1290 Avenue of the Americas
New York, NY 10104
Richard Goldberger
Senior Director & Counsel
201-743-7174 (Tel.)
212-314-3959 (Fax)
December 5, 2014
VIA EDGAR
Ms. Elisabeth Bentzinger
United States Securities and Exchange Commission
Office of Insurance Products
Division of Investment Management
Mail Stop 8629
Washington, DC 20549-8629
| Re: | MONY Life Insurance Company of America |
Correspondence filing related to MONY Life Insurance Company of America’s Post-Effective Amendment No. 2 and Amendment No. 5 (“N-6 Amendment”) to Form N-6 Registration Statement File Nos. 333-191149 and 811-22886
Dear Ms. Bentzinger:
The purpose of this letter is to provide a response to follow-up staff comments received on the N-6 Amendment filed by MONY Life Insurance Company of America (“the Company”) on October 8, 2014, as provided by telephone on November 24, 2014. We first set forth each specific staff comment and then provide our response.
A. Prospectus
| 1. | Prospectus date |
Comment: The effective date of the prospectus should be close in time to the date of the filing.
Response 1:
The date of the prospectus is revised to December 31, 2014.
| 2. | Market Stabilizer Option (Cover page) |
Comment: Please add disclosure to clarify that the Market Stabilizer Option is a standalone investment option.
Response 2:
Added disclosure that makes clear that Market Stabilizer Option is distinct from the other investment options and is covered by a separate prospectus.
| 3. | Table of policy charges (page 6) |
Comment (a): Add language to the description of the charge for decreasing the policy’s face amount that parallels the language used for the surrender charge description.
Response 3(a):
Added the parallel language.
Comment (b): “Separate Account Fund value charge” is not defined.
Response 3(b):
Removed reference to the orphaned defined term.
Comment (c): In footnote 13, clarify which “rate” is being referred to in the second sentence.
Response 3(c):
Clarified that the rate in question is the policy loans interest rate.
| 4. | Premium payments (page 9) |
Comment: Add disclosure that additional premium payments are not permitted if the paid up death benefit guarantee is elected.
Response 4:
This disclosure is added.
| 5. | Extended no lapse guarantee (page 10) |
Comment: Add disclosure that electing the no lapse guarantee limits the available investment options.
Response 5:
This disclosure is added.
| 6. | Paid up death benefit guarantee (page 11) |
Comment: Add disclosure that death benefit Option A must be in effect in order to elect the paid up death benefit guarantee.
Response 6:
This disclosure has been added.
| 7. | Market Stabilizer Option (“MSO”) (page 12) |
Comment: Revise the MSO description to explain that under the MSO interest is credited based in part on the performance of an index, and that dividends are not included in the index return.
Response 7:
The description of the MSO is revised as follows:
“The MSO rider, if available under your policy, provides you with the opportunity to earn interest that we will credit based in part on the performance of the S&P 500 Price Return Index. The S&P 500 Price Return Index includes 500 companies in leading industries of the U.S. economy, capturing 75% coverage of U.S. equities. The S&P 500 Price Return Index does not include dividends declared by any of the companies included in this Index.”
| 8. | Accessing your money (page 14) |
Comment: Add disclosure that loans, partial withdrawals and surrenders may have tax consequences.
Response 8:
This disclosure has been added.
| 9. | Risks of investing in a policy (page 14) |
Comment: Please disclose the risks of adverse tax consequences and the credit risk related to the company’s guarantees under the policy.
Response 9:
The following disclosure has been added:
| • | There may be adverse tax consequences associated with taking a policy loan or making a partial withdrawal from your policy. |
| • | The guarantees we make to you under this policy are supported by AXA Equitable’s general account and are subject to AXA Equitable’s claims paying ability. You should look solely to the financial strength of AXA Equitable for its claims-paying ability. |
| 10. | Who is MONY Life Insurance Company of America? (page 16) |
Comment: Please disclose that the company is obligated to pay all amounts owing under the policy.
Response 10:
The following disclosure has been added:
“AXA Equitable is solely responsible for paying all amounts owed to you under your policy.”
| 11. | Your policy account value (page 28) |
Comment: Please disclose that amounts allocated to the MSO are included in a policy’s account value.
Response 11:
The value of amounts allocated to the MSO is calculated as described in the separate MSO prospectus. A cross reference to the MSO prospectus has been added.
| 12. | Transfers you can make (page 29) |
Comment: Disclose the limitations on transfers referenced in the first paragraph under “Transfers you can make”.
Response 12:
The reference to limitations on transfers was incorrect and has been removed.
| 13. | Paid up death benefit guarantee (page 41) |
Comment (a): Please disclose the rules regarding allocations to the MSO if the paid up death benefit guarantee is in effect.
Response 13(a):
Disclosure that the MSO is not available if the paid up death benefit guarantee is in effect has been added to the accompanying prospectus supplement. We also added a cross reference to that supplement here.
General note: The supplement that accompanies the prospectus serves as a “bridge” to the full MSO prospectus. We created this supplement at the suggestion of the SEC in order to limit the amount of information about the MSO (which is a standalone general account security filed on Form S-3) that is contained in this N-6 registration statement. Accordingly, we believe that appropriate location for disclosure regarding transfers into and out of the MSO, and restrictions on such transfers, is in that supplement.
Comment (b): Confirm whether the disclosure regarding the guaranteed interest option limitation is correct or should be removed.
Response 13(b):
This disclosure is incorrect and has been removed.
| 14. | Extended no lapse guarantee rider (page 43) |
Comment: Please disclose the rules regarding allocations to the MSO if the extended no lapse guarantee rider is in effect.
Response 14:
Disclosure that the MSO is not available if the extended no lapse guarantee rider is in effect has been added to the accompanying prospectus supplement. We also added a cross reference to that supplement here. (Please also see the General note in the response to comment 13(a).)
| 15. | Premium charge (page 49) |
Comment: Disclose whether or not premium charges apply to premium payments that increase the face amount of the policy.
Response 15:
Added disclosure that premium charges do apply to premium payments that increase the face amount of the policy.
| 16. | Charge for returned payments (page 50) |
Comment: Disclose the means by which these payments can be made.
Response 16:
This disclosure has been added.
| 17. | Disability deduction waiver (page 51) |
Comment (a): Please add disclosure that the charge for this rider is based on the risk characteristics of the insured.
Response 17(a):
This disclosure has been added.
Comment (b): Please clarify whether the charge for this rider is assessed on the guaranteed or actual charges being deducted from the policyholder’s account.
Response 17(b):
The existing disclosure is revised as follows:
“This amount is between 7% and 132% (on a guaranteed basis) of the actual amounts of all the other monthly charges (including charges for other riders you elected) deducted from your policy account value, and depends on the individual insurance risk characteristics of the insured person.”
| 18. | Option to purchase additional insurance (page 51) |
Comment: Please revise the description of the charges for this rider as the current sentence is too lengthy.
Response 18:
The description is revised as follows:
“If you choose this rider and while it is in effect, we deduct between $0.04 and $0.17 per $1,000 from your policy account value each month until the insured under the base policy reaches age 40.”
| 19. | Extended no lapse guarantee (page 51) |
Comment: Please add disclosure that the premium charge will be 1% higher while this rider is in effect.
Response 19:
This disclosure has been added.
| 20. | Appendix I |
Comment (a): Please confirm that values for illustration items that are currently blank will be provided in a subsequent post-effective amendment.
Response 20(a):
We have now included these.
Comment(b): In the illustration headers, please replace the form of death benefit terms “level” and “increasing” with “Option A” and “Option B” respectively.
Response 20(b):
We have made these changes.
| 21. | Appendix III |
Comment: In the cash value accumulation test example, check whether the Death Benefit under Option A value for Policy 2 should in fact be $157,845.
Response 21:
We have made this correction.
B. Market Stabilizer Option Supplement
| 22. | Comment: Please provide an explanation of the MSO in the introduction. |
Response 22:
The following disclosure is added:
“The MSO gives you the opportunity to earn interest that we will credit based in part on the performance of the S&P 500 Price Return Index, excluding dividends, over approximately a one year period. Any amount that you decide to invest in the MSO is allocated to a “Segment”, each of which has a specific start date and a limited duration. On the final day of the Segment, the index-linked return associated with that Segment will be applied to your Segment Account Value (as defined in the MSO Prospectus), and may be positive, zero or negative. Please be aware that the possibility of a negative return on this investment at the end of a Segment term could result in a significant loss of principal.”
C. General Comments
| 23. | Financial Statements, Exhibits and Other Information |
Please confirm that the financial statements and exhibits will be filed by a post-effective amendment to the registration statement.
Response 23:
The Company will file a post-effective amendment once comments have been cleared by the staff. The post-effective amendment will be filed to update disclosure (as agreed to in this correspondence filing) and will provide the required financial statements, exhibits and opinions.
| 24. | Statement of Additional Information |
Comment (a): Please provide the identity and address of the independent registered public accounting firm in a subsequent post-effective amendment.
Response 24(a):
The following details will be provided:
PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017
Comment (b): Confirm whether or not references to Separate Account L are accurate.
Response 24(b):
All references to Separate Account L will be removed and replaced with Separate Account K as appropriate.
| 25. | Tandy Representations |
Please include new Tandy representations in a subsequent post-effective amendment that also cover the MSO supplement.
Response 25:
New Tandy representations will be included in a subsequent post-effective amendment.
| 26. | Registration Statement Signatures |
A certification as to meeting requirements for effectiveness is not appropriate in a Rule 485(a) filing.
Response 26:
This certification will be included in a subsequent post-effective amendment once comments have been cleared by the staff.
Please contact the undersigned at (201) 743-7174 and Shane Daly at (212) 314-3912 or Christopher Palmer, Esq. of Goodwin Procter LLP at (202) 346-4253 if you have any questions or comments.
| Very truly yours, |
/s/ Richard Goldberger |
| Richard Goldberger |
cc: Christopher E. Palmer, Esq.
AXA Equitable Life Insurance Company
1290 Avenue of the Americas, New York, NY 10104
IncentiveLife Legacy(R) III
An individual flexible premium variable life insurance policy issued by MONY
Life Insurance Company of America ("MONY America") with variable investment
options offered under MONY America Variable Account K.
<R>
PROSPECTUS DATED DECEMBER 31, 2014
</R>
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT CONTAINS
IMPORTANT INFORMATION THAT YOU SHOULD KNOW BEFORE PURCHASING, OR TAKING ANY
OTHER ACTION UNDER A POLICY. THIS PROSPECTUS SUPERSEDES ALL PRIOR PROSPECTUSES
AND SUPPLEMENTS. ALSO, YOU SHOULD READ THE PROSPECTUSES FOR EACH TRUST, WHICH
CONTAIN IMPORTANT INFORMATION ABOUT THE PORTFOLIOS.
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This prospectus describes the IncentiveLife Legacy(R) III policy but is not
itself a policy. This prospectus is a disclosure document and describes all of
the policy's material features, benefits, rights and obligations, as well as
other information. The description of the policy's material provisions in this
prospectus is current as of the date of this prospectus. If certain material
provisions under the policy are changed after the date of this prospectus in
accordance with the policy, those changes will be described in a supplement to
this prospectus. You should carefully read this prospectus in conjunction with
any applicable supplements. All optional features and benefits described in the
prospectus may not be available at the time you purchase the policy. We reserve
the right to restrict availability of any optional feature or benefit. In
addition, not all optional features and benefits may be available in
combination with other optional features and benefits.
Although this prospectus is primarily designed for potential purchasers of the
policy, you may have previously purchased a policy and be receiving this
prospectus as a current policy owner. If you are a current policy owner, you
should note that the options, features and charges of the policy may have
varied over time. For more information about the particular options, features
and charges applicable to you, please contact your financial professional
and/or refer to your policy.
WHAT IS INCENTIVELIFE LEGACY(R) III?
<R>
IncentiveLife Legacy(R) III provides life insurance coverage, plus the
opportunity for you to earn a return in (i) our guaranteed interest option,
(ii) an investment option we refer to as the Market Stabilizer Option(R), which
is described in the separate Market Stabilizer Option(R) prospectus and/or
(iii) one or more of the following variable investment options:
</R>
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VARIABLE INVESTMENT OPTIONS
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.. All Asset Moderate . AXA Mid Cap Value Managed Volatility
Growth-Alt 15/(1)/ . AXA Moderate Growth Strategy
.. All Asset Growth-Alt 20/(1)/ . Charter/SM/ Multi-Sector Bond
.. All Asset Aggressive-Alt 25/(1)/ . Charter/SM/ Small Cap Growth
.. American Century VP Mid Cap Value . Charter/SM/ Small Cap Value
.. American Funds Insurance Series(R) Global . EQ/AllianceBernstein Small Cap Growth
Small Capitalization Fund/SM/ . EQ/BlackRock Basic Value Equity
.. American Funds Insurance Series(R) New . EQ/Boston Advisors Equity Income
World Fund(R) . EQ/Calvert Socially Responsible
.. AXA Balanced Strategy/(2)/ . EQ/Capital Guardian Research
.. AXA Conservative Growth Strategy/(2)/ . EQ/Common Stock Index
.. AXA Conservative Strategy/(2)/ . EQ/Core Bond Index
.. AXA 400 Managed Volatility . EQ/Equity 500 Index
.. AXA 500 Managed Volatility . EQ/GAMCO Mergers and Acquisitions
.. AXA 2000 Managed Volatility . EQ/GAMCO Small Company Value
.. AXA Global Equity Managed Volatility . EQ/Global Bond PLUS
.. AXA Growth Strategy/(2)/ . EQ/Intermediate Government Bond
.. AXA International Core Managed Volatility . EQ/International Equity Index
.. AXA International Managed Volatility . EQ/Invesco Comstock
.. AXA International Value Managed Volatility . EQ/JPMorgan Value Opportunities
.. AXA Large Cap Core Managed Volatility . EQ/Large Cap Growth Index
.. AXA Large Cap Growth Managed Volatility . EQ/Large Cap Value Index
.. AXA Large Cap Value Managed Volatility . EQ/MFS International Growth
.. AXA/Loomis Sayles Growth . EQ/Mid Cap Index
. EQ/Money Market
. EQ/Morgan Stanley Mid Cap Growth
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VARIABLE INVESTMENT OPTIONS
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.. EQ/PIMCO Ultra Short Bond . Ivy Funds VIP Science and Technology
.. EQ/Quality Bond PLUS . Ivy Funds VIP Small Cap Growth
.. EQ/Small Company Index . Lazard Retirement Emerging Markets Equity
.. EQ/T. Rowe Price Growth Stock . MFS(R) International Value
.. EQ/UBS Growth and Income . MFS(R) Investors Growth Stock
.. EQ/Wells Fargo Omega Growth . MFS(R) Investors Trust
.. Fidelity(R) VIP Contrafund(R) . Multimanager Aggressive Equity
.. Fidelity(R) VIP Growth & Income . Multimanager Core Bond
.. Fidelity(R) VIP Mid Cap . Multimanager Mid Cap Growth
.. Franklin Mutual Shares VIP . Multimanager Mid Cap Value
.. Franklin Rising Dividends VIP . Multimanager Technology
.. Franklin Small Cap Value VIP . PIMCO CommodityRealReturn(R)
.. Franklin Strategic Income VIP . PIMCO Real Return
.. Goldman Sachs VIT Mid Cap Value . PIMCO Total Return
.. Invesco V.I. Global Real Estate . T. Rowe Price Equity Income II
.. Invesco V.I. International Growth . Templeton Developing Markets VIP
.. Invesco V.I. Mid Cap Core Equity . Templeton Global Bond VIP
.. Invesco V.I. Small Cap Equity . Templeton Growth VIP
.. Ivy Funds VIP Energy . Van Eck VIP Global Hard Assets
.. Ivy Funds VIP High Income
.. Ivy Funds VIP Mid Cap Growth
---------------------------------------------------------------------------------------------
(1)Also referred to as an "All Asset" variable investment option in this
prospectus.
(2)Also referred to as an "AXA Strategic Allocation investment option" in this
prospectus.
Amounts that you allocate under your policy to any of the variable investment
options are invested in a corresponding "Portfolio" that is part of one of the
trusts (the "Trusts"), which are mutual funds. Please see "About the Portfolios
of the Trusts" for more information about the Portfolios and the Trusts. Your
investment results in a variable investment option will depend on those of the
related Portfolio. Any gains
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. THE CONTRACTS ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY. THEY ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK AND ARE NOT BANK
GUARANTEED. THEY ARE SUBJECT TO INVESTMENT RISKS AND POSSIBLE LOSS OF PRINCIPAL.
#786977/AA & ADL
will generally be tax deferred and the life insurance benefits we pay if the policy's insured person dies will generally be income tax free. For more tax information, please see "Tax information" later in this prospectus. In this section you will also find additional information about possible estate tax consequences associated with death benefits under "Estate, gift, and generation-skipping taxes." OTHER CHOICES YOU HAVE. You have considerable flexibility to tailor the policy to meet your needs. For example, subject to our rules, you can (1) choose when and how much you contribute (as "premiums") to your policy, (2) pay certain premium amounts to guarantee that your insurance coverage will continue for at least a certain number of policy years, regardless of investment performance, (3) borrow or withdraw amounts you have accumulated, (4) choose between two life insurance death benefit options, (5) increase or decrease the amount of insurance coverage, (6) elect to receive an insurance benefit if the insured person becomes terminally ill, and (7) obtain certain optional benefits that we offer by "riders" to your policy. OTHER MONY AMERICA POLICIES. We offer a variety of fixed and variable life insurance policies which offer policy features, including investment options, that are different from those offered by this prospectus. Not every policy or feature is offered through your financial professional. Replacing existing insurance with IncentiveLife Legacy(R) III or another policy may not be to your advantage. You can contact us to find out more about any other MONY America insurance policy.
Contents of this Prospectus
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1.RISK/BENEFIT SUMMARY: CHARGES AND EXPENSES YOU
WILL PAY 6
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Tables of policy charges 6
How we allocate charges among your investment options 8
Changes in charges 8
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2.RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND
RISKS 9
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How you can pay for and contribute to your policy 9
The minimum amount of premiums you must pay 10
You can guarantee that your policy will not terminate before a
certain date 10
You can elect a "paid up" death benefit guarantee 11
You can receive an accelerated death benefit under the Long
Term Care Services/SM/ Rider 11
Investment options within your policy 11
About your life insurance benefit 12
Alternative higher death benefit in certain cases 12
You can increase or decrease your insurance coverage 13
Accessing your money 14
Risks of investing in a policy 14
How the IncentiveLife Legacy(R) III variable life insurance policy is
available 15
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3. WHO IS MONY LIFE INSURANCE COMPANY OF AMERICA? 16
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How to reach us 17
About our MONY America Variable Account K 17
Your voting privileges 18
About the Trusts 18
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4. ABOUT THE PORTFOLIOS OF THE TRUSTS 19
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Portfolios of the Trusts 20
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5. DETERMINING YOUR POLICY'S VALUE 28
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Your policy account value 28
-------------
"We,""our," and "us" refer to MONY America. "Financial professional" means the
registered representative of either AXA Advisors or an unaffiliated broker
dealer which has entered into a selling agreement with AXA Distributors who is
offering you this policy.
When we address the reader of this prospectus with words such as "you" and
"your," we mean the person who has the right or responsibility that the
prospectus is discussing at that point. This is usually the policy's owner. If
a policy has more than one owner, all owners must join in the exercise of any
rights an owner has under the policy, and the word "owner" therefore refers to
all owners.
When we use the word "state," we also mean any other local jurisdiction whose
laws or regulations affect a policy.
<R>
This prospectus does not offer IncentiveLife Legacy(R) III anywhere such offers
are not lawful. MONY America does not authorize any information or
representation about the offering other than that contained or incorporated in
this prospectus, in any current supplements thereto, or in any related sales
materials authorized by MONY America.
</R>
3
CONTENTS OF THIS PROSPECTUS
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6.TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT
OPTIONS 29
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Transfers you can make 29
How to make transfers 29
Our automatic transfer service 29
Our asset rebalancing service 30
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7.ACCESSING YOUR MONEY 31
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Borrowing from your policy 31
Loan extension (for guideline premium test policies only) 32
Making withdrawals from your policy 33
Surrendering your policy for its net cash surrender value 33
Your option to receive a terminal illness living benefit 33
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8.TAX INFORMATION 35
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Basic income tax treatment for you and your beneficiary 35
Tax treatment of distributions to you (loans, partial withdrawals,
and full surrender; impact of certain policy changes and
transactions) 35
Tax treatment of living benefits rider or Long Term Care
Services/SM/ Rider under a policy with the applicable rider 36
Business and employer owned policies 37
Requirement that we diversify investments 38
Estate, gift, and generation-skipping taxes 38
Pension and profit-sharing plans 38
Split-dollar and other employee benefit programs 38
ERISA 38
Our taxes 39
When we withhold taxes from distributions 39
Possibility of future tax changes and other tax information 39
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9.MORE INFORMATION ABOUT POLICY FEATURES AND
BENEFITS 41
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Guarantee premium test for no lapse guarantees 41
Paid up death benefit guarantee 41
Other benefits you can add by rider 42
Variations among IncentiveLife Legacy(R) III policies 47
Your options for receiving policy proceeds 47
Your right to cancel within a certain number of days 48
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10.MORE INFORMATION ABOUT CERTAIN POLICY CHARGES 49
-----------------------------------------------------------------------
Deducting policy charges 49
Charges that the Trusts deduct 52
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11.MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY 53
----------------------------------------------------------------------
Dates and prices at which policy events occur 53
Policy issuance 54
Ways to make premium and loan payments 54
Assigning your policy 54
You can change your policy's insured person 55
Requirements for surrender requests 55
Gender-neutral policies 55
Future policy exchanges 55
Broker transaction authority 55
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12.MORE INFORMATION ABOUT OTHER MATTERS 56
----------------------------------------------------------------------
About our general account 56
Transfers of your policy account value 56
Telephone and Internet requests 57
Suicide and certain misstatements 58
When we pay policy proceeds 58
Changes we can make 58
Reports we will send you 58
Distribution of the policies 59
Legal proceedings 61
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13.FINANCIAL STATEMENTS OF MONY AMERICA VARIABLE ACCOUNT K AND
MONY AMERICA 62
----------------------------------------------------------------------
----------------------------------------------------------------------
14.PERSONALIZED ILLUSTRATIONS 63
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Illustrations of policy benefits 63
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APPENDICES
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I -- Hypothetical illustrations I-1
II -- State policy availability and/or variations of certain
features and benefits II-1
III -- Calculating the alternate death benefit III-1
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REQUESTING MORE INFORMATION
Statement of additional information
Table of contents
----------------------------------------------------------------------
4
CONTENTS OF THIS PROSPECTUS
An index of key words and phrases
--------------------------------------------------------------------------------
This index should help you locate more information on the terms used in this
prospectus.
PAGE
account value 29
actual premium fund value 41
Administrative Office 17
age; age at issue 54
Allocation Date 11
alternative death benefit 9
amount at risk 50
anniversary 9
assign; assignment 54
automatic transfer service 53
AXA Equitable 8
AXA Financial, Inc. 16
basis 36
beneficiary 12
business day 53
Cash Surrender Value 33
Code 35
collateral 31
commencement of insurance coverage 54
cost of insurance charge 39
cost of insurance rates 50
day 8
default 10
disruptive transfer activity 29
dollar cost averaging service 29
extended no lapse guarantee 10
face amount 12
grace period 36
guaranteed interest option 12
guarantee premium test 41
Guaranteed Interest Account 12
IncentiveLife Legacy(R) III 9
initial premium 11
insured person 12
Internet 17
investment funds 11
investment options cover
investment start date 54
issue date 11
lapse 10
loan extension 32
loan, loan interest 31
PAGE
Long Term Care Services/SM/ Rider 11
Market Stabilizer Option(R) 12
market timing 17
Money Market Lock-in Period 11
mortality and expense risk charge 7
modified endowment contract 9
month, year 44
monthly deduction 8
MONY Access Account 47
MONY America cover
MONY America Variable Account K 17
net cash surrender value 33
no lapse guarantee premium fund value 41
no lapse guarantee 10
Option A, B 12
our 3
owner 3
paid up 14
paid up death benefit guarantee 14
partial withdrawal 33
payments 50
planned periodic premium 9
policy cover
Portfolio cover
premium payments 9
prospectus cover
rebalancing 30
receive 50
register date 54
restored, restoration 47
riders 9
SEC cover
state 3
subaccount 17
surrender 34
surrender charge 6, 47
target premium 59
transfers 29
Trusts cover
units 28
unit values 17
us 3
variable investment options cover
we 12
withdrawals 33
you, your 3
5
AN INDEX OF KEY WORDS AND PHRASES
1. Risk/benefit summary: Charges and expenses you will pay
--------------------------------------------------------------------------------
TABLES OF POLICY CHARGES
For more information about some of these charges, see "Deducting policy
charges" under "More information about certain policy charges" later in this
prospectus. The illustrations of Policy Benefits that your financial
professional will provide will show the impact of the actual current and
guaranteed maximum rates, if applicable, of the following policy charges, based
on various assumptions (except for the loan interest spread, where we use
current rates in all cases).
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the policy. The first table shows the charges
that we deduct when you buy and each time you contribute to your policy,
surrender the policy, reduce the face amount or transfer policy account value
among investment options. All charges are shown on a guaranteed maximum basis.
See "Deducting policy charges" under "More information about certain policy
charges."
<R>
----------------------------------------------------------------------------------------------------------------
TRANSACTION FEES
----------------------------------------------------------------------------------------------------------------
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
----------------------------------------------------------------------------------------------------------------
PREMIUM CHARGE/(1)/ From each premium 9%, if the extended no lapse guarantee rider is in effect.
- or -
8%, if the extended no lapse guarantee rider is not
in effect.
SURRENDER (TURNING Upon surrender Initial surrender charge per $1,000 of initial base
IN) OF YOUR POLICY policy face amount or per $1,000 of requested base
DURING ITS FIRST 15 policy face amount increase:/(3)/
YEARS OR THE FIRST Highest: $48.52
15 YEARS AFTER YOU Lowest: $11.72
HAVE REQUESTED AN Representative: $20.24/(4)/
INCREASE IN YOUR
POLICY'S FACE
AMOUNT/(2)/
REQUEST A DECREASE Effective date of the decrease A pro rata portion of the charge that would apply to
IN YOUR POLICY'S a full surrender at the time of the decrease.
FACE AMOUNT DURING
ITS FIRST 15 YEARS
OR THE FIRST 15
YEARS AFTER YOU
HAVE REQUESTED AN
INCREASE IN YOUR
POLICY'S FACE AMOUNT
TRANSFERS AMONG Upon transfer $25 per transfer./(5)/
INVESTMENT OPTIONS
ADDING THE TERMINAL At the time of the transaction $100 (if elected after policy issue)
ILLNESS LIVING
BENEFIT RIDER
EXERCISE OF OPTION At the time of the transaction $250
TO RECEIVE THE
TERMINAL ILLNESS
LIVING BENEFIT
SPECIAL SERVICES
CHARGES
.. Wire transfer At the time of the transaction Current and Maximum Charge: $90
charge/(6)/
.. Express mail At the time of the transaction Current and Maximum Charge: $35
charge/(6)/
.. Policy At the time of the transaction Current and Maximum Charge: $25
illustration
charge/(7)/
.. Duplicate At the time of the transaction Current and Maximum Charge: $35
policy
charge/(7)/
.. Policy history At the time of the transaction Current and Maximum Charge: $50
charge/(7)(8)/
.. Charge for At the time of the transaction Current and Maximum Charge: $25
returned
payments/(7)/
----------------------------------------------------------------------------------------------------------------
</R>
This table shows the fees and expenses that you will pay periodically during
the time that you own the Policy, not including underlying Trust portfolio fees
and expenses.
--------------------------------------------------------------------------------------------
PERIODIC CHARGES
OTHER THAN UNDERLYING
TRUST PORTFOLIO
OPERATING EXPENSES
--------------------------------------------------------------------------------------------
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
--------------------------------------------------------------------------------------------
COST OF INSURANCE Monthly Charge per $1,000 of the amount for which we
CHARGE/(9)(10)/ are at risk:/(11)/
Highest: $83.34
Lowest: $0.02
Representative: $0.10/(12)/
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6
RISK/BENEFIT SUMMARY: CHARGES AND EXPENSES YOU WILL PAY
<R>
-----------------------------------------------------------------------------------------------------------
PERIODIC CHARGES
OTHER THAN UNDERLYING
TRUST PORTFOLIO
OPERATING EXPENSES
-----------------------------------------------------------------------------------------------------------
CHARGE WHEN CHARGE IS DEDUCTED AMOUNT DEDUCTED
-----------------------------------------------------------------------------------------------------------
MORTALITY AND Monthly 0.85% (annual rate) of your value in our variable
EXPENSE RISK CHARGE investment options.
ADMINISTRATIVE Monthly (1) Current Amount Maximum Amount
CHARGE/(9)/ Deducted Deducted
$10
$15
-plus-
(2) Charge per $1,000 of the initial base policy
face amount and any requested base policy face
amount increase that exceeds the highest pre-
vious face amount:
Highest: $1.20
Lowest: $0.05
Representative: $0.11/(4)/
LOAN INTEREST On each policy anniversary (or on 1% of loan amount.
SPREAD/(13)/ loan termination, if earlier)
OPTIONAL RIDER While the rider is in effect
CHARGES
CHILDREN'S TERM Monthly Charge per $1,000 of rider benefit amount:
INSURANCE $0.50
DISABILITY Monthly Percentage of all other monthly charges:
DEDUCTION WAIVER Highest: 132%
Lowest: 7%
Representative: 12%/(12)/
OPTION TO PURCHASE Monthly Charge per $1,000 of rider benefit amount:
ADDITIONAL INSURANCE Highest: $0.17
Lowest: $0.04
Representative: $0.16/(14)/
EXTENDED NO LAPSE Monthly (1) Charge per $1,000 of the initial base policy
GUARANTEE face amount, and per $1,000 of any requested
base policy face amount increase that exceeds the
highest previous face amount:
Highest: $0.05
Lowest: $0.01
Representative: $0.02/(4)/
-plus-
(2) 0.15% (annual rate) of your policy account
value allocated to our variable investment options.
LONG TERM CARE Monthly Charge per $1,000 of the amount for which we
SERVICES/SM/ are at risk:/(15)/
RIDER/(15)/ With the optional Nonforfeiture Benefit:
Highest: $2.94
Lowest: $0.25
Representative: $0.53/(14)/
Without the optional Nonforfeiture Benefit:
Highest: $2.67
Lowest: $0.22
Representative: $0.49/(14)/
-----------------------------------------------------------------------------------------------------------
</R>
(1)We currently deduct 8% of each premium payment in policy years one and two
and 6% thereafter if the extended no lapse guarantee rider is not in effect.
If the extended no lapse guarantee is in effect, we deduct 9% of each
premium payment in years one and two and 7% thereafter. Any premium received
in the 24th month following policy issuance will also attract the lower
premium charge of 6% (if the extended no lapse guarantee rider is not in
effect) or 7% (if the extended no lapse guarantee rider is in effect).
7
RISK/BENEFIT SUMMARY: CHARGES AND EXPENSES YOU WILL PAY
(2)The surrender charge attributable to an increase in your policy's face
amount is in addition to any remaining surrender charge attributable to the
policy's initial face amount.
(3)The initial amount of surrender charge depends on each policy's specific
characteristics.
(4)This representative amount is the rate we guarantee for a representative
insured male age 35 at issue or at the time of a requested face amount
increase, in the preferred elite non-tobacco user risk class for a face
amount of $250,000 or more. This charge varies based on the individual
characteristics of the insured and may not be representative of the charge
that you will pay. Your financial professional can provide you with more
information about these charges as they relate to the insured's particular
characteristics.
(5)No charge, however, will ever apply to a transfer of all of your variable
investment option amounts to our guaranteed interest option, or to any
transfer pursuant to our automatic transfer service or asset rebalancing
service as discussed later in this prospectus.
(6)Unless you specify otherwise, this charge will be deducted from the amount
you request.
(7)The charge for this service must be paid using funds outside of your policy.
Please see "Deducting policy charges" under "More information about certain
policy charges" for more information.
(8)The charge for this service may be less depending on the policy history you
request. Please see "Deducting policy charges" under "More information about
certain policy charges" for more information.
(9)Not applicable after the insured person reaches age 121.
(10)Insured persons who present particular health, occupational or vocational
risks may be charged other additional charges as specified in their
policies.
(11)Our amount "at risk" under your policy is the difference between the amount
of death benefit and the policy account value as of the deduction date.
(12)This representative amount is the rate we guarantee in the first policy
year for a representative insured male age 35 at issue in the preferred
elite non-tobacco user risk class. This charge varies based on the
individual characteristics of the insured and may not be representative of
the charge that you will pay. Your financial professional can provide you
with more information about these charges as they relate to the insured's
particular characteristics.
<R>
(13)We charge interest on policy loans but credit you with interest on the
amount of the policy account value we hold as collateral for the loan. The
interest rate we charge on policy loans is the greater of (a) 2.5% or
(b) the "Monthly Average Corporate" yield published by Moody's Corporate
Bond Yield Averages for the month that ends two months before the interest
rate is set. The loan interest spread is the excess of the interest rate we
charge over the interest rate we credit, which will not exceed 1%. For more
information on the maximum rate see "Borrowing from your policy -- Loan
interest we charge" in "Accessing your money" later in this prospectus.
</R>
(14)This representative amount is the rate we guarantee for a representative
insured male age 35 at issue in the preferred elite non-tobacco user risk
class. This charge varies based on the individual characteristics of the
insured and, for the Long-Term Care Services/SM/ Rider on the benefit
percentage you choose and may not be representative of the charge that you
will pay. Your financial professional can provide you with more information
about these charges as they relate to the insured's particular
characteristics.
(15)Our amount "at risk" for this rider depends on the death benefit option
selected under the policy. See "More information about policy features and
benefits -- Long-Term Care Services/SM/ Rider" later in this prospectus.
You also bear your proportionate share of all fees and expenses paid by a
Portfolio that corresponds to any variable investment option you are using.
This table shows the lowest and highest total operating expenses currently
charged by any of the Portfolios that you will pay periodically during the time
that you own the Policy. These fees and expenses are reflected in the
Portfolio's net asset value each day. Therefore, they reduce the investment
return of the Portfolio and the related variable investment option. Actual fees
and expenses are likely to fluctuate from year to year. MORE DETAIL CONCERNING
EACH PORTFOLIO'S FEES AND EXPENSES IS CONTAINED IN THE TRUST PROSPECTUS FOR
THAT PORTFOLIO.
----------------------------------------------------------------------------------------------------------------
PORTFOLIO OPERATING EXPENSES EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
----------------------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2013 (expenses that are deducted from Lowest Highest
Portfolio assets including management fees, 12b-1 fees, service fees and/or other expenses)/(1)/ 0.62% 7.45%
----------------------------------------------------------------------------------------------------------------
(1)"Total Annual Portfolio Operating Expenses" are based, in part, on estimated
amounts for options added during the fiscal year 2013, if applicable, and
for the underlying Portfolios. Pursuant to a contract, AXA Equitable Funds
Management Group, LLC has agreed to make payments or waive its management,
administrative and other fees to limit the expenses of certain affiliated
Portfolios through April 30, 2015 ("Expense Limitation Arrangement") (unless
the Trust's Board of Trustees consents to an earlier revision or termination
of this agreement). The Expense Limitation Arrangement may be terminated by
AXA Equitable Funds Management Group, LLC at any time after April 30, 2015.
The range of expenses in the table above does not include the effect of any
Expense Limitation Arrangement. The range of expense in the table below
includes the effect of the Expense Limitation Arrangements.
-----------------------------------------------------------------------------------------------------------------------------
PORTFOLIO OPERATING EXPENSES EXPRESSED AS AN ANNUAL PERCENTAGE OF DAILY NET ASSETS
-----------------------------------------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses for 2013 after the effect of Expense Limitation Arrangements/(/*/)/ Lowest Highest
0.62% 1.66%
-----------------------------------------------------------------------------------------------------------------------------
(*)"Total Annual Portfolio Operating Expenses" are based, in part, on
estimated amounts for the underlying portfolios. In addition, the
"Lowest" represents the total annual operating expenses of the EQ/Equity
500 Index. The "Highest" represents the total annual operating expenses
of the Charter/SM/ Small Cap Growth Portfolio.
HOW WE ALLOCATE CHARGES AMONG YOUR INVESTMENT OPTIONS
In your application for a policy, you tell us from which investment options you
want us to take the policy's monthly deductions as they fall due. You can
change these instructions at any time. If we cannot deduct the charge as your
most current instructions direct, we will allocate the deduction among your
investment options proportionately to your value in each. If the extended no
lapse guarantee rider or the paid up death benefit guarantee is in effect, we
will allocate the deduction among the investment options proportionately to
your value in each.
CHANGES IN CHARGES
We reserve the right in the future to (1) make a charge for certain taxes or
reserves set aside for taxes (see "Our taxes" under "Tax information" later in
this prospectus) that might be imposed on us; (2) make a charge for the
operating expenses of our variable investment options (including, without
limitation, SEC registration fees and related legal counsel fees and auditing
fees); or (3) change our other current policy charges (in no event will they
exceed the maximum charges guaranteed in your policy).
Any changes that we make in our current charges or charge rates will be on a
basis that is equitable to all policy owners of a given class, and will be
determined based on reasonable assumptions as to expenses, mortality, policy
and contract claims, taxes, investment income and lapses. Any changes in
charges may apply to then in force policies, as well as to new policies. You
will be notified in writing of any changes in charges under your policy.
8
RISK/BENEFIT SUMMARY: CHARGES AND EXPENSES YOU WILL PAY
2. Risk/benefit summary: Policy features, benefits and risks
--------------------------------------------------------------------------------
IncentiveLife Legacy(R) III is a variable life insurance policy that provides
you with flexible premium payment plans and benefits to meet your specific
needs. The basic terms of the policy require you to make certain payments in
return for life insurance coverage. The payments you can make and the coverage
you can receive under this "base policy" are described below.
Riders to your base policy can increase the benefits you receive and affect the
amounts you pay in certain circumstances. Available riders are listed in "Other
benefits you can add by rider" under "More information about policy features
and benefits" later in this prospectus.
HOW YOU CAN PAY FOR AND CONTRIBUTE TO YOUR POLICY
PREMIUM PAYMENTS. We call the amounts you contribute to your policy "premiums"
or "premium payments." The amount we require as your first premium varies
depending on the specifics of your policy and the insured person. Each
subsequent premium payment must be at least $50, although we can increase this
minimum if we give you advance notice.
<R>
If you elect a "paid up" death benefit guarantee, you cannot make additional
premium payments under your policy. Otherwise, with a few additional exceptions
mentioned below, you can make premium payments at any time and in any amount.
See "paid up death benefit guarantee" in "More information about policy
features and benefits" later in this prospectus for more information.
</R>
SECTION 1035 EXCHANGES OF POLICIES WITH OUTSTANDING LOANS. If we approve, you
may purchase an IncentiveLife Legacy(R) III policy through an assignment and
exchange of another life insurance policy with a cash surrender value pursuant
to a valid Internal Revenue Code Section 1035 exchange. If such other policy is
subject to a policy loan, we may permit you to carry over all or a portion of
such loan to the IncentiveLife Legacy(R) III policy, subject to our
administrative rules then in effect. In this case, we will treat any cash paid,
plus any loaned amount carried over to the IncentiveLife Legacy(R) III policy,
as premium received in consideration of our issuing the policy. If we allow you
to carry over all or a portion of any such outstanding loan, then we will hold
amounts securing such loan in the same manner as the collateral for any other
policy loan, and your policy also will be subject to all our other rules
regarding loans (see "Borrowing from your policy" later in this prospectus).
--------------------------------------------------------------------------------
YOU CAN GENERALLY PAY PREMIUMS AT SUCH TIMES AND IN SUCH AMOUNTS AS YOU LIKE
BEFORE THE POLICY ANNIVERSARY NEAREST TO THE INSURED'S 121ST BIRTHDAY, SO LONG
AS YOU DON'T EXCEED CERTAIN LIMITS DETERMINED BY THE FEDERAL INCOME TAX LAWS
APPLICABLE TO LIFE INSURANCE.
--------------------------------------------------------------------------------
YOUR CHOICE OF A LIFE INSURANCE QUALIFICATION TEST AND LIMITS ON PREMIUM
PAYMENTS. A policy must satisfy either of two testing methods to qualify as a
life insurance contract for tax purposes under Section 7702 of the Code. In
your application, you may choose either the guideline premium/cash value
corridor test ("guideline premium test") or the cash value accumulation test.
If you do not choose a life insurance qualification test, your policy will be
issued using the guideline premium test. Once your policy is issued, the
qualification method cannot be changed.
The qualification method you choose will depend upon your objective in
purchasing the policy. Generally, under the cash value accumulation test, you
have the flexibility to pay more premiums in the earlier years than under the
guideline premium test for the same face amount and still qualify as life
insurance for federal income tax purposes. Under the guideline premium test,
the federal tax law definition of "life insurance" limits your ability to pay
certain high levels of premiums (relative to your policy's insurance coverage)
but increases those limits over time. We will return any premium payments that
exceed these limits.
You should note, however, that the alternative death benefit under the cash
value accumulation test may be higher in earlier policy years than under the
guideline premium test, which will result in higher charges. Under either test,
if at any time your policy account value (as defined under "Determining your
policy's value," later in the prospectus) is high enough that the alternative
higher death benefit would apply, we reserve the right to limit the amount of
any premiums that you pay, unless the insured person provides us with evidence
of insurability satisfactory to us.
Regardless of which life insurance qualification test you choose, if your
premium payments exceed certain other amounts specified under the Code, your
policy will become a "modified endowment contract," which may subject you to
additional taxes and penalties on any distributions from your policy. See "Tax
information" later in this prospectus. We may return any premium payments that
would cause your policy to become a modified endowment contract if we have not
received a satisfactory modified endowment contract acknowledgment from you.
You can ask your financial professional to provide you with an illustration of
Policy Benefits that shows you the amount of premiums you can pay, based on
various assumptions, without exceeding applicable tax law limits. In
particular, you may wish to ask for an illustration under both the guideline
premium test and cash value accumulation test to see the possible impact of
including future changes to your policy under various investment return
assumptions. The tax law limits can change as a result of certain changes you
make to your policy. For example, a reduction in the face amount of your policy
may reduce the amount of premiums that you can pay and may impact whether your
policy is a modified endowment contract.
You should discuss your choice of life insurance qualification test and
possible limitations on policy premiums with your financial professional and
tax advisor before purchasing the policy.
PLANNED PERIODIC PREMIUMS. Page 3 of your policy will specify a "planned
periodic premium." This is the amount that you request us to bill you. However,
payment of these or any other specific amounts of premiums is not mandatory.
You need to pay only the amount of premiums (if any) necessary to keep your
policy from lapsing and terminating as discussed below.
9
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
THE MINIMUM AMOUNT OF PREMIUMS YOU MUST PAY
POLICY "LAPSE" AND TERMINATION. Your policy will lapse (also referred to in
your policy as "default") if your "net policy account value" is not enough to
pay your policy's monthly charges when due unless:
.. you have paid sufficient premiums to maintain one of our available
guarantees against termination, the guarantee is still in effect and any
outstanding loan and accrued loan interest does not exceed the policy
account value (see "You can guarantee that your policy will not terminate
before a certain date" below);
.. you are receiving monthly benefit payments under the Long Term Care
Services/SM/ Rider (see "Other benefits you can add by rider" under "More
information about policy features and benefits" later in this prospectus);
.. you have elected the paid up death benefit guarantee and it remains in
effect and any outstanding policy loan and accrued loan interest does not
exceed the policy account value (see "You can elect a "paid up" death
benefit guarantee" below); or
.. your policy has an outstanding loan that would qualify for "loan extension."
("Policy account value" and "net policy account value" are explained under
"Determining your policy's value" later in this prospectus.)
We will mail a notice to you at your last known address if your policy lapses.
You will have a 61-day grace period to pay at least an amount prescribed in
your policy which would be enough to keep your policy in force for
approximately three months (without regard to investment performance). You may
not make any transfers or request any other policy changes during a grace
period. If we receive the requested amount before the end of the grace period,
it will be treated as a loan repayment to the extent it is less than or equal
to any outstanding policy loan and accrued loan interest. The remainder of the
payment, if any, will be treated as a premium payment. If we do not receive
your payment by the end of the grace period, your policy (and all riders to the
policy) will terminate without value and all coverage under your policy will
cease. We will mail an additional notice to you if your policy terminates.
If the insured person dies during a grace period, we will pay the death
benefit, less any overdue charges (but not more than the amount to maintain one
of the available guarantees against termination), policy loans or lien and
accrued loan or lien interest, to the beneficiary you have named.
--------------------------------------------------------------------------------
YOUR POLICY WILL TERMINATE IF YOU DON'T PAY ENOUGH PREMIUMS (I) TO PAY THE
CHARGES WE DEDUCT, OR (II) TO MAINTAIN ONE OF THE NO LAPSE GUARANTEES THAT CAN
KEEP YOUR POLICY FROM TERMINATING. HOWEVER, WE WILL FIRST SEND YOU A NOTICE AND
GIVE YOU THE OPPORTUNITY TO PAY ANY SHORTFALL.
--------------------------------------------------------------------------------
You may owe taxes if your policy terminates while you have a loan outstanding,
even though you receive no additional money from your policy at that time. See
"Tax information," later in this prospectus.
RESTORING A TERMINATED POLICY. To have your policy "restored" (put back in
force), you must apply within three years after the date of termination. In
some states, you may have a longer period of time. You must also (i) present
evidence of insurability satisfactory to us and (ii) pay at least the amount of
premium that we require. The amount of payment will be an amount sufficient to
cover total monthly deductions for 3 months, calculated from the effective date
of restoration, and the premium charge. We will determine the amount of this
required payment as if no interest or investment performance were credited to
or charged against your policy account. Your policy contains additional
information about the minimum amount of this premium and about the values and
terms of the policy after it is restored and the effective date of such
restoration. You may only restore your policy if it has terminated without
value. You may not restore a policy that was given up for its net cash
surrender value. Any no lapse guarantee will not be restored after the policy
terminates.
YOU CAN GUARANTEE THAT YOUR POLICY WILL NOT TERMINATE BEFORE A CERTAIN DATE
NO LAPSE GUARANTEE. You can generally guarantee that your policy will not
terminate for a number of years (the "guarantee period") by paying at least
certain specified amounts of premiums (the "guarantee premiums"). We call this
our "No Lapse Guarantee." The length of your policy's guarantee period will
range from 5 to 15 years, depending on the insured's age when we issue the
policy. Both the guarantee period and guarantee premiums will be set forth on
Page 3 of your policy. We make no extra charge for this guarantee.
During the guarantee period, however, the No Lapse Guarantee applies only if:
.. You have satisfied the "guarantee premium test" (discussed in "Guarantee
premium test for no lapse guarantees" under "More information about policy
benefits" later in this prospectus); and
.. Any policy loan and accrued and unpaid loan interest is less than the
policy account value.
The No Lapse Guarantee will not apply if you fail to meet the guarantee premium
test. This feature will automatically terminate if the guarantee period expires.
EXTENDED NO LAPSE GUARANTEE RIDER. An optional rider may be added at issue to
the policy that provides a longer guarantee period than described above with a
higher premium requirement, provided you elect death benefit Option A. The
length of your policy's guarantee period will range from 20 to 40 years,
depending on the insured's age when we issue the policy.
<R>
If you elect the extended no lapse guarantee rider, the investment options
available to you will be restricted to the AXA Strategic Allocation Series
investment options and guaranteed interest option.
</R>
The monthly cost of this rider and the required premium vary by the individual
characteristics of the insured and the face amount of the policy. A change in
the face amount of the policy, however, may affect the cost of this rider. You
can terminate this rider at any time but it cannot be reinstated once
terminated. For more information about this rider, see "Optional benefits you
can add by rider" under "More information about policy features and benefits."
--------------------------------------------------------------------------------
IF YOU PAY AT LEAST CERTAIN PRESCRIBED AMOUNTS OF PREMIUMS AND ANY OUTSTANDING
POLICY LOAN AND ACCRUED LOAN INTEREST DO NOT EXCEED THE POLICY ACCOUNT VALUE,
YOUR POLICY WILL NOT LAPSE FOR A NUMBER OF YEARS, EVEN IF THE VALUE IN YOUR
POLICY BECOMES INSUFFICIENT TO PAY THE MONTHLY CHARGES. FOR THE EXTENDED NO
LAPSE GUARANTEE RIDER, YOUR DEATH BENEFIT MUST ALWAYS HAVE BEEN OPTION A. THE
NO LAPSE GUARANTEE IS NOT IMPACTED BY YOUR CHOICE OF DEATH BENEFIT OPTION.
--------------------------------------------------------------------------------
10
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
YOU CAN ELECT A "PAID UP" DEATH BENEFIT GUARANTEE
<R>
Provided certain requirements are met and subject to our approval, you may
elect to take advantage of our "paid up" death benefit guarantee (certain
policies may refer to this as the "paid up" no lapse guarantee) at any time
after the fourth year of your policy if the insured's attained age is 120 or
less and provided you have death benefit Option A in effect.
</R>
If you elect the paid up death benefit guarantee, we may reduce your base
policy's face amount. Thereafter, your policy will not lapse so long as the
paid up death benefit guarantee remains in effect. Also, if you elect the paid
up death benefit guarantee, you will be required to reallocate your existing
policy account value to a limited number of variable investment options that we
make available at our discretion. The guaranteed interest option will also be
available; however, we will limit the amount that may be allocated to the
guaranteed interest option at any time. Our paid up death benefit guarantee is
not available if you received a living benefit on account of terminal illness
at any time. Our paid up death benefit guarantee is not available if you
received monthly benefit payments under the Long-Term Care Services/SM/ Rider
prior to continuing coverage under any Nonforfeiture Benefit. Also, election of
a paid up death benefit guarantee will terminate any Long-Term Care
Services/SM/ Rider subject to any Nonforfeiture Benefit, if elected.
The guarantee will also terminate if (i) at any time following the election,
the sum of any outstanding policy loan and accrued interest exceeds your policy
account value, or (ii) you request that we terminate the election. For more
information about the circumstances under which you can elect the paid up death
benefit guarantee, the possible reduction in face amount after this guarantee
is elected (including the possible imposition of surrender charges upon such
reduction), restrictions on allocating your policy account value and other
effects of this guarantee on your policy, see "Paid up death benefit guarantee"
under "More information about policy features and benefits" later in this
prospectus.
YOU CAN RECEIVE AN ACCELERATED DEATH BENEFIT UNDER THE LONG TERM CARE
SERVICES/SM/ RIDER
In states where approved, an optional rider may be added to your policy at
issue that provides an acceleration of the policy's death benefit in the form
of monthly payments if the insured becomes chronically ill and is receiving
qualifying long-term care services in accordance with a plan of care. This is
our Long Term Care Services/SM/ Rider. The long-term care specified amount at
issue must be at least $100,000. The monthly rate for this rider varies based
on the individual characteristics of the insured and the benefit percentage you
select and whether you select the rider with or without the optional
Nonforfeiture Benefit. You can terminate this rider after your first policy
year. For more information about this rider, see "Other benefits you can add by
rider" under "More information about policy features and benefits" later in
this prospectus.
INVESTMENT OPTIONS WITHIN YOUR POLICY
Except as set forth in the next paragraph, we will initially put all unloaned
amounts which you have allocated to variable investment options into such
options on the later of the business day that we receive the full minimum
initial premium at our Administrative Office or the register date of your
policy (the "Investment Start Date"). Before this date, your initial premium
will be held in a non-interest bearing account. See "Policy issuance" in "More
information about procedures that apply to your policy" later in this
prospectus.
In those states that require us to return your premium without adjustment for
investment performance within a certain number of days (see "Your right to
cancel within a certain number of days," later in this prospectus), we will
initially put all amounts which you have allocated to the variable investment
options into our EQ/Money Market investment option as of the later of the
Investment Start Date and the issue date for twenty calendar days (the "Money
Market Lock-in Period"). However, if we have not received all necessary
requirements for your policy as of the Issue Date, the Money Market Lock-In
Period will begin on the date we receive all necessary requirements to put the
policy in force at our Administrative Office. On the first business day
following the Money Market Lock-in Period, we will re-allocate that investment
in accordance with your premium allocation instructions then in effect. For
policies issued in these states, the "Allocation Date" is the first business
day following the Money Market Lock-in Period. For all other policies, the
Allocation Date is the Investment Start Date, and there is no automatic initial
allocation to the EQ/Money Market investment option.
You give such allocation instructions in your application to purchase a policy.
You can change the premium allocation percentages at any time, but this will
not affect any prior allocations. The allocation percentages that you specify
must always be in whole numbers and total exactly 100%.
The policy is between you and MONY Life Insurance Company of America. The
policy is not an investment advisory account, and MONY Life Insurance Company
of America is not providing any investment advice or managing the allocations
under your policy. In the absence of a specific written arrangement to the
contrary, you, as the owner of the policy, have the sole authority to make
investment allocations and other decisions under the policy. Your AXA Advisors'
financial professional is acting as a broker-dealer registered representative,
and is not authorized to act as an investment advisor or to manage the
allocations under your policy. If your financial professional is a registered
representative with a broker-dealer other than AXA Advisors, you should speak
with him/her regarding any different arrangements that may apply.
--------------------------------------------------------------------------------
YOU CAN CHOOSE AMONG VARIABLE INVESTMENT OPTIONS.
--------------------------------------------------------------------------------
VARIABLE INVESTMENT OPTIONS. The available variable investment options are
listed on the front cover of this prospectus. (Your policy and other
supplemental materials may refer to these as "Investment Funds.") The
investment results you will achieve in any one of these options will depend on
the investment performance of the corresponding Portfolio that shares the same
name as that option. That Portfolio follows investment practices, policies and
objectives that are appropriate to the variable investment option you have
chosen. You can lose your principal when investing in the variable investment
options. In periods of poor market performance, the net return, after charges
and expenses, may result in negative yields, including for the EQ/Money Market
variable investment option.
The advisers who make the investment decisions for each Portfolio are set forth
later in the prospectus under "About the Portfolios of the Trusts."
You will find other important information about each Portfolio in the separate
prospectuses for each Trust which accompany this prospectus, including a
comprehensive discussion of the risks of investing in each
11
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
Portfolio. TO OBTAIN COPIES OF TRUST PROSPECTUSES THAT DO NOT ACCOMPANY THIS
PROSPECTUS, YOU MAY CALL ONE OF OUR CUSTOMER SERVICE REPRESENTATIVES AT
1-800-777-6510. We may add or delete variable investment options or Portfolios
at any time.
If you elect the extended no lapse guarantee rider or exercise the paid up
death benefit guarantee, your choice of variable investment options will be
limited to the AXA Strategic Allocation Series investment options, or those
investment options we are then making available under the rider (see "Other
benefits you can add by rider" under "More information about policy features
and benefits").
GUARANTEED INTEREST OPTION. You can also allocate some or all of your policy's
value to our guaranteed interest option. We, in turn, invest such amounts as
part of our general assets. Periodically, we declare a fixed rate of interest
(1.5% minimum) on amounts that you allocate to our guaranteed interest option.
We credit and compound the interest daily at an effective annual rate that
equals the declared rate. The rates we are declaring on existing policies at
any time may differ from the rates we are then declaring for newly issued
policies. (The guaranteed interest option is part of what your policy and other
supplemental material may refer to as the "Guaranteed Interest Account.")
If you elect the paid up death benefit guarantee or the extended no lapse
guarantee rider, we will restrict the amount of the policy account value that
can be transferred or allocated to the guaranteed interest option. For more
information on these restrictions, see "Paid up death benefit guarantee" and
"Extended no lapse guarantee rider" under "More information about policy
features and benefits" later in this prospectus.
<R>
MARKET STABILIZER OPTION(R) ("MSO"). The MSO rider, if available under your
policy, provides you with the opportunity to earn interest that we will credit
based in part on the performance of the S&P 500 Price Return Index. The S&P 500
Price Return Index includes 500 companies in leading industries of the U.S.
economy, capturing 75% coverage of U.S. equities. The S&P 500 Price Return
Index does not include dividends declared by any of the companies included in
this Index. Please see the separate supplement accompanying this prospectus and
the Market Stabilizer Option(R) prospectus for more information.
</R>
--------------------------------------------------------------------------------
WE WILL PAY AT LEAST 1.5% ANNUAL INTEREST ON OUR GUARANTEED INTEREST OPTION.
--------------------------------------------------------------------------------
ABOUT YOUR LIFE INSURANCE BENEFIT
YOUR POLICY'S FACE AMOUNT. In your application to buy an IncentiveLife
Legacy(R) III policy, you tell us how much insurance coverage you want on the
life of the insured person. We call this the "face amount" of the base policy.
$100,000 is the minimum amount of coverage you can request.
--------------------------------------------------------------------------------
IF THE INSURED PERSON DIES, WE PAY A LIFE INSURANCE BENEFIT TO THE
"BENEFICIARY" YOU HAVE NAMED. (SEE "YOUR OPTIONS FOR RECEIVING POLICY PROCEEDS"
UNDER "MORE INFORMATION ABOUT POLICY FEATURES AND BENEFITS" LATER IN THIS
PROSPECTUS.) THE AMOUNT WE PAY DEPENDS ON WHETHER YOU HAVE CHOSEN DEATH BENEFIT
OPTION A OR DEATH BENEFIT OPTION B.
--------------------------------------------------------------------------------
YOUR POLICY'S "DEATH BENEFIT" OPTIONS. In your policy application, you also
choose whether the basic amount (or "benefit") we will pay if the insured
person dies is:
.. Option A -- THE POLICY'S FACE AMOUNT on the date of the insured person's
death. The amount of this death benefit doesn't change over time, unless
you take any action that changes the policy's face amount;
-- or --
.. Option B -- THE FACE AMOUNT PLUS THE POLICY'S "ACCOUNT VALUE" on the date
of death. Under this option, the amount of the death benefit generally
changes from day to day, because many factors (including investment
performance, charges, premium payments and withdrawals) affect your
policy's account value.
Your policy's "account value" is the total amount that at any time is earning
interest for you or being credited with investment gains and losses under your
policy. (Account value is discussed in more detail under "Determining your
policy's value" later in this prospectus.)
Under Option B, your policy's death benefit will tend to be higher than under
Option A, assuming the same policy face amount and policy account value. As a
result, the monthly insurance charge we deduct will also be higher, to
compensate us for our additional risk.
If you have elected the paid up death benefit guarantee or your policy has been
placed on loan extension, the death benefit option will be Option A and must
remain Option A thereafter unless the paid up death benefit guarantee is
terminated. If you have elected the extended no lapse guarantee, you must have
always had Option A since the policy issue date.
ALTERNATIVE HIGHER DEATH BENEFIT IN CERTAIN CASES
Your policy is designed to always provide a minimum level of insurance
protection relative to your policy account value, in part to meet the Code's
definition of "life insurance."
We will automatically pay an alternative death benefit if it is HIGHER than the
basic Option A or Option B death benefit you have selected. The alternate
higher death benefit is based upon the life insurance qualification test that
you choose. For the guideline premium test, this alternative death benefit is
computed by multiplying your policy account value on the insured person's date
of death by a percentage specified in your policy. Representative percentages
are as follows:
--------------------------------------------------------------------------------
IF THE ACCOUNT VALUE IN YOUR POLICY IS HIGH ENOUGH, RELATIVE TO THE FACE
AMOUNT, THE LIFE INSURANCE BENEFIT WILL AUTOMATICALLY BE GREATER THAN THE
OPTION A OR OPTION B DEATH BENEFIT YOU HAVE SELECTED.
--------------------------------------------------------------------------------
----------------------------------------------
AGE:* 40 AND UNDER 45 50 55 60 65
----------------------------------------------
%: 250% 215% 185% 150% 130% 120%
----------------------------------------------
AGE: 70 75-90 91 92 93 94 AND OVER
----------------------------------------------
%: 115% 105% 104% 103% 102% 101%
----------------------------------------------
* For the then-current policy year.
For example, if the guideline premium test is selected, if the insured is age
65 at the time of death and has a policy with the face amount of $100,000, an
account value of $85,000, and a death benefit percentage of 120%, then the
death benefit under Option A is the alternative death benefit of $102,000 and
the death benefit under Option B is the death benefit of $185,000. For more
details regarding how we calculate that death benefit under Option A and Option
B, please see "Appendix III: Calculating the alternate death benefit" later in
this prospectus.
For the cash value accumulation test, the alternate death benefit is the
greater of the minimum death benefit as determined under the Code under this
test or 101% of the policy account value. The death benefit must be large
enough to ensure that the policy's cash surrender value (as computed under
section 7702 of the Code) is never larger than the
12
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
net single premium needed to fund future policy benefits. The net single
premium varies based upon the insured's age, sex and risk class and is
calculated using an interest rate of 4% and mortality charges based upon the
2001 Commissioner's Standard Ordinary Mortality Tables.
For example, if the cash value accumulation test is selected, if the insured is
age 65 at the time of death and has a policy with the face amount of $100,000,
an account value of $85,000, and a death benefit percentage of 185.7%, then the
death benefit under Option A is the alternative death benefit of $157,845 and
the death benefit under Option B is the death benefit of $185,000. For more
details regarding how we calculate that death benefit under Option A and Option
B, please see "Appendix III: Calculating the alternate death benefit" later in
this prospectus.
These higher alternative death benefits expose us to greater insurance risk
than the regular Option A and B death benefit. Because the cost of insurance
charges we make under your policy are based in part on the amount of our risk,
you will pay more cost of insurance charges for any periods during which a
higher alternative death benefit is the operative one.
The operative period for the higher alternative death benefit is generally
determined in connection with the requirements of the Code. The calculation of
the death benefit is built into the monthly calculation of the cost of
insurance charge, which is based on the net amount at risk. The need for the
higher alternative death benefit is assessed on each monthly anniversary date,
and on the death of the insured. Each policy owner receives an annual statement
showing various policy values. The annual statement shows the death benefit
amount as of the policy anniversary, and that amount would reflect the
alternative higher death benefit amount, if applicable at that time. This
annual statement also reflects the monthly cost of insurance charge for the
policy year, reflecting a higher net amount at risk in those months when the
higher alternative death benefit is in effect.
OTHER ADJUSTMENTS TO DEATH BENEFIT. We will increase the death benefit proceeds
by the amount of any other benefits we owe upon the insured person's death
under any optional riders which are in effect.
We will reduce the death benefit proceeds by the amount of any outstanding
policy loans and unpaid loan interest, as well as any amount of monthly charges
under the policy that remain unpaid because the insured person died during a
grace period. We also reduce the death benefit if we have already paid part of
it under a living benefits rider. We reduce it by the amount of the living
benefits payment plus accrued interest. See "Your option to receive a terminal
illness living benefit" later in this prospectus. Under the Long Term Care
Services/SM/ Rider, any monthly benefit payments will be treated as a lien
against the death benefit and reduce your death benefit, unless benefits are
being paid under the optional Nonforfeiture Benefit. Please see "Long Term Care
Services/SM/ Rider" later in this prospectus.
DEATH BENEFIT IF YOUR POLICY IS ON LOAN EXTENSION. Your policy offers an
additional feature against policy termination due to an outstanding loan,
called "loan extension." Availability of this feature is subject to certain
terms and conditions, including that you must have elected the guideline
premium test and have had your policy in force for at least 20 years. If your
policy is on loan extension, the death benefit payable under the policy will be
determined differently. For more information on loan extension, see "Borrowing
from your policy" under "Accessing your money."
--------------------------------------------------------------------------------
YOU CAN REQUEST A CHANGE IN YOUR DEATH BENEFIT OPTION FROM OPTION B ANY TIME
AFTER THE FIRST YEAR OF THE POLICY AND BEFORE THE POLICY ANNIVERSARY NEAREST TO
THE INSURED'S 121ST BIRTHDAY; HOWEVER, CHANGES TO OPTION B ARE NOT PERMITTED
BEYOND THE POLICY YEAR IN WHICH THE INSURED PERSON REACHES THE MAXIMUM AGE FOR
CHANGES TO OPTION B SHOWN IN THEIR POLICY.
--------------------------------------------------------------------------------
CHANGE OF DEATH BENEFIT OPTION. If you change your death benefit option, we
will adjust your policy's face amount. The adjustment will be in the amount (up
or down) necessary so that your death benefit amount immediately after the
change is equal to your death benefit amount immediately before the change.
The following rules apply if the alternative death benefit (referenced above)
is NOT higher than the base policy's death benefit at the time of the change in
the death benefit option. If you change from Option A to Option B, we
automatically reduce your policy's face amount by an amount equal to your
policy's account value at the time of the change. If you change from Option B
to Option A, we automatically increase your policy's face amount by an amount
equal to your policy's account value at the time of the change.
If the alternative death benefit (referenced above) is higher than the base
policy's death benefit at the time of the change in death benefit option, we
will set the new base policy face amount so that your death benefit amount
immediately after the change is equal to your death benefit amount immediately
before the change.
We may refuse a change from Option A to Option B if the policy's face amount
would be reduced below $100,000. A change from Option A to Option B is not
permitted (a) beyond the policy year in which the insured person reaches the
maximum age for changes to Option B shown in their policy, (b) if the paid up
death benefit guarantee is in effect, or (c) your policy is on loan extension.
We will not deduct or establish any amount of surrender charge as a result of a
change in death benefit option. You may not request a change of the death
benefit option from Option A to Option B under the policy while the Long-Term
Care Services/SM/ Rider is in effect. You may request a change from Option B to
Option A. Please also refer to "Tax Information" later in this prospectus to
learn about certain possible income tax consequences that may result from a
change in death benefit option, including the effect of an automatic increase
or decrease in face amount.
YOU CAN INCREASE OR DECREASE YOUR INSURANCE COVERAGE
After the first policy year while this policy is in force, you may request an
increase in life insurance coverage under your policy. You may request a
decrease in your policy's face amount any time after the first year of your
policy but before the policy year in which the insured person reaches age 121.
The requested increase or decrease must be at least $10,000. Please refer to
"Tax information" for certain possible tax consequences of changing the face
amount of your policy.
We can refuse or limit any requested increase or decrease. We will not approve
any increase or decrease if (i) we are at that time being required to waive
charges under any optional disability waiver rider that is part of the policy;
(ii) the paid up death benefit guarantee is in effect; or (iii) your policy is
on loan extension. Also, we will not approve a face
13
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
amount increase if (i) the insured person has reached the maximum age for a
face amount increase shown in their policy (or age 71 if the extended no lapse
guarantee rider is in effect); or (ii) while the Long Term Care Services/SM/
Rider is in effect, unless coverage has been continued under the optional
Nonforfeiture Benefit. We will not accept a request for a face amount decrease
while you are receiving monthly benefit payments under the Long Term Care
Services/SM/ Rider.
Certain policy changes, including increases and decreases in your insurance
coverage may also affect the guarantee premiums under the policy and any
applicable monthly charge for the extended no lapse guarantee rider.
The following additional conditions also apply:
FACE AMOUNT INCREASES. We treat an increase in face amount in many respects as
if it were the issuance of a new policy. For example, you must submit
satisfactory evidence that the insured person still meets our requirements for
coverage. Also, we establish additional amounts of surrender charge,
administrative charge, and guarantee premiums under your policy for the face
amount increase, reflecting the additional amount of coverage.
In most states, you can cancel the face amount increase within 10 days after
you receive a new policy page showing the increase. If you cancel, we will
reverse any charges attributable to the increase and recalculate all values
under your policy to what they would have been had the increase not taken place.
The monthly cost of insurance charge we make for the amount of the increase
will be based on the underwriting classification of the insured person when the
original policy was issued, provided the insured qualifies for the same
underwriting classification. An additional 15-year surrender charge will apply
to the face amount that exceeds the highest previous face amount. If the
insured qualifies for a less favorable underwriting classification than the
base policy, the increase will be declined. See "Risk/benefit summary: Charges
and expenses you will pay."
FACE AMOUNT DECREASES. You may not reduce the face amount below the minimum we
are then requiring for new policies. Nor will we permit a decrease that would
cause your policy to fail the Internal Revenue Code's definition of life
insurance. Guarantee premiums, as well as our monthly deductions for the cost
of insurance coverage, will generally decrease from the time you reduce the
face amount.
If you reduce the face amount during the first 15 years of your policy, or
during the first 15 years after a face amount increase you have requested, we
will deduct all or part of the remaining surrender charge from your policy
account. Assuming you have not previously changed the face amount, the amount
of the surrender charge we will deduct will be determined by dividing the
amount of the decrease by the initial face amount and multiplying that fraction
by the total amount of surrender charge that still remains applicable to your
policy. We deduct the charge from the same investment options as if it were
part of a regular monthly deduction under your policy.
In some cases, we may have to make a distribution to you from your policy at
the time we decrease your policy's face amount or change your death benefit
option. This may be necessary in order to preserve your policy's status as life
insurance under the Internal Revenue Code. We may also be required to make such
distribution to you in the future on account of a prior decrease in face amount
or change in death benefit option. The distribution may be taxable.
ACCESSING YOUR MONEY
You can access the money in your policy in different ways. You may borrow up to
90% of the cash surrender value, less any outstanding loan and accrued loan
interest before the policy year in which the insured reaches age 75 (100%
thereafter). In your policy, the cash surrender value is equal to the
difference between your policy account value and any surrender charges that are
in effect under your policy. However, the amount you can borrow will be reduced
by any amount that we hold on a "restricted" basis following your receipt of a
terminal illness living benefits payment, as well as by any other loans and
accrued loan interest you have outstanding. The cash surrender value available
for loans is also reduced on a pro rata basis for the portion of the policy
death benefit accelerated to date but not by more than the accumulated benefit
lien amount. See "More information about policy features and benefits: Other
benefits you can add by rider: Long Term Care Services Rider/SM/" later in this
prospectus. We will charge interest on the amount of the loan. See "Borrowing
from your policy" later in this prospectus for more information.
You can also make a partial withdrawal of $500 or more of your net cash
surrender value (defined later in this prospectus under "Surrendering your
policy for its net cash surrender value") at any time after the first year of
your policy and before the policy anniversary nearest to the insured's 121st
birthday. Partial withdrawals are not permitted if you have elected the paid up
death benefit guarantee, your policy is on loan extension, or you are receiving
monthly benefit payments under the Long Term Care Services/SM/ Rider before
coverage is continued under the optional Nonforfeiture Benefit. See "Making
withdrawals from your policy" later in this prospectus for more information .
<R>
Finally, you can surrender (turn in) your policy for its net cash surrender
value at any time. You may have to pay surrender charges if you surrender your
policy. See "Surrendering your policy for its net cash surrender value" later
in this prospectus.
Policy loans, partial withdrawals and policy surrender may have tax
consequences. See "Tax information" later in this prospectus for the tax
treatment of the various ways in which you can access your money.
</R>
RISKS OF INVESTING IN A POLICY
The policy is unsuitable as a short-term savings vehicle. Some of the principal
risks of investing in a policy are as follows:
.. If the investment options you choose perform poorly, you could lose some or
all of the premiums you pay.
.. If the investment options you choose do not make enough money to pay for
the policy charges, except to the extent provided by any guarantees against
termination, paid-up death benefit guarantee or loan extension feature you
may have, you could have to pay more premiums to keep your policy from
terminating.
.. If any policy loan and any accrued loan interest either equals or exceeds
the policy account value, your policy will terminate subject to the
policy's Grace Period provision and any loan extension endorsement you may
have.
.. We can increase, without your consent and subject to any necessary
regulatory approvals, any charge that you currently pay at less than the
maximum amount. We will not increase any charge
14
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
beyond the highest maximum noted in the tables in the previous chapter in
"Tables of policy charges" under "Risk/benefit summary: Charges and expenses
you will pay."
<R>
.. There may be adverse tax consequences associated with taking a policy loan
or making a partial withdrawal from your policy.
</R>
.. You may have to pay a surrender charge and there may be adverse tax
consequences if you wish to discontinue some or all of your insurance
coverage under a policy.
.. Partial withdrawals from your policy are available only after the first
policy year and must be at least $500 and no more than the net cash
surrender value. Under certain circumstances, we will automatically reduce
your policy's face amount as a result of a partial withdrawal.
<R>
.. The guarantees we make to you under this policy are supported by AXA
Equitable's general account and are subject to AXA Equitable's claims
paying ability. You should look solely to the financial strength of AXA
Equitable for its claims-paying ability.
</R>
Your policy permits other transactions that also have risks. These and other
risks and benefits of investing in a policy are discussed in detail throughout
this prospectus.
A comprehensive discussion of the risks of each investment option may be found
in the Trust prospectus for that investment option.
HOW THE INCENTIVELIFE LEGACY(R) III VARIABLE LIFE INSURANCE POLICY IS AVAILABLE
IncentiveLife Legacy(R) III is primarily intended for individuals, businesses
and trusts. However, we do not place limitations on its use. Please see "Tax
Information" later in this prospectus for more information. IncentiveLife
Legacy(R) III is generally available for issue ages 0-85.
15
RISK/BENEFIT SUMMARY: POLICY FEATURES, BENEFITS AND RISKS
3. Who is MONY Life Insurance Company of America?
--------------------------------------------------------------------------------
<R>
We are MONY Life Insurance Company of America (the "Company"), an Arizona stock
life insurance corporation organized in 1969. MONY Life Insurance Company of
America is an indirect wholly owned subsidiary of AXA Financial, Inc., which is
an indirect wholly owned subsidiary of AXA S.A. ("AXA"), a French holding
company for an international group of insurance and related financial services
companies. As the ultimate sole shareholder of the Company, AXA exercises
significant influence over the operations and capital structure of the Company.
No company other than the Company, however, has any legal responsibility to pay
amounts that the Company owes under the policies. AXA Equitable is solely
responsible for paying all amounts owed to you under your policy.
</R>
AXA Financial, Inc. and its consolidated subsidiaries managed approximately
$552.3 billion in assets as of December 31, 2013. MONY America is licensed to
sell life insurance and annuities in forty-nine states (not including New
York), the District of Columbia, and Puerto Rico, and the U.S. Virgin Islands.
Our main administrative office is located at 525 Washington Boulevard, Jersey
City, NJ 07310.
16
WHO IS MONY LIFE INSURANCE COMPANY OF AMERICA?
HOW TO REACH US
To obtain (1) any forms you need for communicating with us, (2) unit values and
other values under your policy, and (3) any other information or materials that
we provide in connection with your policy or the Portfolios, you may
communicate with our Administrative Office as listed below for the purposes
described. Please refer to "Telephone and Internet requests" for effective
dates for processing telephone, Internet and fax requests, later in this
prospectus.
--------------------------------------------------------------------------------
BY MAIL:
AT THE POST OFFICE BOX FOR OUR ADMINISTRATIVE OFFICE:
MONY America -- Life Operations
P.O. Box 1047
Charlotte, North Carolina 28201-1047
--------------------------------------------------------------------------------
BY EXPRESS DELIVERY ONLY:
AT THE STREET ADDRESS FOR OUR ADMINISTRATIVE OFFICE:
MONY America -- Life Operations
8501 IBM Drive, Suite 150
Charlotte, North Carolina 28262-4333
1-704-341-7000 (for express delivery purposes only)
--------------------------------------------------------------------------------
BY TOLL-FREE PHONE:
Policy information, basic transactions, forms and statements are available 24
hours a day - 7 days a week through our Interactive Telephone Service.
AXA Equitable's Interactive Telephone Service provides the gateway to personal
assisted service, Monday through Friday, 8 AM to 7 PM, Eastern Time:
1-800-777-6510.
--------------------------------------------------------------------------------
BY E-MAIL:
life-service@axa.us.com
--------------------------------------------------------------------------------
BY FAX:
1-855-268-6378
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BY INTERNET:
You may register for online account access at www.axa.com or us.axa.com for
those outside the U.S. Our website provides access to account information and
customer service. After registering, you can view account details, perform
certain transactions, print customer service forms and find answers to common
questions.
REQUIRED FORMS. We require that the following types of communications be on
specific forms we provide for that purpose:
(1)request for our automatic transfer service (our dollar cost averaging
service);
(2)request for our asset rebalancing service;
(3)transfers among investment options (if submitted by e-mail);
(4)designation of new policy owner(s) and beneficiaries; and
(5)authorization for transfers by your financial professional.
OTHER REQUESTS. We also have specific forms that we recommend you use for the
following:
(a)policy surrenders;
(b)transfers among investment options (not submitted by e-mail);
(c)changes in allocation percentages for premiums and deductions; and
(d)electing the paid up death benefit guarantee.
You can also change your allocation percentages and/or change your address
(1) by toll-free phone and assisted service, (2) over the Inter-net, through
axa.com or us.axa.com for those outside the U.S., or (3) by writing our
Administrative Office. You can transfer among investment options using (2) and
(3), as described in the previous sentence, only. For more information about
transaction requests you can make by phone or over the Inter-net, see "How to
make transfers" and "Telephone and Internet requests" later in this prospectus.
Certain methods of contacting us, such as by telephone or electronically, may
be unavailable or delayed (for example our fax service may not be available at
all times and/or we may be unavailable due to emergency closing). In addition,
the level and type of service available may be restricted based on criteria
established by us.
We reserve the right to limit access to these services if we determine that you
are engaged in a disruptive transfer activity, such as "market timing." (See
"Disruptive transfer activity" in "More information about other matters.")
FORMAL REQUIREMENTS. Except for properly authorized telephone or Internet
transactions, any notice or request that does not use our standard form must be
in writing. It must be dated and signed by you and should also specify your
name, the insured person's name (if different), your policy number and adequate
details about the notice you wish to give or other action you wish us to take.
We may require you to return your policy to us before we make certain policy
changes that you may request.
The proper person to sign forms, notices and requests would normally be the
owner or any other person that our procedures permit to exercise the right or
privilege in question. If there are joint owners all must sign. Any irrevocable
beneficiary or assignee that we have on our records also must sign certain
types of requests.
You should send all requests, notices and payments to our Administrative Office
at the addresses specified above. We will also accept requests and notices by
fax at the above number, if we believe them to be genuine. We reserve the
right, however, to require an original signature before acting on any faxed
item. You must send premium payments after the first one to our Administrative
Office at the above addresses; except that you should send any premiums for
which we have billed you to the address on the billing notice.
ABOUT OUR MONY AMERICA VARIABLE ACCOUNT K
Each variable investment option is a part (or "subaccount") of our MONY America
Variable Account K. We established MONY America Variable Account K under
Arizona Insurance Law in 2013. These provisions prevent creditors from any
other business we conduct from reaching the assets we hold in our variable
investment options for owners of our variable life insurance policies. We are
the
17
WHO IS MONY LIFE INSURANCE COMPANY OF AMERICA?
legal owner of all of the assets in MONY America Variable Account K and may
withdraw any amounts that exceed our reserves and other liabilities with
respect to variable investment options under our policies. For example, we may
withdraw amounts from MONY America Variable Account K that represent our
investments in MONY America Variable Account K or that represent fees and
charges under the policies that we have earned. Income, gains and losses
credited to, or charged against MONY America Variable Account K reflect its own
investment experience and not the investment experience of MONY America's other
assets.
MONY America Variable Account K is registered with the SEC under the Investment
Company Act of 1940 and is registered and classified under that act as a "unit
investment trust." The SEC, however, does not manage or supervise MONY America
or MONY America Variable Account K. Although MONY America Variable Account K is
registered, the SEC does not monitor the activity of MONY America Variable
Account K on a daily basis. MONY America is not required to register, and is
not registered, as an investment company under the Investment Company Act of
1940.
Each subaccount (variable investment option) of MONY America Variable Account K
available under IncentiveLife Legacy(R) III invests solely in the applicable
class of shares issued by the corresponding Portfolio of the applicable Trust.
MONY America Variable Account K immediately reinvests all dividends and other
distributions it receives from a Portfolio in additional shares of that class
in that Portfolio.
The Trusts sell their shares to MONY America variable accounts in connection
with MONY America's variable life insurance and/or annuity products, and to
separate accounts of insurance companies, both affiliated and unaffiliated with
MONY America. EQ Advisors Trust and AXA Premier VIP Trust also sell their
shares to the trustee of a qualified plan for AXA Equitable, an affiliate of
MONY America. We currently do not foresee any disadvantages to our policy
owners arising out of these arrangements. However, the Board of Trustees or
Directors of each Trust intends to monitor events to identify any material
irreconcilable conflicts that may arise and to determine what action, if any,
should be taken in response. If we believe that a Board's response
insufficiently protects our policy owners, we will see to it that appropriate
action is taken to do so.
YOUR VOTING PRIVILEGES
VOTING OF PORTFOLIO SHARES. As the legal owner of any Portfolio shares that
support a variable investment option, we will attend (and have the right to
vote at) any meeting of shareholders of the Portfolio (or the Trusts). To
satisfy currently-applicable legal requirements, however, we will give you the
opportunity to tell us how to vote the number of each Portfolio's shares that
are attributable to your policy. The number of full and fractional votes you
are entitled to will be determined by dividing the policy account value (minus
any policy indebtedness) allocable to an investment option by the net asset
value per unit for the Portfolio underlying that investment option. We will
vote shares attributable to policies for which we receive no instructions in
the same proportion as the instructions we do receive from all policies that
participate in our MONY America Variable Account K (discussed below). With
respect to any Portfolio shares that we are entitled to vote directly (because
we do not hold them in a separate account or because they are not attributable
to policies), we will vote in proportion to the instructions we have received
from all holders of variable annuity and variable life insurance policies who
are using that Portfolio. One effect of proportional voting is that a small
number of policy owners may control the outcome of a vote.
Under current legal requirements, we may disregard the voting instructions we
receive from policy owners only in certain narrow circumstances prescribed by
SEC regulations. If we do, we will advise you of the reasons in the next annual
or semiannual report we send to you.
VOTING AS POLICY OWNER. In addition to being able to instruct voting of
Portfolio shares as discussed above, policy owners that use our variable
investment options may in a few instances be called upon to vote on matters
that are not the subject of a shareholder vote being taken by any Portfolio. If
so, you will have one vote for each $100 of policy account value in any such
option; and we will vote our interest in MONY America Variable Account K in the
same proportion as the instructions we receive from holders of IncentiveLife
Legacy(R) III and other policies that MONY America Variable Account K supports.
ABOUT THE TRUSTS
The Trusts are registered under the Investment Company Act of 1940. They are
classified as "open-end management investment companies," more commonly called
mutual funds. Each Trust issues different shares relating to each Portfolio.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust serves for the benefit
of each Trust's shareholders. The Board of Trustees may take many actions
regarding the Portfolios (for example, the Board of Trustees can establish
additional Portfolios or eliminate existing Portfolios; change Portfolio
investment objectives; and change Portfolio investment policies and
strategies). In accordance with applicable law, certain of these changes may be
implemented without a shareholder vote and, in certain instances, without
advanced notice. More detailed information about certain actions subject to
notice and shareholder vote for each Trust, and other information about the
Portfolios, including portfolio investment objectives, policies, restrictions,
risks, expenses, its Rule 12b-1 plan and other aspects of its operations,
appears in the prospectuses for each Trust, which generally accompany this
prospectus, or in their respective SAIs, which are available upon request.
18
WHO IS MONY LIFE INSURANCE COMPANY OF AMERICA?
4. About the Portfolios of the Trusts
--------------------------------------------------------------------------------
We offer both affiliated and unaffiliated Trusts, which in turn offer one or
more Portfolios. AXA Equitable Funds Management Group, LLC ("AXA FMG"), a
wholly owned subsidiary of AXA Equitable, serves as the investment manager of
the Portfolios of AXA Premier VIP Trust and EQ Advisors Trust. For some
Portfolios, AXA FMG has entered into sub-advisory agreements with one or more
investment advisers (the "sub-advisers") to carry out the day-to-day investment
decisions for the Portfolios. As such, among other responsibilities, AXA FMG
oversees the activities of the sub-advisers with respect to the Trusts and is
responsible for retaining or discontinuing the services of those sub-advisers.
The chart below indicates the sub-adviser(s) for each Portfolio, if any. The
chart below also shows the currently available Portfolios and their investment
objectives.
You should be aware that AXA Advisors, LLC and AXA Distributors, LLC (together,
the "Distributors") directly or indirectly receive 12b-1 fees from affiliated
Portfolios for providing certain distribution and/or shareholder support
services. These fees will not exceed 0.25% of the Portfolios' average daily net
assets. The affiliated Portfolios' sub-advisers and/or their affiliates may
also contribute to the cost of expenses for sales meetings or seminar
sponsorships that may relate to the contracts and/or the sub-advisers'
respective Portfolios. It may be more profitable for us to offer affiliated
Portfolios than to offer unaffiliated Portfolios.
AXA Equitable or the Distributors may directly or indirectly receive 12b-1 fees
and additional payments from certain unaffiliated Portfolios, their advisers,
sub-advisers, distributors or affiliates, for providing certain administrative,
marketing, distribution and/or shareholder support services. These fees and
payments range from 0% to 0.60% of the unaffiliated Portfolios' average daily
net assets. The Distributors may also receive payments from the advisers or
sub-advisers of the unaffiliated Portfolios or their affiliates for certain
distribution services, including expenses for sales meetings or seminar
sponsorships that may relate to the contracts and/or the advisers' respective
Portfolios.
As a policy owner, you may bear the costs of some or all of these fees and
payments through your indirect investment in the Portfolios. (See the
Portfolios' prospectuses for more information.) These fees and payments, as
well as the Portfolios' investment management fees and administrative expenses,
will reduce the underlying Portfolios' investment returns. AXA Equitable may
profit from these fees and payments. AXA Equitable considers the availability
of these fees and payment arrangements during the selection process for the
underlying Portfolios. These fees and payment arrangements may create an
incentive for us to select Portfolios (and classes of shares of Portfolios)
that pay us higher amounts.
Some affiliated Portfolios invest in other affiliated Portfolios ("the AXA Fund
of Fund Portfolios"). The AXA Fund of Fund Portfolios offer policy owners a
convenient opportunity to invest in other Portfolios that are managed and have
been selected for inclusion in the AXA Fund of Fund Portfolios by AXA FMG. AXA
Advisors, LLC, an affiliated broker-dealer of AXA Equitable, may promote the
benefits of such Portfolios to policy owners and/or suggest that policy owners
consider whether allocating some or all of their account value to such
Portfolios is consistent with their desired investment objectives. In doing so,
AXA Equitable, and/or its affiliates, may be subject to conflicts of interest
insofar as AXA Equitable may derive greater revenues from the AXA Fund of Fund
Portfolios than certain other Portfolios available to you under your policy.
Please see "Allocating your contributions" later in this section for more
information about your role in managing your allocations.
As described in more detail in the Portfolio prospectuses, the AXA Managed
Volatility Portfolios may utilize a proprietary volatility management strategy
developed by AXA FMG (the "AXA volatility management strategy"), and, in
addition, certain AXA Fund of Fund Portfolios may invest in affiliated
Portfolios that utilize this strategy. The AXA volatility management strategy
uses futures and options, such as exchange-traded futures and options contracts
on securities indices, to reduce the Portfolio's equity exposure during periods
when certain market indicators indicate that market volatility is above
specific thresholds set for the Portfolio. When market volatility is increasing
above the specific thresholds set for a Portfolio utilizing the AXA volatility
management strategy, the manager of the Portfolio may reduce equity exposure.
Although this strategy is intended to reduce the overall risk of investing in
the Portfolio, it may not effectively protect the Portfolio from market
declines and may increase its losses. Further, during such times, the
Portfolio's exposure to equity securities may be less than that of a
traditional equity portfolio. This may limit the Portfolio's participation in
market gains and result in periods of underperformance, including those periods
when the specified benchmark index is appreciating, but market volatility is
high.
The AXA Managed Volatility Portfolios and the AXA Fund of Fund Portfolios that
include the AXA volatility management strategy as part of their investment
objective and/or principal investment strategy are identified below in the
chart by a "(check mark)" under the column entitled "AXA Volatility Management."
Portfolios that utilize the AXA volatility management strategy (or, in the case
of certain AXA Fund of Fund Portfolios, invest in other Portfolios that use the
AXA volatility management strategy) are designed to reduce the overall
volatility of your account value and provide you with risk-adjusted returns
over time. During rising markets, the AXA volatility management strategy,
however, could result in your account value rising less than would have been
the case had you been invested in a Portfolio that does not utilize the AXA
volatility management strategy. Conversely, investing in investment options
that feature a managed-volatility strategy may be helpful in a declining market
when high market volatility triggers a reduction in the investment option's
equity exposure because during these periods of high volatility, the risk of
losses from investing in equity securities may increase. In these instances,
your account value may decline less than would have been the case had you not
been invested in investment options that feature a volatility management
strategy.
19
ABOUT THE PORTFOLIOS OF THE TRUSTS
Please see the underlying Portfolio prospectuses for more information in
general, as well as more information about the AXA volatility management
strategy. Please further note that certain other affiliated Portfolios, as well
as unaffiliated Portfolios, may utilize volatility management techniques that
differ from the AXA volatility management strategy. Any such Portfolio is not
identified under "AXA Volatility Management" below in the chart. Such
techniques could also impact your account value in the same manner described
above. Please see the Portfolio prospectuses for more information about the
Portfolios' objective and strategies.
Portfolio allocations in certain AXA variable annuity contracts with guaranteed
benefits are subject to our Asset Transfer Program (ATP) feature. The ATP helps
us manage our financial exposure in connection with providing certain
guaranteed benefits, by using predetermined mathematical formulas to move
account value between the AXA Ultra Conservative Strategy Portfolio (an
investment option utilized solely by the ATP) and the other Portfolios offered
under those contracts. You should be aware that operation of the predetermined
mathematical formulas underpinning the ATP has the potential to adversely
impact the Portfolios, including their performance, risk profile and expenses.
This means that Portfolio investments in contracts with no ATP feature, such as
yours, could still be adversely impacted. Particularly during times of high
market volatility, if the ATP triggers substantial asset flows into and out of
a Portfolio, it could have the following effects on all contract owners
invested in that Portfolio:
(a)By requiring a Portfolio sub-adviser to buy and sell large amounts of
securities at inopportune times, a Portfolio's investment performance and
the ability of the sub-adviser to fully implement the Portfolio's investment
strategy could be negatively affected; and
(b)By generating higher turnover in its securities or other assets than it
would have experienced without being impacted by the ATP, a Portfolio could
incur higher operating expense ratios and transaction costs than comparable
funds. In addition, even Portfolios structured as funds-of-funds that are
not available for investment by contract owners who are subject to the ATP
could also be impacted by the ATP if those Portfolios invest in underlying
funds that are themselves subject to significant asset turnover caused by
the ATP. Because the ATP formulas generate unique results for each contract,
not all contract owners who are subject to the ATP will be affected by
operation of the ATP in the same way. On any particular day on which the ATP
is activated, some contract owners may have a portion of their account value
transferred to the AXA Ultra Conservative Strategy investment option and
others may not. If the ATP causes significant transfers of total account
value out of one or more Portfolios, any resulting negative effect on the
performance of those Portfolios will be experienced to a greater extent by a
contract owner (with or without the ATP) invested in those Portfolios whose
account value was not subject to the transfers.
PORTFOLIOS OF THE TRUSTS
--------------------------------------------------------------------------------------------------------------
AXA PREMIER VIP
TRUST CLASS B AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
--------------------------------------------------------------------------------------------------------------
CHARTER/SM/ Seeks to achieve high total return through a . AXA Equitable Funds
MULTI-SECTOR BOND combination of current income and capital Management Group, LLC
appreciation.
--------------------------------------------------------------------------------------------------------------
CHARTER/SM/ SMALL Seeks to achieve long-term growth of capital. . AXA Equitable Funds
CAP GROWTH Management Group, LLC
--------------------------------------------------------------------------------------------------------------
CHARTER/SM/ SMALL Seeks to achieve long-term growth of capital. . AXA Equitable Funds
CAP VALUE Management Group, LLC
-------------------------------------------------------------------------------------------------------------------
EQ ADVISORS
TRUST CLASS IB AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
-------------------------------------------------------------------------------------------------------------------
ALL ASSET Seeks long-term capital appreciation and current . AXA Equitable Funds
MODERATE GROWTH - income, with a greater emphasis on current Management Group, LLC
ALT 15 income.
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ALL ASSET GROWTH - Seeks long-term capital appreciation and current . AXA Equitable Funds
ALT 20 income. Management Group, LLC
-------------------------------------------------------------------------------------------------------------------
ALL ASSET Seeks long-term capital appreciation and current . AXA Equitable Funds
AGGRESSIVE - ALT income, with a greater emphasis on capital Management Group, LLC
25 appreciation.
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AXA 400 MANAGED Seeks to achieve long-term growth of capital . AllianceBernstein L.P. (check mark)
VOLATILITY with an emphasis on risk-adjusted returns and . AXA Equitable Funds
managing volatility in the Portfolio. Management Group, LLC
. BlackRock Investment
Management, LLC
-------------------------------------------------------------------------------------------------------------------
AXA 500 MANAGED Seeks to achieve long-term growth of capital . AllianceBernstein L.P. (check mark)
VOLATILITY with an emphasis on risk-adjusted returns and . AXA Equitable Funds
managing volatility in the Portfolio. Management Group, LLC
. BlackRock Investment
Management, LLC
-------------------------------------------------------------------------------------------------------------------
20
ABOUT THE PORTFOLIOS OF THE TRUSTS
--------------------------------------------------------------------------------------------------------------------
EQ ADVISORS
TRUST CLASS IB AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
--------------------------------------------------------------------------------------------------------------------
AXA 2000 MANAGED Seeks to achieve long-term growth of capital . AllianceBernstein L.P. (check mark)
VOLATILITY with an emphasis on risk-adjusted returns and . AXA Equitable Funds
managing volatility in the Portfolio. Management Group, LLC
. BlackRock Investment
Management, LLC
--------------------------------------------------------------------------------------------------------------------
AXA BALANCED Seeks long-term capital appreciation and current . AXA Equitable Funds (check mark)
STRATEGY income. Management Group, LLC
--------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE Seeks current income and growth of capital, with . AXA Equitable Funds (check mark)
GROWTH STRATEGY a greater emphasis on current income. Management Group, LLC
--------------------------------------------------------------------------------------------------------------------
AXA CONSERVATIVE Seeks a high level of current income. . AXA Equitable Funds (check mark)
STRATEGY Management Group, LLC
--------------------------------------------------------------------------------------------------------------------
AXA GLOBAL EQUITY Seeks to achieve long-term capital appreciation . AXA Equitable Funds (check mark)
MANAGED VOLATILITY with an emphasis on risk-adjusted returns and Management Group, LLC
managing volatility in the Portfolio. . BlackRock Investment
Management, LLC
. Morgan Stanley Investment
Management Inc.
. OppenheimerFunds, Inc.
--------------------------------------------------------------------------------------------------------------------
AXA GROWTH STRATEGY Seeks long-term capital appreciation and current . AXA Equitable Funds (check mark)
income, with a greater emphasis on capital Management Group, LLC
appreciation.
--------------------------------------------------------------------------------------------------------------------
AXA INTERNATIONAL Seeks to achieve long-term growth of capital . AXA Equitable Funds (check mark)
CORE MANAGED with an emphasis on risk-adjusted returns and Management Group, LLC
VOLATILITY managing volatility in the Portfolio. . BlackRock Investment
Management, LLC
. EARNEST Partners, LLC
. Massachusetts Financial
Services Company d/b/a
MFS Investment Management
. Hirayama Investments, LLC
. WHV Investment Management
--------------------------------------------------------------------------------------------------------------------
AXA INTERNATIONAL Seeks to achieve long-term growth of capital . AllianceBernstein L.P. (check mark)
MANAGED VOLATILITY with an emphasis on risk-adjusted returns and . AXA Equitable Funds
managing volatility in the Portfolio. Management Group, LLC
. BlackRock Investment
Management, LLC
--------------------------------------------------------------------------------------------------------------------
AXA INTERNATIONAL Seeks to provide current income and long-term . AXA Equitable Funds (check mark)
VALUE MANAGED growth of income, accompanied by growth of Management Group, LLC
VOLATILITY capital with an emphasis on risk-adjusted . BlackRock Investment
returns and managing volatility in the Portfolio. Management, LLC
. Northern Cross, LLC
--------------------------------------------------------------------------------------------------------------------
AXA LARGE CAP CORE Seeks to achieve long-term growth of capital . AXA Equitable Funds (check mark)
MANAGED VOLATILITY with an emphasis on risk-adjusted returns and Management Group, LLC
managing volatility in the Portfolio. . BlackRock Investment
Management, LLC
. Capital Guardian Trust
Company
. Institutional Capital LLC
. Thornburg Investment
Management, Inc.
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21
ABOUT THE PORTFOLIOS OF THE TRUSTS
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EQ ADVISORS
TRUST CLASS IB AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
---------------------------------------------------------------------------------------------------------------------
AXA LARGE CAP Seeks to provide long-term capital growth with . AXA Equitable Funds (check mark)
GROWTH MANAGED an emphasis on risk-adjusted returns and Management Group, LLC
VOLATILITY managing volatility in the Portfolio. . BlackRock Investment
Management, LLC
. Marsico Capital
Management, LLC
. T. Rowe Price Associates,
Inc.
. Wells Capital Management,
Inc.
---------------------------------------------------------------------------------------------------------------------
AXA LARGE CAP VALUE Seeks to achieve long-term growth of capital . AllianceBernstein L.P. (check mark)
MANAGED VOLATILITY with an emphasis on risk-adjusted returns and . AXA Equitable Funds
managing volatility in the Portfolio. Management Group, LLC
. BlackRock Investment
Management, LLC
. Massachusetts Financial
Services Company d/b/a
MFS Investment Management
---------------------------------------------------------------------------------------------------------------------
AXA/LOOMIS SAYLES Seeks to achieve capital appreciation. . Loomis, Sayles & Company,
GROWTH L.P.
---------------------------------------------------------------------------------------------------------------------
AXA MID CAP VALUE Seeks to achieve long-term capital appreciation . AXA Equitable Funds (check mark)
MANAGED VOLATILITY with an emphasis on risk-adjusted returns and Management Group, LLC
managing volatility in the Portfolio. . BlackRock Investment
Management, LLC
. Diamond Hill Capital
Management, Inc.
. Wellington Management
Company, LLP
---------------------------------------------------------------------------------------------------------------------
AXA MODERATE GROWTH Seeks long-term capital appreciation and current . AXA Equitable Funds (check mark)
STRATEGY income, with a greater emphasis on current Management Group, LLC
income.
---------------------------------------------------------------------------------------------------------------------
Seeks to achieve long-term growth of capital. . AllianceBernstein L.P.
EQ/ALLIANCEBERNSTEIN
SMALL CAP GROWTH
---------------------------------------------------------------------------------------------------------------------
EQ/BLACKROCK BASIC Seeks to achieve capital appreciation and . BlackRock Investment
VALUE EQUITY secondarily, income. Management, LLC
---------------------------------------------------------------------------------------------------------------------
EQ/BOSTON ADVISORS Seeks a combination of growth and income to . Boston Advisors, LLC
EQUITY INCOME achieve an above-average and consistent total
return.
---------------------------------------------------------------------------------------------------------------------
EQ/CALVERT SOCIALLY Seeks to achieve long-term capital appreciation. . Calvert Investment
RESPONSIBLE Management Inc.
---------------------------------------------------------------------------------------------------------------------
EQ/CAPITAL GUARDIAN Seeks to achieve long-term growth of capital. . Capital Guardian Trust
RESEARCH Company
---------------------------------------------------------------------------------------------------------------------
EQ/COMMON STOCK Seeks to achieve a total return before expenses . AllianceBernstein L.P.
INDEX that approximates the total return performance
of the Russell 3000 Index, including
reinvestment of dividends, at a risk level
consistent with that of the Russell 3000 Index.
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22
ABOUT THE PORTFOLIOS OF THE TRUSTS
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EQ ADVISORS
TRUST CLASS IB AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
----------------------------------------------------------------------------------------------------------------------
EQ/CORE BOND INDEX Seeks to achieve a total return before expenses . AXA Equitable Funds
that approximates the total return performance of Management Group, LLC
the Barclays Intermediate U.S. Government/Credit . SSgA Funds Management,
Index, including reinvestment of dividends, at a Inc.
risk level consistent with that of the Barclays
Intermediate U.S. Government/Credit Index.
----------------------------------------------------------------------------------------------------------------------
EQ/EQUITY 500 INDEX Seeks to achieve a total return before expenses . AllianceBernstein L.P.
that approximates the total return performance
of the S&P 500 Index, including reinvestment of
dividends, at a risk level consistent with that of
the S&P 500 Index.
----------------------------------------------------------------------------------------------------------------------
EQ/GAMCO MERGERS Seeks to achieve capital appreciation. . GAMCO Asset Management,
AND ACQUISITIONS Inc.
----------------------------------------------------------------------------------------------------------------------
EQ/GAMCO SMALL Seeks to maximize capital appreciation. . GAMCO Asset Management,
COMPANY VALUE Inc.
----------------------------------------------------------------------------------------------------------------------
EQ/GLOBAL BOND PLUS Seeks to achieve capital growth and current . AXA Equitable Funds
income. Management Group, LLC
. BlackRock Investment
Management, LLC
. First International
Advisors, LLC
. Wells Capital Management,
Inc.
----------------------------------------------------------------------------------------------------------------------
EQ/INTERMEDIATE Seeks to achieve a total return before expenses . AXA Equitable Funds
GOVERNMENT BOND that approximates the total return performance of Management Group, LLC
the Barclays Intermediate U.S. Government Bond . SSgA Funds Management,
Index, including reinvestment of dividends, at a Inc.
risk level consistent with that of the Barclays
Intermediate U.S. Government Bond Index.
----------------------------------------------------------------------------------------------------------------------
EQ/INTERNATIONAL Seeks to achieve a total return (before expenses) . AllianceBernstein L.P.
EQUITY INDEX that approximates the total return performance of
a composite index comprised of 40% DJ EURO
STOXX 50 Index, 25% FTSE 100 Index, 25%
TOPIX Index, and 10% S&P/ASX 200 Index,
including reinvestment of dividends, at a risk level
consistent with that of the composite index.
----------------------------------------------------------------------------------------------------------------------
EQ/INVESCO COMSTOCK Seeks to achieve capital growth and income. . Invesco Advisers, Inc.
----------------------------------------------------------------------------------------------------------------------
EQ/JPMORGAN VALUE Seeks to achieve long-term capital appreciation. . J.P. Morgan Investment
OPPORTUNITIES Management Inc.
----------------------------------------------------------------------------------------------------------------------
EQ/LARGE CAP GROWTH Seeks to achieve a total return before expenses . AllianceBernstein L.P.
INDEX that approximates the total return performance of
the Russell 1000 Growth Index, including
reinvestment of dividends at a risk level consistent
with that of the Russell 1000 Growth Index.
----------------------------------------------------------------------------------------------------------------------
EQ/LARGE CAP VALUE Seeks to achieve a total return before expenses . SSgA Funds Management,
INDEX that approximates the total return performance of Inc.
the Russell 1000 Value Index, including
reinvestment of dividends, at a risk level consistent
with that of the Russell 1000 Value Index.
----------------------------------------------------------------------------------------------------------------------
EQ/MFS Seeks to achieve capital appreciation. . Massachusetts Financial
INTERNATIONAL Services Company d/b/a
GROWTH MFS Investment Management
----------------------------------------------------------------------------------------------------------------------
23
ABOUT THE PORTFOLIOS OF THE TRUSTS
-----------------------------------------------------------------------------------------------------------------------
EQ ADVISORS
TRUST CLASS IB AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
-----------------------------------------------------------------------------------------------------------------------
EQ/MID CAP INDEX Seeks to achieve a total return before expenses that . SSgA Funds Management,
approximates the total return performance of the Inc.
S&P Mid Cap 400 Index, including reinvestment of
dividends, at a risk level consistent with that of the
S&P Mid Cap 400 Index.
-----------------------------------------------------------------------------------------------------------------------
EQ/MONEY MARKET Seeks to obtain a high level of current income, . The Dreyfus Corporation
preserve its assets and maintain liquidity.
-----------------------------------------------------------------------------------------------------------------------
EQ/MORGAN STANLEY Seeks to achieve capital growth. . Morgan Stanley Investment
MID CAP GROWTH Management Inc.
-----------------------------------------------------------------------------------------------------------------------
EQ/PIMCO ULTRA Seeks to generate a return in excess of . Pacific Investment
SHORT BOND traditional money market products while Management Company LLC
maintaining an emphasis on preservation of
capital and liquidity.
-----------------------------------------------------------------------------------------------------------------------
EQ/QUALITY BOND PLUS Seeks to achieve high current income consistent . AllianceBernstein L.P.
with moderate risk to capital. . AXA Equitable Funds
Management Group, LLC
. Pacific Investment
Management Company LLC
-----------------------------------------------------------------------------------------------------------------------
EQ/SMALL COMPANY Seeks to replicate as closely as possible (before . AllianceBernstein L.P.
INDEX expenses) the total return of the Russell 2000 Index.
-----------------------------------------------------------------------------------------------------------------------
EQ/T. ROWE PRICE Seeks to achieve long-term capital appreciation . T. Rowe Price Associates,
GROWTH STOCK and secondarily, income. Inc.
-----------------------------------------------------------------------------------------------------------------------
EQ/UBS GROWTH AND Seeks to achieve total return through capital . UBS Global Asset
INCOME appreciation with income as a secondary Management (Americas) Inc.
consideration.
-----------------------------------------------------------------------------------------------------------------------
EQ/WELLS FARGO Seeks to achieve long-term capital growth. . Wells Capital Management,
OMEGA GROWTH Inc.
-----------------------------------------------------------------------------------------------------------------------
MULTIMANAGER Seeks to achieve long-term growth of capital. . AXA Equitable Funds
AGGRESSIVE EQUITY Management Group, LLC
. AllianceBernstein L.P.
. ClearBridge Investments,
LLC
. Marsico Capital
Management, LLC
. Scotia Institutional
Asset Management US, Ltd.
. T. Rowe Price Associates,
Inc.
. Westfield Capital
Management Company, L.P.
-----------------------------------------------------------------------------------------------------------------------
MULTIMANAGER CORE Seeks to achieve a balance of high current . AXA Equitable Funds
BOND income and capital appreciation, consistent with Management Group, LLC
a prudent level of risk. . BlackRock Financial
Management, Inc.
. Pacific Investment
Management Company LLC
. SSgA Funds Management,
Inc.
-----------------------------------------------------------------------------------------------------------------------
24
ABOUT THE PORTFOLIOS OF THE TRUSTS
--------------------------------------------------------------------------------------------------------------
EQ ADVISORS
TRUST CLASS IB AXA
SHARES PORTFOLIO INVESTMENT MANAGER (OR VOLATILITY
NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE) MANAGEMENT
MULTIMANAGER MID Seeks to achieve long-term growth of capital. . AXA Equitable Funds
CAP GROWTH Management Group, LLC
. AllianceBernstein L.P.
. BlackRock Investment
Management, LLC
. Franklin Advisers, Inc.
. Wellington Management
Company, LLP
--------------------------------------------------------------------------------------------------------------
MULTIMANAGER MID Seeks to achieve long-term growth of capital. . AXA Equitable Funds
CAP VALUE Management Group, LLC
. BlackRock Investment
Management, LLC
. Diamond Hill Capital
Management, Inc.
. Knightsbridge Asset
Management, LLC
. Lord, Abbett & Co. LLC
--------------------------------------------------------------------------------------------------------------
MULTIMANAGER Seeks to achieve long-term growth of capital. . AXA Equitable Funds
TECHNOLOGY Management Group, LLC
. Allianz Global Investors
U.S. LLC
. SSgA Funds Management,
Inc.
. Wellington Management
Company, LLP
--------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
AIM VARIABLE
INSURANCE FUNDS
(INVESCO VARIABLE
INSURANCE INVESTMENT MANAGER
FUNDS) - SERIES II (OR SUB-ADVISER(S), AS
PORTFOLIO NAME OBJECTIVE APPLICABLE)
------------------------------------------------------------------------------------------------------
INVESCO V.I. GLOBAL The fund's investment objective is total return . Invesco Advisers, Inc.
REAL ESTATE FUND through growth of capital and current income. . Invesco Asset Management
Limited
------------------------------------------------------------------------------------------------------
INVESCO V.I. The fund's investment objective is long-term . Invesco Advisers, Inc.
INTERNATIONAL growth of capital.
GROWTH FUND
------------------------------------------------------------------------------------------------------
INVESCO V.I. MID The fund's investment objective is long-term . Invesco Advisers, Inc.
CAP CORE EQUITY growth of capital.
FUND
------------------------------------------------------------------------------------------------------
INVESCO V.I. SMALL The fund's investment objective is long-term . Invesco Advisers, Inc.
CAP EQUITY FUND growth of capital.
------------------------------------------------------------------------------------------------------
AMERICAN CENTURY
VARIABLE
PORTFOLIOS, INC. -
CLASS II INVESTMENT MANAGER (OR
PORTFOLIO NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE)
------------------------------------------------------------------------------------------------------
AMERICAN CENTURY VP The fund seeks long-term capital growth. Income . American Century
MID CAP VALUE FUND is a secondary objective. Investment Management,
Inc.
---------------------------------------------------------------------------------------------------------
AMERICAN FUNDS
INSURANCE SERIES(R)
PORTFOLIO NAME - INVESTMENT MANAGER (OR
CLASS 4 SHARES OBJECTIVE SUB-ADVISER(S), AS APPLICABLE)
---------------------------------------------------------------------------------------------------------
GLOBAL SMALL The fund's investment objective is to provide you . Capital Research and
CAPITALIZATION with long-term growth of capital. Management Company
FUND/SM/
---------------------------------------------------------------------------------------------------------
NEW WORLD FUND(R) The fund's investment objective is long-term . Capital Research and
capital appreciation. Management Company
---------------------------------------------------------------------------------------------------------
25
ABOUT THE PORTFOLIOS OF THE TRUSTS
-------------------------------------------------------------------------------------------------------------
FIDELITY(R)
VARIABLE INSURANCE
PRODUCTS (VIP) -
SERVICE CLASS 2 INVESTMENT MANAGER (OR
PORTFOLIO NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE)
-------------------------------------------------------------------------------------------------------------
FIDELITY(R) VIP Seeks long-term capital appreciation. . Fidelity Management &
CONTRAFUND(R) Research Company (FMR)
PORTFOLIO
-------------------------------------------------------------------------------------------------------------
FIDELITY(R) VIP Seeks high total return through a combination of current . Fidelity Management &
GROWTH & INCOME income and capital appreciation. Research Company (FMR)
PORTFOLIO
-------------------------------------------------------------------------------------------------------------
FIDELITY(R) VIP MID Seeks long-term growth of capital. . Fidelity Management &
CAP PORTFOLIO Research Company (FMR)
---------------------------------------------------------------------------------------------------------------
FRANKLIN TEMPLETON
VARIABLE
INSURANCE PRODUCTS
TRUST - CLASS 2 INVESTMENT MANAGER (OR
PORTFOLIO NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE)
---------------------------------------------------------------------------------------------------------------
FRANKLIN MUTUAL The Fund's principal investment goal is capital . Franklin Mutual Advisers,
SHARES VIP FUND appreciation. Its secondary goal is income. LLC
---------------------------------------------------------------------------------------------------------------
FRANKLIN RISING Seeks long-term capital appreciation, with preservation of . Franklin Advisory
DIVIDENDS VIP FUND capital as an important consideration. Services, LLC
---------------------------------------------------------------------------------------------------------------
FRANKLIN SMALL CAP Seeks long-term total return. . Franklin Advisory
VALUE VIP FUND Services, LLC
---------------------------------------------------------------------------------------------------------------
FRANKLIN STRATEGIC The Fund's principal investment goal is to seek a high . Franklin Advisers, Inc.
INCOME VIP FUND level of current income. Its secondary goal is capital
appreciation over long term.
---------------------------------------------------------------------------------------------------------------
TEMPLETON Seeks long-term capital appreciation. . Templeton Asset
DEVELOPING Management Ltd.
MARKETS VIP FUND
---------------------------------------------------------------------------------------------------------------
TEMPLETON GLOBAL Seeks high current income, consistent with preservation . Franklin Advisers, Inc.
BOND VIP FUND of capital. Capital appreciation is a secondary
consideration.
---------------------------------------------------------------------------------------------------------------
TEMPLETON GROWTH Seeks long-term capital growth. . Templeton Global Advisors
VIP FUND Limited
------------------------------------------------------------------------------------------
GOLDMAN SACHS
VARIABLE
INSURANCE TRUST - INVESTMENT MANAGER
SERVICE SHARES (OR SUB-ADVISER(S), AS
PORTFOLIO NAME OBJECTIVE APPLICABLE)
------------------------------------------------------------------------------------------
GOLDMAN SACHS VIT Seeks long-term capital appreciation. . Goldman Sachs Asset
MID CAP VALUE FUND Management, L.P.
-------------------------------------------------------------------------------------------------------------
IVY FUNDS VARIABLE
INSURANCE INVESTMENT MANAGER
PORTFOLIOS (OR SUB-ADVISER(S), AS
PORTFOLIO NAME OBJECTIVE APPLICABLE)
-------------------------------------------------------------------------------------------------------------
IVY FUNDS VIP ENERGY To seek to provide capital growth and appreciation. . Waddell & Reed Investment
Management Company
(WRIMCO)
-------------------------------------------------------------------------------------------------------------
IVY FUNDS VIP HIGH To seek to provide total return through a combination of . Waddell & Reed Investment
INCOME high current income and capital appreciation. Management Company
(WRIMCO)
-------------------------------------------------------------------------------------------------------------
IVY FUNDS VIP MID To seek to provide growth of capital. . Waddell & Reed Investment
CAP GROWTH Management Company
(WRIMCO)
-------------------------------------------------------------------------------------------------------------
IVY FUNDS VIP To seek to provide growth of capital. . Waddell & Reed Investment
SCIENCE AND Management Company
TECHNOLOGY (WRIMCO)
-------------------------------------------------------------------------------------------------------------
IVY FUNDS VIP SMALL To seek to provide growth of capital. . Waddell & Reed Investment
CAP GROWTH Management Company
(WRIMCO)
------------------------------------------------------------------------------------------
LAZARD RETIREMENT
SERIES, INC. INVESTMENT MANAGER
- SERVICE SHARES (OR SUB-ADVISER(S), AS
PORTFOLIO NAME OBJECTIVE APPLICABLE)
------------------------------------------------------------------------------------------
LAZARD RETIREMENT Seeks long-term capital appreciation. . Lazard Asset Management
EMERGING MARKETS LLC
EQUITY PORTFOLIO
------------------------------------------------------------------------------------------
26
ABOUT THE PORTFOLIOS OF THE TRUSTS
-------------------------------------------------------------------------------------------------------
MFS(R) VARIABLE
INSURANCE TRUSTS INVESTMENT MANAGER
- SERVICE CLASS (OR SUB-ADVISER(S), AS
PORTFOLIO NAME OBJECTIVE APPLICABLE)
-------------------------------------------------------------------------------------------------------
MFS(R) The fund's investment objective is to seek capital . Massachusetts Financial
INTERNATIONAL appreciation. Services Company
VALUE PORTFOLIO
-------------------------------------------------------------------------------------------------------
MFS(R) INVESTORS The fund's investment objective is to seek capital . Massachusetts Financial
GROWTH STOCK appreciation. Services Company
SERIES
-------------------------------------------------------------------------------------------------------
MFS(R) INVESTORS The fund's investment objective is to seek capital . Massachusetts Financial
TRUST SERIES appreciation. Services Company
-----------------------------------------------------------------------------------------------------------------
PIMCO VARIABLE
INSURANCE TRUST INVESTMENT MANAGER
- ADVISOR CLASS (OR SUB-ADVISER(S), AS
PORTFOLIO NAME OBJECTIVE APPLICABLE)
-----------------------------------------------------------------------------------------------------------------
PIMCO Seeks maximum real return consistent with prudent . Pacific Investment
COMMODITYREALRETURN(R) investment management. Management Company LLC
STRATEGY PORTFOLIO
-----------------------------------------------------------------------------------------------------------------
PIMCO REAL RETURN Seeks maximum real return, consistent with preservation . Pacific Investment
PORTFOLIO of real capital and prudent investment management. Management Company LLC
-----------------------------------------------------------------------------------------------------------------
PIMCO TOTAL RETURN Seeks maximum total return, consistent with preservation . Pacific Investment
PORTFOLIO of capital and prudent investment management. Management Company LLC
-----------------------------------------------------------------------------------------------------------------
T. ROWE PRICE INVESTMENT MANAGER
EQUITY SERIES, (OR SUB-ADVISER(S), AS
INC. PORTFOLIO NAME OBJECTIVE APPLICABLE)
----------------------------------------------------------------------------------------------------------------
T. ROWE PRICE Seeks a high level of dividend income as well as long-term . T. Rowe Price Associates,
EQUITY INCOME capital growth primarily through investments in stocks. Inc.
PORTFOLIO - II
--------------------------------------------------------------------------------------------------------------
VAN ECK VIP TRUST
- S CLASS INVESTMENT MANAGER (OR
PORTFOLIO NAME OBJECTIVE SUB-ADVISER(S), AS APPLICABLE)
--------------------------------------------------------------------------------------------------------------
VAN ECK VIP GLOBAL Seeks long-term capital appreciation by investing . Van Eck Associates
HARD ASSETS FUND primarily in hard asset securities. Income is a secondary Corporation
consideration.
--------------------------------------------------------------------------------------------------------------
YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, AND CHARGES AND EXPENSES
OF THE PORTFOLIOS CAREFULLY BEFORE INVESTING. THE PROSPECTUSES FOR THE TRUSTS
CONTAIN THIS AND OTHER IMPORTANT INFORMATION ABOUT THE PORTFOLIOS. THE
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING. IN ORDER TO OBTAIN
COPIES OF TRUST PROSPECTUSES THAT DO NOT ACCOMPANY THIS PROSPECTUS, YOU MAY
CALL ONE OF OUR CUSTOMER SERVICE REPRESENTATIVES AT 1-800-777-6510.
27
ABOUT THE PORTFOLIOS OF THE TRUSTS
5. Determining your policy's value
--------------------------------------------------------------------------------
YOUR POLICY ACCOUNT VALUE
As set forth earlier in this prospectus, we deduct certain charges from each
premium payment you make. We credit the rest of each premium payment to your
policy's "account value." You instruct us to allocate your policy account value
to one or more of the policy's investment options indicated on the front cover
of this prospectus.
<R>
Your policy account value is the total of (i) your amounts in our variable
investment options, (ii) your amounts in our guaranteed interest option (other
than in (iii)), and (iii) any amounts that we are holding to secure policy
loans that you have taken (including any interest on those amounts which has
not yet been allocated to the investment options). See "Borrowing from your
policy" later in this prospectus. Your "net policy account value" is the total
of (i) and (ii) above, plus any interest credited on loaned amounts, minus any
interest accrued on outstanding loans and minus any "restricted" amounts that
we hold in the guaranteed interest option as a result of any payment received
under a living benefits rider. (Your policy and other supplemental material may
refer to the account that holds the amounts in (ii) and (iii) above as our
"Guaranteed Interest Account.") Your policy account value is subject to certain
charges discussed in "Risk/benefit summary: Charges and expenses you will pay"
earlier in this prospectus.
The account value of policy amounts transferred to the Market Stabilizer
Option(R), if applicable, is calculated as described in the separate Market
Stabilizer Option(R) prospectus.
</R>
--------------------------------------------------------------------------------
YOUR POLICY ACCOUNT VALUE WILL BE CREDITED WITH THE SAME RETURNS AS ARE
ACHIEVED BY THE PORTFOLIOS THAT YOU SELECT AND INTEREST CREDITED ON AMOUNTS IN
THE GUARANTEED INTEREST OPTION, AND IS REDUCED BY THE AMOUNT OF CHARGES WE
DEDUCT UNDER THE POLICY.
--------------------------------------------------------------------------------
YOUR POLICY'S VALUE IN OUR VARIABLE INVESTMENT OPTIONS. We invest the policy
account value that you have allocated to any variable investment option in
shares of the corresponding Portfolio. Your value in each variable investment
option is measured by "units."
The number of your units in any variable investment option does not change,
absent an event or transaction under your policy that involves moving assets
into or out of that option. Whenever any amount is withdrawn or otherwise
deducted from one of your policy's variable investment options, we "redeem"
(cancel) the number of units that has a value equal to that amount. This can
happen, for example, when all or a portion of monthly deductions and
transaction-based charges are allocated to that option, or when loans,
transfers, withdrawals and surrenders are made from that option. Similarly, you
"purchase" additional units having the same value as the amount of any premium,
loan repayment, or transfer that you allocate to that option.
The value of each unit will increase or decrease each business day, as though
you had invested in the corresponding Portfolio's shares directly (and
reinvested all dividends and distributions from the Portfolio in additional
Portfolio shares). On any day, your value in any variable investment option
equals the number of units credited to your policy under that option,
multiplied by that day's value for one such unit. The mortality and expense
risk charge mentioned earlier in this prospectus is calculated as a percentage
of the value you have in the variable investment options and deducted monthly
from your policy account based on your deduction allocations unless the
extended no lapse guarantee rider or the paid up death benefit guarantee is in
effect. For more information on how we allocate charges, see "How we allocate
charges among your investment options" earlier in this prospectus.
YOUR POLICY'S VALUE IN OUR GUARANTEED INTEREST OPTION. Your policy's value in
our guaranteed interest option includes: (i) any amounts that have been
allocated to that option, based on your request, and (ii) any "restricted"
amounts that we hold in that option as a result of your election to receive a
living benefit. See "Your option to receive a terminal illness living benefit"
later in this prospectus. We credit all of such amounts with interest at rates
we declare from time to time. We guarantee that these rates will not be less
than a 1.5% effective annual rate.
Amounts may be allocated to or removed from your policy's value in our
guaranteed interest option for the same purposes as described earlier in this
prospectus for the variable investment options. We credit your policy with a
number of dollars in that option that equals any amount that is being allocated
to it. Similarly, if amounts are being removed from your guaranteed interest
option for any reason, we reduce the amount you have credited to that option on
a dollar-for-dollar basis.
<R>
</R>
28
DETERMINING YOUR POLICY'S VALUE
6. Transferring your money among our investment options
--------------------------------------------------------------------------------
TRANSFERS YOU CAN MAKE
--------------------------------------------------------------------------------
YOU CAN TRANSFER AMONG OUR VARIABLE INVESTMENT OPTIONS AND INTO OUR GUARANTEED
INTEREST OPTION.
--------------------------------------------------------------------------------
<R>
After your policy's Allocation Date, you can transfer amounts from one
investment option to another. Unless either the paid up death benefit guarantee
or the extended no lapse guarantee are in effect, there are no restrictions on
transfers into or out of the guaranteed interest option. The total of all
transfers you make on the same day must be at least $500; except that you may
transfer your entire balance in an investment option, even if it is less than
$500. We also reserve the right to restrict transfers among variable investment
options as described in your policy, including limitations on the number,
frequency, or dollar amount of transfers.
</R>
Certain transfer restrictions apply if the paid up death benefit guarantee or
the extended no lapse guarantee rider is in effect. For more information, see
"Paid up death benefit guarantee" and "Extended no lapse guarantee rider" in
"More information about policy features and benefits." If your policy is placed
on loan extension, we will transfer any remaining policy account value in the
variable investment options to the guaranteed interest option. No transfers
from the guaranteed interest option are permitted thereafter.
Please see "Investment options within your policy" in "Risk/benefit summary:
Policy features, benefits and risks" for more information about your role in
managing your allocations.
CURRENT UNRESTRICTED TRANSFERS OUT OF THE GUARANTEED INTEREST OPTION. We are
relaxing our policy rules so that, beginning on the business day after the
Allocation Date and thereafter, you may transfer any amount of unloaned policy
account value out of the guaranteed interest option to any other investment
option until further notice.
See the "How to make transfers" section below on how you can request a
transfer. In general, transfers take effect on the date the request is
received. However, any written, telephone, Internet or facsimile transaction
requests received after 4:00 p.m. (Eastern Time) take effect the next business
day.
<R>
Please note that the ability to make unrestricted transfers from the guaranteed
interest option does not apply to any amounts that we are holding as collateral
for a policy loan or as "restricted" amounts as a result of your election to
receive a living benefit, if available under your policy.
</R>
If the policy is on loan extension, transfers out of the guaranteed interest
option are not permitted.
DISRUPTIVE TRANSFER ACTIVITY. We reserve the right to limit access to the
services described below if we determine that you are engaged in a disruptive
transfer activity, such as "market timing" (see "Disruptive transfer activity"
in "More information about other matters").
HOW TO MAKE TRANSFERS
INTERNET TRANSFERS. You can make transfers over the Internet if you are the
owner of the policy. You may do this by visiting our axa.com or us.axa.com (for
those outside the U.S.) websites and registering for online account access.
This service may not always be available. The restrictions relating to
transfers are described below.
ONLINE TRANSFERS. You can make transfers by following one of two procedures:
.. if you are both the policy's insured person and its owner, by logging onto
our website, described under "By Internet" in "How to reach us" earlier in
this prospectus; or
.. whether or not you are both the insured person and owner, by sending us a
signed transfer authorization form. Once we have the form on file, we will
provide you with online access to make transfers.
For more information, see "Telephone and Internet requests" later in this
prospectus. We allow only one request for transfers each day (although that
request can cover multiple transfers). If you are unable to reach us via our
website, you should send a written transfer request to our Administrative
Office.
TRANSFERS THROUGH OUR ADMINISTRATIVE OFFICE. You may submit a written request
for a transfer to our Administrative Office.
OUR AUTOMATIC TRANSFER SERVICE
We offer an automatic transfer service. This service allows you to gradually
allocate amounts to the variable investment options by periodically
transferring approximately the same dollar amount to the variable investment
options you select. This will cause you to purchase more units if the unit's
value is low, and fewer units if the unit's value is high. Therefore, you may
achieve a lower average cost per unit over the long term.
--------------------------------------------------------------------------------
USING THE AUTOMATIC TRANSFER SERVICE DOES NOT GUARANTEE THAT YOU WILL EARN A
PROFIT OR BE PROTECTED AGAINST LOSSES.
--------------------------------------------------------------------------------
Our automatic transfer service (also referred to as our "dollar cost averaging
service") enables you to make automatic monthly transfers from the EQ/Money
Market option to our other variable investment options. You may elect the
automatic transfer service with your policy application or at any later time
(provided you are not using the asset rebalancing service described below). At
least $5,000 must be allocated to the EQ/Money Market option to begin using the
automatic transfer service. You can choose up to eight other variable
investment options to receive the automatic transfers, but each transfer to
each option must be at least $50.
This service terminates when the EQ/Money Market option is depleted. Also, this
service will automatically terminate if you elect the paid up death benefit
guarantee or your policy is placed on loan extension. You can also cancel the
automatic transfer service at any time. You may not simultaneously participate
in the asset rebalancing service and the automatic transfer service. This
service is not available while the extended no lapse guarantee rider is in
effect.
29
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
We will not deduct a transfer charge for any transfer made in connection with
our automatic transfer service.
OUR ASSET REBALANCING SERVICE
You may wish us to periodically redistribute the amounts you have in our
variable investment options so that the relative amount of your policy account
value in each variable option is restored to an asset allocation that you
select. You can accomplish this automatically through our asset rebalancing
service. The rebalancing may be at quarterly, semiannual, or annual intervals.
You may specify asset allocation percentages for all available variable
investment options up to a maximum of 50. The allocation percentage you specify
for each variable investment option selected must be at least 2% (whole
percentages only) of the total value you hold under the variable investment
options, and the sum of the percentages must equal 100%. You may not
simultaneously participate in the asset rebalancing service and the automatic
transfer service (discussed above).
You may request the asset rebalancing service in your policy application or at
any later time by completing our enrollment form. At any time, you may also
terminate the rebalancing program or make changes to your allocations under the
program. Once enrolled in the rebalancing service, it will remain in effect
until you instruct us in writing to terminate the service. Requesting an
investment option transfer while enrolled in our asset rebalancing service will
not automatically change your allocation instructions for rebalancing your
account value. This means that upon the next scheduled rebalancing, we will
transfer amounts among your investment options pursuant to the allocation
instructions previously on file for your rebalancing service. Changes to your
allocation instructions for the rebalancing service (or termination of your
enrollment in the service) must be in writing and sent to our Administrative
Office.
We will not deduct a transfer charge for any transfer made in connection with
our asset rebalancing service. Also, this service will automatically terminate
if you elect the paid up death benefit guarantee or your policy is placed on
loan extension. This service is not available while the extended no lapse
guarantee rider is in effect.
30
TRANSFERRING YOUR MONEY AMONG OUR INVESTMENT OPTIONS
7. Accessing your money
--------------------------------------------------------------------------------
BORROWING FROM YOUR POLICY
You may borrow up to 90% of the cash surrender value, less any outstanding loan
and accrued loan interest before the policy year in which the insured reaches
age 75 (100% thereafter). In your policy, the cash surrender value is equal to
the difference between your policy account value and any surrender charges that
are in effect under your policy. However, the amount you can borrow will be
reduced by any amount that we hold on a "restricted" basis following your
receipt of a terminal illness living benefits payment, as well as by any other
loans (and accrued loan interest) you have outstanding and reduced for any
monthly payments under the Long Term Care Services/SM/ Rider. See "More
information about policy features and benefits: Other benefits you can add by
rider: Long Term Care Services/SM/ Rider" later in this prospectus. See "Your
option to receive a terminal illness living benefit" below. The minimum loan
amount generally is $500.
--------------------------------------------------------------------------------
YOU CAN USE POLICY LOANS TO OBTAIN FUNDS FROM YOUR POLICY WITHOUT SURRENDER
CHARGES OR, IN MOST CASES, PAYING CURRENT INCOME TAXES. HOWEVER, THE BORROWED
AMOUNT IS NO LONGER CREDITED WITH THE INVESTMENT RESULTS OF ANY OF OUR
INVESTMENT OPTIONS UNDER THE POLICY.
--------------------------------------------------------------------------------
When you take a policy loan, we remove an amount equal to the loan from one or
more of your investment options and hold it as collateral for the loan's
repayment. We hold this loan collateral under the same terms and conditions as
apply to amounts supporting our guaranteed interest option, with several
exceptions:
.. you cannot make transfers or withdrawals of the collateral;
.. we expect to credit different rates of interest to loan collateral than we
credit under our guaranteed interest option; and
.. the collateral is not available to pay policy charges.
When you request your loan, you should tell us how much of the loan collateral
you wish to have taken from any amounts you have in each of our investment
options. If you do not give us directions (or if we are making the loan
automatically to cover unpaid loan interest), we will take the loan from your
investment options in the same proportion as we are taking monthly deductions
for charges. If that is not possible, we will take the loan from your
investment options in proportion to your value in each. If either the extended
no lapse guarantee rider or the paid up death benefit guarantee is in effect,
and you do not give us directions or the directions cannot be followed due to
insufficient funds (or we are making the loan automatically to cover unpaid
loan interest), we will take the loan from your investment options in
proportion to your value in each.
LOAN INTEREST WE CHARGE. The interest we charge on a policy loan accrues daily
at an adjustable interest rate. We determine the rate at the beginning of each
year of your policy and that rate applies to all policy loans that are
outstanding at any time during the year. The maximum rate is the greater of
(a) 2.5% or (b) the "Monthly Average Corporate" yield published in Moody's
Corporate Bond Yield Averages for the month that ends two months before the
interest rate is set. (If that average is no longer published, we will use
another average, as the policy provides.) Currently, the loan interest rate is
2.5% for the first fifteen policy years and 1.5% thereafter. We will notify you
of the current loan interest rate when you apply for a loan, and will notify
you in advance of any rate increase.
Loan interest payments are due on each policy anniversary. If not paid when
due, we automatically add the interest as a new policy loan.
INTEREST THAT WE CREDIT ON LOAN COLLATERAL. Under our current rules, the annual
interest rate we credit on your loan collateral during any of your policy's
first fifteen years will be 1% less than the rate we are then charging you for
policy loan interest, and, beginning in the policy's 16th year, equal to the
loan interest rate. The elimination of the rate differential is not guaranteed,
however. Accordingly, we have discretion to increase the rate differential for
any period, including under policies that are already in force (and may have an
outstanding loan). We do guarantee that the annual rate of interest credited on
your loan collateral will never be less than 1.5% and that the differential
will not exceed 1%.
We credit interest on your loan collateral daily. On each anniversary of your
policy (or when your policy loan is fully repaid) we transfer that interest to
your policy's investment options in the same proportions as if it were a
premium payment. If your policy is on loan extension, we transfer the interest
to the unloaned guaranteed interest option. If the paid up death benefit
guarantee is in effect, we transfer the interest to the investment options in
accordance with your allocation instructions on record.
EFFECTS OF A POLICY LOAN. If not repaid, the aggregate amount of the
outstanding loan and any accrued loan interest will reduce your cash surrender
value and your life insurance benefit that might otherwise be payable. We will
deduct any outstanding policy loan and accrued loan interest from your policy's
proceeds if you do not pay it back. Also, a loan can reduce the length of time
that your insurance remains in force, because the amount we set aside as loan
collateral cannot be used to pay charges as they become due. A loan can also
cause any paid up death benefit guarantee to terminate or may cause the no
lapse guarantee or the extended no lapse guarantee to become unavailable.
A policy loan, repaid or not, has a permanent effect on your cash surrender
value. This results because the investment results of each investment option
apply only to the amounts remaining in such investment options. The longer the
loan is outstanding, the greater the effect on your cash surrender value is
likely to be.
Even if a loan is not taxable when made, it may later become taxable, for
example, upon termination or surrender. See "Tax information" below for a
discussion of the tax consequences of a policy loan.
PAYING OFF YOUR LOAN. You can repay all or part of your loan at any time. We
normally assume that payments you send us are premium
31
ACCESSING YOUR MONEY
payments unless the policy has lapsed and the payment is received during the
61-day grace period. See "Policy "lapse" and termination" in "The minimum
amount of premiums you must pay" under "Risk/benefit summary: Policy features,
benefits and risks" for more information. Therefore, you must submit
instructions with your payment indicating that it is a loan repayment. If you
send us more than all of the loan principal and interest you owe, we will treat
the excess as a premium payment. Any payment received while the paid up death
benefit guarantee is in effect, the policy is on loan extension or you are
receiving monthly payments under the Long Term Care Services/SM/ Rider, will be
applied as a loan repayment (or refunded if it is in excess of the loan amount
and outstanding interest).
When you send us a loan repayment, we will transfer an amount equal to such
repayment from your loan collateral back to the investment options under your
policy. First we will restore any amounts that, before being designated as loan
collateral, had been in the guaranteed interest option under your policy. We
will allocate any additional repayments among the investment options as you
instruct; or, if you don't instruct us, in the same proportion as if they were
premium payments.
If you are to receive monthly benefit payments under the Long Term Care
Services/SM/ Rider, a pro rata portion of the loan and accrued loan interest to
that date will be deducted from the monthly benefit payment as a loan
repayment. This will reduce the monthly payment otherwise payable to you under
the rider.
If the extended no lapse guarantee rider or the paid up death benefit guarantee
is in effect, any loan repayment allocated to the unloaned portion of the
guaranteed interest option will be limited to an amount so that the value in
the unloaned portion of the guaranteed interest option does not exceed 25% of
the amount that you have in your unloaned policy account value. Any portion of
the loan repayment that we cannot allocate to the guaranteed interest option
will be allocated to the variable investment options in proportion to any
amounts that you specified for that particular loan repayment. If you did not
specify, we will allocate that portion of the loan repayment in proportion to
the premium allocation percentages or the paid up death benefit guarantee
allocation percentages for the variable investment options on record.
LOAN EXTENSION (FOR GUIDELINE PREMIUM TEST POLICIES ONLY)
Loan extension will protect against lapse of your policy due to an outstanding
policy loan in certain circumstances. There is no additional charge for the
loan extension feature. Your policy will automatically be placed on "loan
extension," if at the beginning of any policy month on or following the policy
anniversary nearest the insured person's 75th birthday, but not earlier than
the 20th policy anniversary, all of the following conditions apply:
.. The net policy account value is not sufficient to cover the monthly
deductions then due;
.. The amount of any outstanding policy loan and accrued loan interest is
greater than the larger of (a) the current base policy face amount, or
(b) the initial base policy face amount;
.. You have selected Death Benefit Option A;
.. You have not received a payment under either the living benefits rider or
the Long Term Care Services/SM/ Rider;
.. The policy is not in a grace period; and
.. No current or future distributions will be required to be paid from the
policy to maintain its qualification as "life insurance" under the Internal
Revenue Code.
When a policy goes on loan extension, all of the following will apply:
.. We will collect monthly deductions due under the policy up to the amount in
the unloaned policy account value.
.. Any policy account value that is invested in our variable investment
options will automatically be transferred to our guaranteed interest
option; and no transfers out of the guaranteed interest option may
thereafter be made into any of our variable investment options.
.. Loan interest will continue to accrue and we will send you a notice of any
loan interest due on or about each policy anniversary. If the loan interest
is not paid when due, it will be added to the outstanding loan balance.
.. No additional loans or partial withdrawals may be requested.
.. No changes in face amount or death benefit option may be requested.
.. No additional premium payments will be accepted. Any payments received will
be applied as loan repayments. If a loan repayment is made, the repaid
amount will become part of the unloaned guaranteed interest option. Any
payment in excess of the outstanding loan balance will be refunded to you.
.. All additional benefit riders and endorsements will terminate, including
the Long Term Care Services/SM/ Rider.
.. The paid up death benefit guarantee if applicable, may not be elected.
.. The policy will not thereafter lapse for any reason.
On the policy anniversary when the insured attains age 75 and if such policy
has been in force for 20 years, and each month thereafter, we will determine
whether the policy is on loan extension. You will be sent a letter explaining
the transactions that are allowed and prohibited while a policy is on loan
extension. Once a policy is on loan extension, it will remain on loan extension
during the lifetime of the insured unless the policy is surrendered.
If your policy is on loan extension, the death benefit payable under the policy
is the greatest of (a), (b) and (c):
(a)The greater of the policy account value or the outstanding loan and accrued
loan interest on the date of the insured's death, multiplied by a percentage
shown in your policy;
(b)The outstanding loan and accrued loan interest, plus $10,000; or
(c)The base policy face amount on the date of death.
Other than as outlined above, all terms and conditions of your policy will
continue to apply as if your policy is not on loan extension.
32
ACCESSING YOUR MONEY
MAKING WITHDRAWALS FROM YOUR POLICY
You may make a partial withdrawal of your net cash surrender value (defined
below) at any time after the first year of your policy and before the policy
anniversary nearest to the insured's attained age 121, provided the paid up
death benefit guarantee is not in effect, the policy is not on loan extension
and you are not receiving monthly benefit payments under the Long Term Care
Services/SM/ Rider. The request must be for at least $500, however, and we have
discretion to decline any request. If you do not tell us from which investment
options you wish us to take the withdrawal, we will use the same allocation
that then applies for the monthly deductions we make for charges; and, if that
is not possible, we will take the withdrawal from all of your investment
options in proportion to your value in each. If you elected the Long Term Care
Services/SM /Rider and selected death benefit Option A, a partial withdrawal
will reduce the current long-term care specified amount by the amount of the
withdrawal, but not to less than the policy account value minus the withdrawal
amount. If you selected death benefit Option B, the current long-term care
specified amount will not be reduced. See "More information about policy
features and benefits: Other benefits you can add by rider: Long Term Care
Services/SM/ Rider" later in this prospectus. We will not deduct a charge for
making a partial withdrawal. If the extended no lapse guarantee is in effect,
there are limitations on partial withdrawals from the variable investment
options and different allocation rules apply. See "Extended No Lapse Guarantee
Rider" under "More information about policy features and benefits" later in
this prospectus.
--------------------------------------------------------------------------------
YOU CAN WITHDRAW ALL OR PART OF YOUR POLICY'S NET CASH SURRENDER VALUE,
ALTHOUGH YOU MAY INCUR TAX CONSEQUENCES BY DOING SO.
--------------------------------------------------------------------------------
EFFECT OF PARTIAL WITHDRAWALS ON INSURANCE COVERAGE. If the Option A death
benefit is in effect, a partial withdrawal results in a dollar-for-dollar
automatic reduction in the policy's face amount (and, hence, an equal reduction
in the Option A death benefit). We will not permit a partial withdrawal that
would reduce the face amount below $100,000, or that would cause the policy to
no longer be treated as life insurance for federal income tax purposes.
If death benefit Option B is in effect, a partial withdrawal reduces the death
benefit on a dollar for dollar basis, but does not affect the face amount.
The result is different, however, during any time when the alternative death
benefit (discussed later in this prospectus) would be higher than the Option A
or B death benefit you have selected. In that case, a partial withdrawal will
cause the death benefit to decrease by more than the amount of the withdrawal.
A partial withdrawal reduces the amount of your premium payments that counts
toward maintaining the policy's no lapse guarantee and the extended no lapse
guarantee, as well. A partial withdrawal may increase the chance that your
policy could lapse because of insufficient value to pay policy charges as they
fall due or failure to pass the guarantee premium test for those guarantees.
You should refer to "Tax information" below, for information about possible tax
consequences of partial withdrawals and any associated reduction in policy
benefits. Also, partial withdrawals are not permitted while the paid up death
benefit guarantee is in effect. Please see "Paid up death benefit guarantee" in
"More information about policy features and benefits."
SURRENDERING YOUR POLICY FOR ITS NET CASH SURRENDER VALUE
You can surrender (give us back) your policy for its "net cash surrender value"
at any time. The net cash surrender value equals your policy account value,
minus any outstanding loan and unpaid loan interest, minus any amount of your
policy account value that is "restricted" as a result of previously distributed
"terminal illness living benefits," and further reduced for any monthly benefit
payments made under the Long Term Care Services/SM/ Rider (see "Other benefits
you can add by rider: Long Term Care Services/SM/ Rider" later in this
prospectus), and minus any surrender charge that then remains applicable. The
surrender charge is described in "Charges and expenses you will pay" earlier in
this prospectus.
Please refer to "Tax information" below for the possible tax consequences of
surrendering your policy.
YOUR OPTION TO RECEIVE A TERMINAL ILLNESS LIVING BENEFIT
Subject to our insurance underwriting guidelines and availability in your
state, your policy will automatically include our living benefits rider. This
feature enables you to receive a portion (generally the lesser of 75% or
$500,000) of the policy's death benefit (excluding death benefits payable under
certain other policy riders), if the insured person has a terminal illness (as
defined in the rider). The maximum aggregate amount of payments that will be
paid under this Living Benefits Rider for all policies issued by MONY America
or an affiliate company on the life of the same insured person is $500,000. We
make no additional charge for the rider, but we will deduct a one-time
administrative charge of up to $250 from any living benefit we pay.
If you tell us that you do not wish to have the living benefits rider added at
issue, but you later ask to add it, there will be a $100 administrative charge.
Also, we will need to evaluate the insurance risk at that time, and we may
decline to issue the rider.
If you receive a living benefit on account of terminal illness , the Long Term
Care Services/SM/ Rider for chronic illness benefits, if elected and before
continuation of coverage under any Nonforfeiture Benefit, will terminate and no
further benefits will be payable under the Long Term Care Services/SM/ Rider.
Long Term Care Services/SM/ Rider charges will also stop. In addition, once you
receive a living benefit, you cannot elect the paid up death benefit guarantee
and your policy cannot be placed on loan extension. We will deduct the amount
of any living benefit we have paid, plus interest (as specified in the rider),
from the death benefit proceeds that become payable under the policy if and
when the insured person dies. (In your policy we refer to this as a "lien" we
establish against your policy.)
When we pay a living benefit, we automatically transfer a pro rata portion of
your policy's net cash surrender value to the policy's guaranteed interest
option. This amount, together with the interest we charge thereon, will be
"restricted"-- that is, it will not be available for any loans, transfers or
partial withdrawals that you may wish to make. In addition, it may not be used
to satisfy the charges we deduct from your policy's value. We also will deduct
these restricted amounts from any subsequent surrender proceeds that we pay.
33
ACCESSING YOUR MONEY
The receipt of a living benefits payment may qualify for exclusion from income
tax. See "Tax information" below. Receipt of a living benefits payment may
affect your eligibility for certain government benefits or entitlements.
--------------------------------------------------------------------------------
YOU CAN ARRANGE TO RECEIVE A "LIVING BENEFIT" IF THE INSURED PERSON BECOMES
TERMINALLY ILL.
--------------------------------------------------------------------------------
34
ACCESSING YOUR MONEY
8. Tax information
--------------------------------------------------------------------------------
This discussion is based on current federal income tax law and interpretations.
It assumes that the policy owner is a natural person who is a U.S. citizen and
resident and has an insurable interest in the insured. The tax effects on
corporate taxpayers, non-U.S. residents or non-U.S. citizens may be different.
This discussion is general in nature, and should not be considered tax advice,
for which you should consult a qualified tax advisor.
BASIC INCOME TAX TREATMENT FOR YOU AND YOUR BENEFICIARY
An IncentiveLife Legacy(R) III policy will be treated as "life insurance" for
federal income tax purposes (a) if it meets the definition of life insurance
under Section 7702 of the Internal Revenue Code (the "Code") and (b) as long as
the investments made by the underlying Portfolios satisfy certain investment
diversification requirements under Section 817(h) of the Code. The following
discussion assumes that the policies meet these requirements and, therefore,
that generally:
.. the death benefit received by the beneficiary under your policy generally
will not be subject to federal income tax; and
.. increases in your policy account value as a result of interest or
investment experience will not be subject to federal income tax, unless and
until there is a distribution from your policy, such as a surrender, a
partial withdrawal, loan or a payment to you.
The IRS, however, could disagree with our position such that certain tax
consequences could be other than as described. There may also be different tax
consequences if you assign your policy, transfer an interest therein or
designate a new owner. See "Assigning your policy" later in this prospectus.
See also special rules below for "Business and employer owned policies," and
for the discussion of insurable interest under "Other information."
TAX TREATMENT OF DISTRIBUTIONS TO YOU (LOANS, PARTIAL WITHDRAWALS, AND FULL
SURRENDER; IMPACT OF CERTAIN POLICY CHANGES AND TRANSACTIONS)
The federal income tax consequences of a distribution from your policy depend
on whether your policy is a "modified endowment contract" (sometimes also
referred to as a "MEC"). In all cases, however, the character of any income
described below as being taxable to the recipient will be ordinary income (as
opposed to capital gain).
TESTING FOR MODIFIED ENDOWMENT CONTRACT STATUS. Your policy will be a "modified
endowment contract" if, at any time during the first seven years of your
policy, you have paid a cumulative amount of premiums that exceeds the
cumulative seven-pay limit. The cumulative seven-pay limit is the amount of
premiums that you would have paid by that time under a similar fixed-benefit
insurance policy that was designed (based on certain assumptions mandated under
the Code) to provide for paid up future benefits after the payment of seven
equal annual premiums. ("Paid up" means that no future premiums would be
required.) This is called the "seven-pay" test.
Whenever there is a "material change" under a policy, the policy will generally
be (a) treated as a new contract for purposes of determining whether the policy
is a modified endowment contract and (b) subjected to a new seven-pay period
and a new seven-pay limit. The new seven-pay limit would be determined taking
into account, under a prescribed formula, the policy account value at the time
of such change. A materially changed policy would be considered a modified
endowment contract if it failed to satisfy the new seven-pay limit at any time
during the new seven-pay period. A "material change" for these purposes could
occur as a result of a change in death benefit option, a requested increase in
the policy's face amount or certain other changes.
If your policy's benefits are reduced during its first seven years (or within
seven years after a material change), the seven-pay limit will be redetermined
based on the reduced level of benefits and applied retroactively for purposes
of the seven-pay test. (Such a reduction in benefits could include, for
example, a requested decrease in face amount, the termination of additional
benefits under a rider or, in some cases, a partial withdrawal or a change in
death benefit option.) If the premiums previously paid are greater than the
recalculated (lower) seven-pay limit, the policy will become a modified
endowment contract.
A life insurance policy that you receive in exchange for a modified endowment
contract will also be considered a modified endowment contract.
In addition to the above premium limits for testing for modified endowment
status, federal income tax rules must be complied with in order for it to
qualify as life insurance. Changes made to your policy, for example, a decrease
in face amount (including any decrease that may occur as a result of a partial
withdrawal), a change in death benefit option, or other decrease in benefits
may impact the maximum amount of premiums that can be paid, as well as the
maximum amount of policy account value that may be maintained under the policy.
If you have elected the cash value accumulation test, such changes may also
impact the maximum amount of cash surrender value that may be maintained under
the policy. In some cases, a change may cause us to take current or future
action in order to assure that your policy continues to qualify as life
insurance, including distribution of amounts to you that may be includible as
income. These tax rules may also result in a higher death benefit applying, not
withstanding a requested decrease in face amount. See "Changes we can make"
later in this prospectus.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT
CONTRACT. As long as your policy remains in force as a non-modified endowment
contract, policy loans will be treated as indebtedness, and no part of the loan
proceeds will be subject to current federal income tax. Interest on the loan
will generally not be tax deductible, although interest credited on loan
collateral may become taxable under the rules below if distributed. Also, see
below for taxation of loans upon surrender or termination of your policy.
35
TAX INFORMATION
If you make a partial withdrawal after the first 15 years of your policy, the
proceeds will not be subject to federal income tax except to the extent such
proceeds exceed your "basis" in your policy. (Your basis generally will equal
the premiums you have paid, less the amount of any previous distributions from
your policy that were not taxable.) During the first 15 years, however, the
proceeds from a partial withdrawal could be subject to federal income tax,
under a complex formula, to the extent that your policy account value exceeds
your basis.
Upon full surrender, any amount by which the proceeds we pay (including amounts
we use to discharge any policy loan and unpaid loan interest) exceed your basis
in the policy will be subject to federal income tax. IN ADDITION, IF A POLICY
TERMINATES AFTER A GRACE PERIOD, THE EXTINGUISHMENT OF ANY THEN-OUTSTANDING
POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A DISTRIBUTION AND
COULD BE SUBJECT TO TAX UNDER THE FOREGOING RULES. Finally, if you make an
assignment of rights or benefits under your policy, you may be deemed to have
received a distribution from your policy, all or part of which may be taxable.
POLICY LOANS. Policy loans can cause taxable income upon the termination of a
policy with no cash payout. In the case of a surrender, the loan amount is
taken into account in determining any taxable amount and such income can also
exceed the payment received. These events can occur from potential situations
which include: (1) amount of outstanding policy debt (loans taken plus unpaid
interest amounts added to the outstanding loan) at or near the maximum loan
value; (2) unfavorable investment results affecting your policy account value;
(3) increasing monthly policy charges due to increasing attained ages of the
insured; (4) high or increasing amount of insurance risk, depending on death
benefit option and changing account value; and (5) increasing policy loan rates
if an adjustable policy loan rate is in effect.
Ideally a policy loan will be paid from income tax free death benefit proceeds
if your policy is kept in force until the death of the insured. To avoid policy
terminations that may give rise to significant income tax liability, you may
need to make substantial premium payments or loan repayments to keep your
policy in force.
You can reduce the likelihood that these situations will occur by considering
these risks before taking a policy loan. If you take a policy loan, you should
monitor the status of your policy with your financial representative and your
tax advisor at least annually, and take appropriate preventative action. As
indicated above, in the case of a policy that is a modified endowment contract
("MEC"), any loan will be treated as a distribution when made, and thus may be
taxable at such time.
TAXATION OF PRE-DEATH DISTRIBUTIONS IF YOUR POLICY IS A MODIFIED ENDOWMENT
CONTRACT. Any distribution from your policy will be taxed on an "income-first"
basis if your policy is a modified endowment contract. Distributions for this
purpose include a loan (including any increase in the loan amount to pay
interest on an existing loan or an assignment or a pledge to secure a loan) or
withdrawal. Any such distributions will be considered taxable income to you to
the extent your policy account value exceeds your basis in the policy. (For
modified endowment contracts, your basis is similar to the basis described
above for other policies, except that it also would be increased by the amount
of any prior loan under your policy that was considered taxable income to you.)
For purposes of determining the taxable portion of any distribution, all
modified endowment contracts issued by MONY America (or its affiliates) to the
same owner (excluding certain qualified plans) during any calendar year are
treated as if they were a single contract.
A 10% penalty tax also will apply to the taxable portion of most distributions
from a policy that is a modified endowment contract. The penalty tax will not,
however, apply to (i) taxpayers whose actual age is at least 59 1/2,
(ii) distributions in the case of a disability (as defined in the Code) or
(iii) distributions received as part of a series of substantially equal
periodic annuity payments for the life (or life expectancy) of the taxpayer or
the joint lives (or joint life expectancies) of the taxpayer and his or her
beneficiary. The exceptions generally do not apply to life insurance policies
owned by corporations or other entities.
IF YOUR POLICY TERMINATES AFTER A GRACE PERIOD, THE EXTINGUISHMENT OF ANY THEN
OUTSTANDING POLICY LOAN AND UNPAID LOAN INTEREST WILL BE TREATED AS A
DISTRIBUTION (to the extent the loan was not previously treated as such) and
could be subject to tax, including the 10% penalty tax, as described above. In
addition, upon a full surrender, any excess of the proceeds we pay (including
any amounts we use to discharge any loan) over your basis in the policy, will
be subject to federal income tax and, unless an exception applies, the 10%
penalty tax.
Distributions that occur during a year of your policy in which it becomes a
modified endowment contract, and during any subsequent years, will be taxed as
described in the four preceding paragraphs. In addition, distributions from a
policy within two years before it becomes a modified endowment contract also
will be subject to tax in this manner. This means that a distribution made from
a policy that is not a modified endowment contract could later become taxable
as a distribution from a modified endowment contract.
POLICY CHANGES. Changes made to a life insurance policy, for example, a
decrease in benefits, a Death Benefit Option change, or the termination or
restoration of a terminated policy, may have other effects on your policy,
including impacting the maximum amount of premiums that can be paid under the
policy. In some cases, this may cause us to take action in order to assure your
policy continues to qualify as life insurance, including distribution of
amounts that may be includable as income. This action may be required under the
tax law even though the policy may not be sufficiently funded to keep it in
force for a desired duration. In some cases, premium payments for a policy year
could be limited to the amount needed to keep the policy in force until the end
of the policy year. You should carefully go over the implications of any policy
changes with your advisor before making a change.
RESTORATION OF A TERMINATED POLICY. For tax purposes, some restorations of a
policy that terminated after a grace period may be treated as the purchase .of
a new policy. Since tax laws and regulations and their application may have
changed by such time, there can be no assurance that we can reinstate the
policy to qualify as life insurance under future tax rules.
TAX TREATMENT OF LIVING BENEFITS RIDER OR LONG TERM CARE SERVICES/SM/ RIDER
UNDER A POLICY WITH THE APPLICABLE RIDER
LIVING BENEFITS RIDER. Amounts received under an insurance policy on the life
of an individual who is terminally ill, as defined by the tax law, are
generally excludable from gross income as an accelerated
36
TAX INFORMATION
death benefit. We believe that the benefits provided under our living benefits
rider meet the tax law's definition of terminally ill under section 101(g) of
the Code and can qualify for this income tax exclusion.
If the owner and the insured person are not the same, the exclusion for
accelerated death benefits for terminal illness or a chronic illness does not
apply if the owner (taxpayer) has an insurable interest with respect to the
life of the insured person by reason of the insured person being an officer,
employee or director of the taxpayer or by reason of the insured person being
financially interested in any trade or business carried on by the taxpayer.
LONG-TERM CARE SERVICES/SM/ RIDER. Benefits received under the Long-Term Care
Services/SM/ Rider are intended to be treated, for Federal income tax purposes,
as accelerated death benefits under the Code on the life of a chronically ill
insured person receiving qualified long-term care services within the meaning
of section 7702B of the Code. The benefits are intended to qualify for
exclusion from income subject to the limitations of the Code with respect to a
particular insured person. Receipt of these benefits may be taxable and may
reduce your investment in the policy. Generally the income exclusion for all
long-term care type payments from all sources with respect to an insured person
will be limited to the higher of the Health Insurance Portability and
Accountability Act ("HIPAA") per day limit or actual costs incurred by the
taxpayer on behalf of the insured person.
<R>
The Long-Term Care Services/SM/ Rider is intended to be a qualified long-term
care insurance contract under section 7702B(b) of the Code. Charges for the
Long-Term Care Services/SM/ Rider are generally not considered deductible for
income tax purposes. Assuming the rider qualifies as intended, charges will
reduce your investment in the policy for income tax purposes (not below zero)
and will not be taxable. Please see the "State policy availability and/or
variations of certain features and benefits" Appendix later in this prospectus
for more information on state variations.
</R>
Any adjustments made to your policy death benefit, face amount and other values
as a result of Long-Term Care Services/SM/ Rider benefits paid will also
generally cause us to make adjustments with respect to your policy under
federal income tax rules for testing premiums paid, your tax basis in your
policy, your overall premium limits and the seven-pay period and seven-pay
limit for testing modified endowment contract status.
<R>
It is not clear whether the exclusion for accelerated death benefits on account
of chronically-ill insureds applies to benefits under a qualified long-term
care insurance policy for owners whose insurable interests arise from
business-type policies. Please see the "State policy availability and/or
variations of certain features and benefits" Appendix later in this prospectus
for more information on state variations.
</R>
UNDER EITHER RIDER, if the owner and insured person are not the same, other tax
considerations may also arise in connection with a transfer of benefits
received to the insured person, for example, gift taxes in personal settings,
compensation income in the employment context and inclusion of life insurance
policy proceeds for estate tax purposes in certain trust owned situations.
Under certain conditions, a gift tax exclusion may be available for certain
amounts paid on behalf of a donee directly to their provider of medical care.
BUSINESS AND EMPLOYER OWNED POLICIES
Any employer owned life insurance arrangement on an employee or director as
well as any corporate, trade, or business use of a policy should be carefully
reviewed by your tax advisor with attention to the rules discussed below. Also,
careful consideration should be given to any other rules that may apply,
including other possible pending or recently enacted legislative proposals.
REQUIREMENTS FOR INCOME TAX FREE DEATH BENEFITS. Federal tax law imposes
additional requirements for employer owned life insurance policies. The
provisions can have broad application for contract owners engaged in a trade or
business, or certain related persons. These requirements include detailed
notice and consent rules, annual tax reporting and recordkeeping requirements
on the employer and limitations on those employees (including directors) who
can be insured under the life insurance policy. Failure to satisfy applicable
requirements will result in death benefits in excess of premiums paid by the
owner being includible in the owner's income upon the death of the insured
employee. Notice and consent requirements must be satisfied before the issuance
of the life insurance policy or a material change to an existing life insurance
policy, otherwise benefits may lose their tax favored treatment.
The new rules generally apply to life insurance policies issued after
August 17, 2006. Note, however, that material increases in the death benefit or
other material changes will generally cause an existing policy to be treated as
a new policy and thus subject to the new requirements. The term "material" has
not yet been fully defined but is expected to not include automatic increases
in death benefits in order to maintain compliance of the life insurance policy
tax qualification rules under the Code. An exception for certain tax-free
exchanges of life insurance policies pursuant to Section 1035 of the Code may
be available but is not clearly defined.
LIMITATIONS ON INTEREST DEDUCTIBILITY FOR BUSINESS OWNED LIFE
INSURANCE. Ownership of a policy by a trade or business can limit the amount of
any interest on business borrowings that entity otherwise could deduct for
federal income tax purposes, even though such business borrowings may be
unrelated to the policy. To avoid the limit, the insured person must be an
officer, director, employee or 20% owner of the trade or business entity when
coverage on that person commences. A recent proposal, if enacted, could narrow
the exception to 20% owners unless the policy is grandfathered.
The limit does not generally apply for policies owned by natural persons (even
if those persons are conducting a trade or business as sole proprietorships),
unless a trade or business entity that is not a sole proprietorship is a direct
or indirect beneficiary under the policy. Entities commonly have such a
beneficial interest, for example, in so-called "split-dollar" arrangements. If
the trade or business entity has such an interest in a policy, it will be
treated the same as if it owned the policy for purposes of the limit on
deducting interest on unrelated business income.
The limit generally applies only to policies issued after June 8, 1997 in
taxable years ending after such date. However, for this purpose, any material
change in a policy will be treated as the issuance of a new policy.
In cases where the above-discussed limit on deductibility applies, the
non-deductible portion of unrelated interest on business loans is determined by
multiplying the total amount of such interest by a fraction.
37
TAX INFORMATION
The numerator of the fraction is the policy's average account value (excluding
amounts we are holding to secure any policy loans) for the year in question,
and the denominator is the average for the year of the aggregate tax bases of
all the entity's other assets. The above limitation is in addition to rules
limiting interest deductions on policy loans against business-owned life
insurance. Special rules apply to insurance company owners of policies which
may be more restrictive.
REQUIREMENT THAT WE DIVERSIFY INVESTMENTS
Under Section 817(h) of the Code, the Treasury Department has issued
regulations that implement investment diversification requirements. Failure to
comply with these regulations would disqualify your policy as a life insurance
policy under Section 7702 of the Code. If this were to occur, you would be
subject to federal income tax on any income and gains under the policy and the
death benefit proceeds would lose their income tax-free status. These
consequences would continue for the period of the disqualification and for
subsequent periods. Through the Portfolios, we intend to comply with the
applicable diversification requirements, though no assurances can be given in
this regard.
ESTATE, GIFT, AND GENERATION-SKIPPING TAXES
If the policy's owner is the insured person, the death benefit will generally
be includable in the owner's estate for purposes of federal estate tax. If the
owner is not the insured person, and the owner dies before the insured person,
the value of the policy would be includable in the owner's estate. If the owner
is neither the insured person nor the beneficiary, the owner will be considered
to have made a gift to the beneficiary of the death benefit proceeds when they
become payable.
In general, a person will not owe estate or gift taxes until gifts made by such
person, plus that person's taxable estate, total at least $5 million indexed
for inflation ($5.340 million in 2014). A portability rule generally permits a
surviving spouse to elect to carryover the unused portion of their deceased
spouse's exclusion amount.
Certain amounts may be deductible or excludable, such as gifts and bequests to
a person's spouse or charitable institutions, as well as for certain gifts per
recipient per year ($14,000 for 2014, indexed for inflation).
As a general rule, if you make a "transfer" to a person two or more generations
younger than you, a generation-skipping tax may be payable. Generation-skipping
transactions would include, for exam ple, a case where a grandparent "skips"
his or her children and names his or her grandchildren as a policy's
beneficiaries. In that case, the generation-skipping "transfer" would be deemed
to occur when the insurance proceeds are paid. The generation-skipping tax
rates are similar to the maximum estate tax rates in effect at the time.
Individuals are generally allowed an aggregate generation-skipping tax
exemption of the same $5 million amount discussed above for estate and gift
taxes, but without portability.
The particular situation of each policy owner, insured person or beneficiary
will determine how ownership or receipt of policy proceeds will be treated for
purposes of federal estate, gift and generation-skipping taxes, as well as
state and local estate, inheritance and other taxes. Because these rules are
complex, you should consult with a qualified tax adviser for specific
information, especially where benefits are passing to younger generations.
If this policy is used with estate and gift tax planning in mind, you should
consult with your tax advisor as to the most up-to-date information as to
federal estate, gift and generation skipping tax rules.
If this policy is being purchased pursuant to a split-dollar arrangement, you
should also consult your tax advisor for advice concerning the effect of IRS
Notice 2002-8 and recent proposed and final regulations regarding split-dollar
arrangements on your split-dollar arrangement. The transition and
grandfathering rules, among other items, should be carefully reviewed. A
material modification to an existing arrangement may result in a change in tax
treatment.
PENSION AND PROFIT-SHARING PLANS
There are special limits on the amount of insurance that may be purchased by a
trust or other entity that forms part of a pension or profit-sharing plan
qualified under Section 401(a) or 403 of the Code. In addition, the federal
income tax consequences will be different from those described in this
prospectus. These rules are complex, and you should consult a qualified tax
advisor.
SPLIT-DOLLAR AND OTHER EMPLOYEE BENEFIT PROGRAMS
Complex rules may also apply when a policy is held by an employer or a trust,
or acquired by an employee, in connection with the provision of other employee
benefits. Employees may have imputed income for the value of any economic
benefit provided by the employer. There may be other tax implications, as well.
It is possible that certain split-dollar arrangements may be considered to be a
form of deferred compensation under Section 409A of the Code, which broadens
the definition of deferred compensation plans, and subjects such plans to new
requirements. Further certain split-dollar arrangements may come within the
rules for business and employer owned policies. Among other issues, policy
owners must consider whether the policy was applied for by or issued to a
person having an insurable interest under applicable state law and with the
insured person's consent. The lack of an insurable interest or consent may,
among other things, affect the qualification of the policy as life insurance
for federal income tax purposes and the right of the beneficiary to receive a
death benefit.
In 2002 the IRS issued Notice 2002-8 concerning the taxation of split-dollar
life insurance arrangements as well as regulations in both 2002 and 2003. They
provide for taxation under one of two mutually exclusive regimes depending upon
the structure of the arrangement. These are a loan regime and an economic
benefit regime. Transition and grandfathering rules, among other items, should
be carefully reviewed when considering such arrangements. A material
modification to an existing arrangement may result in a change in tax
treatment. In addition, public corporations (generally publicly traded or
publicly reporting companies) and their subsidiaries should consider the
possible implications on split-dollar arrangements of the Securities Exchange
Act of 1934 which generally prohibit certain direct or indirect loans to
executive officers or directors. At least some split-dollar arrangements could
be deemed to involve loans within the purview of that section.
ERISA
Employers and employer-created trusts may be subject to reporting, disclosure
and fiduciary obligations under the Employee Retirement Income Security Act of
1974. There may also be other implications. You should consult a qualified
legal advisor.
38
TAX INFORMATION
NEW 3.8 % TAX ON NET INVESTMENT INCOME OR "NII". The new 3.8% Medicare tax on
certain unearned income of taxpayers whose adjusted incomes exceed certain
thresholds applies to all or part of a taxpayer's NII. As currently interpreted
under IRS guidelines, NII includes the taxable portion of an annuitized payment
from a life insurance contract. It has not been defined to include taxable
amounts from partial withdrawals, surrenders or lapses of life insurance
policies subject to loans. You should consult your tax advisor as to the
applicability of this tax to you.
OUR TAXES
The operations of our separate accounts are reported in our federal income tax
return. Separate account investment income and capital gains, however, are, for
tax purposes, reflected in our variable life insurance policy reserves.
Currently we pay no taxes on such income and gains and impose no charge for
such taxes. We reserve the right to impose a charge in the future for taxes
incurred by us that are allocable to the policies.
We are entitled to certain tax benefits related to the investment of company
assets, including assets of the separate accounts. These tax benefits, which
may include the foreign tax credit and the corporate dividends received
deduction, are not passed back to you, since we are the owner of the assets
from which tax benefits may be derived.
WHEN WE WITHHOLD TAXES FROM DISTRIBUTIONS
Generally, unless you provide us with a satisfactory written election to the
contrary prior to the distribution, we are required to withhold income tax from
any proceeds we distribute as part of a taxable transaction under your policy.
If you do not wish us to withhold tax from the payment, or if we do not
withhold enough, you may have to pay later, and you may incur penalties under
the estimated income tax rules. In some cases, where generation skipping taxes
may apply, we may also be required to withhold for such taxes unless we are
provided satisfactory notification that no such taxes are due. States may also
require us to withhold tax on distributions to you and may not always follow
federal rules.
Special withholding rules apply to United States citizens residing outside of
the United States, foreign recipients, and certain U.S. entity recipients which
are treated as foreign because they fail to document their U.S. status before
payment is made. We do not discuss these rules here in detail. However, we may
require additional documentation in the case of payments made to United States
persons living abroad and non-United States persons (including U.S. entities
treated as foreign) prior to processing any requested transaction. For Puerto
Rico and other jurisdictions, income is considered U.S.-source income. We
anticipate requiring owners or beneficiaries of annuity contracts in Puerto
Rico which are not individuals to document their status to avoid 30% FATCA
withholding from U.S.-source income beginning in 2014.
Even though this section in the Prospectus discusses consequences to United
States individuals, you should be aware that the Foreign Account Tax Compliance
Act (FATCA) which applies beginning in 2014 to certain U.S.-source payments may
require AXA Equitable and its affiliates to obtain specified documentation of
an entity's status before payment is made in order to avoid punitive 30% FATCA
withholding. The FATCA rules are directed at foreign entities, but presume that
various U.S. entities are "foreign" unless the U.S. entity has documented its
U.S. status by providing Form W-9. For this reason, AXA Equitable and its
affiliates intend to require appropriate status documentation at purchase,
change of ownership, and affected payment transactions including death benefit
payments, beginning in 2014. FATCA and its related guidance is extraordinarily
complex and its effect varies considerably by type of payor, type of payee and
type of recipient.
POSSIBILITY OF FUTURE TAX CHANGES AND OTHER TAX INFORMATION
The U.S. Congress frequently considers legislation that, if enacted, could
change the tax treatment of life insurance policies or increase the taxes we
pay in connection with such policies. This could include special rules for
tax-exempt entities as well as for corporate or business use of policies.
Congress may also consider proposals to comprehensively reform or overhaul the
U.S. tax and retirement systems. For example, a President's Advisory Panel on
Federal Tax Reform announced its tax reform options several years ago. These
options make sweeping changes to many longstanding tax rules including certain
tax benefits currently available to newly purchased cash value life insurance
and deferred annuity products. More recently, in connection with deficit
reduction and tax reform, proposals have been considered to eliminate some or
all taxable expenditures or tax preferences together with some lowering of tax
rates. We cannot predict what if any, legislation will actually be proposed or
enacted based on these options or what type of grandfathering will be allowed
for existing life insurance policies. In addition, the Treasury Department may
amend existing regulations, issue regulations on the qualification of life
insurance and modified endowment contracts, or adopt new or clarifying
interpretations of existing law. Some areas of possible future guidance include
new rules for testing for policies issued on a special risk class basis. As a
result, there are areas of some uncertainty even under current laws, such that
future tax consequences of a policy could be other than as described herein.
State and local tax law or, if you are not a U.S. citizen and resident, foreign
tax law, may also affect the tax consequences to you, the insured person or
your beneficiary, and are subject to change or change in interpretation. Any
changes in federal, state, local or foreign tax law or interpretations could
have a retroactive effect both on our taxes and on the way your policy is taxed
or the tax benefit of life insurance policies. As explained later under "Cost
of insurance charge," the policy charges and tax qualification are based upon
2001 Commissioner's Standard Ordinary (CSO) tables. New tables may be developed
in the future and apply to new policies. Certain safe harbors may be available
under federal tax rules to permit certain policy changes without losing the
ability to use 2001 CSO based tables for testing. If we determine that certain
future changes to your policy would cause it to lose its ability to be tax
tested under the 2001 CSO mortality tables, we intend to refuse such
transactions which might have otherwise been available under your policy,
subject to our rules then in effect. We would take such action to help assure
that your policy can continue to qualify as life insurance for federal tax
testing under the 2001 CSO based tables.
OTHER INFORMATION
There are a number of tax benefits associated with variable life insurance
policies. For tax benefits to be available, the policy owner must have an
insurable interest in the life of the insured under applicable
39
TAX INFORMATION
state laws. Requirements may vary by state. A failure can, among other
consequences, cause the policy owner to lose anticipated favorable federal tax
treatment generally afforded life insurance.
For tax benefits to continue, the policy must continue to qualify as life
insurance. We reserve the right to restrict transactions that we determine
would cause your policy to fail to qualify as life insurance under federal tax
law. We also reserve the right to decline to make any change that may cause
your policy to lose its ability to be tested for federal income tax purposes
under the 2001 Commissioners Standard Ordinary Mortality Tables.
In addition to other requirements, federal tax law requires that the insurer,
and not the policy owner, have control of the underlying investment assets for
the policy to qualify as life insurance.
You may make transfers among Portfolios of MONY America Variable Account K, but
you may not direct the investments each Portfolio makes. If the IRS were to
conclude that you, as the investor, have control over these investments, then
the policy would no longer qualify as life insurance. You would be treated as
the owner of separate account assets and be currently taxed on any income or
gain the assets generate.
The IRS has provided some guidance on investor control, but many issues remain
unclear. One such issue is whether a policy owner can have too much investor
control if the variable life policy offers a large number of investment options
in which to invest policy account values and/or the ability to make frequent
transfers available under the policy. Although the Treasury Department
announced several years ago that it would provide formal guidance on this
issue, guidance as of the date of this prospectus has been limited. We do not
know if the IRS will provide any further guidance on the issue. If guidance is
provided, we do not know if it would apply retroactively to policies already in
force.
We believe that our variable life policies do not give policy owners investment
control over the investments underlying the various investment options;
however, the IRS could disagree with our position. The IRS could seek to treat
policy owners with a large number of investment options and/or the ability to
freely transfer among investment options as the owners of the underlying
Portfolio's shares. Accordingly, we reserve the right to modify your policy as
necessary to attempt to prevent you from being considered the owner of your
policy's proportionate share of the assets of MONY America Variable Account K.
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TAX INFORMATION
9. More information about policy features and benefits
--------------------------------------------------------------------------------
GUARANTEE PREMIUM TEST FOR NO LAPSE GUARANTEES
We offer two guarantees against policy lapse that depend on your having paid
specified amounts of premiums. We refer to these guarantees as our "no lapse
guarantee" and our optional "extended no lapse guarantee rider" and you can
read more about them in "You can guarantee that your policy will not terminate
before a certain date" in "Risk/benefit summary: Policy features, benefits and
risks," earlier in this Prospectus. You can also read more about our extended
no lapse guarantee rider in "Extended No Lapse Guarantee Rider" later in this
section.
GUARANTEE PREMIUM TEST. If your net policy account value is not sufficient to
pay a monthly deduction that has become due, we check to see if the cumulative
amount of premiums that you have paid to date less any partial withdrawals
(also known as the actual premium fund value) at least equals the cumulative
guarantee premiums due to date for either the no lapse guarantee or extended no
lapse guarantee rider and guarantee premiums for any optional benefit riders
(also known as the no lapse guarantee premium fund value). If it does, your
policy will not lapse, provided that any policy loan and accrued loan interest
does not exceed the policy account value and provided that one of the
guarantees is still in effect.
GUARANTEE PREMIUMS. The amounts of the monthly guarantee premiums for the no
lapse guarantee are set forth in your policy. The amounts of the monthly
guarantee premiums for any elected extended no lapse guarantee rider are set
forth in your policy if your death benefit option is Option A. The guarantee
premiums are actuarially determined at policy issuance and depend on the age
and other insurance risk characteristics of the insured person, as well as the
amount of the coverage and additional features you select. The guarantee
premiums may change if, for example, the face amount of the policy or the
long-term care specified amount changes, or a rider is eliminated, or if there
is a change in the insured person's risk characteristics. We will send you a
new policy page showing any change in your guarantee premiums. Any change will
be prospective only, and no change will extend a no lapse guarantee period or
the extended no lapse guarantee period beyond its original number of years.
PAID UP DEATH BENEFIT GUARANTEE
Subject to our approval, you may elect the "paid up" death benefit guarantee at
any time after the fourth year. This benefit provides an opportunity to lock in
all or a portion of your policy's death benefit without making additional
premium payments. Also, this benefit may be attractive to you if you are
concerned about the impact of poor future investment performance or increases
in policy charges on your policy's death benefit and potential policy lapse.
You may elect this benefit provided:
.. the insured's attained age is not more than 120;
.. you have death benefit Option A in effect (see "About your life insurance
benefit" in "Risk/benefit summary: Policy features, benefits and risks,"
earlier in this prospectus);
.. we are not waiving monthly charges under the terms of a disability waiver
rider;
.. you have not received any payment under a living benefits rider or under
the Long Term Care Services/SM/ Rider;
.. the policy is not in default or in a grace period as of the date of the
paid up death benefit guarantee;
.. the policy account value after the deduction of any proportionate surrender
charge would not be less than any outstanding policy loan and accrued loan
interest;
.. the policy is not on loan extension. (For more information about loan
extension, see "Accessing your money" earlier in this prospectus;
.. the election would not reduce the face amount (see below) below $100,000;
.. no current or future distribution from the policy will be required to
maintain its qualification as life insurance under the Internal Revenue
Code; and
.. You agree to re-allocate your fund values to the guaranteed interest option
and the AXA Strategic Allocation Series investment options. We reserve the
right to change the investment options available to you under the paid up
death benefit guarantee. (See "Restrictions on allocations and transfers,"
below).
The effective date of the paid up death benefit guarantee will be the beginning
of the policy month that next follows the date we approve your request. On the
effective date of this guarantee, all additional benefit riders and
endorsements will automatically terminate, except for any charitable legacy
rider or living benefits rider providing benefits for terminal illness. The
policy's net cash surrender value after the paid up death benefit guarantee is
in effect will equal the policy account value, less any applicable surrender
charges and any outstanding policy loan and accrued loan interest. The policy
death benefit will be Option A. We will continue to deduct policy charges from
your policy account value. As explained below, electing the paid up death
benefit guarantee may reduce your policy's face amount, which in turn may
result in the deduction of a surrender charge. You can request a personalized
illustration that will show you how your policy face amount could be reduced
and values could be affected by electing the paid up death benefit guarantee.
If you elect the paid up death benefit guarantee, the Long-Term Care
Services/SM/ Rider will automatically terminate subject to any Nonforfeiture
Benefit, if elected.
Our paid up death benefit guarantee is not available if you received monthly
benefit payments under the Long-Term Care Services/SM/ Rider before
continuation of coverage under any Nonforfeiture Benefit.
POSSIBLE REDUCTION OF FACE AMOUNT. The face amount of your policy after this
guarantee is elected is the lesser of (a) the face amount immediately before
the election or (b) the policy account
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value on the effective date of the election divided by a factor based on the
then age of the insured person. The factors are set forth in your policy. As a
general matter, the factors change as the insured person ages so that, if your
policy account value stayed the same, the result of the calculation under
clause (b) above would be lower the longer your policy is in force. We will
decline your election if the new face amount would be less than $100,000.
If electing the paid up death benefit guarantee causes a reduction in face
amount, we will deduct the same portion of any remaining surrender charge as we
would have deducted if you had requested that decrease directly (rather than
electing the paid up death benefit guarantee). (See "Risk/benefit summary:
Charges and expenses you will pay" earlier in this prospectus.) In certain
cases, a reduction in face amount may cause a policy to become a modified
endowment contract. See "Tax treatment of distributions to you (loans, partial
withdrawals, and full surrender)" under "Tax information."
<R>
RESTRICTIONS ON ALLOCATIONS AND TRANSFERS. While the paid up death benefit
guarantee is in effect, you will be restricted as to the investment options
available to you under the policy and the amounts that can be allocated to the
guaranteed interest option. You will be able to allocate up to 25% of your
unloaned policy account value to the guaranteed interest option. Currently, the
remainder of your unloaned policy account value must be allocated among the AXA
Strategic Allocation Series investment options. (See "About the Portfolios of
the Trusts" for the listing of AXA Strategic Allocation Series investment
options.) For information about restrictions on transfers to the Market
Stabilizer Option(R) if the paid up death benefit guarantee is in effect, see
the separate supplement accompanying this prospectus. When you elect the paid
up death benefit guarantee, we require that you provide us with new allocation
instructions. In the absence of these instructions, we will be unable to
process your request.
</R>
Also, transfers from one or more of our AXA Strategic Allocation Series
investment options into the guaranteed interest option will not be permitted if
such transfer would cause the value of your guaranteed interest option to
exceed 25% of your total unloaned policy account value. Loan repayments
allocated to your guaranteed interest option will be limited to an amount that
would not cause the value in your guaranteed interest option to exceed 25% of
your total unloaned policy account value. If the value in your guaranteed
interest option already exceeds 25% of your total unloaned policy account value
(including the repayment), no portion of the repayment will be allocated to the
guaranteed interest option. Any portion of the loan repayment that is not
allocated to the guaranteed interest option will be allocated in proportion to
the loan repayment amounts for the variable investment options you have
specified. If we do not have instructions, we will use the allocation
percentages for the variable investment options you specified when you elected
the paid up death benefit guarantee or the most recent instructions we have on
record. These restrictions would be lifted if the paid up death benefit
guarantee is terminated.
OTHER EFFECTS OF THIS GUARANTEE. After you have elected the paid up death
benefit guarantee, you may request a policy loan, make a loan repayment or
transfer policy account value among the guaranteed interest option and variable
investment options, subject to our rules then in effect. The following
transactions, however, are not permitted when this guarantee is in effect:
.. premium payments
.. partial withdrawals
.. changes to the policy's face amount or death benefit option
.. any change that would cause the policy to lose its current or future
qualification as life insurance under the Internal Revenue Code or require
a current or future distribution from the policy to avoid such
disqualification. (See "Tax treatment of distributions to you" under "Tax
information" earlier in this prospectus.)
TERMINATION OF THIS GUARANTEE. You may terminate the paid up death benefit
guarantee by written request to our Administrative Office. If terminated, the
policy face amount will not change. However, premiums may be required to keep
the policy from lapsing. If the guarantee terminates due to an outstanding loan
and accrued loan interest exceeding the policy account value, a payment will be
required to keep the policy and the guarantee in force pursuant to the policy's
grace period provision. The guarantee will also terminate if we make payment
under the living benefits rider or the Long Term Care Services/SM/ Rider. If
the guarantee terminates for any reason, it cannot be restored at a later date.
OTHER BENEFITS YOU CAN ADD BY RIDER
When you purchase this policy, you may be eligible for the following other
optional benefits we currently make available by rider:
.. extended no lapse guarantee -- Described below.
.. Long Term Care Services/SM/ Rider -- Described below.
.. disability deduction waiver -- This rider waives the monthly charges from
the policy account value if the insured is totally disabled, as defined in
the rider, for at least six consecutive months and the disability began
prior to the policy anniversary nearest the insured's 60th birthday. If
total disability begins on or after this date, the monthly charges are
waived to the earlier of the policy anniversary nearest the insured's age
65 or the termination of disability. Issue ages are 0-59. However coverage
is not provided until the insured's fifth birthday. The maximum amount of
coverage is $3,000,000 for all MONY America and affiliates' policies
in-force and applied for.
.. option to purchase additional insurance -- This rider allows you to
purchase a new policy for the amount of the option, on specific dates,
without evidence of insurability. The minimum option amount is $25,000 and
the maximum amount is $100,000. Issue ages are 0-37. The maximum amount of
coverage is $100,000 for all MONY America and affiliates' policies in-force
and applied for.
.. children's term insurance -- This rider provides term insurance on the
lives of the insured's children, stepchildren and legally adopted children
who are between the ages of 15 days to 18 years. The insured under the base
policy must be between the ages of 17 and 55. The maximum amount of
coverage is $25,000 for all MONY America and affiliates' policies in-force
and applied for.
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MORE INFORMATION ABOUT POLICY FEATURES AND BENEFITS
.. charitable legacy rider-Described below.
We add the following benefits automatically at no charge to each eligible
policy:
.. substitution of insured person rider -- (see "You can change your policy's
insured person" under "More information about procedures that apply to your
policy.")
.. living benefits rider -- (see "Your option to receive a terminal illness
living benefit" under "Accessing your money.")
.. paid up death benefit guarantee -- (see "Paid up death benefit guarantee"
earlier in this section).
.. loan extension endorsement -- (see "Loan extension (for guideline premium
test policies only)" under "Accessing your money.")
MONY America or your financial professional can provide you with more
information about these riders. Some of these benefits may be selected only at
the time your policy is issued. Some benefits are not available in combination
with others or may not be available in your state. The riders provide
additional terms, conditions and limitations, and we will furnish samples of
them to you on request. We can add, delete, or modify the riders we are making
available, at any time before they become effective as part of your policy.
See also "Tax information" earlier in this prospectus for certain possible tax
consequences and limitations of deleting riders or changing the death benefits
under a rider.
<R>
EXTENDED NO LAPSE GUARANTEE RIDER. An optional rider may be elected at issue
subject to our underwriting requirements that provides for a longer no lapse
guarantee period than the one in your base policy. The chart below details the
issue age and extended no lapse guarantee period for the rider.
</R>
-------------------------------------------------
ISSUE AGE EXTENDED NO LAPSE GUARANTEE PERIOD
-------------------------------------------------
0-35 40 years from issue age
36-45 Period extends until attained age 75
46-60 30 years from issue age
61-70 Period extends until attained age 90
-------------------------------------------------
If you elect this rider at issue, the investment options available to you will
be restricted to the guaranteed interest option and the AXA Strategic
Allocation Series investment options. You must provide proper allocation
instructions at the time you apply for this policy in order to have your policy
issued with this rider.
This rider, while in force, will prevent your policy from lapsing provided that
all of the following conditions apply:
.. The rider has not terminated;
.. The guarantee premium test for no lapse guarantees has been satisfied (see
"Guarantee premium test for no lapse guarantees" under "More information
about policy features and benefits");
.. The death benefit option under the policy has been Option A since it was
issued; and
.. Any policy loan and accrued loan interest does not exceed the policy
account value.
The monthly cost of this rider varies based on the individual characteristics
of the insured and the face amount of the policy. A change to the policy's face
amount may affect the cost of this rider. See "Risk/benefit summary: Charges
and expenses you will pay" for more information on the charges we deduct for
this rider. The rider will terminate upon our receipt of your written request
to terminate or on the effective date of a change to death benefit Option B
during the extended no lapse guarantee period. This rider cannot be reinstated
once terminated.
<R>
At issue and while the rider is in effect, we currently limit your investment
options under the policy to the AXA Strategic Allocation Series investment
options and the guaranteed interest option. For information about availability
of the Market Stabilizer Option(R) if you elect the extended no lapse guarantee
rider, see the separate supplement accompanying this prospectus. We also limit
your premium allocations, transfers from the variable investment options to the
guaranteed interest option and partial withdrawals from the variable investment
options, as described below and loan repayments as described in "Accessing your
money" earlier in this prospectus.
</R>
.. PREMIUM ALLOCATIONS. You may instruct us to allocate up to 25% of your net
premiums to the guaranteed interest option. The net premiums allocated to the
guaranteed interest option will be limited to an amount so that the value in
the guaranteed interest option does not exceed 25% of your total unloaned
policy account value. Any portion of a net premium that we cannot allocate to
the guaranteed interest option will be allocated to the variable investment
options in proportion to any amounts for the variable investment options that
you specified for that particular premium. If you did not specify, we will
allocate that portion of the net premium in proportion to the premium
allocation instructions for the variable investment options on record.
.. TRANSFERS FROM THE VARIABLE INVESTMENT OPTIONS TO THE GUARANTEED INTEREST
OPTION. You may make a transfer from one or more of the variable investment
options to the guaranteed interest option as long as the transfer would not
cause your value in the guaranteed interest option to exceed 25% of the total
unloaned policy account value. Otherwise, we will reject the transfer request.
If, at the time of a transfer request, the value of the guaranteed interest
option already makes up 25% or more of your total unloaned policy account
value, we will reject the transfer.
.. PARTIAL WITHDRAWALS FROM THE VARIABLE INVESTMENT OPTIONS. Partial withdrawals
from the variable investment options will be limited to an amount that will not
result in your value in the guaranteed interest option exceeding 25% of your
total unloaned policy account value. Any portion of the partial withdrawal not
taken from the variable investment options will be taken from the guaranteed
interest option. If you tell us how much of the partial withdrawal is to come
from the values in each of your variable investment options, the total amount
taken from the variable investment options will be divided among investment
options in proportion to the amounts to be withdrawn from the investment
options as you have specified. If you do not tell us, or if we are unable to
make the withdrawal in this manner, the amount taken from the variable
investment options will be divided among all of your variable investment
options in proportion to your values in each.
.. RIDER TERMINATION. The extended no lapse guarantee rider will terminate on
the earliest of the following:
-- the date your policy ends without value at the end of a grace period;
-- the date you surrender your policy;
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MORE INFORMATION ABOUT POLICY FEATURES AND BENEFITS
-- the expiration date of the extended no lapse guarantee period shown in
your policy;
-- the effective date of a change to death benefit Option B, during the
extended no lapse guarantee period;
-- the effective date of the election of the paid up death benefit guarantee;
-- the date that a new insured person is substituted for the original
insured person;
-- the effective date of a requested increase in face amount during the
extended no lapse guarantee period and after attained age 70 of the
insured;
-- the date the policy goes on loan extension; or
-- the beginning of the policy month that coincides with or next follows the
date we receive your written request to terminate the rider.
This rider cannot be reinstated once it has been terminated.
LONG TERM CARE SERVICES/SM/ RIDER. (PLEASE SEE APPENDIX II LATER IN THIS
PROSPECTUS FOR RIDER VARIATIONS.) The rider provides for the acceleration of
all or part of the policy death benefit as a payment each month as a result of
the insured person being a chronically ill individual who is receiving
qualified long-term care services in accordance with a plan of care./(1)/
Benefits accelerated under this rider will be treated as a lien against the
policy death benefit unless benefits are being paid under the optional
Nonforfeiture Benefit. While this rider is in force and before any continuation
of coverage under the optional Nonforfeiture Benefit, if elected, policy face
amount increases and death benefit option changes from Option A to Option B are
not permitted.
An individual qualifies as "chronically ill" if he has been certified by a
licensed health care practitioner as being unable to perform (without
substantial assistance from another person) at least two activities of daily
living for a period of at least 90 days due to a loss of functional capacity;
or requiring substantial supervision to protect such individual from threats to
health and safety due to cognitive impairment.
Benefits are payable once we receive: 1) a written certification from a U.S.
licensed health care practitioner that the insured person is a chronically ill
individual and is receiving qualified long-term care services in accordance
with a plan of care; 2) proof that the "elimination period," as discussed
below, has been satisfied; and 3) written notice of claim and proof of loss in
a form satisfactory to us. In order to continue monthly benefit payments, we
require recertification by a U.S. licensed health care practitioner every
twelve months from the date of the initial or subsequent certification that the
insured person is still a chronically ill individual receiving qualified
long-term care services in accordance with a plan of care. Otherwise, unless
earlier terminated due to a change in status of the insured or payout of the
maximum total benefit amount, benefit payments will terminate at the end of the
twelve month period. We also, at our own expense, may have the insured person
examined as often as we may reasonably require during a period of coverage.
This rider may not cover all of the costs associated with long-term care
services during the insured person's period of coverage.
The monthly rate charged for this rider varies based on the insured person's
sex, issue age, class of risk and tobacco user status, as well as the benefit
percentage selected and whether you selected the rider with or without the
optional Nonforfeiture Benefit. See "Risk/benefit summary: Charges and expenses
you will pay" earlier in this prospectus for more information on the charges we
deduct for this rider.
If the net policy value is insufficient to cover the total monthly deductions
for the base policy and any riders while benefits under this rider are being
paid, we will not lapse the policy. While monthly benefits under the Long-Term
Care Services/SM/ Rider are being paid, we will waive the monthly charge for
the Long-Term Care Services/SM/ Rider.
We will pay up to the maximum total benefit for qualified long-term care
services for the insured person for the duration of a period of coverage.
During any period of coverage, the maximum total benefit is determined as of
the first day of that period of coverage.
For policies with death benefit Option A, the maximum total benefit is equal to
the current long-term care specified amount. For policies with death benefit
Option A, the initial long term care specified amount is equal to the face
amount of the base policy at issue multiplied by the acceleration percentage.
You can select an acceleration percentage between 20% and 100%, subject to the
minimum initial long-term care specified amount of $100,000.
For policies with death benefit Option B, the maximum total benefit is equal to
the current long-term care specified amount, plus the policy account value. For
policies with death benefit Option B, the initial long term care specified
amount is equal to the face amount of the base policy multiplied by 100%. You
do not select an acceleration percentage.
During any Period of coverage (see below), the maximum Total Benefit is
determined as of the first day of that Period of coverage.
The initial long-term care specified amount may change due to subsequent policy
transactions and will be reduced at the end of a period of coverage to reflect
benefits paid during that period of coverage. Any request for a decrease in the
policy face amount may reduce the current long-term care specified amount to an
amount equal to the lesser of: (a) the new policy face amount multiplied by the
acceleration percentage selected, or (b) the long-term care specified amount
immediately prior to the face amount decrease. If you selected death benefit
Option A, any partial withdrawal will reduce the current long-term care
specified amount by the amount of the withdrawal, but not to less than the
policy account value minus the amount of the withdrawal. If you selected death
benefit Option B, the current long-term care specified amount will not be
reduced.
The maximum monthly benefit is the maximum amount we or an affiliated company
will pay in a month for qualified long-term care services for the insured
person. Affiliates include AXA Equitable Life Insurance Company, AXA Equitable
Life and Annuity Company, MONY Life Insurance Company, and U.S. Financial Life
Insurance Company. The maximum monthly benefit payment amount that you can
purchase from the issuer and its affiliates is limited to $50,000 per month,
per insured person. At issue, the maximum monthly benefit is equal to the
long-term care specified amount multiplied by the benefit percentage selected.
After that, the maximum monthly benefit
-------------
(1)For a more complete description of the terms used in this section and
conditions of this rider please consult your rider policy form.
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MORE INFORMATION ABOUT POLICY FEATURES AND BENEFITS
is equal to the maximum total benefit as of the first day of the first period
of coverage, or on the date coverage under the Nonforfeiture Benefit begins, if
earlier, multiplied by the benefit percentage selected.
Each month, the monthly benefit payment (a portion of which will be applied to
repay any outstanding policy loan) for qualified long-term care services for
the insured person is the lesser of:
1. the maximum monthly benefit (or lesser amount as requested, however, this
may not be less than $500); or
2. the monthly equivalent of 200% of the per day limit allowed by the Health
Insurance Portability and Accountability Act or "HIPAA." (We reserve the
right to increase this percentage.) To find out the current per day limit
allowed by HIPAA, go to www.irs.gov. We may also include this information in
your policy's annual report.
We will pay a proportionate amount of the monthly benefit payment for services
rendered for less than a full month.
When benefits are paid under this rider, we establish an accumulated benefit
lien. This accumulated benefit lien amount will equal the cumulative amount of
rider benefits paid (including any loan repayments) during a period of
coverage. We deduct the accumulated benefit lien amount from the base policy
death benefit if the insured person dies before the end of a period of
coverage. We also reduce the cash surrender value, as described below.
.. ELIMINATION PERIOD. The Long-Term Care Services/SM/ Rider has an elimination
period that is the required period of time while the rider is in force that
must elapse before any benefit is available to the insured person under this
rider. The elimination period is 90 days, beginning on the first day of any
qualified long-term care services that are provided to the insured person.
Generally, benefits under this rider will not be paid until the elimination
period is satisfied, and benefits will not be retroactively paid for the
elimination period. The elimination period can be satisfied by any combination
of days of a long-term care facility stay or days of home health care. The days
do not have to be continuous, but the elimination period must be satisfied
within a consecutive period of 24 months starting with the month in which such
services are first provided. If the elimination period is not satisfied within
this time period, you must submit a new claim for benefits under this rider.
This means that a new elimination period of 90 days must be satisfied within a
new 24 month period. The elimination period must be satisfied only once while
this rider is in effect.
.. PERIOD OF COVERAGE. The period of coverage is the period of time during which
the insured person receives services that are covered under the Long-Term Care
Services/SM/ Rider and for which benefits are payable. This begins on the first
day covered services are received after the end of the elimination period. A
period of coverage will end on the earliest of the following dates:
1. the date we receive the notice of release which must be sent to us when the
insured person is no longer receiving qualified long-term care services;
2. the date we discover the insured person is no longer receiving Qualified
Long-Term Care Services in accordance with the Plan of Care written for that
Period of Coverage;
3. the date you request that we terminate benefit payments under this rider;
4. the date the accumulated benefit lien amount equals the maximum total
benefit (or if your coverage is continued as a Nonforfeiture benefit, the
date the maximum total Nonforfeiture benefit has been paid out);
5. the date you surrender the policy (except to the extent of any Nonforfeiture
Benefit you may have under the rider);
6. the date we make a payment under the living benefits rider (for terminal
illness) if it occurs before coverage is continued as a Nonforfeiture
Benefit; or
7. the date of death of the insured person.
During a period of coverage before coverage is continued as a Nonforfeiture
Benefit:
1. Partial withdrawals, face amount decreases and premium payments are not
permitted.
2. The policy death benefit will not be less than the maximum total benefit.
3. Each monthly benefit payment will increase the accumulated benefit lien
amount by the amount of the payment--including any loan repayment. The
accumulated benefit lien amount will be deducted from the policy death
benefit in determining the insurance benefit we pay.
4. For the purposes of determining the cash surrender value of this policy, the
policy face amount and the unloaned policy account value will be reduced by
a percentage. For policies with death benefit Option A, the percentage will
be equal to the accumulated benefit lien amount divided by the policy face
amount. For policies with death benefit Option B, the percentage will be
equal to the accumulated benefit lien amount divided by the policy face
amount plus the unloaned policy account value. For all policies, the
percentage will not be more than 100% and the unloaned policy account value
will not be reduced by more than the accumulated benefit lien amount. Any
applicable surrender charge will be reduced on a pro rata basis for the
reduction in the policy face amount.
5. If there is an outstanding policy loan (and accrued loan interest) at the
time we make a benefit payment, an amount equal to a percentage of the loan
and accrued loan interest will be deducted from the monthly benefit payment
and used as a loan repayment and will reduce the amount otherwise payable to
you. This percentage will equal the monthly benefit payment divided by the
portion of the maximum total benefit that we have not accelerated to date.
6. The loan extension and paid up death benefit guarantee endorsements will no
longer be applicable at any time once benefits are paid under this rider.
7. Transfers of any unloaned policy account value allocated to the guaranteed
interest option or to the variable investment options are permitted. We do,
however, reserve the right to restrict the variable investment options
available to you during a period of coverage. If we exercise this right, we
will notify you of such restrictions in advance.
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After a period of coverage ends before coverage is continued as a Nonforfeiture
Benefit:
1. The base policy face amount and the unloaned policy account value will each
be reduced by a percentage. For policies with death benefit Option A, the
percentage will be equal to the accumulated benefit lien amount divided by
the base policy face amount. For policies with death benefit Option B, the
percentage will be equal to the accumulated benefit lien amount divided by
the base policy face amount plus the unloaned policy account value. For all
policies, the percentage will not be more than 100% and the unloaned policy
account value will not be reduced by more than the accumulated benefit lien
amount.
2. Any applicable surrender charges will be reduced on a pro rata basis for the
reduction in the policy face amount.
3. The long-term care specified amount will be reduced by a percentage equal to
the accumulated benefit lien amount, divided by the maximum total benefit.
If after this calculation, the long-term care specified amount would be
greater than the base policy face amount, the long-term care specified
amount will be further reduced to the base policy face amount.
4. For any subsequent period of coverage, the maximum monthly benefit will be
equal to the maximum monthly benefit during the initial period of coverage.
5. The premium fund values that are used by us to determine whether a guarantee
against policy lapse or a guarantee of death benefit protection is in effect
will also be reduced pro rata to the reduction in the base policy face
amount.
6. Any remaining balance for an outstanding loan and accrued loan interest will
not be reduced.
7. The accumulated benefit lien amount is reset to zero.
The reduction in your policy account value will reduce your unloaned value in
the guaranteed interest option and your values in the variable investment
options in accordance with your monthly deduction allocation percentages then
in effect. If we cannot make the reduction in this way, we will make the
reduction based on the proportion that your unloaned values in the guaranteed
interest option and your values in the variable investment options bear to the
total unloaned value in your policy account.
After the period of coverage has ended, we will provide you with notice of the
adjusted values.
If the entire maximum total benefit has been paid out, the period of coverage
will end, policy values will be adjusted as described above, and this rider
will terminate. If the net policy account value is insufficient to cover the
monthly deductions, the policy will terminate subject to the grace period
provision.
.. RIDER TERMINATION. This rider will terminate, and no further benefits will be
payable (except, where applicable, as may be provided under the "Extension of
Benefits" and the "Nonforfeiture Benefit" provisions of this rider), on the
earliest of the following:
1. at any time after the first policy year, on the next monthly anniversary on
or following the date we receive your written request to terminate this
rider;
2. upon termination or surrender of the policy;
3. the date of the insured person's death;
4. the date when the accumulated benefit lien amount equals the maximum total
benefit amount;
5. the effective date of the election of the paid up death benefit guarantee;
6. the date you request payment under a living benefits rider due to terminal
illness of the insured person (whether or not monthly benefit payments are
being made as of such date) if it occurs before coverage is continued as a
Nonforfeiture Benefit;
7. the date the policy goes on loan extension if it occurs before coverage is
continued as a Nonforfeiture Benefit; or
8. on the date that a new insured person is substituted for the original
insured person under the terms of any substitution of insured rider if it
occurs before coverage is continued as a Nonforfeiture Benefit.
If this rider does not terminate, it will remain in force as long as the policy
remains in force. This rider may be restored after termination if certain
qualifications for restoration of rider benefits are met.
.. EXTENSION OF BENEFITS. If your policy lapses, terminating this rider, while
the insured person is confined in a long-term care facility but before any
rider benefits have been paid for a current period of coverage, benefits for
that confinement may be payable provided that the confinement began while this
rider was in force and the confinement continues without interruption after
rider termination. Benefits may continue until the earliest of the following
dates: (a) the date the insured person is discharged from such confinement (in
this case, the maximum total benefit will be reduced by rider benefits that
have been paid out); (b) the date the maximum total benefit has been paid; or
(c) the date of death of the insured person. If benefits are payable under this
provision, there will be no death benefit payable to the beneficiary or
beneficiaries named in the base policy.
NONFORFEITURE BENEFIT
For a higher monthly charge, you can elect the Long-Term Care Services/SM/
Rider with the Nonforfeiture Benefit. The Nonforfeiture Benefit may continue
coverage under the rider in a reduced benefit amount in situations where
(a) the Long-Term Care Services/SM/ Rider would otherwise terminate; (b) you
have not already received benefits (including any loan repayments) that equal
or exceed the total charges deducted for the rider; and (c) your policy and
Long-Term Care Services/SM/ Rider were inforce for at least three policy years.
While the Nonforfeiture Benefit is in effect, all of the provisions of the
Long-Term Care Services/SM/ Rider remain applicable to you. The maximum total
Nonforfeiture Benefit will be the greater of:
(a)One month's maximum monthly benefit and
(b)The sum of all charges deducted for the Long-Term Care Services/SM/ Rider
(with the Nonforfeiture Benefit). This amount excludes any charges that may
have previously been waived while rider benefits were being paid.
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The maximum total Nonforfeiture Benefit will be reduced (but not below zero) by
all monthly benefit payments paid under the rider, including any loan
repayments and any payments made under the "Extension of Benefits" and
"Nonforfeiture Benefit" provisions. Also, the maximum total Nonforfeiture
Benefit will not exceed the maximum total benefit under the rider as of the
date coverage under the Nonforfeiture Benefit begins.
Coverage under the Nonforfeiture Benefit begins on the date the Long-Term Care
Services/SM/ Rider would otherwise terminate for one of the following reasons
(unless benefits are being continued under the "Extension of Benefits"
provision of the rider):
(1)We receive your written request to terminate the Long-Term Care Services/SM/
Rider;
(2)You surrender your policy;
(3)Your policy terminates without value at the end of a grace period; or
(4)You elect a Paid Up death benefit guarantee.
If benefits are being continued under the "Extension of Benefits" provision of
the rider and the maximum total benefit has not been paid out, coverage under
the Nonforfeiture Benefit begins on the date the insured is discharged from a
long-term care facility.
Once in effect, the Nonforfeiture benefit will continue long-term care coverage
under a paid-up status until the earliest of (a) the death of the insured, and
(b) the date the maximum total Nonforfeiture Benefit has been paid out and
reduced to zero during a period of coverage. If coverage is continued under the
Nonforfeiture Benefit, you will receive additional information regarding the
benefit, including the maximum total Nonforfeiture Benefit amount.
For tax information concerning the Long-Term Care Services/SM/ Rider, see "Tax
information" earlier in this prospectus.
CHARITABLE LEGACY RIDER. An optional rider may be elected at issue that
provides an additional death benefit of 1% of the base policy face amount to
the qualified charitable organization(s) chosen by the policy owner at no
additional cost. This rider is only available at issue and an accredited
charitable beneficiary must be named at that time. The rider is available for
base policy face amounts of $1 million and above, where the minimum benefit
would be $10,000 and the maximum benefit would be $100,000 (i.e. for face
amounts of $10 million and above).
If the base policy face amount is reduced after issue for any reason, the
benefit will be payable on the face amount at the time of the insured's death,
provided the face amount is at least $1 million. If the face amount has been
decreased below $1 million at the time of death, then no benefit is payable.
The designated beneficiary of this rider must be an accredited 501(c)
organization under IRS Code 170. See www.IRS.gov for valid organizations.
.. RIDER TERMINATION. The charitable legacy rider will terminate and no
further benefits will be paid on the earliest of the following:
-- the termination of the policy;
-- the surrender of the policy;
-- the date we receive the policy owner's written request to terminate the
rider;
-- the date of the insured's death; or
-- the date the policy is placed on loan extension.
If the base policy lapses and is subsequently restored, the rider will be
reinstated. The rider will not be terminated if the policy owner executes the
substitution of insured person rider or elects the paid up death benefit
guarantee.
VARIATIONS AMONG INCENTIVELIFE LEGACY(R) III POLICIES
Time periods and other terms and conditions described in this prospectus may
vary due to legal requirements in your state. These variations will be
reflected in your policy.
MONY America also may vary or waive the charges (including surrender charges)
and other terms of IncentiveLife Legacy(R) III where special circumstances
(including certain policy exchanges) result in sales or administrative expenses
or mortality risks that are different from those normally associated with
IncentiveLife Legacy(R) III. We will make such variations only in accordance
with uniform rules that we establish.
MONY America or your financial professional can advise you about any variations
that may apply to your policy or see Appendix II later in this prospectus for
more information.
YOUR OPTIONS FOR RECEIVING POLICY PROCEEDS
BENEFICIARY OF DEATH BENEFIT. You designate your base policy's beneficiary in
your policy application. You can change the beneficiary at any other time
during the insured person's life. If no beneficiary is living when the insured
person dies, we will pay the death benefit proceeds in equal shares to the
insured person's surviving children. If there are no surviving children, we
will instead pay the insured person's estate.
PAYMENT OF DEATH BENEFIT. We will pay any death benefit in a single sum. If the
beneficiary is a natural person (i.e., not an entity such as a corporation or a
trust) and so elects, death benefit proceeds can be paid through the "MONY
Access Account", which is a draft account that works in certain respects like
an interest-bearing checking account. In that case, we will send the
beneficiary a draftbook, and the beneficiary will have immediate access to the
proceeds by writing a draft for all or part of the amount of the death benefit
proceeds. MONY America will retain the funds until a draft is presented for
payment. Interest on the MONY America Access Account is earned from the date we
establish the account until the account is closed by your beneficiary or by us
if the account balance falls below the minimum balance requirement, which is
currently $1,000. The MONY Access Account is part of MONY America's general
account and is subject to the claims of our creditors. We will receive any
investment earnings during the period such amounts remain in the general
account. The MONY Access Account is not a bank account or a checking account
and it is not insured by the FDIC. Funds held by insurance companies in the
general account are guaranteed by the respective state guaranty association.
If a financial professional has assisted the beneficiary in preparing the
documents that are required for payment of the death benefit, we will
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send the MONY Access Account checkbook or check to the financial professional
within the periods specified for death benefit payments under "When we pay
policy proceeds," later in this prospectus. Our financial professionals will
take reasonable steps to arrange for prompt delivery to the beneficiary.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
You may cancel your policy by returning the policy along with a properly signed
and completed written request for cancellation to our Administrative Office or,
in some states, to the agent who sold it to you, by the 10th day after you
receive it (or such longer period as required under state law). Your coverage
will terminate as of the earlier of the date you sign your request to cancel
form or the business day we receive your request at our Administrative Office
(or, in some states, as of the business day the agent receives your request).
In most states, we will refund the policy account value calculated as of the
business day we receive your request for cancellation at our Administrative
Office (or, in some states, as of the business day the agent receives your
request), plus any charges that were deducted from premiums that were paid and
from the policy account value, less any outstanding loan and accrued loan
interest. In other states, we will refund the premiums that were paid, less any
outstanding loan and accrued loan interest. Your policy will set forth the
specific terms of your "Right to Examine" the policy.
In addition to the cancellation right described above, you have the right to
surrender your policy, rather than cancel it. Please see "Surrendering your
policy for its net cash surrender value," earlier in this prospectus.
Surrendering your policy may yield results different than canceling your
policy, including a greater potential for taxable income. In some cases, your
cash value upon surrender may be greater than your contributions to the policy.
Please see "Tax information," earlier in this prospectus for possible
consequences of cancelling your policy.
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10. More information about certain policy charges
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DEDUCTING POLICY CHARGES
PURPOSES OF POLICY CHARGES. The charges under the policies are designed to
cover, in the aggregate, our direct and indirect costs of selling,
administering and providing benefits under the policies. They are also
designed, in the aggregate, to compensate us for the risks of loss we assume
pursuant to the policies. If, as we expect, the charges that we collect from
the policies exceed our total costs in connection with the policies, we will
earn a profit. Otherwise, we will incur a loss. In addition to the charges
described below, there are also charges at the Portfolio level, which are
described in the prospectuses of the Portfolios in which the funds invest. For
additional information on all policy charges, see "Risk/benefit summary:
Charges and expenses you will pay."
TRANSACTION CHARGES
On the first day of each policy month, charges for cost of insurance and
certain other charges are deducted from your policy account value as specified
below (see "Periodic charges" below). In addition, charges may be deducted for
transactions such as premium payments, policy surrenders, requested decreases
in face amount, or transfers among investment options.
<R>
.. PREMIUM CHARGE. We deduct an amount not to exceed 8% from each premium
payment you send us, including any premium payments that increase the face
amount of your policy. We may increase or decrease the amount we deduct in the
future, but the amount we deduct will never exceed 8%. The premium charge is
designed in part to defray sales and tax expenses we incur that are based on
premium payments.
</R>
In addition, if the extended no lapse guarantee is in effect, we deduct 1% from
each premium payment during the extended no lapse guarantee period. This
additional charge is designed, in part, to compensate us for the additional
insurance risk we take on in providing this rider and the administrative costs
involved with maintaining it.
.. SURRENDER CHARGES. If you give up this policy for its net cash surrender
value before the end of the fifteenth policy year, we will subtract a surrender
charge from your policy account value. The surrender charge in the first policy
month of each policy year is shown in your policy. The initial surrender charge
will be between $11.72 and $48.52 per $1,000 of initial base policy face
amount. The surrender charge declines uniformly in equal monthly amounts within
each policy year until it reaches zero in the twelfth month of policy year
fifteen. The initial amount of surrender charge depends on each policy's
specific characteristics.
We will establish additional surrender charges for any increase in the base
policy face amount you request that represents an increase over the previous
highest base policy face amount. These charges will apply for fifteen years
from the effective date of such increase. Changes in the base policy face
amount resulting from a change in death benefit option will not be considered
in computing the previous highest face amount.
The surrender charges are contingent deferred sales charges. They are
contingent because you only pay them if you surrender your policy for its net
cash surrender value (or request a reduction in its face amount, as described
below). They are deferred because we do not deduct them from your premiums.
Because the surrender charges are contingent and deferred, the amount we
collect in a policy year is not related to actual expenses for that year.
The surrender charges assessed in connection with giving up this policy or with
reductions in policy face amount are intended, in part, to compensate us for
the fact that it takes us time to make a profit on your policy, and if you give
up or reduce the face amount of your policy in its early years, we do not have
the time to recoup our costs.
.. REQUEST A DECREASE IN YOUR POLICY'S FACE AMOUNT. If there is a requested base
policy face amount reduction within the first fifteen policy years or within
fifteen years following a face amount increase, or the paid-up death benefit
guarantee is elected for a reduced amount during a surrender charge period, a
proportionate surrender charge will be deducted from your policy account value.
Assuming you have not previously changed the base policy face amount, a
proportionate surrender charge will be determined by dividing the amount of the
reduction in base policy face amount by the initial base policy face amount of
insurance, and then multiplying that fraction by the surrender charge
immediately before the reduction. The proportionate surrender charge will not
exceed the unloaned policy account value at the time of the reduction. If a
proportionate surrender charge is made, the remaining surrender charge will be
reduced proportionately. We will not deduct a proportionate surrender charge if
the reduction resulted from a change in death benefit option or a partial
withdrawal.
If there have been prior increases in face amount, the decrease will be deemed
to cancel, first, each increase in reverse chronological order (beginning with
the most recent) and then the initial face amount. We will deduct from your
policy account value any surrender charge that is associated with any portion
of the face amount that is thus deemed to be canceled.
.. TRANSFERS AMONG INVESTMENT OPTIONS. Although we do not currently charge for
transfers among investment options, we reserve the right to make a transfer
charge up to $25 for each transfer of amounts among your investment options.
The transfer charge, if any, is deducted from the amounts transferred from your
policy's value in the variable investment options and in our guaranteed
interest option based on the proportion that the amount transferred from each
variable investment option and from our guaranteed interest option bears to the
total amount being transferred. Any such charge would be, in part, to
compensate us for our expenses in administering transfers. The charge will
never apply to a transfer of all of your variable investment option amounts to
our guaranteed interest option, or to any transfer pursuant to our automated
transfer service or asset rebalancing service.
.. ADDING A LIVING BENEFITS RIDER. If you elect the living benefits rider after
the policy is issued, we will deduct $100 from your policy account value at the
time of the transaction. This fee is designed, in part, to compensate us for
the administrative costs involved in processing the request.
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.. EXERCISE OF OPTION TO RECEIVE A TERMINAL ILLNESS "LIVING BENEFIT." If you
elect to receive a terminal illness "living benefit," we will deduct up to $250
from any living benefit we pay. This fee is designed, in part, to compensate us
for the administrative costs involved in processing the request.
SPECIAL SERVICES CHARGES
We deduct a charge for providing the special services described below. These
charges compensate us for the expense of processing each special service. For
certain services, we will deduct from your policy account value any withdrawal
charge that applies and the charge for the special service. Please note that we
may discontinue some or all of these services without notice.
.. WIRE TRANSFER CHARGE. We charge $90 for outgoing wire transfers. Unless you
specify otherwise, this charge will be deducted from the amount you request.
.. EXPRESS MAIL CHARGE. We charge $35 for sending you a check by express mail
delivery. This charge will be deducted from the amount you request.
.. POLICY ILLUSTRATION CHARGE. Currently, you are entitled to one free
illustration each policy year. For each additional illustration, we charge $25.
The charge for this service can be paid (i) using a credit card acceptable to
MONY America, (ii) by sending a check to our Administrative Office, or (iii) by
any other means we make available to you.
.. DUPLICATE POLICY CHARGE. We charge $35 for providing a copy of your policy.
The charge for this service can be paid (i) using a credit card acceptable to
MONY America, (ii) by sending a check to our Administrative Office, or (iii) by
any other means we make available to you.
.. POLICY HISTORY CHARGE. We charge a maximum of $50 for providing you a history
of policy transactions. If you request a policy history of less than 5 years
from the date of your request, there is no charge. If you request a policy
history of more than 5 years but less than 10 years from the date of your
request, the current charge is $25. For policy histories of 10 years or more,
the charge is $50. For all policy histories, we reserve the right to charge a
maximum of $50. The charge for this service can be paid (i) using a credit card
acceptable to MONY America, (ii) by sending a check to our Administrative
Office, or (iii) by any other means we make available to you.
<R>
.. CHARGE FOR RETURNED PAYMENTS. For each payment you make in connection with
your policy that is returned for insufficient funds, we will charge a maximum
of $25. The charge for this service can be paid (i) using a credit card
acceptable to MONY America, (ii) by sending a check to our Administrative
Office, or (iii) by any other means we make available to you.
</R>
PERIODIC CHARGES
On the first day of each month of the policy, charges for cost of insurance and
certain other charges are deducted from your policy account value as specified
below.
.. COST OF INSURANCE CHARGE. The cost of insurance rates vary depending on a
number of factors, including, but not limited to, the individual
characteristics of the insured, the face amount and the policy year. The
monthly cost of insurance charge is determined by multiplying the cost of
insurance rate that is then applicable to your policy by the amount we have at
risk under your policy divided by $1,000. Our amount at risk (also described in
your policy as "net amount at risk") on any date is the difference between
(a) the death benefit that would be payable if the insured person died on that
date and (b) the then total account value under the policy. A greater amount at
risk, or a higher cost of insurance rate, will result in a higher monthly
charge. The cost of insurance rates are intended, in part, to compensate us for
the cost of providing insurance to you under your policy.
Generally, the cost of insurance rate increases from one policy year to the
next. This happens automatically because of the insured person's increasing age.
On a guaranteed basis, we deduct between $0.02 and $83.34 per $1,000 of the
amount for which we are at risk under your policy from your policy account
value each month (but not beyond the policy anniversary date when the insured
person is attained age 121). As the amount for which we are at risk at any time
is the death benefit (calculated as of that time) minus your policy account
value at that time, changes in your policy account value resulting from the
performance of your investment options can affect your amount at risk, and as a
result, your cost of insurance. Subject to any necessary regulatory approvals,
we have the ability to raise our cost of insurance rates up to the guaranteed
maximum at any time.
The guaranteed maximum cost of insurance rates for gender neutral IncentiveLife
Legacy(R) III policies for insureds who are age 18 or above are based on the
2001 Commissioner's Standard Ordinary 80% Male, 20% Female, Smoker or Nonsmoker
Ultimate Age Nearest Birthday Mortality Tables. The guaranteed maximum cost of
insurance rates for gender neutral IncentiveLife Legacy(R) III policies for
insureds who are under age 18 are based on the 2001 Commissioner's Standard
Ordinary 80% Male, 20% Female Composite Ultimate Age Nearest Birthday Mortality
Table. For all other policies, for insureds who are age 18 or above, the
guaranteed maximum cost of insurance rates are based on the 2001 Commissioner's
Standard Ordinary Male or Female, Smoker or Nonsmoker Ultimate Age Nearest
Birthday Mortality Tables. For insureds who are under age 18, the guaranteed
maximum cost of insurance rates are based on the 2001 Commissioner's Standard
Ordinary Male or Female Composite Ultimate Age Nearest Birthday Mortality
Tables.
Our cost of insurance rates will generally be lower (except for gender-neutral
policies and in connection with certain employee benefit plans) if the insured
person is a female than if a male. They also will generally be lower for
non-tobacco users than tobacco users and lower for persons that have other
highly favorable health characteristics, as compared to those that do not. On
the other hand, insured persons who present particular health, occupational or
avocational risks may be charged higher cost of insurance rates and other
additional charges as specified in their policies. In addition, the current
(non-guaranteed) rates also vary depending on the duration of the policy (i.e.,
the length of time since the policy was issued), as well as the base policy
face amount.
For policies issued at ages 0-17, an insured person's cost of insurance rate is
not based on that person's status as a tobacco user or non-tobacco user.
Effective with the policy anniversary when that insured person reaches attained
age 18, non-tobacco user cost of insurance rates will be charged for that
person. That insured person may also be eligible for a more favorable rating,
subject to our underwriting rules.
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We offer lower rates for non-tobacco users only if they are at least age 18.
You may generally ask us to review the tobacco habits of an insured person
issue age 18 or over in order to change the charge from tobacco user rates to
non-tobacco user rates. The change, if approved, may result in lower future
cost of insurance rates beginning on the effective date of the change to
non-tobacco user rates.
The change will be based upon our general underwriting rules in effect at the
time of application, and may include criteria other than tobacco use status as
well as a definition of tobacco use different from that applicable at the time
this policy was issued.
Similarly, after the first policy year, you may generally request us to review
the insured person's rating to see if they qualify for a reduction in future
cost of insurance rates. Any such change will be based upon our general
underwriting rules in effect at the time of application, and may include
various criteria.
For more information concerning possible limitations on any ratings changes,
please see "Other information" in "Tax information" earlier in this prospectus.
The change in rates, if approved, will take effect at the beginning of the
policy month that coincides with or next follows the date we approve your
request. This change may have adverse tax consequences.
Our cost of insurance rates also depend on how large the face amount is at the
time we deduct the charge. Generally, the current (non-guaranteed) cost of
insurance rates are lower for face amounts of $250,000 and higher. For this
purpose, however, we will take into account all face amount decreases, whatever
their cause. Therefore, a decrease in face amount may cause your cost of
insurance rates to go up.
.. MORTALITY AND EXPENSE RISK CHARGE. We will collect a monthly charge for
mortality and expense risk. We are committed to fulfilling our obligations
under the policy and providing service to you over the lifetime of your policy.
Despite the uncertainty of future events, we guarantee that monthly
administrative and cost of insurance deductions from your policy account value
will never be greater than the maximum amounts shown in your policy. In making
this guarantee, we assume the mortality risk that insured persons (as a group)
will live for shorter periods than we estimated. When this happens, we have to
pay a greater amount of death benefit than we expected to pay in relation to
the cost of insurance charges we received. We also assume the expense risks
that the cost of issuing and administering policies will be greater than we
expected. This charge is designed, in part, to compensate us for taking these
risks.
We deduct a monthly charge at an annual rate of 0.85% during the first fifteen
policy years, with no charge in policy year 16 and thereafter, for mortality
and expense risks. We reserve the right to increase or decrease these charges
in the future, although they will never exceed 0.85%. This charge will be
calculated at the beginning of each policy month as a percentage of the amount
of the policy account that is then allocated to the variable investment options.
.. ADMINISTRATIVE CHARGE. Currently we deduct $10 from your policy account value
at the beginning of each policy month. We reserve the right to increase or
decrease this amount in the future, although it will never exceed $15 and will
never be deducted beyond the policy anniversary when the insured person is
attained age 121. In addition we deduct between $0.05 and $1.20 per $1,000 of
your initial base policy face amount and any face amount increase above the
previous highest face amount at the beginning of each policy month in the first
ten policy years and for ten years following a face amount increase. We reserve
the right to continue this charge beyond the ten year period previously
described, but it will never be deducted beyond the policy anniversary when the
insured person is attained age 121. The administrative charge is intended, in
part, to compensate us for the costs involved in administering the policy.
.. LOAN INTEREST SPREAD. We charge interest on policy loans but credit you with
interest on the amount of the policy account we hold as collateral for the
loan. The loan interest spread is the excess of the interest rate we charge
over the interest rate we credit. In no event will the loan interest spread
exceed 1%. We deduct the loan interest spread on each policy anniversary date,
or on loan termination, if earlier. For more information on how this charge is
deducted, see "Borrowing from your policy" under "Accessing your money" earlier
in this prospectus. As with any loan, the interest we charge on the loans is
intended, in part, to compensate us for the time value of the money we are
lending and the risk that you will not repay the loan.
OPTIONAL RIDER CHARGES
If you elect the following riders, the following charges, which are designed to
offset the cost of their respective riders, are deducted from your policy
account value, on the first day of each month of the policy. The costs of each
of the riders below are designed, in part, to compensate us for the additional
insurance risk we take on in providing each of these riders and the
administrative costs involved in administering them:
.. CHILDREN'S TERM INSURANCE. If you choose this rider, we deduct $0.50 per
$1,000 of children's term insurance from your policy account value each month
until the insured under the base policy reaches age 65 while the rider is in
effect. The charge for this rider does not vary depending upon the specifics of
your policy. However, we will continue to charge you for the rider, even after
all of your children, stepchildren and legally adopted children have reached
age 25 (when a child's coverage under the rider terminates), unless you notify
us in writing that you wish to cancel this rider.
<R>
.. DISABILITY DEDUCTION WAIVER. If you choose this rider, we deduct an amount
from your policy account value each month until the insured under the base
policy reaches age 65 while the rider is in effect. This amount is between 7%
and 132% (on a guaranteed basis) of the actual amounts of all the other monthly
charges (including charges for other riders you elected) deducted from your
policy account value, and depends on the individual insurance risk
characteristics of the insured person. The current monthly charges for this
rider are lower than the maximum monthly charges.
.. OPTION TO PURCHASE ADDITIONAL INSURANCE. If you choose this rider and while
it is in effect, we deduct between $0.04 and $0.17 per $1,000 from your policy
account value each month until the insured under the base policy reaches age 40.
.. EXTENDED NO LAPSE GUARANTEE. If you choose this rider we deduct between $0.01
and $0.05 per $1,000 of the initial base policy face amount, and per $1,000 of
any requested increase in the base policy face amount, from your policy account
value each month while the rider is in effect. The rate per $1,000 that is
charged depends upon the individual characteristics of the insured and the face
amount of the policy. Your premium charge will also be 1% higher while this
rider is in effect.
</R>
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We also deduct a monthly charge at an annual rate of 0.15% of the value in your
policy's variable investment options each month while the rider is in effect.
See "Premium charge" under "Deducting policy charges" earlier in this Section
for more information.
.. LONG-TERM CARE SERVICES/SM/ RIDER. If you choose this rider without the
Nonforfeiture Benefit, on a guaranteed basis, we may deduct between $0.22 and
$2.67 per $1,000 of the amount for which we are at risk under the rider from
your policy account value each month. If you choose this rider with the
Nonforfeiture Benefit, on a guaranteed basis, we may deduct between $0.25 and
$2.94 per $1,000 of the amount for which we are at risk under the rider. We
will deduct this charge until the insured reaches age 121 while the rider is in
effect, but not when rider benefits are being paid. The amount at risk under
the rider depends on the death benefit option selected under the policy. For
policies with death benefit Option A, the amount at risk for the rider is the
lesser of (a) the current policy face amount, minus the policy account value
(but not less than zero); and (b) the current long-term care specified amount.
For policies with death benefit Option B, the amount at risk for the rider is
the current long-term care specified amount. The current monthly charges for
this rider may be lower than the maximum monthly charges.
If you continue coverage under the Nonforfeiture Benefit, the charge for the
rider will no longer apply.
CHARGES THAT THE TRUSTS DEDUCT
The Trusts deduct charges for the following types of fees and expenses:
.. Management fees.
.. 12b-1 fees.
.. Operating expenses, such as trustees' fees, independent public accounting
firms' fees, legal counsel fees, administrative service fees, custodian
fees and liability insurance.
.. Investment-related expenses, such as brokerage commissions.
These charges are reflected in the daily share price of each portfolio. Since
shares of each Trust are purchased at their net asset value, these fees and
expenses are, in effect, passed on to the variable investment options and are
reflected in their unit values. Certain portfolios available under the contract
in turn invest in shares of other portfolios of AXA Premier VIP Trust and EQ
Advisors Trust and/or shares of unaffiliated portfolios (collectively, the
"underlying portfolios"). The underlying portfolios each have their own fees
and expenses, including management fees, operating expenses, and investment
related expenses such as brokerage commissions. For more information about
these charges, please refer to the prospectuses for the Trusts.
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11. More information about procedures that apply to your policy
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This section provides further detail about certain subjects that are addressed
in the previous pages. The following discussion generally does not repeat the
information already contained in those pages.
DATES AND PRICES AT WHICH POLICY EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your policy will occur. Other portions of this prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
DATE OF RECEIPT. Where this prospectus refers to the day when we receive a
payment, request, election, notice, transfer or any other transaction request
from you, we usually mean the day on which that item (or the last thing
necessary for us to process that item) arrives in complete and proper form at
our Administrative Office or via the appropriate telephone or fax number if the
item is a type we accept by those means. There are two main exceptions: if the
item arrives (1) on a day that is not a business day or (2) after the close of
a business day, then, in each case, we are deemed to have received that item on
the next business day.
BUSINESS DAY. Our "business day" is generally any day the New York Stock
Exchange ("NYSE") is open for regular trading and generally ends at 4:00 p.m.
Eastern Time (or as of an earlier close of regular trading). A business day
does not include a day on which we are not open due to emergency conditions
determined by the Securities and Exchange Commission. We may also close early
due to such emergency conditions. We compute unit values for our variable
investment options as of the end of each business day.
THIRD PARTY AGREEMENTS. If we have entered into a prior written agreement that
authorizes your financial professional to submit transfer requests and/or
changes to allocation instructions on your behalf, any such transfer request or
change to allocation instructions will be considered received by us on the
business day it arrives from your financial professional in complete and proper
form at our Administrative Office, or via the appropriate telephone or fax
number if the item is of the type we accept by those means. We may terminate
any such agreement at any time without prior notice.
PAYMENTS YOU MAKE. The following are reflected in your policy as of the date we
receive them:
.. premium payments received after the policy's Investment Start Date
(discussed below)
.. loan repayments and interest payments
REQUESTS YOU MAKE. The following transactions occur as of the date we receive
your request:
.. withdrawals
.. tax withholding elections
.. face amount decreases that result from a withdrawal
.. changes of allocation percentages for premium payments or monthly deductions
.. surrenders
.. changes of owner
.. changes of beneficiary
.. transfers from a variable investment option to the guaranteed interest
option
.. loans
.. transfers among variable investment options
.. assignments
.. termination of paid up death benefit guarantee
.. request to cancel your policy
The following transactions occur on your policy's next monthly anniversary that
coincides with or follows the date we approve your request:
.. changes in face amount
.. election of paid up death benefit guarantee
.. changes in death benefit option
.. changes of insured person
.. restoration of terminated policies
.. termination of any additional benefit riders you have elected
AUTOMATIC TRANSFER SERVICE. Transfers pursuant to our automatic transfer
service (dollar-cost averaging) occur as of the first day of each policy month.
If you request the automatic transfer service in your original policy
application, the first transfer will occur as of the first day of the second
policy month after your policy's initial Allocation Date. If you request this
service at any later time, we make the first such transfer as of your policy's
first monthly anniversary that coincides with or follows the date we receive
your request.
ASSET REBALANCING SERVICE. If you request the asset rebalancing service, the
first redistribution will be on the date you specify or the date we receive
your request, if later. However, no rebalancing will occur before your policy's
Allocation Date. Subsequent periodic rebalancings occur quarterly, semiannually
or annually, as you have requested.
DELAY IN CERTAIN CASES. We may delay allocating any payment you make to our
variable investment options, or any transfer, for the same reasons stated in
"Delay of variable investment option proceeds" later in this prospectus. We may
also delay such transactions for any other legally permitted purpose.
PRICES APPLICABLE TO POLICY TRANSACTIONS. If a transaction will increase or
decrease the amount you have in a variable investment option as of a certain
date, we process the transaction using the unit values for that option computed
as of that day's close of business, unless that day is not a business day. In
that case, we use unit values computed as of the next business day's close.
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MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
EFFECT OF DEATH OR SURRENDER. You may not make any surrender or partial
withdrawal request after the insured person has died. Also, all insurance
coverage ends on the date as of which we process any request for a surrender.
POLICY ISSUANCE
REGISTER DATE. When we issue a policy, we assign it a "register date," which
will be shown in the policy. We measure the months, years, and anniversaries of
your policy from your policy's register date.
.. If you submit the full minimum initial premium to your financial
professional at the time you sign the application, and we issue the policy
as it was applied for, then the register date will be the later of (a) the
date you signed part I of the policy application or (b) the date a medical
professional signed part II of the policy application.
.. If we do not receive your full minimum initial premium at our
Administrative Office before the issue date or if we issue the policy on a
different basis than you applied for, the register date initially will
appear on your policy as the date the policy is issued; however, we will
move the register date to the date we deliver the policy provided we
received your full minimum initial premium. This will ensure that premiums
and charges will commence on the same date as your insurance coverage. If
your policy was delivered on the 29th, 30th or 31st of the month, we will
move the register date to the 1st of the following month. We will determine
the interest rate applicable to the guaranteed interest option based on the
Register Date. This rate will be applied to funds allocated to the
guaranteed interest option as of the date we receive the full minimum
initial premium at our Administrative Office.
We may also permit an earlier than customary register date (a) for
employer-sponsored cases, to accommodate a common register date for all
employees or (b) to provide a younger age at issue. (A younger age at issue
reduces the monthly charges that we deduct under a policy.) The charges and
deductions commence as of the register date, even when we have permitted an
early register date. We may also permit policy owners to delay a register date
(up to three months) in employer-sponsored cases.
INVESTMENT START DATE. This is the business day your investment first begins to
earn a return for you. Generally, this is the later of: (1) the business day we
receive the full minimum initial premium at our Administrative Office: and
(2) the register date of your policy. Before this date, your initial premium
will be held in a non-interest bearing account.
COMMENCEMENT OF INSURANCE COVERAGE. You must give the full minimum initial
premium to your financial professional on or before the day the policy and all
amendments are delivered to you. No insurance under your policy will take
effect unless (1) the insured person is still living at the time such payment
and all delivery requirements are completed and (2) the information in the
application continues to be true and complete, without material change, as of
the date the policy and all amendments are delivered to you and all delivery
requirements have been completed and the full minimum initial premium is paid.
If you submit the full minimum initial premium with your application, we may,
subject to certain conditions, provide a limited amount of temporary insurance
on the proposed insured person. You may request and review a copy of our
temporary insurance agreement for more information about the terms and
conditions of that coverage.
NON-ISSUANCE. If, after considering your application, we decide not to issue a
policy, we will refund any premium you have paid, without interest.
AGE; AGE AT ISSUE. Unless the context in this prospectus requires otherwise, we
consider the insured person's "age" during any policy year to be his or her age
on his or her birthday nearest to the beginning of that policy year. For
example, the insured person's age for the first policy year ("age at issue") is
that person's age on whichever birthday is closer to (i.e., before or after)
the policy's register date.
WAYS TO MAKE PREMIUM AND LOAN PAYMENTS
CHECKS AND MONEY ORDERS. Premiums or loan payments generally must be paid by
check or money order drawn on a U.S. bank in U.S. dollars and made payable to
"MONY Life Insurance Company of America."
We prefer that you make each payment to us with a single check drawn on your
business or personal bank account. We also will accept a single money order,
bank draft or cashier's check payable directly to MONY Life Insurance Company
of America, although we must report such "cash equivalent" payments to the
Internal Revenue Service under certain circumstances. Cash and travelers'
checks, or any payments in foreign currency, are not acceptable. We will accept
third-party checks payable to someone other than MONY Life Insurance Company of
America and endorsed over to MONY Life Insurance Company of America only (1) as
a direct payment from a qualified retirement plan or (2) if they are made out
to a trustee who owns the policy and endorses the entire check (without any
refund) as a payment to the policy.
ASSIGNING YOUR POLICY
You may assign (transfer) your rights in a policy to someone else as collateral
for a loan, to effect a change of ownership or for some other reason, if we
agree. Collateral assignments may also sometimes be used in connection with
dividing the benefits of the policy under a split-dollar arrangement, which
will also have its own tax consequences. A copy of the assignment must be
forwarded to our Administrative Office. We are not responsible for any payment
we make or any action we take before we receive notice of the assignment or for
the validity of the assignment. An absolute assignment is a change of ownership.
Certain transfers for value may subject you to income tax and penalties and
cause the death benefit to lose its income-tax free treatment. Further, a gift
of a policy that has a loan outstanding may be treated as part gift and part
transfer for value, which could result in both gift tax and income tax
consequences. The IRS has issued regulations in both 2002 and 2003 concerning
split-dollar arrangements, including policies subject to collateral
assignments. The regulations provide both new and interim guidance as to the
taxation of such arrangements. These regulations address taxation issues in
connection with arrangements which are compensatory in nature, involve a
shareholder and corporation, or a donor and donee. See also discussion under
"Split-dollar and other employee benefit programs" and
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MORE INFORMATION ABOUT PROCEDURES THAT APPLY TO YOUR POLICY
"Estate, gift, and generation-skipping taxes" in the "Tax information" section
of this prospectus. You should consult your tax advisor prior to making a
transfer or assignment.
YOU CAN CHANGE YOUR POLICY'S INSURED PERSON
After the policy's second year, we will permit you to request that a new
insured person replace the existing one subject to our rules then in effect.
This requires that you provide us with adequate evidence that the proposed new
insured person meets our requirements for insurance. Other requirements are
outlined in your policy.
Upon making this change, the monthly insurance charges we deduct will be based
on the new insured person's insurance risk characteristics. In addition, any no
lapse guarantee and Long Term Care Services/SM/ Rider will terminate. It may
also affect the face amount that a policy will have if you subsequently elect
the paid up death benefit guarantee. The change of insured person will not,
however, affect the surrender charge computation for the amount of coverage
that is then in force.
Substituting the insured person is a taxable event and may, depending upon
individual circumstances, have other tax consequences as well. For example, the
change could cause the policy to be a "modified endowment contract" or to fail
the Internal Revenue Code's definition of "life insurance," or in some cases
require that we also distribute certain amounts to you from the policy. See
"Tax information" earlier in this prospectus. You should consult your tax
advisor prior to substituting the insured person. As a condition to
substituting the insured person we may require you to sign a form acknowledging
the potential tax consequences. In no event, however, will we permit a change
that we believe causes your policy to fail the definition of life insurance or
causes the policy to lose its ability to be tested under the 2001 CSO tables.
See "Other information" under "Tax information" earlier in this prospectus.
Also, if the paid up death benefit guarantee is in effect or your policy is on
loan extension, you may not request to substitute the insured person.
REQUIREMENTS FOR SURRENDER REQUESTS
Your surrender request must include the policy number, your name, your tax
identification number, the name of the insured person, and the address where
proceeds should be mailed. The request must be signed by you, as the owner, and
by any joint owner, collateral assignee or irrevocable beneficiary. We may also
require you to complete specific tax forms, or provide a representation that
your policy is not being exchanged for another life or annuity contract.
Finally, in order for your surrender request to be complete, you must return
your policy to us.
GENDER-NEUTRAL POLICIES
Congress and various states have from time to time considered legislation that
would require insurance rates to be the same for males and females. In
addition, employers and employee organizations should consider, in consultation
with counsel, the impact of Title VII of the Civil Rights Act of 1964 on the
purchase of IncentiveLife Legacy(R) III in connection with an
employment-related insurance or benefit plan. In a 1983 decision, the United
States Supreme Court held that, under Title VII, optional annuity benefits
under a deferred compensation plan could not vary on the basis of sex.
There will be no distinctions based on sex in the cost of insurance rates for
IncentiveLife Legacy(R) III policies sold in Montana. We will also make such
gender-neutral policies available on request in connection with certain
employee benefit plans. Cost of insurance rates applicable to a gender-neutral
policy will not be greater than the comparable male rates under a gender
specific Incentive Life Legacy(R) policy.
FUTURE POLICY EXCHANGES
We may at some future time, under certain circumstances and subject to
applicable law, allow the current owner of this policy to exchange it for a
universal life policy we are then offering. The exchange may or may not be
advantageous to you, based on all of the circumstances, including a comparison
of contractual terms and conditions and charges and deductions. We will provide
additional information upon request at such time as exchanges may be permitted.
BROKER TRANSACTION AUTHORITY
After your policy has been issued, we may accept transfer requests and changes
to your allocation instructions by telephone, mail, facsimile or electronically
from your financial professional, provided that we have your prior written
authorization to do so on file. Accordingly, AXA Equitable will rely on the
stated identity of the person placing instructions as authorized to do so on
your behalf. AXA Equitable will not be liable for any claim, loss, liability or
expenses that may arise out of such instructions. AXA Equitable will continue
to rely on this authorization until it receives your written notification at
its processing office that you have withdrawn this authorization. AXA Equitable
may change or terminate telephone or electronic or overnight mail transfer
procedures at any time without prior notice and restrict facsimile, internet,
telephone and other electronic transfer services because of disruptive transfer
activity. AXA Equitable may terminate any such authorization at any time
without prior notice.
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12. More information about other matters
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ABOUT OUR GENERAL ACCOUNT
This policy is offered to customers through various financial institutions,
brokerage firms and their affiliate insurance agencies. No financial
institution, brokerage firm or insurance agency has any liability with respect
to a policy's account value or any guaranteed benefits with which the policy
was issued. The Company is solely responsible to the policy owner for the
policy's account value and such guaranteed benefits. The general obligations
and any guaranteed benefits under the policy are supported by the Company's
general account and are subject to the Company's claims paying ability. An
owner should look to the financial strength of the Company for its claims
paying ability. Assets in the general account are not segregated for the
exclusive benefit of any particular policy or obligation. General account
assets are also available to the insurer's general creditors and the conduct of
its routine business activities, such as the payment of salaries, rent and
other ordinary business expenses. For more information about the Company's
financial strength, you may review its financial statements and/or check its
current rating with one or more of the independent sources that rate insurance
companies for their financial strength and stability. Such ratings are subject
to change and have no bearing on the performance of the variable investment
options. You may also speak with your financial representative.
The general account is subject to regulation and supervision by the
Commissioner of Insurance in the state of Arizona and to the insurance laws and
regulations of all jurisdictions where we are authorized to do business.
Interests under the policies in the general account have not been registered
and are not required to be registered under the Securities Act of 1933 because
of exemptions and exclusionary provisions that apply. The general account is
not required to register as an investment company under the Investment Company
Act of 1940 and it is not registered as an investment company under the
Investment Company Act of 1940. The policy is a "covered security" under the
federal securities laws.
We have been advised that the staff of the SEC has not reviewed the portions of
this prospectus that relate to the general account. The disclosure with regard
to the general account, however, may be subject to certain provisions of the
federal securities law relating to the accuracy and completeness of statements
made in prospectuses.
TRANSFERS OF YOUR POLICY ACCOUNT VALUE
TRANSFERS NOT IMPLEMENTED. If a request cannot be fully administered, only the
part that is in good order will be processed. Any part of the request that
cannot be processed will be denied and an explanation will be provided to you.
This could occur, for example, where the request does not comply with our
transfer limitations, or where you request transfer of an amount greater than
that currently allocated to an investment option.
Similarly, the automatic transfer service will terminate immediately if:
(1) your amount in the EQ/Money Market option is insufficient to cover the
automatic transfer amount; (2) your policy is in a grace period; (3) we receive
notice of the insured person's death; or (4) you have either elected the paid
up death benefit guarantee or your policy is placed on loan extension.
Similarly, the asset rebalancing program will terminate if either (2), (3) or
(4) occurs.
DISRUPTIVE TRANSFER ACTIVITY. You should note that the policy is not designed
for professional "market timing" organizations, or other organizations or
individuals engaging in a market timing strategy. The policy is not designed to
accommodate programmed transfers, frequent transfers or transfers that are
large in relation to the total assets of the underlying portfolio.
Frequent transfers, including market timing and other program trading or
short-term trading strategies, may be disruptive to the underlying portfolios
in which the variable investment options invest. Disruptive transfer activity
may adversely affect performance and the interests of long-term investors by
requiring a portfolio to maintain larger amounts of cash or to liquidate
portfolio holdings at a disadvantageous time or price. For example, when market
timing occurs, a portfolio may have to sell its holdings to have the cash
necessary to redeem the market timer's investment. This can happen when it is
not advantageous to sell any securities, so the portfolio's performance may be
hurt. When large dollar amounts are involved, market timing can also make it
difficult to use long-term investment strategies because a portfolio cannot
predict how much cash it will have to invest. In addition, disruptive transfers
or purchases and redemptions of portfolio investments may impede efficient
portfolio management and impose increased transaction costs, such as brokerage
costs, by requiring the portfolio manager to effect more frequent purchases and
sales of portfolio securities. Similarly, a portfolio may bear increased
administrative costs as a result of the asset level and investment volatility
that accompanies patterns of excessive or short-term trading. Portfolios that
invest a significant portion of their assets in foreign securities or the
securities of small-and mid-capitalization companies tend to be subject to the
risks associated with market timing and short-term trading strategies to a
greater extent than portfolios that do not. Securities trading in overseas
markets present time zone arbitrage opportunities when events affecting
portfolio securities values occur after the close of the overseas market but
prior to the close of the U.S. markets. Securities of small-and
mid-capitalization companies present arbitrage opportunities because the market
for such securities may be less liquid than the market for securities of larger
companies, which could result in pricing inefficiencies. Please see the
prospectuses for the underlying portfolios for more information on how
portfolio shares are priced.
We currently use the procedures described below to discourage disruptive
transfer activity. You should understand, however, that these procedures are
subject to the following limitations: (1) they primarily rely on the policies
and procedures implemented by the underlying portfolios; (2) they do not
eliminate the possibility that disruptive transfer activity, including market
timing, will occur or that portfolio performance will be affected by such
activity; and (3) the design of market timing procedures involves inherently
subjective judgments, which we seek to make in a fair and reasonable manner
consistent with the interests of all policy owners.
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MORE INFORMATION ABOUT OTHER MATTERS
We offer investment options with underlying portfolios that are part of AXA
Premier VIP Trust and EQ Advisors Trust (together, the "affiliated trusts"), as
well as investment options with underlying portfolios of outside trusts with
which AXA Equitable has entered participation agreements (the "unaffiliated
trusts" and, collectively with the affiliated trusts, the "trusts"). The
affiliated trusts have adopted policies and procedures regarding disruptive
transfer activity. They discourage frequent purchases and redemptions of
portfolio shares and will not make special arrangements to accommodate such
transactions. They aggregate inflows and outflows for each portfolio on a daily
basis. On any day when a portfolio's net inflows or outflows exceed an
established monitoring threshold, the affiliated trust obtains from us policy
owner trading activity. The affiliated trusts currently consider transfers into
and out of (or vice versa) the same variable investment option within a five
business day period as potentially disruptive transfer activity.
When a policy is identified in connection with potentially disruptive transfer
activity for the first time, a letter is sent to the policy owner explaining
that MONY America has a policy against disruptive transfer activity and that if
such activity continues, certain transfer privileges may be eliminated. If and
when the policy owner is identified a second time as engaged in potentially
disruptive transfer activity under the policy, we currently prohibit the use of
voice, fax and automated transaction services. We currently apply such action
for the remaining life of each affected policy. We or a trust may change the
definition of potentially disruptive transfer activity, the monitoring
procedures and thresholds, any notification procedures, and the procedures to
restrict this activity. Any new or revised policies and procedures will apply
to all policy owners uniformly. We do not permit exceptions to our policies
restricting disruptive transfer activity.
Each unaffiliated trust may have its own policies and procedures regarding
disruptive transfer activity. If an unaffiliated trust advises us that there
may be disruptive activity from one of our policy owners, we will work with the
unaffiliated trust to review policy owner trading activity. Each trust reserves
the right to reject a transfer that it believes, in its sole discretion, is
disruptive (or potentially disruptive) to the management of one of its
portfolios. Please see the prospectuses for the trusts for more information.
It is possible that a trust may impose a redemption fee designed to discourage
frequent or disruptive trading by policy owners. As of the date of this
prospectus, the trusts had not implemented such a fee. If a redemption fee is
implemented by a trust, that fee, like any other trust fee, will be borne by
the policy owner.
Policy owners should note that it is not always possible for us and the
underlying trusts to identify and prevent disruptive transfer activity. In
addition, because we do not monitor for all frequent trading at the separate
account level, policy owners may engage in frequent trading which may not be
detected, for example, due to low net inflows or outflows on the particular
day(s). Therefore, no assurance can be given that we or the trusts will
successfully impose restrictions on all potentially disruptive transfers.
Because there is no guarantee that disruptive trading will be stopped, some
policy owners may be treated differently than others, resulting in the risk
that some policy owners may be able to engage in frequent transfer activity
while others will bear the effect of that frequent transfer activity. The
potential effects of frequent transfer activity are discussed above.
TELEPHONE AND INTERNET REQUESTS
If you are a properly authorized person, you may make transfers between
investment options over the Internet as described earlier in this prospectus in
"How to make transfers" under "Transferring your money among our investment
options."
Also, you may make the following additional types of requests by calling the
number under "By toll-free phone" in "How to reach us" from a touch-tone phone,
if you are both the owner of the policy and the insured person, or through
axa.com or us.axa.com for those outside the U.S., if you are the individual
owner:
.. changes of premium allocation percentages
.. changes of address
.. request forms and statements
.. to request a policy loan (loan requests cannot be made online by corporate
policy owners)
.. enroll for electronic delivery and view statements/documents online
.. to pay your premium or make a loan repayment
For security purposes, all telephone requests are automatically tape-recorded
and are invalid if the information given is incomplete or any portion of the
request is inaudible. We have established procedures reasonably designed to
confirm that telephone instructions are genuine. These include requiring
personal identification information from the caller and providing subsequent
written confirmation of the instructions.
If you wish to enroll through axa.com or us.axa.com for those outside the U.S.,
or use ACH payments via AXA Equitable's Interactive Telephone Service, you must
first agree to the terms and conditions set forth in our axa.com or us.axa.com
for those outside the U.S., Online Services Agreement or our AXA Equitable's
Interactive Telephone Service Terms and Conditions, which you can find at our
website or request via the automated telephone system, respectively. We will
send you a confirmation letter by first class mail. Additionally, you will be
required to use a password and protect it from unauthorized use. We will
provide subsequent written confirmation of any transactions. We will assume
that all instructions received through axa.com or us.axa.com for those outside
the U.S., or AXA Equitable's Interactive Telephone Service from anyone using
your password are given by you; however, we reserve the right to refuse to
process any transaction and/or block access to axa.com or us.axa.com for those
outside the U.S., or AXA Equitable's Interactive Telephone Service if we have
reason to believe the instructions given are unauthorized.
If we do not employ reasonable procedures to confirm the genuineness of
telephone or Internet instructions, we may be liable for any losses arising out
of any act or omission that constitutes negligence, lack of good faith, or
willful misconduct. In light of our procedures, we will not be liable for
following telephone or Internet instructions that we reasonably believe to be
genuine.
We reserve the right to refuse to process any telephone or Internet
transactions if we have reason to believe that the request compromises the
general security and/or integrity of our automated systems (see discussion of
"Disruptive transfer activity" above).
Any telephone, Internet or fax transaction request that is not completed by the
close of a business day (which is usually 4:00 p.m. Eastern Time) will be
processed as of the next business day. During
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times of extreme market activity, or for other reasons, you may be unable to
contact us to make a telephone or Internet request. If this occurs, you should
submit a written transaction request to our Administrative Office. We reserve
the right to discontinue telephone or Internet transactions, or modify the
procedures and conditions for such transactions, without notifying you, at any
time.
SUICIDE AND CERTAIN MISSTATEMENTS
If an insured person commits suicide within certain time periods, the amount of
death benefit we pay will be limited as described in the policy. Also, if an
application misstated the age or gender of an insured person, we will adjust
the amount of any death benefit (and certain rider benefits), as described in
the policy (or rider).
WHEN WE PAY POLICY PROCEEDS
GENERAL. We will generally pay any death benefit, surrender, withdrawal, or
loan within seven days after we receive the request and any other required
items.
CLEARANCE OF CHECKS. We reserve the right to defer payment of that portion of
your policy account value that is attributable to a premium payment or loan
repayment made by check for a reasonable period of time (not to exceed 15 days)
to allow the check to clear the banking system.
DELAY OF GUARANTEED INTEREST OPTION PROCEEDS. We also have the right to defer
payment or transfers of amounts out of our guaranteed interest option for up to
six months. If we delay more than 30 days in paying you such amounts, we will
pay interest of at least 1.5% per year from the date we receive your request.
DELAY OF VARIABLE INVESTMENT OPTION PROCEEDS. We reserve the right to defer
payment of any death benefit, transfer, loan or other distribution that is
derived from a variable investment option if (a) the New York Stock Exchange is
closed (other than customary weekend and holiday closings) or trading on that
exchange is restricted; (b) the SEC has declared that an emergency exists, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to fairly determine the policy account value; or
(c) the law permits the delay for the protection of owners. If we need to defer
calculation of values for any of the foregoing reasons, all delayed
transactions will be processed at the next available unit values.
DELAY TO CHALLENGE COVERAGE. We may challenge the validity of your insurance
policy or any rider based on any material misstatements in an application you
have made to us. We cannot make such challenges, however, beyond certain time
limits set forth in the policy or rider. If the insured person dies within one
of these limits, we may delay payment of any proceeds until we decide whether
to challenge the policy.
CHANGES WE CAN MAKE
In addition to any of the other changes described in this prospectus, we have
the right to modify how we or MONY America Variable Account K operate. For
example, we have the right to:
.. combine two or more variable investment options or withdraw assets relating
to IncentiveLife Legacy(R) III from one investment option and put them into
another;
.. end the registration of, or re-register, MONY America Variable Account K
under the Investment Company Act of 1940;
.. operate MONY America Variable Account K under the direction of a
"committee" or discharge such a committee at any time;
.. restrict or eliminate any voting rights or privileges of policyown-ers (or
other persons) that affect MONY America Variable Account K;
.. operate MONY America Variable Account K, or one or more of the variable
investment options, in any other form the law allows. This includes any
form that allows us to make direct investments, in which case we may charge
MONY America Variable Account K an advisory fee. We may make any legal
investments we wish for MONY America Variable Account K. In addition, we
may disapprove any change in investment advisers or in investment policy
unless a law or regulation provides differently.
If we take any action that results in a material change in the underlying
investments of a variable investment option, we will notify you to the extent
required by law. We may, for example, cause the variable investment option to
invest in a mutual fund other than, or in addition to, the Trusts. If you then
wish to transfer the amount you have in that option to another investment
option, you may do so.
We may make any changes in the policy or its riders, require additional premium
payments, or make distributions from the policy or change a face amount to the
extent we deem necessary to ensure that your policy qualifies or continues to
qualify as life insurance for tax purposes. Any such change will apply
uniformly to all policies that are affected. We will give you written notice of
such changes. Subject to all applicable legal requirements, we also may make
other changes in the policies that do not reduce any net cash surrender value,
death benefit, policy account value, or other accrued rights or benefits.
Whether to make any of the above discussed changes is generally within our
discretion, although some such changes might require us to obtain regulatory or
policy owner approval. Whether regulatory or policy owner approval is required
would depend on the nature of the change and, in many cases, the manner in
which the change is implemented. You should not assume, therefore, that you
necessarily will have an opportunity to approve or disapprove any such changes.
We will, of course, comply with applicable legal requirements, including notice
to or approval by policy owners where required in particular cases.
It is not possible to foresee all of the circumstances under which we may find
it necessary or appropriate to exercise our right to make changes. Such
circumstances could, however, include changes in law, or interpretations
thereof; changes in financial or investment market conditions; changes in
accepted methods of conducting operations in the relevant market; or a desire
to achieve material operating economies or efficiencies.
REPORTS WE WILL SEND YOU
Shortly after the end of each year of your policy, we will send you a report
that includes information about your policy's current death benefit, policy
account value, cash surrender value (i.e., policy account value minus any
current surrender charge), policy loans, policy transactions and amounts of
charges deducted. We will send you individual
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notices to confirm your premium payments, loan repayments, transfers and
certain other policy transactions. Please promptly review all statements and
confirmations and notify us immediately at 1-800-777-6510 if there are any
errors.
DISTRIBUTION OF THE POLICIES
The policies are distributed by both AXA Advisors, LLC ("AXA Advisors") and AXA
Distributors, LLC ("AXA Distributors") (together, the "Distributors"). The
Distributors serve as principal underwriters of MONY America Variable Account
K. The offering of the policies is intended to be continuous.
AXA Advisors is an affiliate of MONY America, and AXA Distributors is an
indirect wholly owned subsidiary of AXA Equitable. The Distributors are under
the common control of AXA Financial, Inc. Their principal business address is
1290 Avenue of the Americas, New York, NY 10104. The Distributors are
registered with the SEC as broker-dealers and are members of the Financial
Industry Regulatory Authority, Inc. ("FINRA"). Both broker-dealers also act as
distributors for other MONY America life and annuity products.
The policies are sold by financial professionals of AXA Advisors and its
affiliates. The policies are also sold by financial professionals of
unaffiliated broker-dealers that have entered into selling agreements with the
Distributors ("Selling broker-dealers").
MONY America pays compensation to both Distributors based on policies sold.
MONY America may also make additional payments to the Distributors, and the
Distributors may, in turn, make additional payments to certain Selling
broker-dealers. All payments will be in compliance with all applicable FINRA
rules and other laws and regulations.
Although MONY America takes into account all of its distribution and other
costs in establishing the level of fees and charges under its policies, none of
the compensation paid to the Distributors or the Selling broker-dealers
discussed in this section of the Prospectus are imposed as separate fees or
charges under your policy. MONY America, however, intends to recoup amounts it
pays for distribution and other services through the fees and charges of the
policy and payments it receives for providing administrative, distribution and
other services to the Portfolios. For information about the fees and charges
under the policy, see "Risk/benefit summary: Charges and expenses you will pay"
and "More information about certain policy charges" earlier in this Prospectus.
As used below, the "target premium" is actuarially determined for each policy,
based on that policy's specific characteristics, as well as the policy's face
amount and Distributor, among other factors.
AXA ADVISORS COMPENSATION. MONY America pays compensation to AXA Advisors based
on premium payments made on the policies sold through AXA Advisors
("premium-based compensation"). The premium-based compensation will generally
not exceed 99% of premiums you pay up to one target premium in your policy's
first year; plus 8.5% of all other premiums you pay in your policy's first
year; plus 5.8% of all other premiums you pay in policy years two through five;
plus 3.8% of all other premiums you pay in policy years six through ten; plus
2.5% of all other premiums you pay in policy years eleven and later. AXA
Advisors, in turn, may pay a portion of the premium-based compensation received
from MONY America to the AXA Advisors financial professional and/or the Selling
broker-dealer making the sale. Your AXA Advisors financial professional will
receive premium-based compensation on a contract in combination with ongoing
annual compensation based on a percentage of the unloaned account value of the
policy sold ("asset-based compensation"). The compensation paid by AXA Advisors
varies among financial professionals and among Selling broker-dealers. AXA
Advisors also pays a portion of the compensation it receives to its managerial
personnel. When a policy is sold by a Selling broker-dealer, the Selling
broker-dealer, not AXA Advisors, determines the amount and type of compensation
paid to the Selling broker-dealer's financial professional for the sale of the
policy. Therefore, you should contact your financial professional for
information about the compensation he or she receives and any related
incentives, as described below.
AXA Advisors may receive compensation, and, in turn, pay its financial
professionals a portion of such fee, from third party investment advisors to
whom its financial professionals refer customers for professional management of
the assets within their policy.
AXA Advisors also pays its financial professionals and managerial personnel
other types of compensation including service fees, expense allowance payments
and health and retirement benefits. AXA Advisors also pays its financial
professionals, managerial personnel and Selling broker-dealers sales bonuses
(based on selling certain products during specified periods) and persistency
bonuses. AXA Advisors may offer sales incentive programs to financial
professionals and Selling broker-dealers who meet specified production levels
for the sales of both AXA Equitable policies and policies offered by other
companies. These incentives provide non-cash compensation such as stock options
awards and/or stock appreciation rights, expense-paid trips, expense-paid
education seminars and merchandise.
DIFFERENTIAL COMPENSATION. In an effort to promote the sale of MONY America
products, AXA Advisors may pay its financial professionals and managerial
personnel a greater percentage of premium-based compensation and/or asset-based
compensation for the sale of a MONY America policy than it pays for the sale of
a policy or other financial product issued by a company other than MONY
America. AXA Advisors may pay higher compensation on certain products in a
class than others based on a group or sponsored arrangement, or between older
and newer versions or series of the same policy. This practice is known as
providing "differential compensation." Differential compensation may involve
other forms of compensation to AXA Advisors personnel. Certain components of
the compensation paid to managerial personnel are based on whether the sales
involve MONY America policies. Managers earn higher compensation (and credits
toward awards and bonuses) if the financial professionals they manage sell a
higher percentage of MONY America policies than products issued by other
companies. Other forms of compensation provided to its financial professionals
include health and retirement benefits, expense reimbursements, marketing
allowances and premium-based payments, known as "overrides." For tax reasons,
AXA Advisors financial professionals qualify for health and retirement benefits
based solely on their sales of AXA Equitable policies and products sponsored by
affiliates.
The fact that AXA Advisors financial professionals receive differential
compensation and additional payments may provide an incentive for those
financial professionals to recommend a MONY America policy over a policy or
other financial product issued by a company not affiliated with MONY America.
However, under applicable rules of FINRA, AXA Advisors financial professionals
may only recommend to you products that they reasonably believe are suitable
for you based
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on the facts that you have disclosed as to your other security holdings,
financial situation and needs. In making any recommendation, financial
professionals of AXA Advisors may nonetheless face conflicts of interest
because of the differences in compensation from one product category to
another, and because of differences in compensation among products in the same
category. For more information, contact your financial professional.
<R>
AXA DISTRIBUTORS COMPENSATION. MONY America pays premium-based and asset-based
compensation (together "compensation") to AXA Distributors. Premium-based
compensation is paid based on MONY America policies sold through AXA
Distributor's Selling broker-dealers. Asset-based compensation is paid based on
the unloaned account value of policies sold through certain of AXA
Distributor's Selling broker-dealers. Premium-based compensation will generally
not exceed 135% of the premiums you pay up to one target premium in your
policy's first two years; plus 5% of all other premiums you pay in your
policy's first year; plus 2.8% of all other premiums you pay in policy years
two through ten, and 2% thereafter. Asset-based compensation up to 0.15% in
policy years 6-10 and up to 0.05% in policy years 11 and later may also be
paid. AXA Distributors, in turn, pays a portion of the compensation it receives
to the Selling broker-dealer making the sale. The compensation paid by AXA
Distributors varies among Selling broker-dealers.
</R>
The Selling broker-dealer, not AXA Distributors, determines the amount and type
of compensation paid to the Selling broker-dealer's financial professional for
the sale of the policy. Therefore, you should contact your financial
professional for information about the compensation he or she receives and any
related incentives, such as differential compensation paid for various products.
These payments above also include compensation to cover operating expenses and
marketing services under the terms of MONY America's distribution agreements
with AXA Distributors.
ADDITIONAL PAYMENTS BY AXA DISTRIBUTORS TO SELLING BROKER-DEALERS. AXA
Distributors may pay, out of its assets, certain Selling broker-dealers and
other financial intermediaries additional compensation in recognition of
services provided or expenses incurred. AXA Distributors may also pay certain
Selling broker-dealers or other financial intermediaries additional
compensation for enhanced marketing opportunities and other services (commonly
referred to as "marketing allowances"). Services for which such payments are
made may include, but are not limited to, the preferred placement of AXA
Equitable products on a company and/or product list; sales personnel training;
product training; business reporting; technological support; due diligence and
related costs; advertising, marketing and related services; conference; and/or
other support services, including some that may benefit the policy owner.
Payments may be based on ongoing sales, on the aggregate account value
attributable to policies sold through a Selling broker-dealer or such payments
may be a fixed amount. For certain selling broker-dealers, AXA Distributors
increases the marketing allowance as certain sales thresholds are met. AXA
Distributors may also make fixed payments to Selling broker-dealers, for
example in connection with the initiation of a new relationship or the
introduction of a new product.
Additionally, as an incentive for the financial professionals of Selling
broker-dealers to promote the sale of MONY America products, AXA Distributors
may increase the sales compensation paid to the Selling broker-dealer for a
period of time (commonly referred to as "compensation enhancements"). AXA
Distributors also has entered into agreements with certain selling
broker-dealers in which the selling broker-dealer agrees to sell certain AXA
Equitable policies exclusively.
These additional payments may serve as an incentive for Selling broker-dealers
to promote the sale of MONY America policies over policies and other products
issued by other companies. Not all Selling broker-dealers receive additional
payments, and the payments vary among Selling broker-dealers. The list below
includes the names of Selling broker-dealers that we are aware (as of
December 31, 2013) received additional payments. These additional payments
ranged from $1,256 to $5,706,371. MONY America and its affiliates may also have
additional business arrangements with Selling broker-dealers. For more
information, ask your financial professional.
1st Global Capital Corporation
Allstate Financial Services
American Portfolios Financial Services
Ameriprise Financial Services, Inc.
Ash Brokerage Corporation
BBVA Compass Investment Solutions, Inc.
CCO Investment Services Corporation
Centaurus Financial, Inc.
Citigroup Global Markets, Inc.
Commonwealth Financial Network
CUSO Financial Services, L.P.
Farmers Financial Solutions
Financial Network Investment Corporation
First Allied Securities, Inc.
First Citizens Investor Services, Inc.
First Tennessee Brokerage, Inc.
Geneos Wealth Management, Inc.
H.D. Vest Investment Securities, Inc.
Harvest Capital, LLC
ING Financial Partners
Investacorp, Inc.
Investment Professionals, Inc.
Investors Capital Corporation
James T. Borello & Co.
Janney Montgomery Scott, LLC
Key Investment Services, LLC
LPL Financial Corporation
Lucia Securities
Meridian Financial Group
Merrill Lynch Life Agency Inc.
Morgan Keegan & Co., Inc.
Morgan Stanley Smith Barney
Multi-Financial Securities Corporation
National Planning Holdings, Inc.
Next Financial Group, Inc.
NFP Securities, Inc.
PNC Investments
Prime Capital Services
PrimeVest Financial Services, Inc.
Raymond James Financial Services
RBC Capital Markets Corporation
Robert W Baird & Company
Securities America, Inc.
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Stifel, Nicolaus & Company, Inc.
Summit Brokerage Services, Inc
SunTrust Investments
The Advisor Group
Transamerica Financial Advisors, Inc.
Triad Advisors
U.S. Bancorp Investments, Inc.
UBS Financial Services, Inc.
Wells Fargo Network
LEGAL PROCEEDINGS
MONY America and its affiliates are parties to various legal proceedings. In
our view, none of these proceedings would be considered material with respect
to a policy owner's interest in MONY America Variable Account K, nor would any
of these proceedings be likely to have a material adverse effect on MONY
America Variable Account K, our ability to meet our obligations under the
policies, or the distribution of the policies.
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13. Financial statements of MONY America Variable Account K and MONY America
--------------------------------------------------------------------------------
The financial statements of MONY America Variable Account K/(1)/ as well as the
financial statements of MONY America, are in the Statement of Additional
Information ("SAI").
The financial statements of MONY America have relevance for the policies only
to the extent that they bear upon the ability of MONY America to meet its
obligations under the policies. You may request an SAI by writing to our
Administrative Office or by calling 1-800-777-6510 and requesting to speak with
a customer service representative.
-------------
(1)The financial statements of MONY America Variable Account K are not included
because it commenced operations on December 31, 2013.
62
FINANCIAL STATEMENTS OF MONY AMERICA VARIABLE ACCOUNT K AND MONY AMERICA
14. Personalized illustrations
--------------------------------------------------------------------------------
ILLUSTRATIONS OF POLICY BENEFITS
HYPOTHETICAL AND PERSONALIZED ILLUSTRATIONS. Illustrations are intended to show
how different fees, charges and rates of return can affect the values available
under a policy. Illustrations are based upon characteristics of a hypothetical
insured person as well as other assumed factors. This type of illustration is
called a HYPOTHETICAL ILLUSTRATION. Illustrations can also be based upon some
of the characteristics of the insured person under your policy as well as some
other policy feature choices you make such as the face amount, death benefit
option, premium payment amounts, definition of life insurance test, and assumed
rates of return (within limits). This type of illustration is called a
PERSONALIZED ILLUSTRATION. NO ILLUSTRATION WILL EVER SHOW YOU THE ACTUAL VALUES
AVAILABLE UNDER YOUR POLICY AT ANY GIVEN POINT IN TIME. This is because many
factors affect these values including: (i) the insured person's
characteristics; (ii) policy features you choose; (iii) actual premium payments
you make; (iv) loans or withdrawals you make; and (v) actual rates of return
(including the actual fees and expenses) of the underlying portfolios in which
your cash value is invested. Each hypothetical or personalized illustration is
accompanied by an explanation of the assumptions on which that illustration is
based. Because, as discussed below, these assumptions may differ considerably,
you should carefully review all of the disclosure that accompanies each
illustration.
DIFFERENT KINDS OF ILLUSTRATIONS. Both the hypothetical illustrations in this
prospectus and personalized illustrations can reflect the investment management
fees and expenses incurred in 2013 (or expected to be incurred in 2014, if such
amount is expected to be higher) of the available underlying portfolios in
different ways. An ARITHMETIC ILLUSTRATION uses the straight average of all of
the available underlying portfolios' investment management fees and expenses. A
WEIGHTED ILLUSTRATION computes the average of investment management fees and
expenses based upon the aggregate assets in the Portfolios at the end of 2013.
You may request a weighted illustration that computes the average of investment
management fees and expenses of just the EQ Advisors Trust portfolios, just the
AXA Strategic Allocation portfolios, or all portfolios. If you request, a
weighted illustration can also illustrate an assumed percentage allocation of
policy account values among the available underlying portfolios. A FUND
SPECIFIC ILLUSTRATION uses only the investment management fees and expenses of
a specific underlying portfolio. A HISTORICAL ILLUSTRATION reflects the actual
performance of one of the available underlying portfolios during a stated
period. When reviewing a weighted or fund specific illustration you should keep
in mind that the values shown may be higher than the values shown in other
illustrations because the fees and expenses that are assumed may be lower than
those assumed in other illustrations. When reviewing an historical illustration
you should keep in mind that values based upon past performance are no
indication of what the values will be based on future performance. You may also
request a personalized illustration of the guaranteed interest option.
THE EFFECT OF THE EXPENSE LIMITATION ARRANGEMENTS. The illustrations in this
prospectus do not reflect the expense limitation arrangements. Personalized
illustrations reflect the expense limitation arrangements that are in effect
with respect to certain of the Portfolios. If these fees and expenses were not
reduced to reflect the expense limitation arrangements, the values in the
personalized illustrations would be lower.
Currently, you are entitled to one free illustration each policy year. For each
additional illustration in a policy year, we charge $25. Appendix I to this
prospectus contains an arithmetic hypothetical illustration.
63
PERSONALIZED ILLUSTRATIONS
Appendix I: Hypothetical illustrations
--------------------------------------------------------------------------------
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES, NET CASH SURRENDER VALUES AND
ACCUMULATED PREMIUMS
<R>
The following tables illustrate the changes in death benefit, account value and
net cash surrender value of the policy under certain hypothetical circumstances
that we assume solely for this purpose. Each table illustrates the operation of
a policy for a specified issue age, premium payment schedule and face amount
under death benefit Option A or death benefit Option B. The first two tables
illustrate the policy if it is issued with the extended no lapse guarantee
rider with death benefit Option A (the only death benefit option available if
this rider is elected). The tables assume annual planned periodic premiums that
are paid at the beginning of each policy year for an insured person who is a
35-year-old preferred elite risk male non-tobacco user when the policy is
issued. The amounts shown are for the end of each policy year and assume that
all of the policy account value is invested in Portfolios that achieve
investment returns at constant hypothetical gross annual rates of 0%, 6% and
12% (i.e., before any investment management fees or other expenses are deducted
from the underlying Portfolio assets). These hypothetical investment return
assumptions are not intended as estimates of future performance of any
investment fund. MONY America is not able to predict the future performance of
the investment funds. Higher rates of return used in these illustrations
generally reflect rates of return for a number of broad stock indices over
long-term periods. Of course lower rates of return will lower the values
illustrated. For this reason, you should carefully consider the illustrations
at 0% and 6%. After the deduction of the arithmetic average of the investment
management fees and other expenses of all of the underlying Portfolios that are
available as investment options (as described below), the corresponding net
annual rates of return would be (1.09)%, 4.85% and 10.78% for policies with the
extended no lapse guarantee rider in effect. For policies without the rider in
effect, the corresponding net annual rates of return would be (1.20)%, 4.73%
and 10.66%. These net annual rates of return do not reflect the mortality and
expense risk charge, or other charges we deduct from your policy's value each
month. If the net annual rates of return did reflect these charges, the rates
shown would be lower; however, the values shown in the following tables reflect
all policy charges. Investment return reflects investment income and all
realized and unrealized capital gains and losses.
</R>
Tables are provided for each of the two death benefit options if the policy is
issued without the extended no lapse guarantee rider. The tables provided for
the policy issued with the extended no lapse guarantee rider only illustrate
death benefit Option A. The tables headed "Using Current Charges" assume that
the current rates for the following charges are deducted by MONY America in
each year illustrated: premium charge, administrative charge, cost of insurance
charge, mortality and expense risk charge (including MONY America's currently
planned reductions after the 15th policy year). The tables headed "Using
Guaranteed Charges" are the same, except that the maximum permitted rates for
all years are used for all charges. The tables do not reflect any charge that
we reserve the right to make but are not currently making. The tables assume
that (i) no optional rider benefits (other than the extended no lapse guarantee
rider, if applicable) have been elected, (ii) no loans or withdrawals are made,
(iii) no changes in coverage are requested and (iv) no change in the death
benefit option is requested.
<R>
With respect to fees and expenses deducted from assets of the underlying
Portfolios, the amounts shown in the tables reflect (1) investment management
fees equivalent to an effective annual rate of 0.10% for policies with the
extended no lapse guarantee rider in effect (0.56% for policies without the
rider in effect), and (2) an assumed average asset charge for all other
expenses of the underlying Portfolios equivalent to an effective annual rate of
0.99% for policies with the extended no lapse guarantee rider in effect (0.64%
for policies without the rider in effect). These rates are the arithmetic
average for all Portfolios that are available as investment options for each
table. In other words, they are based on the hypothetical assumption that
policy account values are allocated equally among the variable investment
options that are available. THESE RATES DO NOT REFLECT EXPENSE LIMITATION
ARRANGEMENTS IN EFFECT WITH RESPECT TO CERTAIN OF THE UNDERLYING PORTFOLIOS. IF
THOSE ARRANGEMENTS HAD BEEN ASSUMED, THE POLICY VALUES WOULD BE HIGHER THAN
THOSE SHOWN IN THE FOLLOWING TABLES. The actual rates associated with any
policy will vary depending upon the actual allocation of policy values among
the investment options.
</R>
The second column of each table shows the amount you would have at the end of
each policy year if an amount equal to the assumed planned periodic premiums
were invested to earn interest, after taxes, at 5% annually. This is not a
policy value. It is included for comparison purposes only.
Because your circumstances will no doubt differ from those in the illustrations
that follow, values under your policy will differ, in most cases substantially.
Upon request, we will furnish you with a personalized illustration as described
under "Illustrations of policy benefits" in "Personalized illustrations"
earlier in this prospectus.
I-1
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
<R>
INCENTIVELIFE LEGACY(R) III WITH EXTENDED NO LAPSE GUARANTEE RIDER
$400,000 FACE AMOUNT
MALE, ISSUE AGE 35, PREFERRED ELITE NON-TOBACCO USER UNDERWRITING RISK CLASS
INITIAL DEATH BENEFIT IS OPTION A
INITIAL ANNUAL PLANNED PERIODIC PREMIUM: $2,160*
USING CURRENT CHARGES
USING GUIDELINE PREMIUM TEST
</R>
<R>
------------------------------------------------------------------------------------------------------------
DEATH BENEFIT ACCOUNT VALUE NET CASH SURRENDER VALUE
------------- ------------- ------------------------
PREMIUMS
END OF ACCUMULATED
POLICY AT 5% INTEREST ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
YEAR PER YEAR ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF:
------------------------------------------------------------------------------------------------------------
0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS
------------------------------------------------------------------------------------------------------------
1 $ 2,268 $400,000 $400,000 $ 400,000 $ 1,023 $ 1,110 $ 1,197 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
2 $ 4,649 $400,000 $400,000 $ 400,000 $ 2,022 $ 2,258 $ 2,506 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
3 $ 7,150 $400,000 $400,000 $ 400,000 $ 3,034 $ 3,488 $ 3,981 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
4 $ 9,775 $400,000 $400,000 $ 400,000 $ 4,027 $ 4,765 $ 5,601 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
5 $ 12,532 $400,000 $400,000 $ 400,000 $ 4,999 $ 6,092 $ 7,377 $ 0 $ 0 $ 377
------------------------------------------------------------------------------------------------------------
6 $ 15,427 $400,000 $400,000 $ 400,000 $ 5,951 $ 7,469 $ 9,327 $ 0 $ 817 $ 2,675
------------------------------------------------------------------------------------------------------------
7 $ 18,466 $400,000 $400,000 $ 400,000 $ 6,881 $ 8,896 $ 11,463 $ 593 $ 2,608 $ 5,175
------------------------------------------------------------------------------------------------------------
8 $ 21,657 $400,000 $400,000 $ 400,000 $ 7,783 $ 10,370 $ 13,798 $ 1,871 $ 4,458 $ 7,886
------------------------------------------------------------------------------------------------------------
9 $ 25,008 $400,000 $400,000 $ 400,000 $ 8,660 $ 11,893 $ 16,353 $ 3,140 $ 6,373 $ 10,833
------------------------------------------------------------------------------------------------------------
10 $ 28,527 $400,000 $400,000 $ 400,000 $ 9,516 $ 13,471 $ 19,152 $ 4,400 $ 8,355 $ 14,036
------------------------------------------------------------------------------------------------------------
15 $ 48,940 $400,000 $400,000 $ 400,000 $15,826 $ 24,993 $ 40,923 $15,826 $ 24,993 $ 40,923
------------------------------------------------------------------------------------------------------------
20 $ 74,994 $400,000 $400,000 $ 400,000 $22,093 $ 40,205 $ 78,420 $22,093 $ 40,205 $ 78,420
------------------------------------------------------------------------------------------------------------
25 $ 108,245 $400,000 $400,000 $ 400,000 $27,088 $ 58,444 $ 139,861 $27,088 $ 58,444 $ 139,861
------------------------------------------------------------------------------------------------------------
30 $ 150,683 $400,000 $400,000 $ 400,000 $30,012 $ 79,706 $ 240,944 $30,012 $ 79,706 $ 240,944
------------------------------------------------------------------------------------------------------------
35 $ 204,846 $400,000 $400,000 $ 474,452 $29,491 $103,605 $ 409,011 $29,491 $103,605 $ 409,011
------------------------------------------------------------------------------------------------------------
40 $ 273,974 $400,000 $400,000 $ 735,430 $23,909 $129,878 $ 687,318 $23,909 $129,878 $ 687,318
------------------------------------------------------------------------------------------------------------
45 $ 362,200 $400,000 $400,000 $1,207,575 $ 8,498 $156,920 $1,150,071 $ 8,498 $156,920 $1,150,071
------------------------------------------------------------------------------------------------------------
50 $ 474,801 ** $400,000 $2,006,011 ** $179,062 $1,910,486 ** $179,062 $1,910,486
------------------------------------------------------------------------------------------------------------
55 $ 618,512 ** $400,000 $3,308,420 ** $187,600 $3,150,876 ** $187,600 $3,150,876
------------------------------------------------------------------------------------------------------------
60 $ 801,928 ** $400,000 $5,241,609 ** $158,236 $5,189,711 ** $158,236 $5,189,711
------------------------------------------------------------------------------------------------------------
65 $1,036,018 ** $400,000 $8,698,695 ** $167,770 $8,612,569 ** $167,770 $8,612,569
------------------------------------------------------------------------------------------------------------
</R>
<R>
* The illustrations assume that planned periodic premiums are paid at the
start of each policy year. The death benefit, account value and net cash
surrender value will differ if premiums are paid in different amounts or
frequencies.
** Policy lapses unless additional payments are made.
</R>
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND NET CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGED 0%, 6% OR
12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR
INDIVIDUAL POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL
INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY
PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS
COULD BE NEGATIVE.
I-2
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
<R>
INCENTIVELIFE LEGACY(R) III WITH EXTENDED NO LAPSE GUARANTEE RIDER
$400,000 FACE AMOUNT
MALE, ISSUE AGE 35, PREFERRED ELITE NON-TOBACCO USER UNDERWRITING RISK CLASS
INITIAL DEATH BENEFIT IS OPTION A
INITIAL ANNUAL PLANNED PERIODIC PREMIUM: $2,160*
USING GUARANTEED CHARGES
USING GUIDELINE PREMIUM TEST
</R>
<R>
------------------------------------------------------------------------------------------------------------
DEATH BENEFIT ACCOUNT VALUE NET CASH SURRENDER VALUE
------------- ------------- ------------------------
PREMIUMS
END OF ACCUMULATED
POLICY AT 5% INTEREST ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
YEAR PER YEAR ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF:
------------------------------------------------------------------------------------------------------------
0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS
------------------------------------------------------------------------------------------------------------
1 $ 2,268 $400,000 $400,000 $400,000 $ 731 $ 808 $ 886 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
2 $ 4,649 $400,000 $400,000 $400,000 $1,424 $ 1,624 $ 1,834 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
3 $ 7,150 $400,000 $400,000 $400,000 $2,084 $ 2,452 $ 2,854 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
4 $ 9,775 $400,000 $400,000 $400,000 $2,696 $ 3,275 $ 3,937 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
5 $ 12,532 $400,000 $400,000 $400,000 $3,264 $ 4,099 $ 5,093 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
6 $ 15,427 $400,000 $400,000 $400,000 $3,787 $ 4,919 $ 6,325 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
7 $ 18,466 $400,000 $400,000 $400,000 $4,252 $ 5,724 $ 7,629 $ 0 $ 0 $ 1,341
------------------------------------------------------------------------------------------------------------
8 $ 21,657 $400,000 $400,000 $400,000 $4,650 $ 6,500 $ 8,999 $ 0 $ 588 $ 3,087
------------------------------------------------------------------------------------------------------------
9 $ 25,008 $400,000 $400,000 $400,000 $4,973 $ 7,239 $10,435 $ 0 $ 1,719 $ 4,915
------------------------------------------------------------------------------------------------------------
10 $ 28,527 $400,000 $400,000 $400,000 $5,213 $ 7,927 $11,932 $ 97 $ 2,811 $ 6,816
------------------------------------------------------------------------------------------------------------
15 $ 48,940 $400,000 $400,000 $400,000 $5,135 $10,466 $20,478 $5,135 $10,466 $20,478
------------------------------------------------------------------------------------------------------------
20 $ 74,994 $400,000 $400,000 $400,000 $2,629 $10,838 $31,237 $2,629 $10,838 $31,237
------------------------------------------------------------------------------------------------------------
25 $ 108,245 $400,000 $400,000 $400,000 $ 0 $ 5,272 $42,245 $ 0 $ 5,272 $42,245
------------------------------------------------------------------------------------------------------------
30 $ 150,683 $400,000 $400,000 $400,000 $ 0 $ 0 $50,236 $ 0 $ 0 $50,236
------------------------------------------------------------------------------------------------------------
35 $ 204,846 $400,000 $400,000 $400,000 $ 0 $ 0 $46,633 $ 0 $ 0 $46,633
------------------------------------------------------------------------------------------------------------
40 $ 273,974 $400,000 $400,000 $400,000 $ 0 $ 0 $13,042 $ 0 $ 0 $13,042
------------------------------------------------------------------------------------------------------------
45 $ 362,200 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
50 $ 474,801 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
55 $ 618,512 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
60 $ 801,928 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
65 $1,036,018 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
</R>
<R>
* The illustrations assume that planned periodic premiums are paid at the
start of each policy year. The death benefit, account value and net cash
surrender value will differ if premiums are paid in different amounts or
frequencies.
** Policy lapses unless additional payments are made.
</R>
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND NET CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGED 0%, 6% OR
12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR
INDIVIDUAL POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL
INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY
PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS
COULD BE NEGATIVE.
I-3
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
<R>
INCENTIVELIFE LEGACY(R) III
$400,000 FACE AMOUNT
MALE, ISSUE AGE 35, PREFERRED ELITE NON-TOBACCO USER UNDERWRITING RISK CLASS
INITIAL DEATH BENEFIT IS OPTION A
INITIAL ANNUAL PLANNED PERIODIC PREMIUM: $2,160*
USING CURRENT CHARGES
USING GUIDELINE PREMIUM TEST
</R>
<R>
------------------------------------------------------------------------------------------------------------
DEATH BENEFIT ACCOUNT VALUE NET CASH SURRENDER VALUE
------------- ------------- ------------------------
PREMIUMS
END OF ACCUMULATED
POLICY AT 5% INTEREST ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
YEAR PER YEAR ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF:
------------------------------------------------------------------------------------------------------------
0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS
------------------------------------------------------------------------------------------------------------
1 $ 2,268 $400,000 $400,000 $ 400,000 $ 1,109 $ 1,199 $ 1,289 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
2 $ 4,649 $400,000 $400,000 $ 400,000 $ 2,192 $ 2,440 $ 2,700 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
3 $ 7,150 $400,000 $400,000 $ 400,000 $ 3,288 $ 3,767 $ 4,289 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
4 $ 9,775 $400,000 $400,000 $ 400,000 $ 4,362 $ 5,145 $ 6,032 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
5 $ 12,532 $400,000 $400,000 $ 400,000 $ 5,415 $ 6,577 $ 7,946 $ 0 $ 0 $ 946
------------------------------------------------------------------------------------------------------------
6 $ 15,427 $400,000 $400,000 $ 400,000 $ 6,446 $ 8,065 $ 10,047 $ 0 $ 1,413 $ 3,395
------------------------------------------------------------------------------------------------------------
7 $ 18,466 $400,000 $400,000 $ 400,000 $ 7,454 $ 9,607 $ 12,350 $ 1,166 $ 3,319 $ 6,062
------------------------------------------------------------------------------------------------------------
8 $ 21,657 $400,000 $400,000 $ 400,000 $ 8,434 $ 11,201 $ 14,870 $ 2,522 $ 5,289 $ 8,958
------------------------------------------------------------------------------------------------------------
9 $ 25,008 $400,000 $400,000 $ 400,000 $ 9,387 $ 12,850 $ 17,629 $ 3,867 $ 7,330 $ 12,109
------------------------------------------------------------------------------------------------------------
10 $ 28,527 $400,000 $400,000 $ 400,000 $10,317 $ 14,558 $ 20,653 $ 5,201 $ 9,442 $ 15,537
------------------------------------------------------------------------------------------------------------
15 $ 48,940 $400,000 $400,000 $ 400,000 $16,986 $ 26,829 $ 43,955 $16,986 $ 26,829 $ 43,955
------------------------------------------------------------------------------------------------------------
20 $ 74,994 $400,000 $400,000 $ 400,000 $23,647 $ 43,083 $ 84,201 $23,647 $ 43,083 $ 84,201
------------------------------------------------------------------------------------------------------------
25 $ 108,245 $400,000 $400,000 $ 400,000 $29,029 $ 62,686 $ 150,378 $29,029 $ 62,686 $ 150,378
------------------------------------------------------------------------------------------------------------
30 $ 150,683 $400,000 $400,000 $ 400,000 $32,338 $ 85,746 $ 259,676 $32,338 $ 85,746 $ 259,676
------------------------------------------------------------------------------------------------------------
35 $ 204,846 $400,000 $400,000 $ 512,482 $32,208 $112,057 $ 441,795 $32,208 $112,057 $ 441,795
------------------------------------------------------------------------------------------------------------
40 $ 273,974 $400,000 $400,000 $ 795,559 $27,038 $141,641 $ 743,513 $27,038 $141,641 $ 743,513
------------------------------------------------------------------------------------------------------------
45 $ 362,200 $400,000 $400,000 $1,305,183 $11,633 $172,695 $1,243,031 $11,633 $172,695 $1,243,031
------------------------------------------------------------------------------------------------------------
50 $ 474,801 ** $400,000 $2,167,047 ** $201,375 $2,063,854 ** $201,375 $2,063,854
------------------------------------------------------------------------------------------------------------
55 $ 618,512 ** $400,000 $3,572,912 ** $222,116 $3,402,773 ** $222,116 $3,402,773
------------------------------------------------------------------------------------------------------------
60 $ 801,928 ** $400,000 $5,659,597 ** $220,583 $5,603,561 ** $220,583 $5,603,561
------------------------------------------------------------------------------------------------------------
65 $1,036,018 ** $400,000 $9,391,311 ** $258,446 $9,298,328 ** $258,446 $9,298,328
------------------------------------------------------------------------------------------------------------
</R>
<R>
* The illustrations assume that planned periodic premiums are paid at the
start of each policy year. The death benefit, account value and net cash
surrender value will differ if premiums are paid in different amounts or
frequencies.
** Policy lapses unless additional payments are made.
</R>
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND NET CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGED 0%, 6% OR
12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR
INDIVIDUAL POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL
INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY
PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS
COULD BE NEGATIVE.
I-4
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
<R>
INCENTIVELIFE LEGACY(R) III
$400,000 FACE AMOUNT
MALE, ISSUE AGE 35, PREFERRED ELITE NON-TOBACCO USER UNDERWRITING RISK CLASS
INITIAL DEATH BENEFIT IS OPTION A
INITIAL ANNUAL PLANNED PERIODIC PREMIUM: $2,160*
USING GUARANTEED CHARGES
USING GUIDELINE PREMIUM TEST
</R>
<R>
------------------------------------------------------------------------------------------------------------
DEATH BENEFIT ACCOUNT VALUE NET CASH SURRENDER VALUE
------------- ------------- ------------------------
PREMIUMS
END OF ACCUMULATED
POLICY AT 5% INTEREST ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
YEAR PER YEAR ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF:
------------------------------------------------------------------------------------------------------------
0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS
------------------------------------------------------------------------------------------------------------
1 $ 2,268 $400,000 $400,000 $400,000 $ 817 $ 898 $ 979 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
2 $ 4,649 $400,000 $400,000 $400,000 $1,594 $ 1,806 $ 2,029 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
3 $ 7,150 $400,000 $400,000 $400,000 $2,337 $ 2,731 $ 3,161 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
4 $ 9,775 $400,000 $400,000 $400,000 $3,031 $ 3,655 $ 4,368 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
5 $ 12,532 $400,000 $400,000 $400,000 $3,679 $ 4,584 $ 5,660 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
6 $ 15,427 $400,000 $400,000 $400,000 $4,281 $ 5,514 $ 7,043 $ 0 $ 0 $ 391
------------------------------------------------------------------------------------------------------------
7 $ 18,466 $400,000 $400,000 $400,000 $4,824 $ 6,433 $ 8,513 $ 0 $ 145 $ 2,225
------------------------------------------------------------------------------------------------------------
8 $ 21,657 $400,000 $400,000 $400,000 $5,298 $ 7,329 $10,068 $ 0 $ 1,417 $ 4,156
------------------------------------------------------------------------------------------------------------
9 $ 25,008 $400,000 $400,000 $400,000 $5,697 $ 8,193 $11,706 $ 177 $ 2,673 $ 6,186
------------------------------------------------------------------------------------------------------------
10 $ 28,527 $400,000 $400,000 $400,000 $6,011 $ 9,012 $13,427 $ 895 $ 3,896 $ 8,310
------------------------------------------------------------------------------------------------------------
15 $ 48,940 $400,000 $400,000 $400,000 $6,289 $12,295 $23,494 $6,289 $12,295 $23,494
------------------------------------------------------------------------------------------------------------
20 $ 74,994 $400,000 $400,000 $400,000 $4,113 $13,599 $36,765 $4,113 $13,599 $36,765
------------------------------------------------------------------------------------------------------------
25 $ 108,245 ** $400,000 $400,000 ** $ 9,227 $52,012 ** $ 9,227 $52,012
------------------------------------------------------------------------------------------------------------
30 $ 150,683 ** ** $400,000 ** ** $67,380 ** ** $67,380
------------------------------------------------------------------------------------------------------------
35 $ 204,846 ** ** $400,000 ** ** $77,318 ** ** $77,318
------------------------------------------------------------------------------------------------------------
40 $ 273,974 ** ** $400,000 ** ** $70,518 ** ** $70,518
------------------------------------------------------------------------------------------------------------
45 $ 362,200 ** ** $400,000 ** ** $ 8,924 ** ** $ 8,924
------------------------------------------------------------------------------------------------------------
50 $ 474,801 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
55 $ 618,512 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
60 $ 801,928 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
65 $1,036,018 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
</R>
<R>
* The illustrations assume that planned periodic premiums are paid at the
start of each policy year. The death benefit, account value and net cash
surrender value will differ if premiums are paid in different amounts or
frequencies.
** Policy lapses unless additional payments are made.
</R>
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND NET CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGED 0%, 6% OR
12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR
INDIVIDUAL POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL
INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY
PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS
COULD BE NEGATIVE.
I-5
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
<R>
INCENTIVELIFE LEGACY(R) III
$400,000 FACE AMOUNT
MALE, ISSUE AGE 35, PREFERRED ELITE NON-TOBACCO USER UNDERWRITING RISK CLASS
INITIAL DEATH BENEFIT IS OPTION B
INITIAL ANNUAL PLANNED PERIODIC PREMIUM: $2,160*
USING CURRENT CHARGES
USING GUIDELINE PREMIUM TEST
</R>
<R>
------------------------------------------------------------------------------------------------------------
DEATH BENEFIT ACCOUNT VALUE NET CASH SURRENDER VALUE
------------- ------------- ------------------------
PREMIUMS
END OF ACCUMULATED
POLICY AT 5% INTEREST ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
YEAR PER YEAR ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF:
------------------------------------------------------------------------------------------------------------
0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS
------------------------------------------------------------------------------------------------------------
1 $ 2,268 $401,108 $401,198 $ 401,288 $ 1,108 $ 1,198 $ 1,288 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
2 $ 4,649 $402,190 $402,438 $ 402,698 $ 2,190 $ 2,438 $ 2,698 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
3 $ 7,150 $403,284 $403,762 $ 404,283 $ 3,284 $ 3,762 $ 4,283 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
4 $ 9,775 $404,355 $405,138 $ 406,023 $ 4,355 $ 5,138 $ 6,023 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
5 $ 12,532 $405,405 $406,566 $ 407,932 $ 5,405 $ 6,566 $ 7,932 $ 0 $ 0 $ 932
------------------------------------------------------------------------------------------------------------
6 $ 15,427 $406,434 $408,049 $ 410,026 $ 6,434 $ 8,049 $ 10,026 $ 0 $ 1,397 $ 3,374
------------------------------------------------------------------------------------------------------------
7 $ 18,466 $407,437 $409,584 $ 412,320 $ 7,437 $ 9,584 $ 12,320 $ 1,149 $ 3,296 $ 6,032
------------------------------------------------------------------------------------------------------------
8 $ 21,657 $408,412 $411,171 $ 414,828 $ 8,412 $ 11,171 $ 14,828 $ 2,500 $ 5,259 $ 8,916
------------------------------------------------------------------------------------------------------------
9 $ 25,008 $409,360 $412,811 $ 417,572 $ 9,360 $ 12,811 $ 17,572 $ 3,840 $ 7,291 $ 12,052
------------------------------------------------------------------------------------------------------------
10 $ 28,527 $410,284 $414,509 $ 420,579 $10,284 $ 14,509 $ 20,579 $ 5,168 $ 9,393 $ 15,463
------------------------------------------------------------------------------------------------------------
15 $ 48,940 $416,906 $426,685 $ 443,693 $16,906 $ 26,685 $ 43,693 $16,906 $ 26,685 $ 43,693
------------------------------------------------------------------------------------------------------------
20 $ 74,994 $423,483 $442,733 $ 483,425 $23,483 $ 42,733 $ 83,425 $23,483 $ 42,733 $ 83,425
------------------------------------------------------------------------------------------------------------
25 $ 108,245 $428,692 $461,838 $ 548,096 $28,692 $ 61,838 $ 148,096 $28,692 $ 61,838 $ 148,096
------------------------------------------------------------------------------------------------------------
30 $ 150,683 $431,654 $483,689 $ 652,873 $31,654 $ 83,689 $ 252,873 $31,654 $ 83,689 $ 252,873
------------------------------------------------------------------------------------------------------------
35 $ 204,846 $430,880 $507,129 $ 822,048 $30,880 $107,129 $ 422,048 $30,880 $107,129 $ 422,048
------------------------------------------------------------------------------------------------------------
40 $ 273,974 $424,735 $530,452 $1,095,664 $24,735 $130,452 $ 695,664 $24,735 $130,452 $ 695,664
------------------------------------------------------------------------------------------------------------
45 $ 362,200 $408,196 $547,536 $1,535,647 $ 8,196 $147,536 $1,135,647 $ 8,196 $147,536 $1,135,647
------------------------------------------------------------------------------------------------------------
50 $ 474,801 ** $545,280 $2,238,514 ** $145,280 $1,838,514 ** $145,280 $1,838,514
------------------------------------------------------------------------------------------------------------
55 $ 618,512 ** $502,322 $3,358,849 ** $102,322 $2,958,849 ** $102,322 $2,958,849
------------------------------------------------------------------------------------------------------------
60 $ 801,928 ** ** $5,138,592 ** ** $4,738,592 ** ** $4,738,592
------------------------------------------------------------------------------------------------------------
65 $1,036,018 ** ** $8,190,717 ** ** $7,790,717 ** ** $7,790,717
------------------------------------------------------------------------------------------------------------
</R>
<R>
* The illustrations assume that planned periodic premiums are paid at the
start of each policy year. The death benefit, account value and net cash
surrender value will differ if premiums are paid in different amounts or
frequencies.
** Policy lapses unless additional payments are made.
</R>
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND NET CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGED 0%, 6% OR
12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR
INDIVIDUAL POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL
INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY
PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS
COULD BE NEGATIVE.
I-6
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
<R>
</R>
<R>
INCENTIVELIFE LEGACY(R) III
$400,000 FACE AMOUNT
MALE, ISSUE AGE 35, PREFERRED ELITE NON-TOBACCO USER UNDERWRITING RISK CLASS
INITIAL DEATH BENEFIT IS OPTION B
INITIAL ANNUAL PLANNED PERIODIC PREMIUM: $2,160*
USING GUARANTEED CHARGES
USING GUIDELINE PREMIUM TEST
</R>
<R>
------------------------------------------------------------------------------------------------------------
DEATH BENEFIT ACCOUNT VALUE NET CASH SURRENDER VALUE
------------- ------------- ------------------------
PREMIUMS
END OF ACCUMULATED
POLICY AT 5% INTEREST ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS ASSUMING HYPOTHETICAL GROSS
YEAR PER YEAR ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF: ANNUAL INVESTMENT RETURN OF:
------------------------------------------------------------------------------------------------------------
0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS 0% GROSS 6% GROSS 12% GROSS
------------------------------------------------------------------------------------------------------------
1 $ 2,268 $400,815 $400,896 $400,977 $ 815 $ 896 $ 977 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
2 $ 4,649 $401,590 $401,802 $402,024 $1,590 $ 1,802 $ 2,024 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
3 $ 7,150 $402,330 $402,722 $403,151 $2,330 $ 2,722 $ 3,151 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
4 $ 9,775 $403,019 $403,641 $404,351 $3,019 $ 3,641 $ 4,351 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
5 $ 12,532 $403,662 $404,562 $405,633 $3,662 $ 4,562 $ 5,633 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------
6 $ 15,427 $404,256 $405,483 $407,002 $4,256 $ 5,483 $ 7,002 $ 0 $ 0 $ 350
------------------------------------------------------------------------------------------------------------
7 $ 18,466 $404,791 $406,389 $408,453 $4,791 $ 6,389 $ 8,453 $ 0 $ 101 $ 2,165
------------------------------------------------------------------------------------------------------------
8 $ 21,657 $405,256 $407,269 $409,983 $5,256 $ 7,269 $ 9,983 $ 0 $ 1,357 $ 4,071
------------------------------------------------------------------------------------------------------------
9 $ 25,008 $405,644 $408,114 $411,590 $5,644 $ 8,114 $11,590 $ 124 $ 2,594 $ 6,070
------------------------------------------------------------------------------------------------------------
10 $ 28,527 $405,945 $408,909 $413,269 $5,945 $ 8,909 $13,269 $ 829 $ 3,793 $ 8,153
------------------------------------------------------------------------------------------------------------
15 $ 48,940 $406,134 $411,994 $422,914 $6,134 $11,994 $22,914 $6,134 $11,994 $22,914
------------------------------------------------------------------------------------------------------------
20 $ 74,994 $403,850 $412,921 $435,066 $3,850 $12,921 $35,066 $3,850 $12,921 $35,066
------------------------------------------------------------------------------------------------------------
25 $ 108,245 ** $407,925 $447,378 ** $ 7,925 $47,378 ** $ 7,925 $47,378
------------------------------------------------------------------------------------------------------------
30 $ 150,683 ** ** $455,690 ** ** $55,690 ** ** $55,690
------------------------------------------------------------------------------------------------------------
35 $ 204,846 ** ** $449,990 ** ** $49,990 ** ** $49,990
------------------------------------------------------------------------------------------------------------
40 $ 273,974 ** ** $412,387 ** ** $12,387 ** ** $12,387
------------------------------------------------------------------------------------------------------------
45 $ 362,200 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
50 $ 474,801 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
55 $ 618,512 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
60 $ 801,928 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
65 $1,036,018 ** ** ** ** ** ** ** ** **
------------------------------------------------------------------------------------------------------------
</R>
<R>
* The illustrations assume that planned periodic premiums are paid at the
start of each policy year. The death benefit, account value and net cash
surrender value will differ if premiums are paid in different amounts or
frequencies.
** Policy lapses unless additional payments are made.
</R>
THE HYPOTHETICAL INVESTMENT RESULTS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE
DEEMED A REPRESENTATION OF PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING INVESTMENT ALLOCATIONS MADE BY THE OWNER. THE DEATH BENEFIT,
ACCOUNT VALUE AND NET CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM
THOSE SHOWN IF THE ACTUAL GROSS RATES OF INVESTMENT RETURN AVERAGED 0%, 6% OR
12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THE AVERAGE FOR
INDIVIDUAL POLICY YEARS. WE CAN MAKE NO REPRESENTATION THAT THESE HYPOTHETICAL
INVESTMENT RESULTS CAN BE ACHIEVED FOR ANY ONE YEAR OR CONTINUED OVER ANY
PERIOD OF TIME. IN FACT, FOR ANY GIVEN PERIOD OF TIME, THE INVESTMENT RESULTS
COULD BE NEGATIVE.
I-7
APPENDIX I: HYPOTHETICAL ILLUSTRATIONS
Appendix II: State policy availability and/or variations of certain features
and benefits
--------------------------------------------------------------------------------
<R>
The following information is a summary of the states where certain policies or
certain features and/or benefits are either not available as of the date of
this prospectus or vary from the policy's features and benefits as previously
described in this prospectus. Certain features and/or benefits may have been
approved in your state after your policy was issued and cannot be added. Please
contact your financial professional for more information about availability in
your state.
</R>
STATES WHERE CERTAIN POLICIES FEATURES AND/OR BENEFITS ARE NOT AVAILABLE OR
VARY:
--------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
--------------------------------------------------------------------------------
CALIFORNIA . Long Term Care Services/TM/ As of February 1, 2014, these
Rider riders are not available.
. Disability Deduction Waiver
Rider
. Disability Premium Waiver
Rider
--------------------------------------------------------------------------------
CONNECTICUT Long Term Care Services/SM/ Rider In Connecticut, we refer to this
rider as the "LONG-TERM CARE
BENEFITS RIDER" (Rider Form No.
R12-10CT (rev.9/13)).
See "Long Term Care Services/SM/ THE FOLLOWING INFORMATION
Rider" under "Other benefits you REPLACES FIRST THREE PARAGRAPHS
can add by rider" in "More IN THIS SECTION:
information about policy The rider provides for the
features and benefits" acceleration of all or part of
the policy death benefit as a
payment of a portion of the
policy's death benefit each
month as a result of the insured
person being a chronically ill
individual who is receiving
qualified long-term care
services in accordance with a
plan of care and who will
require continuous care for the
remainder of his or her life.
Benefits accelerated under this
rider will be treated as a lien
against the policy death benefit
unless benefits are being paid
under the optional Nonforfeiture
Benefit. While this rider is in
force and before any
continuation of coverage under
the optional Nonforfeiture
Benefit, if elected, policy face
amount increases and death
benefit option changes from
Option A to Option B are not
permitted.
An individual qualifies as
"chronically ill" if they have
been certified by a licensed
health care practitioner as
being expected to require
lifetime confinement in a
long-term care facility or in
the home due to injury or
sickness; or requiring
substantial supervision to
protect such individual from
threats to health and safety due
to cognitive impairment.
Benefits are payable once we
receive: 1) a written
certification from a U.S.
licensed health care
practitioner that the insured
person is a chronically ill
individual who is receiving
qualified long-term care
services in accordance with a
plan of care and will require
continuous care for the rest of
his or her life; 2) proof that
the "elimination period," as
discussed below, has been
satisfied; and 3) written notice
of claim and proof of loss in a
form satisfactory to us. In
order to continue monthly
benefit payments, we require
recertification by a U.S.
licensed health care
practitioner every twelve months
from the date of the initial or
subsequent certification that
the insured
--------------------------------------------------------------------------------
II-1
APPENDIX II: STATE POLICY AVAILABILITY AND/OR VARIATIONS OF CERTAIN FEATURES
AND BENEFITS
----------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
----------------------------------------------------------------------------------
CONNECTICUT person is still a chronically
(CONTINUED) ill individual receiving
qualified long-term care
services in accordance with a
plan of care and will require
continuous care for the
remainder of his or her life.
Otherwise, unless earlier
terminated due to a change in
status of the insured or payout
of the maximum total benefit
amount, benefit payments will
terminate at the end of the
twelve month period. This rider
may not cover all of the costs
associated with long-term care
services during the insured
person's period of coverage.
For a more complete description
of terms used in this section
and conditions of this rider,
please consult your rider policy
form.
The "Extension of Benefits"
feature is not available.
Also see "Long-Term Care
Services/SM/ Rider" policy
variations that may apply
earlier in Appendix II.
----------------------------------------------------------------------------------
FLORIDA Long Term Care Services/SM/ Rider In Florida, we refer to this
See "Long Term Care Services rider as the "Long Term Care
Rider/SM/" in "Risk/benefit Insurance Rider" (Rider Form No.
summary: Charges and expenses R12-10FL).
you will pay" The monthly charge per $1,000 of
the amount for which we are at
risk is as follows:
With the optional Nonforfeiture
benefit:
Highest: $1.19
Lowest: $0.07
Representative: $0.17
Without the optional
Nonforfeiture benefit:
Highest: $1.19
Lowest: $0.07
Representative: $0.17
See "Long Term Care Services/SM/ The following paragraph replaces
Rider" under "Other benefits you the second paragraph in this
can add by rider" in "More section in its entirety:
information about policy An individual qualifies as
features and benefits" "chronically ill" if they have
been certified by a licensed
health care practitioner as
being unable to perform, without
substantial assistance from
another person, at least two
activities of daily living for a
period of at least 90 days due
to a loss of functional
capacity; or requiring
substantial supervision for
protection from threats to
health and safety due to severe
cognitive impairment.
The following two sentences
replace the final two sentences
of the third paragraph of this
section in their entirety:
We also, at our own expense, may
have the insured person examined
as often as reasonably necessary
while a claim is pending. This
rider may not cover all of the
costs associated with long-term
care services which may be
incurred by the buyer of this
rider during the insured
person's period of coverage.
----------------------------------------------------------------------------------
II-2
APPENDIX II: STATE POLICY AVAILABILITY AND/OR VARIATIONS OF CERTAIN FEATURES
AND BENEFITS
--------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
--------------------------------------------------------------------------------
FLORIDA ELIMINATION PERIOD
(CONTINUED) The "Elimination Period"
subsection is replaced in its
entirety with the following:
.. Elimination Period. The
Long-Term Care Insurance Rider
has an elimination period that
is the required period of time
while the rider is in force
that must elapse before any
benefit is available to the
insured person under this
rider. The elimination period
is 90 days, beginning on the
first day of any qualified
long-term care services that
are provided to the insured
person. Generally, benefits
under this rider will not be
paid until the elimination
period is satisfied, and
benefits will not be
retroactively paid for the
elimination period. The
elimination period can be
satisfied by any combination of
days of a long-term care
facility stay or days of home
health care, and the days do
not have to be continuous.
There is no requirement that
the elimination period must be
satisfied within a consecutive
period of 24 months starting
with the month in which such
services are first provided.
The elimination period must be
satisfied only once while this
rider is in effect.
See "Long Term Care Services/SM/ PERIOD OF COVERAGE
Rider" under "Other benefits you The first paragraph of the
can add by rider" in "More "Period of coverage" subsection
information about policy is replaced in its entirety with
features and benefits" the following:
.. PERIOD OF COVERAGE. The
period of coverage is the
period of time during which the
insured receives services that
are covered under the Long-Term
Care Insurance Rider and for
which benefits are payable.
This begins on the first day
covered services are received
after the end of the
elimination period. A period of
coverage will end on the
earliest of the following dates:
1. the date we receive the
notice of release which must be
sent to us when the insured
person is no longer receiving
qualified long-term care
services;
2. the date we determine the
insured person is no longer
eligible to receive qualified
long-term care services under
this rider;
3. the date you request that we
terminate benefit payments under
this rider;
4. the date the accumulated
benefit lien amount equals the
maximum total benefit (or if
your coverage is continued as a
Nonforfeiture benefit, the date
the maximum total Nonforfeiture
Benefit has been paid out);
5. the date you surrender the
policy (except to the extent of
any Nonforfeiture Benefit you
may have under the rider);
6. the date we make a payment
under the living benefits rider
(for terminal illness) if it
occurs before coverage is
continued as a Nonforfeiture
Benefit; or
7. the date of death of the
insured person.
PREEXISTING CONDITION
No benefits will be provided
under this rider during the
first 180 days from the
effective date of the policy for
long-term care services received
by the insured person due to a
preexisting condition. However,
each day of services received by
the insured person for a
preexisting condition during the
first 180 days that this rider
is in force will count toward
satisfaction of the elimination
period.
--------------------------------------------------------------------------------
II-3
APPENDIX II: STATE POLICY AVAILABILITY AND/OR VARIATIONS OF CERTAIN FEATURES
AND BENEFITS
--------------------------------------------------------------------------------
STATE FEATURES AND BENEFITS AVAILABILITY OR VARIATION
--------------------------------------------------------------------------------
FLORIDA See "Long Term Care Services/SM/ The following paragraph replaces
(CONTINUED) Rider" under "Optional rider the first paragraph in this
charges" in "More information section in its entirety:
about certain policy charges" .. LONG-TERM CARE INSURANCE
RIDER. If you choose this rider
without the Nonforfeiture
Benefit, on a guaranteed basis,
we may deduct between $0.07 and
$1.19 per $1,000 of the amount
for which we are at risk under
the rider from your policy
account value each month. If
you choose this rider with the
Nonforfeiture Benefit, on a
guaranteed basis, we may deduct
between $0.07 and $1.19 per
$1,000 of the amount for which
we are at risk under the rider.
We will deduct this charge
until the insured reaches age
121 while the rider is in
effect, but not when rider
benefits are being paid. The
amount at risk under the rider
depends on the death benefit
option selected under the
policy. For policies with death
benefit Option A, the amount at
risk for the rider is the
lesser of (a) the current
policy face amount, minus the
policy account value (but not
less than zero); and (b) the
current long-term care
specified amount. For policies
with death benefit Option B,
the amount at risk for the
rider is the current long-term
care specified amount. The
current monthly charges for
this rider may be lower than
the maximum monthly charges.
--------------------------------------------------------------------------------
II-4
APPENDIX II: STATE POLICY AVAILABILITY AND/OR VARIATIONS OF CERTAIN FEATURES
AND BENEFITS
Appendix III: Calculating the alternate death benefit
--------------------------------------------------------------------------------
USING THE GUIDELINE PREMIUM TEST:
The following examples demonstrate how we calculate the death benefit under
Option A and Option B. The examples show an insured under two policies with the
same face amount, but account values vary as shown. We assume that each insured
is age 65 at the time of death and that there is no outstanding debt. We also
assume that the owner selected the guideline premium test. Policy 1 shows what
the death benefit would be for a policy with low account value. Policy 2 shows
what the death benefit would be for a policy with a higher account value.
The alternate death benefit is equal to the policy account value times the
death benefit percentage. If the account value in your policy is high enough,
relative to the face amount, the life insurance benefit will automatically be
greater than the Option A or Option B death benefit you have selected. In the
example below, the alternate death benefit for Policy 1 is $42,000 ($35,000 x
120%) and the alternate death benefit for Policy 2 is $102,000 ($85,000 x
120%). The basic death benefit under Option A is equal to the face amount on
the date of death. If the owner of Policy 1 elected Option A, the death benefit
would equal the face amount, since the alternate death benefit amount ($42,000)
is less than the face amount ($100,000). If the owner of Policy 2 elected
Option A, the death benefit would be the alternate death benefit, since the
alternate death benefit ($102,000) is greater than the face amount ($100,000).
The basic death benefit under Option B is equal to the face amount plus the
policy account value on the date of death. Based on the example below, the
basic death benefit under Option B is greater than the alternate death benefit
for both Policy 1 (since $135,000 is greater than $42,000) and Policy 2 (since
$185,000 is greater than $102,000).
--------------------------------------------------------------
POLICY 1 POLICY 2
--------------------------------------------------------------
Face Amount $100,000 $100,000
Policy Account Value on the Date of Death $ 35,000 $ 85,000
Death Benefit Percentage 120% 120%
Death Benefit under Option A $100,000 $102,000
Death Benefit under Option B $135,000 $185,000
--------------------------------------------------------------
USING THE CASH VALUE ACCUMULATION TEST:
The following examples demonstrate how we calculate the death benefit under
Option A and Option B. The examples show an insured under two policies with the
same face amount, but account values vary as shown. We assume that each insured
is age 65 at the time of death, is a male preferred non-tobacco user, and that
there is no outstanding debt. We also assume that the owner selected the cash
value accumulation test. Policy 1 shows what the death benefit would be for a
policy with a low account value. Policy 2 shows what the death benefit would be
for a policy with a higher account value.
The alternate death benefit is equal to the policy account value times a death
benefit percentage which will be specified in your policy, and which varies
based upon the insured's attained age, sex and risk class. If the account value
in your policy is high enough, relative to the face amount, the life insurance
benefit will automatically be greater than the Option A or Option B death
benefit you have selected. In the example below, the alternate death benefit
for Policy 1 is $64,995 ($35,000 x 185.7%) and the alternate death benefit for
Policy 2 is $157,845 ($85,000 x 185.7%). The basic death benefit under Option A
is equal to the face amount on the date of death. If the owner of Policy 1
elected Option A, the death benefit would equal the face amount, since the
alternate death benefit amount ($64,995) is less than the face amount
($100,000). If the owner of Policy 2 elected Option A, the death benefit would
be the alternate death benefit, since the alternate death benefit ($157,845) is
greater than the face amount ($100,000). The basic death benefit under Option B
is equal to the face amount plus the policy account value on the date of death.
Based on the example below, the basic death benefit under Option B is greater
than the alternate death benefit for both Policy 1 (since $135,000 is greater
than $64,995) and Policy 2 (since $185,000 is greater than $157,845).
<R>
--------------------------------------------------------------
POLICY 1 POLICY 2
--------------------------------------------------------------
Face Amount $100,000 $100,000
Policy Account Value on the Date of Death $ 35,000 $ 85,000
Death Benefit Percentage 185.7% 185.7%
Death Benefit under Option A $100,000 $157,845
Death Benefit under Option B $135,000 $185,000
--------------------------------------------------------------
</R>
III-1
APPENDIX III: CALCULATING THE ALTERNATE DEATH BENEFIT
Requesting more information
--------------------------------------------------------------------------------
<R>
The Statement of Additional Information ("SAI"), dated December 31, 2014, is
incorporated into this prospectus by reference and is available upon request,
free of charge, by calling our toll free number at 888-855-5100 and requesting
to speak with a customer service representative. You may also request one by
writing to our operations center at P.O. Box 1047, Charlotte, NC 28201-1047.
The SAI includes additional information about the registrant. You can make
inquiries about your policy and request personalized illustrations by calling
our toll free number at 1-800-777-6510, or asking your financial professional.
</R>
You may visit the SEC's web site at www.sec.gov to view the SAI and other
information (including other parts of a registration statement) that relates to
MONY America Variable Account K and the policies. You can also review and copy
information about MONY America Variable Account K, including the SAI, at the
SEC's Public Reference Room in Washington, D.C. or by electronic request at
publicinfo@sec.gov or by writing the SEC's Public Reference Section, at 100 F
Street N.E., Washington, D.C. 20549. You may have to pay a duplicating fee. To
find out more about the Public Reference Room, call the SEC at 1-202-551-8090.
SEC File Number: 811-04234
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
Who is MONY Life Insurance Company of America? 2
Ways we pay policy proceeds 2
Distribution of the policies 2
Underwriting a policy 2
Insurance regulation that applies to MONY America 2
Custodian and independent registered public accounting firm 2
Financial Statements 2
811-04234
MONY Life Insurance Company of America
<R>
SUPPLEMENT DATED DECEMBER 31, 2014 TO PROSPECTUS DATED DECEMBER 31, 2014 FOR
INCENTIVELIFE LEGACY(R) III
--------------------------------------------------------------------------------
This Supplement concerns an additional investment option under our
IncentiveLife Legacy(R) III policies. The additional investment option is our
Market Stabilizer Option(R) (''MSO''), which is available to you, if you have
received this Supplement. The MSO gives you the opportunity to earn interest
that we will credit based in part on the performance of the S&P 500 Price
Return Index, excluding dividends, over approximately a one year period. Any
amount that you decide to invest in the MSO is allocated to a "Segment", each
of which has a specific start date and a limited duration. On the final day of
the Segment, the index-linked return associated with that Segment will be
applied to your Segment Account Value (as defined in the MSO Prospectus), and
may be positive, zero or negative. Please be aware that the possibility of a
negative return on this investment at the end of a Segment term could result in
a significant loss of principal.
The purpose of this Supplement is solely to add to the December 31, 2014
IncentiveLife Legacy(R) III Prospectus (''Legacy Prospectus'') a very limited
amount of information about the MSO. Much more complete information about the
MSO is contained in a separate Market Stabilizer Option(R) prospectus (''MSO
Prospectus'') dated May 1, 2014. All of the information in the Legacy
Prospectus also continues to remain applicable, except as otherwise provided in
this Supplement (or any other supplement to the Legacy Prospectus) or in the
MSO Prospectus.
</R>
Accordingly, you should read this Supplement in conjunction with the Legacy
Prospectus (and any other supplements thereto) and the MSO Prospectus. We will
send you another copy of any prospectus or supplement without charge upon
request. Please contact the customer service group referenced in the Legacy
Prospectus.
<R>
GROWTH CAP RATE AVAILABLE DURING INITIAL YEAR
If you allocate policy account value to any Segment that commences during the
first year that the MSO is available to you under your policy, you are eligible
for a Growth Cap Rate that is at least 15%. Please see "Growth Cap Rate
Available During Initial Year" in the "Description of the Market Stabilizer
Option(R)" of the MSO Prospectus for more details.
NO TRANSFER CHARGES IN CONNECTION WITH THE MSO
</R>
Although we generally reserve the right to impose up to a $25 charge for
transfers under the IncentiveLife Legacy(R) III policies, we will never apply
this charge for any transfers into or out of the MSO.
Accordingly, the following language is added to footnote 5 on page 8 of the
Legacy Prospectus (which appears in the section of that Prospectus entitled
''Tables of policy charges''): Nor will this charge apply to any transfers to
or from any Market Stabilizer Option(R) (''MSO'') that we make available as an
investment option under a Policy or any transfers to or from any MSO Holding
Account. Please refer to the separate prospectus for the MSO (''MSO
Prospectus'') for information about the MSO and the related ''Holding Account.''
CHARGES FOR THE MSO
If you allocate any of your policy account value to the MSO, several types of
charges or deductions would or could result. To reflect these, the following
items are added to the chart entitled ''Periodic charges other than underlying
trust portfolio operating expenses'' on page 1 of the Legacy Prospectus:
-----------------------------------------------------------------------------------------------------------
OPTIONAL RIDER CHARGES WHEN CHARGE IS DEDUCTED MAXIMUM AMOUNT THAT MAY BE DEDUCTED
-----------------------------------------------------------------------------------------------------------
MARKET STABILIZER OPTION(R)
(MSO)/(1)/
MSO VARIABLE INDEX BENEFIT On the MSO Segment Start Date 0.75% of policy account value
CHARGE allocated
MSO VARIABLE INDEX SEGMENT At the beginning of each policy month 1.65% calculated as an annual% of
ACCOUNT CHARGE during the MSO Segment Term your Segment Account Value/(2)/
MSO LOAN SPREAD/(3)/ FOR On each policy anniversary (or on loan 5%/(4)/
AMOUNTS OF POLICY LOANS termination, if earlier)
ALLOCATED TO MSO SEGMENT
MSO EARLY DISTRIBUTION On surrender or other distribution 75% of Segment Account Value/(5)/
ADJUSTMENT (including loan) from an MSO Segment
prior to its Segment Maturity Date
-----------------------------------------------------------------------------------------------------------
(1)Please refer to the MSO Prospectus for information about the MSO and related
charges and deductions, as well as the meaning of special terms that are
relevant to the MSO (such as ''Segment,''''Segment Term,''''Segment Start
Date,''''Segment Account Value'' and ''Early Distribution Adjustment.''
(2)Currently we deduct this charge at a 0.65% annual rate, rather than at the
maximum rate shown.
(3)We charge interest on policy loans but credit you with interest on the
amount of the policy account value we hold as collateral for the loan. The
''spread'' is the difference between the interest rate we charge you on a
policy loan and the interest rate we credit to you on the amount of your
policy account value that we hold as collateral for the loan. Please refer
to the MSO prospectus for more information.
(4)We charge interest on policy loans but credit you with interest on the
amount of the policy account value we hold as collateral for the loan. The
loan interest spread is the excess of the interest rate we charge over the
interest rate we credit.
(5)The actual amount of Early Distribution Adjustment is determined by a
formula that depends on, among other things, how a specified widely
published stock market index has performed since the Segment Start Date. The
maximum amount of the adjustment would occur if there is a total
distribution at a time when that index had declined to zero. Please refer to
the MSO prospectus for more information about the index and Early
Distribution Adjustment.
<R>
EVM 04 (2/15) #790461
NB/IF Cat# 153083 (2/15)
</R>
<R>
TRANSFERS INTO AND OUT OF THE MSO
Unless either the paid up death benefit guarantee or the extended no lapse
guarantee are in effect, there are no restrictions on transfers into or out of
the MSO. The MSO is not available if the paid up death benefit guarantee or
extended no lapse guarantee is in effect.
If you elect to transfer account value to the MSO, there must be sufficient
funds remaining in the guaranteed interest option to cover the Charge Reserve
Amount (as defined in the MSO Prospectus).
</R>
HOW WE ALLOCATE CHARGES AMONG YOUR INVESTMENT OPTIONS
If you allocate any policy account value to the MSO, our procedures for
allocating the policy's monthly deductions among the investment options you are
using is significantly different than in the absence of the MSO. Accordingly,
the following text is added at the end of the section entitled ''How we
allocate charges among your investment options'' on page 8 of the Legacy
Prospectus:
Substantially different procedures apply, however, if you allocate any of your
policy account value to a Segment under the MSO investment option. In that
case, for example, you will be required to maintain a certain amount of policy
account value (the Charge Reserve Amount) in the policy's unloaned guaranteed
interest option. (You will not be subject to any Charge Reserve Amount
requirement, however, at any time when none of your policy account value is
invested in any MSO Segment.) The Charge Reserve Amount at the beginning of any
Segment is the estimated amount required to pay all monthly deductions under
your policy (including, but not limited to, charges for the MSO and any
optional riders) for the remainder of the Segment Term.
While any of your policy account value is invested in any Segment, we will take
all of your policy's monthly deductions (including, but not limited to, the
monthly deductions under the MSO and optional riders) solely from the unloaned
guaranteed interest option, rather than from the investment options from which
those charges otherwise would be deducted. If you have insufficient policy
account value in the unloaned guaranteed interest option to pay a monthly
deduction during any Segment Term, we will first take the balance of the
deduction proportionately from any variable investment options (other than any
Segments) that you are then using. But, if insufficient policy account value
remains in any such other investment options to cover the full balance of the
monthly deduction, we will take the remainder of the monthly deduction from any
MSO Segments in which you have account value invested. We will apply these
procedures for allocating deductions for policy charges automatically at any
time you have any amounts invested in a Segment, and no contrary instructions
from you would apply during the Segment Term.
If we have to make any distribution from an MSO Segment, including (among other
things) to pay any surrender or loan proceeds or any charge deduction from a
Segment, there will generally be negative consequences for you. Among other
things, an Early Distribution Adjustment would apply, which would usually
reduce your policy values, in many cases substantially. In some cases, such an
Early Distribution Adjustment may apply without any action on your part. This
could happen, for example, if the Charge Reserve Amount and funds you have
invested in options other than the MSO are insufficient to pay a monthly
deduction (i) due to poor investment performance of those options or (ii) due
to any permitted increases in charges that we have made above their current
rates.
Please refer to the MSO Prospectus for detailed information about the above
procedures.
MONY Life Insurance Company of America
1290 Avenue of the Americas
New York, NY 10104
<R>
Copyright 2014 AXA Equitable Life Insurance Company. All rights reserved.
</R>
IncentiveLife Legacy(R) III is issued by MONY Life Insurance Company of America
and is a registered trademark of AXA Equitable Life Insurance Company.
2