.A. [To be filed by Amendment] - ----------------- * This exhibit was previously filed as an exhibit to Post-Effective Amendment No. 2 to the registration statement filed May 1, 1990, and is incorporated by reference from such Post-Effective Amendment. ** This exhibit was previously filed as an exhibit to Pre-Effective Amendment No. 1 to the registration statement, filed October 21, 1988, and is incorporated by reference from such Pre-Effective Amendment. ***This exhibit was previously filed as an exhibit to this registration statement filed July 21, 1988, and is incorporated by reference from such registration statement. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, Phoenix Home Life Variable Universal Life Account has duly caused this Post-effective Amendment No. 12 to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Hartford, State of Connecticut on the 13th day of February, 1996. PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT ------------------------------------------------- (Registrant) By: PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY ----------------------------------------- (Depositor) By: /s/ Dona D. Young ----------------------------------------- Dona D. Young, Executive Vice President, Individual and General Counsel ATTEST: /s/ Keith D. Robbins ------------------------------ Keith D. Robbins, Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- -------- Director February 13, 1996 - ------------------------------ *Sal H. Alfiero Director February 13, 1996 - ------------------------------ *J. Carter Bacot Director February 13, 1996 - ------------------------------ *Carol H. Baldi Director February 13, 1996 - ------------------------------ *Peter C. Browning Director February 13, 1996 - ------------------------------ *Richard N. Cooper Director February 13, 1996 - ------------------------------ *Gordon J. Davis Chairman of the Board, President and Chief February 13, 1996 - ------------------------------ *Robert W. Fiondella Chief Executive Officer (Principal Executive Officer) Director February 13, 1996 - ------------------------------ *John W. Johnstone Director February 13, 1996 - ------------------------------ *Marilyn E. LaMarche Director February 13, 1996 - ------------------------------ *Edward P. Lyons Director February 13, 1996 - ------------------------------ *Philip R. McLoughlin Director February 13, 1996 - ------------------------------ *Charles J. Paydos S-1(c) Signature Title Date --------- ----- -------- Director February 13, 1996 - ------------------------------ *Herbert Roth, Jr. Director February 13, 1996 - ------------------------------ *Robert F. Vizza Director February 13, 1996 - ------------------------------ *Wilson Wilde Director February 13, 1996 - ------------------------------ *Robert G. Wilson Executive Vice President February 13, 1996 - ------------------------------ *David W. Searfoss and Chief Financial Officer (Principal Financial & Accounting Officer) By: /s/ Dona D. Young -------------------------------- * Dona D. Young as Attorney in Fact Pursuant to Powers of Attorney, copies of which were filed previously with this Registration Statement. S-2(c) EX-99.B1A(5)(A) 2 EXHIBIT 1A(5)(a) SPECIMENT POLICY WITH OPTIONAL RIDERS FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE ("FLEX EDGE") INSURED JOHN PHOENIX 45 MALE ISSUE AGE AND SEX POLICY NUMBER 11900015 JANUARY 15, 1995 POLICY DATE FACE AMOUNT $100,000.00 JANUARY 15, 2045 POLICY MATURITY DATE* DEAR POLICYOWNER: We agree to pay the benefits of this policy in accordance with its provisions. It is important to us that you are satisfied with your policy and that it meets your insurance goals. For service or information on this policy, contact the agent who sold the policy, any of our agency offices, or our Variable and Universal Life Division at the following address: PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY UNDERWRITING AND ISSUE DEPARTMENT 100 BRIGHT MEADOW BOULEVARD P.O. BOX 1900 ENFIELD, CT 06083-19OO RIGHT TO CANCEL. You have the right to cancel this policy within a limited time after the policy is delivered to you. The policy may be cancelled by returning the policy to us at our Variable and Universal Life Division before the later of: 1. 10 days after the policy is delivered to you; or 2. 10 days after a Notice of Right to Cancel is delivered to you; or 3. 45 days after Part 1 of the application is signed; for a refund of: 1. the policy value less debt, if any; plus 2. any monthly deductions, partial surrender fees, and other charges made under the policy. The policy value and debt will be determined as of the nearest Valuation Date coincident with or following the date we receive the returned policy at our Variable and Universal Life Division. Signed for Phoenix Home Life Mutual Insurance Company at its Main Administrative Office in Hartford, Connecticut. Sincerely yours, /s/ Dona D. Young /s/ Robert W. Fiondella Secretary Chief Executive Officer Registrar FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY THE DEATH BENEFIT AND OTHER VALUES PROVIDED UNDER THIS POLICY ARE BASED ON THE RATES OF INTEREST CREDITED ON ANY AMOUNTS ALLOCATED TO THE GUARANTEED INTEREST ACCOUNT AND THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS WITHIN OUR SEPARATE ACCOUNT TO WHICH YOUR PREMIUMS ARE ALLOCATED. THUS, THE DEATH BENEFIT AND OTHER VALUES MAY INCREASE OR DECREASE IN AMOUNT OR DURATION. SEE PART 7 FOR A DESCRIPTION OF HOW THE DEATH BENEFIT IS DETERMINED. ELIGIBLE FOR ANNUAL DIVIDENDS SCHEDULE PAGE BASIC INFORMATION INSURED JOHN PHOENIX 45 MALE ISSUE AGE AND SEX POLICY NUMBER 11900015 JANUARY 15, 1995 POLICY DATE FACE AMOUNT $100,000.00 JANUARY 15, 2045 POLICY MATURITY DATE* OWNER AS STATED IN THE APPLICATION UNLESS LATER CHANGED. DEATH BENEFIT OPTION: DEATH BENEFIT OPTION 1 OR AS LATER CHANGED AS PROVIDED HEREIN. BENEFICIARY AS STATED IN THE APPLICATION UNLESS LATER CHANGED. PREMIUMS -------- ISSUE PREMIUM: $7,800.00 SUBSEQUENT PLANNED SEMI-ANNUAL PREMIUM: TOTAL PREMIUM LIMIT: GREATER OF $51,248.25** AND RESULT OF $4,228.91 MULTIPLIED BY THE NUMBER OF POLICY YEARS (OR FRACTION THEREOF) AFTER JANUARY 15, 1995 PREMIUM DUE DATES: ISSUE PREMIUM DUE ON POLICY DATE AND SUBSEQUENT PLANNED PREMIUMS PAYABLE ON THE FIRST DAY OF EACH SIX MONTHS THEREAFTER UNTIL MATURITY DATE. SUB-ACCOUNT ALLOCATION SCHEDULE ON THE POLICY DATE -------------------------------------------------- MONTHLY SUB-ACCOUNT*** PREMIUMS DEDUCTIONS**** MONEY MARKET 0.0% NONE GROWTH 0.0% NONE BOND 0.0% NONE GUARANTEED INTEREST 0.0% NONE TOTAL RETURN 0.0% NONE INTERNATIONAL 40.0% PROPORTIONATE BALANCED 60.0% PROPORTIONATE * THE MATURITY DATE IS THE LATEST DATE THAT THE POLICY WILL TERMINATE. EVEN IF ALL PLANNED PREMIUMS ARE PAID THE POLICY MAY TERMINATE EARLIER THAN THE MATURITY DATE. SEE SECTION ENTITLED "GRACE PERIOD AND LAPSE" IN PART 4 AND "POLICY MATURITY" IN PART 6. ANY SURRENDER VALUE ON THE MATURITY DATE WILL BE PAID TO YOU AS PROVIDED IN THE SECTION ENTITLED "POLICY MATURITY" IN PART 6. ** THE AMOUNT WILL DECREASE WHEN MONTHLY CHARGES FOR ANY RIDER OR ANY OTHER MONTHLY CHARGES CEASE. *** SEE NEXT PAGE FOR DESCRIPTION OF SUB-ACCOUNTS. **** SEE PART 1 FOR DEFINITION OF PROPORTIONATE. SUB-ACCOUNTS MARKED "NONE" WILL BE CHARGED WITH A PORTION OF THE MONTHLY DEDUCTION ONLY IF THE SUB-ACCOUNTS MARKED PROPORTIONATE ARE NOT SUFFICIENT TO MAKE THE FULL MONTHLY DEDUCTION. PAGE 1 OF 6 SCHEDULE PAGE (CONTINUED) INSURED: JOHN PHOENIX POLICY NUMBER: 11900015 SEPARATE ACCOUNT SUB-ACCOUNTS FUND: THE PHOENIX EDGE SERIES FUND MONEY MARKET THE INVESTMENT OBJECTIVE OF THE MONEY MARKET SUB-ACCOUNT IS TO PROVIDE MAXIMUM CURRENT INCOME CONSISTENT WITH CAPITAL PRESERVATION AND LIQUIDITY. GROWTH THE INVESTMENT OBJECTIVE OF THE GROWTH SUB-ACCOUNT IS TO ACHIEVE INTERMEDIATE AND LONG-TERM GROWTH OF CAPITAL, WITH INCOME AS A SECONDARY CONSIDERATION. BOND THE INVESTMENT OBJECTIVE OF THE BOND SUB-ACCOUNT IS TO SEEK LONG-TERM TOTAL RETURN BY INVESTING IN A DIVERSIFIED PORTFOLIO OF HIGH YIELD (HIGH RISK) AND HIGH QUALITY FIXED INCOME SECURITIES. TOTAL RETURN THE INVESTMENT OBJECTIVE OF THE TOTAL RETURN SUB-ACCOUNT IS TO REALIZE AS HIGH A LEVEL OF TOTAL RATE OF RETURN OVER AN EXTENDED PERIOD OF TIME AS IS CONSIDERED CONSISTENT WITH PRUDENT INVESTMENT RISK. INTERNATIONAL THE INVESTMENT OBJECTIVE OF THE INTERNATIONAL SUB-ACCOUNT IS TO SEEK A HIGH TOTAL RETURN CONSISTENT WITH REASONABLE RISK. THE INTERNATIONAL SUB-ACCOUNT INTENDS TO INVEST PRIMARILY IN AN INTERNATIONALLY DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES. THE INTERNATIONAL PORTFOLIO PROVIDES A MEANS FOR INVESTORS TO INVEST A PORTION OF THEIR ASSETS OUTSIDE THE UNITED STATES. BALANCED THE INVESTMENT OBJECTIVE OF THE BALANCED SUB-ACCOUNT IS TO SEEK A REASONABLE INCOME, LCNG-TERM CAPITAL GROWTH AND CONSERVATION OF CAPITAL. THE BALANCED SUB-ACCOUNT INTENDS TO INVEST BASED ON COMBINED CONSIDERATIONS OF RISK, INCOME, CAPITAL ENHANCEMENT AND PROTECTION OF CAPITAL VALUE. GUARANTEED THE GUARANTEED INTEREST ACCOUNT IS NOT PART OF THE SEPARATE INTEREST ACCOUNT. IT IS ACCOUNTED FOR AS PART OF OUR GENERAL ACCOUNT ACCOUNT. WE WILL CREDIT INTEREST ON ANY AMOUNTS HELD UNDER THE GUARANTEED INTEREST ACCOUNT AT SUCH RATES AS DESCRIBED IN THE SECTION ENTITLED "GUARANTEED INTEREST ACCOUNT" IN PART 5. PAGE 2 OF 6 SCHEDULE PAGE (CONTINUED) INSURED: JOHN PHOENIX POLICY NUMBER: 11900015 SUB-ACCOUNT FEES ---------------- MAXIMUM DAILY MORTALITY AND EXPENSE RISK FEE: 0.0000219 (BASED ON ANNUAL RATE OF 0.80%) MAXIMUM DAILY TAX FEE: 0 OR SUCH GREATER AMOUNT AS MAY BE ASSESSED AS A RESULT OF A CHANGE IN TAX LAWS. POLICY CHARGES -------------- ISSUE EXPENSE CHARGE: $150.00 PREMIUM TAX CHARGE: AS PROVIDED UNDER CURRENT OR FUTURE LAW OF STATE WHERE POLICYOWNER RESIDES, CURRENTLY 0.175%. MONTHLY DEDUCTION: SEE PART 4, "MONTHLY DEDUCTION". INCLUDES COST OF INSURANCE, ANY RIDER CHARGES, ANY FLAT EXTRA MORTALITY CHARGES AND A MONTHLY ADMINISTRATIVE CHARGE WHICH SHALL NOT EXCEED $10.00 AND IS CURRENTLY SET AT $5. MAXIMUM TRANSFER CHARGE: NONE PARTIAL SURRENDER FEE: LESSER OF $25.00 OR 2% OF PARTIAL SURRENDER AMOUNT PAID. SURRENDER CHARGE: SEE TABLE ON NEXT PAGE. OTHER RATES: ----------- GUARANTEED INTEREST ACCOUNT: MINUMUM RATE 4%. LOAN INTEREST RATE: 8.00% FOR THE FIRST 10 POLICY YEARS OR UNTIL AGE 65 WHICHEVER IS SOONER, 7.00% THEREAFTER. PAGE 3 OF 6 SCHEDULE PAGE (CONTINUED) INSURED: JOHN PHOENIX POLICY NUMBER: 11900015 SURRENDER CHARGE IN POLICY YEARS 1 THROUGH 10 THE FULL SURRENDER CHARGE IS AS DESCRIBED BELOW. THE APPLICABLE SURRENDER CHARGE IN ANY POLICY MONTH IS THE FULL SURRENDER CHARGE MINUS ANY SURRENDER CHARGES PREVIOUSLY PAID, BUT NOT LESS THAN ZERO. IN ALL POLICY YEARS AFTER THE 10TH POLICY YEAR THE SURRENDER CHARGE IS ZERO. THE FULL SURRENDER CHARGE IN ANY POLICY MONTH DURING POLICY YEARS 1 THROUGH 10 IS THE LESSER OF THE AMOUNT SHOWN BELOW IN THE MAXIMUM SURRENDER CHARGE TABLE AND AN AMOUNT EQUAL TO A PLUS B AS DEFINED BELOW. A IS EQUAL TO THE SUM OF (1), (2) AND (3) WHERE, (1) EQUALS 30% OF THE FIRST $3,362.62 OF PREMIUMS PAID; (2) EQUALS 10% OF THE PORTION OF CUMULATIVE PREMIUMS PAID IN EXCESS OF $3,362.62 AND NOT GREATER THAN $6,725.24 (3) EQUALS 9% OF CUMULATIVE PREMIUMS PAID IN EXCESS OF $6,725.24 B IS EQUAL TO $1,000.00 MAXIMUM SURRENDER CHARGE TABLE ------------------------------ POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER MONTH CHARGE MONTH CHARGE MONTH CHARGE - ------ --------- ------ --------- ------ --------- 1- 12 2,681.31 77 2,225.48 99 1,426.45 13- 24 2,681.31 78 2,198.67 100 1,385.70 25- 36 2,681.31 79 2,171.86 101 1,344.94 37- 48 2,681.31 80 2,145.04 102 1,304.18 49- 60 2,681.31 81 2,118.23 103 1,263.43 61 2,654.49 82 2,091.42 104 1,222.67 62 2,627.68 83 2,064.60 105 1,181.92 63 2,600.87 84 2,037.79 106 1,141.16 64 2,574.05 85 1,997.03 107 1,100.40 65 2,547.24 86 1,956.28 108 1,059.65 66 2,520.43 87 1,915.52 109 971.34 67 2,493.61 88 1,874.77 110 883.04 68 2,466.80 89 1,834.01 111 794.74 69 2,439.99 90 1,793.26 112 706.43 70 2,413.17 91 1,752.50 113 618.13 71 2,386.36 92 1,711.74 114 529.82 72 2,359.55 93 1,670.99 115 441.52 73 2,332.73 94 1,630.23 116 353.21 74 2,305.92 95 1,589.48 117 264.91 75 2,279.11 96 1,548.72 118 176.80 76 2,252.30 97 1,507.96 119 88.30 98 1,467.21 120 .00 PAGE 4 OF 6 SCHEDULE PAGE (CONTINUED) INSURED: JOHN PHOENIX POLICY NUMBER: 11900015 TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES BASED ON 1980 CSO MORTALITY TABLE PER $1,000 OF NET AMOUNT AT RISK RISK CLASSIFICATION: MALE NON-SMOKER ATTAINED MONTHLY ATTAINED MONTHLY ATTAINED MONTHLY AGE* RATE AGE* RATE AGE* RATE 45 0.27670 62 1.28500 79 7.14330 46 0.29920 63 1.42580 80 7.80580 47 0.32330 64 1.58500 81 8.54330 48 0.34920 65 1.76080 82 9.37670 49 0.37830 66 1.95000 83 10.31580 50 0.40920 67 2.15500 84 11.34250 51 0.44580 68 2.37500 85 12.43330 52 0.48830 69 2.61500 86 13.56670 53 0.53580 70 2.88580 87 14.73250 54 0.59080 71 3.19250 88 15.90750 55 0.65170 72 3.54670 89 17.10750 56 0.71920 73 3.95330 90 18.34920 57 0.79080 74 4.41000 91 19.65330 58 0.86830 75 4.90000 92 21.06250 59 0.95580 76 5.42170 93 22.63580 60 1.05330 77 5.97000 94 24.63750 61 1.16170 78 6.53920 *ATTAINED AGE IS DEFINED IN PART 1. PAGE 5 OF 6 SCHEDULE PAGE (CONTINUED) INSURED: JOHN PHOENIX POLICY NUMBER: 11900015 TABLE OF FACE AMOUNTS OF INSURANCE ---------------------------------- ISSUE DATE FACE AMOUNT RISK CLASSIFICATION JANUARY 15, 1995 $100,000.00 MALE NON-SMOKER RIDERS AND RIDER BENEFITS ------------------------- RIDER PAYABLE MONTHLY RIDER DESCRIPTION DATE AMOUNT PREMIUM TO CHARGE - ----------------- ---- ------ ------- ------- ------- VR130 TEMPORARY MONEY MARKET ALLOCATION AMENDMENT VRO8 VARIABLE LIFE 1/15/1995 NONE NONE POLICY EXCHANGE OPTION RIDER PAGE 6 OF 6 TABLE OF CONTENTS PART PAGE Schedule Page(s) Basic Information Description of Sub-accounts Policy Charges and Rates Table of Surrender Charges Table of Face Amounts of Insurance Table of Guaranteed Maximum Cost of Insurance Rates Table of Contents 1. Definitions........................................................... 1-2 2. About the Policy...................................................... 2 Effective Date of Insurance......................................... 2 Entire Contract..................................................... 2 Dividends........................................................... 2 Contestability...................................................... 2 Suicide............................................................. 3 Misstatement of Age or Sex.......................................... 3 Assignments......................................................... 3 Annual Reports...................................................... 3 Transaction Rules................................................... 3 3. Rights of Owner....................................................... 4 Who is the Owner.................................................... 4 What are the Rights of the Owner.................................... 4 How to Change the Owner............................................. 4 4. Premiums.............................................................. 5 Premium Allocation to Sub-Accounts...................................................... 5 Premium Flexibility................................................. 5 Total Premium Limit................................................. 5 Grace Period and Lapse.............................................. 6 Policy Value........................................................ 6 Monthly Deduction................................................... 6 5. The Accounts.......................................................... 7 Guaranteed Interest Account......................................... 7 Separate Account.................................................... 8 Voting Rights....................................................... 9 Share of Separate Account Sub- Account Values.................................................... 9 Unit Value.......................................................... 9 Net Investment Factor............................................... 9 6. Lifetime Benefits..................................................... 10 Transfers........................................................... 10 Loans............................................................... 10 Loan Interest....................................................... 11 Cash Surrender Value................................................ 12 Full Surrender...................................................... 12 Partial Surrender................................................... 12 Policy Maturity..................................................... 13 Additional Insurance Option......................................... 13 7. Death Benefits........................................................ 14 How Death Benefit is Determined..................................... 14 Requests for a Decrease in Face Amount............................................................ 15 Death Proceeds...................................................... 15 Interest on Death Proceeds.......................................... 15 The Beneficiary..................................................... 16 How to Change the Beneficiary....................................... 16 8. Payment Options....................................................... 16 Who May Elect Payment Options....................................... 16 How to Elect a Payment Option....................................... 16 Payment Options..................................................... 17 (1) Payment in one sum.............................................. 17 (2) Left to earn interest........................................... 17 (3) Payments for a specified period................................. 17 (4) Life Annuity with Specified period certain......................................................... 17 (5) Life Annuity.................................................... 18 (6) Payments of specified amount.................................... 18 (7) Joint survivorship annuity w/10 year period certain............................................. 18 Additional Interest............................................. 18 9. Tables of Payment Option Amounts...................................... 19 PART 1: DEFINITIONS ATTAINED AGE Age of the insured on the birthday nearest the most recent policy anniversary. DEBT Unpaid loans against this policy with accrued interest. GENDER The terms "he," "his" and "him" are applicable without regard to sex. Where proper, "she," "hers" or "her" may be substituted. IN FORCE The policy has not terminated. IN WRITING In a written form satisfactory to us and filed at our VUL. (WRITTEN REQUEST) VUL Our Variable and Universal Life Division. The address is shown on the cover page of this policy. MONTHLY The first Monthly Calculation Day of a policy is the same CALCULATION DAY day as its Policy Date as shown on the Schedule Page. Subsequent Monthly Calculation Days are the same day for each month thereafter or, if such day does not fall within a given month, the last day of that month will be the Monthly Calculation Day. PAYMENT DATE The Valuation Date on which a premium payment or loan repayment is received at our VUL unless it is received after the close of the New York Stock Exchange in which case it will be the next Valuation Date. POLICY The anniversary of the Policy Date. ANNIVERSARY POLICY DATE The policy date as shown on the Schedule Page. It is the date from which policy years and policy anniversaries are measured. POLICY MONTH The period from one Monthly Calculation Day up to but not including the next Monthly Calculation Day. POLICY VALUE The policy value as defined in Part 4. POLICY YEAR The first policy year is the one-year period from the Policy Date to, but not including, the first policy anniversary. Each succeeding policy year is the one-year period from the policy anniversary to but not including the next policy anniversary. PROPORTIONATE Amounts allocated to sub-accounts on a proportionate basis are allocated by increasing (or decreasing) this policy's share in the value of the affected sub-accounts so that such shares maintain the same ratio to each other before and after the allocation. SEPARATE ACCOUNT Phoenix Home Life Variable Universal Life Account. SUB-ACCOUNTS The Guaranteed Interest Account (exclusive of the loaned portion of such account) and the accounts within our Separate Account to which non-loaned assets under the policy are allocated as described in Part 5. - 1 - UNIT A standard of measurement, as described in Part 4, used to determine the share of this policy in the value of each sub- account of the Separate Account. VALUATION DATE Every day the New York Stock Exchange is open for trading and Phoenix Home Life is open for business. VALUATION PERIOD The period in days from the end of one Valuation Date through the next Valuation Date. WE (OUR, US) means Phoenix Home Life Mutual Insurance Company. YOU (YOUR) The owner of this policy. PART 2: ABOUT THE POLICY EFFECTIVE DATE This policy will begin in force on the Policy Date, provided OF INSURANCE the issue premium is paid while the insured is alive. ENTIRE CONTRACT This policy and the written application of the policyholder, a copy of which is attached to and made a part of the policy, are the entire contract between you and us. Any change in the provisions of the contract, to be in effect, must be signed by one of our executive officers and countersigned by our registrar or one of our executive officers. This policy is issued by us at our Main Administrative Office in Hartford, Connecticut. Any benefits payable under this policy are payable at our Main Administrative Office. DIVIDENDS While this policy is in force it will share in our divisible surplus to the extent that we may provide. We do not expect any dividends to be apportioned to this policy. The share to be apportioned to this policy, if any, will be determined annually by us and credited no later than the end of the policy year for which it was determined. You may elect that the dividend be paid to you in cash or applied under any other method mutually agreed to by you and us. CONTESTABILITY We rely on all statements made by or for the insured in the written application. These statements are considered to be representations and not warranties. We can contest the validity of this policy and any coverage under it for any material misrepresentation of fact To do so, however, the misrepresentation must be contained in an application and the application must be attached to this policy when issued. We cannot contest the validity of this policy after it has been in force during the insured's lifetime for two years from its Policy Date. If we contest this policy, the death benefit will be limited to the policy value adjusted by the following amounts: a. we add any monthly deductions and any other fees and charges made under this policy; b. we subtract any debt owed us under this policy. - 2 - SUICIDE If within two years from the Policy Date the insured dies by suicide, while sane or insane and while this policy is in force, the amount of death benefit will be limited to the policy value adjusted by the following amounts: a. we add any monthly deductions and any other fees and charges made under this policy; b. we subtract any debt owed us under this policy. MISSTATEMENT OF If the age or sex of the insured has been misstated, any AGE OR SEX benefits payable under this policy will be adjusted to reflect the correct age and sex as follows: (A) For adjustments made prior to the insured's death, no change will be made to the then current cost of insurance rates, but subsequent cost of insurance rates will be adjusted to such rates that would apply had this policy been issued based on the correct age and sex. (B) For adjustments made at the time of the insured's death, the death benefit payable will be adjusted to reflect the amount of coverage that would have been supported by the most recent monthly deduction based on the then current cost of insurance rate for the correct age and sex. ASSIGNMENTS Except as otherwise provided herein, any or all of the rights in this policy may be assigned. We will not be considered to have notice of any assignment until we receive the original or copy of the assignment at our VUL. We are not responsible for the validity of any assignment. ANNUAL REPORTS We will annually send you a report showing for this policy: a. the then current policy value, cash surrender value, death benefit and face amount; b. the premiums paid, and deductions and partial surrenders made since the last report; c. any outstanding debt; d. an accounting of the change in policy value since the last report; and e. such additional information as required by applicable law or regulation. TRANSACTION RULES Requests for transactions involving sub-accounts will usually be processed within 7 days after we receive the written request at our VUL. However, we may at our discretion postpone the payment of any variable death benefit in excess of the initial face amount, any policy loans, partial withdrawals, surrenders or transfers: (A) For up to six months from the date of request, for any transactions dependent upon the value of the Guaranteed Interest Account; or (B) Otherwise, for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make processing such transactions impractical. - 3 - PART 3: RIGHTS OF OWNER WHO IS THE OWNER The owner is the person named as owner in the application, unless later changed as provided in this policy. If you, the owner, are not the insured and you die before the insured, ownership rights in this policy will pass to the successive owner if one has been named, except that if joint owners are designated, this policy would remain with the surviving joint owners until death of the survivors. The insured will be the owner if no other person is named the owner. If more than one person is named as owner, they must act jointly unless you and we agree otherwise. WHAT ARE THE RIGHTS You control this policy during the insured's lifetime but OF THE OWNER not until this policy begins in force. Unless you and we agree otherwise, you may exercise all rights provided under this policy without the consent of anyone else. These rights include the right to: a. Receive any amounts payable under this policy during the insured's lifetime. b. Change the owner or the interest of any owner. c. Change the planned premium payment amount and frequency. See Part 4. d. Change the sub-account allocation schedule for premium payments and monthly deductions. See Part 4. e. Transfer amounts between and among sub-accounts. See Part 6. f. Obtain policy loans. See Part 6. g. Obtain a partial surrender. See Part 6. h. Surrender this policy for its cash surrender value. See Part 6. i. Select a payment option for any cash surrender value that becomes payable. See Part 6. j. Request changes in the insurance amount. See Parts 6 and 7. k. Change the beneficiary of the death benefit. See Part 7. l. Assign, release, or surrender any interest in the policy. You may exercise these rights only while the insured is alive. Exercise of any of these rights will, to the extent thereof, assign, release, or surrender the interest of the insured and all other beneficiaries and owners under this policy. HOW TO CHANGE You may change the owner by written request, satisfactory to THE OWNER us, filed at our VUL. - 4 - PART 4: PREMIUMS PREMIUM ALLOCATION The issue premium as shown on the Schedule Page is due on TO SUB-ACCOUNTS the Policy Date. The insured must be alive when the issue premium is paid. Thereafter, the amount and payment frequency of planned premiums are as shown on the Schedule Page unless later changed as described below. All premiums are payable in advance at our VUL, except that the issue premium may be paid to an authorized agent of ours for forwarding to our VUL. No benefit associated with any premium shall be provided until it is actually received by us at our VUL. Any premiums received by us at our VUL will be reduced by the premium tax charge stated on the Schedule Page. The issue premium will also be reduced by the issue expense charge shown on the Schedule Page to the extent such premium is sufficient to pay such charge. Any unpaid balance of the issue expense charge will be included as part of the monthly deduction described below until fully paid. Payments received by us during a grace period will also be reduced by the amount needed to cover any monthly deductions during the grace period. The remainder will be applied on the Payment Date to the various sub-accounts based on the premium allocation schedule elected in the application for this policy or as later changed by you. You may change the allocation schedule for premium payments by written notice filed with us at our VUL. Allocations to each sub-account must be expressed in whole percentages unless we agree otherwise. The number of units credited to each sub-account of the Separate Account will be determined by dividing the net premium applied to that sub-account by the unit value of that sub-account on the Payment Date. The number of units credited to each sub-account is carried to 4 decimal places. PREMIUM FLEXIBILITY Subject to the total premium limit described in the next section and except for the issue premium, you may change the amount and frequency of premium payments while this policy is in force during the lifetime of the insured as follows: a. You may increase or decrease the planned premium amount or payment frequency at any time by written notice to us. We reserve the right to limit increases to such maximums as we may establish from time to time. b. Additional premium payments may be made at any time. c. Each premium payment made must at least equal $100 or, if during a grace period, the amount needed to prevent lapse of this policy. We reserve the right to reduce this limit. TOTAL PREMIUM LIMIT The total premium limit is shown on the Schedule Page and is applied to the sum of all premiums received by us for this policy to date, reduced by the sum of all partial surrender amounts paid by us to date. If the total premium limit is exceeded, we will pay you the excess, with interest at an annual rate of not less than 4%, not later than 60 days after the end of the policy year in which the limit was exceeded. The policy value will be adjusted to reflect such refund. The amount to be taken from each sub-account will be allocated in the same manner as provided for monthly deductions unless you in writing request another allocation. - 5 - The total premium limit may be exceeded if additional premium is needed to prevent lapse under the grace period and lapse provision. The total premium limit may change due to: a. a partial surrender or a decrease in face amount; b. addition, cancellation, or change of a rider; or c. a change in federal tax laws or regulations. If the total premium limit changes, we will send you a Revised Schedule Page reflecting the change. However, we reserve the right to require that this policy be returned to us so that we may endorse the change. GRACE PERIOD If on any Monthly Calculation Day during the first policy AND LAPSE year the policy value is less than the required monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. If on any Monthly Calculation Day during any subsequent policy year the cash surrender value is less than the required monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. This policy will continue in force during any such grace period. We will mail a written notice to you and any assigns at the post office addresses last known to us as to the amount of premium required. If such premium is not paid to us by the end of the grace period this policy will lapse without value, but not before 30 days have elapsed since we mailed our written notice to you. The "date of lapse" will be the Monthly Calculation Day on which the deduction was to be made, and any insurance and rider benefits provided under this policy will terminate as of that date. POLICY VALUE The policy value is the sum of the shares of this policy in the value, if any, of each sub-account of the Separate Account and the value of this policy's Guaranteed Interest Account. See Part 5 for an explanation as to how this policy's share in the value of each sub-account of the Separate Account is determined and for a description of the Guaranteed Interest Account. MONTHLY DEDUCTION A deduction is made each policy month from the policy value (excluding the value of the loaned portion of the Guaranteed Interest Account) to pay: (a) the cost of insurance provided under this policy; (b) any flat extra mortality charges; (c) the cost of any rider benefits provided; (d) any unpaid balance of the issue expense charge; and (e) an administrative charge as shown on the Schedule Page. The administrative charge may vary but in no event will exceed the maximum amount shown on the Schedule Page. We will send you a written notice of any change at least 30 days in advance of such change. Deductions are made on each Monthly Calculation Day. If the Monthly Calculation Day is not a valuation date, the monthly deduction for that policy month will be made on the next valuation date. - 6 - You may request in the application for this policy that monthly deductions not be taken from certain specified sub- accounts. Such a request may later be changed by notifying us in writing but only with respect to future monthly deductions. Monthly deductions will be taken from this policy's share of the remaining sub-accounts exclusive of the loaned portion of the Guaranteed Interest Account, on a proportionate basis. In the event this policy's share in the value of such sub-accounts is not sufficient to permit the withdrawal of the full monthly deduction, the remainder will be taken on a proportionate basis from this policy's share of each of the other sub-accounts exclusive of the loaned portion of the Guaranteed Interest Account. The number of units deducted from each sub-account of the Separate Account will be determined by dividing the portion of the monthly deduction allocated to each such sub-account by the unit value of that sub-account on the Monthly Calculation Day. Each monthly deduction will pay the cost of insurance from the Monthly Calculation Day on which the deduction is made up to but not including the next Monthly Calculation Day. The cost of insurance is equal to the cost of insurance rate for the current policy month divided by 1000 and then multiplied by the result of: (a) the death benefit on the Monthly Calculation Day; minus (b) the policy value on the Monthly Calculation Day. The cost of insurance rate for the current policy month is based on the insured's attained age and risk classification. The rate used in computing the cost of insurance is obtained from the Table of Guaranteed Maximum Cost of Insurance Rates on the Schedule Page for the risk classification(s) shown, or such lower rate as we may declare. Any change we make in the declared cost of insurance rates will be uniform by class and based on our future mortality, expense and lapse expectations. The declared cost of insurance rates for an insured will not be affected by a change in the insured's health or occupation. PART 5: THE ACCOUNTS Assets under this policy, may be allocated either to the Guaranteed Interest Account or to any of the sub-accounts of the Separate Account to support the operation of the Separate Account. GUARANTEED INTEREST The Guaranteed Interest Account is not part of the Separate ACCOUNT Account. It is accounted for as part of our General Account. We reserve the right to limit cumulative deposits, including transfers, to the unloaned portion of the Guaranteed Interest Account during any one-week period to no more than $250,000. We will credit interest daily on the amounts allocated under this policy to the Guaranteed Interest Account. The loaned portion of the Guaranteed Interest Account will be credited interest at an effective annual fixed rate of 6%. We will credit interest on the unloaned portion of the Guaranteed Interest Account at such rates as we shall determine but in no event will the effective annual rate of interest on such portion be less than 4%. - 7 - On the last working day of each week we will set the interest rate that will apply to any net premium or transferred amounts deposited to the unloaned portion of the Guaranteed Interest Account during the following week. A week begins on Saturday and ends on the following Friday. That rate will remain in effect for such deposits, for an initial guarantee period of one full year. Upon expiry of the initial one-year guarantee period, and each subsequent one-year guarantee period thereafter, the rate applicable for any deposits in the unloaned portion of the Guaranteed Interest Account whose guarantee period has just ended shall be the same rate that applies to new deposits to such sub- account made during the week in which the guarantee period expired. Such rate shall likewise remain in effect for such deposits for a subsequent guarantee period of one full year. All transfers, partial surrenders, and deductions from the unloaned portion of the Guaranteed Interest Account will be assessed on a Last-In, First-Out basis based on the date the deposit was initially made to the unloaned portion of such sub-account. At the end of each policy year and at the time of any debt repayment, interest credited to the loaned portion of the Guaranteed Interest Account will be transferred to the unloaned portion of the Guaranteed Interest Account. We reserve the right to add other Guaranteed Interest Accounts, subject, where required, to approval by the issuance of supervisory official of the state where this policy is delivered. SEPARATE ACCOUNT The Separate Account has been established by us as a separate account pursuant to Connecticut law and is registered as a unit investment trust under the Investment Company Act of 1940 (1940 Act). Income and realized and unrealized gains and losses from assets in the Separate Account are credited to or charged against it without regard to our other income, gains or losses. We own the Separate Account assets and they are kept separate from the assets of our General Account. Separate Account assets will be valued on each valuation date. The portion of the Separate Account equal to reserves and liabilities for policies supported by the Separate Account will not be charged with any liabilities arising out of our other business. We reserve the right to use assets of the Separate Account in excess of these reserves and liabilities for any purpose. The Separate Account has several sub-accounts available under this policy as shown on the Schedule Page. We have the right to add additional sub-accounts of the Separate Account subject to approval by the Securities and Exchange Commission and, where required, by the insurance supervisory official of the state where this policy is delivered. We use the assets of the Separate Account to buy shares of the Fund identified on the Schedule Page according to your allocation instructions. The Fund is registered under the 1940 Act as an open-end, diversified management investment company. The Fund has separate Portfolios that correspond to the sub- accounts of the Separate Account. Assets of each such sub- account are invested in shares of the corresponding Fund Portfolio. - 8 - A Portfolio of the Fund might make a material change in its investment policy. If that occurs, you will be notified of the change. In addition, no change will be made in the investment policy of any of the sub-accounts of the Separate Account without approval of the appropriate insurance supervisory official of our domiciliary state of New York. The approval process is on file with the insurance supervisory official of the state where this policy is delivered. If, in our judgment, a Portfolio of the Fund becomes unsuitable for investment by a sub-account of the Separate Account for any reason, we may substitute shares of another Portfolio of the Fund or shares of another mutual fund. Any such change will be subject to approval by the Securities and Exchange Commission and, where required, by the insurance supervisory official of the state where this policy is delivered. VOTING RIGHTS Although we are the legal owner of the Fund shares, we will vote the shares at regular and special meetings of the shareholders of the Fund in accordance with instructions received from you and the other owners of the policies. Any shares held by us will be voted in the same proportion as voted by you and the other owners of the policies. However, we reserve the right to vote the shares of the Fund without direction from you if there is a change in the law which would permit this to be done. SHARE OF SEPARATE The share of this policy in the value of each sub-account of ACCOUNT SUB-ACCOUNT the Separate Account on a valuation date is the unit value VALUES of that sub-account on that day multiplied by the number of this policy's units in that sub-account after all transactions for the valuation period ending on that day have been processed. For any day which does not fall on a valuation date, the share of this policy in the value of each sub-account of the Separate Account is determined using the number of units on that day after all transactions for that day have been processed and the unit values on the next valuation date. UNIT VALUE The unit value of each sub-account of the Separate Account was set by us on the first valuation date of each such sub- account. The unit value of a sub-account of the Separate Account on any other valuation date is determined by multiplying the unit value of that sub-account on the just prior valuation date by the Net Investment Factor for that sub-account for the then current valuation period. The unit value of each sub-account of the Separate Account on a day other than a valuation date is the unit value on the next valuation date. Unit values are carried to 6 decimal places. The unit value of each sub-account of the Separate Account on a valuation date is determined at the end of that day. NET INVESTMENT The Net Investment Factor for each sub-account of the FACTOR Separate Account is determined by the investment performance of the assets held by the sub-account during the valuation period. Each valuation will follow applicable law and accepted procedures. The Net Investment Factor is equal to item (D) below subtracted from the result of dividing the sum of items (A) and (B) by item (C) as defined below. (A) The value of the assets in the sub-account on the current valuation date, including accrued net investment income and realized and unrealized capital gains and losses, but excluding the net value of any transactions during the current valuation period. - 9 - (B) The amount of any dividend (or, if applicable, any capital gain distribution) received by the sub-account if the "ex-dividend" date for shares of the Fund occurs during the current valuation period. (C) The value of the assets in the sub-account as of the just prior valuation date, including accrued net investment income and realized and unrealized capital gains and losses, and including the net value of all transactions during the valuation period ending on that date. (D) The sum of the following daily charges as shown on the Schedule Page, multiplied by the number of days in the current valuation period: 1. the mortality and expense risk charge; and 2. the charge, if any, for taxes and reserves for taxes on investment income, and realized and unrealized capital gains. PART 6: LIFETIME BENEFITS TRANSFERS You may transfer this policy's value among the sub-accounts of the Separate Account and the unloaned portion of the Guaranteed Interest Account. Unless we agree otherwise, you may make only one transfer per policy year from the unloaned portion of the Guaranteed Interest Account. Transfers from the unloaned portion of the Guaranteed Interest Account will be effectuated by us on the last valuation date to occur in the calendar quarter during which the transfer request was received by us at our VUL. The amount that may be transferred from the unloaned portion of the Guaranteed Interest Account at any one time cannot exceed the higher of $1000 or 25% of the value of this policy in the unloaned portion of that sub-account. We reserve the right to require that such transfers be made by written request. We further reserve the right to permit transfers of less than $500 only if the entire balance in the sub-account is transferred. A transfer charge will be imposed in such amount as stated on the Schedule Page. Any such charge, will be deducted from the sub-accounts from which the amounts are to be transferred in the same proportion as the amounts to be transferred to each sub- account bear to the total amount transferred. We reserve the right to prohibit a transfer to any sub-account where the resultant value of this policy's share in that sub- account immediately after the transfer would be less than $500. We further reserve the right to require that the entire balance of a sub-account be transferred if the share of this policy in the value of that sub-account would, immediately after the transfer, be less than $500. LOANS While this policy is in force, a loan may be obtained against this policy in any amount up to the available loan value. To obtain a loan this policy must be properly assigned to us as security. We need no other collateral. We reserve the right not to allow loans of less than $500 unless the loans are to pay premiums on another policy issued by us. The loan value on any day during the first 3 policy years is 75% of the result of - 10 - subtracting the then remaining surrender charge from the then policy value. The loan value on any day after the first 3 policy years is 90% of the result of subtracting the then remaining surrender charge from the then policy value. The "available loan value" is the loan value on the current day less any outstanding debt. The amount of the loan will be added to the loaned portion of the Guaranteed Interest Account and subtracted from this policy's share of the sub-accounts based on the allocation you request at the time of the loan. The total reduction will equal the amount added to the loaned portion of the Guaranteed Interest Account. Unless we agree otherwise, allocations to each sub-account must be expressed in whole percentages. If no allocation request is made, the amount subtracted from the share of each sub-account will be determined in the same manner as provided for monthly deductions. Debt may be repaid at any time during the lifetime of the insured while this policy is in force. Such repayment, in excess of any outstanding accrued loan interest, will be applied to reduce the loaned portion of the Guaranteed Interest Account and will be transferred to the unloaned portion of the Guaranteed Interest Account to the extent that loaned amounts taken from such account have not previously been repaid. Otherwise, such balance will be transferred among the sub-accounts you request upon repayment and, if no allocation request is made, we will use your most recent premium allocation schedule on file with us. Any debt repayment received by us during a grace period as described in Part 4 will be reduced to cover any overdue monthly deductions and only the balance applied to reduce the debt. Such balance will also be applied as described to reduce the loaned portion of the Guaranteed Interest Account. While there is any outstanding debt against this policy, any payments received by us for this policy will be applied directly to reduce the debt unless specified as a premium payment. Until the debt is fully repaid, additional debt repayments may be made at any time during the lifetime of the insured while this policy is in force. Failure to repay a policy loan or to pay loan interest will not terminate this policy except as otherwise provided under Grace Period and Lapse in Part 4 when the policy does not have sufficient remaining value to pay the monthly deductions, in which event, that grace period provision will apply. LOAN INTEREST Loans will bear interest at an effective annual rate equal to the loan interest rate shown on the Schedule Page and will be compounded daily. Interest will accrue on a daily basis from the date of the loan and is included as part of the debt under this policy. Loan interest will be due on each policy anniversary. If not paid when due, the outstanding accrued interest on that date will be charged as a loan against this policy. - 11 - CASH SURRENDER The cash surrender value of this policy is the policy value VALUE as defined in Part 4 less any applicable surrender charge on the date of surrender as stated on the Schedule Page and less any debt. FULL SURRENDER You may fully surrender this policy for its cash surrender value by returning this policy to us at our VUL along with a written release and surrender of all claims under this policy signed by you and any assigns. You may do this at any time during the lifetime of the insured while this policy is in force. The written surrender must be in a form satisfactory to us and must include such tax withholding information as we may reasonably require. The surrender will be effective on the "date of surrender" which is the later of the dates on which we receive the returned policy and the written surrender. Upon full surrender all insurance and any rider benefits provided under this policy will terminate. You may direct that we apply the surrender proceeds under any of the Payment Options described in Part 8. PARTIAL SURRENDER You may obtain a partial surrender of this policy by requesting that a part of this policy's cash surrender value be paid to you. You may do this at any time during the lifetime of the insured while this policy is in force with a written request signed by you and any assigns. We reserve the right to require that this policy first be returned to us before payment is made. A partial surrender will be effective on the date we receive the written request or, if required, the date we receive this policy if later. You may direct that we apply the surrender proceeds under any of the Payment Options described in Part 8. A partial surrender will be denied if the resultant cash surrender value would be less than or equal to zero. We reserve the right not to allow partial surrenders if the resulting death benefit would be less than $25,000 or if the amount of the partial surrender is less than $500. We further reserve the right to require that the entire balance of a sub-account be surrendered and withdrawn if the share of this policy in the value of that sub-account would, immediately after a partial surrender, be less than $500. Upon a partial surrender, the policy value will be reduced by the sum of the following: (A) The partial surrender amount paid. This amount comes from a reduction in this policy's share in the value of each sub-account based on the allocation you request at the time of the partial surrender. If no allocation request is made, the assessment to each sub-account will be made in the same manner as provided for monthly deductions. (B) The partial surrender fee. The fee is the lesser of $25 and 2% of the partial surrender amount paid. The assessment to each sub-account will be made in the same manner as provided for the partial surrender amount paid. - 12 - (C) A partial surrender charge. This charge is equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender, determined by multiplying such applicable surrender charge by a fraction equal to the partial surrender amount payable divided by the result of subtracting the applicable surrender charge from the policy value. This amount is assessed against the sub-accounts in the same manner as provided for the partial surrender amount paid. The cash surrender value will be reduced by the partial surrender amount paid plus the partial surrender fee. The face amount of this policy will be reduced by the same amount as the policy value is reduced as described above. We will send you a Revised Schedule Page reflecting this change. POLICY MATURITY Unless the policy has already terminated, it will mature on its Maturity Date. Upon written request we will pay you the cash surrender value on that date in one sum, or you may direct that we apply the cash surrender value under any of the various payment options described in Part 8 subject to the conditions stated in that part. The issue premium together with any additional premium payments might not continue the policy in force until the Maturity Date, even if such premiums are paid and no further changes take place. The period for which the policy will continue will depend on the following: (A) the amount of the issue premium, and the timing and amount of any additional premium payments; (B) changes in the cost of insurance rates; (C) the investment experience of the sub-accounts of the Separate Account; (D) any policy loans or partial surrenders made. ADDITIONAL While this policy is in force and subject to the terms of INSURANCE this provision including our receipt of evidence OPTION satisfactory to us of the insured's then insurability, you have the option to purchase additional insurance on the same insured under the same plan of insurance as this policy without our assessment of any issue expense charge under the new policy. Except for our waiver of the issue expense charge, the new policy will be based on the same guaranteed rates and charges as are in effect for this plan on the Policy Date of this policy as adjusted for the insured's new attained age and change, if any, in risk classification. The new policy will only include such rider benefits as we may agree based on our rules and practices in effect on the Policy Date of the new policy. The amount of insurance under the new policy, when added to all other insurance with our company on the life of the insured, cannot exceed our total insurance amount limitations in effect on the Policy Date of the new policy. - 13- To elect this option, you must file a written application with our VUL. It must be signed by you and the insured. We must also receive: (A) Evidence that you have a satisfactory insurable interest in the life of the insured. (B) Evidence, satisfactory to us, that the insured is then insurable under our established practice in the selection of risks for this plan of insurance, including the new amount applied for and rider benefits requested. Selection of risks includes health and non- health factors. (C) Payment, while the insured is alive, of the full issue premium for the new policy. The payment must equal or exceed our minimum issue premium requirements in effect for this plan on the Policy Date of the new policy. Any exclusions applicable to the new policy will be determined in accordance with our rules and practices in effect on the Policy Date of the new policy. The new policy will not be subject to any assignments or liens against this policy. The owner and the beneficiary under the new policy shall be as requested in the application for the new policy. Any subsequent changes will be governed by the printed provisions of the new policy. The new policy will begin in effect as of the later of: a. our approval of the application for the new policy; b. payment of the full issue premium due on the new policy. The Policy Date of the new policy will be as shown on the schedule pages of the new policy based on our rules and practices then in effect. The time periods for the suicide and contestability provisions in the new policy will be measured from the Policy Date of the new policy. PART 7: DEATH BENEFITS HOW DEATH BENEFIT The death benefit equals this policy's face amount on the IS DETERMINED date of the insured's death or, if greater, the minimum death benefit on the date of death as defined below. The minimum death benefit is the policy value on the date of death of the insured increased by the applicable percentage from the table below, based on the insured's attained age at the beginning of the policy year in which the death occurs. - 14 - Att'd Att'd Att'd Att'd Age Pct. Age Pct. Age Pct. Age Pct. --- --- --- --- --- --- --- --- Under 40 150% 53 64% 67 18% 81 5% 40 150 54 57 68 17 82 5 41 143 55 50 69 16 83 5 42 136 56 46 70 15 84 5 43 129 57 42 71 13 85 5 44 122 58 38 72 11 86 5 45 115 59 34 73 9 87 5 46 109 60 30 74 7 88 5 47 103 61 28 75 5 89 5 48 97 62 26 76 5 90 5 49 91 63 24 77 5 91 4 50 85 64 22 78 5 92 3 51 78 65 20 79 5 93 2 52 71 66 19 80 5 94 1 REQUESTS FOR A You may request a decrease in face amount at any time after DECREASE IN the first policy year. Unless we agree otherwise, the FACE AMOUNT decrease requested must at least equal $10,000 and the face amount remaining after the decrease must at least equal $25,000. All requests to decrease the face amount must be in writing and will be effective on the first Monthly Calculation Day following the date we approve the request. We reserve the right to require that this policy first be returned to us before the decrease is made. Upon a decrease in face amount, a partial surrender charge will be deducted from the policy value based on the amount of the decrease. The charge will equal the applicable surrender charge that would then apply to a full surrender multiplied by the result of dividing the decrease in face amount by the face amount of the policy before the decrease. We will send you a Revised Schedule Page reflecting the change. DEATH PROCEEDS Upon receipt of due proof at our VUL that the insured died while this policy is in force, we will pay the death proceeds of this policy. The death proceeds equal the death benefit on the date of death, with the following adjustments: (A) We will deduct any debt outstanding against this policy. (B) We will deduct any monthly deductions to and including the policy month of death not already made. (C) We will add any premiums received by us after the Monthly Calculation Day just prior to the date of death and on or before the date of death. INTEREST ON DEATH We will pay interest on any death proceeds from the date of PROCEEDS the insured's death to the date of payment. The amount of interest will be the same as would be paid were the death proceeds left for that period of time to earn interest under Payment Option 2. - 15 - THE BENEFICIARY Unless another payment option is elected as described in Part 8, any death proceeds that become payable will be paid in equal shares to such beneficiaries living at the death of the insured as stated in the application for this policy or as later changed. Payments will be made successively in the following order: a. Primary beneficiaries. b. Contingent beneficiaries, if any, provided beneficiary is living at the death of the insured. c. You or your executor or administrator, provided no primary or contingent beneficiary is living at the death of the insured. Unless otherwise stated the relationship of a beneficiary is the relationship to the insured. HOW TO CHANGE You may change the beneficiary under this policy by written THE BENEFICIARY notice signed by you and filed with us at our VUL. When we receive it, the change will relate back and take effect as of the date it was signed. However the change will be subject to any payments made or actions taken by us before we received the notice at our VUL. PART 8: PAYMENT OPTIONS WHO MAY ELECT The proceeds of this policy will be paid in one sum unless PAYMENT OPTIONS otherwise provided. As an alternative to payment in one sum as provided under Option 1, any surrender or death proceeds that become payable under an account may be applied under one or more of the alternative income payment options as described in this part or such other payment options as may then be currently available for the policy. Our consent is required for the election of an income payment option by a fiduciary or any entity other than a natural person. Our consent is also required for elections by any assigns or an owner other than the insured if the owner has been changed. You may designate or change one or more beneficiaries who will be the payee or payees under the option elected. You may only do this during the lifetime of the insured. For death proceeds, if no election is in effect when the death benefit becomes payable, the beneficiary may elect a payment option. Unless we agree otherwise, all payments under any option chosen will be made to the designated payee or to his executor or administrator. We may require proof of age of any payee or payees on whose life payments depend as well as proof of the continued survival of any such payee(s). HOW TO ELECT A The election of an income payment option must be in a PAYMENT OPTION written form satisfactory to us. Payments may be made on an annual, semi-annual, quarterly or monthly basis provided that each installment will at least equal $25. We also require that at least $1,000 be applied under any income option chosen. - 16 - PAYMENT OPTIONS This section provides a brief description of the various payment options that are available. In Part 9 you will find tables illustrating the guaranteed installment amount provided by several of the options described in this section. The amounts shown for Options 4, 5, and 7 are the minimum monthly payments for each $1,000 applied The actual payments will be based on the monthly payment rates we are using when the first payment is due. They will not be less than shown in the tables. Option 1 - Payment in one sum Option 2 - Left to earn interest We pay interest during the payee's lifetime on the amount left with us under this option as a principal sum. We guarantee that at least one of the versions of this option will provide interest at a rate of at least 3% per year. Option 3 - Payments for a specific period Equal income installments are paid for a specified period of years whether the payee lives or dies. The first payment will be on the date of settlement. The Option 3 Table shows the guaranteed amount of each installment for monthly and annual payment frequencies. The table assumes an interest rate of 3% per year on the unpaid balance. The actual interest rate is guaranteed not to be less than this minimum rate. Option 4 - Life annuity with specified period certain Equal installments are paid until the later of: (A)The death of the payee. (B) The end of the period certain. The first payment will be on the date of settlement. The period certain must be chosen at the time this option is elected. The periods certain that may be chosen are as follows: (A) Ten years. (B) Twenty years. (C) Until the installments paid refund the amount applied under this option. If the payee is not living when the final payment falls due, that payment will be limited to the amount which needs to be added to the payments already made to equal the amount applied under this option. - 17 - If, for the age of the payee, a period certain is chosen that is shorter than another period certain paying the same installment amount, we will deem the longer period certain as having been elected. The life annuity provided under this option is calculated using an interest rate of 3-3/8%, except that any life annuity providing a period certain of twenty years or more is calculated using an interest rate of 3- 1/4%. Option 5 - Life Annuity Equal installments are paid only during the lifetime of the payee. The first payment will be on the date of settlement. Any life annuity as may be provided under this option is calculated using an interest rate of 3-1/2%. Option 6 - Payments of a specified amount Equal installments of a specified amount, out of the principal sum and interest on that sum, are paid until the principal sum remaining is less than the amount of the installment. When that happens, the principal sum remaining with accrued interest will be paid as a final payment. The first payment will be on the date of settlement. The payments will include interest on the principal sum remaining at a rate guaranteed to at least equal 3% per year. This interest will be credited at the end of each year. If the amount of interest credited at the end of a year exceeds the income payments made in the last 12 months, that excess will be paid in one sum on the date credited. Option 7 - Joint survivorship annuity with 10-year period certain. The first payment will be on the date of settlement. Equal income installments are paid until the latest of: (A) The end of the 10-year period certain. (B) The death of the insured. (C) The death of the other named annuitant. The other annuitant must be named at the time this option is elected and cannot later be changed. That annuitant must have an adjusted age as defined in Part 9 of at least 40. The joint survivorship annuity provided under this option is calculated by using an interest rate of 3-3/8%. We may offer other payment options or alternative versions of the options listed in the above section. ADDITIONAL INTEREST In addition to: (A) the interest of 3% per year guaranteed on the principal sum remaining with us under Options 2 or 6; and (B) the interest of 3% per year included in the installments payable under Option 3. - 18 - We will pay or credit at the end of each year such additional interest as we may declare. PART 9: TABLES OF PAYMENT OPTION AMOUNTS The installment amounts shown in the tables that follow are shown for each $1,000 applied. Amounts for payment frequencies, periods or ages not shown will be furnished upon request. Under Options 4 and 5, the installment amount for younger ages than shown will be the same as for the first age shown and for older ages than shown it will be the same amount as for the last age shown. The term "age" as used in the tables refers to the adjusted age. Under Options 4 and 5, the adjusted age is defined as follows: (A) For surrender values, the age of the payee on the payee's birthday nearest to the policy anniversary nearest the date of surrender. (B) For death proceeds, the age of the payee on the payee's birthday nearest the effective date of the payment option elected. Under Option 7, the adjusted age is the age on the birthday nearest to the policy anniversary nearest the date of surrender. OPTION 3 - PAYMENTS FOR A SPECIFIED PERIOD - ------------------------------------------------------------------------------------------------------------------ Number of Years 5 6 7 8 9 10 11 12 13 - ------------------------------------------------------------------------------------------------------------------ Annual Installments$ 211.99 179.22 155.83 138.31 124.69 113.82 104.93 97.54 91.29 - ------------------------------------------------------------------------------------------------------------------ Mo. Installment $ 17.91 15.14 13.16 11.68 10.53 9.61 8.86 8.24 7.71 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ Number of Years 14 15 16 17 18 19 20 25 30 - ------------------------------------------------------------------------------------------------------------------ Annual Installments$ 85.95 81.33 77.29 73.74 70.59 67.78 65.26 55.76 49.53 - ------------------------------------------------------------------------------------------------------------------ Mo. Installment $ 7.26 6.87 6.53 6.23 5.96 5.73 5.51 4.71 4.18 - ------------------------------------------------------------------------------------------------------------------ *OPTION 4 - LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN Age Installment Refund 10 Yrs. Certain 20 Yrs. Certain Age Installment Refund 10 Yrs. Certain 20 Yrs. Certain --------------------------------------------------------- ------------------------------------------------------- of of Payee Male Female Male Female Male Female Payee Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ 10 $3.08 $3.03 $3.08 $2.99 $3.00 $2.84 50 $4.36 $4.12 $4.50 $4.10 $4.28 $3.99 15 3.14 3.09 3.15 3.04 3.07 3.00 55 4.76 4.47 4.95 4.47 4.61 4.31 20 3.22 3.16 3.24 3.11 3.15 3.07 60 5.28 4.93 5.54 4.96 4.97 4.67 25 3.33 3.24 3.34 3.20 3.25 3.15 65 5.97 5.54 6.30 5.63 5.29 5.06 30 3.45 3.35 3.47 3.30 3.38 3.25 70 6.91 6.39 7.24 6.50 5.43 5.31 35 3.61 3.48 3.64 3.43 3.55 3.38 75 8.21 7.57 8.26 7.56 5.44 5.40 40 3.80 3.64 3.86 3.60 3.74 3.54 80 10.04 9.26 9.12 8.60 5.46 5.46 45 4.05 3.85 4.14 3.82 3.99 3.74 85 12.61 11.68 9.60 9.31 5.46 5.46 - ------------------------------------------------------------------------------------------------------------------------------------
OPTION 5 LIFE ANNUITY - -------------------------------------------------------------------------------- Age Age of of Payee Male Female Payee Male Female - -------------------------------------------------------------------------------- 10 $3.17 $3.12 50 $4.62 $4.28 15 3.24 3.18 55 5.12 4.68 20 3.32 3.25 60 5.79 5.24 25 3.42 3.34 65 6.75 6.04 30 3.56 3.44 70 8.15 7.22 35 3.73 3.58 75 10.26 9.03 40 3.95 3.75 80 13.54 11.88 45 4.24 3.98 85 18.72 16.54 - -------------------------------------------------------------------------------- * OPTION 7 - JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN
- ---------------------------------------------------------------------------------------------------------------------------------- Age of Age of Insured Age of Age of Insured Age of Age of Insured Age of Age of Insured Other --------------------- Other --------------------- Other -------------------- Other ------------------- Annuitant Annuitant Annuitant Annuitant Male Male Female Female F F M M 55 60 65 55 60 65 55 60 65 55 60 65 - ---------------------------------------------------------------------------------------------------------------------------------- 40 $3.62 $3.64 $3.65 60 $4.43 $4.64 $4.82 40 $3.72 $3.77 $3.80 60 $4.34 $4.64 $4.93 45 3.80 3.83 3.86 65 4.61 4.93 5.23 45 3.89 3.97 4.03 65 4.44 4.82 5.23 50 4.00 4.07 4.12 70 4.75 5.18 5.63 50 4.06 4.19 4.31 70 4.50 4.95 5.48 55 4.22 4.34 4.44 75 4.86 5.36 5.96 55 4.22 4.43 4.61 75 4.54 5.03 5.65 - ----------------------------------------------------------------------------------------------------------------------------------
*Minimum monthly income for each $1,000 applied. - 19 - Flexible Premium Variable Universal Life Insurance Policy The death benefit and other values provided under this policy are based on the rates of interest, credited on any amounts allocated to the Guaranteed Interest Account and the investment experience of the subaccounts within our Separate Account to which your premiums are allocated. Thus, the death benefit and other values may increase or decrease in amount or duration. See Part 7 for a description of how the death benefit is determined. Eligible for Annual Dividends AMENDMENT PERMITTING FACE AMOUNT INCREASES This amendment is part of the policy to which it is attached. REQUEST FOR The following new provision is added to Part 7 of the INCREASES policy. At any time within 90 days prior to a policy anniversary, you may request an increase in the face amount of this policy to take effect beginning on that anniversary. If we approve the request, such anniversary will be shown as the issue date for such increase on the Revised Schedule Pages we send to you reflecting the change. We reserve the right to limit increases in face amount All requests to increase the face amount must be applied for on a supplemental application and will be subject to evidence of the insured's insurability satisfactory to us. The insured must be alive on the issue date, and you must also pay to us in advance such issue premium for the increase as we may require according to our published rules then in effect. If no issue premium is required, the increase will not take effect unless the cash surrender value on the issue date at least equals the monthly deduction for the total combined face amount. The Issue Expense Charge for Face Amount increases is $3.00 per thousand of increase up to a maximum charge of $150.00. We will send you Revised Schedule Pages reflecting the change. We reserve the right to further require that the policy be returned to us so that we may incorporate the change. RIGHT TO CANCEL The RIGHT TO CANCEL provision on the Cover Page of this policy is amended to further provide that you have the right to cancel any increase in the face amount provided by us under this policy pursuant to your request, within a limited time as stated below. The increase in face amount may be cancelled by returning the policy to us at the following address: Phoenix Home Life Mutual Insurance Company Variable and Universal Life Administration P.O. Box 810 Greenfield, Massachusetts 01302-0810 To effect such cancellation the policy, including the Revised Schedule Pages, must be returned to us before the latest of: 1. 10 days after the new Revised Schedule Page shcwing such increase in the face amount is delivered to you; or 2. 10 days after a Notice of Right to Cancel is delivered to you; or 3. 45 days after Part 1, of the supplementary application for such increased face amount is signed. 1 Upon any such cancellation we will refund the higher of any paid issue premium required by us for the increase or the sum of any monthly deductions and any other fees and charges made under this policy for the increase in face amount. TOTAL PREMIUM LIMIT The Total Premium Limit provision of Part 4 of the policy is amended to additionally reflect that the total premium limit may change due to the following: d. an increase in face amount MONTHLY DEDUCTION The Monthly Deduction provision of Part 4 of the policy is amended to add to the list of monthly deductions the following: f. a monthly pro-rata portion of the Issue Expense Charge for Face Amount Increases during the policy year immediately following the date of the Face Amount Increase. CONTESTABILITY The Contestability provision of Part 2 is amended to read as follows: We rely on all statements made by or for the insured in the written application. These statements are considered to be representations and not warranties. We can contest the validity of this policy and any coverage under it for any material misrepresentation of fact. To do so, however, the misrepresentation must be contained in an application and the application must be attached to the policy when issued or made a part of this policy when a change is made. We cannot contest the validity of the original face amount of this policy after it has been in force during the insured's lifetime for two years from its Policy Date. Any such contest will be based on the application for this policy. We cannot contest the validity of any increase in face amount after the policy has been in force during the insured's lifetime for two years from the issue date of the increase. Any such contest will be based on the supplemental application for the increase. If we contest the validity of all or a portion of the face amount provided under this policy, the amount we pay with respect to such portion of the face amount will be limited to the higher of a return of any paid issue premium required by us for the increase or the sum of any monthly deductions made under this policy for the contested face amount. 2 SUICIDE The Suicide provision of Part 2 is amended to read as follows: If within two years from the Policy Date the insured dies by suicide, while sane or insane and while this policy is in force, the amount of death benefit will be limited to the policy value adjusted by the following amounts: a. we add any monthly deductions made under this policy; b. we subtract any debt owed us under this policy. Except for death occurring within two years of the Policy Date as already addressed above, if within two years from the issue date of an increase in face amount the insured dies by suicide, while sane or insane and while the policy is in force, the death benefit under this policy will be adjusted such that the amount of death benefit as to that increase in face amount will be limited to a pro-rata portion of the policy value corresponding to such increase adjusted by the following amount. a. we add the sum of the monthly deductions corresponding to such increase; b. we subtract any debt owed us under this policy. CASH SURRENDER The Cash Surrender Value Provision of Part 6 is amended to VALUE read as follows: The cash surrender value of this policy is the policy value as defined in Part 4 less any applicable surrender charge on the date of surrender and less any debt. The maximum surrender charge for a full surrender is as stated on the Schedule Page, or Revised Schedule Pages if there has been an increase in face amount. The applicable surrender charge may be less than such maximum and is calculated by us in the same manner as provided under Rule 6(e)-3(T) of the Investment Company Act of 1940, or such amended federal rules as may later apply for the Separate Account under this policy to continue to qualify for exemptive relief under that Act, and reduced by such partial surrender charges as may have previously been paid since the later of the Policy Date and the issue date of the most recent increase in face amount if any. Such method of computation has been filed by us with the insurance supervisory official of the state where this rider is delivered. WAIVER OF Any provisions of the policy relating to endorsement shall ENDORSEMENT be deemed satisfied or waived as to this amendment. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 3 VARIABLE LIFE POLICY EXCHANGE OPTION RIDER This rider is a part of the policy to which it is attached. Except as stated in this rider, it is subject to all of the provisions contained in the policy. DEFINITIONS The original policy is the policy to which this rider is attached. The cash value of the original policy is defined as the policy's Policy Value less any applicable surrender charge. A corresponding whole life policy is a policy that we offer as of the Date of Exchange which provides whole life insurance coverage with level premiums and a level face amount, based upon the issue age and risk classification of the insured under the original policy. The cash value of the corresponding whole life policy is defined as the sum of the guaranteed cash value of the base policy and the termination dividend that would then apply to that policy based on our then current dividend scale. POLICY EXCHANGE The owner may exchange this policy for a new policy on the OPTION life of the insured, without evidence of insurability, if this policy has been in force for at least 15 years and the insured has attained age 65. HOW TO EXERCISE To exercise this option, you must file an exchange THE OPTION application at our Main Administrative Office. It must be signed by you. We must also receive: a. The release of any lien against or assignment of the original policy. However, you may instead submit written approval by the lienholders or assignees of the exchange of policies in a form satisfactory to us with such other documents as we may require. b. The surrender and release of the original policy. c. Payment of any amounts due to us for the exchange as described in the Exchange Adjustments section below. Unless otherwise provided in the exchange application, the owner and the beneficiary of the new policy will be the same as under the original policy. If the owner of the new policy is different, we will require evidence of insurable interest in the life of the insured under that new policy. The application for the original policy shall be considered part of the application for the new policy. The new policy will be issued on the basis of the exchange application, the application for the original policy and any evidence of insurability submitted for issuance of the original policy with respect to the life insured under that new policy. The Date of Exchange will be the policy anniversary following the later of: a. our receipt of the exchange application; b. payment of the Exchange Adjustments for the new policy; and c. our approval of insurable interest, if applicable. The new policy will take effect on the Date of Exchange. When the new policy takes effect, the original policy shall terminate. 1 THE NEW POLICY The Policy Date of the new policy will be the same as the Policy Date of the original policy. The issue age of the insured under the new policy will be as shown on the Schedule Pages of the original policy. The new policy will be written on any plan of whole life insurance with a level face amount and level premiums that we make available as of the Date of Exchange. The premium classification and any exclusions applicable to the new policy will be determined in accordance with our rules and practices in effect on the original policy's Policy Date. The face amount of the new policy will be dependent upon the relationship of the cash value of a corresponding whole life policy to the cash value of the original Variable Universal Life policy, as of the Date of Exchange. A. If the cash value of the corresponding whole life policy, for the same face amount as the original policy, would be greater than or equal to the cash value of the original policy, you may elect the face amount of the new policy from the following options: 1. Same Face Amount - A face amount which is the same as the face amount of the original policy. 2. Same Cash Value - A face amount such that the cash value of the new policy equals the cash value of the original policy as of the Date of Exchange. 3. Same Net Amount at Risk - A face amount such that the excess of the face amount over the corresponding cash value on the new policy is equal to the excess of the death benefit over the cash value of the original policy as of the Date of Exchange. B. If the cash value of the corresponding whole life policy, for the same face amount as the original policy, is less than the cash value of the original policy, then the face amount of the new policy would be determined based upon the same net amount at risk. Thus, the face amount of the new policy would be such that the excess of the face amount over the cash value of the new policy would be equal to the excess of the death benefit over the cash value of the original policy as of the Date of Exchange. If, however, you elect to exchange this policy within 30 days of the date for which this option first becomes available to you, then you may exchange to a new policy such that the face amount on the new policy is the same as that of the original policy. If the death benefit in effect under the original policy as of the Date of Exchange is equal to the "minimum death benefit" as defined in that policy, then the face amount of the new policy may be increased, if so desired, without evidence of insurability, by the lesser of 15% of the face amount of the original policy or $100,000. 2 Any rider contained in the original policy or additional riders may be included in the new policy only if we consent. The new policy will conform to all of the requirements of the jurisdiction in which it is issued regardless of any terms of this rider providing to the contrary. The two year period provided for in the Incontestability and Suicide provisions of the new policy will be considered to have begun on the Policy Date of the original policy. However, new benefits not in the original policy, or an increase in benefits would be subject to a new suicide or contestability period. EXCHANGE The exchange is subject to the following adjustments: ADJUSTMENTS 1. If the cash value under the new policy is less than that under the original policy as of the Date of Exchange, we will pay you the difference in the cash values. 2. If the cash value under the new policy is greater than that under the original policy as of the Date of Exchange, you must pay us 105% of the excess of the cash value of the new policy over the cash value of the original policy. 3. The exchange will also be subject to our receipt of repayment of the amount of any policy debt under the original policy on the Date of Exchange. RIDER CHARGES There are no monthly charges for this rider. NEW POLICY PREMIUM The rates for the new policy will be based on our published rates in effect on the Date of Exchange for the insured's age and risk classification as of the Policy Date of the original policy. Premiums for the new policy will be first due on the Date of Exchange, and thereafter as specified in the new policy. This rider will terminate on the earlier of: a. termination of the original policy for any reason, including, but not limited to, lapse, surrender, exchange of the policy, or death of the insured; and b. your written request to cancel this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young Secretary 3 TEMPORARY MONEY MARKET ALLOCATION AMENDMENT THIS AMENDMENT IS ISSUED AS PART OF THE POLICY TO WHICH IT IS ATTACHED IF IT IS LISTED ON THE SCHEDULE PAGE OF THE POLICY OR IN AN ENDORSEMENT AFTER THAT PAGE. YOU SHOULD THEREFORE REVIEW THE POLICY'S SCHEDULE PAGE FOR APPLICABILITY. REFUND RIGHT AND The refund right stated in the Right to Cancel provision on TEMPORARY MONEY the cover page of the policy is amended to provide for a MARKET SUB-ACCOUNT full refund of any premium paid less any unpaid loans and ALLOCATION loan interest and less any partial surrender amounts paid, if the returned policy is received by us at our Variable and Universal Life Division prior to termination of the Right to Cancel Period. PREMIUM ALLOCATION The provision in Part 4, entitled "Premium Allocation to Sub-accounts," is amended to provide that the issue premium will temporarily be applied on its Payment Date entirely to the Money Market sub-account until termination of the Right to Cancel period stated on the cover page of the policy. UPON TERMINATION OF SUCH PERIOD WITHOUT PRIOR RECEIPT AT OUR VARIABLE AND UNIVERSAL LIFE DIVISION OF THE RETURNED POLICY FOR A REFUND, THE THEN VALUE OF THIS POLICY'S SHARE IN THE MONEY MARKET SUB-ACCOUNT WILL AUTOMATICALLY BE REALLOCATED BASED ON THE PREMIUM ALLOCATION SCHEDULE ELECTED IN THE APPLICATION OR AS LATER CHANGED BY YOU. The resultant share of this policy in the value of each of the respective sub- accounts on the date of transfer shall be in the same percentages of the then total policy value as the premium allocation percentages elected in the application or as later changed by you. MONTHLY DEDUCTION The provision in Part 4, entitled "Monthly Deduction," is amended to provide that until termination of the Right to Cancel period stated on the cover page of the policy, the monthly deduction will be taken entirely from the Money Market sub-account. TRANSFERS The provision in Part 6, entitled "Transfers," is amended to provide that no transfers may be made until termination of the Right to Cancel period stated on the cover page. LOAN INTEREST The provision in Part 6, entitled "Loan Interest" is amended to provide that, until termination of the Right to Cancel period, any debt repayments will temporarily be applied to the Money Market sub-account and reallocated in the same manner as provided above for the issue premium. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young Robert W. Fiondella Secretary Chief Executive Officer /s/ S. Gilmore Registrar DEATH BENEFIT OPTIONS-POLICY AMENDMENT This amendment is issued as a part of the policy to which it is attached. The date of issue of this amendment is the same as the Policy Date shown on the Schedule Page. BENEFIT While the policy is in effect but prior to the policy DESCRIPTION anniversary nearest the insured's 65th birthday, you have the right to elect either of two death benefit options as described below. The death benefit option shall be as elected in the original application unless later changed as provided below. If no option is elected, Death Benefit Option 1 shall apply. DEATH BENEFIT Under this option the death benefit is equal to the greater OPTION 1 of (a) and (lb) as defined below. a. the policy's face amount on the date of death. b. the minimum death benefit on the date of death as defined in Part 7 of the policy. DEATH BENEFIT Under this option the death benefit is equal to the greater OPTION 2 of (a) and (lb) as defined below: a. the policy's face amount on the date of death plus the policy value. b. the minimum death benefit on the date of death as defined in Part 7 of the policy. Under Death Benefit Option 2, on the later of the tenth policy anniversary and the policy anniversary nearest the insured's 65th birthday, the face amount will be increased by an amount equal to the policy value. From that date on, the death benefit will be equal to the greater of the face amount and the minimum death benefit as defined in Part 7 of the policy. THE PAYEE Any death benefit due to this amendment will be paid to the same payee and in the same manner as provided in the policy for payment of the death proceeds. HOW TO CHANGE THE Prior to the later of the tenth policy anniversary and the DEATH BENEFIT policy anniversary nearest the insured's 65th birthday you OPTION may request in writing that the Death Benefit Option be changed from Option 1 tc Option 2, or from Option 2 to Option 1. No evidence of insurability is required. If the request is to change from Option 1 to Option 2, the face amount will be decreased by the policy value; and if the request is to change from Option 2 to Option 1, the face amount will be increased by the policy value. Any such change will be in effect on the Monthly Calculation Day coincident with or next following the day we approve the request. If Death Benefit Option 2 is in effect, the Death Benefit Option will automatically change on the later of the tenth policy anniversary and policy anniversary nearest the insured's 65th birthday from Option 2 to Option 1. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar DEATH BENEFIT PROTECTION RIDER This rider is part of the policy to which it is attached, if it and its monthly charge are listed on the policy Schedule Pages. Except as stated in this rider, it is subject to all of the provisions contained in the policy. GENERAL RIDER DATE The date of this rider is as shown on the policy's Schedule Pages. MONTHLY RIDER While this rider is in effect (either Part A, Part B or CHARGE both) a monthly rider charge will be included as part of the policy's monthly deduction described in Part 4 of the policy. The monthly charge is listed on the policy's Schedule Pages. RIDER TERMINATION Unless Part A or Part B has earlier terminated as provided DATE below, both Part A and Part B of this rider will terminate, on the earliest of the following events: 1. a surrender of the policy for its full cash surrender value; 2. the policy's Maturity Date; 3. our receipt of your written request to cancel this rider, which shall be effective as of the next Monthly Calculation Day. PART A: GUARANTEED DEATH BENEFIT While this Part A is in effect, on any Monthly Calculation Day that this policy would otherwise lapse due to failure of the policy's cash surrender value to cover the required monthly deduction, the policy will nonetheless continue in force during that policy month. The monthly deduction will continue to be deducted from the policy value to the extent possible, and we will waive any excess not covered. See the "Grace Period and Lapse" provision in Part 4 of the policy. CONDITIONS On every Monthly Calculation Day that this rider is in effect and provided this Part A has not otherwise terminated as provided under the Termination section below, we will test this policy to determine whether sufficient premiums have been paid or whether the policy's then cash surrender value is sufficiently large to continue Part A of this rider in effect. Part A will remain in effect for that policy month if on that Monthly Calculation Day any of the following tests is satisfied: 1 1. Total Cumulative Premium Test - The total premium paid by you, less the sum of all partial surrender amounts paid by us, at least equals the cumulative sum of all Monthly Guarantee Premiums applicable for each policy month since the Rider Date. 2. Annual Cumulative Premium Test - The total premium paid by you during the current policy year, less the sum of all partial surrender amounts paid by us during such period, at least equals the cumulative sum of all Monthly Guarantee Premiums applicable for each policy month since the beginning of that policy year. 3. Tabular Account Value Test - The policy's cash surrender value on that Monthly Calculation Day is not less than the policy's Tabular Account Value on the policy anniversary coinciding with that Monthly Calculation Day, or the immediately preceding policy anniversary if the Monthly Calculation Day is not a policy anniversary. The policy's Tabular Account Value is shown on the policy's Schedule Pages. The initial Monthly Guarantee Premium applicable on the Rider Date is as shown on the policy's Schedule Pages, and may change for later months due to subsequent policy changes such as a change in face, a change in death benefit option, an extension of the Expiry Date for Part A of this rider, or the addition, change or termination of a rider. We will send you Revised Schedule Pages reflecting any such change. TERMINATION If on any Monthly Calculation Day none of the above conditions is satisfied, a grace period of 31 days will be allowed for the payment of an amount at least equal to three times the Monthly Guarantee Premium. Part A of this rider will continue in effect during such grace period. If such premium amount is not received by us by the end of the grace period, Part A of this rider will terminate as of the end of that grace period, and for all policy months thereafter be of no further force or effect. Upon termination of this Part A, the regular Grace Period and Lapse provisions described in Part 4 of the policy shall again apply. Unless earlier terminated, this Part A will terminate on the first of any of the following events to occur: 1. if and when any debt under this policy exceeds the policy's loan value; 2. if and when the face amount of this policy is reduced by request for decrease or by partial surrender to an amount less than $50,000; 3. upon the Expiry Date shown for Part A of this rider on the policy's Schedule Pages, unless extended under the Extension provision below. 2 EXTENSION Provided Part A of this rider has not previously terminated, on the Expiry Date for Part A of this rider you may request that we extend the Expiry Date for such extended period as we may agree, but not to a date beyond the policy's Maturity Date. No extension will be permitted unless the policy's cash surrender value on that Expiry Date equals or exceeds the Tabular Account Value for such date as shown on the policy's Schedule Pages. We will send you Revised Schedule Pages reflecting any such change in Expiry Date. PART B: SPECIAL PARTIAL SURRENDER OPTION While this Part B is in effect, beginning on the later of the policy anniversary nearest the insured's age 60 or the 15th policy year, the "Partial Surrender" provision in Part 6 of the policy is amended to additionally allow the following special partial surrender option. A special partial surrender under this option will cause the policy value to be reduced by only the partial surrender amount paid and the partial surrender charge. No partial surrender fee will apply. The face amount of the policy will not be reduced by the reduction in the policy value. CONDITIONS This special partial surrender option is only permitted for partial surrenders on a policy anniversary, and provided that the policy's then cash surrender value exceeds the Tabular Account Value for such date. In addition, the partial surrender amount paid may not exceed any of the following: 1. the excess of the policy's cash surrender value over the policy's then Tabular Account Value; 2. the greater of 5% of the policy's then cash surrender value or 2% of the policy's then Face Amount; 3. $25,000. TERMINATION This Part B will terminate if and when Part A terminates other than a termination of Part A due to attainment of its Expiry Date. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 3 DEATH BENEFIT OPTION - POLICY AMENDMENT This amendment is issued as part of the policy to which it is attached. The date of issue of this amendment is the same as the Policy Date shown on the Schedule Page. BENEFIT DESCRIPTION While the policy is in force, you have the right to elect either of the two death benefit options as described below. The death benefit option shall be as elected in the original application unless later changed as provided below. If no option is elected, Death Benefit Option 1 shall apply. DEATH BENEFIT Under this option the death benefit is equal to the greater OPTION 1 of (a) and (lb) as defined below: a. the policy's face amount on the date of death. b. the minimum death benefit on the date of death as defined in Part 7 of the policy. DEATH BENEFIT Under this option, the death benefit is equal to the greater OPTION 2 of (a) and (lb) as defined below. a. the policy face amount on the date of death plus the policy value. b. the minimum death benefit on the date of death as defined in Part 7 of the policy. THE PAYEE Any death benefit due to this amendment will be paid to the same payee and in the same manner as provided in the policy for payment of the death proceeds. HOW TO CHANGE THE While this policy is in force, you may request in writing DEATH BENEFIT that the Death Benefit Option be changed from Option 1 to OPTION Option 2, or from Option 2 to Option 1. No evidence of insurability is required. If the request is to change from Option 1 to Option 2, the face amount will be decreased by the policy value; and if the request is to change from Option 2 to Option 1, the face amount will be increased by the policy value. Any such change will be in effect on the Monthly Calculation Day coincident with or next following the day we approve the request. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young Secretary ACCIDENTAL DEATH BENEFIT RIDER This rider is part of the policy to which it is attached if it and its premium are listed on the Schedule Page of the policy or in an endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as otherwise stated below, this rider is subject to all of the provisions contained in the policy. Coverage under this rider will begin in effect on the Rider Date shown for this rider on the policy's Schedule Page provided: a. for a Rider Date that occurs during the first policy year, the policy value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge); b. for a Rider Date that occurs during the second policy year and any succeeding policy years, the policy cash surrender value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge). RIDER BENEFIT Subject to the terms stated in this rider we will add the DESCRIPTION amount stated for this rider on the policy's Schedule Page to the death proceeds payable under the policy if we receive satisfactory proof that: a. the insured's death resulted, directly and independently of all other causes, from an accidental bodily injury; b. such injury was effected solely through external and violent causes; c. such injury was evidenced by a visible contusion or wound on the exterior of the body, except for drowning or internal injury revealed by autopsy; and d. the death occurred: 1. after the date this rider took effect; 2. before this rider terminates; 3. while the policy is in force; 4. no later than 90 days after the date of injury; and 5. before the policy anniversary nearest the insured's 75th birthday. EXCLUSIONS The rider benefit will not be payable if the insured's death resulted directly or indirectly from, or was contributed to by, any one or more of the factors listed below: a. Physical or mental infirmity or disease. b. Medical or surgical treatment. c. Suicide while sane or insane. d. Bodily injury received as the result of declared or undeclared war. 1 e. Bodily injury received as the result of international police action with force of arms by: 1. any country; 2. the United Nations; or 3. any other assembly of nations. f. Travel, flight, or descent from or with any kind of aircraft: 1. used for testing, experimental, military or naval purposes; 2. used for the purpose of the insured's descent from such aircraft while in flight, including descent by parachute; or 3. used for any purpose if the insured was acting as or training to become a pilot, co-pilot, crew member, or mechanic, or was acting in any capacity other than solely as a passenger. A hang glider is an aircraft for the purpose of this rider. g. The commission by the insured or attempt to commit an assault or crime. h. Bacterial infection unless the infection occurs simultaneously with and through an accidental cut or wound. i. The administration, inhalation, or taking of any drug, poison, gas or fumes, whether voluntary or otherwise, unless administered on and in accordance with the advice of the insured's physician. RIGHT TO REQUIRE We have the right and must be given the opportunity to AUTOPSY examine the body and make an autopsy, unless it is forbidden by law. THE PAYEE Any benefit that becomes payable under this rider will be paid to the same payee and in the same manner as provided in the policy for the death proceeds. MONTHLY RIDER The monthly charges for coverage under this rider are CHARGES included in and part of the monthly deduction for the policy. They are deducted on each Monthly Calculation Day until coverage under this rider terminates. TERMINATION OF Coverage under this rider will terminate on the earliest of: COVERAGE UNDER THIS RIDER a. full surrender of the policy; b. lapse of the policy; c. the policy anniversary nearest the insured's 75th birthday; d. our receipt on any Monthly Calculation Day of your written request along with the policy, to cancel coverage under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 2 DISABILITY PAYMENT OF SPECIFIED ANNUAL PREMIUM AMOUNT RIDER This rider is part of the policy to which it is attached if it and its premium are listed on the Schedule Page of the policy or in an endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as otherwise stated below this rider is subject to all of the provisions contained in the policy. Coverage under this rider will begin in effect on the Rider Date shown for this rider on the policy's Schedule Page provided: a. for a Rider Date that occurs during the first policy year, the policy value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge); b. for a Rider date that occurs during the second policy year and any succeeding policy years, the policy cash surrender value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge). DEFINITION OF Incapacity of the insured as a result of bodily injury or TOTAL DISABILITY disease to engage for remuneration or profit in any occupation for which the insured is or becomes qualified: a. by training; b. by education; or c. by experience. Total disability is also defined to include the insured's entire and irrecoverable loss through bodily injury or disease of: a. the sight of both eyes; b. the use of both hands or both feet; or c. the use of one hand and one foot. SPECIFIED ANNUAL The specified annual premium amount as shown with respect to PREMIUM AMOUNT this rider on the policy's Schedule Page is the maximum BENEFITS amount payable under this rider during a policy year. The specified frequency premium amount on any premium due date equals the specified annual premium amount divided by the number of premiums due during a policy year based on the premium frequency in effect for the policy on that premium due date. Subject to the terms of this rider we will credit the policy with the specified frequency premium amount on each premium due date during the existence of any total disability of at least 6 months' continuous duration, but prior to the later of: a. the policy anniversary nearest the insured's 65th birthday; or b. one year from the date the total disability commenced if such total disability commenced within the one-year period prior to the policy anniversary nearest the insured's 65th birthday. 1 We will continue to credit the specified frequency premium amount as described above on each premium due date on or after the policy anniversary nearest the insured's 65th birthday if benefits under this rider have been credited or paid continuously during the entire 5-year period just prior to that date. In that event any such specified frequency premium amounts will continue to be credited regardless of whether total disability continues after that anniversary. To the extent that the specified frequency premium amounts to be credited exceed premium amounts allowed to be paid under the policy due to the total premium limit, such excess that would otherwise be credited will be paid in cash to the owner of the policy. The benefits and values under the policy will not be reduced as a result of any specified frequency premium amounts credited or paid under this rider. LIMITATIONS AND We will not credit or pay any specified frequency premium CONDITIONS amounts for premium due dates more than 1 year prior to our receipt of written notice of claim at our Main Administrative Office. Nor will any specified frequency premium amounts be credited or paid under this rider unless the following conditions are satisfied: 1. We must receive at our Main Administrative Office and during the lifetime of the insured written notice of claim and due proof that: a. the insured is totally disabled at the time the proof is furnished to us; and b. the insured has been so totally disabled for the entire 6-month period immediately preceding that date. Any such proof will be subject to the requirements stated in the Required Proof of Disability section. 2. The total disability must not have directly resulted from either: a. injuries willfully and intentionally self- inflicted; or b. service by the insured in the military, naval, or air force of any country at war. By "war" we mean any declared war, undeclared war, or international police action with force of arms by any country, the United Nations, or any other assembly of nations. 3. The total disability must have occurred: a. after this rider's Rider Date; b. after coverage under this rider begins; c. before coverage under this rider terminates; and d. while the policy is in force. 4. If the total disability occurs during the grace period following the due date of a premium required to keep the policy in force, that premium must first be paid to us. If we permit the premium to be paid after the grace period, the payment must include interest on such amount at a rate of 6% compounded annually. 2 5. If coverage under this rider terminates or the policy lapses or becomes void by its terms, we must receive written notice of claim no later than 1 year from that date. This condition will not apply if such notice was given as soon as reasonably possible. REQUIRED PROOF OF In addition to requiring proof of total disability before DISABILITY AND ITS granting any benefits under this rider, we have the right to CONTINUANCE require proof from time to time that the total disability continues. As part of any such proof, we shall have the right to have a physician of our choosing conduct such physical exams of the insured as we may reasonably require. After benefits under this rider have been received for a period of disability of more than 2 years, we will not require such exams more frequently than once a year. Should there be a failure to furnish such proof or a refusal to permit such exams, or should the insured cease to be totally disabled before the policy anniversary nearest the insured's 65th birthday: a. further specified frequency premium amounts will not be credited or paid; and b. any specified frequency premium amounts already credited or paid after that date will be charged as loans against the policy unless repaid to us. THE PAYEE OF ANY If the insured is the owner of the policy and dies before CASH PAYMENTS receiving payment of any amount that becomes due, such payment will be made to the same beneficiary and in the same manner as provided under the policy for payment of death benefits. We may also do this if the insured is the owner of the policy and we have evidence satisfactory to us that the insured is mentally incompetent. Upon such payment we shall no longer be liable for payment of such amount LIMIT ON OUR RIGHT We cannot contest the validity of this rider except for TO CONTEST THIS failure to pay premiums after it has been in force during RIDER the lifetime of the insured for 2 years from the Rider Date. MONTHLY RIDER The monthly charge for coverage under this rider is included CHARGES in and part of the monthly deduction for the policy. It is deducted on each Monthly Calculation Day until coverage under this rider terminates. TERMINATION OF Coverage under this rider will terminate on the earliest of: COVERAGE UNDER THIS RIDER a. full surrender of the policy; b. lapse of the policy; c. death of the insured; d. the policy anniversary nearest the insured's 65th birthday, unless continued as provided under the Specified Annual Premium Amount Benefits section; or e. our receipt on any Monthly Calculation Day of your written request, along with the policy, to cancel coverage under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 3 ADDITIONAL PURCHASE OPTION RIDER This rider is part of the policy to which it is attached, if it and its monthly charge are listed in the Rider Schedule on the Schedule Page of the policy or in an Endorsement after that page. Except as stated in this rider, it is subject to all of the provisions contained in the policy. RIDER DATE OF ISSUE The date for this rider on the Schedule Page under the section entitled Riders and Rider Benefits. MAXIMUM AMOUNT OF The amount shown for this Rider on the Schedule Page under ADDITIONAL the section entitled Riders and Rider Benefits. INSURANCE THAT MAY BE PURCHASED UPON EXERCISE OF EACH PURCHASE OPTION DEFINITIONS REGULAR OPTION Each policy anniversary nearest each of these birthdays of DATES the insured: the 25th, 28th, 31st, 34th, 37th and 40th birthdays. ADVANCE OPTION The date of any of the following: DATE a. marriage of the insured; b. live birth of a child of the insured; c. legal adoption by the insured of a child under 18 years of age. DISABILITY RIDER Disability Payment of Specified Annual Premium Amount Rider. THE PURCHASE While this rider is in effect and subject to its terms, on OPTION each Regular Option Date, you have the option to purchase a new policy on the life of the insured without additional evidence of insurability. The amount of insurance that you may purchase upon exercise of each option is limited to the Maximum Amount stated above. Provided it has not already been exercised, the purchase option available on the next Regular Option Date will become available on an Advance Option Date and may be exercised in advance. Any purchase option exercised in advance is no longer available on the next Regular Option Date. HOW TO EXERCISE To exercise the purchase option, you must file a written THE PURCHASE application with us and pay the first minimum premium for OPTION such additional insurance. The application and premium must be received by us at our Main Administrative Office: a. while the insured is alive; and b. no later than 60 days after the option becomes available. After each Advance Option Date, coverage equal to the Maximum Amount will automatically be provided under this rider until the earlier of: a. the end of the 60-day period following the Advance Option Date; or b. the date of issue of the new policy. 1 THE NEW POLICY Premiums under the new policy will be at our then current rates for the same risk classification as this policy. The new policy must be any one of the following types of insurance and currently in use by us: a. variable life b. universal life c. whole life. ORDINARY LIFE The new insurance will be subject to our rules then in effect as to age, minimum amount and plan of insurance. It will be subject to any limitations of risk contained in your policy. It will not, however, be subject to any assignments or liens against this policy. The limit on our right to contest the validity of the new policy will operate from the Rider Date of Issue. If this policy contains a Disability Rider and the insured is not totally disabled as defined in that rider when the purchase option is exercised, the new policy may contain that rider. If this policy contains a Disability Rider and the insured is totally disabled under the rider when the purchase option is exercised, the new policy will contain that rider. In that case, we will waive any requirement of that rider that the disability occur after the new policy took effect. Except to the extent as provided above, our consent will be required for the new policy to include any other disability, accidental death or any other benefits. MONTHLY RIDER The monthly charges for coverage under this rider are CHARGES included in and are part of the monthly deduction for the policy. They are deducted on each Monthly Calculation Day until coverage under this rider terminates. The amount of the monthly charge for this rider is shown on the schedule page of the policy. TERMINATION OF Subject to your right to exercise a purchase option within THIS RIDER 60 days after an option becomes available, this rider will terminate on the earliest of: a. the death of the insured; b. lapse or surrender of this policy; c. the anniversary of this policy nearest the insured's 40th birthday; d. the exercise of a purchase option on an Advance Option Date occurring within the 3-year period prior to the anniversary of your policy nearest the insured's 40th birthday; e. our receipt of a written request to cancel this rider; such cancellation will be effective on the next Monthly Calculation Date. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 2 ACCELERATED BENEFIT RIDER This rider is part of the policy to which it is attached, effective as of the Rider Date, if it is listed on the policy's Schedule Page or in an Endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as stated in this rider, it is subject to all of the provisions contained in the policy. THE BENEFIT PAID UNDER THIS RIDER MAY BE TAXABLE. YOU SHOULD CONSULT YOUR PERSONAL TAX ADVISOR REGARDING POSSIBLE TAX CONSEQUENCES. RIDER DATE SAME AS POLICY DATE MAXIMUM $300.00 ADMINISTRATIVE CHARGE MAXIMUM PROPORTION 75% ALLOWABLE MAXIMUM ACCELERATED $250,000 BENEFIT MINUMUM REMAINING $10,000 FACE AMOUNT DEFINITIONS INSURED is the person covered under the basic policy. YOU (YOUR) is the owner of the policy to which this rider is attached. WE (OUR, US) refers to Phoenix Home Life Mutual Insurance Company, or its subsidiaries. ELIGIBLE AMOUNT is the amount of insurance under the policy that is eligible for accelerated payment. It is equal to the death benefit of the basic policy at the time of claim plus any term insurance amounts in force provided by rider on the life of the insured, which provides coverage renewable to the insured's attained age 95 or beyond, but exclusive of any other supplemental rider death benefits. PROPORTION is the percentage of the Eligible Amount that will be accelerated under this rider. The Proportion is chosen by you at the time of election of an accelerated benefit, subject to the following limitations. The Proportion elected: 1. can be no more than the Maximum Proportion Allowable as specified in this rider; 2. cannot result in a remaining death benefit below the minimum as specified in this rider; and 3. cannot result in a Requested Benefit that exceeds the Maximum Accelerated Benefit as specified in this rider. 1 This rider terminates upon payment of the accelerated benefit. MAXIMUM ACCELERATED BENEFIT is the amount shown on the first page of this rider. This Maximum Accelerated Benefit applies, in aggregate, to all policies issued on the insured by us. REQUESTED BENEFIT is the Proportion multiplied by the Eligible Amount. TERMINAL ILLNESS is an illness or condition that is expected to result in the insured's death within six months based on evidence satisfactory to us as defined under the Proof of Terminal Illness section below. RIDER DESCRIPTION This rider allows you to elect an accelerated benefit upon terminal illness of the insured. The election must be made by a written request signed by you. We must also receive proof satisfactory to us of the insured's terminal illness as described in the Proof of Terminal Illness section below. The amount of the accelerated benefit will be adjusted as described under the Payment Made to You section below. The resulting payment will be made in a lump sum. Policy values, cash surrender values, loan values and the death benefit as specified in the policy to which this rider is attached will be reduced if you receive an accelerated benefit. There is no premium charge for this rider. PAYMENT MADE TO The amount of the payment made to you will be determined by YOU discounting the Requested Benefit at our then current discounting rate for a period of twelve (12) months, to reflect the early payment of insurance proceeds under the policy. Our discounting rate will be subject to the higher of: 1. 5%; or 2. the Published Monthly Average for the calendar month ending two months before the policy anniversary on or immediately preceding the date that we receive your written request for payment under this rider. The Published Monthly Average will be: a. The Corporate Bond Yield Average -- Monthly Average Corporates as published by Moody's Investors Service, Inc. or any successor to that Service; or b. If that Monthly Average is no longer published, a substantially similar average, established by regulation for policy loan rates issued by the insurance supervisory official of the state where the rider was delivered will be applicable. If the discounting rate computed for a policy year is no more than 1/2% higher than the rate in effect for the previous policy year, then we will maintain such prior year's rate. If the discounting rate computed for a policy year is no more than 1/2% lower than the rate in effect for the previous policy year, then we may, at our discretion, maintain such prior year's rate. If the cash surrender value multiplied by the Proportion exceeds the discounted value, then the discounted Requested Benefit will be increased to equal such greater amount. 2 The discounted Requested Benefit is reduced by the Proportion of any policy debt, including any unpaid loan interest, and the Proportion of any other amounts due us from you. This result is then reduced by our then current Administrative Charge for benefits under this type of rider, not to exceed the maximum as specified in this rider. The amount that remains is the payment that will be made to you. In the event that the insured dies after the written request but before we make the payment, and we receive written notice at our Main Administrative Office during this period of this event, the request will be considered void, and no payment will be made under this rider. EFFECTS ON CONTRACT The following values will be reduced by the Proportion at the time the payment is made to you: 1. the future planned premium payable on the basic policy; 2. the face amount of the policy at the time of claim; 3. the cash value (policy value); 4. any remaining surrender charge; 5. the cash surrender value; and 6. any policy debt including any unpaid loan interest. If this rider is attached to a variable life insurance policy that permits fund investment in various subaccounts of our Variable Universal Life Separate Account, the reduction in policy value will be achieved through a proportionate reduction in this policy's share in the value of each subaccount based on the allocation you request at the time of your accelerated benefit request. If no allocation request is made, the assignment to each subaccount will be made in the same manner as provided for monthly deductions. Future values under the policy will be determined in a manner consistent with that under the original policy, as adjusted to reflect the above reductions. We will mail to you a new policy Schedule Page reflecting any payment made under this rider. PROOF OF TERMINAL A licensed physician, who is not yourself or a member of ILLNESS your family, must provide us with evidence satisfactory to us of the insured's terminal illness. We reserve the right to obtain a second medical opinion from a physician of our choosing at our expense. CONDITIONS Payment under this rider is subject to the following conditions: 1. The policy must not have lapsed. 2. We will require the consent of any assignees and irrevocable beneficiaries to any request for payment under this rider. 3. No payments will be made under this rider to satisfy the claims, demands, or obligations of any creditor, trustee in bankruptcy or governmental agency, or arising under any court order directed against you, to the extent that we have written notice thereof. 3 RIDER TERMINATION This rider will terminate on the earliest of: 1. Lapse or surrender of this policy to which it is attached. 2. Our receipt of your written request to terminate this rider; or 3. Payment of any benefit under this rider. PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 4 EX-99.B1A(5)(B) 3 EXHIBIT 1A(5)(b) SPECIMEN POLICY WITH OPTIONAL RIDERS FLEXIBLE PREMIUM JOINT VARIABLE UNIVERSAL LIFE ("JOINT EDGE") POLICY NUMBER 11144500 APRIL 1, 1995 POLICY DATE POLICY FACE AMOUNT $100,000.00 APRIL 1, 2045 MATURITY DATE Dear Policyowner: We agree to pay the benefits of this policy in accordance with its provisions. It is important to us that you are satisfied with your policy and that it meets your insurance goals. For service or information on this policy, contact the agent who sold the policy, any of our agency offices, or our Variable and Universal Life Administration at the following address: Phoenix Home Life Mutual Insurance Company Underwriting and Issue Division 100 Bright Meadow Boulevard P. 0. Box 1900 Enfield, CT 06083-1900 RIGHT TO CANCEL. You have the right to cancel this policy within a limited time after the policy is delivered to you. The policy may be cancelled by returning the policy to us at our Variable and Universal Life Administration before the later of: 1. 10 days after the policy is delivered to you; or 2. 10 days after a Notice of Right to Cancel is delivered to you; or 3. 45 days after Part 1 of the application is signed; for a refund of: 1. the policy value less debt, if any; plus 2. any monthly deductions, partial surrender fees, and other charges made under the policy. The policy value and debt will be determined as of the nearest Valuation Date coincident with or following the date we receive the returned policy at our Variable and Universal Life Administration. Signed for Phoenix Home Life Mutual Insurance Company at its Main Administrative Office at Hartford, Connecticut. Sincerely yours, /s/ Dona D. Young /s/ Robert W. Fiondella Secretary Chief Executive Officer Registrar FLEXIBLE PREMIUM JOINT VARIABLE UNIVERSAL LIFE INSURANCE POLICY INSURANCE PAYABLE AT FIRST DEATH PREMIUMS PAYABLE UNTIL FIRST DEATH The death benefit and other values provided under this policy are based on the rates of interest credited on any amounts allocated to the Guaranteed Interest Account and on the investment experience of the sub-accounts within our Separate Account to which your premiums are allocated. Thus, the death benefit and other values may increase or decrease in amount or duration. See Part 7 for a description of how the death benefit is determined. ELIGIBLE FOR ANNUAL DIVIDENDS V601 SCHEDULE PAGE BASIC INFORMATION POLICY NUMBER 11144500 APRIL 1, 1995 POLICY DATE POLICY FACE AMOUNT $100,000.00 APRIL 1, 2045 MATURITY DATE* OWNER AS STATED IN THE APPLICATION UNLESS LATER CHANGED. DEATH BENEFIT OPTION: DEATH BENEFIT OPTION 1 OR AS LATER CHANGED AS PROVIDED HEREIN. BENEFICIARY AS STATED IN THE APPLICATION UNLESS LATER CHANGED. INSUREDS INSURED ISSUE AGE & SEX RISK CLASSIFICATION JOHN PHOENIX 45 MALE NON-SMOKER MARY PHOENIX 45 FEMALE NON-SMOKER PREMIUMS ISSUE PREMIUM: $1,666.66 SUBSEQUENT PLANNED ANNUAL PREMIUM: $5,000.00 TOTAL PREMIUM LIMIT: GREATER OF $32,530.07 AND RESULT OF $2,748.17 MULTIPLIED BY NUMBER OF POLICY YEARS (OR FRACTION THEREOF) AFTER APRIL 1, 1995 PREMIUM DUE DATES: ISSUE PREMIUM DUE ON POLICY DATE AND SUBSEQUENT PLANNED PREMIUMS PAYABLE ON THE FIRST DAY OF EACH YEAR THEREAFTER UNTIL MATURITY DATE. * THE MATURITY DATE IS THE LATEST DATE THAT THE POLICY WILL TERMINATE. EVEN IF ALL PLANNED PREMIUMS ARE PAID THE POLICY MAY TERMINATE EARLIER THAN THE MATURITY DATE. SEE SECTION ENTITLED "GRACE PERIOD AND LAPSE" IN PART 4 AND "POLICY MATURITY" IN PART 6. ANY SURRENDER VALUE ON THE MATURITY DATE WILL BE PAID TO YOU AS PROVIDED IN THE SECTION ENTITLED "POLICY MATURITY" IN PART 6. ** THE AMOUNT WILL DECREASE WHEN MONTHLY CHARGES FOR ANY RIDER OR ANY OTHER MONTHLY CHARGES CEASE. DATE PREPARED: MAY 2, 1995 PAGE 1 OF 6 V601 SCHEDULE PAGE (CONTINUED) POLICY NUMBER: 11144500 SUB-ACCOUNT ALLOCATION SCHEDULE ON THE POLICY DATE MONTHLY SUB-ACCOUNT*** PREMIUMS DEDUCTIONS**** MONEY MARKET 50.0% PROPORTIONATE GROWTH 50.0% PROPORTIONATE BOND 0.0% NONE GUARANTEED INTEREST 0.0% NONE TOTAL RETURN 0.0% NONE INTERNATIONAL 0.0% NONE BALANCED 0.0% NONE *** SEE BELOW FOR DESCRIPTION OF SUB-ACCOUNTS. **** SEE PART 1 FOR DEFINITION OF PROPORTIONATE. SUB-ACCOUNTS MARKED "NONE" WILL BE CHARGED WITH A PORTION OF THE MONTHLY DEDUCTION ONLY IF THE SUB-ACCOUNTS MARKED PROPORTIONATE ARE NOT SUFFICIENT TO MAKE THE FULL MONTHLY DEDUCTION. SEPARATE ACCOUNT SUB-ACCOUNTS FUND: THE PHOENIX EDGE SERIES FUND MONEY MARKET THE INVESTMENT OBJECTIVE OF THE MONEY MARKET SUB-ACCOUNT IS TO PROVIDE MAXIMUM CURRENT INCOME CONSISTENT WITH CAPITAL PRESERVATION AND LIQUIDITY. GROWTH THE INVESTMENT OBJECTIVE OF THE GROWTH SUB-ACCOUNT IS TO ACHIEVE INTERMEDIATE AND LONG-TERM GROWTH OF CAPITAL, WITH INCOME AS A SECONDARY CONSIDERATION. BOND THE INVESTMENT OBJECTIVE OF THE BOND SUB-ACCOUNT IS TO SEEK LONG-TERM TOTAL RETURN BY INVESTING IN A DIVERSIFIED PORTFOLIO OF HIGH YIELD (HIGH RISK) AND HIGH QUALITY FIXED INCOME SECURITIES. TOTAL RETURN THE INVESTMENT OBJECTIVE OF THE TOTAL RETURN SUB-ACCOUNT IS TO REALIZE AS HIGH A LEVEL OF TOTAL RATE OF RETURN OVER AN EXTENDED PERIOD OF TIME AS IS CONSIDERED CONSISTENT WITH PRUDENT INVESTMENT RISK. INTERNATIONAL THE INVESTMENT OBJECTIVE OF THE INTERNATIONAL SUB-ACCOUNT IS TO SEEK A HIGH TOTAL RETURN CONSISTENT WITH REASONABLE RISK. THE INTERNATIONAL SUB-ACCOUNT INTENDS TO INVEST PRIMARILY IN AN INTERNATIONALLY DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES. THE INTERNATIONAL PORTFOLIO PROVIDES A MEANS FOR INVESTORS TO INVEST A PORTION OF THEIR ASSETS OUTSIDE THE UNITED STATES. BALANCED THE INVESTMENT OBJECTIVE OF THE BALANCED SUB-ACCOUNT IS TO SEEK A REASONABLE INCOME, LONG-TERM CAPITAL GROWTH AND CONSERVATION OF CAPITAL. THE BALANCED SUB-ACCOUNT INTENDS TO INVEST BASED ON COMBINED CONSIDERATIONS OF RISK, INCOME, CAPITAL ENHANCEMENT AND PROTECTION OF CAPITAL VALUE. GUARANTEED THE GUARANTEED INTEREST ACCOUNT IS NOT PART OF THE SEPARATE INTEREST ACCOUNT. IT IS ACCOUNTED FOR AS PART OF OUR GENERAL ACCOUNT ACCOUNT. WE WILL CREDIT INTEREST ON ANY AMOUNTS HELD UNDER THE GUARANTEED INTEREST ACCOUNT AT SUCH RATES AS DESCRIBED IN THE SECTION ENTITLED "GUARANTEED INTEREST ACCOUNT" IN PART 5. DATE PREPARED: MAY 2, 1995 PAGE 2 OF 6 V601 SCHEDULE PAGE (CONTINUED) POLICY NUMBER: 11144500 SUB-ACCOUNT FEES MAXIMUM DAILY MORTALITY AND EXPENSE RISK FEE: 0.0000219 (BASED ON ANNUAL RATE OF 0.80%) MAXIMUM DAILY TAX FEE: 0 OR SUCH GREATER AMOUNT AS MAY BE ASSESSED AS A RESULT OF A CHANGE IN TAX LAWS. POLICY CHARGES ISSUE EXPENSE CHARGE: $150.00 PREMIUM TAX CHARGE: AS PROVIDED UNDER CURRENT OR FUTURE LAW OF STATE WHERE POLICYOWNER RESIDES, CURRENTLY 3.000 %. MONTHLY DEDUCTION: SEE PART 4, "MONTHLY DEDUCTION". INCLUDES COST OF INSURANCE, ANY RIDER CHARGES, ANY FLAT EXTRA MORTALITY CHARGES AND A MONTHLY ADMINISTRATIVE CHARGE WHICH SHALL NOT EXCEED $10.00 AND IS CURRENTLY SET AT $5 MAXIMUM TRANSFER CHARGE: NONE PARTIAL SURRENDER FEE: LESSER OF $25.00 OR 2% OF PARTIAL SURRENDER AMOUNT PAID. SURRENDER CHARGE: SEE TABLE ON NEXT PAGE. OTHER RATES: GUARANTEED INTEREST ACCOUNT: MINIMUM RATE 4%. LOAN INTEREST RATE: 8.00% IN ARREARS POLICY YEARS 1 THRU 10 7.00% IN ARREARS THEREAFTER. DATE PREPARED: MAY 2, 1995 PAGE 3 OF 6 V601 SCHEDULE PAGE (CONTINUED) POLICY NUMBER: 11144500 SURRENDER CHARGE IN POLICY YEARS 1 THROUGH 10 THE FULL SURRENDER CHARGE IS AS DESCRIBED BELOW. THE APPLICABLE SURRENDER CHARGE IN ANY POLICY MONTH IS THE FULL SURRENDER CHARGE MINUS ANY SURRENDER CHARGES PREVIOUSLY PAID, BUT NOT LESS THAN ZERO. IN ALL POLICY YEARS AFTER THE 10TH POLICY YEAR THE SURRENDER CHARGE IS ZERO. THE FULL SURRENDER CHARGE IN ANY POLICY MONTH DURING POLICY YEARS 1 THROUGH 10 IS THE LESSER OF THE AMOUNT SHOWN BELOW IN THE MAXIMUM SURRENDER CHARGE TABLE AND AN AMOUNT EQUAL TO A PLUS B AS DEFINED BELOW. A IS EQUAL TO THE SUM OF (1), (2) AND (3) WHERE, (1) EQUALS 30% OF THE FIRST $2,302.93 OF PREMIUMS PAID; (2) EQUALS 10% OF THE PORTION OF CUMULATIVE PREMIUMS PAID IN EXCESS OF $2,302.93 AND NOT GREATER THAN $ 4,605.86 (3) EQUALS 9% OF CUMULATIVE PREMIUMS PAID IN EXCESS OF $4, 605.86 B IS EQUAL TO $500.00 MAXIMUM SURRENDER CHARGE TABLE POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER MONTH CHARGE MONTH CHARGE MONTH CHARGE - ------ --------- ------ --------- ------- --------- 1- 12 1,651.46 77 1,370.71 99 878.57 13- 24 1,651.46 78 1,354.20 100 853.47 25- 36 1,651.46 79 1,337.68 101 828.37 37- 48 1,651.46 80 1,321.17 102 803.27 49- 60 1,651.46 81 1,304.65 103 778.17 61 1,634.95 82 1,288.14 104 753.06 62 1,618.43 83 1,271.62 105 727.96 63 1,601.92 84 1,255.11 106 702.86 64 1,585.40 85 1,230.01 107 677.76 65 1,568.89 86 1,204.90 108 652.65 66 1,552.37 87 1,179.80 109 598.27 67 1,535.86 88 1,154.70 110 543.88 68 1,519.34 89 1,129.60 111 489.49 69 1,502.83 90 1,104.49 112 435.10 70 1,486.31 91 1,079.39 113 380.71 71 1,469.80 92 1,054.29 114 326.32 72 1,453.28 93 1,029.19 115 271.94 73 1,436.77 94 1,004.09 116 217.55 74 1,420.25 95 978.98 117 163.16 75 1,403.74 96 953.88 118 108.77 76 1,387.23 97 928.78 119 54.38 98 903.68 120 .00 DATE PREPARED: MAY 2, 1995 PAGE 4 OF 6 V601 SCHEDULE PAGE (CONTINUED) POLICY NUMBER: 11144500 TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK BASED ON 1980 CSO MORTALITY TABLE POLICY MONTHLY POLICY MONTHLY POLICY MONTHLY YEAR RATE YEAR RATE YEAR RATE 01 0.52500 18 2.10380 35 11.59660 02 0.56400 19 2.32760 36 12.72420 03 0.60640 20 2.58480 37 13.98510 04 0.65210 21 2.86610 38 15.41080 05 0.70190 22 3.16830 39 17.01590 06 0.75660 23 3.48710 40 18,75970 07 0.81880 24 3.82090 41 20.61380 08 0.89010 25 4.18170 42 22.53730 09 0.97130 26 4.59130 43 24.52250 10 1.06080 27 5.06300 44 26.53450 11 1.15850 28 5.62030 45 28.59830 12 1.26360 29 6.27280 46 30.72150 13 1.37280 30 7.01600 47 32.93570 14 1.48600 31 7.82710 48 35.29760 15 1.61160 32 8.69710 49 37.89520 16 1.75350 33 9.61460 50 41.03180 17 1.91440 34 10.57320 DATE PREPARED: MAY 2, 1995 PAGE 5 OF 6 V601 SCHEDULE PAGE (CONTINUED) POLICY NUMBER: 11144500 RIDERS AND RIDER BENEFITS RIDER RIDER DATE OF TERMINATION MONTHLY RIDER DESCRIPTION ISSUE AMOUNT DATE CHARGE - ----------------- ------- ------ ---------- ------- VRO4 - JOINT LIFE EXCHANGE OPTION RIDER 4/01/1995 4/01/2045 DATE PREPARED: MAY 2, 1995 PAGE 6 OF 6 V601 TABLE OF CONTENTS PART PAGE Schedule Page Basic Information Description of Sub-Accounts Policy Charges and Rates Table of Surrender Charges Table of Guaranteed Maximum Cost of Insurance Rates Table of Contents 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2 2 About The Policy. . . . . . . . . . . . . . . . . . . . . . . . . 3 Effective Date of Insurance. . . . . . . . . . . . . . . . . . . 3 Entire Contract. . . . . . . . . . . . . . . . . . . . . . . . . 3 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Contestability . . . . . . . . . . . . . . . . . . . . . . . . . 4 Suicide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Misstatement of Age or Sex . . . . . . . . . . . . . . . . . . . 4 Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . 5 Policy Termination Upon First Death. . . . . . . . . . . . . . . . . . . . . . . . 5 Transaction Rules. . . . . . . . . . . . . . . . . . . . . . . . 5 3 Rights of Owner . . . . . . . . . . . . . . . . . . . . . . . . . 6 Who is the Owner . . . . . . . . . . . . . . . . . . . . . . . . 6 What are the Rights of the Owner . . . . . . . . . . . . . . . . 6 How to Change the Owner. . . . . . . . . . . . . . . . . . . . . 6 4 Premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Premium Allocation to Sub-Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . 7 Premium Flexibility. . . . . . . . . . . . . . . . . . . . . . . 7 Total Premium Limit. . . . . . . . . . . . . . . . . . . . . . . 8 Grace Period and Lapse . . . . . . . . . . . . . . . . . . . . . 8 Policy Value . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Monthly Deduction. . . . . . . . . . . . . . . . . . . . . . . . 9 5 The Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Guaranteed Interest Account. . . . . . . . . . . . . . . . . . . 10 Separate Account . . . . . . . . . . . . . . . . . . . . . . . . 11 Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 11 Share of Separate Account Sub-Account Values. . . . . . . . . . . . . . . . . . . . . . . 12 Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Net Investment Factor. . . . . . . . . . . . . . . . . . . . . . 12 6 Lifetime Benefits . . . . . . . . . . . . . . . . . . . . . . . . 13 Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Loan Interest. . . . . . . . . . . . . . . . . . . . . . . . . . 14 Cash Surrender Value . . . . . . . . . . . . . . . . . . . . . . 14 Full Surrender . . . . . . . . . . . . . . . . . . . . . . . . . 14 Partial Surrender. . . . . . . . . . . . . . . . . . . . . . . . 15 Policy Maturity. . . . . . . . . . . . . . . . . . . . . . . . . 16 Additional Insurance Option. . . . . . . . . . . . . . . . . . . 16 7 Death Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . 17 How the Death Benefit is Determined. . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Death Benefit Option 1 . . . . . . . . . . . . . . . . . . . . . 17 Death Benefit Option 2 . . . . . . . . . . . . . . . . . . . . . 17 How to Change the Death Benefit Option. . . . . . . . . . . . . . . . . . . . . . . . . 18 Minimum Death Benefit. . . . . . . . . . . . . . . . . . . . . . 18 Requests for a Decrease in Face Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Death Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 19 Interest on Death Proceeds . . . . . . . . . . . . . . . . . . . 19 The Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . 19 30 Day Survival Clause . . . . . . . . . . . . . . . . . . . . . 19 How to Change the Beneficiary. . . . . . . . . . . . . . . . . . 19 8 Payment Options . . . . . . . . . . . . . . . . . . . . . . . . . 20 Who May Elect Payment Options. . . . . . . . . . . . . . . . . . 20 How to Elect a Payment Option. . . . . . . . . . . . . . . . . . 20 Payment Options. . . . . . . . . . . . . . . . . . . . . . . . . 20 (1) Payment in One Sum . . . . . . . . . . . . . . . . . . . . . 20 (2) Left to Earn Interest. . . . . . . . . . . . . . . . . . . . 20 (3) Payments for a Specified Period. . . . . . . . . . . . . . . . . . . . . . . . . . . 21 (4) Life Annuity with Specified Period Certain. . . . . . . . . . . . . . . . . . . . . . . 21 (5) Life Annuity . . . . . . . . . . . . . . . . . . . . . . . . 21 (6) Payments of Specified Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . 22 (7) Joint Survivors Annuity w/10-year Period Certain. . . . . . . . . . . . . . . . . . 22 (8) Variable Payout Life Annuity w/10-year Period Certain. . . . . . . . . . . . . . . . . . 22 Calculation of Variable Income Payments . . . . . . . . . . . . . . . . . . . . . . 22 Annuity Units. . . . . . . . . . . . . . . . . . . . . . . . 23 Annuity Unit Value . . . . . . . . . . . . . . . . . . . . . 23 Assumed Investment Rate. . . . . . . . . . . . . . . . . . . 23 Payment Calculation Date . . . . . . . . . . . . . . . . . . 23 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 23 (9) Variable Payout Annuity for a Specified Period . . . . . . . . . . . . . . . . . . 24 Additional Interest and Enhanced Rates. . . . . . . . . . . . . . . . . . . . . . . . . 24 9 Tables of Payment Option Amounts. . . . . . . . . . . . . . . . . 24 PART 1: DEFINITIONS ANNUITY UNIT A standard of measurement used to measure the amount of each variable income payment under the variable payout annuity payment options as described in Part 8. ASSIGNS Any persons to whom you assign an interest in this policy if we have notice of the assignment in accordance with the provisions stated in Part 2. ATTAINED AGE Age of that insured on the birthday nearest the most recent policy anniversary. BASIC POLICY The policy as it exists, without any additional rider benefits. DEBT Unpaid loans against a policy with accrued interest. FIRST DEATH The death of the first of the insureds to die. Unless you and we agree otherwise, if we are unable to determine on the basis of proofs of death furnished to us which of the insureds was the first to die, and the order of deaths affects the amount of the death benefit payable under this policy, the deceased insured whose death would produce the highest aggregate death proceeds payable under this policy, inclusive of any rider benefits, will be considered to have been the first of the insureds to die. GENDER The terms "he," "his" and "him" are applicable without regard to sex. Where proper, "she," "hers" or "her" may be substituted. IN FORCE The policy has not terminated. IN WRITING In a written form satisfactory to us and filed at our (WRITTEN REQUEST) Variable and Universal Life Administration. INSUREDS The insureds are those persons named as insureds on Page 1 of the Schedule Pages. MONTHLY CALCULATION The first Monthly Calculation Day of a policy is the same DAY day as its Policy Date as shown on the Schedule Page. Subsequent Monthly Calculation Days are the same day for each month thereafter or, if such day does not fall within a given month, the last day of that month will be the Monthly Calculation Day. OLDEST INSURED The oldest insured is the person among the insureds on Page 1 of the Schedule Pages who was born first. V601 1 PAYMENT DATE The Valuation Date on which a premium payment or loan repayment is received at our Variable and Universal Life Administration, unless it is received after the close of the New York Stock Exchange in which case it will be the next Valuation Date. POLICY ANNIVERSARY The anniversary of the Policy Date. POLICY DATE The Policy Date as shown on the Schedule Page. It is the date from which policy years and policy anniversaries are measured. POLICY MONTH The period from one Monthly Calculation Day up to but not including the next Monthly Calculation Day. POLICY VALUE The Policy Value as defined in Part 4. POLICY YEAR The first Policy Year is the one-year period from the Policy Date to, but not including, the first Policy Anniversary. Each succeeding Policy Year is the one-year period from the Policy Anniversary to but not including the next Policy Anniversary. PROPORTIONATE Amounts allocated to sub-accounts on a Proportionate basis are allocated by increasing (or decreasing) this policy's share in the value of the affected sub-accounts so that such shares maintain the same ratio to each other before and after the allocation. SEPARATE ACCOUNT Phoenix Home Life Variable Universal Life Account. SUB-ACCOUNTS The Guaranteed Interest Account (exclusive of the loaned portion of such account) and the accounts within our Separate Account to which non-loaned assets under the policy are allocated as described in Part 5. UNIT A standard of measurement, as described in Part 4, used to determine the share of this policy in the value of each sub- account of the Separate Account. VALUATION DATE Every day the New York Stock Exchange is open for trading. VALUATION PERIOD The period in days from the end of one Valuation Date through the next Valuation Date. WE (OUR, US) means Phoenix Home Life Mutual Insurance Company. YOU (YOUR) The owners of this policy. YOUNGEST INSURED The youngest insured is the person among the insureds listed on Page 1 of the Schedule Pages who was born last. V601 2 PART 2: ABOUT THE POLICY EFFECTIVE DATE This policy will begin in force on the Policy Date, provided OF INSURANCE the issue premium is paid while all the insureds are alive. ENTIRE CONTRACT This policy and the written application, a copy of which is attached to and made a part of the policy, are the entire contract between you and us. Any change in the provisions of the contract, to be in effect, must be signed by one of our executive officers and countersigned by our registrar or one of our executive officers. This policy is issued by us at our Main Administrative Office in Hartford, Connecticut. Any benefits payable under this policy are payable at our Main Administrative Office. DIVIDENDS While this policy is in force it will share in our divisible surplus to the extent that we may provide. The share to be apportioned this policy, if any, will be determined annually by us and credited no later than the end of the Policy Year for which it was determined. We will pay the dividend to you in cash unless you elect that it be applied under any other method mutually agreed to by you and us. We do not expect any dividends to be apportioned to this policy. You may elect that any dividends that become payable be applied under one of the dividend options described in this section. If no election is made, any dividends will be applied to buy paid-up insurance additions under option 3. 1. Paid in Cash; 2. Applied as an additional premium to the policy value in the same manner as would be provided for additional premiums as described in the section entitled "Premium Allocation to Sub-accounts" in Part 4; or 3. Applied to buy paid-up insurance additions. The dividends are used to buy participating level face amount paid up additions with no further premiums due. If death of an insured occurs while this policy is in force, the death benefit from these additions will be added to the death benefit under this policy. Upon policy lapse or surrender, any such additions will be terminated and the cash value of such additions will be paid to you in cash. Net single premiums for paid-up insurance additions will not exceed such net single premiums based on the Commissioners 1980 Standard Ordinary Mortality Table, continuous functions and an interest rate of 4% per year. The cash value of these additions will also be based on such table and method and will never be less than the amount of dividends applied to purchase them. Within 30 days after any policy anniversary, the cash value of any additions will be not less than their cash value on that anniversary. On any other date, we will allow for the lapse of time since the beginning of the current policy year. V601 3 4. Accumulate at interest. The dividends are left with us to accumulate at the rate declared by us. The rate will not be less than 3% per year. The interest is credited annually on each policy anniversary. Any amount held by us under this option may be withdrawn in cash, unless being used to secure policy debt. 5. Applied under any other method agreed to by us. CONTESTABILITY We rely on all statements made by any or all of the insureds in the written application. These statements are considered to be representations and not warranties. We can contest the validity of this policy and any coverage under it for any material misrepresentation of fact. To do so, however, the misrepresentation must be contained in the written application and a copy of the application must be attached to this policy when issued. We cannot contest the validity of this policy after it has been in force during the insureds' lifetimes for two years from its Policy Date. If we contest this policy, the death benefit will be limited to the Policy Value adjusted by the following amounts: a. we add any monthly deductions and any other fees and charges made under this policy; b. we subtract any debt owed us under this policy. SUICIDE If, within two years from the Policy Date, any of the insureds die by suicide, while sane or insane and while this policy is in force, the amount of death benefit will be limited to the Policy Value adjusted by the following amounts: a. we add any monthly deductions and any other fees and charges made under this policy; b. we subtract any debt owed us under this policy. MISSTATEMENT OF If the age or sex of any of the insureds has been misstated, AGE OR SEX any benefits payable under this policy will be adjusted to reflect the correct ages and sexes as follows: (A) For adjustments made prior to any of the insureds' deaths, no change will be made to the then current cost of insurance rates, but subsequent cost of insurance rates will be adjusted to such rates that would apply had this policy been issued based on the correct ages and sexes. (B) For adjustments made at the time of the first death, the death benefit payable will be adjusted to reflect the amount of coverage that would have been supported by the most recent monthly deduction based on the then current cost of insurance rate for the correct ages and sexes. V601 4 ASSIGNMENTS Except as otherwise provided herein, any or all of the rights in this policy may be assigned. We will not be considered to have notice of any assignment until we receive the original or copy of the assignment at our Variable and Universal Life Administration. We are not responsible for the validity of any assignment. ANNUAL REPORTS We will annually send you a report showing for this policy: a. the then current Policy Value, cash surrender value, death benefit and face amount; b. the premiums paid, and deductions and partial surrenders made since the last report; c. any outstanding debt; d. an accounting of the change in Policy Value since the last report; and e. such additional information as required by applicable law or regulation. POLICY TERMINATION Upon the first death, all benefits then due and payable UPON FIRST DEATH under this policy will be paid to the beneficiary. This policy shall then terminate and thereafter have no force or effect. TRANSACTION RULES Requests for transactions involving sub-accounts will usually be processed within seven days after we receive the written request at our Variable and Universal Life Administration. However, we may at our discretion postpone the payment of any variable death benefit in excess of the initial face amount, any policy loans, partial withdrawals, surrenders or transfers: (A) for up to six months from the date of request, if dependent upon the value of the Guaranteed Interest Account; (B) otherwise we may postpone transactions, for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make processing such transactions impractical. If we delay payment of any partial or full surrender for 30 days or more, we will pay interest at a rate guaranteed to be at least equal to 4.5%. V601 5 PART 3: RIGHTS OF OWNER WHO IS THE OWNER The owner is the person named as owner in the application, unless later changed as provided in this policy. If no other person is named as owner, then the insureds shall be joint owners, with rights of survivorship as regards any post-first death elections as may be permitted by rider. If you, the owner, are not one of the insureds and you die before any of the insureds, ownership rights in this policy will pass to the successive owner if one has been named, except that if joint owners are designated, this policy would remain with the surviving joint owners until death of the survivors unless otherwise provided. If more than one person is named as owner, they must act jointly unless you and we agree otherwise. WHAT ARE THE RIGHTS You control this policy until the first death but not until OF THE OWNER this policy begins in force. Unless you and we agree otherwise, you may exercise all rights provided under this policy without the consent of anyone else. These rights include the right to: a. Receive any amounts payable under this policy before the first death. b. Change the owner or the interest of any owner. c. Change the planned premium payment amount and frequency. See Part 4. d. Change the sub-account allocation schedule for premium payments and monthly deductions. See Part 4. e. Transfer amounts between and among sub-accounts. See Part 6. f. Obtain policy loans. See Part 6. g. Obtain a partial surrender. See Part 6. h. Surrender this policy for its cash surrender value. See Part 6. i. Select a payment option for any cash surrender value that becomes payable. See Part 6. j. Request changes in the insurance amount. See Parts 6 and 7. k. Change the death benefit option. See Part 7. l. Change the beneficiary of the death benefit. See Part 7. m. Assign, release, or surrender any interest in the policy. You may exercise these rights only until the first death. Exercise of any of these rights will, to the extent thereof, assign, release, or surrender the interest of the insureds and all other beneficiaries and owners under this policy. HOW TO CHANGE You may change the owner by written request, satisfactory to THE OWNER us, filed at our Variable and Universal Life Administration. V601 6 PART 4: PREMIUMS PREMIUM ALLOCATION The issue premium as shown on the Schedule Page is due on TO SUB-ACCOUNTS the Policy Date. All insureds must be alive when the issue premium is paid. Thereafter, the amount and payment frequency of planned premiums are as shown on the Schedule Page unless later changed as described below. All premiums are payable in advance at our Variable and Universal Life Administration, except that the issue premium may be paid to an authorized agent of ours for forwarding to our Variable and Universal Life Administration. No benefit associated with any premium shall be provided until it is actually received by us at our Variable and Universal Life Administration. Any premiums received by us at our Variable and Universal Life Administration will be reduced by the premium tax charge stated on the Schedule Page. Such premiums will also be reduced by the issue expense charge shown on the Schedule Page to the extent that such premiums are sufficient to pay such charge. Any unpaid balance of the issue expense charge will be included as part of the monthly deduction described below until fully paid. Any premiums received by us at our Variable and Universal Life Administration will be applied on the Payment Date to the various sub-accounts based on the premium allocation schedule elected in the application for this policy or as later changed by you. Payments received by us during a grace period will be reduced by the amount needed to cover any monthly deductions during the grace period before being applied to the various sub-accounts. You may change the allocation schedule for premium payments by written notice filed with us at our Variable and Universal Life Administration. Allocations to each sub-account must be expressed in whole percentages unless we agree otherwise. The number of Units credited to each sub-account of the Separate Account will be determined by dividing the premium applied to that sub-account by the Unit value of that sub- account on the Payment Date. The number of Units credited to each sub-account is carried to 4 decimal places. PREMIUM FLEXIBILITY Subject to the total premium limit described in the next section and except for the issue premium, you may change the amount and frequency of premium payments while this policy is in force before the first death as follows: a. You may increase or decrease the planned premium amount or payment frequency at any time by written notice to us. We reserve the right to limit increases to such maximums as we may establish from time to time. b. Additional premium payments may be made at any time. c. Each premium payment made must at least equal $100 or, if during a grace period, the amount needed to prevent lapse of this policy. We reserve the right to reduce this limit. V601 7 TOTAL PREMIUM The total premium limit is shown on the Schedule Page and is LIMIT applied to the sum of all premiums received by us for this policy to date, reduced by the sum of all partial surrender amounts paid by us to date. If the total premium limit is exceeded, we will pay you the excess, with interest at an annual rate of not less than 4%, not later than 60 days after the end of the Policy Year in which the limit was exceeded. The Policy Value will be adjusted to reflect such refund. The amount to be taken from each sub-account will be allocated in the same manner as provided for monthly deductions unless you in writing request another allocation. The total premium limit may be exceeded if additional premium is needed to prevent lapse under the grace period and lapse provision. The total premium limit may change due to: a. a partial surrender, expiry, or decrease in face amount; b. addition, cancellation, expiry, or change of a rider; c. a change in federal tax laws or regulations; or d. a change of death benefit option. If the total premium limit changes, we will send you a Revised Schedule Page reflecting the change. However, we reserve the right to require that this policy be returned to us so that we may endorse the change. GRACE PERIOD AND If on any Monthly Calculation Day during the first Policy LAPSE Year the Policy Value is less than the required monthly deduction, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. If on any Monthly Calculation Day during any subsequent Policy Year the cash surrender value is less than the required monthly deduction, a grace period of 61 days will be allowed for the payment of an amount such that the Cash Surrender Value is equal to three times the required monthly deduction. This policy will continue in force during any such grace period. We will mail a written notice to you and any assigns at the post office addresses last known to us as to the amount of premium required. If such premium is not paid to us by the end of the grace period this policy will lapse without value, but not before 30 days have elapsed since we mailed our written notice to you. The "date of lapse" will be the Monthly Calculation Day on which the deduction was to be made, and any insurance and rider benefits provided under this policy will terminate as of that date. POLICY VALUE The Policy Value is the sum of the shares of this policy in the value, if any, of each sub-account of the Separate Account and the value of this policy's Guaranteed Interest Account. See Part 5 for an explanation as to how this policy's share in the value of each sub-account of the Separate Account is determined and for a description of the Guaranteed Interest Account. V601 8 MONTHLY DEDUCTION A deduction is made each Policy Month from the Policy Value (excluding the value of the loaned portion of the Guaranteed Interest Account) to pay: (a) the cost of insurance provided under this policy; (a) any flat extra mortality charges; (c) the cost of any rider benefits provided,- (d) any unpaid balance of the issue expense charge; and (e) an administrative charge as shown on the Schedule Page. The administrative charge may vary but in no event will exceed the maximum amount shown on the Schedule Page. We will send you a written notice of any change at least 30 days in advance of such change. Deductions are made on each Monthly Calculation Day. If the Monthly Calculation Day is not a Valuation Date, the monthly deduction for that Policy Month will be made on the next Valuation Date. You may request in the application for this policy that monthly deductions not be taken from certain specified sub- accounts. Such a request may later be changed by notifying us in writing but only with respect to future monthly deductions. Monthly deductions will be taken from this policy's share of the remaining sub-accounts exclusive of the loaned portion of the Guaranteed Interest Account, on a proportionate basis. In the event this policy's share in the value of such sub-accounts is not sufficient to permit the withdrawal of the full monthly deduction, the remainder will be taken on a proportionate basis from this policy's share of each of the other sub-accounts exclusive of the loaned portion of the Guaranteed Interest Account. The number of Units deducted from each sub-account of the Separate Account will be determined by dividing the portion of the monthly deduction allocated to each such sub- account by the Unit value of that sub-account on the Monthly Calculation Day. Each monthly deduction will pay the cost of insurance from the Monthly Calculation Day on which the deduction is made up to but not including the next Monthly Calculation Day. The cost of insurance is equal to the cost of insurance rate for the current Policy Month divided by 1000 and then multiplied by the result of: (a) the death benefit on the Monthly Calculation Day; minus (b) the Policy Value on the Monthly Calculation Day. The cost of insurance rate for the current Policy Month is based on the insureds' attained ages and risk classifications. The rate used in computing the cost of insurance is obtained from the Table of Guaranteed Maximum Cost of Insurance Rates on the Schedule Page for the risk classifications shown, or such lower rate as we may declare. Any change we make in the declared cost of insurance rates will be uniform by class and based on our future mortality, expense and lapse expectations. The declared cost of insurance rates for any of the insureds will not be affected by changes in any of the insureds' health or occupation. V601 9 PART 5: THE ACCOUNTS GUARANTEED INTEREST Assets under this policy, may be allocated either to the ACCOUNT Guaranteed Interest Account or to any of the sub-accounts of the Separate Account to support the operation of the Separate Account. The Guaranteed Interest Account is not part of the Separate Account. It is accounted for as part of our General Account. We reserve the right to limit cumulative deposits, including transfers, to the unloaned portion of the Guaranteed Interest Account during any one-week period to no more than $250,000. We will credit interest daily on the amounts allocated under this policy to the Guaranteed Interest Account. The loaned portion of the Guaranteed Interest Account will be credited interest at an effective annual fixed rate of 6%. We will credit interest on the unloaned portion of the Guaranteed Interest Account at such rates as we shall determine but in no event will the effective annual rate of interest on such portion be less than 4%. At least once each month we will determine the interest rate that will apply to any premium or transferred amounts deposited to the unloaned portion of the Guaranteed Interest Account. That rate will remain in effect for such deposits, for an initial guarantee period of one full year. Upon expiry of the initial one-year guarantee period, and each subsequent one-year guarantee period thereafter, the rate applicable for any deposits in the unloaned portion of the Guaranteed Interest Account whose guarantee period has just ended shall be the same rate that applies at that time to new deposits to such sub-account. Such rate shall likewise remain in effect for such deposits for a subsequent guarantee period of one full year. All transfers, partial surrenders, and deductions from the unloaned portion of the Guaranteed Interest Account will be assessed on a Last-In, First-Out basis based on the date the deposit was initially made to the unloaned portion of such sub-account. At the end of each Policy Year and at the time of any debt repayment, interest credited to the loaned portion of the Guaranteed Interest Account will be transferred to the unloaned portion of the Guaranteed Interest Account. We reserve the right to add other Guaranteed Interest Accounts, subject, where required, to approval by the insurance supervisory official of the state where this policy is delivered. V601 10 SEPARATE ACCOUNT The Separate Account has been established by us as a Separate Account pursuant to New York law and is registered as a Unit investment trust under the Investment Company Act of 1940 (1940 Act). Income and realized and unrealized gains and losses from assets in the Separate Account are credited to or charged against it without regard to our other income, gains or losses. We own the Separate Account assets and they are kept separate from the assets of our General Account. Separate Account assets will be valued on each Valuation Date. The portion of the Separate Account equal to reserves and liabilities for policies supported by the Separate Account will not be charged with any liabilities arising out of our other business. We reserve the right to use assets of the Separate Account in excess of these reserves and liabilities for any purpose. The Separate Account has several sub-accounts available under this policy as shown on the Schedule Page. We have the right to add additional sub-accounts of the Separate Account subject to approval by the Securities and Exchange Commission and, where required, by the insurance supervisory official of the state where this policy is delivered. We use the assets of the Separate Account to buy shares of the Fund identified on the Schedule Page according to your allocation instructions. The Fund is registered under the 1940 Act as an open-end, diversified management investment company. The Fund has separate Portfolios that correspond to the sub- accounts of the Separate Account Assets of each such sub- account are invested in shares of the corresponding Fund Portfolio. A Portfolio of the Fund might make a material change in its investment policy. If that occurs, you will be notified of the change. In addition, no change will be made in the investment policy of any of the sub-accounts of the Separate Account without approval of the appropriate insurance supervisory official of our domiciliary state of New York. The approval process is on file with the insurance supervisory official of the state where this policy is delivered. If, in our judgment, a Portfolio of the Fund becomes unsuitable for investment by a sub-account of the Separate Account for any reason, we may substitute shares of another Portfolio of the Fund or shares of another mutual fund. Any such change will be subject to approval by the Securities and Exchange Commission and, where required, by the insurance supervisory official of the state where this policy is delivered. VOTING RIGHTS Although we are the legal owner of the Fund shares, we will vote the shares at regular and special meetings of the shareholders of the Fund in accordance with instructions received from you and the other owners of the policies. Any shares held by us will be voted in the same proportion as voted by you and the other owners of the policies. However, we reserve the right to vote the shares of the Fund without direction from you if there is a change in the law which would permit this to be done. V601 11 SHARE OF SEPARATE The share of this policy in the value of each sub-account of ACCOUNT SUB-ACCOUNT the Separate Account on a Valuation Date is the Unit value VALUES of that sub-account on that day multiplied by the number of this policy's Units in that sub-account after all transactions for the Valuation Period ending on that day have been processed. For any day which does not fall on a Valuation Date, the share of this policy in the value of each sub-account of the Separate Account is determined using the number of Units on that day after all transactions for that day have been processed and the Unit values on the next Valuation Date. UNIT VALUE The Unit value of each sub-account of the Separate Account was set by us on the first Valuation Date of each such sub- account. The Unit value of a sub-account of the Separate Account on any other Valuation Date is determined by multiplying the Unit value of that sub-account on the just prior Valuation Date by the Net Investment Factor for that sub-account for the then current Valuation Period. The Unit value of each sub-account of the Separate Account on a day other than a Valuation Date is the Unit value on the next Valuation Date. Unit values are carried to 6 decimal places. The Unit value of each sub-account of the Separate Account on a Valuation Date is determined at the end of that day. NET INVESTMENT The Net Investment Factor for each sub-account of the FACTOR Separate Account is determined by the investment performance of the assets held by the sub-account during the Valuation Period. Each valuation will follow applicable law and accepted procedures. The Net Investment Factor is equal to item (D) below subtracted from the result of dividing the sum of items (A) and (B) by item (C) as defined below. (A) The value of the assets in the sub-account on the current Valuation Date, including accrued net investment income and realized and unrealized capital gains and losses, but excluding the net value of any transactions during the current Valuation Period. (B) The amount of any dividend (or, if applicable, any capital gain distribution) received by the sub-account if the "ex-dividend" date for shares of the Fund occurs during the current Valuation Period. (C) The value of the assets in the sub-account as of the just prior Valuation Date, including accrued net investment income and realized and unrealized capital gains and losses, and including the net value of all transactions during the valuation period ending on that date. (D) The sum of the following daily charges as shown on the Schedule Page, multiplied by the number of days in the current Valuation Period: 1. the mortality and expense risk charge; 2. the daily administrative fee; and 3. the charge, if any, for taxes and reserves for taxes on investment income, and realized and unrealized capital gains. V601 12 PART 6: LIFETIME BENEFITS TRANSFERS You may transfer this policy's value among each sub-account of the Separate Account and the unloaned portion of the Guaranteed Interest Account. Unless we agree otherwise, you may make only one transfer per Policy Year from the unloaned portion of the Guaranteed Interest Account. The amount that may be transferred from the unloaned portion of the Guaranteed Interest Account at any one time cannot exceed the higher of $1000 or 25% of the value of this policy in the unloaned portion of that sub-account. We further reserve the right to require that such transfers be made by written request. We further reserve the right to permit transfers of less than $500 only if the entire balance in the sub-account is transferred. A transfer charge will be imposed in such amount as stated on the Schedule Page. Any such charge will be deducted from the sub-accounts from which the amounts are to be transferred in the same proportion as the amounts to be transferred to each sub-account bear to the total amount transferred. We reserve the right to prohibit a transfer to any sub-account where the resultant value of this policy's share in that sub-account immediately after the transfer would be less than $500. We further reserve the right to require that the entire balance of a sub-account be transferred if the share of this policy in the value of that sub-account would, immediately after the transfer, be less than $500. LOANS While this policy is in force, a loan may be obtained against this policy in any amount up to the available loan value. The taking of a loan under this policy in accordance with this loan provision shall operate to assign this policy as collateral security for such loan. We need no other collateral. We reserve the right not to allow loans of less than $500 unless the loans are to pay premiums on another policy issued by us. The loan value is 90% of the result of subtracting the then remaining surrender charge from the then Policy Value. The "available loan value" is the loan value on the current day less any outstanding debt. The amount of the loan will be added to the loaned portion of the Guaranteed Interest Account and subtracted from this policy's share of the sub-accounts based on the allocation you request at the time of the loan. The total reduction will equal the amount added to the loaned portion of the Guaranteed Interest Account. Unless we agree otherwise, allocations to each sub-account must be expressed in whole percentages. If no allocation request is made, the amount subtracted from the share of each sub-account will be determined in the same manner as provided for monthly deductions. V601 13 Debt may be repaid at any time while all of the insureds are alive and while this policy is in force. Such repayment, in excess of any outstanding accrued loan interest, will be applied to reduce the loaned portion of the Guaranteed Interest Account and will be added to this policy's share of the sub-accounts based on the allocation you request upon repayment. If no allocation request is made, we will use your most recent premium allocation schedule on file with us. Any debt repayment received by us during a grace period as described in Part 4 will be reduced to cover any overdue monthly deductions and only the balance applied to reduce the debt. While there is any outstanding debt against this policy, any payments received by us for this policy will be applied directly to reduce the debt unless specified as a premium payment. Until the debt is fully repaid, additional debt repayments may be made at any time while all of the insureds are alive and while this policy is in force. Failure to repay a policy loan or to pay loan interest will not terminate this policy except as otherwise provided under Grace Period and Lapse in Part 4 when the policy does not have sufficient remaining value to pay the monthly deductions, in which event, that grace period provision will apply. LOAN INTEREST Loans will bear interest at an effective annual rate equal to the loan interest rate shown on the Schedule Page and will be compounded daily. Interest will accrue on a daily basis from the date of the loan and is included as part of the debt under this policy. Loan interest will be due on each Policy Anniversary. If not paid when due, the outstanding accrued interest on that date will be charged as a loan against this policy. CASH SURRENDER The cash surrender value of this policy is the Policy Value VALUE as defined in Part 4 less any applicable surrender charge on the date of surrender as stated on the Schedule Page and less any debt. FULL SURRENDER You may fully surrender this policy for its cash surrender value by returning this policy to us at our Variable and Universal Life Administration along with a written release and surrender of all claims under this policy signed by you and any assigns. You may do this at any time while all of the insureds are alive and while this policy is in force. The written surrender must be in a form satisfactory to us and must include such tax withholding information as we may reasonably require. The surrender will be effective on the "date of surrender" which is the later of the dates on which we receive the returned policy and the written surrender. Upon full surrender all insurance and any rider benefits provided under this policy will terminate. You may direct that we apply the surrender proceeds under any of the Payment Options described in Part 8. V601 14 PARTIAL SURRENDER You may obtain a partial surrender of this policy by requesting that a part of this policy's cash surrender value be paid to you. You may do this at any time while all of the insureds are alive and while this policy is in force with a written request signed by you and any assigns. We reserve the right to require that this policy first be returned to us before payment is made. A partial surrender will be effective on the date we receive the written request or, if required, the date we receive this policy if later. You may direct that we apply the surrender proceeds under any of the Payment Options described in Part 8. A partial surrender will be denied if the resultant cash surrender value would be less than or equal to zero. We reserve the right not to allow partial surrenders if the resulting death benefit would be less than $25,000 or if the amount of the partial surrender is less than $500. We further reserve the right to require that the entire balance of a sub-account be surrendered and withdrawn if the share of this policy in the value of that sub-account would, immediately af ter a partial surrender, be less than $500. Upon a partial surrender, the Policy Value will be reduced by the sum of the following: (A) The partial surrender amount paid. This amount comes from a reduction in this policy's share in the value of each sub-account based on the allocation you request at the time of the partial surrender. If no allocation request is made, the assessment to each sub-account will be made in the same manner as provided for monthly deductions. (B) The partial surrender fee. The fee is the lesser of $25 and 2% of the partial surrender amount paid. The assessment to each sub-account will be made in the same manner as provided for the partial surrender amount paid. (C) A partial surrender charge. This charge is equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender. This charge is determined as follows: Partial Surrender Charge = SC x PS ------- PV - SC Where SC = applicable surrender charge PS = Partial surrender amount PV = Policy Value The cash surrender value will be reduced by the partial surrender amount plus the partial surrender fee. The face amount of this policy will be reduced by the same amount as the policy value is reduced as described above. We will send you revised schedule pages reflecting this change. V601 15 POLICY MATURITY Unless the policy has already terminated, it will mature on its Maturity Date. Upon written request we will pay you the cash surrender value on that date in one sum, or you may direct that we apply the cash surrender value under any of the various payment options described in Part 8 subject to the conditions stated in that part. The issue premium together with any additional premium payments might not continue the policy in force until the Maturity Date, even if such premiums are paid and no further changes take place. The period for which the policy will continue will depend on the following: (A) the amount of the issue premium, and the timing and amount of any additional premium payments; (B) changes in the cost of insurance rates; (C) the investment experience of the sub-accounts of the Separate Account; (D) any policy loans or partial surrenders made. ADDITIONAL While this policy is in force, while all of the insureds are INSURANCE OPTIONS alive and subject to the terms of this provision including our receipt of evidence satisfactory to us of all of the insureds' then insurability, you have the option to purchase additional insurance on the same insureds under the same plan of insurance as this policy without our assessment of any issue expense charge under the new policy. Except for our waiver of the issue expense charge, the new policy will be based on the same guaranteed rates and charges as are in effect for this plan on the Policy Date of this policy as adjusted for the insureds' new attained ages and changes, if any, in risk classifications. The new policy will only include such rider benefits as we may agree based on our rules and practices in effect on the Policy Date of the new policy. The amount of insurance under the new policy, when added to all other insurance with our company on the lives of any of the insureds, cannot exceed our total insurance amount limitations in effect on the Policy Date of the new policy. To elect this option, you must file a written application with our Variable and Universal Life Administration. It must be signed by you and all of the insureds. We must also receive: (A) Evidence that you have a satisfactory insurable interest in the lives of the insureds. (B) Evidence, satisfactory to us, that all of the insureds are then insurable under our established practice in the selection of risks for this plan of insurance, including the new amount applied for and rider benefits requested. Selection of risks includes health and non-health factors. V601 16 (C) Payment, while all of the insureds are alive, of the full issue premium for the new policy. The payment must equal or exceed our minimum issue premium requirements in effect for this plan on the Policy Date of the new policy. Any exclusions applicable to the new policy will be determined in accordance with our rules and practices in effect on the Policy Date of the new policy. The new policy will not be subject to any assignments or liens against this policy. The owner and the beneficiary under the new policy shall be as requested in the application for the new policy. Any subsequent changes will be governed by the printed provisions of the new policy. The new policy will begin in effect as of the later of: a. our approval of the application for the new policy; b. payment of the full issue premium due on the new policy. The Policy Date of the new policy will be as shown on the schedule pages of the new policy based on our rules and practices then in effect. The time periods for the suicide and contestability provisions in the new policy will be measured from the Policy Date of the new policy. PART 7: DEATH BENEFITS HOW THE DEATH While this policy is in effect but prior to the Policy BENEFIT IS Anniversary nearest the oldest insured's 65th birthday, you DETERMINED have the right to elect either of two death benefit options as described below. The death benefit option shall be as elected in the original application unless later changed as provided below. If no option is elected, Death Benefit Option 1 shall apply. DEATH BENEFIT Under this option the death benefit is equal to the greater OPTION 1 of (a) and (b) as defined below. a. the policy's face amount on the date of the first death. b. the minimum death benefit on the date of the first death as described below. DEATH BENEFIT Under this option the death benefit is equal to the greater OPTION 2 of (a) and (b) as defined below: a. the policy's face amount on the date of the first death plus the Policy Value. b. the minimum death benefit on the date of the first death as described below. Under Death Benefit Option 2, on the later of the tenth Policy Anniversary and the Policy Anniversary nearest the oldest insured's 65th birthday, the face amount will be increased by an amount equal to the Policy Value. From that date on, the death benefit will be equal to the greater of the face amount and the minimum death benefit as defined below. V601 17 HOW TO CHANGE THE Prior to the later of the tenth Policy Anniversary and the DEATH BENEFIT Policy Anniversary nearest the oldest insured's 65th OPTION birthday you may request in writing that the Death Benefit Option be changed from Option 1 to Option 2, or from Option 2 to Option 1. No evidence of insurability is required. If the request is to change from Option 1 to Option 2, the face amount will be decreased by the Policy Value; if the request is to change from Option 2 to Option 1, the face amount will be increased by the Policy Value. Any such change will be in effect on the Monthly Calculation Day coincident with or next following the day we approve the request. MINIMUM DEATH The minimum death benefit is the Policy Value on the date of BENEFIT the first death increased by the applicable percentage from the table below, based on the youngest insured's attained age at the beginning of the Policy Year in which the first death occurs. Att'd Att'd Att'd Att'd Age Pct. Age Pct. Age Pct. Age Pct. --- --- --- --- --- --- --- --- Under 40 150% 53 64% 67 18% 81 5% 40 150 54 57 68 17 82 5 41 143 55 50 69 16 83 5 42 136 56 46 70 15 84 5 43 129 57 42 71 13 85 5 44 122 58 38 72 11 86 5 45 115 59 34 73 9 87 5 46 109 60 30 74 7 88 5 47 103 61 28 75 5 89 5 48 97 62 26 76 5 90 5 49 91 63 24 77 5 91 4 50 85 64 22 78 5 92 3 51 78 65 20 79 5 93 2 52 71 66 19 80 5 94 1 REQUESTS FOR A You may request a decrease in face amount at any time DECREASE IN FACE after the first Policy Year. Unless we agree AMOUNT otherwise, the decrease requested must at least equal $10,000 and the face amount remaining after the decrease must at least equal $25,000. All requests to decrease the face amount must be in writing and will be effective on the first Monthly Calculation Day following the date we approve the request. We reserve the right to require that this policy first be returned to us before the decrease is made. Upon a decrease in face amount, a partial surrender charge will be deducted from the Policy Value based on the amount of the decrease. The charge will equal the applicable surrender charge that would then apply to a full surrender multiplied by the result of dividing the decrease in face amount by the face amount of the policy before the decrease. The cash surrender value is not changed. We will send you a Revised Schedule Page reflecting the change in face amount. V601 18 DEATH PROCEEDS Upon receipt of due proof at our Variable and Universal Life Administration of the first death of an insured while this policy is in force, we will pay the death proceeds of this policy. The death proceeds equal the death benefit on the date of the first death, with the following adjustments: (A) We will deduct any debt outstanding against this policy. (B) We will deduct any monthly deductions to and including the Policy Month of the first death not already made. (C) If the Death Benefit Option is 1 we will add any premiums received by us after the Monthly Calculation Day just prior to the date of the first death and on or before the date of the first death. (D) If the Death Benefit Option is 1, we will deduct any partial surrenders made after the date of the first death. INTEREST ON DEATH We will pay interest on any death proceeds from the date of PROCEEDS the first death to the date of payment. The amount of interest will be the same as would be paid were the death proceeds left for that period of time to earn interest under Payment Option 2. THE BENEFICIARY Unless another payment option is elected as described in Part 8, any death proceeds that become payable will be paid in equal shares to such beneficiaries living at the first death as stated in the application for this policy or as later changed. Payments will be made successively in the following order: a. Primary beneficiaries. b. Contingent beneficiaries, if any, provided contingent beneficiary is living at the first death. c. You or your executor or administrator, provided no primary or contingent beneficiary is living at the first death. 30 DAY SURVIVAL The notation on any signed beneficiary designation that this CLAUSE 30-day clause shall apply will, for purposes of administering the beneficiary provisions of this policy, mean that such beneficiary(ies) shall be considered living at the first death only if they survive such death by at least 30 days. HOW TO CHANGE You may change the beneficiary under this policy by written THE BENEFICIARY notice signed by you and filed with us at our Variable and Universal Life Administration. When we receive it, the change will relate back and take effect as of the date it was signed. However, the change will be subject to any payments made or actions taken by us before we received the notice at our Variable and Universal Life Administration. V601 19 PART 8: PAYMENT OPTIONS WHO MAY ELECT The proceeds of this policy will be paid in one sum unless PAYMENT OPTIONS otherwise provided. As an alternative to payment in one sum as provided under Payment Option 1 below, any surrender or death proceeds that become payable under this policy may be applied under one or more of the alternative income payment options as described in this part or such other payment options as may then be currently available for the policy. Our consent is required for the election of an income payment option by a fiduciary or any entity other than a natural person. Our consent is also required for elections by any assigns or an owner other than one of the insureds if the owner has been changed. You may designate or change one or more beneficiaries who will be the payee or payees under the option elected. You may only do this before the first death. For death proceeds, if no election is in effect when the death benefit becomes payable, the beneficiary may elect a payment option. Unless we agree otherwise, all payments under any option chosen will be made to the designated payee or to his executor or administrator. We may require proof of age of any payee or payees on whose life payments depend as well as proof of the continued survival of any such payee(s). HOW TO ELECT A The election of an income payment option must be in a PAYMENT OPTION written form satisfactory to us. Payments may be made on an annual, semi-annual, quarterly or monthly basis provided that each installment will at least equal $25. We also require that at least $1,000 be applied under any income option chosen. PAYMENT OPTIONS This section provides a brief description of the various payment options that are available. In Part 9 you will find tables illustrating the guaranteed installment amount provided by several of the options described in this section. The amounts shown for Option 4, Option 5, and Option 7 are the minimum monthly payments for each $1,000 applied. The actual payments will be based on the monthly payment rates we are using when the first payment is due. They will not be less than shown in the tables. Option 1 - Payment in one sum Option 2 - Left to earn interest. We pay interest during the payee's lifetime on the amount left with us under this option as a principal sum. We guarantee under this option to provide interest at a rate of at least 3% per year. V601 20 Option 3 - Payments for a specified period. Equal income installments are paid for a specified period of years whether the payee lives or dies. The first payment will be on the date of settlement. The Option 3 Table shows the guaranteed amount of each installment for monthly and annual payment frequencies. The table assumes an interest rate of 3% per year on the unpaid balance. The actual interest rate is guaranteed to be not less than this minimum rate. Option 4 - Life annuity with specified period certain Equal installments are paid until the later of: (A) The death of the payee. (B) The end of the period certain. The first payment will be on the date of settlement. The period certain must be chosen at the time this option is elected. The periods certain that may be chosen are as follows: (A) Ten years. (B) Twenty years. (C) Until the installments paid refund the amount applied under this option. If the payee is not living when the final payment falls due, that payment will be limited to the amount that needs to be added to the payments already made to equal the amount applied under this option. If, for the age of the payee, a period certain is chosen that is shorter than another period certain paying the same installment amount, we will deem the longer period certain as having been elected. The life annuity provided under this option is calculated using an interest rate of 3 3/8%, except that any life annuity providing a period certain of twenty years or more is calculated using an interest rate of 3 1/4%. Option 5 - Life Annuity Equal installments are paid only during the lifetime of the payee. The first payment will be on the date of settlement. Any life annuity as may be provided under this option is calculated using an interest rate of 3 1/2%. V601 21 Option 6 - Payments of a Specified Amount Equal installments of a specified amount, out of the principal sum and interest on that sum, are paid until the principal sum remaining is less than the amount of the installment. When that happens, the principal sum remaining with accrued interest will be paid as a final payment. The first payment will be on the date of settlement. The payments will include interest on the principal sum remaining at a rate guaranteed to at least equal 3% per year. This interest will be credited at the end of each year. If the amount of interest credited at the end of a year exceeds the income payments made in the last 12 months, that excess will be paid in one sum on the date credited. Option 7- Joint survivorship annuity with 10-year period certain The first payment will be on the date of settlement. Equal income installments are paid until the latest of: (A) The end of the 10-year period certain. (B) The death of the payee. (C) The death of the other named annuitant. The other annuitant must be named at the time this option is elected and cannot later be changed. That annuitant must have an adjusted age as defined in Part 9 of at least 40. The joint survivorship annuity provided under this option is calculated by using an interest rate of 3 3/8%. Option 8 - Variable Payout Life Annuity with 10-year Period Certain Variable payout monthly payments are paid during the lifetime of the annuitant, or, if later, the end of the 10-year period certain starting with the date the first payment is due. The first monthly income payment will be on the date of settlement. Future payments will be due on the same day of the month as the first payment is due, or if such date does not fall within a month then the first Valuation Date to occur in the following month. Calculation of Variable Income Payments The Variable Income Table in Part 9 shows the minimum amount of the first monthly payment for each $1,000 applied. The minimum first payments shown are based on the 1983 Annuity Table projected to the year 2000 with Projection Scale G. and with projection Scale G thereafter, and an effective annual interest rate of 4 1/2%. The actual payments will be based on the monthly payment rates we are using when the first payment is due. They will not be less than shown in the table. V601 22 In determining the first payment, the amounts held under this option in each sub-account of the Separate Account are multiplied by the rates we are using for this option on the first Payment Calculation Date. The first payment equals the total of such figures determined for each sub- account. Future payments are measured by Annuity Units and are determined by multiplying the Annuity Units in each sub-account with assets under this option by the Annuity Unit Value for each sub-account on the Payment Calculation Date that applies. The payment will equal the sum of the amounts provided by each such sub-account. These payments will vary with the investment experience of the sub-accounts of the Separate Account and may be either higher or lower than the first payment. Annuity Units The number of Annuity Units in each sub-account with assets under this option is equal to the portion of the first payment provided by that sub-account divided by the Annuity Unit Value for that sub-account on the first Payment Calculation Date. Annuity Unit Value All Annuity Unit Values in each sub-account of the Separate Account were set at $1.000000 on the first Valuation Date selected by us. The value on any date thereafter is equal to (a) the Net Investment Factor for that sub-account for the Valuation Period divided by (b) the sum of 1.000000 and the rate of interest for the number of days in the Valuation Period, based on an effective annual rate of interest equal to the Assumed Investment Rate, and multiplied by (c) the corresponding Annuity Unit Value on the preceding Valuation Date. Assumed Investment Rate The Assumed Investment Rate of 4 1/2% per year is the annual interest rate assumed in determining the first payment. The amount of each subsequent payment from each sub-account of the Separate Account will depend on the relationship between the Assumed Investment Rate and the actual investment performance of that sub-account. If a 4 1/2% rate would result in a first variable payment larger than that permitted under applicable state law, we will select a lower rate which will comply with that law. Payment Calculation Date Payments are calculated on a Payment Calculation Date. That date is the earliest Valuation Date which is not more than 10 days before the due date of the payment. Restrictions No withdrawals, partial or full surrenders, transfers, or additional premium payments may be made as regards any assets held under this option, except as may be otherwise agreed to by us. V601 23 Option 9 - Variable Payout Annuity for a Specified Period Variable payout monthly income installments are paid for a specified period of time, whether the payee lives or dies. The period certain specified must be in whole numbers of years from 5 to 30. Payments will be made on the same basis as described for variable income payments under Option 8 except that: 1. payments will not extend beyond the specified period, regardless of whether the payee lives or dies; and 2. the minimum first payment will be based on the Assumed Interest Rate of 4 1/2% and the specified period (no annuity table will be used). Installment payments will vary with the investment experience of the sub-accounts of the Separate Account and may be either higher or lower than the first installment. We may offer other payment options or alternative versions of the options listed in the above section. ADDITIONAL INTEREST In addition to the interest of 3% per year guaranteed on the AND ENHANCED RATES principal sum remaining with us under Options 2 or 6 and the interest of 3% per year included in the installments payable under Option 3, we will pay or credit at the end of each year such additional interest as we may declare. The amounts shown for Options 4, 5, and 7 are the minimum monthly payments for each $1,000 applied. If the current payment rates when the first payment is due would provide a greater payment, we will use such current rate. PART 9: TABLES OF PAYMENT OPTION AMOUNTS The installment amounts shown in the tables that follow are shown for each $1,000 applied, and except for Options 8 and 9 are the minimum monthly income amounts. Amounts for payment frequencies, periods or ages not shown will be furnished upon request. Under Options 4 and 5, the installment amount for younger ages than shown will be the same as for the first age shown and for older ages than shown it will be the same amount as for the last age shown. The term "age" as used in the tables refers to the adjusted age. Under Options 4, 5 and 8, the adjusted age is defined as follows: (A) For surrender values, the age of the payee on the payee's birthday nearest to the Policy Anniversary nearest the date of surrender. (B) For death proceeds, the age of the payee on the payee's birthday nearest the effective date of the payment option elected. Under Option 7, the adjusted age is the age of the payee on the birthday nearest to the policy anniversary nearest the date of surrender. V601 24 OPTION 3 - PAYMENTS FOR A SPECIFIED PERIOD - ------------------------------------------------------------------------------------------------------------------ Number of Years 5 6 7 8 9 10 11 12 13 - ------------------------------------------------------------------------------------------------------------------ Annual Installment $ 211.99 179.22 155.83 138.31 124.69 113.82 104.93 97.54 91.29 - ------------------------------------------------------------------------------------------------------------------ Mo. Installment $ 17.91 15.14 13.16 11.68 10.53 9.61 8.86 8.24 7.71 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ Number of Years 14 15 16 17 18 19 20 25 30 - ------------------------------------------------------------------------------------------------------------------ Annual Installment $ 85.95 81.33 77.29 73.74 70.59 67.78 65.26 55.76 49.53 - ------------------------------------------------------------------------------------------------------------------ Mo. Installment $ 7.26 6.87 6.53 6.23 5.96 5.73 5.51 4.71 4.18 - ------------------------------------------------------------------------------------------------------------------ OPTION 4 - LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN Age Installment Refund 10 Yrs. Certain 20 Yrs. Certain Age Installment Refund 10 Yrs. Certain 20 Yrs. Certain --------------------------------------------------------- ------------------------------------------------------- Of Of Payee Male Female Male Female Male Female Payee Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ 10 $3.08 $3.03 $3.08 $2.99 $3.00 $2.94 50 $4.36 $4.12 $4.50 $4.10 $4.28 $3.99 15 3.14 3.09 3.15 3.04 3.07 3.00 55 4.76 4.47 4.95 4.47 4.61 4.31 20 3.22 3.16 3.24 3.11 3.15 3.07 60 5.28 4.93 5.54 4.96 4.97 4.67 25 3.33 3.24 3.34 3.20 3.25 3.15 65 5.97 5.54 6.30 5.63 5.29 5.06 30 3.45 3.35 3.47 3.30 3.38 3.25 70 6.91 6.39 7.24 6.50 5.43 5.31 35 3.61 3.48 3.64 3.43 3.55 3.38 75 8.21 7.57 8.26 7.56 5.44 5.40 40 3.80 3.64 3.64 3.60 3.74 3.54 80 10.04 9.26 9.12 8.60 5.46 5.46 45 4.05 3.85 4.14 3.82 3.99 3.74 85 12.61 11.68 9.60 9.31 5.46 5.46 - ------------------------------------------------------------------------------------------------------------------------------------
OPTION 5 - LIFE ANNUITY - -------------------------------------------------------------------------------- Age Age Of Of Payee Male Female Payee Male Female - -------------------------------------------------------------------------------- 10 $3.17 $3.12 50 $4.62 $4.28 15 3.24 3.18 55 5.12 4.68 20 3.32 3.25 60 5.79 5.24 25 3.42 3.34 65 6.75 6.04 30 3.56 3.44 70 8.15 7.22 35 3.73 3.58 75 10.26 9.03 40 3.95 3.75 80 13.54 11.88 45 4.24 3.98 85 18.72 16.54 - -------------------------------------------------------------------------------- OPTION 7 - JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN
- ------------------------------------------------------------------------------------------------------------------------------------ Age of Age of Insured Age of Age of Insured Age of Age of Insured Age of Age of Insured Other --------------------- Other --------------------- Other -------------------- Other ------------------- Annuitant Annuitant Annuitant Annuitant Male Male Female Female F F M M 55 60 65 55 60 65 55 60 65 55 60 65 - ------------------------------------------------------------------------------------------------------------------------------------ 40 $3.62 $3.64 $3.65 60 $4.43 $4.64 $4.82 40 $3.72 $3.77 $3.80 60 $4.34 $4.64 $4.93 45 3.80 3.83 3.86 65 4.61 4.93 5.23 45 3.89 3.97 4.03 56 4.44 4.82 5.23 50 4.00 4.07 4.12 70 4.75 5.18 5.63 50 4.06 4.19 4.31 70 4.50 4.95 5.48 55 4.22 4.34 4.44 75 4.86 5.36 5.96 55 4.22 4.43 4.61 75 4.54 5.03 5.65 - ------------------------------------------------------------------------------------------------------------------------------------
*OPTION 8 - VARIABLE PAYOUT LIFE ANNUITY WITH 10-YEAR PERIOD CERTAIN ------------------------------------------------------- Age Of Payee Male Female ------------------------------------------------------- 40 $4.31 $4.14 45 4.51 4.28 50 4.76 4.47 55 5.09 4.73 60 5.52 5.07 65 6.10 5.53 70 6.83 6.17 75 7.69 7.00 80 8.62 8.01 85 9.46 9.04 ------------------------------------------------------- *OPION 9 - VARIABLE PAYOUT ANNUITY FOR A SPECIFIED PERIOD ---------------------------------------------------------------------- No. Annual Monthly No. Annual Monthly Of Of Years Installment Installment Years Installment Installment ---------------------------------------------------------------------- 5 $217.98 $18.53 14 $93.61 $7.96 6 185.53 15.77 15 89.10 7.58 7 162.39 13.81 16 85.18 7.24 8 145.08 12.34 17 81.74 6.95 9 131.65 11.19 18 78.70 6.69 10 120.94 10.28 19 75.99 6.46 11 112.20 9.54 20 73.57 6.25 12 104.94 8.92 25 64.53 5.49 13 98.83 8.40 30 58.75 5.00 ---------------------------------------------------------------------- *Minimum initial monthly income for each $1,000 applied. Payments after the initial payment will depend on the investment experience of the sub-accounts and may be more or less than the amounts shown. V601 25 FLEXIBLE PREMIUM JOINT VARIABLE UNIVERSAL LIFE INSURANCE POLICY INSURANCE PAYABLE AT FIRST DEATH PREMIUMS PAYABLE UNTIL FIRST DEATH The death benefit and other values provided under this policy are based on the rates of interest credited on any amounts allocated to the Guaranteed Interest Account and on the investment experience of the sub-accounts within our Separate Account to which your premiums are allocated. Thus, the death benefit and other values may increase or decrease in amount or duration. See Part 7 for a description of how the death benefit is determined. ELIGIBLE FOR ANNUAL DIVIDENDS V601 VARIABLE JOINT LIFE POLICY EXCHANGE OPTION RIDER This rider is a part of the policy to which it is attached if it is listed on the Schedule Pages of the policy or in an Endorsement after that page. Except as stated in this rider, it is subject to all of the provisions contained in the policy. JOINT LIFE POLICY The owner may exchange this policy (hereinafter "the EXCHANGE OPTION original policy") for new policies, one on the life of each insured (hereinafter "new policies"), without any additional evidence of insurability, by filing an exchange application at our Main Administrative Office. HOW TO EXERCISE To exercise this option, you must file an exchange THE OPTION application at our Main Administrative Office. It must be signed by you. We must also receive: a. The release of any lien against or assignment of the original policy. However, you may instead submit written approval by the lienholders or assignees of the exchange of policies in a form satisfactory to us with such other documents as we may require. b. The surrender and release of the original policy. c. Payment of any amounts due to us for the exchange as described in the Exchange Adjustments. Unless otherwise provided in the exchange application, the owner and the beneficiary of the new policies will be the same as under the original policy. If the owner of any new policy is different, we will require evidence of insurable interest in the life insured under that new policy. The application for the original policy shall be considered part of the application for the new policies. The new policies will be issued on the basis of the exchange application, the application for the original policy and any evidence of insurability submitted for issuance of the original policy with respect to the life insured under that new policy. The Date of Exchange will be the policy anniversary following the later of: a. our receipt of the exchange application; b. payment of the Exchange Adjustments for all new policies; and c. our approval of insurable interest, if applicable. The new policies will take effect on the Date of Exchange. When the new policies take effect, the original policy shall terminate. THE NEW POLICIES The Policy Date of the new policies shall be the Date of Exchange. The limit on our right to contest the validity of the new policy will operate from the Policy Date of the original policy. The issue ages of the respective insureds under the new policies will be determined based upon their respective ages nearest birthday as of the Date of Exchange. VR04 1 The new policies will be written on any plan of variable life insurance with a level face amount issued by us at the time of the exchange. The new policies will be subject to our published issue rules (e.g. age and amount limits) for the plans chosen which are in effect at that time. The risk classification and any exclusions applicable to the new policies will be determined in accordance with our rules and practices in effect on the original policy's Policy Date. The rates for the new policies will be based on our published rates in effect on the Date of Exchange, without our assessment of any issue expense charges under the new policies. The face amount of each new policy will be chosen by the owner, subject to the following limitation: The sum of the face amounts of the new policies cannot exceed the face amount of the original policy. The policy value for the original policy will be applied as premium to the new policies as directed by the owner, but with the following condition. The cash surrender value of each new policy net of surrender charge must be greater than zero. Any rider contained in the original policy or additional riders may be included in the new policies only if we consent. The new policies will conform to all of the requirements of the jurisdiction in which they are issued regardless of any terms of this rider providing to the contrary. EXCHANGE The exchange is subject to the following adjustments: ADJUSTMENTS 1. If the policy value of the original policy is insufficient to produce a positive cash surrender value for each new policy, the owner must pay an Exchange Adjustment in an amount that, when applied as premium, will make the cash surrender value of each new policy greater than zero. 2. The owner must pay an amount equal to the excess, if any, of the surrender charge in effect on the original policy over the sum of the surrender charges for the new policies. All such surrender charges will be determined as of the Exchange Date. 3. In some cases, the amount of policy value which may be applied to the new policies may exceed the premiums limit for the new policies. In that event, we will return such excess policy value to you in cash. 4. The owner must pay a processing fee not to exceed $100. VR04 2 RIDER CHARGES There are no monthly charges for this rider. TERMINATION This rider will terminate on the earliest of: THIS RIDER a. termination of the original policy; b. lapse or exchange of the original policy; c. your written request to cancel this rider; and d. death of an insured. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar VR04 3 SURVIVOR INSURANCE PURCHASE OPTION RIDER This rider is part of the policy to which it is attached, if it and its monthly charge are listed on the Schedule Page of the policy or in an Endorsement after that page. Except as stated in this rider, it is subject to all of the provisions contained in the policy. DEFINITIONS PURCHASE OPTION DATE is the date of death of the first of the insureds to die provided that such death did not involve a simultaneous death of insureds under the basic policy. THE SURVIVING INSURED(S) are such insured(s) that are living at the date of death of the first of the insureds to die provided that such death did not involve a simultaneous death of insureds under the basic policy. SIMULTANEOUS DEATH means, for purposes of this rider, that more than one insured died under the basic policy and we are unable to determine on the basis of the proofs of death furnished to us which of the insureds was the first to die. DISABILITY RIDER means the Disability Benefit to Age 65 Rider. YOU (YOUR) means the owner of this policy, as continued to be administered, following the first death, in accordance with the ownership provisions of this policy for the limited purpose of permitting your exercise of such ownership rights as are provided under this purchase option rider. BENEFIT PAYABLE In the event of a simultaneous death, where the death UPON SIMULTANEOUS proceeds payable under the basic policy were already DEATH determined such that the first death was deemed to be such of the deceased insured whose death would result in the highest aggregate death benefit inclusive of any rider death benefits provided, we will add a supplemental death benefit under this rider. Such supplemental death benefit will equal the same face amount as provided under the basic policy and will include such additional rider death benefits as would provide the next highest aggregate death benefit for the deceased insured. No further purchase options, interim coverage nor other benefits will be provided under this rider and this rider will terminate without any further value. THE PURCHASE OPTION While this rider is in effect and subject to its terms, on the Purchase Option Date not involving the simultaneous death of insureds covered under the basic policy, you have the option to purchase a new policy without evidence of insurability on the life of any or all surviving insured(s). Only one such new policy will be issued by us. The amount of insurance that may be included as part of that policy covering the life of a surviving insured is limited to the total face amount of coverage, including any death benefits provided by rider, in effect for that insured under the original policy on the Purchase Option Date. Any such term insurance coverage amount continued under the new policy will be provided in the same rider form as under the original policy, unless not available in rider form under the new policy. VR03 1 HOW TO EXERCISE To exercise the purchase option, you must file a written THE PURCHASE OPTION application with us and pay us the first full premium for such additional insurance. The application and premium must be received by us at our Main Administrative Office: a. while the surviving insured(s) to be covered under the new policy are alive; and b. no later than 90 days after the Purchase Option Date. INTERIM INSURANCE For a period of 90 days after the Purchase Option Date, in COVERAGE the event of the death of a surviving insured before coverage begins under a new policy requested under this option, we will pay a single interim death benefit under this rider. Such interim death benefit will equal the same face amount as provided under the basic policy and include such additional rider death benefits on the life of that insured as was in effect under this policy on the Purchase Option Date. If more than one surviving insured dies during that interim period, payment under this rider will be limited to a single payment based on the first of such surviving insureds to die. If we are unable to determine on the basis of proofs of death furnished to us which of the surviving insureds died first, such of the deceased insureds whose death would produce the highest interim death benefit amount payable under this rider will be considered the first of the surviving insureds to die. No further benefits will be payable under this rider and this rider will terminate without any further value. THE NEW POLICY Premiums under the new policy will be at our then current rates for the same risk classification(s) as under this policy for the surviving insured(s) to be covered under the new policy. The new policy will be a Variable Universal Life Policy if only one surviving insured is to be provided additional insurance coverage, or a Joint Variable Universal Life Policy if more than one insured is to be provided additional insurance coverage. If you would like, and we agree, we will substitute another policy form in use by us at the time the option is exercised. The new policy will be issued on the policy form in use by us at the time the option is exercised. It will be subject to any limitations of risk contained in this policy. It will not, however, be subject to any assignments or liens against this policy. The limit on our right to contest the validity of the new policy will operate from the Rider Date. If this policy contains a Disability Rider on a surviving insured to be covered under the new policy, the new policy will contain the rider for that insured, whether or not the insured is totally disabled as defined in that rider. If the insured is totally disabled under the rider when the purchase option is exercised, we will waive any requirement of that rider that the disability occur after the new policy took effect. Except to the extent as provided above, our consent will be required for the new policy to include any other disability or any accidental death benefits. MONTHLY RIDER The monthly charges for coverage provided under this rider CHARGES are included in and part of the monthly deduction for the policy. They are deducted on each Monthly Calculation Day until coverage under this rider terminates. VR03 2 TERMINATION OF Subject to your right to exercise a purchase option within THIS RIDER 90 days after the option becomes available, this rider will terminate on the earliest of: a. Simultaneous Death under the policy; b. the death of a surviving insured; c. 90 days after the Purchase Option Date; d. lapse or full surrender of the policy; e. the Rider Termination Date as shown on the policy's Schedule Page; or f. our receipt on any Monthly Calculation Day of your written request, along with the policy, to cancel coverage under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar VR03 3 DISABILITY BENEFIT TO AGE 65 RIDER This rider is part of the policy to which it is attached if it and its monthly charge is listed on the Schedule Page of the policy or in an endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as otherwise stated below, this rider is subject to all of the provisions contained in the policy. INSURED RIDER DATE OF ISSUE Coverage under this rider will begin in effect on the Rider Date shown above provided: a. for a Rider Date that occurs during the first policy year, the policy value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge); b. for a Rider Date that occurs during the second policy year and any succeeding policy years, the policy cash surrender value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge). DEFINITIONS TOTAL DISABILITY - Incapacity of the insured as a result of bodily injury or disease to engage for remuneration or profit in any occupation for which the insured is or becomes qualified: a. by training; b. by education; or c. by experience. Total disability is also defined to include the insured's entire and irrecoverable loss through bodily injury or disease of: a. the sight of both eyes; b. the use of both hands or both feet; or c. the use of one hand and one foot SPECIFIED MONTHLY AMOUNT - The specified annual amount as shown with respect to this rider on the policy's Schedule Page is the maximum amount payable under this rider during a policy year, in addition to any waived or refunded monthly deductions. Such amount may be zero depending on your written election at the time this rider was requested. The specified monthly amount equals the specified annual amount divided by 12. VR05 1 To the extent that the specified monthly amount to be credited exceed premium amounts allowed to be paid under the policy due to the total premium limit, such excess that would otherwise be credited will be paid in cash to the owner of the policy. One-twelfth (1/12) of the specified monthly amount payable in any policy year shall not exceed 1% of the face amount of the policy to which this rider is attached. DISABILITY Subject to the terms of this rider, during the existence of BENEFITS any total disability of at least 6 months' continuous duration but prior to the end of the disability benefit period as described below, we will apply the following disability benefits: a. WAIVER OF MONTHLY DEDUCTIONS - We will waive or refund the monthly deductions under the policy otherwise scheduled to be made on each Monthly Calculation Day during such period to the extent not already being waived under a Disability Benefit Rider which provides coverage on another insured under the policy. b. CREDITING OF SPECIFIED MONTHLY AMOUNT - We will credit the policy with the specified monthly amount on each Monthly Calculation Day during such period, to the extent that the specified monthly amount is not already being credited under a Disability Benefit Rider which provides coverage on another insured under the policy. Such disability benefit period will end on the later of: a. the policy anniversary nearest the insured's 65th birthday; or b. one year from the date the total disability commenced, if such total disability commenced within the one-year period prior to the policy anniversary nearest the insured's 65th birthday. However, we will continue to apply such disability benefits to the policy on or after the policy anniversary nearest the insured's 65th birthday if the insured has received disability benefits under this rider continuously during the entire five-year period just prior to that date. Such disability benefits will then continue to be applied regardless of whether total disability continues after that policy anniversary. LIMITATIONS No monthly deduction will be waived or refunded and no AND CONDITIONS specified monthly amount will be credited or paid under this rider unless the following conditions are satisfied: 1. We must be given written notice of claim and due proof during the lifetime of the insured that: a. the insured is totally disabled at the time the proof is furnished to us; and b. the insured has been so totally disabled for the entire 6-month period immediately preceding that date. Any such proof will be subject to the requirements stated in the Required Proof of Disability section. VR05 2 2. The total disability must not have directly resulted from either: a. injuries willfully and intentionally self- inflicted; or b. service by the insured in the military, naval, or air force of any country at war. By "war" we mean any declared war, undeclared war, or international police action with force of arms by any country, the United Nations, or any other assembly of nations. 3. The total disability must have occurred: a. after coverage under this rider begins; and b. before coverage under this rider terminates. 4. If coverage under this rider terminates or the policy lapses or becomes void by its terms, we must receive proof of total disability no later than one year from that date. However, failure to furnish such required proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from time proof is otherwise required. 5. If multiple disability benefits would otherwise be payable under the policy due to Disability Benefit Riders on more than one insured, benefits will be limited to only one such rider such that the highest disability benefit amount will be credited or paid. REQUIRED PROOF OF In addition to requiring proof of total disability before DISABILITY AND granting any benefits under this rider, we have the right to ITS CONTINUANCE require proof that the total disability continues. As part of any such proof, we shall have the right to have a physician of our choosing conduct such physical exams of the insured as we may reasonably require. After benefits under this rider have been received for a period of disability of more than 2 years, we will not require such exams more frequently than once a year. Should there be a failure to furnish such proof or a refusal to permit such exams, or should the insured cease to be totally disabled before the policy anniversary nearest the insured's 65th birthday: a. further disability benefits will not be applied; and b. any disability benefits already applied after that date will be charged as loans against the policy unless repaid to us. However, failure to furnish such required proof of disability within the time allowed shall not invalidate or reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required. THE PAYEE OF ANY If the insured under this rider is the owner of the policy CASH PAYMENTS and dies before receiving payment of any amount that becomes due the owner, such payment will be made to the same beneficiary and in the same manner as provided under the policy for payment of death benefits. We may also do this if the insured is the owner of the policy and we have evidence satisfactory to us that the insured is mentally incompetent. Upon such payment we shall no longer beliable for payment of such amount. VR05 3 LIMIT ON OUR RIGHT We cannot contest the validity of this rider except for TO CONTEST THIS failure to pay premiums after it has been in force during RIDER the lifetime of the insured for 2 years from the Rider Date. MONTHLY RIDER The monthly charge for coverage under this rider is included CHARGES in and part of the monthly deduction for the policy. It is deducted on each Monthly Calculation Day until coverage under this rider terminates. TERMINATION OF Coverage under this rider will terminate on the earliest of: COVERAGE UNDER THIS RIDER a. full surrender of the basic policy; b. lapse of the basic policy; c. the first death under the basic policy; d. the policy anniversary nearest the insured's 65th birthday, unless continued as provided under the Disability Benefits section; or e. our receipt on any Monthly Calculation Day of your written request, along with the policy, to cancel coverage under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar VR05 4 TERM INSURANCE RIDER This rider is part of the policy to which it is attached, if it is listed on the policy's Schedule Page or in an Endorsement after that page. Except as stated in this rider, it is subject to all of the provisions contained in the policy. This rider is effective as of the Rider Date of Issue. INSURED RIDER DATE OF ISSUE TERM INSURANCE AMOUNT RIDER EXPIRY DATE RIDER FINAL CONVERSION DATE RIDER BENEFIT This rider provides term insurance coverage to the Expiry DESCRIPTION Date shown above in accordance with its terms. Subject to the terms of this rider, we will pay the Term Insurance Amount as shown above if we receive proof, satisfactory to us, that the insured is the first of the insureds to die under the basic policy, while the basic policy is in full force and this rider is in effect. In the event of a simultaneous death, determination of the first of the insureds to die shall be made in accordance with the terms of the basic policy. EXCLUSION IF DEATH If within two years from the Rider Date of Issue and while BY SUICIDE this rider is in effect the insured dies by suicide, whether sane or insane, the amount we pay under this rider will be limited to the charges assessed for benefits under this rider. LIMIT ON OUR RIGHT We cannot contest the validity of this rider, except for TO CONTEST THIS failure to pay premiums, after it has been in effect during RIDER the lifetime of the insured for two years from the Rider Date of Issue. THE PAYEE Unless you and we agree otherwise, any benefit that becomes payable under this rider will be paid to the same payee and in the same manner as provided in the policy for the death benefit. MONTHLY RIDER The monthly charges for coverage provided under this rider CHARGES are included in and part of the monthly deduction for the policy. They are deducted on each Monthly Calculation Day until coverage under this rider terminates. VR06 1 The monthly rates for term insurance provided under this rider are not guaranteed beyond the current rider year. The current rate scale will be in effect until such time that we declare a new schedule of monthly term rates for this rider. Any new schedule of rates will be determined by us based on factors which will be uniform by class without regard to changes in the health of the insured after the Rider Date of Issue, and based on our future mortality, expense, lapse and investment expectations. Guaranteed maximum term rates are based on the 1980 Commissioners' Standard Ordinary Mortality Ultimate Table, (Age Nearest Birthday), sex and smoker distinct, as adjusted for the rating class of the insured under this rider, as shown on the policy's Schedule Page for this rider. THE RIGHT TO Subject to the terms contained in this section, you have the CONVERT right to convert this rider, without evidence of THIS RIDER insurability, to a new policy on the life of the same insured under this rider but on a different plan of insurance. To convert this rider you must return it to us at our Main Administrative Office along with a written release and surrender of all claims under this rider. The written surrender must be signed by you and satisfactory to us. The conversion must be exercised while this policy is in full force, while this rider is in effect, and no later than the Final Conversion Date shown above. The new policy will be a Variable Life Policy or, if you prefer, and we agree, another plan of insurance in use by us at time of conversion so long as it provides for a level death benefit and we issue that plan with the face amount requested. The new policy must have a face amount that is of equal or lesser amount than the face amount of this rider. It will be issued under the same class of risk as this rider. If desired, the new policy will contain a disability benefits rider provided the insured is not totally disabled on the date of conversion. The premium for the disability benefits rider on the new policy will be at our rates then in effect on the date of conversion. If the insured is totally disabled on the date of conversion, the new policy will contain this rider only if conversion is made on the Final Conversion Date. We will then waive any requirement of that rider that the disability occur after the new policy took effect. No other riders contained in this policy will be contained in the new policy unless we agree otherwise. VR06 2 TERMINATION This rider will terminate on the earliest of: OF THIS RIDER 1. the Rider Expiry Date; 2. lapse or surrender of the basic policy; 3. the first death under the basic policy; or 4. our receipt on any Monthly Calculation Day of your written request to cancel this rider, accompanied by the policy for change or endorsement. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar VR06 3 TEMPORARY MONEY MARKET ALLOCATION AMENDMENT THIS AMENDMENT IS ISSUED AS PART OF THE POLICY TO WHICH IT IS ATTACHED IF IT IS LISTED ON THE SCHEDULE PAGE OF THE POLICY OR IN AN ENDORSEMENT AFTER THAT PAGE. YOU SHOULD THEREFORE REVIEW THE POLICY'S SCHEDULE PAGE FOR APPLICABILITY. REFUND RIGHT AND The refund right stated in the Right to Cancel provision on TEMPORARY MONEY the cover page of the policy is amended to provide for a MARKET SUB-ACCOUNT full refund of any premium paid less any unpaid loans and ALLOCATION loan interest and less any partial surrender amounts paid, if the returned policy is received by us at our Variable and Universal Life Division prior to termination of the Right to Cancel Period. PREMIUM ALLOCATION The provision in Part 4, entitled "Premium Allocation to Sub-accounts," is amended to provide that the issue premium will temporarily be applied on its Payment Date entirely to the Money Market sub-account until termination of the Right to Cancel period stated on the cover page of the policy. UPON TERMINATION OF SUCH PERIOD WITHOUT PRIOR RECEIPT AT OUR VARIABLE AND UNIVERSAL LIFE DIVISION OF THE RETURNED POLICY FOR A REFUND, THE THEN VALUE OF THIS POLICY'S SHARE IN THE MONEY MARKET SUB-ACCOUNT WILL AUTOMATICALLY BE REALLOCATED BASED ON THE PREMIUM ALLOCATION SCHEDULE ELECTED IN THE APPLICATION OR AS LATER CHANGED BY YOU. The resultant share of this policy in the value of each of the respective sub- accounts on the date of transfer shall be in the same percentages of the then total policy value as the premium allocation percentages elected in the application or as later changed by you. MONTHLY DEDUCTION The provision in Part 4, entitled "Monthly Deduction," is amended to provide that until termination of the Right to Cancel period stated on the cover page of the policy, the monthly deduction will be taken entirely from the Money Market sub-account. TRANSFERS The provision in Part 6, entitled "Transfers," is amended to provide that no transfers may be made until termination of the Right to Cancel period stated on the cover page. LOAN INTEREST The provision in Part 6, entitled "Loan Interest" is amended to provide that, until termination of the Right to Cancel period, any debt repayments will temporarily be applied to the Money Market sub-account and reallocated in the same manner as provided above for the issue premium. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ Robert W. Fiondella Secretary Chief Executive Officer /s/ S. Gilmore Registrar VR130 EX-99.B1A(5)(C) 4 EXHIBIT 1A(5)(c) Specimen Policy with Optional Riders Flexible Premium Variable Universal Life Insurance ("Flex Edge Success") PHOENIX HOME LIFE MAIN ADMINISTRATIVE OFFICE: STATUTORY HOME OFFICE: MUTUAL INSURANCE ONE AMERICAN ROW 99 TROY STREET COMPANY HARTFORD, CT 06115 EAST GREENBUSH, NEW YORK 12061 - -------------------------------------------------------------------------------- INSURED: JOHN DOE 35 - MALE :ISSUE AGE AND SEX POLICY NUMBER: 2,000,000 NOVEMBER 1, 1995 :POLICY DATE FACE AMOUNT: $100,000.00 Dear Policyowner: We agree to pay the benefits of this policy in accordance with its provisions. It is important to us that you are satisfied with your policy and that it meets your insurance goals. For service or information on this policy, contact the agent who sold the policy, any of our agency offices, or our Variable and Universal Life Administration at the following address: PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY VARIABLE AND UNIVERSAL LIFE ADMINISTRATION 101 MUNSON STREET P.O. BOX 942 GREENFIELD, MA 01302-0942 RIGHT TO CANCEL You have the right to cancel this policy within a limited time after the policy is delivered to you. The policy may be cancelled by returning the policy to us at our Variable and Universal Life Administration before the later of: 1. 10 days after the policy is delivered to you; or 2. 10 days after a Notice of Right to Cancel is delivered to you; or 3. 45 days after Part 1 of the application is signed; for a refund of: 1. the policy value less debt, if any; plus 2. any monthly deductions, partial surrender fees, and other charges made under the policy. The policy value and debt will be determined as of the nearest Valuation Date coincident with or following the date we receive the returned policy at our Variable and Universal Life Division. Signed for Phoenix Home Life Mutual Insurance Company at its Main Administrative Office in Hartford, Connecticut Sincerely yours, /s/ Dona D. Young /s/ Robert W. Fiondella Secretary Chief Executive Officer Registrar FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY THE DEATH BENEFIT AND OTHER VALUES PROVIDED UNDER THIS POLICY ARE BASED ON THE RATES OF INTEREST CREDITED ON ANY AMOUNTS ALLOCATED TO THE GUARANTEED INTEREST ACCOUNT AND THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS WITHIN OUR SEPARATE ACCOUNT TO WHICH YOUR PREMIUMS ARE ALLOCATED. THUS, THE DEATH BENEFIT AND OTHER VALUES MAY INCREASE OR DECREASE IN AMOUNT OR DURATION. SEE PART 7 FOR A DESCRIPTION OF HOW THE DEATH BENEFIT IS DETERMINED. ELIGIBLE FOR ANNUAL DIVIDENDS SCHEDULE PAGE BASIC INFORMATION INSURED: [JOHN DOE] [35-MALE] : ISSUE AGE AND SEX POLICY NUMBER: [2,000,000] [NOVEMBER 1, 1995] : POLICY DATE FACE AMOUNT: [$100,000.00] OWNER AS STATED IN THE APPLICATION UNLESS LATER CHANGED. DEATH BENEFIT OPTION: Death Benefit Option [1] as later changed as provided herein. BENEFICIARY AS STATED IN THE APPLICATION UNLESS LATER CHANGED. PREMIUMS -------- ISSUE PREMIUM: [$1,000.00] due on [November 1, 1995] SUBSEQUENT PLANNED ANNUAL PREMIUM: [1,000.00] TOTAL PREMIUM LIMIT: Greater of [$16,257.00] and result of [$ 1,331.00] multiplied by the number of policy elapsed years (or fraction thereof) ending on [November 1, 2060] PREMIUM DUE DATES: The amount and, time of premium payments following the Policy Date are flexible. Subsequent planned premiums are payable on the [first day of each November] thereafter for the life of the insured, but not beyond [November 1, 2060.] SUB-ACCOUNT ALLOCATION SCHEDULE ON THE POLICY DATE -------------------------------------------------- MONTHLY SUB-ACCOUNT* PREMIUMS DEDUCTIONS** Money Market 100% Proportionate *See next page for description of sub-accounts. ** See Part 1 for definition of Proportionate. Sub-accounts marked "NONE" will be charged with a portion of the monthly deduction only if the sub-accounts marked "PROPORTIONATE" are not sufficient to make the full monthly deduction. DATE PREPARED: NOVEMBER 1, 1995 PAGE 1 OF 7 SCHEDULE PAGE (CONTINUED) INSURED: John Doe POLICY NUMBER: 2,000,000 SEPARATE ACCOUNT SUB-ACCOUNTS FUND: THE PHOENIX EDGE SERIES FUND MONEY MARKET The investment objective of the Money Market Sub- Account is to provide maximum current income consistent with capital preservation and liquidity. GROWTH The investment objective of the Growth Sub-Account is to achieve intermediate and long-term growth of capital, with income as a secondary consideration BOND The investment objective of the Bond Sub-Account is to seek long-term total return by investing in a diversified portfolio of high yield (high risk)-and high quality fixed income securities. TOTAL RETURN The investment objective of the Total Return Sub- Account is to realize as high a level of the total rate of return over an extended period of time as is considered consistent with prudent investment risk. INTERNATIONAL The investment objective of the International Sub- Account is to seek a high total return consistent with reasonable risk. The International Sub-Account intends to invest primarily in an internationally diversified portfolio of equity securities. The International Portfolio provides a means for investors to invest a portion of their assets outside the United States. BALANCED The investment objective of the Balanced Sub-Account is to seek a reasonable income, long-term capital growth and conservation of capital. The Balanced Sub-Account intends to invest based on combined considerations of risk, income, capital enhancement and protection of capital value. REAL ESTATE The investment objective of the Real Estate Securities SECURITIES Sub-Account is to seek capital appreciation and income with approximately equal emphasis. It intends under normal circumstances to invest in marketable securities of publicly traded Real Estate Investment Trusts (REITS) and companies that operate, develop, manage and/or invest in real estate located primarily in the United States. STRATEGIC THEME The investment objective of the Strategic Theme Sub- Account is to seek long-term appreciation of capital by identifying securities benefiting from long-term trends present in the United States and abroad. The Strategic Theme Sub-Account intends to invest primarily in common stocks believed to have substantial potential for capital growth. FUND: WANGER ADVISORS TRUST: WANGER SMALL CAP: The investment objective of the Wanger Small Cap Sub- Account is to provide long-term growth. The Wanger Small Cap Sub-Account will invest in a series that invests primarily in securities of U.S. companies with capitalization of less than $1 billion. DATE PREPARED: NOVEMBER 1, 1995 PAGE 2 OF 7 INSURED: John Doe POLICY NUMBER: 2,000,000 WANGER INTERNATIONAL The investment objective of the Wanger International SMALL CAP Small Cap Sub-Account is to provide long-term growth. The Wanger International Small Cap Sub-Account will invest in a series that invests primarily in securities of Non-U.S. companies with capitalization of less than $1 billion. GENERAL ACCOUNT SUB-ACCOUNTS GUARANTEED INTEREST The Guaranteed Interest Account is not part of ACCOUNT the Separate Account. We reserve the right to limit cumulative deposits made to the Guaranteed Interest Account during any one-week period to not more than $250,000. It is accounted for as part of our General Account. We will credit interest daily on any amounts held under the Guaranteed Interest Account at such rates as we shall determine but in no event will the effective annual rate of interest be less than 4%. Twice each calendar month we will set the interest rate that will apply to any deposit made to the unloaned portion of the Guaranteed Interest Account, during the applicable period of that month. That rate will remain in effect for such deposits for an initial guaranteed period, of one full year. Upon expiry of the initial one-year guarantee period, and for any deposits whose guarantee has just ended, the applicable rate shall be the same rate that applies to new deposits made at the time the guarantee period expires. Such rate shall likewise remain in effect for such deposits for a subsequent guarantee period of one full year. DATE PREPARED: NOVEMBER 1, 1995 PAGE 3 OF 7 SCHEDULE PAGE (CONTINUED) INSURED: John Doe POLICY NUMBER: 2,000,000 SUB-ACCOUNT FEES ---------------- MAXIMUM DAILY MORTALITY AND EXPENSE RISK FEE: 0.0000219 (Based on Annual Rate of 0.80% for 15 Policy Years) 0.0000068 (Based on Annual Rate of 0.25% after 15 Policy Years) MAXIMUM DAILY TAX FEE: [O] or such greater amount as may be assessed as a result of a change in tax laws. POLICY CHARGES -------------- ISSUE EXPENSE CHARGE: $150.00 ISSUE EXPENSE CHARGE FOR FACE INCREASES AFTER POLICY DATE: $1.50 per thousand of Face Increase, but not to exceed $600. PREMIUM TAX CHARGE: 2.25% of premiums FEDERAL TAX CHARGE: 1.50% of premiums MONTHLY DEDUCTION: See Part 4, "Monthly Deduction". Includes cost of insurance, any rider charges, any flat extra mortality charges, a monthly administrative charge which shall not exceed $10 and is currently set at [$5,] and one- twelfth of the Issue Expense Charge for the first policy year after an increase in face amount. MAXIMUM TRANSFER $0 - First two transfers per policy year. CHARGE: $10 - Subsequent transfers per policy year. PARTIAL SURRENDER FEE: Lesser of $25.00 or 2% of partial surrender amount paid. SURRENDER CHARGE: See Table on next page. OTHER RATES ----------- GUARANTEED INTEREST ACCOUNT: UNLOANED PORTION: Minimum Rate 4% LOANED PORTION: 2% LOAN INTEREST RATE: 4% or the first 10 policy years or until age 65 whichever is sooner. 3% thereafter. DATE PREPARED: NOVEMBER 1, 1995 PAGE 4 OF 7 SCHEDULE PAGE (CONTINUED) INSURED: John Doe POLICY NUMBER: 2,000,000 SURRENDER CHARGE ----------------- In Policy Years 1 through 10 the full Surrender Charge is given in the table below. The applicable Surrender Charge in any Policy Month is the full Surrender Charge minus any Surrender Charges previously paid, but not less than zero. In all policy years after the 10th policy year, the Surrender Charge is zero. SURRENDER CHARGE TABLE Policy Surrender Policy Surrender Policy Surrender Month Charge Month Charge Month Charge - ------ --------- ----- -------- ------ --------- 1-60 1295.14 50 1056.12 100 720.48 61 1283.19 81 1044.16 101 684.37 62 1271.24 82 1032.21 102 648.27 63 1259.29 83 1020.26 103 612.17 64 1247.34 84 1008.31 104 576.06 65 1235.39 85 996.36 105 539.96 66 1223.44 86 984.41 106 503.85 67 1211.48 87 972.46 107 467.75 68 1199.53 88 960.50 108 431.65 69 1187.58 89 948.55 109 395-54 70 1175.63 90 936.60 110 359.44 71 1163.68 91 924.65 111 323.33 72 1151.73 92 912.70 112 287.23 73 1139.78 93 900.75 113 251.13 74 1127.82 94 888.80 114 215.02 75 1115.87 95 876.84 115 178.92 76 1103.92 96 864.89 116 142.82 77 1091.97 97 828.79 117 106.71 78 1080.02 98 792.69 118 70.61 79 1068.07 99 756.58 119 34.50 120 0.00 If you fully surrender your policy in the first two policy years, you may be entitled to a reduction in the amount of the above Surrender Charge. Any such reduction will depend on the amount of premium paid. Assuming that you pay the planned premium stated in the Schedule Pages in each of the first two policy years, such reduced Surrender Charge would equal [$785.00] in the first policy year, and [$882.04] in the second policy year. DATE PREPARED: NOVEMBER 1, 1995 PAGE 5 OF 7 SCHEDULE PAGE (CONTINUED) INSURED: John Doe POLICY NUMBER: 2,000,000 TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES BASED ON 1980 CSO MORTALITY TABLE PER $ 1,000 OF NET AMOUNT AT RISK RISK CLASSIFICATION: MALE NON SMOKER Attained Monthly Attained Monthly Attained Monthly Age Rate Age Rate Age Rate ---- ---- --- ---- --- ----- 35 .1408 57 .7908 79 7.1433 36 .1475 58 .8683 80 7.8058 37 .1567 59 .9558 81 8.5433 38 .1667 60 1.0533 82 9.3767 39 .1783 61 1.1617 83 10.3158 40 .1908 62 1.2850 84 11.3425 41 .2058 63 1.4258 85 12.4333 42 .2208 64 1.5850 86 13.5667 43 .2383 65 1.7608 87 14.7325 44 .2558 66 1.9500 88 15.9075 45 .2767 67 2.1550 89 17.1075 46 .2992 68 2.3750 90 18.3492 47 .3233 69 2.6150 91 19.6533 48 .3492 70 2.8858 92 21.0625 49 .3783 71 3.1925 93 22.6358 50 .4092 72 3,5467 94 24.6375 51 .4458 73 3.9533 95 27.4967 52 .4883 74 4.4100 96 32.0458 53 .5358 75 4.9000 97 40.0167 54 .5908 76 5.4217 98 54.8317 55 .6517 77 5.9700 99 83.3333 56 .7192 78 6.5392 DATE PREPARED: NOVEMBER 1,1995 PAGE 6 OF 7 SCHEDULE PAGE (CONTINUED) INSURED: John Doe POLICY NUMBER: 2,000,000 TABLE OF FACE AMOUNTS OF INSURANCE ---------------------------------- ISSUE DATE FACE AMOUNT RISK CLASSIFICATION ---------- ----------- ------------------- NOVEMBER 1, 1995 $100,000.00 Male Non-Smoker RIDERS AND RIDER BENEFITS ------------------------- RIDER PAYABLE MONTHLY RIDER DESCRIPTION DATE AMOUNT PREMIUM TO CHARGE - ----------------- ----- ------ ------- --- ------- DATE PREPARED: NOVEMBER 1, 1995 PAGE 7 OF 7 TABLE OF CONTENTS
PART PAGE PART PAGE Schedule Page(s) 6. Lifetime Benefits 11 Basic Information Transfers 11 Description of Sub-accounts Loans 12 Policy Charges and Rates Loan Interest 13 Table of Surrender Charges Cash Surrender Value 13 Table of Guaranteed Maximum Insurance Rates Full Surrender 13 Table of Face Amounts of Insurance Partial Surrender 13 and Riders Additional Insurance Option 14 7. Death Benefits 15 Table of Contents Death Benefit Option 1 15 Death Benefit Option 2 15 1. Definitions 1-2 Minimum Death Benefit 15 Death Benefit Following Insured's 2. About the Policy 2 Age 100 16 Effective Date of Insurance 2 How to Change the Death Entire Contract 2 Benefit Option 16 Dividends 2 Request for an Increase in Contestability 2 Face Amount 16 Suicide 3 Right to Cancel Face Misstatement of Age or Sex 3 Amount Increases 17 Assignments 3 Request for Decrease in Annual Reports 4 Face Amount 17 Transaction Rules 4 Death Proceeds 17 Interest on Death Proceeds 18 3. Rights of Owner 4 The Beneficiary 18 Who is the Owner 4 How to Change the Beneficiary 18 What are the Rights of the Owner 4 How to Change the Owner 5 8. Payment Options 18 Who May Elect Payment Options 18 4. Premiums and Charges 5 How to Elect a Payment Option 18 Premium Payments Payment Options 19 Premium Deductions 5 (1) Payment in One Sum 19 Net Premium Allocation (2) Left to Earn Interest 19 to Sub-Accounts 6 (3) Payments for a Specified Period 19 Premium Flexibility 6 (4) Life Annuity with Specified Period Total Premium Limit 6 Certain 19 Grace Period & Lapse 7 (5) Life Annuity 20 Policy Value 7 (6) Payments of Specified Amount 20 Monthly Deduction 7 (7) Joint Survivorship Annuity with 10-year Period Certain 20 5. The Accounts Additional Interest 20 Guaranteed Interest Account 8 Separate Account 9 9. Tables of Payment Option Amounts 21 Voting Rights 10 Share of Separate Account Sub-Account Values 10 Unit Value 10 Net Investment Factor 11
PART 1: DEFINITIONS ATTAINED AGE Age of the insured on the birthday nearest the most recent policy anniversary. DEBT Unpaid loans against this policy plus accrued interest. GENDER The terms "he," "his" and "him" are applicable without regard to sex. Where proper, "she," "hers" or "her" may be substituted. IN FORCE The policy has not terminated. IN WRITING (WRITTEN In a written form satisfactory to us and filed at our REQUEST) VUL. VUL Our Variable and Universal Life Administration. The address is shown on the cover page of this policy. MONTHLY CALCULATION The first Monthly Calculation Day of a policy is the same DAY day as its Policy Date as shown on the Schedule Page. Subsequent Monthly Calculation Days are the same day for each month thereafter or, if such day does not fall within a given month, the last day of that month will be the Monthly Calculation Day. PAYMENT DATE The Valuation Date on which a premium payment or loan repayment is received at our VUL unless it is received after the close of the New York Stock Exchange in which case it will be the next Valuation Date. POLICY ANNIVERSARY The anniversary of the Policy Date. POLICY DATE The policy date as shown on the Schedule Page. It is the date from which policy years and policy anniversaries are measured. POLICY MONTH The period from one Monthly Calcualtion Day up to, but not including, the next Monthly Calculation Day. POLICY VALUE The policy value as defined in Part 4. POLICY YEAR The first policy year is the one-year period from the Policy Date to, but not including, the first policy anniversary. Each succeeding policy year is the one-year period from the period from the policy anniversary to but not including the next policy anniversary. PROPORTIONATE Amounts are allocated to sub-accounts on a proportionate basis such that the ratios of this policy's sub-account values to each other are the same before and after the allocation. SEPARATE ACCOUNT Phoenix Home Life Variable Universal Life Account. SUB -ACCOUNTS The Guaranteed Interest Account (exclusive of the loaned portion of such account) and the accounts within our Separate Account to which non-loaned assets under the policy are allocated as described in Part 5. -1- UNIT A standard of measurement, as described in Part 4, used to determine the share of this policy in the value of each sub-account of the Separate Account. VALUATION DATE Every day the New York Stock Exchange is open for trading and Phoenix Home Life is open for business. VALUATION PERIOD The period in days from the end of one Valuation Date through the next Valuation Date. WE (OUR, US) Phoenix Home Life Mutual Insurance Company. YOU (YOUR) The owner of this policy. PART 2: ABOUT THE POLICY EFFECTIVE DATE OF This policy will begin in force on the Policy Date, INSURANCE provided the issue premium is paid while the insured is alive. ENTIRE CONTRACT This policy and the written application of the policyholder, a copy of which is attached to and made a part of the policy, are the entire contract between you and us. Any change in the provisions of the contract, to be in effect, must be signed by one of our executive officers and countersigned by our registrar or one of our executive officers. This policy is issued by us at our Main Administrative Office in Hartford, Connecticut. Any benefits payable under this policy are payable at our Main Administrative Office. DIVIDENDS While this policy is in force it will share in our divisible surplus to the extent that we may provide. We do not expect any dividends to be apportioned to this policy. The share to be apportioned to this policy, if any, will be determined annually by us and credited no later than the end of the policy year for which it was determined You may elect that the dividend be paid to you in cash or applied under any other method mutually agreed to by you and us. CONTESTABILITY We rely on all statements made by or for the insured in the written application. These statements are considered to be representations and not warranties. We can contest the validity of this policy and any coverage under it for any material misrepresentation of fact. To do so, however, the misrepresentation must be contained in an application and the application must be attached to this policy when issued or made a part of this policy when a change is made. We cannot contest the validity of the original face amount of this policy after it has been in force during the insured's lifetime for two years from its Policy Date. If we contest the policy, it will be based on the application for this policy. We cannot contest the validity of any increase in face amount after the policy has been in force during the insured's lifetime for two years from the issue date of the increase. Any such contest will be based on the supplemental application for the increase. -2- If we contest the validity of all or a portion of the face amount provided under this policy, the amount we pay with respect to such portion of the face amount will be limited to the higher of a return of any paid premium required by us for the contested Face Amount, or the sum of any monthly deductions made under this policy for the contested face amount. SUICIDE If within two years from the Policy Date the insured dies by suicide, while sane or insane, and while this policy is in force, the amount of death benefit will be limited to the policy value adjusted as follows: a. we will add any monthly deductions made under this policy; b. we will subtract any debt owed us under this policy. If within two years from the issue date of an increase in face amount the insured dies by suicide, while sane or insane, and while the policy is in force, the death benefit for that increase will be limited to a pro-rata portion of the policy value corresponding to such increase adjusted as follows: a. we will add the sum of the monthly deductions corresponding to such increase; b. we will subtract any debt owed us under this policy. MISSTATEMENT OF If the age or sex of the insured has been misstated, any AGE OR SEX benefits payable under this policy will be adjusted to reflect the correct age and sex as follows: (A) For adjustments made prior to the insured's death, no change will be made to the then current cost of insurance rates, but subsequent cost of insurance rates will be adjusted to such rates that would apply had this policy been issued based on the correct age and sex (B) For adjustments made at the time of the insured's death, the death benefit payable will be adjusted to reflect the amount of coverage that would have been supported by the most recent monthly deduction based on the then current cost of insurance rates for the correct age and sex. ASSIGNMENTS Except as otherwise provided herein, any or all of the rights in this policy may be assigned. We will not be considered to have notice of any assignment until we receive the original or copy of the assignment at our VUL. We are not responsible for the validity of any assignment. -3- ANNUAL REPORTS We will annually send you a report showing for this policy: a. the then current policy value, cash surrender value, death benefit and face amount; b. the premiums paid, and deductions and partial surrenders made since the last report; c. any outstanding debt; d. an accounting of the change in policy value since the last report; and e. such additional information as required by applicable law or regulation. TRANSACTION RULES Requests for transactions involving sub-accounts will usually be processed within 7 days after we receive the written request at our VUL. However, we may, at our discretion, postpone the payment of any death benefit in excess of the initial face amount, any policy loans, partial withdrawals, surrenders or transfers: (A) For up to six months from the date of request, for any transactions dependent upon the value of the Guaranteed Interest Account; or (B) Otherwise, for any period during which the New York Stock Exchange is closed for trading (except for normal holiday closing) or when the Securities and Exchange Commission has determined that a state of emergency exists which may make processing such transactions impractical. PART 3: RIGHTS OF OWNER WHO IS THE OWNER The owner is the person named as owner in the application, unless later changed as provided in this policy. If you, the owner, are not the insured and you die before the insured, ownership rights in this policy will pass to the successive owner if one has been named, except that if joint owners are designated, this policy would remain with the surviving joint owners until death of the survivors. The insured will be the owner if no other person is named the owner. If more than one person is named as owner, they must act jointly unless you and we agree otherwise. WHAT ARE THE RIGHTS You control this policy during the insured's lifetime but OF THE OWNER not until this policy begins in force. Unless you and we agree otherwise, you may exercise all rights provided under this policy without the consent of anyone else. These rights include the right to: a. Receive any amounts payable under this policy during the insured's lifetime. -4- b. Change the owner or the interest of any owner. c. Change the planned premium payment amount and frequency. See Part 4. d. Change the sub-account allocation schedule for premium payments and monthly deductions. See Part 4. e. Transfer amounts between and among sub-accounts. See Part 6. f. Obtain policy loans. See Part 6. g. Obtain a partial surrender. See Part 6. h. Surrender this policy for its cash surrender value. See Part 6. i. Select a payment option for any cash surrender value that becomes payable. See Part 6. j. Request changes in the insurance amount. See Part 7. k. Change the beneficiary of the death benefit. See Part 7. l. Assign, release, or surrender any interest in the policy. m. Change the death benefit option. See Part 7. You may exercise these rights only while the insured is alive. Exercise of any of these rights will, to the extent thereof, assign, release, or surrender the interest of the insured and all other beneficiaries and owners under this policy. HOW TO CHANGE THE You may change the owner by written request, OWNER satisfactory to us, filed at our VUL. PART 4: PREMIUMS PREMIUM PAYMENTS The issue premium as shown on the Schedule Page is due on the Policy Date. The insured must be alive when the issue premium is paid. Thereafter, the amount and payment frequency of planned premiums are as shown on the Schedule Page unless later changed as described below. All premiums are payable at our VUL, except that the issue premium may be paid to an authorized agent of ours for forwarding to our VUL. No benefit associated with any premium shall be provided until it is actually received by us at our VUL . PREMIUM DEDUCTIONS Premium tax charges and federal tax charges as stated on the Schedule Page, will be deducted from any premiums received by us at our VUL. If the issue premium is received by us at our VUL after the policy date, then it will also be reduced by the amount necessary to cover any past unpaid monthly deductions described below. In addition, payments received by us during a grace period will also be reduced by the amount needed to cover any monthly deductions during the grace period. -5- NET PREMIUM ALLOCATION The premiums, net of these charges, will be applied on TO SUB-ACCOUNTS the Payment Date to the various sub-accounts based on the premium allocation schedule elected in the application for this policy or as later changed by you. You may change the allocation schedule for premium payments by written notice filed with us at our VUL. Allocations to each sub-account must be expressed in whole percentages unless we agree otherwise. The number of units credited to each sub-account of the Separate Account will be determined by dividing the net premium applied to that sub-account by the unit value of that sub-account on the Payment Date. The number of units credited to each sub-account is carried to four decimal places. PREMIUM FLEXIBILITY Subject to the total premium limit described in the next section and except for the issue premium, you may change the amount and frequency of premium payments while this policy is in force during the lifetime of the insured as follows: a. You may increase or decrease the planned premium amount or payment frequency at any time by written notice to us. We reserve the right to limit increases to such maximums as we may establish from time to time. b. Additional premium payments may be made at any time. c. Each premium payment made must at least equal $25 or, if during a grace period, the amount needed to prevent lapse of this policy. We reserve the right to reduce this limit. TOTAL PREMIUM LIMIT The total premium limit is shown on the Schedule Page and is applied to the sum of all premiums received by us for this policy to date, reduced by the sum of all partial surrender amounts paid by us to date. If the total premium limit is exceeded, we will pay you the excess, with interest at an annual rate of not less than 4%, not later than 60 days after the end of the policy year in which the limit was exceeded. The policy value will be adjusted to reflect such refund. The amount to be taken from the sub-account will be allocated in the same manner as provided for monthly deductions unless you request another allocation in writing. The total premium limit may be exceeded if additional premium is needed to prevent lapse under the grace period and lapse provision. The total premium limit may change due to: a. a partial surrender or a decrease in face amount; b. addition, cancellation, or change of a rider; or c. a change in federal tax laws or regulations. -6- If the total premium limit changes, we will send you a Revised Schedule Page reflecting the change. However, we reserve the right to require that this policy be returned to us so that we may endorse the change. GRACE PERIOD AND If, on any Monthly Calculation Day, the required monthly LAPSE deduction exceeds the policy value during the first three policy years, or the cash surrender value after the third policy year, a grace period of 61 days will be allowed for the payment of an amount equal to three times the required monthly deduction. This policy will continue in force during any such grace period. We will mail a written notice to you and any assigns at the post office addresses last known to us as to the amount of premium required. If such premium is not paid to us by the end of the grace period this policy will lapse without value, but not before 30 days have elapsed since we mailed our written notice to you. The "date of lapse" will be the Monthly Calculation Day on which the deduction was to be made, and any insurance and rider benefits provided under this policy will terminate as of that date. POLICY VALUE The policy value is the sum of this policy's share in the value of each sub-account of the Separate Account and the value of this policy's Guaranteed Interest Account. See Part 5 for an explanation as to how this policy's share in the value of each sub-account of the Separate Account is determined and for a description of the Guaranteed Interest Account. MONTHLY DEDUCTION A deduction is made each policy month from the policy value (excluding the value of the loaned portion of the Guaranteed Interest Account) to pay: (a) the cost of insurance provided under this policy; (b) any flat extra mortality charges; (c) the cost of any rider benefits provided; (d) an administrative charge as shown on the Schedule Page. The administrative charge may vary but in no event will exceed the maximum amount shown on the Schedule Page. We will send you a written notice of any change at least 30 days in advance of such change; and (e) for the first policy year and for the first policy year after a face amount increase, one-twelfth of the Issue Expense charge shown on the Schedule Page. Any unpaid balance of the Issue Expense Charge will be paid to us upon policy lapse or termination. -7- Deductions are made on each Monthly Calculation Day. If the Monthly Calculation Day is not a valuation date, the monthly deduction for that policy month will be made on the next valuation date. You may request in the application for this policy that monthly deductions not be taken from certain specified sub-accounts. Such a request may later be changed by notifying us in writing, but only with respect to future monthly deductions. Monthly deductions will be taken from this policy's share of the remaining sub-accounts exclusive of the loaned portion of the Guaranteed Interest Account, on A proportionate basis. In the event this policy's share in the value of such sub-accounts is not sufficient to permit the withdrawal of the full monthly deduction, the remainder will be taken on a proportionate basis from this policy's share of each of the other sub-accounts exclusive of the loaned portion of the Guaranteed Interest Account. The number of units deducted from each sub-account of the Separate Account will be determined by dividing the portion of the monthly deduction allocated to each such sub-account by the unit value of that sub-account on the Monthly Calculation Day. Each monthly deduction will pay the cost of insurance from the Monthly Calculation Day on which the deduction is made up to, but not including, the next Monthly Calculation Day. The cost of insurance is equal to the cost of insurance rate for the current policy month divided by 1,000 and then multiplied by the result of: (a) the death benefit on the Monthly Calculation Day; minus (b) the policy value on the Monthly Calculation Day. The cost of insurance rate for the current policy month is based on the insured's attained age and risk classification. The rate used in computing the cost of insurance is obtained from the Table of Guaranteed Maximum Cost of Insurance Rates on the Schedule Page for the risk classification(s) shown, or such lower rate as we may declare. Any change we make in the declared cost of insurance rates will be uniform by class and based on our future mortality, expense and lapse expectations. The declared cost of insurance rates for an insured will not be affected by a change in the insured's health or occupation. PART 5: THE ACCOUNTS Assets under this policy may be allocated either to the Guaranteed Interest Account or to any of the sub-accounts of the Separate Account. GUARANTEED INTEREST The Guaranteed Interest Account is not part of the ACCOUNT Separate Account. It is part of our General Account. We reserve the right to limit cumulative deposits, including transfers, to the unloaned -8- portion of the Guaranteed Interest Account during any one-week period to no more than $250,000. We will credit interest daily on the amounts allocated under this policy to the Guaranteed Interest Account. The loaned portion of the Guaranteed Interest Account will be credited interest at an effective annual fixed rate as shown on the Schedule Page. We will credit interest on the unloaned portion of the Guaranteed Interest Account at such rates as we shall determine but in no event will the effective annual rate of interest on such portion be less than the minimum interest rate shown on the Schedule Page. Twice each calendar month we will set the interest rate that will apply to any net premium or transferred amounts deposited to the unloaned portion of the Guaranteed Interest Account during the applicable period of that month. That rate will remain in effect for such deposits, for an initial guarantee period of one full year. Upon expiry of the initial one-year guarantee period, and each subsequent one-year guarantee period thereafter, the rate applicable for any deposits in the, unloaned portion of the Guaranteed Interest Account whose guarantee period has just ended shall be the same rate that applies to new deposits to such sub-account at the time the guarantee period expires. Such rate shall likewise remain in effect for such deposits for a subsequent guarantee period of one full year. All transfers, partial surrenders, and deductions from the unloaned portion of the Guaranteed Interest Account will be assessed on a Last-In, First-0ut basis based on the date the deposit was initially made to the unloaned portion of such sub-account. At the end of each policy year and at the time of any debt repayment, interest credited to the loaned portion of the Guaranteed Interest Account will be transferred to the unloaned portion of the Guaranteed Interest Account. We reserve the right to add other Guaranteed Interest Accounts, subject, where required, to approval by the insurance supervisory official of the state where this policy is delivered. SEPARATE ACCOUNT The Separate Account has been established by us as a separate account pursuant to New York law and is registered as a unit investment trust under the Investment Company Act of 1940 (1940 Act). Income and realized and unrealized gains and losses from assets in the Separate Account are credited to or charged against it without regard to our other income, gains or losses. We own the Separate Account assets and they are kept separate from the Assets of our General Account. Separate Account assets will be valued on each valuation date. The portion of the Separate Account equal to reserves and liabilities for policies supported by the Separate Account will not be charged with any liabilities arising out of our other business. We reserve the right to use assets of the Separate Account in excess of these reserves and liabilities for any purposes. The Separate Account has several sub-accounts available under this policy as shown on the Schedule Page. We have the right to add -9- additional sub-accounts of the Separate Account subject to approval by the Securities and Exchange Commission and, where required, by the insurance supervisory official of the state where this policy is delivered. We use the assets of the Separate Account to buy shares of the Fund identified on the Schedule Page according to your allocation instructions. The Fund is registered under the 1940 Act as an open-end, diversified management investment company. The Fund has separate Portfolios that correspond to the sub-accounts of the Separate Account. Assets of each such sub-account are invested in shares of the corresponding Fund Portfolio. A Portfolio of the Fund might make a material change in its investment policy. If that occurs, you will be notified of the change. In addition, no change will be made in the investment policy of any of the sub-accounts of the Separate Account without approval of the appropriate insurance supervisory official of our domiciliary state of New York. The approval process is on file with the insurance supervisory official of the state where the policy is delivered. If, in our judgment, a Portfolio of the Fund becomes unsuitable for investment by a sub-account of the Separate Account for any reason, we may substitute shares of another Portfolio of the Fund or shares of another mutual fund. Any such change will be subject to approval by the Securities and Exchange Commission and, where required, by the insurance supervisory official of the state where this policy is delivered. VOTING RIGHTS Although we are the legal owner of the Fund shares, we will vote the shares at regular and special meetings of the shareholders of the Fund in accordance with instructions received from you and the other owners of the policies. Any shares held by us will be voted in the same proportion as voted by you and the other owners of the policies. However, we reserve the right to vote the shares of the Fund without direction from you if there is a change in the law which would permit this to be done. SHARE OF SEPARATE The share of this policy in the value of each sub- ACCOUNT SUB-ACCOUNT account of the Separate Account on a valuation date is VALUES the unit value of that sub-account on that date multiplied by the number of this policy's units in that sub-account after all transactions for the valuation period ending on that day have been processed. For any day which does not fall on a valuation date, the share of this policy in the value of each sub-account of the Separate Account is determined using the number of units on that day after all transactions for that day have been processed and the unit values on the next valuation date. UNIT VALUE The unit value of each sub-account of the Separate Account was set by us on the first valuation date of each such sub-account. The unit value of a sub-account of the Separate Account on any other valuation date is determined by multiplying the unit value of that sub- account on the just prior valuation date by the Net Investment Factor for that sub-account for the then current valuation period. The unit value of each sub- account of the Separate Account on a day other than a valuation date is the unit value on the next valuation date. -10- Unit values are carried to 6 decimal places. The unit value of each sub-account of the Separate Account on a valuation date is determined at the end of that day. NOT INVESTMENT FACTOR The Net Investment Factor for each sub-account of the Separate Account is determined by the investment performance of the assets held by the sub-account during the valuation period. Each valuation will follow applicable law and accepted procedures. The Net Investment Factor is equal to item (D) below subtracted from the result of dividing the sum of items (A) and (B) by item (C) as defined below. (A) The value of the assets in the sub-account on the current valuation date, including accrued net investment income and realized and unrealized capital gains and losses, but excluding the net value of any transactions during the current valuation period. (B) The amount of any dividend (or, if applicable, any capital gain distribution) received by the sub- account if the "ex-dividend" date for shares of the Fund occurs during the current valuation period. (C) The value of the assets in the sub-account as of the just prior valuation date, including accrued net investment income and realized and unrealized capital gains and losses, and including the net value of all transactions during the valuation period ending on that date. (D) The sum of the following daily charges as shown on the Schedule Page, multiplied by the number of days in the current valuation period: (1) the mortality and expense risk charge; and (2) the charge, if any, for taxes and reserves for taxes on investment income, and realized and unrealized capital gains. PART 6: LIFETIME BENEFITS TRANSFERS You may transfer all or a portion of this policy's value among one or more of the sub-accounts of the Separate Account and the unloaned portion of the Guaranteed Interest Account. We reserve the right to limit the number of transfers you may make, however, you can make up to six transfers per contract year from sub-accounts of the Separate Account and only one transfer per contract year from the unloaned portion of the Guaranteed Interest Account unless the Systematic Transfer Program is elected. Under that program, funds may be transferred automatically among the sub-accounts on a monthly, quarterly, semi-annual or annual basis. Unless we agree otherwise, the minimum initial and subsequent transfer amounts are $25 monthly, $75 quarterly, $150 semi- annually or $300 annually. Except as otherwise provided under the Systematic Transfer Program, the amount that may be transferred from the Guaranteed Interest Account at any one time cannot exceed the higher of $1,000 or 25% of the value of the Guaranteed Interest Account. -11- Transfers may be made by written or telephone request. The maximum transfer charge is shown on the Schedule Page. There is no transfer charge for the Systematic Transfer Program. Any such charge will be deducted from the sub-accounts from which the amounts are to be transferred in the same proportion as the amounts to be transferred bear to the total amount transferred. The value of each sub-account will be determined on the Valuation Date that coincides with the date of transfer. LOANS While this policy is in force, a loan may be obtained against this policy in any amount up to the available loan value. To obtain a loan, this policy must be properly assigned to us as security. We need no other collateral. We reserve the right not to allow loans of less than $500 unless the loans are to pay premiums on another policy issued by us. The loan value is 90% of the result of subtracting the then applicable surrender charge from the then policy value. The "available loan value" is the loan value on the current day less any outstanding debt. The amount of the loan will be added to the loaned portion of the Guaranteed Interest Account and subtracted from this policy's share of the sub-accounts based on the allocation you request at the time of the loan. The total reduction will equal the amount added to the loaned portion of the Guaranteed Interest Account. Unless we agree otherwise, allocations to each sub-account must be expressed in whole percentages. If no allocation request is made, the amount subtracted from the share of each sub-account will be determined in the same manner as provided for monthly deductions. Debt may be repaid at any time during the lifetime of the insured while this policy is in force. Such repayment, in excess of any outstanding accrued loan interest, will be applied to reduce the loaned portion of the Guaranteed Interest Account and will be transferred to the unloaned portion of the Guaranteed Interest Account to the extent that loaned amounts taken from such account have not previously been repaid. Otherwise, such balance will be transferred among the sub-accounts you request upon repayment and, if no allocation request is made, we will use your most recent premium allocation schedule on file with us. Any debt repayment received by us during a grace period as described in Part 4 will be reduced to cover any overdue monthly deductions and only the balance applied to reduce the debt. Such balance will also be applied as described to reduce the loaned portion of the Guaranteed Interest Account While there is any outstanding debt against this policy, any payments received by us for this policy will be applied directly to reduce the debt unless specified as a premium payment. Until the debt is fully repaid, additional debt repayments may be made at any time during the lifetime of the insured while this policy is in force. Failure to repay a policy loan or to pay loan interest will not terminate this policy except as otherwise provided under Grace Period and -12- Lapse in Part 4 when the policy does not have sufficient remaining value to pay the monthly deductions, in which event, that grace period provision will apply. LOAN INTEREST Loans will bear interest at an effective annual rate equal to the loan interest rate shown on the Schedule Page and will be compounded daily. Interest will accrue on a daily basis from the date of the loan and is included as part of the debt under this policy. Loan interest will be due on each policy anniversary. If not paid when due, the outstanding accrued interest on that date will be charged as a loan against this policy. CASH SURRENDER VALUE The cash surrender value of this policy is the policy value as defined in Part 4 less any applicable surrender charge on the date of surrender and less any debt. The surrender charge for a full surrender is as stated on the Schedule Pages, or Revised Schedule Pages if there has been an increase in face amount. FULL SURRENDER You may fully surrender this policy for its cash surrender value by returning this policy to us at our VUL along with a written release and surrender of all claims under this policy signed by you and any assigns. You may do this at any time during the lifetime of the insured while this policy is in force. The written surrender must be in a form satisfactory to us and must include such tax withholding information AS we may reasonably require. The surrender will be effective on the "date of surrender" which is the later of the dates on which we receive the returned policy and the written surrender. Upon full surrender all insurance and any rider benefits provided under this policy will terminate. You may direct that we apply the surrender proceeds under any of the Payment Options described in Part 8. PARTIAL SURRENDER You may obtain a partial surrender of this policy by requesting that a part of this policy's cash surrender value be paid to you. You may do this at any time during the lifetime of the insured while this policy is in force with a written request signed by you and any assigns. We reserve the right to require that this policy first be returned to us before payment is made. A partial surrender will be effective on the date we receive the written request or, if required, the date we receive this policy if later. You may direct that we apply the surrender proceeds under any of the Payment Options described in Part 8. A partial surrender will be denied if the resultant cash surrender value would be less than or equal to zero. We reserve the right not to allow partial surrenders if the resulting death benefit would be less than $25,000 or if the amount of the partial surrender is less than $500. We further reserve the right to require that the entire balance of a sub-account be surrendered and withdrawn if the share of this policy in the value of that sub-account would, immediately after a partial surrender, be less than $500. Upon a partial surrender, the policy value will be reduced by the sum of the following: (A) The partial surrender amount paid. This amount comes from a reduction in this policy's share in the value of each sub-account based on the allocation you request at the time of the partial -13- surrender. If no allocation request is made, the assessment to each sub-account will be made in the same manner as provided for monthly deductions. (B) The partial surrender fee. The fee is the lesser of $25 and 2% of the partial surrender amount paid. The assessment to each sub-account will be made in the same manner as provided for the partial surrender amount paid. (C) A partial surrender charge. This charge is equal to a pro-rata portion of the applicable surrender charge that would apply to a full surrender, determined by multiplying such applicable surrender charge by a fraction equal to the partial surrender amount payable divided by the result of subtracting the applicable surrender charge from the policy value. This amount is assessed against the sub-accounts in the same manner as provided for the partial surrender amount paid. The cash surrender value will be reduced by the partial surrender amount paid plus the partial surrender fee. The face amount of this policy will be reduced by the same amount as the policy value is reduced as described above. We will send you a Revised Schedule Page reflecting this change. ADDITIONAL INSURANCE While this policy is in force and subject to the terms of OPTION this provision, including our receipt of evidence satisfactory to us of the insured's then insurability, you have the option to purchase additional insurance on the same insured under the same plan of insurance as this policy without our assessment of any issue expense charge under the new policy. Except for our waiver of the issue expense charge, the new policy will be based on the same guaranteed rates and charges as are in effect for this plan on the Policy Date of this policy as adjusted for the insured's new attained age and change, if any, in risk classification The new policy will only include such rider benefits as we may agree based on our rules and practices in effect on the Policy Date of the new policy. The amount of insurance under the new policy, when added to all other insurance with our company on the life of the insured, cannot exceed our total insurance amount limitations in effect on the Policy Date of the new policy. To elect this option, you must file a written application with our VUL. It must be signed by you and the insured. We must also receive: (A) Evidence that you have a satisfactory insurable interest in the life of the insured. (B) Evidence; satisfactory to us, that the insured is then insurable under our established practice in the selection of risks for this plan of insurance, including the new amount applied for and rider benefits requested Selection of risks includes health and non-health factors. -14- (C) Payment, while the insured is alive, of the full issue premium for the new policy. The payment must equal or exceed our minimum issue premium requirements in effect for this plan on the Policy Date of the new policy. Any exclusions applicable to the new policy will be determined in accordance with our rules and practices in effect on the Policy Date of the new policy. The new policy will not be subject to any assignments or liens against this policy. The owner and the beneficiary under the new policy shall be as requested in the application for the new policy. Any subsequent changes will be governed by the printed provisions of the new policy. The new policy will begin in effect as of the later of: a. our approval of the application for the new policy; b. payment of the full issue premium due on the new policy. The Policy Date of the new policy will be as shown on the schedule pages of the new policy based on our rules and practices then in effect. The time periods for the suicide and contestability provisions in the new policy will be measured from the Policy Date of the new policy. PART 7: DEATH BENEFITS While, the policy is in force, you have the right to elect either of the two death benefit options as described below. The death benefit option shall be as elected in the original application unless later changed as provided below. If no option is elected, Death Benefit Option 1 shall apply. DEATH BENEFIT OPTION 1 Under this option, during all policy years until the policy anniversary which follows the insured's 100th birthday, the death benefit is equal to the greater of (a) and (b) as defined below. a. the policy's face amount on the date of death. b. the minimum death benefit on the date of death as defined below. DEATH BENEFIT OPTION 2 Under this option, during all policy years until the policy anniversary which follows the insured's 100th birthday, the death benefit is equal to the greater of (a) and (b) as defined below. a. the policy's face amount on the date of death plus the policy value. b. the minimum death benefit on the date of death as defined below. MINIMUM DEATH BENEFIT The minimum death benefit is the policy value on the date of death of the insured increased by the applicable percentage from the table below, based on the insured's attained age at the beginning of the policy year in which the death occurs. 15
Attained Attained Attained Attained Age Pct Age Pct Age Pct Age Pct --- --- --- --- --- --- --- --- Under 40 150% 53 64% 67 18% 81 5% 40 150 54 57 68 17 82 5 41 143 55 50 69 16 83 5 42 136 56 46 70 15 84 5 43 129 57 42 71 13 85 5 44 122 58 38 72 11 86 5 45 115 59 34 73 9 87 5 46 109 60 30 74 7 88 5 47 103 61 28 75 5 89 5 48 97 62 26 76 5 90 5 49 91 63 24 77 5 91 4 50 85 64 22 78 5 92 3 51 78 65 20 79 5 93 2 52 71 66 19 80 5 94 1 95 0 Over 95 0
DEATH BENEFIT After the policy anniversary which follows the insured's FOLLOWING INSURED'S 100th birthday, the death benefit will equal the policy AGE 100 value. HOW TO CHANGE THE While this policy is in force, you may request in writing DEATH BENEFIT OPTION that the Death Benefit Option be changed from Option 1 to Option 2, or from Option 2 to Option 1. No evidence of insurability is required. If the request is to change from Option 1 to Option 2, the face amount will be decreased by the policy value and if the request is to change from Option 2 to Option 1, the face amount will be increased by the policy value. Any such change will be in effect on the Monthly Calculation Day coincident with or next following the day we approve the request. REQUEST FOR AN Anytime that this policy is in force, you may request an INCREASE IN FACE increase in its face amount. Unless we agree otherwise, AMOUNT the minimum such face amount increase is $25,000, and the increase will be effective on the first policy anniversary on or following the date that we approve the request. Such date will be shown as the issue date for such increase on the Revised Schedule Pages we send you reflecting the change. We reserve the right to limit increases in face amount. All requests to increase the face amount must be applied for on a supplemental application and will be subject to evidence of the insured's insurability satisfactory to us. The insured must be alive on the issue date, and you must also pay to us in advance such issue premium for the increase as we may require according to our published rules then in effect. If no issue premium is required, the increase will not take effect unless the cash surrender value on the issue date at least equals the monthly deduction for the total combined face amount. The Issue Expense Charge for Face Amount increases is as stated on the Schedule Page. We will send you Revised Schedule Pages reflecting the change. We reserve the right to further require that the policy be returned to us so that we may incorporate the change. -16- RIGHT TO CANCEL FACE You have the right to cancel any increase in the face AMOUNT INCREASES amount provided by us under this policy pursuant to your request, within a limited time as stated below. The increase in face amount may be cancelled by returning the policy to us at the following address: Phoenix Home Life Mutual Insurance Company Variable and Universal Life Administration P.O. Box 942 Greenfield, Massachusetts 01302-0942 To cancel, you must return the policy, including the Revised Schedule Pages, before the latest of: 1. 10 days after the new Revised Schedule Page showing such increase in the face amount is delivered to you; or 2. 10 days after a Notice of Right to Cancel is delivered to you; or 3. 45 days after Part 1 of the supplementary application for such increased face amount is signed. Upon any such cancellation we will refund the higher of any paid premium required by us for the increase or the sum of any monthly deductions and any other fees and charges made under this policy for the increase in face amount. REQUEST FOR A You may request a decrease in face amount at any time DECREASE IN FACE after the first policy year. Unless we agree otherwise, AMOUNT the decrease requested must at least equal $10,000 and the face amount remaining after the decrease must at least equal $25,000. All requests to decrease the face amount must be in writing and will be effective on the first Monthly Calculation Day following the date we approve the request. We reserve the right to require that this policy first be returned to us before the decrease is made. Upon a decrease in face amount, a partial surrender charge will be deducted from the policy value based on the amount of the decrease. The charge will equal the applicable surrender charge that would then apply to a full surrender multiplied by the result of dividing the decrease in face amount by the face amount of the policy before the decrease. We will send you a Revised Schedule Page reflecting the change. DEATH PROCEEDS Upon receipt of due proof at our VUL that the insured died while this policy is in force, we will pay the death proceeds of this policy. The death proceeds equal the death benefit on the date of death, with the following adjustments; (A) We will deduct any debt outstanding against this policy. (B) We will deduct any monthly deductions to and including the policy month of death not already made. (C) We will add any premiums received by us after the Monthly Calculation Day just prior to the date of death and on or before the date of death. -17- INTEREST ON DEATH We will pay interest on any death proceeds from the date PROCEEDS of the insured's death to the date of payment. The amount of interest will be the same as would be paid were the death proceeds left for that period of time to earn interest under Payment Option 2. THE BENEFICIARY Unless another payment option is elected as described in Part 8, any death proceeds that become payable will be paid in equal shares to such beneficiaries living at the death of the insured as stated in the application for this policy or as later changed. Payments will be made successively in the following order: a. Primary beneficiaries. b. Contingent beneficiaries, if any, provided beneficiary is living at the death of the insured. c. You or your executor or administrator, provided no primary or contingent beneficiary is living at the death of the insured. Unless otherwise stated the relationship of a beneficiary is the relationship to the insured. HOW TO CHANGE THE You may change the beneficiary under this policy by BENEFICIARY written notice signed by you and filed with us at our VUL. When we receive it, the change will relate back and take effect as of the date it was signed. However, the change will be subject to any payments made or actions taken by us before we received the notice at our VUL PART 8: PAYMENT OPTIONS WHO MAY ELECT The proceeds of this policy will be paid in one sum PAYMENT OPTIONS unless otherwise provided. As an alternative to payment in one sum as provided under Option 1, any surrender or death proceeds that become payable under an account may be applied under one or more of the alternative income payment options as described in this part or such other payment options as may then be currently available for the policy. Our consent is required for the election of an income payment option by a fiduciary or any entity other than a natural person. Our consent is also required for elections by any assigns or an owner other than the insured if the owner has been changed. You may designate or change one or more beneficiaries who will be the payee or payees under the option elected. You may only do this during the lifetime of the insured. For death proceeds, if no election is in effect when the death benefit becomes payable, the beneficiary may elect a payment option. Unless we agree otherwise, all payments under any option chosen will be made to the designated payee or to his executor or administrator. We may require proof of age of any payee or payees on whose life payments depend as well as proof of the continued survival of any such payee(s). -18- HOW TO ELECT A The election of an income payment option must be in a PAYMENT OPTION written form satisfactory to us. Payments may be made on an annual, semi-annual, quarterly, or monthly basis provided that each installment will at least equal $25. We also require that at least $ 1,000 be applied under any income option chosen. PAYMENT OPTIONS This section provides a brief description of the various payment options that are available. In Part 9 you will find tables illustrating the guaranteed installment amount provided by several of the options described in this section. The amount shown for Options 4, 5, and 7 are the minimum monthly payments for each $1,000 applied. The actual payments will be based on the monthly payment rates we are using when the first payment is due. They will not be less than shown in the tables. Option 1 - Payment in one sum Option 2 - Left to earn interest We pay interest during the payee's lifetime on the amount left with us under this option as a principal sum. We guarantee that at least one of the versions of this option will provide interest at a rate of at least 3% per year. Option 3 - Payments for a specific period Equal income installments are paid for a specified period of years whether the payee lives or dies. The first payment will be on the date of settlement. The Option 3 Table shows the guaranteed amount of each installment for monthly and annual payment frequencies. The table assumes an interest rate of 3% per year on the unpaid balance. The actual interest rate is guaranteed not to be less than this minimum rate. Option 4 - Life annuity with specified period certain Equal installments are paid until the later of: (A) The death of the payee. (B) The end of the period certain. The first payment will be on the date of settlement. The period certain must be chosen at the time this option is elected. The periods certain that may be chosen are as follows: (A) Ten years (B) Twenty years (C) Until the installments paid refund the amount applied under this option. If the payee is not living when the final payment falls due, that payment will be -19- limited to the amount which needs to be added to the payments already made to equal the amount applied under this option. If, for the age of the payee, a period certain is chosen that is shorter than another period certain paying the same installment amount, we will deem the longer period certain as having been elected. The life annuity provided under this option is calculated using an interest rate of 3-3/8%, except that any life annuity providing a period certain of twenty years or more is calculated using an interest rate of 3-1/4% Option 5 - Life Annuity Equal installments are paid only during the lifetime of the payee. The first payment will be on the date of settlement. Any life annuity as may be provided under this option is calculated using an interest rate of 3-1/2%. Option 6 - Payments of specified amount Equal installments of a specified amount, out of the principal sum and interest on that sum, are paid until the principal sum remaining is less than the amount of the installment. When that happens, the principal sum remaining with accrued interest will be paid as a final payment. The first payment will be on the date of settlement. The payments will include interest on the principal sum remaining at a rate guaranteed to at least equal 3% per year. This interest will be credited at the end of each year. If the amount of interest credited at the end of a year exceeds the income payments made in the last 12 months, that excess will be paid in one sum on the date credited. Option 7 - Joint survivorship annuity with 10-year period certain The first payment will be on the date of settlement. Equal income installments are paid until the latest of: (A) The end of the 10-year period certain. (B) The death of the insured. (C) The death of the other named annuitant. The other annuitant must be named at the time this option is elected and cannot later be changed That annuitant must have an adjusted age as defined in Part 9 of at least 40. The joint survivorship annuity provided under this option is calculated by using an interest rate of 3-3/8%. We may offer other payment options or alternative versions of the options listed in the above section. -20- ADDITIONAL INTEREST In addition to: (A) the interest of 3% per year guaranteed on the principal sum remaining with us under Options 2 or 6; and (B) the interest of 3% per year included in the installments payable under Option 3. We will pay or credit at the end of each year such additional interest as we may declare. PART 9: TABLES OF PAYMENT OPTION AMOUNTS The installment amounts shown in the tables that follow are shown for each $1,000 applied. Amounts for payment frequencies, periods or ages not shown will be furnished upon request. Under Options 4 and 5, the installment amount for younger ages than shown will be the same as for the first age shown and for older ages than shown it will be the same amount as for the last age shown. The term "age" as used in the tables refers to the adjusted age. Under Options 4 and 5, the adjusted age is defined as follows: (A) For surrender values, the age of the payee on the payee's birthday nearest to the policy anniversary nearest the date of surrender. (B) For death proceeds, the age of the payee on the payee's birthday nearest the effective date of the payment option elected. Under Option 7, the adjusted age is the age on the birthday nearest to the policy anniversary nearest the date of surrender. Option 3 - Payments for a specified period - ---------------------------------------------------------------------------------------------------------------------------------- Number of Years 5 6 7 8 9 10 11 12 13 14 15 - ---------------------------------------------------------------------------------------------------------------------------------- Annual Installments $211.99 179.22 155.80 138.31 124.69 113.82 104.93 97.54 91.29 85.95 81.33 Mo. Installments $17.91 15.14 13.16 11.68 10.53 9.61 8.86 8.24 7.71 7.26 6.87 - ---------------------------------------------------------------------------------------------------------------------------------- 16 17 18 19 20 25 30 - ---------------------------------------------------------------------------------------------------- Annual Installments 77.29 73.74 70.59 67.78 65.26 55.76 49.53 Mo. Installments 6.53 6.23 5.96 5.73 5.51 4.71 - ---------------------------------------------------------------------------------------------------- *Option 4 -Life annuity with specified period certain - ----------------------------------------------------------------------------------------------------------------------------------- Age Installment Refund 10 Yrs Certain 20 Yrs. Certain Age Installment Refund 10 Yrs Certain 20 Yrs. Certain of -------------------------------------------------------- of --------------------------------------------------- Payee Male Female Male Female Male Female Payee Male Female Male Female Male Female - ------------------------------------------------------------------------------------------------------------------------------------ 10 $3.08 $3.03 $3.08 $2.99 $3.00 $2.94 50 $4.36 $4.12 $4.50 $4.10 $4.28 $3.99 15 3.14 3.09 3.15 3.04 3.07 3.00 55 4.76 4.47 4.95 4.47 4.61 4.31 20 3.22 3.16 3.24 3.11 3.15 3.07 50 5.28 4.93 5.54 4.96 4.97 4.67 25 3.33 3.24 3.34 3.20 3.25 3.15 65 5.97 5.54 6.30 5.63 5.29 5.06 30 3.45 3.35 3.47 3.30 3.38 3.25 70 6.91 6.39 7.24 6.50 5.43 5.31 35 3.61 3.48 3.64 3.43 3.55 3.38 75 8.21 7.57 8.26 7.55 5.44 5.40 40 3.80 3.64 3.86 3.60 3.74 3.54 50 10.04 9.26 9.12 8.60 5.46 5.46 45 4.05 3.85 4.14 3.82 3.99 3.74 85 12.81 11.68 9.80 9.31 5.46 5.46 - ------------------------------------------------------------------------------------------------------------------------------------
-21- OPTION 5 - LIFE ANNUITY ----------------------------------------------------------------- Age of Age of Payee Male Female Payee Male Female ----------------------------------------------------------------- 10 3.17 3.12 50 4.62 4.28 15 3.24 3.18 55 5.12 4.89 20 3.32 3.25 60 5.79 5.24 25 3.42 3.34 65 6.75 6.04 30 3.56 3.44 70 8.15 7.22 35 3.73 3.58 75 10.26 9.03 40 3.95 3.75 80 13.54 11.88 45 4.24 3.98 85 18.72 16.54 ----------------------------------------------------------------- * OPTION 7 - JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD CERTAIN
- ------------------------------------------------------------------------------------------------- Age of Age of Insured Age of Age of Insured -------------------------- ------------------------------- Other Other Annuitant Male Annuitant Male -------------------------------------------------------------------------------- F 55 50 65 F 55 60 65 - ------------------------------------------------------------------------------------------------- 40 3.62 3.54 3.65 60 4.43 4.64 4.82 45 3.80 3.93 3.86 65 4.61 4.93 5.23 50 4.00 4.07 4.12 70 4.75 5.18 5.83 55 4.22 4.34 4.44 75 4.86 5.35 5.96 - ------------------------------------------------------------------------------------------------- Age of Age of Insured Age of Age of Insured -------------------------- ------------------------------- Other Other Annuitant Female Annuitant Female -------------------------------------------------------------------------------- F 55 50 65 F 55 60 65 - ------------------------------------------------------------------------------------------------- 40 3.72 3.77 3.80 60 4.34 4.64 4.93 45 3.89 3.97 4.03 65 4.44 4.82 5.23 50 4.08 4.19 4.31 70 4.50 4.95 5.48 55 4.22 4.43 4.61 75 4.54 5.03 5.65 - ------------------------------------------------------------------------------------------------- * Minimum monthly income for each $1,000 applied.
-22- Flexible Premium Variable Universal Life Insurance Policy The death benefit and other values provided under this policy are based on the rates of interest credited on any amounts allocated to the Guaranteed Interest Account and the investment experience of the sub-accounts within our Separate Account to which your premiums are allocated Thus, the death benefit and other values may increase or decrease in amount or duration. See Part 7 for a description of how the death benefit is determined. Eligible for Annual Dividends DEATH BENEFIT PROTECTION RIDER This rider is part of the policy to which it is attached, if it and its monthly charge are listed on the policy Schedule Pages. Except as stated in this rider, it is subject to all of the provisions contained in the policy. GENERAL RIDER DATE The date of this rider is as shown on the policy's Schedule Pages. MONTHLY RIDER While this rider is in effect (either Part A, or Part B CHARGE or both), a monthly rider charge will be included as part of the policy's monthly deduction described in Part 4 of the policy. The monthly charge is listed on the policy's Schedule Pages. RIDER TERMINATION Unless Part A or Part B has earlier terminated as DATE provided below, both Part A and Part B of this rider will terminate, on the earliest of the following events: 1. a surrender of the policy for its full cash surrender value; 2. our receipt of your written request to cancel this rider, which shall be effective as of the next Monthly Calculation Day; 3. termination of the policy. PART A: GUARANTEED DEATH BENEFIT While this Part A is in effect, on any Monthly Calculation Day that this policy would otherwise lapse due to failure of the policy's cash surrender value to cover the required monthly deduction, the policy will nonetheless continue in force during that policy month. The monthly deduction will continue to be deducted from the policy value to the extent possible, and we will waive any excess not covered. See the "Grace Period and Lapse" provision in Part 4 of the policy. CONDITIONS On every Monthly Calculation Day that this rider is in effect and provided this Part A has not otherwise terminated as provided under the Termination section below, we will test this policy to determine whether sufficient premiums have been paid or whether the policy's then cash surrender value is sufficiently large to continue Part A of this rider in effect Part A will remain in effect for that policy month if, on that Monthly Calculation Day, any of the following tests are satisfied. 1. Total Cumulative Premium Test. - The total premium paid by you, less the sum of all partial surrender amounts paid by us, at least equals the cumulative sum of all Monthly Guarantee Premiums applicable for each policy month since the Rider Date. 2. Annual Cumulative Premium Test - The total premium paid by you during the current policy year, less the sum of all partial surrender amounts paid by us during such period, at least equals the cumulative sum of all Monthly Guarantee Premiums applicable for each policy month since the beginning of that policy year. -1- 3. Tabular Account Value Test - The policy's cash surrender value on that Monthly Calculation Day is not less than the policy's Tabular Account Value on the policy anniversary coinciding with that Monthly Calculation Day, or the immediately preceding policy anniversary if the Monthly Calculation Day is not a policy anniversary. The policy's Tabular Account Value is shown on the policy's Schedule Pages. The initial Monthly Guarantee Premium applicable on the Rider Date is as shown on the policy's Schedule Pages, and may change for later months due to subsequent policy changes such as a change in face, a change in death benefit option, an extension of the Expiry Date for Part A of this rider, or the addition, change or termination of a rider. We will send you Revised Schedule Pages reflecting any such change. TERMINATION If on any Monthly Calculation Day none of the above conditions is satisfied, a grace period of 31 days will be allowed for the payment of an amount at least equal to three times the Monthly Guarantee Premium. Part A of this rider will continue in effect during such grace period. If such premium amount is not received by us by the end of the grace period, Part A of this rider will terminate as of the end of that grace period, and for all policy months thereafter be of no further force or effect Upon such termination of this Part A, the regular Grace Period and Lapse provisions described in Part 4 of the policy shall again apply. Unless earlier terminated, this Part A will terminate on the first of any of the following events to occur: 1. if and when any debt under this policy exceeds the policy's loan value; 2. if and when the face amount of this policy is reduced by request for decrease or by partial surrender to an amount less than $50,000; 3. upon the Expiry Date shown for Part A of this rider on the policy's Schedule Pages, unless extended under the Extension provision below. EXTENSION Provided Part A of this rider has not previously terminated, on the Expiry Date f or Part A of this rider you may request that we extend the Expiry Date for such extended period as we may agree. No extension will be permitted unless the policy's cash surrender value on that Expiry Date equals or exceeds the Tabular Account Value for such date as shown on the policy's Schedule Pages. We will send you Revised Schedule Pages reflecting any such change in Expiry Date. PART B: SPECIAL PARTIAL SURRENDER OPTION While this Part B is in effect, beginning on the later of the policy anniversary nearest the insured's age 60 or the 15th policy year, the "Partial Surrender" provision in Part 6 of the policy is amended to additionally allow the following special partial surrender option. A special partial surrender under this option will cause the policy value VR24 -2- to be reduced by only the partial surrender amount paid and the partial surrender charge. No partial surrender fee will apply. The face amount of the policy will not be reduced by the reduction in the policy value. CONDITIONS This special partial surrender option is only permitted for partial surrenders on a policy anniversary, and provided that the policy's then cash surrender value exceeds the Tabular Account Value for such date. In addition, the partial surrender amount paid may not exceed any of the following: 1. the excess of the policy's cash surrender value over the policy's then Tabular Account Value; 2. the greater of 5% of the policy's then cash surrender value or 2% of the policy's then Face Amount; 3. $25,000 TERMINATION This Part B will terminate if and when Part A terminates other than a termination of Part A due to attainment of its Expiry Date. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young Secretary Registrar VR24 -3- POLICY AMENDMENT CASH VALUE ACCUMULATION TEST This amendment is part of the policy to which it is attached. TOTAL PREMIUM LIMIT The provision entitled "Total Premium Limit" in Part 4 of the policy is replaced by the following: Our acceptance of any premium payment which would increase the Death Benefit by more than it would increase the Policy Value, shall be subject to evidence of insurability satisfactory to us. HOW DEATH BENEFIT The provision entitled "How Death Benefit is Determined" IS DETERMINED in Part 7 is replaced by the following: The death benefit equals the policy's face amount on the date of the insured's death or, if greater, the minimum death benefit on the date of death as defined below. The minimum death benefit is the policy value on the date of death of the insured multiplied by the applicable factor from the table attached, based on the insured's attained age, sex, and smoking status at the beginning of the policy year in which the death occurs. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young Secretary 1 VARIABLE LIFE POLICY EXCHANGE OPTION RIDER This rider is a part of the policy to which it is attached. Except as stated in this rider, it is subject to all of the provisions contained in the policy. DEFINITIONS The original policy is the policy to which this rider is attached. The cash value of the original policy is defined as the policy's Policy Value less any applicable surrender charge. A corresponding whole life policy is a policy that we offer as of the Date of Exchange which provides whole life insurance coverage with level premiums and a level face amount, based upon the issue age and risk classification of the insured under the original policy. The cash value of the corresponding whole life policy is defined as the sum of the guaranteed cash value of the base policy and the termination dividend that would then apply to that policy based on our then current dividend scale. POLICY EXCHANGE The owner may exchange this policy for a new policy on OPTION the life of the insured, without evidence of insurability, if this policy has been in force for at least 15 years and the insured has attained age 65. HOW TO EXERCISE To exercise this option, you must file an exchange THE OPTION application at our Main Administrative Office. It must be signed by you. We must also receive: a. The release of any lien against or assignment of the original policy. However, you may instead submit written approval by the lienholders or assignees of the exchange of policies in a form satisfactory to us with such other documents as we may require. b. The surrender and release of the original policy. c. Payment of any amounts due to us for the exchange as described in the Exchange Adjustments section below. Unless otherwise provided in the exchange application, the owner and the beneficiary of the new policy will be the same as under the original policy. If the owner of the new policy is different, we will require evidence of insurable interest in the life of the insured under that new policy. The application for the original policy shall be considered part of the application for the new policy. The new policy will be issued on the basis of the exchange application, the application for the original policy and any evidence of insurability submitted for issuance of the original policy with respect to the life insured under that new policy. The Date of Exchange will be the policy anniversary following the later of: a. our receipt of the exchange application; b. payment of the Exchange Adjustments for the new policy; and c. our approval of insurable interest, if applicable. The new policy will take effect on the Date of Exchange. When the new policy takes effect, the original policy shall terminate. 1 THE NEW POLICY The Policy Date of the new policy will be the same as the Policy Date of the original policy. The issue age of the insured under the new policy will be as shown on the Schedule Pages of the original policy. The new policy will be written on any plan of whole life insurance with a level face amount and level premiums that we make available as of the Date of Exchange. The premium classification and any exclusions applicable to the new policy will be determined in accordance with our rules and practices in effect on the original policy's Policy Date. The face amount of the new policy will be dependent upon the relationship of the cash value of a corresponding whole life policy to the cash value of the original Variable Universal Life policy, as of the Date of Exchange. A. If the cash value of the corresponding whole life policy, for the same face amount as the original policy, would be greater than or equal to the cash value of the original policy, you may elect the face amount of the new policy from the following options: 1. Same Face Amount - A face amount which is the same as the face amount of the original policy. 2. Same Cash Value - A face amount such that the cash value of the new policy equals the cash value of the original policy as of the Date of Exchange. 3. Same Net Amount at Risk - A face amount such that the excess of the face amount over the corresponding cash value on the new policy is equal to the excess of the death benefit over the cash value of the original policy as of the Date of Exchange. B. If the cash value of the corresponding whole life policy, for the same face amount as the original policy, is less than the cash value of the original policy, then the face amount of the new policy would be determined based upon the same net amount at risk. Thus, the face amount of the new policy would be such that the excess of the face amount over the cash value of the new policy would be equal to the excess of the death benefit over the cash value of the original policy as of the Date of Exchange. If, however, you elect to exchange this policy within 30 days of the date for which this option first becomes available to you, then you may exchange to a new policy such that the face amount on the new policy is the same as that of the original policy. If the death benefit in effect under the original policy as of the Date of Exchange is equal to the "minimum death benefit" as defined in that policy, then the face amount of the new policy may be increased, if so desired, without evidence of insurability, by the lesser of 15% of the face amount of the original policy or $100,000. 2 Any rider contained in the original policy or additional riders may be included in the new policy only if we consent. The new policy will conform to all of the requirements of the jurisdiction in which it is issued regardless of any terms of this rider providing to the contrary. The two year period provided for in the Incontestability and Suicide provisions of the new policy will be considered to have begun on the Policy Date of the original policy. However, new benefits not in the original policy, or an increase in benefits would be subject to a new suicide or contestability period. EXCHANGE The exchange is subject to the following adjustments: ADJUSTMENTS 1. If the cash value under the new policy is less than that under the original policy as of the Date of Exchange, we will pay you the difference in the cash values. 2. If the cash value under the new policy is greater than that under the original policy as of the Date of Exchange, you must pay us 105% of the excess of the cash value of the new policy over the cash value of the original policy. 3. The exchange will also be subject to our receipt of repayment of the amount of any policy debt under the original policy on the Date of Exchange. RIDER CHARGES There are no monthly charges for this rider. NEW POLICY PREMIUM The rates for the new policy will be based on our published rates in effect on the Date of Exchange for the insured's age and risk classification as of the Policy Date of the original policy. Premiums for the new policy will be first due on the Date of Exchange, and thereafter as specified in the new policy. TERMINATION OF This rider will terminate on the earlier of: THIS RIDER a. termination of the original policy for any reason, including, but not limited to, lapse, surrender, exchange of the policy, or death of the insured; and b. your written request to cancel this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young Secretary 3 TEMPORARY MONEY MARKET ALLOCATION AMENDMENT THIS AMENDMENT IS ISSUED AS PART OF THE POLICY TO WHICH IT IS ATTACHED IF IT IS LISTED ON THE SCHEDULE PAGE OF THE POLICY OR IN AN ENDORSEMENT AFTER THAT PAGE. YOU SHOULD THEREFORE REVIEW THE POLICY'S SCHEDULE PAGE FOR APPLICABILITY. REFUND RIGHT AND The refund right stated in the Right to Cancel provision TEMPORARY MONEY on the cover page of the policy is amended to provide for MARKET SUB-ACCOUNT a full refund of any premium paid less any unpaid loans ALLOCATION and loan interest and less any partial surrender amounts paid, if the returned policy is received by us at our Variable and Universal Life Division prior to termination of the Right to Cancel Period. PREMIUM ALLOCATION The provision in Part 4, entitled "Premium Allocation to Sub-accounts," is amended to provide that the issue premium will temporarily be applied on its Payment Date entirely to the Money Market sub-account until termination of the Right to Cancel period stated on the cover page of the policy. UPON TERMINATION OF SUCH PERIOD WITHOUT PRIOR RECEIPT AT OUR VARIABLE AND UNIVERSAL LIFE DIVISION OF THE RETURNED POLICY FOR A REFUND, THE THEN VALUE OF THIS POLICY'S SHARE IN THE MONEY MARKET SUB-ACCOUNT WILL AUTOMATICALLY BE REALLOCATED BASED ON THE PREMIUM ALLOCATION SCHEDULE ELECTED IN THE APPLICATION OR AS LATER CHANGED BY YOU. The resultant share of this policy in the value of each of the respective sub-accounts on the date of transfer shall be in the same percentages of the then total policy value as the premium allocation percentages elected in the application or as later changed by you. MONTHLY DEDUCTION The provision in Part 4, entitled "Monthly Deduction," is amended to provide that until termination of the Right to Cancel period stated on the cover page of the policy, the monthly deduction will be taken entirely from the Money Market sub-account. TRANSFERS The provision in Part 6, entitled "Transfers," is amended to provide that no transfers may be made until termination of the Right to Cancel period stated on the cover page. LOAN INTEREST The provision in Part 6, entitled "Loan Interest" is amended to provide that, until termination of the Right to Cancel period, any debt repayments will temporarily be applied to the Money Market sub-account and reallocated in the same manner as provided above for the issue premium. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ Robert W. Fiondella Secretary Chief Executive Officer /s/ S. Gilmore Registrar ACCIDENTAL DEATH BENEFIT RIDER This rider is part of the policy to which it is attached if it and its premium are listed on the Schedule Page of the policy or in an endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as otherwise stated below, this rider is subject to all of the provisions contained in the policy. Coverage under this rider will begin in effect on the Rider Date shown for this rider on the policy's Schedule Page provided: a. for a Rider Date that occurs during the first policy year, the policy value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge); b. for a Rider Date that occurs during the second policy year and any succeeding policy years, the policy cash surrender value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge). RIDER BENEFIT Subject to the terms stated in this rider we will add the DESCRIPTION amount stated for this rider on the policy's Schedule Page to the death proceeds payable under the policy if we receive satisfactory proof that: a. the insured's death resulted, directly and independently of all other causes, from an accidental bodily injury; b. such injury was effected solely through external and violent causes; c. such injury was evidenced by a visible contusion or wound on the exterior of the body, except for drowning or internal injury revealed by autopsy; and d. the death occurred: 1. after the date this rider took effect; 2. before this rider terminates; 3. while the policy is in force; 4. no later than 90 days after the date of injury; and 5. before the policy anniversary nearest the insured's 75th birthday. EXCLUSIONS The rider benefit will not be payable if the insured's death resulted directly or indirectly from, or was contributed to by, any one or more of the factors listed below: a. Physical or mental infirmity or disease. b. Medical or surgical treatment. c. Suicide while sane or insane. d. Bodily injury received as the result of declared or undeclared war. 1 e. Bodily injury received as the result of international police action with force of arms by: 1. any country; 2. the United Nations; or 3. any other assembly of nations. f. Travel, flight, or descent from or with any kind of aircraft: 1. used for testing, experimental, military or naval purposes; 2. used for the purpose of the insured's descent from such aircraft while in flight, including descent by parachute; or 3. used for any purpose if the insured was acting as or training to become a pilot, co-pilot, crew member, or mechanic, or was acting in any capacity other than solely as a passenger. A hang glider is an aircraft for the purpose of this rider. g. The commission by the insured or attempt to commit an assault or crime. h. Bacterial infection unless the infection occurs simultaneously with and through an accidental cut or wound. i. The administration, inhalation, or taking of any drug, poison, gas or fumes, whether voluntary or otherwise, unless administered on and in accordance with the advice of the insured's physician. RIGHT TO REQUIRE We have the right and must be given the opportunity to AUTOPSY examine the body and make an autopsy, unless it is forbidden by law. THE PAYEE Any benefit that becomes payable under this rider will be paid to the same payee and in the same manner as provided in the policy for the death proceeds. MONTHLY RIDER The monthly charges for coverage under this rider are CHARGES included in and part of the monthly deduction for the policy. They are deducted on each Monthly Calculation Day until coverage under this rider terminates. TERMINATION OF Coverage under this rider will terminate on the earliest of: COVERAGE UNDER THIS RIDER a. full surrender of the policy; b. lapse of the policy; c. the policy anniversary nearest the insured's 75th birthday; d. our receipt on any Monthly Calculation Day of your written request along with the policy, to cancel coverage under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 2 DISABILITY PAYMENT OF SPECIFIED ANNUAL PREMIUM AMOUNT RIDER This rider is part of the policy to which it is attached if it and its premium are listed on the Schedule Page of the policy or in an endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as otherwise stated below this rider is subject to all of the provisions contained in the policy. Coverage under this rider will begin in effect on the Rider Date shown for this rider on the policy's Schedule Page provided: a. for a Rider Date that occurs during the first policy year, the policy value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge); b. for a Rider date that occurs during the second policy year and any succeeding policy years, the policy cash surrender value on the Rider Date at least equals the full monthly deduction for the policy (including the rider charge). DEFINITION OF Incapacity of the insured as a result of bodily injury or TOTAL DISABILITY disease to engage for remuneration or profit in any occupation for which the insured is or becomes qualified: a. by training; b. by education; or c. by experience. Total disability is also defined to include the insured's entire and irrecoverable loss through bodily injury or disease of: a. the sight of both eyes; b. the use of both hands or both feet; or c. the use of one hand and one foot. SPECIFIED ANNUAL The specified annual premium amount as shown with respect PREMIUM AMOUNT to this rider on the policy's Schedule Page is the BENEFITS maximum amount payable under this rider during a policy year. The specified frequency premium amount on any premium due date equals the specified annual premium amount divided by the number of premiums due during a policy year based on the premium frequency in effect for the policy on that premium due date. Subject to the terms of this rider we will credit the policy with the specified frequency premium amount on each premium due date during the existence of any total disability of at least 6 months' continuous duration, but prior to the later of: a. the policy anniversary nearest the insured's 65th birthday; or b. one year from the date the total disability commenced if such total disability commenced within the one-year period prior to the policy anniversary nearest the insured's 65th birthday. 1 We will continue to credit the specified frequency premium amount as described above on each premium due date on or after the policy anniversary nearest the insured's 65th birthday if benefits under this rider have been credited or paid continuously during the entire 5- year period just prior to that date. In that event any such specified frequency premium amounts will continue to be credited regardless of whether total disability continues after that anniversary. To the extent that the specified frequency premium amounts to be credited exceed premium amounts allowed to be paid under the policy due to the total premium limit, such excess that would otherwise be credited will be paid in cash to the owner of the policy. The benefits and values under the policy will not be reduced as a result of any specified frequency premium amounts credited or paid under this rider. LIMITATIONS AND We will not credit or pay any specified frequency premium CONDITIONS amounts for premium due dates more than 1 year prior to our receipt of written notice of claim at our Main Administrative Office. Nor will any specified frequency premium amounts be credited or paid under this rider unless the following conditions are satisfied: 1. We must receive at our Main Administrative Office and during the lifetime of the insured written notice of claim and due proof that a. the insured is totally disabled at the time the proof is furnished to us; and b. the insured has been so totally disabled for the entire 6-month period immediately preceding that date. Any such proof will be subject to the requirements stated in the Required Proof of Disability section. 2. The total disability must not have directly resulted from either: a. injuries willfully and intentionally self- inflicted; or b. service by the insured in the military, naval, or air force of any country at war. By "war" we mean any declared war, undeclared war, or international police action with force of arms by any country, the United Nations, or any other assembly of nations. 3. The total disability must have occurred: a. after this rider's Rider Date; b. after coverage under this rider begins; c. before coverage under this rider terminates; and d. while the policy is in force. 4. If the total disability occurs during the grace period following the due date of a premium required to keep the policy in force, that premium must first be paid to us. If we permit the premium to be paid after the grace period, the payment must include interest on such amount at a rate of 6% compounded annually. 2 5. If coverage under this rider terminates or the policy lapses or becomes void by its terms, we must receive written notice of claim no later than 1 year from that date. This condition will not apply if such notice was given as soon as reasonably possible. REQUIRED PROOF OF In addition to requiring proof of total disability DISABILITY AND ITS before granting any benefits under this rider, we have CONTINUANCE the right to require proof from time to time that the total disability continues. As part of any such proof, we shall have the right to have a physician of our choosing conduct such physical exams of the insured as we may reasonably require. After benefits under this rider have been received for a period of disability of more than 2 years, we will not require such exams more frequently than once a year. Should there be a failure to furnish such proof or a refusal to permit such exams, or should the insured cease to be totally disabled before the policy anniversary nearest the insured's 65th birthday: a. further specified frequency premium amounts will not be credited or paid; and b. any specified frequency premium amounts already credited or paid after that date will be charged as loans against the policy unless repaid to us. THE PAYEE OF ANY If the insured is the owner of the policy and dies before CASH PAYMENTS receiving payment of any amount that becomes due, such payment will be made to the same beneficiary and in the same manner as provided under the policy for payment of death benefits. We may also do this if the insured is the owner of the policy and we have evidence satisfactory to us that the insured is mentally incompetent. Upon such payment we shall no longer be liable for payment of such amount. LIMIT ON OUR RIGHT We cannot contest the validity of this rider except for TO CONTEST THIS failure to pay premiums after it has been in force during RIDER the lifetime of the insured for 2 years from the Rider Date. MONTHLY RIDER The monthly charge for coverage under this rider is CHARGES included in and part of the monthly deduction for the policy. It is deducted on each Monthly Calculation Day until coverage under this rider terminates. TERMINATION OF Coverage under this rider will terminate on the earliest COVERAGE UNDER of: THIS RIDER a. full surrender of the policy; b. lapse of the policy; c. death of the insured; d. the policy anniversary nearest the insured's 65th birthday, unless continued as provided under the Specified Annual Premium Amount Benefits section; or e. our receipt on any Monthly Calculation Day of your written request, along with the policy, to cancel coverage under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 3 ADDITIONAL PURCHASE OPTION RIDER This rider is part of the policy to which it is attached, if it and its monthly charge are listed in the Rider Schedule on the Schedule Page of the policy or in an Endorsement after that page. Except as stated in this rider, it is subject to all of the provisions contained in the policy. RIDER DATE OF ISSUE The date for this rider on the Schedule Page under the section entitled Riders and Rider Benefits. MAXIMUM AMOUNT OF The amount shown for this Rider on the Schedule Page ADDITIONAL under the section entitled Riders and Rider Benefits. INSURANCE THAT MAY BE PURCHASED UPON EXERCISE OF EACH PURCHASE OPTION DEFINITIONS REGULAR OPTION Each policy anniversary nearest each of these birthdays DATES of the insured: the 25th, 28th, 31st, 34th, 37th and 40th birthdays. ADVANCE OPTION The date of any of the following: DATE a. marriage of the insured; b. live birth of a child of the insured; c. legal adoption by the insured of a child under 18 years of age. DISABILITY RIDER Disability Payment of Specified Annual Premium Amount Rider. THE PURCHASE OPTION While this rider is in effect and subject to its terms, on each Regular Option Date, you have the option to purchase a new policy on the life of the insured without additional evidence of insurability. The amount of insurance that you may purchase upon exercise of each option is limited to the Maximum Amount stated above. Provided it has not already been exercised, the purchase option available on the next Regular Option Date will become available on an Advance Option Date and may be exercised in advance. Any purchase option exercised in advance is no longer available on the next Regular Option Date. HOW TO EXERCISE THE To exercise the purchase option, you must file a written PURCHASE OPTION application with us and pay the first minimum premium for such additional insurance. The application and premium must be received by us at our Main Administrative Office: a. while the insured is alive; and b. no later than 60 days after the option becomes available. After each Advance Option Date, coverage equal to the Maximum Amount will automatically be provided under this rider until the earlier of: a. the end of the 60-day period following the Advance Option Date; or b. the date of issue of the new policy. 1 THE NEW POLICY Premiums under the new policy will be at our then current rates for the same risk classification as this policy. The new policy must be any one of the following types of insurance and currently in use by us: a. variable life b. universal life c. whole life. ORDINARY LIFE The new insurance will be subject to our rules then in effect as to age, minimum amount and plan of insurance. It will be subject to any limitations of risk contained in your policy. It will not, however, be subject to any assignments or liens against this policy. The limit on our right to contest the validity of the new policy will operate from the Rider Date of Issue. If this policy contains a Disability Rider and the insured is not totally disabled as defined in that rider when the purchase option is exercised, the new policy may contain that rider. If this policy contains a Disability Rider and the insured is totally disabled under the rider when the purchase option is exercised, the new policy will contain that rider. In that case, we will waive any requirement of that rider that the disability occur after the new policy took effect. Except to the extent as provided above, our consent will be required for the new policy to include any other disability, accidental death or any other benefits. MONTHLY RIDER The monthly charges for coverage under this rider are CHARGES included in and are part of the monthly deduction for the policy. They are deducted on each Monthly Calculation Day until coverage under this rider terminates. The amount of the monthly charge for this rider is shown on the schedule page of the policy. TERMINATION OF Subject to your right to exercise a purchase option THIS RIDER within 60 days after an option becomes available, this rider will terminate on the earliest of: a. the death of the insured; b. lapse or surrender of this policy; c. the anniversary of this policy nearest the insured's 40th birthday; d. the exercise of a purchase option on an Advance Option Date occurring within the 3-year period prior to the anniversary of your policy nearest the insured's 40th birthday; e. our receipt of a written request to cancel this rider; such cancellation will be effective on the next Monthly Calculation Date. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 2 ACCELERATED BENEFIT RIDER This rider is part of the policy to which it is attached, effective as of the Rider Date, if it is listed on the policy's Schedule Page or in an Endorsement after that page. You should therefore review the policy's Schedule Page for applicability. Except as stated in this rider, it is subject to all of the provisions contained in the policy. THE BENEFIT PAID UNDER THIS RIDER MAY BE TAXABLE. YOU SHOULD CONSULT YOUR PERSONAL TAX ADVISOR REGARDING POSSIBLE TAX CONSEQUENCES. RIDER DATE SAME AS POLICY DATE MAXIMUM $300.00 ADMINISTRATIVE CHARGE MAXIMUM PROPORTION 75% ALLOWABLE MAXIMUM ACCELERATED $250,000 BENEFIT MINIMUM REMAINING $10,000 FACE AMOUNT DEFINITIONS INSURED is the person covered under the basic policy. YOU (YOUR) is the owner of the policy to which this rider is attached. WE (OUR, US) refers to Phoenix Home Life Mutual Insurance Company, or its subsidiaries. ELIGIBLE AMOUNT is the amount of insurance under the policy that is eligible for accelerated payment. It is equal to the death benefit of the basic policy at the time of claim plus any term insurance amounts in force provided by rider on the life of the insured, which provides coverage renewable to the insured's attained age 95 or beyond, but exclusive of any other supplemental rider death benefits. PROPORTION is the percentage of the Eligible Amount that will be accelerated under this rider. The Proportion is chosen by you at the time of election of an accelerated benefit, subject to the following limitations. The Proportion elected: 1. can be no more than the Maximum Proportion Allowable as specified in this rider; 2. cannot result in a remaining death benefit below the minimum as specified in this rider; and 3. cannot result in a Requested Benefit that exceeds the Maximum Accelerated Benefit as specified in this rider. 1 This rider terminates upon payment of the accelerated benefit. MAXIMUM ACCELERATED BENEFIT is the amount shown on the first page of this rider. This Maximum Accelerated Benefit applies, in aggregate, to all policies issued on the insured by us. REQUESTED BENEFIT is the Proportion multiplied by the Eligible Amount. TERMINAL ILLNESS is an illness or condition that is expected to result in the insured's death within six months based on evidence satisfactory to us as defined under the Proof of Terminal Illness section below. RIDER DESCRIPTION This rider allows you to elect an accelerated benefit upon terminal illness of the insured. The election must be made by a written request signed by you. We must also receive proof satisfactory to us of the insured's terminal illness as described in the Proof of Terminal Illness section below. The amount of the accelerated benefit will be adjusted as described under the Payment Made to You section below. The resulting payment will be made in a lump sum. Policy values, cash surrender values, loan values and the death benefit as specified in the policy to which this rider is attached will be reduced if you receive an accelerated benefit. There is no premium charge for this rider. PAYMENT MADE TO YOU The amount of the payment made to you will be determined by discounting the Requested Benefit at our then current discounting rate for a period of twelve (12) months, to reflect the early payment of insurance proceeds under the policy. Our discounting rate will be subject to the higher of: 1. 5%; or 2. the Published Monthly Average for the calendar month ending two months before the policy anniversary on or immediately preceding the date that we receive your written request for payment under this rider. The Published Monthly Average will be: a. The Corporate Bond Yield Average -- Monthly Average Corporates as published by Moody's Investors Service, Inc. or any successor to that Service; or b. If that Monthly Average is no longer published, a substantially similar average, established by regulation for policy loan rates issued by the insurance supervisory official of the state where the rider was delivered will be applicable. If the discounting rate computed for a policy year is no more than 1/2% higher than the rate in effect for the previous policy year, then we will maintain such prior year's rate. If the discounting rate computed for a policy year is no more than 1/2% lower than the rate in effect for the previous policy year, then we may, at our discretion, maintain such prior year's rate. If the cash surrender value multiplied by the Proportion exceeds the discounted value, then the discounted Requested Benefit will be increased to equal such greater amount. 2 The discounted Requested Benefit is reduced by the Proportion of any policy debt, including any unpaid loan interest, and the Proportion of any other amounts due us from you. This result is then reduced by our then current Administrative Charge for benefits under this type of rider, not to exceed the maximum as specified in this rider. The amount that remains is the payment that will be made to you. In the event that the insured dies after the written request but before we make the payment, and we receive written notice at our Main Administrative Office during this period of this event, the request will be considered void, and no payment will be made under this rider. EFFECT ON CONTRACT The following values will be reduced by the Proportion at the time the payment is made to you: 1. the future planned premium payable on the basic policy; 2. the face amount of the policy at the time of claim; 3. the cash value (policy value); 4. any remaining surrender charge; 5. the cash surrender value; and 6. any policy debt including any unpaid loan interest. If this rider is attached to a variable life insurance policy that permits fund investment in various subaccounts of our Variable Universal Life Separate Account, the reduction in policy value will be achieved through a proportionate reduction in this policy's share in the value of each subaccount based on the allocation you request at the time of your accelerated benefit request. If no allocation request is made, the assignment to each subaccount will be made in the same manner as provided for monthly deductions. Future values under the policy will be determined in a manner consistent with that under the original policy, as adjusted to reflect the above reductions. We will mail to you a new policy Schedule Page reflecting any payment made under this rider. PROOF OF TERMINAL A licensed physician, who is not yourself or a member of ILLNESS your family, must provide us with evidence satisfactory to us of the insured's terminal illness. We reserve the right to obtain a second medical opinion from a physician of our choosing at our expense. CONDITIONS Payment under this rider is subject to the following conditions: 1. The policy must not have lapsed. 2. We will require the consent of any assignees and irrevocable beneficiaries to any request for payment under this rider. 3. No payments will be made under this rider to satisfy the claims, demands, or obligations of any creditor, trustee in bankruptcy or governmental agency, or arising under any court order directed against you, to the extent that we have written notice thereof. 3 RIDER TERMINATION This rider will terminate on the earliest of: 1. Lapse or surrender of this policy to which it is attached. 2. Our receipt of your written request to terminate this rider; or 3. Payment of any benefit under this rider. Phoenix Home Life Mutual Insurance Company /s/ Dona D. Young /s/ S. Gilmore Secretary Registrar 4 EX-99.B1A(6)(A) 5 CHARTER EXHIBIT 1A(6)(a) Charter of Phoenix Home Life EXHIBIT A CHARTER of PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Corporate Name ARTICLE I. The name of the Corporation shall hereafter be "Phoenix Home Life Mutual Insurance Company". The Corporation shall be a continuation of the corporate existence of Phoenix Mutual Life Insurance Company (originally incorporated under the name American Temperance Life Insurance Company) by the Connecticut General Assembly at its 1851 session and, immediately prior hereto, redomesticated as a New York corporation pursuant to Article 71 of the Insurance Law of the State of New York following its merger pursuant to Article 71 of the Insurance Law of the State of New York with Home Life Insurance Company. Principal Office ARTICLE II. The Corporation shall have a principal office in East Greenbush, County of Rensselaer in the State of New York. Business of the Corporation ARTICLE III. The business of the Corporation shall be life insurance, endowments, annuities, accident insurance, health insurance and any other business or type of business as may be authorized by and under Paragraphs 1, 2 and 3 of Section 1113(a) of the Insurance Law of the State of New York; and the Corporation is specifically empowered to accept and to cede reinsurance of any such risks or hazards. The Corporation may undertake such other reinsurance business as may be permitted to it by Section 1114 of said Insurance Law and such other kinds of business as permitted under Section 4205 of said Insurance Law. The Corporation shall also have the power and authority to provide general investment advisory and financial management services and to conduct and carry on any other kind or kinds of business permitted to be conducted by mutual life insurance companies under the Insurance Law of the State of New York, and to invest in affiliated entities to the extent permitted by said Insurance Law, and shall have the right and authority to undertake and provide such additional kinds of reinsurance and other coverages as may hereafter be permitted by said Insurance Law, as well as the general rights, powers and privileges now or hereafter granted by the Insurance Law of the State of New York or any other law applicable to mutual life insurance companies having power to do the kinds of business herein above referred to and any and all other rights, powers and privileges of the Corporation as the same may now or hereafter be declared by applicable law. - 1 - The Corporation may exercise such powers outside of New York to the extent permitted by the laws of the particular jurisdiction. Policies or other contracts may be issued stipulated to be participating or non-participating; and they may be with or without seal. Mutual Company ARTICLE IV. The Corporation shall have no capital stock but shall be a mutual company. ARTICLE V. The care and direction of the affairs, business and property of the Corporation shall be vested in a Board of Directors consisting of not fewer than thirteen (13) nor more than thirty (30) Directors, as may be determined from time to time by the Board of Directors. Each Director shall be at least eighteen (18) years of age and at all times the majority shall be citizens and residents of the United States. Not fewer than three (3) Directors shall be residents of the State of New York. The Board of Directors will have the power to make from time to time such bylaws, rules and regulations for the transaction of the business of the Corporation and the conduct of its affairs, not inconsistent with this Charter and the laws of the State of New York, as may be deemed expedient, and to amend or repeal such bylaws, rules and regulations. Election of Directors ARTICLE VI. The Directors of the Corporation shall be elected by those persons entitled to vote as prescribed by law, voting by ballot alone and not by proxy. The Officers of the Corporation shall be elected or appointed by the Board of Directors. An annual election of Directors shall be held on the third Tuesday of February each year at the home office of the Corporation in the manner prescribed by law. The Directors shall be divided into three (3) classes, as nearly equal in number as may be, so that each class shall be elected for terms of three (3) years and the terms of office of only one (1) class shall expire at each annual election of Directors, and as the respective terms of office of Directors shall expire, their successors shall be elected for terms of three (3) years, except as otherwise contemplated by this Article VI. Any newly created Directorships or any decrease in Directorships shall be so apportioned by the Board of Directors among the classes of Directors as to make all classes as nearly equal number as may be. Whenever the number of Directors is increased by the Board of Directors and any vacancies resulting from the newly created Directorships are filled by the Board of Directors, there shall not be any classification of the additional Directors until the next annual election of Directors. Vacancies on the Board of Directors, including vacancies resulting from any increase in the authorized number of Directors, may be filled by the Board of Directors. Perpetual Duration ARTICLE VII. The duration of the Corporation shall be perpetual. - 2 - ARTICLE VIII. No Director shall be personally liable to the Corporation or any of its policyholders 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 the Director establishes that the Director personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that the Director's acts or omissions were in bad faith or involved intentional misconduct or were acts or omissions (a) which the Director knew or reasonably should have known violated the Insurance Law of the State of New York, or (b) which 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) which constituted a knowing violation of any other law; or (ii) the liability of a Director for any act or omission prior to the adoption of this Article VIII. - 3 - EX-99.B1A(6)(B) 6 CHARTER EXHIBIT 1A(6)(b) By-Laws of Phoenix Home Life EXHIBIT B BYLAWS of PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY ARTICLE I Meetings of the Company Annual Meeting; Special Meetings Section 1.1 The Annual Meeting of the Company for the transaction of such business as the Board of Directors shall from time to time prescribe, shall be held on the fourth Monday of February of each year and at such time and place as the Board of Directors by resolution adopted at least sixty (60) days prior to such Annual Meeting shall specify. Special meetings may be called at any time at the direction of the Chief Executive Officer and shall be called at any time in accordance with the vote of the Directors, or at the written request of any six (6) of them. Statements of Operations and Conditions Section 1.2 At each Annual Meeting there shall be presented to the policyholders of the Company a report of the operations of the Company for the preceding calendar year and a statement of its financial condition. Notice of Meetings Section 1.3 Notice of the Annual Meeting or any special meeting shall be given to policyholders of the Company by publication in the same manner as prescribed by the New York Insurance Law for notice of the election of Directors or by such other means as the Board may from time to time prescribe. Quorum Section 1.4 At any meeting of the Company those policyholders present in person shall constitute a quorum. Chairman and Secretary of Meetings Section 1.5 The person designated pursuant to Section 2.10 hereof to preside at meetings of the Board of Directors shall act as Chairman of the meeting. The Secretary of the Board of Directors, unless he or she is absent or elects not to serve, shall act as the secretary of the meeting. Unless otherwise voted, the order of business at the meeting shall be as prescribed by the Chief Executive Officer or by such other person as may be presiding. ARTICLE II Board of Directors Number, Quorum and Adjournments Section 2.1 The authorized number of Directors of the Company shall be such number, not less than thirteen (13) nor more than thirty (30), as may be determined by a majority - 1- of the authorized number of Directors immediately prior to any such determination. No decrease in the authorized number of Directors shall shorten the term of any incumbent Director. At least two (2) of the principal Officers of the Company shall be Directors but the number of officers and salaried employees who are Directors shall at all time be less than a quorum of the Board of Directors. A majority of the authorized number of Directors, at least one (1) of whom shall be a person as described in Section 1202(b)(1) of the New York Insurance Law (hereinafter referred to in these Bylaws as "Independent Director(s)"), shall constitute a quorum for the transaction of business. Except as otherwise provided by law or these Bylaws, 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. A majority of the Directors present, whether or not a quorum shall be present, may adjourn any meeting. Notice of the time and place of an adjourned meeting of the Board shall be given if and as determined by a majority of the Directors present at the time of the adjournment. Regular Board Meetings Section 2.2 No fewer than four (4) regular meetings of the Board of Directors shall be held each year at such place within the State of New York, on such dates and at such hours as the Board may from time to time determine. Additional regular meetings of the Board for the transaction of any business shall be held at such places and on such dates and at such hours as the Board may from time to time determine. Provided that no fewer than four (4) regular meetings of the Board shall have been or will be held in the State of New York during any calendar year, one (1) of such additional regular meetings during such calendar year may be held elsewhere within the United States or Canada in a jurisdiction in which the Company is licensed to do business. Except as otherwise required by law or these Bylaws, notice of regular meetings need not be given. Special Board Meetings Waiver of Notice Section 2.3 Special meetings of the Board shall be held whenever called by the Chief Executive Officer or by any three (3) Directors. Notice of each such special meeting shall be mailed to each Director at such Director's residence or usual place of business or other address filed with the Secretary to the Board for such purpose, or shall be sent to such Director by any form of telecommunication, or be delivered or given to such Director personally or by telephone, not later than the second day preceding the day on which such meeting is to be held. Notice of any meeting of the Board need not, however, 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 thereto or at its commencement, the lack of notice. Every such notice shall state the time and place but, except as otherwise required by law or these Bylaws, need not state the purpose of the meeting. Election of Directors Section 2.4 The annual election of Directors shall be held on the third Tuesday of February of each year. The Directors of the Company shall be elected by policyholders as prescribed by law. Qualification of Directors and Term Section 2.5 No person may stand for election or re-election or be appointed as a Director if during the three (3) years following election he or she would attain the age of seventy - 2 - (70) years. All Directors shall serve through the third Annual Meeting of the Company following their election, unless elected or appointed for a lesser term, and until their successors are elected and qualified, provided, however, that with the exception of the Chief Executive Officer, the term of a Director who is an Officer of the Company shall expire on the date that such Director retires or resigns as an Officer of the Company. The foregoing notwithstanding, to the extent any Director fails to conduct himself or herself in accordance with such written standards as may be established from time to time by the Board of Directors, then such Director may be removed through affirmative vote of at least two-thirds of the remaining Directors. Organization Meeting of Directors Section 2.6 As soon as practicable following the Annual Meeting of the Company, the Directors shall commence a regular meeting of the Board which shall be the Organization Meeting of the Board. At such meeting the Board shall elect Officers and take such other actions as they deem appropriate, including a review of the annual report, appointment of auditor, and appointment of Directors to Board committees. Participation by Telephone Section 2.7 Any one (1) or more members of the Board or any committee thereof may participate in any meeting of the Board or such committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting of the Board or such committee for quorum and voting purposes. Action Without a Board Meeting Section 2.8 If in the opinion of the Chief Executive Officer circumstances exist which require the immediate taking of any action which is required or permitted to be taken by the Board or any committee thereof, such action may be taken without a meeting if all members of the Board or such committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or such committee shall be filed with the minutes of the proceedings of the Board or committee. Board Vacancies Section 2.9 Any vacancy in the Board, including any vacancy resulting from an increase in the authorized number of Directors, may be filled, until the next annual election of Directors, at any regular or special meeting of the Board by the affirmative vote of a majority of the remaining Directors. Chairman of the Board; Vice Chairman; Secretary Section 2.10 At the Organization Meeting, the Board may elect a Chairman of the Board of Directors or a Chairman and Vice Chairman of the Board of Directors, who shall be Officers of the Company and each of whom shall discharge such duties as may be assigned from time to time by the Directors. The Chairman shall preside at the meetings of the Board and, in his or her absence, the Vice Chairman, if any, shall preside. In all other cases the President of the Company shall preside. In the absence of the persons above designated to preside at a meeting, the Board shall appoint a Chairman pro tem. At the Organization Meeting, the Board of Directors shall elect a Secretary of the Board, - 3 - who shall attend the meetings of the Board of Directors, shall keep the minutes of such meetings, shall send notices thereof, if any, and shall perform such other duties as may be attendant to such office. The Secretary of the Board need not be a member of the Board. In case the Secretary is absent or unable to discharge such duties, the Board shall appoint a Secretary pro tem. ARTICLE III Committees Standing Committees Section 3.1 The Board shall have the following standing committees, each consisting of not fewer than five (5) Directors, as shall be determined by the Board: Executive Committee Investment Committee Audit Committee Human Resources Committee Policyholder and External Affairs Committee Nominating Committee All members of the Audit Committee, the Human Resources Committee and the Nominating Committee shall be Independent Directors. At least one-third of the members of any other committee shall be Independent Directors. Designation of Members and Chairmen of Standing Committees Section 3.2 At its Organization Meeting each year, the Board, by resolution adopted by a majority of the then authorized number of Directors, shall designate from among the Directors the members of the standing committees and from among the members of each such committee a chairperson thereof, each of whom shall serve as such, at the pleasure of the Board, so long as they shall continue in office as Directors, and through the next succeeding Annual Meeting of the Company. The Board may by similar resolution designate one (1) or more Directors as alternate members of such committees, who may replace any absent member or members at any meeting of such committees, but only an Independent Director may be designated as an alternate member of the Audit Committee, the Human Resources Committee or the Nominating Committee. Vacancies in the membership or chair of any standing committee may be filled in the same manner as the original designations at any regular or special meeting of the Board, and the Chief Executive Officer may designate from among the remaining members of any standing committee whose chair is vacant a chairperson who shall serve until a successor is designated by the Board. Notices of Times of Meetings of Standing Committees and Presiding Members Section 3.3 Meetings of each standing committee shall be held upon call of the Chief Executive Officer, or upon call of the chairperson of such standing committee or of two members of such standing committee. Meetings of each standing committee may also be - 4 - held at such other times as such committee may determine. Meetings of a standing committee shall be held at such places and upon such notice as such committee may determine or as may be specified in the calls of such meetings. Any such chairperson, if present, or such member or members of each committee as may be designated by the Chief Executive Officer, shall preside at meetings thereof or, in the event of the absence or disability of any thereof or failing such designation, the committee shall select from among its members present a presiding Member. Quorum Section 3.4 At each meeting of any standing committee there shall be present to constitute a quorum for the transaction of business at least a majority of the members of such committee, at least one (1) of whom is an Independent Director. Any alternate member who is replacing an absent member shall be counted in determining whether a quorum is present. The vote of a majority of the members present at a meeting of any standing committee at the time of the vote, if a quorum is present at such time, shall be the act of such committee. Standing Committee Minutes Section 3.5 Each of the standing committees shall keep minutes of its meetings, which shall be reported to the Board at its regular meetings and, if called for by the Board, at any special meeting. Executive Committee Section 3.6 The Executive Committee shall consist of five (5) or more Directors, as the Board of Directors may determine from time to time, a majority of whom shall be Independent Directors. This Committee shall have general power to act for the Board of Directors in the intervals between meetings of the Board on all matters of policy and direction relating to the conduct of the affairs of the Company, subject to such limitations as the Board may from time to time impose. Investment Committee Section 3.7 The Investment Committee shall consist of five (5) or more Directors, as the Board of Directors may determine from time to time, a majority of whom shall be Independent Directors. This Committee shall review the investment policies and programs of the Company, including, but not limited to, the purchase and sale of bonds, stocks, other securities, real estate, mortgages and all other investments. The Investment Committee shall supervise the financial affairs of the Company. Except as otherwise ordered by the Board (i) no investment or loan, other than a policy loan, and no sale, assignment, exchange, extension or transfer thereof, shall be made unless the same has been authorized or approved by the Investment Committee; and (ii) the Investment Committee shall designate from time to time depositories of the Company's funds. Audit Committee Section 3.8 The Audit Committee shall consist of five (5) or more Directors, as the Board of Directors may determine from time to time, all of whom shall be Independent Directors. The Audit Committee shall, prior to the last meeting of the Board of Directors in each calendar year, recommend to the Board of Directors the selection of independent certified public accountants for the ensuing fiscal year. This Committee shall engage such independent certified public accountants selected by the Board of Directors to audit and - 5 - examine the financial position of the Company and shall prescribe the scope of such audit and of any internal audit. It shall review the Company's financial condition, and the scope and results of the independent audit and any internal audit, and shall from time to time confer with such independent certified public accountants and with management and review recommendations of such independent accountants and management with respect to the business of the Company and the business of any majority-owned subsidiary of the Company. The Audit Committee shall report to the Board of Directors upon the annual report of such independent certified public accountants and at such other times as the Audit Committee may deem necessary. Human Resources Committee Section 3.9 The Human Resources Committee shall consist of five (5) or more Directors, as the Board of Directors may determine from time to time, all of whom shall be Independent Directors. This Committee shall exercise general supervision of compensation and personnel administration and all activities conducted by the Company in the interest of the health, welfare and safety of field and office personnel, shall evaluate the performance of Officers deemed by such Committee to be principal Officers, and shall make recommendations to the Board of Directors as to the selection of and compensation payable to such principal Officers. Policyholder and External Affairs Committee Section 3.10 The Policyholder and External Affairs Committee shall consist of five (5) or more Directors as the Board of Directors may determine from time to time, a majority of whom shall be Independent Directors. This Committee shall be responsible for matters relating to the interest of the policyholders and customers of the Company and shall exercise general supervision of the dividend and surplus policies and practices of the Company. Annually the Committee shall make a written report to the Board recommending for the ensuing year the apportionment of divisible surplus on participating policies issued by the Company and interest rates payable on funds held by the Company under policies or other contracts entitled by their terms to such interest. This Committee shall review generally the activities of the various businesses conducted by the Company and shall also exercise general supervision of the Company's external activities including, but not limited to, government relations, charitable contributions, public benefit programs and compliance with policies on ethical business conduct and other corporate responsibility matters. Nominating Committee Section 3.11 The Nominating Committee shall consist of five (5) or more Directors, as the Board of Directors may determine from time to time, all of whom shall be Independent Directors. This Committee shall have responsibility for nominating candidates for Director for election by policyholders and shall make recommendations to the Board with respect to the filling of vacancies on the Board. ARTICLE IV Officers - 6 - Principal Officers Section 4.1 The Board shall determine who shall act as Chief Executive Officer of the Company. In its discretion, the Board may also designate a Chief Operating Officer. The Board in its discretion may also from time to time designate one or more other Officers as Principal Officers. Chief Executive Officer Section 4.2 The Chief Executive Officer of the Company shall have the general executive management of its affairs, and may decide upon and execute all matters not otherwise covered by action of the Board of Directors or Executive Committee or more specifically provided for in the Bylaws. In the absence of action by the Board of Directors, the Chief Executive Officer may from time to time prescribe and assign such duties, functions and authority among Officers or other employees and representatives as he or she shall determine are necessary or desirable for the proper conduct of the business of the Company. Chief Operating Officer Section 4.3 The Chief Operating Officer, if any, shall assist the Chief Executive Officer in the execution of his or her duties and shall have such other duties as the Board of Directors or the Chief Executive Officer may from time to time determine. President and Other Officers Section 4.4 At each Organization Meeting, the Board shall elect a President, who shall hold office until the next Organization Meeting and until the election of a successor or until his or her earlier death, removal or resignation. The President may also serve as the Chief Executive Officer or Chief Operating Officer. If a vacancy occurs in the office of the President for any reason, such vacancy shall be filled by the Board at any regular or special meeting of the Board. In addition to the President, the Board shall elect or appoint such other Officers, including a Secretary, one (1) or more Assistant Secretaries and one (1) or more Vice Presidents as it may determine for the conduct of the business of the Company. Any two (2) or more offices may be held by the same person, except the offices of President and Secretary. Officers other than the Chief Executive Officer shall have such powers and perform such duties as may be assigned to them by these Bylaws or by or pursuant to authorization of the Board or the Chief Executive Officer. The Board of Directors may, in its discretion, delegate to the Chief Executive Officer authority to appoint and discharge any Officers other than principal Officers. Notwithstanding any such delegation to the Chief Executive Officer, all Officers shall hold office at the pleasure of the Board of Directors, which retains authority to terminate any Officer at any time. A vacancy in any office may be filled by the Board at any meeting. ARTICLE V Execution of Papers - 7 - Instruments Section 5.1 Any employee designated for the purpose by the Chief Executive Officer or the Board, and any Officers designated by the Board shall have power to execute all instruments in writing necessary or desirable for the Company to execute in the transaction and management of its business and affairs and to affix the corporate seal. Disposition of Funds Section 5.2 All funds of the Company deposited in its name shall be subject to disposition by check or other means, in such manner as the Board may from time to time determine. Caption Signatures on Policies and Certain Other Contracts Section 5.3 The Chief Executive Officer may appoint one (1) or more Registrars. All policies of insurance and annuity contracts shall be signed by the Chairman of the Board of Directors (if any), the Vice Chairman of the Board of Directors (if any), the President, a Vice President, the Secretary, or an Assistant Secretary. Such signatures may be in facsimile, provided such policies and contracts are countersigned by a Registrar or a Vice President. All policy endorsements and modifications (other than endorsement of the exercise of a right or option provided for in a policy) and all contracts incident, related or supplementary to policies of insurance and annuity contracts shall be signed by the Chairman of the Board of Directors (if any), the Vice Chairman of the Board of Directors (if any), the President, a Vice President, the Secretary, or an Assistant Secretary. Any such signature may be in facsimile provided there is a countersignature by a Registrar or a Vice President. ARTICLE VI General Indemnification of Directors and Officers Section 6.1 To the full extent permitted by the laws of the State of New York, the Company shall indemnify any person made or threatened to be made a party to any action, proceeding or investigation, whether civil or criminal, by reason of the fact that such person, or such person's testator or intestate: (1) is or was a Director or Officer of the Company; or (2) serves or served another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity at the request of the Company, and also is or was a Director or Officer of the Company against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred in connection with or as a result of such action or proceeding, or any appeal therein. The Company shall also indemnify any person made or threatened to be made such party - 8 - by reason of the fact that such person or such person's testator or intestate is or was an employee of the Company or serves another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise at the request of the Company and also is an employee of the Company to the same extent as if such person were an Officer or Director of the Company. The indemnification provided in this Article VI shall not be deemed to be exclusive of any other rights to which a Director or Officer of the Company seeking indemnification may be entitled whether contained in (i) a resolution of Directors, or (ii) an agreement providing for such indemnification, provided that no indemnification may be made to or on behalf of any Director or Officer if a judgment or other final adjudication adverse to the Director or Officer establishes that his or her acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled. The Company may indemnify persons other than Officers or Directors of the Company, to such greater extent as the Board of Directors may from time to time by resolution prescribe. ARTICLE VII Amendment of Bylaws Section 7.1 These Bylaws or any of them may be amended, altered or repealed by a vote of two-thirds of the Directors present at any regular or special meeting, provided that any such proposed amendment, alteration or repeal shall have been submitted in writing and filed with the Secretary of the Board at least sixty (60) days before being presented at such a meeting. The notice of the meeting at which action may be taken upon such proposal to amend, change or repeal these Bylaws shall contain a statement in general terms that such action has been proposed. Notwithstanding the foregoing, Section 6.1 of these Bylaws may not be amended, altered or repealed by the Board so as to effect adversely any then existing rights of any Director, Officer or other persons designated therein. - 9 - -----END PRIVACY-ENHANCED MESSAGE-----