485BPOS 1 d418218d485bpos.htm FIDELITY INVESTMENTS VARIABLE LIFE ACCOUNT I FIDELITY INVESTMENTS VARIABLE LIFE ACCOUNT I
Table of Contents

As filed with the SEC on April 28, 2023

Registration No. 333-103174

Registration No. 811-05258

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-6

 

 

REGISTRATION STATEMENT

UNDER

       THE SECURITIES ACT OF 1933   
  Pre-Effective Amendment No.   
  Post-Effective Amendment No. 24   

REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

       Amendment No. 27   

 

 

FIDELITY INVESTMENTS VARIABLE LIFE ACCOUNT I

(Exact Name of Registrant)

FIDELITY INVESTMENTS LIFE INSURANCE COMPANY

(Name of Depositor)

 

 

900 Salem Street

Smithfield, Rhode Island 02917

(Address of Depositor’s Principal Executive Offices)

Depositor’s Telephone Number: 1-800-544-8888

 

 

GERALD W. PATTERSON

President

Fidelity Investments Life Insurance Company

900 Salem Street

Smithfield, Rhode Island 02917

(Name and Address of Agent for Service)

 

 

Copy to:

MICHAEL BERENSON

MORGAN, LEWIS & BOCKIUS LLP

1111 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

 

 

It is proposed that this filing will become effective (check appropriate box):

 

immediately upon filing pursuant to paragraph (b)

on April 29, 2023, pursuant to paragraph (b)

60 days after filing pursuant to paragraph (a)(1)

on (date), pursuant to paragraph (a)(1) of Rule 485 under the Securities Act.

If appropriate, check the following box:

 

this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

 

 

 


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PROSPECTUS

April 29, 2023

This prospectus describes the important features of Fidelity Lifetime Reserves®, an individual, flexible premium, variable universal life insurance policy (the “Policy”) issued by Fidelity Investments Life Insurance Company (“we” or “FILI”). Fidelity Lifetime Reserves is designed to provide death benefit protection. Each Policy was issued as either:

 

  1.

a Single Life Policy, in which we pay Insurance Proceeds to the named Beneficiaries upon the death of the single insured person (“Insured”),

or

 

  2.

a Survivorship Life Policy, in which we pay Insurance Proceeds to the named Beneficiaries upon the death of the last survivor of two insured persons (“Insureds”).

Unless we specify otherwise in this prospectus, the features of a Single Life Policy and a Survivorship Life Policy are the same.

Investment Options available under the Policy are subaccounts of Fidelity Investments Variable Life Account I (the “Variable Account”).

PLEASE NOTE: Currently, we do not offer the Policy for sale to new investors.

Important Disclosures:

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

Additional information about certain investment products, including variable life insurance, has been prepared by the Securities and Exchange Commission’s staff and is available at Investor.gov.

 

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TABLE OF CONTENTS

 

Glossary    4

Important Information You Should Consider About the Policy

   8

Overview of the Policy

   11

Fee Tables

   14

1. Principal Risks of Investing in the Policy

   17

2. FILI, the Variable Account, and the Funds

   19

(a). FILI and The Variable Account

   19

(b). The Funds

   19

(c). Legal Proceedings

   20

3. General Description of the Policy

   20

(a). Purchasing a Policy

   20

(b). Selecting and Changing the Beneficiary

   21

(c). Death of Owner

   21

(d). Transferring Ownership and Assigning Policy Rights

   22

(e). Surrenders and Partial Withdrawals

   22

(f). Loans

   24

4. Charges and Other Deductions

   26

(a). Sales or Surrender Charges

   26

(b). State Tax Charge

   26

(c). Monthly Deduction

   26

(d). Mortality and Expense Risk Charge

   28

(e). Charges on Loans

   28

(f). Exchange Charge

   28

(g). Fund Expenses

   28

(h). Reduction in Charges

   29

5. Premiums, Policy Account Values, and Investment Option Values

   29

(a). Premiums

   29

(b). Allocating Premiums Among Investment Options and the Fixed Account

   30

(c). Policy Account Values and Investment Option Values

   31

6. Death Benefit and Insurance Proceeds

   32

(a). Overview of Death Benefit

   32

(b). Setting the Death Benefit at Purchase

   32

(c). Changing the Death Benefit after Purchase

   34

(d). Policy Validity

   36

(e). Extended Maturity

   37

7. Other Benefits Available Under the Policy

   38

(a). Overview of Other Benefits

   38

(b). More Details on Other Benefits and Riders

   40

 

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8. Policy Lapse and Reinstatement

   43

(a). Death During Grace Period

   43

(b). No Lapse Guarantee

   43

(c). Policy Reinstatement

   44

9. The Fixed Account

   44

10. Making Exchanges Among Investment Options and the Fixed Account

   45

(a). Overview

   45

(b). Making Exchanges by Telephone

   45

(c). Effective Date of Exchanges Among Investment Options

   46

(d). Frequent Exchanges Among Investment Options

   46

(e). Exchanges To and From the Fixed Account

   48

(f) Written Requests Received at the Company

   48

11. Tax Considerations

   49

(a). Tax Status of the Policy

   49

(b). IRC Qualification

   50

(c). Modified Endowment Contracts

   50

(d). Distributions from Policies Classified as Modified Endowment Contracts

   51

(e). Distributions from Policies Not Classified as Modified Endowment Contracts

   51

(f). Policy Loan Interest

   51

(g). Investment in the Policy

   51

(h). Policy Lapse

   51

(i). Other Tax Considerations

   52

12. More Information about the Policy and the Variable Account

   52

(a). Signature Guarantee or Customer Authentication

   52

(b). Voting Rights

   52

(c). Changes in Investment Options

   53

(d). Resolving Material Conflicts

   53

Appendix A: Funds Available Under the Policy

   54

 

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GLOSSARY

Accelerated Benefit: An additional benefit of the Single Life Policy that permits you to claim a portion of the Insurance Proceeds in the event of the Insured’s terminal illness as defined in the Policy. This Benefit comes with the Single Life Policy for no additional charge. This benefit is not available in all states.

Application: A form or set of forms that must be completed and signed by a prospective Owner and each Insured before we can issue a Policy.

Beneficiary: The person or persons designated in the Application or the most recent Beneficiary designation in our files, to whom Insurance Proceeds are paid.

Cash Surrender Value: The Policy Account Value (the total value of your accounts in the Investment Options, in the Fixed Account, and the Loan Collateral Account), less any Loan Balance (which includes accrued interest) and charges due.

Cash Value Accumulation Test: One of two tests prescribed in Section 7702 of the Internal Revenue Code that define whether an insurance contract qualifies to be treated as a life insurance policy for Federal tax purposes. Both this test and the Guideline Premium Test establish requirements for how much the Death Benefit amount must exceed the Policy Account Value through the life of the Policy. See the SAI and your Policy for more information.

Conditional Receipt: A receipt evidencing our receipt of a Premium payment before we issue a Single Life Policy. A Conditional Receipt is not an insurance Policy.

Cost of Insurance: A monthly charge we assess to compensate us for underwriting the Death Benefit. It is the product of your Policy’s Cost of Insurance Rate times its Net Amount at Risk on your Policy’s monthly Policy Processing Day. It varies from Policy to Policy and from month to month. Your Policy Schedule indicates the guaranteed Cost of Insurance Rates applicable to your Policy.

Cost of Insurance Rate: This rate is used to calculate the monthly Cost of Insurance charge. It depends on a number of factors that are unique to your Policy, including each Insured’s Issue Age, sex (in most states) and Underwriting Class, as well as the Policy Year and, for a Single Life Policy, the Face Amount.

Death Benefit: The gross amount, before deduction of Loan Balances and outstanding charges, that we agree to pay the Beneficiary upon receipt of proof of the death of the Insured in a Single Life Policy, or the death of last surviving Insured in a Survivorship Life Policy. The Death Benefit is based upon your choice of Death Benefit Option A or B, your choice of Face Amount and in some cases on the Policy Account Value and choice of tax test.

Default: A Policy goes into Default if its Cash Surrender Value is too low to pay the Monthly Deduction amount and if the No-Lapse Guarantee no longer applies. Following a Default, the Owner has a 61-day Grace Period in which to make a Premium payment sufficient to cure the Default.

EFT: Electronic Funds Transfer. You can make Premium payments by authorizing us to automatically deduct a specified amount monthly from your bank account.

Exchange: A transaction in which amounts allocated to one Investment Option and/or the Fixed Account are redeemed and invested in a different Investment Option and/or the Fixed Account, at the Owner’s request.

 

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Extended Maturity: The period after the Policy Anniversary nearest the Insured’s 100th birthday for a Single Life Policy, and after the Policy Anniversary nearest the 100th anniversary of the younger Insured’s date of birth, even if the younger Insured is not the surviving Insured, for a Survivorship Life Policy. During Extended Maturity, the Death Benefit is changed to equal the Policy Account Value and we do not assess Monthly Deductions. This feature does not apply in Florida. See 6(e). Extended Maturity—Florida Residents for more information.

Face Amount: The dollar amount of insurance selected by the Owner. The Face Amount is a factor in determining the Death Benefit and certain charges.

FILI (“we”): Fidelity Investments Life Insurance Company, the issuer of the Policy.

Fixed Account: A part of our general account. You may allocate a portion of your Net Premium payments or a portion of your Policy Account Value to the Fixed Account. Amounts allocated to the Fixed Account do not fluctuate in value, and earn interest at rates that we declare from time to time. We guarantee that the declared rate will always be at least the guaranteed rate stated in your Policy Schedule. The guaranteed rate is 1.5% in Illinois and Nebraska, 2% in Pennsylvania, and in all other states is 1%.

Fund: A mutual fund in which an Investment Option invests. The Funds are named in this prospectus and described in detail in the Fund prospectuses.

Grace Period: A 61-day period after a Policy first goes into Default, after which the Policy will Lapse if the Owner does not make a Premium payment sufficient to cure the Default.

Guideline Premium Test: One of two tests prescribed in Section 7702 of the Internal Revenue Code that define whether an insurance contract qualifies to be treated as a life insurance Policy for Federal tax purposes. This test defines a limit on the Premiums you can pay into your Policy. Both this test and the Cash Value Accumulation Test establish requirements for how much the Death Benefit amount must exceed the Policy Account Value through the life of the Policy. See the SAI and your Policy for more information.

Home Office: Fidelity Investments Life Insurance Company, 900 Salem Street, Smithfield, Rhode Island 02917. For information or transactions regarding your Policy, please contact our Service Center.

Insurance Proceeds: The amount we pay to the Beneficiaries or other persons after we receive satisfactory proof of death of the Insured on a Single Life Policy or both Insureds on a Survivorship Life Policy. It is calculated as the Death Benefit, less any Loan Balance, unpaid Monthly Deductions and any payment made under the Accelerated Benefit, including any accrued but unpaid interest. Any Rider benefits will be determined and paid in accordance with the terms of the applicable Rider.

Insured: A person whose life is insured by the Policy. In the case of a Single Life Policy, there will be only one Insured. In the case of a Survivorship Life Policy, there will be two Insureds and the Insurance Proceeds will be paid only upon the death of the second Insured to die.

Internal Revenue Code: The U.S. Internal Revenue Code of 1986, as amended.

Investment Option: A subaccount of our Variable Account, which invests all of its net assets in a specific Fund. You may allocate Premium payments into one or more Investment Options, and the value of the amount allocated will change daily with the Fund’s investment performance.

Issue Age: The Insured’s age on the Insured’s birthday nearest the Policy Date.

Issue Date: The date we produced your Policy. It is stated on your Policy.

 

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Lapse: The termination of a Policy without value. If a Policy goes into Default, because the Cash Surrender Value is too low to cover monthly charges and the No-Lapse Guarantee no longer applies, it will Lapse at the end of a 61-day Grace Period unless the Owner makes a minimum Premium payment. You may reinstate a lapsed Policy, subject to certain conditions.

Loan: A transaction in which you borrow money from us, using the Policy as the only collateral. Interest charges and other terms and conditions are described under 3(f). Loans.

Loan Balance: The principal and accrued interest due under all Policy Loans you have taken, as reflected on our records.

Loan Collateral Account: The account to which we transfer funds, from the Investment Options and/or the Fixed Account, as collateral for a Policy Loan.

MEC: A modified endowment contract, as defined under the Internal Revenue Code.

Minimum Initial Premium: The minimum Premium payment needed in order for us to issue a Policy. Your Minimum Initial Premium amount was at least: the Planned Annual Premium if you selected an annual payment schedule; one-half the Planned Annual Premium if you selected a semi-annual payment schedule; or one-sixth of the Planned Annual Premium (two months’ worth), if you selected a monthly payment schedule using automatic electronic funds transfer (EFT).

Monthly Deduction: The amount we deduct from the Cash Surrender Value on each monthly Policy Processing Day. The Monthly Deduction includes the Cost of Insurance charge, the monthly Policy charge, the monthly unit charge for Survivorship Life Policies, and charges for any Riders.

Net Amount at Risk: The Death Benefit minus the Policy Account Value. This figure measures the insurance risk we bear, and is the basis for the Cost of Insurance charge.

Net Premium: The remaining Premium payment amount after we deduct the State Tax Charge.

No-Lapse Guarantee: A guarantee by us that, as long as your Policy satisfies the No-Lapse Guarantee Cumulative Premium Test as defined in the Policy (see 8(b). No-Lapse Guarantee), the Policy will not Lapse during the No-Lapse Guarantee Period. The No-Lapse Guarantee Period for a Single Life Policy is the first ten (10) Policy Years, if the Issue Age of the Insured is 70 or less; or the first five (5) Policy Years, if the Issue Age of the Insured is 71 or more. The No-Lapse Guarantee Period for a Survivorship Life Policy is the first five (5) Policy Years. This feature is not available in all states.

Owner (“you”): The person who holds the rights and duties under the insurance Policy, including the right to designate the Beneficiaries, choose the Death Benefit and Riders, apply for the Accelerated Benefit of a Single Life Policy, and the responsibility to make Premium payments. The Owner is the person with whom we, the insurance company, make the contract of insurance. A Policy may be jointly owned only by a married couple, or by two unmarried individuals to the extent state law requires recognition of their joint ownership.

Partial Withdrawal: An Owner’s withdrawal of a portion of the Cash Surrender Value.

Planned Annual Premium: An annual Premium amount stated in the Policy Schedule. The Owner is not required to make payments according to this plan to keep the Policy in force. However, a failure to make at least the Planned Annual Premium payments in a timely manner will result in the loss of the No-Lapse Guarantee.

Policy Account Value: The total value of your accounts in the Investment Options, in the Fixed Account, and the Loan Collateral Account. Policy Account Value is the starting point for calculating important values under the Policy, including the Death Benefit and Cash Surrender Value.

 

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Policy Anniversary: The same day and month as the Policy Date in each later year.

Policy Date: The date insurance coverage became effective. It is stated in your Policy Schedule.

Policy Processing Day: The day of each month when we deduct monthly charges from the Cash Surrender Value. It is the same day of every month as the Policy Date.

Policy Schedule: The portion of your Policy that sets forth information specific to your agreement with us, including the Insured(s), Face Amount, tax test and Death Benefit option.

Policy Year: A year that starts on the Policy Date or on a Policy Anniversary.

Premiums: Payments by the Owner to us in order to provide the Policy benefits and fund the Policy Account Value.

Rider: An extra benefit that you can choose to add to the Policy, generally for an additional cost. Each Rider has its own form, that describes its terms, conditions and benefits. If you purchase a Rider, the Rider form will be attached to your Policy.

SEC: The United States Securities and Exchange Commission.

Service Center: The office where we process Policy-related transactions, P.O. Box 724677, Atlanta, GA 31139. We may change this upon advance written notice to you.

Single Life Policy: The Fidelity Lifetime Reserves® Flexible Premium Variable Universal Life Policy offered by this prospectus.

State Tax Charge: A charge assessed by the Company to pay applicable state and/or local taxes assessed as a percentage of Premiums received by the Company.

Surrender: Termination of the Policy at the Owner’s request, with the then-current Cash Surrender Value paid to the Owner.

Survivorship Life Policy: The Fidelity Lifetime ReservesSM Flexible Premium Survivorship Variable Universal Life Policy offered by this prospectus.

Underwriting Class: The risk classification we assign to the Insured or Insureds, based on the Application form and evidence of insurability. The Underwriting Class is a principal factor in determining the Cost of Insurance Rate.

Valuation Day: Any day on which the Funds and Investment Options are priced, generally each day the New York Stock Exchange is open for trading.

Variable Account: Fidelity Investments Variable Life Account I. The Variable Account holds all assets allocated by Owners to the Investment Options, and is maintained separately from our general account.

You: The owner of the Policy. See “Owner” above.

 

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IMPORTANT INFORMATION YOU SHOULD CONSIDER ABOUT THE POLICY

 

     
Fees and Expenses       Location in Prospectus
Charges for Early Withdrawals   None        

Transaction

Charges

 

Although we do not currently intend to charge for Investment Option Exchanges, we reserve the right to impose a charge if you make Investment Option Exchanges on more than 12 business days during a calendar year.

 

We deduct a tax charge from each Premium payment to pay applicable state taxes that are assessed as a percentage of Premiums received by the Company.

     

Fee Tables

 

4. Charges and Other Deductions

Ongoing Fees and Expenses (annual charges)  

In addition to transaction charges and state tax charges, an investment in the Policy is subject to certain ongoing fees and expenses, including fees and expenses covering the cost of insurance under the Policy and the cost of optional benefits available under the Policy. These fees and expenses are set based on characteristics of the Insureds (e.g., age, sex, and rating classification). The fees and expenses applicable to your Policy are disclosed on your Policy’s Schedule page.

 

Owners also bear expenses associated with the Funds, as shown in the following table.

   

Fee Tables

 

4. Charges and Other Deductions

      Annual Fee   Minimum   Maximum  
     

Investment Options (Fund fees and expenses)

  0.10%1   1.77%1  
    1 As a percentage of net assets of each Investment Option.    

 

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Risks       Location in Prospectus
Risk of Loss  

An investor can lose money by investing in the Policy.

     

1. Principal Risks of Investing in the Policy

 

2(a). FILI and the Variable Account

 

2(b). The Funds

Not a Short-Term Investment  

The Policy is not suitable as a short-term investment and is not appropriate for an investor who needs ready access to cash.

 

The Policy is designed to provide a life insurance benefit or to help meet other long-term financial objectives. Substantial fees, expenses, and tax implications in the early years of the Policy make variable life insurance unsuitable as a short-term savings vehicle. Additionally, the Policy may limit your ability to withdraw a portion of the Policy Account Value through partial surrenders or loans.

     

1. Principal Risks of Investing in the Policy

 

3(e). Surrenders and Partial Withdrawals

 

3(f). Loans

Risks Associated with Investment Options  

•  An investment in the Policy is subject to the risk of poor performance of the Investment Options

 

•  Each Investment Option as well as the Fixed Account has its own unique risks.

 

•  Performance of the Investment Options will vary based on which ones you select.

 

•  You should review each Fund’s prospectus and information in this prospectus about the Fixed Account carefully before making an investment decision.

     

1. Principal Risks of Investing in the Policy

 

2(a). FILI and the Variable Account

 

2(b). The Funds

Insurance Company Risks   The Policy is issued by FILI. An investment in the Policy is subject to the risks related to FILI. The obligations (including under the Fixed Account), guarantees, and benefits of the Policy are subject to FILI’s financial strength and claims-paying ability. FILI has an A+ Financial Strength Rating from AM Best as of February 8, 2023.      

1. Principal Risks of Investing in the Policy

 

2(a). FILI and the Variable Account

Policy Lapse   If your Cash Surrender Value is not enough to pay the Monthly Deduction and other charges, your Policy will be in Default. The Cash Surrender Value may decline for several reasons, including negative investment performance, the Policy’s regular monthly charges, and any Partial Withdrawals or Loans you take out. We will notify you of any Default and explain that your Policy will Lapse, that is, terminate without value, unless you make sufficient Premium payments during the 61-day Grace Period. A Death Benefit will not be paid if your Policy has lapsed. You may reinstate a lapsed Policy if you meet certain requirements. If the Policy lapses, there are premium requirements associated with reinstatement of the Policy.       8. Policy Lapse and Reinstatement

 

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Restrictions       Location in Prospectus
Investments  

•  You may generally not allocate more than $20,000 (including transfers) to the Fixed Account during any one Policy Year. You may not allocate more than 25% of your Policy Account Value or any Premium payment to the Fixed Account and you may not make more than one transfer to the Fixed Account during any one Policy Year.

 

•  You cannot Exchange less than $250 from any Investment Option except that if you have less than $250 in an Investment Option you may Exchange the entire amount.

 

•  Owners who engage in frequent trading may be subjected to temporary or permanent restrictions on future purchase or Exchanges.

 

•  We have the right to eliminate Investment Options, to combine two or more Investment Options, or to substitute a new Fund for the Fund in which an Investment Option invests.

     

5(b). Allocating Premiums Among Investment Options and the Fixed Account

 

9. The Fixed Account

 

10. Making Exchanges Among Investment Options and the Fixed Account

 

12(c). Changes in Investment Options

Optional Benefits  

As an Owner, you may be able to obtain extra benefits, which may require additional charges. These optional insurance benefits are described in what is known as a “Rider” to the Policy. Riders are generally only available when you apply for a Policy, unless noted otherwise.

 

Rider benefits will no longer be available if the Policy lapses. Some Riders are not available in conjunction with other riders and other restrictions may apply. In addition, some riders described in this prospectus may be subject to state variations or may not be available in all states.

      7. Other Benefits Available Under the Policy
   
Taxes       Location in Prospectus
Tax Implications  

•  Consult with a tax professional to determine the tax implications of an investment in and payments received under this Policy.

 

•  We believe, but do not guarantee, that the Policy should be considered a life insurance Policy under federal tax law. This means that unless you take out a Loan, make a Partial Withdrawal or Surrender your Policy, you should not be deemed to have received any distributions or income from the Policy for federal tax purposes. Moreover, the Proceeds under the Policy should be excludable from the gross income of the Beneficiary. Estate taxes may, however, apply.

     

Overview of the Policy

 

1. Principal Risks of Investing in the Policy

 

11. Tax Considerations

 

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Conflicts of Interest       Location in Prospectus
Investment Professional Compensation   Your investment professional may receive compensation for selling this Policy to you in the form of commissions. This financial incentive may influence your investment professional to recommend this Policy over another investment.      

Fee Tables

 

2(b). The Funds

 

4. Charges and Other Deductions

Exchanges   Your investment professional may have a financial incentive to offer you a new policy in place of the one you own. You should only exchange your policy if you determine, after comparing the features, fees, and risks of both policies, that it is better for you to purchase the new policy rather than continue to own your existing policy.        

OVERVIEW OF THE POLICY

Brief Description of the Policy

This prospectus describes the important features of the Fidelity Lifetime Reserves® variable universal life insurance policy (“Single Life Policy”) and survivorship variable universal life insurance policy (“Survivorship Life Policy”) offered by FILI. The features of each Policy are the same, unless we specify differences in this prospectus. Please read the entire prospectus for important details.

Currently, we do not offer the Policy for sale to new investors.

The Policy is designed to provide death benefit protection. We will pay Insurance Proceeds to the named Beneficiaries: upon the death of the single insured person (“Insured”) under the Single Life Policy; or upon the death of the last survivor of the two insured persons (“Insureds”) under the Survivorship Life Policy.

You, as the Policy’s Owner(s), pay the Premiums and name the Beneficiaries. You may designate yourself as Insured, or in appropriate situations, designate another person or persons as Insured(s).

The Policy also allows you, the Owner(s), to seek long-term asset growth on a tax-deferred basis by investing in one or more of the Investment Options of Fidelity Investments Variable Life Account I (the “Variable Account”) and/or in the Fixed Account. Your investment in the Policy is reflected in a Policy Account Value, and the Policy gives you access to your Policy Account Value in several ways.

Flexible Premiums

The Policy is a flexible Premium Policy. This means that, subject to certain requirements described below, you may decide when to make Premium payments and in what amounts. You were required to make a Minimum Initial Premium in order for coverage to take effect. After the Policy is issued, you are not required to pay Premiums according to any particular schedule. You will, however, need to make enough Premium payments to avoid Lapse (termination of the Policy without value). You may greatly increase the risk of Lapse if you do not regularly pay sufficient Premiums.

Generally, we credit Premium payments, less applicable State Tax Charges, to your Policy Account Value, and allocate them to the Investment Options and the Fixed Account according to your instructions.

 

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Policy Features

 

 

Policy Account Value and Cash Surrender Value

Policy Account Value is the total value of your accounts in the Investment Options, the Fixed Account and the Loan Collateral Account. Cash Surrender Value is the Policy Account Value, less any Loan Balance (which includes accrued interest) and unpaid charges due.

Policy Account Value and Cash Surrender Value may vary from day to day, depending on the investment performance of the Investment Options you choose, interest we credit to the Fixed Account, transactions you request, Loan interest and collateralization, and periodic charges.

 

 

No-Lapse Guarantee

Your Policy will specify your Planned Annual Premium. Your Policy will not Lapse during your Policy’s No-Lapse Guarantee Period if, on each monthly Policy Processing Day, your total Premium payments, less any Loans, Partial Withdrawals and outstanding interest and charges, are at least as much as if you had paid 1/12 of the Planned Annual Premium each month.

The No-Lapse Guarantee period of a Single Life Policy is 10 (ten) years if the Insured’s Issue Age is 70 or less; for other Single Life Policies and for all Survivorship Life Policies, this period is 5 (five) years.

No-Lapse Guarantee is not available in all states.

 

 

Death Benefit and Insurance Proceeds

We will pay Insurance Proceeds based on the Death Benefit to the named Beneficiaries: (a) upon satisfactory proof of death of the Insured while a Single Life Policy is in force; or (b) upon satisfactory proof of death of the last surviving Insured while a Survivorship Life Policy is in force.

Insurance Proceeds. The Insurance Proceeds will be the Death Benefit, less any Loan Balance and any Accelerated Benefits paid (including principal and accrued interest), and any Monthly Deductions due but unpaid at death.

Death Benefit Options. You will select a Face Amount, and choose between two Death Benefit options under the Policy. Under Death Benefit Option A, the Death Benefit is generally the fixed Face Amount you select. Increases in the Policy Account Value in an Option A Policy will normally decrease the insurance company’s Net Amount at Risk, on which the Cost of Insurance charges are based. For the same reason, decreases in the Policy Account Value will increase the Net Amount at Risk and increase your Cost of Insurance charges.

Under Death Benefit Option B, the Death Benefit is generally the sum of the fixed Face Amount you choose and the Policy Account Value. The Option B Death Benefit generally varies with the Policy Account Value.

You will also choose one of two tax tests to be applied to your Policy, so that the Policy can be treated as life insurance under Federal tax law. In some circumstances, these tests may increase the Death Benefit and Cost of Insurance under Option A or Option B.

Extended Maturity. If an Insured is alive when the Policy reaches its Extended Maturity date, the Death Benefit will be converted to, and thereafter be defined as, the Policy Account Value. No new Premiums will be accepted, but the Owner retains other rights under the Policy as described in 6(e). Extended Maturity below. The Extended Maturity date is: for a Single Life Policy, the Policy Anniversary nearest the Insured’s 100th birthday; for a Survivorship Life Policy, the Policy Anniversary nearest the 100th anniversary of the younger Insured’s date of birth, even if the younger Insured is not the surviving Insured. Insurance Proceeds immediately after the Extended Maturity date may be far less than before that date. This feature does not apply in Florida. See 6(e). Extended Maturity—Florida Residents for more information.

 

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Investment Choices

Investment Options. You may direct your Net Premiums to one or more of 47 Investment Options of the “Variable Account. Each Investment Option invests exclusively in one of the mutual funds (“Funds”) described in 2(b). The Funds below. Each Fund has its own investment strategies, investment advisers, expense ratios, and returns. Information about the Funds is provided in Appendix A: Funds Available Under the Policy.

Fixed Account. You may also currently allocate funds to the Fixed Account, a part of our general account that earns interest at fixed rates. We may restrict the Fixed Account’s availability from time to time. We guarantee that amounts allocated to the Fixed Account will earn interest daily at an annual rate that will never be less than the guaranteed rate stated in your Policy Schedule. The fixed rate will be reset periodically. Any Funds in the Fixed Account do not fluctuate with the investment performance of our general account or of the Investment Options.

 

 

Exchanges

You may currently transfer or “Exchange” money among the Investment Options without charge. We reserve the right to charge if you Exchange on more than twelve days during a calendar year. You may currently make one transfer per Policy Year from the Variable Account to the Fixed Account, but the total of such transfer plus any Premium payment amounts allocated to the Fixed Account during that Policy Year may not exceed $20,000. Additional Exchange policies and restrictions are described in detail in 10. Making Exchanges Among Investment Options and the Fixed Account.

 

 

Surrenders and Partial Withdrawals

At any time while the Policy is in force, you may make a request to Surrender your Policy or to take a Partial Withdrawal of $500 or more. Upon Surrender, we will send you the Cash Surrender Value of the Policy, and the Policy will terminate. A Partial Withdrawal will reduce the Policy Account Value, Cash Surrender Value and the Death Benefit. There are no fees imposed upon Surrenders or Partial Withdrawals.

 

 

Loans

After the first Policy Year, you may borrow money from FILI using the Policy as the only collateral for the Loan. At the time we lend you the money, we will transfer an equivalent amount from your Investment Options and Fixed Account into a Loan Collateral Account as collateral. We will charge you 6% per year on outstanding Loan Balances. The Loan Collateral Account earns 4% per year in the first ten Policy Years, and 5.75% per year thereafter.

You may repay Loans at any time and on any schedule while the Policy is in force.

 

 

Additional Benefits and Riders

The Single Life Policy includes an Accelerated Benefit that allows you to request payment of up to the lesser of 50% of the Net Amount at Risk or $250,000 as a living benefit, in the event the Insured is diagnosed with a terminal illness as defined in the Policy.

The Accelerated Benefit is not available in all states.

For additional charges, and subject to underwriting, you may also add these optional benefits to a Single Life Policy: (a) Children’s Term Rider; and/or (b) either Total Disability Premium Payment Rider or Total Disability Waiver of Monthly Deductions Rider.

For additional charges, and subject to underwriting, you may also add the Total Disability Premium Payment Rider, on one or both Insureds, to a Survivorship Life Policy. An Estate Protection Rider may also be added to the Survivorship Life Policy, subject to underwriting.

 

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FEE TABLES

The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering or making withdrawals from the Policy. Please refer to your Policy Schedule for information about the specific fees you will pay each year based on the options you have elected.

The first table describes the fees and expenses that you will pay at the time that you buy the Policy, surrender or make withdrawals from the Policy, or make Exchanges between the Investment Options.

TRANSACTION FEES

 

Charge  

When Charge is Deducted

 

Amount Deducted

Sales Charges (Loads)  

N/A

 

None

State Tax Charge1  

Upon any Premium payment

 

2.25%

Surrender/Withdrawal Charges  

N/A

 

None

Exchange Fees2   Upon Investment Option Exchanges after the first 12 business days of Exchanges per calendar year.  

Up to $20 (Not currently charged)

 

1 

This charge is for applicable state taxes assessed as a percentage of Premiums received by the Company. Applicable state taxes vary between jurisdictions, and are subject to change in the event of a change in the applicable tax rate. The Company will charge 2.25%, regardless of whether the applicable state tax rate is higher or lower. We currently deduct only for state taxes, and not local taxes. We may in the future increase the State Tax Charge up to the applicable state tax rate and begin charging for local taxes, but will only do so after providing written notice to Owners. See 4(b). State Tax Charge.

2 

You may generally make Investment Option Exchanges on up to 12 business days per calendar year free of charge.

 

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The next table describes the fees and expenses that you will pay periodically during the time that you own a Single Life Policy, not including the underlying Funds’ fees and expenses.

SINGLE LIFE POLICY PERIODIC CHARGES

OTHER THAN THE FUND EXPENSES

 

CHARGES

 

WHEN DEDUCTED

 

AMOUNT DEDUCTED

BASE POLICY CHARGES

Cost of Insurance3

(per $1,000 of Net Amount at Risk)

  Monthly  

•  Minimum

•  Maximum

•  Representative Insured

(45-year old male nonsmoker, preferred class, $1 million Face Amount policy)

    Minimum: $0.029 per $1,000 Maximum: $83.33 per $1,000 Representative (first ten years): $0.0625 per $1,000

Administrative Expenses

(referred to as “Policy Charge” in your Policy)

  Monthly   $5

Mortality and Expense Risk Charge4

(charged on and deducted from Investment Options ONLY)

  Daily based on annual rates   Years 1-20: 1.00% annually
OPTIONAL BENEFIT CHARGES
Children’s Term Rider   Monthly   $5

Total Disability Waiver of Monthly Deductions Rider3

(per $1.00 of Monthly Deduction Waiver)

  Monthly  

•  Minimum

•  Maximum

•  Representative Insured

(45-year old male nonsmoker, preferred class, $1 million Face Amount policy)

    Minimum: $0.03 per $1 Maximum: $0.362 per $1 Representative: $0.064 per $1
Total Disability Premium Payment Rider3
(per $1.00 of Disability Benefit Amount)
  Monthly  

•  Minimum

•  Maximum

•  Representative Insured

(45-year old male nonsmoker, preferred class, $1 million Face Amount policy)

    Minimum: $0.025 per $1 Maximum: $0.204 per $1 Representative: $0.039 per $1

POLICY LOAN INTEREST RATES

(For details, see “Loans”)   Annually  

•  Charged on Loan Balance

    All Policy Years: 6% of Loan Balance

 

3 

The Cost of Insurance and Disability Rider costs vary based on individual characteristics. The Cost of Insurance charge or other charges shown in the table may not be representative of the charge that a particular Owner will pay. For more information about the particular Cost of Insurance or other charges that may apply to your specific situation, please call 1-888-343-5433.

 

4 

The Mortality and Expense Risk Charge is 0.40% annually for Years 21+.

 

 

“Net Amount at Risk” is the Death Benefit less the Policy Account Value, and reflects the insurance company’s financial risk in the event of the Insured’s death. See 4. Charges and Other Deductions.

 

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The next table describes the fees and expenses that you will pay periodically during the time that you own a Survivorship Life Policy, not including the underlying Funds’ fees and expenses.

SURVIVORSHIP LIFE POLICY PERIODIC CHARGES

OTHER THAN THE FUND EXPENSES

 

CHARGES

  

WHEN DEDUCTED

  

AMOUNT DEDUCTED

BASE POLICY CHARGES

Cost of Insurance5
(per $1,000 of Net Amount at Risk)
   Monthly   

•  Minimum

•  Maximum

•  Representative Insureds

(55-year old male nonsmoker, preferred class, and 50-year old female nonsmoker, preferred class)

      Minimum: $0.0001 per $1,000 Maximum: $83.33 per $1,000 Representative (1st year): $0.00208 per $1,000

Unit Charge

(per $1,000 of Face Amount or Face Amount Increase)

   Monthly for 36 months after Issue or Face Amount Increase   

$0.10 per $1,000 (guaranteed maximum charge)

$0.05 per $1,000 (current charge)

Administrative Expenses

(referred to as “Policy Charge” in your Policy)

   Monthly    $5

Mortality and Expense Risk Charge6

(charged on and deducted from Investment Options ONLY)

   Daily based on annual rates    Years 1-20: 1.00% annually

OPTIONAL BENEFIT CHARGES

Total Disability Premium Payment Rider5
(Per $1.00 of Disability Benefit Amount) (Single Insured Rate: charges apply to each Insured selected for coverage)
   Monthly   

•  Minimum

•  Maximum

•  Representative Insured

(55-year old male nonsmoker, preferred class)

      Minimum: $0.025 per $1 Maximum: $0.204 per $1 Representative: $0.072 per $1

POLICY LOAN INTEREST RATES

(For details, see “Loans”)    Annually   

•  Charged on Loan Balance

      All Policy Years: 6% of Loan Balance

 

5 

The Cost of Insurance and Disability Rider costs vary based on individual characteristics. The Cost of Insurance charge or other charge shown in the table may not be representative of the charge that a particular Owner will pay. For more information about the particular Cost of Insurance or other charges that may apply to your specific situation, please call 1-888-343-5433.

 

6 

The Mortality and Expense Risk Charge is 0.40% annually for Years 21+.

 

 

“Net Amount at Risk” is the Death Benefit less the Policy Account Value, and reflects the insurance company’s financial risk in the event of the Insureds’ death. See 4. Charges and Other Deductions.

 

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The next item shows the minimum and maximum total annual operating expenses charged by the Funds that you may pay periodically during the time you own the Policy. A complete list of Funds available under the Policy, including their annual expenses, may be found at the back of this document.

 

Annual Portfolio Company Expenses

   Minimum     Maximum  

(expenses that are deducted from Fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses)

     0.10     1.77

(expenses that are deducted from Fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses after any waivers or expense reimbursements)

     0.10     1.25 %7 

 

  7 

This reflects temporary reductions to Fund expenses.

1. PRINCIPAL RISKS OF INVESTING IN THE POLICY

Investment Risk

Investment Options. This Policy is designed for Death Benefit protection and long-term asset growth. This Policy is not a short-term savings vehicle. You bear the risk that the investment performance of any Investment Options you select will be unfavorable and that the Policy Account Value will decrease. You could lose everything you invest. A comprehensive discussion of the risks of each underlying Fund may be found in the Fund’s prospectus, and if available, summary prospectus.

Fixed Account. We credit Premiums you allocate to the Fixed Account with interest at a fixed rate. You bear the risk that the rate may decrease, although it will never be lower than the guaranteed rate stated in your Policy Schedule. In addition, because the Fixed Account interest rate is set for as long as 15 months, during periods of rising general interest rates you may earn less competitive rates in the Fixed Account than in variable or shorter-term instruments. Finally, the Fixed Account is subject to our claims-paying ability.

Policy Lapse

If your Cash Surrender Value is not enough to pay the Monthly Deduction and other charges, your Policy will be in Default. The Cash Surrender Value may decline for several reasons, including negative investment performance, the Policy’s regular monthly charges, and any Partial Withdrawals or Loans you take out. We will notify you of any Default and explain that your Policy will Lapse, that is, terminate without value, unless you make sufficient Premium payments during the 61-day Grace Period. A Death Benefit will not be paid if your Policy has lapsed. You may reinstate a lapsed Policy if you meet certain requirements. A payment equal to the amount that was required to bring the Policy out of Default immediately prior to termination, plus an amount equal to the applicable Monthly Deduction for the next three (3) months, must be paid to us.

Insurance Company Risks

All insurance benefits, including the Death Benefit and benefits provided through Riders, and all guarantees, including those related to the Fixed Account, are general account obligations that are subject to FILI’s financial strength and claims paying ability. You are encouraged to review our financial statements, which are updated annually and available upon request in the Statement of Additional Information (“SAI”).

Tax Risks

We believe, but do not guarantee, that the Policy should be considered a life insurance Policy under Federal tax law. Unless you take out a Loan, make a Partial Withdrawal or Surrender your Policy, you should not be deemed to have received any distributions or income from the Policy for federal tax purposes. Moreover, the

 

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Beneficiaries should be able to exclude the Insurance Proceeds from their gross incomes, and generally should not have to pay income tax on these proceeds. Estate taxes may, however, apply. In the event the Policy were determined not to be a life insurance Policy for Federal tax purposes, however, you may be considered to be in constructive receipt of Policy Account Value, with uncertain tax consequences, and the Insurance Proceeds may be treated as taxable income to the Beneficiary.

Distributions from the Policy may be treated in two ways. If you pay Premiums in excess of certain tax guidelines, the Policy may be treated as a Modified Endowment Contract (“MEC”) under Federal tax laws. If a Policy is treated as a MEC, then distributions from Surrenders, Partial Withdrawals and Loans will be taxable as ordinary income to the extent there are earnings in the Policy, and taxable amounts withdrawn prior to the Owner’s age 591/2 may also be subject to a 10 percent (10%) IRS penalty. If the Policy is not a MEC, these distributions generally will be treated first as a return of basis or investment in the Policy and then as taxable income, and generally will not be subject to the 10 percent (10%) IRS penalty.

Existing tax laws that benefit this Policy may be changed at any time.

You should consult a qualified tax advisor for assistance in all Policy-related tax matters. See 11. Tax Considerations.

Partial Withdrawal Risk

Partial Withdrawals increase the risk of Lapse and reduce the Policy Account Value, Cash Surrender Value and Insurance Proceeds.

Partial Withdrawals may also result in adverse tax consequences. You should consult a qualified tax advisor for assistance in all Policy-related tax matters. See 11. Tax Considerations.

Loan Risks

A Policy Loan may reduce benefits, increase costs, and increase the risk of Lapse.

First, if you take a Policy Loan, we will transfer the Loan amount from the Investment Options and Fixed Account, into the Loan Collateral Account. This reduces the Cash Surrender Value and Insurance Proceeds while the Loan is outstanding.

Second, a Policy Loan, whether or not repaid, will affect Policy Account Value and Cash Surrender Value over time, because the amounts held in the Loan Collateral Account will not participate in the Investment Options or Fixed Account while the Loan is outstanding.

Third, you will pay interest on Loan balances while the Loan is outstanding.

Fourth, a Policy Loan increases the risk of Lapse by reducing the Cash Surrender Value while the Loan is outstanding.

Policy Loans may also result in adverse tax consequences. You should consult a qualified tax advisor for assistance in all Policy-related tax matters. See 11. Tax Considerations.

Potential Harmful Fund Transfer Activity:

Frequent Exchanges among Investment Options by Owners can reduce the long-term returns of the Funds. The reduced returns could adversely affect the Owners, annuitants, Insureds or Beneficiaries of any variable annuity

 

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contract or variable life insurance policy issued by any insurance company with respect to values allocated to the Funds. Frequent exchanges may reduce the Fund’s performance by increasing costs paid by the Fund (such as brokerage commissions); they can disrupt portfolio management strategies; and they can have the effect of diluting the value of the shares of long-term shareholders in cases in which fluctuations in markets are not fully priced into the Fund’s net asset value (“NAV”). FILI has adopted policies designed to discourage frequent trading. See 10(d). Frequent Exchanges Among Investment Options for more information.

2. FILI, THE VARIABLE ACCOUNT, AND THE FUNDS

2(a). FILI and the Variable Account

FILI: The Policy is issued by FILI. FILI is part of Fidelity Investments, a group of companies that provides a variety of financial services and products. FILI is a wholly-owned subsidiary of FMR LLC, the parent company of the Fidelity Investments companies. The obligations, guarantees, and benefits of the Policy are subject to FILI’s claims-paying ability. We have an A+ Financial Strength Rating from AM Best as of February 8, 2023.FILI’s principal executive offices are located at 900 Salem Street, Smithfield, Rhode Island 02917. The address of FILI’s Annuity Service Center is P.O. Box 724677, Atlanta, GA 31139.

The Variable Account: Fidelity Investments Variable Life Account I is a separate account of FILI used to support the Policy, and for other purposes permitted by law. We are the legal owner of the assets of the Variable Account. However, income, gains, and losses credited to, or charged against, the Variable Account reflect the Variable Account’s own investment experience and not the investment experience of any of our other assets. The assets of the Variable Account may not be used to pay any of our liabilities other than those arising from the Policies. The assets in the Variable Account will always be at least equal to the reserves and other liabilities of the Variable Account. If the assets exceed the required reserves and other liabilities, we may transfer the excess to our general account. We are obligated to pay all amounts promised to investors under the Policies.

Financial Statements: FILI’s financial statements and the financial statements of the Variable Account appear in the Statement of Additional Information.

1 Financial strength ratings are opinions from independent rating agencies of an insurer’s financial strength and ability to pay its insurance policies and contract obligations. They are not recommendations to purchase, hold or terminate any insurance policy or contract issued by an insurer, nor do they address the suitability of any particular policy or contract for a specific purpose or purchaser. AM Best Ratings range from A++ to F and are subject to change.

2(b). The Funds

Each Investment Option (also referred to as “Subaccount”) in the Variable Account invests exclusively in a single Fund. Each Fund is part of a trust that is registered with the SEC as an open-end management investment company under the 1940 Act. The names and investment objectives of the Funds may be similar to those of other funds available through the same Adviser; however, the performance of such funds may differ significantly. This registration does not involve supervision of the management or investment practices or policies of the Funds by the SEC. Each Fund’s assets are held separate from the assets of the other Funds, and each Fund has investment objectives and policies that are different from those of the other Funds. Thus, each Fund operates as a separate investment fund, and the income and losses of one Fund have no effect on the investment performance of any other Fund.

FILI or its insurance agency affiliate receives annual compensation of up to 0.45% of assets allocated to the Funds, for customer service, distribution and recordkeeping services with respect to those assets. This compensation is received from the Funds’ advisors or their affiliates. These payments are not Policy charges, and do not increase Fund or Policy charges.

 

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Where to Find More Information on the Funds: Information regarding each Fund including its name, investment objective, investment advisers and any subadvisers, current expenses, and performance is available in Appendix A: Funds Available Under the Policy. In addition, each Fund has issued a prospectus that contains more detailed information about the Fund. Investors may obtain paper or electronic copies of a Fund prospectus by calling 1-800-544-2442.

2(c). Legal Proceedings

Neither the Registrant, the Registrant’s principal underwriter nor the Depositor is a party to any material pending legal proceedings.

3. GENERAL DESCRIPTION OF THE POLICY

The Policy belongs to you, the Owner(s) named in the Application or in a later valid assignment or transfer. While any Insured is living, the Owner(s) may exercise all of the rights and options described in the Policy.

A Policy may be jointly owned only by a married couple, or by two unmarried individuals to the extent state law requires recognition of their joint ownership. If there are two Owners, both Owners must act together to change Beneficiaries, change the Death Benefit, or to request payment transactions, such as Surrenders, Partial Withdrawals, Loans and Accelerated Benefit payments. Either Owner may exercise other Policy rights, consistent with our then-current procedures.

3(a). Purchasing a Policy

PLEASE NOTE: Currently, we do not offer the Policy for sale to new investors.

We offered these Policies only in states in which we obtained the necessary approval. To purchase a Policy, you submitted a completed Application to us at our Home Office. The minimum initial Face Amount was $250,000 for a Single Life Policy and $500,000 for a Survivorship Life Policy. The Single Life Policy was available if the Insured was generally between the Issue Ages of 0-85, and the Survivorship Life Policy was available generally only if both Insureds were between the Issue Ages of 21-90. We may have permitted exceptions to these rules in some cases. In addition, product terms and Policy availability may vary depending on applicable state requirements.

We required evidence of insurability, usually including a medical examination of each named Insured, that satisfied our underwriting standards before we issued a Policy. If any proposed Owner was not also an Insured, we may have also required evidence that the proposed Owner and/or the Beneficiaries had insurable interests, consistent with applicable law, in the life of each Insured. We reserve the right to modify our underwriting requirements at any time, and to reject an Application for any reason permitted by law.

Insurance coverage under the Policy became effective on the Policy Date stated in your Policy, provided all of the following three conditions were met: (1) when we issued the Policy to you, each proposed Insured was alive and in the same condition of health as described in the Application, (2) the Minimum Initial Premium had been paid, and (3) the Application and any other forms we required had been completed and returned to our Service Center. The printed Policy, together with the Application and other materials you may have submitted, and any Riders, endorsements or amendments attached to the Policy constitute the entire Policy. Only the President, Secretary or Assistant Secretary of FILI has the power to change the Policy or waive any Policy provision on our behalf.

In certain states, we may have in our discretion issued a Conditional Receipt prior to issuance of a Single Life Policy. Any Premiums paid prior to issuance were held in a non-interest-bearing suspense account during the underwriting process.

 

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3(b). Selecting and Changing the Beneficiary

The Beneficiaries are those persons properly shown in the Company’s records as being Beneficiaries on the date of death of the Insured for a Single Life Policy, and the date of death of the last surviving Insured for a Survivorship Life Policy. The Beneficiaries will receive the Insurance Proceeds after the death of all Insured(s). You named Beneficiaries initially in the Application. You may change Beneficiaries in accordance with our procedures at any time while an Insured is alive, as described below.

You may designate Beneficiaries as Primary and Contingent. These designations are described below. You may also request alternate forms of Beneficiary designation, subject to our acceptance. We reserve the right to reject any Beneficiary designation we deem unable to administer.

You can designate several Primary or several Contingent Beneficiaries. The Primary Beneficiaries that survive all Insured(s) share in any Insurance Proceeds. Shares will be equal, unless you provide otherwise in the Application or in a written notice received in good order at our Service Center while an Insured is alive.

If no Primary Beneficiary survives all Insured(s), then the surviving Contingent Beneficiaries will share the Insurance Proceeds. Each Contingent Beneficiary will receive an equal share of the Insurance Proceeds, unless you have instructed us otherwise in the Application or in a written notice received in good order at our Service Center while an Insured is alive. No Contingent Beneficiary will receive any Insurance Proceeds unless all of the Primary Beneficiaries die before the death of the last surviving Insured.

If you designate Beneficiary shares, your instructions must specify each share as a whole number percentage. If the total does not equal 100% for the class receiving payment (Primary or Contingent), each Beneficiary’s share will be determined by using a fraction, the numerator of which is the stated percentage for the Beneficiary, and the denominator of which is the total of the percentages for the Beneficiaries who will receive payment.

If all named Beneficiaries die before the death of the last surviving Insured, we will pay the Insurance Proceeds to any surviving Owner(s). If no Owner survives, we will pay the estate of the last surviving Owner.

The consent of each irrevocable Beneficiary, if any, is needed to exercise any Policy rights except changing the amount or timing of Premiums, reinstating the Policy, changing Premium allocations, and exchanging among Investment Options and the Fixed Account.

You can change any Beneficiary, other than an irrevocable Beneficiary, while an Insured is alive by providing us with written notice, in a form acceptable to us. We reserve the right to reject any Beneficiary designation that we deem unable to administer and may in our discretion require evidence that the proposed Beneficiary has an insurable interest, consistent with applicable law, in the life of each Insured.

Any Beneficiary change is effective as of the date we receive your written notice in good order. We are not liable for any payment or other actions we take consistent with valid Beneficiary designations we have on file at the time of the payment or action.

A Beneficiary generally may not pledge, commute, or otherwise encumber or transfer payments under the Policy before they are due.

3(c). Death of Owner

If you, the Owner, are not an Insured and if you die while an Insured is still alive, ownership of the Policy will generally pass to your estate. If you are the Insured under a Single Life Policy or the second Insured to die under a Survivorship Life Policy, we will pay Insurance Proceeds upon your death as described below under 6. Death Benefit and Insurance Proceeds.

 

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3(d). Transferring Ownership and Assigning Policy Rights

Any Owner may request to transfer his or her ownership interest of the Policy to a new Owner by providing a written notice to us at any time while an Insured is alive. If you transfer ownership, your ownership rights terminate and the new Owner will succeed to all of your rights under the Policy. Transferring ownership does not change the Beneficiary, and all such transfers are subject to any outstanding Policy Loan.

You may also request to assign specific Policy rights to a creditor as collateral for a new or pre-existing obligation. Such an assignment does not cause a change of ownership, but your ownership rights and the interests of any Beneficiary will be subject to the assignment. Assignments of rights are subject to any outstanding Policy Loan. We may require the written consent of a collateral assignee to exercise certain Policy rights, such as Surrenders, withdrawals, Loans and the Accelerated Benefit Payments.

We may in our discretion require evidence that any proposed transferee or assignee has an insurable interest, consistent with applicable law, in the life of the Insured, and we may refuse a request for a transfer of ownership or for an assignment for any reason as permitted or required by law.

With respect to ownership transfers or assignments of Policy rights, we are not:

 

   

bound by any ownership transfer or assignment unless and until we receive a written notice of the transfer or assignment in good order at our Service Center;

 

   

responsible for the validity of any ownership transfer or assignment or determining the extent of an assignee’s interest;

 

   

liable for any payment we make before we receive written notice of the transfer or assignment at our Service Center; or

 

   

bound by an ownership transfer to more than one person, except for transfers to married couples and to unmarried individuals where required by law.

Transferring ownership of the Policy or assigning Policy rights may have tax consequences. See 11. Tax Considerations. You should consult a qualified tax advisor before making any transfer or assignment.

3(e). Surrenders and Partial Withdrawals

You may Surrender your Policy at any time while any Insured is alive and the Policy is in force. We will send you the Cash Surrender Value less any required tax withholding and any outstanding charges. You must send written instructions to our Service Center to initiate a Surrender, and we may require that you return your Policy. Your Policy will terminate on the date we receive your Surrender request in good order at our Service Center.

You may also make Partial Withdrawals of $500 or more from the Cash Surrender Value while any Insured is alive and the Policy is in force. You may not make a Partial Withdrawal that would reduce your Cash Surrender Value to less than $2,500.

If you do not specify where we should take the money for a Partial Withdrawal, we will take it proportionately from all the Investment Options and from the Fixed Account. You may, in the alternative, specify the dollar amounts or percentages to be withdrawn from each Investment Option (but not the Fixed Account), provided that the Partial Withdrawal amount is less than the total you have in all the Investment Options. If you request a Partial Withdrawal in an amount that is more than the total you have in all the Investment Options, you may instruct us to withdraw all the money you have in the Investment Options and the rest from the Fixed Account.

You may request Partial Withdrawals by sending us a letter or calling us at the Service Center. Withdrawals by telephone are limited as follows: (1) no withdrawal may be for more than $500,000; (2) total telephone

 

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withdrawals in a seven-day period cannot total more than $500,000; and (3) if we have recorded an address change for an Owner during the past 15 days, the limits in (1) and (2) become $10,000. We reserve the right to change telephone withdrawal requirements or limitations.

For jointly owned Policies, all checks will be made payable to both Owners. You may have the money transferred to your bank account, or to a Fidelity mutual fund or brokerage account. Any Policies and accounts between which money will be transferred must have at least one owner’s name in common.

FILI reserves the right to restrict your Policy from Surrenders, Partial Withdrawals, and/or Exchanges if there is reasonable suspicion of fraud, diminished capacity, or inappropriate activity. FILI also reserves the right to restrict your Policy from Surrenders, Partial Withdrawals, and/or Exchanges if FILI is put on reasonable notice that the ownership of the Policy is in dispute.

We will normally pay you the amount of any Surrender or Partial Withdrawal, less any taxes withheld and any outstanding charges, within seven days after we receive the Surrender or Partial Withdrawal request in good order at the Service Center. We may, however, delay payment if (a) the disposal or valuation of the assets in an Investment Option is not reasonably practicable because the New York Stock Exchange is closed for other than a regular holiday or weekend, trading is restricted by the SEC, or the SEC declares that an emergency exists; or (b) the SEC by order permits the postponement of payment to protect our Owners.

In addition, we reserve the right to delay payment of any Partial Withdrawal or Surrender from the Fixed Account for not more than six months. If payment from the Fixed Account is delayed more than 30 days, we will credit interest from the date of the withdrawal request at a rate not less than 1.0% per year compounded annually or, if greater, the rate required by applicable law.

Effect of Surrenders and Partial Withdrawals

 

   

A Surrender will take effect and the Policy will terminate on the date we receive your request in good order at our Service Center.

 

   

Once you Surrender your Policy, all coverage and other benefits under it cease and cannot be reinstated.

 

   

A Partial Withdrawal reduces the Cash Surrender Value, and can affect the Face Amount, Death Benefit, and the Net Amount at Risk (which is used to calculate the Cost of Insurance charge).

 

   

If Death Benefit Option A is in effect, we will reduce the Face Amount by the amount of the Partial Withdrawal. For purposes of determining the Cost of Insurance charge, any decrease will first be used to reduce the most recent increase in Face Amount, then the next most recent increases, and finally the initial Face Amount. However, if a decrease in Face Amount moves a Single Life Policy into a lower Cost of Insurance band, (for example, from $1.1 million to $900,000) then the Cost of Insurance Rate applied to that Policy’s Net Amount at Risk may increase.

 

   

If Death Benefit Option B is in effect, a Partial Withdrawal will not affect the Face Amount, but the Death Benefit will be reduced in the same amount as the Policy Account Value.

 

   

You may not make a Partial Withdrawal if, or to the extent that, the Partial Withdrawal would reduce the Face Amount below the minimum Face Amount we require in order to issue a Policy, generally $250,000 for a Single Life Policy and $500,000 for a Survivorship Life Policy. See “Purchasing a Policy” above.

 

   

We reserve the right to reject a request for a Partial Withdrawal if, in our opinion, the requested Partial Withdrawal may cause the Policy to fail to qualify as life insurance under the Internal Revenue Code. In such a situation, you may reduce the amount of the Partial Withdrawal or request a Surrender.

 

   

Partial Withdrawals may increase your risk of Lapse. Both Surrenders and Partial Withdrawals may have unfavorable tax consequences. You should consult a qualified tax advisor before making a Surrender or Partial Withdrawal. See 8. Policy Lapse and Reinstatement and 11. Tax Considerations.

 

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3(f). Loans

After the first Policy Year, while any Insured is alive and the Policy is in force, you may submit a request to borrow money from us using the Policy as the only collateral for the Loan. We normally pay you the Loan proceeds within seven (7) days after we receive a Loan request in good order. We may postpone payment of Loans under certain conditions, as described above in Surrenders and Partial Withdrawals.

 

   

The minimum Loan you may take is $500.

 

   

The maximum Loan you may take is up to 90% of your Policy Account Value.

 

   

If you have a Policy Loan outstanding, you may take an additional Loan so long as the total of all your Policy Loans does not exceed 90% of the Policy Account Value, including outstanding Policy Loan indebtedness.

 

   

If you have another life insurance policy with an outstanding loan and wish to transfer that policy’s proceeds into this Policy under Section 1035 of the Internal Revenue Code, we may permit you to carry over the Loan Balance even during the first Policy Year. You may not, however, request any new Loan proceeds during the first Policy Year.

 

   

In most states, we will not extend new or additional Policy Loans after the Extended Maturity Date.

Loan Balance and Loan Collateral Account

After your Loan application is approved, we will take three steps as of the close of business on the next Valuation Day:

 

   

We will send you the initial Loan amount requested from our general account.

 

   

We will set up an account to record the amount you owe, the “Loan Balance.” Initially, of course, the Loan Balance is equal to the initial Loan amount we have sent you.

 

   

Finally, to secure the Loan, we will transfer a net amount equal to the initial Loan Balance out of your Investment Options and Fixed Account and into a Loan Collateral Account that we hold as collateral. You may specify that we redeem this amount from specific Investment Options. Otherwise, we will transfer the Loan amount on a pro rata basis from all of your Investment Options and the Fixed Account based on the proportion of the Cash Surrender Value then allocated to each Investment Option and to the Fixed Account on the date of the transaction. These amounts will remain in the Loan Collateral Account until you repay the Loan.

 

   

If we have approved your request to transfer proceeds to this Policy from another policy subject to an outstanding Loan, your initial Loan Balance and Loan Collateral Account will be the outstanding Loan Balance you owed under the prior policy, and we will pay no new Loan proceeds to you.

The amounts held in the Loan Collateral Account are part of your Policy Account Value. While you have an outstanding Loan Balance, the Cash Surrender Value will be the Policy Account Value (including the Loan Collateral Account balance) less the Loan Balance and any unpaid charges due.

As long as the Loan is outstanding, we will continue to hold an amount as collateral for the Loan in the Loan Collateral Account. This amount is not affected by the investment performance of the Investment Options and will not be credited with the interest rates accruing on the Fixed Account. Amounts held in the Loan Collateral Account will accrue Loan interest and affect the Policy Account Value, even after the Loan is repaid, because these amounts will miss the opportunity to participate in the investment performance of the Investment Options while the Loan is outstanding.

 

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Interest Processing

We charge you interest at a six percent (6%) annual rate on your Loan Balance. This rate will not be adjusted. Interest will be accrued and compounded (that is, become part of the Loan Balance) on each monthly Policy Processing Day.

Amounts in the Loan Collateral Account earn interest at an annual rate guaranteed not to be lower than four percent (4%) before the tenth (10th) Policy anniversary, and 5.75% thereafter. Loan interest is credited to the Loan Collateral Account on each monthly Policy Processing Day.

Loan interest capitalizes annually on the Policy Anniversary date, or when you take out a new Loan or make a repayment. Two things happen simultaneously when Loan interest capitalizes. First, the interest we have credited on the Loan Collateral Account is exchanged into the Investment Options and the Fixed Account in accordance with your then-current Premium allocation instructions. Second, we transfer an amount equal to the interest accrued upon your Loan Balance since the last Loan interest capitalization from your Cash Surrender Value to the Loan Collateral Account. We will obtain this amount by making redemptions from the Government Money Market Investment Option, or on a pro-rata basis from your balances in all Investment Options and the Fixed Account, based on your then-current Monthly Deduction instructions. (See 4(c). Monthly Deduction.)

Repayment

You may repay all or part of your indebtedness at any time while any Insured is alive and the Policy is in force. Upon each Loan repayment, we will allocate an amount equal to the Loan repayment (but not more than the Loan Balance) from the Loan Collateral Account back to the Investment Options and/or Fixed Account according to your then-current new Premium allocation instructions and our Premium allocation procedures. (See 5(b). Allocating Premiums Among Investment Options and the Fixed Account.) We will treat any repayment in excess of the Loan Balance as a Premium payment.

While your Loan is outstanding, we will credit payments we receive as Premium payments or Loan repayments in accordance with your written instructions. If we do not receive written instructions, we will assume that any payments you make are Premium payments.

Making Premium payments while a Loan is outstanding will increase your short-term costs of owning a Policy. Loan repayments, unlike Premium payments, are not subject to the State Tax Charge and will reduce net interest charges. Accordingly, while you have a Loan outstanding, you should provide written instructions about whether you want us to treat each payment as a Loan repayment or a Premium payment.

Effect of Loans on Policy Account Values and Insurance Proceeds

 

   

The amount of the Loan Balance, including unpaid principal and any accrued and unpaid interest, reduces the Cash Surrender Value and the Insurance Proceeds payable on the Insured’s death.

 

   

Amounts transferred as collateral to the Loan Collateral Account do not participate in the investment performance of the Investment Options, or earn Fixed Account interest, as long as the Loan is outstanding. Moreover, the interest we charge on your Loan Balance is greater than the interest earned on the Loan Collateral Account. This may limit your opportunity for asset growth over the long term.

 

   

Repaying a Loan causes the Insurance Proceeds and the Cash Surrender Value to increase by the amount of the repayment.

 

   

If your indebtedness causes the Cash Surrender Value on a Policy Processing Day to be less than the Monthly Deduction due, and the No-Lapse Guarantee no longer applies, your Policy will go into Default and enter a Grace Period. See 8. Policy Lapse and Reinstatement. If the Default is not remedied before the

 

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end of the Grace Period, the Policy will Lapse and we will repossess the collateral held in the Loan Collateral Account and use it to reduce or eliminate the Loan Balance.

 

   

Policy Loans may increase your risk of Lapse and may have unfavorable tax consequences. You should consult a qualified tax advisor before taking a Policy Loan. See 8. Policy Lapse and Reinstatement and 11. Tax Considerations.

4. CHARGES AND OTHER DEDUCTIONS

The Policy is subject to several types of charges and deductions, which will affect the Policy Account Value, Cash Surrender Value and the risk of Lapse, and may affect the Death Benefit. Unless specified otherwise, the below charges and deductions apply to both Single Life Policies and Survivorship Life Policies.

4(a). Sales or Surrender Charges

We do not deduct a sales charge from Premium payments, nor a Surrender charge upon Surrenders or Partial Withdrawals.

4(b). State Tax Charge

We deduct a State Tax Charge from each Premium payment to pay applicable state taxes that are assessed as a percentage of Premiums received by the Company. We do not currently deduct any taxes assessed by municipalities or other governmental entities, but we have the contractual right to do so if we provide you with advance written notice. State taxes vary by jurisdiction and may change from time to time. We charge 2.25% regardless of whether the applicable tax rate is higher or lower, but may in the future increase the State Tax Charge up to the applicable state tax rate.

4(c). Monthly Deduction

We make a deduction from the Cash Surrender Value as of each monthly Policy Processing Day to compensate us for administrative expenses and for the Policy’s insurance coverage. You may instruct us to take these deductions from the Government Money Market Investment Option (but not from the Fixed Account), or from all Investment Options and the Fixed Account on a pro rata basis, based on the proportion of the Cash Surrender Value then allocated to each Investment Option and to the Fixed Account as of each Policy Processing Day. You may change these instructions by giving written notice to us at our Service Center. If you do not provide us with written instructions, or if we cannot make a Monthly Deduction per your instructions, we will take the Monthly Deductions from the Investment Options and Fixed Account based on the proportion then allocated to each Investment Option and to the Fixed Account as of each Policy Processing Day.

The Monthly Deduction has 4 components: the monthly Cost of Insurance charge; the monthly Policy charge; the monthly unit charge (Survivorship Life Policies only); and charges for Riders you selected (as specified in the applicable Riders).

• Cost of Insurance. We assess a monthly Cost of Insurance charge to compensate us for providing the Death Benefit. Because this charge depends on a number of variables (Issue Age, sex (in most states), Underwriting Class, Policy Year and Face Amount), it varies from Policy to Policy and from Policy Processing Day to Policy Processing Day. Your Policy Schedule indicates the guaranteed maximum Cost of Insurance Rates applicable to your Policy.

The Cost of Insurance charge is equal to the Net Amount at Risk for your Policy on the Policy Processing Day, times the applicable monthly Cost of Insurance Rate.

 

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Net Amount at Risk. The Net Amount at Risk is equal to the Death Benefit minus the Policy Account Value on each monthly Policy Processing Day, regardless of your choice of Death Benefit. Under either Death Benefit Option, a Face Amount increase or decrease will increase or decrease the Net Amount at Risk. In addition, under Death Benefit Option A, the Net Amount at Risk generally increases when the Policy Account Value decreases, and decreases when the Policy Account Value increases. Therefore, the Net Amount at Risk is affected by any factor that affects the Policy Account Value, including investment performance, Premium payments, Policy charges, and withdrawals. Under Death Benefit Option B, the Net Amount at Risk is generally the same as the Face Amount and not affected by changes in Policy Account Value. However, under either Death Benefit Option, while your Policy Death Benefit is determined by the tax test, both the Death Benefit and the Net Amount at Risk will generally increase or decrease based on increases or decreases of the Policy Account Value.

We calculate the Net Amount at Risk separately for the initial Face Amount and for any increases in Face Amount. If we approve an increase in your Policy’s Face Amount, then a different Underwriting Class (and a different Cost of Insurance Rate) may apply to the amount of the increase, based on each Insured’s circumstances at the time of the increase. In order to determine the Net Amount at Risk for each coverage layer, we first calculate your Policy’s total Net Amount at Risk. This total Net Amount at Risk includes any increase to the Death Benefit due to the requirements of your Policy’s tax test. The total Net Amount at Risk is then allocated among the coverage layers, up to each coverage layer’s Face Amount, in the reverse order in which the coverage layers were added to the Policy. Any remaining Net Amount at Risk will be allocated to the initial Face Amount layer, even if that Net Amount at Risk is greater than the initial Face Amount.

Cost of Insurance Rates. We base the Cost of Insurance Rates on each Insured’s Issue Age, sex (or unisex rate), Underwriting Class, number of full years the insurance has been in force and, for a Single Life Policy, the Face Amount. The actual monthly Cost of Insurance Rates are based on, among other things, our expectations as to future mortality and expense experience. We may increase or decrease these rates from time to time, but the rates will never be greater than the guaranteed Cost of Insurance Rates stated in your Policy. These guaranteed rates are based on: either the 1980 or 2001 Commissioner’s Standard Ordinary Mortality Table, as specified in your Policy, except that we may adjust the table rates in order to offer flat guaranteed rates during the first ten (10) Policy Years; and each Insured’s age nearest birthday, sex (except where unisex rates are required), and smoker/nonsmoker status. Any change in the Cost of Insurance Rates will be on a uniform basis for all Insureds of the same Issue Age, sex, Underwriting Class, and number of full years insurance has been in force.

A Single Life Policy’s Cost of Insurance Rate also depends in part on the Face Amount. We have three different Cost of Insurance “bands” applicable to Face Amounts of: 1) under $500,000, 2) $500,000 to $999,999, and 3) $1 million or above. Higher bands have lower Cost of Insurance Rates. If you make a Policy change that reduces your Single Life Policy’s Face Amount into a different Cost of Insurance band (i.e., reduction from $1.1 million to $900,000) then we may change your Cost of Insurance Rate to the appropriate rate for the new Face Amount.

For a Survivorship Life Policy, the Cost of Insurance Rates are not impacted by the Face Amount.

Underwriting Class. When you apply for a Policy, we will place each Insured in an Underwriting Class based on our underwriting process. We currently place Insureds into preferred classes, standard classes and non-standard classes with extra ratings, and smoker/nonsmoker status.

If all other factors are equal, the Cost of Insurance Rates will generally be lower for preferred classes than standard classes, and lower for standard classes than nonstandard classes. A Nonsmoking Insured will generally incur lower Cost of Insurance Rates than an Insured in the same Underwriting Class who is classified as a smoker. For Insureds under age 18, we have one set of rates; we do not have separate smoker and nonsmoker status, or separate preferred and standard Underwriting Classes. An Insured child who reaches age 18 will be classified as a standard smoker unless and until the Insured provides satisfactory evidence of non-smoker status and/or evidence that they qualify for our preferred Underwriting Class.

 

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 Monthly Administrative Expenses (referred to as “Policy Charge” in your Policy). The $5.00 monthly charge compensates us for some of our ordinary administrative expenses, such as recordkeeping, processing Death Benefit claims and Policy changes, preparing and mailing reports, and overhead costs. This charge will not be increased during the life of the Policy.

• Monthly Unit Charge (Survivorship Life Policy Only). We deduct a monthly unit charge, expressed as an amount per $1,000 of the Policy’s Face Amount, for the first three Policy Years and for the three years (36 monthly Policy Processing Days) following a Face Amount increase. This charge compensates us for a portion of the additional underwriting and issue costs associated with a Survivorship Life Policy. The unit charge per $1,000 of Face Amount will never be greater than the rate set forth in the Policy Schedule.

• Charges for Optional Riders. Riders offering supplemental benefits are also available under the Single Life Policy and the Survivorship Life Policy. See 7. Other Benefits Available Under the Policy. We deduct any monthly charges for these Riders from the Cash Surrender Value as part of the Monthly Deduction. Rider charges are described in the Fee Tables above.

• Changes in Face Amount. We do not charge a transaction fee for any increases or decreases in your Policy’s Face Amount. However, increases in Face Amount will generally increase the Policy’s Net Amount at Risk and the monthly Cost of Insurance charges. See 6(c). Changing the Death Benefit after Purchase.

4(d). Mortality and Expense Risk Charge

We assess a daily charge against the Policy’s assets that are invested in the Investment Options of the Variable Account (but not the Fixed Account) to compensate us for certain mortality and expense risks we assume. The mortality risk is that Policy Insureds will live for a shorter time on average than we project, requiring us to make larger or earlier payments than we project. The expense risk is that our costs of issuing and administering the Policies will be greater than we can collect through other charges. We deduct a daily charge at an annual rate of 1.00% of the average daily net assets of your Policy in the Variable Account during the first twenty (20) Policy Years. The mortality and expense risk charge rate will then be reduced to an annual rate of 0.40% of the average daily net assets of your Policy in the Variable Account in the twenty-first (21st) Policy Year and beyond. These rates are guaranteed not to increase.

If this charge does not cover our actual costs, we absorb the loss. Conversely, if the charge is more than the actual costs, the excess can be used to cover our administrative or distribution costs, or added to our surplus.

4(e). Charges on Loans

If you take a Loan against your Policy, we charge you interest at a six percent (6%) annual rate on your Loan Balance. This rate will not be adjusted. Interest will be accrued and compounded (that is, become part of the Loan Balance) on each monthly Policy Processing Day. See 3(f). Loans.

4(f). Exchange Charge

We do not currently impose any charges when you Exchange among Investment Options or the Fixed Account, but we reserve the right to impose a charge if you Exchange on more than twelve days during a calendar year. We would deduct the Exchange charge from the amount being exchanged.

4(g). Fund Expenses

The value of the net assets of each Investment Option reflects the management fees and other expenses incurred by the corresponding Fund in which the Investment Option invests. For more information on Fund fees and expenses, please refer to Appendix A of this prospectus and the prospectuses for those Funds.

 

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4(h). Reduction in Charges

The Policy is available for purchase by individuals, corporations and other entities. We may reduce or waive certain charges where the size or nature of such sales results in savings to us with respect to sales, underwriting, administrative, or other costs. We also may reduce or waive charges on Policies sold to employees, officers, directors or agents of FILI or its affiliates, and to their immediate family members. Eligibility for these reductions and the amount of reductions will be determined by a number of factors, including the number of lives to be insured, the total Premiums expected to be paid, total assets under management for the Owner, the nature of the relationship among the insured individuals, the purpose for which the Policies are being purchased, expected persistency of these individual Policies, and any other circumstances which FILI believes to be relevant to the expected reduction of its expenses. Some of these reductions may be guaranteed and others may be subject to modification, on a uniform case basis. Reductions in charges will not be unfairly discriminatory to any Owners. The Company may modify from time to time, on a uniform basis, both the amounts of reductions and the criteria for qualification.

5. PREMIUMS, POLICY ACCOUNT VALUES, AND INVESTMENT OPTION VALUES

5(a). Premiums

The Policy is a flexible Premium Policy. This means that, subject to certain requirements described below, you may decide when to make Premium payments and in what amounts.

Minimum Initial Premium: You were required make a Minimum Initial Premium in order for coverage to take effect. Your Minimum Initial Premium amount was required to be at least: the Planned Annual Premium if you selected an annual payment schedule; one-half the Planned Annual Premium if you selected a semi-annual payment schedule; or one-sixth of the Planned Annual Premium (two months worth), if you selected a monthly payment schedule using automatic electronic funds transfer (EFT). We calculated the Minimum Initial Premium based on several factors, including your choice of Face Amount, the Insured’s age, sex (in most states) and underwriting classification, and, for a Survivorship Life Policy, by Rider selected.

Subsequent Premium Payments: You can pay subsequent Premiums at any time. Each subsequent Premium payment must be at least $50.

When the Policy was issued, we provided you with a planned Premium payment schedule reflecting your choice of an annual or semi-annual payment schedule, or a monthly payment schedule if you chose to make payments under our EFT (electronic funds transfer) program. You may select a monthly EFT payment schedule of $100 or more for us to automatically deduct Premiums from your bank account, or from your eligible Fidelity mutual fund or brokerage account.

You are not required to pay Premiums according to the planned Premium payment schedule. It is your responsibility, however, to pay enough Premiums to avoid Lapse of the Policy. For additional information, please see 8. Policy Lapse and Reinstatement.

We have the right to limit or refund any Premium or portion of a Premium, or to request additional written instructions if, in our opinion, (1) the Premium would disqualify the Policy as a life insurance contract under the Internal Revenue Code (see 11. Tax Considerations); or (2) the Premium would make your Policy a MEC under the Internal Revenue Code (see 11. Tax Considerations); or (3) the Premium would increase the Net Amount at Risk, unless you provide us with satisfactory evidence of each Insured’s insurability. This could occur if the Death Benefit is based on the Policy Account Value times the applicable Internal Revenue Code factor. See 6. Death Benefit and Insurance Proceeds below.

If you have an outstanding Policy Loan, you should instruct us whether to credit your payments either as Premium payments or as Loan repayments. (See 3(f). Loans.) Finally, you may not pay any Premiums after the

 

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Policy’s Extended Maturity date, although you may make Loan repayments after that date. (See 6(e). Extended Maturity.)

Method of Payment: You may pay for the Premiums with a personal check drawn on a U.S. bank subject to our approval. We reserve the right to refuse a personal check for any reason. You may also make Premium payments by moving money from your Fidelity mutual fund or brokerage account, or under our EFT program. Any Contracts and accounts between which money will be transferred must have at least one owner’s name in common. You may also request that we accept proceeds from another life insurance contract in a transaction that qualifies as a tax-free exchange under Section 1035 of the Internal Revenue Code. However, if we agree to process a requested 1035 exchange, we are responsible only for actions we take and are specifically not responsible for the performance of the transferring insurance company, for the timing of the transfer or for any adverse tax consequences.

Purchase Payments Made with Returned Checks or Unfunded Electronic Funds Transfers: If you make a Premium payment with a check that is returned to us unpaid due to insufficient funds or for any other reason, or if your Premium payment is made by an electronic funds transfer that is later reversed due to lack of funds in the bank account from which the transfer was made or for any other reason, we will: (1) reverse the transaction; and (2) if the reversal results in a loss of more than one thousand dollars ($1,000) to us, redeem a sufficient number of Investment Option units at the then-current unit values to provide us with an amount equal to the loss. Money will be taken proportionately from all of the Investment Options and the Fixed Account in which you are invested.

If you do not have sufficient value in your Cash Surrender Value, we may take legal action against you to recover any remaining losses we have incurred.

Any redemption we make under this provision may result in a taxable event to you, just as for any other withdrawal.

5(b). Allocating Premiums Among Investment Options and the Fixed Account

You choose how to allocate your Premium payments among the Investment Options and the Fixed Account, and the percentage to be allocated to each.

Additional Net Premiums allocated to the Investment Options are credited to your Policy based on the next computed value of an Investment Option unit following receipt of your payment at the Service Center. Net Premiums allocated to the Fixed Account are credited under your Policy as of the date the payment is received at our Service Center.

For subsequent Premium payments, you may send allocation instructions to our Service Center in accordance with our then-current procedures. We do not accept instructions by fax or electronic mail. If you make a subsequent Premium payment and do not give us allocation instructions for it, we will allocate it among the Investment Options and the Fixed Account in accordance with your most recent allocation instructions. Any allocation instructions will be effective upon receipt in good order at our Service Center, and will apply only to Premium payments received on or after that date.

Instructions may be expressed in dollars or in percentages. All instructions must be in whole numbers, not decimals or fractions. If you give us instructions that are unclear or incomplete, your Premium payment and any future Premium payments will be allocated to the Government Money Market Investment Option until we receive instructions that are clear and complete. Instructions may be unclear or incomplete if percentage allocations do not total 100% or for some other reason. In the case of incomplete or unclear instructions, we will not be responsible for changes in unit values or for lost market opportunities.

 

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If you pay Premium payments monthly by electronic funds transfer, you will not be able to allocate any of those payments to the Fixed Account.

You may generally not allocate more than $20,000 (including transfers) to the Fixed Account during any one Policy Year. You may not allocate more than 25% of your Policy Account Value or any Premium payment to the Fixed Account and you may not make more than one transfer to the Fixed Account during any one Policy Year. We may discontinue the availability of the Fixed Account for transfers from the Investment Options, or for Premium payments, at any time.

You should verify the accuracy of your transaction confirmations and statements immediately after you receive them. If you find a discrepancy with regard to a particular transaction, you should notify the Service Center promptly. We will not be responsible for losses due to unit value changes unless you notify us within ten calendar days from the first time we mail a confirmation or statement with details of the transaction.

5(c). Policy Account Values and Investment Option Values

The Policy Account Value is the starting point for calculating values under a Policy. The Policy Account Value:

 

   

equals the sum of a Policy’s Fixed Account value, all Investment Option values, and Loan Collateral Account value;

 

   

is determined on each Valuation Day after the Policy becomes effective; and

 

   

has no guaranteed minimum amount and may be more or less than Premiums paid.

The Cash Surrender Value is the Policy Account Value, less any Loan Balance (which includes accrued interest) and unpaid charges due.

For each Investment Option to which you allocate Premiums, the Investment Option value is equal to the number of Investment Option units held by the Policy multiplied by the Investment Option’s unit value at the end of each Valuation Day. Your Policy’s number of units in any Investment Option is the sum of all units purchased with Premium payments or Exchanges, minus the sum of all units redeemed as a result of transactions you have requested (including Exchanges, withdrawals, Surrenders or Loans) and units we have redeemed for Policy charges or to pay Policy benefits.

The value of each Investment Option’s accumulation units is calculated as of the close of business (normally 4:00 p.m. Eastern Time) on each day that there is trading on the New York Stock Exchange (“Valuation Day”). The unit value changes on each Valuation Day based on the total return of the Investment Option. The total return reflects the investment performance of the Fund in which the Investment Option invests and is net of the asset charges to the Investment Option. Shares of the Funds are valued at their net asset values as described in the Funds’ prospectuses. Any dividends or capital gains distributions from a Fund are reinvested in that Fund. The Policy is “non-participating,” meaning there are no dividends. Investment results of the Investment Options are reflected in the Policy Account Value and certain other Policy features.

The investment performance of the Investment Options and underlying Funds, Policy expenses and deduction of charges will affect your Policy Account Value and Cash Surrender Value, and may also affect the amount of your Death Benefit. Positive total returns of the Investment Options you select generally increase Policy Account Value, and negative total returns generally decrease Policy Account Value. Policy Account Value may also decline due to Policy charges and deductions. Policy Account Value in turn may impact the amount of the Death Benefit, depending on which of the two Death Benefit options you chose when you purchased your Policy. See 6(b). Setting the Death Benefit at Purchase. You bear the entire investment risk for amounts you allocate to the Investment Options. You should periodically review your allocation strategy in light of market conditions and your overall financial objectives.

 

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6. DEATH BENEFIT AND INSURANCE PROCEEDS

6(a). Overview of Death Benefit

We will pay Insurance Proceeds based on a Death Benefit to the named Beneficiaries: (a) upon satisfactory proof of death of the Insured while a Single Life Policy is in force; or (b) upon satisfactory proof of death of the last surviving Insured (that is, after both Insureds have died) while a Survivorship Life Policy is in force. If all named Beneficiaries die before the Insured, or the last surviving Insured in a Survivorship Life Policy, we will pay the Insurance Proceeds to any surviving Owner(s); if no Owner survives, to the estate of the last surviving Owner.

We will make payment in a lump sum, unless you have agreed with us to a different method of payment. Please contact our Service Center for customer service concerning payment options.

The Insurance Proceeds equal:

 

   

the Death Benefit (described below); minus

 

   

any unpaid monthly charges; minus

 

   

any Loan Balances, including any accrued but unpaid interest; minus

 

   

any payment made under the Accelerated Benefit, including any accrued but unpaid interest on such a payment.

We calculate the Death Benefit and Insurance Proceeds as of the Valuation Day on or next following: the date of the Insured’s death for a Single Life Policy; the date of death of the last surviving Insured for a Survivorship Life Policy. We will transfer the amounts allocated to Investment Options to the Government Money Market Investment Option upon receipt of notice of such Insured’s death, while we review or process a death claim. We will also pay interest on Insurance Proceeds to the extent required by applicable state law.

Once we have received due proof of the Insured’s death that is acceptable to us, we will ordinarily pay the Insurance Proceeds to the Beneficiaries within 15 days. These payments may be delayed in the event that we exercise our right to seek additional evidence, see “Policy Validity” below, or in the event of difficulty locating a Beneficiary or determining the correct Beneficiaries.

Upon the payment of Insurance Proceeds, and any additional benefits then due under a Policy Rider, the Policy and all Riders, will terminate, except that a Children’s Term Rider will continue in force until its termination. See “Children’s Term Rider” under 7(b). below for details.

6(b). Setting the Death Benefit at Purchase

When you applied for a Policy, you made three decisions in order to set the Death Benefit:

 

  (1)

Selected a Face Amount of insurance coverage.

 

  (2)

Chose Death Benefit Option A or Option B, which determined how the Policy Account Value will affect the Death Benefit.

 

  (3)

Chose the tax test we apply to assure that your Policy is considered life insurance under the Internal Revenue Code.

You can request a hypothetical illustration that shows how each of these decisions affects the benefits of the Policy. You may wish to consult a financial planning or tax professional for additional advice.

Face Amount: The Face Amount sets a minimum level for the Death Benefit.

Death Benefit Options: This Policy provides two Death Benefit options: Option A and Option B.

 

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Under Option A, the Death Benefit is the greater of:

 

  (1)

the Face Amount; or

 

  (2)

the minimum death benefit under the tax test you select.

Under Option B, the Death Benefit is the greater of:

 

  (1)

the Face Amount plus the Policy Account Value; or

 

  (2)

the minimum death benefit under the tax test you select.

Under either option, the Death Benefit is reset to equal the Policy Account Value on the Extended Maturity date. See “Extended Maturity” below.

Option A is intended for individuals who are comfortable with a fixed Face Amount of insurance coverage and prefer that increases, if any, in Policy Account Value reduce insurance costs. Cost of Insurance charges are based on a Policy’s Net Amount at Risk, which is the difference between Death Benefit and Policy Account Value. Under Option A, increases in Policy Account Value generally reduce the Net Amount at Risk, while decreases in Policy Account Value generally increase the Net Amount at Risk.

Option B is intended for individuals who prefer to have increases in Policy Account Value, due to Premium payments and/or favorable investment performance, reflected in a variable Death Benefit. If you chose Option B and your Policy Account Value increases, it will be reflected in an increased Death Benefit; if, however, your Policy Account Value declines, your Death Benefit will decrease. Policy Account Value may decline due to adverse investment experience and/or Policy charges and deductions, if not offset by Premium payments.

The amount of the Death Benefit may vary with the Policy Account Value:

(1) Under Option A, the Death Benefit will vary with the Policy Account Value only when the applicable tax test requires that the Death Benefit exceed the Face Amount. This may occur when the Policy Account Value is large in relation to the Death Benefit. (See “Tax Test” below.) The Death Benefit will also vary after the Extended Maturity date. See “Extended Maturity” below.

(2) Under Option B, the Death Benefit will always vary with the Policy Account Value.

Tax Test: In order to be treated as life insurance under Federal tax law, the Policy’s Death Benefit must meet or exceed the minimum requirements of either the Guideline Premium Test or the Cash Value Accumulation Test. These tests generally impact the Death Benefit when an Owner has a relatively large Policy Account Value in relation to the Face Amount.

You were asked to choose on your Policy Application the Guideline Premium Test (GPT) or the Cash Value Accumulation Test (CVAT), except that if the Insured on a Single Life Policy was 75 years old or more on the Issue Date, the CVAT automatically applied. The GPT generally gives Owners the ability to minimize insurance costs by maintaining a lower Net Amount at Risk over the life of the Policy. (The Net Amount at Risk is the difference between the Death Benefit and the Policy Account Value, and is the basis for monthly Cost of Insurance charges.) The CVAT, on the other hand, enables an Owner to pay in a greater amount of Premium in the early years of the Policy. Once the Policy is issued, you cannot change the tax test. You should consult a qualified tax advisor regarding your choice of tax tests.

Under the GPT, a Policy’s Death Benefit will not be less than the Policy Account Value times the corridor factor under the Code. The corridor factors, which require that the Death Benefit be greater than the Policy Account Value by a percentage that decreases over time, are shown in the Table of Guideline Premium Test Percentages in your Policy and in the SAI. They are summarized below, based on the Insured’s age or, for Survivorship Life

 

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Policies, the younger Insured’s age, at the start of each Policy Year (for attained ages not shown, percentages decline pro rata each year):

 

Insured’s

Attained Age

   GPT Corridor
Factor
  

Insured’s

Attained Age

   GPT Corridor
Factor

40 and under

   250%    60    130%

45

   215%    65    120%

50

   185%    70    115%

55

   150%    75 through 90    105%
      95 through 99    100%

Under the CVAT, the Death Benefit will not be less than: (a) 1000 times the Policy Account Value, divided by (b) the Net Single Premium Factor per $1,000 of Death Benefit. The net single premium factors vary based on each Insured’s sex, underwriting class, age at Issue and Policy Year, and are shown in your Policy.

6(c). Changing the Death Benefit after Purchase

After the first Policy Year and while the Policy is in force, you may make a written request to change the Face Amount or the Death Benefit option or both. Any such change may affect the Net Amount at Risk over time, which would affect the monthly Cost of Insurance charge. We reserve the right to discontinue allowing such changes.

We generally do not permit more than one such change in any 12-month period, and we do not permit changes while benefits are being paid under any Disability Rider. We reserve the right to reject any change that may, in our opinion, result in your Policy being disqualified as a life insurance contract under Section 7702 of the Internal Revenue Code. We also reserve the right to require additional written instructions from you in the event that the requested change may, in our opinion, make your policy a MEC under the Internal Revenue Code. A change of Face Amount or Death Benefit option may have unfavorable tax consequences. You should consult a qualified tax advisor before making any change to the Face Amount or the Death Benefit.

In order to request a change of your Face Amount or Death Benefit option, you must submit a written request. If you request an increase in Face Amount or a change in Death Benefit option which, in our opinion, increases our insurance risk, you must also provide additional evidence of the Insured’s insurability, as well as any additional paperwork we may require, to our Service Center. The effective date of any requested change in your Death Benefit will be the next monthly Policy Processing Day following the date when we approve your request for a change. A change in Face Amount or Death Benefit option has the effect of amending your Policy terms, and we will send you new Policy Schedule pages to reflect this change.

Increasing the Face Amount: You may request an increase in the Face Amount by submitting a written Application and providing evidence of insurability satisfactory to us at our Service Center.

 

   

The minimum increase is $50,000.

 

   

We will require that, on the effective date of an increase, and taking the increase into account, the Cash Surrender Value be at least equal to the monthly charges then due.

 

   

An increase will be effective on the next Policy Processing Day following the date we approve the change, provided that an Insured is living on that date.

 

   

The total Net Amount at Risk will be affected, which will increase the monthly Cost of Insurance charges.

 

   

Each increase in Face Amount will have its own Underwriting Class and Cost of Insurance Rates as determined at the time of the increase.

 

   

We reserve the right to limit increases in the Face Amount to one increase in any twelve (12) month period.

 

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Decreasing the Face Amount: You may request a decrease in the Face Amount by submitting a written request to decrease the Face Amount, but you may not decrease the Face Amount below the applicable minimum initial Face Amount (generally $250,000 for a Single Life Policy and $500,000 for a Survivorship Life Policy). See 3(a). Purchasing a Policy above.

 

   

The minimum decrease is $25,000.

 

   

Any decrease will be effective on the next Policy Processing Day following the date we approve your request.

 

   

To apply the decrease, we will first reduce any increases in the Face Amount, starting with the most recent. Then we will reduce the initial Face Amount.

A decrease in Face Amount generally will decrease the Net Amount at Risk, on which the Cost of Insurance charges are based. For purposes of determining the Cost of Insurance charge, any decrease in Face Amount will first be used to reduce the most recent increase, then the next most recent increases in succession, and finally the initial Face Amount. However, if a decrease in Face Amount moves a Single Life Policy into a lower Cost of Insurance band, (for example, from $1.1 million to $900,000) then the Cost of Insurance Rate applied to the Policy’s Net Amount at Risk may increase. See “Cost of Insurance” below.

Changing Death Benefit from Option A to Option B: In order for us to approve a change from Option A to Option B:

 

   

The Policy must be in force;

 

   

The current Face Amount must be greater than the minimum Death Benefit required by Section 7702 of the Internal Revenue Code; and

 

   

The change must not reduce the Face Amount below the minimum Face Amount we require to issue a Policy.

If we approve a request from Option A to Option B, the following will occur:

 

   

We first decrease the Face Amount (beginning with the most recent increase, then the next most recent increases in succession, and finally the initial Face Amount) by the Policy Account Value;

 

   

The Death Benefit will not change on the effective date of the change, but thereafter the Death Benefit will vary daily with changes in Policy Account Value;

 

   

The Face Amount will be the Net Amount at Risk and will generally remain level after the change. This means there may be a relative increase in the Cost of Insurance charges, which are based in part on Net Amount at Risk, as the Insured ages, because increases in Policy Account Value, if any, will not reduce the Net Amount at Risk;

 

   

If you also request that the Face Amount stay the same after the change, the change will increase the Net Amount at Risk and the Monthly Deduction applied to your Policy Account Value.

Example:

 

Change Death Benefit From Option A to Option B

   Option A
(Before
Change)
     Calculation:
Subtract
Policy
Account
Value
     Option B
(After Change)
 

Face Amount

   $ 300,000      $50,000      $ 250,000  

Policy Account Value

   $ 50,000         $ 50,000  
  

 

 

       

 

 

 

Death Benefit

   $ 300,000         $ 300,000  

 

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Changing Death Benefit from Option B to Option A: In order for us to approve a change from Option B to Option A, the Policy must be in force.

If we approve a request from Option B to Option A, the Face Amount will be increased by the Policy Account Value on the effective date of the change.

Example:

 

Change Death Benefit From Option B to Option A

   Option B
(Before
Change)
     Calculation:
Add Policy
Account
Value
     Option A
(After Change)
 

Face Amount

   $ 250,000      +$ 50,000      $ 300,000  

Policy Account Value

   $ 50,000         $ 50,000  
  

 

 

       

 

 

 

Death Benefit

   $ 300,000         $ 300,000  

6(d). Policy Validity

Contestability and Suicide provisions vary according to requirements of state law. This section describes FILI’s basic Policy terms, but you should review your Policy for the specific terms.

Except for Policy Lapse, we will not contest the validity of a Policy after it has been in force during the Insured’s life, or the lifetime of the last surviving Insured for a Survivorship Life Policy, for two years continuously from the Issue Date and for 2 years after any Policy reinstatement, or a shorter period if required by state law. Similarly, we will not contest the validity of a Death Benefit change requiring underwriting after such change has been in force during the Insured’s life, or the lifetime of the last surviving Insured for a Survivorship Life Policy, for two years, or a shorter period if required by state law. If we wish to contest the validity of a Survivorship Life Policy based on a material misrepresentation concerning the first Insured to die, we will notify you within 12 months after we have received proof of that Insured’s death.

If a Policy, or a change in Death Benefit requiring underwriting, has been in force less than two years, or if a reinstated Policy has been in force less than two years from the date of reinstatement, we can contest the validity of the Policy or Death Benefit change on the grounds of any misrepresentation of a material fact in the applicable Policy, reinstatement or Death Benefit change application.

We reserve the right to obtain evidence of the fact, manner and cause of death of any Insured, including the first Insured to die under a Survivorship Life Policy. You and your Beneficiaries agree to provide us with reasonably timely notice of the death of each Insured, including the first Insured to die in the case of a Survivorship Life Policy, so that our rights are not prejudiced by delay.

If an Insured, whether sane or insane, dies by suicide within two years after the Issue Date or within 2 years of any Policy reinstatement, or within the maximum period permitted by state law, if less, the following will occur:

 

   

a Single Life Policy will terminate;

 

   

a Survivorship Life Policy will terminate upon the suicide of either Insured during the time period if permitted by state law; otherwise, the Policy will terminate only upon the suicide of the second Insured to die within the time period.

If a Policy terminates due to a suicide, our liability will be limited to the Premiums paid for the Policy, less Loans and withdrawals.

If an Insured, whether sane or insane, dies by suicide within two years after a change in Death Benefit requiring underwriting, or within the maximum period permitted by state law, if less, our liability will be limited to the

 

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Insurance Proceeds that would have been payable if the change had not taken effect, plus any additional Cost of Insurance charges taken as a result of the change.

If the age or sex of an Insured is misstated in the Policy Application, the following will occur:

 

   

if we discover the misstatement while any Insured is living, we will retroactively adjust the Policy Account Value and the Cash Surrender Value to reflect the Monthly Charges that would have applied if the Policy had correctly stated the age and sex of each Insured;

 

   

if we discover the misstatement after the death of the Insured in a Single Life Policy or after the death of both Insureds under a Survivorship Life Policy, we will change the Face Amount, Death Benefit and Insurance Proceeds, as well as any Death Benefit payable under any Riders, to reflect the amount that would be purchased by the most recent deductions for the Cost of Insurance and applicable Riders, applying each Insured’s correct age and sex.

Any modifications or waiver of our rights under a Policy are valid only if they are in writing and signed by the President, Secretary, or Assistant Secretary of FILI. We may modify the Policy to the extent necessary or appropriate to conform to applicable law, to assure continued qualification of the Policy as a life insurance Policy under Federal tax laws, or to reflect a change in the operation of the Variable Account. We will send you an endorsement to the Policy to reflect any such modifications.

6(e). Extended Maturity

A Single Life Policy Extended Maturity begins on the Policy Anniversary nearest the Insured’s 100th birthday. A Survivorship Life Policy Extended Maturity begins on the Policy Anniversary nearest the 100th anniversary of the younger Insured’s date of birth, even if the younger Insured is not the surviving Insured. At this time:

 

   

we will discontinue Monthly Deductions;

 

   

the Death Benefit will be converted to, and thereafter be defined as, the Policy Account Value, without regard to the Face Amount or Death Benefit option chosen;

 

   

we will not accept any new Premiums or, in most states, make any new or additional Policy Loans;

 

   

any Policy Loans will continue in place and interest will continue to accrue unless and until the Loans are repaid; and

 

   

the Owner retains all other rights under the Policy.

The tax consequences of continuing the Policy during Extended Maturity are not clear. You should consult a qualified tax advisor if you intend to do so.

Florida Residents: This Extended Maturity feature is not available in Florida. For Florida residents, the Single Life Policy will mature on the Policy Anniversary nearest the Insured’s 100th birthday, if the Insured is still living on that day. Upon maturity, the Policy will terminate and we will pay the Cash Surrender Value to the policy Owner and retire any Policy Loan by retaining the balance in the Loan Collateral Account. The Survivorship Life Policy will mature on the Policy Anniversary nearest the 100th anniversary of the younger Insured’s date of birth, even if the younger Insured is not the surviving Insured. Upon maturity, the Policy will terminate and we will pay the Cash Surrender Value to the policy Owner and retire any Policy Loan by retaining the balance in the Loan Collateral Account.

 

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7. OTHER BENEFITS AVAILABLE UNDER THE POLICY

In addition to the standard Death Benefit associated with your Policy, other standard and/or optional benefits may also be available to you. The following tables summarize information about those benefits. Information about the fees, if any, associated with each benefit included in the table may be found in the Fee Tables.

7(a). Overview of Other Benefits

STANDARD BENEFITS

 

Name of Benefit   Purpose  

Brief Description of

Restrictions / Limitations

Accelerated Benefit   Allows you to request partial payment of the Insurance Proceeds as a living benefit if the Insured is diagnosed with a terminal illness and is expected to live less than 12 months.  

This benefit is only applicable to Single Life Policies.

 

We may require evidence of the terminal illness, as defined in the Policy, before making payment.

 

This benefit is not included in New Jersey or Montana Policies.

 

Receipt of accelerated payment of Insurance Proceeds may have tax consequences.

Dollar Cost Averaging   Allows for automatic monthly Exchanges from either the Government Money Market Investment Option or the Investment Grade Bond Investment Option (the “Source Options”), but not both, to the other Investment Options you select (the “Destination Options”).  

Minimum transfer amount is $250.

 

May not be used at the same time as Automatic Rebalancing.

 

May not be used to transfer money to the Fixed Account.

 

We reserve the right to modify or terminate this benefit.

Automatic Rebalancing   Helps to maintain a specified allocation mix among Investment Options.  

May not be used at the same time as Dollar Cost Averaging.

 

May not be used if you have a balance in the Fixed Account.

 

We reserve the right to modify or terminate this benefit.

 

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SINGLE LIFE POLICY OPTIONAL BENEFITS

 

Name of Benefit   Purpose  

Brief Description of

Restrictions / Limitations

Children’s Term Rider   Provides $10,000 term life insurance coverage on each of the Insured’s children named in the Application and on each child later born to or adopted by the Insured.  

Coverage initially applies to each child over 14 days and under 18 years old while the Rider is in effect, and terminates on the earlier of the Insured’s age 65 or as each child turns age 25.

 

This Rider is not available for Montana Policies.

Total Disability Premium Payment Rider   Provides that during periods of the Insured’s total disability, as defined in the Rider, we will pay a Disability Benefit Amount of up to the lesser 1/12th of the Planned Annual Premium or $2,500 per month, as a Premium to this Policy on each monthly Policy Processing Day.  

Benefit, if any, dependent on age of Insured when total disability begins.

 

We may require evidence of the disability before making payment, and on an ongoing basis while disability continues.

 

You were required to apply for this Rider in connection with your initial Policy application.

 

Only one of the two Total Disability Riders could be elected per Policy.

 

Not available in Pennsylvania.

Total Disability Waiver of Monthly Deductions Rider   Provides that during periods of the Insured’s total disability, as defined in the Rider, Monthly Deductions under this Policy will be waived.  

Benefit, if any, dependent on age of Insured when total disability begins.

 

We may require evidence of the disability before making payment, and on an ongoing basis while disability continues.

 

You were required to apply for this Rider in connection with your initial Policy application.

 

Only one of the two Total Disability Riders could be elected per Policy.

 

Not available in Pennsylvania.

 

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SURVIVORSHIP LIFE POLICY OPTIONAL BENEFITS

 

Name of Benefit   Purpose   Brief Description of
Restrictions / Limitations
Total Disability Premium Payment Rider   Provides that during periods of the covered Insured(s)’ total disability we will pay a Disability Benefit Amount of up to the lesser 1/12th of the Planned Annual Premium or $2,500 per month, as a Premium to this Policy on each monthly Policy Processing Day.  

Benefit, if any, dependent on age of Insured when total disability begins.

 

We may require evidence of the disability before making payment, and on an ongoing basis while disability continues.

 

You were required to apply for this Rider in connection with your initial Policy application.

 

Not available in Pennsylvania.

Estate Protection Rider   Provides a limited additional term life insurance benefit in the event that both Insureds die during the first four (4) Policy Years.   You were required to apply for this Rider in connection with your initial Policy application.

7(b). More Details on Other Benefits and Riders

PLEASE NOTE: “Benefits” are included with each Policy for no additional charge. “Riders” are separate forms that can be added to your Policy, usually for additional costs, to provide additional insurance benefits. You must generally apply for Rider coverage when you apply for the Policy itself. We may decline or limit Rider coverage in accordance with our underwriting standards or for any reason permitted by law. Benefits and Riders may not be included / available in all states and where included / available may vary from state to state. The Benefit and Rider descriptions below are summaries only; you should review your Policy and Rider forms themselves for more complete terms and conditions.

STANDARD BENEFITS

 Accelerated Benefit

This benefit is only applicable to Single Life Policies.

Included as part of a Single Life Policy at no additional charge, this benefit allows you to request partial payment of the Insurance Proceeds as a living benefit if the Insured is diagnosed with a terminal illness and is expected to live less than 12 months. We may require evidence of the terminal illness, as defined in the Policy, before making payment. The amount available as a benefit is up to fifty percent (50%) of the Net Amount at Risk (Death Benefit less Policy Account Value), up to a maximum of $250,000. We place a lien against the Insurance Proceeds equal to the amount of the Accelerated Benefit payment, plus interest at an annual rate of six percent (6%) from the date of Accelerated Benefit payment until the time of death; the lien has the effect of reducing the Insurance Proceeds payable at death. After a payment of this benefit, we will continue to make Monthly Deductions based on the entire Net Amount at Risk. A payment of this benefit will not affect the Policy Account Value, Cash Surrender Value or Policy Loans. See your Policy for complete details of the coverage. This benefit is not included in New Jersey or Montana Policies.

Receipt of accelerated payment of Insurance Proceeds may have tax consequences. You should consult a qualified tax advisor before requesting any Accelerated Benefit payment.

 

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 Dollar Cost Averaging

Dollar Cost Averaging allows you to make automatic monthly Exchanges at no charge from either the Government Money Market Investment Option or the Investment Grade Bond Investment Option (the “Source Options”), but not both, to the other Investment Options you select (the “Destination Options”). You may not, however, select the Source Options as Destination Options. Each month you must move at least $250 to each Destination Option then in effect. You may change your Source Option or your Destination Options at any time, by calling us or by sending written notice to our Service Center. Dollar Cost Averaging transactions do not count toward the Policy’s limits on the number of Exchanges.

You may select any day of the month from the 1st to the 28th as the day your Dollar Cost Averaging transactions will take place each month. If the New York Stock Exchange is not open on the scheduled day in a particular month, the Exchange will take place on the next day the New York Stock Exchange is open for trading.

If your balance in the Source Option on a transfer date is less than the amount to be transferred to the Destination Option(s), we will transfer all the money in the Source Option to the Destination Options proportionately, and your participation in the program will automatically terminate.

You may cancel Dollar Cost Averaging at any time by calling us or sending written notice to the Service Center.

You may not use Dollar Cost Averaging to transfer money to the Fixed Account. You cannot use Dollar Cost Averaging at the same time that you use Automatic Rebalancing, which is described immediately below. We reserve the right to modify or terminate Dollar Cost Averaging.

 Automatic Rebalancing

You can use Automatic Rebalancing at no charge to help you maintain your specified allocation mix among the Investment Options.

You direct us to readjust your allocations on a quarterly, semi-annual or annual basis to return to the allocations you select on the Automatic Rebalancing instruction form. Automatic Rebalancing transactions do not count toward the Policy’s limits on the number of Exchanges.

You choose one day of the month from the 1st to the 28th for Automatic Rebalancing. If the New York Stock Exchange is not open on the scheduled day in a particular month, the Exchange will take place on the next day the New York Stock Exchange is open for trading.

Automatic Rebalancing will continue until you notify us to cancel it. We reserve the right to modify or terminate Automatic Rebalancing. You may not use Automatic Rebalancing if you have a balance in the Fixed Account. You may not use Automatic Rebalancing at the same time you use Dollar Cost Averaging, which is described immediately above.

SINGLE LIFE POLICY OPTIONAL BENEFITS

• Children’s Term Rider

This Rider provides $10,000 term life insurance coverage on each of the Insured’s children named in the

Application and on each child later born to or adopted by the Insured. Coverage initially applies to each child over 14 days and under 18 years old while the Rider is in effect. You can apply for this Rider at the time of Application for the Policy or at the birth or legal adoption of the first child of the Insured. This Rider terminates as to each insured child on the Child’s 25th birthday. This Rider will terminate as to all insured children on the earliest of:

 

  1.

The first Policy Processing Day after we receive Written Request for termination;

 

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  2.

The date of Surrender or other termination of the Policy (other than by the death of the Insured); or

  3.

The Policy Anniversary nearest the Insured’s 65th birthday.

See the Rider for complete details of the coverage. This Rider is not available for Montana Policies.

• Total Disability Riders

You had the opportunity to purchase one of two total disability Riders, in connection with your initial Policy application, as long as the Insured was at least 18 and under 65 when the Policy was issued.

 

   

Total Disability Premium Payment Rider. This Rider provides that during periods of the Insured’s total disability, as defined in the Rider, we will pay a Disability Benefit Amount of up to the lesser of the one-twelfth (1/12) of the Planned Annual Premium or $2,500 per month, as a Premium to this Policy on each monthly Policy Processing Day while total disability continues and other requirements are met.

 

   

Total Disability Waiver of Monthly Deductions Rider. This Rider provides that during periods of the Insured’s total disability, as defined in the Rider, Monthly Deductions under this Policy will be waived while total disability continues and other requirements are met.

Limitations On Both Total Disability Riders. If the Insured’s total disability begins at age 65 or later, no benefits will be paid. If the total disability begins on or after the Insured’s age 63 but before 65, benefits may continue for up to two years. If the total disability begins on or after the Insured’s age 60 but before 63, benefits may continue until up to age 65. If the total disability begins before the Insured’s age 60, the benefits will continue as long as the Insured remains totally disabled. You can only elect one of the two Total Disability Riders. We reserve the right to require evidence of the disability before making payment under these Riders, and on an ongoing basis while disability continues. See the Rider(s) for complete details of the coverage. These Riders were not available for Pennsylvania Policies.

SURVIVORSHIP LIFE POLICY OPTIONAL BENEFITS

 Total Disability Premium Payment Rider(s)

You had the opportunity to purchase this Rider for either or both Insureds in connection with your initial Policy Application. It provides that during periods of the covered Insured(s)’ total disability, as defined in the Rider, we will pay a Disability Benefit Amount of up to the lesser of one-twelfth (1/12) of the Planned Annual Premium or $2500, as a Premium to this Policy on each monthly Policy Processing Day while total disability continues and other requirements are met. If the Insured’s total disability begins at age 65 or later, no benefits will be paid. If the total disability begins on or after the Insured’s age 63 but before 65, benefits may continue for up to two years. If the total disability begins on or after the Insured’s age 60 but before 63, benefits may continue until up to age 65. If the total disability begins before the Insured’s age 60, the benefits will continue as long as the Insured remains totally disabled. We reserve the right to require evidence of the disability before making payment under this Rider, and on an ongoing basis while disability continues. See the Rider for complete details of the coverage. This Riders was not available for Pennsylvania Policies.

 Estate Protection Rider

This Rider provides a limited additional term life insurance benefit in the event that both Insureds die during the first four (4) Policy Years. You had the opportunity to apply for this Rider in connection with your initial Policy application. See the Rider for complete details of the coverage. There are no separate charges for this Rider.

 

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8. POLICY LAPSE AND REINSTATEMENT

A Policy will go into Default if, on a monthly Policy Processing Day, the Cash Surrender Value is insufficient to pay the amount of the Monthly Deduction and the No-Lapse Guarantee no longer applies to the Policy. Therefore, a Policy could Lapse eventually if its Cash Surrender Value is not sufficient to cover Policy charges.

We will notify you in writing of any Default and will allow you a Grace Period of 61 days from the date of the written notice, in which you may make a Premium payment sufficient to bring the Policy out of Default. The required payment will be the accumulated deficiencies plus three (3) months’ Monthly Deductions.

If we do not receive the required payment by the end of the Grace Period, the Policy will Lapse: that is, terminate with no value. If there is a Policy Loan, we will repossess the collateral held in the Loan Collateral Account and use it to reduce or eliminate the Loan Balance. In addition, a Policy Lapse may have unfavorable tax consequences. See “Federal Tax Considerations.”

8(a). Death During Grace Period

If the Insured under a Single Life Policy, or the last surviving Insured under a Survivorship Life Policy, should die during the Grace Period, the Cash Surrender Value used in the calculation of the Death Benefit will be the Cash Surrender Value as of the Policy Processing Day on which the Policy went into Default.

8(b). No Lapse Guarantee

As long as your Policy satisfies the No-Lapse Guarantee Cumulative Premium Test, we guarantee that the Policy will not go into Default during the No-Lapse Guarantee Period, even if adverse investment experience or other factors should cause the Cash Surrender Value to fall to zero or below. The No-Lapse Guarantee applies to all Underwriting Classes. The No-Lapse Guarantee Period for a Single Life Policy is the first ten (10) Policy Years, if the Issue Age of the Insured is 70 or less; or the first five (5) Policy Years, if the Issue Age of the Insured is 71 or more. The No-Lapse Guarantee Period for a Survivorship Life Policy is the first five (5) Policy Years. After the end of the No-Lapse Guarantee Period, this guarantee no longer applies. If you make a material change to your Policy, such as an increase or decrease in the Face Amount, the Premium payments necessary to maintain this guarantee may increase or decrease.

Because this guarantee prevents Lapse during the No-Lapse Guarantee Period, it is possible for your Cash Surrender Value to decline below zero. In this case, unless you repay the negative balance before the end of the No-Lapse Guarantee Period, your Policy will Lapse after the end of that period.

The No-Lapse Guarantee is not available in all states.

No-Lapse Guarantee Cumulative Premium Test. At the time you purchase your Policy, we will provide you with a Planned Premium Payment Schedule. The No-Lapse Guarantee Cumulative Premium Test is satisfied if, on each monthly Policy Processing Day, the sum of all Premiums paid to date, less any Loans and withdrawals taken and any charges or interest then due, is equal to or exceeds the sum of the payments that would have been made through that date if the Planned Annual Premium had been paid in timely equal monthly installments prior to each Policy Processing Day. If you fail the Cumulative Premium Test and fail to make the necessary payments during the NLG Grace Period (defined below), you will not be able to reinstate this guarantee.

NLG Grace Period: If your Policy fails the No-Lapse Guarantee Cumulative Premium Test on a monthly Policy Processing Day, we will send you a letter indicating that you have a grace period of thirty (30) days from the day your Policy failed the test, in which to pay Premiums sufficient to make up the shortfall.

Important: If your Policy fails the No-Lapse Guarantee Cumulative Premium Test and you fail to make the necessary payment before the end of the NLG Grace Period, the guarantee will no longer apply and

 

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there is no way to reinstate the guarantee. If the Policy still has a sufficient Cash Surrender Value, however, it will remain in force despite the loss of the No-Lapse Guarantee.

The No-Lapse Guarantee is not available in all states and may vary according to state law. Please check your Policy.

8(c). Policy Reinstatement

An Owner may, by making a written request, reinstate a Policy which has terminated after going into Default at any time within the three-year period following the date of termination subject to the following conditions:

 

   

Evidence of each Insured’s insurability, satisfactory to us, is provided to us; and

 

   

A payment equal to the amount that was required to bring the Policy out of Default immediately prior to termination, plus an amount equal to the applicable Monthly Deduction for the next three (3) months, must be paid to us.

If reinstatement is approved, the effective date of reinstatement will be the later of the date we approve the Owner’s request or the date we receive the required payment at our Service Center.

A reinstated Policy:

 

   

Has the same Policy Date as the Policy when originally issued;

 

   

May have higher Cost of Insurance Rates if the Insured is in a different Underwriting Class and/or a different age group at the time of reinstatement;

 

   

Will NOT have a No-Lapse Guarantee; and

 

   

Reflects the reduction or elimination of any previous Policy Loans due to the previous Lapse.

9. THE FIXED ACCOUNT

Because of exemptive and exclusionary provisions, we have not registered interests in the Fixed Account under the Securities Act of 1933, nor have we registered our general account as an investment company under the 1940 Act. Interests in the Fixed Account are generally not subject to the provisions of those laws. Disclosures regarding the Fixed Account and our general account may, however, be subject to certain generally applicable provisions of the Federal securities laws relating to the accuracy and completeness of statements made in prospectuses.

The Fixed Account is a portion of our general account. You may allocate a portion of your Premium payments or transfer a part of your Policy Account Value to the Fixed Account. The value of your interest in the Fixed Account does not fluctuate with the investment experience of our general account or the investment experience of the Investment Options.

We guarantee that money held in the Fixed Account will accrue interest daily at an annual rate that will never be less than the guaranteed rate stated in your Policy Schedule.

When you allocate money to the Fixed Account, we assign an interest rate to that amount. The rate will be guaranteed for a period of time. The length of that period will depend on when you allocate the amount to the Fixed Account.

When the initial guaranteed period ends, we will assign a new rate to that amount, and the new rate will be guaranteed for a period of at least one year. At the end of each guaranteed period we will set a new rate, each time for a period of at least one year.

 

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Different rates may apply to different amounts in the Fixed Account. The rate for a given amount will depend on when that amount was first allocated to the Fixed Account. Also, the interest rate we apply to any particular amount will vary from time to time.

We reserve the right to limit or discontinue at any time the availability of the Fixed Account, both for transfers from the Funds and for Premium payments. If you attempt to allocate any portion of a Premium payment to the Fixed Account in excess of permitted amounts, we will place any excess in the Government Money Market Investment Option.

You may generally not allocate more than $20,000 (including transfers) to the Fixed Account during any one Policy Year. You may not allocate more than 25% of your Policy Account Value or of any Premium payment to the Fixed Account and you may not make more than one transfer to the Fixed Account during any one Policy year.

10. MAKING EXCHANGES AMONG INVESTMENT OPTIONS AND THE FIXED ACCOUNT

10(a). Overview

In general, you may make transfers of money (“Exchanges”) among the Investment Options and/or the Fixed Account by sending us instructions in writing with your original signature or by calling us. We do not accept instructions by fax, electronic mail or via the internet, or instructions that are not in good order under our then-current procedures.

We do not currently impose any charges when you make Exchanges but we reserve the right to impose a charge if you make Exchanges on more than twelve days during a calendar year.

Making excessive Exchanges can disrupt the ability of a Fund to achieve its investment objective and increase the Fund’s expenses. We may limit the number of days on which you can make Exchanges, but you will always be able to make Exchanges on at least five days each Policy Year and we may limit the number of Exchanges permitted. We may also require you to submit your Exchanges by mail.

Your request to make an Exchange may be expressed in terms of dollars, such as a request to move $5,000 from one Investment Option to another. You may also request a percentage reallocation among Investment Options. Percentage requests must be made in whole numbers. You cannot move less than $250 from any Investment Option except that if you have less than $250 in an Investment Option you may move the entire amount.

10(b). Making Exchanges by Telephone

Currently you may make Exchanges by telephone up to 18 days in each calendar year. You may make Exchanges on additional days only by a letter to our Service Center.

We reserve the right to revise or terminate your ability to make Exchanges by telephone. We also reserve the right to limit the amount of any telephone Exchange or to reject any telephone Exchange.

We will not be responsible for any losses resulting from unauthorized telephone Exchanges if we follow reasonable procedures designed to verify the identity of the caller. We may record telephone calls. You should verify the accuracy of your Exchanges by checking the confirmations and statements we send to you as soon as you receive them. Notify the Service Center immediately if you find any discrepancies. We will not be responsible for losses resulting from unit value changes unless you notify us within ten calendar days from the first time we mail a confirmation or statement containing details of the transaction.

 

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10(c). Effective Date of Exchanges Among Investment Options

Any redemption from an Investment Option that is part of an Exchange among Investment Options will be effected as of the end of the Valuation Day in which we receive the request at our Service Center. Generally the purchase of Investment Option units in other Investment Options with the proceeds of the redemption will occur at the same time. However, if your Exchange involves (1) moving from an Investment Option (“Source”) that invests in an equity Fund that is in an illiquid position due to substantial redemptions or Exchanges that require it to sell portfolio securities in order to make funds available, and (2) moving to an Investment Option (“Target”) that invests in a Government Money Market Fund that accrues dividends on a daily basis and requires federal funds before accepting a purchase order, then there may be a delay in crediting the amount that is moving to the new Investment Option. The delay will last until the Source Investment Option obtains liquidity, or for seven days, whichever is shorter. During this period, the amount to be transferred from the Source Investment Option will remain as a fixed obligation of the Source Investment Option and will not participate in the investment results of either the Source or the Target Investment Option.

10(d). Frequent Exchanges Among Investment Options

Use of Market Timing Services: Some Owners desire to use firms or individuals who engage in market timing. Market timing services usually obtain authorization from Owners to make Exchanges among the Investment Options on the basis of perceived market trends. Large Exchanges resulting from market timing activity may disrupt the management of the Funds and become a detriment to other Owners of variable life insurance policies or variable annuity contracts who allocate money to the Funds.

To protect Owners not using market timing services, we reserve the right to reject Exchanges communicated to us by anyone acting under a power of attorney on behalf of more than one person. We also reserve the right to reject Exchange instructions we receive from a market timing firm or other third party that any Owner has authorized to make multiple Exchanges. We will exercise these rights only if we believe that doing so will prevent harm to other Owners of variable life insurance policies or variable annuity contracts. In the event we reject an Exchange without a prior warning, we will promptly notify the party requesting the Exchange of the rejection by telephone, in writing or in the manner the request was made.

Short-Term Trading Risk: Frequent Exchanges among Investment Options by Owners can reduce the long-term returns of the underlying mutual funds. The reduced returns could adversely affect the Owners, annuitants, Insureds or Beneficiaries of any variable annuity contracts or variable life insurance policies issued by any insurance company with respect to values allocated to the underlying Fund. Frequent Exchanges may reduce the mutual fund’s performance by increasing costs paid by the Fund (such as brokerage commissions); they can disrupt portfolio management strategies; and they can have the effect of diluting the value of the shares of long-term shareholders in cases in which fluctuations in markets are not fully priced into the Fund’s net asset value.

The insurance-dedicated mutual funds available through the Investment Options are also available in products issued by other insurance companies. These Funds carry a significant risk that short-term trading may go undetected. The Funds themselves generally cannot detect individual Owner Exchange activity, because they are owned primarily by insurance company separate accounts that aggregate Exchange orders from Owners of individual Policies. Accordingly, the Funds are dependent in large part on the rights, ability and willingness of all participating insurance companies to detect and deter short-term trading by Owners. As a result of the adoption of Rule 22c-2 of Investment Company Act of 1940, all Funds have entered into information sharing agreements with FILI that will require FILI, upon request, to (i) provide the Funds with specific information about Contract Owner transfer activity, and, if so requested by a Fund, (ii) prohibit future transfers into such Fund.

As outlined below, FILI has adopted policies regarding frequent trading, but can provide no assurance that other insurance companies using the same mutual funds have adopted comparable procedures. There is also the risk that these policies and procedures concerning short-term trading will prove ineffective in whole or in part to

 

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detect or prevent frequent trading. Please review the mutual funds’ prospectuses for specific information about the Funds’ short-term trading policies and risks.

FILI Policies Regarding Frequent Trading: FILI does not authorize market timing. FILI has adopted policies and procedures designed to discourage frequent trading (i.e. frequent transfers or Exchanges) as described below. If requested by the underlying mutual funds, FILI will consider additional steps to discourage frequent trading of shares of those Funds, not inconsistent with the policies and procedures described below.

Owners who engage in frequent trading may be subject to temporary or permanent restrictions as described below on future purchases or Exchanges in a Fund, and potentially in all Fidelity Funds. Further, Owners who have engaged in frequent trading in other Fidelity Funds—or in Other Funds—may be subject to temporary or permanent restrictions on purchases or Exchanges in those Funds. FILI may alter its policies, in any manner not inconsistent with the terms of the Policy, at any time without notice to Owners.

Although there is no minimum holding period and Owners can make withdrawals or Exchanges out of any Investment Option at any time, Owners may ordinarily comply with FILI’s policies regarding frequent trading by allowing 90 days to pass after each purchase or allocation into an Investment Option before they withdraw or exchange out of that Investment Option.

In addition, each underlying mutual fund reserves the right to reject the Variable Account’s entire purchase or Exchange transaction at any time, which would make FILI unable to execute Owner purchase, withdrawal or Exchange transactions involving that Fund on that trading day. FILI’s policies and procedures are separate and independent from any policies and procedures of the underlying mutual funds, and do not guarantee that the mutual funds will not reject Variable Account orders.

Frequent Trading Monitoring and Restriction Procedures: FILI has adopted policies and procedures related to Exchanges among Investment Options that are set out below. Frequent trading activity is measured by the number of roundtrip transactions by an Owner. A roundtrip transaction occurs when an Owner makes an allocation or Exchange into an Investment Option followed by a withdrawal or Exchange out of the same Investment Option within 30 days. Owners are limited to one roundtrip transaction per Investment Option within any rolling 90-day period, subject to an overall limit of four roundtrip transactions in the Policy over a rolling 12-month period.

Owners with two or more roundtrip transactions in one Investment Option within a rolling 90-day period will be blocked from making additional allocations or Exchanges into that Investment Option, through any means, for 85 days.

In addition, Owners who complete a fourth (or higher) roundtrip transaction, at least two of which are completed on different business days, within any rolling 12-month period, will have a U.S. Mail-Only Trade Restriction imposed on all contracts/policies issued by FILI or its affiliate, that they own. This rule will apply even if the four or more roundtrips occur in two or more different Investment Options. This restriction will stay in effect for 12 months. If the Owner makes another roundtrip in a contract that is currently subject to a U.S. Mail-Only Trade Restriction, then the U.S. Mail-Only Trade Restriction period (12 months) is re-started and all purchase transactions will be permanently blocked in the violated Investment Option across all contracts with common ownership. “U.S. Mail-Only” for purposes of the U.S. Mail-Only Trade Restriction is defined as First-Class Mail delivered via the U.S. Postal Service. Expedited delivery or courier services, including such services performed by the U.S. Postal Service, will not be accepted.

FILI further reserves the right to reject specific transactions or impose restrictions as described above in respect of any Policy owned or controlled commonly with a Policy subject to the above restrictions, or in respect to any Policy owned or controlled commonly by a person who is the subject of a complex-wide block.

 

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Exceptions: FILI has approved the following exceptions to the frequent trading policy:

 

  (1)

Transactions in the Government Money Market Investment Option;

 

  (2)

Dollar cost averaging, automatic rebalancing and automatic Premium payment programs via electronic funds transfer (“EFT”) will not count toward an Investment Option’s roundtrip limits;

 

  (3)

FILI may suspend the frequent trading policy and make exceptions to the policy for transactions made during periods of severe market turbulence or national emergency. There is no assurance that FILI will do so or that, if it does so, the underlying mutual funds will make any necessary exceptions to their frequent trading policies.

FILI may choose not to monitor transactions below certain dollar value thresholds. No other exceptions will be allowed. The Frequent Trading procedures will be applied consistently to all Owners.

10(e). Exchanges To and From the Fixed Account

There is no additional charge for Exchanges to or from the Fixed Account. You can make Exchanges to and from the Fixed Account only in accordance with our then current procedures for such Exchanges and only with our consent. We may discontinue the availability of the Fixed Account for Exchanges from the Investment Options or for Premium payments at any time. We also reserve the right to limit the frequency and amount of Premiums allocated to, and Exchanges into, the Fixed Account.

You may currently make one transfer per Policy Year from the Variable Account to the Fixed Account. However, for one year following your last Exchange out of the Fixed Account, you may not (1) exchange any portion of your Policy Account Value from the Investment Options to the Fixed Account, or (2) allocate any portion of any Premium payment to the Fixed Account. You may generally not allocate more than $20,000 (includes transfers and Premium payments) to the Fixed Account during any one Policy Year. You may not allocate more than 25% of your Policy Account Value or of any Premium payment to the Fixed Account and you may not make more than one transfer to the Fixed Account during any one Policy Year. If you attempt to make an Exchange into the Fixed Account in excess of permitted amounts, we may reject the entire Exchange.

The minimum dollar amount you may Exchange from any Investment Option to the Fixed Account is $250, unless you have less than $250 in an Investment Option. Then you may exchange the entire amount from the Investment Option to the Fixed Account. We will determine in our sole discretion the maximum amount that you can exchange from the Fixed Account.

If you pay Premiums monthly by electronic funds transfer, you will not be able to allocate any of those payments to the Fixed Account.

When you withdraw or Exchange amounts out of the Fixed Account, the amounts that have been credited to the Fixed Account for the shortest time are withdrawn first. At the end of each annual renewal interest guarantee period after the Policy Issue Date, we will set the amount that may be Exchanged into or out of the Fixed Account for the next year, provided that these amounts will not be less than the minimum specified above.

10(f). Written Requests Received at the Company

Any request that is required to be submitted to the Company in writing must be in accordance with the Company’s then current standards and shall not be effective until the date and time that either:

 

  1.

The original request is physically received at the Annuity Service Center; or

 

  2.

An electronic image of the original request, which has been submitted by an agent of Fidelity, is received at the Annuity Service Center.

 

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All communications to us regarding your Contract should be sent to: Fidelity Investments Life Insurance Company, Annuity Service Center, PO Box 770001, Cincinnati, Ohio 45277-0050.

11. TAX CONSIDERATIONS

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

11(a). Tax Status of the Policy

To qualify as a life insurance contract for Federal income tax purposes, the Policy must meet the definition of a life insurance contract which is set forth in Section 7702 of the Internal Revenue Code. The manner in which Section 7702 should be applied to certain features of the Policy offered in this prospectus is not directly addressed by Section 7702 or any guidance issued to date under Section 7702. Nevertheless, FILI believes that the Policy will meet the Section 7702 definition of a life insurance contract. In the absence of final regulations or other pertinent interpretations of Section 7702, however, there is necessarily some uncertainty as to whether a Policy will meet the statutory life insurance contract definition. If a Policy were determined not to be a life insurance contract for purposes of Section 7702, such contract would not provide most of the tax advantages normally provided by a life insurance contract.

If it is subsequently determined that a Policy does not satisfy Section 7702, we may take whatever steps are appropriate and reasonable to comply with Section 7702. For these reasons, we reserve the right to restrict Policy transactions as necessary to attempt to qualify it as a life insurance contract under Section 7702.

Section 817(h) of the Internal Revenue Code requires that the investments of each subaccount of the Variable Account must be “adequately diversified” in accordance with Treasury regulations in order for the Policy to qualify as a life insurance contract under Section 7702 of the Internal Revenue Code (discussed above). The Variable Account, through the Funds, intends to comply with the diversification requirements prescribed in Treas. Reg. § 1.817-5, which affect how the Funds’ assets are to be invested. FILI believes that the Variable Account will thus meet the diversification requirement, and FILI will monitor continued compliance with this requirement.

The IRS has stated in published rulings that a variable contract owner will be considered the owner of separate account assets if the contract owner possesses incidents of ownership in those assets, such as the ability to exercise investment control over the assets. In circumstances where the variable contract Owner is considered the Owner of separate account assets, income and gain from the assets would be includable in the variable contract Owner’s gross income. The Treasury Department indicated in 1986 that, in regulations or revenue rulings under Section 817(d) (relating to the definition of a variable contract), it would provide guidance on the extent to which contract Owners may direct their investments to particular subaccounts without being treated as Owners of the underlying shares. No such regulations or revenue rulings have been issued to date. It is possible that when regulations or rulings are issued, the Policies may need to be modified to comply with them.

 

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11(b). IRC Qualification

For a Policy to be treated as a life insurance contract under the Internal Revenue Code, it must pass one of two tests—a Cash Value Accumulation Test or a guideline premium/cash value corridor test. At the time of issuance of the Policy, you choose which test you want to be applied. It may not be changed thereafter.

 

   

Cash Value Accumulation Test (CVAT). Under the terms of the Policy, the Policy Account Value may not at any time exceed the net single premium cost (at any such time) for the benefits promised under the Policy. If the Insured under a Single Life Policy is 75 years old or more on the Policy Date, the CVAT will automatically apply.

 

   

Guideline Premium Test (GPT). The Policy must at all times satisfy a guideline premium requirement and a cash value corridor requirement. Under the guideline premium requirement, the sum of the Premiums paid under the Policy may not at any time exceed the greater of the guideline single premium or the sum of the guideline level premiums, for the benefits promised under the Policy. Under the cash value corridor requirement, the Death Benefit at any time must be equal to or greater than the applicable percentage of Policy Account Value specified in the Code.

The CVAT does not limit the amount of Premiums that may be paid under the Policy. If you desire to pay Premiums in excess of those permitted under the GPT, you should consider electing to have your Policy qualify under the CVAT. However, any Premium that would increase the Net Amount at Risk is subject to evidence of insurability satisfactory to us. Required increases in the minimum Death Benefit due to growth in the Policy Account Value will generally be greater under the CVAT than under the GPT.

The GPT limits the amount of Premium that may be paid under the Policy. If you do not desire to pay Premiums in excess of those permitted under GPT limitations, you should consider electing to have your Policy qualify under the GPT.

The following discussion assumes that the Policy qualifies as a life insurance contract for Federal income tax purposes.

We believe that the Insurance Proceeds under the Policy will be excludable from the gross income of the Beneficiary and that you will not be taxed on increases in the Policy’s Account Value during the life of the Insured, or in the case of Survivorship Life Policy, the life of the second of the two Insureds.

11(c). Modified Endowment Contracts

The Internal Revenue Code establishes a class of life insurance contracts designated as “modified endowment contracts” (“MECs”), which applies to Policies entered into or materially changed after June 20, 1988.

Due to the Policy’s flexibility, classification as a MEC will depend on the individual circumstances of each Policy. In general, a Policy will be a MEC if the accumulated Premiums paid at any time during the first seven Policy Years exceeds the sum of the net level premiums which would have been paid on or before such time if the Policy provided for paid-up future benefits after the payment of seven level annual Premiums. We have the right to limit or refund any Premium or portion of a Premium, or to request additional written instructions if, in our opinion, the Premium would cause your Policy to become a MEC.

All Policies that we issue to the same Owner during any calendar year, which are treated as MECs, are treated as one MEC for purposes of determining the amount includable in gross income under Section 72(e) of the Code.

The rules relating to whether a Policy will be treated as a MEC are complex and make it impracticable to adequately describe in the limited confines of this summary. Therefore, you may wish to consult with a competent advisor to determine whether a Policy transaction will cause the Policy to be treated as a MEC.

 

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11(d). Distributions from Policies Classified as Modified Endowment Contracts

Policies classified as a MEC will be subject to the following tax rules. First, all distributions, including distributions upon Surrender and Partial Withdrawals from such a Policy are treated as ordinary income subject to tax up to the amount equal to the excess (if any) of the Policy Account Value immediately before the distribution over the investment in the Policy (described below) at such time. Second, Loans taken from or secured by, such a Policy are treated as distributions from such a Policy and taxed accordingly. Past due Loan interest that is added to the Loan amount will be treated as a Loan. Third, a 10 percent additional income tax is imposed on the portion of any distribution from, or Loan taken from or secured by, such a Policy that is included in income except where the distribution or Loan is made on or after the Owner attains age 591/2, is attributable to the Owner’s becoming totally and permanently disabled, or is part of a series of substantially equal periodic payments for the life (or life expectancy) of the Owner or the joint lives (or joint life expectancies) of the Owner and the Owner’s Beneficiary.

Once a Policy becomes a MEC, it is always treated as a MEC. MEC status may be particularly burdensome for Owners who intend to take Loans or Partial Withdrawals, such as employers that intend to fund employee benefits.

11(e). Distributions from Policies Not Classified as Modified Endowment Contracts

Distributions from a Policy that is not a MEC, are generally treated as first recovering the investment in the Policy (described below) and then, only after the return of all such investment in the Policy, as distributing taxable income.

Loans from, or secured by, a Policy that is not a MEC are not treated as distributions. Instead, such Loans are treated as indebtedness of the Owner.

Finally, neither distributions (including distributions upon Surrender) nor Loans from, or secured by, a Policy that is not a MEC are subject to the 10 percent additional tax.

11(f). Policy Loan Interest

Generally, personal interest paid on a Loan under a Policy which is owned by an individual is not deductible. In addition, interest on any Loan under a Policy owned by a taxpayer and covering the life of any individual will generally not be tax deductible. The deduction of interest on Policy Loans may also be subject to the restrictions of Section 264 of the Code. An Owner should consult a qualified tax advisor before deducting any interest paid in respect of a Policy Loan.

11(g). Investment in the Policy

Investment in the Policy means: (i) the aggregate amount of any Premiums or other consideration paid for a Policy, minus (ii) the aggregate amount received under the Policy which is excluded from gross income of the owner (except that the amount of any Loan from, or secured by, a Policy that is a MEC, to the extent such amount is excluded from gross income, will be disregarded), plus (iii) the amount of any Loan from, or secured by, a Policy that is a MEC to the extent that such amount is included in the gross income of the Owner.

11(h). Policy Lapse

If a Policy Lapses in part due to Loans or Partial Withdrawals taken by the Owner, then gains in the Policy may be immediately taxable.

 

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11(i). Other Tax Considerations

The tax consequences of continuing the Policy after the Extended Maturity date are not clear. Consult your qualified tax advisor if you intend to do so.

The transfer or assignment of the Policy or the designation of a Beneficiary may have Federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate and generation-skipping transfer taxes. For example, the transfer of the Policy to, or the designation as Beneficiary of, or the payment of proceeds to, a person who is assigned to a generation which is two or more generations below the generation of the Owner, may have generation skipping transfer tax considerations under Section 2601 of the Code.

The individual situation of each Owner or Beneficiary will determine the extent, if any, to which Federal, state and local transfer taxes may be imposed. Consult with your qualified tax advisor for specific information in connection with these taxes.

12. MORE INFORMATION ABOUT THE POLICY AND THE VARIABLE ACCOUNT

12(a). Signature Guarantee or Customer Authentication

Certain requests may require a signature guarantee or a customer authentication. A signature guarantee or a customer authentication is designed to protect you and FILI from fraud.

Your request must be in writing and may require a signature guarantee if any of the following situations apply:

 

  (1)

Loss of account ownership.

 

  (2)

Any other circumstances where we deem it necessary for your protection.

You should be able to obtain a signature guarantee from a bank, broker/dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. A customer authentication can be obtained only at a Fidelity Investments Investor Center.

12(b). Voting Rights

We currently vote shares of the Funds owned by the Variable Account according to your instructions. However, if the 1940 Act or any related regulations or interpretations should change, and we decide that we are permitted to vote the shares of the Funds in our own right, we may decide to do so.

We calculate the number of shares that you may instruct us to vote by dividing your Policy Account Value in an Investment Option by the net asset value of one share of the corresponding Fund. Fractional votes are counted. We reserve the right to modify the manner in which we calculate the weight to be given to your voting instructions where such a change is necessary to comply with then current Federal regulations or interpretations of those regulations.

We will determine the number of shares you can instruct us to vote 90 days or less before the applicable Fund shareholder meeting. At least 14 days before the meeting we will send you material by mail for providing us with your voting instructions.

If we do not receive your voting instructions in time, we will vote the shares in the same proportion as the instructions we receive from other Owners. We will also vote in the same proportionate manner any shares we hold in the Variable Account that are not attributable to Owners. As a result of proportional voting, the votes of a small number of policy owners could determine the outcome of a shareholder vote.

 

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Under certain circumstances, we may be required by state regulatory authorities to disregard voting instructions. This may happen if following such instructions would change the sub-classification or investment objectives of a Fund, or result in the approval or disapproval of an investment advisory contract.

Under Federal regulations, we may also disregard instructions to vote for Owner-initiated changes in investment policies or the investment adviser if we disapprove of the proposed changes. We would disapprove a proposed change only if it were contrary to state law, prohibited by state regulatory authorities, or if we decided that the change would result in overly speculative or unsound investments. If we ever disregard voting instructions, we will include a summary of our actions in the next semiannual report.

12(c). Changes in Investment Options

We may make additional Investment Options available to you from time to time. These Investment Options will invest in mutual funds that we find suitable for the Policies.

We also have the right to eliminate Investment Options, to combine two or more Investment Options, or to substitute a new mutual fund for the mutual fund in which an Investment Option invests.

A substitution may become necessary if, in our judgment, a Fund no longer suits the purposes of the Policies. This may happen due to a change in laws or regulations, a change in a Fund’s investment objectives or restrictions, because the Fund is no longer available for investment, or for some other reason. We would obtain any required SEC and other approvals before making such a substitution.

We also reserve the right to operate the Variable Account as a management investment company under the 1940 Act or any other form permitted by law or to deregister the Variable Account under such Act in the event such registration is no longer required. We would obtain any required approval from the SEC before making such changes.

12(d). Resolving Material Conflicts

The Fidelity Funds are available to separate accounts of insurance companies offering variable annuity contracts and variable life insurance policies issued by other insurance companies, as well as to our Variable Account and other separate accounts we may establish. The other Funds may be offered to qualified plans as well as to insurance company separate accounts.

Although we do not anticipate any disadvantages due to these arrangements, there is a possibility that a material conflict could arise between the interest of the Variable Account and one or more of the other separate accounts or qualified plans that hold shares of the Funds. A conflict may occur due to a change in law affecting the operations of variable life and variable annuity separate accounts, differences in the voting instructions of our Owners and those of other insurance companies, or for some other reason. In the event of a conflict, we will take any steps necessary to protect our Owners and their Beneficiaries.

 

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APPENDIX A: FUNDS AVAILABLE UNDER THE POLICY

The following is a list of Funds available under the Policy. More information about the Funds is available in the prospectuses for the Funds, which may be amended from time to time. You can also request this information at no cost by calling 1-800-634-9361 or by sending an email request to filifunddocuments@fidelity.com.

The current expenses and performance information below reflects fee and expenses of the Funds, but do not reflect the other fees and expenses that your Policy may charge. Expenses would be higher and performance would be lower if these other charges were included. Each Fund’s past performance is not necessarily an indication of future performance.

 

          Current
Expenses
  Average Annual Total
Returns (as of 12/31/22)
Investment Objective   Fund & Adviser/Subadviser   1 year   5 year   10 year
Seeks to obtain high total return with reduced risk over the long-term by allocating its assets among stocks, bonds, and short-term instruments  

Fidelity® Variable Insurance Products (“VIP”) Asset Manager Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.60%   -14.94%   3.75%   5.66%
Seeks to maximize total return by allocating its assets among stocks, bonds, short-term instruments, and other investments  

Fidelity® VIP Asset Manager: Growth Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.68%   -16.88%   4.73%   7.11%
Seeks income and capital growth consistent with reasonable risk  

Fidelity® VIP Balanced Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.47%   -17.94%   7.21%   8.91%
Seeks capital appreciation  

Fidelity® VIP Communication Services Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.68%   -38.14%   4.07%   7.00%
Seeks capital appreciation  

Fidelity® VIP Consumer Discretionary Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.66%   -34.63%   5.98%   10.78%
Seeks capital appreciation  

Fidelity® VIP Consumer Staples Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.65%   -0.62%   7.09%   9.96%
Seeks long-term capital appreciation  

Fidelity® VIP Contrafund® Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.60%   -26.31%   8.66%   11.43%
Seeks capital appreciation  

Fidelity® VIP Disciplined Small Cap Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.48%   -18.23%   4.67%   8.94%

 

54


Table of Contents
          Current
Expenses
  Average Annual Total
Returns (as of 12/31/22)
Investment Objective   Fund & Adviser/Subadviser   1 year   5 year   10 year
Seeks capital appreciation  

Fidelity® VIP Dynamic Capital Appreciation Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.67%   -20.87%   10.27%   12.45%
Seeks capital appreciation  

Fidelity® VIP Energy Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.64%   63.18%   7.19%   4.80%
Seeks reasonable income while also considering the potential for capital appreciation. The fund’s goal is to achieve a yield which exceeds the composite yield on the securities comprising the S&P 500® Index  

Fidelity® VIP Equity-Income Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.51%   -4.96%   8.16%   10.19%
Seeks capital appreciation  

Fidelity® VIP Financials Portfolio†

 

Adviser: Fidelity Management & Research Company LLC

  0.65%   -8.33%   6.85%   11.10%
Seeks high total return with a secondary objective of principal preservation as the fund approaches its target date and beyond  

Fidelity® VIP FreedomSM 2005 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.36%   -12.37%   2.31%   4.08%
Seeks high total return with a secondary objective of principal preservation as the fund approaches its target date and beyond  

Fidelity® VIP FreedomSM 2010 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.40%   -13.53%   2.80%   4.94%
Seeks high total return with a secondary objective of principal preservation as the fund approaches its target date and beyond  

Fidelity® VIP FreedomSM 2015 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.44%   -14.60%   3.29%   5.52%
Seeks high total return with a secondary objective of principal preservation as the fund approaches its target date and beyond  

Fidelity® VIP FreedomSM 2020 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.48%   -15.69%   3.73%   6.07%
Seeks high total return with a secondary objective of principal preservation as the fund approaches its target date and beyond  

Fidelity® VIP FreedomSM 2025 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.51%   -16.43%   4.12%   6.78%

 

55


Table of Contents
          Current
Expenses
  Average Annual Total
Returns (as of 12/31/22)
Investment Objective   Fund & Adviser/Subadviser   1 year   5 year   10 year
Seeks high total return with a secondary objective of principal preservation as the fund approaches its target date and beyond  

Fidelity® VIP FreedomSM 2030 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.54%   -16.87%   4.61%   7.49%
Seeks high total return with a secondary objective of principal preservation  

Fidelity® VIP Freedom IncomeSM Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.35%   -12.05%   1.96%   3.15%
Seeks high current income and, as a secondary objective, capital appreciation  

Fidelity® VIP FundsManager® 20% Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.54%*   -9.60%   1.94%   2.94%
Seeks high total return  

Fidelity® VIP FundsManager® 50% Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.70%*   -13.94%   3.82%   5.69%
Seeks high total return  

Fidelity® VIP FundsManager® 70% Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.78%*   -15.67%   4.93%   7.43%
Seeks high total return  

Fidelity® VIP FundsManager® 85% Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.82%*   -17.07%   5.71%   8.77%
Seeks as high a level of current income as is consistent with preservation of capital and liquidity  

Fidelity® VIP Government Money Market Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.24%   1.44%   1.08%   0.64%
Seeks to achieve capital appreciation  

Fidelity® VIP Growth Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.61%   -24.46%   12.42%   14.81%
Seeks high total return through a combination of current income and capital appreciation  

Fidelity® VIP Growth & Income Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.52%   -4.95%   8.85%   11.58%
Seeks to provide capital growth  

Fidelity® VIP Growth Opportunities Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.63%   -38.15%   13.09%   15.09%

 

56


Table of Contents
          Current
Expenses
  Average Annual Total
Returns (as of 12/31/22)
Investment Objective   Fund & Adviser/Subadviser   1 year   5 year   10 year
Seeks capital appreciation  

Fidelity® VIP Health Care Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.63%   -12.41%   10.50%   15.07%
Seeks a high level of current income, while also considering growth of capital  

Fidelity® VIP High Income Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.72%   -11.37%   1.10%   2.97%
Seeks investment results that correspond to the total return of common stocks publicly traded in the United States, as represented by the S&P 500® Index  

Fidelity® VIP Index 500 Portfolio

 

Adviser: Fidelity Management & Research Company LLC

 

Principal Subadviser: Geode Capital Management, LLC

  0.10%   -18.21%   9.30%   12.45%
Seeks capital appreciation  

Fidelity® VIP Industrials Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.66%   -10.30%   5.11%   10.04%
Seeks capital appreciation  

Fidelity® VIP International Capital Appreciation Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.82%   -26.40%   3.29%   7.25%
Seeks as high a level of current income as is consistent with the preservation of capital  

Fidelity® VIP Investment Grade Bond Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.40%   -12.96%   0.64%   1.53%
Seeks capital appreciation  

Fidelity® VIP Materials Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.69%   -9.79%   4.84%   7.17%
Seeks long-term growth of capital  

Fidelity® VIP Mid Cap Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.61%   -14.74%   5.95%   9.96%
Seeks long-term growth of capital  

Fidelity® VIP Overseas Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.77%   -24.48%   2.61%   5.74%
Seeks above-average income and long-term capital growth, consistent with reasonable investment risk. The fund seeks to provide a yield that exceeds the composite yield of the S&P 500® Index  

Fidelity® VIP Real Estate Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.64%   -27.51%   1.70%   5.11%
Seeks a high level of current income. The fund may also seek capital appreciation  

Fidelity® VIP Strategic Income Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.67%   -11.26%   1.35%   2.46%

 

57


Table of Contents
          Current
Expenses
  Average Annual Total
Returns (as of 12/31/22)
Investment Objective   Fund & Adviser/Subadviser   1 year   5 year   10 year
Seeks capital appreciation  

Fidelity® VIP Technology Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.63%   -35.86%   13.65%   17.08%
Seeks capital appreciation  

Fidelity® VIP Utilities Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.64%   5.47%   10.64%   11.37%
Seeks capital appreciation  

Fidelity® VIP Value Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.64%   -4.11%   8.59%   11.10%
Seeks capital appreciation  

Fidelity® VIP Value Strategies Portfolio

 

Adviser: Fidelity Management & Research Company LLC

  0.64%   -7.03%   8.38%   10.22%
Seeks long-term capital appreciation by investing primarily in equity securities of issuers throughout the world, including U.S. issuers  

Invesco V.I. Global Core Equity Fund

 

Adviser: Invesco Advisers, Inc.

 

Subadviser: Invesco Canada Ltd.

  0.98%   -21.88%   1.69%   5.67%
Seeks long-term capital appreciation  

Lazard Retirement Emerging Markets Equity Portfolio

 

Adviser: Lazard Asset Management LLC

  1.13%   -14.96%   -2.95%   0.13%
Seeks high total return by investing primarily in fixed income-securities of government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries  

Morgan Stanley Variable Insurance Fund, Inc. (“Morgan Stanley”) Emerging Markets Debt Portfolio

 

Adviser: Morgan Stanley Investment Management Inc.

  1.10%*   -18.74%   -2.23%   0.06%
Seeks long-term capital appreciation by investing primarily in growth-oriented equity securities of issuers in emerging market countries  

Morgan Stanley Emerging Markets Equity Portfolio

 

Adviser: Morgan Stanley Investment Management Inc.

  1.25%*   -25.08%   -2.71%   0.59%
Seeks total return  

Morgan Stanley Global Strategist Portfolio

 

Adviser: Morgan Stanley Investment Management Inc.

  0.90%*   -16.94%   1.91%   4.10%

 

*

This Fund’s current expenses reflect temporary fee reductions. See the Fund’s prospectus for additional information.

Prior to April 28, 2023, the fund was named Fidelity® VIP Financial Services Portfolio

 

58


Table of Contents

Edgar Contract Identifier C000024032

VUL-PRO-0423

1. 796104.121

 

We have filed additional information about the Policy and the Variable Account with the Securities and Exchange Commission in a Statement of Additional Information (“SAI”) dated April 29, 2023. The SAI is incorporated by reference in this prospectus and is available, without charge, upon request. To request the SAI, other information about the Policy, or to make investor inquiries, call us at 1-800-544-2442.

Reports and other information about the Variable Account are available on the Securities and Exchange Commission’s website at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following email address: publicinfo@sec.gov.

 

59


Table of Contents

Fidelity Lifetime Reserves®

Flexible Premium Variable Universal Life Insurance Policy

and

Fidelity Lifetime Reserves®

Flexible Premium Survivorship Variable Universal Life Insurance Policy

STATEMENT OF ADDITIONAL INFORMATION

April 29, 2023

This Statement of Additional Information (“SAI”) supplements the information found in the current prospectus for the variable universal life insurance policy (“Policy”) offered by Fidelity Investments Life Insurance Company (“FILI” or the “Company”) through its Fidelity Investments Variable Life Account I (the “Variable Account”). You may obtain a copy of the Prospectus dated April 29, 2023 without charge by calling 1-888-343-5433.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS.

 

Table of Contents

 
     PAGE  

General Information and History

     2  

Non-Principal Risks of Investing in the Contract

     2  

Services

     2  

Safekeeping of Variable Account Assets

     3  

Underwriters

     3  

Underwriting a Policy

     3  

Experts

     3  

Financial Statements

     3  

Variable Account (enclosed)

  

Fidelity Investments Life Insurance Company (enclosed)

  

VUL-PTB-0423

1.796150.121


Table of Contents

GENERAL INFORMATION AND HISTORY

Fidelity Investments Life Insurance Company (“FILI”)

FILI is a stock life insurance company that was established in 1981 and exists in accordance with the laws, rules and regulations of the State of Utah. FILI issues life insurance and annuity products in 49 states (not New York) and the District of Columbia; FILI’s wholly-owned subsidiary Empire Fidelity Investments Life Insurance Company (“EFILI”) issues life insurance and annuity products in New York. FILI is part of Fidelity Investments, a group of companies that provides a variety of financial services and products. FILI is a wholly-owned subsidiary of FMR LLC, the parent company of the Fidelity Investments companies. Abigail P. Johnson, certain Johnson family members, and various key employees of FMR LLC own the voting common stock of FMR LLC.

Fidelity Investments Variable Life Account I (“FILI Variable Account”)

The FILI Variable Account is a separate investment account of FILI established on July 22, 1987 and exists in accordance with the laws, rules and regulations of the State of Utah. It is used to support the variable universal life policy described herein. It is registered with the Securities and Exchange Commission (“SEC”) as a unit investment trust under the Investment Company Act of 1940 (“1940 Act”). It is also a separate account as defined under the federal securities laws.

NON-PRINCIPAL RISKS OF INVESTING IN THE CONTRACT

Considerations Regarding Cybersecurity

With the increased use of technologies such as the Internet to conduct business, our business, including our variable insurance business, is susceptible to operational, information security and related risks. In general, cyber incidents can result from deliberate attacks or unintentional events and may arise from external or internal sources. Cyber attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through “hacking” or malicious software coding) for purposes of misappropriating assets or sensitive information; corrupting data, equipment or systems; or causing operational disruption. Cyber attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make network services unavailable to intended users). Cyber incidents affecting FILI, the Funds, and any affiliated or unaffiliated vendors or service providers have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with our processing of policy transactions (including surrenders, withdrawals, annuity income payments, and insurance proceeds), our ability to calculate Accumulation Unit Values and Annuity Income Unit Values, destruction to equipment and systems, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While FILI has established business continuity plans in the event of, and risk management systems to prevent, such cyber incidents, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Furthermore, FILI cannot control the cyber security plans and systems put in place by its service providers or any other third parties whose operations may affect its business. A variable insurance product and its Owners, Annuitants, Insureds, and Beneficiaries could be negatively impacted as a result.

SERVICES

McCamish Systems, LLC (in California the company is registered as McCamish Systems, LLC Insurance Administrators), 6425 Powers Ferry Road, 3rd floor, Atlanta, GA, 30339, provides administrative services to FILI related to Policy application processing, production of Policy documents, administration of Policy transactions, maintenance of Policy files, production of periodic reports, and Variable Account administration. McCamish Systems, LLC provides similar administrative services to FILI for other insurance policies that it issues. The total amount FILI paid to McCamish Systems, LLC for this Policy and other products for the period January 1, 2022 through December 31, 2022 was $719,704.

 

2


Table of Contents

SAFEKEEPING OF VARIABLE ACCOUNT ASSETS

The assets of the Variable Account are held by FILI. The assets of the Variable Account are held apart from our general account assets and any other separate accounts we may establish. We maintain records of all purchases and redemptions of the shares of the Funds held by the variable Subaccounts. We maintain fidelity bond coverage for the acts of our officers and employees.

UNDERWRITERS

The Policies are distributed through Fidelity Brokerage Services LLC (“FBS”) and Fidelity Insurance Agency, Inc. (“FIA”). FBS is the principal underwriter. FIA and FILI are wholly-owned, direct subsidiaries of FMR LLC; and FBS is a wholly-owned, indirect subsidiary of FMR LLC. The principal business address of FBS is 900 Salem Street, Smithfield, RI 02917. The Policies are no longer sold, but were offered to the public on a continuing basis.

We pay FIA first year sales compensation of not more than 35% of first year premium, up to planned Premium, plus 3% of the excess of first year Premium over planned Premium.

No underwriting commissions have been paid to or retained by the principal underwriter related to sales of contracts of the Registrant (Fidelity Investments Life Account I) for the past three years.

UNDERWRITING A POLICY

The underwriting of a Policy determines: (1) whether the Policy application will be approved or disapproved; and (2) into what Underwriting Class the Insured should be placed. The Underwriting Class is a principal factor in determining the Cost of Insurance Rate. Risk factors that are considered for Underwriting Class determinations include: (a) the Insured’s age; (b) the Insured’s health history and lifestyle; (c) whether the Insured smokes or not. As risk factors are added (i.e., higher age, smoker, poor health history, risky lifestyle) the amount of the premium required for an approved Policy will increase.

EXPERTS

The consolidated financial statements of the Company as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022, and the financial statements of each of the subaccounts of Fidelity Investments Variable Life Account I as of December 31, 2022 and for each of the periods indicated, included in this Statement of Additional Information constituting part of this Registration Statement, have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. The principal business address for PricewaterhouseCoopers LLP  is 101 Seaport Boulevard, Boston, MA 02210.

FINANCIAL STATEMENTS

The consolidated financial statements of Fidelity Investments Life Insurance Company included herein should be distinguished from the financial statements of the Variable Account and should be considered only as bearing upon our ability to meet our obligations under the Policies.

 

3


Table of Contents

LOGO

 

Fidelity(R) Investments Variable Life Account I Annual Report December 31, 2022 Fidelity (R) Investments Life Insurance Company


Table of Contents

 

 

This report and the financial statements contained herein are submitted for the general information of Fidelity Investments Life Insurance Company variable life owners. This report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Neither Fidelity Investments Life Insurance Company nor Fidelity Brokerage Services LLC is a bank, and neither the life insurance policies nor mutual fund shares are backed or guaranteed by any bank or insured by the FDIC.

 


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Assets and Liabilities

December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
Government
Money
Market
Initial Class
    VIP –
High Income
Initial Class
    VIP –
Equity-Income
Initial Class
    VIP –
Growth
Initial Class
    VIP –
Overseas
Initial Class
 

Assets:

         

Investments at market value

  $ 940,688     $ 493,056     $ 4,263,773     $ 2,579,673     $ 560,148  

Receivable from FILI

          87             82       37  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 940,688     $ 493,142     $ 4,263,774     $ 2,579,755     $ 560,185  

Liabilities:

         

Payable to FILI

    259,512             315              
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $  681,176     $ 493,142     $ 4,263,459     $ 2,579,755     $ 560,185  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

         

Life contracts

    681,176       493,142       4,263,459       2,579,755       560,185  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 681,176     $ 493,142     $ 4,263,459     $ 2,579,755     $ 560,185  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

         

Variable Life:

         

Units Outstanding

    5,403       864       17,174       7,347       3,642  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 20.93     $ 55.11     $ 161.13     $ 245.90     $ 55.78  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

         

Units Outstanding

    28,266       23,057       9,501       3,112       18,056  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 20.10     $ 19.32     $ 157.48     $ 248.48     $ 19.78  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    Subaccounts Investing In:  
    VIP –
Investment
Grade Bond
Initial Class
    VIP –
Asset Manager
Initial Class
    VIP –
Index 500
Initial Class
    VIP –
Asset Manager
Growth
Initial Class
    VIP –
Contrafund
Initial Class
    VIP –
Balanced
Initial Class
 

Assets:

           

Investments at market value

  $ 1,324,318     $ 265,021     $ 3,187,795     $ 433,463     $ 4,517,290     $ 1,955,495  

Receivable from FILI

          80       265                    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 1,324,317     $ 265,101     $ 3,188,060     $ 433,463     $ 4,517,290     $ 1,955,495  

Liabilities:

           

Payable to FILI

    69                   292       215       45  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 1,324,249     $ 265,101     $ 3,188,060     $ 433,171     $ 4,517,075     $ 1,955,450  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

           

Life contracts

    1,324,249       265,101       3,188,060       433,171       4,517,075       1,955,450  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 1,324,249     $ 265,101     $ 3,188,060     $ 433,171     $ 4,517,075     $ 1,955,450  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

           

Variable Life:

           

Units Outstanding

    5,905       2,782                          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 42.39     $ 70.25     $     $     $     $  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

           

Units Outstanding

    26,227       1,045       26,955       9,025       33,791       43,962  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 40.95     $ 66.66     $ 118.27     $ 48.00     $ 133.68     $ 44.48  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   3    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Assets and Liabilities - continued

December 31, 2022

 

 

 

    Subaccounts Investing In:  
    VIP –
Dynamic Capital
Appreciation
Initial Class
    VIP –
Growth &
Income
Initial Class
    VIP –
Growth
Opportunities
Initial Class
    VIP –
Mid Cap
Initial Class
    VIP –
Value
Strategies
Initial Class
    VIP –
Utilities
Initial Class
 

Assets:

           

Investments at market value

  $ 160,097     $ 800,935     $ 954,106     $ 1,628,111     $ 164,357     $ 136,572  

Receivable from FILI

    92       94       31             17       55  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 160,189     $ 801,029     $ 954,137     $ 1,628,111     $ 164,374     $ 136,627  

Liabilities:

           

Payable to FILI

                      58              
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 160,189     $ 801,029     $ 954,137     $ 1,628,053     $ 164,374     $ 136,627  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

           

Life contracts

    160,189       801,029       954,137       1,628,053       164,374       136,627  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 160,189     $ 801,029     $ 954,137     $ 1,628,053     $ 164,374     $ 136,627  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

           

Variable Life:

           

Units Outstanding

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $     $     $     $     $     $  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

           

Units Outstanding

    3,697       14,227       16,841       26,850       4,978       3,437  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 43.32     $ 56.30     $ 56.66     $ 60.64     $ 33.02     $ 39.75  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Subaccounts Investing In:  
    VIP –
Technology
Initial Class
    VIP –
Energy
Initial Class
    VIP –
Health Care
Initial Class
    VIP –
Financial
Services
Initial Class
    VIP –
Industrials
Initial Class
    VIP –
Consumer
Discretionary
Initial Class
 

Assets:

           

Investments at market value

  $ 433,739     $ 469,597     $ 839,836     $ 259,256     $ 248,898     $ 58,152  

Receivable from FILI

                125       32             52  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 433,740     $ 469,597     $ 839,961     $ 259,288     $ 248,898     $ 58,204  

Liabilities:

           

Payable to FILI

    285       183                   7        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 433,454     $ 469,414     $ 839,961     $ 259,288     $ 248,891     $ 58,204  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

           

Life contracts

    433,454       469,414       839,961       259,288       248,891       58,204  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 433,454     $ 469,414     $ 839,961     $ 259,288     $ 248,891     $ 58,204  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

           

Variable Life:

           

Units Outstanding

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $     $     $     $     $     $  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

           

Units Outstanding

    6,504       13,454       12,626       11,749       4,343       1,515  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 66.65     $ 34.89     $ 66.53     $ 22.07     $ 57.30     $ 38.43  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   4    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Assets and Liabilities - continued

December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
Real Estate
Initial Class
    VIP –
Strategic
Income
Initial Class
    VIP –
International
Capital
Appreciation
Initial Class
    VIP –
Value
Initial Class
 

Assets:

       

Investments at market value

  $     1,572,087     $ 538,552     $ 358,865     $ 263,829  

Receivable from FILI

    43       31       26        
 

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 1,572,130     $ 538,583     $ 358,891     $ 263,829  

Liabilities:

       

Payable to FILI

                      368  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 1,572,130     $ 538,583     $ 358,891     $ 263,461  
 

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

       

Life contracts

    1,572,130       538,583       358,891       263,461  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 1,572,130     $ 538,583     $ 358,891     $ 263,461  
 

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

       

Variable Life:

       

Units Outstanding

                       
 

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $     $     $     $  
 

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

       

Units Outstanding

    68,390       29,290       15,757       8,257  
 

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 22.99     $ 18.39     $ 22.78     $ 31.91  
 

 

 

   

 

 

   

 

 

   

 

 

 

 

     Subaccounts Investing In:  
     VIP –
Freedom
Income
Initial Class
     VIP –
Freedom
2015
Initial Class
     VIP –
Freedom
2020
Initial Class
     VIP –
Freedom
2025
Initial Class
     VIP –
Freedom
2030
Initial Class
 

Assets:

              

Investments at market value

   $ 7,811      $ 165,856      $ 719,889      $ 329,222      $ 406,617  

Receivable from FILI

     8        10        89        16        12  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

   $ 7,819      $ 165,866      $ 719,978      $ 329,238      $ 406,629  

Liabilities:

              

Payable to FILI

                                  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total net assets

   $ 7,819      $ 165,866      $ 719,978      $ 329,238      $ 406,629  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Assets:

              

Life contracts

     7,819        165,866        719,978        329,238        406,629  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total net assets

   $ 7,819      $ 165,866      $ 719,978      $ 329,238      $ 406,629  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Units Outstanding and Unit Value:

              

Variable Life:

              

Units Outstanding

                                  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Unit Value

   $      $      $      $      $  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fidelity Lifetime Reserves:

              

Units Outstanding

     489        7,712        32,065        13,530        16,037  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Unit Value

   $ 15.99      $ 21.51      $ 22.45      $ 24.33      $ 25.36  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   5    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Assets and Liabilities - continued

December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
Disciplined
Small Cap
Initial Class
    VIP –
FundsManager
20%
Investor Class
    VIP –
FundsManager
50%
Investor Class
    VIP –
FundsManager
70%
Investor Class
    VIP –
FundsManager
85%
Investor Class
    VIP –
Consumer
Staples
Initial Class
    VIP –
Materials
  Initial Class  
 

Assets:

             

Investments at market value

  $ 121,857     $ 301,506     $ 822,720     $ 3,487,654     $ 364,644     $ 106,907     $ 6,853  

Receivable from FILI

    36       3       75                          
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 121,893     $ 301,509     $ 822,795     $ 3,487,654     $ 364,644     $ 106,907     $ 6,853  

Liabilities:

             

Payable to FILI

                      3       216       319       43  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 121,893     $ 301,509     $ 822,795     $ 3,487,651     $ 364,428     $ 106,588     $ 6,810  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

             

Life contracts

    121,893       301,509       822,795       3,487,651       364,428       106,588       6,810  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 121,893     $ 301,509     $ 822,795     $ 3,487,651     $ 364,428     $ 106,588     $ 6,810  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

             

Variable Life:

             

Units Outstanding

                                         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $     $     $     $     $     $     $  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

             

Units Outstanding

    5,166       20,458       43,565       164,280       16,003       3,173       260  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 23.59     $ 14.74     $ 18.89     $ 21.23     $ 22.77     $ 33.60     $ 26.17  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Subaccounts Investing In:  
    VIP –
Communication
Services
Initial Class
    VIF –
Emerging
Markets Equity
Portfolio -
Class I
    VIF –
Emerging
Markets Debt
Portfolio -
Class I
    VIF –
Global
Strategist –
Class II
Portfolio
    Invesco –
V.I.
Global
Core Equity
Fund - Series I
    Lazard –
Retirement
Emerging
Markets Equity
Portfolio -
Investor
 

Assets:

           

Investments at market value

  $ 19,142     $ 156,788     $ 41,589     $ 138,652     $ 104,207     $ 52,506  

Receivable from FILI

    29       68       1       7              
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

  $ 19,171     $ 156,856     $ 41,590     $ 138,659     $ 104,207     $ 52,506  

Liabilities:

           

Payable to FILI

                4             115       3  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 19,171     $ 156,856     $ 41,585     $ 138,659     $ 104,092     $ 52,503  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Assets:

           

Life contracts

    19,171       156,856       41,585       138,659       104,092       52,503  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net assets

  $ 19,171     $ 156,856     $ 41,585     $ 138,659     $ 104,092     $ 52,503  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Units Outstanding and Unit Value:

           

Variable Life:

           

Units Outstanding

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $     $     $     $     $     $  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fidelity Lifetime Reserves:

           

Units Outstanding

    1,064       6,006       1,425       7,433       4,713       3,829  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Unit Value

  $ 18.01     $ 26.11     $ 29.19     $ 18.66     $ 22.09     $ 13.71  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   6    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Operations

For the year ended December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
Government
Money

Market
Initial Class
    VIP –
High
Income
Initial Class
    VIP –
Equity-
Income
Initial Class
    VIP –
Growth
Initial Class
    VIP –
Overseas
Initial Class
    VIP –
Investment
Grade Bond
Initial Class
 

Income:

           

Dividends

  $ 10,912     $ 26,424     $ 81,963     $ 18,359     $ 6,340     $ 31,605  

Expenses:

           

Mortality and expense risk charges

    6,880       5,125       31,917       21,828       5,143       13,231  

Administrative charges

    364       124       7,016       5,529       535       660  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    3,668       21,175       43,030       (8,998     662       17,714  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

           

Realized gain (loss) on sale of fund shares

          (3,652     18,929       48,935       9,736       (39,784

Realized gain distributions

                143,585       221,418       5,845       87,303  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

          (3,652     162,514       270,353       15,581       47,519  

Unrealized appreciation (depreciation)

          (89,588     (472,488     (1,196,512     (213,763     (293,132
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ 3,668     $ (72,065   $ (266,944   $ (935,157   $ (197,520   $ (227,899
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    Subaccounts Investing In:  
    VIP –
Asset
Manager
Initial Class
    VIP –
Index 500
Initial Class
    VIP –
Asset
Manager
Growth
Initial Class
    VIP –
Contrafund
Initial Class
    VIP –
Balanced
Initial Class
    VIP –
Dynamic
Capital

Appreciation
Initial Class
    VIP –
Growth &
Income
Initial Class
 

Income:

             

Dividends

  $ 5,840     $ 49,893     $ 8,446     $ 25,421     $ 26,774     $ 525     $ 13,540  

Expenses:

             

Mortality and expense risk charges

    1,957       34,232       4,598       49,726       21,140       1,742       7,686  

Administrative charges

    518                                      
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    3,365       15,661       3,848       (24,305     5,634       (1,217     5,854  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

             

Realized gain (loss) on sale of fund shares

    (354     74,532       3,630       32,987       12,051       3,888       8,485  

Realized gain distributions

    18,264       25,354       29,140       238,697       125,016       21,518       15,824  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

    17,910       99,886       32,770       271,684       137,067       25,406       24,309  

Unrealized appreciation (depreciation)

    (70,563     (871,207     (130,358     (1,927,926     (598,577     (69,648     (84,281
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (49,288   $ (755,660   $ (93,740   $ (1,680,547   $ (455,876   $ (45,459   $ (54,118
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   7    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Operations - continued

For the year ended December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
Growth
Opportunities
Initial Class
    VIP –
Mid Cap
Initial Class
    VIP –
Value
Strategies
Initial Class
    VIP –
Utilities
Initial Class
    VIP –
Technology
Initial Class
    VIP –
Energy
Initial Class
 

Income:

           

Dividends

  $     $ 8,456     $ 1,896     $ 2,030     $     $ 10,329  

Expenses:

           

Mortality and expense risk charges

    11,408       17,006       1,713       1,109       5,091       4,241  

Administrative charges

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    (11,409     (8,550     183       921       (5,097     6,088  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

           

Realized gain (loss) on sale of fund shares

    14,422       4,463       2,868       2,368       5,793       17,758  

Realized gain distributions

    219,109       111,415       7,870       258       51,068        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

    233,531       115,878       10,738       2,626       56,861       17,758  

Unrealized appreciation (depreciation)

    (818,079     (415,641     (25,215     (245     (296,140     155,248  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (595,957   $ (308,313   $ (14,294   $ 3,302     $ (244,376   $ 179,094  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    Subaccounts Investing In:  
    VIP –
Health Care
Initial Class
    VIP –
Financial
Services

Initial Class
    VIP –
Industrials
Initial Class
    VIP –
Consumer
Discretionary
Initial Class
    VIP –
Real Estate
Initial Class
    VIP –
Strategic
Income

Initial Class
 

Income:

           

Dividends

  $     $ 5,187     $ 428     $     $ 23,827     $ 20,465  

Expenses:

           

Mortality and expense risk charges

    8,283       2,601       2,488       696       18,129       5,593  

Administrative charges

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    (8,289     2,586       (2,060     (702     5,698       14,872  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

           

Realized gain (loss) on sale of fund shares

    7,844       4,983       (398     569       10,768       (291

Realized gain distributions

    53,522       3,742       34,471       6,887       54,769       572  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

    61,366       8,725       34,073       7,456       65,537       281  

Unrealized appreciation (depreciation)

    (175,544     (38,426     (64,801     (38,601     (690,534     (89,331
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (122,467   $ (27,115   $ (32,788   $ (31,847   $ (619,299   $ (74,178
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   8    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Operations - continued

For the year ended December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
International
Capital
Appreciation
Initial Class
    VIP –
Value
Initial Class
    VIP –
Freedom
Income

Initial Class
 

Income:

     

Dividends

  $ 1,028     $ 3,526     $ 202  

Expenses:

     

Mortality and expense risk charges

    3,823       2,446       90  

Administrative charges

                 
 

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    (2,795     1,080       112  
 

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

     

Realized gain (loss) on sale of fund shares

    1,270       1,260       (32

Realized gain distributions

    29,188       7,750       328  
 

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

    30,458       9,010       296  

Unrealized appreciation (depreciation)

    (160,787     (24,693     (1,718
 

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (133,124   $ (14,603   $ (1,310
 

 

 

   

 

 

   

 

 

 

 

    Subaccounts Investing In:  
    VIP –
Freedom
2015
Initial Class
    VIP –
Freedom
2020
Initial Class
    VIP –
Freedom
2025
Initial Class
    VIP –
Freedom
2030
Initial Class
    VIP –
Disciplined
Small Cap

Initial Class
 

Income:

         

Dividends

  $ 4,454     $ 15,962     $ 7,071     $ 8,316     $ 1,120  

Expenses:

         

Mortality and expense risk charges

    2,311       7,661       3,446       4,312       1,359  

Administrative charges

                             
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    2,143       8,301       3,625       4,004       (239
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

         

Realized gain (loss) on sale of fund shares

    (10,845     1,197       972       95,208       (423

Realized gain distributions

    25,093       77,025       22,145       28,595       26,454  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

    14,248       78,222       23,117       123,803       26,031  

Unrealized appreciation (depreciation)

    (60,575     (231,053     (94,766     (219,349     (56,666
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (44,184   $ (144,530   $ (68,024   $ (91,542   $ (30,874
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   9    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Operations - continued

For the year ended December 31, 2022

 

    Subaccounts Investing In:  
    VIP –
FundsManager
20%
Investor Class
    VIP –
FundsManager
50%
Investor Class
    VIP –
FundsManager
70%
Investor Class
    VIP –
FundsManager
85%
Investor Class
    VIP –
Consumer
Staples
Initial Class
    VIP –
Materials
Initial Class
 

Income:

           

Dividends

  $ 7,295     $ 17,430     $ 59,096     $ 4,227     $ 1,884     $ 80  

Expenses:

           

Mortality and expense risk charges

    3,174       8,643       36,612       3,817       1,052       74  

Administrative charges

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    4,121       8,787       22,484       410       832       6  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

           

Realized gain (loss) on sale of fund shares

    24       4,061       2,426       329       443       126  

Realized gain distributions

    22,016       143,945       662,862       77,935       6,137       224  

Net realized gain (loss) on investments

    22,040       148,006       665,288       78,264       6,580       350  

Unrealized appreciation (depreciation)

    (62,332     (300,061     (1,376,482     (157,345     (9,165     (1,298
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (36,171   $ (143,268   $ (688,710   $ (78,671   $ (1,753   $ (942
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Subaccounts Investing In:  
    VIP –
Communication
Services
Initial Class
    VIF –
Emerging
Markets
Equity
Portfolio -
Class I
    VIF –
Emerging
Markets

Debt
Class I
    VIF –
Global
Strategist
Portfolio –

Class II
    Invesco –
V.I.
Global
Core Equity -
Series I
    Lazard –
Retirement
Emerging
Markets Equity
Portfolio  -
Investor
 

Income:

           

Dividends

  $     $ 714     $ 3,857     $     $ 391     $ 1,949  

Expenses:

           

Mortality and expense risk charges

    178       1,727       490       1,461       1,127       546  

Administrative charges

                                   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income (loss)

    (180     (1,013     3,367       (1,463     (736     1,403  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized gain (loss) on investments:

           

Realized gain (loss) on sale of fund shares

    (62     (2,933     (1,775     (2     11,338       (1,913

Realized gain distributions

    150       17,410             25,459       7,491        

Net realized gain (loss) on investments

    88       14,477       (1,775     25,457       18,829       (1,913

Unrealized appreciation (depreciation)

    (8,165     (70,880     (13,792     (53,585     (49,382     (8,992
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in net assets from operations

  $ (8,257   $ (57,416   $ (12,200   $ (29,591   $ (31,289   $ (9,502
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

See accompanying notes which are an integral part of the financial statements.

 

   10    Annual Report


Table of Contents

Fidelity Investments Variable Life Account I

Statements of Changes in Net Assets

For the years ended December 31, 2022 and 2021

 

    Subaccounts Investing In:  
    VIP –
Government
Money Market
Initial Class
    VIP –
High Income
Initial Class
    VIP –
Equity-Income
Initial Class
    VIP –
Growth
Initial Class
 
    12/31/22     12/31/21     12/31/22     12/31/21     12/31/22