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Registration No. _____________
811-10133
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM
N-8B-2
INITIAL REGISTRATION
SEPARATE ACCOUNT SPVL
OF FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
(Exact Name of Registrant)
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
440 Lincoln Street
Worcester, MA 01653
(Address of Principal Executive Office)
Charles F. Cronin, Secretary
440 Lincoln Street
Worcester, MA 01653
(Name and Address of Agent for Service of Process)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule 485
----
on May 1, 2001 pursuant to paragraph (b) of Rule 485
----
60 days after filing pursuant to paragraph (a) (1) of Rule 485
----
on (date) pursuant to paragraph (a) (1) of Rule 485
----
this post-effective amendment designates a new effective date
---- for a previously filed post-effective amendment.
SINGLE PREMIUM VARIABLE LIFE
Pursuant to Reg. Section 270.24f-2 of the Investment Company Act of 1940,
Registrant hereby declares that an indefinite amount of its securities is being
registered under the Securities Act of 1933 ("1933 Act").
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date or
dates as the Commission, acting pursuant to said Section 8(a) may determine.
Registrant is making this filing in order to register a new flexible premium
variable life policy, under the Securities Act of 1933.
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RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8b-2 AND THE PROSPECTUS
ITEM NO. OF
FORM N-8b-2 CAPTION IN PROSPECTUS
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution
5 The Company, The Variable Account
6 The Variable Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 Summary; Description of the Company, Variable Account and
Underlying Funds; The Contract; Contract Termination and
Reinstatement; Other Contract Provisions
11 Summary; The Underlying Funds; Investment Objectives and
Policies
12 Summary; The Underlying Funds
13 Summary; The Underlying Funds; Charges and Deductions
14 Summary; Applying for a Contract
15 Summary; Applying for a Contract; Premium Payments;
Allocation of Net Premiums
16 The Variable Account; The Underlying Funds; Allocation of Net
Premiums
17 Summary; Surrender; Partial Withdrawal; Charges and
Deductions; Contract Termination and Reinstatement
18 The Variable Account; The Underlying Funds; Premium Payments
19 Reports; Voting Rights
20 Not Applicable
21 Summary; Contract Loans; Other Contract Provisions
22 Other Contract Provisions
23 Not Required
24 Other Contract Provisions
25 Allmerica Financial
26 Not Applicable
27 The Company
28 Directors and Principal Officers
29 The Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Distribution
36 Not Applicable
37 Not Applicable
38 Summary; Distribution
39 Summary; Distribution
40 Not Applicable
41 The Company, Distribution
42 Not Applicable
43 Not Applicable
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44 Premium Payments; Contract Value and Cash Surrender Value
45 Not Applicable
46 Contract Value and Cash Surrender Value; Federal Tax
Considerations
47 The Company
48 Not Applicable
49 Not Applicable
50 The Variable Account
51 Cover Page; Summary; Charges and Deductions; The Contract;
Contract Termination and Reinstatement; Other Contract
Provisions
52 Addition, Deletion or Substitution of Investments
53 Federal Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Not Applicable
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FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
WORCESTER, MASSACHUSETTS
MODIFIED SINGLE PAYMENT VARIABLE LIFE INSURANCE CONTRACTS
ALLMERICA SPL II
This Prospectus provides important information about Allmerica SPL II, a
modified single payment variable life insurance contract issued by First
Allmerica Financial Life Insurance Company. The Contracts are funded through
the Separate Account SPVL, a separate investment account of the Company that
is referred to as the Variable Account. The Contracts are designed for a
large single payment and limit the ability to make additional payments.
PLEASE READ THIS PROSPECTUS CAREFULLY BEFORE INVESTING AND KEEP IT FOR FUTURE
REFERENCE.
The Variable Account is subdivided into Sub-Accounts. Each Sub-Account invests
exclusively in shares of one of the following Funds:
ALLMERICA INVESTMENT TRUST (SERVICE CLASS)
AIT Core Equity Fund
AIT Equity Index Fund
AIT Government Bond Fund
AIT Money Market Fund
AIT Select Aggressive Growth Fund
AIT Select Capital Appreciation Fund
AIT Select Emerging Markets Fund
AIT Select Growth Fund
AIT Select Growth and Income Fund
AIT Select International Equity Fund
AIT Select Investment Grade Income Fund
AIT Select Strategic Growth Fund
AIT Select Strategic Income Fund
AIT Select Value Opportunity Fund
AIM VARIABLE INSURANCE FUNDS (SERIES II SHARES)
AIM V.I. Aggressive Growth Fund
AIM V.I. Basic Value Fund
AIM V.I. Blue Chip Fund
AIM V.I. Capital Development Growth Fund
AIM V.I. Premier Equity Fund
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC. (CLASS B)
AllianceBernstein Small Cap Value Portfolio
AllianceBernstein Value Portfolio
Alliance Growth and Income Portfolio
Alliance Premier Growth Portfolio
Alliance Technology Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND (SERVICE CLASS 2)
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II (SERVICE CLASS 2)
Fidelity VIP II Contrafund(R) Portfolio
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III (SERVICE CLASS 2)
Fidelity VIP III Mid Cap Portfolio
Fidelity VIP III Value Strategies Portfolio
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST (CLASS 2)
FT VIP Franklin Large Cap Growth Securities Fund
FT VIP Franklin Small Cap Fund
FT VIP Franklin Small Cap Value Securities Fund
FT VIP Mutual Shares Securities Fund
FT VIP Templeton Foreign Securities Fund
MFS VARIABLE INSURANCE TRUST (SM) (SERVICE CLASS)
MFS(R) Mid Cap Growth Series
MFS(R) New Discovery Series
MFS(R) Total Return Series
MFS(R) Utilities Series
OPPENHEIMER VARIABLE ACCOUNT FUNDS (SERVICE SHARES)
Oppenheimer Capital Appreciation Fund/VA Oppenheimer Global Securities Fund/VA
Oppenheimer High Income Fund/VA
Oppenheimer Main Street Growth & Income Fund/VA
Oppenheimer Multiple Strategies Fund/VA
Contract values may also be allocated to the Fixed Account, which is part of the
Company's General Account.
The Contract provides for life insurance coverage and for the accumulation of a
Contract Value, which will accumulate on a variable basis. The Contract requires
the Contract Owner to make an initial payment of at least $10,000. Each Contract
is a "modified endowment contract" for federal income tax purposes, except in
certain circumstances described in FEDERAL TAX CONSIDERATIONS. A loan,
distribution or other amounts received from a modified
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endowment contract during the life of the Insured will be taxed to the extent of
accumulated income in the Contract. Death Benefits under a modified endowment
contract, however, are generally not subject to federal income tax. See FEDERAL
TAX CONSIDERATIONS.
We offer a variety of variable life policies. They may offer features, including
investment options, fees and/or charges that are different from those in the
policies offered by this Prospectus. The policies may be offered through
different distributors. Upon request, your financial representative can show you
information regarding other life policies offered by the Company. You can also
contact us directly to find out more about these life policies.
THE CONTRACTS ARE NOT SUITABLE FOR SHORT-TERM INVESTMENT. VARIABLE LIFE
CONTRACTS INVOLVE RISKS INCLUDING POSSIBLE LOSS OF PRINCIPAL. IT MAY NOT BE
ADVANTAGEOUS TO REPLACE EXISTING INSURANCE WITH THE CONTRACT. THIS LIFE CONTRACT
IS NOT: A BANK DEPOSIT OR OBLIGATION; OR FEDERALLY INSURED; OR ENDORSED BY ANY
BANK OR GOVERNMENTAL AGENCY.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED THAT THE INFORMATION IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus can also be obtained from the Securities and Exchange
Commission's website (http://www.sec.gov).
------------------
CORRESPONDENCE MAY BE MAILED TO: DATED ____________
ALLMERICA VARIABLE LIFE SERVICE CENTER 440 LINCOLN STREET
P.O. BOX 8179 WORCESTER, MASSACHUSETTS 01653
BOSTON, MA 02266-8179 (508)855-1000
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TABLE OF CONTENTS
SPECIAL TERMS
SUMMARY OF FEES AND CHARGES
SUMMARY OF FEATURES
DESCRIPTION OF THE COMPANY, THE VARIABLE ACCOUNT, AND THE UNDERLYING FUNDS
INVESTMENT OBJECTIVES AND POLICIES
THE CONTRACT
Market Timers
Applying for a Contract
Free Look Period
Conversion Privilege
Payments
Allocation of Payments
Transfer Privilege
Death Benefit (Without Guaranteed Death Benefit Rider)
Guaranteed Death Benefit Rider
Contract Value
Payment Options
Optional Insurance Benefits
Surrender
Partial Withdrawal
CHARGES AND DEDUCTIONS
Monthly Deductions
Daily Deductions
Surrender Charge
Transfer Charges
CONTRACT LOANS
CONTRACT TERMINATION AND REINSTATEMENT
OTHER CONTRACT PROVISIONS
FEDERAL TAX CONSIDERATIONS
The Company and The Variable Account
Taxation of the Contracts
Modified Endowment Contracts
Contract Loans
Diversification
VOTING RIGHTS
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY
DISTRIBUTION
REPORTS
LEGAL PROCEEDINGS
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
FURTHER INFORMATION
MORE INFORMATION ABOUT THE FIXED ACCOUNT
INDEPENDENT ACCOUNTANTS
FINANCIAL STATEMENTS
APPENDIX A-- GUIDELINE MINIMUM SUM INSURED TABLE A-1
APPENDIX B-- OPTIONAL INSURANCE BENEFITS B-1
APPENDIX C-- PAYMENT OPTIONS C-1
APPENDIX D-- ILLUSTRATIONS D-1
APPENDIX E--PERFORMANCE INFORMATION E-1
FINANCIAL STATEMENTS FIN-1
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SPECIAL TERMS
AGE: how old the Insured is on his/her last birthday measured on the Date of
Issue and each Contract anniversary.
ALLMERICA FINANCIAL: Allmerica Financial Life Insurance and Annuity Company.
BENEFICIARY: the person or persons you name to receive the Net Death Benefit
when the Insured dies.
CONTRACT OWNER: the person who may exercise all rights under the Contract, with
the consent of any irrevocable Beneficiary. "You" and "your" refer to the
Contract Owner in this prospectus.
CONTRACT VALUE: the total value of your Contract. It is the SUM of the:
- Value of the units of the Sub-Accounts credited to your Contract, PLUS
- Accumulation in the Fixed Account credited to the Contract.
DATE OF ISSUE: the date the Contract was issued, used to measure the Monthly
Processing Date, Contract months, Contract years and Contract anniversaries.
DEATH BENEFIT: the Face Amount (the amount of insurance determined by your
payment) or the Guideline Minimum Sum Insured, whichever is greater. After the
Final Payment Date, if the Guaranteed Death Benefit Rider is in effect, the
Death Benefit will be the greater of (a) the Face Amount as of the Final Payment
Date or (b) the Contract Value as of the date due proof of death is received by
the Company.
EVIDENCE OF INSURABILITY: information, including medical information, used to
decide the Insured's Underwriting Class.
FACE AMOUNT: the amount of insurance coverage. The Face Amount is shown in your
Contract.
FINAL PAYMENT DATE: the Contract anniversary before the Insured's 100th
birthday. After this date, no payments may be made and the Net Death Benefit is
the Contract Value less any Outstanding Loan. The Net Death Benefit may be
different before and after the Final Payment Date. See NET DEATH BENEFIT.
FIRST ALLMERICA: First Allmerica Financial Life Insurance Company. "We," "our,"
"us," and "the Company" refer to First Allmerica Financial Life Insurance
Company in this Prospectus.
FIXED ACCOUNT: the part of the Company's General Account that guarantees
principal and a fixed interest rate.
GENERAL ACCOUNT: all our assets other than those held in separate investment
accounts.
GUIDELINE MINIMUM SUM INSURED: the minimum death benefit required to qualify the
Contract as "life insurance" under federal tax laws. The guideline minimum sum
insured is the PRODUCT of
- The Contract Value TIMES
- A percentage based on the Insured's age
The percentage factor is a percentage that, when multiplied by the Policy Value,
determines the minimum death benefit required under federal tax laws. The
percentage factor is based on the Insured's attained age, as set forth in
APPENDIX A - GUIDELINE MINIMUM SUM INSURED TABLE.
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GUIDELINE SINGLE PREMIUM: used to determine the Face Amount under the Contract.
INSURED: the person or persons covered under the Contract. If more than one
person is named, all provisions of the Contract that are based on the death of
the Insured will be based on the date of death of the last surviving Insured.
LOAN VALUE: the maximum amount you may borrow under the Contract.
MONTHLY DEDUCTIONS: the amount of money that we deduct from the Contract Value
each month to pay for the Monthly Maintenance Fee, Administration Charge,
Monthly Insurance Protection Charge, Distribution Charge and the Federal and
State Payment Tax Charge.
MONTHLY INSURANCE PROTECTION CHARGE: the amount of money that we deduct from the
Contract Value each month to pay for the insurance.
MONTHLY PROCESSING DATE: the date, shown in your Contract, when Monthly
Deductions are deducted.
NET DEATH BENEFIT: Before the Final Payment Date , the Net Death Benefit is:
- The Death Benefit, MINUS
- Any Outstanding Loan on the Insured's death, rider charges and Monthly
Deductions due and unpaid through the Contract month in which the
Insured dies, as well as any partial withdrawal costs and surrender
charges.
After the Final Payment Date, if the Guaranteed Death Benefit Rider is NOT in
effect, the Net Death Benefit is:
- The Contract Value, MINUS
- Any Outstanding Loan on the Insured's death.
If the Guaranteed Death Benefit Rider is in effect on the Final Payment Date, a
guaranteed Net Death Benefit will be provided thereafter unless the Guaranteed
Death Benefit Rider is terminated. The guaranteed Net Death Benefit will be:
- The greater of (a) the Face Amount as of the Final Payment Date or (b)
the Contract Value as of the date due proof of death is received by
the Company, MINUS
- Any Outstanding Loan, through the Contract month in which the Insured
dies.
OUTSTANDING LOAN: all unpaid Contract loans plus loan interest due or accrued.
PRINCIPAL OFFICE: our office at 440 Lincoln Street, Worcester, Massachusetts
01653.
PRO-RATA ALLOCATION: an allocation among the Fixed Account and the Sub-Accounts
of the Variable Account in the same proportion that, on the date of allocation,
the Contract Value in the Fixed Account (other than value subject to Outstanding
Loan) and the Contract Value in each Sub-Account bear to the total Contract
Value.
SECOND-TO-DIE: the Contract may be issued as a joint survivorship
("Second-to-Die") Contract. Life insurance coverage is provided for two
Insureds, with death benefits payable at the death of the last surviving
Insured.
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SUB-ACCOUNT: a subdivision of the Variable Account investing exclusively in the
shares of a Fund.
SURRENDER VALUE: the amount payable on a full surrender. It is the Contract
Value less any Outstanding Loan and surrender charges.
UNDERLYING FUNDS (FUNDS): the investment Funds of Allmerica Investment Trust
("AIT") or of AIM Variable Insurance Funds ("AIM"), the Portfolios of
Alliance Variable Products Series Fund, Inc. ("Alliance"), the Portfolios of
Fidelity Variable Insurance Products Fund, Fidelity Variable Insurance
Products Fund II, and Fidelity Variable Insurance Products Fund III
(collectively, "Fidelity VIP"), the investment Funds of Franklin Templeton
Variable Insurance Products Trust ("FT VIP"), the series of MFS(R) Variable
Insurance Trust(SM) ("MFS VIT"), and the funds of Oppenheimer Variable Account
Funds ("Oppenheimer"), which are available under the Contract.
UNDERWRITING CLASS: the insurance risk classification that we assign the Insured
based on the information in the application and other Evidence of Insurability
we consider. The Insured's underwriting class will affect the Monthly Insurance
Protection Charge.
UNIT: a measure of your interest in a Sub-Account.
VALUATION DATE: any day on which the net asset value of the shares of any Funds
and Unit values of any Sub-Accounts are computed. Valuation dates currently
occur on:
- Each day the New York Stock Exchange is open for trading; and
- Other days (other than a day during which no payment, partial
withdrawal or surrender of a Contract was received) when there is a
sufficient degree of trading in a Fund's portfolio securities so that
the current net asset value of the Sub-Accounts may be materially
affected.
VALUATION PERIOD: the interval between two consecutive Valuation Dates.
VARIABLE ACCOUNT: Separate Account SPVL, one of the Company's separate
investment accounts.
WRITTEN REQUEST: your request in writing, satisfactory to us, received at our
Principal Office.
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SUMMARY OF FEES AND CHARGES
WHAT CHARGES WILL I INCUR UNDER MY CONTRACT?
The following charges will apply to your Contract under the circumstances
described. Some of these charges apply throughout the Contract's duration.
We deduct the following monthly charges from the Contract Value:
- A $5.00 Maintenance Fee from Contracts with a Contract Value of
$10,000 or less (See "Maintenance Fee");
- 0.20% on an annual basis for the administrative expenses (See
"Administration Charge");
- A deduction for the cost of insurance, which varies depending on the
type of Contract and Underwriting Class (See "Monthly Insurance
Protection Charge");
- For the first ten Contract years only, 0.90% on an annual basis for
distribution expenses (See "Distribution Fee"); and
- For the first Contract year only, 1.50% on an annual basis for
federal, state and local taxes (See "Federal and State Payment Tax
Charge").
The following daily charge is deducted from the Variable Account:
- 0.90% on an annual basis for the mortality and expense risks (See
"Mortality and Expense Risk Charge.").
There are deductions from and expenses paid out of the assets of the Funds that
are described in their prospectuses.
WHAT CHARGES DO I INCUR IF I SURRENDER MY CONTRACT OR MAKE A PARTIAL WITHDRAWAL?
The charges below apply only if you surrender your Contract or make partial
withdrawals:
- Surrender Charge -- A surrender charge on a withdrawal exceeding the
"Free 10% Withdrawal," described below. This Charge applies on
surrenders or partial withdrawals within ten Contract years from Date
of Issue. The surrender charge begins at 10.00% of the amount that
exceeds the Free 10% Withdrawal amount and decreases to 0% by the
tenth Contract year.
- Partial Withdrawal Transaction Fee -- A transaction fee of 2.0% of the
amount withdrawn, not to exceed $25, for each partial withdrawal for
processing costs. The transaction fee applies to all partial
withdrawals, including a Withdrawal without a surrender charge.
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WHAT ARE THE EXPENSES AND FEES OF THE FUNDS?
In addition to the charges described above, certain fees and expenses are
deducted from the assets of the Underlying Funds. The levels of fees and
expenses vary among the Underlying Funds. The following table shows the expenses
of the Underlying Funds for 2001.
<Table>
<Caption>
MANAGEMENT FEES UNDER OTHER TOTAL FUND
UNDERLYING FUND FEE* 12b-1 PLAN** EXPENSES* EXPENSES*
- --------------- ---- ------------ --------- ---------
AIT Core Equity Fund (Service Class)
AIT Equity Index Fund (Service Class)
AIT Government Bond Fund (Service Class)
AIT Money Market Fund (Service Class)
AIT Select Aggressive Growth Fund (Service Class)
AIT Select Capital Appreciation Fund (Service Class)
AIT Select Emerging Markets Fund (Service Class)
AIT Select Growth Fund (Service Class)
AIT Select Growth and Income Fund (Service Class)
AIT Select International Equity Fund (Service Class)
AIT Select Investment Grade Income Fund (Service Class)
AIT Select Strategic Growth Fund (Service Class)
AIT Select Strategic Income Fund (Service Class)
AIT Select Value Opportunity Fund (Service Class)
AIM V.I. Aggressive Growth Fund (Series II Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Blue Chip Fund (Series II Shares)
AIM V.I. Capital Development Growth Fund(Series II Shares)
AIM V.I. Premier Equity Fund (Series II Shares)
AllianceBernstein Small Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
Alliance Growth and Income Portfolio (Class B)
Alliance Premier Growth Portfolio (Class B)
Alliance Technology Portfolio (Class B)
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP Value Strategies Portfolio (Service Class 2)
Fidelity VIP II Contrafund Portfolio (Service Class 2)
Fidelity VIP III Mid Cap Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Templeton Foreign Securities Fund (Class 2)
MFS(R) Mid Cap Growth Series (Service Class)
MFS(R) New Discovery Series (Service Class)
MFS(R) Total Return Series (Service Class)
MFS(R) Utilities Series (Service Class)
Oppenheimer Capital Appreciation Fund/VA (Service Shares)
Oppenheimer Global Securities Fund/VA (Service Shares)
Oppenheimer High Income Fund/VA (Service Shares)
Oppenheimer Main Street Growth & Income Fund/VA (Service Shares)
Oppenheimer Multiple Strategies Fund/VA (Service Shares)
</Table>
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* After any waivers/reimbursements
**These expenses are fees paid by the Underlying Funds under 12b-1 plans. In
addition to receiving all or part of the fees listed in the table, the Company
may also receive Service Fees from the investment advisers or other service
providers of certain Underlying Funds for providing various services to
Policyowners. Currently the Company receives Service Fees ranging from 0.10% to
0.25% of the aggregate net asset value of assets held in the Separate Account
with respect to such Underlying Funds.
The Underlying Fund information above was provided by the Underlying Funds and
was not independently verified by the Company.
Footnotes for underlying fund expense information to be inserted by
pre-effective amendment
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SUMMARY OF CONTRACT FEATURES
This Summary is intended to provide only a very brief overview of the more
significant aspects of the Contract. If you are considering the purchase of this
product, you should read the remainder of this Prospectus carefully before
making a decision. It offers a more complete presentation of the topics
presented here, and will help you better understand the product. However, the
Contract, together with its attached application, constitutes the entire
agreement between you and the Company.
There is no guaranteed minimum Contract Value. The value of a Contract will vary
up or down to reflect the investment experience of allocations to the
Sub-Accounts and the fixed rates of interest earned by allocations to the
General Account. The Contract Value will also be adjusted for other factors,
including the amount of charges imposed. The Contract Value may decrease to the
point where the Contract will lapse and provide no further death benefit without
additional premium payments, unless the optional Guaranteed Death Benefit Rider
is in effect. This Rider may not be available in all states.
WHAT IS THE CONTRACT'S OBJECTIVE?
The objective of the Contract is to give permanent life insurance protection and
to help you build assets tax-deferred. Benefits available through the Contract
include:
- A life insurance benefit that can protect your family;
- Payment options that can guarantee an income for life, if you want to
use your Contract for retirement income;
- A personalized investment portfolio you may tailor to meet your needs,
time frame and risk tolerance level;
- Experienced professional investment advisers; and
- Tax deferral on earnings while your money is accumulating.
The Contract combines features and benefits of traditional life insurance with
the advantages of professional money management. However, unlike the fixed
benefits of ordinary life insurance, the Contract Value will increase or
decrease depending on investment results. Unlike traditional insurance policies,
the Contract has no fixed schedule for payments.
WHO ARE THE KEY PERSONS UNDER THE CONTRACT?
The Contract is a contract between you and us. Each Contract has a Contract
Owner ("you"), the Insured and a Beneficiary. As Contract Owner, you make the
payment, choose investment allocations and select the Insured and Beneficiary.
The Insured is the person covered under the Contract. The Beneficiary is the
person who receives the Net Death Benefit when the Insured dies.
WHAT HAPPENS WHEN THE INSURED DIES?
We will pay the Net Death Benefit to the Beneficiary when the Insured dies while
the Contract is in effect. If the Contract was issued as a Second-to-Die
Contract, the Net Death Benefit will be paid on the death of the last surviving
Insured.
Before the Final Payment Date, the Death Benefit is either the Face Amount (the
amount of insurance determined
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by your payment) or the minimum death benefit provided by the Guideline Minimum
Sum Insured, whichever is greater. The Net Death Benefit is the Death Benefit
less any Outstanding Loan, rider charges and Monthly Deductions due and unpaid
through the Contract month in which the Insured dies, as well as any partial
withdrawals and surrender charges.
After the Final Payment Date, if the Guaranteed Death Benefit is NOT in effect,
the Net Death Benefit is the Contract Value less any Outstanding Loan. If the
Guaranteed Death Benefit Rider is in effect on the Final Payment date, a
Guaranteed Death Benefit will be provided unless the Rider is subsequently
terminated. The Guaranteed Death Benefit will be either the Face Amount as of
the Final Payment Date or the Contract Value as of the date due proof of death
is received by the Company, whichever is greater, reduced by any Outstanding
Loan through the Contract month in which the insured dies. For more information,
see "Guaranteed Death Benefit Rider."
The Beneficiary may receive the Net Death Benefit in a lump sum or under one of
the Company's payment options.
CAN I EXAMINE THE CONTRACT?
Yes. You have the right to examine and cancel your Contract by returning it to
us or to one of our representatives within 10 days (or such later date as
required in your state) after you receive the Contract. If your Contract was
purchased in New York as a replacement for an existing policy, you after the
right to cancel for up to 60 days after your receive the Contract.
If you exercise your right to cancel, the Company will mail a refund to you
within seven days. We may delay a refund of any payment made by check until the
check has cleared your bank.
Where required by state law, your refund will be your entire payment. In other
states or if the Contract was issued in New York as a replacement, the refund
will equal the sum of:
- Amounts allocated to the Fixed Account, PLUS
- The value of the Units in the Variable Account, PLUS
- All fees, charges and taxes which have been imposed.
Your refund will be determined as of the Valuation Date that the Contract is
received at our Principal Office.
WHAT ARE MY INVESTMENT CHOICES?
The Contract allows you to allocate payments in up to 20 Sub-Accounts of the
Variable Account at a time. Each Sub-Account invests its assets in a
corresponding investment portfolio ("Fund") of Allmerica Investment Trust
("AIT"), AIM Variable Insurance Funds ("AIM"), Alliance Variable Products Series
Fund, Inc. ("Alliance"), Fidelity Variable Insurance Products Fund, Fidelity
Variable Insurance Products Fund II, and Fidelity Variable Insurance Products
Fund III (collectively, "Fidelity VIP"), Franklin Templeton Variable Insurance
Products Trust ("FT VIP"), MFS(R) Variable Insurance Trust(SM) ("MFS VIT"), and
Oppenheimer Variable Account Funds ("Oppenheimer"). In some states, insurance
regulations may restrict the availability of particular Underlying Funds.
The Contract also offers a Fixed Account that is part of the General Account of
the Company. The Fixed Account is a guaranteed account offering a minimum
interest rate. This range of investment choices allows you to allocate your
money among the Sub-Accounts and the Fixed Account to meet your investment
needs.
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If your Contract provides for a full refund under its "Right to Cancel"
provision as required in your state, we will allocate all sub-account
investments to the AIT Money Market Fund until the fourth day after the
expiration of the "Right to Cancel" provision of your Contract. After this, we
will allocate all amounts as you have chosen. For more information about your
investment choices, see WHO ARE THE INVESTMENT ADVISERS?, below.
WHO ARE THE INVESTMENT MANAGERS?
The following are the Sub-Advisers of the AIT Funds and the investment managers
of the other Underlying Funds:
<Table>
<Caption>
UNDERLYING FUND SUB-ADVISERS/FUND MANAGERS
--------------- --------------------------
AIT Core Equity Fund (Service Class) Miller Anderson & Sherrerd, LLP
AIT Equity Index Fund (Service Class) Allmerica Asset Management, Inc.
AIT Government Bond Fund (Service Class) Allmerica Asset Management, Inc.
AIT Money Market Fund (Service Class) Allmerica Asset Management, Inc.
AIT Select Aggressive Growth Fund (Service Class) Massachusetts Financial Services Company
Jennison Associates LLC
AIT Select Capital Appreciation Fund (Service Class) T. Rowe Price Associates, Inc.
AIT Select Emerging Markets Fund (Service Class) Schroder Investment Management North America Inc.
AIT Select Growth Fund (Service Class) Putnam Investment Management, Inc.
AIT Select Growth and Income Fund (Service Class) J. P. Morgan Investment Management Inc.
AIT Select International Equity Fund (Service Class) Bank of Ireland Asset Management (U.S.) Limited
AIT Select Investment Grade Income Fund) (Service Class) Allmerica Asset Management, Inc.
AIT Select Strategic Growth Fund (Service Class) TCW Investment Management Company
AIT Select Strategic Income Fund (Service Class) Western Asset Management Company
AIT Select Value Opportunity Fund (Service Class) Cramer Rosenthal McGlynn, LLC
AIM V.I. Aggressive Growth Fund AIM Advisors, Inc.
AIM V.I. Basic Value Fund AIM Advisors, Inc.
AIM V.I. Blue Chip Fund AIM Advisors, Inc.
AIM V.I. Capital Development Growth Fund AIM Advisors, Inc.
AIM V.I. Premier Equity Fund (Series II Shares) AIM Advisors, Inc.
AllianceBernstein Small Cap Value Portfolio Alliance Capital Management, L.P
AllianceBernstein Value Portfolio) Alliance Capital Management, L.P
Alliance Growth and Income Portfolio) Alliance Capital Management, L.P
Alliance Premier Growth Portfolio) Alliance Capital Management, L.P
Alliance Technology Portfolio Alliance Capital Management, L.P
Fidelity VIP Equity-Income Portfolio Fidelity Management & Research Company
Fidelity VIP Growth Portfolio) Fidelity Management & Research Company
Fidelity VIP II Contrafund Portfolio Fidelity Management & Research Company
Fidelity VIP III Mid Cap Portfolio Fidelity Management & Research Company
Fidelity VIP III Value Strategies Portfolio Fidelity Management & Research Company
FT VIP Franklin Large Cap Growth Securities Fund Franklin Advisers, Inc.
FT VIP Franklin Small Cap Fund Franklin Advisers, Inc.
FT VIP Franklin Small Cap Value Securities Fund Franklin Advisory Services, LLC
FT VIP Mutual Shares Securities Fund Franklin Mutual Advisers, LLC
FT VIP Templeton Foreign Securities Fund Templeton Investment Counsel, LLR
MFS Mid Cap Growth Series Massachusetts Financial Services Company
MFS New Discovery Series Massachusetts Financial Services Company
MFS Total Return Series Massachusetts Financial Services Company
MFS Utilities Series Massachusetts Financial Services Company
Oppenheimer Capital Appreciation Fund/VA OppenheimerFunds, Inc.
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Oppenheimer Global Securities Fund/VA OppenheimerFunds, Inc.
Oppenheimer High Income Fund/VA OppenheimerFunds, Inc.
Oppenheimer Main Street Growth & Income Fund/VA OppenheimerFunds, Inc.
Oppenheimer Multiple Strategies Fund/VA OppenheimerFunds, Inc.
</Table>
CAN I MAKE TRANSFERS AMONG THE FUNDS AND THE FIXED ACCOUNT?
Yes. The Contract permits you to transfer Contract Value among the available
Sub-Accounts and between the Sub-Accounts and the General Account of the
Company, subject to certain limitations described under THE CONTRACT --
"Transfer Privilege." You also may elect automatic account rebalancing so that
assets remain allocated according to a desired mix or choose automatic dollar
cost averaging to gradually move funds into one or more Sub-Accounts. See
"Transfer Privilege."
The first 12 transfers of Contract Value in a Contract year are free. A transfer
charge not to exceed $25 may apply for each additional transfer in the same
Contract year. This charge is for the costs of processing the transfer.
HOW MUCH CAN I INVEST AND HOW OFTEN?
The Contract requires a single payment on or before the Date of Issue.
Additional payment(s) of at least $1,000 may be made as long as the total
payments do not exceed the maximum payment amount specified in the contract.
WHAT IF I NEED MY MONEY?
You may borrow up to the Loan Value of your Contract. The Loan Value is 90% of
the Surrender Value. You may also make partial withdrawals and surrender the
Contract for its Surrender Value.
The guaranteed annual interest rate credited to the Contract Value securing a
loan will be at least 4.0% (5.5% for a preferred loan). The Company charges
interest on loans at an annual rate that is guaranteed not to exceed 6.0%.
We will allocate Contract loans among the Sub-Accounts and the Fixed Account
according to your instructions. If you do not make an allocation, we will make a
Pro-rata Allocation. We will transfer the Contract Value in each Sub-Account
equal to the Contract loan to the Fixed Account.
You may surrender your Contract and receive its Surrender Value. You may make
partial withdrawals of $1,000 or more from the Contract Value, subject to a
partial withdrawal transaction fee and any applicable surrender charges. The
Face Amount is proportionately reduced by each partial withdrawal. We will not
allow a partial withdrawal if it would reduce the Contract Value below $10,000.
There is some uncertainty as to the tax treatment of a preferred loan, which may
be treated as a taxable withdrawal from the Contract. See FEDERAL TAX
CONSIDERATIONS -- "Contract Loans." A surrender or partial withdrawal may have
tax consequences. See FEDERAL TAX CONSIDERATIONS -- "Taxation of the Contracts."
CAN I MAKE FUTURE CHANGES UNDER MY CONTRACT?
- Yes. There are several changes you can make after receiving your
Contract, within limits. You may
- Cancel your Contract under its "Right to Cancel" provision;
- Transfer your ownership to someone else;
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- Change the Beneficiary;
- Change the allocation for any additional payment, with no tax
consequences under current law;
- Make transfers of the Contract Value among the Funds, with no taxes
incurred under current law; and
- Add or remove the optional insurance benefits provided by rider.
CAN I CONVERT MY CONTRACT INTO A FIXED CONTRACT?
Yes. You can convert your Contract without charge during the first 24 months
after the Date of Issue. On conversion, we will transfer the Contract Value in
the Variable Account to the Fixed Account. We will allocate any future
payment(s) to the Fixed Account, unless you instruct us otherwise.
WHAT ARE THE LAPSE AND REINSTATEMENT PROVISIONS OF MY CONTRACT?
The Contract will not lapse unless the Surrender Value on a Monthly Processing
Date is less than zero. There is a 62-day grace period in this situation. If the
Insured has not died, you may reinstate your Contract within three years after
the grace period, within limits. The Insured must provide evidence of
insurability subject to our then current underwriting standards. See POLICY
TERMINATION AND REINSTATEMENT. If the Guaranteed Death Benefit Rider is in
effect, the Contract will not lapse regardless of the investment performance of
the Variable Account (excluding loan foreclosure). However, if the Guaranteed
Death Benefit Rider terminates, the Contract may then lapse. See THE CONTRACT -
"Guaranteed Death Benefit Rider."
HOW IS MY CONTRACT TAXED?
The Contract has been designed to be a "modified endowment contract." However,
under Section 1035 of the Internal Revenue Code of 1986, as amended ("Code"), an
exchange of (1) a life insurance contract entered into before June 21, 1988 or
(2) a life insurance contract that is not itself a modified endowment contract,
will not cause the Contract to be treated as a modified endowment contract if no
additional payments are paid and there is no increase in the death benefit as a
result of the exchange.
If the Contract is considered a modified endowment contract, all distributions
(including Contract loans, partial withdrawals, surrenders and assignments) will
be taxed on an "income-first" basis. Also, a 10% additional penalty tax may be
imposed on that part of a distribution that is includible in income. However,
the Net Death Benefit under the Contract is excludable from the gross income of
the Beneficiary. In some circumstances, federal estate tax may apply to the Net
Death Benefit or the Contract Value. See FEDERAL TAX CONSIDERATIONS -- "Taxation
of the Contract."
----------
This Summary is intended to provide only a very brief overview of the more
significant aspects of the Contract. The Prospectus and the Contract provide
further detail. The Contract provides insurance protection for the named
beneficiary. The Contract and its attached application or enrollment form are
the entire agreement between you and the Company.
THE PURPOSE OF THE CONTRACT IS TO PROVIDE INSURANCE PROTECTION FOR THE
BENEFICIARY. IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE, OR IF YOU
ALREADY OWN A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE CONTRACT. NO CLAIM IS
MADE THAT THE CONTRACT IS IN ANY WAY SIMILAR OR COMPARABLE TO A SYSTEMATIC
INVESTMENT PLAN OF A MUTUAL FUND.
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DESCRIPTION OF THE COMPANY, THE VARIABLE ACCOUNT,
AND THE UNDERLYING FUNDS
THE COMPANY
The Company, organized under the law of Massachusetts in 1844, is the fifth
oldest life insurance company in America. As of December 31, 2000, the Company
and its subsidiaries had over $24 billion in combined assets and over $34
billion of life insurance in force. The Company is a wholly owned subsidiary of
Allmerica Financial Corporation ("AFC"). The Company's Principal Office is
located at 440 Lincoln Street, Worcester, Massachusetts 01653, telephone
508-855-1000 ("Principal Office").
The Company is subject to the laws of the Commonwealth of Massachusetts
governing insurance companies and to regulation by the Commissioner of Insurance
of Massachusetts. In addition, the Company is subject to the insurance laws and
regulations of other states and jurisdictions in which it is licensed to
operate.
The Company is a charter member of the Insurance Marketplace Standards
Association ("IMSA"). Companies that belong to IMSA subscribe to a rigorous set
of standards that cover the various aspects of sales and service for
individually sold life insurance and annuities. IMSA members have adopted
policies and procedures that demonstrate a commitment to honesty, fairness and
integrity in all customer contacts involving sales and service of individual
life insurance and annuity products.
THE VARIABLE ACCOUNT
The Variable Account is a separate investment account with forty-three (43)
Sub-Accounts. Each Sub-Account invests in a Fund of AIT, AIM, Alliance, Fidelity
VIP, FT VIP, MFS or Oppenheimer. The assets used to fund the variable part of
the Contracts are set aside in Sub-Accounts and are separate from our general
assets. We administer and account for each Sub-Account as part of our general
business. However, income, capital gains and capital losses are allocated to
each Sub-Account without regard to any of our other income, capital gains or
capital losses. Under Massachusetts law, the assets of the Variable Account may
not be charged with any liabilities arising out of any other business of ours.
Our Board of Directors authorized the Variable Account by vote on June 13, 1996.
The Variable Account meets the definition of "separate account" under federal
securities laws. It is registered with the Securities and Exchange Commission
("SEC") as a unit investment trust under the Investment Company Act of 1940
("1940 Act"). This registration does not involve SEC supervision of the
management or investment practices or policies of the Variable Account or of the
Company. We reserve the right, subject to law, to change the names of the
Variable Account and the Sub-Accounts.
THE UNDERLYING FUNDS
Each Underlying Fund pays a management fee to an investment manager or adviser
for managing and providing services to the Underlying Fund. However, management
fee waivers and/or reimbursements may be in effect for certain or all of the
Underlying Funds. For specific information regarding the existence and effect of
any waiver/reimbursements see "WHAT ARE THE EXPENSES AND FEES OF THE FUNDS?"
under the SUMMARY OF FEES AND CHARGES section. The prospectuses of the
Underlying Funds also contain information regarding fees for advisory services
and should be read in conjunction with this Prospectus.
ALLMERICA INVESTMENT TRUST. Allmerica Investment Trust (the "Trust") is an
open-end, diversified, management investment company registered with the SEC
under the 1940 Act. The Trust was established as a Massachusetts business trust
on October 11, 1984, for the purpose of providing a vehicle for the
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investment of assets of various separate accounts established by the Company or
other insurance companies. Fourteen investment portfolios ("Funds") of AIT
currently are available under the Contract.
The trustees have overall responsibility for the supervision of the affairs of
AIT. The Trustees have entered into a management agreement ("Management
Agreement") with Allmerica Financial Investment Management Services, Inc.
("AFIMS"), a wholly owned subsidiary of Allmerica Financial, to handle the
day-to-day affairs of AIT. AFIMS, subject to Trustee review, is responsible for
the general management of the Funds. AFIMS also performs certain administrative
and management services for AIT, furnishes to AIT all necessary office space,
facilities and equipment and pays the compensation, if any, of officers and
Trustees who are affiliated with AFIMS.
AFIMS has entered into agreements with investment advisers ("Sub-Advisers")
selected by AFIMS and the Trustees, in consultation with BARRA RogersCasey, Inc.
("BARRA RogersCasey") a pension consulting firm. The cost of such consultation
is borne by AFIMS. BARRA RogersCasey provides consulting services to pension
plans representing hundreds of billions of dollars in total assets and, in its
consulting capacity, monitors the investment performance of over 1000 investment
advisers. BARRA RogersCasey is wholly controlled by BARRA, Inc. As a consultant,
BARRA RogersCasey has no discretionary or decision-making authority with respect
to the Funds and has no responsibility for any investment advice or other
services provided to the Funds by AFIMS or the Sub-Advisers. Under each
Sub-Adviser agreement, the Sub-Adviser is authorized to engage in portfolio
transactions on behalf of the applicable Fund, subject to the Trustees' and/ or
AFIMS' instructions. AFIMS is solely responsible for the payment of all fees for
investment management services.
AIM VARIABLE INSURANCE FUNDS. AIM Variable Insurance Funds ("AIM"), an open-end,
series, management investment company, was organized as a Maryland corporation
on January 22, 1993, changed to a Delaware business trust on May 1, 2000, and is
registered with the SEC under the 1940 Act. Five of its investment portfolios
are available under the Contract. The investment advisor for the AIM V.I.
Aggressive Growth Fund, AIM V.I. Basic Value Fund, AIM V.I. Blue Chip Fund, AIM
V.I. Capital Development Growth Fund, and the AIM V.I. Premier Equity Fund is A
I M Advisors, Inc. ("A I M Advisors"). A I M Advisors was organized in 1976,
and, together with its subsidiaries, manages or advises over 130 investment
company portfolios encompassing a broad range of investment objectives.
ALLIANCE VARIABLE PRODUCTS SERIES FUND, INC. Alliance Variable Products Series
Fund, Inc. ("Alliance") is registered with the SEC as an open-end, management
investment company. Five of its separate investment portfolios are currently
available under the Contract. Alliance Variable Products Series Fund's
investment adviser is Alliance Capital Management, L.P. ("Alliance Capital"), a
global investment manager providing diversified services to institutions and
individuals through a broad line of investments including more than 100 mutual
funds.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND. Fidelity Variable Insurance
Products Fund ("Fidelity VIP"), managed by Fidelity Management & Research
Company ("FMR"), is an open-end, diversified, management investment company
organized as a Massachusetts business trust on November 13, 1981 and
registered with the SEC under the 1940 Act. Two of its investment portfolios
are available under the Contract: Fidelity VIP Equity-Income Portfolio and
Fidelity VIP Growth Portfolio.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II. Fidelity Variable Insurance
Products Fund II ("Fidelity VIP II"), managed by FMR (see discussion above), is
an open-end, diversified management investment company organized as a
Massachusetts business trust on March 21, 1988, and registered with the SEC
under the 1940 Act. One of its investment portfolios is available under the
Contract: the Fidelity VIP II Contrafund(R) Portfolio.
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FIDELITY VARIABLE INSURANCE PRODUCTS FUND III. Fidelity Variable Insurance
Products Fund III ("Fidelity VIP III"), managed by FMR (see discussion above) is
an open-end, diversified management investment company registered with the SEC
under the 1940 Act. Two of its investment portfolios are available under the
Contract: the Fidelity VIP III Mid Cap Portfolio and the Fidelity VIP III
Value Strategies Portfolio.
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST. Franklin Templeton
Variable Insurance Products Trust ("FT VIP") and the funds' investment managers
and their affiliates manage over $226.9 billion (as of December 31, 2001). The
investment adviser to the FT VIP Franklin Large Cap Growth Securities Fund and
FT VIP Franklin Small Cap Fund is Franklin Advisers, Inc. The investment adviser
to the FT VIP Franklin Small Cap Value Securities Fund is Franklin Advisory
Services, LLC. The investment adviser to the FT VIP Mutual Shares Securities
Fund is Franklin Mutual Advisers, LLC. The investment adviser to the FT VIP
Templeton Foreign Securities Fund is Templeton Investment Counsel, LLR.
MFS(R) Variable Insurance Trustsm. MFS(R) Variable Insurance Trust ("MFS VIT")
is a Massachusetts business trust organized on February 1, 1994. The investment
adviser for the MFS(R) Mid Cap Growth Series, MFS(R) New Discovery Series,
MFS(R) Total Return Series, and MFS(R) Utilities Series is Massachusetts
Financial Services Company ("MFS"), America's oldest mutual fund organization.
MFS and its predecessor organizations have a history of money management dating
from 1924. MFS is located at 500 Boylston Street, Boston, Massachusetts 02116.
OPPENHEIMER VARIABLE ACCOUNT FUNDS. Oppenheimer Variable Account Funds
("Oppenheimer") was organized as a Massachusetts business trust in 1984. The
investment adviser for the Oppenheimer Capital Appreciation Fund/VA, Oppenheimer
Global Securities Fund/VA, Oppenheimer High Income Fund/VA, Oppenheimer Main
Street Growth & Income Fund/VA, Oppenheimer Multiple Strategies Fund/VA is
OppenheimerFunds, Inc. ("OppenheimerFunds"). OppenheimerFunds has operated as an
investment adviser since 1959. OppenheimerFunds is located at 498 Seventh
Avenue, New York, NY 10018.
INVESTMENT OBJECTIVES AND POLICIES
A summary of investment objectives of each of the Funds is set forth below. MORE
DETAILED INFORMATION REGARDING THE INVESTMENT OBJECTIVES, RESTRICTIONS AND
RISKS, EXPENSES PAID BY THE FUNDS AND OTHER RELEVANT INFORMATION REGARDING THE
FUNDS MAY BE FOUND IN THEIR RESPECTIVE PROSPECTUSES, WHICH ACCOMPANY THIS
PROSPECTUS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. The Statements of
Additional Information of the Funds are available upon request. There can be no
assurance that the investment objectives of the Funds can be achieved.
Certain Underlying Funds have similar investment objectives and/or policies.
Therefore, to choose the Sub-Accounts which best meet your needs and objectives,
carefully read the prospectuses of the Underlying Funds, along with this
Prospectus. In some states, insurance regulations may restrict the availability
of particular Sub-Accounts.
AIT CORE EQUITY FUND -- seeks long-term growth of capital through investments
primarily in common stocks and securities convertible into common stocks that
are believed to represent significant underlying value in relation to current
market prices. Realization of current investment income, if any, is incidental
to this objective.
AIT EQUITY INDEX FUND -- seeks to achieve investment results that correspond to
the aggregate price and yield performance of a representative selection of
United States publicly traded common stocks. The Equity Index Fund seeks to
achieve its objective by attempting to replicate the aggregate price and yield
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performance of the Standard & Poor's Composite Index of 500 Stocks.
AIT GOVERNMENT BOND FUND (Service Class) -- seeks high income, preservation
of capital and maintenance of liquidity, primarily through investments in
debt instruments issued or guaranteed by the U.S. Government or its agencies
or instrumentalities, and in related options, futures and repurchase
agreements.
AIT MONEY MARKET FUND (Service Class) -- seeks to obtain maximum current
income consistent with the preservation of capital and liquidity.
AIT SELECT AGGRESSIVE GROWTH FUND (Service Class) - seeks above-average
capital appreciation by investing primarily in common stocks of companies
which are believed to have significant potential for capital appreciation.
AIT SELECT CAPITAL APPRECIATION FUND (Service Class) - seeks long-term growth
of capital. Realization of income is not a significant investment
consideration and any income realized on the Fund's investments will be
incidental to its primary objective.
AIT SELECT EMERGING MARKETS FUND (Service Class) - seeks long-term growth of
capital by investing in the world's emerging markets.
AIT SELECT GROWTH FUND (Service Class) -- seeks to achieve long-term growth
of capital by investing in a diversified portfolio consisting primarily of
common stocks selected on the basis of their long-term growth potential.
AIT SELECT GROWTH AND INCOME FUND (Service Class) - seeks a combination of
long-term growth of capital and current income. The Fund will invest
primarily in dividend-paying common stocks and securities convertible into
common stocks.
AIT SELECT INTERNATIONAL EQUITY FUND (Service Class) - seeks maximum
long-term total return (capital appreciation and income). The Fund will
invest primarily in common stocks of established non-U.S. companies.
AIT SELECT INVESTMENT GRADE INCOME FUND (Service Class) -- seeks as high a
level of total return (including both income and capital appreciation) as is
consistent with prudent investment management.
AIT SELECT STRATEGIC GROWTH FUND (Service Class) - seeks long-term growth of
capital appreciation.
AIT SELECT STRATEGIC INCOME FUND (Service Class) - seeks to maximize total
return, consistent with prudent investment management and liquidity needs, by
investing in various types of fixed income securities.
AIT SELECT VALUE OPPORTUNITY FUND (Service Class) - seeks long-term growth of
capital by investing principally in diversified portfolio of common stocks of
small and mid-size companies whose securities at the time of purchase are
considered by the Sub-Adviser to be undervalued.
AIM V.I. AGGRESSIVE GROWTH FUND - seeks to achieve long-term growth of capital.
AIM V.I. BLUE CHIP FUND -- seeks to achieve as high a total return as possible,
consistent with preservation of capital.
AIM V.I. PREMIER EQUITY FUND - seeks to achieve long-term growth of capital
(formerly known as AIM V.I. Value Fund)
AIM V.I. BASIC VALUE FUND -- seeks to provide long-term growth of capital.
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AIM V.I. CAPITAL DEVELOPMENT GROWTH FUND - seeks long-term capital of growth.
ALLIANCE PREMIER GROWTH PORTFOLIO (CLASS B) - seeks to achieve long-term growth
of capital by investing principally in equity securities of a limited number of
large, carefully selected, high-quality U.S. companies.
ALLIANCEBERNSTEIN SMALL CAP VALUE PORTFOLIO (CLASS B) - seeks long-term growth
of capital.
ALLIANCEBERNSTEIN VALUE PORTFOLIO (CLASS B) - seeks long-term growth of capital.
ALLIANCE GROWTH AND INCOME PORTFOLIO (CLASS B) - seeks to provide current income
and capital appreciation through investment in dividend-paying common stocks of
quality companies.
ALLIANCE TECHNOLOGY PORTFOLIO (CLASS B) - emphasizes growth of capital and
invests for capital appreciation, and only incidentally for current income.
FIDELITY VIP EQUITY-INCOME PORTFOLIO (SERVICE CLASS 2) - seeks reasonable income
by investing primarily in income-producing equity securities. In choosing these
securities, the Portfolio also will consider the potential for capital
appreciation. The Portfolio's goal is to achieve a yield which exceeds the
composite yield on the securities comprising the S&P 500.
FIDELITY VIP GROWTH PORTFOLIO (SERVICE CLASS 2) - seeks to achieve capital
appreciation. The Portfolio normally purchases common stocks, although its
investments are not restricted to any one type of security. Capital appreciation
also may be found in other types of securities, including bonds and preferred
stocks.
FIDELITY VIP II CONTRAFUND(R) Portfolio (Service Class 2) -- seeks long-term
capital appreciation. The Portfolio invests primarily in common stocks of
domestic and foreign issuers whose value is not fully recognized by the public.
The Portfolio may invest in either growth stocks or value stocks or both.
FIDELITY VIP III MID CAP PORTFOLIO (SERVICE CLASS 2) - seeks long-term growth of
capital. The Portfolio invests primarily in common stocks of domestic and
foreign issuers with medium market capitalizations. The Portfolio may invest in
either growth stocks or value stocks or both.
FIDELITY VIP III VALUE STRATEGIES PORTFOLIO (SERVICE CLASS 2) - seeks capital
appreciation.
FT VIP FRANKLIN LARGE CAP GROWTH SECURITIES FUND (CLASS 2) - seeks capital
appreciation.
FT VIP FRANKLIN SMALL CAP FUND (CLASS 2) - seeks long-term capital growth. The
fund invests primarily in equity securities of U.S. small cap companies with
market cape values of less than $1.5 billion or similar in size to those in the
Russell 2000 Index, at the time of purchase.
FT VIP FRANKLIN SMALL CAP VALUE SECURITIES PORTFOLIO (CLASS 2) - seeks long-term
total return. Income, while not a goal, is a secondary consideration (formerly
known as FT VIP Franklin Value Securities Fund).
FT VIP MUTUAL SHARES SECURITIES FUND (CLASS 2) - seeks capital appreciation. Its
secondary goal is income. The fund invests primarily in equity securities of
companies the manager believes are available at market prices less than their
value based on certain recognized or objective criteria (intrinsic value).
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FT VIP TEMPLETON FOREIGN SECURITIES FUND (CLASS 2) - seeks long-term capital
growth. The fund invests primarily in an international portfolio of common
stocks (formerly known as FT VIP Templeton Foreign International Securities
Fund).
MFS(R) Mid Cap Growth Series (Service Class) - seeks long-term growth of
capital.
MFS(R) New Discovery Series (Service Class) - seeks capital appreciation.
MFS(R) Total Return Series (Service Class) - seeks mainly to provide
above-average income (compared to a portfolio invested entirely in equity
securities) consistent with the prudent employment of capital and secondarily to
provide a reasonable opportunity for growth of capital and income.
MFS(R) Utilities Series (Service Class) - seeks capital growth and current
income (income above that available from a portfolio invested entirely in equity
securities).
OPPENHEIMER CAPITAL APPRECIATION FUND/VA (CLASS B) - seeks capital appreciation
to makes your investment grow.
OPPENHEIMER GLOBAL SECURITIES FUND/VA (CLASS B) - seeks long-term capital
appreciation by investing a substantial portion of assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and special
situations that are considered to have appreciation possibilities.
OPPENHEIMER HIGH INCOME FUND/VA (CLASS B) - seeks a high level of current
income.
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND/VA (CLASS B) - seeks high total
return, which includes growth in the value of its shares as well as current
income, from equity and debt securities.
OPPENHEIMER MULTIPLE STRATEGIES FUND/VA (CLASS B) - seeks a total investment
return, which includes current income and capital appreciation in the value of
its shares.
If required in your state, in the event of a material change in the investment
policy of a Sub-Account or the Underlying Fund in which it invests, you will be
notified of the change. If you have Contract Value in that Sub-Account, the
Company will transfer it without charge on written request within sixty (60)
days of the later of (1) the effective date of such change in the investment
policy, or (2) your receipt of the notice of the right to transfer. You may then
change the percentages of your premium and deduction allocations.
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THE CONTRACT
MARKET TIMERS
The Contracts are not designed for use by individuals, professional market
timing organizations, or other entities that do "market timing," programmed
transfers, frequent transfers, or transfers that are large in relation to the
total assets of an Underlying Fund. These and similar activities may adversely
affect an Underlying Fund's ability to invest effectively in accordance with its
investment objectives and policies, and may harm other Contract Owners.
Accordingly, individuals and organizations that use market-timing investment
strategies and make frequent transfers should not purchase the Contracts.
In order to prevent "market timing" activities that may harm or disadvantage
other Contract Owners, the Company may (a) reject or restrict any specific
purchase and transfer requests and (b) impose specific limitations with respect
to market timers, including restricting transfers by market timers to certain
Underlying Funds. In addition, some of the Underlying Funds have reserved the
right to temporarily or permanently refuse purchase or transfer requests from
the Company if, in the judgment of the Underlying Fund's investment adviser, the
Underlying Fund would be unable to invest effectively in accordance with its
investment objective or policies, or would otherwise potentially be adversely
affected. Accordingly, the Company may not be in a position to effect certain
transfers requested by market timers and may refuse such transfer requests
without prior notice. The Company reserves the right to impose, without prior
notice, restrictions on transfers that it determines, in its sole discretion,
will disadvantage or potentially hurt the rights or interests of other Contract
Owners.
APPLYING FOR A CONTRACT
Individuals wishing to purchase a Contract must complete an application and
submit it to an authorized representative or to the Company at its Principal
Office. We offer Contracts to applicants 89 years old and under. After receiving
a completed application from a prospective Contract Owner, we will begin
underwriting to decide the insurability of the proposed Insured. We may require
medical examinations and other information before deciding insurability. We
issue a Contract only after underwriting has been completed. We may reject an
application that does not meet our underwriting guidelines.
If a prospective Contract Owner makes the initial payment with the application,
we will provide fixed conditional insurance during underwriting. The conditional
insurance will be based upon Death Benefit Factors shown in the Conditional
Insurance Agreement, up to a maximum of $500,000, depending on Age and
Underwriting Class. This coverage will continue for a maximum of 90 days from
the date of the application or, if required, the completed medical exam. If
death is by suicide, we will return only the payment made.
If you made the initial payment before the date of Issuance and Acceptance, we
will allocate the payment to our Fixed Account within two business days of
receipt of the payment at our Principal Office. IF WE ARE UNABLE TO ISSUE THE
CONTRACT, THE PAYMENT WILL BE RETURNED TO THE CONTRACT OWNER WITHOUT INTEREST.
If your application is approved and the Contract is issued and accepted, we will
allocate your Contract Value on Issuance and Acceptance according to your
instructions. However, if your Contract provides for a full refund of payments
under its "Right to Cancel" provision as required in your state (see THE
CONTRACT -- "Free Look Period," below), we will initially allocate your
Sub-Account investments to the AIT Money Market Fund. We will reallocate all
amounts according to your investment choices no later than the expiration of the
right to cancel period.
If your initial payment is equal to the amount of the Guideline Single Premium,
the Contract will be issued with
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the Guaranteed Death Benefit Rider at no additional cost. If the guaranteed
Death Benefit Rider is in effect on the Final Payment Date, a guaranteed Net
Death Benefit will be provided thereafter unless the Guaranteed Death Benefit
Rider is terminated. See THE CONTRACT - "Death Benefit" - "Guaranteed Death
Benefit Rider," below.
FREE LOOK PERIOD
The Contract provides for a free look period under the "Right to Cancel"
provision. You have the right to examine and cancel your Contract by returning
it to us or to one of our representatives on or before the tenth day (or such
later date as required in your state) after you receive the Contract. If your
Contract was purchased in New York as a replacement for an existing policy, you
after the right to cancel for up to 60 days after your receive the Contract. If
you exercise your right to cancel, the Company will mail a refund to you within
seven days. We may delay a refund of any payment made by check until the check
has cleared your bank.
Where required by state law, the refund will be your entire payment. In other
states or if the Contract was issued in New York as a replacement, the refund
will equal the sum of:
- Amounts allocated to the Fixed Account, PLUS
- The Contract Value in the Variable Account, PLUS
- All fees, charges and taxes which have been imposed.
Your refund will be determined as of the Valuation Date that the Contract is
received at our Principal Office.
CONVERSION PRIVILEGE
Within 24 months of the Date of Issue, you can convert your Contract into a
fixed Contract by transferring all Contract Value in the Sub-Accounts to the
Fixed Account. The conversion will take effect at the end of the Valuation
Period in which we receive, at our Principal Office, notice of the conversion
satisfactory to us. There is no charge for this conversion. We will allocate any
future payment(s) to the Fixed Account, unless you instruct us otherwise.
PAYMENTS
The Contracts are designed for a large single payment to be paid by the Contract
Owner on or before the Date of Issue. The minimum initial payment is $10,000.
The initial payment is used to determine the Face Amount. The Face Amount will
be determined by treating the payment as equal to 100% of the Guideline Single
Premium. You may indicate the desired Face Amount on the application. If the
Face Amount specified exceeds 100% of the Guideline Single Premium for the
payment amount, the application will be amended and a Contract with a higher
Face Amount will be issued.
If the Face Amount specified is less than 80% of the Guideline Single Premium
for the payment amount, the application will be amended and a Contract with a
lower Face Amount will be issued. The Contract Owner must agree to any amendment
to the application.
Under our underwriting rules, the Face Amount must be based on 100% of the
Guideline Single Premium to be eligible for simplified underwriting.
Payments are payable to the Company. Payments may be made by mail to our
Principal Office or through our authorized representative. Any additional
payment, after the initial payment, is credited to the Variable Account
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or Fixed Account on the date of receipt at the Principal Office.
The Contract limits the ability to make additional payments. However, no
additional payment may be less than $1,000 without our consent. Any additional
payment(s) may not cause total payments to exceed the maximum payment on the
specifications page of your Contract
Total payments may not exceed the current maximum payment limits under federal
tax law. Where total payments would exceed the current maximum payment limits,
we will only accept that part of a payment that will make total payments equal
the maximum. We will return any part of a payment that is greater than that
amount. However, we will accept a payment needed to prevent Contract lapse
during a Contract year. See CONTRACT TERMINATION AND REINSTATEMENT.
ALLOCATION OF PAYMENTS
In the application for your Contract, you decide the initial allocation of
the payment among the Sub-Accounts and the Fixed Account. You may allocate
the payment to one or more of the Sub-Accounts and/or the Fixed Account. The
minimum amount that you may allocate to a Sub-Account is 1.00% of the
payment. Allocation percentages must be in whole numbers (for example, 33 1/3%
may not be chosen) and must total 100%.
You may change the allocation of any future payment by Written Request or
telephone request. You have the privilege to make telephone requests, unless you
elected not to have the privilege on the application. The policy of the Company
and its representatives and affiliates is that they will not be responsible for
losses resulting from acting on telephone requests reasonably believed to be
genuine. We will use reasonable methods to confirm that instructions
communicated by telephone are genuine; otherwise, the Company may be liable for
any losses from unauthorized or fraudulent instructions. Such procedures may
include, among other things, requiring some form of personal identification
prior to acting upon instructions received by telephone. All telephone requests
are tape recorded. An allocation change will take effect on the date of receipt
of the notice at the Principal Office. No charge is currently imposed for
changing payment allocation instructions. We reserve the right to impose a
charge in the future, but guarantee that the charge will not exceed $25.
The Contract Value in the Sub-Accounts will vary with investment experience. You
bear this investment risk. Investment performance may also affect the Death
Benefit. Review your allocations of Contract Value as market conditions and your
financial planning needs change.
TRANSFER PRIVILEGE
At any time prior to the election of a Payment Option, subject to our then
current rules, you may transfer amounts among the Sub-Accounts or between a
Sub-Account and the Fixed Account. (You may not transfer that portion of the
Contract Value held in the Fixed Account that secures a Contract loan.)
We will make transfers at your Written Request or telephone request, as
described in THE CONTRACT -- "Allocation of Payments." Transfers are effected at
the value next computed after receipt of the transfer order.
The first 12 transfers in a Contract year are free. After that, we may deduct a
transfer charge not to exceed $25 from amounts transferred in that Contract
year.
Transfers to and from the Fixed Account are currently permitted only if:
- There has been at least a ninety (90) day period since the last
transfer from the Fixed Account; and
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- The amount transferred from the Fixed Account in each transfer does
not exceed the lesser of $100,000 or 25% of the Contract Value under
the Contract.
DOLLAR-COST AVERAGING OPTION AND AUTOMATIC REBALANCING OPTION You may have
automatic transfers of at least $100 made on a periodic basis:
- From the Fixed Account or the Sub-Accounts which invests in the AIT
Money Market Fund and AIT Select Investment Grade Income Fund to one
or more of the other Sub-Accounts ("Dollar-Cost Averaging Option"), or
- To reallocate Contract Value among the Fixed Accounts and Sub-Accounts
("Automatic Rebalancing Option").
Automatic transfers may be made every one, three, six or twelve months.
Generally, all transfers will be processed on the 15th of each scheduled month.
If the 15th is not a business day, however, or is the Monthly Processing Date,
the automatic transfer will be processed on the next business day. The
Dollar-Cost Averaging Option and the Automatic Account Rebalancing Option may
not be in effect at the same time. The Fixed Account is not included in
Automatic Account Rebalancing.
If the Contract Value in the Sub-Account from which the automatic transfer is to
be made is reduced to zero, the automatic transfer option will terminate. The
Contract Owner must reapply for any future automatic transfers.
The first automatic transfer counts as one transfer toward the 12 free transfers
allowed in each Contract year. Each subsequent automatic transfer is free and
does not reduce the remaining number of transfers that are free in a Contract
year. Any transfers made for a conversion privilege, Contract loan or material
change in investment policy will not count toward the 12 free transfers.
ASSET ALLOCATION MODEL REALLOCATIONS
If a Contract Owner elects to follow an asset allocation strategy, the Contract
Owner may preauthorize transfers in accordance with the chosen strategy. The
Company may provide administrative or other support services to independent
third parties who provide recommendations as to such allocation strategies.
However, the Company does not engage any third parties to offer investment
allocation services of any type under this Contract, does not endorse or review
any investment allocations recommendations made by such third parties, and is
not responsible for the investment allocations and transfers transacted on the
Contract Owner's behalf. The Company does not charge for providing additional
asset allocation support services. Additional information concerning asset
allocation programs for which the Company is currently providing support
services may be obtained from a registered representative or the Company.
TRANSFER PRIVILEGES SUBJECT TO POSSIBLE LIMITS
All of the transfer privileges described above are subject to our consent. We
reserve the right to impose limits on transfers including, but not limited to,
the:
- Minimum or maximum amount that may be transferred,
- Minimum amount that may remain in a Sub-Account following a transfer
from that Sub-Account,
- Minimum period between transfers, and
- Maximum number of transfers in a period.
DEATH BENEFIT (WITHOUT GUARANTEED DEATH BENEFIT RIDER)
If the Contract is in force on the Insured's death, we will, with due proof of
death, pay the Net Death Benefit to the
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named Beneficiary. For Second-to-Die Contracts, the Net Death Benefit is payable
on the death of the last surviving Insured. There is no Death Benefit payable on
the death of the first Insured to die. We will normally pay the Net Death
Benefit within seven days of receiving due proof of the Insured's death, but we
may delay payment of Net Death Benefits. See OTHER CONTRACT PROVISIONS -- "Delay
of Payments." The Beneficiary may receive the Net Death Benefit in a lump sum or
under a payment option, unless the payment option has been restricted by the
Contract Owner. See APPENDIX B -- PAYMENT OPTIONS.
The Death Benefit is the GREATER of the:
- Face Amount or
- Minimum Sum Insured.
Before the Final Payment Date the Net Death Benefit is:
- The Death Benefit, MINUS
- Any Outstanding Loan, rider charges and Monthly Deductions due and
unpaid through the Contract month in which the Insured dies, as well
as any partial withdrawals and surrender charges.
After the Final Payment Date, the Net Death benefit is:
- The Contract Value, MINUS
- Any Outstanding Loan.
GUARANTEED DEATH BENEFIT RIDER (NOT AVAILABLE IN ALL STATES)
If at the time of issue the Contract Owner has made payments equal to 100% of
the Guideline Single Premium, a Guaranteed Death Benefit Rider will be added to
the Contract at no additional charge. If this Rider is in effect, the Company:
- Guarantees that the Policy will not lapse regardless of the investment
performance of the Variable Account (excluding loan foreclosure); and
- Provides a guaranteed Net Death Benefit after the Final Payment Date.
Certain transactions, including certain policy loans, partial withdrawals,
underwriting reclassifications, change in face amount, and changes in Death
Benefit Options, can result in the termination of the Rider. IF THIS RIDER IS
TERMINATED, IT CANNOT BE REINSTATED.
GUARANTEED DEATH BENEFIT
The Death Benefit before the Final Payment Date will be the greater of the Face
Amount as of the date of death OR the Minimum Sum Insured. Before the Final
Payment Date the Net Death Benefit is:
- The Death Benefit, MINUS
- Any Outstanding Loan on the Insured's death rider, charges and Monthly
Deductions due and unpaid through the Contract month in which the
Insured dies, as well as any partial withdrawal costs and surrender
charges.
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If the Guaranteed Death Benefit Rider is in effect on the Final Payment Date, a
guaranteed Net Death Benefit will be provided thereafter unless the Guaranteed
Death Benefit Rider is terminated, as described below. The guaranteed Net Death
Benefit will be:
- The GREATER of (a) the Face Amount as of the Final Payment Date or (b)
the Contract Value as of the date due proof of death is received by
the Company, REDUCED
- By the Outstanding Loan, if any, through the Contract month in which
the Insured dies.
TERMINATION OF THE GUARANTEED DEATH BENEFIT RIDER
The Guaranteed Death Benefit Rider will terminate (AND MAY NOT BE REINSTATED) on
the first to occur of the following:
- Foreclosure of an Outstanding Loan, if any; or
- Any Contract change that results in a negative guideline level
premium; or
- A request for a partial withdrawal or preferred loan after the Final
Payment Date; or
- Upon the Contract Owner's written request.
GUIDELINE MINIMUM SUM INSURED -- The Guideline Minimum Sum Insured is a
percentage of the Contract Value as set forth in APPENDIX A -- GUIDELINE MINIMUM
SUM INSURED TABLE. The Guideline Minimum Sum Insured is computed based on
federal tax regulations to ensure that the Contract qualifies as a life
insurance Contract and that the insurance proceeds will be excluded from the
gross income of the Beneficiary. The Guideline Minimum Sum Insured under this
Contract meets or exceeds the IRS Guideline Minimum Sum Insured.
ILLUSTRATION -- In this illustration, assume that the Insured is under the age
of 40, and that there is no Outstanding Loan.
A Contract with a $100,000 Face Amount will have a Death Benefit of $100,000.
However, because the Death Benefit must be equal to or greater than 250% of
Contract Value, if the Contract Value exceeds $40,000 the Death Benefit will
exceed the $100,000 Face Amount. In this example, each dollar of Contract Value
above $40,000 will increase the Death Benefit by $2.50. For example, a Contract
with a Contract Value of $50,000 will have a guideline minimum sum insured of
$125,000 ($50,000 X 2.50); Contract Value of $60,000 will produce a guideline
minimum sum insured of $150,000 ($60,000 X 2.50); and Contract Value of $75,000
will produce a guideline minimum sum insured of $187,500 ($75,000 X 2.50).
Similarly, if Contract Value exceeds $40,000, each dollar taken out of Contract
Value will reduce the Death Benefit by $2.50. If, for example, the Contract
Value is reduced from $60,000 to $50,000 because of partial withdrawals, charges
or negative investment performance, the Death Benefit will be reduced from
$150,000 to $125,000. If, however, the Contract Value multiplied by the
applicable percentage from the table in Appendix A is less than the Face Amount,
the Death Benefit will equal the Face Amount.
The applicable percentage becomes lower as the Insured's age increases. If the
Insured's age in the above example were, for example, 50 (rather than between
zero and 40), the applicable percentage would be 185%. The Death Benefit would
not exceed the $100,000 Face Amount unless the Contract Value exceeded $54,055
(rather than $40,000), and each dollar then added to or taken from Contract
Value would change the Death Benefit by $1.85.
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CONTRACT VALUE
The Contract Value is the total value of your Contract. It is the SUM of:
- Your accumulation in the Fixed Account, PLUS
- The value of your Units in the Sub-Accounts.
There is no guaranteed minimum Contract Value. The Contract Value on any date
depends on variables that cannot be predetermined.
Your Contract Value is affected by the:
- Amount of your payment(s);
- Interest credited in the Fixed Account;
- Investment performance of the Funds you select;
- Partial withdrawals;
- Loans, loan repayments and loan interest paid or credited; and
- Charges and deductions under the Contract.
COMPUTING CONTRACT VALUE-- We compute the Contract Value on the Date of Issue
and on each Valuation Date. On the Date of Issue, the Contract Value is:
- Your payment plus any interest earned during the underwriting period
it was allocated to the Fixed Account (see THE CONTRACT -- "Applying
for a Contract"), MINUS
- The Monthly Deductions due.
On each Valuation Date after the Date of Issue, the Contract Value is the SUM
of:
- Accumulations in the Fixed Account, PLUS
- The SUM of the PRODUCTS of:
- The number of Units in each Sub-Account, TIMES
- The value of a Unit in each Sub-Account on the Valuation Date.
THE UNIT -- We allocate each payment to the Sub-Accounts you selected. We credit
allocations to the Sub-Accounts as Units. Units are credited separately for each
Sub-Account.
The number of Units of each Sub-Account credited to the Contract is the QUOTIENT
of:
- That part of the payment allocated to the Sub-Account, DIVIDED by
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- The dollar value of a Unit on the Valuation Date the payment is
received at our Principal Office.
The number of Units will remain fixed unless changed by a split of Unit value,
transfer, loan, partial withdrawal or surrender. Also, Monthly Deductions taken
from a Sub-Account will result in cancellation of Units equal in value to the
amount deducted.
The dollar value of a Unit of a Sub-Account varies from Valuation Date to
Valuation Date based on the investment experience of that Sub-Account. This
investment experience reflects the investment performance, expenses and charges
of the Fund in which the Sub-Account invests. The value of each Unit was set at
$1.00 on the first Valuation Date of each Sub-Account.
The value of a Unit on any Valuation Date is the PRODUCT of:
- The dollar value of the Unit on the preceding Valuation Date, TIMES
- The Net Investment Factor.
NET INVESTMENT FACTOR -- The net investment factor measures the investment
performance of a Sub-Account during the Valuation Period just ended. The net
investment factor for each Sub-Account is the result of:
- The net asset value per share of a Fund held in the Sub-Account
determined at the end of the current Valuation Period, PLUS
- The per share amount of any dividend or capital gain distributions
made by the Fund on shares in the Sub-Account if the "ex-dividend"
date occurs during the current Valuation Period, DIVIDED BY
- The net asset value per share of a Fund share held in the Sub-Account
determined as of the end of the immediately preceding Valuation
Period, MINUS
- The mortality and expense risk charge for each day in the Valuation
Period, currently at an annual rate of 0.90% of the daily net asset
value of that Sub-Account.
The net investment factor may be greater or less than one.
PAYMENT OPTIONS
The Net Death Benefit payable may be paid in a single sum or under one or more
of the payment options then offered by the Company. See APPENDIX B -- PAYMENT
OPTIONS. These payment options also are available at the Final Payment Date or
if the Contract is surrendered. If no election is made, we will pay the Net
Death Benefit in a single sum.
OPTIONAL INSURANCE BENEFITS
You may add an optional insurance benefit to the Contract by rider, as described
in APPENDIX B - OPTIONAL INSURANCE BENEFITS.
SURRENDER
You may surrender the Contract and receive its Surrender Value. The Surrender
Value is:
- The Contract Value, MINUS
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- Any Outstanding Loan and surrender charges.
We will compute the Surrender Value on the Valuation Date on which we receive
the Contract with a Written Request for surrender. We will deduct a surrender
charge if you surrender the Contract within 10 full Contract years of the Date
of Issue. See CHARGES AND DEDUCTIONS -- "Surrender Charge."
The Surrender Value may be paid in a lump sum or under a payment option then
offered by us. See APPENDIX B -- PAYMENT OPTIONS. We will normally pay the
Surrender Value within seven days following our receipt of Written Request. We
may delay benefit payments under the circumstances described in OTHER CONTRACT
PROVISIONS -- "Delay of Payments."
For important tax consequences of a surrender, see FEDERAL TAX CONSIDERATIONS.
PARTIAL WITHDRAWAL
You may withdraw part of the Contract Value of your Contract on Written Request.
Your Written Request must state the dollar amount you wish to receive. You may
allocate the amount withdrawn among the Sub-Accounts and the Fixed Account. If
you do not provide allocation instructions, we will make a Pro-rata Allocation.
Each partial withdrawal must be at least $1,000. We will not allow a partial
withdrawal if it would reduce the Contract Value below $10,000. The Face Amount
is reduced proportionately based on the ratio of the amount of the partial
withdrawal and charges to the Contract Value on the date of withdrawal.
On a partial withdrawal from a Sub-Account, we will cancel the number of Units
equal in value to the amount withdrawn. The amount withdrawn will be the amount
you requested plus the partial withdrawal transaction fee and any applicable
surrender fee. See CHARGES AND DEDUCTIONS -- "Surrender Charge." We will
normally pay the partial withdrawal within seven days following our receipt of
the written request. We may delay payment as described in OTHER CONTRACT
PROVISIONS -- "Delay of Payments."
For important tax consequences of partial withdrawals, see FEDERAL TAX
CONSIDERATIONS.
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CHARGES AND DEDUCTIONS
The following charges will apply to your Contract under the circumstances
described. Some of these charges apply throughout the Contract's duration.
The Company may waive or reduce the premium tax charge, administrative charges,
surrender charge, or 5% partial withdrawal charge, and will not pay commissions
on Contracts, where the Insured is within the following class of individuals:
All employees of First Allmerica and its affiliates and subsidiaries
located at First Allmerica's home office (or at off-site locations if
such employees are on First Allmerica's home office payroll); all
directors of First Allmerica and its affiliates and subsidiaries; all
retired employees of First Allmerica and its affiliates and
subsidiaries eligible under First Allmerica Companies' Pension Plan or
any successor plan; all General Agents, agents and field staff of First
Allmerica; and all spouses, children, siblings, parents and
grandparents of any individuals identified above, who reside in the
same household.
MONTHLY DEDUCTIONS
On the Monthly Processing Date, the Company will deduct an amount to cover
charges and expenses incurred in connection with the Contract. This Monthly
Deduction will be deducted by subtracting values from the Fixed Account
accumulation and/or canceling Units from each applicable Sub-Account in the
ratio that the Contract Value in the Sub-Account bears to the Contract Value.
The amount of the Monthly Deduction will vary from month to month. If the
Contract Value is not sufficient to cover the Monthly Deduction which is due,
the Contract may lapse. (See CONTRACT TERMINATION AND REINSTATEMENT.) The
Monthly Deduction is comprised of the following charges:
- - MAINTENANCE FEE: The Company will make a deduction of $2.50 from any
Contract with less than $100 in Contract Value to cover charges and
expenses incurred in connection with the Contract. This charge is to
reimburse the Company for expenses related to issuance and maintenance of
the Contract. The Company does not intend to profit from this charge.
- - ADMINISTRATION CHARGE: The Company imposes a monthly charge at an annual
rate of 0.20% of the Contract Value. This charge is to reimburse us for
administrative expenses incurred in the administration of the Contract. It
is not expected to be a source of profit.
- - MONTHLY INSURANCE PROTECTION CHARGE: Immediately after the Contract is
issued, the Death Benefit will be greater than the payment. While the
Contract is in force, prior to the Final Payment Date, the Death Benefit
will generally be greater than the Contract Value. To enable us to pay this
excess of the Death Benefit over the Contract Value, a monthly cost of
insurance charge is deducted. This charge varies depending on the type of
Contract and the Underwriting Class. In no event will the current deduction
for the cost of insurance exceed the guaranteed maximum insurance
protection rates set forth in the Contract. These guaranteed rates are
based on the Commissioners 1980 Standard Ordinary Mortality Tables, Tobacco
User or Non-Tobacco User (Mortality Table B for unisex Contracts and
Mortality Table D for Second-to-Die Contracts) and the Insured's sex and
Age. The Tables used for this purpose set forth different mortality
estimates for males and females and for tobacco user and non-tobacco user.
Any change in the insurance protection rates will apply to all Insureds of
the same Age, sex and Underwriting Class whose Contracts have been in force
for the same period.
The Underwriting Class of an Insured will affect the insurance protection
rate. We currently place Insureds into standard Underwriting Classes and
non-standard Underwriting Classes. The Underwriting Classes are also
divided into two categories: tobacco user and non-tobacco user. We will
place Insureds under the age of
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18 at the Date of Issue in a standard or non-standard Underwriting Class.
We will then classify the Insured as a non-tobacco user.
- - DISTRIBUTION EXPENSE: During the first ten Contract years, we make a
monthly deduction to compensate for a portion of the sales expenses which
are incurred by us with respect to the Contracts. This charge is equal to
an annual rate of 0.90% of the Contract Value.
- - FEDERAL AND STATE PAYMENT TAX CHARGE: During the first Contract year, we
make a monthly deduction to partially compensate the Company for the
increase in federal tax liability from the application of Section 848 of
the Internal Revenue Code and to offset a portion of the average premium
tax the Company is expected to pay to various state and local
jurisdictions. This charge is equal to an annual rate of 1.50% of the
Contract Value. Premium taxes vary from state to state, ranging from zero
to 5%. The deduction may be higher or lower than the actual premium tax
imposed by the applicable jurisdiction, and is made whether or not any
premium tax applies. The Company does not intend to profit from the premium
tax portion of this charge.
DAILY DEDUCTIONS
We assess each Sub-Account with a charge for mortality and expense risks we
assume. Fund expenses are also reflected in the value of the units of the
Variable Account.
- - MORTALITY AND EXPENSE RISK CHARGE: We impose a daily charge at a current
annual rate of 0.90% of the average daily net asset value of each
Sub-Account. This charge compensates us for assuming mortality and expense
risks for variable interests in the Contracts.
The mortality risk we assume is that Insureds may live for a shorter time
than anticipated. If this happens, we will pay more Net Death Benefits than
anticipated. The expense risk we assume is that the expenses incurred in
issuing and administering the Contracts will exceed those compensated by
the maintenance fee and administration charges in the Contracts. If the
charge for mortality and expense risks is not sufficient to cover mortality
experience and expenses, we will absorb the losses. If the charge turns out
to be higher than mortality and expense risk expenses, the difference will
be a profit to us. If the charge provides us with a profit, the profit will
be available for our use to pay distribution, sales and other expenses.
- - FUND EXPENSES: The value of the Units of the Sub-Accounts will reflect the
investment advisory fee and other expenses of the Funds whose shares the
Sub-Accounts purchase. The prospectuses and statements of additional
information of the Funds contain more information concerning the fees and
expenses.
No charges are currently made against the Sub-Accounts for federal or state
income taxes. Should income taxes be imposed, we may make deductions from the
Sub-Accounts to pay the taxes. See FEDERAL TAX CONSIDERATIONS.
SURRENDER CHARGE
A contingent surrender charge is deducted from Contract Value in the case of
surrender and/or a partial withdrawal for up to 10 years from Date of Issue of
the Contract. The payments you make for the Contract are the maximum amount
subject to a surrender charge. Certain withdrawals may be made without surrender
charges, but any part of a withdrawal that is assessed a surrender charge
reduces the remaining payments that will be subject to a surrender charge in the
future.
In any Contract year, you may withdraw, without a surrender charge, up to:
- 10% of the Contract Value at the time of the withdrawal, MINUS
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- The total of any prior free withdrawals in the same Contract year
("Free 10% Withdrawal.")
The 10% Free Withdrawal amount applies to both partial withdrawals and a full
surrender of the Contract.
We will apply a surrender charge only to the amount by which your requested
withdrawal exceeds the remaining 10% Free Withdrawal amount for that Contract
year. This excess withdrawal amount, which is subject to a surrender charge
based on the table below, reduces the remaining amount of your payments that
will be subject to a surrender charge in the future. If the amount of the
remaining payments that are subject to a surrender charge is reduced to zero, we
will no longer assess a surrender charge, even if the surrender or partial
withdrawal is within 10 years of the Contract's Date of Issue. During the first
Contract year, the surrender charge could be as much as 10% of your purchase
payments. See the EXAMPLES, below.
The surrender charge applicable to the excess withdrawal amount will depend upon
the number of years that the Contract has been in force, based on the following
schedule:
<Table>
<Caption>
Contract Year* 1 2 3 4 5 6 7 8 9 10+
Surrender Charge 10.00% 9.25% 8.50% 7.75% 7.00% 6.25% 4.75% 3.25% 1.50% 0%
</Table>
* For a Contract that lapses and reinstates, see CONTRACT TERMINATION AND
REINSTATEMENT.
The amount withdrawn from Contract Value equals the amount you request plus the
contingent surrender charge and the partial withdrawal transaction fee
(described below).
The right to make the Free 10% Withdrawal is not cumulative from Contract year
to Contract year. For example, if you withdraw only 8% of Contract Value in the
second Contract year, the amount you could withdraw in future Contract years
would not be increased by the amount you did not withdraw in the second Contract
year.
PARTIAL WITHDRAWAL TRANSACTION FEE
For each partial withdrawal (including a Free 10% Withdrawal), we deduct a
transaction fee of 2.0% of the amount withdrawn, not to exceed $25. This fee is
intended to reimburse us for the cost of processing the partial withdrawal. The
transaction fee applies to all partial withdrawals, including a Withdrawal
without a surrender charge (described below).
EXAMPLES
In each example below, it is assumed that you have not taken any loans from the
Contract.
EXAMPLE 1. Assume that you made an initial payment of $100,000 to the Contract,
and that the Contract Value is $120,000 when you request a full surrender of the
Contract eight months later. The amount of the Free 10% Withdrawal is $12,000
(10% of Contract Value). The amount of the Contract Value that is subject to a
surrender charge is $108,000 (the $120,000 Contract Value minus the Free 10%
Withdrawal of $12,000). However, the amount of the surrender charge is capped at
$10,000 (the first year surrender charge of 10% times your $100,000 payment to
the Contract). The Surrender Value is $110,000 (the Contract Value of $120,000
minus the surrender charge of $10,000).
EXAMPLE 2. Assume that you made an initial payment of $100,000 for the Contract,
and that you request a partial withdrawal of $15,000 at the beginning of the
fifth Contract year when the Contract Value is $130,000. The amount of the Free
10% Withdrawal is $13,000 (10% of the Contract Value). The amount of the partial
withdrawal that is subject to a surrender charge is $2,000 (the $15,000 you
requested minus the Free 10% Withdrawal of $13,000). The amount of the surrender
charge is $140 ($2,000 times the 7.00% surrender charge
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applicable in the fifth Contract year). The remaining Contract Value is $114,835
(the $130,000 Contract Value at the time of the withdrawal minus the $15,000 you
requested, the $140 surrender charge, and the $25 partial withdrawal transaction
fee). The amount of the Contract Value that is subject to a surrender charge is
$98,000 (your $100,000 initial payment minus the $2,000 that was subject to the
surrender charge).
Assume that, later in the same year, your Contract Value has grown to $150,000
and you make a request for a partial withdrawal of $10,000. The amount of the
Free 10% Withdrawal is $2,000 (the $15,000 that is 10% of Contract Value at the
time of withdrawal minus the prior Free 10% Withdrawal in that year of $13,000).
The amount of the withdrawal that is subject to a surrender charge is $8,000
(the $10,000 you requested minus the current Free 10% Withdrawal of $2,000). The
amount of the surrender charge is $560 ($8,000 times the 7.00% surrender charge
applicable in the fifth Contract year). The remaining Contract Value is $139,415
(the $150,000 Contract Value at the time of the withdrawal minus the $10,000 you
requested, the $560 surrender charge, and the $25 partial withdrawal transaction
fee). The amount of the Contract Value that is subject to a surrender charge is
now $90,000 (the $98,000 of the initial payment that was still subject to a
surrender charge after the first withdrawal minus the $8,000 that is subject to
the surrender charge at the second withdrawal).
TRANSFER CHARGES
The first 12 transfers in a Contract year are free. After that, we may deduct a
transfer charge not to exceed $25 from amounts transferred in that Contract
year. This charge reimburses us for the administrative costs of processing the
transfer.
If you apply for automatic transfers, the first automatic transfer counts as one
transfer. Each future automatic transfer is without charge and does not reduce
the remaining number of transfers that may be made without charge in that
Contract year or in later Contract years. However, if you change your
instructions for automatic transfers, the first automatic transfer thereafter
will count as one transfer.
Each of the following transfers of Contract Value from the Sub-Accounts to the
Fixed Account is free and does not count as one of the 12 free transfers in a
Contract year:
- A conversion within the first 24 months from Date of Issue;
- A transfer to the Fixed Account to secure a loan; and
- A transfer from the Fixed Account as a result of a loan repayment.
CONTRACT LOANS
You may borrow money secured by your Contract Value, both during and after the
first Contract year. The total amount you may borrow is the Loan Value. The Loan
Value is 90% of the Surrender Value.
The minimum loan amount is $1,000. The maximum loan is the Loan Value minus any
Outstanding Loan. We will usually pay the loan within seven days after we
receive the Written Request. We may delay the payment of loans as stated in
OTHER CONTRACT PROVISIONS -- "Delay of Payments."
We will allocate the loan among the Sub-Accounts and the Fixed Account according
to your instructions. If you do not make an allocation, we will make a Pro-rata
Allocation. We will transfer Contract Value in each Sub-Account equal to the
Contract loan to the Fixed Account. We will not count this transfer as a
transfer subject to the transfer charge.
Policy value equal to the outstanding loan will earn monthly interest in the
fixed account at an annual rate of at
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least 4.0% (5.5% for preferred loans). NO OTHER INTEREST WILL BE CREDITED.
PREFERRED LOAN OPTION
Any portion of the Outstanding Loan that represents earnings in this Contract
may be treated as a preferred loan. You may change a preferred loan to a
non-preferred loan at any time upon written request.
There is some uncertainty as to the tax treatment of a preferred loan, which may
be treated as a taxable withdrawal from the Contract. Consult a qualified tax
adviser (and see FEDERAL TAX CONSIDERATIONS).
LOAN INTEREST CHARGED
The Company charges interest on loans at an annual rate that is guaranteed not
to exceed 6.0%. Interest is due and payable in arrears at the end of each
Contract year or for as short a period as the loan may exist. Interest accrues
daily. Interest not paid when due will be added to the Outstanding Loan by
transferring Contract Value equal to the interest due to the Fixed Account. The
interest due will bear interest at the same rate.
REPAYMENT OF OUTSTANDING LOAN
You may pay any loans before Contract lapse. We will allocate that part of the
Contract Value in the Fixed Account that secured a repaid loan to the
Sub-Accounts and Fixed Account according to your instructions. If you do not
make a repayment allocation, we will allocate Contract Value according to your
most recent payment allocation instructions. However, loan repayments allocated
to the Variable Account cannot exceed Contract Value previously transferred from
the Variable Account to secure the outstanding loan.
If the Outstanding Loan exceeds the Contract Value less the surrender charge,
the Contract will terminate. We will mail a notice of termination to the last
known address of you and any assignee. If you do not make sufficient payment
within 62 days after this notice is mailed, the Contract will terminate with no
value. See CONTRACT TERMINATION AND REINSTATEMENT.
EFFECT OF CONTRACT LOANS
Contract loans will permanently affect the Contract Value and Surrender Value,
and may permanently affect the Death Benefit. The effect could be favorable or
unfavorable, depending on whether the investment performance of the Sub-Accounts
is less than or greater than the interest credited to the Contract Value in the
Fixed Account that secures the loan. We will deduct any Outstanding Loan from
the proceeds payable when the Insured dies or from a surrender.
CONTRACT TERMINATION AND REINSTATEMENT
TERMINATION
Unless the Guaranteed Death Benefit Rider is in effect, the Contract will
terminate if on a Monthly Processing Date the Surrender Value is less than $0
(zero.) If this situation occurs, the Contract will be in default. You will then
have a grace period of 62 days, measured from the date of default, to make a
payment sufficient to prevent termination. On the date of default, we will send
a notice to you and to any assignee of record. The notice will state the payment
due and the date by which it must be paid. Failure to make a sufficient payment
within the grace period will result in the Contract terminating without value.
If the Insured dies during the grace period, we will deduct from the Net Death
Benefit any overdue charges.
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REINSTATEMENT
A terminated Contract may be reinstated within three years of the date of
default and before the Final Payment Date. The reinstatement takes effect on the
Monthly Processing Date following the date you submit to us:
- Written application for reinstatement;
- Evidence of Insurability showing that the Insured is insurable
according to our current underwriting rules;
- A payment that is large enough to cover the cost of all Contract
charges that were due and unpaid during the grace period;
- A payment that is large enough to keep the Contract in force for three
months; and
- A payment or reinstatement of any loan against the Contract that
existed at the end of the grace period.
Contracts which have been surrendered may not be reinstated. The Guaranteed
Death Benefit Rider may not be reinstated.
SURRENDER CHARGE -- For the purpose of measuring the surrender charge period,
the Contract will be reinstated as of the date of default. The surrender charge
on the date of reinstatement is the surrender charge that would have been in
effect on the date of default.
CONTRACT VALUE ON REINSTATEMENT -- The Contract Value on the date of
reinstatement is:
- The payment made to reinstate the Contract and interest earned from
the date the payment was received at our Principal Office, PLUS
- The Contract Value less any Outstanding Loan on the date of default,
MINUS
- The Monthly Deductions due on the date of reinstatement.
You may reinstate any Outstanding Loan.
OTHER CONTRACT PROVISIONS
CONTRACT OWNER
The Contract Owner named on the specifications page of the Contract is the
Insured unless another Contract Owner has been named in the application. As
Contract Owner, you are entitled to exercise all rights under your Contract
while the Insured is alive, with the consent of any irrevocable Beneficiary.
BENEFICIARY
The Beneficiary is the person or persons to whom the Net Death Benefit is
payable on the Insured's death. Unless otherwise stated in the Contract, the
Beneficiary has no rights in the Contract before the Insured dies. While the
Insured is alive, you may change the Beneficiary, unless you have declared the
Beneficiary to be irrevocable. If no Beneficiary is alive when the Insured dies,
the Contract Owner (or the Contract Owner's estate) will be the Beneficiary. If
more than one Beneficiary is alive when the Insured dies, we will pay each
Beneficiary in equal shares, unless you have chosen otherwise. Where there is
more than one Beneficiary, the interest of a Beneficiary who dies before the
Insured will pass to surviving Beneficiaries proportionally, unless the Contract
Owner has
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requested otherwise.
ASSIGNMENT
You may assign a Contract as collateral or make an absolute assignment. All
Contract rights will be transferred to the assignee's interest. The consent of
the assignee may be required to make changes in payment allocations, make
transfers or to exercise other rights under the Contract. We are not bound by an
assignment or release thereof, unless it is in writing and recorded at our
Principal Office. When recorded, the assignment will take effect on the date the
Written Request was signed. Any rights the assignment creates will be subject to
any payments we made or actions we took before the assignment is recorded. We
are not responsible for determining the validity of any assignment or release.
THE FOLLOWING CONTRACT PROVISIONS MAY VARY BY STATE.
LIMIT ON RIGHT TO CHALLENGE THE CONTRACT
We cannot challenge the validity of your Contract if the Insured was alive after
the Contract had been in force for two years from the Date of Issue.
SUICIDE
The Net Death Benefit will not be paid if the Insured commits suicide within two
years from the Date of Issue. Instead, we will pay the Beneficiary all payments
made for the Contract, without interest, less any Outstanding Loan and partial
withdrawals.
MISSTATEMENT OF AGE OR SEX
If the Insured's Age or sex is not correctly stated in the Contract application,
we will adjust the Death Benefit and the Face Amount under the Contract to
reflect the correct Age and sex. The adjustment will be based upon the ratio of
the maximum payment for the Contract to the maximum payment for the Contract
issued for the correct Age or sex. We will not reduce the Death Benefit to less
than the Guideline Minimum Sum Insured. For a unisex Contract, there is no
adjusted benefit for misstatement of sex.
DELAY OF PAYMENTS
We may delay paying any amounts derived from a payment you made by check until
the check has cleared your bank. Amounts payable from the Variable Account for
surrender, partial withdrawals, Net Death Benefit, Contract loans and transfers
may be postponed whenever:
- The New York Stock Exchange is closed other than customary weekend and
holiday closings;
- The SEC restricts trading on the New York Stock Exchange; or
- The SEC determines an emergency exists, so that disposal of securities
is not reasonably practicable or it is not reasonably practicable to
compute the value of the Variable Account's net assets.
We reserve the right to defer amounts payable from the Fixed Account. This delay
may not exceed six months. However, if payment is delayed for 30 days or more,
we will pay interest at least equal to an effective annual yield of 3.0% per
year for the deferment. Amounts from the Fixed Account used to make payments on
Contracts that we or our affiliates issue will not be delayed.
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<Page>
FEDERAL TAX CONSIDERATIONS
The following summary of federal tax considerations is based on our
understanding of the present federal income tax laws as they are currently
interpreted. Legislation may be proposed which, if passed, could adversely and
possibly retroactively affect the taxation of the Contracts. This summary is not
exhaustive, does not purport to cover all situations, and is not intended as tax
advice. We do not address tax provisions that may apply if the Contract Owner is
a corporation or the Trustee of an employee benefit plan. You should consult a
qualified tax adviser to apply the law to your circumstances.
THE COMPANY AND THE VARIABLE ACCOUNT
The Company is taxed as a life insurance company under Subchapter L of the
Internal Revenue Code. We file a consolidated tax return with our parent and
affiliates. We do not currently charge for any income tax on the earnings or
realized capital gains in the Variable Account. We do not currently charge for
federal income taxes with respect to the Variable Account. A charge may apply in
the future for any federal income taxes we incur. The charge may become
necessary, for example, if there is a change in our tax status. Any charge would
be designed to cover the federal income taxes on the investment results of the
Variable Account.
Under current laws, the Company may incur state and local taxes besides premium
taxes. These taxes are not currently significant. If there is a material change
in these taxes affecting the Variable Account, we may charge for taxes paid or
for tax reserves.
TAXATION OF THE CONTRACTS
We believe that the Contracts described in this prospectus are life insurance
contracts under Section 7702 of the Code. Section 7702 affects the taxation of
life insurance contracts and places limits on the total amount of premiums and
on the relationship of the Contract Value to the Death Benefit. So long as the
Contracts are life insurance contracts, the Net Death Benefit of the Contract is
excludable from the gross income of the Beneficiary. Also, any increase in
Contract Value is not taxable until received by you or your designee. Although
the Company believes the Contracts are in compliance with Section 7702 of the
Code, the manner in which Section 7702 should be applied to a last survivorship
life insurance contract is not directly addressed by Section 7702. In absence of
final regulations or other guidance issued under Section 7702, there is
necessarily some uncertainty whether a Contract will meet the Section 7702
definition of a life insurance Contract. This is true particularly if the
Contract Owner pays the full amount of payments permitted under the Contract. A
Contract Owner contemplating the payment of such amounts should do so only after
consulting a tax advisor. If a Contract were determined not to be a life
insurance contract under Section 7702, it would not have most of the tax
advantages normally provided by a life insurance contract.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract" under
Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay test" of Section 7702A. The seven-pay test
provides that payments cannot be paid at a rate more rapidly than allowed by the
payment of seven annual payments using specified computational rules provided in
Section 7702A. If the Contract is considered a modified endowment contract,
distributions (including Contract loans, partial withdrawals, surrenders and
assignments) will be taxed on an "income-first" basis and includible in gross
income to the extent that the Surrender Value exceeds the Contract Owner's
investment in the Contract. Any other amounts will be treated as a return of
capital up to the Contract Owner's basis in the Contract. A 10% additional tax
is imposed on that part of any distribution that is includible in income, unless
the distribution is:
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- Made after the taxpayer becomes disabled;
- Made after the taxpayer attains age 59 1/2; OR
- Part of a series of substantially equal periodic payments for the
taxpayer's life or life expectancy or joint life expectancies of the
taxpayer and beneficiary.
The Company has designed this Contract to meet the definition of a modified
endowment contract.
Any contract received in exchange for a modified endowment contract will also be
a modified endowment contract. However, an exchange under Section 1035 of the
Code of (1) a life insurance contract entered into before June 21, 1988 or (2) a
life insurance contract that is not itself a modified endowment contract, will
not cause the new Contract to be treated as a modified endowment contract if no
additional payments are paid and there is no increase in the death benefit as a
result of the exchange.
All modified endowment contracts issued by the same insurance company to the
same Contract Owner during any calendar period will be treated as a single
modified endowment contract in computing taxable distributions.
CONTRACT LOANS
Consumer interest paid on Contract loans under an individually owned Contract is
not tax deductible. A business may deduct interest on loans up to $50,000
subject to a prescribed maximum amount, provided that the Insured is a "key
person" of that business. The Code defines "key person" to mean an officer or a
20% owner.
You may convert your preferred loan to a non-preferred loan. However, it is
possible that, notwithstanding the conversion, some or all of the loan could be
treated as a taxable withdrawal from the Contract.
DIVERSIFICATION
Federal tax law requires that the investment of each Sub-Account funding the
Contracts be adequately diversified according to Treasury regulations. Although
we do not have control over the investments of the Funds, we believe that the
Funds currently meet the Treasury's diversification requirements. We will
monitor continued compliance with these requirements.
The Treasury Department has announced that previous regulations on
diversification do not provide guidance concerning the extent to which Contract
Owners may direct their investments to divisions of a separate investment
account. Regulations may provide guidance in the future. The Contracts or our
administrative rules may be modified as necessary to prevent a Contract Owner
from being considered the owner of the assets of the Variable Account.
VOTING RIGHTS
Where the law requires, we will vote Fund shares that each Sub-Account holds
according to instructions received from Contract Owners with Contract Value in
the Sub-Account. If, under the 1940 Act or its rules, we may vote shares in our
own right, whether or not the shares relate to the Contracts, we reserve the
right to do so.
We will provide each person having a voting interest in a Fund with proxy
materials and voting instructions. We will vote shares held in each Sub-Account
for which no timely instructions are received in proportion to all instructions
received for the Sub-Account. We will also vote in the same proportion our
shares held in the Variable Account that do not relate to the Contracts.
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We will compute the number of votes that a Contract Owner has the right to
instruct on the record date established for the Fund. This number is the
quotient of:
- Each Contract Owner's Contract Value in the Sub-Account, divided by
- The net asset value of one share in the Fund in which the assets of
the Sub-Account are invested.
We may, when required by state insurance regulatory authorities, disregard
voting instructions if the instructions require that Fund shares be voted so as
(1) to cause to change in the sub-classification or investment objective of one
or more of the Funds, or (2) to approve or disapprove an investment advisory
contract for the Funds. In addition, we may disregard voting instructions that
are in favor of any change in the investment policies or in any investment
adviser or principal underwriter if the change has been initiated by Contract
Owners or the Trustees. Our disapproval of any such change must be reasonable
and, in the case of a change in investment policies or investment adviser, based
on a good faith determination that such change would be contrary to state law or
otherwise is inappropriate in light of the objectives and purposes of the Funds.
In the event we do disregard voting instructions, a summary of and the reasons
for that action will be included in the next periodic report to Contract Owners.
DIRECTORS AND PRINCIPAL OFFICERS OF THE COMPANY
<Table>
<Caption>
NAME AND POSITION WITH COMPANY PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------------ ----------------------------------------------
Bruce C. Anderson Director (since 1996) and Vice President (since 1984) of
Director and Vice President First Allmerica
Warren E. Barnes Vice President (since 1996) and Corporate Controller (since
Vice President and Corporate 1998) of First Allmerica
Controller
Mark R. Colborn Director (since 2000) and Vice President (since 1992) of First
Director and Vice President Allmerica
Charles F. Cronin Secretary and Counsel (since 2000) of First Allmerica;
Secretary Counsel (since 1996) of First Allmerica; Attorney (1991-1996)
of Nutter, McClennen & Fish
J. Kendall Huber Director, Vice President and General Counsel (since 2000)
Director, Vice President and of First Allmerica; Vice President (1999) of Promos Hotel
General Counsel Corporation; Vice President and Deputy General Counsel
(1998-1999) of Legg Mason, Inc.; Vice President and Deputy
General Counsel (1995-1998) of USF&G Corporation
Mark A. Hug Director (since 2001) and Vice President (since 2000) of First
Director and Vice President Allmerica; Senior Vice President of Life and Annuity Products
(2001) for The Equitable Life Assurance Society
John P. Kavanaugh Director and Chief Investment Officer (since 1996) and Vice
Director, Vice President and President (since 1991) of First Allmerica; Director (since 1996)
Chief Investment Officer and President (since 1995) of Allmerica Asset Management, Inc.
</Table>
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<Page>
<Table>
<Caption>
NAME AND POSITION WITH COMPANY PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------------ ----------------------------------------------
Mark C. McGivney Vice President (since 1997) and Treasurer (since 2000) of First
Vice President and Treasurer Allmerica; Associate, Investment Banking (1996-1997) of
Merrill Lynch & Co.
John F. O'Brien Director, President and Chief Executive Officer (since 1989) of
Director, President and First Allmerica
Chief Executive Officer
Edward J. Parry, III Director and Chief Financial Officer (since 1996), Vice
Director, Vice President and President (since 1993) and Treasurer (1993-2000) of First
Chief Financial Officer Allmerica
Richard M. Reilly Director (since 1996); Vice President (1990-2001) and Senior
Director and Senior Vice President Vice President (since 2001) of First Allmerica; Director
(since 1990), President and Chief Executive Officer (1995- 2001) of
Allmerica Financial Life Insurance and Annuity Company; Director and
President (since 1998) of Allmerica Financial Investment Management
Services, Inc.
Robert P. Restrepo, Jr. Director and Vice President (since 1998) of First Allmerica;
Director and Vice President Chief Executive Officer (1996 to 1998) of Travelers
Property & Casualty; Senior Vice President (1993 to 1996)
of Aetna Life & Casualty Company
Gregory D. Tranter Director and Vice President (since 2000) of First Allmerica;
Director and Vice President Vice President (1996-1998) of Travelers Property & Casualty;
Director of Geico Team (1983-1996) of Aetna Life & Casualty
</Table>
DISTRIBUTION
Allmerica Investments, Inc., an indirect wholly-owned subsidiary of First
Allmerica, acts as the principal underwriter and general distributor of the
Contracts. Allmerica Investments, Inc. is registered with the SEC as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. ("NASD"). Broker-dealers sell the Contracts through their registered
representatives who are appointed by us.
The Company pays commissions not to exceed 10% of the payment to broker-dealers
which sell the Contracts. Alternative commission schedules are available with
lower initial commission amounts, plus ongoing annual compensation of up to
1.00% of Contract Value. To the extent permitted by NASD rules, overrides and
promotional incentives or payments may also be provided to General Agents,
independent marketing organizations, and broker-dealers based on sales volumes,
the assumption of wholesaling functions or other sales-related criteria. Other
payments may be made for other services that do not directly involve the sale of
the Contracts. These services may include the recruitment and training of
personnel, production of promotional literature, and similar services.
We intend to recoup commissions and other sales expenses through a combination
of the contingent surrender charge, distribution expense charge and investment
earnings on amounts allocated under the Contracts to the Fixed Account in excess
of the interest credited on amounts in the Fixed Account. Commissions paid on
the Contracts, including other incentives or payments, are not charged to
Contract Owners or to the Separate Account.
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REPORTS
We will maintain the records for the Variable Account. We will promptly send you
statements of transactions under your Contract, including:
- Payments;
- Transfers among Sub-Accounts and the Fixed Account;
- Partial withdrawals;
- Increases in loan amount or loan repayments;
- Lapse or termination for any reason; and
- Reinstatement.
We will send an annual statement to you that will summarize all of the above
transactions and deductions of charges during the Contract year. It will also
set forth the status of the Death Benefit, Contract Value, Surrender Value,
amounts in the Sub-Accounts and Fixed Account, and any Contract loans. The Owner
should review the information in all statements carefully. All errors or
corrections must be reported to the Company immediately to assure proper
crediting to the Contract. The Company will assume that all transactions are
accurately reported on confirmation statements and quarterly/annual statements
unless the Owner notifies the Principal Office in writing within 30 days after
receipt of the statement. We will send you reports containing financial
statements and other information for the Variable Account and the Funds as the
1940 Act requires.
LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Variable Account is a party,
or to which the assets of the Variable Account are subject. The Company and
Allmerica Investments Inc. are not involved in any litigation that is of
material importance in relation to their total assets or that relates to the
Variable Account.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
We reserve the right, subject to law, to make additions to, deletions from, or
substitutions for the shares that are held in the Sub-Accounts. We may redeem
the shares of a Fund and substitute shares of another registered open-end
management company, if:
- The shares of the Fund are no longer available for investment; or
- In our judgment further investment in the Fund would be improper based
on the purposes of the Variable Account or the affected Sub-Account.
Where the 1940 Act or other law requires, we will not substitute any shares
respecting a Contract interest in a Sub-Account without notice to Contract
Owners and prior approval of the SEC and state insurance authorities. The
Variable Account may, as the law allows, purchase other securities for other
contracts or allow a conversion between contracts on a Contract Owner's request.
We reserve the right to establish additional Sub-Accounts funded by a new fund
or by another investment company. Subject to law, we may, in our sole
discretion, establish new Sub-Accounts or eliminate one or more Sub-Accounts.
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Shares of the Funds are issued to other separate accounts of the Company and its
affiliates that fund variable annuity contracts ("mixed funding"). Shares of the
Funds may also be issued to other unaffiliated insurance companies ("shared
funding"). It is conceivable that in the future such mixed funding or shared
funding may be disadvantageous for variable life contract owners or variable
annuity contract owners. The Company and the Funds do not believe that mixed
funding is currently disadvantageous to either variable life insurance contract
owners or variable annuity contract owners. The Company will monitor events to
identify any material conflicts among contract owners because of mixed funding.
If the Company concludes that separate funds should be established for variable
life and variable annuity separate accounts, we will bear the expenses.
We may change the Contract to reflect a substitution or other change and will
notify Contract Owners of the change. Subject to any approvals the law may
require, the Variable Account or any Sub-Accounts may be:
- Operated as a management company under the 1940 Act;
- Deregistered under the 1940 Act if registration is no longer required;
or
- Combined zwith other Sub-Accounts or our other separate accounts.
FURTHER INFORMATION
We have filed a registration statement under the Securities Act of 1933 ("1933
Act") for this offering with the SEC. Under SEC rules and regulations, we have
omitted from this Prospectus parts of the registration statement and amendments.
Statements contained in this prospectus are summaries of the Contract and other
legal documents. The complete documents and omitted information may be obtained
from the SEC's principal office in Washington, D.C., on payment of the SEC's
prescribed fees.
MORE INFORMATION ABOUT THE FIXED ACCOUNT
This Prospectus serves as a disclosure document only for the aspects of the
Contract relating to the Variable Account. For complete details on the Fixed
Account, read the Contract itself. The Fixed Account and other interests in the
General Account are not regulated under the 1933 Act or the 1940 Act because of
exemption and exclusionary provisions. 1933 Act provisions on the accuracy and
completeness of statements made in prospectuses may apply to information on the
fixed part of the Contract and the Fixed Account. The SEC has not reviewed the
disclosures in this section of the prospectus.
GENERAL DESCRIPTION
You may allocate part or all of your payment to accumulate at a fixed rate of
interest in the Fixed Account. The Fixed Account is a part of our General
Account. The General Account is made up of all of our general assets other than
those allocated to any separate account. Allocations to the Fixed Account become
part of our General Account assets and are used to support insurance and annuity
obligations.
FIXED ACCOUNT INTEREST
We guarantee amounts allocated to the Fixed Account as to principal and a
minimum rate of interest. We will credit amounts allocated to the Fixed Account
with interest at an effective annual yield of at least 4.0%, compounded daily.
"Excess interest" may or may not be credited at our sole discretion. We will
guarantee initial rates on amounts allocated to the Fixed Account, either as a
payment or a transfer, to the next Contract anniversary.
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Contract loans may also be made from the Contract Value in the Fixed Account. We
will credit that part of the Contract Value that is equal to any Outstanding
Loan with interest at an effective annual yield of at least 4.0% (5.5% for
preferred loans).
We may delay transfers, surrenders, partial withdrawals, Net Death Benefits and
Contract loans up to six months. However, if payment is delayed for 30 days or
more, we will pay interest at least equal to an effective annual yield of 3.0%
per year for the deferment. Amounts from the Fixed Account used to make payments
on Contracts that we or our affiliates issue will not be delayed.
TRANSFERS, SURRENDERS, AND PARTIAL WITHDRAWALS
If a Contract is surrendered or if a partial withdrawal is made, a surrender
charge and/or partial withdrawal charge may be imposed. We deduct partial
withdrawals from Contract Value allocated to the Fixed Account on a
last-in/first out basis. This means that the last payments allocated to Fixed
Account will be withdrawn first.
The first 12 transfers in a Contract year are free. After that, we may deduct a
transfer charge not to exceed $25 for each transfer in that Contract year. The
transfer privilege is subject to our consent and to our then current rules.
INDEPENDENT ACCOUNTANTS
The financial statements of the Company as of December 31, 2001 and 2000 and for
each of the three years in the period ended December 31, 2001, included in this
Prospectus constituting part of this Registration Statement, have been so
included in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
FINANCIAL STATEMENTS
Financial Statements for the Company are included in this Prospectus, beginning
immediately after the Appendices. The financial statements of the Company should
be considered only as bearing on our ability to meet our obligations under the
Contract. They should not be considered as bearing on the investment performance
of the assets held in the Variable Account.
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APPENDIX A
GUIDELINE MINIMUM SUM INSURED TABLE
The Guideline Minimum Sum Insured is a percentage of the Contract Value. The
factors for the Guideline Minimum Sum Insured will meet or exceed the
requirements under federal tax regulations, as set forth in the table below. The
Guideline Minimum Sum Insured factors applicable to your contract are set forth
in its specifications pages.
GUIDELINE MINIMUM SUM INSURED
<Table>
<Caption>
AGE OF INSURED PERCENTAGE OF
ON DATE OF DEATH CONTRACT VALUE
---------------- --------------
40 and under 250%
41 245%
42 240%
43 235%
44 220%
45 215%
46 209%
47 203%
48 197%
49 191%
50 185%
51 178%
52 171%
53 164%
54 157%
55 150%
56 146%
57 142%
58 138%
59 134%
60 130%
61 128%
62 126%
63 124%
64 122%
65 120%
70 115%
71 113%
72 111%
73 109%
74 107%
75-90 105%
91 104%
92 103%
93 102%
94 101%
95 and above 100%
</Table>
A-1
<Page>
APPENDIX B -- OPTIONAL INSURANCE BENEFITS
GUARANTEED DEATH BENEFIT RIDER
This rider provides a guaranteed net Death Benefit which is the greater of (a)
the Face Amount as of the Final Payment Date or (b) the Contract Value as of the
date due proof of death is received by the Company, reduced by any Outstanding
Loan through the Contract month in which the Insured dies. If the Contract Owner
pays an initial payment equal to the Guideline Single Premium, the contract will
be issued with the Guaranteed Death Benefit Rider at no additional charge. The
rider may terminate under certain circumstances. See THE CONTRACT, "Death
Benefit" -"Guaranteed Death Benefit Rider."
B-1
<Page>
APPENDIX C -- PAYMENT OPTIONS
PAYMENT OPTIONS -- On Written Request, the Surrender Value or all or part of any
payable Net Death Benefit may be paid under one or more payment options then
offered by the Company. If you do not make an election, we will pay the benefits
in a single sum. If a payment option is selected, the Beneficiary may pay to us
any amount that would otherwise be deducted from the Death Benefit. A
certificate will be provided to the payee describing the payment option
selected.
The amounts payable under a payment option are paid from the Fixed Account.
These amounts are not based on the investment experience of the Variable
Account. The amounts payable under these options, for each $1,000 applied, will
be:
(a) the rate per $1,000 of benefit based on our non-guaranteed current
benefit option rates for this class of Contracts, or
(b) the rate in your Contract for the applicable benefit option, whichever
is greater.
If you choose a benefit option, the Beneficiary may, when filing a proof of
claim, pay us any amount that otherwise would be deducted from the proceeds.
OPTION A: BENEFITS FOR A SPECIFIED NUMBER OF YEARS -- We will make equal
payments for any selected number of years up to 30 years. These payments may be
made annually, semi-annually, quarterly or monthly, whichever you choose.
OPTION B: LIFETIME MONTHLY BENEFIT -- Benefits are based on the age of the
person who receives the money (called the payee) on the date the first payment
will be made. You may choose one of the three following options to specify when
benefits will cease:
- when the payee dies with no further benefits due (Life Annuity);
- when the payee dies but not before the total benefit payments made by
us equals the amount applied under this option (Life Annuity with
Installment Refund); or
- when the payee dies but not before 10 years have elapsed from the date
of the first payment (Life Annuity with payments Guaranteed for 10
years).
OPTION C: INTEREST BENEFITS -- We will pay interest at a rate we determine each
year. It will not be less than 3% per year. We will make payments annually,
semi-annually, quarterly, or monthly, whichever is preferred. These benefits
will stop when the amount left has been withdrawn. If the payee dies, any unpaid
balance plus accrued interest will be paid in a lump sum.
OPTION D: BENEFITS FOR A SPECIFIED AMOUNT -- Interest will be credited to the
unpaid balance and we will make payments until the unpaid balance is gone. We
will credit interest at a rate we determine each year, but not less than 3%. We
will make payments annually, semi-annually, quarterly, or monthly, whichever is
preferred. The benefit level chosen must provide for an annual benefit of at
least 8% of the amount applied.
C-1
<Page>
OPTION E: LIFETIME MONTHLY BENEFITS FOR TWO PAYEES -- We will pay a benefit
jointly to two payees during their joint lifetime. After one payee dies, the
benefits to the survivor will be:
- the same as the original amount, or
- in an amount equal to 2/3 of the original amount.
Benefits are based on the payees' ages on the date the first payment is due.
Benefits will end when the second payee dies.
SELECTION OF PAYMENT OPTIONS -- The amount applied under any one option for any
one payee must be at least $5,000. The periodic payment for any one payee must
be at least $50. Subject to the Contract Owner and Beneficiary provisions, any
option selection may be changed before the Net Death Benefit become payable. If
you make no selection, the Beneficiary may select an option when the Net Death
Benefit becomes payable.
- If the amount of the monthly benefit under Option B for the age of the
payee is the same for different periods certain, the payee will be
entitled to the longest period certain for the payee's age.
- You may give the Beneficiary the right to change from Option C or D to
any other option at any time. If Option C or D is chosen by the payee
when this Contract becomes a claim, the payee may reserve the right to
change to any other option. The payee who elects to change options
must be the payee under the option selected.
ADDITIONAL DEPOSITS -- An additional deposit may be added to any proceeds when
they are applied under Option B and E. We reserve the right to limit the amount
of any additional deposit. We may levy a charge of no more than 3% on any
additional deposits.
RIGHTS AND LIMITATIONS -- A payee has no right to assign any amount payable
under any option, nor to demand a lump sum benefit in place of any amount
payable under Options B or E. A payee will have the right to receive a lump sum
in place of installments under Option A. The payee must provide us with a
Written Request to reserve this right. If the right to receive a lump sum is
exercised, we will determine the lump sum benefit at the same interest rates
used to calculate the installments. The amount left under Option C and any
unpaid balance under Option D, may be withdrawn only as noted in the Written
Request selecting the option.
A corporate or fiduciary payee may select only Option A, C or D, subject to our
approval.
PAYMENT DATES -- The first payment under any option, except Option C, will be
due on the date this Contract matures, by death or otherwise, unless another
date is designated. Benefits under Option C begin at the end of the first
benefit period.
The last payment under any option will be made as stated in the option's
description. However, if a payee under Options B or E dies before the due date
of the second monthly payment, the amount applied, minus the first monthly
payment, will be paid in a lump sum or under any option other than Option E.
This payment will be made to the surviving payee under Option E or the
succeeding payee under Option B.
BENEFIT RATES -- The Benefit Option Tables in your Contract show benefit amounts
for Option A, B and E. If you choose one of these options, either within five
years of the date of surrender or the date the proceeds are otherwise payable,
we will apply either the benefit rates listed in the Tables, or the rates we use
on the date the proceeds are paid, whichever is more favorable. Benefits that
begin more than five years after that date, or as a result of additional
deposits, will be based on the rates we use on the date the first benefit is
due.
C-2
<Page>
APPENDIX D -- ILLUSTRATIONS OF DEATH BENEFIT, CONTRACT VALUES
AND ACCUMULATED PAYMENTS
The following tables illustrate the way in which a Contract's Death Benefit and
Contract Value could vary over an extended period.
ASSUMPTIONS
The tables illustrate the following Contracts: a Contract issued to a male, age
55, under a standard underwriting class and qualifying for the non-tobacco user
discount; a Contract issued on a unisex basis to an Insured, age 55, under a
standard underwriting class and qualifying for the non-tobacco user discount; a
Second-to-Die Contract issued to a male, age 65, under a standard Underwriting
Class and qualifying for the non-tobacco user discount and a female, age 65,
under a standard Underwriting Class and qualifying for the non-tobacco user
discount; and a Second-to-Die Contract issued on a unisex basis to two Insureds
both age 65, under a standard Underwriting Class and qualifying for the
non-tobacco user discount. The tables illustrate the guaranteed insurance
protection rates and the current insurance protection rates as presently in
effect. On request, we will provide a comparable illustration based on the
proposed Insured's age, sex, and Underwriting Class, and a specified payment.
The tables illustrate Contract Values based on the assumptions that no Contract
loans have been made, that no partial withdrawals have been made, and that no
more than 12 transfers have been made in any Contract year (so that no
transaction or transfer charges have been incurred).
The tables assume that the initial payment is allocated to and remains in the
Variable Account for the entire period shown. They are based on hypothetical
gross investment rates of return for the Fund (i.e., investment income and
capital gains and losses, realized or unrealized) equal to constant gross annual
rates of 0%, 6%, and 12%. The second column of the tables shows the amount that
would accumulate if the initial payment was invested to earn interest (after
taxes) at 5% compounded annually.
The Contract Values and Death Benefit would be different from those shown if the
gross annual investment rates of return averaged 0%, 6%, and 12% over a period
of years, but fluctuated above or below the averages for individual Contract
years. The values would also be different depending on the allocation of the
Contract's total Contract Value among the Sub-Accounts, if the rates of return
averaged 0%, 6% or 12, but the rates of each Fund varied above and below the
averages.
The hypothetical returns shown in the table do not reflect any charges for
income taxes against the Variable Account since no charges are currently made.
However, if in the future the charges are made, to produce illustrated Death
Benefits and Contract Value, the gross annual investment rate of return would
have to exceed 0%, 6% or 12% by a sufficient amount to cover the tax charges.
DEDUCTIONS FOR CHARGES
The amounts shown for the Death Proceeds and Contract Values take into account
the deduction from payment for the tax expense charge, the Monthly Deductions
from Contract Value (including the administrative charge (equivalent to 0.20% on
an annual basis), and the distribution charge (equivalent to 0.90% on an annual
basis, for the first ten Contract years only), and the daily charge against the
Variable Account for mortality and expense risks (0.90% on an annual basis). In
both the Current Cost of Insurance Charges illustrations and Guaranteed Cost of
Insurance Charges illustrations, the Variable Account charges currently are
equivalent to an effective annual rate of 0.90% of the average daily value of
the assets in the Variable Account.
D-1
<Page>
EXPENSES OF THE UNDERLYING FUNDS
The amounts shown in the tables also take into account the Underlying Fund
advisory fees and operating expenses. These are assumed to be at an annual rate
of x.xx% of the average daily net assets of the Underlying Funds, which is the
approximate average of the expenses of the Underlying Funds in 2001. The actual
fees and expenses of each Underlying Fund vary, and, in 2001, ranged from an
annual rate of x.xx% to an annual rate of x.xx% of average daily net assets. The
fees and expenses associated with the Contract may be more or less than x.xx% in
the aggregate, depending upon how you make allocations of the Contract Value
among the Sub-Accounts.
Through December 31, 2002, Allmerica Financial Investment Management Services,
Inc. ("AFIMS") has declared a voluntary expense limitation of 1.50% of average
net assets for AIT Select International Equity Fund, 1.35% for AIT Select
Aggressive Growth Fund and AIT Select Capital Appreciation Fund, 1.25% for AIT
Select Value Opportunity Fund, 1.20% for AIT Select Growth Fund and AIT Select
Strategic Growth Fund, 1.10% for AIT Select Growth and Income Fund, 1.00% for
AIT Select Strategic Income Fund and AIT Select Investment Grade Income Fund,
and 0.60% for AIT Money Market Fund and AIT Equity Index Fund. The total
operating expenses of the funds were less than their respective expense
limitations throughout 2001.
In addition, through December 31, 2002, AFIMS has agreed to voluntarily waive
its management fee to the extent that expenses of the AIT Select Emerging
Markets Fund exceed 2.00% of the Fund's average daily net assets, except that
such waiver shall not exceed the net amount of management fees earned by AFIMS
from the Fund after subtracting fees paid by AFIMS to a sub-advisor. Through
December 31, 2002, the AIT Select Value Opportunity Fund's management fee rate
has been voluntarily limited to an annual rate of 0.90% of average daily net
assets, and total expenses are limited to 1.25% of average daily net assets. The
declaration of a voluntary management fee or expense limitation in any year does
not bind AFIMS to declare future expense limitations with respect to these
Funds.
Underlying Fund expense limitation Information will be updated by
pre-effective amendment
The Underlying Fund information above was provided by the Underlying Funds and
was not independently verified by the Company.
NET ANNUAL RATES OF INVESTMENT
Taking into account the Separate Account mortality and expense risk charge of
0.90%, and the assumed 0.95% charge for Underlying Fund advisory fees and
operating expenses, the gross annual rates of investment return of 0%, 6% and
12% correspond to net annual rates of -1.85%, 4.15% and 10.15%, respectively.
The hypothetical returns shown in the table do not reflect any charges for
income taxes against the Separate Account since no charges are currently made.
However, if in the future such charges are made, in order to produce illustrated
death benefits and Contract Values, the gross annual investment rate of return
would have to exceed 0%, 6% or 12% by a sufficient amount to cover the tax
charges.
UPON REQUEST, THE COMPANY WILL PROVIDE A COMPARABLE ILLUSTRATION BASED UPON THE
PROPOSED INSURED'S AGE AND UNDERWRITING CLASSIFICATION, AND THE REQUESTED FACE
AMOUNT, SUM INSURED OPTION, AND RIDERS.
D-2
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
MALE NONSMOKER AGE 55
SPECIFIED FACE AMOUNT = $74,596
CURRENT COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 60 31,907
Age 65 40,722
Age 70 51,973
Age 75 66,332
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-3
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
MALE NONSMOKER AGE 55
SPECIFIED FACE AMOUNT = $74,596
GUARANTEED COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT* VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 60 31,907
Age 65 40,722
Age 70 51,973
Age 75 66,332
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-4
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
UNISEX NONSMOKER AGE 55
SPECIFIED FACE AMOUNT = $76,948
CURRENT COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 60 31,907
Age 65 40,722
Age 70 51,973
Age 75 66,332
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-5
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
UNISEX NONSMOKER AGE 55
SPECIFIED FACE AMOUNT = $76,948
GUARANTEED COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT* VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 60 31,907
Age 65 40,722
Age 70 51,973
Age 75 66,332
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-6
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
MALE NONSMOKER AGE 65
FEMALE NONSMOKER AGE 65
SPECIFIED FACE AMOUNT = $73,207
CURRENT COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 70 31,907
Age 75 40,722
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-7
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
MALE NONSMOKER AGE 65
FEMALE NONSMOKER AGE 65
SPECIFIED FACE AMOUNT = $73,207
GUARANTEED COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT* VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 70 31,907
Age 75 40,722
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-8
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
UNISEX NONSMOKER AGE 65
UNISEX NONSMOKER AGE 65
SPECIFIED FACE AMOUNT = $72,969
CURRENT COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 70 31,907
Age 75 40,722
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-9
<Page>
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
ALLMERICA SPL II
UNISEX NONSMOKER AGE 65
UNISEX NONSMOKER AGE 65
SPECIFIED FACE AMOUNT = $72,969
GUARANTEED COST OF INSURANCE CHARGES
<Table>
<Caption>
PREMIUMS HYPOTHETICAL 0% HYPOTHETICAL 6% HYPOTHETICAL 12%
PAID PLUS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
INTEREST ----------------------- ----------------------- -----------------------
CONTRACT AT 5% SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH SURRENDER CONTRACT DEATH
YEAR PER YEAR VALUE VALUE BENEFIT* VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------- ----- ----- ------- ----- ----- ------- ----- ----- -------
1 26,250
2 27,563
3 28,941
4 30,388
5 31,907
6 33,502
7 35,178
8 36,936
9 38,783
10 40,722
11 42,758
12 44,896
13 47,141
14 49,498
15 51,973
16 54,572
17 57,300
18 60,165
19 63,174
20 66,332
Age 70 31,907
Age 75 40,722
</Table>
THE HYPOTHETICAL INVESTMENT RATES OF RETURN ARE ILLUSTRATIVE ONLY. THEY ARE NOT
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. INVESTMENT
RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN. INVESTMENT RESULTS WILL DEPEND ON
INVESTMENT ALLOCATIONS AND THE DIFFERENT INVESTMENT RATES OF RETURN FOR THE
FUNDS. THESE HYPOTHETICAL INVESTMENT RATES OF RETURN MAY NOT BE ACHIEVED FOR ANY
ONE YEAR OR SUSTAINED OVER ANY PERIOD. VALUES WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE RATES OF RETURN AVERAGED THE HYPOTHETICAL 0%, 6%, AND 12%, BUT
FLUCTUATED ABOVE AND BELOW THE AVERAGE IN INDIVIDUAL CONTRACT YEARS.
D-10
<Page>
APPENDIX E
PERFORMANCE INFORMATION
The Contracts were first offered to the public in 2000. However, the Company may
advertise "Total Return" and "Average Annual Total Return" performance
information based on the periods that the Funds have been in existence. The
results for any period prior to the Contracts being offered will be calculated
as if the Contracts had been offered during that period of time, with all
charges assumed to be those applicable to the Sub-Accounts and the Funds.
Total return and average annual total return are based on the hypothetical
profile of a representative Contract Owner and historical earnings and are not
intended to indicate future performance. "Total return" is the total income
generated net of certain expenses and charges. "Average annual total return" is
net of the same expenses and charges, but reflects the hypothetical return
compounded annually. This hypothetical return is equal to cumulative return had
performance been constant over the entire period. Average annual total returns
are not the same as yearly results and tend to smooth out variations in the
Fund's return.
In Tables IA and IIA, performance information under the Contracts is net of Fund
expenses, Monthly Deductions and surrender charges. We take a representative
Contract Owner and assume that:
- The Insured is a male Age 55, standard (non-tobacco user) Underwriting
Class;
- The Contract Owner had allocations in each of the Sub-Accounts for the
Fund durations shown; and
- There was a full surrender at the end of the applicable period.
Performance information for any Sub-Account reflects only the performance of a
hypothetical investment in the Sub-Account during a period. It is not
representative of what may be achieved in the future. However, performance
information may be helpful in reviewing market conditions during a period and in
considering a Fund's success in meeting its investment objectives.
We may compare performance information for a Sub-Account in reports and
promotional literature to:
- Standard & Poor's 500 Stock Index ("S&P 500");
- Dow Jones Industrial Average ("DJIA");
- Shearson Lehman Aggregate Bond Index;
- Other unmanaged indices of unmanaged securities widely regarded by
investors as representative of the securities markets;
- Other groups of variable life separate accounts or other investment
products tracked by Lipper Inc.;
- Other services, companies, publications, or persons such as
Morningstar, Inc., who rank the investment products on performance or
other criteria; and
- The Consumer Price Index.
Unmanaged indices may assume the reinvestment of dividends but generally do not
reflect deductions for insurance and administrative charges, separate account
charges and Fund management costs and expenses.
In advertising, sales literature, publications or other materials, we may give
information on various topics of
E-1
<Page>
interest to Contract Owners and prospective Contract Owners. These topics may
include:
- The relationship between sectors of the economy and the economy as a
whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, market timing,
dollar cost averaging, asset allocation and automatic account
rebalancing);
- The advantages and disadvantages of investing in tax-deferred and
taxable investments;
- Customer profiles and hypothetical payment and investment scenarios;
- Financial management and tax and retirement planning; and
- Investment alternatives to certificates of deposit and other financial
instruments, including comparisons between the Contracts and the
characteristics of and market for the financial instruments.
At times, the Company may also advertise the ratings and other information
assigned to it by independent rating organizations such as A.M. Best Company
("A.M. Best"), Moody's Investors Service ("Moody's"), Standard & Poor's
Insurance Rating Services ("S&P") and Duff & Phelps. A.M. Best's and Moody's
ratings reflect their current opinion of the Company's relative financial
strength and operating performance in comparison to the norms of the life/health
insurance industry. S&P's and Duff & Phelps' ratings measure the ability of an
insurance company to meet its obligations under insurance policies it issues but
do not measure the ability of such companies to meet other non-policy
obligations. The ratings also do not relate to the performance of the Underlying
Funds.
E-2
<Page>
TABLE IA
AVERAGE ANNUAL TOTAL RETURNS OF SUB-ACCOUNTS
FOR PERIODS ENDING DECEMBER 31, 2001
SINCE INCEPTION OF SUB-ACCOUNTS
NET OF ALL CHARGES AND ASSUMING SURRENDER OF THE POLICY
The following performance information is based on the periods that the Funds
have been in existence. The data is net of expenses of the Funds, all
Sub-Account charges, and all Contract charges (including surrender charges) for
a representative Contract. It is assumed that the Insured is Male, Age 36,
standard (non-tobacco user) underwriting class, that a single payment of $10,000
was made, that the entire payment was allocated to each Sub-Account
individually, and that there was a full surrender of the Contract at the end of
the applicable period.
<Table>
<Caption>
10 YEARS
SUB-ACCOUNT FOR YEAR OR LIFE OF
INCEPTION ENDED 5 SUB-ACCOUNT
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
AIT Core Equity Fund (Service Class)
AIT Equity Index Fund (Service Class)
AIT Government Bond Fund (Service Class)
AIT Money Market Fund (Service Class)
AIT Select Aggressive Growth Fund (Service Class)
AIT Select Capital Appreciation Fund (Service Class)
AIT Select Emerging Markets Fund (Service Class)
AIT Select Growth Fund (Service Class)
AIT Select Growth and Income Fund (Service Class)
AIT Select International Equity Fund (Service Class)
AIT Select Investment Grade Income Fund (Service Class)
AIT Select Strategic Growth Fund (Service Class)
AIT Select Strategic Income Fund (Service Class)
AIT Select Value Opportunity Fund (Service Class)
AIM V.I. Aggressive Growth Fund (Series II Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Blue Chip Fund (Series II Shares)
AIM V.I. Capital Development Growth Fund (Series II Shares)
AIM V.I. Premier Equity Fund (Series II Shares)
AllianceBernstein Small Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
Alliance Growth and Income Portfolio (Class B)
Alliance Premier Growth Portfolio (Class B)
Alliance Technology Portfolio (Class B)
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP II Contrafund Portfolio (Service Class 2)
Fidelity VIP III Mid Cap Portfolio (Service Class 2)
Fidelity VIP III Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Templeton Foreign Securities Fund (Class 2)
</Table>
E-3
<Page>
<Table>
<Caption>
10 YEARS
SUB-ACCOUNT FOR YEAR OR LIFE OF
INCEPTION ENDED 5 SUB-ACCOUNT
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Series (Service Class)
MFS New Discovery Series (Service Class)
MFS Total Return Series (Service Class)
MFS Utilities Series (Service Class)
Oppenheimer Capital Appreciation Fund/VA (Service Shares)
Oppenheimer Global Securities Fund/VA (Service Shares)
Oppenheimer High Income Fund/VA (Service Shares)
Oppenheimer Main Street Growth & Income Fund/VA (Service Shares)
Oppenheimer Multiple Strategies Fund/VA (Service Shares)
</Table>
PERFORMANCE INFORMATION REFLECTS ONLY THE PERFORMANCE OF A HYPOTHETICAL
INVESTMENT DURING THE PARTICULAR TIME PERIOD ON WHICH THE CALCULATIONS ARE
BASED. ONE-YEAR TOTAL RETURN AND AVERAGE ANNUAL TOTAL RETURN FIGURES ARE BASED
ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
PERFORMANCE INFORMATION SHOULD BE CONSIDERED IN LIGHT OF THE INVESTMENT
OBJECTIVES AND POLICIES, CHARACTERISTICS AND QUALITY OF THE PORTFOLIO OF THE
FUND IN WHICH A SUB-ACCOUNT INVESTS AND THE MARKET CONDITIONS DURING THE GIVEN
TIME PERIOD, AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF WHAT MAY BE
ACHIEVED IN THE FUTURE.
E-4
<Page>
TABLE IB
SUPPLEMENTAL AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING DECEMBER 31, 2001
SINCE INCEPTION OF SUB-ACCOUNT
EXCLUDING MONTHLY CONTRACT CHARGES AND SURRENDER CHARGES
The following performance information is based on the periods that the Funds
have been in existence. The performance information is net of total Fund
expenses and all Sub-Account charges. THE DATA DOES NOT REFLECT MONTHLY CHARGES
UNDER THE CONTRACTS OR SURRENDER CHARGES. It is assumed that a single premium
payment of $10,000 has been made and that the entire payment was allocated to
each Sub-Account individually.
<Table>
<Caption>
10 YEARS
SUB-ACCOUNT FOR YEAR OR LIFE OF
INCEPTION ENDED 5 SUB-ACCOUNT
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
AIT Core Equity Fund (Service Class)
AIT Equity Index Fund (Service Class)
AIT Government Bond Fund (Service Class)
AIT Money Market Fund (Service Class)
AIT Select Aggressive Growth Fund (Service Class)
AIT Select Capital Appreciation Fund (Service Class)
AIT Select Emerging Markets Fund (Service Class)
AIT Select Growth Fund (Service Class)
AIT Select Growth and Income Fund (Service Class)
AIT Select International Equity Fund (Service Class)
AIT Select Investment Grade Income Fund (Service Class)
AIT Select Strategic Growth Fund (Service Class)
AIT Select Strategic Income Fund (Service Class)
AIT Select Value Opportunity Fund (Service Class)
AIM V.I. Aggressive Growth Fund (Series II Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Blue Chip Fund (Series II Shares)
AIM V.I. Capital Development Growth Fund (Series II Shares)
AIM V.I. Premier Equity Fund (Series II Shares)
AllianceBernstein Small Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
Alliance Growth and Income Portfolio (Class B)
Alliance Premier Growth Portfolio (Class B)
Alliance Technology Portfolio (Class B)
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP II Contrafund Portfolio (Service Class 2)
Fidelity VIP III Mid Cap Portfolio (Service Class 2)
Fidelity VIP III Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Templeton Foreign Securities Fund (Class 2)
</Table>
E-5
<Page>
<Table>
<Caption>
10 YEARS
SUB-ACCOUNT FOR YEAR OR LIFE OF
INCEPTION ENDED 5 SUB-ACCOUNT
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
MFS Mid Cap Growth Series (Service Class)
MFS New Discovery Series (Service Class)
MFS Total Return Series (Service Class)
MFS Utilities Series (Service Class)
Oppenheimer Capital Appreciation Fund/VA (Service Shares)
Oppenheimer Global Securities Fund/VA (Service Shares)
Oppenheimer High Income Fund/VA (Service Shares)
Oppenheimer Main Street Growth & Income Fund/VA (Service Shares)
Oppenheimer Multiple Strategies Fund/VA (Service Shares)
</Table>
PERFORMANCE INFORMATION REFLECTS ONLY THE PERFORMANCE OF A HYPOTHETICAL
INVESTMENT DURING THE PARTICULAR TIME PERIOD ON WHICH THE CALCULATIONS ARE
BASED. ONE-YEAR TOTAL RETURN AND AVERAGE ANNUAL TOTAL RETURN FIGURES ARE BASED
ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
PERFORMANCE INFORMATION SHOULD BE CONSIDERED IN LIGHT OF THE INVESTMENT
OBJECTIVES AND POLICIES, CHARACTERISTICS AND QUALITY OF THE PORTFOLIO OF THE
FUND IN WHICH A SUB-ACCOUNT INVESTS AND THE MARKET CONDITIONS DURING THE GIVEN
TIME PERIOD, AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF WHAT MAY BE
ACHIEVED IN THE FUTURE.
TABLE IIA
AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING DECEMBER 31, 2001
SINCE INCEPTION OF THE UNDERLYING FUNDS(1)
NET OF ALL CHARGES AND ASSUMING SURRENDER OF THE POLICY
The following performance information is based on the periods that the Funds
have been in existence. The data is net of expenses of the Funds, all
Sub-Account charges, and all Contract charges (including surrender charges) for
a representative Contract. It is assumed that the Insured is Male, Age 36,
standard (non-tobacco user) underwriting class, that a single payment of $10,000
was made, that the entire payment was allocated to each Sub-Account
individually, and that there was a full surrender of the Contract at the end of
the applicable period.
<Table>
<Caption>
10 YEARS
FUND FOR YEAR OR LIFE OF
INCEPTION ENDED 5 SUB-ACCOUNT
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
AIT Core Equity Fund (Service Class)
AIT Equity Index Fund (Service Class)
AIT Government Bond Fund (Service Class)
AIT Money Market Fund (Service Class)
AIT Select Aggressive Growth Fund (Service Class)
AIT Select Capital Appreciation Fund (Service Class)
AIT Select Emerging Markets Fund (Service Class)
AIT Select Growth Fund (Service Class)
AIT Select Growth and Income Fund (Service Class)
AIT Select International Equity Fund (Service Class)
AIT Select Investment Grade Income Fund (Service Class)
</Table>
E-6
<Page>
<Table>
<Caption>
10 YEARS
FUND FOR YEAR OR LIFE OF
INCEPTION ENDED 5 FUND
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
AIT Select Strategic Growth Fund (Service Class)
AIT Select Strategic Income Fund (Service Class)
AIT Select Value Opportunity Fund (Service Class)
AIM V.I. Aggressive Growth Fund (Series II Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Blue Chip Fund (Series II Shares)
AIM V.I. Capital Development Growth Fund (Series II Shares)
AIM V.I. Premier Equity Fund (Series II Shares)
AllianceBernstein Small Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
Alliance Growth and Income Portfolio (Class B)
Alliance Premier Growth Portfolio (Class B)
Alliance Technology Portfolio (Class B)
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP II Contrafund Portfolio (Service Class 2)
Fidelity VIP III Mid Cap Portfolio (Service Class 2)
Fidelity VIP III Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Templeton Foreign Securities Fund (Class 2)
MFS Mid Cap Growth Series (Service Class)
MFS New Discovery Series (Service Class)
MFS Total Return Series (Service Class)
MFS Utilities Series (Service Class)
Oppenheimer Capital Appreciation Fund/VA (Service Shares)
Oppenheimer Global Securities Fund/VA (Service Shares)
Oppenheimer High Income Fund/VA (Service Shares)
Oppenheimer Main Street Growth & Income Fund/VA (Service Shares)
Oppenheimer Multiple Strategies Fund/VA (Service Shares)
</Table>
(1) Many of the Underlying Funds in which the Sub-Accounts invest existed prior
to the date the Sub-Accounts commenced operations. In this table, the specified
period is based on the inception date of each Underlying Fund rather than the
inception date of the Sub-Account. As such, the table represents what the
performance of a Sub-Account would have been if the Sub-Account had been both in
existence and invested in the corresponding Underlying Fund since the date
indicated. In that respect, these numbers are hypothetical and are not the
actual performance numbers for the Sub-Accounts or the Contract.
PERFORMANCE INFORMATION REFLECTS ONLY THE PERFORMANCE OF A HYPOTHETICAL
INVESTMENT DURING THE PARTICULAR TIME PERIOD ON WHICH THE CALCULATIONS ARE
BASED. ONE-YEAR TOTAL RETURN AND AVERAGE ANNUAL TOTAL RETURN FIGURES ARE BASED
ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
PERFORMANCE INFORMATION SHOULD BE CONSIDERED IN LIGHT OF THE INVESTMENT
OBJECTIVES AND POLICIES, CHARACTERISTICS AND QUALITY OF THE PORTFOLIO OF THE
FUND IN WHICH A SUB-ACCOUNT INVESTS AND THE MARKET CONDITIONS DURING THE GIVEN
TIME PERIOD, AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF WHAT MAY BE
ACHIEVED IN THE FUTURE.
E-7
<Page>
TABLE IIB
SUPPLEMENTAL AVERAGE ANNUAL TOTAL RETURNS
FOR PERIODS ENDING DECEMBER 31, 2000
SINCE INCEPTION OF UNDERLYING FUNDS(1)
EXCLUDING MONTHLY CONTRACT CHARGES AND SURRENDER CHARGES
The following performance information is based on the periods that the Funds
have been in existence. The performance information is net of total Fund
expenses and all Sub-Account charges. THE DATA DOES NOT REFLECT MONTHLY CHARGES
UNDER THE CONTRACTS OR SURRENDER CHARGES. It is assumed that a single premium
payment of $10,000 has been made and that the entire payment was allocated to
each Sub-Account individually.
<Table>
<Caption>
10 YEARS
FUND FOR YEAR OR LIFE OF
INCEPTION ENDED 5 FUND
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
AIT Core Equity Fund (Service Class)
AIT Equity Index Fund (Service Class)
AIT Government Bond Fund (Service Class)
AIT Money Market Fund (Service Class)
AIT Select Aggressive Growth Fund (Service Class)
AIT Select Capital Appreciation Fund (Service Class)
AIT Select Emerging Markets Fund (Service Class)
AIT Select Growth Fund (Service Class)
AIT Select Growth and Income Fund (Service Class)
AIT Select International Equity Fund (Service Class)
AIT Select Investment Grade Income Fund (Service Class)
AIT Select Strategic Growth Fund (Service Class)
AIT Select Strategic Income Fund (Service Class)
AIT Select Value Opportunity Fund (Service Class)
AIM V.I. Aggressive Growth Fund (Series II Shares)
AIM V.I. Basic Value Fund (Series II Shares)
AIM V.I. Blue Chip Fund (Series II Shares)
AIM V.I. Capital Development Growth Fund (Series II Shares)
AIM V.I. Premier Equity Fund (Series II Shares)
AllianceBernstein Small Cap Value Portfolio (Class B)
AllianceBernstein Value Portfolio (Class B)
Alliance Growth and Income Portfolio (Class B)
Alliance Premier Growth Portfolio (Class B)
Alliance Technology Portfolio (Class B)
Fidelity VIP Equity-Income Portfolio (Service Class 2)
Fidelity VIP Growth Portfolio (Service Class 2)
Fidelity VIP II Contrafund Portfolio (Service Class 2)
Fidelity VIP III Mid Cap Portfolio (Service Class 2)
Fidelity VIP III Value Strategies Portfolio (Service Class 2)
FT VIP Franklin Large Cap Growth Securities Fund (Class 2)
FT VIP Franklin Small Cap Fund (Class 2)
FT VIP Franklin Small Cap Value Securities Fund (Class 2)
FT VIP Mutual Shares Securities Fund (Class 2)
FT VIP Templeton Foreign Securities Fund (Class 2)
MFS Mid Cap Growth Series (Service Class)
</Table>
E-8
<Page>
<Table>
<Caption>
10 YEARS
FUND FOR YEAR OR LIFE OF
INCEPTION ENDED 5 FUND
DATE 12/31/01 YEARS (IF LESS)
- -------------------------------------------------------------------------------------------------------------------
MFS New Discovery Series (Service Class)
MFS Total Return Series (Service Class)
MFS Utilities Series (Service Class)
Oppenheimer Capital Appreciation Fund/VA (Service Shares)
Oppenheimer Global Securities Fund/VA (Service Shares)
Oppenheimer High Income Fund/VA (Service Shares)
Oppenheimer Main Street Growth & Income Fund/VA (Service Shares)
Oppenheimer Multiple Strategies Fund/VA (Service Shares)
</Table>
(1) Many of the Underlying Funds in which the Sub-Accounts invest existed prior
to the date the Sub-Accounts commenced operations. In this table, the specified
period is based on the inception date of each Underlying Fund rather than the
inception date of the Sub-Account. As such, the table represents what the
performance of a Sub-Account would have been if the Sub-Account had been both in
existence and invested in the corresponding Underlying Fund since the date
indicated. In that respect, these numbers are hypothetical and are not the
actual performance numbers for the Sub-Accounts or the Contract.
PERFORMANCE INFORMATION REFLECTS ONLY THE PERFORMANCE OF A HYPOTHETICAL
INVESTMENT DURING THE PARTICULAR TIME PERIOD ON WHICH THE CALCULATIONS ARE
BASED. ONE-YEAR TOTAL RETURN AND AVERAGE ANNUAL TOTAL RETURN FIGURES ARE BASED
ON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE.
PERFORMANCE INFORMATION SHOULD BE CONSIDERED IN LIGHT OF THE INVESTMENT
OBJECTIVES AND POLICIES, CHARACTERISTICS AND QUALITY OF THE PORTFOLIO OF THE
FUND IN WHICH A SUB-ACCOUNT INVESTS AND THE MARKET CONDITIONS DURING THE GIVEN
TIME PERIOD, AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF WHAT MAY BE
ACHIEVED IN THE FUTURE.
E-9
<Page>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission ("SEC") such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the SEC heretofore or hereafter duly adopted pursuant to authority
conferred in that section.
RULE 484 UNDERTAKING
Article VIII of Registrant's Bylaws provides: Each Director and each Officer of
the Corporation, whether or not in office, (and his executors or
administrators), shall be indemnified or reimbursed by the Corporation against
all expenses actually and necessarily incurred by him in the defense or
reasonable settlement of any action, suit, or proceeding in which he is made a
party by reason of his being or having been a Director or Officer of the
Corporation, including any sums paid in settlement or to discharge judgment,
except in relation to matters as to which he shall be finally adjudged in such
action, suit, or proceeding to be liable for negligence or misconduct in the
performance of his duties as such Director or Officer; and the foregoing right
of indemnification or reimbursement shall not affect any other rights to which
he may be entitled under the Articles of Incorporation, any statute, bylaw,
agreement, vote of stockholders, or otherwise.
Insofar as indemnification for liability arising under the 1933 Act may be
permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a Director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such Director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
REPRESENTATIONS PURSUANT TO SECTION 26(E) OF THE INVESTMENT COMPANY ACT OF 1940
The Company hereby represents that the aggregate fees and charges under the
Policy are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by the Company.
<Page>
CONTENTS OF THE REGISTRATION STATEMENT
This registration statement amendment comprises the following papers and
documents:
The facing sheet.
Cross-reference to items required by Form N-8B-2.
The prospectus consisting of ____ pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484 under the 1933 Act.
Representations pursuant to Section 26(e) of the 1940 Act.
The signatures.
Written consents of the following persons:
1. Actuarial Consent
2. Opinion of Counsel
The following exhibits:
1. Exhibit 1 (Exhibits required by paragraph A of the instructions to Form
N-8B-2)
(1) Certified copy of Resolutions of the Board of Directors of the Company
dated October 12, 1993 authorizing the establishment of the Separate
Account SPVL was previously filed in the Initial Registration
Statement of Separate SPVL (Registration Statement Nos.
333-45914/811-10133) on September 15, 2000, and is incorporated by
reference herein.
(2) Not Applicable.
(3) (a) Underwriting and Administrative Services Agreement was previously
filed on April 16, 1998 in Post-Effective Amendment No. 11 of the
VEL II Account (Registration No. 33-57792), and is incorporated
by reference herein.
(b) General Agent's Agreement was previously filed in Initial
Registration Statement of VEL Account III (Registration Statement
No. 333-58385) on July 3, 1998, and is incorporated by reference
herein.
(c) Compensation Schedule was previously filed in Initial
Registration Statement of VEL Account III (Registration Statement
No. 333-58385) on July 3, 1998, and is incorporated by reference
herein.
(4) Not Applicable.
(5) The following were all previously filed in Initial Registration
Statement of VEL Account III (Registration Statement No. 333-58385) on
July 3, 1998, and are incorporated herein by reference:
(a) Form of Select SPL II Contract; and
(b) Guaranteed Death Benefit Rider are filed herewith.
(6) Organizational documents of the Company were previously filed on
November 5, 1996
<Page>
Registration Statement No. 333-155569, and are incorporated by
reference herein.
(7) Not Applicable.
(8) (a) Amendment dated October 30, 2000 to the Allmerica Investment Trust
Participation Agreement was previously filed in April 2001 in
Post-Effective Amendment No. 10 of Registration Statement No.
33-71056/811-8130, and is incorporated by reference herein. Amendment
dated June 1, 2000 to the Participation Agreement between the Company
and Allmerica Investment Trust was previously filed in the Initial
Registration Statement of Separate SPVL (Registration Statement Nos.
333-45914/811-10133) on September 15, 2000, and is incorporated by
reference herein. Participation Agreement between the Company and
Allmerica Investment Trust dated March 22, 2000 was previously filed
in April 2000 in Post-Effective Amendment No. 9 of Registration
Statement No. 33-71056/811-8130, and is incorporated by reference
herein.
(b) Form of Amendment #6 dated May 1, 2001 to the Participation
Agreement between the Company and AIM Variable Insurance Funds, Inc.
was previously filed in April 2001 in Post-Effective Amendment No. 10
of Registration Statement 333-06383/811-7663 and is incorporated by
reference herein. Participation Agreement with AIM Variable Insurance
Funds, Inc. was previously filed on August 27, 1998 in Post-Effective
Amendment No. 2 in Registration Statement No. 333-16929/811-7747, and
is incorporated by reference herein.
(c) Form of Amendment dated May 1, 2001 to the Amendment and Restated
Participation Agreement, Merger and Consolidated Agreement, and
Amended and Restated Participation Agreement between the Company and
Alliance Variable Products Series Fund, Inc. dated August 1, 2000 were
previously filed in April 2001 in Post-Effective Amendment No. 10 of
Registration Statement 33-71056/811-8130, and are incorporated by
reference herein.
(e) Amendment dated October 1, 2000 to the Variable Insurance Products
Fund Participation Agreement was previously filed in April 2001 in
Post-Effective Amendment No. 10 of Registration Statement
33-71056/811-8130, and is incorporated by reference herein. Amendment
dated August 1, 2000 to the Variable Insurance Products Fund
Participation Agreement was previously filed in the Initial
Registration Statement of Separate SPVL (Registration Statement Nos.
333-45914/811-10133) on September 15, 2000, and is incorporated by
reference herein. Amendment dated March 29, 2000 and Amendment dated
November 13, 1998 to the Variable Insurance Products Fund
Participation Agreement was previously filed in April 2000 in
Post-Effective Amendment No. 9 of Registration Statement No.
33-71056/811-8130, and is incorporated by reference herein.
Participation Agreement with Variable Insurance Products Fund, as
amended was previously filed on April 16, 1998 in Post-Effective
Amendment No. 8 (Registration Statement No. 33-74184), and is
incorporated by reference herein.
(f) Form of Amendment dated May 1, 2001 to the Variable Insurance
Products Fund II Participation Agreement was previously filed in April
2001 in Post-Effective Amendment No. 10 of Registration Statement
33-71056/811-8130, and is incorporated by reference herein. Amendment
dated August 1, 2000 to the Variable Insurance Products Fund II
Participation Agreement is being filed herewith. Amendment dated March
29, 2000 and Amendment dated October 4, 1999 to the Variable Insurance
Products Fund II Participation Agreement was previously filed in the
Initial
<Page>
Registration Statement of Separate SPVL (Registration Statement Nos.
333-45914/811-10133) on September 15, 2000, and is incorporated by
reference herein. Participation Agreement with Variable Insurance
Products Fund II, as amended, was previously filed on April 16, 1998
in Post-Effective Amendment No. 12, and is incorporated by reference
herein.
(g) Form of Amendment dated May 1, 2001 and Participation Agreement
with Variable Insurance Products Fund III were previously filed on
April 24, 2001 in Post-Effective Amendment No. 13 of Registration
Statement No. 33-71052/811-8114, and are incorporated by reference
herein.
(h) Form of Amendment dated May 1, 2001 and Participation Agreement
between the Company and Franklin Templeton Variable Insurance Products
Trust dated March 1, 2000 was previously filed in April 2001 in
Post-Effective Amendment No. 10 of Registration Statement
33-71056/811-8130, and are incorporated by reference herein.
(i) MFS Participation Agreement with MFS Variable Insurance Trust was
previously filed on August 27, 1998 in Post-Effective Amendment No. 2
of Registration Statement No. 333-16929/811-7947, and is incorporated
by reference herein.
(j) Participation Agreement with Oppenheimer Variable Account Funds
was previously filed on August 27, 1998 in Post-Effective Amendment
No. 2 of Registration Statement No. 333-16929/811-7947, and is
incorporated by reference herein.
(k) Fidelity Service Agreement was previously filed on April 30, 1996,
in Post-Effective Amendment No. 4 (Registration Statement No.
33-74184), and is incorporated by reference herein.
(l) An Amendment to the Fidelity Service Agreement was previously
filed on May 1, 1997 in Post-Effective Amendment No. 6 (Registration
Statement No. 33-74184), and is incorporated by reference herein.
(m) Fidelity Service Contract was previously filed on May 1, 1997 in
Post-Effective Amendment No. 6 (Registration Statement No. 33-74184),
and is incorporated by reference herein.
(9) (a) BFDS Agreements for lockbox and mailroom services, effective
January 1, 1997, were previously filed on April 16, 1998 in
Post-Effective Amendment No. 12 of the VEL II Account
(Registration Statement No. 33-57792), and are incorporated by
reference herein.
(b) Directors' Power of Attorney is filed herewith.
(10) Form of Application is filed herewith.
2. Form of Contract and Contract riders are included in Exhibit 1(5) above.
3. Opinion of Counsel is filed herewith.
4. Not Applicable.
5. Not Applicable.
<Page>
6. Actuarial Consent is filed herewith.
7. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the 1940
Act, which includes conversion procedures pursuant to Rule
6e-3(T)(b)(13)(v)(B) was previously filed in the Initial Registration
Statement of Separate SPVL (Registration Statement Nos.
333-45914/811-10133) on September 15, 2000, and is incorporated by
reference herein.
8. Consent of Independent Accountants will be filed by Pre-Effective
Amendment.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940 the Registrant has duly caused this Initial Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Worcester, and Commonwealth of Massachusetts, on the
14th day of March, 2002.
SEPARATE ACCOUNT SPVL OF
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
By: /s/ Charles F. Cronin
------------------------------
Charles F. Cronin, Secretary
Pursuant to the requirements of the Securities Act of 1933, this Initial
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<Table>
<Caption>
SIGNATURES TITLE DATE
- ---------- ----- ----
/s/ Warren E. Barnes Vice President and Corporate Controller March 14, 2002
- ------------------------------------
Warren E. Barnes
Edward J. Parry* Director, Vice President and Chief Financial Officer
- ------------------------------------
Richard M. Reilly* Director and Senior Vice President
- ------------------------------------
John F. O'Brien* Director, President and Chief Executive Officer
- ------------------------------------
Bruce C. Anderson* Director and Vice President
- ------------------------------------
Mark R. Colborn* Director and Vice President
- ------------------------------------
John P. Kavanaugh* Director, Vice President and Chief Investment Officer
- ------------------------------------
J. Kendall Huber* Director, Vice President and General Counsel
- ------------------------------------
Mark A. Hug* Director and Vice President
- ------------------------------------
Robert P. Restrepo, Jr.* Director and Vice President
- ------------------------------------
Gregory D. Tranter* Director and Vice President
- ------------------------------------
</Table>
Sheila B. St. Hilaire, by signing her name hereto, does hereby sign this
document on behalf of each of the above-named Directors and Officers of the
Registrant pursuant to the Power of Attorney dated December 6, 2001 duly
executed by such persons.
/s/ Sheila B. St. Hilaire
- --------------------------------------------
Sheila B. St. Hilaire, Attorney-in-Fact
<Page>
FORM S-6 EXHIBIT TABLE
Exhibit (1)(5)(a) Form of SPL II Contract
Exhibit (1)(5)(b) Guaranteed Death Benefit Rider
Exhibit 1(9)(b) Directors' Power of Attorney
Exhibit 1(10) Form of Application
Exhibit 3 Opinion of Counsel
Exhibit 6 Actuarial Consent