485BPOS 1 e115956.htm
As filed with the Securities and Exchange Commission on April 25, 2016.
 
 
Registration File No. 333-148419
File No. 811-03915

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549


FORM N-6

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933   [x]
     

PRE-EFFECTIVE AMENDMENT NO. ___        

  [  ]

POST-EFFECTIVE AMENDMENT NO. 10    

  [x]
and/or    
     
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940                                                [x]
     

AMENDMENT NO. 28                                          

  [x]
(Check appropriate box or boxes.)

CMFG Variable Life Insurance Account
(Exact name of registrant)

CMFG Life Insurance Company
(Name of depositor)
5910 Mineral Point Road
Madison, WI 53705
(Address of depositor’s principal executive offices)
Depositor’s Telephone Number, including Area Code: (319) 352-4090

Ross D. Hansen, Esq.
CMFG Life Insurance Company
5910 Mineral Point Road
Madison, Wisconsin 53705
(Name and address of agent for service)

Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this registration statement.

It is proposed that this filing will become effective (check appropriate box)
|  |   immediately upon filing pursuant to paragraph (b) of Rule 485.
|x|   on May 1, 2016 pursuant to paragraph (b) of Rule 485.
|  |   60 days after filing pursuant to paragraph (a)(i) of Rule 485.
|  |   on (date) pursuant to paragraph (a)(i) of Rule 485.

If appropriate, check the following box:
|  | this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Title of securities being registered: Units of interest in a Variable Account under individual flexible premium deferred variable annuity contracts.


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PROSPECTUS   May 1, 2016
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MEMBERS® Variable Universal Life
A Flexible Premium Variable Universal Life Insurance Policy
Issued by
CMFG Life Insurance Company

This Prospectus describes the Policy issued by CMFG Life Insurance Company (“we”, “our” or “us”) and supported by the CMFG Variable Life Insurance Account (“Separate Account”). The Policy is designed as a long-term investment that attempts to provide significant life insurance benefits for the entire life of the Insured. This discussion in this Prospectus is meant for current Owners. We no longer issue new Policies and we no longer issue new riders on any Policy.

This Prospectus provides information that a prospective Owner should know before investing. You should keep this Prospectus for future reference as you consider the Policy in conjunction with other insurance you own.

With this Policy, you can allocate Net Premium and Accumulated Values to:

 
Subaccounts of the Separate Account, each of which invests in one of the mutual funds listed on this page; or
     
 
An Interest Bearing Account, which credits a specified rate of interest.

A prospectus for each of the mutual funds in which the Separate Account invests accompanies this Prospectus. Please read these documents before investing and save them for future reference.

The mutual funds available include:

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Ultra Series Fund   T. Rowe Price International Series

Core Bond Fund

 

T. Rowe Price International Stock Portfolio

Diversified Income Fund

   

Large Cap Value Fund

   

Large Cap Growth Fund

   

Mid Cap Fund

   

Vanguard® Variable Insurance Fund

Vanguard Variable Insurance Fund Money Market Portfolio

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An investment in the Separate Account is not a bank or credit union deposit and the Policy is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Investment in the Separate Account involves certain risks including loss of premium (principal).

Please refer to the “Summary of Policy Benefits and Risks” section of this Prospectus that describes certain risks associated with investing in a Policy.

The Securities and Exchange Commission (“SEC”) has not approved or disapproved this Policy or determined that this Prospectus is accurate or complete. Any representation to the contrary is a criminal offense.


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TABLE OF CONTENTS
 
     
    Page
SUMMARY OF POLICY BENEFITS AND RISKS   1

Benefits Summary

  1

Risk Summary

  3

Fee Tables

  4
CMFG LIFE INSURANCE COMPANY   8
THE SEPARATE ACCOUNT AND THE FUNDS   8

Ultra Series Fund

  9

T. Rowe Price International Series, Inc.

  9

More Information About the Funds

  9

The Interest Bearing Account

  10
THE POLICY   10

The Policy

  10

Flexibility of Premiums

  10

Allocation of Net Premiums

  11

Lapse

  11

Reinstatement

  11

Premiums to Prevent Lapse

  11

Death Benefit Proceeds

  12

Change of Death Benefit Option

  13

Accelerated Benefit Option

  13

Change of Specified Amount

  14

Policy Values

  14

Transfer of Values

  16

Additional Transfer Limitations

  16

Change of Allocations

  17

Dollar-Cost Averaging

  17

Surrender and Partial Withdrawals

  18

Maturity

  18

Payment of Proceeds/Settlement Options

  18

Suspension of Payments

  19

Policy Loans

  19

Cyber Security

  20
CHARGES AND DEDUCTIONS   20

Premium Expense Charge

  20

Monthly Deduction

  20

Cost of Insurance

  21

Monthly Policy Fee

  21

Monthly Administrative Fee

  21

Cost of Additional Benefits

  22

Mortality and Expense Risk Charge

  22

Contingent Deferred Sales and Administrative Charges

  22

Partial Withdrawal Fee

  23

Transfer Fee

  23

Federal and State Income Taxes

  23

Duplicate Policy Charge

  23

Change of Specified Amount Charge

  23

Research Fee

  24

Fund Expenses

  24

Additional Information

  24
OTHER POLICY BENEFITS AND PROVISIONS   24

Issue Date

  24
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Owner, Beneficiary

  24

Right-to-Examine Period

  24

Paid-up Insurance

  25

Transfer of Ownership

  25

Addition, Deletion, or Substitution of Investments

  25

Voting Rights

  26
DISTRIBUTION OF POLICIES   26

Compensation Arrangements For CBSI and Its Sales Personnel

  26

Compensation Arrangements For Selling Firms and Their Sales Personnel

  27

Source of Compensation

  27
RIDERS AND ENDORSEMENTS   27

Children’s Insurance

  27

Guaranteed Insurability

  27

Accidental Death Benefit

  27

Automatic Increase

  27

Other Insured

  28

Term Insurance

  28

Disability Waiver of Monthly Deductions

  28

Disability Benefit Waiver of Premium and Monthly Deduction

  28

Executive Benefits Plan Endorsement

  28
FEDERAL INCOME TAX CONSIDERATIONS   28

Introduction

  28

Tax Status of the Policy

  28

Tax Treatment of Policy Benefits

  29

Special Rules for Pension and Profit-Sharing Plans

  30

Business Uses of the Policy

  31

Medicare Tax on Investment Income

  32

Alternative Minimum Tax

  32

Estate, Gift and Generation-Skipping Transfer Taxes

  32

Possible Tax Law Changes

  32

Our Taxes

  32
LEGAL PROCEEDINGS   33
FINANCIAL STATEMENTS   33
GLOSSARY   34
STATEMENT OF ADDITIONAL INFORMATION   37
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SUMMARY OF POLICY BENEFITS AND RISKS
 

This summary describes important benefits and risks of the Policy and corresponds to sections in this Prospectus which discuss the topics in more detail, including variations by state. Please refer to the Glossary for definitions of certain terms.

Benefits Summary

General Benefits of the Policy. Like fixed benefit life insurance, the Policy offers a minimum death benefit and provides an Accumulated Value, loan privileges and a value on surrender. However, the Policy differs from a fixed benefit policy because it allows you to allocate your Net Premiums or transfer Accumulated Value to the Subaccounts. The amount and duration of life insurance protection and of Accumulated Value and Cash Value varies with the investment experience of the Accumulated Value you place in the Subaccounts.

Premiums. The Policy requires an initial premium. The amount of your Policy’s Specified Amount determines the amount of your initial premium. After you pay the initial premium, you can pay subsequent premiums at any time while your Policy is In Force. We may refuse any premium payment that is less than $25. We also may refuse any premium or part of a premium which would increase the Face Amount of the Policy by more than the amount of the Premium.

The Policy provides for a planned annual premium. You are not required to pay premiums according to the plan. You can vary the frequency and amount of premiums, and can skip premiums. (If you do skip a premium, you may increase the likelihood that your Policy will Lapse.) We may reject any premiums after the Insured reaches Attained Age 95.

From time to time, we may extend the period for premium and purchase payments and other time-sensitive provisions of a policy or contract for specific geographic areas in response to weather-related incidents, natural disasters and similar events. Policyholders who have experienced such events and would like to know whether a moratorium is in effect should contact us for more information at our Mailing Address.

Minimum Death Benefit Guarantee. If the Target Premium is paid until the later of Attained Age 65 or 10 years from the Issue Date the Policy will not Lapse during those years. The Target Premium will be shown on each Policy. Generally, it is determined by dividing the minimum premium by 0.60 and is stated on the specifications page of the Policy.

No-Lapse Guarantee. If at all times during the first three Policy Years the sum of the premiums received to date, less all partial withdrawals and Indebtedness, is at least equal to the monthly minimum premium multiplied by the number of months (plus one month) the Policy has been In Force, the Policy will not Lapse. The monthly minimum premium is the minimum premium (the minimum annual amount needed each year during the first three Policy Years to keep the no-Lapse guarantee in effect) divided by 12. If any requested increase in Specified Amount is made during the first three Policy Years, the no-Lapse guarantee is voided.

In cases where the no-Lapse guarantee is in effect and there is insufficient Net Cash Value to pay the Monthly Deduction, Accumulated Value from the Deferred Charges Account will be used to pay the Monthly Deduction. Deferred Charges are collected only if the Policy is surrendered during the first nine Policy Years after the Issue Date or the first nine years after an increase in Specified Amount, whichever is applicable. We will waive any Monthly Deduction remaining after the Deferred Charges have been exhausted.

Death Benefit Options. You must choose between two Death Benefit Options under the Policy. Your selection will affect the Face Amount, the Monthly Deduction, and the Cash Value. Under either option, Death Benefit Proceeds are equal to:

 
the Face Amount on the date of death; plus
 
any premiums received after the date of death; minus
 
Policy indebtedness
       
The Face Amount differs under the two Death Benefit Options:
u  
The Face Amount under Option 1 is the greater of:
       
    O the Specified Amount; or
    O
the Accumulated Value on the date of death multiplied by the Death Benefit Ratio.

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u   The Face Amount under Option 2 is the greater of:
       
    O the Specified Amount plus the Policy’s Accumulated Value on the date of death; or
    O the Accumulated Value on the date of death multiplied by the Death Benefit Ratio.

The Death Benefit Ratio is the ratio of Face Amount to Accumulated Value required by the Internal Revenue Code of 1986, as amended (“Code”), for treatment of the Policy as a life insurance policy. The Death Benefit Ratio varies by Attained Age as shown in Appendix B in the Statement of Additional Information (“SAI”). The death benefit factor decreases from year to year as the Attained Age of the Insured increases.

You may select the Specified Amount, which we will normally require be at least $50,000 ($10,000 for Issue Ages 65 and over). You also may increase or decrease the Specified Amount; however, we may require that the Specified Amount after any decrease be at least $50,000 ($10,000 for Issue Ages 65 and over).

Cancellation, Surrender and Partial Withdrawals

Cancellation: Once we issue your Policy, the Right-to-Examine Period begins. You may cancel the Policy during this period and receive a refund. A request to increase the Specified Amount also triggers a Right to Examine Period for the increased amount.

Surrender: At any time while the Insured is alive and the Policy is In Force, you may make a Written Request to our Mailing Address to surrender your Policy for its Net Cash Value. Federal income taxes may apply to surrenders or partial withdrawals. A penalty tax may be applied to distributions (including loans) if the policy is classified as a Modified Endowment Contract and may apply to surrenders.

Partial Withdrawals: You may withdraw part of the net Cash Value using a Written Request, subject to the following rules.

 
Federal income taxes and a penalty tax may apply to partial withdrawals;
 
A partial withdrawal reduces the death benefit by at least the amount withdrawn;
 
Unless the Face Amount derived from the application of the Death Benefit Ratio applies, under either Death Benefit Option 1 or Death Benefit Option 2, a partial withdrawal will reduce both the Accumulated Value and the Face Amount by the amount surrendered but will not affect the Cost of Insurance. Under Death Benefit Option 1, the Specified Amount is also reduced by the same amount, but the Specified Amount is not changed by a partial withdrawal under Death Benefit Option 2. If the Face Amount derived from the application of the Death Benefit Ratio applies, the effect on the monthly Cost of Insurance and Face Amount is somewhat different. The Face Amount is then decreased by more than the amount surrendered, and the monthly Cost of Insurance is less than it would have been without the surrender; and
 
We may deduct a processing fee for each partial withdrawal. We currently do not deduct this fee.

Transfers. Each Policy Year, you may make:

 
Accumulated Value transfers from the Subaccounts to other Subaccounts and to the Interest Bearing Account at any time; and
 
Accumulated Value transfers from the Interest Bearing Account only during the 30 day period beginning on and immediately following the Policy Anniversary. (We currently waive this restriction.)

A transfer from the Interest Bearing Account may be limited to 25% of the Interest Bearing Account. We may deduct a charge of $20 per transfer after the fourth transfer in a Policy Year. We currently waive this restriction. Transfer privileges are subject to restriction based on our Frequent Transfers Procedures.

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Loans. Subject to certain conditions, you may borrow money from us using the Accumulated Value of your Policy as collateral. To secure the loan, we transfer an amount of your Accumulated Value equal to the loan from the Subaccounts and Interest Bearing Account to the Loan Account, until the loan is repaid. Accumulated Value in the Loan Account earns interest at the guaranteed minimum rate of 6% per year. We can charge you an interest rate of up to 8% per year on money that you borrow. Interest is accrued throughout the year and is payable at the end of each Policy Year. Unpaid interest is added to the Loan Amount (becomes part of the outstanding loan) if it is not paid at the end of the Policy Year. The interest rate charged on Loans is subject to change by us. You may repay all or part of your outstanding loans at any time. Loan repayments must be clearly marked as loan repayments or we will treat them as premiums. Outstanding loans and accrued interest are deducted from the death benefit to arrive at the Death Benefit Proceeds (the amount payable to the Beneficiary upon the Insured’s death). Loans may have adverse tax consequences.
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2


Risk Summary

Investment Risk. If you invest your Accumulated Value in one or more Subaccounts, you will be subject to the risk that investment experience will be unfavorable and that your Accumulated Value will decrease. If you allocate Net Premiums or transfer Accumulated Value to the Interest Bearing Account, we credit your Accumulated Value with a declared rate of interest, but you assume the risk that the rate may decrease, although it will never be lower than a guaranteed minimum annual effective rate of 4.0%.

Because we continue to deduct charges from Accumulated Value, if investment results are not sufficiently favorable, or if interest rates are too low, or if you do not make additional premium payments, then your Policy’s Cash Value may fall to zero. In that case, the Policy may Lapse. We do not guarantee any Accumulated Value you place in the Subaccounts. The value of each Subaccount may increase or decrease, depending on the investment experience of the corresponding Fund. You could lose some or all of your money.

However, if investment experience is sufficiently favorable and you have kept the Policy In Force for a substantial time, you may be able to draw upon Accumulated Value, through partial withdrawals and loans.

Inappropriate Frequent Transfers Risk. Frequent, large, or short-term transfers among Subaccounts, such as those associated with “market timing” transactions, can adversely affect the Funds and the returns achieved by Owners. In particular, such transfers may dilute the value of Fund shares, interfere with the efficient management of the Funds, and increase brokerage and administrative costs of the Funds. These costs are borne by all Owners allocating purchase payments to the Subaccounts and other Fund shareholders, not just the Owner making the transfers. In order to try to protect Owners and the Funds from potentially harmful trading activity, we have certain policies and procedures (“Frequent Transfers Procedures”).

Risk of Lapse. Certain circumstances will cause your Policy to enter a grace period during which you must make a sufficient premium payment to keep your Policy In Force:

 
If your Policy’s Accumulated Value on a Monthly Day is too low to cover the Monthly Deduction, and the minimum death benefit guarantee and the no-Lapse guarantee are not in effect, then the Policy will enter a 61-day grace period. If the Policy enters the grace period, we will mail a notice of termination to the Owner. A grace period of 61 days will begin on the date the notice is mailed.
 
       
 
Whenever your Policy enters a grace period if you do not make a sufficient premium payment before the grace period ends, your Policy will Lapse (terminate without value), and insurance coverage and other benefits under your Policy will cease. To avoid the Policy Lapsing at the end of the grace period, the Owner must: (1) pay Net Premium in an amount sufficient to pay overdue Monthly Deductions plus the anticipated amount of the next two Monthly Deductions and loan interest due during the grade period, or (2) if prior to the third Policy Anniversary, and no requested increase in Specified Amount was made, pay either the above amount or the amount needed to qualify for the no-Lapse guarantee. In addition to allowing the Policy to remain In Force, payment of the latter amount will reinstate the no-Lapse guarantee.
 

Deferred Sales Charge Risks. Deferred sales charges play a role in determining whether your Policy will Lapse. The deferred sales charges under this Policy are significant, especially in the early Policy Years. It is likely that you will receive no Cash Value if you surrender your Policy in the first few Policy Years. If you do not have the financial ability to keep your Policy In Force at the initial Specified Amount for a substantial period of time or you intend to surrender all or part of the Cash Value during the deferred sales charge period, you may be subject to significant deferred sales charges. This Policy is designed to meet long-term financial goals. This Policy is not suitable as a short-term investment.

Even if you do not surrender your Policy, deferred sales charges may still help determine whether your Policy will Lapse. Cash Value (that is, Accumulated Value minus any Deferred Charges and outstanding Loan Amount) is one measure we use to determine whether your Policy will enter a grace period, and possibly Lapse. A surrender may have adverse tax consequences.

Tax Risks. In order to qualify as a life insurance contract for federal income tax purposes and to receive the tax treatment normally accorded life insurance contracts under federal tax law, a policy must satisfy certain requirements which are set forth in the Code. We anticipate that the Policy will generally be deemed a life insurance contract under federal income tax law, so that the Death Benefit Proceeds paid to the Beneficiary will not be subject to federal income tax. However, due to lack of guidance, there is less certainty in this regard with respect to Policies issued on a substandard basis and it is not clear whether such policies will in all cases satisfy the applicable requirements particularly if you pay the full amount of premiums permitted under the policy.

3


Depending on the total amount of premiums that you pay, your Policy may be treated as a modified endowment contract (“MEC”) under federal income tax laws. If a Policy is treated as a MEC, then partial withdrawals, surrenders and loans under it are taxable as ordinary income to the extent such amounts represent earnings under the Policy. For this purpose, any partial withdrawals, surrenders and loans are considered first a distribution of earnings under the Policy, and when earnings are fully distributed, a distribution of the Owner’s investment in the Policy. In addition, a 10% federal penalty tax may be imposed on partial withdrawals, surrenders and loans taken before you reach age 59½. There may be tax consequences to distributions from Policies that are not MECs. However, the 10% penalty tax will not apply to distributions from Policies that are not MECs. You should consult a qualified tax adviser for assistance in all tax matters involving your Policy.

Partial Withdrawal Risks. The Policy permits you to make a partial withdrawal, as long as the Specified Amount remaining after such withdrawal would not be less than $40,000 ($8,000 for issue ages 65 and over). A partial withdrawal reduces the Accumulated Value and Cash Value, so it increases the risk that the Policy will Lapse. It also increases the likelihood that either the minimum death benefit guarantee or the no-Lapse guarantee will not remain in effect.

A partial withdrawal also may have adverse tax consequences.

A partial withdrawal reduces the death benefit. If you selected the level death benefit (Option 1), then when you make a partial withdrawal, the Specified Amount is reduced by the amount of the withdrawal. If you selected the variable death benefit (Option 2), then when you make a partial withdrawal, the death benefit is reduced because the Accumulated Value is reduced.

Currently there are no limitations on partial withdrawals; however, we may limit the number of partial withdrawals to two per Policy Year.

Loan Risks. A Policy loan, whether or not repaid, affects Accumulated Value over time because we transfer an amount equal to the amount of the loan from the Subaccounts and Interest Bearing Account to the Loan Account as collateral. We then credit a fixed interest rate of at least 4.0% to the loan collateral. As a result, the loan collateral does not participate in the investment results of the Subaccounts nor does it receive current interest rates in excess of 4.0% that we may, from time to time, credit to the Interest Bearing Account. The longer the loan is outstanding, the greater the likely effect of not participating in the Subaccounts or the Interest Bearing Account. Depending on the investment results of the Subaccounts and the interest rate credited to the Interest Bearing Account, the effect could be favorable or unfavorable. We also charge you interest on the amount that you borrow at a rate of 8.0%, compounded annually. A loan may have adverse tax consequences.

Policy Indebtedness reduces the Death Benefit Proceeds and net Cash Value by the amount of such indebtedness. As with partial withdrawals, loans reduce the Net Cash Value of your Policy and therefore increase the likelihood that the Policy will Lapse or that the minimum death benefit guarantee or the no-Lapse guarantee would not remain in effect.

Fund Risks. A comprehensive discussion of the risks of each Fund may be found in each Fund’s prospectus. Please refer to the Fund’s prospectus for more information.

Fee Tables
The following tables describe the fees and expenses that a Policy Owner will pay when buying, owning, and surrendering the Policy. The first table describes the fees and expenses that a Policy Owner will pay at the time that he or she buys the Policy, surrenders the Policy, or transfers Policy value among the Subaccounts and the Interest Bearing Account.

Transaction Fees
Charge When Charge is Deducted Amount Deducted
  Maximum Guaranteed Charge Current Charge
Premium Expense Charge (Taxes) Upon receipt of each premium payment 0–3.5% of each premium payment, depending on the Insured’s state of residence 0–3.5% of each premium payment, depending on the Insured’s state of residence
Maximum Sales Charge Imposed on Premiums (Load) Not applicable None None

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Transaction Fees
Charge When Charge is Deducted Amount Deducted
  Maximum Guaranteed Charge Current Charge
Surrender Charge (Deferred Sales and Administrative Charge)1 (Minimum and Maximum Charge) Upon surrender or Lapse during the first 9 Policy Years, or during the first 9 Policy Years following an increase in Specified Amount $0.87 – $42.31 per $1,000 of Specified Amount during the first Policy Year2 $0.87 – $42.31 per $1,000 of Specified Amount during the first Policy Year2
Charge for a male Insured, Attained Age 38, in the non-smoker rating class Upon surrender or Lapse during the first 9 Policy Years, or during the first 9 Policy Years following an increase in Specified Amount $8.95 per $1,000 of Specified Amount $8.95 per $1,000 of Specified Amount
Accelerated Death Benefit Option At the time the Accelerated Death Benefit is paid $300 $300
Partial Withdrawal Fee Upon partial withdrawal The lesser of: $25 per withdrawal, or 2% of the amount withdrawn The lesser of: $25 per withdrawal, or 2% of the amount withdrawn (currently waived)
Specified Amount Increase Charge Upon increase in Specified Amount3 $50 for each Specified Amount increase after the first in a Policy Year $50 for each Specified Amount increase after the first in a Policy Year
Transfer Fee Upon every transfer other than the first four transfers in a Policy Year $20 None
Executive Benefits Plan Endorsement Upon exercise during the first 2 Policy Years $150 None
Duplicate Policy Fee Upon request for a duplicate Policy $30 $30 (currently waived)
Research Fee Upon request for information that is duplicative of information previously provided to you and that requires extensive research $50 $50
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The next table describes the fees and expenses that a Policy Owner will pay periodically during the time that he or she owns the Policy, not including Fund fees and expenses.

       
 
1   The contingent deferred sales and administrative charge varies based on the Insured’s Attained Age, gender, rating class, Policy Year, and Specified Amount (or increase in Specified Amount). The charge shown in the table may not be typical of the charges you will pay. Your Policy’s specifications page will indicate the charges for your Policy, and more detailed information concerning your charges is available on request from us. Also, before you purchase the Policy, we will provide you personalized illustrations of your future benefits under the Policy based upon the Insured’s Issue Age and rating class, the Death Benefit Option, Specified Amount, planned premium, and riders you select.
2   The surrender charge decreases annually each year during the first 9 Policy Years or the first 9 years after an increase in Specified Amount. After the 9th year, there is no charge.
3   We do not assess a Specified Amount increase charge for the first increase in a Policy Year.

5


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Periodic Charges Other Than Portfolio Operating Expenses
Charge When Charge is Deducted Annual Amount Deducted
Maximum Guaranteed Charge Current Charge
Policy Fee On Policy Issue Date and Monthly Days $724,5 $724,5
Monthly Administrative Fee On Policy Issue Date and monthly on Monthly Day, during Policy Years 1 – 10 or during the first 10 Policy Years following an increase in Specified Amount $0.45 per $1,000 of Specified Amount or increase in specified amount5 $0.45 per $1,000 of Specified Amount or increase in specified amount5
Cost of Insurance6 (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days $0.68 – $311.27 per $1,000 of Net Amount at Risk5 $0.48 – $178.37 per $1,000 of Net Amount at Risk5
Charge for a male Insured, Attained Age 38 in the non-smoker rating class On Policy Issue Date and Monthly Days $2.07 per $1,000 of Net Amount of Risk8 $2.07 per $1,000 of Net Amount of Risk8
Mortality and Expense Risk Charge Daily 0.90% of Variable Account Value 0.90% of Variable Account Value
Loan Interest Spread On Policy Anniversary or earlier as applicable7 4.00% 2.00%
Rider Charges:9      
Accidental Death Benefit Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days $0.46 – $1.86 per $1,000 of Accidental Death Benefit8 $0.46 – $1.86 per $1,000 of Accidental Death Benefit8
Charge for a male Insured, Attained Age 33 in the non-smoker rating class. On Policy Issue Date and Monthly Days $0.68 per $1,000 of Accidental Death Benefit10 $0.68 per $1,000 of Accidental Death Benefit10
Children’s Insurance Rider On Policy Issue Date Monthly Days $9.00 per Unit of coverage10 $9.00 per Unit of coverage10
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4   $36.00 for Issue Ages 0-19.
5   The annual amount is shown, 1/12th of this amount is deducted on each Monthly Day.
6   Cost of Insurance varies based on the Insured’s Attained Age, gender, rating class, Policy Year and Net Amount at Risk. The Cost of Insurance shown in the table may not be typical of the charges you will pay. Cost of Insurance rate changes will depend on the Company’s expectations as to future mortality experience. Your Policy’s specifications page will indicate the guaranteed Cost of Insurance charge for your Policy. More detailed information concerning your Cost of Insurance is available on request from us. Also, before you purchase the Policy, we will provide you personalized illustrations of your future benefits under the Policy based upon the Insured’s Issue Age and rating class, the Death Benefit Option, Specified Amount, planned premium, and riders you select.
7   Loan interest must be paid in arrears on each Policy Anniversary, or, if earlier, on the date of loan repayments, Lapse, surrender, or the Insured’s death. The loan interest spread is the difference between the rate of interest we charge you for a loan and the amount of interest credits to your Loan Account.
8   The annual amount is shown 1/12th of this amount is deducted on each Monthly Day. We are no longer issuing new Accidental Death Benefit riders.
9   Charges for the Accidental Death Benefit Rider, Children’s Insurance Rider, Guaranteed Insurability Rider, Other Insured Rider, Term Insurance Rider, Disability Waiver of Monthly Deduction Rider, and Disability Waiver of Monthly Deduction and Premium Rider vary based on the Insured’s Attained Age, gender, and rating class, and may vary based on Policy Year, Specified Amount, and Net Amount at Risk. Charges based on actual age may increase as the Insured ages. The rider charges shown in the table may not be typical of the charges you will pay. Your Policy’s specifications page will indicate the rider charges for your Policy, and more detailed information concerning these rider charges is available on request from us. Also, before you purchase the Policy, we will provide you personalized illustrations of your future benefits under the Policy based upon the Insured’s Issue Age and rating class, the Death Benefit Option, Specified Amount, planned premium, and riders that you select. We are not currently issuing new riders on any Policy.
10   The annual amount is shown 1/12th of this amount is deducted on each Monthly Day.

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Periodic Charges Other Than Portfolio Operating Expenses
Charge When Charge is Deducted Annual Amount Deducted
Maximum Guaranteed Charge Current Charge
Guaranteed Insurability Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days $0.87 - $2.07 per $1,000 of coverage11 $0.87 - $2.07 per $1,000 of coverage11
Charge for a male Insured, Issue Age 13, in the standard rating class On Policy Issue Date Monthly Days $1.18 per $1,000 of coverage11 $1.18 per $1,000 of coverage11
Automatic Increase Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days $0.25 – $0.50 per $1,000 of annual increase11 $0.25 – $0.50 per $1,000 of annual increase11
Charge for a male non-smoker issue age 37 On Policy Issue Date and Monthly Days $0.50 per $1,000 of annual increase11 $0.50 per $1,000 of annual increase11
Other Insured Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days $0.68 – $311.27 per $1,000 of Net Amount at Risk plus $2011 $0.48 – $178.37 per $1,000 of Net Amount at Risk plus $2011
Charge for a female Insured, Attained Age 36, in the non-smoker rating class On Policy Issue Date and Monthly Days $1.61 per $1,000 Net Amount at Risk plus $2011 $1.53 per $1,000 Net Amount at Risk plus $2011
Term Insurance Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days $0.06 – $83.33 per $1,000 of coverage11 $0.06 – $83.33 per $1,000 of coverage11
Charge for a male Insured, Attained Age 37, in the non-smoker rating class On Policy Issue Date and Monthly Days $1.94 per $1,000 of Net Amount at Risk11 $1.23 per $1,000 of coverage11
Disability Waiver of Monthly Deductions Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days 2.20% - 24.20% of Monthly Deductions11 2.20% - 24.20% of Monthly Deductions11
Charge for a male Insured, Attained Age 31, in the non-smoker rating class On Policy Issue Date and Monthly Days 4.5% of Monthly Deductions11 4.5% of Monthly Deductions11
Disability Waiver of Premium and Monthly Deductions Rider (Minimum and Maximum Charge) On Policy Issue Date and Monthly Days 2.20% - 24.20% of Monthly Deductions and 2.2% to 12.2% of premium to be waived 2.20% - 24.20% of Monthly Deductions and 2.2% to 12.2% of premium to be waived
Charge for a male Insured, Attained Age 33, in the non-smoker rating class On Policy Issue Date and Monthly Days 4.5% of Monthly Deductions and 2.25% of premium to be waived 4.5% of Monthly Deductions and 2.25% of premium to be waived
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11   The annual amount is shown, 1/12th of this amount is deducted on each Monthly Day.

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The next table describes the lowest and highest total operating fees and expenses (before waiver or reimbursement) charged by any of the Funds during the fiscal year ended December 31, 2015. Expenses of the Funds may be higher or lower in the future. More detail concerning each Fund’s fees and expenses is contained in the prospectus for each Fund.
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Annual Fund Operating Expenses (expenses that are deducted from Fund assets):

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Minimum Maximum
  Total Annual Fund Operating Expenses 0.16% 1.05%
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In addition, certain Funds may impose a redemption fee of no more than 2% of the amount of Fund shares redeemed. We may be required to implement a Fund’s redemption fee. The redemption fee will be assessed against your Accumulated Value. For more information, please see each Fund’s prospectus.

CMFG LIFE INSURANCE COMPANY
 

CUNA Mutual Insurance Society is a mutual life insurance company that was originally organized in Wisconsin in 1935. CUNA Mutual Life Insurance Company merged with CUNA Mutual Insurance Society effective on December 31, 2007. CUNA Mutual Insurance Society reorganized into a stock insurance company incorporated in Iowa within a mutual insurance holding company structure and was renamed CMFG Life Insurance Company on January 31, 2012.

We are one of the world’s largest direct underwriters of credit life and disability insurance, and are a major provider of qualified pension products to credit unions. Further, we offer fixed and variable annuities, individual life insurance, health policies, term and permanent life insurance, and long-term care insurance.

CUNA Brokerage Services, Inc. (“CBSI”) is our indirect wholly owned subsidiary.

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As of December 31, 2015, we and our subsidiaries had approximately $17.3 billion in assets, and we had more than $58 billion of life insurance in force. The Company does not file reports under the Securities Exchange Act of 1934, as amended, in reliance on applicable regulation.
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THE SEPARATE ACCOUNT AND THE FUNDS
 

The Separate Account was established by CUNA Mutual Life Insurance Company on August 16, 1983. CUNA Mutual Life Insurance Company merged with us as of December 31, 2007. Although the assets in the Separate Account are our property, the assets attributable to the Policies are not chargeable with liabilities arising out of any other business that we may conduct. The assets of the Separate Account are available to cover our general liabilities only to the extent that the Separate Account’s assets exceed its liabilities arising under the Policies and any other policies supported by the Separate Account. We may transfer to the General Account any assets of the Separate Account that are in excess of reserves and other contract liabilities. Periodically, the Separate Account makes payments to us for Mortality and Expense Charges.

The Separate Account is divided into Subaccounts. The income, gains and losses, realized or unrealized, from the assets allocated to each Subaccount are credited to or charged against that Subaccount without regard to income, gains or losses from any other Subaccount.

The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940, as amended (“1940 Act”). Registration with the SEC does not involve supervision of the management, investment practices, or policies of the Separate Account or of us by the SEC. The Separate Account is also subject to the laws of the State of Iowa which regulate the operations of insurance companies domiciled in Iowa.

We do not guarantee the investment experience of the Separate Account or of any Subaccount. Accumulated Value varies daily with the value of the assets under the Separate Account. The Death Benefit Proceeds may also vary with the value of the assets in the Subaccounts selected by the Owner. To the extent that the Death Benefit Proceeds payable upon the death of the Insured exceed the Accumulated Value, such amounts, like all other benefits payable under a Policy, are our general obligations and payable out of our General Account.

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From time to time, the Funds may reorganize or merge with other mutual funds. If that occurs, we will process any instructions to allocate to the Subaccount investing in the merged fund post-merger instead to the Subaccount investing in the surviving fund.

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Ultra Series Fund
Madison Asset Management, LLC serves as investment adviser to the Ultra Series Fund and manages assets in accordance with general policies and guidelines established by the board of trustees of the Ultra Series Fund. Shares of the Ultra Series Fund are offered to CMFG Life Insurance Company’s separate accounts and qualified pension plans.
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Core Bond Fund (Class I). This Fund seeks to generate a high level of current income, consistent with the prudent limitation of investment risk.

Diversified Income Fund (Class I). This Fund seeks a high total return through the combination of income and capital appreciation.

Large Cap Value Fund (Class I). This Fund seeks long-term growth of capital with income as a secondary consideration.

Large Cap Growth Fund (Class I). This Fund seeks long-term capital appreciation.

Mid Cap Fund (Class I). This Fund seeks long-term capital appreciation.

T. Rowe Price International Series, Inc.
T. Rowe Price Associates, Inc. serves as the investment adviser and T. Rowe Price International Ltd. serves as the investment sub-adviser to the T. Rowe Price International Stock Portfolio.

T. Rowe Price International Stock Portfolio. This Fund seeks long-term growth of capital through investments primarily in the common stocks of established, non-U.S. companies.

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Vanguard® Variable Insurance Fund
Vanguard Variable Insurance Fund Money Market Portfolio. This Fund seeks to provide current income while maintaining liquidity and a stable share price of $1.

The Vanguard Group, Inc. provides investment advisory services on an at-cost basis to the Portfolio.
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More Information About the Funds
In addition to the Separate Account, the Funds may sell shares to separate accounts of other insurance companies to support variable annuity contracts and variable life insurance policies, or to certain pension and retirement plans qualifying under Section 401 of the Code.

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These Funds are not available for purchase directly by the general public, and are not the same as other mutual funds with very similar or nearly identical names that are sold directly to the public. However, the investment objectives and policies of certain Funds available under the Policy may be very similar to the investment objectives and policies of other Funds that are or may be managed by the same investment adviser or manager. Nevertheless, the investment performance of the Funds available under the Policy may be lower or higher than the investment performance of these other (publicly available) Funds. There can be no assurance, and we make no representation, that the investment performance of any of the Funds available under the Policy will be comparable to the investment performance of any other Fund, even if the other Fund has the same investment adviser or manager, the same investment objectives and policies, and a very similar name. Please note that during extended periods of low interest rates, the yields of the Vanguard Variable Insurance Fund Money Market Subaccount may become extremely low and possibly negative.
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To reduce service expenses, we intend to send only one copy of the fund’s reports per household regardless of the number of Owners at the household. However, any Owner may obtain additional reports upon Written Request.

Selection of the Funds
We select the Funds offered through the Policy, review them periodically, and may remove a Fund or limit its availability to new premiums and/or transfers of Accumulated Value if we determine the Fund no longer satisfies one or more of our selection criteria and/or if the Fund has not attracted significant allocations from Owners. We may consider various factors, including, but not limited to, asset class coverage, the investment objectives of a Fund, strength of an adviser’s or a sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm.

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We have entered into agreements with the investment advisers of several of the Funds under which the investment adviser pays us a servicing fee based upon an annual percentage of the average daily net assets invested by the Separate Account (and other of our separate accounts) in the Funds managed by that adviser. These percentages differ, and some advisers may pay us more than others. These fees are in consideration for administration services provided to the Funds by us. Payments of fees under these agreements by managers or advisers do not increase the fees or expenses paid by the Funds or their shareholders.
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You should carefully consider the investment objectives, risks, and charges and expenses of the Funds before investing. The Funds’ prospectuses contain this and other information. You can receive a current copy of a prospectus for each of the Funds by contacting us at our Mailing Address.

The Interest Bearing Account
The Interest Bearing Account is part of our General Account. We use General Account assets to support our insurance and annuity obligations other than those funded by various separate accounts. The Interest Bearing Account is not subject to the same laws as the Separate Account and the SEC has not reviewed material in this prospectus relating to the Interest Bearing Account. However, information relating to the Interest Bearing Account is subject to federal securities laws relating to accuracy and completeness of prospectus disclosure. Subject to applicable law, we have sole discretion over investment of the Interest Bearing Account’s assets. We bear the full investment risk for all assets contributed to the Interest Bearing Account. We guarantee that all Accumulated Value allocated to the Interest Bearing Account is credited interest daily at a net effective interest rate of at least 4%. We will determine any interest rate credited in excess of the guaranteed rate at our sole discretion. The Interest Bearing Account is not available in New Jersey.

THE POLICY
 

The Policy
We no longer issue new Policies or new riders on any Policy. Please note that certain provisions of your Policy may be different than the general description in this Prospectus, and certain riders and options may not be available because of legal restrictions in your state. Contact us at our Mailing Address or see your Policy for specific variations since any such variations will be included in your Policy or in riders or endorsements attached to your Policy.

Flexibility of Premiums
The Policy provides for a schedule of planned annual premiums determined by you. You are not required, however, to pay premiums in accordance with the schedule. Premiums are generally flexible both as to timing and amount. Premiums must be large enough to keep the Policy In Force. You may pay premiums after the initial premium at any time while the Policy is In Force.

We will process additional Premium at the Accumulation Unit Value next determined after the request is received in Good Order at our Mailing Address. If we receive your Premium on a Valuation Day at our Mailing Address in Good Order by the close of regular trading on the New York Stock Exchange (usually, 3:00 p.m. Central Time), your Premium will be applied with that day’s Accumulation Unit Value.

If you want the no-Lapse guarantee to be in effect, you must make planned annual premium payments in an amount that, if paid each year for the first three Policy Years, will keep the no-Lapse guarantee in effect. The specifications page of your Policy indicates the minimum premium. If you want the minimum death benefit guarantee to be in effect so that the Policy will not Lapse during the later of the Insured’s Attained Age 65 or 10 years from the Issue Date, you must pay the Target Premium until the later of Attained Age 65 or 10 years from the Issue Date. The Target Premium is generally determined by dividing the minimum premium by 0.60, and is shown on the specifications page of your Policy.

If you do not choose to utilize the no-Lapse guarantee or minimum death benefit guarantee, the initial premium is at least one-twelfth (1/12) of the minimum premium. The minimum premium is the minimum annual amount that, if paid each year for the first three Policy Years, will keep the no-Lapse guarantee in effect for that time. The minimum initial premium for your Policy is shown on the Policy’s data page.

We may refuse any premium payment that is less than $25.

The total of all premiums paid may never exceed the maximum premium limitation determined by the Code for treatment of the Policy as a life insurance policy. If at any time a premium is paid which would result in total premiums exceeding the maximum premium limitation, we will only accept that portion of the premium which would make total premiums equal the maximum. We will return any excess amount and will not accept further premiums until the maximum premium limitation increases.

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We may refuse any Premium or part of a Premium that would increase the Face Amount by more than the amount of the Net Premium.

Allocation of Net Premiums
You determine what percentages of the Net Premiums are allocated to each Subaccount and the Interest Bearing Account. The minimum allocation is 1% of any Net Premium using whole percentages. If the initial premium is received before we issue the Policy, it is held in our General Account until the Issue Date. On the first Valuation Day following the Record Date, the Net Premium plus interest from the Issue Date, and less Monthly Deductions and amounts held in the Deferred Charges Account are allocated to the Subaccounts of the Separate Account and the Interest Bearing Account in the percentages established by the Owner and recorded on the application for the Policy. These allocations apply to future Net Premiums until the allocations are changed by the Owner.

Lapse
Unless the no-Lapse Guarantee or minimum death benefit guarantee is in effect (see “Premiums to Prevent Lapse” below), if your Net Cash Value on any Monthly Day is insufficient to pay the Monthly Deduction, then we will mail you a written notice informing you that a grace period has begun under the Policy. The grace period will end 61 days after the date on which we must receive the payment. If sufficient Net Premium is not paid during the grace period, the Policy will Lapse without value. The Net Premium required to terminate the grace period is that which is sufficient to pay overdue Monthly Deductions plus the anticipated amount of the next two Monthly Deductions and loan interest due during the grace period. If the Insured dies during the grace period, unpaid Monthly Deductions and any outstanding loan balance will be deducted from the Death Benefit Proceeds.

Reinstatement
You may ask to have a Lapsed Policy reinstated. We will reinstate a Policy based upon the original terms of the Policy if all of the following conditions are met:

 
The Owner makes a Written Request to reinstate the Policy within five years after the Lapse.
     
 
The Insured meets our insurability requirements.
     
 
The Owner pays Net Premiums in an amount sufficient to increase the Net Cash Value to zero by the end of the grace period plus the anticipated amount of three monthly deductions and any loan interest due.
     
 
If Lapse occurs during the twelve months following the Issue Date or a Specified Amount increase, you pay an amount equal to the difference between Deferred Charges on the date of Lapse and Deferred Charges on the date of reinstatement, computed as if the Lapse had not occurred.
     
 
You pay the amount of or reinstate any loan outstanding as of the date of Lapse.

A reinstatement becomes effective only after we approve it. We will reinstate Accumulated Value to the Deferred Charges Account in an amount equal to the lesser of the Deferred Charges on the date of Lapse or Deferred Charge on the date of reinstatement, computed as if the Policy had not Lapsed. After reinstatement, the Deferred Charges will be handled as if the Lapse had not occurred. Cost of Insurance rates following reinstatement, if approved, will be based upon the risk classification of the reinstated policy.

Premiums to Prevent Lapse
If your Policy meets the premium requirements of one of the guarantees described below, your Policy will continue In Force for the duration of the guarantee. The guarantees described may vary by state.

a.  
No-Lapse Guarantee: If at all times during the first three Policy Years the sum of the premiums received to date, less all partial withdrawals and Indebtedness, is at least equal to the monthly minimum premium multiplied by the number of months (plus one month) the Policy has been In Force, the Policy will not Lapse. The monthly minimum premium is the minimum premium (the minimum annual amount needed each year during the first three Policy Years to keep the no-Lapse guarantee in effect) divided by 12. If any requested increase in Specified Amount is made during the first three Policy Years, the no-Lapse guarantee is recalculated.
     
   
In cases where the no-Lapse guarantee is in effect and there is insufficient Net Cash Value to pay the monthly deduction, the Deferred Charges Account will be used to pay the Monthly Deduction. Deferred Charges are collected only if the Policy is surrendered during the first nine Policy Years after the Issue Date or the first nine

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years after an increase in Specified Amount, whichever is applicable. We will waive any Monthly Deduction remaining after the Deferred Charges have been exhausted.
     
b.  
Minimum Death Benefit Guarantee: The minimum death benefit guarantee provides that we will pay a minimum amount of death benefit if, at all times, the sum of the premiums received to date, less all partial withdrawals and Policy loans, is at least equal to the monthly Target Premium multiplied by the number of months (plus one month) the Policy has been In Force. The Target Premium is stated on the specifications page of the Policy and is generally determined by dividing the minimum premium by 0.60. Thus, if the Owner pays a premium at least equal to the Target Premium each year, the Policy will remain In force and the minimum death benefit will be paid even if the Net Cash Value is insufficient to pay Monthly Deductions on a Monthly Day and the Policy would otherwise Lapse. The monthly Target Premium is the Target Premium divided by twelve. The minimum death benefit guarantee expires at the later of Attained Age 65 or 10 years from the Issue Date.
     
   
The Target Premium will be increased or decreased, as appropriate, when you request to increase or decrease the Specified Amount, change the Death Benefit Option, or add or delete riders.
     
   
If the premiums required to maintain the minimum death benefit guarantee are not paid, the minimum death benefit guarantee will be lost. We will mail you notice of this loss, after which you will have 60 days to reinstate the minimum death benefit guarantee by paying premiums sufficient to raise the total premiums to the required amount. If the necessary premiums are not paid within the 60 day grace period, the minimum death benefit guarantee cannot be reinstated.
     
   
Where the minimum death benefit guarantee is in effect and there is insufficient Net Cash Value to pay the Monthly Deduction, Deferred Charges will be used to pay the monthly deduction during those first nine Policy Years. During those years, any Monthly Deduction remaining after amounts in the deferred Charges Account have been exhausted will be waived. In the 10th Policy Year and beyond, any Monthly Deduction in excess of the Net Cash Value will be waived.

Death Benefit Proceeds

Payment of Death Benefit Proceeds. When we receive satisfactory, written proof of the Insured’s death at our Mailing Address, we will pay the Death Benefit Proceeds to the Beneficiary. If no Beneficiary survives the Insured, we will pay the Death Benefit Proceeds to you, the owner, if living, or to your estate. The death benefit is paid when we have received Due Proof of Death and proof (in Good Order) of each beneficiary(ies) interest, which shall include the required documentation and proper instructions from each of the beneficiary(ies).

We will pay Death Benefit Proceeds payable to your estate in one sum. We will pay Death Benefit Proceeds payable to you or to other beneficiaries in one sum unless another settlement option is selected. If the Beneficiary is not a natural person, Death Benefit Proceeds due may only be applied under settlement options we consent to.

We pay interest on single sum Death Benefit Proceeds from the date we receive proof of death (or from the date of the Insured’s death, if required by law), until the date of payment. Interest is paid at an annual rate that we determine.

During the Insured’s lifetime, you may elect a settlement option for the payment of the Death Benefit Proceeds. To make such an election, we must receive (in Good Order) the written consent of all Irrevocable Beneficiaries and assignees. After the Insured’s death, if you did not select a settlement option, any Beneficiary entitled to receive the proceeds in one sum may select a settlement option.

Every state has unclaimed property laws which generally declare life insurance policies to be abandoned after a period of inactivity of 3 to 5 years from the policy’s Maturity Date or date the Death Benefit Proceeds are due and payable. For example, if the payment of Death Benefit Proceeds has been triggered, but, if after a thorough search, we are still unable to locate the Beneficiary, or the Beneficiary does not come forward to claim the Death Benefit Proceeds in a timely manner, the Death Benefit Proceeds will be paid to the abandoned property division or unclaimed property office of the state in which the Beneficiary or the Owner last resided, as shown on our books and records, or to our state of domicile. This “escheatment” is revocable, however, and the state is obligated to pay the Death Benefit Proceeds if the Beneficiary steps forward to claim the Death Benefit Proceeds with the proper documentation. To prevent such escheatment, it is important that you update your beneficiary designations, including addresses, if and as they change. Such updates should be communicated in writing to our Mailing Address.

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Death Benefit Options 1 and 2. You may select one of two Death Benefit Options. Your selection will affect the death benefit, the Monthly Deduction, and the Accumulated Value. Under either option, Death Benefit Proceeds are equal to the Face Amount on the date of death, plus any premiums received after the date of death, minus Indebtedness.

However, the Face Amount differs under the two Death Benefit Options. The Face Amount under option 1 is the greater of (a) the Specified Amount, or (b) the Accumulated Value on the date of death multiplied by the Death Benefit Ratio. The Face Amount under option 2 is the greater of (a) the Specified Amount plus the Policy’s Accumulated Value on the date of death, or (b) the Accumulated Value on the date of death multiplied by the Death Benefit Ratio.

The Death Benefit Ratio is the ratio of Face Amount to Accumulated Value required by the Code for treatment of the Policy as a life insurance policy. The Death Benefit Ratio varies by Attained Age as shown in Appendix B of the SAI. The death benefit factor decreases from year to year as the Attained Age of the Insured increases.

Change of Death Benefit Option
You may change the Death Benefit Option at any time by Written Request. Changing the Death Benefit Option may have tax consequences. A change becomes effective as of the first Monthly Processing Day after we receive a Written Request requesting the change, or the first Monthly Processing Day after underwriting is complete if evidence was requested. The written consent of all assignees and irrevocable beneficiaries must be obtained prior to the change. We may require evidence of insurability.

If option 1 is changed to option 2, the Specified Amount is reduced by the amount of the Policy value as of the effective date of the change. This change does not alter the amount of the Policy’s death benefit at the time of the change, but does affect how the death benefit is determined from that point on. The death benefit will vary with Policy value from that point on, unless the death benefit derived from application of the death benefit percentage factor applies. We may decline a change from Death Benefit Option 2 if the resulting Specified Amount would be less than $50,000 ($10,000 for Issue Ages 65 and over).

If option 2 is changed to option 1, the Specified Amount is increased by the amount of the Policy value as the effective date of the change. This change does not alter the amount of the Policy’s death benefit at the time of the change, but does affect the determination of the death benefit from that point on. The death benefit as of the date of the change becomes the new Specified Amount and remains at that level, unless the death benefit derived from application of the death benefit percentage factor applies.

Your insurance goals should determine the appropriate Death Benefit Option. If you prefer to have favorable investment results and additional Net Premiums reflected in the form of an increased death benefit, you should choose Death Benefit Option 2. If you are satisfied with the amount of insurance coverage and wish to have favorable investment results and additional Net Premiums reflected to the maximum extent in increasing Cash Value, you should choose Death Benefit Option 1.

A change of Death Benefit Option may also change the Cost of Insurance for the duration of the Policy. Though the Cost of Insurance rate is the same under both options, the Net Amount at Risk varies inversely with Policy value under option 1, but is constant under option 2, unless the death benefit derived from application of the death benefit percentage factor applies.

A change of Death Benefit Option may have tax consequences. You should consult a tax advisor before changing the Death Benefit Option.

Accelerated Benefit Option
If you elect to receive an accelerated payment of the death benefit and provide us with satisfactory evidence that the Insured is terminally ill, we will advance up to 50% of a Policy’s eligible death benefit subject to a $250,000 maximum per Insured. Terminal illness is a non-correctable medical condition in which the Insured’s life expectancy is no more than twelve months. The eligible death benefit is the death benefit calculated without including Accumulated Value. We assess an administrative charge (of no more than $300) for an accelerated payment of the death benefit and deduct interest on the amount paid. As a result, the Death Benefit Proceeds payable to the Beneficiary upon the death of the Insured is reduced by an amount greater than the amount you receive as an accelerated benefit.

In order to be considered eligible, the coverage must:

1)  
be In Force other than as extended term insurance; and
2)  
have more than two years until its maturity or expiration date, from the date written notification to exercise this benefit is received by us at our Mailing Address.

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The accelerated benefit option is not available in all states and may vary by state. The tax consequences of accelerated benefits are uncertain and you should consult a tax advisor before exercising this option.

Change of Specified Amount
A Written Request is needed to change the Specified Amount. Changing the Specified Amount is currently allowed at any time. We may discontinue our current practice of allowing a change in Specified Amount during the first Policy Year. Changing the Specified Amount may have tax consequences. You should consult a tax advisor before changing the specified amount. If more than one increase is requested in a Policy Year, we may charge $50 for each increase after the first. Changes are subject to the following conditions.

Decreases. We may require that the Specified Amount after any decrease be at least $50,000 ($10,000 for Issue Ages 65 and over). The decrease is effective as of the Monthly Processing Day coincident with or next following the day the request is received by us at our Mailing Address. The effective date of the decrease will be shown on an endorsement to the Policy. For purposes of determining the Cost of Insurance, any decrease is applied to the initial Specified Amount and to increases in the Specified Amount in reverse order in which they became effective. A decrease does not result in reduced Deferred Charges.

Increases. A supplemental application containing evidence of insurability satisfactory to us is required. The increase is effective as of the first Monthly Processing Day after we receive the Written Request requesting the change, or the first Monthly Processing Day after underwriting is complete if evidence was requested. The effective date of the increase will be shown on an endorsement to the Policy. The incontestable and suicide provisions apply to the increase as if a new Policy had been issued for the amount of the increase.

The Net Cash Value of the original Policy, as well as any premiums paid at the time of the increase, and any premiums paid after the increase will be allocated between the original Specified Amount and the increased Specified Amount according to the ratios of their respective guideline annual premiums (as defined under the 1940 Act).

Because the Deferred Charges are a function of Specified Amount, an increase in Specified Amount results in an increase in the applicable Deferred Charge. No additional Deferred Charges will accrue for increases in Specified Amount due to the Automatic Increase Rider or a change from Death Benefit Option 2 to Death Benefit Option 1.

Likewise, because the Administrative Charge is a function of Specified Amount, an increase in Specified Amount results in an increase in the ongoing Administrative Charge. As with the Deferred Charges, an increase resulting from a change in death benefit death option 2 to option 1 does not result in an increase in the Administrative Charge.

We may require for a Specified Amount increase, the payment of additional premiums in an amount equal to the initial premium which would be charged based on Attained Age and rating class for a newly-issued Policy with a Specified Amount equal to the amount of increase.

The rating class assigned to an increase in Specified Amount may result in the use of a Cost of Insurance rate different than the Cost of Insurance rate charged on the original Specified Amount.

Policy Values

Accumulated Value. The Accumulated Value is the sum of the values attributable to the Policy in the Loan Account, Deferred Charges Account, each Subaccount, and the Interest Bearing Account. Accumulated Value is determined as of the end of each Valuation Period. The Loan Account is part of our General Account into which is transferred an amount equal to any Policy loans. The Deferred Charges Account is part of our General Account in which Policy values are held in support of the deferred sales and administrative charges.

Accumulated Value increases whenever:

 
Investment gains occur in any Subaccount.
 
Interest is credited to the Policy for amounts held in the Interest Bearing Account.
 
Interest is credited to the Policy for any loan amounts held in the Loan Account.
 
Additional Net Premiums are paid.
 
Policy dividends are paid into the Subaccounts or Interest Bearing Account.

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Accumulated Value decreases whenever:

 
Investment losses occur in any Subaccount.
 
Monthly Deduction or service fees are paid.
 
A partial withdrawal is made.
 
Net Cash Value is reduced by the amount of the transfer charge.

Accumulated Value is unaffected when:

 
A Policy loan is either disbursed or repaid.
 
Accumulated Value is transferred between any Subaccount or Interest Bearing Account and the Loan Account, between Subaccounts or between the Subaccounts and the Interest Bearing Account (exclusive of any transfer charge).

Accumulated Value is determined as of the end of each Valuation Period by adding the value attributable to the Policy in the Loan Account, Deferred Charges Account, each Subaccount, and the Interest Bearing Account.

Accumulated Value in an Interest Bearing Account. As of the end of any Valuation Period, a Policy’s value in the Interest Bearing Account is equal to:

 
aggregate Net Premium allocated to the Interest Bearing Account; plus
 
Accumulated Value transferred to the Interest Bearing Account; plus
 
interest credited to the Interest Bearing Account; minus
 
any partial withdrawals (including any applicable surrender charges deducted); minus
 
any transfers of Accumulated Value from the Interest Bearing Account (including any transfer fees); minus
 
the aggregated portion of monthly deductions made from the Interest Bearing Account; less
 
the Interest Bearing Account’s portion of any Increase of Specified Amount Charge.

Accumulated Value in the Subaccounts. Accumulated Value in a Subaccount reflects the investment experience of that Subaccount and the Accumulated Value in all Subaccounts reflects the weighted investment experience of those Subaccounts.

The Accumulated Value in any Subaccount as of the Policy Issue Date is equal to the amount of the initial Net Premium allocated to that Subaccount. For subsequent Valuation Periods, the Accumulated Value in the Subaccount is equal to that part of any Net Premium allocated to and any Accumulated Value transferred to the Subaccount during the Valuation Period, adjusted by dividends, realized and unrealized net capital gains and losses during the Valuation Period, and decreased by partial withdrawals (including any applicable surrender charges) from the Subaccount during the Valuation Period and by any transfers of Accumulated Value (including any transfer fees) from the Subaccount during the Valuation Period. Net Premiums allocated to a Subaccount and Accumulated Value transferred to a Subaccount are converted into Units. For each such allocation or transfer, the number of Units of a Subaccount credited to a Policy is determined by dividing the dollar amount of the allocation or transfer directed to the Subaccount by the value of the Subaccount’s Unit for the Valuation Period during which the allocation or transfer is made. Therefore, Net Premium allocated to or Accumulated Value transferred to a Subaccount increases the number of the Subaccount’s Units credited to the Policy as of the end of the Valuation Period for which they are credited.

Certain events reduce the number of Units of a Subaccount credited to a Policy. Partial withdrawals or transfers of Accumulated Value from a Subaccount result in the cancellation of an appropriate number of Units of that Subaccount, as do: (1) surrender of the Policy, (2) payment of the Death Benefit Proceeds, and (3) the deduction of that Subaccount’s share of the monthly deduction or any applicable Increase of Specified Amount Charge. Units are redeemed as of the end of the Valuation Period during which the transaction is executed or we receive notice regarding the event.

The value of a Unit for a Subaccount is calculated for each Valuation Period subtracting (2) from (1) and dividing the result by (3) where:

(1) is  
(a) the net assets of the Subaccount as of the end of the Valuation Period; (b) plus or minus the net charge or credit with respect to any taxes paid or any amount set aside as a provision for taxes during the Valuation Period.

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(2) is  
a daily factor representing the mortality and expense risk charge multiplied by the number of days in the Valuation Period.
     
(3) is  
the number of Units outstanding as of the end of the Valuation Period.

The Unit Value may increase or decrease from one Valuation Period to the next and varies between Subaccounts.

Transfer of Values
You may make the following transfers of Accumulated Value: (1) between Subaccounts; (2) from a Subaccount to the Interest Bearing Account; and (3) from the Interest Bearing Account into the Subaccounts only during the 30 day period beginning on and immediately following the Policy Anniversary (we are currently waiving this restriction). The first four transfers in a Policy Year are free. We may charge $20 for the fifth and each additional transfer in a Policy Year. We currently waive this fee. All transfer requests received as of the same Valuation Day are treated as one transfer for the purposes of assessing the transfer fee. A transfer from the Interest Bearing Account may be limited to 25% of the Interest Bearing Account. We may deduct a charge of $20 per transfer after the fourth transfer in a Policy Year. We currently waive this restriction. Transfer privileges are subject to restriction based on our Frequent Transfers Procedures.

A request to transfer Subaccount Values to other Subaccounts and/or Interest Bearing Account or from Interest Bearing Account to one or more Subaccounts which is received before the close of regular trading on the New York Stock Exchange (usually, 3:00 p.m. Central Time) will take effect as of the day it is received. Transfer requests received after that time are processed as the following Valuation Day.

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We may restrict the ability to transfer Policy value among Subaccounts and/or the Interest Bearing Account if we believe such action is necessary to maintain the tax status of the Policies. Transfers can be made by Written Request.
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Additional Transfer Limitations
Frequent, large, or short-term transfers among Subaccounts, such as those associated with “market timing” transactions, can adversely affect the Funds and the returns achieved by Owners. In particular, such transfers may dilute the value of Fund shares, interfere with the efficient management of the Funds, and increase brokerage and administrative costs of the Funds. These costs are borne by all Owners allocating purchase payments to the Subaccounts and other Fund shareholders, not just the Owner making the transfers. In order to try to protect Owners and the Funds from potentially harmful trading activity, we have adopted Frequent Transfers Procedures.

Detection. We employ various means in an attempt to detect, deter, and prevent inappropriate frequent, large, or short-term transfer activity among the Subaccounts that may adversely affect other Owners or Fund shareholders. We may vary the Frequent Transfers Procedures with respect to the monitoring of potential harmful trading activity from Subaccount to Subaccount, and may be more restrictive with regard to certain Subaccounts than others. However, we will apply the Frequent Transfers Procedures, including any variance in the Frequent Transfers Procedures by Subaccount, uniformly to all Owners. We also coordinate with the Funds to identify potentially inappropriate frequent trading, and will investigate any patterns of trading behavior identified by Funds that may not have been captured through operation of the Frequent Transfers Procedures.

Please note that despite our best efforts, we may not be able to detect nor stop all harmful transfers.

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Deterrence. If we determine under the Frequent Transfers Procedures that an Owner has engaged in inappropriate frequent transfers, we notify such Owner that from that date forward, for three months from the date we mail the notification letter, transfer privileges for the fund(s) in which inappropriate transfers were made will be revoked. Second time offenders will be permanently restricted from selling or buying into the fund(s).
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In our sole discretion, we may revise the Frequent Transfers Procedures at any time without prior notice as necessary to (i) better detect and deter frequent, large, or short-term transfers that may adversely affect other Owners or Fund shareholders, (ii) comply with state or federal regulatory requirements, or (iii) impose additional or alternate restrictions on Owners who make inappropriate frequent transfers (such as dollars or percentage limits on transfers). We also may, to the extent permitted by applicable law, implement and administer redemption fees imposed by one or more of the Funds in the future. If required by applicable law, we may deduct redemption fees imposed by the Funds. Further, to the extent permitted by law, we also may defer the transfer privilege at any time that we are unable to purchase or redeem shares of the Funds. You should be aware that we are contractually obligated to prohibit purchases and transfers or redemptions of Fund shares at the Fund’s request.

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We currently do not impose redemption fees on transfers, or expressly allow a certain number of transfers in a given period, or limit the size of transfers in a given period. Redemption fees, transfer limits, and other procedures or restrictions may be more or less successful than our policies in deterring inappropriate frequent transfers or other disruptive transfers and in preventing or limiting harm from such transfers.

Our ability to detect and deter such transfer activity is limited by our operational and technological systems, as well as by our ability to predict strategies employed by Owners (or those acting on their behalf) to avoid detection. Accordingly, despite our best efforts, we cannot guarantee that the Frequent Transfers Procedures will detect or deter frequent or harmful transfers by such Owners or intermediaries acting on their behalf. We apply the Frequent Transfers Procedures consistently to all Owners without waiver or exception.

Fund Frequent Trading Policies. The Funds have adopted their own policies and procedures with respect to inappropriate frequent purchases and redemptions of their respective shares. The prospectuses for the Funds describe any such policies and procedures. The frequent trading policies and procedures of a Fund may be different, and more or less restrictive, than the frequent trading policies and procedures of other Funds and the policies and procedures we have adopted to discourage inappropriate frequent transfers. Accordingly, Owners and other persons who have material rights under the Contracts should assume that the sole protections they may have against potential harm from frequent transfers are the protections, if any, provided by the Frequent Transfers Procedures. You should read the prospectuses of the Funds for more details on their ability to refuse or restrict purchases or redemptions of their shares.

Omnibus Orders. Owners and other persons with material rights under the Contracts also should be aware that the purchase and redemption orders received by the Funds generally are “omnibus” orders from intermediaries such as retirement plans and separate accounts funding variable insurance contracts. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance contracts and individual retirement plan participants. The omnibus nature of these orders may limit each Fund’s ability to apply its respective frequent trading policies and procedures. In addition, if a Fund believes that an omnibus order we submit may reflect one or more transfer requests from Owners engaged in inappropriate frequent transfers, the Fund may reject the entire omnibus order and thereby delay or prevent us from implementing your request.

You should be aware that we are required to provide to a Fund or its designee, promptly upon request, certain information about the transfer activity of individual Owners and, if requested by the Fund, to restrict or prohibit further purchases or transfers by specific Owners identified by the Fund as violating the frequent trading policies established for that Fund.

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Change of Allocations
You may request a change in the allocation of future Net Premiums by Written Request.. You may also change the percentages of Monthly Deductions withdrawn from each Subaccount and Interest Bearing Account by Written Request. Any allocation to, or withdrawal from, a Subaccount or Interest Bearing Account must be at least 1% of Net Premiums and only whole percentages are allowed.

A Written Request to change allocation of premiums will be effective for the first premium payment on or following the date the request for change is received by us (in Good Order) at our Mailing Address. A request to change the allocation of withdrawal of Monthly Deductions will be effective on the first Monthly Day on or following the date the request is received by us at our Mailing Address.

Dollar-Cost Averaging
If elected at the time of the application or at any other time by Written Request, you may systematically or automatically transfer (on a monthly basis) specified dollar amounts from the Vanguard Variable Insurance Fund Money Market Subaccount to other Subaccounts. The fixed dollar amount will purchase more accumulation units of a Subaccount when their value is lower and fewer units when their value is higher. Over time, the cost per accumulation unit averages out to be less than if all purchases had been made at the highest value and greater than if all purchases had been made at the lowest value. The dollar-cost averaging method of investment reduces the risk of making purchases only when the price of accumulation units is high. It does not assure a profit or protect against a loss in declining markets.

The minimum transfer amount for dollar-cost averaging is the equivalent of $100 per month. If less than $100 remains in the Vanguard Variable Insurance Fund Money Market Subaccount, the entire amount will be transferred. The amount transferred to a Subaccount must be at least 1% of the amount transferred and must be stated in whole percentages.

Once elected, dollar-cost averaging remains in effect until the earliest of: (1) the Accumulated Value in the Vanguard Variable Insurance Fund Money Market Subaccount is depleted to zero; (2) you cancel the election by Written Request; or (3) for three
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successive months, the Accumulated Value in the Vanguard Variable Insurance Fund Money Market Subaccount has been insufficient to implement the dollar-cost averaging instructions you have given to us. We will notify you when dollar-cost averaging is no longer in effect. There is no additional charge for using dollar-cost averaging. Dollar-cost averaging transfers do not count against the four free transfers in a Policy Year. We may discontinue offering dollar-cost averaging at any time and for any reason. We may discontinue offering automatic transfers at any time for any reason.
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Surrender and Partial Withdrawals
You may, by Written Request, make surrenders under your Policy, subject to obtaining the prior written consent of all assignees or irrevocable Beneficiaries. You may, by Written Request, make partial withdrawals under your Policy, subject to obtaining the prior written consent of all assignees or irrevocable Beneficiaries. A surrender or partial withdrawal of the Policy will take effect as of the day the Written Request is received, if received before the close of regular trading on the New York Stock Exchange (usually, 3:00 p.m. Central Time) at our Mailing Address. Any requests after the close of regular trading on the New York Stock Exchange (usually, 3:00 p.m. Central Time) will be processed as of the next Valuation Day. Payments generally are made within seven days of the effective date unless a suspension of payments is in effect. Surrenders and partial withdrawals may have adverse tax consequences. For information on possible tax effects of surrenders and partial withdrawals, see Tax Treatment of Policy Benefits.

Policy Surrender. You may surrender the Policy for its Net Cash Value, in which case we may require the return of the Policy. We will determine the Net Cash Value as of the end of the Valuation Period during which the surrender date occurs. The Policy and all insurance terminate upon surrender.

Partial Withdrawals. You may take a portion of your Policy’s Net Cash as a partial withdrawal. A partial withdrawal may have adverse tax consequences. An amount up to the Net Cash Value, less one or two months of insurance charges, may be taken as a partial withdrawal. You may specify the allocation percentages among the Subaccount(s) and Interest Bearing Account from which the partial withdrawal is to be made. We will not deduct any contingent deferred sales or administrative charges in the case of a partial withdrawal, but may apply a service charge against the amount withdrawn equal to the lesser of $25 or 2% of that amount. If no specification is made, we will withdraw the amount from the Subaccounts and Interest Bearing Account in the same percentages as Monthly Deductions are deducted. If there is insufficient Accumulated Value to follow these percentages, the partial withdrawal amount will be withdrawn on a pro rata basis based on the Accumulated Value in the Subaccounts and Interest Bearing Account. The partial withdrawal fee is deducted from amounts withdrawn from the Subaccounts and the Interest Bearing Account on the same pro rata basis, unless otherwise directed by the Owner. We currently waive the partial withdrawal fee.

No partial withdrawal will be allowed if the Specified Amount remaining under the Policy would be less than $40,000 ($8,000 if Issue Age is 65 and over).

Unless the Face Amount derived from the application of the Death Benefit Ratio applies, under either Death Benefit Option, a partial withdrawal will reduce both the Accumulated Value and Face Amount by the amount surrendered but will not affect the Cost of Insurance. Under Death Benefit Option 1, the Specified Amount is also reduced by the same amount. The Specified Amount is not changed by a partial withdrawal under Death Benefit Option 2. If the Face Amount derived from the application of the Death Benefit Ratio applies, the effect on the monthly Cost of Insurance and Face Amount is somewhat different. The Face Amount is then decreased by more than the amount surrendered, and the monthly Cost of Insurance is less than it would have been without the surrender.

Maturity
The Policy matures on the Policy Anniversary following the Insured’s 95th birthday. Coverage under the Policy ceases on that date and you will receive maturity proceeds equal to the Net Cash Value as of that date.

Payment of Proceeds/Settlement Options
There are several options for receiving Death Benefit Proceeds, surrender proceeds, and maturity proceeds, other than in a lump sum. None of these options vary based upon the performance of the Separate Account. Proceeds payable to other than a natural person will be applied only under settlement options agreed to by us. For more information concerning the options listed below, please contact us at our Mailing Address. The available settlement options are as follows:

 
Interest Option
 
Installment Option
 
Life Income – Guaranteed Period Certain
 
Joint and Survivor Life

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In lieu of one of the above options, the Death Benefit Proceeds may be applied to any other settlement option we make available.

Suspension of Payments
For amounts allocated to the Separate Account, we may suspend or postpone the right to transfer among Subaccounts, make a surrender or partial surrender, or take a Policy loan when:

1.  
The New York Stock Exchange is closed other than for customary weekend and holiday closings.
     
2.  
During periods when trading on the Exchange is restricted as determined by the SEC.
     
3.  
During any emergency as determined by the SEC which makes it impractical for the Separate Account to dispose of its securities or value its assets.
     
4.  
During any other period permitted or required by order of the SEC for the protection of investors.
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Pursuant to SEC rules, if the Vanguard Variable Insurance Fund Money Market Subaccount suspends payment of redemption proceeds in connection with a liquidation of such Fund, we will delay payment of any transfer, partial withdrawal, surrender, loan or death benefit from the Vanguard Variable Insurance Fund Money Market Subaccount until the Fund is liquidated.

In addition, pursuant to SEC rules, if the Vanguard Variable Insurance Fund Money Market Subaccount suspends the payment of redemption proceeds in connection with the implementation of liquidity gates by the Fund, we will delay payment of any transfer, partial withdrawal, surrender, loan or death benefit from the Vanguard Variable Insurance Fund Money Market Subaccount until the removal of such liquidity gates.

If, pursuant to SEC rules, the Vanguard Variable Insurance Fund Money Market Subaccount decides to impose a liquidity fee on redemptions from the Subaccount, we will assess the liquidity fee against Contract Value you withdraw or transfer from the Vanguard Variable Insurance Fund Money Market Subaccount.
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To the extent values are allocated to the Interest Bearing Account, the payment of full or partial surrender proceeds or loan proceeds may be deferred for up to six (6) months from the date of receipt, in Good Order, of the surrender or loan request, unless state law requires exception to the period of deferment. Death Benefit Proceeds may be deferred for up to 60 days from the date we receive (in Good Order) proof of death. If payment is postponed for more than 29 days, we will pay interest at an effective annual rate of 4.00% for the period of postponement.

If mandated under applicable law, we may be required to reject a premium payment. We may also be required to provide additional information about your account to government regulators. In addition, we may be required to block an Owner’s account and thereby refuse to pay any request for transfers, withdrawals, surrenders, loans or death benefits, until instructions are received from the appropriate regulator.

Policy Loans

General. At any time prior to the Maturity Date while the Insured is still living and the Policy is In Force, you may, by Written Request, borrow money from us using the Cash Value as the security for the loan. The maximum amount that you may borrow is 80% (90% for Virginia residents) of the Cash Value of the Policy as of the date of the loan. You must obtain the written consent of all assignees and Irrevocable Beneficiaries before the loan is made. The Policy will be the sole security for the loan.

The loan date is the date a written loan request containing the necessary signatures is received by us, in Good Order, at our Mailing Address. The loan value will be determined as of the loan date. Payment will be made within seven days of the loan date unless a suspension of payments is in effect.

Interest. We charge interest on amounts that you borrow. The interest rate charged is 8% and is an effective annual rate compounded annually on the Policy Anniversary. This rate is subject to change by us. Interest accrues on a daily basis from the loan date. Interest is due and payable at the end of each Policy Year. If interest is not paid when due, an amount equal to the interest due less interest earned on the Loan Account will be transferred from the Subaccounts and Interest Bearing Account to the Loan Account. The amount of loan interest billed will increase the loan principal and be charged the same rate of interest as the loan.

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We credit Loan Account with interest at a minimum guaranteed rate of at least 4%. On each Policy Anniversary, interest earned on amounts in the Loan Account since the preceding Policy Anniversary is transferred to the Subaccounts and the Interest Bearing Account. Unless you specify otherwise, such transfers are allocated in the same manner as transfers of collateral to the Loan Account.

Loan Collateral. To secure a Policy loan to you, we withdraw an amount equal to the loan out of the Subaccounts and the Interest Bearing Account and transfer this amount into the Loan Account to be held there until the loan is repaid. You may specify how this transferred Accumulated Value is allocated among the Subaccounts and the Interest Bearing Account If you do not specify the allocation, we make the allocation in the based on the proportion that Monthly Deductions are withdrawn from the Subaccounts and Interest Bearing Account. If you make a specification but there are insufficient values in one or more of the Subaccounts and the Interest Bearing Account for withdrawal as you have specified, we will withdraw the loan amount from all Subaccounts and the Interest Bearing Account on a pro rata basis based on values in the Subaccounts and Interest Bearing Account.

Loan Repayment. Any Indebtedness may be repaid at any time while the Insured is still living and the Policy is In Force prior to the Maturity Date. Loan payments must be clearly marked as loan payments or we will treat them as premiums. As the loan is repaid, the amount repaid will be transferred from the Loan Account to the Subaccounts and the Interest Bearing Account in the same manner as premiums are allocated.

Effect of a Policy Loan. A loan, whether or not repaid, has a permanent effect on the death benefit and Accumulated Values because the investment results of the Subaccounts and current interest rates credited on Interest Bearing Account value do not apply to Accumulated Value in the Loan Account. The larger the loan and longer the loan is outstanding, the greater will be the effect of Accumulated Value being held as collateral in the Loan Account. Depending on the investment results of the Subaccounts or credited interest rates for the Interest Bearing Account while the loan is outstanding, the effect could be favorable or unfavorable. Policy loans also may increase the potential for Lapse if investment results of the Subaccounts to which Cash Value is allocated is unfavorable. If a Policy Lapses with loans outstanding, certain amounts may be subject to income tax. See “Federal Income Tax Considerations,” for a discussion of the tax treatment of Policy loans. In addition, if a Policy is a modified endowment contract (“MEC”), loans may be currently taxable and subject to a 10% federal penalty tax.

Cyber Security
Our variable product business is highly dependent upon the effective operation of our computer systems and those of our business partners, so that our business is potentially susceptible to operational and information security risks resulting from a cyber-attack. These risks include, among other things, the theft, misuse, corruption and destruction of data maintained online or digitally, denial of service attacks on websites and other operational disruption and unauthorized release of confidential customer information. Cyber-attacks affecting us, CBSI, the underlying Funds, and intermediaries may adversely affect us and your Cash Value. For instance, cyber-attacks may interfere with our processing of Policy transactions, including processing orders with the underlying Funds, impact our ability to calculate Policy values, cause the release and possible destruction of confidential Owner or business information, impede order processing, subject us and/or CBSI and intermediaries to regulatory fines and financial losses and/or cause reputational damage. Cyber security risks may also impact the issuers of securities in which the underlying Funds invest, which may cause the Funds underlying your Policy to lose value. There can be no assurance that we or the underlying Funds or CBSI will avoid losses affecting your Policy due to cyber-attacks or information security breaches in the future.

CHARGES AND DEDUCTIONS
 

Premium Expense Charge
We deduct from premiums for Premium Expense Charges charged by your state of residence. We determine your state of residence by the mailing address as shown on our records. The initial percentage of reduction for state charges is shown on the specifications page of your Policy.

Monthly Deduction
The Monthly Deduction due on each Monthly Day will be the sum of:

 
the Cost of Insurance for that month; plus
 
the monthly Policy fee; plus
 
the monthly administrative fee; plus
 
the cost of any additional benefits provided by rider, if any.

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The Monthly Deduction is allocated to the subaccounts and interest bearing account values prescribed by the Owner and is collected by liquidating the number of units (or fraction of units) in Subaccounts (and/or withdrawing values from the Interest Bearing Account) in an amount equal to the amount of the Monthly Deduction, except during the second through ninth Policy Years, in which case the amount in the Deferred Charges Account in excess of the Deferred Charges will be first applied to the Monthly Deduction. The excess amount will include interest earned in the account and, when the Monthly Day falls on a Policy Anniversary, the amount released from the Deferred Charges Account.

On any Monthly Day when there is insufficient Net Cash Value to pay the Monthly Deduction and the no-Lapse guarantee or minimum death benefit guarantee is in effect, the Monthly Deduction remaining after the Net Cash Value is exhausted will be made from the Deferred Charges Account. If the Deferred Charges Account balance is insufficient to pay the Monthly Deduction, we will waive any Monthly Deduction remaining after the amount in the Deferred Charges Account has been exhausted.

In the 10th Policy Year and beyond, any Monthly Deduction in excess of the Net Cash Value will be waived by us if the minimum death benefit guarantee is still in effect.

The Owner may specify what percentages of the Monthly Deduction will be withdrawn from each Subaccount and the Interest Bearing Account. Each withdrawal from a Subaccount or the Interest Bearing Account must be at least 1% of the total Monthly Deduction. Only whole percentages are permitted. If a specification is not made, the withdrawals will be made in the same percentages as premiums are currently allocated among the Subaccounts and the Interest Bearing Account.

Cost of Insurance
This charge compensates us for the expense of underwriting the Face Amount. We determine a Cost of Insurance (“COI”) rate on each Monthly Day. The COI rate for the Policy is determined by certain factors including, but not limited to, the Insured’s Attained Age, gender, smoker status, and rating class. (For factors used in unisex Policies, see the Section entitled Unisex Policies.) Attained Age means Age on the most recent Policy Anniversary. COI rate charges depend on our expectations as to future mortality experience. The monthly COI rate will not exceed the rates shown in Table I - Guaranteed Maximum Insurance Rates contained in the Policy. However, we may charge less than these rates. While not guaranteeing to do so, we intend to charge less than the guaranteed maximum insurance rates after the 10th Policy Year. The guaranteed maximum insurance rates for each attained age are based on the 1980 CSO Mortality Tables, Age last birthday.

The COI is determined by multiplying the COI rate by the Net Amount at Risk for a Policy. Under Death Benefit Option 2, the Net Amount at Risk is always the Specified Amount. Under Death Benefit Option 1, the Net Amount at Risk is the Specified Amount less the Accumulated Value. Therefore, under Death Benefit Option 1, all of the factors that affect Accumulated Value affect the Net Amount at Risk. For a Policy where there has been an increase in the Specified Amount, there is a Net Amount at Risk associated with the initial Specified Amount and a Net Amount at Risk associated with the increase. The COI rate applicable to the initial Specified Amount is usually less than that for the increase. Likewise, the Net Amount at Risk for the initial Specified Amount is multiplied by the COI rate for the initial Specified Amount to determine the COI charge for the initial Specified Amount and the Net Amount at Risk for the increase is multiplied by the COI rate for the increase to determine the COI for the increase. To compute the net amounts at risk after an increase for a Policy with an option 1 death benefit, Accumulated Value is first used to offset the initial Specified Amount, and any Accumulated Value in excess of the initial Specified Amount is then used to offset the increase in Specified Amount.

Monthly Policy Fee
The monthly Policy fee is a fee we charge to compensate us for some of the administrative expenses associated with the Policy. The fee cannot be increased. It is equal to $3 per month for Policies with Issue Ages of 0-19 and $6 per month for all other Policies. It is not based on the Specified Amount.

Monthly Administrative Fee
We assess an administrative fee of $.45 per thousand dollars of Specified Amount per year on a monthly basis to reimburse us for some of the administrative expenses associated with the Policy. On a monthly basis, the administrative fee amounts to $.0375 per thousand dollars of Specified Amount. The fee is based on the Specified Amount and cannot be increased unless the Specified Amount is changed. The fee will not be decreased in the event of a Specified Amount decrease. This fee is charged only during the first 10 Policy Years of the Policy or, on an increase in Specified Amount, during the first 10 Policy Years after the increase.

The monthly administrative fee, together with the monthly Policy fee, is designed to equitably distribute the administrative costs among all Policies.

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Cost of Additional Benefits
The cost of additional benefits will include charges for any additional insurance benefits added to the Policy by rider. These charges are for insurance protection, and the amounts will be specified in the Policy.

Mortality and Expense Risk Charge
We deduct daily a mortality and expense risk charge of .00002466% of the Policy’s Net Asset Value in the Separate Account (and the Policy’s Accumulated Value in the Interest Bearing Account), which is equal on an annual basis to 0.9% of the daily value of the net assets of the Separate Account (and the value in the General Account attributable to the Interest Bearing Account). The mortality risk assumed is that the Insured may not live as long as expected. The expense risk assumed by us is that the actual expense to us of administrating the Policy will exceed what we expected when setting the other charges under the Policy. Please note that the mortality and expense risk may generate profits. We may use any profits from this charge to finance other expenses, including expenses incurred in the administration of the Policies and distribution expenses of the Policies or for any other corporate purpose.

Contingent Deferred Sales and Administrative Charges
To reimburse us for sales expenses and Policy issue expenses, including but not limited to registered representatives’ commissions, advertising, sales materials, training allowances, and preparation of prospectuses, we deduct contingent deferred sales and administrative charges from the proceeds in the event of a complete surrender of the Policy during the first ten years or the first ten years following an increase in the Specified Amount. A chart showing the percentage of Deferred Charges remaining at the beginning of Policy Years 2 through 9 (or the same number of years following an increase in Specified Amount) is shown below. The contingent deferred sales charge will be used to offset the expenses that were incurred in the distribution of the Policy, including but not limited to representatives’ commissions, advertising, sales materials, training allowances, and preparation of prospectuses. In no instance will the charge exceed 30% of the lesser of premiums paid or the “guideline annual premium.” The “guideline annual premium” is approximately equal to the amount of premium that would be required on an annual basis to keep the Policy In Force if the Policy had a mandatory fixed premium schedule assuming (among other things) a 5% net investment return. If you would like to obtain the guideline annual premium specific to your contract, please contact us at our Mailing Address.

The Deferred Charges vary by the Age of Insured, gender, and smoking status and are shown on the specifications page of your Policy. For a 35-year-old male nonsmoker, the charges would be $7.71 per $1,000 of the Specified Amount. For a 50-year-old male nonsmoker, the charges would be $15.91 per $1,000 of Specified Amount. For a chart showing how the charges vary, see Appendix A in the SAI.

We use the contingent deferred sales and administrative charge to recover the first-year costs of underwriting and issuing the Policy. They are contingent in that they will not be collected unless the Policy is surrendered during the first nine Policy Years. We will not deduct any Deferred Charges from the proceeds in the event of a partial withdrawal of the Policy. The Deferred Charges generally build up monthly during the first Policy Year in twelve equal increments to the total Deferred Charges. Then the Deferred Charges decrease annually after the first year. The percentage of the Deferred Charges remaining in each Policy Year is:

Beginning
Policy Year
Percentage of
Deferred Charges Remaining
2
3
4
5
6
7
8
9
10+
95%
90%
85%
75%
65%
50%
35%
20%
0%

At the time the Policy is issued, the first month’s portion of the Deferred Charges is placed in a non-segregated portion of our General Account, which is referred to as the Deferred Charges Account. This amount will earn interest at a minimum rate of 4% per annum with us crediting additional interest, at our option, from time to time. At the next Monthly Day, taking into account the interest earned, we will transfer from the Separate Account and/or the Interest Bearing Account to the Deferred Charges Account the amount necessary to equal the current Deferred Charges. This withdrawal will be made in the same percentages as premiums are currently allocated among the Subaccounts and the Interest Bearing Account.

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We will do the same for each month of the first Policy Year. If the Owner has not paid sufficient premium to build up the Deferred Charges to the appropriate level in the first Policy Year, additional amounts will be transferred out of the Separate Account and/or Interest Bearing Account in subsequent years. The transfers will continue until the Deferred Charges equal premiums required in the first year to completely fund the Deferred Charges, and the corresponding deductions had taken place every year, as scheduled.

We will release on the first Monthly Day of the second Policy Year the amount in the Deferred Charges Account in excess of 95% of the first Policy Year Deferred Charges, taking into account the interest earned. This process continues each Policy Year until the 10th Policy Year or until the Policy is surrendered.

The amount in the Deferred Charges Account is included in calculating the Accumulated Value of the Policy. We will withdraw Deferred Charges from the Deferred Charges Account only in the following instances:

 
to pay surrender charges upon full surrender of the Policy;
     
 
to release amounts back to the Separate Account and/or Interest Bearing Account on the second through ninth Policy Anniversaries; and
     
 
to pay the Monthly Deduction when there is insufficient Net Cash Value and the no-Lapse guarantee or minimum death benefit guarantee is in effect.

In the latter two situations, allocations will be made in the same percentages as premiums are currently allocated among the Subaccounts and the Interest Bearing Account.

Net Premiums paid following the payment of the Monthly Deduction with Deferred Charges will first be transferred from the Subaccounts and/or Interest Bearing Account to the Deferred Charges Account on the day the premiums are received, to the extent necessary to bring the Deferred Charges Account to the same level as if no Deferred Charges had been used to pay the Monthly Deduction, and if on a Policy Anniversary, the reduction in Deferred Charges had taken place as scheduled. If the premium is paid on a Monthly Day during the first Policy Year, additional amounts will be transferred to the Deferred Charges Account. This process of using Deferred Charges to pay the Monthly Deduction will continue every Monthly Day that: (1) there is insufficient Net Cash Value to pay the Monthly Deduction; and (2) the no-Lapse guarantee or minimum death benefit guarantee are in effect; and (3) the Policy is not beyond the ninth Policy Year.

Partial Withdrawal Fee
If a partial withdrawal is made, we will not deduct any contingent deferred sales or administrative charges, but may make a service charge equal to the lesser of $25 or 2% of the amount surrendered for each partial withdrawal. These fees are currently waived by us.

Transfer Fee
An Owner may transfer a Policy’s Accumulated Value among one or more of the Subaccounts and the Interest Bearing Account. Currently, we allow four transfers in each Policy Year without charge. After four transfers in any given Policy Year, we may deduct $20 per transfer from the amount transferred. These fees are currently waived by us.

Federal and State Income Taxes
Other than premium expense charge, no charges are currently made against the Separate Account and/or Interest Bearing Account for federal or state income taxes. In the event we determine that any such taxes will be imposed, we may make deductions from the Separate Account and/or Interest Bearing Account to pay such taxes.

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Duplicate Policy Charge
You can obtain a summary of your policy at no charge. There will be a $30 charge for a duplicate policy. This fee is currently being waived.
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Change of Specified Amount Charge
We will assess a $50 charge for each change in Specified Amount after the first in a Policy Year. This charge compensates us for administrative expenses associated with underwriting the increase in Specified Amount. We currently intend to waive certain fees as stated above. We, however, may reinstate the fees and charges in the future.

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Research Fee
We may charge you up to $50 per request when you request information that is duplicative of information previously provided to you and that requires extensive research.

Fund Expenses
Expense of the Funds, including fees and charges, are discussed in the Funds’ prospectuses and in their statements of additional information available by writing to us at our Mailing Address.

Please note that the Funds and their investment adviser are affiliated with us. In addition, as discussed under “Contingent Deferred Sales and Administrative Charges” above, the Funds pay us for performing certain administrative services.

Additional Information
We sell the Policies through registered representatives of broker-dealers. These registered representatives are also appointed and licensed as our insurance agents. We pay commissions to the broker-dealers for selling the Policies. You do not directly pay these commissions, we do. We intend to recover commissions, marketing, administrative and other expenses and the cost of Policy benefits through the fees and charges imposed under the Policies. See “Distribution of Policies” for more information.

OTHER POLICY BENEFITS AND PROVISIONS
 

Issue Date
The Issue Date is the date used to determine Policy Anniversaries and Monthly Days. If a premium is paid with the application, the Issue Date will be no earlier than the date the application is received and no later than the Record Date. Insurance coverage will begin as of the Issue Date provided the applicant subsequently is deemed to have been insurable. If a premium is not paid with the application or the application is approved other than as applied for, the Issue Date will ordinarily be approximately 10 days after underwriting approval. Insurance coverage will begin on the later of the Issue Date or the date the premium is received.

Owner, Beneficiary
You are the person who purchases the Policy and is named in the application. You may not be the Insured. You may name one or more Beneficiaries in the application. Beneficiaries may be primary or contingent. If no primary Beneficiary survives the Insured, payment is made to contingent Beneficiaries. Beneficiaries in the same class will receive equal payments unless otherwise directed. A Beneficiary must survive the Insured in order to receive his or her share of the Death Benefit Proceeds. If a Beneficiary dies before the Insured dies, his or her unpaid share is divided among the Beneficiaries who survive the Insured. The unpaid share will be divided equally unless you direct otherwise. If no Beneficiary survives the Insured, the Death Benefit Proceeds will be paid to you, if living, or to your estate.

You may change the Beneficiary while the Insured is living. The written consent of all Irrevocable Beneficiaries must be obtained before such a change. To make a change, you must provide us with a Written Request satisfactory to us. The request will not be effective until we record it. After the request is recorded, it will take effect as of the date you signed the request. We will not be responsible for any payment or other action taken before the request is recorded. We may require the Policy be returned for endorsement of the Beneficiary change.

Right-to-Examine Period
The Owner may cancel the Policy before the latest of the following three events:

 
45 days after the date of the application;
     
 
20 days after we have personally delivered or have sent the Policy and a Notice of Right of Withdrawal to the Owner by first class mail; or,
     
 
20 days after the Owner receives the Policy.

To cancel the Policy, the Owner must mail or deliver a Written Request to cancel (in Good Order) to the representative who sold it or to us at our Mailing Address. Unless prohibited by state law, the refund will include:

 
All charges for state taxes deducted from premiums; plus
     
 
Total amount of Monthly Deductions; plus

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Any other charges taken from the Accumulated Value; plus
     
 
The Accumulated Value on the date we received the Written Request to cancel the Policy in Good Order; minus
     
 
Any Policy Indebtedness.

If required by state law, the refund amount will be equal to the total of all premiums paid for the policy. We may require that you return the Policy.

Paid-up Insurance
The Policy may be exchanged, in whole or in part, for a paid-up whole life policy at any time prior to attained age 86, if the following conditions are met:

A.  
The Owner makes a Written Request for this Policy change;
B.  
The Policy is one we are then issuing for the Insured’s age and premium class;
C.  
The Policy is subject to our normal underwriting rules;
D.  
There is compliance with any other conditions determined by us; and
E.  
Any indebtedness not repaid at the time of the change will be continued as a loan against the paid-up policy.

Transfer of Ownership
The Owner may transfer ownership of the Policy. The written consent of all Irrevocable Beneficiaries must be obtained prior to such transfer. The Written Request must be in writing and filed (in Good Order) at our Mailing Address. The transfer will take effect as of the date the Written Request was signed. We may require that the Policy be sent in for endorsement to show the transfer of ownership.

We are not responsible for the validity or effect of any transfer of ownership. We will not be responsible for any payment or other action we have taken before having received Written Request for the transfer, in Good Order. A transfer of ownership may have tax consequences. Consult a tax adviser before transferring ownership of the Policy.

Addition, Deletion, or Substitution of Investments
We may make additions to, deletions from, or substitutions for the shares of a Fund that are held in the Separate Account or that the Separate Account may purchase. If the shares of a Fund are no longer available for investment or if, in our judgment, further investment in any Fund should become inappropriate, we may redeem the shares, if any, of that Fund and substitute shares of another Fund. To the extent required by the 1940 Act or other applicable law, we will not substitute any shares attributable to a Policy’s interest in a Subaccount without notice and prior approval of the SEC and state insurance authorities.

We also may establish additional Subaccounts of the Separate Account, each of which would invest in shares of a new corresponding Fund having a specified investment objective. We may, in our sole discretion, establish new Subaccounts or eliminate or combine one or more Subaccounts if marketing needs, tax considerations or investment conditions warrant. Any new Subaccounts may be made available to existing Owners on a basis to be determined by us. Some existing subaccounts may be closed to certain classes of Owners. Subject to obtaining any approvals or consents required by applicable law, the assets of one or more Subaccounts may be transferred to any other Subaccount if, in our sole discretion, marketing, tax, or investment conditions warrant.

In the event of any such substitution or change, we (by appropriate endorsement, if necessary) may change the Policy to reflect the substitution or change. Affected Owners will be notified of such a material substitution or change. If you object to the change, you may exchange the Policy for a fixed benefit whole life insurance policy then issued by us. The new Policy will be subject to normal underwriting rules and other conditions determined by us. No evidence of insurability will be necessary. The option to exchange must be exercised within sixty (60) days of notification to you of the investment Policy change. You may also surrender the Policy.

If we consider it to be in the best interest of Owners, and subject to any approvals that may be required under applicable law, the Separate Account may be operated as a management investment company under the 1940 Act, it may be deregistered under the 1940 Act if registration is no longer required, it may be combined with other Company separate accounts, or its assets may be transferred to another separate account of ours. In addition, we may, when permitted by law, restrict or eliminate any voting rights of Owners or other persons who have such rights under the Policies.

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Voting Rights
We will vote Fund shares held in the Separate Account at regular and special shareholder meetings of the underlying Funds in accordance with instructions received from persons having voting interests in the corresponding Subaccounts. We will vote shares for which we have not received timely instructions and shares attributable to Policies sold to employee benefit plans not registered pursuant to an exemption from the registration provisions of the Securities Act of 1933, in the same proportion as we vote shares for which we have received instructions. This means that a small number of Owners may control the outcome of the vote. If, however, the 1940 Act or any regulation thereunder should be amended, or if the present interpretation thereof should change, or we otherwise determine that we are allowed to vote the shares in our own right, we may elect to do so.

You have the voting interest under a Policy. The number of votes you have a right to instruct will be calculated separately for each Subaccount. You have the right to instruct one vote for each $1 of Accumulated Value in the Subaccount with fractional votes allocated for amounts less than $1. The number of votes you have available will coincide with the date established by the Fund for determining shareholders eligible to vote at the relevant meeting of the Fund’s shareholders. Voting instructions will be solicited by written communication before such meeting in accordance with procedures established by the Funds. Each Owner having a voting interest in a Subaccount will receive proxy materials and reports relating to any meeting of shareholders of the Fund in which that Subaccount invests.

We may, when required by state insurance regulatory authorities, vote shares of a Fund without regard to voting instructions from Owners, if the instructions would require that the shares be voted so as to cause a change in the sub-classification of a Fund, or investment objectives of a Fund, or to approve or disapprove an investment advisory contract for a Fund. In addition, we may, under certain circumstances, vote shares of a Fund without regard to voting instructions from Owners in favor of changes initiated by Owners in the investment Policy, or the investment adviser or the principal underwriter of a Fund. For example, we may vote against a change if we in good faith determine that the proposed change is contrary to state or federal law or we determine that the change would not be consistent with the investment objectives of a Fund and would result in the purchase of securities for the Separate Account which vary from the general quality and nature of investments and investment techniques used by our other Separate Accounts.

DISTRIBUTION OF THE POLICY
 

We no longer issue new Policies. CBSI serves as principal underwriter for the Policy. CBSI is a Wisconsin corporation and its home office is located at 2000 Heritage Way, Waverly, Iowa 50677. CBSI is our indirect, wholly owned subsidiary, and is registered as a broker-dealer with the Securities and Exchange Commission (”SEC”) under the Securities Exchange Act of 1934, as amended, as well as with the securities commissions in the states in which it operates, and is a member of Financial Industry Regulatory Authority, Inc. CBSI services Owners through its registered representatives. CBSI also may enter into selling agreements with other broker-dealers (“selling firms”) and compensate them for their services. Registered representatives of CBSI and of other selling firms are appointed as our insurance agents.

Compensation Arrangements For CBSI and Its Sales Personnel
We pay commissions to CBSI for the sale of the Policies by its registered representatives in the amount of: 116.22% of Premiums up to the Minimum Premium and 8.15% of Excess Premiums above that amount paid in the first Policy Year; and 5.00% of Premium in Policy Years 2 through 10. For each Premium paid following an increase in face amount, we pay a commission up to the target Premium for the increase in each year; the commission is calculated using the commission rates for the corresponding Policy Year. We pay commissions for substandard risk and rider Premiums based on our rules at the time of payment. Registered representatives may be required to return first-year commissions (less the surrender charge) if a Policy is not continued through the first Policy year. The investment adviser for, or another affiliate of one or more of the Funds also may, from time to time, make payments to CBSI for services.

CBSI pays its registered representatives a portion of the commissions received for their sales of Policies. Registered Representatives may also be eligible for various cash benefits, such as insurance benefits, bonuses and financing arrangements, and non-cash compensation items that we may provide jointly with CBSI. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items. Sales of the Policies may help registered representatives and/or their managers qualify for such benefits. CBSI’s registered representatives and managers may receive other payments from us for services that do not directly involve the sale of the Policies, including payments made for the recruitment and training of personnel, production of promotional literature and similar services.

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Compensation Arrangements For Selling Firms and Their Sales Personnel
We pay commissions to selling firms for sales of the Policies by their registered representatives in the amount of: 105% of Premiums up to the Minimum Premium and 7.3% of Excess Premiums above that amount paid in the first Policy Year; and 5.0% of Premium in Policy Years 2 through 10. For each Premium paid following an increase in face amount, we pay a commission up to the target Premium for the increase in each year; the commission is calculated using the commission rates for the corresponding Policy Year. We pay commissions for substandard risk and rider Premiums based on our rules at the time of payment. Registered representatives may be required to return first-year commissions (less the surrender charge) if a Policy is not continued through the first Policy year.

Selling firms pay their registered representatives a portion of the commissions received for their sales of Policies. We and/or CBSI may pay certain selling firms additional amounts for: (1) sales promotions relating to the Policies, including increased access to their registered representatives, (2) costs associated with sales conferences and educational seminars for their registered representatives, and (3) other expenses incurred by them. We and/or CBSI may make bonus payments to certain selling firms based on aggregate sales of our insurance contracts (including the Policies). We may pay certain selling firms an additional bonus after the first Policy Year for sales by their registered representatives, which may be up to the amount of the basic commission for the particular Policy Year. In addition, we may reimburse these selling firms for portions of their Policy sales expenses. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms.

A portion of the payments made to selling firms may be passed on to their registered representatives in accordance with their internal compensation programs. These programs also may include other types of cash and non-cash compensation and other benefits. Ask your registered representative for further information about what your registered representative and the selling firm for which he or she works may receive in connection with your purchase of a Policy.

Source of Compensation
Commissions and other incentives or payments described above are not charged directly to Owners or to the Separate Account. We recoup commissions and other sales expenses through fees and charges deducted under the Policy.

RIDERS AND ENDORSEMENTS
 

A rider attached to a Policy adds additional insurance and benefits. The rider explains the coverage it offers. A rider is available only in states which have approved the rider. A rider may vary from state to state. Some riders are not available to Policies sold to employee benefit plans. The cost for riders is deducted as a part of the Monthly Deduction. Riders are subject to normal underwriting requirements. We are not currently issuing new riders on any Policy.

Children’s Insurance
The rider provides level term insurance to children of the Insured up to the earlier of age 23 of the child or age 65 of the Insured. The death benefit will be payable to the Beneficiary stated in the rider upon the death of any Insured child. If the Insured parent dies prior to the termination of this rider, the coverage on each child becomes paid-up term insurance to Age 23. On the policy anniversary following each Insured child’s 23rd birthday or at age 65 of the Insured, if sooner, each child may convert this rider to a new policy without evidence of insurability.

Guaranteed Insurability
This rider provides that additional insurance may be purchased on the life of the Insured on specific future dates at standard rates without evidence of insurability. It is issued only to standard risks. It may be issued until the Policy Anniversary following the Insured’s 37th birthday.

Accidental Death Benefit
This rider provides for the payment of an additional death benefit on the life of the Insured should death occur due to accidental bodily injury occurring before Age 70. The premium for the accidental death benefit is payable to Age 70.

Automatic Increase
This rider provides for automatic increases in the Policy’s Specified Amount on each Policy Anniversary without evidence of insurability. This rider may be issued until the earlier of the 15th Policy Anniversary or the Policy Anniversary following the Insured’s 55th birthday. A tax adviser should be consulted to determine whether the automatic increases provided by this rider could cause the Owner’s Policy to become a Modified Endowment Contract.

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Other Insured
This rider provides level term insurance. The “other Insured” could be the Insured or could be another person within the immediate family of the Insured. The death benefit expires on the “other Insured’s” 95th birthday or upon termination of the Policy, whichever comes first. Evidence of insurability is required for issuance of the rider or to increase the amount of the death benefit. The rider may be issued until the Policy Anniversary following the Insured’s 65th birthday.

Term Insurance
This rider is available only on Policies with a face value of at least $250,000. It is available only on the primary Insured. The rider is convertible to Age 75. The death benefit expires on the Insured’s 95th birthday or upon termination of the Policy.

Disability Waiver of Monthly Deductions
This rider provides that, during the Insured’s total disability, we will waive Monthly Deductions for administrative and life insurance costs. The rider may be issued until the Policy Anniversary following the Insured’s 55th birthday. It may be renewed until the Policy Anniversary following the Insured’s 65th birthday.

Disability Benefit Waiver of Premium and Monthly Deduction
Like the rider just described, this rider provides that, during the Insured’s total disability, we will waive the Monthly Deduction for administrative and life insurance costs. In addition, this rider provides that we will contribute additional premium. The amount of additional premium we will contribute will be shown on the specifications page for the rider. The maximum amount we will contribute is $12,000 on an annual basis. The rider may be issued until the Policy Anniversary following the Insured’s 55th birthday. It may be renewed until the Policy Anniversary following the Insured’s 65th birthday at which time the rider terminates.

Executive Benefits Plan Endorsement
This endorsement is available on policies issued in conjunction with certain types of deferred compensation and/or employee benefits plans. The executive benefits plan endorsement waives the deferred charges on the policy to which it is attached subject to the following conditions:

1.  
the Policy is surrendered and the proceeds are used to fund a new policy provided through CMFG Life Insurance Company or an affiliate;
     
2.  
the Policy is owned by a business or trust;
     
3.  
the new Policy is owned by the same entity;
     
4.  
the Insured under the Policy is a selected manager or a highly compensated employee (as those terms are defined by Title 1 of the Employee Retirement Income Security Act, as amended);
     
5.  
the Insured under the new Policy is also a selected manager or highly compensated employee;
     
6.  
we receive an application for the new Policy (and have evidence of insurability satisfactory to us).

There is no charge for this benefit. However, if you exercise this benefit during the first two Policy Years, we may charge a fee to offset expenses incurred. This fee will not exceed $150. The Executive Benefits Plan Endorsement may not be available in all states.

FEDERAL INCOME TAX CONSIDERATIONS
 

Introduction
The following summary provides a general description of the federal income tax considerations associated with the Policy and does not purport to be complete or to cover all tax situations. This discussion is not intended as tax advice. Counsel or other competent tax advisors should be consulted for more complete information. This discussion is based upon our understanding of the present federal income tax laws. No representation is made as to the likelihood of continuation of the present federal income tax laws or as to how they may be interpreted by the Internal Revenue Service (“IRS”).

Tax Status of the Policy
In order to qualify as a life insurance contract for federal income tax purposes and to receive the tax treatment normally accorded life insurance contracts under federal tax law, a Policy must satisfy certain requirements which are set forth in the Code. Guidance as to how these requirements should be applied is limited. Nevertheless, we believe that Policies issued on a standard rating class basis

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should satisfy the applicable requirements. There is less guidance, however, with respect to Policies issued on a substandard basis, and it is not clear whether such Policies will in all cases satisfy the applicable requirements, particularly if you pay the full amount of premiums permitted under the Policy. If it is subsequently determined that a Policy does not satisfy the applicable requirements, we may take appropriate steps to bring the Policy into compliance with such requirements and we may restrict Policy transactions in order to do so.

In certain circumstances, owners of variable universal life insurance contracts have been considered for federal income tax purposes to be the owners of the assets of the separate account supporting their contracts due to their ability to exercise investment control over those assets. Where this is the case, the contract owners have been currently taxed on income and gains attributable to the separate account assets. While we believe that the Policies do not give you investment control over Separate Account assets, we may modify the Policies as necessary to prevent you from being treated as the Owner of the Separate Account assets supporting the Policy.

In addition, the Code requires that the investments of the Separate Accounts be “adequately diversified” in order for the Policies to be treated as life insurance contracts for federal income tax purposes. It is intended that the Separate Accounts, through the Funds, will satisfy these diversification requirements.

The following discussion assumes that the Policy generally will qualify as a life insurance contract for federal income tax purposes.

Tax Treatment of Policy Benefits

In General. We believe that the death benefit under a Policy should be excludible from the gross income of the Beneficiary.

Generally, you will not be deemed to be in constructive receipt of the Accumulated Value until there is a distribution. When distributions from a Policy occur, or when loans are taken out from or secured by a Policy, the tax consequences depend on whether the Policy is classified as a “Modified Endowment Contract.”

Federal, state and local transfer, estate, inheritance, and other tax consequences of ownership or receipt of Policy proceeds depend on the circumstances of each Owner or Beneficiary. A tax advisor should be consulted on these consequences.

Modified Endowment Contracts. Under the Code, certain life insurance contracts are classified as “Modified Endowment Contracts,” with less favorable income tax treatment than other life insurance contracts. Due to the Policy’s flexibility with respect to premium payments and benefits, each Policy’s circumstances will determine whether the Policy is a MEC. In general, a policy will be classified as a Modified Endowment Contract if the amount of premiums paid into the policy causes the policy to fail the “7-pay test.” A policy will fail the 7-pay test if at any time in the first seven Policy Years, the amount paid into the policy exceeds the sum of the level premiums that would have been paid at that point under a policy that provided for paid-up future benefits after the payment of seven level annual payments. A Policy received in a tax-free exchange for a Modified Endowment contract will also be classified as a Modified Endowment Contract.

If there is a reduction in the benefits under the Policy during the first seven Policy Years, for example, as a result of a partial withdrawal, the 7-pay test will have to be reapplied as if the policy had originally been issued at the reduced face amount. If there is a “material change” in the policy’s benefits or other terms, even after the first seven Policy Years, the policy may have to be retested as if it were a newly issued policy. A material change can occur, for example, when there is an increase in the death benefit which is due to the payment of an unnecessary premium. Unnecessary premiums are premiums paid into the policy which are not needed in order to provide a death benefit equal to the lowest death benefit that was payable in the first seven Policy Years. To prevent your policy from becoming a modified endowment contract, it may be necessary to limit premium payments or to limit reductions in benefits. A current or prospective policy owner should consult with a competent advisor to determine whether a policy transaction will cause the policy to be classified as a Modified Endowment Contract.

Distributions Other Than Death Benefits from Modified Endowment Contracts. Policies classified as Modified Endowment Contracts are subject to the following tax rules:

All distributions other than death benefits from a Modified Endowment Contract, including distributions upon surrender and partial withdrawals, are treated first as distributions of gain taxable as ordinary income and as tax-free recovery of your investment in the Policy only after all gain has been distributed.

Loans taken from or secured by a Policy classified as a Modified Endowment Contract are treated as distributions and taxed in same manner as surrenders and partial withdrawals.

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A 10% additional income tax is imposed on the amount subject to tax except where the distribution or loan is made when you have attained age 59½ or are disabled, or where the distribution is part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your Beneficiary or designated Beneficiary.

If a Policy becomes a Modified Endowment Contract, distributions that occur during the Policy Year will be taxed as distributions from a Modified Endowment Contract. In addition, distributions from a Policy within two years before it becomes a Modified Endowment Contract may be taxed in this manner. This means that a distribution made from a Policy that is not a Modified Endowment Contract could later become taxable as a distribution from a Modified Endowment Contract.

Distributions Other Than Death Benefits from Policies that are not Modified Endowment Contracts. Distributions other than death benefits from a Policy that is not classified as a Modified Endowment Contract are generally treated first as a recovery of your investment in the Policy and only after the recovery of all investment in the Policy as taxable income. However, certain distributions which must be made in order to enable the Policy to continue to qualify as a life insurance contract for federal income tax purposes if Policy benefits are reduced during the first 15 Policy Years may be treated in whole or in part as ordinary income subject to tax.

Loans from or secured by a Policy that is not a Modified Endowment Contract are generally not treated as distributions.

Finally, neither distributions from nor loans from or secured by a Policy that is not a Modified Endowment Contract are subject to the 10 percent additional income tax.

Investment in the Policy. Your investment in the Policy is generally the aggregate premium payments. When a distribution is taken from the Policy, your investment in the Policy is reduced by the amount of the distribution that is tax-free.

Policy Loans. In general, interest on a Policy loan will not be deductible. Before taking out a Policy loan, you should consult a tax advisor as to the tax consequences. If a loan from a Policy is outstanding when the Policy is canceled or Lapses, then the amount of the outstanding Indebtedness will be added to the amount treated as a distribution from the Policy and will be taxed accordingly.

Policy Changes, Transfers and Exchanges. Changes to a Policy’s Death Benefit Option or Face Amount, the conversion or exchange of a policy, and transfer or assignment of ownership of a Policy may have adverse tax consequences. You should consult a tax adviser if you are considering any such transaction.

Multiple Policies. All Modified Endowment Contracts that are issued by us (or our affiliates) to the same Owner during any calendar year are treated as one Modified Endowment Contract for purposes of determining the amount includible in your income when a taxable distribution occurs.

Withholding. To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient’s federal income tax liability. Recipients can generally elect, however, not to have tax withheld from distributions.

Life Insurance Purchases by Residents of Puerto Rico. In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the IRS announced that income received by residents of Puerto Rico under life insurance contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax.

Life Insurance Purchases by Nonresident Aliens and Foreign Corporations. The discussion above provides general information regarding U.S. federal income tax consequences to life insurance purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding U.S. state, and foreign taxation with respect to a life insurance policy purchase.

Accelerated Death Benefit Rider. The federal income tax consequences associated with the Accelerated Benefit Option Endorsement are uncertain. You should consult a qualified tax advisor about the consequences of requesting payment under this Endorsement. (See “THE POLICY ACCELERATED DEATH BENEFIT OPTION” for more information.)

Special Rules for Pension and Profit-Sharing Plans
If a Policy is purchased by a pension or profit-sharing plan, or similar deferred compensation arrangement, the federal, state and estate tax consequences could differ. A competent tax advisor should be consulted in connection with such a purchase.

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The amounts of life insurance that may be purchased on behalf of a participant in a pension or profit-sharing plan are limited. The current cost of insurance for the Net Amount at Risk is treated as a “current fringe benefit” and must be included annually in the plan participant’s gross income. We report this cost (generally referred to as the “P.S. 58” cost) to the participant annually. If the plan participant dies while covered by the plan and the Policy proceeds are paid to the participant’s Beneficiary, then the excess of the death benefit over the Policy value is not taxable. However, the Cash Value will generally be taxable to the extent it exceeds the participant’s cost basis in the Policy. Policies owned under these types of plans may be subject to restrictions under the Employee Retirement Income Security Act of 1974 (“ERISA”). You should consult a qualified advisor regarding ERISA.

Department of Labor (“DOL”) regulations impose requirements for participant loans under retirement plans covered by ERISA. Plan loans must also satisfy tax requirements to be treated as nontaxable. Plan loan requirements and provisions may differ from Policy loan provisions. Failure of plan loans to comply with the requirements and provisions of the DOL regulations and of tax law may result in adverse tax consequences and/or adverse consequences under ERISA. Plan fiduciaries and participants should consult a qualified advisor before requesting a loan under a Policy held in connection with a retirement plan.

Business Uses of the Policy
Businesses can use the Policy in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. If the value of a Policy to you depends in part on its tax consequences, you should consult a qualified tax advisor. In recent years, moreover, Congress has adopted new rules relating to life insurance owned by businesses, and the IRS has issued guidance relating to split dollar insurance plans. Any business contemplating the purchase of a new insurance policy or a change in an existing insurance policy should consult a tax advisor.

Non-Individual Owners and Business Beneficiaries of Policies. If a Policy is owned or held by a corporation, trust or other non-natural person, this could jeopardize some (or all) of such entity’s interest deduction under Code Section 264, even where such entity’s indebtedness is in no way connected to the Policy. In addition, under Section 264(f)(5), if a business (other than a sole proprietorship) is directly or indirectly a beneficiary of a Policy, this Policy could be treated as held by the business for purposes of the Section 264(f) entity-holder rules. Therefore, it would be advisable to consult with a qualified tax advisor before any non-natural person is made an owner or holder of a Policy, or before a business (other than a sole proprietorship) is made a beneficiary of a Policy.

Employer-owned Life Insurance Contracts. Pursuant to section 101(j) of the Code, unless certain eligibility, notice and consent requirements are satisfied, the amount excludible as a death benefit payment under an employer-owned life insurance contract will generally be limited to the Premiums paid for such contract (although certain exceptions may apply in specific circumstances). An employer-owned life insurance contract is a life insurance contract owned by an employer that insures an employee of the employer and where the employer is a direct or indirect Beneficiary under such contact. It is the employer’s responsibility to verify the eligibility of the intended Insured under employer-owned life insurance contracts and to provide the notices and obtain the consents required by section 101(j). These requirements generally apply to employer-owned life insurance contracts issued or materially modified after August 17, 2006. A tax adviser should be consulted by anyone considering the purchase or modification of an employer-owned life insurance contract.

Tax Shelter Regulations. Prospective owners that are corporations should consult a tax advisor about the treatment of the Policy under Treasury Regulations applicable to corporate tax shelters.

Split-Dollar Arrangements. The IRS and the Treasury Department have issued guidance that substantially affects split-dollar arrangements. Consult a qualified tax adviser before entering into or paying additional Premiums with respect to such arrangements.

Additionally, the Sarbanes-Oxley Act of 2002 prohibits, with limited exceptions, publicly traded companies, including non-U.S. companies that have securities listed on exchanges in the United States, from extending, directly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted as applying to split-dollar life insurance policies for directors and executive officers of such companies, since such insurance arguably can be viewed as involving a loan from the employer for at least some purposes.

Although the prohibition on loans is generally effective as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, so long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing policy, or the purchase of a new policy, in connection with a split-dollar life insurance arrangement should consult legal counsel.

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Medicare Tax on Investment Income
A 3.8% tax may be applied to some or all of the taxable portion of some distributions (such as payments under certain settlement options) from life insurance contracts to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information.

Alternative Minimum Tax
There may also be an indirect tax upon the income in the Policy or the proceeds of a Policy under the federal corporate alternative minimum tax.

Estate, Gift and Generation-Skipping Transfer Taxes
The transfer of the policy or designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. The transfer of the policy or designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. For example, when the Insured dies, the death benefit proceeds will generally be includable in the Owner’s estate for purposes of federal estate tax if the Insured owned the Policy. If the Owner was not the Insured, the fair market value of the Policy would be included in the Owner’s estate upon the Owner’s death. The Policy would not be includable in the Insured’s estate if the Insured neither retained incidents of ownership at death nor had given up ownership within three years before death.

Moreover, under certain circumstances, the Code may impose a “generation skipping transfer tax” when all or part of a life insurance Policy is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Code may require us to deduct the tax from your Policy, or from any applicable payment, and pay it directly to the IRS.

Qualified tax advisers should be consulted concerning the estate and gift tax consequences of Policy ownership and distributions under federal, state and local law. The individual situation of each owner or beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation skipping and other taxes. The individual situation of each owner or beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation skipping and other taxes.

<R>
For 2016, the federal estate tax, gift tax, and GST tax exemptions and maximum rates are $5,450,000 and 40%, respectively.
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The potential application of these taxes underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios.

Foreign Tax Credits. We may benefit from any foreign tax credits attributable to taxes paid by certain funds to foreign jurisdictions to the extent permitted under federal tax law.

Possible Tax Law Changes
Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Policy could change by legislation or otherwise. Consult a tax advisor with respect to legislative developments and their effect on the Policy.

Our Taxes
Under current federal income tax law, we are not taxed on the Separate Account’s operations. Thus, currently we do not deduct charges from the Separate Account for its federal income taxes. We may charge the Separate Account for any future federal income taxes that we may incur.

Under current laws in several states, we may incur state and local taxes (in addition to Premium Taxes). These taxes are not now significant and we are not currently charging for them. If they increase, we may deduct charges for such taxes.

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LEGAL PROCEEDINGS
 

We, like other life insurance companies, are often involved in lawsuits, including class action lawsuits. In some class action and other lawsuits involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any litigation cannot be predicted with certainty, we believe that at the present time there are not pending or threatened lawsuits that are reasonably likely to have a material adverse impact on the Separate Account or us or on the ability of the CBSI to perform its contract with the Variable Account, or on our ability to meet our obligations under the Policy.

FINANCIAL STATEMENTS
 

Our financial statements and the financial statements of the Separate Account are contained in the SAI. Our financial statements should be distinguished from the Separate Account’s financial statements and you should consider our financial statements only as bearing upon our ability to meet our obligations under the Policies. For a free copy of these financial statements and/or the SAI, please contact us at our Mailing Address.

33


GLOSSARY
 

Accumulated Value
The total of the values attributable to a Policy in all Subaccounts and the Interest Bearing Account plus the values attributable to it, if any, in the Loan Account and Deferred Charges Account.

Age
The number of completed years from the Insured’s date of birth.

Attained Age
Age of the Insured on the most recent Policy Anniversary.

Beneficiary
Person or entity named to receive all or part of the Death Benefit Proceeds.

Cost of Insurance or COI
An insurance charge determined by multiplying the cost of insurance rate by the Net Amount at Risk.

Cash Value
Accumulated Value minus Deferred Charges that would be applicable if the Policy were surrendered at that time, but not less than zero.

CUNA Mutual Group
CMFG Life Insurance Company, its subsidiaries and affiliates.

Death Benefit Ratio
The ratio of Face Amount to Accumulated Value required by the Code for treatment of the Policy as a life insurance Policy. The Death Benefit Ratio varies by the Attained Age.

Death Benefit Option
One of two options that you may select for computation of the Death Benefit.

Death Benefit Proceeds
Amount to be paid if the Insured dies while the Policy is In Force.

Deferred Charges
Sometimes referred to as surrender charges, they are the contingent deferred sales charge plus the contingent deferred administrative charge.

Deferred Charges Account
A non-segregated potion of our General Account where Deferred Charges accrued for each Policy are accumulated during the first Policy Year and the first 12 months after an increase in Face Amount. Amounts held in the Deferred Charges Account are credited with interest at a rate of at least 4% compounded annually. The Company may, at its sole discretion, credit rates in excess of 4%.

Due Proof of Death
Proof of death satisfactory to us. Such proof may consist of the following if acceptable to us:
a)   A certified copy of the death record;
b)   A certified copy of a court decree reciting a finding of death; and
c)   Any other proof satisfactory to us.
     

Face Amount
Under Death Benefit Option 1, the Face Amount is the greater of the Specified Amount, or the Accumulated Value on the date of death multiplied by the Death Benefit Ratio. Under Death Benefit Option 2, the Face Amount is the greater of the Specified Amount plus the Accumulated Value on the date of death, or the Accumulated Value on the date of death multiplied by the Death Benefit Ratio.

34


Fund
An investment portfolio of the Ultra Series Fund or the T. Rowe Price International Series, Inc.

General Account
Our assets other than those allocated to the Separate Account or another of our separate accounts.

In Force
Condition under which the Policy is active and the Insured’s life remains insured and sufficient Net Cash Value exists from premium payment or otherwise to pay the Monthly Deductions on a Monthly Day.

Good Order
An instruction that is received by the Company that is sufficiently complete and clear, along with all forms, information and supporting legal documentation (including any required spousal or joint owner’s consents) so that the Company does not need to exercise any discretion to follow such instruction. All orders to process a withdrawal request, a loan request, a request to surrender your Policy, a transfer request, or a death benefit claim must be in Good Order.

Indebtedness
Policy loans plus accrued interest on the loans.

Insured
Person whose life is insured under the Policy.

Issue Age
Age of Insured at the time the Policy was issued.

Interest Bearing Account
Part of our General Account to which Net Premiums may be allocated or Accumulated Value transferred.

Issue Date
The date from which Policy Anniversaries, Policy Years, and Policy months are determined.

Lapse
Condition when the Insured’s life is no longer insured under the Policy.

Loan Account
A portion of our General Account into which amounts are transferred from the Separate Account as collateral for Policy loans. Amounts held in the Loan Account are credited a fixed rate of interest. The Minimum Guaranteed Interest rate is described in the Policy.

Mailing Address
2000 Heritage Way, Waverly, IA 50677.

Maturity Date
The maturity date is the first Policy Anniversary after the Insured’s 95th birthday. Coverage under the Policy ceases on that date if the Insured is still alive, and maturity proceeds equal to the Net Cash Value as of that date are paid.

Monthly Day
Same day as the Issue Date for each month the Policy remains In Force. The Monthly Day is the first day of the Policy month. If there is no Monthly Day in a calendar month, the Monthly Day will be the first day of the next calendar month.

Monthly Deduction
The amount we deduct from the Accumulated Value each month. It includes the Cost of Insurance, the monthly administrative fee, the monthly Policy fee, and the cost of any additional benefits under riders.

Net Amount at Risk
As of any Monthly Day, the Face Amount (discounted for the upcoming month) less Accumulated Value (after the deduction of the Monthly Deduction).

35


Net Asset Value
The total current value of portfolio securities, cash, receivables, and other assets minus liabilities.

Net Cash Value
The Cash Value less any Indebtedness. This value is equal to the value attributable to the Policy in each Subaccount and the Interest Bearing Account and represents the amount an Owner would receive upon full surrender of the Policy.

Net Premiums
Premiums paid less any charges for Premium Tax (or tax in lieu of Premium Tax).

Owner (you, your)
The Owner as named in the application. The Owner may be other than the Insured.

Policy
MEMBERS Variable Universal Life Policy.

Policy Anniversary
Same day and month as the Issue Date for each year the Policy remains In Force.

Policy Issue Date
The date as of which the Policy is issued and coverage takes effect. We measure Policy months, Policy Years, and Policy Anniversaries from the Policy Issue Date.

Policy Year
A twelve month period beginning on the Policy Issue Date or on a Policy Anniversary.

Premium Tax
An amount deducted from premium payments to cover Premium Tax (and tax in lieu of Premium Tax) currently charged by the Owner’s state of residence (except in Pennsylvania and Texas). State of residence is determined by the Owner’s mailing address as shown in our records. The term “in lieu of Premium Tax” means any income and any franchise tax assessed by a state as a substitute for Premium Tax.

Record Date
The date we record the Policy on our books as an In Force Policy.

Right-to-Examine Period
The period when you may cancel the Policy and receive a refund. The length of the period varies by state and is shown the cover page of your Policy.

Specified Amount
The amount chosen by the Owner which is used to determine the Face Amount.

Target Premium
The Target Premium is shown on the specifications page of the Policy. It is determined by dividing the minimum premium by 0.60.

Unit
A unit of measurement used to calculate the Accumulated Value in a Subaccount under a Policy.

Unit Value
The value determined by dividing Net Asset Value by the number of Subaccount units outstanding at the time of calculation.

Valuation Day
For each Subaccount, each day that the New York Stock Exchange is open for business except for days that the Subaccount’s corresponding Fund does not value its shares.

36


Valuation Period
The period beginning at the close of regular trading on the New York Stock Exchange on any Valuation Day and ending at the close of regular trading on the next succeeding Valuation Day.

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Written Request
A request in writing and in a form satisfactory to us signed by the Owner and received at our Mailing Address. A Written Request may also include a telephone or fax request for specific transactions that you make if permitted under our current administrative procedures.
</R>
STATEMENT OF ADDITIONAL INFORMATION
 

<R>
To learn more about the Policy, you should read the SAI dated May 1, 2016, as it may be amended. The SAI includes additional information about the Separate Account. For a free copy of the SAI, personalized illustrations of Death Benefits, Net Cash Values, and Accumulated Value, and to request other information about the Policy please call toll-free at (800) 798-5500 or write to us at 2000 Heritage Way, Waverly, Iowa 50677-9202.
</R>

The SAI has been filed with the SEC and is incorporated by reference into this prospectus. The SEC maintains an Internet website (http://www.sec.gov) that contains the SAI and other information about us and the Policy. Information about us and the Policy (including the SAI) may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC., or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street N.E., Washington, DC 20549. Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.

Investment Company Act of 1940 Registration File No. 811-03915

37


STATEMENT OF ADDITIONAL INFORMATION

CMFG LIFE INSURANCE COMPANY
2000 Heritage Way
Waverly, Iowa 50677-9202
(800) 798-5500

CMFG Variable Life Insurance Account
MEMBERS® Variable Universal Life

Flexible Premium Variable Universal Life Insurance Policy

<R>
This Statement of Additional Information (“SAI”) contains additional information regarding the MEMBERS Variable Universal Life flexible premium variable life insurance policy (“Policy”) issued by CMFG Life Insurance Company and supported by CMFG Variable Life Insurance Account (“Separate Account”). This SAI is not a prospectus, and should be read together with the Prospectus for the Policy dated May 1, 2016, as it may be amended from time to time. You may obtain a copy of these prospectuses by writing or calling us at our address or phone number shown above. This SAI does not include information incorporated by reference from other documents. Capitalized terms in this SAI have the same meanings as in the Prospectus for the Policy.

The date of this SAI is May 1, 2016.
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Form 1933


TABLE OF CONTENTS
 

    Page
Policy Information   1

The Policy

  1

Our Right to Contest the Policy

  1

Misstatement of Age or Gender

  1

Suicide Exclusion

  1

Collateral Assignments

  1

Dividends

  2

Additional Information on Underwriting and Charges

  2

Additional Information on Benefits and Settlement Options

  2
Illustrations   3
Other Information   3

Registration Statement

  3

Distribution of the Policies

  3

Records

  4

State Regulation

  4

Independent Auditors

  4

Information About Us

  5

The Interest Bearing Account

  5

Additional Information about the Separate Account and the Funds

  5

Financial Statements

  5
Appendix A – First Year Surrender Charges per 1,000 of Specified Amount   A-1
Appendix B – Death Benefit Percentage Factor   B-1

i


POLICY INFORMATION
 

The Policy
The Policy, application(s), policy schedule pages, and any riders are the entire contract. Only statements made in the applications can be used to void the Policy or to deny a claim. We assume that all statements in an application are made to the best of the knowledge and belief of the person(s) who made them, and, in the absence of fraud, those statements are considered representations and not warranties. We rely on those statements when we issue or change a Policy. As a result of differences in applicable state laws, certain provisions of the Policy may vary from state to state.

Our Right to Contest the Policy
We have the right to contest the validity of the Policy or to resist a claim under it on the basis of any material misrepresentation of a fact stated in the application or any supplemental application. We also have the right to contest the validity of any increase of Specified Amount or other change to the Policy on the basis of any material misrepresentation of a fact stated in the application (or supplemental application) for such increase in coverage or change. In issuing this Policy, we rely on all statements made by or for the Insured in the application or in a supplemental application. In the absence of fraud, we consider statements made in the application(s) to be representations and not warranties.

In the absence of fraud, we cannot bring any legal action to contest the validity of the Policy after it has been In Force during the lifetime of the Insured for two years from the Policy Issue Date, or if reinstated, for two years from the date of reinstatement. Likewise, we cannot contest any increase in coverage effective after the Policy Issue Date, or any reinstatement thereof, after such increase or reinstatement has been In Force for two years from its effective date.

Misstatement of Age or Gender
For a Policy based on male or female cost of insurance rates (as shown in your Policy), if the Insured’s age or gender has been misstated, an adjustment will be made to reflect the correct age and gender as follows (unless a different result is required by state law):

  a)  
If the misstatement is discovered at death, the death benefit amount will be adjusted based on what the cost of insurance rate as of the most recent Monthly Day would have been at the Insured’s correct age and gender.
  b)  
If the misstatement is discovered prior to death, the cost of insurance rate will be adjusted based on the Insured’s correct age and gender beginning on the next Monthly Day.

For a Policy based on blended cost of insurance rates (as shown in your Policy), a misstatement of gender will not result in an adjustment. However, if the Insured’s age has been misstated, an adjustment will be made to reflect the correct age as follows (unless a different result is required by state law):

  a)  
If the misstatement is discovered at death, the death benefit amount will be adjusted based on what the cost of insurance rate as of the most recent Monthly Day would have been at the Insured’s correct age.
  b)  
If the misstatement is discovered prior to death, the cost of insurance rate will be adjusted based on the Insured’s correct age beginning on the next Monthly Day.

Suicide Exclusion
If the Insured commits suicide, while sane or insane, within two years of the Issue Date, our liability is limited to an amount equal to the Accumulated Value less any Loan Amount. We will pay this amount to the Beneficiary in one sum.

If the Insured commits suicide, while sane or insane, within two years from the effective date of any increase in Specified Amount, our liability with respect to that increase is limited to an amount equal to the cost of insurance attributable to the increase from the effective date of the increase to the date of death.

Collateral Assignments
You may assign the Policy as collateral security. The written consent of all Irrevocable Beneficiaries must be obtained before an assignment. The assignment must be in writing and filed at our Mailing Address. The assignment will then take effect as of the date the Written Request was signed.

We are not responsible for the validity or effect of any collateral assignment. We will not be responsible for any payment or other action we have taken before receiving the written collateral assignment.

A collateral assignment takes precedence over the interest of a Beneficiary. Any Policy proceeds payable to an assignee will be paid in one sum. Any remaining proceeds will be paid to the designated Beneficiary or Beneficiaries.

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A collateral assignee is not an Owner. A collateral assignee is a person or entity to whom you give some, but not all ownership rights under the Policy. A collateral assignment is not a transfer of ownership.

Dividends
While the Policy is In Force, it will share in our divisible surplus. We determine the Policy’s share annually. It is payable annually on the Policy Anniversary. You may select to have dividends:

  a)   Paid into the Subaccounts and the Interest Bearing Account as Net Premiums; or
  b)   Paid to you in cash.

If no option is selected, the dividends will be paid into Subaccounts and/or Interest Bearing Account as Net Premiums. We currently do not expect to pay dividends during the first 10 Policy Years. For each of Policy years 11-20, we project annual dividends equal to 0.61% of the Accumulated Value at the end of the Policy year, plus $39 per Policy. For each Policy year 21 and after we project annual dividends equal to 1.01% of the Accumulated Value at the end of the Policy year, plus $39 per Policy. For Issue Ages 0 – 19, the projected dividends are the same as those for ages 20 and above, except the per Policy dividend is $3 in years 11 and above, instead of $39. These dividends are not guaranteed.

Additional Information on Underwriting and Charges
We currently place each Insured into one of three standard rating classes - preferred, non-tobacco, and tobacco or into a rating class with sub-standard and flat extra charges. In an otherwise identical Policy, an Insured in the standard class will have a lower cost of insurance rate than an Insured in a class with sub-standard and flat extra charges.

   
The preferred rating class is only available if the Specified Amount equals or exceeds $100,000.
       
   
Non-tobacco Insureds will generally incur lower cost of insurance rates than Insureds who are classified as tobacco in the same rating class. The non-tobacco designation is not available for Insureds under attained age 21, but shortly before an Insured attains age 21, we may notify the Insured about possible classification as non-tobacco. If the Insured does not qualify as non-tobacco or does not respond to the notification, cost of insurance rates will remain as shown in the Policy. However, if the Insured does respond to the notification, and qualifies as non-tobacco, the cost of insurance rates will be changed to reflect the non-tobacco classification.
       
   
Preferred Insureds will generally incur lower cost of insurance rates than Insureds who are classified as non-tobacco.
       
   
Premium classes with sub-standard and flat extra charges may be available for those Insured’s who we find uninsurable under our preferred or standard underwriting guidelines. These charges may be related to health or to participate in certain hazardous sports, aviation activities, or other avocations. Generally, we will not issue contracts with more than 400% extra substandard cost of insurance charges or $15 per $1000 in flat extra charges.

Additional Information on Benefits and Settlement Options
Settlement options other than lump sum payments are, in our discretion, available for Death Benefit Proceeds, surrender proceeds, and maturity proceeds, payable to natural persons, subject to certain restrictions on Death Benefit Proceeds. Proceeds payable to a nonnatural person are available only under settlement options we agree to. The four available settlement options are as follows:

  1)  
Interest Option. The proceeds may be left with us to collect interest during the lifetime of the payee. We determine the interest rate each year. It is guaranteed to be not less than the settlement option rate of interest shown on the data page of the Policy. The payee may choose to receive interest payments either once a year or once a month (may not be available in all states) unless the amount of interest to be paid monthly is less than $25 per month, then interest will be paid annually. The payee may withdraw any remaining proceeds, if this right was given at the time the option was selected.
       
  2)  
Installment Option. The proceeds may be left with us to provide equal monthly installments for a specified period. No period can be greater than 30 years. The interest we guarantee to pay is set forth in the Policy. Additional interest, if any, will be payable as determined by us. (This option may not be available in all states.) The payee may withdraw the present value of any remaining guaranteed installments, but only if this right was given at the time the option was selected.
       
  3)  
Life Income - Guaranteed Period Certain. The proceeds may be left with us to provide monthly installments for as long as the original payee lives. A guaranteed period of 10 or 20 years may be selected. A period of years such that the total installments during the period will be at least equal to the proceeds applied under the option may also be selected. Payments will cease when the original payee dies or at the end of the guaranteed period, whichever is later. If the original payee dies during the guaranteed period, the remaining guaranteed payments will be paid to the successor payee.

2


  4)  
Joint and Survivor Life. The proceeds may be left with us to provide monthly installments for two payees for a guaranteed period of 10 years. After the 10-year period is over, payments will continue as long as either of the original payees is living. The monthly installment amount will depend on the Age and sex of both payees at the date of the first payment.

Not all settlement options are available. See your Policy for details on which options are available to you.

The minimum amount that can be applied under settlement options 2, 3 and 4 is $2,500 or that amount which will provide an initial monthly installment of at least $25.

Even if the death benefit under the Policy is excludible from income, payments under Settlement options may not be excludible in full. This is because earnings on the death benefit after the Insured’s death are taxable and payments under the settlement options general include such earnings. You should consult a tax adviser as to the tax treatment of payments under the settlement options.

Additional monthly income may be purchased under settlement options 2 and 3. The amount of additional annuity income or payments which can be purchased with new money is 95% of the amount which can be purchased with the net Policy Death Benefit Proceeds under those options. The additional annuity amount may not exceed twice that which the application of proceeds under the selected option would provide. The selection of an additional annuity purchase must be in writing and on file at our Mailing Address. Selection must be within 30 days of settlement under this Policy and is available only if the settlement is on or after the later of the 10th Policy Anniversary or the annuitant’s 55th birthday.

We may, at our option, provide for additional settlement options or cease offering any of the settlement options above.

ILLUSTRATIONS
 

We may provide illustrations for death benefit, Accumulated Value, and Cash Value based on hypothetical rates of return that are not guaranteed. The illustrations also assume costs of insurance for a hypothetical person. These illustrations are illustrative only and should not be considered a representation of past or future performance. Your rates of return and insurance charges may be higher or lower than these illustrations. The actual return on your Accumulated Value will depend on factors such as the amounts you allocate to particular Funds, the amounts deducted for the Policy’s monthly charges, the Funds’ expense ratios, and your policy loan and partial withdrawal history.

Before you purchase the Policy and upon request thereafter, we will provide illustrations of future benefits under the Policy based upon the proposed Insured’s issue age and premium class, the Death Benefit Option, Specified Amount, Planned Premiums, and riders requested. We reserve the right to charge a reasonable fee for this service to persons who request more than one policy illustration during a Policy year.

OTHER INFORMATION
 

Registration Statement
A Registration Statement under the Securities Act of 1933, as amended, relating to this offering has been filed with the Securities and Exchange Commission (“SEC”). Certain portions of the Registration Statement and amendments have been omitted from this prospectus pursuant to the rules and regulations of the SEC. Statements contained in this prospectus concerning the Policy and other legal documents are summaries. The complete documents and omitted information may be obtained from the SEC’s principal office in Washington, D.C.

Distribution of the Policies

Information About the Distributor. CUNA Brokerage Services, Inc. (“CBSI”) is responsible for distributing the Policies pursuant to a distribution agreement with us. CBSI serves as principal underwriter for the Policies. CBSI, a Wisconsin corporation organized in 1983 and a direct, wholly owned subsidiary of CUNA Mutual Investment Corporation which in turn is wholly owned by us, is located at 2000 Heritage Way, Waverly, Iowa 50677. CBSI is registered as a broker-dealer with the SEC under the Securities Exchange Act of 1934, as amended, as well as with the securities commissions in the states in which it operates, and is a member of Financial Industry Regulatory Authority, Inc.

Sales Commissions and Other Compensation. We no longer offer new Policies. We intend to recoup commissions and other sales expenses for through fees and charges imposed under the Policy. Commissions paid on the Policy, including other incentives or payments, are not charged directly to the Owners or the Separate Account.

Description of Servicing Network. CBSI services the Policies through its registered representatives. CBSI also may have entered into selling agreements with other broker-dealers and compensates these broker-dealers (“selling firms”) for their services up to the

3


amounts disclosed in the prospectus. Registered representatives of CBSI and selling firms who sell the Policies have been appointed by us as insurance agents.

Compensation Received. CBSI received sales compensation with respect to the Policies in the following amounts during the periods indicated:

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Fiscal year Aggregate Amount of
Commissions Paid to CBSI
Aggregate Amount of Commissions Retained by CBSI After
Payments to its Registered Persons and Other Broker-Dealers
2015 $0 $0
2014 $1,873 $71
2013 $1,462 $544
</R>

Compensation arrangements for CBSI sales personnel. Because registered representatives of CBSI are also our insurance agents, they may be eligible for various cash benefits, such as insurance benefits, bonuses and financing arrangements, and non-cash compensation programs that we offer. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, merchandise and other similar items. Sales of the Policies may help registered representatives qualify for such benefits.

Additional compensation paid to selling firms. We may pay certain selling firms additional amounts for: (1) sales promotions relating to the Policies, (2) costs associated with sales conferences and educational seminars for their registered representatives, and (3) other expenses incurred by them. We may make bonus payments to certain selling firms based on aggregate sales of our insurance contracts (including the Policies). We may pay certain selling firms an additional bonus after the first Policy year for sales by their registered representatives, which may be up to the amount of the basic commission for the particular Policy year. In addition, we may reimburse these selling firms for portions of their Policy sales expenses. These additional payments are not offered to all selling firms, and the terms of any particular agreement governing the payments may vary among selling firms.

Source of revenue for sales compensation. Sales charges deducted from premium payments, as well as proceeds from the contingent deferred sales charge on the Policies are retained by us and used to defray the expenses we incur in paying for distribution-related services under the distribution agreement, such as the payment of commissions.

Records
We will maintain all records relating to the Separate Account and the Interest Bearing Account at our Mailing Address or at our executive offices at 5910 Mineral Point Road, Madison, WI 53705.

State Regulation
We are subject to the laws of Iowa governing insurance companies and to regulation by the Iowa Insurance Department. An annual statement in a prescribed form is filed with the Insurance Department each year covering our operations for the preceding year and our financial condition as of the end of such year. Regulation by the Insurance Department includes periodic examination to determine our liabilities and reserves so that the Insurance Department may certify the items are correct. Our books and accounts are subject to review by the Insurance Department at all times and a full examination of its operations is conducted periodically by the National Association of Insurance Commissioners. Such regulation does not, however, involve any supervision of management or investment practices or policies. In addition, we are subject to regulation under the insurance laws of other jurisdictions in which we may operate.

Independent Auditors

<R>
The financial statements of each of the individual Subaccounts comprising the CMFG Variable Life Insurance Account included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report, dated February 25, 2016, appearing herein. Such financial statements are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

The consolidated statutory-basis financial statements of CMFG Life Insurance Company and subsidiary (the “Company”) included in this Statement of Additional Information, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, dated March 24, 2016, appearing herein. Such report 1) expresses an unmodified opinion on the consolidated statutory-basis financial statements and 2) included an emphasis of matter in relation to the inclusion of the accounts of MEMBERS Life Insurance Company, an indirect wholly-owned subsidiary within the Company’s consolidated statutory basis financial statements as of and for the year ended December 31, 2015 and an emphasis of matter in relation to the CMFG Life Insurance Company’s merger with CMFG Life Vermont Inc. which was previously a wholly owned subsidiary. The merger was accounted for as a non-reciprocal transfer and is reflected in the consolidated statutory basis financial statements as if the merger had occurred on January 1, 2015.

The principal business address of Deloitte & Touche LLP is 111 S Wacker Dr., Chicago, IL 60606.
</R>

4


Information About Us
CUNA Mutual Insurance Society is a mutual life insurance company that was originally organized in Wisconsin in 1935. CUNA Mutual Life Insurance Company merged with CUNA Mutual Insurance Society on December 31, 2007. CUNA Mutual Insurance Society reorganized into a stock insurance company incorporated in Iowa within a mutual insurance holding company structure and was renamed CMFG Life Insurance Company on January 31, 2012.

We are one of the world’s largest direct underwriters of credit life and disability insurance, and are a major provider of qualified pension products to credit unions. Further, we offer fixed and variable annuities, individual life insurance, health policies, term and permanent life insurance, and long-term care insurance.

CBSI is our indirect wholly owned subsidiary.

Periodically, rating agencies, review our ratings for financial stability and operating performance. To obtain our current ratings, contact us at the address and telephone number shown on the first page of this SAI.

The Interest Bearing Account
The Interest Bearing Account is not registered with the SEC and the staff of the SEC has not reviewed the disclosure in this prospectus relating to the Fixed Account.

Additional Information about the Separate Account and the Funds
The Separate Account was established by CUNA Mutual Life Insurance Company on August 16, 1983. CUNA Mutual Life Insurance Company merged with us as of December 31, 2007. The Separate Account is registered under 1940 Act as a unit investment trust. The Separate Account purchases shares of the Funds in accordance with separate participation agreements. The agreements contain varying termination provisions. If a participation agreement terminates, the Separate Account may not be able to purchase additional shares of the Fund(s) covered by that agreement. Likewise, in certain circumstances, it is possible that shares of a Fund may not be available to the Separate Account even if the participation agreement relating to that Fund has not been terminated. In either event, owners will no longer be able to allocate purchase payments or transfer Accumulated Value to the Subaccount investing in that Fund.

Shares of the Funds may be sold to separate accounts of insurance companies that are not affiliated with us or each other, a practice known as “shared funding.” They are also sold to separate accounts to serve as the underlying investment for both variable annuity contracts and variable life insurance contracts, a practice known as “mixed funding.” As a result, there is a possibility that a material conflict may arise between the interests of Owners, whose contract values are allocated to the Separate Account, and of owners of other contracts whose contract values are allocated to one or more other separate accounts investing in any one of the Funds. Shares of some of the Funds may also be sold directly to certain qualified pension and retirement plans qualifying under Section 401 of the Code. As a result, there is a possibility that a material conflict may arise between the interests of Owners or owners of other contracts (including contracts issued by other companies), and such retirement plans or participants in such retirement plans. In the event of any such material conflicts, we will consider what action may be appropriate, including removing the Fund from the Separate Account or replacing the Fund with another Fund. There are certain risks associated with mixed and shared funding and with sale of shares to qualified pension and retirement plans, as disclosed in the Fund’s prospectus and statement of additional information.

Financial Statements
Our financial statements and those of the Separate Account appear on the following pages. Our financial statements should be distinguished from the financial statements of the Separate Account and should be considered only as bearing upon our ability to meet our obligations under your Policy.

5


APPENDIX A – FIRST YEAR SURRENDER CHARGES PER 1,000 OF SPECIFIED AMOUNT
 

ISSUE AGE MALE COMPOSITE FEMALE COMPOSITE
0 0.95 0.87
1 1.07 0.99
2 1.19 1.11
3 1.30 1.22
4 1.42 1.34
5 1.54 1.46
6 1.70 1.59
7 1.88 1.72
8 2.06 1.85
9 2.24 1.98
10 2.39 2.11
11 2.51 2.23
12 2.62 2.35
13 2.71 2.46
14 2.80 2.57
15 2.88 2.67

ISSUE AGE MALE FEMALE
NON TOBACCO TOBACCO NON TOBACCO TOBACCO
16 2.94 2.94 2.74 2.74
17 2.99 2.99 2.80 2.80
18 3.03 3.03 2.85 2.85
19 3.10 3.10 2.92 2.92
20 3.21 3.24 3.03 3.05
21 3.37 3.49 3.18 3.28
22 3.56 3.74 3.37 3.51
23 3.78 4.00 3.57 3.75
24 4.03 4.25 3.79 3.98
25 4.29 4.50 4.02 4.21
26 4.57 4.79 4.26 4.51
27 4.88 5.11 4.51 4.85
28 5.21 5.45 4.77 5.22
29 5.55 5.82 5.05 5.59
30 5.89 6.18 5.33 5.95
31 6.23 6.54 5.63 6.31
32 6.59 6.91 5.93 6.68
33 6.95 7.30 6.25 7.04
34 7.32 7.70 6.57 7.42
35 7.71 8.13 6.90 7.79

Note: Preferred and Standard Policies use the same Surrender Charge.

A-1


ISSUE AGE MALE FEMALE
NON TOBACCO TOBACCO NON TOBACCO TOBACCO
36 8.11 8.58 7.22 8.17
37 8.53 9.05 7.55 8.55
38 8.95 9.54 7.88 8.94
39 9.40 10.07 8.22 9.32
40 9.87 10.62 8.58 9.70
41 10.36 11.21 8.96 10.06
42 10.86 11.82 9.35 10.41
43 11.39 12.46 9.76 10.76
44 11.94 13.14 10.18 11.12
45 12.53 13.86 10.64 11.52
46 13.14 14.61 11.10 11.92
47 13.76 15.39 11.56 12.30
48 14.41 16.21 12.06 12.73
49 15.12 17.08 12.62 13.25
50 15.91 18.00 13.28 13.91
51 16.79 19.00 14.07 14.77
52 17.74 20.07 14.98 15.79
53 18.74 21.18 15.94 16.89
54 19.78 22.31 16.92 18.00
55 20.83 23.43 17.86 19.04
56 21.85 24.48 18.70 19.96
57 22.84 25.47 19.49 20.80
58 23.88 26.50 20.30 21.65
59 25.04 27.68 21.20 22.59
60 26.39 29.11 22.30 23.71
61 27.01 29.87 23.08 24.53
62 27.42 30.48 23.84 25.32
63 27.73 31.00 24.55 26.06
64 28.04 31.50 25.20 26.71
65 28.45 32.05 25.75 27.25
66 28.96 32.58 26.18 27.60
67 29.50 33.05 26.49 27.78
68 30.07 33.55 26.74 27.91
69 30.70 34.19 27.00 28.07
70 31.39 35.07 27.31 28.39
71 32.25 36.52 27.72 29.01
72 33.12 37.97 28.12 29.64
73 33.98 39.41 28.53 30.26
74 34.85 40.86 28.93 30.89
75 35.71 42.31 29.34 31.51

Note: Preferred and Standard Policies use the same Surrender Charge.

A-2


APPENDIX B – DEATH BENEFIT PERCENTAGE FACTOR
 
 
The death benefit percentage factor required by the Code for treatment of the Policy as a life insurance policy.

  Attained Age   Death Benefit
Percentage Factor
 
     
  0-40   2.50  
  41   2.43  
  42   2.36  
  43   2.29  
  44   2.22  
  45   2.15  
     
  46   2.09  
  47   2.03  
  48   1.97  
  49   1.91  
  50   1.85  
     
  51   1.78  
  52   1.71  
  53   1.64  
  54   1.57  
  55   1.50  
     
  56   1.46  
  57   1.42  
  58   1.38  
  59   1.34  
  60   1.30  
     
  61   1.28  
  62   1.26  
  63   1.24  
  64   1.22  
  65   1.20  
     
  66   1.19  
  67   1.18  
  68   1.17  
  69   1.16  
  70   1.15  
     
  71   1.13  
  72   1.11  
  73   1.09  
  74   1.07  
  75-90   1.05  
     
  91   1.04  
  92   1.03  
  93   1.02  
  94   1.01  
  95   1.00  
     

B-1


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of
CMFG Life Insurance Company and
Policy Owners of CMFG Variable Life Insurance Account:

We have audited the accompanying statement of assets and liabilities for each of the individual subaccounts listed in Appendix A of CMFG Variable Life Insurance Account (the “Account”) as of December 31, 2015, and the related statements of operations, statements of changes in net assets and financial highlights for each of the periods presented in Appendix A. These financial statements are the responsibility of the Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Account’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the fund houses. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the individual subaccounts comprising CMFG Variable Life Insurance Account as of December 31, 2015, and the results of their operations, the changes in their net assets, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois

February 25, 2016


            APPENDIX A
CMFG Variable Life Insurance Account                    
    Statement of Assets and       Statements of Changes in        
Subaccount   Liabilities   Statement of Operations   Net Assets       Financial Highlights
 
    As Of   For the   For Each of the       For Each of the
 
Templeton Developing Markets VIP Fund, Class 2, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
MFS® Strategic Income Portfolio, Initial Class, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Two Years ended December 31, 2015 and
For the period from August 16, 2013* -
December 31, 2013
Oppenheimer Global Strategic Income Fund/VA, Non-Service Shares, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Three Years Ended December 31, 2015 and
For the Period from October 26, 2012* –
December 31, 2012
T. Rowe Price International Stock Portfolio, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Aggressive Allocation Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Core Bond Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Conservative Allocation Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Diversified Income Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series High Income Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series International Stock Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Large Cap Growth Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Large Cap Value Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Mid Cap Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Moderate Allocation Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Money Market Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
Ultra Series Small Cap Fund, Class I, Subaccount   December 31, 2015   Year Ended December 31, 2015   Two Years Ended December
31, 2015
      Five Years Ended December 31, 2015
                     
*Date represents commencement of operations.                    

CMFG Variable Life Insurance Account
Statement of Assets and Liabilities
As of December 31, 2015

    Templeton   MFS®   Oppenheimer   T. Rowe Price
    Developing   Strategic   Global Strategic   International
    Markets VIP   Income Portfolio,   Income Fund/VA,   Stock
    Fund, Class 2,   Initial Class,   Non-Service Shares,   Portfolio,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Assets                                

Investments in mutual funds at fair value

  $ 10,818     $ 242,899     $ 10,678     $ 5,948,140  
                         

Total assets

    10,818       242,899       10,678       5,948,140  
                                 
Liabilities     -       -       -       -  
                         

Net assets

  $ 10,818     $ 242,899     $ 10,678     $ 5,948,140  
                         
                                 
Net assets                                

Net assets: type 1

  $ -     $ 242,667     $ -     $ 5,819,899  

Net assets: type 2

    10,818       232       10,678       128,241  
                         

Total net assets

  $ 10,818     $ 242,899     $ 10,678     $ 5,948,140  
                         
                                 
Number of shares outstanding     1,712       26,259       2,188       405,463  
Net asset value per share   $ 6.32     $ 9.25     $ 4.88     $ 14.67  
Cost of mutual fund shares   $ 12,552     $ 263,192     $ 12,081     $ 5,654,533  
 
    Ultra Series   Ultra Series   Ultra Series   Ultra Series
    Aggressive   Core Bond   Conservative   Diversified
    Allocation   Fund,   Allocation Fund,   Income
    Fund, Class I,   Class I,   Class I,   Fund, Class I,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Assets                                

Investments in mutual funds at fair value

  $ 969,072     $ 6,580,065     $ 420,959     $ 52,559,635  
                         

Total assets

    969,072       6,580,065       420,959       52,559,635  
                                 
Liabilities     -       -       -       -  
                         

Net assets

  $ 969,072     $ 6,580,065     $ 420,959     $ 52,559,635  
                         
                                 
Net assets                                

Net assets: type 1

  $ -     $ 4,313,401     $ -     $ 45,201,515  

Net assets: type 2

    969,072       2,266,664       420,959       7,358,120  
                         

Total net assets

  $ 969,072     $ 6,580,065     $ 420,959     $ 52,559,635  
                         
                                 
Number of shares outstanding     109,542       671,531       44,011       2,819,602  
Net asset value per share   $ 8.85     $ 9.80     $ 9.56     $ 18.64  
Cost of mutual fund shares   $ 1,076,147     $ 6,928,112     $ 458,145     $ 48,944,879  


See accompanying notes to financial statements
1

CMFG Variable Life Insurance Account
Statement of Assets and Liabilities (continued)
As of December 31, 2015

    Ultra Series   Ultra Series   Ultra Series   Ultra Series
    High Income   International   Large Cap   Large Cap
    Fund,   Stock Fund,   Growth Fund,   Value Fund,
    Class I,   Class I,   Class I,   Class I,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Assets                                

Investments in mutual funds at fair value

  $ 996,340     $ 2,470,673     $ 37,203,689     $ 68,311,619  
                         

Total assets

    996,340       2,470,673       37,203,689       68,311,619  
                                 
Liabilities     -       -       -       -  
                         

Net assets

  $ 996,340     $ 2,470,673     $ 37,203,689     $ 68,311,619  
                         
                                 
Net assets                                

Net assets: type 1

  $ -     $ -     $ 29,322,487     $ 60,169,033  

Net assets: type 2

    996,340       2,470,673       7,881,202       8,142,586  
                         

Total net assets

  $ 996,340     $ 2,470,673     $ 37,203,689     $ 68,311,619  
                         
                                 
Number of shares outstanding     123,843       243,081       1,481,133       2,524,469  
Net asset value per share   $ 8.05     $ 10.16     $ 25.12     $ 27.06  
Cost of mutual fund shares   $ 1,170,371     $ 2,700,902     $ 32,483,125     $ 68,108,177  
 
    Ultra Series   Ultra Series   Ultra Series   Ultra Series
    Mid Cap   Moderate   Money Market   Small Cap
    Fund,   Allocation   Fund,   Fund,
    Class I,   Fund, Class I,   Class I,   Class I,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Assets                                

Investments in mutual funds at fair value

  $ 18,614,041     $ 1,847,019     $ 1,921,512     $ 132,908  
                         

Total assets

    18,614,041       1,847,019       1,921,512       132,908  
                                 
Liabilities     -       -       -       -  
                         

Net assets

  $ 18,614,041     $ 1,847,019     $ 1,921,512     $ 132,908  
                         
                                 
Net assets                                

Net assets: type 1

  $ 9,407,470     $ -     $ 1,066,352     $ -  

Net assets: type 2

    9,206,571       1,847,019       855,160       132,908  
                         

Total net assets

  $ 18,614,041     $ 1,847,019     $ 1,921,512     $ 132,908  
                         
                                 
Number of shares outstanding     1,054,739       186,263       1,921,512       20,084  
Net asset value per share   $ 17.65     $ 9.92     $ 1.00     $ 6.62  
Cost of mutual fund shares   $ 16,391,007     $ 1,910,818     $ 1,921,512     $ 179,848  


See accompanying notes to financial statements
2

CMFG Variable Life Insurance Account
Statement of Operations
For the Year Ended December 31, 2015

    Templeton   MFS®   Oppenheimer   T. Rowe Price
    Developing   Strategic   Global Strategic   International
    Markets VIP   Income Portfolio,   Income Fund/VA,   Stock
    Fund, Class 2,   Initial Class,   Non-Service Shares,   Portfolio,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Investment income (loss)                                

Dividend Income

  $ 312     $ 14,985     $ 670     $ 59,487  

Mortality and expense charges (note 3)

    (136 )     (2,342 )     (105 )     (59,160 )
                         

Net investment income (loss)

    176       12,643       565       327  
                                 
Realized gain (loss) on sale of fund shares                                

Net realized gain (loss) on sale of fund shares

    (153 )     (623 )     (112 )     90,580  

Realized gain distributions

    1,985       -       -       118,974  
                         

Net realized gain (loss) on investments

    1,832       (623 )     (112 )     209,554  
                                 
Net change in unrealized appreciation                                

(depreciation) on investments

    (5,241 )     (18,890 )     (766 )     (295,902 )
                         
                                 
Net increase (decrease) in net assets                                

resulting from operations

  $ (3,233 )   $ (6,870 )   $ (313 )   $ (86,021 )
                         
 
    Ultra Series   Ultra Series   Ultra Series   Ultra Series
    Aggressive   Core Bond   Conservative   Diversified
    Allocation   Fund,   Allocation Fund,   Income
    Fund, Class I,   Class I,   Class I,   Fund, Class I,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Investment income (loss)                                

Dividend Income

  $ 15,830     $ 213,192     $ 8,366     $ 1,354,923  

Mortality and expense charges (note 3)

    (9,768 )     (63,632 )     (5,832 )     (492,306 )
                         

Net investment income (loss)

    6,062       149,560       2,534       862,617  
                                 
Realized gain (loss) on sale of fund shares                                

Net realized gain (loss) on sale of fund shares

    4,215       (12,656 )     (7,528 )     741,595  

Realized gain distributions

    108,825       -       16,532       3,055,075  
                         

Net realized gain (loss) on investments

    113,040       (12,656 )     9,004       3,796,670  
                                 
Net change in unrealized appreciation                                

(depreciation) on investments

    (140,755 )     (205,706 )     (20,547 )     (5,107,563 )
                         
                                 
Net increase (decrease) in net assets                                

resulting from operations

  $ (21,653 )   $ (68,802 )   $ (9,009 )   $ (448,276 )
                         


See accompanying notes to financial statements
3

CMFG Variable Life Insurance Account
Statement of Operations (continued)
For the Year Ended December 31, 2015

    Ultra Series   Ultra Series   Ultra Series   Ultra Series
    High Income   International   Large Cap   Large Cap
    Fund,   Stock Fund,   Growth Fund,   Value Fund,
    Class I,   Class I,   Class I,   Class I,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Investment income (loss)                                

Dividend Income

  $ 60,420     $ 53,531     $ 429,826     $ 874,308  

Mortality and expense charges (note 3)

    (9,768 )     (24,638 )     (343,500 )     (647,256 )
                         

Net investment income (loss)

    50,652       28,893       86,326       227,052  
                                 
Realized gain (loss) on sale of fund shares                                

Net realized gain (loss) on sale of fund shares

    (7,815 )     (3,181 )     650,244       1,061,623  

Realized gain distributions

    -       4,330       3,695,278       10,405,875  
                         

Net realized gain (loss) on investments

    (7,815 )     1,149       4,345,522       11,467,498  
                                 
Net change in unrealized appreciation                                

(depreciation) on investments

    (76,947 )     (140,511 )     (3,543,232 )     (14,300,578 )
                         
                                 
Net increase (decrease) in net assets                                

resulting from operations

  $ (34,110 )   $ (110,469 )   $ 888,616     $ (2,606,028 )
                         
                                 
    Ultra Series   Ultra Series   Ultra Series   Ultra Series
    Mid Cap   Moderate   Money Market   Small Cap
    Fund,   Allocation   Fund,   Fund,
    Class I,   Fund, Class I,   Class I,   Class I,
    Subaccount   Subaccount   Subaccount   Subaccount
 
                                 
Investment income (loss)                                

Dividend Income

  $ 13,779     $ 32,395     $ -     $ 889  

Mortality and expense charges (note 3)

    (175,676 )     (17,918 )     (17,503 )     (2,172 )
                         

Net investment income (loss)

    (161,897 )     14,477       (17,503 )     (1,283 )
                                 
Realized gain (loss) on sale of fund shares                                

Net realized gain (loss) on sale of fund shares

    390,154       15,457       -       (12,481 )

Realized gain distributions

    1,841,560       122,211       -       30,936  
                         

Net realized gain (loss) on investments

    2,231,714       137,668       -       18,455  
                                 
Net change in unrealized appreciation                                

(depreciation) on investments

    (2,024,597 )     (186,742 )     -       (19,717 )
                         
                                 
Net increase (decrease) in net assets                                

resulting from operations

  $ 45,220     $ (34,597 )   $ (17,503 )   $ (2,545 )
                         



See accompanying notes to financial statements
4

CMFG Variable Life Insurance Account
Statements of Changes in Net Assets
For the Years Ended December 31,

    Templeton Developing     MFS® Strategic  
    Markets VIP Fund,     Income Portfolio,  
    Class 2, Subaccount     Initial Class, Subaccount  
           
    2015   2014   2015   2014
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ 176     $ 108     $ 12,643     $ 6,388  

Net realized gain (loss) on investments

    1,832       958       (623 )     239  

Net change in unrealized appreciation

                               

(depreciation) on investments

    (5,241 )     (2,829 )     (18,890 )     (61 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    (3,233 )     (1,763 )     (6,870 )     6,566  
                                 
Contract transactions                                

Payments received from policy owners

    -       -       -       -  

Transfers between subaccounts (including

                               

fixed accounts), net

    (1,624 )     (407 )     (645 )     (423 )

Payment for contract benefits and terminations

    (14 )     (1,506 )     (4,805 )     (64 )

Contract charges and fees

    (1,093 )     (1,405 )     (14,098 )     (13,431 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (2,731 )     (3,318 )     (19,548 )     (13,918 )
                         

Total increase (decrease) in net assets

    (5,964 )     (5,081 )     (26,418 )     (7,352 )
                         
                                 
Net assets                                

Beginning of period

    16,782       21,863       269,317       276,669  
                         

End of period

  $ 10,818     $ 16,782     $ 242,899     $ 269,317  
                         
                                 
    Oppenheimer Global     T. Rowe Price  
    Strategic Income Fund/VA,   International Stock  
    Non-Service Shares, Subaccount     Portfolio, Subaccount  
           
    2015   2014   2015   2014
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ 565     $ 466     $ 327     $ 9,656  

Net realized gain (loss) on investments

    (112 )     (28 )     209,554       117,073  

Net change in unrealized appreciation

                               

(depreciation) on investments

    (766 )     (163 )     (295,902 )     (265,479 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    (313 )     275       (86,021 )     (138,750 )
                                 
Contract transactions                                

Payments received from policy owners

    -       -       399,639       400,050  

Transfers between subaccounts (including

                               

fixed accounts), net

    13       19       (95,032 )     (15,385 )

Payment for contract benefits and terminations

    (1,737 )     (75 )     (449,709 )     (339,508 )

Contract charges and fees

    (731 )     (903 )     (394,820 )     (383,531 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (2,455 )     (959 )     (539,922 )     (338,374 )
                         

Total increase (decrease) in net assets

    (2,768 )     (684 )     (625,943 )     (477,124 )
                         
                                 
Net assets                                

Beginning of period

    13,446       14,130       6,574,083       7,051,207  
                         

End of period

  $ 10,678     $ 13,446     $ 5,948,140     $ 6,574,083  
                         


See accompanying notes to financial statements
5

CMFG Variable Life Insurance Account
Statements of Changes in Net Assets (continued)
For the Years Ended December 31,

    Ultra Series     Ultra Series
    Aggressive Allocation Fund,     Core Bond Fund,
    Class I, Subaccount     Class I, Subaccount
           
      2015       2014       2015       2014  
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ 6,062     $ 11,335     $ 149,560     $ 167,433  

Net realized gain (loss) on investments

    113,040       203,127       (12,656 )     (14,158 )

Net change in unrealized appreciation

                               

(depreciation) on investments

    (140,755 )     (145,507 )     (205,706 )     159,344  
                         

Net increase (decrease) in net assets

                               

resulting from operations

    (21,653 )     68,955       (68,802 )     312,619  
                                 
Contract transactions                                

Payments received from policy owners

    92,481       104,152       379,300       389,846  

Transfers between subaccounts (including

                               

fixed accounts), net

    (37,885 )     8,761       (255,804 )     (421,504 )

Payment for contract benefits and terminations

    (96,646 )     (113,475 )     (417,087 )     (367,017 )

Contract charges and fees

    (55,718 )     (56,076 )     (437,387 )     (442,499 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (97,768 )     (56,638 )     (730,978 )     (841,174 )
                         

Total increase (decrease) in net assets

    (119,421 )     12,317       (799,780 )     (528,555 )
                         
                                 
Net assets                                

Beginning of period

    1,088,493       1,076,176       7,379,845       7,908,400  
                         

End of period

  $ 969,072     $ 1,088,493     $ 6,580,065     $ 7,379,845  
                         
                                 
                                 
    Ultra Series     Ultra Series
    Conservative Allocation Fund,     Diversified Income Fund,
    Class I, Subaccount     Class I, Subaccount
           
      2015       2014       2015       2014  
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ 2,534     $ 9,206     $ 862,617     $ 832,194  

Net realized gain (loss) on investments

    9,004       60,751       3,796,670       4,751,401  

Net change in unrealized appreciation

                               

(depreciation) on investments

    (20,547 )     (36,149 )     (5,107,563 )     (2,175,049 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    (9,009 )     33,808       (448,276 )     3,408,546  
                                 
Contract transactions                                

Payments received from policy owners

    10,938       10,204       2,933,730       3,006,698  

Transfers between subaccounts (including

                               

fixed accounts), net

    668       105,752       2,863       (155,008 )

Payment for contract benefits and terminations

    (270,703 )     (112,411 )     (3,510,534 )     (3,425,266 )

Contract charges and fees

    (25,712 )     (26,767 )     (3,542,122 )     (3,565,263 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (284,809 )     (23,222 )     (4,116,063 )     (4,138,839 )
                         

Total increase (decrease) in net assets

    (293,818 )     10,586       (4,564,339 )     (730,293 )
                         
                                 
Net assets                                

Beginning of period

    714,777       704,191       57,123,974       57,854,267  
                         

End of period

  $ 420,959     $ 714,777     $ 52,559,635     $ 57,123,974  
                         


See accompanying notes to financial statements
6

CMFG Variable Life Insurance Account
Statements of Changes in Net Assets (continued)
For the Years Ended December 31,

    Ultra Series     Ultra Series  
    High Income Fund,     International Stock Fund,  
    Class I, Subaccount     Class I, Subaccount  
           
      2015       2014       2015       2014  
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ 50,652     $ 59,150     $ 28,893     $ 78,049  

Net realized gain (loss) on investments

    (7,815 )     (2,427 )     1,149       263,135  

Net change in unrealized appreciation

                               

(depreciation) on investments

    (76,947 )     (38,418 )     (140,511 )     (552,678 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    (34,110 )     18,305       (110,469 )     (211,494 )
                                 
Contract transactions                                

Payments received from policy owners

    42,681       46,508       177,555       192,864  

Transfers between subaccounts (including

                               

fixed accounts), net

    (1,773 )     (182,232 )     (7,700 )     (30,767 )

Payment for contract benefits and terminations

    (59,065 )     (105,470 )     (137,204 )     (243,054 )

Contract charges and fees

    (51,174 )     (56,931 )     (126,023 )     (142,951 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (69,331 )     (298,125 )     (93,372 )     (223,908 )
                         

Total increase (decrease) in net assets

    (103,441 )     (279,820 )     (203,841 )     (435,402 )
                         
                                 
Net assets                                

Beginning of period

    1,099,781       1,379,601       2,674,514       3,109,916  
                         

End of period

  $ 996,340     $ 1,099,781     $ 2,470,673     $ 2,674,514  
                         
                                 
                                 
    Ultra Series     Ultra Series
    Large Cap Growth Fund,     Large Cap Value Fund,
    Class I, Subaccount     Class I, Subaccount
           
      2015       2014       2015       2014  
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ 86,326     $ (86,407 )   $ 227,052     $ 316,378  

Net realized gain (loss) on investments

    4,345,522       6,981,485       11,467,498       12,903,536  

Net change in unrealized appreciation

                               

(depreciation) on investments

    (3,543,232 )     (2,965,658 )     (14,300,578 )     (5,138,570 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    888,616       3,929,420       (2,606,028 )     8,081,344  
                                 
Contract transactions                                

Payments received from policy owners

    1,979,129       1,979,955       3,909,647       4,084,804  

Transfers between subaccounts (including

                               

fixed accounts), net

    (249,489 )     (108,476 )     (776,341 )     (387,174 )

Payment for contract benefits and terminations

    (1,800,730 )     (2,632,691 )     (4,105,621 )     (5,078,806 )

Contract charges and fees

    (1,927,958 )     (1,913,734 )     (4,095,863 )     (4,266,421 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (1,999,048 )     (2,674,946 )     (5,068,178 )     (5,647,597 )
                         

Total increase (decrease) in net assets

    (1,110,432 )     1,254,474       (7,674,206 )     2,433,747  
                         
                                 
Net assets                                

Beginning of period

    38,314,121       37,059,647       75,985,825       73,552,078  
                         

End of period

  $ 37,203,689     $ 38,314,121     $ 68,311,619     $ 75,985,825  
                         


See accompanying notes to financial statements
7

CMFG Variable Life Insurance Account
Statements of Changes in Net Assets (continued)
For the Years Ended December 31,

    Ultra Series     Ultra Series
    Mid Cap Fund,     Moderate Allocation Fund,
    Class I, Subaccount     Class I, Subaccount
           
      2015       2014       2015       2014  
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ (161,897 )   $ (166,155 )   $ 14,477     $ 21,177  

Net realized gain (loss) on investments

    2,231,714       4,646,645       137,668       290,672  

Net change in unrealized appreciation

                               

(depreciation) on investments

    (2,024,597 )     (2,835,226 )     (186,742 )     (179,527 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    45,220       1,645,264       (34,597 )     132,322  
                                 
Contract transactions                                

Payments received from policy owners

    1,111,714       1,157,758       127,303       151,893  

Transfers between subaccounts (including

                               

fixed accounts), net

    (575,177 )     (278,012 )     (103,201 )     69,473  

Payment for contract benefits and terminations

    (897,658 )     (1,292,392 )     (80,382 )     (679,486 )

Contract charges and fees

    (988,903 )     (1,081,894 )     (99,012 )     (112,769 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (1,350,024 )     (1,494,540 )     (155,292 )     (570,889 )
                         

Total increase (decrease) in net assets

    (1,304,804 )     150,724       (189,889 )     (438,567 )
                         
                                 
Net assets                                

Beginning of period

    19,918,845       19,768,121       2,036,908       2,475,475  
                         

End of period

  $ 18,614,041     $ 19,918,845     $ 1,847,019     $ 2,036,908  
                         
                                 
                                 
    Ultra Series     Ultra Series
    Money Market Fund,     Small Cap Fund,
    Class I, Subaccount     Class I, Subaccount
           
      2015       2014       2015       2014  
 
                                 
Increase (decrease) in net assets from operations                                

Net investment income (loss)

  $ (17,503 )   $ (19,075 )   $ (1,283 )   $ (427 )

Net realized gain (loss) on investments

    -       -       18,455       24,676  

Net change in unrealized appreciation

                               

(depreciation) on investments

    -       -       (19,717 )     (8,615 )
                         

Net increase (decrease) in net assets

                               

resulting from operations

    (17,503 )     (19,075 )     (2,545 )     15,634  
                                 
Contract transactions                                

Payments received from policy owners

    250,368       262,785       5,558       7,414  

Transfers between subaccounts (including

                               

fixed accounts), net

    166,912       (87,372 )     (114,450 )     10,073  

Payment for contract benefits and terminations

    (204,631 )     (354,706 )     (1,133 )     (13,977 )

Contract charges and fees

    (239,953 )     (230,304 )     (9,911 )     (10,226 )
                         

Net increase (decrease) in net assets from

                               

contract transactions

    (27,304 )     (409,597 )     (119,936 )     (6,716 )
                         

Total increase (decrease) in net assets

    (44,807 )     (428,672 )     (122,481 )     8,918  
                         
                                 
Net assets                                

Beginning of period

    1,966,319       2,394,991       255,389       246,471  
                         

End of period

  $ 1,921,512     $ 1,966,319     $ 132,908     $ 255,389  
                         


See accompanying notes to financial statements
8

CMFG Variable Life Insurance Account
Notes to Financial Statements

(1) Organization
   
 
The CMFG Variable Life Insurance Account (the “Account”) is a unit investment trust organized under the laws of the State of Iowa and registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended. The Account was established as a separate account of CMFG Life Insurance Company (the “Company”) to receive and invest net premiums paid by the policy owners to the Company under two flexible premium variable life insurance policy types issued by the Company: MEMBERS® Variable Universal Life and UltraVers ALL-LifeSM (type 1) and MEMBERS® Variable Universal Life II (type 2) (“contracts”).

The Account is divided into a number of subaccounts and the contract owner makes elections from the subaccounts listed below in which to participate:

  Franklin Templeton Variable Insurance Products Trust   Ultra Series Fund
 

Templeton Developing Markets VIP Fund (1)

     Aggressive Allocation Fund (1)
  MFS® Variable Insurance Trust II      Core Bond Fund
 

MFS® Strategic Income Portfolio

     Conservative Allocation Fund (1)
  Oppenheimer Variable Account Funds      Diversified Income Fund
 

Oppenheimer Global Strategic Income Fund/VA (1)

     High Income Fund (1)
  T. Rowe Price International Series, Inc.      International Stock Fund (1)
 

T. Rowe Price International Stock Portfolio

     Large Cap Growth Fund
           Large Cap Value Fund
           Mid Cap Fund
           Moderate Allocation Fund (1)
  (1) This subaccount is only available in the MEMBERS® Variable Universal Life II (type 2) product.      Money Market Fund Small Cap Fund (1)

 
The Account may, in the future, include additional subaccounts. Each subaccount invests exclusively in shares of an underlying open-end management investment company that is registered with the SEC. Such registration does not involve supervision of the management or investment practices or policies of the companies or their funds by the SEC.
   
 
The accompanying financial statements include only the contract owner assets, deposits, investment activity, and the contract transactions applicable to the variable portions of the contracts and exclude assets and activity for deposits for fixed dollar benefits, which are included in the general account of the Company. The net investment income and the realized and unrealized gains and losses from the assets for each subaccount are credited to or charged against that subaccount without regard to income, gains or losses from any other subaccount.
   
(2) Significant Accounting Policies
   
  Basis of Presentation
   
 
The Account is an investment company and follows the accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services- Investment Companies.
   
  Use of Estimates
   
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

9


CMFG Variable Life Insurance Account
Notes to Financial Statements

(2) Significant Accounting Policies (continued)
   
  Investment Valuation
   
 
Investments are made in shares of a fund and are recorded at fair value, determined by the net asset value per share of the respective fund. Investment transactions in each fund are recorded on the trade date. Realized gains and losses on redemptions of the shares of the fund are determined using the average cost basis. Income from dividends and gains from realized gain distributions from each fund are recorded on the ex- dividend date and are reinvested in that fund. The difference between cost and fair value of investments owned on the day of measurement is recorded as unrealized appreciation or depreciation of investments.
   
  Federal Income Taxes
   
 
The operations of the Account are included in the consolidated federal income tax return of CUNA Mutual Holding Company (“CMHC”), the Company’s ultimate parent, and its subsidiaries. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code (“IRC”). The Account’s activities are included in the Company’s taxable income. Under current provisions of the IRC, the Company does not expect to incur federal income taxes on recorded earnings or the realized capital gains attributed to the Account to the extent these earnings are credited to the policies. Accordingly, no charge for income tax is currently recorded. If such taxes are incurred by the Company in the future, a charge to the Account may be assessed.
   
  Accounting Standards Updated Pending Adoption
   
 
In January 2016, the FASB issued Accounting Standard Update (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities (“ASU 2016-01”), effective in 2018. The new standard will require equity investments to be measured at fair value with changes in fair value recognized in net income. Other provisions in ASU 2016-01 were not applicable to the Account. Because the Account currently records the change in fair value of equity investments in the statement of operations in accordance with guidance for investment companies, ASU 2016-01 will have no impact on its financial statements.
   
(3) Fees and Charges
   
  Policy Charges
   
 
In addition to charges for premium taxes, which reduce premiums prior to the allocation of net premiums to the subaccounts of the Account, the following charges may be deducted by the Company by redeeming an appropriate number of units for each policy and are included in contract charges and fees in the accompanying Statements of Changes in Net Assets of the applicable subaccount:
   
 
Administrative Fee: The Company has primary responsibility for the administration of the Account and the policies issued. As reimbursement for these expenses, the Company may assess each policy a monthly administrative fee which is processed through redemption of units. This fee on an annual basis is $0.45 per $1,000 of the amount specified in the policy for the first ten policy years. This fee is not assessed after ten policy years.
   
 
Surrender Charges: For the type 1 product, the sales and administrative expenses are incurred when a policy is issued and are deferred (deferred charges) until the policy is surrendered. Such charges are not collected at all if the policy is held for nine years, or if the insured dies during the first ten years. In no instance will the charge exceed 30 percent of the lesser of premiums paid or the guideline annual premium (as defined under the Investment Company Act of 1940) of the policy.
   
 
For the type 2 product, in the event a policy owner surrenders a policy prior to nine years, the policy owner is assessed a contractual surrender charge to compensate the Company for certain sales and administrative expenses. Any such surrender charges are included in contract charges and fees in the accompanying Statements of Changes in Net Assets. The surrender charges are deducted from the payout in the event of a complete surrender of the policy during the first nine policy years; there is no surrender charge after nine policy years. Should there be a change of a specified amount, surrender charges are deducted from the payout for the first nine years following the change. There are no surrender charges after nine years following the change to a specified amount.

10


CMFG Variable Life Insurance Account
Notes to Financial Statements

(3) Fees and Charges (continued)
   
 
Policy Fee: The Company incurs first-year expenses upon issue of a policy, and assesses each policy a monthly policy fee in the amount of $6 per month ($3 per month for issue ages 0-19 for the type 1 product only) to recover these expenses.
   
 
Cost of Insurance and Additional Benefits Provided: The Company is responsible for providing the insurance benefits provided in the policy. The cost of insurance is determined each month based upon the applicable cost of insurance rates and the net amount at risk. The cost of insurance can vary from month to month since the determination of both the insurance rate and the net amount at risk depends upon a number of variables such as the death benefit option selected by the policy owner, the benefit amount specified in the policy, and the cash value, all as described in the Account’s prospectus. Several riders are available on the contracts that provide additional benefits, including children’s insurance, guaranteed insurability, accidental death benefit, other insured term rider, and disability waiver of deductions or premium which can also impact the cost of insurance.
   
  Account Charges
   
 
Mortality and Expense Risk Charge: The Company deducts a daily mortality and expense risk charge from the assets of the Account to compensate it for assuming certain mortality and expense risks at an annual rate of 0.90%. These charges are included in mortality and expense charges in the accompanying Statement of Operations of the applicable subaccount.
   
(4) Fair Value
   
 
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
   
 
The fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value of assets and liabilities into three broad levels. The Account has categorized its financial instruments, based on the degree of subjectivity inherent in the valuation technique, as follows:

   
Level 1: Inputs are directly observable and represent quoted prices for identical assets or liabilities in active markets the Account has the ability to access at the measurement date.
 
   
Level 2: All significant inputs are observable, either directly or indirectly, other than quoted prices included in Level 1, for the asset or liability. This includes: (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in markets that are not active and (iii) inputs other than quoted prices that are observable for the asset or liability, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
 
   
Level 3: One or more significant inputs are unobservable and reflect the Account’s estimates of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

 
The hierarchy requires the use of market observable information when available for assessing fair value.

11


CMFG Variable Life Insurance Account
Notes to Financial Statements

(4) Fair Value (continued)

The following table summarizes the Account’s assets that are measured at fair value as of December 31, 2015. All of the Account’s assets consist of Level 2 mutual funds that have daily quoted net asset values at which the Account could transact.

  December 31, 2015 Assets, at Fair Value     Level 2     Total
   
  Templeton Developing Markets VIP Fund, Class 2, Subaccount   $ 10,818   $ 10,818
  MFS® Strategic Income Portfolio, Initial Class, Subaccount     242,899     242,899
  Oppenheimer Global Strategic Income Fund/VA, Non-Service Shares, Subaccount     10,678     10,678
  T. Rowe Price International Stock Portfolio, Subaccount     5,948,140     5,948,140
  Ultra Series Aggressive Allocation Fund, Class I, Subaccount     969,072     969,072
  Ultra Series Core Bond Fund, Class I, Subaccount     6,580,065     6,580,065
  Ultra Series Conservative Allocation Fund, Class I, Subaccount     420,959     420,959
  Ultra Series Diversified Income Fund, Class I, Subaccount     52,559,635     52,559,635
  Ultra Series High Income Fund, Class I, Subaccount     996,340     996,340
  Ultra Series International Stock Fund, Class I, Subaccount     2,470,673     2,470,673
  Ultra Series Large Cap Growth Fund, Class I, Subaccount     37,203,689     37,203,689
  Ultra Series Large Cap Value Fund, Class I, Subaccount     68,311,619     68,311,619
  Ultra Series Mid Cap Fund, Class I, Subaccount     18,614,041     18,614,041
  Ultra Series Moderate Allocation Fund, Class I, Subaccount     1,847,019     1,847,019
  Ultra Series Money Market Fund, Class I, Subaccount     1,921,512     1,921,512
  Ultra Series Small Cap Fund, Class I, Subaccount     132,908     132,908
   
 

Total assets

  $ 198,240,067   $ 198,240,067
   
               
 
The following table summarizes the Account’s assets that are measured at fair value as of December 31,2014. All of the Account’s assets consist of Level 2 mutual funds that have daily quoted net asset values at which the Account could transact.
               
  December 31, 2014 Assets, at Fair Value     Level 2     Total
   
  Templeton Developing Markets VIP Fund, Class 2, Subaccount   $ 16,782   $ 16,782
  MFS® Strategic Income Portfolio, Initial Class, Subaccount     269,317     269,317
  Oppenheimer Global Strategic Income Fund/VA, Non-Service Shares, Subaccount     13,446     13,446
  T. Rowe Price International Stock Portfolio, Subaccount     6,574,083     6,574,083
  Ultra Series Aggressive Allocation Fund, Class I, Subaccount     1,088,493     1,088,493
  Ultra Series Core Bond Fund, Class I, Subaccount     7,379,845     7,379,845
  Ultra Series Conservative Allocation Fund, Class I, Subaccount     714,777     714,777
  Ultra Series Diversified Income Fund, Class I, Subaccount     57,123,974     57,123,974
  Ultra Series High Income Fund, Class I, Subaccount     1,099,781     1,099,781
  Ultra Series International Stock Fund, Class I, Subaccount     2,674,514     2,674,514
  Ultra Series Large Cap Growth Fund, Class I, Subaccount     38,314,121     38,314,121
  Ultra Series Large Cap Value Fund, Class I, Subaccount     75,985,825     75,985,825
  Ultra Series Mid Cap Fund, Class I, Subaccount     19,918,845     19,918,845
  Ultra Series Moderate Allocation Fund, Class I, Subaccount     2,036,908     2,036,908
  Ultra Series Money Market Fund, Class I, Subaccount     1,966,319     1,966,319
  Ultra Series Small Cap Fund, Class I, Subaccount     255,389     255,389
   
 

Total assets

  $ 215,432,419   $ 215,432,419
   

There were no Level 3 investments in the Account, therefore, Level 3 roll-forward tables have not been provided. There were no transfers between levels during the years ended December 31, 2015 and 2014.

12


CMFG Variable Life Insurance Account
Notes to Financial Statements

(5) Purchases and Sales of Investments

The cost of purchases and proceeds from sales of investments in the various subaccounts for the year ended December 31, 2015 are as follows:
   
  Year Ended December 31, 2015     Purchases     Sales
   
  Templeton Developing Markets VIP Fund, Class 2, Subaccount   $ 2,297   $ 2,867
  MFS® Strategic Income Portfolio, Initial Class, Subaccount     15,024     21,929
  Oppenheimer Global Strategic Income Fund/VA, Non-Service Shares, Subaccount     704     2,593
  T. Rowe Price International Stock Portfolio, Subaccount     298,104     718,726
  Ultra Series Aggressive Allocation Fund, Class I, Subaccount     190,239     173,120
  Ultra Series Core Bond Fund, Class I, Subaccount     333,868     915,285
  Ultra Series Conservative Allocation Fund, Class I, Subaccount     30,362     296,105
  Ultra Series Diversified Income Fund, Class I, Subaccount     5,043,960     5,242,332
  Ultra Series High Income Fund, Class I, Subaccount     86,398     105,077
  Ultra Series International Stock Fund, Class I, Subaccount     183,020     243,168
  Ultra Series Large Cap Growth Fund, Class I, Subaccount     4,764,252     2,981,697
  Ultra Series Large Cap Value Fund, Class I, Subaccount     12,132,290     6,567,542
  Ultra Series Mid Cap Fund, Class I, Subaccount     2,246,600     1,916,961
  Ultra Series Moderate Allocation Fund, Class I, Subaccount     225,392     243,997
  Ultra Series Money Market Fund, Class I, Subaccount     328,083     372,891
  Ultra Series Small Cap Fund, Class I, Subaccount     40,384     130,667
               
 
The cost of purchases and proceeds from sales of investments in the various subaccounts for the year ended December 31, 2014 are as follows:
   
  Year Ended December 31, 2014     Purchases     Sales
   
  Templeton Developing Markets VIP Fund, Class 2, Subaccount   $ 285   $ 3,495
  MFS® Strategic Income Portfolio, Initial Class, Subaccount     8,958     16,487
  Oppenheimer Global Strategic Income Fund/VA, Non-Service Shares, Subaccount     640     1,133
  T. Rowe Price International Stock Portfolio, Subaccount     324,775     615,154
  Ultra Series Aggressive Allocation Fund, Class I, Subaccount     270,136     138,964
  Ultra Series Core Bond Fund, Class I, Subaccount     466,793     1,140,535
  Ultra Series Conservative Allocation Fund, Class I, Subaccount     184,706     143,450
  Ultra Series Diversified Income Fund, Class I, Subaccount     5,601,723     5,230,770
  Ultra Series High Income Fund, Class I, Subaccount     94,396     333,371
  Ultra Series International Stock Fund, Class I, Subaccount     427,914     368,687
  Ultra Series Large Cap Growth Fund, Class I, Subaccount     6,867,827     3,815,050
  Ultra Series Large Cap Value Fund, Class I, Subaccount     12,606,520     7,083,111
  Ultra Series Mid Cap Fund, Class I, Subaccount     4,373,664     2,152,406
  Ultra Series Moderate Allocation Fund, Class I, Subaccount     371,492     739,581
  Ultra Series Money Market Fund, Class I, Subaccount     168,976     597,647
  Ultra Series Small Cap Fund, Class I, Subaccount     45,432     25,657

13


CMFG Variable Life Insurance Account
Notes to Financial Statement

(6) Changes in Units Outstanding

The changes in units outstanding for years ended December 31, 2015 and 2014 were as follows:

    Templeton     MFS®  
    Developing     Strategic  
    Markets VIP     Income Portfolio,  
    Fund, Class 2,     Initial Class,  
    Subaccount     Subaccount  
         
    Type 1 ^   Type 2     Type 1     Type 2  
 
Units outstanding at December 31, 2013   -   1,039     11,641     28  

Units issued

  -   -     2     -  

Units redeemed

  -   (161 )   (557 )   (15 )
         
Units outstanding at December 31, 2014   -   878     11,086     13  

Units issued

  -   -     4     -  

Units redeemed

  -   (167 )   (807 )   (1 )
         
Units outstanding at December 31, 2015   -   711     10,283     12  
         
                       
    Oppenheimer     T. Rowe Price  
    Global Strategic     International  
    Income Fund/VA,     Stock  
    Non-Service Shares,     Portfolio,  
    Subaccount     Subaccount  
         
    Type 1 ^   Type 2     Type 1     Type 2  
 
Units outstanding at December 31, 2013   -   3,220     326,841     13,381  

Units issued

  -   -     26,916     -  

Units redeemed

  -   (217 )   (42,477 )   (1,130 )
         
Units outstanding at December 31, 2014   -   3,003     311,280     12,251  

Units issued

  -   -     22,652     -  

Units redeemed

  -   (548 )   (46,936 )   (1,803 )
         
Units outstanding at December 31, 2015   -   2,455     286,996     10,448  
         
                       
    Ultra Series     Ultra Series  
    Aggressive     Core Bond  
    Allocation     Fund,  
    Fund, Class I,     Class I,  
    Subaccount     Subaccount  
         
    Type 1 ^   Type 2     Type 1     Type 2  
 
Units outstanding at December 31, 2013   -   99,832     105,273     180,577  

Units issued

  -   18,176     8,038     126,651  

Units redeemed

  -   (23,104 )   (13,107 )   (161,698 )
         
Units outstanding at December 31, 2014   -   94,904     100,204     145,530  

Units issued

  -   11,948     5,873     122,439  

Units redeemed

  -   (20,556 )   (15,844 )   (136,463 )
         
Units outstanding at December 31, 2015   -   86,296     90,233     131,506  
         
^ This Subaccount is not available in this product type.
 

14


CMFG Variable Life Insurance Account
Notes to Financial Statements

(6) Changes in Units Outstanding (continued)

    Ultra Series     Ultra Series  
    Conservative     Diversified  
    Allocation Fund,     Income  
    Class I,     Fund, Class I,  
    Subaccount     Subaccount  
         
    Type 1 ^     Type 2     Type 1     Type 2  
 
Units outstanding at December 31, 2013   -     58,886     589,637     479,514  

Units issued

  -     11,582     36,710     122,694  

Units redeemed

  -     (13,577 )   (76,550 )   (161,791 )
         
Units outstanding at December 31, 2014   -     56,891     549,797     440,417  

Units issued

  -     2,500     34,473     113,696  

Units redeemed

  -     (25,360 )   (73,982 )   (147,117 )
         
Units outstanding at December 31, 2015   -     34,031     510,288     406,996  
         
                         
    Ultra Series     Ultra Series  
    High Income     International  
    Fund,     Stock Fund,  
    Class I,     Class I,  
    Subaccount     Subaccount  
         
    Type 1 ^     Type 2     Type 1 ^     Type 2  
 
Units outstanding at December 31, 2013   -     70,623     -     117,831  

Units issued

  -     48,069     -     101,360  

Units redeemed

  -     (62,813 )   -     (109,538 )
         
Units outstanding at December 31, 2014   -     55,879     -     109,653  

Units issued

  -     47,533     -     105,432  

Units redeemed

  -     (51,034 )   -     (109,279 )
         
Units outstanding at December 31, 2015   -     52,378     -     105,806  
         
                         
    Ultra Series     Ultra Series  
    Large Cap     Large Cap  
    Growth Fund,     Value Fund,  
    Class I,     Class I,  
    Subaccount     Subaccount  
         
    Type 1     Type 2     Type 1     Type 2  
 
Units outstanding at December 31, 2013   653,570     569,592     549,129     644,402  

Units issued

  48,074     204,350     37,356     270,897  

Units redeemed

  (88,309 )   (260,562 )   (74,219 )   (342,876 )
         
Units outstanding at December 31, 2014   613,335     513,380     512,266     572,423  

Units issued

  39,172     185,320     32,758     256,458  

Units redeemed

  (67,865 )   (219,955 )   (66,790 )   (301,508 )
         
Units outstanding at December 31, 2015   584,642     478,745     478,234     527,373  
         
^ This Subaccount is not available in this product type.        

15


CMFG Variable Life Insurance Account
Notes to Financial Statements

(6) Changes in Units Outstanding (continued)

    Ultra Series     Ultra Series  
    Mid Cap     Moderate  
    Fund,     Allocation  
    Class I,     Fund, Class I,  
    Subaccount     Subaccount  
         
    Type 1     Type 2     Type 1 ^   Type 2  
 
Units outstanding at December 31, 2013   385,358     325,112     -   215,461  

Units issued

  30,675     143,726     -   37,718  

Units redeemed

  (54,159 )   (172,135 )   -   (85,975 )
         
Units outstanding at December 31, 2014   361,874     296,703     -   167,204  

Units issued

  23,678     134,069     -   23,613  

Units redeemed

  (44,548 )   (156,629 )   -   (36,297 )
         
Units outstanding at December 31, 2015   341,004     274,143     -   154,520  
         
                       
    Ultra Series     Ultra Series  
    Money Market     Small Cap  
    Fund,     Fund,  
    Class I,     Class I,  
    Subaccount     Subaccount  
         
    Type 1     Type 2     Type 1 ^   Type 2  
 
Units outstanding at December 31, 2013   50,441     108,674     -   15,346  

Units issued

  10,040     29,613     -   4,774  

Units redeemed

  (10,786 )   (63,798 )   -   (5,202 )
         
Units outstanding at December 31, 2014   49,695     74,489     -   14,918