485BPOS 1 corp.txt As filed with the Securities and Exchange Commission on April 9, 2002 Registration No. 333-95163 -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- Post-Effective Amendment No. 3 to Form S-6 -------------- For Registration under the Securities Act of 1933 of Securities of Unit Investment Trusts Registered on Form N-8B-2 ---------------- AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V (Exact Name of Registrant) ---------------- AMERITAS VARIABLE LIFE INSURANCE COMPANY (Depositor) 5900 "O" Street Lincoln, Nebraska 68510 ---------------- DONALD R. STADING Secretary and General Counsel Ameritas Variable Life Insurance Company 5900 "O" Street Lincoln, Nebraska 68510 ----------------- Title of Securities Being Registered: Securities of Unit Investment Trust ------------------------------------ Approximate Date of Proposed Public offering: As soon as practicable after effective date. It is proposed that this filing will become effective: [ ] Immediately upon filing pursuant to paragraph (b). [X] On May 1, 2002 pursuant to paragraph (b). [ ] 60 days after filing pursuant to paragraph (a)(1). [ ] On ___________ pursuant to paragraph (a)(1) of Rule 485. RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2 AND THE PROSPECTUS ITEM NO. OF FORM N-8B-2 CAPTION IN PROSPECTUS ----------- --------------------- 1 Cover Page 2 Cover Page 3 Not Applicable 4 Distribution of the Policies 5 Ameritas Variable Life Insurance Company Separate Account V 6 Ameritas Variable Life Insurance Company Separate Account V 7 Not Required 8 Not Required 9 Legal Proceedings 10 Summary; Addition, Deletion of Substitution of Investments; Policy Benefits; Policy Rights; Payment and Allocation of Premiums; General Provisions; Voting Rights 11 Summary; The Funds 12 Summary; The Funds 13 Summary; The Funds - Charges and Deductions 14 Summary; Payment and Allocation of Premiums 15 Summary; Payment and Allocation of Premiums 16 Summary; The Funds 17 Summary, Policy Rights 18 The Funds 19 General Provisions; Voting Rights 20 Not Applicable 21 Summary; Policy Rights, Loan Benefits; General Provisions 22 Not Applicable 23 Safekeeping of the Separate Account's Assets 24 General Provisions 25 Ameritas Variable Life Insurance Company 26 Not Applicable 27 Ameritas Variable Life Insurance Company 28 Executive Officers and Directors of AVLIC; Ameritas Variable Life Insurance Company 29 Ameritas Variable Life Insurance Company 30 Not Applicable 31 Not Applicable 32 Not Applicable 33 Not Applicable 34 Not Applicable 35 Not Applicable 36 Not Required 37 Not Applicable 38 Distribution of the Policies 39 Distribution of the Policies 40 Distribution of the Policies 41 Distribution of the Policies ITEM NO. OF FORM N-8B-2 CAPTION IN PROSPECTUS ----------- --------------------- 42 Not Applicable 43 Not Applicable 44 Cash Value, Payment and Allocation of Premium 45 Not Applicable 46 The Funds; Cash Value 47 The Funds 48 State Regulation of AVLIC 49 Not Applicable 50 The Separate Account 51 Cover Page; Summary; Policy Benefits; Payment and Allocation of Premiums, Charges and Deductions 52 Addition, Deletion or Substitution of Investments 53 Summary; Federal Tax Matters 54 Not Applicable 55 Not Applicable 56 Not Required 57 Not Required 58 Not Required 59 Financial Statements AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO 5900 "O" Street PROSPECTUS P.O. Box 82550/Lincoln, NE 68501 CORPORATE BENEFIT VUL--A Flexible Premium Variable Universal Life Insurance Policy issued by Ameritas Variable Life Insurance Company Corporate Benefit VUL is a flexible premium variable universal life insurance Policy ("Policy") issued by Ameritas Variable Life Insurance Company ("AVLIC"). Corporate Benefit VUL is designed primarily for an employer who is seeking a cost-effective and tax-efficient means of informally funding a non-qualified deferred compensation plan for its key executives. Like traditional life insurance policies, a Corporate Benefit VUL Policy provides Death Benefits to Beneficiaries and gives you, the Policy Owner, the opportunity to increase the Policy's value. Unlike traditional policies, Corporate Benefit VUL lets you vary the frequency and amount of premium payments, rather than follow a fixed premium payment schedule. It also lets you change the level of Death Benefits as often as once each year. A Corporate Benefit VUL Policy is different from traditional life insurance policies in another important way: the Policy Owner selects how Policy premiums will be invested. Although the Policy guarantees a minimum Death Benefit as long as the Policy remains in force, the value of the Policy, as well as the actual Death Benefit, will vary with the performance of investments you select. The Investment Options available through Corporate Benefit VUL include investment portfolios managed by American Century Investment Management, Inc., Ameritas Investment Corp., Calvert Asset Management Company, Inc., Fidelity Management & Research Company, Fred Alger Management, Inc., Invesco Funds Group, Inc., Massachusetts Financial Services Company, Morgan Stanley Investment Management Inc. (dba "Van Kampen), Salomon Brothers Asset Management Inc, Summit Investment Partners, Inc., and EQSF Advisers, Inc. Each of these portfolios has its own investment objective and policies. These are described in the prospectuses for each investment portfolio which must accompany this Corporate Benefit VUL prospectus. You may also choose to allocate premium payments to the Fixed Account managed by AVLIC. A Corporate Benefit VUL Policy will be issued after AVLIC accepts a prospective Policy Owner's application. Generally, an application must specify a minimum Death Benefit of $100,000 ($50,000 if the Term Insurance Rider is attached to the Policy). Corporate Benefit VUL Policies are available on individuals ages 18 to 65 at the time of purchase if guaranteed or simplified underwriting is used and ages 18 to 85 with regular underwriting. A Corporate Benefit VUL Policy, once purchased, may generally be canceled within 10 days after you receive it. This Corporate Benefit VUL prospectus is designed to assist you in understanding the opportunities and risks associated with the purchase of a Corporate Benefit VUL Policy. Prospective Policy Owners are urged to read the prospectus carefully and retain it for future reference. This prospectus includes a summary of the most important features of the Corporate Benefit VUL Policy, information about AVLIC, a list of the investment portfolios to which you may allocate premium payments, as well as a detailed description of the Corporate Benefit VUL Policy. The appendix to the prospectus includes tables designed to illustrate how values and Death Benefits may change with the investment experience of the Investment Options. This prospectus must be accompanied by a prospectus for each of the investment portfolios available through this Policy. Although the Corporate Benefit VUL Policy is designed to provide life insurance, a Corporate Benefit VUL Policy is considered to be a security. It is not a deposit with, an obligation of, or guaranteed or endorsed by any banking institution, nor is it insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other agency. The purchase of a Corporate Benefit VUL Policy involves investment risk, including the possible loss of principal. For this reason, Corporate Benefit VUL may not be suitable for all businesses. It may not be advantageous to purchase a Corporate Benefit VUL Policy as a replacement for another type of life insurance or as a way to obtain additional insurance protection if the purchaser already owns another flexible premium variable universal life insurance policy on the Insured. In addition, the tax consequences of continuing coverage beyond age 100 are uncertain, and the Policy Owner should consult a tax adviser as to the potential consequences. The Securities and Exchange Commission ("SEC") maintains a web site (http://www.sec.gov) that contains other information regarding registrants that file electronically with the Securities and Exchange Commission. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. May 1, 2002 CORPORATE BENEFIT VUL 1 CONTACTING US. To answer your questions or to send additional premium, contact your sales representative or write or call us at: Ameritas Variable Life Insurance Company, Service Center P.O. Box 82550 Lincoln, Nebraska 68501 Or 5900 "O" Street Lincoln, Nebraska 68510 Telephone: 1-800-745-1112 Fax: 1-402-467-6153 variable.ameritas.com --------------------- Express mail packages should be sent to our street address, not our P.O. Box address. SENDING FORMS, WRITTEN NOTICE AND WRITTEN REQUESTS IN "GOOD ORDER." If you are writing to change your beneficiary, request a withdrawal or for any other purpose, contact us or your sales representative to learn what information is required for the request to be in "good order". Often, we can only accept information on a form we provide. We can only act upon requests that are received in good order. REMEMBER, THE CORRECT FORM is important for us to accurately process your Policy elections and changes. Many can be found on the on-line services section of our Web site. Or, call us at our toll-free number and we'll send you the form you need. MAKE CHECKS PAYABLE TO: "Ameritas Variable Life Insurance Company" TABLE OF CONTENTS PAGE -------------------------------------------------------------------------------- DEFINITIONS.................................................3 SUMMARY.....................................................5 AVLIC, THE SEPARATE ACCOUNT AND THE FUNDS..........................................12 Ameritas Variable Life Insurance Company The Separate Account Performance Information The Funds - Investment Strategies and Objectives Addition, Deletion or Substitution of Investments Fixed Account POLICY BENEFITS............................................16 Purposes of the Policy Death Benefit Proceeds Death Benefit Options Methods of Affecting Insurance Protection Duration of the Policy Accumulation Value Payment of Policy Benefits POLICY RIGHTS..............................................20 Loan Benefits Surrenders Partial Withdrawals Transfers Systematic Programs (PORTFOLIO REBALANCING, DOLLAR COST AVERAGING, EARNINGS SWEEP) Free Look Privileges PAYMENT AND ALLOCATION OF PREMIUMS.........................22 Issuance of a Policy Premiums Allocation of Premiums and Accumulation Value Policy Lapse and Reinstatement CHARGES & DEDUCTIONS.......................................25 Deductions from Premium Payments Charges from Accumulation Value Partial Withdrawal Charge Transfer Charge Daily Charges Against the Separate Account GENERAL PROVISIONS.........................................27 DISTRIBUTION OF THE POLICIES...............................29 FEDERAL TAX MATTERS........................................30 SAFEKEEPING OF THE SEPARATE ACCOUNT ASSETS.................................................33 THIRD PARTY SERVICES.......................................33 VOTING RIGHTS..............................................33 STATE REGULATION OF AVLIC..................................33 EXECUTIVE OFFICERS AND DIRECTORS OF AVLIC..................34 LEGAL MATTERS..............................................34 LEGAL PROCEEDINGS..........................................35 INDEPENDENT AUDITORS.......................................35 ADDITIONAL INFORMATION.....................................35 ILLUSTRATIONS..............................................35 FINANCIAL STATEMENTS.......................................35 CORPORATE...........................................F-I-1 SEPARATE ACCOUT....................................F-II-1 EMPLOYEE BENEFIT PLAN INFORMATION STATEMENT.............................................A-1 The Policy, certain Funds, and/or certain riders are not available in all states. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON. CORPORATE BENEFIT VUL 2 DEFINITIONS ACCRUED EXPENSE CHARGES - Any Monthly Deductions that are due and unpaid. ACCUMULATION VALUE - The total amount that the Policy provides for investment at any time. It is equal to the total of the Accumulation Value held in the Separate Account, the Fixed Account, and any Accumulation Value held in the General Account which secures Outstanding Policy Debt. ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly Deduction, to cover the cost of administering the Policy. ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from the overall assets of the Separate Account to provide for expenses of ongoing administrative services to the Policy Owners as a group. ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy Years that the Policy has been in force. AVLIC ("we, us, our") - Ameritas Variable Life Insurance Company, a Nebraska stock company. AVLIC's Home Office is located at 5900 "O" Street, P.O. Box 82550, Lincoln, NE 68501. BENEFICIARY - The person or persons to whom the Death Benefit Proceeds are payable upon the death of the Insured. (See the sections on Beneficiary and Change of Beneficiary.) COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to provide the life insurance protection. The Cost of Insurance is calculated with reference to an annual "Cost of Insurance Rate." This rate is based on the Insured's gender (where applicable), Issue Age, Policy duration, and risk class. The Cost of Insurance is part of the Monthly Deduction. DEATH BENEFIT - The amount of insurance coverage provided under the selected Death Benefit option of the Policy. DEATH BENEFIT PROCEEDS - The proceeds payable to the Beneficiary upon receipt by AVLIC of Satisfactory Proof of Death of the Insured while the Policy is in force. It is equal to: (l) the Death Benefit; (2) plus additional life insurance proceeds provided by any riders; (3) minus any Outstanding Policy Debt; (4) minus any Accrued Expense Charges, including the Monthly Deduction through the month of death. FIXED ACCOUNT - An account that is a part of AVLIC's General Account to which all or a portion of Net Premiums and transfers may be allocated for accumulation at fixed rates of interest. GENERAL ACCOUNT - The General Account of AVLIC includes all of AVLIC's assets except those assets segregated into separate accounts such as the Separate Account. GRACE PERIOD - A 61day period from the date written notice of lapse is mailed to the Policy Owner's last known address. If the Policy Owner makes a payment during the Grace Period such that the Net Cash Surrender Value of the Policy is sufficient to pay the Monthly Deduction, the Policy will not lapse. INSURED - The person whose life is insured under the Policy. INVESTMENT OPTIONS - Refers to the Subaccounts and/or the Fixed Account offered under this Policy. ISSUE AGE - The age of the Insured at the Insured's birthday nearest the Policy Date. ISSUE DATE - The date that all financial, contractual and administrative requirements have been met and processed for the Policy. MONTHLY ACTIVITY DATE - The same date in each succeeding month as the Policy Date except should such Monthly Activity Date fall on a date other than a Valuation Date, the Monthly Activity Date will be the next Valuation Date. MONTHLY DEDUCTION - The deductions taken from the Accumulation Value on the Monthly Activity Date. These deductions are equal to: (1) the current Cost of Insurance; (2) the Administrative Expense Charge; and (3) rider charges, if any. CORPORATE BENEFIT VUL 3 MORTALITY AND EXPENSE RISK CHARGE - A daily charge that is deducted from the overall assets of the Separate Account to provide for the risk that mortality and expense costs may be greater than expected. NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation Date (including for this purpose, the date of Surrender), less any Outstanding Policy Debt and any Accrued Expense Charges. NET PREMIUM - Premium paid less the Percent of Premium Charge. OUTSTANDING POLICY DEBT - The sum of all unpaid Policy loans and accrued interest on Policy loans. PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to cover certain expenses such as premium-based taxes, expressed as a percentage of the premium. (See the section on Deductions From Premium Payment.) PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at fixed intervals. The Policy Owner is not required to follow this schedule, nor does following this schedule ensure that the Policy will remain in force. POLICY - The flexible premium variable universal life insurance Policy offered by AVLIC and described in this prospectus. POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the Policy remains in force. POLICY DATE - The effective date for all coverage provided in the application. The Policy Date is used to determine Policy Anniversary Dates, Policy Years and Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date. The Policy Date and the Issue Date will be the same unless: (1) an earlier Policy Date is specifically requested, or (2) there are additional premiums or application amendments at time of delivery. (See the section on Issuance of a Policy.) POLICY OWNER - ("you, your") The owner of the Policy, as designated in the application or as subsequently changed. If a Policy has been absolutely assigned, the assignee is the Policy Owner. A collateral assignee is not the Policy Owner. POLICY YEAR - The period from one Policy Anniversary Date until the next Policy Anniversary Date. A "Policy Month" is measured from the same date in each succeeding month as the Policy Date. SATISFACTORY PROOF OF DEATH - Means all of the following must be submitted: (1) A certified copy of the death certificate; (2) A Claimant Statement; (3) The Policy; and (4) Any other information that AVLIC may reasonably require to establish the validity of the claim. SEPARATE ACCOUNT - This term refers to Ameritas Variable Life Insurance Company Separate Account V, a separate investment account established by AVLIC to receive and invest the Net Premiums paid under the Policy and allocated by the Policy Owner to the Separate Account. The Separate Account is segregated from the General Account and all other assets of AVLIC. SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by the Policy Owner. SUBACCOUNT - A subdivision of the Separate Account. Each Subaccount invests exclusively in the shares of a specified portfolio of the Funds. SURRENDER - The termination of the Policy during the Insured's life for the Net Cash Surrender Value. VALUATION DATE - Any day on which the New York Stock Exchange is open for trading. VALUATION PERIOD - The period between two successive Valuation Dates, commencing at the close of the New York Stock Exchange ("NYSE") on one Valuation Date and ending at the close of the NYSE on the next succeeding Valuation Date. CORPORATE BENEFIT VUL 4 SUMMARY The following summary of prospectus information and diagram of the Policy should be read along with the detailed information found elsewhere in this prospectus. Unless stated otherwise, this prospectus assumes that the Policy is in force and that there is no Outstanding Policy Debt. DIAGRAM OF POLICY PREMIUM PAYMENTS You can vary amount and frequency. DEDUCTIONS FROM PREMIUMS Percent of Premium Charge--currently 3.0% (maximum 5.0%) NET PREMIUMS The Net Premium may be invested in the Fixed Account or in the Separate Account which offers a wide variety of Subaccount investment options. DEDUCTIONS FROM ASSETS Monthly charge for Cost of Insurance and cost of any riders. The charge varies by the Policy duration and the Issue Age, gender, and risk class of the Insured. (See the Policy Schedule for rates.) Monthly per Policy charge for administrative expenses: CURRENT MAXIMUM POLICY YEAR MONTHLY CHARGE MONTHLY CHARGE ----------- -------------- -------------- 1 $15.00 $15.00 2 + $ 7.00 $12.00 Monthly per $1000 charge for administrative expenses: The first ten Policy Years, there is a monthly charge per $1000 of initial Specified Amount (maximum monthly charge $1.97 per $1000). In addition, there is a monthly charge per $1000 of each increase in Specified Amount for ten years from the date of increase (maximum monthly charge $1.97 per $1000). The per $1000 rates for both the initial Specified Amount and each increase vary by Issue Age, gender, and risk class. (See the Policy Schedule for rates.)
Daily charge from the Subaccounts (not deducted from the Fixed Account): CURRENT ANNUAL CHARGE MAXIMUM ANNUAL CHARGE POLICY YEARS POLICY YEARS 1-15 16+ 1-15 16+ ---- --- ---- --- Mortality and Expense Risk Charge 0.75% 0.30% 0.95% 0.50% Asset-Based Administrative Expense Charge 0.15% 0.15% 0.15% 0.15% ----- ----- ----- ----- Combined annual rate of Subaccount daily charge 0.90% 0.45% 1.10% 0.65% ----- ------ ----- -----
Fund expense charges, which ranged from 0.36% to 1.80% at the most recent fiscal year end, are also deducted. There is no Surrender charge. LIVING BENEFITS You may make partial withdrawals, subject to certain restrictions. The Death Benefit will be reduced by the amount of the partial withdrawal. Partial withdrawals are subject to a maximum charge of the lesser of $50 (currently $25) or 2% of the amount withdrawn. AVLIC guarantees up to 15 free transfers between the Investment Options each Policy Year. After that, a $10 charge may be made for each transfer. Under current practice, unlimited free transfers are permitted. You may Surrender the Policy at any time for its Net Cash Surrender Value. RETIREMENT INCOME BENEFITS Loans may be available on a more favorable interest rate basis after the tenth Policy Year. Should the Policy lapse while loans are outstanding, the portion of the loan attributable to earnings will become a taxable distribution. (SEE FEDERAL TAX MATTERS SECTION.) You may Surrender the Policy or make a partial withdrawal and take values as payments under one or more of five different payment options. DEATH BENEFITS Generally, Death Benefit income is tax free to the Beneficiary. The Beneficiary may be paid a lump sum or may select any of the five payment methods available as retirement benefits. CORPORATE BENEFIT VUL 5 SUMMARY The following summary is intended to highlight the most important features of a Corporate Benefit VUL Policy that you, as a prospective Policy Owner, should consider. You will find more detailed information in the main portion of the prospectus; cross-references are provided for your convenience. Capitalized terms are defined in the Definitions section that begins on page 3 of this prospectus. This summary and all other parts of this prospectus are qualified in their entirety by the terms of the Corporate Benefit VUL Policy, which is available upon request from AVLIC. WHO IS THE ISSUER OF A CORPORATE BENEFIT VUL POLICY? AVLIC is the issuer of each Corporate Benefit VUL Policy. AVLIC enjoys a rating of A (Excellent) for financial strength and operating performance from A.M. Best Company, a firm that analyzes insurance carriers. This is the third highest of Best's 15 categories. AVLIC, as part of the Ameritas consolidated group, is rated AA (Very Strong) for financial insurance strength from Standard & Poor's. This is the third highest of Standard & Poor's 21 ratings. (See the section on Ameritas Variable Life Insurance Company.) The financial statements for AVLIC can be found on page F-II-1. WHAT IS THE PRIMARY PURPOSE OF PURCHASING A CORPORATE BENEFIT VUL POLICY? The primary purpose of a Corporate Benefit VUL Policy is to serve as an informal funding vehicle for various executive benefit arrangements. These arrangements typically focus on one or more financial objectives, which can be met by the following characteristics of the Corporate Benefit VUL Policy: o Payment of a Death Benefit, which will never be less than the Specified Amount the Policy Owner selects (See the section on Death Benefit Options.) o Accessibility of Policy values through Policy loan, Surrender and withdrawal features (See the section on Policy Rights.) o Ability to direct the manner in which the net premiums will be invested. So long as the Policy is in force, the Policy Owner will be responsible for selecting the manner in which Net Premiums will be invested. Thus, the value of a Corporate Benefit VUL Policy will reflect your investment choices over the life of the Policy. WHAT ARE THE CHARGES ASSOCIATED WITH OWNERSHIP OF A CORPORATE BENEFIT VUL POLICY? Certain states impose premium and other taxes in connection with insurance policies such as Corporate Benefit VUL. AVLIC may deduct up to 5.0% of each premium as a Percent of Premium Charge. Currently, the charge is 3.0%. Charges are deducted against the Accumulation Value to cover the Cost of Insurance under the Policy and to compensate AVLIC for administering each individual Corporate Benefit VUL Policy. These charges, which are part of the Monthly Deduction, are calculated and deducted on each Monthly Activity Date. The Cost of Insurance is calculated based on risk factors relating to the Insured as reflected in relevant actuarial tables. There are two separate charges for administration of the Policy--a monthly Administrative Expense Charge, and a daily Asset-Based Administrative Expense Charge. The monthly Administrative Expense Charge itself has three components: (1) a per Policy charge; (2) a charge per $1000 of initial specified amount; and (3) a charge per $1000 of each increase in specified amount. Currently, the per Policy charge is $15 per month in the first Policy Year and $7 per month thereafter. The per Policy portion of the Administrative Expense Charge is levied throughout the life of the Policy and is guaranteed not to increase above $15 per month in the first Policy Year and $12 per month thereafter. During the first ten Policy Years (or for the life of the Policy where required by state law), there is a monthly charge per $1000 of initial Specified Amount. In addition, there is a monthly charge per $1000 of each increase in Specified Amount for ten years from the date of increase (or life of the Policy, where required). The per $1000 rates for both the initial Specified Amount and each increase vary by Issue Age, gender, and risk class. The current charge per $1000 is the same as the maximum charge. (See the section on Charges from Accumulation Value.) Also, AVLIC is entitled to receive fees for its services in administering the Separate Account and Subaccounts and as compensation for bearing certain mortality and expense risks. These fees are calculated and deducted daily during CORPORATE BENEFIT VUL 6 the first 15 Policy Years, at a combined current annual rate of 0.90% (maximum 1.10%) of the value of the net assets of the Separate Account. After the 15th Policy Anniversary Date, the combined current annual rate is expected to decrease to 0.45% (maximum 0.65%) of the daily net assets of the Separate Account. No daily fees will be deducted from the amounts in the Fixed Account. (See the section on Daily Charges Against the Separate Account.) FUND EXPENSE SUMMARY. The following chart shows the expenses charged in the year 2001 by each Subaccount's underlying portfolio based on that portfolio's average daily net assets. We then deduct applicable Separate Account charges from the net asset value in calculating the unit value of the corresponding Subaccount. The management fees and other expenses are more fully described in the prospectus for each underlying portfolio. Information relating to the underlying portfolios was provided by the underlying portfolios and was not independently verified by us.
Total Waivers Total Expenses Subaccount's underlying Management 12b-1 Other Fund and after waivers and Portfolio Name Fees Fees Fees Fees Reductions reductions, if any -------------- ---- ---- ---- ---- ---------- ------------------ ALGER o Alger American Balanced 0.75% - 0.10% 0.85% - 0.85% o Alger American Leveraged AllCap 0.85% - 0.07% 0.92% - 0.92% AMERICAN CENTURY - o VP Income & Growth 0.70% - - 0.70% - 0.70% AMERITAS PORTFOLIOS (SUBADVISOR) (1) o Ameritas Growth (FRED ALGER) 0.80% - 0.10% 0.90% 0.01% 0.89% o Ameritas Income & Growth (FRED ALGER) 0.68% - 0.12% 0.80% 0.02% 0.78% o Ameritas MidCap Growth (FRED ALGER) 0.85% - 0.11% 0.96% 0.02% 0.94% o Ameritas Small Company Equity (BABSON) 1.17% - 1.21% 2.38% 0.88% 1.50% o Ameritas Money Market (CALVERT) 0.25% - 0.13% 0.38% 0.02% 0.36%(2) o Ameritas Small Capitalization (MCSTAY) 0.90% - 0.21% 1.11% 0.11% 1.00% o Ameritas Emerging Growth (MFS CO.) 0.80% - 0.41% 1.21% 0.26% 0.95% o Ameritas Growth With Income (MFS CO.) 0.80% - 0.52% 1.32% 0.34% 0.98% o Ameritas Research (MFS CO.) 0.80% - 0.61% 1.41% 0.45% 0.96% o Ameritas Select (HARRIS/OAKMARK) 0.97% - 0.48% 1.45% - 1.45% o Ameritas Index 500 (STATE STREET) 0.29% - 0.15% 0.44% 0.06% 0.38% CALVERT PORTFOLIOS o CVS Income 0.70% - 0.50% 1.20% 0.22% 0.98%(3) o CVS Social Balanced 0.70% - 0.18%(4) 0.88% - 0.88% o CVS Social Equity 0.70% - 0.64% 1.34% 0.36% 0.98%(3) o CVS Social International Equity 1.10% - 0.51%(4) 1.61% - 1.61% o CVS Social Mid Cap Growth 0.90% - 0.23%(4) 1.13% - 1.13% o CVS Social Small Cap Growth 1.00% - 0.39%(4) 1.39% - 1.39% FIDELITY o VIP Asset Manager - SERVICE CLASS 0.53% 0.10% 0.11% 0.74% - 0.74%(5) o VIP Asset Manager: Growth - SERVICE CLASS 0.58% 0.10% 0.15% 0.83% - 0.83%(5) o VIP Contrafund(R)- SERVICE CLASS 0.58% 0.10% 0.10% 0.78% - 0.78%(5) o VIP Equity-Income - SERVICE CLASS 0.48% 0.10% 0.10% 0.68% - 0.68%(5) o VIP Growth - SERVICE CLASS 0.58% 0.10% 0.10% 0.78% - 0.78%(5) o VIP High Income - SERVICE CLASS 0.58% 0.10% 0.13% 0.81% - 0.81% o VIP Investment Grade Bond - INITIAL CLASS 0.43% - 0.11% 0.54% - 0.54% o VIP Overseas - SERVICE CLASS 0.73% 0.10% 0.20% 1.03% - 1.03%(5) INVESCO FUNDS o VIF-Dynamics(6) 0.75% - 0.33% 1.08% - 1.08% MFS o New Discovery 0.90% - 0.19%(7) (8)1.09% 0.03% 1.06% o Strategic Income 0.75% - 0.37%(7) (8)1.12% 0.20% 0.92% o Utilities 0.75% - 0.18%(7) 0.93% - 0.93% MORGAN STANLEY o Emerging Markets Equity 1.25% - 0.87% 2.12% 0.27% 1.85%(9) o Global Value Equity 0.80% - 0.48% 1.28% 0.13% 1.15%(9) o International Magnum 0.80% - 0.54% 1.34% 0.18% 1.16%(9) o U.S. Real Estate 0.80% - 0.35% 1.15% 0.05% 1.10%(9) SALOMON BROTHERS o Variable Capital 0.85% - 0.17% 1.02% 0.02%(10) 1.00% SUMMIT PINNACLE SERIES(11) o Nasdaq-100 Index 0.35% - 0.30% 0.65% - 0.65% o Russell 2000 Small Cap Index 0.35% - 0.40% 0.75% - 0.75% o S&P MidCap 400 Index 0.30% - 0.30% 0.60% - 0.60% CORPORATE BENEFIT VUL 7 Total Waivers Total Expenses Subaccount's underlying Management 12b-1 Other Fund and after waivers and Portfolio Name Fees Fees Fees Fees Reductions reductions, if any -------------- ---- ---- ---- ---- ---------- ------------------ THIRD AVENUE o Third Avenue Value (12) 0.90% - 0.40% 1.30% - 1.30%
(1) The portfolio adviser (AIC) has contractually agreed to limit annual portfolio operating expenses through December 31, 2002, as reflected above, except for Ameritas Select, which has a cap of 1.50%. (2) AIC may recapture fees waived and/or reimbursed for the Ameritas Money Market portfolio. Such recapture is permitted, after taking into account the fee recapture, only to the extent that the expense ratio of the Ameritas Money Market portfolio does not exceed 0.36%. The adviser may recapture fees until December 31, 2002, the expiration of the recapture period. (3) Expenses are based on estimates for the portfolio's upcoming fiscal l year. The adviser has contractually agreed to limit annual portfolio operating expenses to 0.98% for the fiscal year ending December 31, 2002. (4) "Other Fees" reflect an indirect fee resulting from the portfolio's offset arrangement with the custodian bank whereby the custodian's and transfer agent's agent's fees may be paid indirectly by credits earned on the portfolio's uninvested cash balances. These credits are used to reduce the portfolio's expenses. Net operating expenses after reductions for fees paid indirectly would be as follows: CVS Social Balanced 0.87% CVS Social International Equity 1.54% CVS Social Mid Cap Growth 1.10% CVS Social Small Cap Growth 1.22% (5) Actual annual class operating expenses were lower because a portion of the brokerage commissions that the fund paid was used to reduce the fund's expenses. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce a portion of the fund's custodian expenses. These offsets may be discontinued at any time. See the fund prospectus for details. (6) The fund's manager has voluntarily agreed to reimburse the class's expenses if they exceed a certain level. Including this reimbursement, the annual class operating expenses were 1.05%. This arrangement may be discontinued by the fund's manager at any time. The fund's actual other expenses and total annual fund operating expenses were lower than the figures shown because the custodian fees were reduced under an expense offset arrangement. Certain expenses of the INVESCO portfolios were absorbed voluntarily by INVESCO in order to ensure that expenses for the fund, excluding any expense offset arrangements, did not exceed the "Total Expenses" stated in the table. This commitment may be changed at any time following consultation with the board of directors. After absorption, but excluding any expense offset arrangements, the fund's other and total annual fund operating expenses were insignificant for the year ended December 31, 2001. (7) Each MFS portfolio has an expense offset arrangement which reduces the portfolio's custodian fee based upon the amount of cash maintained by the portfolio with its custodian and dividend disbursing agent. Each portfolio may enter into other such arrangements and directed brokerage arrangements, (which would also have the effect of reducing the portfolio's expenses). "Other Fees" do not take into account these expense reductions and are therefore higher than the actual expenses of the portfolio. Had these fee reductions been taken into account, "Total Expenses (reflecting waivers and/or reimbursements, if any)" would be lower and would equal: New Discovery 1.05% Strategic Income 0.90% Utilities 0.92% (8) MFS has contractually agreed, subject to reimbursement, to bear expenses for the MFS New Discovery and Strategic Income portfolio's such that each portfolio's "Other Fees" (after taking into account the expense offset arrangement described above) do not exceed 0.15% of the average daily net assets of the portfolio during the current fiscal year. The MFS Utilities portfolio has no such limitation. These contracted contractual fee arrangements will continue until at least May 1, 2003, unless changed with the consent of the board of trustees who oversees the portfolio. (9) The portfolio's investment adviser has voluntarily agreed to reduce its management fee and/or reimburse each portfolio so that total annual operating expenses for each portfolio will not exceed: Emerging Markets Equity 1.75% Global Value Equity 1.15% International Magnum 1.15% U.S. Real Estate 1.10% The investment adviser reserves the right to terminate any waiver and/or reimbursement at any time and without notice. In determining the actual amount of voluntary management fee waiver and/or expense reimbursement for a portfolio, if any, certain investment related expenses, such as foreign country tax expense and interest expense on borrowing are excluded from annual operating expenses. If these expenses were incurred, the portfolio's total expenses after voluntary fee waivers and/or expense reimbursements could exceed the expense ratios shown above. For the year ended December 31, 2001, after giving effect to the above voluntary management fee waiver and/or expense reimbursement, the total expenses for each portfolio, including certain investment related expenses, were as stated in the table. (10) The manager voluntarily reimbursed the fund for certain expenses during the period ended December 31, 2001. Without this reimbursement, the fund's Total Expenses would have been 1.2702%. The manager may discontinue the waiver at any time. (11) Total operating expenses in excess of those stated for each Summit portfolio are paid by the investment adviser. The S&P MidCap 400(R) Index is a trademark of The McGraw-Hill Companies, Inc. The Nasdaq-100(R) Inde is a trademark of The Nasdaq Stock Market, Inc. The Russell 2000(R) Index is a trademark of the Frank Russell Company. These trademarks have been licensed for use by Summit Mutual Funds. The Funds are not sponsored, endorsed, sold or promoted by any of the licensing organizations, and they make no representation or warranty regarding the Funds, and bear no liability with respect to the Funds. CORPORATE BENEFIT VUL 8 (12) Under current arrangements, whenever, in any fiscal year, the portfolio's normal operating expenses, including the investment advisory fee, but excluding broker commissions, exceeds 1.30% of the portfolio's average net assets, the adviser is obligated to reimburse the portfolio in an amount equal to that excess. Expense reimbursement agreements are expected to continue in future years but may be terminated at any time. As long as the expense limitations continue for a portfolio, if a reimbursement occurs, it has the effect of lowering the portfolio's expense ratio and increasing its total return. AVLIC may receive administrative fees from the investment advisers of certain Funds. AVLIC currently does not assess a separate charge against the Separate Account or the Fixed Account for any federal, state or local income taxes. AVLIC may, however, make such a charge in the future if income or gains within the Separate Account will incur any federal, or any significant state or local income tax liability, or if the federal, state or local tax treatment of AVLIC changes. HOW DOES THE INVESTMENT COMPONENT OF THE CORPORATE BENEFIT VUL POLICY WORK? AVLIC has established the Separate Account, which is separate from all other assets of AVLIC, as a vehicle to receive and invest premiums received from Corporate Benefit VUL Policy Owners and owners of certain other variable universal life products offered by AVLIC. The Separate Account is divided into separate Subaccounts. Each Subaccount invests exclusively in shares of one of the investment portfolios available through Corporate Benefit VUL. Each Policy Owner may allocate Net Premiums to one or more Subaccounts, or to AVLIC's Fixed Account in the initial application. These allocations may be changed, without charge, by notifying AVLIC's Home Office. The aggregate value of your interests in the Subaccounts, the Fixed Account, and any amount held in the General Account to secure Policy debt will represent the Accumulation Value of your Corporate Benefit VUL Policy. (See the section on Accumulation Value.) WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE CORPORATE BENEFIT VUL POLICY? The Investment Options available through Corporate Benefit VUL include a variety of investment portfolios, each of which is a separate series of a mutual fund managed by American Century Investment Management, Inc., Ameritas Investment Corp., Calvert Asset Management Company, Inc., Fidelity Management & Research Company, Fred Alger Management, Inc., Invesco Funds Group, Inc., Massachusetts Financial Services Company, Morgan Stanley Dean Witter Investment Management Inc., Salomon Brothers Asset Management Inc, Summit Investment Partners, Inc., and EQSF Advisers, Inc. (On December 1, 1998, Morgan Stanley Asset Management Inc. changed its name to Morgan Stanley Dean Witter Investment Management Inc., but continues to do business in certain instances using the name Morgan Stanley Asset Management.) These portfolios are listed in the Fund Expense Summary above. Details about the investment objectives and policies of each of the available investment portfolios and management fees and expenses appear in the sections on Investment Objectives and Policies of the Funds' Portfolios and Fund Expense Summary. In addition to the listed portfolios you may also elect to allocate Net Premiums to AVLIC's Fixed Account. (See the section on Fixed Account.) HOW DOES THE LIFE INSURANCE COMPONENT OF A CORPORATE BENEFIT VUL POLICY WORK? A Corporate Benefit VUL Policy provides for the payment of a minimum Death Benefit upon the death of the Insured. The amount of the minimum Death Benefit--sometimes referred to as the Specified Amount of the Corporate Benefit VUL Policy--is chosen by you at the time your Corporate Benefit VUL Policy is established. However, Death Benefit Proceeds--the actual amount that will be paid after AVLIC receives Satisfactory Proof of Death of the Insured--will vary over the life of your Corporate Benefit VUL Policy, depending on which of the two available coverage options you select. If you choose Option A, Death Benefit Proceeds payable under your Corporate Benefit VUL Policy will be the Specified Amount of your Corporate Benefit VUL Policy OR the applicable percentage of its Accumulation Value, whichever is greater. If you choose Option B, Death Benefit Proceeds payable under your Corporate Benefit VUL Policy will be the Specified Amount of your Corporate Benefit VUL Policy PLUS the Accumulation Value of your Corporate Benefit VUL Policy, or if it is higher, the applicable percentage of the Accumulation Value on the date of death. In either case, the applicable percentage is established based on the age of the Insured at the date of death. (See the section on Death Benefit Options.) CORPORATE BENEFIT VUL 9 ARE THERE ANY RISKS INVOLVED IN OWNING CORPORATE BENEFIT VUL POLICY? Yes. Over the life of the Corporate Benefit VUL Policy, the Subaccounts to which you allocate premiums will fluctuate with changes in the stock market and overall economic factors. These fluctuations will be reflected in the Accumulation Value of your Corporate Benefit VUL Policy and may result in loss of principal. For this reason, the purchase of a Corporate Benefit VUL Policy may not be suitable for all businesses. It may not be advantageous to purchase a Corporate Benefit VUL Policy to replace or augment existing insurance arrangements. WHAT IS THE PREMIUM THAT MUST BE PAID TO KEEP A CORPORATE BENEFIT VUL POLICY IN FORCE? Like traditional life insurance policies, a Corporate Benefit VUL Policy requires the payment of periodic premiums in order to keep the Policy in force. You will be asked to establish a payment schedule before your Corporate Benefit VUL Policy becomes effective. The distinction between traditional life policies and a Corporate Benefit VUL Policy is that a Corporate Benefit VUL Policy will not lapse simply because premium payments are not made according to that payment schedule. However, a Corporate Benefit VUL Policy will lapse, even if scheduled premium payments are made, if the Net Cash Surrender Value of your Corporate Benefit VUL Policy falls below zero. (See the section on Premiums.) HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED? A Corporate Benefit VUL Policy will be issued after a completed application is accepted, and the initial premium payment is received, by AVLIC at its Home Office. AVLIC's Home Office is located at 5900 "O" Street, P.O. Box 82550, Lincoln, NE 68501. The initial Net Premium will be allocated on the Issue Date to the Subaccounts and/or the Fixed Account according to the selections made in the application. When state or other applicable law or regulation requires return of at least the premium payments, should you return the Policy under the free-look privilege, the initial Net Premium will be allocated to the Money Market Subaccount. Thirteen days after the Issue Date, the Accumulation Value of the Policy will be allocated among the Subaccounts and/or the Fixed Account according to the instructions in the application. You have the right to examine the Corporate Benefit VUL Policy and return it for a refund for a limited time, even after the Issue Date. (See the section on Issuance of a Policy.) You may make subsequent premium payments, although you are not required to do so. AVLIC will send premium payment notices to you according to any schedule you select. When AVLIC receives a premium payment at its Home Office, we will deduct any applicable Percent of Premium Charge and allocate the Net Premium to the Subaccounts and/or the Fixed Account according to your selections. (See the sections on Premiums and Allocations of Premiums and Accumulation Value.) As already noted, Corporate Benefit VUL provides considerable flexibility in determining the frequency and amount of premium payments. This flexibility is not, however, unlimited. You should keep certain factors in mind in determining the payment schedule that is best suited to your needs. These include the Cost of Insurance needed to keep the Corporate Benefit VUL Policy in force; maximum premium limitations established under the federal tax laws; and the impact that reduced premium payments may have on the Net Cash Surrender Value of the Corporate Benefit VUL Policy. (See the section on Premiums.) IS THE ACCUMULATION VALUE OF THE CORPORATE BENEFIT VUL POLICY AVAILABLE WITHOUT SURRENDER? Yes. You may access the value of your Corporate Benefit VUL Policy in one of two ways. You may obtain a loan, secured by the Accumulation Value of your Corporate Benefit VUL Policy. The maximum interest rate on any such loan is 6% annually; the current rate is 5.5% annually. After the tenth Policy Anniversary, you may borrow against a limited amount of the Net Cash Surrender Value of your Corporate Benefit VUL Policy at a maximum annual interest rate of 4%; the current rate for such loans is 3.5% annually. (See the section on Loan Benefits.) You may also access the value of your Corporate Benefit VUL Policy by making a partial withdrawal. A partial withdrawal is subject to a maximum charge not to exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial withdrawal charge is the lesser of $25 or 2%). (See the section on Partial Withdrawals.) WHEN DOES THE CORPORATE BENEFIT VUL POLICY TERMINATE? CORPORATE BENEFIT VUL 10 You may terminate the Corporate Benefit VUL Policy by Surrendering the Policy during the lifetime of the Insured for its Net Cash Surrender Value. If you surrender the Policy in the first two Policy Years, we will refund a portion of the Percent of Premium Charge deducted in the first Policy Year. As noted above, the Corporate Benefit VUL Policy will terminate if you fail to maintain sufficient Net Cash Surrender Value to cover Policy charges. (See the sections on Surrenders and Premiums.) CORPORATE BENEFIT VUL 11 AVLIC, THE SEPARATE ACCOUNT AND THE FUNDS AMERITAS VARIABLE LIFE INSURANCE COMPANY RATINGS: A.M. BEST - A (EXCELLENT), 3rd highest of 15 ratings for financial strength and operating performance. STANDARD & POOR'S - AA (VERY STRONG), 3rd highest of 21 ratings for insurer financial strength. (THESE RATINGS DO NOT BEAR ON THE INVESTMENT PERFORMANCE OF ASSETS HELD IN THE SEPARATE ACCOUNT OR ON THE DEGREE OF RISK IN INVESTMENTS IN THE SEPARATE ACCOUNT.) AWARDS: 1999 BETTER BUSINESS BUREAU NATIONAL TORCH AWARD. AMERITAS LIFE INSURANCE CORP. AND ITS AFFILIATED COMPANIES, INCLUDING AMERITAS VARIABLE LIFE INSURANCE COMPANY, WERE AMONG ONLY 22 FINALISTS HONORED IN THIS AWARD FOR MARKETPLACE ETHICS. WE WERE SITED FOR "DEMONSTRATING THE HIGHEST LEVEL OF INTEGRITY IN [OUR] PRACTICE TOWARD CUSTOMERS, EMPLOYEES, SUPPLIERS, INDUSTRY PEERS, AND THE COMMUNITIES WHERE [WE] DO BUSINESS." Ameritas Variable Life Insurance Company issues the Policy described in this prospectus and is responsible for providing each Policy's insurance and annuity benefits. We are a stock life insurance company organized under the insurance laws of the State of Nebraska in 1983. We are an indirect majority-owned subsidiary of Ameritas Acacia Mutual Holding Company, the ultimate parent company of Ameritas Life Insurance Corp., Nebraska's first insurance company - in business since 1887, and Acacia Life Insurance Company, a District of Columbia domiciled company chartered by an Act of the United States Congress in 1869. Our home office and Service Office address is 5900 "O" Street, Lincoln, Nebraska, 68510. Our website address is variable.ameritas.com. We are engaged in the business of issuing life insurance and annuities throughout the United States (except New York), with an emphasis on products with variable investment options in underlying portfolios. The Ameritas Acacia companies are a diversified family of financial services businesses offering the above-listed products and services as well as mutual funds and other investments, financial planning, group dental and vision insurance, retirement plans and 401(k) plans, banking, and public financing. THE SEPARATE ACCOUNT Ameritas Variable Life Insurance Company Separate Account V ("Separate Account") was established under Nebraska law on August 28, 1985. The assets of the Separate Account are held by AVLIC segregated from all of AVLIC's other assets, are not chargeable with liabilities arising out of any other business which AVLIC may conduct, and are not affected by income, gains, or losses of AVLIC. Although the assets maintained in the Separate Account will not be charged with any liabilities arising out of AVLIC's other business, all obligations arising under the Policies are liabilities of AVLIC who will maintain assets in the Separate Account of a total market value at least equal to the reserve and other contract liabilities of the Separate Account. The Separate Account will at all times contain assets equal to or greater than Accumulation Values invested in the Separate Account. Nevertheless, to the extent assets in the Separate Account exceed AVLIC's liabilities in the Separate Account, the assets are available to cover the liabilities of AVLIC's General Account. AVLIC may, from time to time, withdraw assets available to cover the General Account obligations. The Separate Account is registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940 ("1940 Act") as a unit investment trust, which is a type of investment company. This does not involve any SEC supervision of the management or investment policies or practices of the Separate Account. For state law purposes, the Separate Account is treated as a Division of AVLIC. CORPORATE BENEFIT VUL 12 PERFORMANCE INFORMATION Performance information for the Subaccounts of the Separate Account and the Funds available for investment by the Separate Account may appear in advertisements, sales literature, or reports to Policy Owners or prospective purchasers. AVLIC may also provide a hypothetical illustration of Accumulation Value, Net Cash Surrender Value and Death Benefit based on historical investment returns of the Funds for a sample Insured based on assumptions as to age, gender, and other Policy specific assumptions. AVLIC may also provide individualized hypothetical illustrations of Accumulation Value, Net Cash Surrender Value and Death Benefit based on historical investment returns of the Funds. These illustrations will reflect deductions for Fund expenses and Policy and the Separate Account charges, including the Monthly Deduction and the Percent of Premium Charge. These hypothetical illustrations will be based on the actual historical experience of the Funds as if the Subaccounts had been in existence and a Policy issued for the same periods as those indicated for the Funds. THE FUNDS - INVESTMENT STRATEGIES AND OBJECTIVES The Separate Account Subaccount underlying portfolios listed below are designed primarily as investments for variable annuity and variable life insurance policies issued by insurance companies. They are not publicly traded mutual funds available for direct purchase by you. THERE IS NO ASSURANCE THE INVESTMENT OBJECTIVES WILL BE MET. This information is just a summary for each underlying portfolio. Read the prospectus for each portfolio for more information.
-------------------------------------- ---------------------------------------- -------------------------------------- Separate Account Investment Strategy Investment Objective Portfolio -------------------------------------- ------------------------------------------------------------------------------- ALGER Offered through THE ALGER AMERICAN FUND Advised by FRED ALGER MANAGEMENT, INC. -------------------------------------- ------------------------------------------------------------------------------- ALGER AMERICAN BALANCED Common stock of companies with Current Income and long-term capital growth potential and fixed-income growth securities. -------------------------------------- ---------------------------------------- -------------------------------------- ALGER AMERICAN LEVERAGED ALLCAP Common stocks of companies with Long-term capital growth growth potential. -------------------------------------- ------------------------------------------------------------------------------- AMERICAN CENTURY Offered through AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. Advised by AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. -------------------------------------- ------------------------------------------------------------------------------- VP INCOME & GROWTH Common stocks of U.S. companies. Long-term capital growth. Income is secondary. -------------------------------------- ------------------------------------------------------------------------------- AMERITAS PORTFOLIOS (SUBADVISOR) Offered through CALVERT VARIABLE SERIES, INC. AMERITAS PORTFOLIOS Advised by AMERITAS INVESTMENT CORP. (BOTH ARE AMERITAS ACACIA COMPANIES) -------------------------------------- ------------------------------------------------------------------------------- AMERITAS GROWTH Common stocks of large U.S. Long-term capital growth. (FRED ALGER) companies with broad product lines, markets, financial resources and depth of management. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS INCOME & GROWTH Dividend paying equity securities, High level of dividend income, with (FRED ALGER) preferably with growth potential. capital growth as a secondary goal. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS MIDCAP GROWTH Common stocks of midsize U.S. (FRED ALGER) companies with promising growth Long-term capital growth. potential. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS SMALL COMPANY EQUITY Common stocks of small size U.S. Long-term capital growth. (BABSON) companies. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS MONEY MARKET (CALVERT) Money market securities of domestic Current income. and foreign issuers. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS SMALL CAPITALIZATION Common stocks of small, fast-growing Long-term capital growth. (MCSTAY) U.S. companies that offer innovative products, services or technologies to a rapidly expanding marketplace. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS EMERGING GROWTH Common stocks of emerging growth Long-term capital growth. (MFS CO.) companies or related securities, including foreign securities. -------------------------------------- ---------------------------------------- -------------------------------------- Common stocks of companies or related securities, including AMERITAS GROWTH WITH INCOME foreign securities, to seek to Current income, long-term growth of (MFS CO.) provide income equal to 90% of the capital and income. S&P 500 Composite Index dividend yield. -------------------------------------- ---------------------------------------- -------------------------------------- Common stocks and related securities of companies with favorable prospects for long-term growth, Long-term capital growth and future AMERITAS RESEARCH (MFS CO.) attractive valuations, dominant or income. growing market share, and superior management. -------------------------------------- ---------------------------------------- -------------------------------------- AMERITAS SELECT (HARRIS/OAKMARK) Common stocks of U.S. companies. Long-term capital growth. -------------------------------------- ---------------------------------------- -------------------------------------- CORPORATE BENEFIT VUL 13 AMERITAS INDEX 500 (STATE STREET) Common stocks of U.S. companies on Results that correspond to the S&P the S&P 500 Index. 500 Index company common stocks. -------------------------------------- ------------------------------------------------------------------------------- Offered through CALVERT VARIABLE SERIES, INC. CALVERT PORTFOLIOS CALVERT PORTFOLIOS Advised by CALVERT ASSET MANAGEMENT COMPANY, INC. (BOTH ARE AMERITAS ACACIA COMPANIES) -------------------------------------- ------------------------------------------------------------------------------- CVS INCOME Primarily investment grade bonds and Long-term income. other income producing securities. -------------------------------------- ---------------------------------------- -------------------------------------- Primarily large-cap growth oriented common stock of U.S. companies, with Income and capital growth through CVS SOCIAL BALANCED 40% bonds and other fixed-income socially screened investments. investments. -------------------------------------- ---------------------------------------- -------------------------------------- CVS SOCIAL EQUITY Primarily large-cap common stocks. Capital growth through socially screened investments. -------------------------------------- ---------------------------------------- -------------------------------------- CVS SOCIAL INTERNATIONAL EQUITY Common stocks of mid to large cap High total return through socially companies. screened investments. -------------------------------------- ---------------------------------------- -------------------------------------- CVS SOCIAL MID CAP GROWTH Common stocks of mid cap companies. Long-term capital growth through socially screened investments. -------------------------------------- ---------------------------------------- -------------------------------------- CVS SOCIAL SMALL CAP GROWTH Common stocks of small cap companies. Long-term capital growth through socially screened investments. -------------------------------------- ---------------------------------------- -------------------------------------- FIDELITY Offered through VARIABLE INSURANCE PRODUCTS Advised by FIDELITY MANAGEMENT AND RESEARCH COMPANY -------------------------------------- ------------------------------------------------------------------------------- VIP ASSET MANAGER (SERVICE CLASS) Allocated investments among stocks, High total return with reduced risk bonds and short-term/money market over the long-term. investments. -------------------------------------- ---------------------------------------- -------------------------------------- Allocated investments among stocks, VIP ASSET MANAGER: GROWTH (SERVICE bonds and short-term/money market High total return. CLASS) investments. -------------------------------------- ---------------------------------------- -------------------------------------- VIP CONTRAFUND(R)(SERVICE CLASS) Common stocks of companies whose Long-term capital growth. value is not fully recognized. -------------------------------------- ---------------------------------------- -------------------------------------- VIP EQUITY-INCOME (SERVICE CLASS) Income producing equity securities. Reasonable income. -------------------------------------- ---------------------------------------- -------------------------------------- VIP GROWTH (SERVICE CLASS) Common stocks of companies with Capital growth. above average growth potential. -------------------------------------- ---------------------------------------- -------------------------------------- High yielding fixed-income VIP HIGH INCOME (SERVICE CLASS) securities, while also considering High level of current income. growth of capital. -------------------------------------- ---------------------------------------- -------------------------------------- U.S. Dollar-denominated High level of current income as is VIP INVESTMENT GRADE BOND (INITIAL investment-grade bonds (medium and consistent with preservation of CLASS) high quality). capital. -------------------------------------- ---------------------------------------- -------------------------------------- VIP OVERSEAS (SERVICE CLASS) Securities of foreign companies, Long-term capital growth. diversified across countries and regions. -------------------------------------- ------------------------------------------------------------------------------- INVESCO FUNDS Offered through INVESCO VARIABLE INVESTMENT FUNDS, INC. Advised by INVESCO FUNDS GROUP, INC. -------------------------------------- ------------------------------------------------------------------------------- VIF-DYNAMICS Common stocks of mid size companies. Long-term capital growth. -------------------------------------- ------------------------------------------------------------------------------- MFS Offered through MFS VARIABLE INSURANCE TRUST Advised by MASSACHUSETTS FINANCIAL SERVICES COMPANY -------------------------------------- ------------------------------------------------------------------------------- NEW DISCOVERY Common stocks of smaller cap Capital growth. emerging growth companies that are early in their life cycles. -------------------------------------- ---------------------------------------- -------------------------------------- STRATEGIC INCOME (formerly known as U.S. and foreign government Income and capital growth. MFS(R) Global Governments Series) securities, corporate bonds, and mortgage-backed and asset-backed securities. -------------------------------------- ---------------------------------------- -------------------------------------- UTILITIES Equity and debt securities of U.S. Capital growth and current income and foreign companies (including emerging markets) in the utility industry. -------------------------------------- ------------------------------------------------------------------------------- MORGAN STANLEY Offered through THE UNIVERSAL INSTITUTIONAL FUNDS, INC. Advised by MORGAN STANLEY INVESTMENT MANAGEMENT, INC. DBA "VAN KAMPEN" -------------------------------------- ------------------------------------------------------------------------------- EMERGING MARKETS EQUITY Growth oriented equity securities of Long-term capital growth. issuers in emerging market countries. -------------------------------------- ---------------------------------------- -------------------------------------- Equity securities of issuers GLOBAL VALUE EQUITY throughout the world, including U.S. Long-term capital growth. issuers. -------------------------------------- ---------------------------------------- -------------------------------------- Equity securities of non-U.S. INTERNATIONAL MAGNUM issuers domiciled in "EAFE" Long-term capital growth. countries. -------------------------------------- ---------------------------------------- -------------------------------------- U.S. REAL ESTATE Equity securities of companies in Above average current income and the U.S. real estate industry, long-term capital growth. including real estate investment trusts ("REITs"). -------------------------------------- ------------------------------------------------------------------------------- SALOMON BROTHERS Offered through SALOMON BROTHERS VARIABLE SERIES FUNDS INC. Advised by SALOMON BROTHERS ASSET MANAGEMENT, INC. -------------------------------------- ------------------------------------------------------------------------------- VARIABLE CAPITAL Common stocks of U.S. companies of Capital Appreciation. all sizes. CORPORATE BENEFIT VUL 14 -------------------------------------- ------------------------------------------------------------------------------- SUMMIT PINNACLE SERIES Offered through SUMMIT MUTUAL FUNDS INC. SUMMIT PINNACLE SERIES Advised by SUMMIT INVESTMENT PARTNERS, INC. -------------------------------------- ------------------------------------------------------------------------------- NASDAQ-100 INDEX Common stocks of U.S. companies in Results that correspond to the the Nasdaq-100 Index. Nasdaq-100 Index company common stocks. -------------------------------------- ---------------------------------------- -------------------------------------- Results that correspond to the RUSSELL 2000 SMALL CAP INDEX Common stocks of U.S. companies in Russell 2000 Index company common the Russell 2000 Index. stocks. -------------------------------------- ---------------------------------------- -------------------------------------- S&P MIDCAP 400 INDEX Common stocks of U.S. companies in Results that correspond to the S&P the S&P MidCap 400 Index. 400 MidCap Index company common stocks. -------------------------------------- ------------------------------------------------------------------------------- THIRD AVENUE Offered through THIRD AVENUE VARIABLE SERIES TRUST Advised by EQSF ADVISERS, INC. -------------------------------------- ------------------------------------------------------------------------------- THIRD AVENUE VALUE Primarily common stocks of companies Long-term capital growth. with strong balance sheets which the manager considers undervalued, often smaller companies. -------------------------------------- ---------------------------------------- --------------------------------------
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS AVLIC reserves the right, subject to applicable law, to add, delete, combine, or substitute investments in the Separate Account if, in our judgment, marketing needs, tax considerations, or investment conditions warrant. This may happen due to a change in law or a change in a Fund's objectives or restrictions, or for some other reason. AVLIC may operate the Separate Account as a management company under the 1940 Act, it may be deregistered under that Act if registration is no longer required, or it may be combined with other AVLIC separate accounts. AVLIC may also transfer the assets of the Separate Account to another separate account. If necessary, we will notify the SEC and/or state insurance authorities and will obtain any required approvals before making these changes. If any changes are made, AVLIC may, by appropriate endorsement, change the Policy to reflect the changes. In addition, AVLIC may, when permitted by law, restrict or eliminate any voting rights of Policy Owners or other persons who have voting rights as to the Separate Account. AVLIC will determine the basis for making any new Subaccounts available to existing Policy Owners. You will be notified of any material change in the investment policy of any Fund in which you have an interest. FIXED ACCOUNT You may elect to allocate all or a portion of your Net Premium payments to the Fixed Account, and you may also transfer monies between the Separate Account and the Fixed Account. (See the section on Transfers.) Payments allocated to the Fixed Account and transferred from the Separate Account to the Fixed Account are placed in AVLIC's General Account. The General Account includes all of AVLIC's assets, except those assets segregated in AVLIC's separate accounts. AVLIC has the sole discretion to invest the assets of the General Account, subject to applicable law. AVLIC bears an investment risk for all amounts allocated or transferred to the Fixed Account, plus interest credited thereto, less any deduction for charges and expenses. The Policy Owner bears the investment risk that the declared rate, described below, will fall to a lower rate after the expiration of a declared rate period. Because of exemptions and exclusionary provisions, interests in the General Account have not been registered under the Securities Act of 1933 (the "1933 Act"), nor is the General Account registered as an investment company under the Investment Company Act of 1940. Accordingly, neither the General Account nor any interest in it is generally subject to the provisions of the 1933 or 1940 Act. We understand that the staff of the SEC has not reviewed the disclosures in this prospectus relating to the Fixed Account portion of the Policy; however, these disclosures may be subject to generally applicable provisions of the federal securities laws regarding the accuracy and completeness of statements made in prospectuses. AVLIC guarantees that it will credit interest at a declared rate of at least 3.5%. AVLIC may, at its discretion, set a higher declared rate(s). Each month AVLIC will establish the declared rate for the Policies with a Policy Date or Anniversary Date that month. Each month is assumed to have 30 days, and each year to have 360 days for purposes of crediting interest on the Fixed Account. The Policy Owner will earn interest on the amounts transferred or allocated to the Fixed Account at the declared rate effective for the month in which the Policy was issued, which rate is guaranteed for the remainder of the first Policy Year. During later Policy Years, all amounts in the Fixed Account will earn interest at the declared rate in effect in the month of the last Policy Anniversary. Declared interest rates may increase or decrease from previous periods, but will not fall below 3.5%. AVLIC reserves the right to change the declaration practice and the period for which a declared rate will apply. CORPORATE BENEFIT VUL 15 POLICY BENEFITS The rights and benefits under the Policy are summarized in this prospectus; however prospectus disclosure regarding the Policy is qualified in its entirety by the Policy itself, a copy of which is available upon request from AVLIC. PURPOSES OF THE POLICY The Policy is designed to provide the Policy Owner with both lifetime insurance protection on the life of the Insured and flexibility in the amount and frequency of premium payments and with the level of life insurance proceeds payable under the Policy. You are not required to pay scheduled premiums to keep the Policy in force, but you may, subject to certain limitations, vary the frequency and amount of premium payments. You also may adjust the level of Death Benefits payable under the Policy without having to purchase a new Policy by increasing (with evidence of insurability) or decreasing the Specified Amount. Thus, as insurance needs or financial conditions change, you have the flexibility to adjust life insurance benefits and vary premium payments. The Death Benefit may, and the Accumulation Value will, vary with the investment experience of the chosen Subaccounts of the Separate Account. Thus the Policy Owner benefits from any appreciation in value of the underlying assets, but bears the investment risk of any depreciation in value. As a result, whether or not a Policy continues in force may depend in part upon the investment experience of the chosen Subaccounts. The failure to pay a Planned Periodic Premium will not necessarily cause the Policy to lapse, but the Policy could lapse even if Planned Periodic Premiums have been paid, depending upon the investment experience of the Separate Account. DEATH BENEFIT PROCEEDS As long as the Policy remains in force, AVLIC will pay the Death Benefit Proceeds of the Policy upon Satisfactory Proof of Death, according to the Death Benefit option in effect at the time of the Insured's death. The amount of the Death Benefits payable will be determined at the end of the Valuation Period during which the Insured's death occurred. The Death Benefit Proceeds may be paid in a lump sum or under one or more of the payment options set forth in the Policy. (See the section on Payment Options.) Death Benefit Proceeds will be paid to the surviving Beneficiary or Beneficiaries you specified in the application or as subsequently changed. If you do not choose a Beneficiary, the proceeds will be paid to you, as the Policy Owner, or if individually owned, to your estate. DEATH BENEFIT OPTIONS The Policy provides two Death Benefit options. The Policy Owner selects one of the options in the application. The Death Benefit under either option will never be less than the current Specified Amount of the Policy as long as the Policy remains in force. (See the section on Policy Lapse and Reinstatement.) The net amount at risk for Option A will generally be less than the net amount at risk for Option B. If you choose Option A, your Cost of Insurance deduction will generally be lower than if you choose Option B. (See the section on Charges and Deductions.) The following graphs illustrate the differences in the two Death Benefit options. OPTION A. OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION A, SPECIFICALLY BY SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE ACCUMULATION VALUE. Death Benefit Option A. Pays a Death Benefit equal to the Specified Amount or the Accumulation Value multiplied by the Death Benefit percentage (as illustrated at Point A) whichever is greater. CORPORATE BENEFIT VUL 16 Under Option A, the Death Benefit is the current Specified Amount of the Policy or, if greater, the applicable percentage of Accumulation Value on the date of death. The applicable percentage is 250% for Insureds with an Attained Age 40 or younger on the Policy Anniversary Date prior to the date of death. For Insureds with an Attained Age over 40 on that Policy Anniversary Date, the percentage declines. For example, the percentage at Attained Age 40 is 250%, at Attained Age 50 is 185%, at Attained Age 60 is 130%, at Attained Age 70 is 115%, at Attained Age 80 is 105%, and Attained Age 90 is 105%. The applicable percentage will never be less than 101%. Accordingly, under Option A the Death Benefit will remain level at the Specified Amount unless the applicable percentage of Accumulation Value exceeds the current Specified Amount, in which case the amount of the Death Benefit will vary as the Accumulation Value varies. Policy Owners who prefer to have favorable investment performance, if any, reflected in higher Accumulation Value, rather than increased insurance coverage, generally should select Option A. OPTION B. OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION B, SPECIFICALLY BY SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE ACCUMULATION VALUE. Death Benefit Option B. Pays a Death Benefit equal to the Specified Amount plus the Policy's Accumulation Value or the Accumulation Value multiplied by the Death Benefit percentage, whichever is greater. Under Option B, the Death Benefit is equal to the current Specified Amount plus the Accumulation Value of the Policy or, if greater, the applicable percentage of the Accumulation Value on the date of death. The applicable percentage is the same as under Option A: 250% for Insureds with an Attained Age 40 or younger on the Policy Anniversary Date prior to the date of death. For Insureds with an Attained Age over 40 on that Policy Anniversary Date the percentage declines. Accordingly, under Option B the amount of the Death Benefit will always vary as the Accumulation Value varies (but will never be less than the Specified Amount). Policy Owners who prefer to have favorable investment performance, if any, reflected in increased insurance coverage, rather than higher Accumulation Values, generally should select Option B. CHANGE IN DEATH BENEFIT OPTION. The Death Benefit option may be changed once per year after the first Policy Year by sending AVLIC a written request. The effective date of such a change will be the Monthly Activity Date on or following the date the change is approved by AVLIC. A change may have federal tax consequences. If the Death Benefit option is changed from Option A to Option B, the Specified Amount after the change will equal the Specified Amount before the change less the Accumulation Value as of the date of the change. If the Death Benefit option is changed from Option B to Option A, the Specified Amount under Option A after the change will equal the Death Benefit under Option B on the effective date of change. No charges will be imposed upon a change in Death Benefit option, nor will such a change in and of itself result in an immediate change in the amount of a Policy's Accumulation Value. However, a change in the Death Benefit option may affect the Cost of Insurance because this charge varies depending on the net amount at risk (i.e. the amount by which the Death Benefit as calculated on a Monthly Activity Date exceeds the Accumulation Value on that date). Changing from Option B to Option A generally will decrease the net amount at risk in the future, and will therefore decrease the Cost of Insurance. Changing from Option A to Option B generally will result in an increase in the Cost of Insurance over time because the Cost of Insurance Rate will increase with the Insured's age, even though the net amount at risk will generally remain level. (See the sections on Charges and Deductions and Federal Tax Matters.) CORPORATE BENEFIT VUL 17 CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first Policy Year, a Policy Owner may increase or decrease the Specified Amount of a Policy. A change in Specified Amount may affect the Cost of Insurance Rate and the net amount at risk, both of which may affect a Policy Owner's Cost of Insurance and have federal tax consequences. (See the sections on Charges and Deductions and Federal Tax Matters.) Any increase or decrease in the Specified Amount will become effective on the Monthly Activity Date on or following the date a written request is approved by AVLIC. The Specified Amount of a Policy may be changed only once per year and AVLIC may limit the size of a change in a Policy Year. The Specified Amount remaining in force after any requested decrease may not be less than $100,000 ($50,000 if the Term Insurance Rider is attached to the Policy). After the Insured reaches Attained Age 100, the Policy Owner may decrease the Specified Amount to no less than $1000. If a decrease in the Specified Amount makes the Policy not comply with the maximum premium limits required by federal tax law, the decrease may be limited or the Accumulation Value may be returned to you, at your election, to the extent necessary to meet the requirements. (See the section on Premiums.) The Administrative Expense Charge will include a monthly charge per $1000 of increase in Specified Amount for ten years from the date of the increase. Increases in the Specified Amount will be allowed after the first Policy Year. For an increase in the Specified Amount, you must submit a written supplemental application. AVLIC may also require additional evidence of insurability. Although an increase need not necessarily be accompanied by an additional premium, in certain cases an additional premium will be required to put the requested increase in effect. (See the section on Premiums upon Increases in Specified Amount.) The minimum amount of any increase is $25,000. Generally an increase cannot be made if the Insured's Attained Age is over the maximum age for the Insured's risk class. The increase may be subject to guaranteed issue guidelines, if applicable. In states which require Cost of Insurance charges to cease at a stated Attained Age, the Specified Amount will decrease to $1000 when that age is reached. METHODS OF AFFECTING INSURANCE PROTECTION You may increase or decrease the pure insurance protection provided by a Policy--the difference between the Death Benefit and the Accumulation Value--in several ways as your insurance needs change. These ways include increasing or decreasing the Specified Amount of insurance, changing the level of premium payments, and making a partial withdrawal of the Policy's Accumulation Value. Certain of these changes may have federal tax consequences. The consequences of each of these methods will depend upon the individual circumstances. DURATION OF THE POLICY The duration of the Policy generally depends upon the Accumulation Value. The Policy will remain in force so long as the Net Cash Surrender Value is sufficient to pay the Monthly Deduction. (See the section on Charges from Accumulation Value.) However, when the Net Cash Surrender Value is insufficient to pay the Monthly Deduction and the Grace Period expires without an adequate payment by the Policy Owner, the Policy will lapse and terminate without value. (See the section on Policy Lapse and Reinstatement.) ACCUMULATION VALUE The Accumulation Value will reflect the investment performance of the chosen Investment Options, the Net Premiums paid, any partial withdrawals, and the charges assessed in connection with the Policy. You may Surrender the Policy at any time and receive the Policy's Net Cash Surrender Value. (See the section on Surrenders.) There is no guaranteed minimum Accumulation Value. Accumulation Value is determined on each Valuation Date. On the Issue Date, the Accumulation Value will equal the portion of any Net Premium allocated to the Investment Options, reduced by the portion of the first Monthly Deduction allocated to the Investment Options. (See the section on Allocation of Premiums and Accumulation Value.) Thereafter, on each Valuation Date, the Accumulation Value of the Policy will equal: (1) The aggregate values belonging to the Policy in each of the Subaccounts on the Valuation Date, determined by multiplying each Subaccount's unit value by the number of Subaccount units you have allocated to the Policy; plus (2) The value of allocations to the Fixed Account; plus (3) Any Accumulation Value impaired by Outstanding Policy Debt held in the General Account; plus (4) Any Net Premiums received on that Valuation Date; minus (5) Any partial withdrawal, and its charge, made on that Valuation Date; minus (6) Any Monthly Deduction to be made on that Valuation Date. In computing the Policy's Accumulation Value on the Valuation Date, the number of Subaccount units allocated to the Policy is determined after any transfers among Investment Options (and deduction of transfer charges), but before any other Policy transactions, such as receipt of Net Premiums and partial withdrawals. Because the Accumulation Value depends on a number of variables, a Policy's Accumulation Value cannot be predetermined. CORPORATE BENEFIT VUL 18 THE UNIT VALUE. The unit value of each Subaccount reflects the investment performance of that Subaccount. The unit value of each Subaccount is calculated by: (1) Multiplying the net asset value per share of each Fund portfolio on the Valuation Date times the number held by that Subaccount, before the purchase or redemption of any shares on that Valuation Date; minus (2) A charge not exceeding an annual rate of 0.95% (years 1-15) or 0.50% (years 16+) for mortality and expense risk; minus (3) A charge not exceeding an annual rate of 0.15% for administrative service expenses; minus (4) Any taxes payable by the Separate Account; and (5) Dividing the result by the total number of units held in the Subaccount on the Valuation Date, before the purchase or redemption of any units on that Valuation Date. (See the section on Daily Charges Against the Separate Account.) VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which the New York Stock Exchange ("NYSE") is open for trading. The net asset value for each Fund portfolio is determined as of the close of regular trading on the NYSE. The net investment return for each Subaccount and all transactions and calculations with respect to the Policies as of any Valuation Date are determined as of that time. A Valuation Period is the period between two successive Valuation Dates, commencing at the close of the NYSE on each Valuation Date and ending at the close of the NYSE on the next succeeding Valuation Date. PAYMENT OF POLICY BENEFITS Death Benefit Proceeds under the Policy will usually be paid within seven days after AVLIC receives Satisfactory Proof of Death. Payments may be postponed in certain circumstances. (See the section on Postponement of Payments.) The Policy Owner may decide the form in which Death Benefit Proceeds will be paid. During the Insured's lifetime, the Policy Owner may arrange for the Death Benefit Proceeds to be paid in a lump sum or under one or more of the optional methods of payment described below. Changes must be in writing and will revoke all prior elections. If no election is made, AVLIC will pay Death Benefit Proceeds or the Accumulation Value Benefit in a lump sum. When Death Benefit Proceeds are payable in a lump sum and no election for an optional method of payment is in force at the death of the Insured, the Beneficiary may select one or more of the optional methods of payment. Further, if the Policy is assigned, any amounts due to the assignee will first be paid in one sum. The balance, if any, may be applied under any payment option. Once payments have begun, the payment option may not be changed. (Also see the section on Surrenders.) PAYMENT OPTIONS FOR DEATH BENEFIT PROCEEDS. The minimum amount of each payment is $100. If a payment would be less than $100, AVLIC has the right to make payments less often so that the amount of each payment is at least $100. Once a payment option is in effect, Death Benefit Proceeds will be transferred to AVLIC's General Account. AVLIC may make other payment options available in the future. For additional information concerning these options, see the Policy itself. The following payment options are currently available: o INTEREST PAYMENT OPTION. AVLIC will hold any amount applied under this option. Interest on the unpaid balance will be paid or credited each month at a rate determined by AVLIC. o FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed fixed amount. Payments continue until the amount AVLIC holds runs out. o FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any period selected up to 20 years. If the beneficiary is a natural person, the following payment options are also currently available: o LIFETIME PAYMENT OPTION. Equal monthly payments are based on the life of a named person. Payments will continue for the lifetime of that person. Variations provide for guaranteed payments for a period of time. o JOINT LIFETIME PAYMENT OPTION. Equal monthly payments are based on the lives of two named persons. While both are living, one payment will be made each month. When one dies, the same payment will continue for the lifetime of the other. As an alternative to the above payment options, Death Benefits Proceeds may be paid in any other manner approved by AVLIC. Further, one of AVLIC's affiliates may make payments under the above payment options. If an affiliate makes the payment, it will do so according to the request of the Policy Owner, using the rules set out above. CORPORATE BENEFIT VUL 19 POLICY RIGHTS LOAN BENEFITS LOAN PRIVILEGES. The Policy Owner may borrow an amount up to the current Net Cash Surrender Value less twelve times the most recent Monthly Deduction, at regular or reduced loan rates (described below). Loans usually are funded within seven days after receipt of a written request. The loan may be repaid at any time while the Insured is living. Policy Owners in certain states may borrow 100% of the Net Cash Surrender Value after deducting Monthly Deductions and any interest on Policy loans that will be due for the remainder of the Policy Year. Loans may have tax consequences. (See the section on Federal Tax Matters.) LOAN INTEREST. AVLIC charges interest to Policy Owners at regular and reduced rates. Regular loans will accrue interest on a daily basis at a rate of up to 6% per year; currently the interest rate on regular Policy loans is 5.5%. Each year after the tenth Policy Anniversary Date, the Policy Owner may borrow a limited amount of the Net Cash Surrender Value at a reduced interest rate. For those loans, interest will accrue on a daily basis at a rate of up to 4% per year; the current reduced loan rate is 3.5%. The amount available at the reduced loan rate is: (1) The Accumulation Value; minus (2) Total premiums paid minus any partial withdrawals previously taken, and minus (3) Any Outstanding Policy Debt held at a reduced loan rate. However, this amount may not exceed the maximum loan amount described above. (See the section on Loan Privileges.) If unpaid when due, interest will be added to the amount of the loan and bear interest at the same rate. The Policy Owner earns 3.5% interest on the Accumulation Values held in the General Account securing the loans. EFFECT OF POLICY LOANS. When a loan is made, Accumulation Value equal to the amount of the loan will be transferred from the Investment Options to the General Account as security for the loan. The Accumulation Value transferred will be allocated from the Investment Options according to the instructions you give when you request the loan. The minimum amount that can remain in a Subaccount or the Fixed Account as a result of a loan is $100. If no instructions are given, the amounts will be withdrawn in proportion to the various Accumulation Values in the Investment Options. In any Policy Year that loan interest is not paid when due, AVLIC will add the interest due to the principal amount of the Policy loan on the next Policy Anniversary. This loan interest due will be transferred from the Investment Options as set out above. No charge will be made for these transfers. A Policy loan will permanently affect the Accumulation Value and may permanently affect the amount of the Death Benefits, even if the loan is repaid. When a loan is repaid, the amount repaid will increase the Accumulation Value in Investment Options consistent with "Repayment of Loan" provisions, below. Interest earned on amounts held in the General Account will be allocated to the Investment Options in the same proportion that Net Premiums are allocated to those Investment Options. OUTSTANDING POLICY DEBT. The Outstanding Policy Debt equals the total of all Policy loans and accrued interest on Policy loans. If the Outstanding Policy Debt exceeds the Accumulation Value less any Accrued Expense Charges, the Policy Owner must pay the excess. AVLIC will send a notice of the amount that must be paid. If you do not make the required payment within the 61 days after AVLIC sends the notice, the Policy will terminate without value ("lapse"). Should the Policy lapse while Policy loans are outstanding, the portion of the loans attributable to earnings will become taxable. You may lower the risk of a Policy lapsing while loans are outstanding as a result of a reduction in the market value of investments in the Subaccounts by investing in a diversified group of lower risk investment portfolios and/or transferring the funds to the Fixed Account and receiving a guaranteed rate of return. Should you experience a substantial reduction, you may need to lower anticipated withdrawals and loans, repay loans, make additional premium payments, or take other action to avoid Policy lapse. A lapsed Policy may later be reinstated. (See the section on Policy Lapse and Reinstatement.) REPAYMENT OF LOAN. Unscheduled premiums paid while a Policy loan is outstanding are treated as repayment of the debt only if the Policy Owner so requests. As a loan is repaid, the Accumulation Value in the General Account securing the repaid loan will be allocated among the Subaccounts and the Fixed Account in the same proportion that Net Premiums are being allocated at the time of repayment. SURRENDERS At any time during the lifetime of the Insured, the Policy Owner may withdraw a portion of the Accumulation Value or Surrender the Policy by sending a written request to AVLIC. The amount available for Surrender is the Net Cash Surrender Value at the end of the Valuation Period when the Surrender request is received CORPORATE BENEFIT VUL 20 at AVLIC's Home Office. Surrenders will generally be paid within seven days of receipt of the written request. (See the section on Postponement of Payments.) SURRENDERS MAY HAVE TAX CONSEQUENCES. Once a Policy is Surrendered, it may not be reinstated. (See the section on Tax Treatment of Policy Proceeds.) If the Policy is being Surrendered in its entirety, the Policy itself must be returned to AVLIC along with the request. AVLIC will pay the Net Cash Surrender Value. Coverage under the Policy will terminate as of the date of a total Surrender. A Policy Owner may elect to have the amount paid in a lump sum or under a payment option. (See the section on Payment Options.) If you surrender the Policy in the first two Policy Years, we will refund a portion of the Percent of Premium Charge deducted in the first Policy Year. The applicable portion is 100% in the first Policy Year and 50% in the second Policy Year. PARTIAL WITHDRAWALS Partial withdrawals are irrevocable. The amount of a partial withdrawal may not be less than $500. After a partial withdrawal, the Net Cash Surrender Value, not including any percent of premium refund, must be at least $1,000 or an amount sufficient to maintain the Policy in force for the remainder of the Policy Year. The amount paid will be deducted from the Investment Options according to your instructions when you request the withdrawal. However, the minimum amount remaining in a Subaccount as a result of the allocation is $100. If no instructions are given, the amounts will be withdrawn in proportion to the various Accumulation Values in the Investment Options. The Death Benefit will be reduced by the amount of any partial withdrawal and may affect the way the Cost of Insurance charge is calculated and the amount of pure insurance protection under the Policy. If Death Benefit option B is in effect, the Specified Amount will not change, but the Accumulation Value will be reduced. A fee that does not exceed the lesser of $50 or 2% of the amount withdrawn is deducted from the Accumulation Value. Currently, the charge is the lesser of $25 or 2% of the amount withdrawn. (See the section on Partial Withdrawal Charge.) TRANSFERS Accumulation Value may be transferred among the Subaccounts of the Separate Account and to the Fixed Account as often as desired. However, you may make only one transfer out of the Fixed Account per Policy Year. We may limit the transfer period to the 30 day period following the Policy Anniversary Date. The transfers may be ordered in person, by mail, by telephone, or through our website. The total amount transferred each time must be at least $250, or the balance of the Subaccount, if less. The minimum amount that may remain in a Subaccount or the Fixed Account after a transfer is $100. The first 15 transfers per Policy Year will be permitted free of charge. After that, a transfer charge of $10 may be imposed each additional time amounts are transferred. Currently, no charge is imposed for additional transfers. This charge will be deducted pro rata from each Subaccount (and if applicable, the Fixed Account) in which the Policy Owner is invested. (See the section on Transfer Charge.) Additional restrictions on transfers may be imposed at the Fund level. Specifically, Fund managers may have the right to refuse sales, or suspend or terminate the offering of portfolio shares, if they determine that such action is necessary in the best interests of the portfolio's shareholders. If a Fund manager refuses a transfer for any reason, the transfer will not be allowed. AVLIC will not be able to process the transfer if the Fund manager refuses. Transfers resulting from Policy loans will not be subject to a transfer charge and will not be counted towards the guaranteed 15 free transfers per Policy Year. AVLIC may at any time revoke or modify the transfer privilege, including the minimum amount transferable. Transfers out of the Fixed Account, unless part of the dollar cost averaging systematic program described below, are limited to one per Policy Year. Transfers out of the Fixed Account are limited to the greater of (1) 25% of the Fixed Account attributable to the Policy; (2) the largest transfer made by the Policy Owner out of the Fixed Account during the last 13 months; or (3) $1,000. This provision is not available while dollar cost averaging from the Fixed Account. CORPORATE BENEFIT VUL 21 The privilege to initiate transactions by telephone or through our website will be made available to Policy Owners automatically. The registered representative designated on the application will have the authority to initiate telephone transfers. Policy Owners who do not wish to authorize AVLIC to accept telephone transactions from their registered representative must specify so on the application. AVLIC will employ reasonable procedures to confirm that instructions communicated by telephone are genuine, and if it does not, AVLIC may be liable for any losses due to unauthorized or fraudulent instructions. The procedures AVLIC follows for transactions initiated by telephone include, but are not limited to, requiring the Policy Owner to provide the Policy number at the time of giving transfer instructions; AVLIC's tape recording of all telephone transfer instructions; and AVLIC providing written confirmation of telephone transactions. Procedures for making transfers through our website can be accessed at the Internet address stated in the Ameritas Variable Life Insurance Company section of this prospectus. SYSTEMATIC PROGRAMS AVLIC may offer systematic programs as discussed below. These programs will be subject to administrative guidelines AVLIC may establish from time to time. We will count your transfers in these programs when determining whether any transfer fee applies. Lower minimum amounts may be allowed to transfer as part of a systematic program. No other separate fee is assessed when one of these options is chosen. All other normal transfer restrictions, as described above, also apply. You can request participation in the available programs when purchasing the Policy or at a later date. You can change the allocation percentage or discontinue any program by sending written notice or calling the Home Office. Other scheduled programs may be made available. AVLIC reserves the right to modify, suspend, or terminate such programs at any time. Participation in any systematic program will automatically terminate upon death of the Insured. Use of systematic programs may not be advantageous, and does not guarantee success. PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can instruct AVLIC to reallocate the Accumulation Value among the Subaccounts (but not the Fixed Account) on a systematic basis, according to your specified allocation instructions. DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can instruct AVLIC to automatically transfer, on a systematic basis, a predetermined amount or specified percentage from the Fixed Account or the Money Market Subaccount to any other Subaccount(s). Dollar cost averaging is permitted from the Fixed Account if each monthly transfer is no more than 1/36th of the value of the Fixed Account at the time dollar cost averaging is established. EARNINGS SWEEP. This program permits systematic redistribution of earnings among Investment Options. FREE-LOOK PRIVILEGE You may cancel the Policy within 10 days after you receive it, within 10 days after AVLIC delivers a notice of your right of cancellation, or within 45 days of completing Part I of the application, whichever is later. When allowed by state law, the amount of the refund is the Net Premiums allocated to the Investment Options, adjusted by investment gains and losses, plus the sum of all charges deducted from premiums paid. Otherwise, the amount of the refund will equal the gross premiums paid. To cancel the Policy, you should mail or deliver it to the selling agent, or to AVLIC at the Home Office. A refund of premiums paid by check may be delayed until the check has cleared your bank. PAYMENT AND ALLOCATION OF PREMIUMS ISSUANCE OF A POLICY Individuals wishing to purchase a Policy must complete an application and submit it to AVLIC's Home Office (5900 "O" Street, P.O. Box 82550, Lincoln, Nebraska 68501). With guaranteed or simplified underwriting, a Policy will be issued to individuals ages 18 to 65 on their nearest birthday. With regular underwriting, a Policy will generally be issued only to individuals age 18 to 85 on their nearest birthday who supply satisfactory evidence of insurability to AVLIC. Preferred class regular issue Policies are available only for ages 18 to 75. Acceptance of a regular underwriting application is subject to AVLIC's underwriting rules, and AVLIC reserves the right to reject an application for any reason. CORPORATE BENEFIT VUL 22 The Policy Date is the effective date for all coverage in the original application. The Policy Date is used to determine Policy Anniversary Dates, Policy Years and Policy Months. The Issue Date is the date that all financial, contractual and administrative requirements have been met and processed for the Policy. The Policy Date and the Issue Date will be the same unless: (1) an earlier Policy Date is specifically requested, or (2) additional premiums or application amendments are needed. When there are additional requirements before issue (see below) the Policy Date will be the date the Policy is sent for delivery and the Issue Date will be the date the requirements are met. When all required premiums and application amendments have been received by AVLIC in its Home Office, the Issue Date will be the date the Policy is mailed to you or sent to the agent for delivery to you. When application amendments or additional premiums need to be obtained upon delivery of the Policy, the Issue Date will be when the Policy receipt and federal funds (monies of member banks within the Federal Reserve System which are held on deposit at a Federal Reserve Bank) are received and available to AVLIC, and the application amendments are received and reviewed in AVLIC's Home Office. The initial Net Premium will be allocated on the Issue Date to the Subaccounts and/or the Fixed Account according to the selections made in the application. When state or other applicable law or regulation requires return of at least the premium payments if you return the Policy under the free-look privilege, the initial Net Premium will be allocated to the Money Market Subaccount. Then, thirteen days after the Issue Date, the Accumulation Value of the Policy will be allocated among the Subaccounts and/or Fixed Account according to the instructions in the application. Subject to approval, a Policy may be backdated, but the Policy Date may not be more than six months prior to the date of the application. Backdating can be advantageous if the Insured's lower Issue Age results in lower Cost of Insurance Rates. If a Policy is backdated, the minimum initial premium required will include sufficient premium to cover the backdating period. Monthly Deductions will be made for the period the Policy Date is backdated. Conditional receipt coverage may be available prior to the Policy Date, provided that certain conditions are met, upon the completion of an application and the payment of the required premium at the time of the application. The maximum total amount of insurance which will be payable pursuant to all conditional receipts received by the applicant as a result of pending applications with AVLIC and its affiliates is limited to the smaller of: (1) The total amount of insurance applied for with AVLIC and its affiliates; or (2) $250,000 minus the total amount of insurance in force with AVLIC and its affiliates, but not less than zero. As used above, total amount of insurance includes any amounts payable under any Accidental Death Benefit provision. PREMIUMS No insurance will take effect before the minimum initial premium payment is received by AVLIC in federal funds. Subsequent premiums are payable at AVLIC's Home Office. A Policy Owner has flexibility in determining the frequency and amount of premiums. However, unless you have paid sufficient premiums to pay the Monthly Deduction and Percent of Premium Charges, the Policy may have a zero Net Cash Surrender Value and lapse. (See the section on Policy Benefits, Purposes of the Policy.) PLANNED PERIODIC PREMIUMS. At the time the Policy is issued you may determine a Planned Periodic Premium schedule that provides for the payment of level premiums at selected intervals. You are not required to pay premiums according to this schedule. You have considerable flexibility to alter the amount and frequency of premiums paid. AVLIC reserves the right to limit the number and amount of additional or unscheduled premium payments. You may also change the frequency and amount of Planned Periodic Premiums by sending a written request to the Home Office, although AVLIC reserves the right to limit any increase. Premium payment notices will be sent annually, semi-annually or quarterly, depending upon the frequency of the Planned Periodic Premiums. Payment of the Planned Periodic Premiums does not guarantee that the Policy remains in force. Instead, the duration of the Policy depends upon the Policy's Net Cash Surrender Value. (See the section on Duration of the Policy.) Even if Planned Periodic Premiums are paid, the Policy will lapse any time the Net Cash Surrender Value is insufficient to pay the Monthly Deduction, and the Grace Period expires without a sufficient payment. (See the section on Policy Lapse and Reinstatement.) PREMIUM LIMITS. AVLIC's current minimum premium limit is $45, $15 if paid by automatic bank draft. AVLIC currently has no maximum premium limit, other than the current maximum premium limits established by federal tax laws. AVLIC reserves the right to change any premium limit. In no event may the total of all premiums paid, CORPORATE BENEFIT VUL 23 both planned and unscheduled, exceed the current maximum premium limits established by federal tax laws. (See the section on Tax Status of the Policy.) If at any time a premium is paid which would result in total premiums exceeding the current maximum premium limits, AVLIC will accept only that portion of the premium which will make total premiums equal the maximum. Any part of the premium in excess of that amount will be returned or applied as otherwise agreed and no further premiums will be accepted until allowed by the current maximum premium limits allowed by law. AVLIC may require additional evidence of insurability if any premium payment would result in an increase in the Policy's net amount at risk on the date the premium is received. PREMIUMS UPON INCREASES IN SPECIFIED AMOUNT. Depending upon the Accumulation Value of the Policy at the time of an increase in the Specified Amount of the Policy and the amount of the increase requested by the Policy Owner, an additional premium payment may be required. AVLIC will notify you of any premium required to fund the increase, which premium must be made in a single payment. The Accumulation Value of the Policy will be immediately increased by the amount of the payment, less the applicable Percent of Premium Charge. ALLOCATION OF PREMIUMS AND ACCUMULATION VALUE ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Policy Owner allocates Net Premiums to one or more Subaccounts and/or to the Fixed Account. Allocations must be whole number percentages and must total 100%. The allocation of future Net Premiums may be changed without charge by providing proper notification to the Home Office. If there is any Outstanding Policy Debt at the time of a payment, AVLIC will treat the payment as a premium payment unless you instruct otherwise by proper written notice. The initial Net Premium will be allocated on the Issue Date to the Subaccounts and/or the Fixed Account according to the selections made in the application. When state or other applicable law or regulation requires return of at least the premium payments if you return the Policy under the free-look privilege, the initial Net Premium will be allocated to the Money Market Subaccount. Then, thirteen days after the Issue Date, the Accumulation Value of the Policy will be allocated among the Subaccounts and/or Fixed Account according to the instructions in the application. Premium payments received by AVLIC prior to the Issue Date are held in the General Account until the Issue Date and are credited with interest at a rate determined by AVLIC for the period from the date the payment has been converted into federal funds and is available to AVLIC. In no event will interest be credited prior to the Policy Date. The Accumulation Value of the Subaccounts will vary with the investment performance of these Subaccounts and you, as the Policy Owner, will bear the entire investment risk. This will affect the Policy's Accumulation Value, and may affect the Death Benefit as well. You should periodically review your allocations of premiums and values in light of market conditions and overall financial planning requirements. POLICY LAPSE AND REINSTATEMENT LAPSE. Unlike conventional life insurance policies, the failure to make a Planned Periodic Premium payment will not itself cause the Policy to lapse. Lapse will occur when the Net Cash Surrender Value is insufficient to cover the Monthly Deduction and a Grace Period expires without a sufficient payment. The Grace Period is 61 days from the date AVLIC mails a notice that the Grace Period has begun. AVLIC will notify you at the beginning of the Grace Period by mail addressed to your last known address on file with AVLIC. The notice will specify the premium required to keep the Policy in force. The required premium will equal the amount necessary to cover the Monthly Deductions and Percent of Premium Charges for the three Policy Months after commencement of the Grace Period. Failure to pay the required premium within the Grace Period will result in lapse of the Policy. If the Insured dies during the Grace Period, any overdue Monthly Deductions and Outstanding Policy Debt will be deducted from the Death Benefit Proceeds. (See the section on Charges and Deductions.) REINSTATEMENT. A lapsed Policy may be reinstated any time within three years (five years in Missouri) after the beginning of the Grace Period. We will reinstate your Policy based on the Insured's risk class at the time of the reinstatement. CORPORATE BENEFIT VUL 24 Reinstatement is subject to the following: (1) Evidence of insurability of the Insured satisfactory to AVLIC (including evidence of insurability of any person covered by a rider to reinstate the rider); (2) Any Outstanding Policy Debt on the date of lapse will be reinstated with interest due and accrued; (3) The Policy cannot be reinstated if it has been Surrendered for its full Net Cash Surrender Value; (4) The minimum premium required at reinstatement is the greater of: (a) the amount necessary to raise the Net Cash Surrender Value as of the date of reinstatement to equal to or greater than zero; or (b) three times the current Monthly Deduction. The amount of Accumulation Value on the date of reinstatement will equal: (1) The amount of the Net Cash Surrender Value on the date of lapse, increased by (2) The premium paid at reinstatement, less (3) The Percent of Premium Charge. If any Outstanding Policy Debt is reinstated, that debt will be held in AVLIC's General Account. Accumulation Value calculations will then proceed as described under the section on Accumulation Value. The effective date of reinstatement will be the first Monthly Activity Date on or next following the date of approval by AVLIC of the application for reinstatement. CHARGES AND DEDUCTIONS Charges will be deducted in connection with the Policy to compensate AVLIC for: (1) providing the insurance benefits set forth in the Policy and any optional insurance benefits added by rider; (2) administering the Policy and payment of applicable taxes; (3) assuming certain risks in connection with the Policy; and (4) incurring expenses in distributing the Policy. The nature and amount of these charges are described more fully below. We determine the charges according to our expectations of future experience for mortality, lapse, interest and expenses. If our expectations of future experience for mortality, lapse, interest and expenses change, we may increase or decrease charges where permitted by the Policy, but we will never charge more than the maximum amount specified in the Policy. Any change in the charges will apply to all Insureds of the same age, gender, and risk class and whose Policies have been in effect for the same length of time. DEDUCTIONS FROM PREMIUM PAYMENTS PERCENT OF PREMIUM CHARGE. A deduction of up to 5.0% of the premium is made from each premium payment; currently the charge is 3.0%. The deduction is intended to partially offset the premium taxes imposed by the states and their subdivisions, and to help defray the tax cost due to capitalizing certain Policy acquisition expenses as required under applicable federal tax laws. (See the section on Federal Tax Matters.) AVLIC does not expect to derive a profit from the Percent of Premium Charge. If you surrender the Policy in the first two Policy Years, we will refund a portion of the Percent of Premium Charge deducted in the first Policy Year. The applicable portion is 100% in the first Policy Year and 50% in the second Policy Year. CHARGES FROM ACCUMULATION VALUE MONTHLY DEDUCTION. Charges will be deducted as of the Policy Date and on each Monthly Activity Date thereafter from the Accumulation Value of the Policy to compensate AVLIC for administrative expenses and insurance provided. These charges will be allocated from the Investment Options according to your instructions. If no instructions are given, the charges will be allocated pro rata among the Investment Options. Each of these charges is described in more detail below. ADMINISTRATIVE EXPENSE CHARGE. To compensate AVLIC for the ordinary administrative expenses expected to be incurred in connection with a Policy, we deduct an Administrative Expense Charge based on the Specified Amount and the Policy duration. Currently, the per Policy charge is $15 per month in the first Policy Year and $7 per month thereafter. The per Policy portion of the Administrative Expense Charge is levied throughout the life of the Policy and is guaranteed not to increase above $15 per month in the first Policy Year and $12 per month thereafter. During the first ten Policy Years, there is a monthly charge per $1000 of initial Specified Amount. In addition, there is a monthly charge per $1000 of each increase in Specified Amount for ten years from the CORPORATE BENEFIT VUL 25 date of increase. The per $1000 rates for both the initial Specified Amount and each increase vary by Issue Age, gender, and risk class. The current charge per $1000 is the same as the maximum charge. (See the Policy Schedule for rates.) COST OF INSURANCE. Because the Cost of Insurance depends upon several variables, the cost for each Policy Month can vary from month to month. AVLIC will determine the monthly Cost of Insurance by multiplying the applicable Cost of Insurance Rate by the net amount at risk for each Policy Month. The net amount at risk on any Monthly Activity Date is based on the amount by which the Death Benefit which would have been payable on that Monthly Activity Date exceeds the Accumulation Value on that date. COST OF INSURANCE RATE. The Annual Cost of Insurance Rates are based on the Insured's gender, Issue Age, Policy duration and risk class. The rates will vary depending upon tobacco use and other risk factors. For the initial Specified Amount, the Cost of Insurance Rates will not exceed those shown in the Schedule of Guaranteed Annual Cost of Insurance Rates shown in the schedule pages of the Policy. These guaranteed rates are based on the Insured's Attained Age and are equal to the 1980 Insurance Commissioners Standard Ordinary Male and Female Mortality Tables without smoker distinction. The maximum rates for the table-rated substandard Insureds are based on a multiple (shown in the schedule pages of the Policy) of the above rates. We may add flat extra ratings to an Insured to reflect higher mortality risk. Any change in the Cost of Insurance Rates will apply to all Insureds of the same age, gender, risk class and whose Policies have been in effect for the same length of time. The Cost of Insurance Rates, Policy charges, and payment options for Policies issued in Montana, and perhaps other states or in connection with certain employee benefit arrangements, are issued on a gender-neutral (unisex) basis. The unisex rates will be higher than those applicable to females and lower than those applicable to males. If the rating class for any increase in the Specified Amount is not the same as the rating class at issue, the Cost of Insurance Rate used after such increase will be a composite rate based upon a weighted average of the rates of the different rating classes. Decreases may be reflected in the Cost of Insurance Rate, as discussed earlier. The actual charges made during the Policy Year will be shown in the annual report delivered to Policy Owners. RATING CLASS. The rating class of the Insured will affect the Cost of Insurance Rate. AVLIC currently places Insureds into both standard rating classes and substandard rating classes that involve a higher mortality risk. In an otherwise identical Policy, Insureds in the standard rating class will have a lower Cost of Insurance Rate than Insureds in a rating class with higher mortality risks. PARTIAL WITHDRAWAL CHARGE A charge will be imposed for each partial withdrawal. This charge will compensate AVLIC for the administrative costs of processing the requested payment and in making necessary calculations for any reductions in Specified Amount which may be required because of the partial withdrawal. This charge is currently the lesser of $25 or 2% of the amount withdrawn (guaranteed not to be greater than the lesser of $50 or 2% of the amount withdrawn). A partial withdrawal charge is not assessed when a Policy is Surrendered. TRANSFER CHARGE Currently there is no charge for transfers among the Investment Options in excess of 15 per Policy Year. A charge of $10 (guaranteed not to increase) for each transfer in excess of 15 may be imposed to compensate AVLIC for the costs of processing the transfer. Since the charge reimburses AVLIC only for the cost of processing the transfer, AVLIC does not expect to make any profit from the transfer charge. This charge will be deducted pro rata from each Subaccount (and, if applicable, the Fixed Account) in which the Policy Owner is invested. The transfer charge will not be imposed on transfers that occur as a result of Policy loans or the exercise of exchange rights. DAILY CHARGES AGAINST THE SEPARATE ACCOUNT A daily Mortality and Expense Risk Charge will be deducted from the value of the net assets of the Separate Account to compensate AVLIC for mortality and expense risks assumed in connection with the Policy. This daily charge from the Separate Account is currently at the rate of 0.002050% (equivalent to an annual rate of 0.75%) for Policy Years 1-15 and will not exceed 0.95% annually. After the fifteenth Policy Year the daily charge will be applied at the rate of 0.000820% (equivalent to an annual rate of 0.30%) and will not exceed 0.50% annually. The daily charge will be deducted from the net asset value of the Separate Account, and therefore the Subaccounts, on each Valuation Date. Where the previous day or days was not a Valuation Date, the deduction on the Valuation Date will be the applicable daily rate multiplied by the number of days since the last Valuation Date. No Mortality and Expense Risk Charges will be deducted from the amounts in the Fixed Account. CORPORATE BENEFIT VUL 26 AVLIC believes that this level of charge is within the range of industry practice for comparable flexible premium variable universal life policies. The mortality risk assumed by AVLIC is that Insureds may live for a shorter time than calculated, and that the aggregate amount of Death Benefits paid will be greater than initially estimated. The expense risk assumed is that expenses incurred in issuing and administering the Policies will exceed the administrative charges provided in the Policies. An Asset-Based Administrative Expense Charge will also be deducted from the value of the net assets of the Separate Account on a daily basis. Currently, this charge is applied at a rate of 0.000409% (equivalent to 0.15% annually). The rate of this charge will never exceed 0.15% annually. No Asset-Based Administrative Expense Charge will be deducted from the amounts in the Fixed Account. Policy Owners who choose to allocate Net Premiums to one or more of the Subaccounts will also bear a pro rata share of the management fees and expenses paid by each of the investment portfolios in which the various Subaccounts invest. No such management fees are assessed against Net Premiums allocated to the Fixed Account. (See the Summary section for the Fund Expense Summary.) Expense reimbursement agreements are expected to continue in future years but may be terminated at any time. As long as the expense limitations continue for a portfolio, if a reimbursement occurs, it has the effect of lowering the portfolio's expense ratio and increasing its total return. AVLIC and its affiliates may receive administrative fees from the investment advisers of certain Funds. AVLIC currently does not assess a separate charge against the Separate Account or the Fixed Account for any federal, state or local income taxes. AVLIC may, however, make such a charge in the future if income or gains within the Separate Account will incur any federal, or any significant state or local income tax liability, or if the federal, state or local tax treatment of AVLIC changes. GENERAL PROVISIONS THE CONTRACT. The Policy, the application, any supplemental applications, and any riders, amendments or endorsements make up the entire contract. Any changes must be made in writing, and approved by AVLIC. No agent has the authority to alter or modify any of the terms, conditions or agreements of the Policy or to waive any of its provisions. The rights and benefits under the Policy are summarized in this prospectus; however prospectus disclosure regarding the Policy is qualified in its entirety by the Policy itself, a copy of which is available upon request from AVLIC. CONTROL OF POLICY. The Policy Owner is as shown in the application or subsequent written endorsement. Subject to the rights of any irrevocable Beneficiary and any assignee of record, all rights, options, and privileges belong to the Policy Owner. If the Policy Owner is a natural person, upon the death of the Policy Owner, all rights, options, and privileges pass to any successor-owner or owners, if living; otherwise to the estate of the last Policy Owner to die. BENEFICIARY. Policy Owners may name both primary and contingent Beneficiaries in the application. Payments will be shared equally among Beneficiaries of the same class unless otherwise stated. If a Beneficiary dies before the Insured, payments will be made to any surviving Beneficiaries of the same class; otherwise to any Beneficiary(ies) of the next class; otherwise to the Policy Owner; otherwise to the estate of the Policy Owner, if a natural person. CHANGE OF BENEFICIARY. The Policy Owner may change the Beneficiary by written request at any time during the Insured's lifetime unless otherwise provided in the previous designation of Beneficiary. The change will take effect as of the date the change is recorded at the Home Office. AVLIC will not be liable for any payment made or action taken before the change is recorded. CHANGE OF POLICY OWNER OR ASSIGNMENT. In order to change the Policy Owner of the Policy or assign Policy rights, an assignment of the Policy must be made in writing and filed with AVLIC at its Home Office. Any such assignment is subject to Outstanding Policy Debt. The change will take effect as of the date the change is recorded at the Home Office, and AVLIC will not be liable for any payment made or action taken before the change is recorded. Payment of Death Benefit Proceeds is subject to the rights of any assignee of record. A collateral assignment is not a change of ownership. PAYMENT OF PROCEEDS. The Death Benefit Proceeds are subject first to any debt to AVLIC and then to the interest of any assignee of record. The balance of any CORPORATE BENEFIT VUL 27 Death Benefit Proceeds shall be paid in one sum to the designated Beneficiary unless an Optional Method of Payment is selected. If no Beneficiary survives the Insured, the Death Benefit Proceeds shall be paid in one sum to the Policy Owner. If the Policy Owner is a natural person and is no longer living, the Death Benefit Proceeds shall be paid to any successor-owner, if living; otherwise to the Policy Owner's estate. Any proceeds payable upon Surrender shall be paid in one sum unless an Optional Method of Payment is elected. INCONTESTABILITY. AVLIC cannot contest the Policy or reinstated Policy during the lifetime of the Insured after it has been in force for two years from the Policy Date (or reinstatement effective date). After the Policy Date, AVLIC cannot contest an increase in the Specified Amount or addition of a rider during the lifetime of the Insured after such increase or addition has been in force for two years from its effective date. However, this two-year provision shall not apply to riders with their own contestability provision. MISSTATEMENT OF AGE AND GENDER. If the age or gender of the Insured or any person insured by rider has been misstated, the amount of the Death Benefit and any added riders provided will be those that would be purchased by the most recent deduction for the Cost of Insurance and the cost of any additional riders at the Insured's correct age or gender. The Death Benefit Proceeds will be adjusted correspondingly. SUICIDE. The Policy does not cover suicide within two years of the Policy Date unless otherwise provided by a state's Insurance law. If the Insured, while sane or insane, commits suicide within two years after the Policy Date, AVLIC will pay only the premiums received less any partial withdrawals, the cost for riders and any outstanding Policy debt. If the Insured, while sane or insane, commits suicide within two years after the effective date of any increase in the Specified Amount, AVLIC's liability with respect to such increase will only be its total Cost of Insurance applicable to the increase. The laws of Missouri provide that death by suicide at any time is covered by the Policy, and further that suicide by an insane person may be considered an accidental death. POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial withdrawal, Policy loans, benefits payable at death, and transfers may be postponed whenever: (1) the New York Stock Exchange ("NYSE") is closed other than customary weekend and holiday closings, or trading on the NYSE is restricted as determined by the SEC; (2) the SEC by order permits postponement for the protection of Policy Owners; (3) an emergency exists, as determined by the SEC, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the Separate Account's net assets; or (4) Surrenders, loans or partial withdrawals from the Fixed Account may be deferred for up to 6 months from the date of written request. Payments under the Policy of any amounts derived from premiums paid by check may be delayed until such time as the check has cleared the Policy Owner's bank. REPORTS AND RECORDS. AVLIC will maintain all records relating to the Separate Account and will mail to the Policy Owner, at the last known address of record, within 30 days after each Policy Anniversary, an annual report which shows the current Accumulation Value, Net Cash Surrender Value, Death Benefit, premiums paid, Outstanding Policy Debt and other information. Quarterly statements are also mailed detailing Policy activity during the calendar quarter. Instead of receiving an immediate confirmation of transactions made pursuant to some types of periodic payment plan (such as a dollar cost averaging program, or payment made by automatic bank draft or salary reduction arrangement), the Policy Owner may receive confirmation of such transactions in their quarterly statements. The Policy Owner should review the information in these statements carefully. All errors or corrections must be reported to AVLIC immediately to assure proper crediting to the Policy. AVLIC will assume all transactions are accurately reported on quarterly statements unless AVLIC is notified otherwise within 30 days after receipt of the statement. The Policy Owner will also be sent a periodic report for the Funds and a list of the portfolio securities held in each portfolio of the Funds. ADDITIONAL INSURANCE BENEFITS (RIDERS). Subject to certain requirements, you may add one or more of the following additional insurance benefits to a Policy by rider. All riders are not available in all states. The cost, if any, of additional insurance benefits will be deducted as part of the Monthly Deduction. (See the section on Charges From Accumulation Value - Monthly Deduction.) TERM COVERAGE RIDER. You may increase the total coverage by adding a term insurance rider, at issue, on the Insured person's life. The death benefit provided by the rider adjusts over time. CORPORATE BENEFIT VUL 28 If you purchase this rider, the total specified amount is the total of the specified amount for the base Policy plus the specified amount for this rider. We generally restrict the total specified amount at issue to an amount not more than ten times the base Policy specified amount. For example, if the base Policy specified amount is $100,000, then the maximum total specified amount we allow is $1,000,000. The death benefit for the term insurance rider is the difference between the total death benefit and the base Policy Death Benefit. (See the section on Death Benefit Options.) The total death benefit depends upon which Death Benefit option is in effect. If Option A is in effect, the total death benefit is the greater of (1) the total specified amount, or (2) the Accumulation Value multiplied by the appropriate Death Benefit percentage. If Option B is in effect, the total death benefit is the greater of (1) the total specified amount plus the Accumulation Value, or (2) the Accumulation Value multiplied by the appropriate Death Benefit percentage. Over time, it is possible that the base Policy Death Benefit could grow and cause a corresponding reduction in the term rider death benefit. If the base Policy Death Benefit becomes equal to the total death benefit, the term rider death benefit will drop to zero, but it will never be less than zero. Even if the death benefit for the rider is reduced to zero, the rider remains in effect until you remove it from the Policy. Therefore, if later the base Policy death benefit is reduced below the total death benefit, the rider death benefit reappears to maintain the total death benefit. There is no defined premium for a given amount of term insurance coverage. Instead, we deduct a monthly cost of insurance charge from the Accumulation Value. The cost of insurance for this rider is calculated as the monthly cost of insurance rate for the rider coverage multiplied by the term death benefit in effect that month. We will determine the cost of insurance rates from time to time. They will be based on the Insured's gender, Issue Age, Policy duration, and risk class. The monthly maximum cost of insurance rates for this rider will be in the Policy. Subject to certain limitations, after the first Policy Year you may decrease the specified amount for this rider. The specified amount remaining in force for this rider after any requested decrease may not be less than $50,000. You may terminate all coverage under this rider at any time after the first Policy Year. You may not increase the specified amount of this rider nor add this rider to your Policy after issue. Coverage under this rider is not convertible. You may select only one of the following riders: WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. This rider provides for the waiver of Monthly Deductions for the Policy and all riders while the Insured is disabled. DISABILITY BENEFIT PAYMENT RIDER. This rider provides for the payment by AVLIC of a disability benefit in the form of premiums while the Insured is disabled. The Policy Owner may choose the benefit amount when the rider is issued. In addition, while the Insured is totally disabled, the Cost of Insurance for the rider will not be deducted from Accumulation Value. DISTRIBUTION OF THE POLICIES Ameritas Investment Corp. ("AIC"), 5900 "O" Street, Lincoln, Nebraska 68510, an affiliate of ours, is the principal underwriter of the Policies. Like us, AIC is also an indirect majority-owned subsidiary of Ameritas Acacia Mutual Holding Company. AIC enters into contracts with various broker-dealers ("Distributors") to distribute Policies. All persons selling the Policy must be registered representatives of the Distributors, and must also be licensed as insurance agents to sell variable insurance products. AIC is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. During the first Policy Year, the commission may equal an amount up to 30% of premium in the first year and up to 12% of premium in renenwal years. Broker-dealers may also receive a service fee up to an annualized rate of 0.25% of the Accumulation Value beginning in the sixth Policy Year. Compensation arrangements may vary among broker-dealers. We may also pay other distribution expenses such as production incentive bonuses. These distribution expenses do not result in any additional charges under the Policy other than those described in this prospectus' CHARGES AND DEDUCTIONS section. CORPORATE BENEFIT VUL 29 AVLIC may reduce or waive the sales charge and/or other charges on any Policy sold to directors, officers or employees of AVLIC or any of its affiliates, employees and registered representatives of any broker-dealer that has entered into a sales agreement with AVLIC or AIC and the spouses or children of the above persons. In no event will any such reduction or waiver be permitted where it would be unfairly discriminatory to any person. FEDERAL TAX MATTERS The following discussion provides a general description of the federal income tax considerations associated with the Policy and does not purport to be complete or cover all situations. This discussion is not intended as tax advice. No attempt has been made to consider in detail any applicable state or other tax laws except premium taxes (See discussion in the section on Percent of Premium Charge). This discussion is based upon AVLIC's understanding of the relevant laws at the time of filing. You should consult with your counsel or other tax advisor for more complete information before a Policy is purchased. AVLIC makes no representation as to the likelihood of the continuation of present federal income tax laws nor of the interpretations by the Internal Revenue Service. Federal tax laws are subject to change and thus tax consequences to the Insured, Policy Owner or Beneficiary may be altered. (1) TAXATION OF AVLIC. AVLIC is taxed as a life insurance company under Part I of Subchapter L of the Internal Revenue Code of 1986, as amended from time to time, (the "Code"). At this time, since the Separate Account is not a separate entity from AVLIC, and its operations form a part of AVLIC, it will not be taxed separately as a "regulated investment company" under Subchapter M of the Code. Net investment income and realized net capital gains on the assets of the Separate Account are reinvested and automatically retained as a part of the reserves of the Policy and are taken into account in determining the Death Benefit and Accumulation Value of the Policy. AVLIC believes that the Separate Account net investment income and realized net capital gains will not be taxable to the extent that such income and gains are retained as reserves under the Policy. AVLIC does not currently expect to incur any federal income tax liability attributable to the Separate Account with respect to the sale of the Policies. Accordingly, no charge is being made currently to the Separate Account for federal income taxes. If, however, AVLIC determines that it may incur such taxes attributable to the Separate Account, it may assess a charge for such taxes against the Separate Account. AVLIC may also incur state and local taxes (in addition to premium taxes for which a deduction from premiums is currently made). At present, they are not charges against the Separate Account. If there is a material change in state or local tax laws, charges for such taxes attributable to the Separate Account, if any, may be assessed against the Separate Account. (2) TAX STATUS OF THE POLICY. The Code Section 7702 includes a definition of a life insurance contract for federal tax purposes which places limitations on the amount of premiums that may be paid for the Policy and the relationship of the Accumulation Value to the Death Benefit. AVLIC believes that the Policy meets the statutory definition of a life insurance contract. If the Death Benefit of a Policy is changed, the applicable defined limits may change. In the case of a decrease in the Death Benefit, a partial withdrawal, a change in Death Benefit option, or any other such change that reduces future benefits under the Policy during the first 15 years after a Policy is issued and that results in a cash distribution to the Policy Owners in order for the Policy to continue complying with the Section 7702 defined limits on premiums and Accumulation Values, such distributions may be taxable in whole or in part as ordinary income to the Policy Owner (to the extent of any gain in the Policy) as prescribed in Section 7702. The Code Section 7702A also defines a "modified endowment contract" for federal tax purposes. If a life insurance policy is classified as a modified endowment contract, distributions from it (including loans) are taxed as ordinary income to the extent of any gain. This Policy will become a "modified endowment contract" if the premiums paid into the Policy fail to meet a 7-pay premium test as outlined in Section 7702A of the Code. Certain benefits the Policy Owner may elect under this Policy may be material changes affecting the 7-pay premium test. These include, but are not limited to, changes in Death Benefits and changes in the Specified Amount. Should the Policy become a "modified endowment contract" partial withdrawals, full Surrenders, assignments, pledges, and loans (including loans to pay loan interest) under the Policy will be taxable to the extent of any gain under the Policy. A 10% penalty tax also applies to the taxable portion of any distribution made prior to the taxpayer attaining age 59 1/2. The 10% penalty tax does not apply if the distribution is made CORPORATE BENEFIT VUL 30 because the taxpayer becomes disabled as defined under the Code or if the distribution is paid out in the form of a life annuity on the life of the taxpayer or the joint lives of the taxpayer and Beneficiary. One may avoid a Policy becoming a modified endowment contract by, among other things, not making excessive payments or reducing benefits. Should you deposit excessive premiums during a Policy Year, that portion that is returned by AVLIC within 60 days after the Policy Anniversary Date will reduce the premiums paid to avoid the Policy becoming a modified endowment contract. All modified endowment policies issued by AVLIC to the same Policy Owner in any 12 month period are treated as one modified endowment contract for purposes of determining taxable gain under Section 72(e) of the Internal Revenue Code. Any life insurance policy received in exchange for a modified endowment contract will also be treated as a modified endowment contract. You should contact a competent tax professional before paying additional premiums or making other changes to the Policy to determine whether such payments or changes would cause the Policy to become a modified endowment contract. The Code Section 817(h) also authorizes the Secretary of the Treasury (the "Treasury") to set standards by regulation or otherwise for the investments of the Separate Account to be "adequately diversified" in order for the Policy to be treated as a life insurance contract for federal tax purposes. If the Policy is not treated as life insurance because it fails the diversification requirements, the Policy Owner is then subject to federal income tax on gain in the Policy as it is earned. The Separate Account, through the Funds, intends to comply with the diversification requirements prescribed by the Treasury in regulations published in the Federal Register on March 2, 1989, which affect how the Fund's assets may be invested. AVLIC does not have control over any of the Funds or their investments. However, AVLIC believes that the Funds will be operated in compliance with the diversification requirements of the Code. Thus, AVLIC believes that the Policy will be treated as a life insurance contract for federal tax purposes. In connection with the issuance of regulations relating to the diversification requirements, the Treasury announced that such regulations do not provide guidance concerning the extent to which policy owners may direct their investments to particular divisions of a separate account. Regulations in this regard may be issued in the future. It is possible that when regulations are issued, the Policy may need to be modified to comply with such regulations. For these reasons, AVLIC reserves the right to modify the Policy as necessary to prevent the Policy Owner from being considered the owner of the assets of the Separate Account or otherwise to qualify the Policy for favorable tax treatment. The following discussion assumes that the Policy qualifies as a life insurance contract for federal tax purposes. (3) TAX TREATMENT OF POLICY PROCEEDS. AVLIC believes that the Policy will be treated in a manner consistent with a fixed benefit life insurance policy for federal income tax purposes. Thus, AVLIC believes that the Death Benefit will generally be excludable from the gross income of the Beneficiary under Section 101(a)(1) of the Code and the Policy Owner will not be deemed to be in constructive receipt of the Accumulation Value under the Policy until its actual Surrender. However, in the event of certain cash distributions under the Policy resulting from any change which reduces future benefits under the Policy, the distribution may be taxed in whole or in part as ordinary income (to the extent of gain in the Policy.) See previous discussion on Tax Status of the Policy. In addition, certain exceptions apply to the general rule that death benefit proceeds are non-taxable. Federal, state, and local tax consequences of ownership or receipt of Policy proceeds depends on the circumstances of each Policy Owner and Beneficiary. AVLIC also believes that loans received under a Policy will be treated as debt of the Policy Owner and that no part of any loan under a Policy will constitute income to the Policy Owner so long as the Policy remains in force, unless the Policy becomes a "modified endowment contract." See discussion of modified endowment contract distributions in the section on Tax Status of the Policy. Should the Policy lapse while Policy loans are outstanding the portion of the loans attributable to earnings will become taxable. Generally, interest paid on any loan under a Policy owned by an individual will not be tax-deductible. Except for policies with respect to a limited number of key persons of an employer (both terms are as defined in the Internal Revenue Code), and subject to applicable interest rate caps and debt limits, the Health CORPORATE BENEFIT VUL 31 Insurance Portability and Accountability Act of 1996 ("HIPAA") generally repealed the deduction for interest paid or accrued after October 13, 1995 on loans from corporate owned life insurance policies on the lives of officers, employees or persons financially interested in the taxpayer's trade or business. Certain transitional rules for then existing debt are included in HIPAA. The transitional rules included a phase-out of the deduction for debt incurred (1) before January 1, 1996, or (2) before January 1, 1997, for policies entered into in 1994 or 1995. The phase-out of the interest expense deduction occurred over a transition period between October 13, 1995 and January 1, 1999. There is also a special rule for pre-June 21, 1986 policies. The Taxpayer Relief Act of 1997 ("TRA '97"), further expanded the interest deduction disallowance for businesses by providing, with respect to policies issued after June 8, 1997, that no deduction is allowed for interest paid or accrued on any debt with respect to life insurance covering the life of any individual (except as noted above under pre-'97 law with respect to key persons and pre-June 21, 1986 policies). Any material change in a policy (including a material increase in the death benefit) may cause the policy to be treated as a new policy for purposes of this rule. TRA '97 also provides that no deduction is permissible for premiums paid on a life insurance policy if the taxpayer is directly or indirectly a beneficiary under the policy. Also under TRA '97 and subject to certain exceptions, for policies issued after June 8, 1997, no deduction is allowed for that portion of a taxpayer's interest expense that is allocable to unborrowed policy cash values. This disallowance generally does not apply to policies owned by natural persons. BUSINESSES CONTEMPLATING THE PURCHASE OF A NEW POLICY OR A CHANGE TO AN EXISTING POLICY SHOULD CONSULT A QUALIFIED TAX ADVISOR REGARDING THE TAX IMPLICATIONS OF THESE RULES FOR THEIR PARTICULAR SITUATIONS. The right to change Policy Owners (See the section on General Provisions.) and the provision for partial withdrawals (See the section on Partial Withdrawals.) may have tax consequences depending on the circumstances of such exchange, change, or partial withdrawal. Upon complete Surrender, if the amount received plus any Outstanding Policy Debt exceeds the total premiums paid (the "basis") that are not treated as previously withdrawn by the Policy Owner, the excess generally will be taxed as ordinary income. Federal, state and local tax consequences of ownership or receipt of Death Benefit Proceeds depend on applicable law and the circumstances of each Policy Owner or Beneficiary. In addition, the tax consequences of using the Policy in non-qualified deferred compensation, salary continuance, split-dollar insurance, and executive bonus plans may vary depending on the particular facts and circumstances of the arrangement. Further, if the Policy is used in connection with tax-qualified retirement plans, certain limitations prescribed by the Internal Revenue Service on, and rules with respect to the taxation of, life insurance protection provided through such plans may apply. The advice of qualified tax counsel should be sought in connection with use of life insurance in non-qualified or qualified plans. YOU SHOULD CONSULT A QUALIFIED TAX AND/OR LEGAL ADVISOR TO OBTAIN COMPLETE INFORMATION ON HOW FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLY TO YOUR TAX SITUATION CORPORATE BENEFIT VUL 32 SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS AVLIC holds the assets of the Separate Account. The assets are kept physically segregated and held separately and apart from the General Account assets, except for the Fixed Account. AVLIC maintains records of all purchases and redemptions of Funds' shares by each of the Subaccounts. THIRD PARTY SERVICES AVLIC is aware that certain third parties are offering investment advisory, asset allocation, money management and timing services in connection with the Policies. AVLIC does not engage any such third parties to offer such services of any type. In certain cases, AVLIC has agreed to honor transfer instructions from such services where it has received powers of attorney, in a form acceptable to it, from the Policy Owners participating in the service. Firms or persons offering such services do so independently from any agency relationship they may have with AVLIC for the sale of Policies. AVLIC takes no responsibility for the investment allocations and transfers transacted on a Policy Owner's behalf by such third parties or any investment allocation recommendations made by such parties. Policy Owners should be aware that fees paid for such services are separate and in addition to fees paid under the Policies. VOTING RIGHTS As a Policy Owner, you may have voting rights in the portfolios whose shares underlie the Subaccounts in which you invest. You will receive proxy material, reports, and other materials relating to each underlying portfolio in which you have voting rights. If you send us written voting instructions, we will follow your instructions in voting the Portfolio shares attributable to your Policy. If you do not send us written instructions, we will vote those shares in the same proportions as we vote the shares for which we have received instructions from other Policy Owners. We will vote shares that we hold in the same proportions as we vote the shares for which we receive instructions from other Policy Owners. The underlying portfolios may not hold routine annual shareholder meetings. STATE REGULATION OF AVLIC AVLIC, a stock life insurance company organized under the laws of Nebraska, is subject to regulation by the Nebraska Department of Insurance. In addition, AVLIC is subject to the insurance laws and regulations of other states within which it is licensed or may become licensed to operate. The Policies offered by the prospectus are available in the various states as approved. Generally, the Insurance Department of any other state applies the laws of the state of domicile in determining permissible investments. CORPORATE BENEFIT VUL 33 EXECUTIVE OFFICERS AND DIRECTORS OF AVLIC DIRECTORS --------- Lawrence J. Arth(1).........an officer of our Company (see below) William J. Atherton(1).......an officer of our Company (see below) Thomas C. Godlasky(2)........an officer of our Company (see below) Kenneth C. Louis(1)...........an officer of our Company (see below) JoAnn M. Martin(1)...........an officer of our Company (see below) Gary R. McPhail(2)............an officer of our Company (see below) SENIOR OFFICERS --------------- Lawrence J. Arth(1) Chairman and Chief Executive Officer. Also holds director/officer positions with Ameritas Acacia Mutual Holding Company and several of its subsidiaries. William J. Atherton(1) President & Chief Operating Officer. Also a director of AMAL Corporation, the joint venture parent company of Ameritas Variable Life. Previously, President of North American Security Life Insurance Company. Kenneth C. Louis(1) Executive Vice President. Also Director, President and Chief Operating Officer of Ameritas Life Insurance Corp. Holds director/officer positions with other subsidiaries of Ameritas Acacia Mutual Holding Company. Gary R. McPhail(2) Executive Vice President. Also Director, President and Chief Operating Officer of AmerUs Life Insurance Company. Holds director/officer positions with other subsidiaries/affiliates of AmerUs Life. Previously, Executive Vice President of Marketing and Individual Operations of New York Life Insurance Company. Thomas C. Godlasky(2) Senior Vice President and Chief Investment Officer. Also, Executive Vice President and Chief Investment Officer of AmerUs Life Insurance Company. Holds director/officer positions with other subsidiaries/affiliates of AmerUs Life. Thomas N. Simpson(1) Senior Vice President and National Sales Manager. Previously held similar positions with Lincoln Benefit Life Insurance Company, Allstate Financial Services, and First variable Life Insurance Company. Raymond M. Gilbertson(1) Vice President - Corporate Compliance. Also Vice President - Corporate Compliance of Ameritas Life Insurance Corp. and its insurer subsidiaries. JoAnn M. Martin(1) Vice President and Chief Financial Officer. Also Senior Vice President and Chief Financial Officer of Ameritas Life Insurance Corp. Holds director/officer positions with other subsidiaries of Ameritas Acacia Mutual Holding Company. Robert C. Barth(1) Controller. Also Vice President and Controller, Ameritas Life Insurance Corp. William W. Lester(1) Treasurer. Also, Senior Vice President (Investments) & Treasurer, Ameritas Life Insurance Corp. Holds director/officer positions with several other subsidiaries of Ameritas Acacia Mutual Holding Company. Donald R. Stading(1) General Counsel & Secretary. Also, Senior Vice President, Corporate General Counsel and Secretary of Ameritas Life Insurance Corp. Holds director/officer positions with several other subsidiaries of Ameritas Acacia Mutual Holding Company. (1) Principal business address: Ameritas Life Insurance Corp., 5900 "O" Street, Lincoln, NE 68510 (2) Principal business address: AmerUs Life Insurance Company, 611 Fifth Ave., Des Moines, Iowa 50309 LEGAL MATTERS All matters of Nebraska law pertaining to the Policy, including the validity of the Policy and AVLIC's right to issue the Policy under Nebraska Insurance Law, have been passed upon by Donald R. Stading, Secretary and General Counsel of AVLIC. CORPORATE BENEFIT VUL 34 LEGAL PROCEEDINGS As of the date of this Prospectus, there are no proceedings affecting the Separate Account, or that are material in relation to our total assets. INDEPENDENT AUDITORS The financial statements of Ameritas Variable Life Insurance Company as of December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001, and the financial statements of the Subaccounts of Ameritas Variable Life Insurance Company Separate Account V as of December 31, 2001, and for each of the periods in the three year period then ended, included in this prospectus have been audited by Deloitte & Touche LLP, 1248 "O" Street Suite 1040, Lincoln, Nebraska 68508, independent auditors, as stated in their reports appearing herein, and are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. ADDITIONAL INFORMATION A registration statement including other information about us and the Policy is on file with the Securities and Exchange Commission ("SEC"). For a free copy, access it on the SEC's Web site (WWW.SEC.GOV, EDGAR "SEARCH FOR COMPANY FILINGS," "QUICK FORMS LOOKUP" and type in "Ameritas Variable") You can also ask for it from the SEC's office in Washington, D.C.; they may charge you a fee. We will send you a statement at least annually showing your Policy's death benefit, Policy value and any outstanding Policy loan balance. We will also confirm Policy loans, Subaccount transfers, lapses, surrender, partial withdrawals, and other Policy transactions as they occur. You will receive such additional periodic reports as may be required by the SEC. ILLUSTRATIONS Illustrations are tools that can help demonstrate how the Policy operates, given the Policy's expenses, investment options and any optional features selected, how you plan to accumulate or access Policy value over time, and assumed rates of return. Illustrations may also be able to assist you in comparing the Policy's death benefits, Cash Surrender Values and Policy values with those of other variable life insurance policies based upon the same or similar assumptions. You may ask us to provide an illustration based upon your specific situation. FINANCIAL STATEMENTS The financial statements of AVLIC which are included in this prospectus should be considered only as bearing on the ability of AVLIC to meet its obligations under the Policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account. CORPORATE BENEFIT VUL 35 INDEPENDENT AUDITORS' REPORT To the Board of Directors Ameritas Variable Life Insurance Company Lincoln, Nebraska We have audited the accompanying statements of net assets of each of the subaccounts listed in Note 1 which comprise Ameritas Variable Life Insurance Company Separate Account V as of December 31, 2001, and the related statements of operations and changes in net assets for each of the periods in the three year period then ended. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at December 31, 2001, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of each of the subaccounts constituting Ameritas Variable Life Insurance Company Separate Account V as of December 31, 2001, and the results of their operations and changes in net assets for each of the periods in the three year period then ended, in conformity with accounting principles generally accepted in the United States of America. /S/ Deloitte & Touche LLP Lincoln, Nebraska February 13, 2002 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V STATEMENTS OF NET ASSETS DECEMBER 31, 2001 ASSETS INVESTMENTS AT FAIR VALUE:
Fidelity Variable Insurance Products (Fidelity): VIP Equity-Income Portfolio Initial Class (Equity-Income IC) - 1,288,071.561 shares at $22.75 per share (cost $29,417,086) $ 29,303,630 VIP Equity-Income Portfolio Service Class (Equity-Income SC) - 7,755.275 shares at $22.67 per share (cost $181,699) 175,813 VIP Equity-Income Portfolio Service Class 2 (Equity-Income SC2) - 95.400 shares at $22.59 per share (cost $2,118) 2,155 VIP Growth Portfolio Initial Class (Growth IC) - 1,434,025.053 shares at $33.61 per share (cost $57,257,537) 48,197,582 VIP Growth Portfolio Service Class (Growth SC) - 10,342.096 shares at $33.48 per share (cost $421,039) 346,256 VIP Growth Portfolio Service Class 2 (Growth SC2) - 86.856 shares at $33.34 per share (cost $2,888) 2,896 VIP High Income Portfolio Initial Class (High Income IC) - 1,119,309.153 shares at $6.41 per share (cost $8,028,569) 7,174,769 VIP High Income Portfolio Service Class (High Income SC) - 8,193.664 shares at $6.38 per share (cost $58,509) 52,276 VIP High Income Portfolio Service Class 2 (High Income SC2) - 544.955 shares at $6.36 per share (cost $3,461) 3,465 VIP Overseas Portfolio Initial Class (Overseas IC) - 881,936.839 shares at $13.88 per share (cost $18,422,655) 12,241,284 VIP Overseas Portfolio Service Class (Overseas SC) - 7,808.256 shares at $13.83 per share (cost $140,049) 107,989 VIP Overseas Portfolio Service Class 2 (Overseas SC2) - 23.407 shares at $13.81 per share (cost $321) 324 VIP Asset Manager Portfolio Initial Class (Asset Mgr. IC) - 1,797,661.987 shares at $14.51 per share (cost $29,621,567) 26,084,073 VIP Asset Manager Portfolio Service Class (Asset Mgr. SC) - 8,103.805 shares at $14.41 per share (cost $121,542) 116,776 VIP Asset Manager Portfolio Service Class 2 (Asset Mgr. SC2) - 715.604 shares at $14.36 per share (cost $10,162) 10,276 VIP Investment Grade Bond Portfolio Initial Class (Inv. Bond IC) - 1,101,148.092 shares at $12.92 per share (cost $13,578,812) 14,226,831 VIP Investment Grade Bond Portfolio Service Class 2 (Inv. Bond SC2) - 1,437.685 shares at $12.82 per share (cost $18,346) 18,430 VIP Contrafund Portfolio Initial Class (Contrafund IC) - 971,232.850 shares at $20.13 per share (cost $20,861,969) 19,550,919 VIP Contrafund Portfolio Service Class (Contrafund SC) - 13,952.696 shares at $20.06 per share (cost $313,034) 279,891 VIP Contrafund Portfolio Service Class 2 (Contrafund SC2) - 878.961 shares at $20.00 per share (cost $17,284) 17,578
F-1 2 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V STATEMENTS OF NET ASSETS DECEMBER 31, 2001 ASSETS, continued
Fidelity Variable Insurance Products (Fidelity), continued: VIP Asset Manager: Growth Portfolio Initial Class (Asset Mgr. Gr. IC) - 289,186.446 shares at $12.56 per share (cost $4,303,207) $ 3,632,184 VIP Asset Manager: Growth Portfolio Service Class (Asset Mgr. Gr. SC) - 1,264.402 shares at $12.47 per share (cost $16,312) 15,768 VIP Asset Manager: Growth Portfolio Service Class 2 (Asset Mgr. Gr. SC2) - 52.941 shares at $12.43 per share (cost $658) 659 The Alger American Fund (Alger): Alger American Balanced Portfolio (Balanced) - 536,146.735 shares at $13.08 per share (cost $7,106,953) 7,012,798 Alger American Leveraged AllCap Portfolio (Leveraged) - 547,566.298 shares at $31.55 per share (cost $22,423,344) 17,275,718 MFS Variable Insurance Trust (MFS): Global Governments Series (Global Govern.) - 66,791.813 shares at $10.09 per share (cost $662,369) 673,929 Utilities Series (Utilities) - 438,285.781 shares at $15.95 per share (cost $8,830,757) 6,990,658 New Discovery Series (New Discovery) - 296,820.370 shares at $15.27 per share (cost $5,089,105) 4,532,447 The Universal Institutional Funds, Inc. (Morgan Stanley): Emerging Markets Equity Portfolio (Emerging Markets) - 352,137.592 shares at $6.63 per share (cost $2,283,896) 2,334,676 Global Value Equity Portfolio (Global Equity) - 286,573.149 shares at $12.13 per share (cost $3,632,633) 3,476,134 International Magnum Portfolio (Intl. Magnum) - 172,709.153 shares at $9.46 per share (cost $1,982,873) 1,633,829 U.S. Real Estate Portfolio (U.S. Real Estate) - 169,821.937 shares at $12.08 per share (cost $1,910,246) 2,051,449 Calvert Variable Series, Inc., Ameritas Portfolios (Ameritas): Ameritas Emerging Growth Portfolio (Emerging Growth) - 767,705.542 shares at $17.86 per share (cost $20,184,096) 13,711,220 Ameritas Growth Portfolio (Growth) - 615,798.419 shares at $47.95 per share (cost $34,952,096) 29,527,532 Ameritas Growth With Income Portfolio (Growth with Income) - 235,480.536 shares at $17.64 per share (cost $4,723,844) 4,153,877 Ameritas Income & Growth Portfolio (Income and Growth) - 912,194.197 shares at $13.17 per share (cost $13,631,686) 12,013,598 Ameritas Index 500 Portfolio (Index 500) - 215,363.019 shares at $124.30 per share (cost $32,833,207) 26,769,623
F-1 3 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V STATEMENTS OF NET ASSETS DECEMBER 31, 2001 ASSETS, continued
Calvert Variable Series, Inc., Ameritas Portfolios (Ameritas), continued: Ameritas MidCap Growth Portfolio (MidCap) - 686,170.278 shares at $30.50 per share (cost $21,048,227) $ 20,928,194 Ameritas Money Market Portfolio (Money Market) - 22,502,813.910 shares at $1.00 per share (cost $22,502,814) $ 22,502,814 Dividends Receivable 2,273 ----------------- Total 22,505,087 Ameritas Research Portfolio (Research) - 261,195.783 shares at $16.27 per share (cost $5,369,542) 4,249,655 Ameritas Small Capitalization Portfolio (Small Cap) - 601,471.412 shares at $29.40 per share (cost $25,880,598) 17,683,260 Ameritas Micro Cap Portfolio (Micro Cap) - 72,518.898 shares at $19.46 per share (cost $1,347,879) 1,411,217 Ameritas Select Portfolio (Select) - 128,022.145 shares at $17.84 per share (cost $2,249,052) 2,283,915 Calvert Variable Series, Inc. Calvert Social Portfolios (Calvert): CVS Social Balanced Portfolio (Balanced) - 274,562.957 shares at $1.759 per share (cost $514,536) 482,954 CVS Social International Equity Portfolio (Intl. Equity) - 11,584.345 shares at $12.84 per share (cost $188,784) 148,743 CVS Social Mid Cap Growth Portfolio (Mid Cap) - 35,793.998 shares at $25.51 per share (cost $1,095,642) 913,102 CVS Social Small Cap Growth Portfolio (Small Cap) - 57,182.580 shares at $14.80 per share (cost $791,575) 846,300 American Century Variable Portfolios Inc. (American Century): VP Income & Growth Fund (Income & Growth) - 149,270.410 shares at $6.46 per share (cost $958,002) 964,288 INVESCO Variable Investment Funds, Inc. (Invesco): VIF-Dynamics Fund (Dynamics) - 47,884.928 shares at $12.54 per share (cost $652,559) 600,477 Salomon Brothers Variable Series (Salomon): Capital Fund (Capital) - 43,065.581 shares at $15.10 per share (cost $649,239) 650,291 Summit Mutual Funds, Inc. Summit Pinnacle Series (Summit): S&P MidCap 400 Index Portfolio (S&P MidCap) - 56,980.404 shares at $9.34 per share (cost $495,184) 532,196 Russell 2000 Small Cap Index Portfolio (Russell Small Cap) - 29,429.617 shares at $9.62 per share (cost $259,625) 283,113 Nasdaq-100 Index Portfolio (Nasdaq-100 Index) - 220,109.995 shares at $4.46 per share (cost $1,072,283) 981,692
F-1 4 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V STATEMENTS OF NET ASSETS DECEMBER 31, 2001 ASSETS, continued
Third Avenue Variable Series Trust (Third Avenue): Third Avenue Value Portfolio (Value) - 153,750.068 shares at $17.13 per share (cost $2,509,667) $ 2,633,740 ------------------ NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS $ 371,817,536 ==================
The accompanying notes are an integral part of these financial statements. F-1 5 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------- Equity-Income IC ------------------------------------------------- 2001 2000 1999 ---------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 515,942 $ 506,497 $ 438,682 Mortality and expense risk charge 271,366 268,108 285,410 ---------------- ---------------- --------------- Net investment income(loss) 244,576 238,389 153,272 ---------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 1,449,552 1,908,198 969,719 Net realized gain(loss) on sale of fund shares (3,935) 205,900 412,393 ---------------- ---------------- --------------- Net realized gain(loss) 1,445,617 2,114,098 1,382,112 ---------------- ---------------- --------------- Change in unrealized appreciation(depreciation) (3,536,039) (277,865) (503) ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ (1,845,846) $ 2,074,622 $ 1,534,881 ================ ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 244,576 $ 238,389 $ 153,272 Net realized gain(loss) 1,445,617 2,114,098 1,382,112 Net change in unrealized appreciation(depreciation) (3,536,039) (277,865) (503) ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations (1,845,846) 2,074,622 1,534,881 ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 3,034,705 3,267,572 3,830,382 Subaccounts transfers (including fixed account), net (429,861) (2,669,491) (1,429,685) Transfers for policyowner benefits and terminations (1,162,639) (850,953) (1,108,456) Policyowner maintenance charges (1,655,780) (1,312,037) (1,465,373) ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions (213,575) (1,564,909) (173,132) ---------------- ---------------- --------------- Total increase(decrease) in net assets (2,059,421) 509,713 1,361,749 Net assets at beginning of period 31,363,051 30,853,338 29,491,589 ---------------- ---------------- --------------- Net assets at end of period $ 29,303,630 $ 31,363,051 $ 30,853,338 ================ ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 6 Fidelity
-------------------------------------------------------------------------------------------------------------------- Equity-Income SC Equity-Income SC2 ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 988 $ 22 $ ---- $ ---- $ ---- $ ---- 1,052 171 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (64) (149) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 2,915 86 ---- ---- ---- ---- (4,993) 23 ---- 2 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (2,078) 109 ---- 2 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (8,977) 3,085 5 37 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (11,119) $ 3,045 $ 5 $ 39 $ ---- $ ---- =================== ================== ================== ================== ================= ================= $ (64) $ (149) $ ---- $ ---- $ ---- $ ---- (2,078) 109 ---- 2 ---- ---- (8,977) 3,085 5 37 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (11,119) 3,045 5 39 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 36,157 6,625 ---- 82 ---- ---- 107,669 49,463 606 2,232 ---- ---- (3,645) ---- ---- ---- ---- ---- (11,543) (1,438) (12) (198) ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 128,638 54,650 594 2,116 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 117,519 57,695 599 2,155 ---- ---- 58,294 599 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 175,813 $ 58,294 $ 599 $ 2,155 $ ---- $ ---- =================== ================== ================== ================== ================= =================
F-1 7 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------- Growth IC ------------------------------------------------- 2001 2000 1999 ---------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 41,077 $ 73,209 $ 82,737 Mortality and expense risk charge 462,957 614,792 489,259 ---------------- ---------------- --------------- Net investment income(loss) (421,880) (541,583) (406,522) ---------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 3,861,237 7,284,267 5,202,111 Net realized gain(loss) on sale of fund shares (1,751,882) 2,779,589 2,074,622 ---------------- ---------------- --------------- Net realized gain(loss) 2,109,355 10,063,856 7,276,733 ---------------- ---------------- --------------- Change in unrealized appreciation(depreciation) (12,771,288) (17,443,376) 10,286,702 ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ (11,083,813) $ (7,921,103) $ 17,156,913 ================ ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (421,880) $ (541,583) $ (406,522) Net realized gain(loss) 2,109,355 10,063,856 7,276,733 Net change in unrealized appreciation(depreciation) (12,771,288) (17,443,376) 10,286,702 ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations (11,083,813) (7,921,103) 17,156,913 ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 5,708,577 5,849,676 5,316,037 Subaccounts transfers (including fixed account), net (1,440,521) 873,741 1,372,566 Transfers for policyowner benefits and terminations (1,924,747) (2,395,248) (1,440,496) Policyowner maintenance charges (2,937,382) (2,791,992) (2,367,138) ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions (594,073) 1,536,177 2,880,969 ---------------- ---------------- --------------- Total increase(decrease) in net assets (11,677,886) (6,384,926) 20,037,882 Net assets at beginning of period 59,875,468 66,260,394 46,222,512 ---------------- ---------------- --------------- Net assets at end of period $ 48,197,582 $ 59,875,468 $ 66,260,394 ================ ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 8
Fidelity -------------------------------------------------------------------------------------------------------------------- Growth SC Growth SC2 ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ ---- $ 42 $ ---- $ ---- $ ---- $ ---- 2,562 1,222 5 ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (2,562) (1,180) (5) ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 15,680 4,986 ---- ---- ---- ---- (11,531) (440) 1 5 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 4,149 4,546 1 5 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (47,011) (28,465) 689 8 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (45,424) $ (25,099) $ 685 $ 13 $ ---- $ ---- =================== ================== ================== ================== ================= ================= $ (2,562) $ (1,180) $ (5) $ ---- $ ---- $ ---- 4,149 4,546 1 5 ---- ---- (47,011) (28,465) 689 8 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (45,424) (25,099) 685 13 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 138,154 60,170 86 180 ---- ---- 63,005 183,834 19,069 2,966 ---- ---- (3,915) (135) ---- ---- ---- ---- (29,902) (14,235) (37) (263) ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 167,342 229,634 19,118 2,883 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 121,918 204,535 19,803 2,896 ---- ---- 224,338 19,803 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 346,256 $ 224,338 $ 19,803 $ 2,896 $ ---- $ ---- =================== ================== ================== ================== ================= =================
F-1 9 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------ High Income IC ------------------------------------------------ 2001 2000 1999 --------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 766,657 $ 447,960 $ 792,857 Mortality and expense risk charge 52,451 56,484 69,467 --------------- ---------------- --------------- Net investment income(loss) 714,206 391,476 723,390 --------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions ---- ---- 29,639 Net realized gain(loss) on sale of fund shares (2,092,382) (401,999) (707,243) --------------- ---------------- --------------- Net realized gain(loss) (2,092,382) (401,999) (677,604) --------------- ---------------- --------------- Change in unrealized appreciation(depreciation) 691,256 (1,566,513) 566,051 --------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ (686,920) $ (1,577,036) $ 611,837 =============== ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 714,206 $ 391,476 $ 723,390 Net realized gain(loss) (2,092,382) (401,999) (677,604) Net change in unrealized appreciation(depreciation) 691,256 (1,566,513) 566,051 --------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations (686,920) (1,577,036) 611,837 --------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 689,395 836,754 882,301 Subaccounts transfers (including fixed account), net 2,422,346 (644,290) (1,901,400) Transfers for policyowner benefits and terminations (261,007) (271,823) (223,510) Policyowner maintenance charges (321,750) (288,812) (353,289) --------------- ---------------- --------------- Net increase(decrease) from policyowner transactions 2,528,984 (368,171) (1,595,898) --------------- ---------------- --------------- Total increase(decrease) in net assets 1,842,064 (1,945,207) (984,061) Net assets at beginning of period 5,332,705 7,277,912 8,261,973 --------------- ---------------- --------------- Net assets at end of period $ 7,174,769 $ 5,332,705 $ 7,277,912 =============== ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 10 Fidelity
-------------------------------------------------------------------------------------------------------------------- High Income SC High Income SC2 ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 4,501 $ 32 $ ---- $ ---- $ ---- $ ---- 5,109 94 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (608) (62) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- ---- ---- ---- (168,639) (53) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (168,639) (53) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (982) (5,251) ---- 5 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (170,229) $ (5,366) $ ---- $ 5 $ ---- $ ---- =================== ================== ================== ================== ================= ================= $ (608) $ (62) $ ---- $ ---- $ ---- $ ---- (168,639) (53) ---- ---- ---- ---- (982) (5,251) ---- 5 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (170,229) (5,366) ---- 5 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 21,129 6,980 ---- 359 ---- ---- 197,107 34,696 ---- 3,208 ---- ---- (26) ---- ---- ---- ---- ---- (31,311) (704) ---- (107) ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 186,899 40,972 ---- 3,460 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 16,670 35,606 ---- 3,465 ---- ---- 35,606 ---- ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 52,276 $ 35,606 $ ---- $ 3,465 $ ---- $ ---- =================== ================== ================== ================== ================= =================
F-1 11 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------- Overseas IC ------------------------------------------------- 2001 2000 1999 ---------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 828,586 $ 273,101 $ 226,340 Mortality and expense risk charge 124,511 163,794 138,144 ---------------- ---------------- --------------- Net investment income(loss) 704,075 109,307 88,196 ---------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 1,309,700 1,719,800 365,064 Net realized gain(loss) on sale of fund shares (1,286,444) 329,720 2,328,938 ---------------- ---------------- --------------- Net realized gain(loss) 23,256 2,049,520 2,694,002 ---------------- ---------------- --------------- Change in unrealized appreciation(depreciation) (4,323,464) (5,768,575) 3,115,852 ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ (3,596,133) $ (3,609,748) $ 5,898,050 ================ ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 704,075 $ 109,307 $ 88,196 Net realized gain(loss) 23,256 2,049,520 2,694,002 Net change in unrealized appreciation(depreciation) (4,323,464) (5,768,575) 3,115,852 ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations (3,596,133) (3,609,748) 5,898,050 ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,644,970 1,799,679 1,650,693 Subaccounts transfers (including fixed account), net (640,400) 904,699 (2,819,581) Transfers for policyowner benefits and terminations (512,781) (379,632) (557,307) Policyowner maintenance charges (777,248) (724,111) (660,085) ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions (285,459) 1,600,635 (2,386,280) ---------------- ---------------- --------------- Total increase(decrease) in net assets (3,881,592) (2,009,113) 3,511,770 Net assets at beginning of period 16,122,876 18,131,989 14,620,219 ---------------- ---------------- --------------- Net assets at end of period $ 12,241,284 $ 16,122,876 $ 18,131,989 ================ ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 12
Fidelity -------------------------------------------------------------------------------------------------------------------- Overseas SC Overseas SC2 ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 5,132 $ 88 $ ---- $ ---- $ ---- $ ---- 874 264 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 4,258 (176) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 8,200 571 ---- ---- ---- ---- (6,517) (2,365) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 1,683 (1,794) ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (27,836) (4,227) 3 2 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (21,895) $ (6,197) $ 3 $ 2 $ ---- $ ---- =================== ================== ================== ================== ================= ================= $ 4,258 $ (176) $ ---- $ ---- $ ---- $ ---- 1,683 (1,794) ---- ---- ---- ---- (27,836) (4,227) 3 2 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (21,895) (6,197) 3 2 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 30,223 35,869 ---- 13 ---- ---- (676) 81,016 43 315 ---- ---- 35 133 ---- ---- ---- ---- (8,677) (1,881) (7) (6) ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 20,905 115,137 36 322 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (990) 108,940 39 324 ---- ---- 108,979 39 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 107,989 $ 108,979 $ 39 $ 324 $ ---- $ ---- =================== ================== ================== ================== ================= =================
F-1 13 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------- Asset Mgr. IC ------------------------------------------------- 2001 2000 1999 ---------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 1,153,594 $ 1,035,167 $ 1,054,568 Mortality and expense risk charge 241,519 277,686 290,374 ---------------- ---------------- --------------- Net investment income(loss) 912,075 757,481 764,194 ---------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 432,598 2,438,782 1,335,786 Net realized gain(loss) on sale of fund shares (374,012) (4,398) 164,025 ---------------- ---------------- --------------- Net realized gain(loss) 58,586 2,434,384 1,499,811 ---------------- ---------------- --------------- Change in unrealized appreciation(depreciation) (2,398,295) (4,670,490) 831,798 ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ (1,427,634) $ (1,478,625) $ 3,095,803 ================ ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 912,075 $ 757,481 $ 764,194 Net realized gain(loss) 58,586 2,434,384 1,499,811 Net change in unrealized appreciation(depreciation) (2,398,295) (4,670,490) 831,798 ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations (1,427,634) (1,478,625) 3,095,803 ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 2,821,941 3,088,744 3,699,921 Subaccounts transfers (including fixed account), net (1,009,144) (2,608,297) (2,321,849) Transfers for policyowner benefits and terminations (1,150,693) (1,832,613) (1,532,170) Policyowner maintenance charges (1,742,007) (1,617,729) (1,734,593) ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions (1,079,903) (2,969,895) (1,888,691) ---------------- ---------------- --------------- Total increase(decrease) in net assets (2,507,537) (4,448,520) 1,207,112 Net assets at beginning of period 28,591,610 33,040,130 31,833,018 ---------------- ---------------- --------------- Net assets at end of period $ 26,084,073 $ 28,591,610 $ 33,040,130 ================ ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 14
Fidelity -------------------------------------------------------------------------------------------------------------------- Asset Mgr. SC Asset Mgr. SC2 ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 3,949 $ 66 $ ---- $ ---- $ ---- $ ---- 901 868 ---- 7 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 3,048 (802) ---- (7) ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 1,505 158 ---- ---- ---- ---- (5,746) (727) 1 ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (4,241) (569) 1 ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (1,119) (3,654) 7 114 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (2,312) $ (5,025) $ 8 $ 107 $ ---- $ ---- =================== ================== ================== ================== ================= ================= $ 3,048 $ (802) $ ---- $ (7) $ ---- $ ---- (4,241) (569) 1 ---- ---- ---- (1,119) (3,654) 7 114 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (2,312) (5,025) 8 107 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 71,633 8,540 122 29 ---- ---- (40,252) 99,570 290 10,172 ---- ---- 174 (2) ---- ---- ---- ---- (10,349) (5,593) (28) (32) ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 21,206 102,515 384 10,169 ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 18,894 97,490 392 10,276 ---- ---- 97,882 392 ---- ---- ---- ---- ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 116,776 $ 97,882 $ 392 $ 10,276 $ ---- $ ---- =================== ================== ================== ================== ================= =================
F-1 15 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------ Inv. Bond IC ------------------------------------------------ 2001 2000 1999 ---------------- ---------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 268,084 $ 262,163 $ 178,023 Mortality and expense risk charge 109,703 37,985 39,812 ---------------- ---------------- -------------- Net investment income(loss) 158,381 224,178 138,211 ---------------- ---------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions ---- ---- 55,850 Net realized gain(loss) on sale of fund shares 94,544 (60,719) 56,608 ---------------- ---------------- -------------- Net realized gain(loss) 94,544 (60,719) 112,458 ---------------- ---------------- -------------- Change in unrealized appreciation(depreciation) 472,114 238,506 (347,460) ---------------- ---------------- -------------- Net increase(decrease) in net assets resulting from operations $ 725,039 $ 401,965 $ (96,791) ================ ================ ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 158,381 $ 224,178 $ 138,211 Net realized gain(loss) 94,544 (60,719) 112,458 Net change in unrealized appreciation(depreciation) 472,114 238,506 (347,460) ---------------- ---------------- -------------- Net increase(decrease) in net assets resulting from operations 725,039 401,965 (96,791) ---------------- ---------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 583,797 425,421 524,374 Subaccounts transfers (including fixed account), net 8,559,689 963,784 (411,086) Transfers for policyowner benefits and terminations (183,615) (234,332) (490,633) Policyowner maintenance charges (609,785) (184,555) (194,413) ---------------- ---------------- -------------- Net increase(decrease) from policyowner transactions 8,350,086 970,318 (571,758) ---------------- ---------------- -------------- Total increase(decrease) in net assets 9,075,125 1,372,283 (668,549) Net assets at beginning of period 5,151,706 3,779,423 4,447,972 ---------------- ---------------- -------------- Net assets at end of period $ 14,226,831 $ 5,151,706 $ 3,779,423 ================ ================ ==============
The accompanying notes are an integral part of these financial statements. F-1 16
Fidelity -------------------------------------------------------------------------------------------------------------------- Inv. Bond SC2 Contrafund IC ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ ---- $ ---- $ ---- $ 159,732 $ 72,121 $ 68,862 5 ---- ---- 171,391 189,463 148,735 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (5) ---- ---- (11,659) (117,342) (79,873) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- 563,760 2,617,988 504,989 (2) ---- ---- (149,684) 262,614 209,678 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (2) ---- ---- 414,076 2,880,602 714,667 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 85 ---- ---- (3,306,161) (4,488,515) 3,076,967 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 78 $ ---- $ ---- $ (2,903,744) $ (1,725,255) $ 3,711,761 =================== ================== ================== ================== ================= ================= $ (5) $ ---- $ ---- $ (11,659) $ (117,342) $ (79,873) (2) ---- ---- 414,076 2,880,602 714,667 85 ---- ---- (3,306,161) (4,488,515) 3,076,967 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 78 ---- ---- (2,903,744) (1,725,255) 3,711,761 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 7,853 ---- ---- 3,305,073 3,548,230 3,202,874 10,843 ---- ---- (192,050) 592,252 1,634,800 ---- ---- ---- (867,398) (473,933) (431,665) (344) ---- ---- (1,391,012) (1,177,682) (1,020,388) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 18,352 ---- ---- 854,613 2,488,867 3,385,621 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 18,430 ---- ---- (2,049,131) 763,612 7,097,382 ---- ---- ---- 21,600,050 20,836,438 13,739,056 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 18,430 $ ---- $ ---- $ 19,550,919 $ 21,600,050 $ 20,836,438 =================== ================== ================== ================== ================= =================
F-1 17 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------ Contrafund SC ------------------------------------------------ 2001 2000 1999 --------------- ----------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 1,281 $ 69 $ ---- Mortality and expense risk charge 2,038 898 ---- --------------- ----------------- -------------- Net investment income(loss) (757) (829) ---- --------------- ----------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 5,123 2,501 ---- Net realized gain(loss) on sale of fund shares (5,850) (482) (1) --------------- ----------------- -------------- Net realized gain(loss) (727) 2,019 (1) --------------- ----------------- -------------- Change in unrealized appreciation(depreciation) (23,051) (10,275) 183 --------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations $ (24,535) $ (9,085) $ 182 =============== ================= ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (757) $ (829) $ ---- Net realized gain(loss) (727) 2,019 (1) Net change in unrealized appreciation(depreciation) (23,051) (10,275) 183 --------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations (24,535) (9,085) 182 --------------- ----------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 108,394 45,542 123 Subaccounts transfers (including fixed account), net 28,261 157,109 8,434 Transfers for policyowner benefits and terminations (202) (4) ---- Policyowner maintenance charges (24,034) (10,265) (29) --------------- ----------------- -------------- Net increase(decrease) from policyowner transactions 112,419 192,382 8,528 --------------- ----------------- -------------- Total increase(decrease) in net assets 87,884 183,297 8,710 Net assets at beginning of period 192,007 8,710 ---- --------------- ----------------- -------------- Net assets at end of period $ 279,891 $ 192,007 $ 8,710 =============== ================= ==============
The accompanying notes are an integral part of these financial statements. F-1 18
Fidelity -------------------------------------------------------------------------------------------------------------------- Contrafund SC2 Asset Mgr. Gr. IC ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- $ ---- $ ---- $ ---- $ 109,529 $ 87,724 $ 80,579 9 ---- ---- 30,411 35,031 32,359 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- (9) ---- ---- 79,118 52,693 48,220 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- ---- ---- ---- 131,997 355,639 133,643 1 ---- ---- (121,034) 46,065 46,443 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- 1 ---- ---- 10,963 401,704 180,086 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- 295 ---- ---- (426,768) (1,007,098) 287,243 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- $ 287 $ ---- $ ---- $ (336,687) $ (552,701) $ 515,549 =================== ================== ================== ================== ==================== ================ $ (9) $ ---- $ ---- $ 79,118 $ 52,693 $ 48,220 1 ---- ---- 10,963 401,704 180,086 295 ---- ---- (426,768) (1,007,098) 287,243 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- 287 ---- ---- (336,687) (552,701) 515,549 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- 114 ---- ---- 606,727 664,906 695,735 17,371 ---- ---- 26,300 (384,811) 163,508 ---- ---- ---- (70,583) (122,489) (101,062) (194) ---- ---- (284,521) (253,492) (240,081) ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- 17,291 ---- ---- 277,923 (95,886) 518,100 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- 17,578 ---- ---- (58,764) (648,587) 1,033,649 ---- ---- ---- 3,690,948 4,339,535 3,305,886 ------------------- ------------------ ------------------ ------------------ -------------------- ---------------- $ 17,578 $ ---- $ ---- $ 3,632,184 $ 3,690,948 $ 4,339,535 =================== ================== ================== ================== ==================== ================
F-1 19 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Fidelity ------------------------------------------------ Asset Mgr. Gr. SC ------------------------------------------------ 2001 2000 1999 --------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 100 $ 5 $ ---- Mortality and expense risk charge 60 20 ---- --------------- ---------------- --------------- Net investment income(loss) 40 (15) ---- --------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 127 19 ---- Net realized gain(loss) on sale of fund shares (99) (19) ---- --------------- ---------------- --------------- Net realized gain(loss) 28 ---- ---- --------------- ---------------- --------------- Change in unrealized appreciation(depreciation) (46) (499) ---- --------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ 22 $ (514) $ ---- =============== ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 40 $ (15) $ ---- Net realized gain(loss) 28 ---- ---- Net change in unrealized appreciation(depreciation) (46) (499) ---- --------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations 22 (514) ---- --------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 6,826 522 ---- Subaccounts transfers (including fixed account), net 6,270 4,308 ---- Transfers for policyowner benefits and terminations ---- ---- ---- Policyowner maintenance charges (1,276) (390) ---- --------------- ---------------- --------------- Net increase(decrease) from policyowner transactions 11,820 4,440 ---- --------------- ---------------- --------------- Total increase(decrease) in net assets 11,842 3,926 ---- Net assets at beginning of period 3,926 ---- ---- --------------- ---------------- --------------- Net assets at end of period $ 15,768 $ 3,926 $ ---- =============== ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 20
Fidelity Alger ---------------------------------------------------------- -------------------------------------------------------- Asset Mgr. Gr. SC2 Balanced ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ ---- $ ---- $ ---- $ 99,221 $ 50,804 $ 39,415 ---- ---- ---- 58,208 54,486 33,636 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- 41,013 (3,682) 5,779 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- 120,768 484,561 199,925 ---- ---- ---- (13,738) 104,114 130,906 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- 107,030 588,675 330,831 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 1 ---- ---- (367,726) (877,509) 638,648 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 1 $ ---- $ ---- $ (219,683) $ (292,516) $ 975,258 =================== ================== ================== ================== ================= ================= $ ---- $ ---- $ ---- $ 41,013 $ (3,682) $ 5,779 ---- ---- ---- 107,030 588,675 330,831 1 ---- ---- (367,726) (877,509) 638,648 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 1 ---- ---- (219,683) (292,516) 975,258 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- 1,193,795 1,176,922 652,587 658 ---- ---- 301,926 1,076,269 1,111,865 --- ---- ---- (178,599) (166,995) (133,356) --- ---- ---- (565,785) (400,927) (243,952) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 658 ---- ---- 751,337 1,685,269 1,387,144 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 659 ---- ---- 531,654 1,392,753 2,362,402 ---- ---- ---- 6,481,144 5,088,391 2,725,989 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 659 $ ---- $ ---- $ 7,012,798 $ 6,481,144 $ 5,088,391 =================== ================== ================== ================== ================= =================
F-1 21 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Alger ------------------------------------------------- Leveraged ------------------------------------------------- 2001 2000 1999 --------------- ----------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ ---- $ ---- $ ---- Mortality and expense risk charge 150,956 206,550 99,090 --------------- ----------------- --------------- Net investment income(loss) (150,956) (206,550) (99,090) --------------- ----------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 649,613 2,368,184 658,702 Net realized gain(loss) on sale of fund shares (1,139,625) 1,593,491 444,024 --------------- ----------------- --------------- Net realized gain(loss) (490,012) 3,961,675 1,102,726 --------------- ----------------- --------------- Change in unrealized appreciation(depreciation) (2,920,740) (10,349,087) 6,228,230 --------------- ----------------- --------------- Net increase(decrease) in net assets resulting from operations $ (3,561,708) $ (6,593,962) $ 7,231,866 =============== ================= =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (150,956) $ (206,550) $ (99,090) Net realized gain(loss) (490,012) 3,961,675 1,102,726 Net change in unrealized appreciation(depreciation) (2,920,740) (10,349,087) 6,228,230 --------------- ----------------- --------------- Net increase(decrease) in net assets resulting from operations (3,561,708) (6,593,962) 7,231,866 --------------- ----------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 3,494,557 3,958,348 2,197,902 Subaccounts transfers (including fixed account), net (762,063) 2,923,872 7,155,968 Transfers for policyowner benefits and terminations (576,701) (337,285) (280,708) Policyowner maintenance charges (1,378,992) (1,173,771) (566,873) --------------- ----------------- --------------- Net increase(decrease) from policyowner transactions 776,801 5,371,164 8,506,289 --------------- ----------------- --------------- Total increase(decrease) in net assets (2,784,907) (1,222,798) 15,738,155 Net assets at beginning of period 20,060,625 21,283,423 5,545,268 --------------- ----------------- --------------- Net assets at end of period $ 17,275,718 $ 20,060,625 $ 21,283,423 =============== ================= ===============
The accompanying notes are an integral part of these financial statements. F-1 22
MFS -------------------------------------------------------------------------------------------------------------------- Global Govern. Utilities ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 24,400 $ 21,767 $ 21,210 $ 248,847 $ 62,030 $ 45,844 6,511 4,374 3,721 63,315 55,188 35,886 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 17,889 17,393 17,489 185,532 6,842 9,958 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- ---- ---- 652,595 467,624 230,507 15,988 (21,356) 8,100 (55,189) 225,839 120,303 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 15,988 (21,356) 8,100 597,406 693,463 350,810 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (6,002) 27,987 (40,388) (2,998,813) (347,750) 866,015 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 27,875 $ 24,024 $ (14,799) $ (2,215,875) $ 352,555 $ 1,226,783 =================== ================== ================== ================== ================= ================= $ 17,889 $ 17,393 $ 17,489 $ 185,532 $ 6,842 $ 9,958 15,988 (21,356) 8,100 597,406 693,463 350,810 (6,002) 27,987 (40,388) (2,998,813) (347,750) 866,015 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 27,875 24,024 (14,799) (2,215,875) 352,555 1,226,783 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 78,246 83,082 99,607 1,403,465 1,080,404 820,148 (247,179) 387,911 (189,632) 1,107,273 1,148,017 711,914 (2,171) (10,122) (21,169) (157,674) (178,851) (124,813) (47,179) (28,964) (27,667) (705,824) (461,851) (312,076) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (218,283) 431,907 (138,861) 1,647,240 1,587,719 1,095,173 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (190,408) 455,931 (153,660) (568,635) 1,940,274 2,321,956 864,337 408,406 562,066 7,559,293 5,619,019 3,297,063 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 673,929 $ 864,337 $ 408,406 $ 6,990,658 $ 7,559,293 $ 5,619,019 =================== ================== ================== ================== ================= =================
F-1 23 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
MFS ------------------------------------------------ New Discovery ------------------------------------------------ 2001 2000 1999 ---------------- ---------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ ---- $ ---- $ ---- Mortality and expense risk charge 35,441 21,353 37 ---------------- ---------------- -------------- Net investment income(loss) (35,441) (21,353) (37) ---------------- ---------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 135,232 39,123 1,661 Net realized gain(loss) on sale of fund shares (216,973) (37,774) ---- ---------------- ---------------- -------------- Net realized gain(loss) (81,741) 1,349 1,661 ---------------- ---------------- -------------- Change in unrealized appreciation(depreciation) (165,672) (398,932) 7,946 ---------------- ---------------- -------------- Net increase(decrease) in net assets resulting from operations $ (282,854) $ (418,936) $ 9,570 ================ ================ ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (35,441) $ (21,353) $ (37) Net realized gain(loss) (81,741) 1,349 1,661 Net change in unrealized appreciation(depreciation) (165,672) (398,932) 7,946 ---------------- ---------------- -------------- Net increase(decrease) in net assets resulting from operations (282,854) (418,936) 9,570 ---------------- ---------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 811,078 486,645 268 Subaccounts transfers (including fixed account), net 112,301 4,265,320 141,426 Transfers for policyowner benefits and terminations (71,405) (38,639) ---- Policyowner maintenance charges (334,959) (147,224) (144) ---------------- ---------------- -------------- Net increase(decrease) from policyowner transactions 517,015 4,566,102 141,550 ---------------- ---------------- -------------- Total increase(decrease) in net assets 234,161 4,147,166 151,120 Net assets at beginning of period 4,298,286 151,120 ---- ---------------- ---------------- -------------- Net assets at end of period $ 4,532,447 $ 4,298,286 $ 151,120 ================ ================ ==============
The accompanying notes are an integral part of these financial statements. F-1 24 Morgan Stanley
-------------------------------------------------------------------------------------------------------------------- Asian Equity Emerging Markets ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ ---- $ 2,330 $ 5,861 $ ---- $ ---- $ 320 1,627 7,991 5,901 16,773 20,559 10,340 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (1,627) (5,661) (40) (16,773) (20,559) (10,020) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- 215,431 ---- ---- 330,498 ---- (237,483) (270,123) 81,421 (1,121,217) 170,155 (14,605) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (237,483) (54,692) 81,421 (1,121,217) 500,653 (14,605) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 199,400 (429,608) 306,846 1,069,929 (1,679,239) 932,312 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (39,710) $ (489,961) $ 388,227 $ (68,061) $ (1,199,145) $ 907,687 =================== ================== ================== ================== ================= ================= $ (1,627) $ (5,661) $ (40) $ (16,773) $ (20,559) $ (10,020) (237,483) (54,692) 81,421 (1,121,217) 500,653 (14,605) 199,400 (429,608) 306,846 1,069,929 (1,679,239) 932,312 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (39,710) (489,961) 388,227 (68,061) (1,199,145) 907,687 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 354 212,757 156,793 558,132 683,360 339,540 (589,000) (67,694) 282,014 74,489 560,623 228,230 (7,731) (21,947) (18,126) (20,769) (88,989) (27,008) (18,504) (69,999) (51,473) (181,356) (162,397) (93,292) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (614,881) 53,117 369,208 430,496 992,597 447,470 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (654,591) (436,844) 757,435 362,435 (206,548) 1,355,157 654,591 1,091,435 334,000 1,972,241 2,178,789 823,632 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ ---- $ 654,591 $ 1,091,435 $ 2,334,676 $ 1,972,241 $ 2,178,789 =================== ================== ================== ================== ================= =================
F-1 25 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Morgan Stanley ------------------------------------------------ Global Equity ------------------------------------------------ 2001 2000 1999 ---------------- ---------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 37,110 $ 62,490 $ 30,920 Mortality and expense risk charge 27,707 23,717 20,462 ---------------- ---------------- -------------- Net investment income(loss) 9,403 38,773 10,458 ---------------- ---------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions ---- 200,225 119,961 Net realized gain(loss) on sale of fund shares (36,110) 37,019 27,634 ---------------- ---------------- -------------- Net realized gain(loss) (36,110) 237,244 147,595 ---------------- ---------------- -------------- Change in unrealized appreciation(depreciation) (257,710) 30,928 (74,942) ---------------- ---------------- -------------- Net increase(decrease) in net assets resulting from operations $ (284,417) $ 306,945 $ 83,111 ================ ================ ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 9,403 $ 38,773 $ 10,458 Net realized gain(loss) (36,110) 237,244 147,595 Net change in unrealized appreciation(depreciation) (257,710) 30,928 (74,942) ---------------- ---------------- -------------- Net increase(decrease) in net assets resulting from operations (284,417) 306,945 83,111 ---------------- ---------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 611,539 553,477 602,471 Subaccounts transfers (including fixed account), net 211,811 (6,906) 125,969 Transfers for policyowner benefits and terminations (80,490) (83,257) (74,379) Policyowner maintenance charges (248,214) (177,457) (161,040) ---------------- ---------------- -------------- Net increase(decrease) from policyowner transactions 494,646 285,857 493,021 ---------------- ---------------- -------------- Total increase(decrease) in net assets 210,229 592,802 576,132 Net assets at beginning of period 3,265,905 2,673,103 2,096,971 ---------------- ---------------- -------------- Net assets at end of period $ 3,476,134 $ 3,265,905 $ 2,673,103 ================ ================ ==============
The accompanying notes are an integral part of these financial statements. F-1 26
Morgan Stanley -------------------------------------------------------------------------------------------------------------------- Intl. Magnum U.S. Real Estate ---------------------------------------------------------- -------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 8,242 $ 14,608 $ 13,210 $ 74,692 $ 27,333 $ 48,301 14,111 16,788 11,040 14,815 9,678 7,470 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (5,869) (2,180) 2,170 59,877 17,655 40,831 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- ---- 50,660 5,512 15,523 7,876 ---- (112,649) 36,600 21,450 53,614 22,741 (24,923) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (112,649) 87,260 26,962 69,137 30,617 (24,923) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (273,730) (352,908) 285,903 24,375 228,573 (40,700) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ (392,248) $ (267,828) $ 315,035 $ 153,389 $ 276,845 $ (24,792) =================== ================== ================== ================== ================= ================= $ (5,869) $ (2,180) $ 2,170 $ 59,877 $ 17,655 $ 40,831 (112,649) 87,260 26,962 69,137 30,617 (24,923) (273,730) (352,908) 285,903 24,375 228,573 (40,700) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (392,248) (267,828) 315,035 153,389 276,845 (24,792) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 307,390 351,118 275,498 273,934 185,091 195,740 (124,011) 309,724 331,831 261,144 334,817 (74,073) (48,252) (38,747) (6,719) (95,993) (36,061) (24,125) (118,176) (108,234) (85,815) (118,530) (62,671) (52,806) ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- 16,951 513,861 514,795 320,555 421,176 44,736 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- (375,297) 246,033 829,830 473,944 698,021 19,944 2,009,126 1,763,093 933,263 1,577,505 879,484 859,540 ------------------- ------------------ ------------------ ------------------ ----------------- ----------------- $ 1,633,829 $ 2,009,126 $ 1,763,093 $ 2,051,449 $ 1,577,505 $ 879,484 =================== ================== ================== ================== ================= =================
F-1 27
AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31 Ameritas ------------------------------------------------ Emerging Growth ------------------------------------------------ 2001 2000 1999 --------------- ----------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ ---- $ ---- $ ---- Mortality and expense risk charge 133,239 213,853 29,906 --------------- ----------------- -------------- Net investment income(loss) (133,239) (213,853) (29,906) --------------- ----------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 932,081 490,195 ---- Net realized gain(loss) on sale of fund shares (1,388,648) 977,120 69,203 --------------- ----------------- -------------- Net realized gain(loss) (456,567) 1,467,315 69,203 --------------- ----------------- -------------- Change in unrealized appreciation(depreciation) (7,234,351) (6,598,695) 7,360,170 --------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations $ (7,824,157) $ (5,345,233) $ 7,399,467 =============== ================= ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (133,239) $ (213,853) $ (29,906) Net realized gain(loss) (456,567) 1,467,315 69,203 Net change in unrealized appreciation(depreciation) (7,234,351) (6,598,695) 7,360,170 --------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations (7,824,157) (5,345,233) 7,399,467 --------------- ----------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 2,828,609 3,076,160 399,887 Subaccounts transfers (including fixed account), net (795,478) 1,908,799 16,120,925 Transfers for policyowner benefits and terminations (702,453) (723,564) (166,431) Policyowner maintenance charges (1,102,793) (1,199,742) (162,776) --------------- ----------------- -------------- Net increase(decrease) from policyowner transactions 227,885 3,061,653 16,191,605 --------------- ----------------- -------------- Total increase(decrease) in net assets (7,596,272) (2,283,580) 23,591,072 Net assets at beginning of period 21,307,492 23,591,072 ---- --------------- ----------------- -------------- Net assets at end of period $ 13,711,220 $ 21,307,492 $ 23,591,072 =============== ================= ==============
The accompanying notes are an integral part of these financial statements. F-1 28
Ameritas --------------------------------------------------------------------------------------------------------------------- Growth Growth with Income ---------------------------------------------------------- ---------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 12,563 $ 13,672 $ 4,570 $ 26,012 $ 8,794 $ 1,856 270,450 334,112 53,250 35,420 33,113 5,394 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (257,887) (320,440) (48,680) (9,408) (24,319) (3,538) ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 151,926 ---- ---- ---- 6,430 ---- (532,601) 408,126 91,185 (123,398) 34,360 2,197 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (380,675) 408,126 91,185 (123,398) 40,790 2,197 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (3,742,825) (6,479,573) 4,797,837 (676,507) (60,600) 167,141 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ (4,381,387) $ (6,391,887) $ 4,840,342 $ (809,313) $ (44,129) $ 165,800 =================== ================= ================== =================== ================= ================== $ (257,887) $ (320,440) $ (48,680) $ (9,408) $ (24,319) $ (3,538) (380,675) 408,126 91,185 (123,398) 40,790 2,197 (3,742,825) (6,479,573) 4,797,837 (676,507) (60,600) 167,141 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (4,381,387) (6,391,887) 4,840,342 (809,313) (44,129) 165,800 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 4,982,916 5,197,765 791,274 832,959 857,189 186,705 (1,861,259) 2,834,310 31,410,603 327,409 103,810 3,556,248 (1,063,741) (2,176,885) (148,246) (227,790) (110,304) (11,081) (2,210,774) (1,992,956) (302,543) (339,497) (286,727) (47,402) ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (152,858) 3,862,234 31,751,088 593,081 563,968 3,684,470 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (4,534,245) (2,529,653) 36,591,430 (216,232) 519,839 3,850,270 34,061,777 36,591,430 ---- 4,370,109 3,850,270 ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 29,527,532 $ 34,061,777 $ 36,591,430 $ 4,153,877 $ 4,370,109 $ 3,850,270 =================== ================= ================== =================== ================= ==================
F-1 29 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Ameritas -------------------------------------------------- Income and Growth -------------------------------------------------- 2001 2000 1999 ---------------- ----------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 60,019 $ 22,473 $ ---- Mortality and expense risk charge 106,592 116,969 16,266 ---------------- ----------------- --------------- Net investment income(loss) (46,573) (94,496) (16,266) ---------------- ----------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 740,898 631,286 330,344 Net realized gain(loss) on sale of fund shares (50,926) 265,807 32,672 ---------------- ----------------- --------------- Net realized gain(loss) 689,972 897,093 363,016 ---------------- ----------------- --------------- Change in unrealized appreciation(depreciation) (2,926,134) (940,011) 2,248,057 ---------------- ----------------- --------------- Net increase(decrease) in net assets resulting from operations $ (2,282,735) $ (137,414) $ 2,594,807 ================ ================= =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (46,573) $ (94,496) $ (16,266) Net realized gain(loss) 689,972 897,093 363,016 Net change in unrealized appreciation(depreciation) (2,926,134) (940,011) 2,248,057 ---------------- ----------------- --------------- Net increase(decrease) in net assets resulting from operations (2,282,735) (137,414) 2,594,807 ---------------- ----------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 1,948,693 1,767,043 226,613 Subaccounts transfers (including fixed account), net (408,799) 1,743,203 9,033,423 Transfers for policyowner benefits and terminations (418,659) (253,443) (164,905) Policyowner maintenance charges (864,400) (677,541) (92,288) ---------------- ----------------- --------------- Net increase(decrease) from policyowner transactions 256,835 2,579,262 9,002,843 ---------------- ----------------- --------------- Total increase(decrease) in net assets (2,025,900) 2,441,848 11,597,650 Net assets at beginning of period 14,039,498 11,597,650 ---- ---------------- ----------------- --------------- Net assets at end of period $ 12,013,598 $ 14,039,498 $ 11,597,650 ================ ================= ===============
The accompanying notes are an integral part of these financial statements. F-1 30 Ameritas
--------------------------------------------------------------------------------------------------------------------- Index 500 MidCap ---------------------------------------------------------- --------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ $ 394,478 $ 174,138 $ 45,131 $ ---- $ ---- $ ---- 232,904 266,882 44,210 182,951 186,833 23,079 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ 161,574 (92,744) 921 (182,951) (186,833) (23,079) ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ 834,050 358,915 ---- 998,868 586,728 358,344 (583,994) 211,068 17,271 69,786 985,515 30,642 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ 250,056 569,983 17,271 1,068,654 1,572,243 388,986 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ (4,439,350) (3,801,394) 2,177,161 (2,893,312) 268,562 2,504,717 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ $ (4,027,720) $ (3,324,155) $ 2,195,353 $ (2,007,609) $ 1,653,972 $ 2,870,624 =================== ================== ================== ================== ================= ================== $ 161,574 $ (92,744) $ 921 $ (182,951) $ (186,833) $ (23,079) 250,056 569,983 17,271 1,068,654 1,572,243 388,986 (4,439,350) (3,801,394) 2,177,161 (2,893,312) 268,562 2,504,717 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ (4,027,720) (3,324,155) 2,195,353 (2,007,609) 1,653,972 2,870,624 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ 4,775,610 4,807,303 794,221 2,917,996 2,678,209 350,572 (586,771) 505,232 27,896,245 (803,631) 4,269,324 12,864,272 (1,052,580) (868,441) (197,927) (626,582) (650,248) (35,676) (2,045,663) (1,818,044) (283,040) (1,391,451) (1,034,828) (126,750) ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ 1,090,596 2,626,050 28,209,499 96,332 5,262,457 13,052,418 ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ (2,937,124) (698,105) 30,404,852 (1,911,277) 6,916,429 15,923,042 29,706,747 30,404,852 ---- 22,839,471 15,923,042 ---- ------------------- ------------------ ------------------ ------------------ ----------------- ------------------ $ 26,769,623 $ 29,706,747 $ 30,404,852 $ 20,928,194 $ 22,839,471 $ 15,923,042 =================== ================== ================== ================== ================= ==================
F-1 31 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Ameritas -------------------------------------------------- Money Market -------------------------------------------------- 2001 2000 1999 ----------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 864,242 $ 969,387 $ 167,556 Mortality and expense risk charge 196,648 142,140 42,280 ----------------- ---------------- --------------- Net investment income(loss) 667,594 827,247 125,276 ----------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions ---- ---- ---- Net realized gain(loss) on sale of fund shares ---- ---- ---- ----------------- ---------------- --------------- Net realized gain(loss) ---- ---- ---- ----------------- ---------------- --------------- Change in unrealized appreciation(depreciation) ---- ---- ---- ----------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ 667,594 $ 827,247 $ 125,276 ================= ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ 667,594 $ 827,247 $ 125,276 Net realized gain(loss) ---- ---- ---- Net change in unrealized appreciation(depreciation) ---- ---- ---- ----------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations 667,594 827,247 125,276 ----------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 33,957,760 29,824,117 5,138,659 Subaccounts transfers (including fixed account), net (25,197,131) (30,630,238) 13,733,671 Transfers for policyowner benefits and terminations (1,779,587) (1,087,311) (99,720) Policyowner maintenance charges (1,622,197) (1,143,367) (209,686) ----------------- ---------------- --------------- Net increase(decrease) from policyowner transactions 5,358,845 (3,036,799) 18,562,924 ----------------- ---------------- --------------- Total increase(decrease) in net assets 6,026,439 (2,209,552) 18,688,200 Net assets at beginning of period 16,478,648 18,688,200 ---- ----------------- ---------------- --------------- Net assets at end of period $ 22,505,087 $ 16,478,648 $ 18,688,200 ================= ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 32 Ameritas
--------------------------------------------------------------------------------------------------------------------- Research Small Cap ---------------------------------------------------------- ---------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ $ ---- $ ---- $ ---- $ ---- $ ---- $ ---- 37,922 41,635 6,148 161,050 270,277 45,011 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ (37,922) (41,635) (6,148) (161,050) (270,277) (45,011) ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ 139,631 116,628 48,862 ---- 155,419 249,625 (176,289) 108,283 23,464 (2,441,748) 1,756,963 146,905 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ (36,658) 224,911 72,326 (2,441,748) 1,912,382 396,530 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ (1,091,825) (531,250) 503,189 (4,089,979) (10,941,100) 6,833,740 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ $ (1,166,405) $ (347,974) $ 569,367 $ (6,692,777) $ (9,298,995) $ 7,185,259 =================== ================= ================== =================== ================== ================== $ (37,922) $ (41,635) (6,148) $ (161,050) $ (270,277) $ (45,011) (36,658) 224,911 72,326 (2,441,748) 1,912,382 396,530 (1,091,825) (531,250) 503,189 (4,089,979) (10,941,100) 6,833,740 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ (1,166,405) (347,974) 569,367 (6,692,777) (9,298,995) 7,185,259 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ 862,759 769,641 125,229 3,227,622 3,747,998 601,352 7,830 651,005 3,673,171 (574,047) (182,891) 24,775,069 (110,587) (120,145) (14,853) (711,892) (1,222,335) (246,417) (328,467) (279,397) (41,519) (1,238,800) (1,449,797) (236,089) ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ 431,535 1,021,104 3,742,028 702,883 892,975 24,893,915 ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ (734,870) 673,130 4,311,395 (5,989,894) (8,406,020) 32,079,174 4,984,525 4,311,395 ---- 23,673,154 32,079,174 ---- ------------------- ----------------- ------------------ ------------------- ------------------ ------------------ $ 4,249,655 $ 4,984,525 $ 4,311,395 $ 17,683,260 $ 23,673,154 $ 32,079,174 =================== ================= ================== =================== ================== ==================
F-1 33 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Ameritas ------------------------------------------------- Micro Cap ------------------------------------------------- 2001 2000 1999 ---------------- ---------------- --------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ ---- $ ---- $ ---- Mortality and expense risk charge 4,271 ---- ---- ---------------- ---------------- --------------- Net investment income(loss) (4,271) ---- ---- ---------------- ---------------- --------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 27,469 ---- ---- Net realized gain(loss) on sale of fund shares (1,181) ---- ---- ---------------- ---------------- --------------- Net realized gain(loss) 26,288 ---- ---- ---------------- ---------------- --------------- Change in unrealized appreciation(depreciation) 63,339 ---- ---- ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations $ 85,356 $ ---- $ ---- ================ ================ =============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (4,271) $ ---- $ ---- Net realized gain(loss) 26,288 ---- ---- Net change in unrealized appreciation(depreciation) 63,339 ---- ---- ---------------- ---------------- --------------- Net increase(decrease) in net assets resulting from operations 85,356 ---- ---- ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 156,305 ---- ---- Subaccounts transfers (including fixed account), net 1,229,767 ---- ---- Transfers for policyowner benefits and terminations (3,961) ---- ---- Policyowner maintenance charges (56,250) ---- ---- ---------------- ---------------- --------------- Net increase(decrease) from policyowner transactions 1,325,861 ---- ---- ---------------- ---------------- --------------- Total increase(decrease) in net assets 1,411,217 ---- ---- Net assets at beginning of period ---- ---- ---- ---------------- ---------------- --------------- Net assets at end of period $ 1,411,217 $ ---- $ ---- ================ ================ ===============
The accompanying notes are an integral part of these financial statements. F-1 34
Ameritas Calvert ---------------------------------------------------------- --------------------------------------------------------- Select Balanced ---------------------------------------------------------- ---------------------------------------------------------- 2001 2000 1999 2001 2000 1999 -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ ---- $ ---- $ ---- $ 18,246 $ 858 $ ---- 7,940 ---- ---- 1,824 109 ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (7,940) ---- ---- 16,422 749 ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ ---- ---- ---- 8,889 1,514 ---- (7,630) ---- ---- (3,208) (321) ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (7,630) ---- ---- 5,681 1,193 ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 34,863 ---- ---- (27,071) (4,510) ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 19,293 $ ---- $ ---- $ (4,968) $ (2,568) $ ---- ==================== ================= ================== =================== ================= ================== $ (7,940) $ ---- $ ---- $ 16,422 $ 749 $ ---- (7,630) ---- ---- 5,681 1,193 ---- 34,863 ---- ---- (27,071) (4,510) ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 19,293 ---- ---- (4,968) (2,568) ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 240,150 ---- ---- 73,858 9,796 ---- 2,135,905 ---- ---- 404,742 47,118 ---- (22,456) ---- ---- (18,645) 213 ---- (88,977) ---- ---- (25,129) (1,463) ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 2,264,622 ---- ---- 434,826 55,664 ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 2,283,915 ---- ---- 429,858 53,096 ---- ---- ---- ---- 53,096 ---- ---- -------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 2,283,915 $ ---- $ ---- $ 482,954 $ 53,096 $ ---- ==================== ================= ================== =================== ================= ==================
F-1 35 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Calvert ------------------------------------------------- Intl. Equity ------------------------------------------------- 2001 2000 1999 ---------------- ----------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 162 $ ---- $ ---- Mortality and expense risk charge 748 112 ---- ---------------- ----------------- -------------- Net investment income(loss) (586) (112) ---- ---------------- ----------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 17,507 4,576 ---- Net realized gain(loss) on sale of fund shares (5,366) (837) ---- ---------------- ----------------- -------------- Net realized gain(loss) 12,141 3,739 ---- ---------------- ----------------- -------------- Change in unrealized appreciation(depreciation) (33,565) (6,476) ---- ---------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations $ (22,010) $ (2,849) $ ---- ================ ================= ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (586) $ (112) $ ---- Net realized gain(loss) 12,141 3,739 ---- Net change in unrealized appreciation(depreciation) (33,565) (6,476) ---- ---------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations (22,010) (2,849) ---- ---------------- ----------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 27,240 9,848 ---- Subaccounts transfers (including fixed account), net 98,533 47,623 ---- Transfers for policyowner benefits and terminations (529) 60 ---- Policyowner maintenance charges (7,990) (1,183) ---- ---------------- ----------------- -------------- Net increase(decrease) from policyowner transactions 117,254 56,348 ---- ---------------- ----------------- -------------- Total increase(decrease) in net assets 95,244 53,499 ---- Net assets at beginning of period 53,499 ---- ---- ---------------- ----------------- -------------- Net assets at end of period $ 148,743 $ 53,499 $ ---- ================ ================= ==============
The accompanying notes are an integral part of these financial statements. F-1 36 Calvert
--------------------------------------------------------------------------------------------------------------------- Mid Cap Small Cap ---------------------------------------------------------- ---------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ ---- $ ---- $ ---- $ ---- $ ---- $ ---- 6,523 1,484 ---- 4,194 445 ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (6,523) (1,484) ---- (4,194) (445) ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 59,416 59,778 ---- 14,242 12,978 ---- (81,509) (209) ---- 2,911 (3,729) ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (22,093) 59,569 ---- 17,153 9,249 ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (86,318) (96,220) ---- 55,869 (1,142) ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ (114,934) $ (38,135) $ ---- $ 68,828 $ 7,662 $ ---- =================== ================= ================== =================== ================= ================== $ (6,523) $ (1,484) $ ---- $ (4,194) $ (445) $ ---- (22,093) 59,569 ---- 17,153 9,249 ---- (86,318) (96,220) ---- 55,869 (1,142) ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (114,934) (38,135) ---- 68,828 7,662 ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 195,303 25,375 ---- 135,062 4,015 ---- 124,102 816,296 ---- 340,143 338,533 ---- (13,826) 325 ---- (1,253) 220 ---- (69,383) (12,021) ---- (43,870) (3,040) ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 236,196 829,975 ---- 430,082 339,728 ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 121,262 791,840 ---- 498,910 347,390 ---- 791,840 ---- ---- 347,390 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 913,102 $ 791,840 $ ---- $ 846,300 $ 347,390 $ ---- =================== ================= ================== =================== ================= ==================
F-1 37 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
American Century ------------------------------------------------- Income & Growth ------------------------------------------------- 2001 2000 1999 --------------- ------------------ -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 606 $ ---- $ ---- Mortality and expense risk charge 2,960 ---- ---- --------------- ------------------ -------------- Net investment income(loss) (2,354) ---- ---- --------------- ------------------ -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions ---- ---- ---- Net realized gain(loss) on sale of fund shares (6,407) ---- ---- --------------- ------------------ -------------- Net realized gain(loss) (6,407) ---- ---- --------------- ------------------ -------------- Change in unrealized appreciation(depreciation) 6,285 ---- ---- --------------- ------------------ -------------- Net increase(decrease) in net assets resulting from operations $ (2,476) $ ---- $ ---- =============== ================== ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (2,354) $ ---- $ ---- Net realized gain(loss) (6,407) ---- ---- Net change in unrealized appreciation(depreciation) 6,285 ---- ---- --------------- ------------------ -------------- Net increase(decrease) in net assets resulting from operations (2,476) ---- ---- --------------- ------------------ -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 124,527 ---- ---- Subaccounts transfers (including fixed account), net 896,788 ---- ---- Transfers for policyowner benefits and terminations (16,073) ---- ---- Policyowner maintenance charges (38,478) ---- ---- --------------- ------------------ -------------- Net increase(decrease) from policyowner transactions 966,764 ---- ---- --------------- ------------------ -------------- Total increase(decrease) in net assets 964,288 ---- ---- Net assets at beginning of period ---- ---- ---- --------------- ------------------ -------------- Net assets at end of period $ 964,288 $ ---- $ ---- =============== ================== ==============
The accompanying notes are an integral part of these financial statements. F-1 38
Invesco Salomon ---------------------------------------------------------- --------------------------------------------------------- Dynamics Capital ---------------------------------------------------------- ---------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ ---- $ ---- $ ---- $ 4,430 $ ---- $ ---- 2,471 ---- ---- 2,261 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (2,471) ---- ---- 2,169 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ ---- ---- ---- 2,827 ---- ---- (102,901) ---- ---- (3,916) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (102,901) ---- ---- (1,089) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (52,082) ---- ---- 1,052 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ (157,454) $ ---- $ ---- $ 2,132 $ ---- $ ---- =================== ================= ================== =================== ================= ================== $ (2,471) $ ---- $ ---- $ 2,169 $ ---- $ ---- (102,901) ---- ---- (1,089) ---- ---- (52,082) ---- ---- 1,052 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (157,454) ---- ---- 2,132 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 63,648 ---- ---- 147,758 ---- ---- 724,149 ---- ---- 581,276 ---- ---- (2,537) ---- ---- (44,276) ---- ---- (27,329) ---- ---- (36,599) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 757,931 ---- ---- 648,159 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 600,477 ---- ---- 650,291 ---- ---- ---- ---- ---- ---- ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 600,477 $ ---- $ ---- $ 650,291 $ ---- $ ---- =================== ================= ================== =================== ================= ==================
F-1 39 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Summit ----------------------------------------------- S&P MidCap ------------------------------------------------- 2001 2000 1999 ---------------- ----------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 74 $ ---- $ ---- Mortality and expense risk charge 1,298 ---- ---- ---------------- ----------------- -------------- Net investment income(loss) (1,224) ---- ---- ---------------- ----------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 37 ---- ---- Net realized gain(loss) on sale of fund shares (833) ---- ---- ---------------- ----------------- -------------- Net realized gain(loss) (796) ---- ---- ---------------- ----------------- -------------- Change in unrealized appreciation(depreciation) 37,013 ---- ---- ---------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations $ 34,993 $ ---- $ ---- ================ ================= ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (1,224) $ ---- $ ---- Net realized gain(loss) (796) ---- ---- Net change in unrealized appreciation(depreciation) 37,013 ---- ---- ---------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations 34,993 ---- ---- ---------------- ----------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 64,517 ---- ---- Subaccounts transfers (including fixed account), net 448,505 ---- ---- Transfers for policyowner benefits and terminations 2,241 ---- ---- Policyowner maintenance charges (18,060) ---- ---- ---------------- ----------------- -------------- Net increase(decrease) from policyowner transactions 497,203 ---- ---- ---------------- ----------------- -------------- Total increase(decrease) in net assets 532,196 ---- ---- Net assets at beginning of period ---- ---- ---- ---------------- ----------------- -------------- Net assets at end of period $ 532,196 $ ---- $ ---- ================ ================= ==============
The accompanying notes are an integral part of these financial statements. F-1 40
Summit --------------------------------------------------------------------------------------------------------------------- Russell Small Cap Nasdaq-100 Index ---------------------------------------------------------- ---------------------------------------------------------- 2001 2000 1999 2001 2000 1999 ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 930 $ ---- $ ---- $ ---- $ ---- $ ---- 694 ---- ---- 3,183 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 236 ---- ---- (3,183) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 424 ---- ---- ---- ---- ---- (651) ---- ---- (119,622) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ (227) ---- ---- (119,622) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 23,488 ---- ---- (90,592) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 23,497 $ ---- $ ---- $ (213,397) $ ---- $ ---- =================== ================= ================== =================== ================= ================== $ 236 $ ---- $ ---- $ (3,183) $ ---- $ ---- (227) ---- ---- (119,622) ---- ---- 23,488 ---- ---- (90,592) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 23,497 ---- ---- (213,397) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 39,898 ---- ---- 63,981 ---- ---- 228,815 ---- ---- 1,202,521 ---- ---- 2,293 ---- ---- (2,598) ---- ---- (11,390) ---- ---- (68,815) ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 259,616 ---- ---- 1,195,089 ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ 283,113 ---- ---- 981,692 ---- ---- ---- ---- ---- ---- ---- ---- ------------------- ----------------- ------------------ ------------------- ----------------- ------------------ $ 283,113 $ ---- $ ---- $ 981,692 $ ---- $ ---- =================== ================= ================== =================== ================= ==================
F-1 41 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V FOR THE PERIODS ENDED DECEMBER 31
Third Avenue ------------------------------------------------- Value ------------------------------------------------- 2001 2000 1999 ---------------- ----------------- -------------- STATEMENTS OF OPERATIONS Investment income: Dividend distributions received $ 1,361 $ ---- $ ---- Mortality and expense risk charge 8,909 ---- ---- ---------------- ----------------- -------------- Net investment income(loss) (7,548) ---- ---- ---------------- ----------------- -------------- Realized gain(loss) on investments: Net realized gain(loss) distributions 8,935 ---- ---- Net realized gain(loss) on sale of fund shares (8,285) ---- ---- ---------------- ----------------- -------------- Net realized gain(loss) 650 ---- ---- ---------------- ----------------- -------------- Change in unrealized appreciation(depreciation) 124,072 ---- ---- ---------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations $ 117,174 $ ---- $ ---- ================ ================= ============== STATEMENTS OF CHANGES IN NET ASSETS Increase(decrease) in net assets from operations: Net investment income(loss) $ (7,548) $ ---- $ ---- Net realized gain(loss) 650 ---- ---- Net change in unrealized appreciation(depreciation) 124,072 ---- ---- ---------------- ----------------- -------------- Net increase(decrease) in net assets resulting from operations 117,174 ---- ---- ---------------- ----------------- -------------- Net increase(decrease) from policyowner transactions: Payments received from policyowners 327,594 ---- ---- Subaccounts transfers (including fixed account), net 2,359,842 ---- ---- Transfers for policyowner benefits and terminations (53,794) ---- ---- Policyowner maintenance charges (117,076) ---- ---- ---------------- ----------------- -------------- Net increase(decrease) from policyowner transactions 2,516,566 ---- ---- ---------------- ----------------- -------------- Total increase(decrease) in net assets 2,633,740 ---- ---- Net assets at beginning of period ---- ---- ---- ---------------- ----------------- -------------- Net assets at end of period $ 2,633,740 $ ---- $ ---- ================ ================= ==============
The accompanying notes are an integral part of these financial statements. F-1 42 AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V NOTES TO FINANCIAL STATEMENTS FOR THE PERIODS ENDED DECEMBER 31, 2001, 2000 AND 1999 1. ORGANIZATION Ameritas Variable Life Insurance Company Separate Account V (the Account) was established on August 28, 1985, under Nebraska law by Ameritas Variable Life Insurance Company (AVLIC), a wholly owned subsidiary of AMAL Corporation, a holding company majority owned by Ameritas Life Insurance Corp. (ALIC) (an indirect wholly owned subsidiary of Ameritas Acacia Mutual Holding Company) and minority owned by AmerUs Life Insurance Company (AmerUs). The assets of the Account are segregated from AVLIC's other assets and are used only to support variable life products issued by AVLIC. The Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. The Account is made up of variable investment options called subaccounts for which accumulation units are separately maintained. Each subaccount corresponds to a single underlying non-publicly traded portfolio issued through a series fund. At December 31, 2001, there are fifty-four subaccounts available within the Account:
Fidelity Management and Research Fidelity Management and Research Company (Advisor) Company Fidelity (Fund) Fidelity, continued * Equity-Income IC (Subaccount) * Asset Mgr. SC (Commenced March 6, 1987) (Commenced November 29, 1999) * Equity-Income SC * Asset Mgr. SC2 (Commenced November 2, 1999) (Commenced November 26, 2001) * Equity-Income SC2 * Inv. Bond IC (Commenced November 28, 2001) (Commenced June 6, 1991) * Growth IC * Inv. Bond SC2 (Commenced March 6, 1987) (Commenced November 8, 2001) * Growth SC * Contrafund IC (Commenced November 2, 1999) (Commenced September 5, 1995) * Growth SC2 * Contrafund SC (Commenced November 28, 2001) (Commenced November 29, 1999) * High Income IC * Contrafund SC2 (Commenced March 6, 1987) (Commenced November 23, 2001) * High Income SC * Asset Mgr. Gr. IC (Commenced January 25, 2000) (Commenced September 13, 1995) * High Income SC2 * Asset Mgr. Gr. SC (Commenced December 3, 2001) (Commenced February 2, 2000) * Overseas IC * Asset Mgr. Gr. SC2 (Commenced March 6, 1987) (Commenced December 26, 2001) * Overseas SC (Commenced December 7, 1999) Fred Alger Management, Inc. * Overseas SC2 Alger (Commenced November 14, 2001) * Balanced * Asset Mgr. IC (Commenced June 28, 1993) (Commenced December 14, 1989) * Leveraged (Commenced September 13, 1995)
F-1 43
1. ORGANIZATION, continued Massachusetts Financial Services Calvert Asset Management Company, Inc. Company (See Note 4) MFS Calvert * Global Govern. * Balanced (Commenced September 13, 1995) (Commenced May 8, 2000) * Utilities * Intl. Equity (Commenced October 18, 1995) (Commenced July 20, 2000) * New Discovery * Mid Cap (Commenced November 12, 1999) (Commenced June 13, 2000) * Small Cap Morgan Stanley Asset Management (Commenced June 13, 2000) Morgan Stanley * Asian Equity American Century Investment (Commenced April 22, 1997) Management, Inc. (Ceased Business April 30, 2001) American Century * Emerging Markets * Income & Growth (Commenced April 8, 1997) (Commenced January 31, 2001) * Global Equity (Commenced April 17, 1997) INVESCO Funds Group, Inc. * Intl. Magnum Invesco (Commenced April 7, 1997) * Dynamics * U.S. Real Estate (Commenced January 19, 2001) (Commenced April 28, 1997) Salomon Brothers Asset Management Inc. Ameritas Investment Corp. (See Note 4) Salomon Ameritas * Capital * Emerging Growth (Commenced January 31, 2001) (Commenced October 29,1999) * Growth Summit Investment Partners, Inc. (Commenced October 29,1999) Summit * Growth with Income * S&P MidCap (Commenced October 29,1999) (Commenced February 13, 2001) * Income and Growth * Russell Small Cap (Commenced October 29,1999) (Commenced February 8, 2001) * Index 500 * Nasdaq-100 Index (Commenced October 29,1999) (Commenced January 19, 2001) * MidCap (Commenced October 29,1999) EQSF Advisers, Inc. * Money Market Third Avenue (Commenced October 28,1999) * Value * Research (Commenced January 2, 2001) (Commenced October 29,1999) * Small Cap (Commenced October 29,1999) * Micro Cap (Commenced January 5, 2001) * Select (Commenced January 5, 2001)
F-1 44 1. ORGANIZATION, continued SUBSTITUTIONS Pursuant to an order of the SEC allowing for the substitution, all policyowner funds invested in a portfolio of Fidelity Money Market were transferred to the Money Market subaccount of the Ameritas portfolio as of October 28, 1999. Also, as of October 29, 1999 pursuant to an order of the SEC allowing for the substitution, all policyowner funds invested in a portfolio of Fidelity Index 500 I-Class were transferred to the Index 500 subaccount of the Ameritas portfolio; all policyowner funds invested in a portfolio of Alger Management Growth were transferred to the Growth subaccount of the Ameritas portfolio; all policyowner funds invested in a portfolio of Alger Management Income and Growth were transferred to the Income and Growth subaccount of the Ameritas portfolio; all policyowner funds invested in a portfolio of Alger Management Small Capitalization Fund were transferred to the Small Cap subaccount of the Ameritas portfolio; all policyowner funds invested in a portfolio of Alger Management MidCap Growth were transferred to the MidCap Growth subaccount of the Ameritas portfolio; all policyowner funds invested in a portfolio of MFS Co. Emerging Growth Series were transferred to the Emerging Growth subaccount of the Ameritas portfolio; all policyowner funds invested in a portfolio of MFS Co. Research Series was transferred to the Research subaccount of the Ameritas portfolio; and all policyowner funds invested in a portfolio of MFS Co. Growth with Income Series were transferred to the Growth with Income subaccount of the Ameritas portfolio. 2. ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. VALUATION OF INVESTMENTS The assets of the subaccounts are carried at the net asset value of the underlying portfolios, adjusted for the accrual of dividends. The value of the policyowners' units corresponds to the investment in the underlying subaccounts. The availability of investment portfolio and subaccount options may vary between products. Share transactions and security transactions are accounted for on a trade date basis. Income from dividends and gains from realized gain distributions are recorded on the ex-distribution date. Realized gains and losses on the sales of investments are computed on the weighted average cost basis. FEDERAL AND STATE TAXES The operations of the Account are included in the federal income tax return of AVLIC, which is taxed as a life insurance company under the Internal Revenue Code. AVLIC has the right to charge the Account any federal income taxes, or provision for federal income taxes, attributable to the operations of the Account or to the policies funded in the Account. Currently, AVLIC does not make a charge for income or other taxes. Charges for state and local taxes, if any, attributable to the Account may also be made. RECLASSIFICATIONS Certain items on the prior period financial statements have been reclassified to conform to current period presentation. F-1 45 3. CHARGES AVLIC charges the subaccounts for mortality and expense risks assumed. This daily charge is made on the ending daily value of the net assets representing equity of policyowners held in each subaccount per each product's current policy provisions. Additional policyowner maintenance charges are made at intervals and in amounts per each product's current policy provisions. These charges are prorated against the balance in each investment option of the policyowner, including the Fixed Account option, which is not reflected in this separate account. 4. RELATED PARTIES During October 1999, AVLIC established a variable insurance trust (VIT) which contains the Ameritas subaccounts. The Ameritas subaccounts are managed by Ameritas Investment Corp., an affiliate of AVLIC. During the periods ended December 31, 2001, 2000 and 1999, these subaccounts incurred advisory fees of approximately $773,000, $894,000 and $119,000, respectively, payable to Ameritas Investment Corp. Other affiliates of AVLIC also provided sub-advisory and administrative services to these subaccounts during 2001, 2000 and 1999 of approximately $134,000, $125,000 and $25,000, respectively. Calvert Asset Management Company, Inc., an affiliate of AVLIC, serves as an investment advisor to the Calvert subaccounts. 5. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and proceeds from sales of investments in the subaccounts for the period ended December 31, 2001 were as follows:
Purchases Sales ----------------- ----------------- Fidelity: Equity-Income IC $ 8,168,596 $ 6,688,042 Equity-Income SC 169,419 37,929 Equity-Income SC2 2,314 198 Growth IC 13,093,297 10,248,013 Growth SC 225,479 45,019 Growth SC2 3,120 237 High Income IC 11,137,353 7,894,161 High Income SC 1,940,076 1,753,785 High Income SC2 3,460 --- Overseas IC 6,816,322 5,088,006 Overseas SC 69,982 36,605 Overseas SC2 327 6 Asset Mgr. IC 2,990,464 2,725,693 Asset Mgr. SC 101,185 75,425 Asset Mgr. SC2 10,184 22 Inv. Bond IC 11,458,486 2,950,018 Inv. Bond SC2 18,508 161 Contrafund IC 3,252,228 1,845,514 Contrafund SC 156,950 40,165 Contrafund SC2 17,379 97 Asset Mgr. Gr. IC 1,091,526 602,487 Asset Mgr. Gr. SC 12,502 515 Asset Mgr. Gr. SC2 658 ---
F-1 46 5. PURCHASES AND SALES OF INVESTMENTS, continued
Purchases Sales ----------------- ----------------- Alger: Balanced $ 2,204,774 $ 1,291,655 Leveraged 4,759,398 3,483,941 MFS: Global Govern. 989,593 1,189,986 Utilities 3,587,696 1,102,329 New Discovery 1,761,786 1,144,979 Morgan Stanley: Asian Equity 75 616,582 Emerging Markets 5,558,665 5,144,942 Global Equity 1,213,492 709,442 Intl. Magnum 609,491 598,409 U.S. Real Estate 1,006,795 610,840 Ameritas: Emerging Growth 4,994,859 3,968,131 Growth 4,121,640 4,380,457 Growth with Income 1,952,462 1,368,789 Income and Growth 3,274,141 2,322,981 Index 500 5,362,186 3,275,967 MidCap 4,380,969 3,468,720 Money Market 55,862,102 49,837,936 Research 1,349,040 815,796 Small Cap 6,718,532 6,176,698 Micro Cap 1,412,572 63,512 Select 2,567,076 310,393 Calvert: Balanced 578,237 118,099 Intl. Equity 172,182 38,006 Mid Cap 673,280 384,190 Small Cap 582,691 142,560 American Century: Income & Growth 1,055,240 90,831 Invesco: Dynamics 1,320,900 565,440 Salomon: Capital 753,066 99,910 Summit: S&P MidCap 506,933 10,916 Russell Small Cap 288,057 27,781
F-1 47 5. PURCHASES AND SALES OF INVESTMENTS, continued
Purchases Sales ----------------- ----------------- Summit, continued: Nasdaq-100 Index $ 1,644,889 $ 452,983 Third Avenue: 2,633,976 116,023 Value
6. UNIT VALUES A summary of unit values, units, net assets, investment income ratio (Inv. Income Ratio) as a percentage of average net assets (excludes mortality and expense risk charge and is affected by the timing of the declaration of dividends by the underlying fund portfolio), expenses as a percentage of average net assets (excluding the effect of expenses of the underlying fund portfolio and charges made directly to policyowner accounts through the redemption of units), and total return percentage (based upon the change in the unit value reported year-to-date, however, subaccounts which commenced in the current year, as shown in Note 1, are based on shorter return periods) for the period ended December 31 follows (amounts have been rounded):
Expenses Inv. as a % of Unit Net Assets Income Average Total Value ($) Units ($) Ratio Net Assets Return % ------------------------------------------------------------------------------------------- Min Max Min Max Min Max Fidelity: Equity-Income IC 2001 28.55 47.27 739,280 29,303,630 1.73 0.70 1.20 (6.09) (5.62) Equity-Income SC 2001 22.50 25.87 6,824 175,813 .86 0.90 0.90 (5.94) (5.94) Equity-Income SC2 2001 22.58 22.58 95 2,155 ---- 0.70 0.70 2.94 2.94 Growth IC 2001 50.11 62.70 820,789 48,197,582 .08 0.70 1.20 (18.64) (18.22) Growth SC 2001 33.22 39.32 8,825 346,256 ---- 0.90 0.90 (18.47) (18.47) Growth SC2 2001 33.32 33.32 87 2,896 ---- 0.70 0.70 1.92 1.92 High Income IC 2001 9.24 20.97 502,467 7,174,769 13.20 0.70 1.20 (12.79) (12.35) High Income SC 2001 6.35 7.56 6,977 52,276 .76 0.90 0.90 (12.69) (12.69) High Income SC2 2001 6.36 6.36 545 3,465 ---- 0.70 0.70 (0.06) (0.06)
F-1 48 6. UNIT VALUES, continued
Expenses Inv. as a % of Unit Net Assets Income Average Total Value ($) Units ($) Ratio Net Assets Return % ------------------------------------------------------------------------------------------- Min Max Min Max Min Max Fidelity, continued: Overseas IC 2001 18.92 21.80 594,496 12,241,284 5.96 0.70 1.20 (22.12) (21.72) Overseas SC 2001 13.77 17.10 6,536 107,989 5.22 0.90 0.90 (21.99) (21.98) Overseas SC2 2001 13.80 13.80 24 324 ---- 0.70 0.70 0.49 0.49 Asset Mgr. IC 2001 20.39 28.71 949,603 26,084,073 4.32 0.70 1.20 (5.23) (4.76) Asset Mgr. SC 2001 14.37 16.76 7,099 116,776 3.84 0.90 0.90 (5.10) (5.05) Asset Mgr. SC2 2001 14.35 14.35 716 10,276 ---- 0.70 0.70 0.07 0.07 Inv. Bond IC 2001 12.83 20.53 952,845 14,226,831 2.25 0.70 1.20 7.16 7.70 Inv. Bond SC2 2001 12.81 12.81 1,440 18,430 ---- 0.70 0.70 (1.94) (1.94) Contrafund IC 2001 25.36 26.29 758,024 19,550,919 .80 0.70 1.20 (13.29) (12.85) Contrafund SC 2001 19.90 23.35 12,178 279,891 .56 0.90 0.90 (13.28) (13.15) Contrafund SC2 2001 19.97 19.97 880 17,578 ---- 0.70 0.70 2.10 2.10 Asset Mgr. Gr. IC 2001 17.27 19.20 200,826 3,632,184 3.04 0.70 1.20 (8.50) (8.03) Asset Mgr. Gr. SC 2001 12.42 14.53 1,100 15,768 1.46 0.90 0.90 (8.68) (8.33) Asset Mgr. Gr. SC2 2001 12.43 12.43 53 659 ---- 0.70 0.70 1.06 1.06
F-1 49 6. UNIT VALUES, continued
Expenses Inv. as a % of Unit Net Assets Income Average Total Value ($) Units ($) Ratio Net Assets Return % ------------------------------------------------------------------------------------------- Min Max Min Max Min Max Alger: Balanced 2001 13.07 28.26 341,289 7,012,798 1.46 0.70 1.20 (3.10) (0.40) Leveraged 2001 31.57 39.74 438,930 17,275,718 ---- 0.70 1.20 (16.94) 4.16 MFS: Global Govern. 2001 10.09 12.62 57,066 673,929 3.43 0.70 1.20 0.46 4.02 Utilities 2001 15.94 24.77 312,494 6,990,658 3.25 0.70 1.20 (25.12) (1.81) New Discovery 2001 15.25 16.13 281,965 4,532,447 ---- 0.70 1.20 (6.16) 13.33 Morgan Stanley: Emerging Markets 2001 6.63 8.02 293,594 2,334,676 ---- 0.70 1.20 (7.61) 2.94 Global Equity 2001 12.19 14.20 246,734 3,476,134 1.09 0.70 1.20 (8.15) 2.12 Intl. Magnum 2001 9.44 10.04 164,340 1,633,829 .48 0.70 1.20 (20.26) 1.25 U.S. Real Estate 2001 12.08 14.22 145,417 2,051,449 4.21 0.70 1.20 4.67 9.08 Ameritas: Emerging Growth 2001 18.55 19.36 716,605 13,711,220 ---- 0.70 1.20 (36.44) 2.72 Growth 2001 47.34 66.28 460,660 29,527,532 .04 0.70 1.20 (13.17) 0.65 Growth with Income 2001 17.44 17.74 235,263 4,153,877 .61 0.70 1.20 (16.81) 1.26 Income and Growth 2001 14.08 46.52 462,327 12,013,598 .49 0.70 1.20 (16.40) 0.25
F-1 50 6. UNIT VALUES, continued
Expenses Inv. as a % of Unit Net Assets Income Average Total Value ($) Units ($) Ratio Net Assets Return % ------------------------------------------------------------------------------------------- Min Max Min Max Min Max Ameritas, continued: Index 500 2001 130.06 143.15 193,990 26,769,623 1.44 0.70 1.20 (13.46) 2.67 MidCap 2001 31.98 42.50 498,157 20,928,194 ---- 0.70 1.20 (8.47) 7.91 Money Market 2001 1.00 1.91 16,460,335 22,505,087 3.85 0.70 1.20 0.24 3.21 Research 2001 16.68 17.51 244,966 4,249,655 ---- 0.70 1.20 (21.82) 2.04 Small Cap 2001 29.14 40.63 440,182 17,683,260 ---- 0.70 1.20 (28.14) 8.82 Micro Cap 2001 19.69 19.84 71,482 1,411,217 ---- 0.70 0.90 7.55 32.07 Select 2001 17.68 17.82 128,850 2,283,915 ---- 0.70 0.90 3.28 15.51 Calvert: Balanced 2001 1.76 1.94 250,679 482,954 8.18 0.70 1.20 (8.05) 0.02 Intl. Equity 2001 12.84 15.79 9,451 148,743 .16 0.70 1.20 (25.64) 1.08 Mid Cap 2001 25.51 29.13 31,428 913,102 ---- 0.70 1.20 (13.22) 2.16 Small Cap 2001 14.80 15.48 54,762 846,300 ---- 0.70 1.20 8.37 15.34 American Century: Income & Growth 2001 6.41 6.47 149,390 964,288 .15 0.70 0.90 (11.43) 3.25 Invesco: Dynamics 2001 12.47 13.14 47,481 600,477 ---- 0.70 0.90 (28.17) 4.41
F-1 51 6. UNIT VALUES, continued
Expenses Inv. as a % of Unit Net Assets Income Average Total Value ($) Units ($) Ratio Net Assets Return % ------------------------------------------------------------------------------------------- Min Max Min Max Min Max Salomon: Capital 2001 15.16 15.30 42,559 650,291 1.43 0.70 0.90 (6.76) 10.13 Summit: S&P MidCap 2001 9.29 11.69 49,870 532,196 .04 0.70 0.90 (7.30) 2.48 Russell Small Cap 2001 9.60 10.08 28,678 283,113 .90 0.70 0.90 (5.87) 3.07 Nasdaq-100 Index 2001 4.43 4.46 221,670 981,692 ---- 0.70 0.90 (41.47) (4.13) Third Avenue: Value 2001 17.11 17.19 153,406 2,633,740 .11 0.70 0.90 4.17 15.87
7. CHANGES IN UNITS OUTSTANDING The changes in units outstanding were as follows: 2001 2000 1999 ------------------- -------------------- -------------------- Fidelity: Equity-Income IC Units issued 400,324 315,664 292,235 Units redeemed (394,722) (341,597) (278,761) ------------------- -------------------- -------------------- Net increase (decrease) 5,602 (25,933) 13,474 =================== ==================== ==================== Equity-Income SC Units issued 7,327 2,323 24 Units redeemed (2,623) (227) ---- ------------------- -------------------- -------------------- Net increase (decrease) 4,704 2,096 24 =================== ==================== ==================== Equity-Income SC2 Units issued 104 ---- ---- Units redeemed (9) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 95 ---- ---- =================== ==================== ==================== Growth IC Units issued 543,688 461,735 375,289 Units redeemed (548,149) (433,103) (327,321) ------------------- -------------------- -------------------- Net increase (decrease) (4,461) 28,632 47,968 =================== ==================== ====================
F-1 52 7. CHANGES IN UNITS OUTSTANDING, continued
2001 2000 1999 ------------------- -------------------- -------------------- Fidelity, continued: Growth SC Units issued 7,831 5,896 363 Units redeemed (3,657) (1,606) ---- ------------------- -------------------- -------------------- Net increase (decrease) 4,174 4,290 363 =================== ==================== ==================== Growth SC2 Units issued 95 ---- ---- Units redeemed (8) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 87 ---- ---- =================== ==================== ==================== High Income IC Units issued 2,082,657 340,021 1,096,648 Units redeemed (1,911,913) (340,972) (1,154,404) ------------------- -------------------- -------------------- Net increase (decrease) 170,744 (951) (57,756) =================== ==================== ==================== High Income SC Units issued 263,244 4,288 ---- Units redeemed (260,381) (174) ---- ------------------- -------------------- -------------------- Net increase (decrease) 2,863 4,114 ---- =================== ==================== ==================== High Income SC2 Units issued 564 ---- ---- Units redeemed (19) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 545 ---- ---- =================== ==================== ==================== Overseas IC Units issued 1,248,475 1,502,035 1,743,762 Units redeemed (1,263,750) (1,438,192) (1,817,242) ------------------- -------------------- -------------------- Net increase (decrease) (15,275) 63,843 (73,480) =================== ==================== ==================== Overseas SC Units issued 4,213 7,371 2 Units redeemed (2,648) (2,401) ---- ------------------- -------------------- -------------------- Net increase (decrease) 1,565 4,970 2 =================== ==================== ==================== Overseas SC2 Units issued 24 ---- ---- Units redeemed ---- ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 24 ---- ---- =================== ==================== ==================== Asset Mgr. IC Units issued 215,475 202,246 224,590 Units redeemed (250,223) (291,256) (279,205) ------------------- -------------------- -------------------- Net increase (decrease) (34,748) (89,010) (54,615) =================== ==================== ====================
F-1 53 7. CHANGES IN UNITS OUTSTANDING, continued
2001 2000 1999 ------------------- -------------------- -------------------- Fidelity, continued: Asset Mgr. SC Units issued 6,635 8,968 23 Units redeemed (5,079) (3,446) (2) ------------------- -------------------- -------------------- Net increase (decrease) 1,556 5,522 21 =================== ==================== ==================== Asset Mgr. SC2 Units issued 718 ---- ---- Units redeemed (2) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 716 ---- ---- =================== ==================== ==================== Inv. Bond IC Units issued 1,037,096 266,447 252,427 Units redeemed (373,725) (210,065) (282,178) ------------------- -------------------- -------------------- Net increase (decrease) 663,371 56,382 (29,751) =================== ==================== ==================== Inv. Bond SC2 Units issued 1,495 ---- ---- Units redeemed (55) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 1,440 ---- ---- =================== ==================== ==================== Contrafund IC Units issued 410,246 395,490 379,774 Units redeemed (380,137) (316,114) (256,290) ------------------- -------------------- -------------------- Net increase (decrease) 30,109 79,376 123,484 =================== ==================== ==================== Contrafund SC Units issued 8,133 7,955 301 Units redeemed (3,095) (1,113) (1) ------------------- -------------------- -------------------- Net increase (decrease) 5,038 6,842 300 ==================== =================== ==================== Contrafund SC2 Units issued 890 ---- ---- Units redeemed (10) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 880 ---- ---- =================== ==================== ==================== Asset Mgr. Gr. IC Units issued 101,045 86,072 95,269 Units redeemed (86,886) (89,153) (69,512) ------------------- -------------------- -------------------- Net increase (decrease) 14,159 (3,081) 25,757 =================== ==================== ==================== Asset Mgr. Gr. SC Units issued 947 270 ---- Units redeemed (95) (23) ---- ------------------- -------------------- -------------------- Net increase (decrease) 852 247 ---- =================== ==================== ====================
F-1 54 7. CHANGES IN UNITS OUTSTANDING, continued
2001 2000 1999 ------------------- -------------------- -------------------- Fidelity, continued: Asset Mgr. Gr. SC2 Units issued 53 ---- ---- Units redeemed ---- ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 53 ---- ---- =================== ==================== ==================== Alger: Balanced Units issued 217,912 206,160 154,071 Units redeemed (175,069) (116,338) (77,753) ------------------- -------------------- -------------------- Net increase (decrease) 42,843 89,822 76,318 =================== ==================== ==================== Leveraged Units issued 286,000 444,023 367,520 Units redeemed (271,905) (355,252) (186,114) ------------------- -------------------- -------------------- Net increase (decrease) 14,095 88,771 181,406 =================== ==================== ==================== MFS: Global Govern. Units issued 134,005 128,507 73,804 Units redeemed (153,737) (88,022) (86,730) ------------------- -------------------- -------------------- Net increase (decrease) (19,732) 40,485 (12,926) =================== ==================== ==================== Utilities Units issued 221,578 170,552 151,416 Units redeemed (160,194) (115,669) (101,817) ------------------- -------------------- -------------------- Net increase (decrease) 61,384 54,883 49,599 =================== ==================== ==================== New Discovery Units issued 214,178 357,016 8,741 Units redeemed (183,978) (113,854) (139) ------------------- -------------------- -------------------- Net increase (decrease) 30,200 243,162 8,602 =================== ==================== ==================== Morgan Stanley: Asian Equity Units issued 12,034 668,113 256,066 Units redeemed (140,106) (657,712) (202,533) ------------------- -------------------- -------------------- Net increase (decrease) (128,072) 10,401 53,533 =================== ==================== ==================== Emerging Markets Units issued 892,706 333,845 264,842 Units redeemed (829,240) (257,572) (223,385) ------------------- -------------------- -------------------- Net increase (decrease) 63,466 76,273 41,457 =================== ==================== ====================
F-1 55 7. CHANGES IN UNITS OUTSTANDING, continued
2001 2000 1999 ------------------- -------------------- -------------------- Morgan Stanley, continued: Global Equity Units issued 179,857 186,047 164,502 Units redeemed (146,454) (165,674) (127,808) ------------------- -------------------- -------------------- Net increase (decrease) 33,403 20,373 36,694 ==================== =================== ==================== Intl. Magnum Units issued 160,960 230,007 151,394 Units redeemed (158,268) (191,648) (109,068) ------------------- -------------------- -------------------- Net increase (decrease) 2,692 38,359 42,326 =================== ==================== ==================== U.S. Real Estate Units issued 136,241 149,778 76,330 Units redeemed (112,515) (114,940) (72,431) ------------------- -------------------- -------------------- Net increase (decrease) 23,726 34,838 3,899 =================== ==================== ==================== Ameritas: Emerging Growth Units issued 680,661 522,210 439,400 Units redeemed (673,515) (437,873) (379,721) ------------------- -------------------- -------------------- Net increase (decrease) 7,146 84,337 59,679 =================== ==================== ==================== Growth Units issued 257,366 227,443 254,952 Units redeemed (257,203) (178,810) (191,269) ------------------- -------------------- -------------------- Net increase (decrease) 163 48,633 63,683 =================== ==================== ==================== Growth with Income Units issued 228,811 144,382 214,693 Units redeemed (200,163) (118,163) (208,398) ------------------- -------------------- -------------------- Net increase (decrease) 28,648 26,219 6,295 =================== ==================== ==================== Income and Growth Units issued 278,583 253,391 224,115 Units redeemed (237,511) (155,504) (154,270) ------------------- -------------------- -------------------- Net increase (decrease) 41,072 97,887 69,845 =================== ==================== ==================== Index 500 Units issued 115,278 112,821 121,731 Units redeemed (107,653) (96,803) (83,317) ------------------- -------------------- -------------------- Net increase (decrease) 7,625 16,018 38,414 =================== ==================== ==================== MidCap Units issued 289,874 406,499 215,899 Units redeemed (290,305) (294,800) (187,382) ------------------- -------------------- -------------------- Net increase (decrease) (431) 111,699 28,517 =================== ==================== ====================
F-1 56 7. CHANGES IN UNITS OUTSTANDING, continued
2001 2000 1999 ------------------- -------------------- -------------------- Ameritas, continued: Money Market Units issued 100,178,358 87,732,721 85,248,552 Units redeemed (95,041,570) (89,797,434) (79,932,183) ------------------- -------------------- -------------------- Net increase (decrease) 5,136,788 (2,064,713) 5,316,369 =================== ==================== ==================== Research Units issued 165,199 174,536 157,984 Units redeemed (145,744) (132,066) (129,735) ------------------- -------------------- -------------------- Net increase (decrease) 19,455 42,470 28,249 =================== ==================== ==================== Small Cap Units issued 707,194 424,613 362,075 Units redeemed (691,087) (409,826) (368,450) ------------------- -------------------- -------------------- Net increase (decrease) 16,107 14,787 (6,375) =================== ==================== ==================== Micro Cap Units issued 103,758 ---- ---- Units redeemed (32,276) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 71,482 ---- ---- ==================== =================== ==================== Select Units issued 198,372 ---- ---- Units redeemed (69,522) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 128,850 ---- ---- =================== ==================== ==================== Calvert: Balanced Units issued 324,017 31,864 ---- Units redeemed (98,702) (6,499) ---- ------------------- -------------------- -------------------- Net increase (decrease) 225,315 25,365 ---- =================== ==================== ==================== Intl. Equity Units issued 10,518 3,028 ---- Units redeemed (3,601) (495) ---- ------------------- -------------------- -------------------- Net increase (decrease) 6,917 2,533 ---- =================== ==================== ==================== Mid Cap Units issued 29,928 32,956 ---- Units redeemed (22,234) (9,222) ---- ------------------- -------------------- -------------------- Net increase (decrease) 7,694 23,734 ---- =================== ==================== ==================== Small Cap Units issued 52,731 29,253 ---- Units redeemed (22,680) (4,542) ---- ------------------- -------------------- -------------------- Net increase (decrease) 30,051 24,711 ---- =================== ==================== ====================
F-1 57 7. CHANGES IN UNITS OUTSTANDING, continued
2001 2000 1999 ------------------- -------------------- -------------------- American Century: Income & Growth Units issued 214,655 ---- ---- Units redeemed (65,265) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 149,390 ---- ---- =================== ==================== ==================== Invesco: Dynamics Units issued 99,718 ---- ---- Units redeemed (52,237) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 47,481 ---- ---- =================== ==================== ==================== Salomon: Capital Units issued 61,505 ---- ---- Units redeemed (18,946) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 42,559 ---- ---- =================== ==================== ==================== Summit: S&P MidCap Units issued 58,828 ---- ---- Units redeemed (8,958) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 49,870 ---- ---- =================== ==================== ==================== Russell Small Cap Units issued 34,571 ---- ---- Units redeemed (5,893) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 28,678 ---- ---- =================== ==================== ==================== Nasdaq-100 Index Units issued 339,012 ---- ---- Units redeemed (117,342) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 221,670 ---- ---- =================== ==================== ==================== Third Avenue: Value Units issued 220,202 ---- ---- Units redeemed (66,796) ---- ---- ------------------- -------------------- -------------------- Net increase (decrease) 153,406 ---- ---- =================== ==================== ====================
8. ACCOUNTING PRONOUNCEMENT As required, effective January 1, 2001, the subaccounts have adopted the provisions of the AICPA Audit and Accounting Guide, Audits of Investment Companies. This guide has no impact on the underlying value of the net assets, but has changed the required disclosures of the subaccounts on a prospective basis. F-1 58 INDEPENDENT AUDITORS' REPORT To the Board of Directors Ameritas Variable Life Insurance Company Lincoln, Nebraska We have audited the accompanying balance sheets of Ameritas Variable Life Insurance Company (a wholly owned subsidiary of AMAL Corporation) as of December 31, 2001 and 2000, and the related statements of operations, comprehensive income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of Ameritas Variable Life Insurance Company as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. /S/ Deloitte & Touche LLP Lincoln, Nebraska February 13, 2002 F-II 1 AMERITAS VARIABLE LIFE INSURANCE COMPANY BALANCE SHEETS (in thousands, except share data)
December 31 ------------------------------------- 2001 2000 ----------------- ------------------ ASSETS Investments: Fixed maturity securities, available for sale (amortized cost $197,116 - 2001 and $141,027 - 2000) $ 199,551 $ 139,933 Equity securities (amortized cost $2,031 - 2001 and $2,031 - 2000) 1,960 1,745 Mortgage loans on real estate 2,907 2,091 Loans on insurance policies 29,391 23,186 ----------------- ------------------ Total Investments 233,809 166,955 ----------------- ------------------ Cash and cash equivalents 46,927 18,347 Accrued investment income 3,487 2,873 Reinsurance receivable-affiliate 519 9,870 Reinsurance recoverable 1,369 2,414 Prepaid reinsurance premiums 4,100 4,542 Deferred policy acquisition costs 164,234 160,827 Federal income tax receivable 3,228 4,161 Other 3,080 2,705 Separate accounts 1,936,397 2,262,680 ----------------- ------------------ Total Assets $ 2,397,150 $ 2,635,374 ================= ==================
The accompanying notes are an integral part of these financial statements. F-II 2 AMERITAS VARIABLE LIFE INSURANCE COMPANY BALANCE SHEETS (in thousands, except share data)
December 31 ------------------------------------- 2001 2000 ----------------- ------------------ LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES Policy and contract reserves $ 4,924 $ 3,323 Policy and contract claims 251 2,831 Accumulated contract values 321,867 242,471 Unearned policy charges 2,762 2,390 Unearned reinsurance ceded allowance 3,758 3,946 Deferred federal income tax payable 10,643 6,846 Accounts payable - affiliates 1,811 4,199 Other 4,162 2,550 Separate accounts 1,936,397 2,262,680 ----------------- ------------------ Total Liabilities $ 2,286,575 $ 2,531,236 ----------------- ------------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDER'S EQUITY Common stock, par value $100 per share; authorized 50,000 shares, issued and outstanding 40,000 shares 4,000 4,000 Additional paid-in capital 58,370 58,370 Retained earnings 47,822 41,950 Accumulated other comprehensive income (loss) 383 (182) ----------------- ------------------ Total Stockholder's Equity $ 110,575 $ 104,138 ----------------- ------------------ Total $ 2,397,150 $ 2,635,374 ================= ==================
The accompanying notes are an integral part of these financial statements. F-II 3 AMERITAS VARIABLE LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS (in thousands)
Years Ended December 31 --------------------------------------------------------- 2001 2000 1999 ----------------- ----------------- ------------------- INCOME: Insurance revenues: Contract charges $ 62,172 $ 61,627 $ 51,834 Premium-reinsurance ceded (11,489) (9,135) (8,253) Reinsurance ceded allowance 4,519 4,223 3,594 Investment revenues: Investment income, net 13,550 11,864 13,970 Realized gains(losses), net 230 (973) (1,786) Other 3,246 1,790 2,521 ----------------- ----------------- ------------------- 72,228 69,396 61,880 ----------------- ----------------- ------------------- BENEFITS AND EXPENSES: Policy benefits: Death benefits 3,088 2,357 2,805 Interest credited 13,272 11,076 12,548 Change in policy and contract reserves 1,601 784 633 Other 153 226 - Sales and operating expenses 26,808 22,711 22,277 Amortization of deferred policy acquisition costs 21,734 25,306 12,760 ----------------- ----------------- ------------------- 66,656 62,460 51,023 ----------------- ----------------- ------------------- Income before federal income taxes 5,572 6,936 10,857 Income taxes - current (3,793) (693) 4,898 Income taxes - deferred 3,493 (289) (639) ----------------- ----------------- ------------------- Total income taxes (300) (982) 4,259 ----------------- ----------------- ------------------- Net income $ 5,872 $ 7,918 $ 6,598 ================= ================= ===================
The accompanying notes are an integral part of these financial statements. F-II 4 AMERITAS VARIABLE LIFE INSURANCE COMPANY STATEMENTS OF COMPREHENSIVE INCOME (in thousands)
Years Ended December 31 ------------------------------------------------------- 2001 2000 1999 ------------------ ---------------- ------------------ Net income $ 5,872 $ 7,918 $ 6,598 Other comprehensive income (loss), net of tax: Unrealized gains (losses) on securities: Unrealized holding gains (losses) arising during period (net of deferred tax expense (benefit) of $385, $70 and ($1,610) for 2001, 2000 and 1999 respectively) 714 130 (2,990) Reclassification adjustment for (gains) losses included in net income (net of deferred tax benefit (expense) of $(80), $340 and $625 for 2001, 2000 and 1999 respectively) (149) 633 1,161 ------------------ ---------------- ------------------ Other comprehensive income (loss) 565 763 (1,829) ------------------ ---------------- ------------------ Comprehensive income $ 6,437 $ 8,681 $ 4,769 ================== ================ ==================
The accompanying notes are an integral part of these financial statements. F-II 5
AMERITAS VARIABLE LIFE INSURANCE COMPANY STATEMENTS OF STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands, except shares) Accumulated Common Stock Additional Other ------------------------ Paid - in Retained Comprehensive Shares Amount Capital Earnings Income(loss) Total ----------- ---------- ---------- ---------- ------------- ---------- BALANCE, January 1, 1999 40,000 $ 4,000 $ 40,370 $ 27,434 $ 884 $ 72,688 Net unrealized investment loss, net - - - - (1,829) (1,829) Capital contribution - - 2,500 - - 2,500 Net income - - - 6,598 - 6,598 ---------- ---------- ---------- ---------- ------------ --------- BALANCE, December 31, 1999 40,000 4,000 42,870 34,032 (945) 79,957 Net unrealized investment gain, net - - - - 763 763 Capital contribution - - 15,500 - - 15,500 Net income - - - 7,918 - 7,918 ----------- ---------- ----------- ---------- ------------ --------- BALANCE, December 31, 2000 40,000 4,000 58,370 41,950 (182) 104,138 Net unrealized investment gain, net - - - - 565 565 Net income - - - 5,872 - 5,872 ----------- ---------- ----------- ---------- ------------ --------- BALANCE, December 31, 2001 40,000 $ 4,000 $ 58,370 $ 47,822 $ 383 $ 110,575 =========== ========== ============ ============ ============ ==============
The accompanying notes are an integral part of these financial statements. F-II 6 AMERITAS VARIABLE LIFE INSURANCE COMPANY STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31 -------------------------------------------------- 2001 2000 1999 --------------- ---------------- ---------------- OPERATING ACTIVITIES: Net Income $ 5,872 $ 7,918 $ 6,598 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of deferred policy acquisition costs 21,734 25,306 12,760 Policy acquisition costs deferred (28,014) (36,440) (39,491) Interest credited to contract values 13,272 11,076 12,548 Amortization of discounts or premiums (130) (52) 67 Net gains on other invested assets - - (2,830) Net realized (gains) losses on investment transactions (230) 973 1,786 Deferred income taxes 3,493 (289) (639) Change in assets and liabilities: Accrued investment income (614) (431) (17) Reinsurance receivable-affiliate 9,351 26,051 - Reinsurance recoverable 1,045 (2,071) 302 Prepaid reinsurance premium 442 (854) (587) Federal income tax receivable 933 (7,083) (19) Other assets (375) 135 (1,145) Policy and contract reserves 1,601 784 633 Policy and contract claims (2,580) 1,886 130 Unearned policy charges 372 360 216 Unearned reinsurance ceded allowance (188) 4 346 Other liabilities (776) (7,175) 5,838 --------------- ---------------- ---------------- Net cash from operating activities 25,208 20,098 (3,504) --------------- ---------------- ---------------- INVESTING ACTIVITIES: Purchase of fixed maturity securities available for sale (81,138) (29,350) (48,474) Purchase of mortgage loans on real estate (1,000) (855) (1,400) Purchase of equity securities (4,000) - - Purchase of other invested assets - - (1,252) Proceeds from maturities or repayment of fixed maturity securities available for sale 13,867 14,127 11,242 Proceeds from sales of fixed maturity securities available for sale 10,814 2,842 7,762 Proceeds from repayments of mortgage loans on real estate 181 154 - Proceeds from the sale of equity securities 4,729 - - Proceeds from the sale of other invested assets - - 1,162 Net change in loans on insurance policies (6,205) (6,687) (5,550) --------------- ---------------- ---------------- Net cash from investing activities (62,752) (19,769) (36,510) --------------- ---------------- ----------------
The accompanying notes are an integral part of these financial statements. F-II 7 AMERITAS VARIABLE LIFE INSURANCE COMPANY STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31 -------------------------------------------------- 2001 2000 1999 ---------------- ----------------- --------------- FINANCING ACTIVITIES: Capital contribution $ - $ 15,500 $ 2,500 Net change in accumulated contract values 66,124 (9,452) 37,473 ---------------- ----------------- --------------- Net cash from financing activities 66,124 6,048 39,973 ---------------- ----------------- --------------- INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS 28,580 6,377 (41) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 18,347 11,970 12,011 ---------------- ----------------- --------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 46,927 $ 18,347 $ 11,970 ================ ================= =============== Supplemental cash flow information: Cash (refunded) paid for income taxes $ (4,726) $ 6,390 $ 4,917
The accompanying notes are an integral part of these financial statements. F-II 8 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Ameritas Variable Life Insurance Company (the Company), a stock life insurance company domiciled in the State of Nebraska, is a wholly-owned subsidiary of AMAL Corporation, a holding company majority owned by Ameritas Life Insurance Corp. (ALIC) with the minority interest held by AmerUs Life Insurance Company (AmerUs). ALIC is a wholly owned subsidiary of Ameritas Holding Company (AHC) which is a wholly owned subsidiary of Ameritas Acacia Mutual Holding Company (AAMHC). The Company currently issues variable life insurance, variable annuity, and fixed premium annuity policies, none of which are participating with respect to dividends. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates susceptible to significant change include deferred policy acquisition costs, reserves and income taxes. The principal accounting and reporting practices followed are: INVESTMENTS The Company classifies its securities into categories based upon the Company's intent relative to the eventual disposition of the securities. The first category, held to maturity securities, is comprised of fixed maturity securities which the Company has the positive intent and ability to hold to maturity. These securities are carried at amortized cost. The second category, available for sale securities, may be sold to address the liquidity and other needs of the Company. Securities classified as available for sale are carried at fair value on the balance sheet with unrealized gains and losses excluded from operations and reported as a separate component of stockholder's equity, net of related deferred acquisition costs and income tax effects. The third category, trading securities, is for debt and equity securities acquired for the purpose of selling them in the near term. The Company has classified all of its securities as available for sale. Realized investment gains and losses on sales of securities are determined on the specific identification method. Mortgage loans on real estate are carried at amortized cost less an allowance for estimated uncollectible amounts except impaired loans which are measured at the present value of expected future cash flows, or alternatively, the observable market price or the fair value of the collateral. Total impaired loans as of December 31, 2001, 2000 and 1999, and the associated interest income were not material. The Company records write-offs or allowances for its investments based upon an evaluation of specific problem investments. The Company reviews, on a continual basis, all invested assets to identify investments where the Company may have credit concerns. Investments with credit concerns include those the Company has identified as experiencing a deterioration in financial condition. F-II 9 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) -------------------------------------------------------------------------------- CASH EQUIVALENTS The Company considers all highly liquid debt securities purchased with a remaining maturity of less than three months to be cash equivalents. SEPARATE ACCOUNTS The Company operates Separate Accounts on which the earnings or losses accrue exclusively to contractholders. The assets (mutual fund investments) and liabilities of each account are clearly identifiable and distinguishable from other assets and liabilities of the Company. Assets are reported at fair value. PREMIUM REVENUE AND BENEFITS TO POLICYOWNERS RECOGNITION OF UNIVERSAL LIFE-TYPE CONTRACTS REVENUE AND BENEFITS TO POLICYOWNERS Universal life-type policies are insurance contracts with terms that are not fixed and guaranteed. The terms that may be changed could include one or more of the amounts assessed the policyowner, premiums paid by the policyowner or interest accrued to policyowners' balances. Amounts received as payments for such contracts are reflected as deposits in accumulated contract values and are not reported as premium revenues. Revenues for universal life-type policies consist of charges assessed against policy account values for deferred policy loading, mortality risk expense, the cost of insurance and policy administration. Policy benefits and claims that are charged to expense include interest credited to contracts under the fixed account investment option and benefit claims incurred in the period in excess of related policy account balances. RECOGNITION OF INVESTMENT CONTRACT REVENUE AND BENEFITS TO POLICYOWNERS Contracts that do not subject the Company to risks arising from policyowner mortality or morbidity are referred to as investment contracts. Certain deferred annuities are considered investment contracts. Amounts received as payments for such contracts are reflected as deposits in accumulated contract values and are not reported as premium revenues. Revenues for investment products consist of investment income and policy administration charges. Contract benefits that are charged to expense include benefit claims incurred in the period in excess of related contract balances and interest credited to contract balances. DEFERRED POLICY ACQUISITION COSTS Those costs of acquiring new business, which vary with and are directly related to the production of new business, have been deferred to the extent that such costs are deemed recoverable from future premiums. Such costs include commissions, certain costs of policy issuance and underwriting, and certain variable distribution expenses. Costs deferred related to universal life-type policies and investment-type contracts are amortized generally over the lives of the policies, in relation to the present value of estimated gross profits from mortality, investment and expense margins. The estimated gross profits are reviewed and adjusted periodically based on actual experience and changes in assumptions. F-II 10 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued) -------------------------------------------------------------------------------- DEFERRED POLICY ACQUISITION COSTS, (continued) A roll-forward of the amounts reflected in the balance sheets as deferred policy acquisition costs is as follows:
December 31 --------------------------------------------- 2001 2000 1999 ---------------------------------------------------------------------- -------------- -------------- --------------- Beginning balance $ 160,827 $ 152,297 $ 121,236 Acquisition costs deferred 28,014 36,440 39,491 Amortization of deferred policy acquisition costs (21,734) (25,306) (12,760) Adjustment for unrealized investment (gain) loss (2,873) (2,604) 6,145 Balance released under co-insurance agreement (note 4) - - (1,815) ---------------------------------------------------------------------- -------------- -------------- --------------- Ending balance $ 164,234 $ 160,827 $ 152,297 ---------------------------------------------------------------------- -------------- -------------- ---------------
To the extent that unrealized gains or losses on available for sale securities would result in an adjustment of deferred policy acquisition costs had those gains or losses actually been realized, the related unamortized deferred policy acquisition costs are recorded as an adjustment of the unrealized investment gains or losses included in stockholder's equity. FUTURE POLICY AND CONTRACT BENEFITS Liabilities for future policy and contract benefits left with the Company on variable universal life and annuity-type contracts are based on the policy account balance, and are shown as accumulated contract values. In addition, the Company carries as future policy benefits a liability for additional coverages offered under policy riders. INCOME TAXES The provision for income taxes includes amounts currently payable and deferred income taxes resulting from the cumulative differences in assets and liabilities determined on a tax return and financial statement basis at the current enacted tax rates. RECLASSIFICATIONS Certain items on the prior year financial statements have been reclassified to conform to current year presentation. F-II 11 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 2. INVESTMENTS Investment income summarized by type of investment was as follows:
Years Ended December 31 ------------------------------------------------- 2001 2000 1999 ------------------------------------------------------------------ ----------------- --------------- --------------- Fixed maturity securities available for sale $ 10,846 $ 9,539 $ 9,644 Equity securities 159 159 159 Mortgage loans on real estate 158 160 34 Loans on insurance policies 1,645 1,203 845 Cash equivalents 1,033 1,029 681 Other invested assets - - 2,830 ------------------------------------------------------------------ ----------------- --------------- --------------- Gross investment income 13,841 12,090 14,193 Investment expenses 291 226 223 ------------------------------------------------------------------ ----------------- --------------- --------------- Net investment income $ 13,550 $ 11,864 $ 13,970 ------------------------------------------------------------------ ----------------- --------------- --------------- Net pretax realized investment gains (losses) were as follows: Years Ended December 31 ------------------------------------------ 2001 2000 1999 ------------------------------------------------------------------------- -------------- ------------- ------------- Net losses on disposals of fixed maturity securities available for sale (note 4) $ (499) $ (973) $ (1,786) Net gains on disposal of equity securities (note 9) 729 - - ------------------------------------------------------------------------- -------------- ------------- ------------- Net pretax realized investment gains(losses) $ 230 $ (973) $ (1,786) ------------------------------------------------------------------------- -------------- ------------- ------------- The Company recorded other than temporary impairments on bonds of $1,002 and $800 for 2001 and 2000, respectively. There were no other than temporary impairments on bonds recorded by the Company in 1999. Proceeds from sales of securities and gross gains and losses realized on those sales were as follows: Year Ended December 31, 2001 ------------------------------------------ Proceeds Gains Losses ------------------------------------------------------------------------- -------------- ------------- ------------- Fixed maturity securities available for sale $ 10,814 $ 452 $ 72 Equity securities 4,729 729 - ------------------------------------------------------------------------- -------------- ------------- ------------- Total $ 15,543 $ 1,181 $ 72 ------------------------------------------------------------------------- -------------- ------------- ------------- Year Ended December 31, 2000 ------------------------------------------- Proceeds Gains Losses ------------------------------------------------------------------------ --------------- ------------- ------------- Fixed maturity securities available for sale $ 2,842 $ - $ 45 ------------------------------------------------------------------------ --------------- ------------- ------------- Year Ended December 31, 1999 ------------------------------------------- Proceeds Gains Losses ------------------------------------------------------------------------ --------------- ------------- ------------- Fixed maturity securities available for sale $ 7,762 $ 6 $ 80 ------------------------------------------------------------------------ --------------- ------------- -------------
F-II 12 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 2. INVESTMENTS, (continued) The amortized cost and fair value of investments in securities by type of investment were as follows:
December 31, 2001 ------------------------------------------------------ Amortized Gross Unrealized Fair ------------------------ Cost Gains Losses Value ------------------------------------------------------------ -------------- ------------ ----------- -------------- U. S. Corporate $ 155,920 $ 4,031 $ 2,492 $ 157,459 Mortgage-backed 34,525 670 75 35,120 U.S. Treasury securities and obligations of U.S. government agencies 6,671 303 2 6,972 ------------------------------------------------------------ -------------- ------------ ----------- -------------- Total fixed maturity securities available for sale 197,116 5,004 2,569 199,551 ------------------------------------------------------------ -------------- ------------ ----------- -------------- Equity securities 2,031 - 71 1,960 ------------------------------------------------------------ -------------- ------------ ----------- -------------- Total securities available for sale $ 199,147 $ 5,004 $ 2,640 $ 201,511 ------------------------------------------------------------ -------------- ------------ ----------- -------------- December 31, 2000 ------------------------------------------------------ Amortized Gross Unrealized Fair ------------------------ Cost Gains Losses Value ------------------------------------------------------------ -------------- ------------ ----------- -------------- U. S. Corporate $ 102,895 $ 1,412 $ 2,621 $ 101,686 Mortgage-backed 32,095 179 267 32,007 U.S. Treasury securities and obligations of U.S. government agencies 6,037 203 - 6,240 ------------------------------------------------------------ -------------- ------------ ----------- -------------- Total fixed maturity securities available for sale 141,027 1,794 2,888 139,933 ------------------------------------------------------------ -------------- ------------ ----------- -------------- Equity securities 2,031 - 286 1,745 ------------------------------------------------------------ -------------- ------------ ----------- -------------- Total securities available for sale $ 143,058 $ 1,794 $ 3,174 $ 141,678 ------------------------------------------------------------ -------------- ------------ ----------- --------------
The amortized cost and fair value of fixed maturity securities available for sale by contractual maturity at December 31, 2001 are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Amortized Fair Cost Value ------------------------------------------------------------------------------------------------------------------- Due in one year or less $ - $ - Due after one year through five years 80,790 82,927 Due after five years through ten years 67,646 67,865 Due after ten years 14,155 13,639 Mortgage-backed securities 34,525 35,120 ------------------------------------------------------------------------------------------------------------------- Total $ 197,116 $ 199,551 -------------------------------------------------------------------------------------------------------------------
At December 31, 2001, the Company had fixed maturity securities available for sale with a carrying value of $3,395 on deposit with various state insurance departments. F-II 13 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 3. INCOME TAXES The items that give rise to deferred tax assets and liabilities relate to the following:
December 31 -------------------------------- 2001 2000 ----------------------------------------------------------------------------------- --------------- ---------------- Deferred policy acquisition costs $ 47,824 $ 47,686 Prepaid expenses 1,435 1,012 Net unrealized investment gains 600 - Other 182 - ----------------------------------------------------------------------------------- --------------- ---------------- Gross deferred tax liability 50,041 48,698 ----------------------------------------------------------------------------------- --------------- ---------------- Future policy and contract benefits 36,521 39,108 Net unrealized investment losses - 685 Capital loss carryforward 434 434 Deferred future revenues 2,282 2,218 Other 161 121 ----------------------------------------------------------------------------------- --------------- ---------------- Gross deferred tax asset 39,398 42,566 Less valuation allowance - 714 ----------------------------------------------------------------------------------- --------------- ---------------- Total deferred tax asset after valuation allowance 39,398 41,852 ----------------------------------------------------------------------------------- --------------- ---------------- Net deferred tax liability 10,643 $ 6,846 ----------------------------------------------------------------------------------- --------------- ----------------
The Company has approximately $1,241 of capital loss carryforwards as of December 31, 2001 that may be applied against future capital gains. The capital loss carryforwards of approximately $1,103 and $138 will expire in 2004 and 2005, respectively. In 2000 and 1999, the Company provided for a valuation allowance against the deferred tax asset related to the capital loss carryforwards. In 2001, this valuation allowance was released as the capital loss carryforwards are expected to be realized. The difference between the U.S. federal income tax rate and the tax provision rate is summarized as follows:
Years Ended December 31 --------------------------------------------------- 2001 2000 1999 -------------------------------------------------------------------------------------------------------------------- Federal statutory tax rate 35.0 % 35.0 % 35.0 % Dividends received deduction (26.6) (21.3) - Income tax liability released due to settlement on exam - (29.6) - Release of valuation allowance (12.8) - - Other (1.0) 1.7 4.2 -------------------------------------------------------------------------------------------------------------------- Effective tax rate (5.4) % (14.2) % 39.2 % --------------------------------------------------------------------------------------------------------------------
The Company's federal income tax returns through March 31, 1996 were examined and settled with the IRS in 2000. Based on the settlement, the Company released the income tax liability provided in prior years of $2,050. F-II 14 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 4. RELATED PARTY TRANSACTIONS Affiliates provide technical, financial, legal, marketing and investment advisory support to the Company under administrative service agreements. The cost of these services to the Company for years ended December 31, 2001, 2000 and 1999 was $16,192, $12,573 and $12,265, respectively. The Company has entered into reinsurance agreements (yearly renewable term) with affiliates. Under these agreements, these affiliates assume life insurance risk in excess of the Company's retention limit. These reinsurance contracts do not relieve the Company of its obligations to its policyowners. The Company recorded $5,355, $4,912 and $4,419 of reinsurance premiums, net of ceded allowances, to affiliates for the years ended December 31, 2001, 2000 and 1999, respectively. The Company has recorded reinsurance recoveries from affiliates of $4,462, $3,603 and $7,268 for the years ended December 31, 2001, 2000 and 1999, respectively, reflected in the statement of operations as a reduction of death benefits. Reinsurance recoverable of $1,243 and $2,414 and prepaid reinsurance premiums of $2,766 and $2,671 as of December 31, 2001 and 2000, respectively, relate to these agreements and are included in the balance sheet amounts of the same titles. Effective June 30, 1999 the Company agreed to 100% co-insure its equity indexed annuity business to AmerUs in a non-cash transaction. Under the terms of the agreement investments with a fair value of $57,648 and an amortized cost of $59,390 were transferred to AmerUs. In return AmerUs co-insured the full liability for this business resulting in a $59,561 reinsurance receivable from affiliate being recorded. The Company also released the $1,815 of deferred policy acquisition costs, which it was carrying on this block. AmerUs, through assumption reinsurance, has assumed approximately 99% and 83% of this business as of December 31, 2001 and 2000, respectively, reducing the reinsurance receivable - affiliate to $519 and $9,870 as of December 31, 2001 and 2000, respectively. As a condition to assumption reinsurance, certain states have required the Company remain contingently liable in the event the assuming reinsurer is unable to fulfill its obligations. The Company was contingently liable for $14,210 and $11,610 of additional reserves as of December 31, 2001 and 2000, respectively. The Company has entered into guarantee agreements with ALIC, AmerUs and AMAL Corporation whereby they guarantee the full, complete and absolute performance of all duties and obligations of the Company. The Company's variable life and annuity products are distributed through Ameritas Investment Corp. (AIC), a wholly-owned subsidiary of AMAL Corporation. Policies placed by this affiliate generated commission expense of $26,745, $34,544 and $35,736 for the years ended December 31, 2001, 2000 and 1999, respectively. During 1999, the Company formed a variable insurance trust (VIT). The Company, ALIC, and an affiliate, First Ameritas Life Insurance Corp. of New York (FALIC), offer the VIT as an investment option to policyowners through their Separate Accounts. The Company had separate account investments of $827,893 and $1,021,332 in the VIT as of December 31, 2001 and 2000, respectively. ALIC had separate account investments of $465 and $600 in the VIT as of December 31, 2001 and 2000, respectively. FALIC had separate account investments of $339 as of December 31, 2001, the first year the VIT was available to its policyowners. Affiliates of the Company provide investment advisory and administrative services to the VIT on a fee basis. F-II 15 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 4. RELATED PARTY TRANSACTIONS, (continued) During 2000, the Company began offering Calvert Variable Series, Inc. (CVS) mutual funds, an affiliate, to policyowners through the Separate Accounts. Separate Account investments in mutual funds offered through CVS were $ 15,574 and $6,009 as of December 31, 2001 and 2000, respectively. The Company provides supervision, training and marketing support for variable product distributions to AIC, an affiliate. Beginning in 2001, the Company received fees of $1,420 for these services. The fees are reflected in other income on the statement of operations. Transactions with related parties are not necessarily indicative of revenues and expenses which would have occurred had the parties not been related. 5. BENEFIT PLANS In past years, the Company was included in a multiple employer non-contributory defined-benefit pension plan (pension plan) and a defined contribution plan that covered substantially all full-time employees of ALIC and its subsidiaries and AMAL Corporation and its subsidiaries. During 2000, the pension plan was closed to new participants, and all existing participants were given two options for future participation. The first option was to continue participation in the pension plan and defined contribution plan. Pension plan costs include current service costs, which are accrued and funded on a current basis, and past service costs, which are amortized over the average remaining service life of all employees on the adoption date. The assets and liabilities of this plan are not segregated. Total Company contributions for the years ended December 31, 2001, 2000 and 1999 were $6, $221 and $159, respectively. The second option for pension plan participants was to elect to end participation in the pension plan, fully vest in their accumulated pension benefits, and receive Company contributions to their defined contribution plan accounts on a quarterly basis. During 2000, the pension plan and defined contribution plan each merged with the respective pension plan and defined contribution plan of an affiliated company, and both are now sponsored by AHC. While the pension plans were merged, AMAL Corporation and its subsidiaries will continue to have a different benefit formula. Company matching contributions under the defined contribution plan range from 0.5% to 3% in 2001 and 2000, and from 1% to 3% in 1999 of the participant's compensation. In addition, for those employees who elected to terminate their participation in the pension plan, and for new full time employees subsequent to the closing of the pension plan, the Company makes a contribution of 6.0% of the participant's compensation. Total Company contributions for the years ended December 31, 2001, 2000 and 1999 were $235, $108 and $47, respectively. The Company is also included in the post-retirement benefit plan providing group medical coverage to retired employees of AMAL Corporation and its subsidiaries. For associates eligible to retire on or before January 1, 2000, these benefits are a specified percentage of premium until age 65 and a flat dollar amount thereafter. For associates eligible for retirement after January 1, 2000, benefits will be provided up to the date when the associate becomes eligible for Medicare. Employees become eligible for these benefits upon the attainment of age 55, 15 years of service and participation in the plan for the F-II 16 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 5. BENEFIT PLANS, (continued) immediately preceding 5 years. Benefit costs include the expected cost of post retirement benefits for newly eligible employees, interest cost, and gains and losses arising from differences between actuarial assumptions and actual experience. Total Company contributions were $31, $35 and $12 for the years ended December 31, 2001, 2000 and 1999, respectively. Expenses for the defined benefit plan and post retirement group medical plan are allocated to the Company based on the number of associates in AMAL Corporation and its subsidiaries. 6. INSURANCE REGULATORY MATTERS Net income (loss), as determined in accordance with statutory accounting practices, was ($5,802), $6,874 and ($4,513) for 2001, 2000 and 1999, respectively. The Company's statutory surplus was $60,516, $63,665 and $41,637 at December 31, 2001, 2000 and 1999, respectively. The Company is required to maintain a certain level of surplus to be in compliance with state laws and regulations. Company surplus is monitored by state regulators to ensure compliance with risk based capital requirements. Under statutes of the Insurance Department of the State of Nebraska, the Company is limited in the amount of dividends it can pay to its stockholder. The Company adopted the provisions of the National Association of Insurance Commissioner's Codification of Statutory Accounting Practices for the preparation of statutory financial statements effective January 1, 2001. The adoption of the new accounting principles has the effect of increasing statutory surplus at January 1, 2001 by $2,854, which relates primarily to accounting principles regarding income taxes. 7. FAIR VALUE OF FINANCIAL INSTRUMENTS The following disclosures are made regarding fair value information about certain financial instruments for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates, in many cases, may not be realized in immediate settlement of the instrument. All nonfinancial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The fair value estimates presented herein are based on pertinent information available to management as of December 31, 2001 and 2000. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date; therefore, current estimates of fair value may differ significantly from the amounts presented herein. F-II 17 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 7. FAIR VALUE OF FINANCIAL INSTRUMENTS, (continued) The following methods and assumptions were used by the Company in estimating its fair value disclosures for each class of financial instrument for which it is practicable to estimate a value: Fixed maturity securities available for sale -- For publicly traded securities, fair value is determined using an independent pricing source. For securities without a readily ascertainable fair value, the value has been determined using an interest rate spread matrix based upon quality, weighted average maturity and Treasury yields. Equity securities -- Fair value is determined using an independent pricing source. Mortgage Loans on real estate -- Mortgage loans in good standing are valued on the basis of discounted cash flow. The interest rate that is assumed is based upon the weighted average term of the mortgage and appropriate spread over Treasuries. There were no mortgage loans in default at December 31, 2001 and 2000. Loans on insurance policies -- Fair value for loans on insurance policies are estimated using a discounted cash flow analysis at interest rates currently offered for similar loans with similar remaining terms. Loans on insurance policies with similar characteristics are aggregated for purposes of the calculations. Cash and cash equivalents, accrued investment income, reinsurance receivable and recoverable -- The carrying amounts equal fair value. Accumulated contract values -- Funds on deposit which do not have fixed maturities are carried at the amount payable on demand at the reporting date, which approximates fair value. Estimated fair values are as follows:
December 31 -------------------------------------------------------- 2001 2000 ------------------------- -- --------------------------- Carrying Fair Carrying Fair Amount Value Amount Value ----------------------------------------------------------- ------------ ------------ -- ------------ -------------- Financial assets: Fixed maturity securities, available for sale $ 199,551 $ 199,551 $ 139,933 $ 139,933 Equity securities 1,960 1,960 1,745 1,745 Mortgage loans on real estate 2,907 2,981 2,091 2,138 Loans on insurance policies 29,391 25,185 23,186 18,948 Cash and cash equivalents 46,927 46,927 18,347 18,347 Accrued investment income 3,487 3,487 2,873 2,873 Reinsurance receivable - affiliate 519 519 9,870 9,870 Reinsurance recoverable 1,369 1,369 2,414 2,414 Financial liabilities: Accumulated contract values excluding amounts held under insurance contracts $ 286,059 $ 286,059 $ 204,577 $ 204,577
F-II 18 AMERITAS VARIABLE LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 (in thousands) 8. COMMITMENTS AND CONTINGENCIES INVESTMENTS Mortgage loan commitments of $1,250 were outstanding for investments to be purchased in subsequent years as of December 31, 2001. There were no mortgage loan commitments outstanding as of December 31, 2000. These commitments have been made in the normal course of business and are not reflected in the accompanying financial statements. The Company's exposure to credit loss is represented by the contractual notional amount of these commitments. The Company uses the same credit policies and collateral requirements in making commitments and conditional obligations as it does for on-balance sheet instruments. LITIGATION From time to time, the Company is subject to litigation in the normal course of business. Management does not believe that the Company is party to any such pending litigation which would have a material adverse effect on its financial statements or future operations. 9. SEPARATE ACCOUNTS The Company is currently marketing variable life and variable annuity products, which have Separate Accounts as an investment option. Separate Account V (Account V) was formed to receive and invest premium receipts from variable life insurance policies issued by the Company. Separate Account VA-2 (Account VA-2) was formed to receive and invest premium receipts from variable annuity policies issued by the Company. Both Separate Accounts are registered under the Investment Company Act of 1940, as amended, as unit investment trusts. Assets of the Separate Accounts are invested in mutual funds and are carried at fair value and are only used to support variable products issued by the Company. During 2001, the Company made initial investments totaling $4,000 into two new mutual fund options offered through Account VA-2. The Company withdrew its investments and related earnings by December 31, 2001 in the amount of $4,729. The realized gains are recorded in the statement of operations. Amounts in the Separate Accounts include policyowner investments in mutual fund options offered through affiliates (See note 4). Account V and VA-2's assets and liabilities are segregated from the other assets and liabilities of the Company. Amounts in the Separate Accounts are as follows:
December 31 --------------------------------------- 2001 2000 ---------------------------------------------------------------------------- ------------------- ------------------- Separate Account V $ 371,818 $ 393,900 Separate Account VA-2 1,564,579 1,868,780 ---------------------------------------------------------------------------- ------------------- ------------------- $ 1,936,397 $ 2,262,680 ---------------------------------------------------------------------------- ------------------- -------------------
F-II 19 AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO APPENDIX A EMPLOYEE BENEFIT PLAN INFORMATION STATEMENT The purpose of this statement is to inform you as an independent Fiduciary of the Employee Benefit Plan, of the Sales Representative's relationship to and compensation from Ameritas Variable Life Insurance Company (AVLIC), as well as to describe certain fees and charges under the Corporate Benefit VUL Policy being purchased from the Sales Representative. The Sales Representative is appointed with AVLIC as its Sales Representative and is a Securities Registered Representative. In this position, the Sales Representative is employed to procure and submit to AVLIC applications for contracts, including applications for Corporate Benefit VUL. COMMISSIONS, FEES AND CHARGES The following commissions, fees and charges apply to Corporate Benefit VUL (Policy): SALES COMMISSION: AVLIC pays commission to the broker-dealers, which in turn pay commissions to the registered representative who sells this Policy. The commission may equal an amount up to 30% of premium in the first Policy Year and up to 12% of premium in renewal years. Broker-dealers may also receive a service fee up to an annualized rate of 0.50% of the Accumulation Value beginning in the sixth Policy Year. Compensation arrangements may vary among broker-dealers. In addition, AVLIC may also pay override payments, expense allowances, bonuses, wholesaler fees, and training allowances. Registered representatives who meet certain production standards may receive additional compensation. From time to time, additional sales incentives may be provided to broker-dealers. COST OF INSURANCE: A monthly charge for the Policy and any riders. The Cost of Insurance Rates are shown on the Policy Schedule. MONTHLY PER POLICY CHARGE: AVLIC will make a per Policy charge of $15.00 per month (maximum $15.00) during the first Policy Year and $7.00 per month (maximum $12.00) thereafter. This charge is guaranteed not to increase above the maximum. MONTHLY PER $1000 CHARGE FOR ADMINISTRATIVE EXPENSES: The first ten Policy Years, there is a monthly charge per $1000 of initial Specified Amount. In addition, there is a monthly charge per $1000 of each increase in Specified Amount for ten years from the date of increase. The per $1000 rates for both the initial Specified Amount and each increase vary by Issue Age, gender, and risk class. (See the Policy Schedule for rates.) DAILY ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE: AVLIC makes a daily charge of the value of the average daily net assets of the Account under the policies equal to an annual rate of 0.15% (maximum 0.15%). This charge is subtracted when determining the daily accumulation unit value. This charge is guaranteed not to increase above the maximum and is designed to reimburse AVLIC for administrative expenses of issuing, servicing and maintaining the policies. AVLIC does not expect to make a profit on this fee. MORTALITY AND EXPENSE RISK CHARGE: AVLIC imposes a charge to compensate it for bearing certain mortality and expense risks under the policies. AVLIC makes a daily charge of the value of the average daily net assets of the Account under the policies equal to an annual rate of 0.75% (maximum 0.95%) in Policy Years 1-15 and 0.30% (maximum 0.50%) thereafter. This charge is subtracted when determining the daily accumulation unit value. AVLIC guarantees that this charge will never increase above the maximum. If this charge is insufficient to cover assumed risks, the loss will fall on AVLIC. Conversely, if the charge proves more than sufficient, any excess will be added to AVLIC's surplus. No mortality and expense risk charge is imposed on the Fixed Account. CORPORATE BENEFIT VUL A-1 PARTIAL AND FULL WITHDRAWALS: Partial withdrawals may be made, subject to certain restrictions. The Death Benefit will be reduced by the amount of the partial withdrawal. A partial withdrawal is subject to a maximum charge not to exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial withdrawal charge is the lesser of $25 or 2%). You may Surrender the Policy at any time for its Net Cash Surrender Value. There is no surrender charge. PERCENT OF PREMIUM CHARGE: AVLIC will deduct a percent of premium charge upon receipt of a premium payment. Currently, this charge is 3.0% of the premium paid (maximum 5.0%). FUND INVESTMENT ADVISORY FEES AND EXPENSES: At the direction of the Policy Owner, Separate Account V purchases shares of Funds which are available for investment under this Policy. The net assets of Separate Account V will reflect the value of the Fund shares and therefore, investment advisory fees and other expenses of the Funds. A complete description of these fees and expenses is contained in the Funds' prospectuses. CORPORATE BENEFIT VUL A-2 UNDERTAKING TO FILE REPORTS Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore, or hereafter duly adopted pursuant to authority conferred in that section. Registrant makes the following representation pursuant to the National Securities Markets Improvements Act of 1996: Ameritas Variable Life Insurance Company represents that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. RULE 484 UNDERTAKING AVLIC'S By-laws provide as follows: The Company shall indemnify any person who was, or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is or was a director, officer, or employee of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorney's fees, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding to the full extent authorized by the laws of Nebraska. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. REPRESENTATION PURSUANT TO RULE 6E-3(T) This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment Company Act of 1940. CONTENTS OF REGISTRATION STATEMENT This Registration Statement comprises the following Papers and Documents: The facing sheet. The prospectus consisting of 124 pages. The undertaking to file reports. The undertaking pursuant to Rule 484. Representations pursuant to Rule 6e-3(T). The signatures. Written consents of the following: (a) Donald R. Stading (c) Deloitte & Touche LLP The Following Exhibits: 1. The following exhibits correspond to those required by paragraph A of the instructions as to exhibits in Form N-8B-2. (1) Resolution of the Board of Directors of AVLIC Authorizing Establishment of the Account. 1 (2) Not applicable. (3) (a) Principal Underwriting Agreement. 1 (b) Proposed Form of Selling Agreement. 1 (c) Commission Schedule. 6 (d) Amendment to Principal Underwriting Agreement. 2 (4) Not Applicable. (5) (a) Proposed Form of Policy. 6 (b) Proposed Form of Policy Riders. 6 (6) (a) Articles of incorporation of Ameritas Variable Life Insurance Company. 2 (b) Bylaws of Ameritas Variable Life Insurance Company. 3 (7) Not applicable. (8) (a) Participation Agreement in the Variable Insurance Products Fund. 2 (b) Participation Agreement in the Alger American Fund. 2 (c) Participation Agreement in the MFS Variable Insurance Trust. 1 (d) Participation Agreement in the Morgan Stanley Universal Funds, Inc. 1 (e) Participation Agreement in the Calvert Variable Series, Inc. Ameritas Portfolios. 4 (f) Form of Participation Agreement in the Calvert Variable Series, Inc. Social Portfolios. 7 (g) Form of Participation Agreement in the American Century Variable Portfolios, Inc. 7 (h) Form of Participation Agreement in the INVESCO Variable Investment Funds, Inc. 7 (i) Form of Participation Agreement in the Salomon Brothers Variable Series Funds Inc. 7 (j) Form of Participation Agreement in the Summit Mutual Funds, Inc. 7 (k) Form of Participation Agreement in the Third Avenue Variable Series Trust. 7 (9) Not Applicable. (10) Application for Policy. 6 (11) Code of Ethics. 5 2. (a)(b) Opinion and Consent of Donald R. Stading. 3. No financial statements will be omitted from the final Prospectus pursuant to Instruction 1(b) or (c) or Part I. 4. Not applicable. 5. Not applicable. 6. Consent of Deloitte & Touche LLP. 7. Form of Notice of Withdrawal Right and Refund pursuant to Rule 6e-3(T)(b) (13)(viii) under the Investment Company Act of 1940. 2 8. Powers of Attorney. 8 Footnotes: 1 Incorporated by reference to the initial Registration Statement for Ameritas Variable Life Insurance Company Separate Account V, File No. 333-15585, filed November 5, 1996. 2 Incorporated by reference to the Pre-Effective Amendment to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account V, File No. 333-15585, filed January 17, 1997. 3 Incorporated by Reference to Pre-Effective Amendment No. 1 to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account VA-2, File No. 333-36507, filed February 20, 1998. 4 Incorporated by reference to Post-Effective Amendment No. 5 to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account V, File No. 333-15585, filed August 30, 1999. 5 Incorporated by reference to Post-Effective Amendment No. 6 to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account V, File No. 333-15585, filed February 29, 2000. 6 Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account V, File No. 333-95163, filed April 5, 2000. 7 Incorporated by reference to Post-Effective Amendment No. 7 to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account V, File No. 333-14845, filed November 22, 2000. 8 Incorporated by reference to Post-Effective Amendment No. 7 to the Registration Statement for Ameritas Variable Life Insurance Company Separate Account VA-2, File No. 333-46675, filed March 29, 2002. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant, Ameritas Variable Life Insurance Company Separate Account V, certifies that it meets all the requirements for effectiveness of this Post-Effective Amendment No. 3 to Registration Statement Number 333-95163 pursuant to Rule 485(b) under the Securities Act of 1933 and has caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized in the City of Lincoln, County of Lancaster, State of Nebraska on this 5th day of April, 2002. AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT V, Registrant AMERITAS VARIABLE LIFE INSURANCE COMPANY, Depositor By: Lawrence J. Arth * --------------------------------- Chairman of the Board As required by the Securities Act of 1933, this Amendment to the Registration Statement has been signed by the following persons in the capacities indicated on April 5, 2002. SIGNATURE TITLE --------- ----- Lawrence J. Arth * Director, Chairman of the Board and Chief Executive Officer William J. Atherton * Director, President and Chief Operating Officer Kenneth C. Louis * Director, Executive Vice President Gary R. McPhail * Director, Executive Vice President Thomas C. Godlasky * Director, Senior Vice President and Chief Investment Officer JoAnn M. Martin * Director, Vice President and Chief Financial Officer Robert C. Barth * Controller (PRINCIPAL ACCOUNTING OFFICER) William W. Lester * Treasurer (PRINCIPAL FINANCIAL OFFICER) /S/ Donald R. Stading Secretary and General Counsel -------------------------- Donald R. Stading * Signed by Donald R. Stading under Powers of Attorney executed effective as of January 25, 2001. EXHIBIT EXHIBIT INDEX ------- ------------- 2. (a)(b) Opinion and Consent of Donald R. Stading 6. Consent of Deloitte & Touche LLP.