PROSPECTUS: [effective date]
Excel Performance VUL
THE UNION CENTRAL LIFE
INSURANCE COMPANY
Individual Flexible Premium
Variable Universal Life Insurance Policy
CARILLON LIFE ACCOUNT
This prospectus describes the Policy, especially its Separate Account,
the Carillon Life Account. The Policy is designed to help you, the Policy Owner,
provide life insurance protection while having flexibility, within limits, as to
the amount and timing of premium payments, the amount of the death benefit, and
how you invest your Account Value. The value of your Policy will increase or
decrease based on the performance of the Investment Options you choose. The
amount of the death benefit can also vary as a result of investment performance.
You may allocate all or part of your Account Value among a variety of
Subaccount variable Investment Options where you have the investment risk,
including possible loss of principal. The Subaccounts are listed in the
Investment Options section of this prospectus.
You may also allocate all or part of your investment to a Fixed Account
option, where we have the investment risk. We guarantee a fixed rate of interest
on your investment in the Fixed Account.
Please Read this Prospectus Carefully and Keep It for Future Reference.
It provides information you should consider before investing in a Policy.
Prospectuses for the portfolios that underlie the Subaccount
variable Investment Options are available without charge from your sales
representative or from our Service Center.
The Securities and Exchange Commission ("SEC") does not
pass upon the accuracy or adequacy of this prospectus,
and has not approved or disapproved the Policy. Any
representation to the contrary is a criminal offense.
This prospectus may only be used to offer the Policy where
the Policy may lawfully be sold.
No one is authorized to give information or make any
representation about the Policy that is not in this prospectus. If
anyone does so, you should not rely upon it as being accurate or
adequate.
NOT FDIC INSURED o MAY LOSE VALUE o NO BANK GUARANTEE
THE UNION CENTRAL LIFE INSURANCE COMPANY (we, us, our, Union Central)
Home Office: 1876 Waycross Road, Cincinnati, Ohio 45240. 1-800-319-6902
Service Center: P.O. Box 82550, Lincoln, Nebraska 68501.
1-800-745-1112. www.unioncentral.com
Contacting Us. To answer your questions or to send additional premium, contact
your sales representative or write or call us at:
The Union Central Life Insurance Company
Service Center
P.O. Box 82550
Lincoln, Nebraska 68501
or
5900 "O" Street
Lincoln, Nebraska 68501
or
Union Central
1876 Waycross Road
Cincinnati, Ohio 45240
1-800-319-6902
Fax: 1-402-467-7335
Interfund Transfer Request Fax:
1-402-467-7923
www.unioncentral.com
Express mail packages should be sent to the Service Center street address, not
the P.O. Box address.
Remember, the Correct Form of Written Notice "in good order" is important for us
to accurately process your Policy elections and changes. Many forms can be found
at the online services section of our Internet site. Or, call us at our
toll-free number and we will send you the form you need and tell you the
information we require.
Facsimile Written Notice. To provide you with timely service you want, we accept
some Written Notices by facsimile. However, by not requiring your original
signature, there is a greater risk unauthorized persons can manipulate your
signature and make changes on your Policy (including withdrawals) without your
knowledge. We are entitled to act upon facsimile signatures that reasonably
appear to us to be genuine.
Make checks payable to:
The Union Central Life Insurance Company
TABLE OF CONTENTS Begin on Page
POLICY SUMMARY........................................................3
Policy Operation and Features...............................3
CHARGES...............................................................4
Policy Charges..............................................7
Portfolio Company Operating Expenses........................7
CHARGES EXPLAINED.....................................................9
Transaction Charges........................................12
Periodic Charges:
Monthly Deductions from Account Value..................12
Periodic Charges:
Daily Deductions from Separate Account Assets..........13
INVESTMENT OPTIONS...................................................14
Separate Account Variable Investment Options...............14
Fixed Account Option.......................................17
Transfers..................................................17
Third Party Services.......................................18
Disruptive Trading Procedures..............................19
Systematic Transfer Programs...............................20
Model Asset Allocation.....................................21
OTHER IMPORTANT POLICY INFORMATION...................................22
Policy Application and Issuance............................22
Account Value..............................................23
Telephone Transactions.....................................24
Electronic Delivery and Communications.....................24
Misstatement of Age or Gender..............................25
Suicide....................................................25
Incontestability...........................................25
Assignment.................................................25
Lapse and Grace Period.....................................25
Reinstatement..............................................26
Delay of Payments or Transfers.............................26
Beneficiary................................................26
Minor Owner or Beneficiary.................................27
Policy Changes.............................................27
"Free Look" Rights.........................................27
Optional Features..........................................27
Nonparticipating...........................................27
POLICY DISTRIBUTIONS.................................................27
Death Benefit..............................................27
Policy Loans...............................................31
Cash Surrender.............................................32
Partial Withdrawal.........................................32
Payment of Policy Proceeds.................................32
TAX MATTERS..........................................................33
LEGAL PROCEEDINGS....................................................36
HOW TO GET FINANCIAL STATEMENTS......................................36
DISTRIBUTION OF THE POLICY...........................................36
APPENDIX A: Optional Features........................................37
DEFINED TERMS........................................................38
IMSA.....................................................Last Page
Illustrations
Statement of Additional Information; Registration Statement
Reports to You
Excel Performance VUL UC
2
POLICY SUMMARY
The Excel Performance VUL Policy is flexible premium variable universal
life insurance offered and issued by The Union Central Life Insurance Company
("Union Central"), 1876 Waycross Road, Cincinnati, Ohio 45240. The Policy offers
variable Investment Options through Subaccounts of Carillon Life Account (the
"Separate Account"), a separate account operated by us under Ohio law, and a
fixed interest rate option through the Fixed Account. The Policy's primary
purpose is to provide lifetime protection against economic loss due to the death
of the insured person. We are obligated to pay all amounts promised under the
Policy. Premium is used to create Account Value to cover Policy charges and to
generate investment earnings. The amount we require as your first premium
depends on the specifics of your Policy and the Insured. The Policy is called a
"flexible premium" policy because you may make any other premium payments you
wish at any time. The Policy is referred to as a "variable" life insurance
policy because the value of the amount you invest in the Policy may increase or
decrease daily based on the investment results of the variable Investment
Options that you choose. The amount we pay to the Policy's beneficiary upon the
death of the Insured person (the "death benefit proceeds") may vary similarly.
The Policy pays death benefit proceeds to the Policy beneficiary upon the
Insured's death, or pays a Cash Surrender Value to you if you Surrender the
Policy. The Insured cannot be over age 80 on the Insured's birthday nearest the
Policy Date. We will issue the Policy only for an initial Specified Amount of
insurance coverage of $100,000 or more. The Policy is subject to the laws of the
State of New York, where the application is signed.
POLICY BENEFITS
You have flexibility under the Policy. Within certain limits, you can
vary the amount and timing of premium payments, change the death benefit, and
transfer amounts among the Investment Options. You can take out a Policy loan,
make a partial withdrawal from the Account Value, or Surrender your Policy
completely, subject to payment of charges and certain restrictions. We will pay
Surrender amounts or death benefit proceeds in a lump sum.
Death Benefit.
o We will pay the death benefit proceeds to the beneficiary when we
receive satisfactory proof of death of the Insured while the
Policy is in force.
o If you meet certain premium requirements, we will guarantee a
death benefit for a certain period even if your Policy's Cash
Surrender Value falls to zero.
o Three death benefit options are available.
Death benefit proceeds are reduced by any Policy Debt and any Monthly Deductions
due but unpaid at death. See the POLICY DISTRIBUTIONS: Death Benefit section for
details.
Surrender and Partial Withdrawals.
o You can Surrender the Policy in full at any time for its Cash
Surrender Value, or, within limits, withdraw part of the Account
Value. Applicable charges are shown in the CHARGES section.
o Restrictions include that we may limit access to amounts in the
Fixed Account for up to six months
Loans.
o You may borrow a limited amount of Account Value.
o Interest accrues on outstanding loan amounts.
o After five Policy years, a lower interest rate may be available
for a portion of your Policy Debt.
Policy Riders.
When you apply for the Policy, you can request any of the optional
supplementary benefit riders that we make available. Charges for most riders
will be deducted monthly from the Account Value. (See the CHARGES section on the
next pages.).
Investment Options.
o Variable Investment Option allocations are invested in
Subaccounts of the Separate Account, which in turn invest in
corresponding underlying portfolios.
o Fixed Account allocations are invested in our general account and
we guarantee a fixed rate of interest.
o You may transfer Account Value between Investment Options,
subject to limits.
o Model asset allocation, dollar cost averaging, portfolio
rebalancing and earnings sweep systematic investment programs are
available.
Excel Performance VUL 3 UC
Variable Investment Option returns vary, depending upon the investment
results of the underlying portfolios. The Investment Options cover a broad
spectrum of investment styles and strategies. Although the portfolios that
underlie the Subaccounts operate like publicly traded mutual funds, there are
important differences. You can transfer money from one investment account to
another without tax liability. Also, any dividends and capital gains distributed
by each underlying portfolio are automatically reinvested and reflected in the
portfolio's value and create no taxable event for you. If and when Policy
earnings are distributed (generally as a result of a Surrender or withdrawal),
they will be treated as ordinary income instead of as capital gains.
POLICY RISKS
Suitability, Investment Risks, and Underlying Portfolio Risks.
The Policy is unsuitable for short-term savings or short-term life
insurance needs. You should evaluate the Policy's long-term investment potential
and risks before purchasing a Policy. You should purchase a Policy only if you
have the financial capability and the intent to keep the Policy in force for a
substantial period of time.
Your Account Value (and in some circumstances your death benefit) will
fluctuate with changes in interest rates and performance of the underlying
portfolios. You assume the risk that your Account Value may decline or not
perform to your expectations. Each underlying portfolio has various investment
risks and some have greater risks than others.
As mentioned above, the investment performance of any Investment Option
may be good or bad. Your Policy value will rise or fall based on the investment
performance of the underlying portfolios of the Subaccounts you select. The fund
prospectuses accompanying this Policy prospectus provide comprehensive
discussion of the risks (and potential rewards) of each underlying portfolio.
There is no assurance that any underlying portfolio will meet its objectives.
Lapse Risks.
If the Cash Surrender Value is not sufficient to pay charges when due,
your Policy can terminate, or "lapse." This can happen if you have not paid
enough premiums or if the Investment Options you selected experienced poor
performance or because of a combination of both factors. You will be given a
"grace period" within which to make additional premium payments to keep the
Policy from lapsing. Even if the Policy does lapse, you may be given the
opportunity to reinstate the Policy by making the required premium payments and
satisfying certain other conditions.
Since partial withdrawals reduce your Account Value, partial
withdrawals increase the risk of lapse. Policy Debt also increases the risk of
lapse.
Limitations on Access.
Policy Debt, partial withdrawals and Surrenders may be subject to
income tax and penalty tax. Policy Debt and partial withdrawals will decrease
death benefit protection and may cause the Policy to lapse, in which case you
would have no coverage. Even if you pay Planned Periodic Premiums, your Policy
could lapse if the Cash Surrender Value is not enough to pay the Monthly
Deduction. However, your Policy will stay in force for the first 10 Policy years
if you meet the Minimum No-Lapse Premium requirements.
Transfer Risks.
There is a risk that you will not be able to transfer your Account
Value from one Investment Option to another because of limits on the dollar
amount or frequency of transfers you can make. Limitations on transfers out of
the Fixed Account are more restrictive than those that apply to transfers out of
the Subaccounts.
Early Surrender Risks.
Depending on the Account Value at the time you are considering
Surrender, there may be little or no Cash Surrender Value payable to you.
Excel Performance VUL 4 UC
Market Timing Risks.
Investments in variable life insurance products can be a prime target
for abusive transfer activity because these products value their Subaccounts on
a daily basis and allow transfers among Subaccounts without immediate tax
consequences. As a result, some investors may seek to frequently transfer into
and out of Subaccounts in reaction to market news or to exploit a perceived
pricing inefficiency. Whatever the reason, long-term investors in a Subaccount
can be harmed by frequent transfer activity since such activity may expose the
investment account's underlying portfolio to increased portfolio transaction
costs and/or disrupt the portfolio manager's ability to effectively manage the
portfolio's investments in accordance with the portfolio's investment objectives
and policies, both of which may result in dilution with respect to interests
held for long-term investment.
To discourage disruptive frequent trading activity, we impose
restrictions on transfers (See the Disruptive Trading Procedures section.) and
reserve the right to change, suspend or terminate telephone, facsimile and
Internet transaction privileges (See the Transfers section.). In addition, we
reserve the right to take other actions at any time to restrict trading,
including, but not limited to: (i) restricting the number of transfers made
during a defined period, (ii) restricting the dollar amount of transfers, and
(iii) restricting transfers into and out of certain Subaccounts. We also reserve
the right to defer a transfer at any time we are unable to purchase or redeem
shares of the underlying portfolio.
While we seek to identify and prevent disruptive frequent trading
activity, it may not always be possible to do so. Therefore, no assurance can be
given that the restrictions we impose will be successful in preventing all
disruptive frequent trading and avoiding harm to long-term investors.
Tax Risks.
Life insurance death benefits are ordinarily not subject to income tax.
Other federal and state taxes may apply. In general, you will be taxed on the
amount of a distribution if it exceeds the investment in the Policy (premiums
paid). Any taxable distributions are treated as ordinary income (rather than as
capital gains) for tax purposes.
In order for you to receive the tax benefits extended to life insurance
under the Internal Revenue Code (the "Code"), your Policy must comply with
certain requirements of the Code. We will monitor your Policy for compliance
with these requirements, but a Policy might fail to qualify as life insurance in
spite of our monitoring. If this were to occur, you would be subject to income
tax on the income credited to your Policy for the period of disqualification and
all subsequent periods. The tax laws also contain a so-called "7 pay limit" that
limits the amount of premium that can be paid in relation to the Policy's death
benefit. If the limit is violated, the Policy will be treated as a "modified
endowment contract, which can have adverse tax consequences. (See the Tax
Matters section.) There are also certain Treasury Department rules referred to
as the "investor control rules" that determine whether you would be treated as
the "owner" of the assets underlying your Policy. If that were determined to be
the case, you would be taxed on any income or gains those assets generate. In
other words, you would lose the value of the so-called "inside build-up" that is
a major benefit of life insurance.
There is a tax risk associated with Policy Debt. Although no part of a
loan is treated as income to you when the loan is made (unless your Policy is a
"modified endowment contract"), Surrender or lapse of the Policy would result in
the loan being treated as a distribution at the time of lapse or Surrender. This
could result in a considerable taxable income. Under certain circumstances
involving large amounts of outstanding loans and an insured person of advanced
age, they might find they have to pay additional premium to keep their policy
from lapsing and to avoid a significant tax burden if the Policy should lapse.
Tax consequences of ownership or receipt of Policy proceeds under
federal, state and local estate, inheritance, gift and other tax laws can vary
greatly depending upon the circumstances of each owner or beneficiary. There can
also be unfavorable tax consequences on such things as the change of Policy
ownership or assignment of ownership interests. For these and all the other
reasons mentioned above, we recommend you consult with a qualified tax adviser
before buying the Policy and before exercising certain rights under the Policy.
Buying a Policy might not be advisable if it is just replacing existing life
insurance. You may wish to consult with your financial or insurance adviser.
Excel Performance VUL 5 UC
Excel Performance VUL 6 UC
CHARGES
Some charges are rounded.
POLICY CHARGES
The following tables describe the fees and expenses that you will pay
when buying, owning, and surrendering the Policy. The first table describes the
fees and expenses that you will pay at the time that you pay a premium,
Surrender the Policy, or transfer Account Value between Investment Options.
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Guaranteed
TRANSACTION FEES When Deducted Maximum Current
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PREMIUM CHARGE When each premium is 5% 3.5%
Calculated as a percentage of each premium paid.
payment.
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SURRENDER CHARGE Upon a full Surrender Varies(1) Varies(1)
Rates are per $1,000 of base Policy Specified during the first 12 Policy year 2: Policy year 2:
Amount. Policy years or in Minimum $2.97 Minimum $2.97
the 12 Policy years Maximum $48.38 Maximum $48.38
following an increase Example (2) $20.14 Example (2) $20.14
in base policy
Specified Amount.
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PARTIAL WITHDRAWAL CHARGE Upon each withdrawal. $50 $0
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TRANSFER FEE (per transfer) First 15 transfers
per year: $0 $0
Each additional transfer: $10 $0
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Transaction Fees Table Footnotes:
(1) Rate varies by Insured's gender, Issue Age, risk class, and the amount of
time you have had your Policy (or the number of years since any increase in base
policy Specified Amount). Taxes and penalties may also apply. Ask for a Policy
illustration or see your Policy for these charges applicable to you.
(2) Assumes a male, age 45 at policy issue and in our best risk class. Surrender
charge rate is $13.43 in year 1, $20.14 in years 2-5, $17.62 in year 6, $15.10
in year 7, $12.49 in year 8, $10.07 in year 9, $7.55 in year 10, $5.03 in year
11, $2.51 in year 12, and $0.00 thereafter.
The next table describes the fees and expenses that you will pay
periodically during the time that you own the Policy, to equal the annualized
charges shown, not including Subaccount portfolio operating fees and expenses.
- ---------------------------------------------------- ---------------------- -------------------- --------------------
PERIODIC CHARGES
(other than Subaccount portfolio operating Guaranteed Current
expenses) When Deducted Maximum (annual) (annual)
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MONTHLY DEDUCTIONS FROM ACCOUNT VALUE
Several of the charges below vary based on individual characteristics. The
cost shown for these charges may not be representative of the charge you
will pay. Ask for a Policy illustration or see your Policy for the charge
applicable to you.
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COST OF INSURANCE Monthly Varies(1) Varies (2)
Minimum $0.18 Minimum $0.12
Rates are per $1,000 of the net amount at risk Maximum $1000.00 Maximum $1000.00
allocated to the base Policy. Example (3) $2.33 Example (3) $1.81
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MONTHLY ADMINISTRATIVE CHARGE Monthly
Specified Amounts $100,000 - $249,999 $120 $120
Specified Amounts $250,000 + $120 $90
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MONTHLY SPECIFIED AMOUNT CHARGE Monthly during the Varies(2) Varies(2)
first 10 Policy Policy year 2: Policy year 2:
years or the first Minimum $0.00 Minimum $0.00
Rates are per $1,000 of base Policy Specified 10 Policy years Maximum $9.16 Maximum $7.64
Amount. after an increase in Example(3,4)$0.55 Example(3,5) $0.46
base Policy
Specified Amount.
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DAILY DEDUCTIONS FROM SEPARATE ACCOUNT ASSETS
(to equal the annual percentage stated of the Account Value in the Subaccounts)
- ---------------------------------------------------- ---------------------- -------------------- --------------------
RISK CHARGE (for mortality and expense risk) Daily
Policy Years 1-15 0.90% 0.70%
Policy Years 16+ 0.30% 0.10%
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Periodic Charges Table Footnotes:
(1) Rate varies by Insured's gender, risk class and Attained Age.
(2) Rate varies by Insured's gender, Issue Age, risk class, Specified
Amount, and the amount of time you have had your Policy.
(3) "Example" charges assume an Insured who is male, best risk class, age
45 when the Policy is issued, a Specified Amount of $250,000, and that
the Policy is in its first Policy year.
(4) The annual rate is $0.2004 in year 1, $0.5472 in years 2-6, $0.4380 in
year 7, $0.3288 in year 8, $0.2196 in year 9, $0.1104 in year 10, and
$0.00 thereafter. These same rates would apply for an increase in base
Policy Specified Amount at Attained Age 45.
(5) The annual rate is $0.1668 in year 1, $0.4560 in years 2-6, $0.3648 in
year 7, $0.2736 in year 8, $0.1824 in year 9, $0.0912 in year 10, and
$0.00 thereafter. These same rates would apply for an increase in base
Policy Specified Amount at Attained Age 45.
Excel Performance VUL 7 UC
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Guaranteed Current
COST OF OPTIONAL FEATURES When Deducted Maximum (annual) (annual)
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ACCELERATED BENEFIT RIDER N/A No Cost No Cost
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ACCIDENTAL DEATH BENEFIT RIDER Monthly Varies (1) Varies (1)
Rates are per $1,000 of the rider benefit amount. Minimum $0.24 Minimum $0.24
Maximum $1.56 Maximum $1.56
Example (2) $0.84 Example (2) $0.84
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ACCOUNTING BENEFIT RIDER ("ABR") Monthly Varies(3) Varies(4)
Cost of Insurance (rates are per $1,000 of net Minimum $0.18 Minimum $0.06
amount at risk allocated to the ABR) Maximum $1,000.00 Maximum $1,000.00
Example(5) $2.33 Example(5) $0.25
- ------------------------------------------------------ -------------------- -------------------- --------------------
Monthly Specified Amount Charge (rates are per Monthly Varies(4) Varies(4)
$1,000 of ABR Specified Amount) Policy year 2: Policy year 2:
Minimum $1.13 Minimum $0.94
Maximum $35.31 Maximum $29.42
Example(5,6) $2.22 Example(5,7) $1.85
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CHILDREN'S INSURANCE RIDER Monthly $5.76 $5.76
Rate is per $1,000 of the rider benefit amount.
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GUARANTEED INSURABILITY RIDER Monthly Varies (8) Varies (8)
Rates are per $1,000 of the rider benefit amount. Minimum $0.72 Minimum $0.72
Maximum $2.28 Maximum $2.28
Example (9) $2.28 Example (9) $2.28
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INSURANCE EXCHANGE RIDER N/A No Cost No Cost
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PAID-UP INSURANCE BENEFIT ENDORSEMENT When Benefit 3.5% 3.5%
Calculated as a percentage times the Account Value. Elected
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SCHEDULED INCREASE RIDER N/A No Cost No Cost
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SUPPLEMENTAL COVERAGE RIDER ("SCR") Monthly Varies(3) Varies(4)
Cost of Insurance (rates are per $1,000 of net Minimum $0.18 Minimum $0.06
amount at risk allocated to the SCR) Maximum $1,000.00 Maximum $1,000.00
Example(5) $2.33 Example(5) $0.25
- ------------------------------------------------------ -------------------- -------------------- --------------------
Monthly Specified Amount Charge (rates are per Varies(4) Varies(4)
$1,000 of SCR Specified Amount) Policy year 2: Policy year 2:
Minimum $0.59 Minimum $0.49
Maximum $43.76 Maximum $36.47
Example(5,10)$2.06 Example(5,11)$1.71
- ------------------------------------------------------ -------------------- -------------------- --------------------
TERM INSURANCE RIDER Monthly Varies(3) Varies(3)
Rates are per $1,000 of the rider benefit amount. Minimum $0.18 Minimum $0.13
Maximum $1000.00 Maximum $950.00
Example(5) $2.33 Example(5) $1.74
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TOTAL DISABILITY BENEFIT RIDER Monthly Varies(3) Varies(3)
Rates are per $100 of the rider annual benefit Minimum $0.74 Minimum $0.74
amount. Maximum $8.64 Maximum $8.64
Example(5) $2.05 Example(5) $2.05
- ------------------------------------------------------ -------------------- -------------------- --------------------
WAIVER OF MONTHLY DEDUCTION RIDER Monthly Varies (3) Varies (3)
Rates are per $100 of the Monthly Deduction. Minimum $1.48 Minimum $1.48
Maximum $17.28 Maximum $17.28
Example (5) $4.10 Example (5) $4.10
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Cost of Optional Features Table Footnotes:
(1) Rate varies by Insured's gender and Attained Age.
(2) "Example" charges assume an Insured who is male Attained Age 45.
(3) Rate varies by Insured's gender, risk class and Attained Age.
(4) Rate varies by Insured's gender, Issue Age, risk class, Specified
Amount, and the amount of time the rider has been in force.
(5) "Example" charges assume an Insured who is male, best risk class,
age 45 when the rider is issued, a Specified Amount of $250,000, and
that the rider coverage is in its first year.
(6) The annual rate is $0.0000 in year 1 of the rider, $2.2212 in years 2-8,
$1.7772 in year 9, $1.3332 in year 10, $0.8892 in year 11, $0.4452 in year
12, and $0.00 thereafter. These same rates would apply for an increase in
ABR Specified Amount at Attained Age 45.
(7) The annual rate is $0.0000 in year 1 of the rider, $1.8504 in years 2-8,
$1.4808 in year 9, $1.1112 in year 10, $0.7404 in year 11, $0.3708 in year
12, and $0.00 thereafter. These same rates would apply for an increase in
ABR Specified Amount at Attained Age 45.
(8) Rate varies by Insured's Issue Age.
(9) "Example" charges assume an Insured who is male Issue Age 35.
(10) The annual rate is $0.7584 in year 1 of the rider, $2.0568 in years
2-6, $1.6452 in year 7, $1.2336 in year 8, $0.8232 in year 9, $0.4116 in
year 10, and $0.00 thereafter. These same rates would apply for an increase
in SCR Specified Amount at Attained Age 45.
(11) The annual rate is $0.6324 in year 1 of the rider, $1.7136 in years
2-6, $1.3716 in year 7, $1.0284 in year 8, $0.6864 in year 9, $0.3432 in
year 10, and $0.00 thereafter. These same rates would apply for an increase
in SCR Specified Amount at Attained Age 45.
We currently do not assess a separate charge against our Separate
Account or Fixed Account for any income taxes. We may, however, make such a
charge in the future if income or gains within the Separate Account will incur
any income tax liability, or if tax treatment of our company changes.
Excel Performance VUL 8 UC
The next table describes interest rates charged on amounts borrowed
from the Policy, net of 3.0% annual credited interest rate.
Guaranteed
NET INTEREST CHARGED ON LOANS When Deducted Maximum Current
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LOAN ACCOUNT (effective annual rates)
Regular Loan Interest Rate Upon each 1.0% 1.0%
Preferred Loan Interest Rate (available only after five Policy
policy years, on only a portion of the Policy Debt) Anniversary. 0.5% 0.0%
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PORTFOLIO COMPANY OPERATING EXPENSES
The next table shows the minimum and maximum total operating expenses
of the underlying portfolios. Expenses before and after any waivers or
reductions are expressed as a percentage of average net assets as of December
31, 2007. The chart below the table lists information for each Subaccount's
underlying portfolio. Actual fees and expenses for the underlying portfolios
vary daily, so expenses for any given day may be greater or less than listed.
More detail concerning each portfolio's fees and expenses is contained in the
prospectus for that portfolio.
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TOTAL ANNUAL PORTFOLIO COMPANY OPERATING EXPENSES
Expenses that are deducted from portfolio assets, including Minimum Maximum
management fees, distribution and/or service (12b-1) fees, and other
expenses
- ------------------------------------------------------------------------------- ------------------ ------------------
Before any Waivers and Reductions 0.38% (1) 1.61% (2)
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After any Waivers and Reductions (explained in the footnotes to the Portfolio 0.36% (1) 1.61% (2)
Expenses Table at the end of this section)
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(1) Ameritas Money Market Portfolio
(2) CVS Social International Equity Portfolio
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- --------------------------------------------------------------------------------------------------------------------------
Acquired
Fund Fees Total Waivers Total Expenses
Subaccount's underlying Management 12b-1 Other and Portfolio and after waivers and
Portfolio Name* Fees Fees** Fees Expenses*** Fees Reductions reductions if any
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AIM VI, Series I (1)
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Global Real Estate 0.75% - 0.38% - 1.13% - 1.13%(2,3)
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International Growth 0.71% - 0.36% 0.01% 1.08% 0.01%(4) 1.07% (3)
- ---------------------------------------------------------------------------------------------------------------------
Small Cap Equity 0.75% - 0.37% 0.01% 1.13% - 1.13%(3)
- ---------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN, Class O
- ---------------------------------------------------------------------------------------------------------------------
Balanced 0.71%(1) - 0.13% - 0.84% 0.04%(2) 0.80%
- ---------------------------------------------------------------------------------------------------------------------
Capital Appreciation 0.81%(1) - 0.155% - 0.965% 0.035%(3) 0.93%
- ---------------------------------------------------------------------------------------------------------------------
AMERICAN CENTURY VP, Class I
- ---------------------------------------------------------------------------------------------------------------------
Mid Cap Value 1.00% - 0.01% - 1.01% - 1.01%
- ---------------------------------------------------------------------------------------------------------------------
CALVERT VARIABLE SERIES (1,2)
- ---------------------------------------------------------------------------------------------------------------------
Ameritas Core Strategies 0.80% - 0.13% - 0.93% - 0.93%(3)
- ---------------------------------------------------------------------------------------------------------------------
Ameritas Income & Growth 0.675% - 0.125% - 0.80% 0.02% 0.78%(3)
- ---------------------------------------------------------------------------------------------------------------------
Ameritas MidCap Growth 0.85% - 0.17% - 1.02% 0.08% 0.94%
- ---------------------------------------------------------------------------------------------------------------------
Ameritas MidCap Value 0.97% - 0.17% - 1.14% - 1.14%(3)
- ---------------------------------------------------------------------------------------------------------------------
Ameritas Money Market 0.25% - 0.13% - 0.38% 0.02% 0.36%
- ---------------------------------------------------------------------------------------------------------------------
Ameritas Small Capitalization 0.90% - 0.20% - 1.10% 0.10% 1.00%
- ---------------------------------------------------------------------------------------------------------------------
Ameritas Small Company Equity 1.17% - 0.27% - 1.44% 0.11% 1.33%
- ---------------------------------------------------------------------------------------------------------------------
Income 0.70% - 0.17% - 0.87% - 0.87% (3)
- ---------------------------------------------------------------------------------------------------------------------
Social Balanced 0.70% - 0.20% - 0.90% - 0.90%
- ---------------------------------------------------------------------------------------------------------------------
Social Equity 0.70% - 0.41% - 1.11% 0.03% 1.08% (3)
- ---------------------------------------------------------------------------------------------------------------------
Social International Equity 1.10% - 0.51% - 1.61% - 1.61% (3)
- ---------------------------------------------------------------------------------------------------------------------
DWS VS I, Class A
- ---------------------------------------------------------------------------------------------------------------------
Capital Growth VIP 0.37% - 0.13%(1) - 0.50% 0.01%(2) 0.49%
- ---------------------------------------------------------------------------------------------------------------------
DWS VS II, Class A
- ---------------------------------------------------------------------------------------------------------------------
Dreman Small Mid Value VIP 0.64% - 0.14%(3) - 0.78% - 0.78%
- ---------------------------------------------------------------------------------------------------------------------
Global Thematic VIP 0.92% - 0.40%(3) 0.01% 1.33% 0.27%(4) 1.06%(5)
- ---------------------------------------------------------------------------------------------------------------------
FIDELITY (R) VIP, Initial Class
- ---------------------------------------------------------------------------------------------------------------------
Contrafund (R) 0.56% - 0.09% - 0.65% - 0.65%(1)
- ---------------------------------------------------------------------------------------------------------------------
Equity-Income 0.46% - 0.09% - 0.55% - 0.55%(1)
- ---------------------------------------------------------------------------------------------------------------------
High Income 0.57% - 0.11% - 0.68% - 0.68%
- ---------------------------------------------------------------------------------------------------------------------
Investment Grade Bond 0.32% - 0.11% - 0.43% - 0.43%
- ---------------------------------------------------------------------------------------------------------------------
Mid Cap 0.56% - 0.11% - 0.67% - 0.67%(1)
- ---------------------------------------------------------------------------------------------------------------------
Overseas 0.71% - 0.14% - 0.85% - 0.85%(1)
- ---------------------------------------------------------------------------------------------------------------------
Strategic Income 0.56% - 0.17% - 0.73% - 0.73%
- ---------------------------------------------------------------------------------------------------------------------
FTVIPT, Class 2
- ---------------------------------------------------------------------------------------------------------------------
Franklin Income Securities(1) 0.45% 0.25%(2) 0.02% 0.72% 0.72%(3)
- ---------------------------------------------------------------------------------------------------------------------
IVY VIP
- ---------------------------------------------------------------------------------------------------------------------
Science and Technology 0.85% 0.25% 0.07% - 1.17% - 14 1.17%
- ---------------------------------------------------------------------------------------------------------------------
MFS(R) VIT, Initial Class
- ---------------------------------------------------------------------------------------------------------------------
Research International 0.90% - 0.66%(1) - 1.56%(1) 0.46%(2) 1.10%(1)
- ---------------------------------------------------------------------------------------------------------------------
Total Return 0.75% - 0.08%(1) - 0.83%(1) 0.03%(3) 0.80%(1)
- ---------------------------------------------------------------------------------------------------------------------
Utilities 0.75% - 0.10%(1) - 0.85%(1) 0.03%(4) 0.82%(1)
- ---------------------------------------------------------------------------------------------------------------------
Value 0.75% - 0.11%(1) - 0.86% - 0.86%(1)
- ---------------------------------------------------------------------------------------------------------------------
Excel Performance VUL 9 UC
- --------------------------------------------------------------------------------------------------------------------------
Acquired
Fund Fees Total Waivers Total Expenses
Subaccount's underlying Management 12b-1 Other and Portfolio and after waivers and
Portfolio Name* Fees Fees** Fees Expenses*** Fees Reductions reductions if any
- --------------------------------------------------------------------------------------------------------------------------
NEUBERGER BERMAN AMT, Class I(1)
- ---------------------------------------------------------------------------------------------------------------------
Guardian 0.85% - 0.16% - 1.01% - 1.01%
- ---------------------------------------------------------------------------------------------------------------------
OPPENHEIMER, Non-Service Shares
- ---------------------------------------------------------------------------------------------------------------------
Global Securities 0.62% - 0.03%(1) - 0.65% - 0.65%
- ---------------------------------------------------------------------------------------------------------------------
PIMCO VIT, Administrative Class
- ---------------------------------------------------------------------------------------------------------------------
Total Return 0.40% - 0.43%(1) - 0.83% - 0.83%(2)
- ---------------------------------------------------------------------------------------------------------------------
SUMMIT
- ---------------------------------------------------------------------------------------------------------------------
Bond 0.47% - 0.28%(1) 0.01% 0.76% - 0.76%
- ---------------------------------------------------------------------------------------------------------------------
EAFE International Index 0.56% - 0.69%(2) 0.02% 1.27% 0.30%(3) 0.97%
- ---------------------------------------------------------------------------------------------------------------------
Inflation Protected Plus 0.50% - 0.25%(2) 0.01% 0.76% - 0.76%
- ---------------------------------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index 0.30% - 0.29% 0.01% 0.60% - 0.60%
- ---------------------------------------------------------------------------------------------------------------------
Lifestyle ETF Aggressive 0.55% - 0.20%(2) 0.25% 1.00% - 1.00%
- ---------------------------------------------------------------------------------------------------------------------
Lifestyle ETF Conservative 0.55% - 0.20%(2) 0.23% 0.98% - 0.98%
- ---------------------------------------------------------------------------------------------------------------------
Lifestyle ETF Target 0.55% - 0.20%(2) 0.26% 1.01% - 1.01%
- ---------------------------------------------------------------------------------------------------------------------
Nasdaq-100 Index 0.35% - 0.30%(2) 0.01% 0.66% - 0.66%
- ---------------------------------------------------------------------------------------------------------------------
Natural Resources 0.55% - 0.20%(2) 0.56% 1.31% - 1.31%
- ---------------------------------------------------------------------------------------------------------------------
Russell 2000 Small Cap Index 0.35% - 0.29% 0.03% 0.67% - 0.67%
- ---------------------------------------------------------------------------------------------------------------------
S&P 500**** 0.25% - 0.20% - 0.45% 0.06%(4) 0.39%
- ---------------------------------------------------------------------------------------------------------------------
S&P MidCap 400 Index**** 0.30% - 0.22% 0.01% 0.53% - 0.53%
- ---------------------------------------------------------------------------------------------------------------------
T. ROWE PRICE
- ---------------------------------------------------------------------------------------------------------------------
Blue Chip Growth-II 0.85% 0.25% - - 1.10% - 1.10%
- ---------------------------------------------------------------------------------------------------------------------
Equity Income-II 0.85% 0.25% - - 1.10% - 1.10%
- ---------------------------------------------------------------------------------------------------------------------
THIRD AVENUE
- ---------------------------------------------------------------------------------------------------------------------
Value 0.90% - 0.27% - 1.17% - 1.17%
- ---------------------------------------------------------------------------------------------------------------------
UIF, Class I
- ---------------------------------------------------------------------------------------------------------------------
Emerging Markets Equity 1.21% - 0.37% 0.02%(1) 1.60% - 1.60%
- ---------------------------------------------------------------------------------------------------------------------
AIM (1) Except as otherwise noted, figures shown in the table are for the year
ended December 31, 2007 and are expressed as a percentage of the Fund's average
daily net assets. There is no guarantee that actual expenses will be the same as
those shown in the table.
AIM (2) Effective July 1, 2007, the Board of Trustees approved a reduced
contractual advisory fee schedule for the Fund. Prior to such date, the Funds'
advisor had contractually agreed to waive advisory fees to the same reduced
advisory fee schedule. The maximum annual advisory fee rate ranges from 0.75%
(for average net assets up to $250 million) to 0.68% (for average net assets
over $10 billion). Management Fees and Waivers and Reductions have been restated
to reflect the new fee schedule.
AIM (3) The Fund's advisor has contractually agreed to waive advisory fees
and/or reimburse expenses of Series I shares to the extent necessary to limit
Total Portfolio Fees (excluding certain items discussed below) of Series I
shares to 1.30% for Global Real Estate and International Growth and 1.15% for
Small Cap Equity, of average daily net assets. In determining the advisor's
obligation to waive advisory fees and/or reimburse expenses, the following
expenses are not taken into account, and could cause the Total Portfolio Fees to
exceed the numbers reflected above: (i) interest; (ii) taxes; (iii) dividend
expense on short sales; (iv) extraordinary items; (v) expenses related to a
merger or reorganization, as approved by the Fund's Board of Trustees; and (vi)
expenses that the Fund has incurred but did not actually pay because of an
expense offset arrangement. Currently, the expense offset arrangements from
which the Fund may benefit are in the form of credits that the Fund receives
from banks where the Fund or its transfer agent has deposit accounts in which it
holds uninvested cash. The expense limitation agreement is in effect through at
least April 30, 2009.
AIM (4) Effective July 1, 2007, through at least April 30, 2009, Invesco Aim
contractually agreed to waive advisory fees in an amount equal to 100% of the
advisory fee Invesco Aim receives from affiliated money market funds on
investments by the fund in such affiliated money market funds. Fee Waiver
reflects this agreement.
Alger (1) Previously, the Portfolio's Management Fees included an additional
0.04% in administrative fees that are now included in Other Fees.
Alger (2) Effective December 1, 2006 through November 30, 2011, the Manager has
contractually agreed to waive 0.04% of its Advisory Fees.
Alger (3) Effective December 1, 2006 through November 30, 2011, the Manager has
contractually agreed to waive 0.035% of its Advisory Fees.
Calvert (1) The Investment Advisor (Calvert Asset Management Company, Inc.) has
contractually agreed to limit direct net annual portfolio operating expenses
through April 30, 2009, as shown below. Under the terms of the contractual
expense limitation, operating expenses do not include interest expense,
brokerage commissions, taxes and extraordinary expenses.
Ameritas Core Strategies 0.95%
Ameritas Income & Growth 0.78%
Ameritas MidCap Growth 0.94%
Ameritas Money Market 0.36%
Ameritas Small Capitalization 1.00%
Ameritas Small Company Equity 1.33%
Social Equity 1.08%
Each Portfolio has an expense offset arrangement with the custodian bank whereby
the custodian's fees may be paid indirectly by credits on the Portfolio's
uninvested cash balances. These credits are used to reduce the Portfolio's
expenses. Under those circumstances where the Advisor has provided to the
Portfolio a contractual expense limitation, and to the extent any expense offset
credits are earned, the Advisor may benefit from the expense offset arrangement
and the Advisor's obligation under the contractual limitation may be reduced by
the credits earned.
Calvert (2) Management fees for the Calvert Variable Series, Inc. Portfolios
include both the investment advisory fee paid by each Portfolio to the Advisor
and the administrative fee paid by the Portfolio to Calvert Administrative
Services Company, an affiliate of the Advisor. The administrative fees (as a
percentage of net assets) are as follows: 0.05% for each Ameritas Portfolio,
0.30% for Income, 0.275% for Social Balanced, 0.20% for Social Equity and 0.35%
for Social International Equity.
Calvert (3) "Total Portfolio Fees" reflect an indirect fee and fees before
waivers. Indirect fees result from a Portfolio's offset arrangement with the
custodian bank whereby the custodian's fees may be paid indirectly by credits on
the Portfolio's uninvested cash balances. These credits are used to reduce the
Portfolio's expenses. Net operating expenses after reductions for fees paid
indirectly and fee waivers would be as follows:
Ameritas Core Strategies 0.91%
Ameritas Income & Growth 0.77%
Excel Performance VUL 10 UC
Ameritas MidCap Value 1.04%
Income 0.84%
Social Equity 1.05%
Social International Equity 1.59%
DWS (1) "Other Fees" are based on estimated amounts for the current fiscal year.
Actual expenses may be different.
DWS (2) Through 4/30/2010, the Advisor has contractually agreed to waive all or
a portion of its management fee and reimburse or pay operating expenses of the
fund to the extent necessary to maintain the fund's operating expenses at 0.49%,
excluding certain expenses such as extraordinary expenses, taxes, brokerage and
interest.
DWS (3) Restated on an annual basis to reflect approved fee changes taking
effect on May 1, 2008. Includes a 0.10% administrative services fee paid to the
Advisor.
DWS (4) Through 4/30/2009, the Advisor has contractually agreed to
waive all or a portion of its management fee and reimburse or pay operating
expenses of the fund to the extent necessary to maintain the fund's operating
expenses at 1.06%, excluding certain expenses such as extraordinary expenses,
taxes, brokerage and interest.
DWS (5) In addition to the expenses that the portfolio bears directly, the
portfolio's shareholders indirectly bear the expenses of the underlying
portfolios in which the portfolio invests. The portfolio's estimated indirect
expense from investing in the underlying portfolios, based on its expected
allocations to the underlying portfolios, is as shown in the table.
Fidelity (1) A portion of the brokerage commissions that the fund pays may be
reimbursed and used to reduce the fund's expenses. In addition, through
arrangements with the fund's custodian, credits realized as a result of
uninvested cash balances are used to reduce the fund's custodian expenses. These
offsets may be discontinued at any time. Including these reductions, the total
class operating expenses would have been:
Contrafund 0.64%
Equity-Income 0.54%
Mid Cap 0.66%
Overseas 0.82%
FTVIPT (1) The Fund administration fee is paid indirectly through the management
fee.
FTVIPT (2) While the maximum amount payable under the Fund's Class 2 rule 12b-1
plan is 0.35% per year of the Fund's average daily net assets, the Fund's board
of trustees has set the current rate at 0.25% per year through April 30, 2009.
FTVIPT (3) Fund shares are held by a limited number of Insurers and, when
applicable, Funds of Funds. Substantial withdrawals by one or more Insurers or
Funds of Funds could reduce Fund assets, causing total Fund expenses to become
higher than those shown.
MFS (1) The fund has entered into an expense offset arrangement that reduces the
fund's custodian fee based upon the amount of cash maintained by the fund with
its custodian. Such fee reduction is not reflected in the table. Had this fee
reduction been taken into account, "Total Expenses" would be lower.
MFS (2) MFS has agreed in writing to bear the funds' expenses such that "Total
Portfolio Fees", determined without giving effect to the expense offset
arrangements described above, do not exceed 1.10% annually. This written
agreement excludes interest, taxes, extraordinary expenses, brokerage and
transaction costs and investment-related expenses and will continue until
modified by the fund's Board of Trustees.
MFS (3) MFS has agreed in writing to reduce its management fee to 0.65% annually
on average daily net assets in excess of $3 billion. This written agreement will
remain in effect until modified by the fund's Board of Trustees.
MFS (4) MFS has agreed in writing to reduce its management fee to 0.70% annually
on average daily net assets in excess of $1 billion. This written agreement will
remain in effect until modified by the fund's Board of Trustees.
Neuberger Berman (1) Neuberger Berman Management Inc. ("NBMI") has undertaken
through December 31, 2011 to waive fees and/or reimburse certain operating
expenses, including the compensation of NBMI (except with respect to the
Guardian Portfolio) and excluding taxes, interest, extraordinary expenses,
brokerage commissions and transaction costs, that exceed, in the aggregate, 1%
of average daily net asset value. The expense limitation arrangements for the
Portfolios are contractual and any excess expenses can be repaid to NBMI within
three years of the year incurred, provided such recoupment would not cause a
Portfolio to exceed its respective limitation.
Oppenheimer (1) The "Other Fees" in the table are based on, among other things,
the fees the Fund would have paid if the transfer agent had not waived a portion
of its fee under a voluntary undertaking to the Fund to limit these fees to
0.35% of average daily net assets per fiscal year. That undertaking may be
amended or withdrawn at any time. For the Fund's fiscal year ended December 31,
2007, the transfer agent fees did not exceed the expense limitation described
above. The Manager will voluntarily waive and/or reimburse Fund expenses in an
amount equal to the indirect management fees incurred through the Fund's
investment in Oppenheimer Institutional Money Market Fund ("IMMF"). During the
fiscal year, these amounts were not material to the above ratios. The Fund also
receives certain credits from the Fund's custodian that, during the fiscal year,
reduced its custodial expenses (by less than 0.01% of average daily net assets).
PIMCO (1) "Other Fees" reflect an administrative fee of 0.25% and interest
expense. Interest expense is generally incurred as a result of investment
management activities.
PIMCO (2) PIMCO Cayman Commodity Portfolio I LTD. (the Subsidiary) has entered
into a separate contract with the advisor for the management of the Subsidiary's
portfolio pursuant to which the Subsidiary pays the advisor at the annual rates
of 0.49% for a management fee and 0.20% for an administration fee.
Summit (1) The adviser has contractually agreed to waive administration fees for
the Bond Portfolio, as long as that Portfolio's direct operating expense ratio
exceeds 0.75%. Expenses of Acquired Funds are not included in this arrangement.
Summit (2) The fund does not bear any direct operating expenses above the amount
disclosed; any additional direct operating expenses are borne by the adviser
according to the terms of the advisory agreement. Expenses of Acquired Funds are
not included in this arrangement.
Summit (3) The adviser has agreed to waive its fees and/or reimburse expenses of
the portfolio to the extent necessary, to limit direct operating expenses to
0.95% of the average daily net assets of the portfolio until May 1, 2009.
Expenses of Acquired Funds are not included in this arrangement.
Summit (4) The adviser has agreed to waive its fees and/or reimburse expenses of
the portfolio to the extent necessary, to limit direct operating expenses to
0.39% of the average daily net assets of the portfolio until May 1, 2009.
Expenses of Acquired Funds are not included in this arrangement.
UIF (1) The Portfolio may invest a portion of its assets in other investment
companies (the "Acquired Funds"). The Portfolio's shareholders indirectly bear a
pro rata portion of the expenses of the Acquired Funds in which the Portfolio
invests. "Acquired Fund Fees and Expenses" in the table is an estimate of those
expenses. The estimate is based upon the average allocation of the Portfolio's
investments in the Acquired Funds and upon the actual total operating expenses
of the Acquired Funds (including any current waivers and expense limitations)
for the fiscal year ended December 31, 2007. Actual Acquired Fund expenses
incurred by the Portfolio may vary with changes in the allocation of Portfolio
assets among the Acquired Funds and with other events that directly affect the
expenses of the Acquired Funds. Since "Acquired Fund Fees and Expenses" are not
directly borne by the Portfolio, they are not reflected in the Portfolio's
financial statements, with the result that the information presented in the
table will differ from that presented in the Financial Highlights section of the
Portfolio prospectus.
UIF (2) This table does not show the effects of the Adviser's voluntary fee
waivers and/or expense reimbursements. The Adviser has voluntarily agreed to
reduce its advisory fee and/or reimburse the Portfolio so that Total Expenses ,
excluding certain investment related expenses described below and Acquired Fund
Fees and Expenses, will not exceed 1.60%. In determining the actual amount of
voluntary advisory fee waivers and/or expense reimbursements for the Portfolio,
if any, certain investment related expenses, such as foreign country tax expense
and interest expense on amounts borrowed, are excluded from Total Expenses. If
these expenses were included, the Total Expenses after voluntary fee waivers
and/or
Excel Performance VUL 11 UC
expense reimbursements could exceed the expense ration shown. Fee waivers
and/or expense reimbursements are voluntary and the Adviser reserves the right
to terminate any waivers and/or reimubrsements at any time and without notice.
* Short cites are used in this list. The "Investment Options" section uses
complete Portfolio names.
** Portfolios pay 12b-1 fees to us pursuant to Rule 12b-1 under the Investment
Company Act of 1940, which allows investment companies to pay fees out of
portfolio assets to those who sell and distribute portfolio shares. Some
portfolios may also pay 0.05 to 0.25 percent of annual portfolio assets for our
providing shareholder support and marketing services.
*** Some portfolios invest in other investment companies (the "acquired
portfolios"). In these instances, portfolio shareholders indirectly bear the
fees and expenses of the acquired portfolios.
**** "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500,"
and "500" are trademarks of The McGraw-Hill Companies, Inc. and have been
licensed for use by us and Summit. The Product is not sponsored, endorsed, sold
or promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the Product. The Statement of
Additional Information sets forth certain additional disclaimers and limitations
of liabilities on behalf of S&P as set forth in the Licensing Agreement between
S&P and us.
CHARGES EXPLAINED
The following repeats and adds to information provided in the CHARGES
section where the amount of each charge is shown. Please review both prospectus
sections, and the Policy, for information on charges. For those Policies issued
on a unisex basis in certain states or in certain cases, gender-distinct rates
do not apply. Certain charges expressly permit you to designate the Investment
Options from which the charge is to be deducted. If there are insufficient funds
in such a designated Investment Option, and for all other charges deducted from
total Account Value, charges are deducted Pro-Rata from your selected Subaccount
and Fixed Account Investment Options.
TRANSACTION CHARGES
o Premium Charge
We currently charge a percentage of each Policy premium payment we
receive as a Premium Charge. This charge partially offsets state and local
premium taxes and federal taxes on certain capitalized acquisition expenses. We
do not expect to profit from this charge. Our current charge is less than our
guaranteed maximum amount for this charge.
o Surrender Charge
Upon a full Surrender from your Policy, we deduct a Surrender Charge
from the total Account Value. The amount of this charge varies by the Insured's
gender, Issue Age (or Attained Age at the time of any increase), risk class,
Specified Amount of insurance coverage, and the length of time the Policy has
been in force. Surrender Charges apply during the first 12 Policy years and for
the first 12 Policy years after an increase in Specified Amount. The initial
Surrender Charge applies from the Policy Date. In the event of an increase in
the Specified Amount, the Surrender Charge will increase. You will receive a
revised Policy schedule reflecting the increase. Taxes and tax penalties may
apply.
o Partial Withdrawal Charge
Upon a partial withdrawal from your Policy, we may assess a partial
withdrawal charge. The partial withdrawal charge will be allocated the same as
the partial withdrawal itself. Taxes and tax penalties may apply.
o Transfer Charge
We may charge a transfer charge for any transfer in excess of 15
transfers per Policy year. You may tell us how to allocate the transfer charge.
o Periodic Charges:
Monthly Deductions from Account Value
On each Monthly Date, we will deduct an amount from your Account
Value to pay us for providing the benefits of the Policy. This amount is called
the Monthly Deduction. It equals the sum of monthly charges for the cost of
insurance, administrative charge, specified amount charge, and the costs of any
riders. You may tell us how to allocate the Monthly Deduction.
Excel Performance VUL 12 UC
o Cost of Insurance Charge
The cost of insurance rate per $1,000 of Net Amount at Risk cannot
exceed the guaranteed cost of insurance rate that is set forth in the Policy.
The maximum cost of insurance each month can be determined by using the
guaranteed cost of insurance rate in the formula for cost of insurance, below.
The cost of insurance charge is for providing insurance protection
under the Policy. Because the cost of insurance charge depends upon several
variables, the cost for each Policy can vary from month to month. The cost of
insurance rate for the Specified Amount of insurance coverage varies by the
Insured's gender, Issue Age, risk class, Specified Amount and the length of time
the Policy has been in force. The cost of insurance rate for an increase in
Specified Amount varies by the Insured's gender, age and risk class at the time
of the increase, Specified Amount and the length of time the Policy has been in
force since the increase. We may use current cost of insurance rates less than
those shown in the Policy, and reserve the right to change them so long as they
do not exceed the maximum rates shown in the Policy. Changes will apply equally
to similarly situated Policy Owners and be based on changes in future
expectations of factors such as investment earnings, mortality, persistency, and
expenses. We expect a profit from this charge. Ask for a Policy illustration or
see your Policy for these charges applicable to you.
The Cost of Insurance each month equals:
- The Net Amount at Risk for the month; multiplied by
- The cost of insurance rate per $1,000 of Net Amount at Risk; divided by
- $1,000.
o Administrative Charge
This monthly charge partially compensates us for our costs in issuing
and administering the Policy and operating the Separate Account. We do not
anticipate making a profit from this charge. The maximum monthly administrative
charge is shown on your Policy schedule.
o Specified Amount Charge
For certain risk classes and Issue Ages, the maximum cost of insurance
rates and other Policy charges are insufficient to cover our costs in issuing
and administering the Policy, operating the Separate Account, and providing the
benefits under the Policy. The Specified Amount charge partially compensates us
for these costs. We do not anticipate making a profit from this charge. The
maximum monthly Specified Amount charge, if any, is shown on your Policy
schedule. Any increase in Specified Amount will result in an additional monthly
Specified Amount charge, unless the applicable rate at the time of the increase
is zero.
o Costs of Optional Features
The cost for any optional features you select (sometimes called Policy
"Riders") is also deducted monthly from Account Value. See the CHARGES section
for information about the costs of these features, and refer to APPENDIX A for
descriptions of these features.
PERIODIC CHARGES:
DAILY DEDUCTIONS FROM SEPARATE ACCOUNT ASSETS
The following charges are applied daily to Separate Account assets in
determining the daily Accumulation Unit value of each Subaccount.
o Risk Charge
The Risk Charge is for the mortality risks we assume - that Insureds
may live for shorter periods of time than we estimate, and also compensates us
for the Policy expense risks we assume. If this charge exceeds our actual costs
to cover these risks, the excess goes to our general account. Conversely, if
this charge is not enough, we bear the additional expense, not you. We expect a
profit from this charge.
o Policy Debt
If you borrow from your Account Value, interest accrues on outstanding
loan amounts. After five Policy years, a lower interest rate may be available
for a portion of your Policy Debt. See the POLICY DEBT section for more
information on applicable interest rates.
Excel Performance VUL 13 UC
o Portfolio Charges
Each Subaccount's underlying portfolio has investment advisory
expenses. These expenses, as of the end of each portfolio's last fiscal year,
are stated in this prospectus' CHARGES section and described in more detail in
each portfolio's prospectus. A portfolio's charges and expenses are not deducted
from your Account Value. Instead, they are reflected in the daily value of
portfolio shares which, in turn, will affect the daily Accumulation Unit value
of the Subaccounts. These charges and expenses help to pay the portfolio's
investment adviser and operating expenses.
INVESTMENT OPTIONS
The Policy allows you to choose from a wide array of Investment Options
- - each chosen for its potential to meet specific investment objectives.
You may allocate all or a part of your premiums among the Separate
Account variable Investment Options ("Subaccounts") or the Fixed Account option.
Allocations must be in whole percentages and total 100%. The Subaccounts, which
invest in underlying portfolios, are listed and described in this section of
this prospectus.
SEPARATE ACCOUNT VARIABLE INVESTMENT OPTIONS
The Separate Account provides you with variable Investment Options in
the form of underlying portfolio investments. Each underlying portfolio is an
open-end investment management company. When you allocate investments to an
underlying portfolio, those investments are placed in a Subaccount of the
Separate Account corresponding to that portfolio, and the Subaccount in turn
invests in the portfolio. The Account Value of your Policy depends directly on
the investment performance of the portfolios that you select.
The Separate Account is registered with the SEC as a unit investment
trust. However, the SEC does not supervise the management or the investment
practices or policies of the Separate Account or Union Central. Under Ohio law,
we own the Separate Account assets, but they are held separately from our other
assets and are not charged with any liability or credited with any gain of
business unrelated to the Separate Account. Our Separate Account may be (i)
operated as an investment management company or any other form permitted by law,
(ii) deregistered with the SEC if registration is no longer required, or (iii)
combined with one or more other separate accounts. To the extent permitted by
law, we also may transfer assets of the Separate Account to other accounts.
The underlying portfolios in the Separate Account are NOT publicly traded
mutual funds, and are NOT the same as other publicly traded mutual funds with
very similar names. The portfolios are only available as separate account
Investment Options in life insurance or variable annuity policies issued by
insurance companies, or through participation in certain qualified pension or
retirement plans.
Even if the investment objectives and policies of some underlying
portfolios available under the Policy may be very similar to the investment
objectives and policies of publicly traded mutual funds that may be managed by
the same investment adviser, the investment performance and results of the
portfolios available under the Policy may vary significantly from the investment
results of such other publicly traded mutual funds.
Read the prospectuses for the underlying portfolios together with this
prospectus for more information.
Any and all distributions made by the underlying portfolios, with
respect to the shares held by the Separate Account, will be reinvested in
additional shares at net asset value. We are responsible to you for meeting the
obligations of the Policy, but we do not guarantee the investment performance of
any of the variable Investment Options' underlying portfolios. We do not make
any representations about their future performance.
The value of your Policy will go up () or down () based on the investment
performance of the variable Investment Options you choose. The investment
results of each variable Investment Option are likely to differ significantly,
and vary over time. They do not earn a fixed interest rate. Please consider
carefully, and on a continuing basis, which Investment Options best suit your
long-term investment objectives and risk tolerance.
You bear the risk that the variable Investment Options you
select may fail to meet their objectives, that they
could decrease in value, and that you could lose principal.
Excel Performance VUL 14 UC
Each Subaccount's underlying portfolio operates as a separate variable
Investment Option, and generally the income or loss of one has no effect on the
investment performance of any other. Complete descriptions of each portfolio's
investment objectives and restrictions and other material information related to
an investment in the variable Investment Option are contained in the
prospectuses for each of the underlying portfolios which accompany this
prospectus. You should read the prospectus for an underlying portfolio for more
information about that portfolio, including detailed information about the
portfolio's fees and expenses, investment strategy and investment objectives,
restrictions, and potential risks, such as those related to mixed and shared
funding for portfolios that are also offered through individual variable
annuities, other variable life insurance policies, and qualified pension and
retirement plans (see the Transfers section, Omnibus Orders). To get a copy of
any portfolio prospectus, contact your representative or us as shown on the
Table of Contents page or the last page of this prospectus.
The Subaccount underlying portfolios listed below are designed
primarily as investments for variable annuity and variable life insurance
policies issued by insurance companies. They are not publicly traded mutual
funds available for direct purchase by you. There is no assurance the investment
objectives will be met.
- --------------------------------------------------------------------------------------------------------------------
FUND NAME INVESTMENT ADVISER
Portfolio Name - Subadviser(s) Portfolio Type / Summary of Investment Strategy
- --------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Invesco Aim Advisors, Inc.
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Global Real Estate Fund, Series I - High total return through growth of capital and
current income.
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. International Growth Fund, Series I - Long-term growth of capital.
- --------------------------------------------------------------------------------------------------------------------
AIM V.I. Small Cap Equity Fund, Series I - Long-term growth of capital.
- --------------------------------------------------------------------------------------------------------------------
- - Subadvisers: AIM Funds Management Inc. (AIM Funds Management Inc. anticipates changing its name to Invesco
Trimark Ltd. on or prior to December 31, 2008); Invesco Global Asset Management (N.A.), Inc.; Invesco
Institutional (N.A.), Inc.; Invesco Senior Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset Management Deutschland, GmbH; and
Invesco Australia Limited
- --------------------------------------------------------------------------------------------------------------------
The Alger American Fund Fred Alger Management, Inc.
- --------------------------------------------------------------------------------------------------------------------
Alger American Balanced Portfolio, Class O Current income and long-term capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
Alger American Capital Appreciation Portfolio, Class O Long-term capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
American Century Investments American Century Investment Management, Inc.
- --------------------------------------------------------------------------------------------------------------------
American Century VP Mid Cap Value Fund, Class I Long-term capital growth; income is secondary.
- --------------------------------------------------------------------------------------------------------------------
Calvert Variable Series, Inc.* Calvert Asset Management Company, Inc.
- --------------------------------------------------------------------------------------------------------------------
Ameritas Core Strategies Portfolio - Thornburg Investment Long-term capital appreciation; current income is
Management, Inc. secondary.
- --------------------------------------------------------------------------------------------------------------------
Ameritas Income & Growth Portfolio - Fred Alger Management, Income; capital appreciation is secondary.
Inc. (Fred Alger)
- --------------------------------------------------------------------------------------------------------------------
Ameritas MidCap Growth Portfolio - Fred Alger Long-term capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
Ameritas MidCap Value Portfolio - RiverSource Investments, Long-term capital appreciation.
LLC
- --------------------------------------------------------------------------------------------------------------------
Ameritas Money Market Portfolio Money market: current income.
- --------------------------------------------------------------------------------------------------------------------
Ameritas Small Capitalization Portfolio - Eagle Asset Long-term capital appreciation.
Management, Inc.
- --------------------------------------------------------------------------------------------------------------------
Ameritas Small Company Equity Portfolio - OFI Institutional Long-term capital appreciation.
Asset Management Inc.
- --------------------------------------------------------------------------------------------------------------------
Income Portfolio Long-term income.
- --------------------------------------------------------------------------------------------------------------------
Social Balanced Portfolio - Equity Portion: New Amsterdam Income and capital growth.
Partners LLC; Fixed Income Portion: No Subadviser
- --------------------------------------------------------------------------------------------------------------------
Social Equity Portfolio - Atlanta Capital Management Capital growth.
Company, L.L.C.
- --------------------------------------------------------------------------------------------------------------------
Social International Equity Portfolio - Acadian Asset Growth.
Management, Inc.
- --------------------------------------------------------------------------------------------------------------------
DWS Variable Series I Deutsche Investment Management Americas Inc.
- --------------------------------------------------------------------------------------------------------------------
DWS Capital Growth VIP Portfolio, Class A Long-term capital growth.
- --------------------------------------------------------------------------------------------------------------------
DWS Variable Series II Deutsche Investment Management Americas Inc.
- --------------------------------------------------------------------------------------------------------------------
DWS Dreman Small Mid Cap Value VIP Portfolio, Class A Long-term capital growth.
- --------------------------------------------------------------------------------------------------------------------
DWS Global Thematic VIP Portfolio, Class A Long-term capital growth.
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) Variable Insurance Products Fidelity Management & Research Company
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP Contrafund(R) Portfolio, Initial Class Long-term growth.
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP Equity-Income Portfolio, Initial Class Index: S&P 500 Index.
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP High Income Portfolio, Initial Class Income and growth.
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP Investment Grade Bond Portfolio, Bond.
Initial Class
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP Mid Cap Portfolio, Initial Class Long-term growth.
- --------------------------------------------------------------------------------------------------------------------
Excel Performance VUL 15 UC
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP Overseas Portfolio, Initial Class Long-term growth.
- --------------------------------------------------------------------------------------------------------------------
Fidelity(R) VIP Strategic Income Portfolio, Initial Class Income.
- --------------------------------------------------------------------------------------------------------------------
Franklin Templeton Variable Insurance Products Trust Franklin Advisers, Inc.
- --------------------------------------------------------------------------------------------------------------------
Franklin Income Securities Fund, Class 2 Income.
- --------------------------------------------------------------------------------------------------------------------
Ivy Funds Variable Insurance Portfolios, Inc. Waddell & Reed Investment Management Company
- --------------------------------------------------------------------------------------------------------------------
Ivy Funds VIP Science and Technology Long-term capital growth.
- --------------------------------------------------------------------------------------------------------------------
MFS(R) Variable Insurance TrustSM Massachusetts Financial Services Company
- --------------------------------------------------------------------------------------------------------------------
MFS(R) VIT Research International Series, Initial Class Capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
MFS(R) VIT Total Return Series, Initial Class Total return.
- --------------------------------------------------------------------------------------------------------------------
MFS(R) VIT Utilities Series, Initial Class Total return.
- --------------------------------------------------------------------------------------------------------------------
MFS(R) VIT Value Series, Initial Class Capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman Advisers Management Trust Neuberger Berman Management Inc.
- --------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Guardian Portfolio, Class I Long-term capital growth; income is secondary.
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Securities Fund/VA, Non-Service Shares Long-term capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
PIMCO Variable Insurance Trust Pacific Investment Management Company LLC
- --------------------------------------------------------------------------------------------------------------------
PIMCO Total Return Portfolio, Administrative Class Total return.
- --------------------------------------------------------------------------------------------------------------------
Summit Mutual Funds, Inc., Summit Pinnacle Series* Summit Investment Partners, Inc.
- --------------------------------------------------------------------------------------------------------------------
Summit Bond Portfolio Bond.
- --------------------------------------------------------------------------------------------------------------------
Summit EAFE International Index Portfolio Index: MSCI EAFE Index.
- --------------------------------------------------------------------------------------------------------------------
Summit Inflation Protected Plus Portfolio Inflation-adjusted income.
- --------------------------------------------------------------------------------------------------------------------
Summit Lehman Aggregate Bond Index Portfolio Index: Lehman Aggregate Bond Index.
- --------------------------------------------------------------------------------------------------------------------
Summit Lifestyle ETF Market Strategy Aggressive Portfolio Target allocation - Aggressive.
- --------------------------------------------------------------------------------------------------------------------
Summit Lifestyle ETF Market Strategy Conservative Portfolio Target allocation - Conservative.
- --------------------------------------------------------------------------------------------------------------------
Summit Lifestyle ETF Market Strategy Target Portfolio Target allocation - Moderate.
- --------------------------------------------------------------------------------------------------------------------
Summit Nasdaq-100 Index Portfolio Index: Nasdaq-100 Index.
- --------------------------------------------------------------------------------------------------------------------
Summit Natural Resources Portfolio Specialty.
- --------------------------------------------------------------------------------------------------------------------
Summit Russell 2000 Small Cap Index Portfolio Index: Russell 2000 Index.
- --------------------------------------------------------------------------------------------------------------------
Summit S&P 500 Index Portfolio Index: S&P 500 Index.
- --------------------------------------------------------------------------------------------------------------------
Summit S&P MidCap 400 Index Portfolio Index: S&P MidCap 400 Index.
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Series, Inc. T. Rowe Price Associates, Inc.
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price Blue Chip Growth Portfolio-II Growth.
- --------------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Income Portfolio-II Long-term capital growth.
- --------------------------------------------------------------------------------------------------------------------
Third Avenue Variable Series Trust Third Avenue Management LLC
- --------------------------------------------------------------------------------------------------------------------
Third Avenue Value Portfolio Long-term capital growth.
- --------------------------------------------------------------------------------------------------------------------
The Universal Institutional Funds, Inc. Morgan Stanley Investment Management Inc.,
dba Van Kampen
- --------------------------------------------------------------------------------------------------------------------
UIF Emerging Markets Equity Portfolio, Class I Long-term capital appreciation.
- --------------------------------------------------------------------------------------------------------------------
* These funds and their investment advisers are part of the UNIFI Mutual
Holding Company ("UNIFI"), the ultimate parent of Union Central. Also, Ameritas
Investment Corp., a majority owned indirect subsidiary of UNIFI, is the
underwriter for the Summit Mutual Funds, Inc., Summit Pinnacle Series.
o Adding, Deleting, or Substituting Variable Investment Options
We do not control the Subaccounts' underlying portfolios, so we cannot
guarantee that any of the portfolios will always be available. Subject to
applicable law, we retain the right to add or change the Subaccounts of the
Separate Account, the right to eliminate the shares of any Subaccount's
underlying portfolio and the right to substitute shares of another portfolio for
an eliminated portfolio. If the shares of an underlying portfolio are no longer
available for investment or if, in our judgment, investment in the portfolio
would be inappropriate in view of the purposes of the Separate Account, we will
first notify you and receive any necessary SEC and state approval before making
such a change. Separate Account underlying portfolios may be added or
eliminated, when, in our sole discretion, conditions warrant a change. If a
portfolio is eliminated, we may ask you to reallocate any Account Value in the
corresponding Subaccount. If you do not reallocate this amount, we may
automatically reallocate it to the Money Market Subaccount. If you are
allocating premium to the eliminated Subaccount, we will ask you to change your
premium allocation. If you do not, we will automatically redirect any future
premium allocations to the eliminated Subaccount to the Money Market Subaccount.
We will notify you when such a transfer occurs. You may, within 60 days of the
date of our notice, reallocate the amount transferred, without charge, to
another investment option. If we make a portfolio substitution or change, we may
change the Policy to reflect the substitution or change.
Excel Performance VUL 16 UC
o Voting Rights
As a Policy Owner, you may have voting rights in the portfolios whose
shares underlie the Subaccounts in which you invest. You will receive proxy
material, reports, and other materials relating to each underlying portfolio in
which you have voting rights. If you send us written voting instructions, we
will follow your instructions in voting the portfolio shares attributable to
your Policy. If you do not send us written instructions, we will vote those
shares in the same proportions as we vote the shares for which we have received
instructions from other Policy owners. We will vote shares that we hold in the
same proportions as we vote the shares for which we receive instructions from
other Policy owners. It is possible that a small number of Policy owners can
determine the outcome of a voting proposal. The underlying portfolios may not
hold routine annual shareholder meetings.
FIXED ACCOUNT OPTION
The Policy has one fixed interest rate option ("Fixed Account"), where
we bear the investment risk. We guarantee that you will earn a minimum interest
rate that will yield at least 3.0% per year, compounded annually. We may declare
a higher current interest rate. However, you bear the risk that interest will
remain at the minimum guaranteed rate for the life of the Policy.
All amounts allocated to the Fixed Account become assets of our general account.
The general account has not been registered with the SEC and is not subject to
SEC regulation. Therefore, SEC staff have not reviewed the Fixed Account
disclosures in this prospectus.
Net Premiums allocated to and transfers to the Fixed Account under the
Policy become part of our general account assets, which support annuity and
insurance obligations. The general account includes all of our assets, except
those assets segregated in separate accounts. We have sole discretion to invest
the assets of the general account, subject to applicable law, and we bear the
risk that assets in the Fixed Account will perform better or worse than the
interest we pay. Since the focus of this prospectus is to disclose the Separate
Account aspects of the Policy, please refer to the Policy for additional details
regarding the Fixed Account.
TRANSFERS
The Policy is designed for long-term investment. Excessive transfers
such as those triggered by market timing services or other large or frequent
transfers could harm other Policy owners by having a detrimental effect on
investment portfolio management. In addition to the right of each portfolio to
impose redemption fees on short-term trading, we may reject any specific premium
allocation or transfer request, if in the judgment of a Subaccount portfolio
investment adviser, a Subaccount portfolio would be unable to invest effectively
in accordance with its investment objectives and policies, or if Policy Owners
would otherwise potentially be adversely affected.
We consider any transfer of money out of a Subaccount within 60 days of
a purchase to be evidence of possible market timing. We will not execute such a
trade until we provide the underlying portfolio's investment adviser with
information about it for an opportunity to evaluate the transfer pursuant to the
investment adviser's own standards, as stated in the Subaccount's underlying
portfolio prospectus. Ultimately the portfolio's investment adviser has the
authority to make the determination whether or not to accept a transfer.
Subject to restrictions prior to the Right to Examine Transfer Date,
you may transfer Account Value from one Subaccount to another, from the Separate
Account to the Fixed Account, or from the Fixed Account to any Subaccount,
subject to these rules:
Transfer Rules:
o A transfer is considered any single request to move assets
between one or more Investment Options.
o We must receive notice of the transfer request - either Written
Notice, an authorized telephone transaction, or by Internet when
available. Our Trading Unit facsimile number is 402-467-7923.
Transfers will be processed on the Business Day they are received
by our Trading Unit before close of the New York Stock Exchange
(usually 3:00 p.m. Central Time). You must be available to
receive a confirmation telephone call for any faxed transfer
requests sent to us, or your trade may not be processed until it
is confirmed.
o The transferred amount must be at least $250, or the entire
Subaccount or Fixed Account value if it is less. (If the Account
Value remaining in a Subaccount after a transfer will be less
than $100, we will include that Account Value in the amount
transferred.)
- If the Dollar Cost Averaging systematic transfer program is
used, then the minimum transfer amount out of a Subaccount
or the Fixed Account is the lesser of $100 or the balance in
the Subaccount or Fixed Account. Under this program, the
maximum amount that may be transferred from the Fixed
Account each month is 1/36th of the value of the Fixed
Account at the time the Dollar Cost Averaging program is
established. While a Dollar Cost Averaging program is in
Excel Performance VUL 17 UC
effect, elective transfers out of the Fixed Account are
prohibited.
- The Portfolio Rebalancing and Earnings Sweep systematic
transfer programs have no minimum transfer limits.
o The first 15 transfers each Policy year are free. Thereafter,
transfers may result in a $10 charge for each transfer. See the
CHARGES section of this prospectus for information about how this
charge is applied. This fee is not subtracted from the amount of
the transfer. Transfers under any systematic transfer program do
count toward the 15 free transfers limit.
o A transfer from the Fixed Account (except made pursuant to a
systematic transfer program):
- may be made only once each Policy year;
- may be delayed up to six months;
- is limited during any Policy year to the greatest of:
- 25% of the Account Value in the Fixed Account on the
date of the transfer;
- the amount of any Fixed Account transfer that occurred
during the prior 13 months; and,
- $1,000.
o We reserve the right to limit transfers, or to modify transfer
privileges, and we reserve the right to change the transfer rules
at any time. We and the investment advisers consider market
timing strategies, programmed transfers or transfers that are
large in relation to the total assets of an Investment Option's
underlying portfolio as disruptive. We may react to disruptive
transfers by, among other things, restricting the availability of
personal telephone requests, facsimile transmissions, automated
telephone services, Internet services or any electronic transfer
service. We may also refuse to act on transfer instructions of an
agent acting under a power of attorney or otherwise who is acting
on behalf of one or more Owners. In making these determinations,
we may consider the combined transfer activity of annuity
contracts and life insurance policies that we believe are under
common ownership, control or direction.
o If the Account Value in any Subaccount falls below $100, we may
transfer the remaining balance, without charge, to the Money
Market Subaccount. We will notify you when such a transfer
occurs. You may, within 60 days of the date of our notice,
reallocate the amount transferred, without charge, to another
investment option.
o In the event you authorize telephone or Internet transfers, we
are not liable for telephone or Internet instructions that we in
good faith believe you authorized. We will employ reasonable
procedures to confirm that instructions are genuine.
Omnibus Orders
Purchase and redemption orders received by the portfolios generally
are "omnibus" orders from intermediaries such as retirement plans and separate
accounts funding variable insurance products. The omnibus orders reflect the
aggregation and netting of multiple orders from individual retirement plan
participants and individual owners of variable insurance products. The omnibus
nature of these orders may limit the ability of the portfolios to apply their
respective disruptive trading policies and procedures. We cannot guarantee that
the portfolios will not be harmed by transfer activity relating to the
retirement plans or other insurance companies that may invest in the portfolios.
These other insurance companies are responsible for their own policies and
procedures regarding frequent transfer activity. If their policies and
procedures fail to successfully discourage harmful transfer activity, it will
affect other owners of portfolio shares, as well as the owners of all variable
life insurance or variable annuity contracts, including ours, whose variable
investment options correspond to the affected portfolios. In addition, if a
portfolio believes that an omnibus order that we submit may reflect one or more
transfer requests from Owners engaged in disruptive trading, the portfolio may
reject the entire omnibus order and thereby delay or prevent us from
implementing your request.
Time Period for Special Transfer
At any time within 24 months of the Policy Date, you may request a
transfer of the entire Account Value in the Subaccounts to the Fixed Account
without incurring a transfer charge.
THIRD PARTY SERVICES
Where permitted and subject to our rules (including those Transfer
Rules above regarding rejection of a transfer request), we may accept your
authorization to have a third party (such as your sales representative or
someone else you name) exercise transfers or investment allocations on your
behalf. Third-party transfers and allocations are subject to the same rules as
all other transfers and allocations. You can make this election on the
application or by sending us Written Notice on a form provided by us. Please
note that any person or entity you authorize to make transfers or allocations on
your behalf, including any investment advisory, asset allocation, money
management or timing service, does so independently from any agency relationship
they may have with us for the
Excel Performance VUL 18 UC
sale of the Policies. They are accountable to you alone for such transfers or
allocations. We are not responsible for such transfers or allocations on your
behalf, or recommendations to you, by such third-party services. You should be
aware that charges charged by such third parties for their service are separate
from and in addition to charges paid under the Policy.
DISRUPTIVE TRADING PROCEDURES
Do not invest with us if you intend to conduct market timing or potentially
disruptive trading.
The Policy is not designed to serve as a vehicle for frequent trading
in response to short-term fluctuations in the market. Such frequent trading,
programmed transfers, or transfers that are large in relation to the total
assets of a Subaccount's underlying portfolio can disrupt management of a
Subaccount's underlying portfolio and raise expenses. This in turn can hurt
performance of an affected Subaccount and therefore hurt your Policy's
performance. The risks and harmful effects of disruptive trading include:
o dilution of the interests of long-term investors in a separate
account if market timers manage to transfer into a portfolio at
prices that are below the true value or to transfer out of the
portfolio at prices that are above the true value of the
portfolio's investments (some market timers attempt to do this
through methods known as "time-zone arbitrage" and "liquidity
arbitrage");
o Reduced investment performance due to adverse effects on
portfolio management by:
- impeding a portfolio investment adviser's ability to sustain
an investment objective;
- causing the portfolio to maintain a higher level of cash
than would otherwise be the case;
- causing a portfolio to liquidate investments prematurely (or
otherwise at an inopportune time) in order to pay
withdrawals or transfers out of the portfolio; and
o increased costs to you in the form of increased brokerage and
administrative expenses. These costs are borne by all Policy
Owners invested in those separate accounts, not just those making
the transfers.
Policy Owners should be aware that we are contractually obligated to
provide, at the portfolio investment adviser's request, Policy Owner transaction
data relating to trading activities, including tax identification numbers and
other identifying information contained in our records to assist in identifying
any pattern or frequency of Subaccount transfers that may violate the
portfolio's trading policies. We are obligated to follow each portfolio
investment adviser's instructions regarding enforcement of their trading policy.
On receipt of written instructions from a portfolio investment adviser, we will
restrict or prohibit further purchases or transfers by Policy Owners identified
as having engaged in transactions that violate the portfolio's trading policies.
We are not authorized to grant exceptions to an underlying portfolio's trading
policy. Please refer to each portfolio's prospectus for more information on its
trading policies.
We reserve the right to reject or restrict, in our sole discretion,
transfers initiated by a market timing organization or individual or other party
authorized to give transfer instructions. We further reserve the right to impose
restrictions on transfers that we determine, in our sole discretion, will
disadvantage or potentially hurt the rights or interests of other Policy Owners.
Restrictions may include changing, suspending or terminating telephone, online
and facsimile transfer privileges. We will enforce any Subaccount underlying
portfolio investment adviser's restrictions imposed upon transfers considered by
the portfolio investment adviser to be disruptive. Our disruptive trading
procedures may vary from Subaccount to Subaccount, and may also vary due to
differences in operational systems and contract provisions. However, any
Subaccount restrictions will be uniformly applied; we do not make special
arrangements or grant exceptions or waivers to accommodate any persons or class
of persons with regard to these procedures.
There is no assurance that the measures we take will be effective in
preventing market timing or other excessive transfer activity. Our ability to
detect and deter disruptive trading and to consistently apply our disruptive
trading procedures may be limited by operational systems and technological
limitations. Also, because other insurance companies and retirement plans may
invest in Subaccount underlying portfolios, we cannot guarantee that Subaccount
underlying portfolios will not suffer harm from disruptive trading within
contracts issued by them.
Excessive Transfers
We reserve the right to restrict transfers if we determine you are
engaging in a pattern of transfers that may disadvantage Policy Owners.
In making this determination, we will consider, among other things:
o the total dollar amount being transferred;
o the number of transfers you make over a period of time;
o whether your transfers follow a pattern designed to take
advantage of short term market fluctuations, particularly within
certain Subaccount underlying portfolios;
Excel Performance VUL 19 UC
o whether your transfers are part of a group of transfers made by a
third party on behalf of individual Policy Owners in the group;
and
o the investment objectives and/or size of the Subaccount
underlying portfolio.
Third Party Traders
We reserve the right to restrict transfers by any firm or any other
third party authorized to initiate transfers on behalf of multiple
Policy Owners if we determine such third party trader is engaging in a
pattern of transfers that may disadvantage Policy Owners. In making
this determination, we may, among other things:
o reject the transfer instructions of any agent acting under a
power of attorney on behalf of more than one Policy Owner, or
o reject the transfer or exchange instructions of individual Policy
Owners who have executed transfer forms which are submitted by
market timing firms or other third parties on behalf of more than
one Policy Owner.
We will notify affected Policy Owners before we limit transfers, modify
transfer procedures or refuse to complete a transfer. Transfers made pursuant to
participation in a dollar cost averaging, portfolio rebalancing, earnings sweep
or asset allocation program are not subject to these rules. See the sections of
the prospectus describing those programs for the rules of each program.
SYSTEMATIC TRANSFER PROGRAMS
Transfers under any systematic transfer program do count toward the 15
free transfers limit. We reserve the right to alter or terminate any systematic
transfer program upon thirty days advance written notice. Only one systematic
transfer program may be utilized at a time.
o Dollar Cost Averaging Program
Dollar Cost Averaging allows you to automatically transfer, on a
periodic basis, a set dollar amount or percentage from the Money Market
Subaccount or the Fixed Account to any other Subaccount(s) or the Fixed Account.
Requested percentages are converted to a dollar amount. You can begin Dollar
Cost Averaging when you purchase the Policy or later. You can increase or
decrease the amount or percentage of transfers or discontinue the program at any
time. Dollar Cost Averaging is intended to limit loss by resulting in the
purchase of more Accumulation Units when a portfolio's value is low, and fewer
units when its value is high. However, there is no guarantee that such a program
will result in a higher Account Value, protect against a loss, or otherwise
achieve your investment goals.
Dollar Cost Averaging Rules:
o There is no additional charge for the Dollar Cost Averaging
program.
o We must receive notice of your election and any changed
instruction - either Written Notice, by telephone transaction
instruction, or by Internet when available.
o Automatic transfers can only occur monthly.
o The minimum transfer amount out of the Money Market Subaccount or
the Fixed Account is the lesser of $250 or the balance in the
Subaccount or Fixed Account. Under this program, the maximum
amount that may be transferred from the Fixed Account each month
is 1/36th of the Fixed Account value at the time Dollar Cost
Averaging is established. While a Dollar Cost Averaging program
is in effect, elective transfers out of the Fixed Account are
prohibited. There is no maximum transfer amount limitation
applicable to any of the Subaccounts.
o Dollar Cost Averaging program transfers cannot begin before the
Right to Examine Transfer Date.
o You may specify that transfers be made on the 1st through the
28th day of the month. Transfers will be made on the date you
specify (or if that is not a Business Day, then on the next
Business Day). If you do not select a date, the program will
begin on the next Monthly Date following the Right to Examine
Transfer Date.
o You can limit the number of transfers to be made, in which case
the program will end when that number has been made. Otherwise,
the program will terminate when the amount remaining in the Money
Market Subaccount or the Fixed Account is less than $100.
o Dollar Cost Averaging is not available when the Portfolio
Rebalancing Program is elected.
Excel Performance VUL 20 UC
o Portfolio Rebalancing Program
The Portfolio Rebalancing program allows you to rebalance your Account
Value among designated Subaccounts only as you instruct. You may change your
rebalancing allocation instructions at any time. Any change will be effective
when the next rebalancing occurs.
Portfolio Rebalancing Program Rules:
o There is no additional charge for the Portfolio Rebalancing
program.
o The Fixed Account is excluded from this program.
o You must request the rebalancing program, give us your
rebalancing instructions, or request to end this program either
by Written Notice, by telephone transaction instruction, or by
Internet when available.
o You may have rebalancing occur quarterly, semi-annually or
annually.
o Portfolio Rebalancing is not available when the Dollar Cost
Averaging Program is elected.
o Earnings Sweep Program
The Earnings Sweep program allows you to rebalance your Account Value
by automatically allocating earnings from your Subaccounts among designated
Investment Options (Subaccounts or the Fixed Account), either based on your
original Policy allocation of premiums or pursuant to new allocation
instructions. You may change your Earnings Sweep program instructions at any
time. Any change will be effective when the next sweep occurs.
Earnings Sweep Program Rules:
o There is no additional charge for the Earnings Sweep program.
o The Fixed Account is included in this program.
o You must request the Earnings Sweep program, give us your
allocation instructions, or request to end this program either by
Written Notice, by telephone transaction instruction, or by
Internet when available.
o You may have your earnings sweep quarterly, semi-annually or
annually.
MODEL ASSET ALLOCATION
We may offer a model asset allocation program. However, you always have
the ability to construct your own asset allocation plan from among the
Investment Options available in your Policy. Model asset allocation programs are
intended to match model risk tolerance and investment objectives with the
Investment Options available in your Policy.
To assist you in your selection of an asset allocation model, our Model
Asset Allocation program uses the Morningstar Asset Allocator. This tool was
developed by Morningstar Associates, LLC ("Morningstar") and is offered to you
through a license agreement between Morningstar and our affiliate Ameritas
Investment Corp. ("AIC"). The Model Asset Allocation program consists of five
models, ranging from aggressive to conservative. Morningstar provides AIC with
ongoing recommendations and monitoring of the portfolios that comprise the
models.
To participate in the asset allocation program:
o AIC will serve as your investment adviser fiduciary for the
program solely for purposes of development of the models and
periodic updates to the models. You must give AIC your written
consent and discretionary authority for AIC to give us
instructions to allocate your premiums (or, for an existing
Policy, Account Value) pursuant to the allocations of the model
you select. AIC will also periodically instruct us to change your
allocations consistent with any changes to the model made by AIC
as recommended by Morningstar. AIC has no discretionary authority
to execute any other transfers for your Policy.
o You must complete the Morningstar Asset Allocator Questionnaire.
o You must allocate all of your Account Value to one asset
allocation model. We must receive notice of your asset allocation
model election either by Written Notice or Internet (when
available) before we can begin a program for you. Only you can
select which model is best for you. The Asset Allocator
Questionnaire can be an aid, but neither it nor AIC will make
this decision for you. You may wish to consult with your own
financial professional to determine whether participation in the
program is best for you, and if so, which model is most suitable.
o Each quarter we will automatically rebalance the Subaccount
values to be consistent with the allocation percentages for the
program model that you elected. Such rebalancing will be
disclosed in quarterly statements to you. Performance of each
model is updated daily on our Internet site and is available upon
request.
o Annually, AIC will re-evaluate and may make changes to each
investment level model based upon Morningstar's recommendations.
When AIC updates the models, we will send you Written Notice of
the updated models at least 30 days in advance of the date the
updated models are to be effective. If
Excel Performance VUL 21 UC
you wish to accept the changes in your selected model, you will
not need to take any action, as your Account Value and any
subsequent premium will be automatically reallocated pursuant to
the updated model. If you do not wish to accept the changes to
your selected model, you can change to a different model or
withdraw from the Model Asset Allocation program.
o If you are currently participating in a Model Asset Allocation
model and you make changes to your allocations outside the model,
you will not receive future notifications of model changes. You
will then be considered as having withdrawn from the Model Asset
Allocation program and as having cancelled your relationship with
AIC for purposes of implementing the program with your Policy.
o AIC is compensated by us as principal underwriter for the Policy.
We and AIC may receive fees for administrative services from
other portfolios in the models. This additional compensation and
related responsibilities may create conflicts of interest as AIC
determines what portfolios should be in the models. Also, Calvert
Variable Series, Inc. and Summit Mutual Funds, Inc., which are
part of the UNIFI Mutual Holding Company and therefore are
affiliated with us, have portfolios offered through the Policy
(these portfolios may or may not be included in the models). We
believe any potential risk of a conflict of interest in these
arrangements may be reduced by contracting with Morningstar to
independently evaluate and recommend the selection, allocation
weighting, and periodic updates regarding portfolios in the
models.
There is no additional charge for selecting the Model Asset Allocation
program. Although asset allocation programs are intended to mitigate investment
risk, there is a risk that investing pursuant to a model will still lose value.
For information about risks of participating in the Model Asset Allocation
program and more detail about the program, including more information about
conflicts of interest, ask for a copy of this prospectus' Statement of
Additional Information. More information about AIC's role as investment adviser
for the program is available on AIC's Form ADV Part II which is delivered to you
at the time you subscribe to the program. We may modify or discontinue the Model
Asset Allocation program at any time.
OTHER IMPORTANT POLICY INFORMATION
POLICY APPLICATION AND ISSUANCE
The Insured must not be older than age 80 on the Insured's birthday
nearest to the Policy Date. The minimum initial Specified Amount (or "face
amount") of life insurance is $100,000. To purchase a Policy, you must submit an
application, at least the Initial Premium (see below), and provide evidence of
the proposed Insured's insurability satisfactory to us. Before accepting an
application, we conduct underwriting to determine insurability. We reserve the
right to reject any application or premium. If we issue a Policy, insurance
coverage will be effective as of the Policy Date.
Replacing an existing life insurance policy is not always your best choice.
Evaluate any replacement carefully.
When you apply for your Policy, you will choose one of three death
benefit options, which will be used to determine the death benefit.
o Application in Good Order
o All application questions must be answered, but particularly note
these requirements:
o The Owner's and Insured's full name(s), Social Security number
(tax identification number for a business or trust Owner), date
of birth, and certain other required information must be
included.
o Your premium allocations must be complete, be in whole
percentages, and total 100%.
o Initial Premium requirements must be met (see below).
o Your signature and your agent's signature must be on the
application.
o City, state and date the application was signed must be
completed.
o You must provide all information required for us to underwrite
your application (including health and medical information about
the Insured, and other information we consider relevant).
o Please give us your e-mail address to facilitate receiving
updated Policy information by electronic delivery.
o There may be forms in addition to the application required by law
or regulation, especially when a replacement of other coverage is
involved.
o Your agent must be both properly licensed and appointed with us.
o Premium Requirements
Your premium checks should be made payable to "The Union Central Life
Insurance Company." We may postpone crediting payment of your initial premium
made by personal check until the check has been honored
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by your bank. Payment by certified check, banker's draft, or cashier's check
will be promptly applied. Under our electronic fund transfer program, you may
select a monthly payment schedule for us to automatically deduct premiums from
your bank account or other sources.
Initial Premium
o At least the Monthly Minimum No-Lapse Premium times the number of
months between the Policy Date and the date the Policy is issued
plus one month.
Additional Premiums
o Payment of additional premiums is flexible, but must be enough to
cover Policy charges.
o If a premium increases the Net Amount at Risk, it is subject to
evidence of the Insured's continued insurability and our
underwriting requirements as to the amount of the increase.
o Planned Periodic Premiums may be paid annually, semi-annually,
quarterly, or monthly. You may change your Planned Periodic
Premium, subject to our approval. Because Account Value can
fluctuate depending upon the performance of your selected
variable Investment Options, payment of your Planned Periodic
Premiums does not guarantee that your Policy will remain in
force. Your Policy can lapse even if you pay all Planned Periodic
Premiums on time.
o If there is a Policy loan, you should identify any payment
intended to reduce a loan as a loan repayment; otherwise it will
be treated as a premium and added to the Account Value.
o We reserve the right to limit premiums or refund any values so
the Policy qualifies as life insurance under the federal Internal
Revenue Code.
o Allocating Premium
You may allocate your premiums among the variable Investment Options
(the Subaccounts) and the Fixed Account option. The initial allocation
instructions in your Policy application will be used for additional premiums
until you change your allocation instructions.
o Allocations must be in whole percentages, and total 100%.
o You may change your allocation by sending us Written Notice or
through an authorized telephone transaction. The change will
apply to premiums received on or after the date we receive your
Written Notice or authorized telephone transaction.
o All premiums will be allocated pursuant to your instructions on
record with us, except your initial premium and any additional
premiums received prior to your Policy's Right to Examine
Transfer Date.
Prior to the Right to Examine Transfer Date, we will hold your initial
Net Premium and any additional Net Premiums in the Money Market Subaccount. On
the Right to Examine Transfer Date, we will invest your Account Value in the
Investment Options pursuant to your application allocation instructions. If, by
the Right to Examine Transfer Date, you decide to cancel your Policy, we will
refund the premiums paid minus Policy Debt and partial withdrawals.
Until your Policy is issued, premium payments we receive are held in
our general account and are credited with interest at a rate we determine.
ACCOUNT VALUE
On your Policy's Issue Date, Account Value (or "policy value" or
"accumulation value") equals your initial Net Premium (premium less the Percent
of Premium Charge) minus any Monthly Deductions since the Policy Date. On any
Business Day thereafter, your total Account Value equals the sum of Account
Value in the Separate Account variable Investment Options, the Fixed Account,
and the loan account, plus any Net Premium received that Business Day, but not
yet allocated.
Separate Account Value
Premiums or transfers allocated to Subaccounts are accounted for in
Accumulation Units. The Account Value held in the Separate Account Subaccounts
on any Business Day is determined by multiplying each Subaccount's unit value by
the number of Accumulation Units held in that Subaccount. We will determine the
value of the assets of each Subaccount at the close of trading on the New York
Stock Exchange on each Business Day.
The unit value of each Subaccount reflects the investment performance
of that Subaccount. The unit value of each Subaccount on any Business Day equals
the unit value of the Subaccount on the previous Business Day multiplied by the
net investment factor for the Subaccount. The net investment factor for each
Subaccount can be determined on any Business Day by using the following
calculation:
o the net asset value per share of the Subaccount's underlying
portfolio as of the end of the current Business Day, plus the per
share amount of any dividend or capital gain distribution paid by
that underlying portfolio since the previous Business Day, plus
the per share amount of any taxes payable by the Separate
Account; divided by
Excel Performance VUL 23 UC
o the net asset value per share of the Subaccount's underlying
portfolio as of the end of the previous Business Day, minus
o the daily risk charge.
When transactions are made to or from a Subaccount, the actual dollar
amounts are converted to Accumulation Units. The number of Accumulation Units
for a transaction is equal to the dollar amount of the transaction divided by
the Accumulation Unit value on that Business Day. Each transaction described
below will increase or decrease your Accumulation Units.
The number of Accumulation Units in a Subaccount will increase when:
o Net Premiums are credited to it; or
o amounts are transferred to it from other Subaccounts, the Fixed
Account, or the loan account.
The number of Accumulation Units in a Subaccount will decrease when:
o partial withdrawals (and any partial withdrawal fees) are taken
from it;
o Monthly Deductions are taken from it;
o transfer charges are taken from it; or
o amounts are transferred out of it into other Subaccounts, the
Fixed Account, or the loan account.
o Fixed Account Value
The Account Value of the Fixed Account on any Business Day equals:
o Net Premiums credited to the Fixed Account; plus
o any transfers from the Subaccounts or the loan account to the
Fixed Account; plus
o interest credited to the Fixed Account; minus
o any partial withdrawal (and partial withdrawal fee) taken from
the Fixed Account; minus
o the Fixed Account's share of any Monthly Deductions from Account
Value; minus
o any transfer fees taken from the Fixed Account; minus
o amounts transferred from the Fixed Account to the Subaccounts or
the loan account.
o Loan Account Value
The Account Value in the loan account on any Business Day equals:
o amounts transferred to the loan account from the Investment
Options (the Subaccounts and the Fixed Account); plus
o interest credited to the loan account; minus
o amounts transferred from it into the Investment Options.
(Also see DEFINED TERMS for the definition of "Policy Debt.")
TELEPHONE TRANSACTIONS
Telephone Transactions Permitted
o Transfers among Investment Options.
o Establish systematic transfer programs.
o Change premium allocations.
How to Authorize Telephone Transactions
o Upon your authorization on the Policy application or in Written
Notice to us, you, your registered representative or a third
person named by you may do telephone transactions on your behalf.
You bear the risk of the accuracy of any designated person's
instructions to us.
Telephone Transaction Rules
o Must be received by close of the New York Stock Exchange ("NYSE")
(usually 4:00 p.m. Eastern Time); if later, the transaction will
be processed the next day the NYSE is open.
o Calls will be recorded for your protection.
o For security, you or your authorized designee must provide your
Social Security number and/or other identification information.
o May be discontinued at any time as to some or all Owners.
We are not liable for following telephone transaction instructions we reasonably
believe to be genuine.
ELECTRONIC DELIVERY AND COMMUNICATIONS
You may access certain documents relating to the Policy and Subaccounts
electronically. Current prospectuses and reports for the Policy and Subaccounts
are available on our Website, and updated prospectuses are posted on or about
May 1 of each year. Prospectuses may be supplemented throughout the year, and
copies of all supplements are also available on our Website. We post annual
reports on our Website shortly after March 1 each year.
We may make other documents available to you electronically through the
email address that you provide to us. When electronic delivery becomes
available, and upon your election to receive information online, we will notify
you when a transaction pertaining to your Policy has occurred or a document
impacting your Policy or the Subaccounts has been posted. In order to receive
your Policy documents online you should have regular and continuous Internet
access.
Excel Performance VUL 24 UC
MISSTATEMENT OF AGE OR GENDER
If an Insured's age or gender has been misstated on the application, an
adjustment will be made to reflect the correct age and gender. If the
misstatement is discovered at death, the Policy death benefit and any additional
benefits provided will be adjusted based on what the cost of insurance rate as
of the most recent Monthly Date would have purchased at the Insured's correct
age and gender. If the misstatement is discovered prior to death, the Cash
Surrender Value will be adjusted, based on the Insured's correct age and gender,
to reflect the expense charges, Surrender Charges, and cost of insurance rates
from the Policy Date.
SUICIDE
We will terminate the Policy and give back the premiums received, less
any partial withdrawals and Policy Debt, if the Insured, while sane or insane,
commits suicide within two years after the date the Policy was issued. We will
pay only the Monthly Deductions for an increase in Specified Amount of insurance
if the Insured, while sane or insane, commits suicide within two years after the
effective date of any increase.
INCONTESTABILITY
We will not contest the Policy, in the absence of fraud, after it has
been in force while the Insured is alive for two years from the Issue Date, nor
will we contest any increased benefits later than two years after the effective
date of such increase. If you did not request the increase or if evidence of
insurability was not required, we will not contest the increase. Increased
benefits, for the purposes of this provision, shall include any favorable Policy
changes you request. If the Policy is reinstated, the incontestable period will
start over again beginning on the reinstatement date, but only for statements
made in the application for reinstatement. Riders to the Policy may have
separate incontestability provisions.
ASSIGNMENT
You may assign your Policy by giving Written Notice. We will not be
responsible for the validity of an assignment. We will not be liable for any
payments we make or actions we take before we receive Written Notice of an
assignment. An assignment is subject to any Policy Debt.
LAPSE AND GRACE PERIOD
o Minimum No-Lapse Period
Because Account Value can fluctuate depending upon the performance of
your selected variable Investment Options, your Policy can lapse, even if you
pay all Planned Periodic Premiums on time.
Lapse of the Policy may result in adverse tax consequences.
See discussion at TAX TREATMENT OF LOANS AND OTHER DISTRIBUTIONS.
This Policy will lapse with no value when the Policy's Cash Surrender
Value is not enough to cover any due but unpaid charges. However, we guarantee
the Policy will remain in force for the period shown in your Policy's schedule
page so long as the premium paid, less partial withdrawals and Policy Debt,
equals or exceeds the sum of the monthly Minimum No-Lapse Premiums from the
Policy Date to the most recent Monthly Date. Your minimum no-lapse period and
Minimum No-Lapse Premium are shown in your Policy schedule.
o Grace Period
If the Cash Surrender Value on any Monthly Date is less than the
Monthly Deduction for the next Policy month, you will have a 61-day grace period
to make a premium payment to continue your Policy. The minimum premium to
continue the Policy is the amount which will result in the Cash Surrender Value
on the date the grace period began being equal to the current Monthly Deduction
plus the next two Monthly Deductions. At the start of the grace period, we will
mail a notice of the minimum premium necessary to keep the Policy in force to
you at your current address on record with us and to any assignee on record.
Insurance coverage continues during the grace period. If sufficient premium is
not paid by the end of the grace period, the Policy will terminate without value
as of
Excel Performance VUL 25 UC
the first day of the grace period. If the Insured dies during the grace period,
we will deduct outstanding Policy Debt and Policy charges due but not paid from
the death benefit proceeds payable.
REINSTATEMENT
If the Policy lapses because a grace period ended without a sufficient
payment being made, you may reinstate it within five years of the date of lapse,
so long as the Insured is Attained Age 80 or less. To reinstate, we must
receive:
o Written application signed by you and the Insured;
o Evidence of the Insured's insurability satisfactory to us, and
the insurability of any insured covered under an optional benefit
rider;
o Premium at least equal to (a + b + c - d) divided by (e) where:
(a) is the sum of all due and unpaid monthly deductions during
the grace period;
(b) is the sum of monthly deductions for three months from the
date of reinstatement;
(c) is the surrender charge on the date of reinstatement;
(d) is the account value at the beginning of the grace period;
and
(e) is one minus the premium charge.
o Repayment or reinstatement of any outstanding Policy Debt.
The effective date of reinstatement will be the Monthly Date on or next
following the date the reinstatement is approved.
The Account Value on the date of reinstatement will equal the Net
Premium paid to reinstate the Policy; plus the Account Value at the beginning of
the grace period; minus the sum of the due and unpaid Monthly Deductions during
the grace period.. The Surrender Charge at reinstatement will be based on the
original Policy Date and the dates of any increases in Specified Amount as if
the Policy had never terminated.
The Policy cannot be reinstated once it has been fully Surrendered.
DELAY OF PAYMENTS OR TRANSFERS
We will usually pay any amounts from the Separate Account requested as
a partial withdrawal or Surrender within seven days after we receive your
Written Notice. We can postpone such payments or any transfers out of a
Subaccount if:
o the NYSE is closed for other than customary weekend and holiday
closings, or trading on the NYSE is restricted as determined by
the SEC; or
o the SEC permits delay for the protection of security holders; or
o an emergency exists as determined by the SEC, as a result of
which it is not reasonably practical to dispose of securities, or
not reasonably practical to determine the value of the net assets
of the subaccounts.
The applicable rules of the SEC will govern as to whether these conditions
exist.
We may defer payments of a Policy loan, partial withdrawal or full
Surrender from the Fixed Account for up to six months from the date we receive
your Written Notice requesting the loan, withdrawal or Surrender.
BENEFICIARY
The beneficiary will receive the death benefit proceeds when the
Insured dies. You name the primary beneficiary and any contingent beneficiaries
in your application. If no primary beneficiary is living when the Insured dies,
we will pay to the contingent beneficiary. If no contingent beneficiary is
living when the Insured dies, we will pay you or your estate. Unless otherwise
provided, if any beneficiary dies within 30 days after the Insured dies as the
result of the same disaster, we will pay the death benefit proceeds as if that
beneficiary died first.
Unless your beneficiary designation provides otherwise, we will follow
these rules:
o We will pay equal shares when more than one beneficiary of the
same class is to share the funds.
o No revocable beneficiary has rights in this Policy until the
Insured dies.
o An irrevocable beneficiary cannot be changed without his or her
consent.
o The interest of any beneficiary is subject to the rights of any
assignee shown on our records.
o When beneficiaries are not shown by name (such as "children"), we
may find who they are from sworn statements and not wait for
court records.
Excel Performance VUL 26 UC
You may change your beneficiary at any time while the Insured is living
by sending Written Notice to us. We must approve any change. If approved, the
change will be effective as of the date you signed the Written Notice. We will
not be liable for any payments we make or actions we take before the change is
approved.
MINOR OWNER OR BENEFICIARY
Generally, a minor may not own the Policy solely in the minor's name
and cannot receive payments directly as a Policy beneficiary. Parental status
does not automatically give parents the power to provide an adequate release to
us to make beneficiary payments to the parent for the minor's benefit. A minor
can "own" a Policy through the trustee of a trust established for the minor's
benefit, or through the minor's named and court appointed guardian, who owns the
Policy in his or her capacity as trustee or guardian. Where a minor is a named
beneficiary, we may be able to pay the minor's beneficiary payments to the
minor's trustee or guardian. Parents seeking to have a minor's interest made
payable to them for the minor's benefit are encouraged to check with their local
court to determine the process to claim proceeds on behalf of the minor; it is
often a very simple process that can be accomplished without the assistance of
an attorney. If there is no adult representative able to give us an adequate
release for payment of the minor's beneficiary interest, we will retain the
minor's interest on deposit until the minor attains the age of majority.
POLICY CHANGES
You may request to change your Specified Amount, death benefit option,
or riders. Any change to your Policy is effective only if by Written Notice on a
form acceptable to us, and only when recorded on our records. Information on how
to contact us to determine what information is needed and where you can get
various forms for Policy changes is shown on this prospectus' first two pages
and last page. When a Policy change is made, we will send you a revised Policy
schedule that will show the updated coverage and any new charges.
"RIGHT TO EXAMINE" PERIOD
You may cancel your Policy for a refund during your "right to examine"
or "free look" period. This period expires 10 days after you receive your Policy
(30 days after if it is a replacement for another policy), or 45 days after your
application is signed, whichever is later. If you decide to cancel the Policy,
you must return it by mail or delivery to the Service Center, home office, or to
the Union Central selling agent by the date the "right to examine" period
expires. Your Policy will be void from the beginning. We will refund the
premiums paid minus Policy Debt and partial withdrawals.
OPTIONAL FEATURES
Subject to certain requirements, one or more of the optional insurance
benefits described in APPENDIX A may be added to your Policy by rider. The cost
of any optional insurance benefit will be deducted monthly from Account Value as
stated in this prospectus' CHARGES section.
NONPARTICIPATING
The Policy is nonparticipating. No dividends will be paid under the
Policy.
POLICY DISTRIBUTIONS
The principle purpose of the Policy is to provide a death benefit upon
the Insured's death, but before then you may also borrow against the Policy's
Cash Surrender Value, take a partial withdrawal, or fully Surrender it for its
Cash Surrender Value. Tax penalties and Surrender Charges may apply to amounts
taken out of your Policy. The Policy will terminate and all insurance will stop
when the Insured dies.
DEATH BENEFIT
Upon the Insured's death, we will pay to the Policy beneficiary:
o the death benefit on the Insured's life under the death benefit
option in effect; plus
o any additional life insurance proceeds provided by any optional
benefit or rider; minus
Excel Performance VUL 27 UC
o any Policy Debt; minus
o any overdue Monthly Deductions, including the Monthly Deduction
for the month of death.
We will pay the death benefit proceeds after we receive satisfactory
proof that the Insured died while the Policy was in force and other proof that
we may require in order to investigate the claim. We will pay the death benefit
proceeds in a lump-sum payment to the beneficiary. We will include interest from
the Insured's date of death to the payment date. The rate of interest will be at
least the amount required by law. Full payment of the death benefit proceeds
discharges us from any and all claims.
o Death Benefit Options
When you apply for your Policy, you will choose one of three death
benefit options, which will be used to determine the death benefit.
Death Benefit Option A
Under Option A, the death benefit is the greater of:
o the Specified Amount of insurance coverage; and
o the Account Value multiplied by the corridor factor.
Death Benefit Option B
Under Option B, the death benefit is the greater of:
o the Specified Amount of insurance coverage plus the Account
Value; and
o the Account Value multiplied by the corridor factor.
Death Benefit Option C
Under Option C, the death benefit is the greater of:
o the Specified Amount of insurance coverage plus the sum of
premiums paid minus the sum of partial withdrawals taken; and
o the Account Value multiplied by the corridor factor.
If you select Option C and the sum of partial withdrawals taken is
greater than the sum of premiums paid, the death benefit may be less than the
Specified Amount.
Excel Performance VUL 28 UC
When you apply for your Policy, you will also choose one of two
alternative tests to evaluate whether your Policy qualifies as a life insurance
contract under the Internal Revenue Code. Once you have chosen a test for tax
qualification, you cannot change it. If you choose the guideline premium test,
total premium payments may not exceed the guideline premium payment limitations
for life insurance set forth under the Internal Revenue Code. If you choose the
cash value accumulation test, the guideline premium limitations do not apply.
The corridor factors are higher for the cash value accumulation test than for
the guideline premium test. The corridor factors are shown in the Policy
schedule.
o Changes in Death Benefit Option
You select the death benefit option when you apply for the Policy. You
also may change the death benefit option after the first Policy year, as
discussed below.
Changes in Death Benefit Option Rules
o Your request for a change must be by Written Notice.
o You can only change your Policy death benefit option once each
Policy year. The change will be effective on the Monthly Date
after we receive (or, if evidence of insurability is necessary,
after we approve) your Written Notice.
o There is no fee to change your Policy death benefit option.
o Changing from Option B to Option A, or from Option C to Option A:
The Specified Amount will not change, and the death benefit will
be reduced to equal the Specified Amount.
o Changing from Option A to Option B, or from Option C to Option B:
The Specified Amount will be adjusted so that the Net Amount at
Risk is unchanged.
o The change is allowed only if the new Specified Amount of
insurance meets the requirements stated in the Changes in
Specified Amount section, below.
o Changes in Specified Amount
The initial Specified Amount is set at the time we issue your Policy.
The Specified Amount may change from time to time, as discussed below. A change
in Specified Amount could have federal tax consequences (See the TAX MATTERS
section.).
Under the Scheduled Increase Rider for the Insured, we will
automatically increase the Specified Amount on Annual Dates. The amount of the
increase is shown on the Policy schedule. Total increases from the rider may not
exceed two times the initial Specified Amount. No increase will be made after
the Annual Date nearest the Insured's 65th birthday. We will mail to you a
revised Policy schedule for each increase, Acceptance is automatic. You may
reject the increase by Written Notice to us and return of the revised Policy
schedule within 30 days of the increase date. There is no charge for the rider.
In addition, on or after one year from the Policy Date, you may change
the current Specified Amount of insurance coverage by Written Notice on a form
provided by us, and subject to our approval. Any change will take effect on the
Monthly Date on or after the date we receive your Written Notice.
INCREASE () in Coverage Rules
o The minimum amount of an increase in Specified Amount of insurance coverage
is $25,000.
o An increase of the Specified Amount will require evidence of insurability
satisfactory to us and be subject to our underwriting limits in place at
that time. (Underwriting requirements do not apply to requested increases
if certain riders are part of your Policy.)
o Any increase of the Specified Amount will be subject to increased cost of
insurance charges, monthly Specified Amount charges, and Surrender Charges
based on the Insured's gender and the Issue Age and rate class for the
increase. You will receive a revised Policy schedule stating the increased
charges.
DECREASE () in Coverage Rules
o The amount of any decrease may be no less than $1,000.
o Any reduction in the Specified Amount will be in the following order:
- first, reduce the most recent increase of the Specified Amount;
- then, the next most recent increases; and
- finally, the Policy's initial Specified Amount.
o Any decrease of the Specified Amount you request will not reduce the
Surrender Charges or the monthly Specified Amount charges in effect at the
time of the decrease.
o The Specified Amount of coverage after the decrease must be at least
$50,000. We may limit any requested decrease to the amount necessary to
keep the Policy in compliance with maximum premium limits under federal tax
law.
o If the change is within the minimum no-lapse period, we will update the
monthly Minimum No-Lapse Premium on the revised Policy schedule.
Excel Performance VUL 29 UC
o Use of Accounting Benefit Rider and Supplemental Coverage Rider
When you apply for the Policy, you can combine coverage under either or
both the Accounting Benefit Rider (ABR) and the Supplemental Coverage Rider
(SCR) with coverage under the base Policy. You must allocate at least $50,000 to
base Specified Amount, and the total Specified Amount must be at least $100,000
if you elect the ABR and $250,000 if you elect the SCR. The SCR Specified Amount
cannot exceed nine (9) times the base Specified Amount. Use of these riders will
change the cost of your insurance coverage.
Accounting Benefit Rider
Allocating a portion of the total Specified Amount to the ABR increases
early year Cash Surrender Values and decreases later year Cash Surrender Values,
as compared to all base coverage. There is no Surrender Charge associated with
the ABR Specified Amount, but Monthly Deductions for the rider generally are
higher than Monthly Deductions for base coverage. The Monthly Deduction for the
ABR consists of a cost of insurance charge and an ABR Specified Amount charge.
The ABR Specified Amount charge is an amount per $1000 of ABR Specified Amount
and will vary based on gender, rate class, issue age, Policy year, and Specified
Amount.
This rider is available only at issue. You cannot surrender the rider
separately from the Policy.
Supplemental Coverage Rider
The Supplemental Coverage Rider ("SCR") provides the opportunity to
allocate part of the Policy's Specified Amount to this rider. The SCR will
adjust over time to maintain total death benefit coverage as described below.
The death benefit for the SCR is the difference between your total
death benefit and the sum of the base death benefit and ABR death benefit. The
SCR death benefit automatically adjusts daily as your base and ABR death
benefits change. The total death benefit depends on which death benefit option
is in effect:
You may allocate a portion of the total specified amount to the SCR.
The SCR death benefit will adjust over time to maintain the total death benefit
as described below. The SCR death benefit at any point in time equals the
difference between the total death benefit and the death benefit calculated
without the SCR. The total death benefit depends on the death benefit option you
select.
Option A: If Option A is in effect, the total death benefit is the greater of:
1. the Specified Amount of the Policy plus any ABR Specified Amount plus
the SCR Specified Amount; and
2. the Account Value multiplied by the corridor factor.
Option B: If Option B is in effect, the total death benefit is the greater of:
1. the Specified Amount of the Policy plus any ABR Specified Amount plus
the SCR Specified Amount plus the Account Value; and
2. the Account Value multiplied by the corridor factor.
Option C: If Option C is in effect, the total death benefit is the greater of:
1. the Specified Amount of the Policy plus any ABR Specified Amount plus
the SCR Specified Amount plus the sum of premiums paid minus the sum
of partial withdrawals taken; and
2. the Account Value multiplied by the corridor factor.
If the sum of partial withdrawals taken is greater than the sum of
premiums paid, the death benefit may be less than the Specified Amount.
If the Account Value grows sufficiently large, it is possible for the
SCR death benefit to become zero. As long as the SCR death benefit remains zero,
the SCR cost of insurance will be zero. The SCR death benefit can never be less
than zero. Even when the SCR death benefit is zero, the rider remains in effect
until you remove it from the Policy.
Example: If your Account Value increases over time due to positive
investment performance in the Subaccounts you choose, and you elect the
cash value accumulation test and death benefit option A, your Account
Value multiplied by the corridor factor could exceed the sum of the
base and ABR Specified Amounts. In that situation, your SCR death
benefit would reduce so that your total death benefit remains constant.
Eventually, your Account Value could peak and begin to decline so that,
when multiplied by the corridor factor, the result would become less
than the sum of the base and ABR Specified Amounts. In that situation,
your SCR death benefit would increase so that your total death benefit
remains constant.
Excel Performance VUL 30 UC
There is no Surrender Charge associated with the SCR Specified Amount.
The Monthly Deduction for the SCR consists of a cost of insurance charge and an
SCR Specified Amount charge. The SCR Specified Amount charge is an amount per
$1000 of SCR Specified Amount and will vary based on gender, rate class, issue
age, Policy year, and Specified Amount. Current rates for the SCR generally are
lower than current rates for the base Policy, but maximum rates generally are
higher.
No Maturity Date
This Policy does not have a maturity date. There are no cost of
insurance charges after the Insured reaches Attained Age 121.
POLICY LOANS
You may obtain a loan from the Cash Surrender Value of your Policy. Any
loan transaction will permanently affect your Account Value. We may require you
to sign a loan agreement. You may ask your sales representative or us to provide
illustrations giving examples of how a loan might affect your Account Value,
Cash Surrender Value and death benefit.
Surrender or lapse of a Policy while a loan is outstanding could result
in significant tax consequences. See the discussion at TAX TREATMENT OF LOANS
AND OTHER DISTRIBUTIONS.
Amount You Can Borrow Loan Interest Rate
- --------------------------------------------------------------- ------------------------------------------------------
Standard Policy Loan. You may borrow no more than: Standard Loan Interest Rate. Current net annual
o the Cash Surrender Value; minus loan interest rate of 1.0%: we charge a current
o loan interest on Policy Debt including the requested interest rate with a 4.0% effective annual yield
loan to the next Annual Date; minus (guaranteed not to exceed 4.0%), but we also credit
o the sum of the next three Monthly Deductions. an interest rate with an effective annual yield of
3.0% to any amounts in the loan account.
- --------------------------------------------------------------- ------------------------------------------------------
Amount You Can Borrow Loan Interest Rate
- --------------------------------------------------------------- ------------------------------------------------------
Preferred Rate Policy Loan. After five (5) Policy years, a Preferred Loan Interest Rate. Current net annual
portion of the Policy Debt may qualify for the preferred loan loan interest rate of 0.0%: we charge a current
interest rate. The portion eligible for the preferred loan interest rate with a 3.0% effective annual yield
interest rate is: (guaranteed not to exceed 3.5%), but we also credit
o the Account Value; plus an interest rate with an effective annual yield of
o the sum of partial withdrawals taken, minus 3.0% to any amounts in the loan account.
o the sum of premiums paid.
Loan Rules
o The Policy must be assigned to us as security for the loan.
o We will accept a loan request signed by you on our form of Written Notice
by mail or facsimile. However, when accepting a request by a method not
requiring an original signature, there is a greater possibility that
unauthorized persons can manipulate your signature and make changes on your
Policy (including withdrawals) without your knowledge.
o We will transfer all loan amounts from the Subaccounts and the Fixed
Account to a loan account. The amounts will be transferred on a Pro-Rata
basis, unless you instruct us otherwise. If the value of an Investment
Option after a transfer pursuant to your instructions is less than $100,
the amounts will be transferred on a Pro-Rata basis.
o Loan interest is due on each Annual Date. If the interest is not paid when
due, we will transfer an amount equal to the unpaid loan interest only from
the Policy Investment Options you designate; if that is not possible (due
to insufficient value in an Investment Option you elect) or you have not
provided such instructions, we will deduct loan interest on a Pro-Rata
basis from balances in all Subaccounts and the Fixed Account.
o If Policy Debt exceeds Account Value minus the Surrender Charge minus
accrued expenses and charges, you must pay the excess or your Policy will
lapse.
o You may repay Policy Debt in full or in part any time while the Policy is
in force. We will deduct the amount of the loan repayment from the loan
account and allocate that amount among the Subaccounts and the Fixed
Account in the same percentages as Net Premium is allocated on the date of
repayment. You must instruct us to treat your payment as a loan repayment;
otherwise, we will treat any unspecified payment as premium.
o The death benefit will be reduced by the amount of any Policy Debt on the
date of the Insured's death.
o We may defer making a loan from the Fixed Account for up to six months
unless the loan is to pay premiums to us.
Excel Performance VUL 31 UC
CASH SURRENDER
While the Insured is alive, you may terminate the Policy for its Cash
Surrender Value. After a full Surrender, all your rights in the Policy end, and
you may not reinstate the Policy.
Cash Surrender Rules
o We will accept a full Surrender request signed by you on our form
of Written Notice by mail or facsimile. However, when accepting a
request by a method not requiring an original signature, there is
a greater possibility that unauthorized persons can manipulate
your signature and make changes on your Policy (including
withdrawals) without your knowledge.
o The applicable Surrender Charge is described in your Policy and
in the CHARGES section of this prospectus.
o We may defer Surrender payments from the Fixed Account for up to
six months from the date we receive your request.
PARTIAL WITHDRAWAL
While the Insured is alive, you may withdraw part of the Account Value.
The amount requested and any partial withdrawal fee will usually be deducted
from the Account Value on the date we receive your request if received before 3
p.m. Central Time.
If Death Benefit Option A (described above) is in effect, then the
Specified Amount will be reduced by the partial withdrawal amount plus any fee.
If Death Benefit Option B or Option C (described above) is in effect,
the Account Value will be reduced by the amount of the partial withdrawal, but
the Specified Amount of insurance coverage will not change.
Partial Withdrawal Rules
o We will accept a partial withdrawal request signed by you on our
form of Written Notice by mail or facsimile.
o The applicable partial withdrawal fee is stated in your Policy
and the CHARGES section of this prospectus.
- The minimum partial withdrawal amount is $100; the maximum
is an amount such that the remaining Cash Surrender Value is
at least an amount sufficient to maintain the Policy in
force for the next three months.
o A partial withdrawal is irrevocable.
o For tax purposes, partial withdrawals are treated as made first
from premiums paid and then from earnings, beginning with the
most recent premium payment, unless the Policy is a modified
endowment contract.
o Partial withdrawals will be deducted from your Policy Investment
Options on a Pro-Rata basis, unless you instruct us otherwise. If
the value of an Investment Option after a withdrawal pursuant to
your instructions is less than $100, the amounts will be deducted
on a Pro-Rata basis.
o Partial withdrawals result in cancellation of Accumulation Units
from each applicable Subaccount.
o We reserve the right to defer withdrawal payments from the Fixed
Account for up to six months from the date we receive your
request.
o Partial withdrawals may change the Minimum No-Lapse Premium
requirements. You may request a new illustration of Account Value
from us to demonstrate these changes.
o Depending upon the circumstances, a partial withdrawal may have
tax consequences.
PAYMENT OF POLICY PROCEEDS
A primary function of a life insurance policy is to provide payment of
Policy proceeds. Policy proceeds are payable upon the Insured's death, a full
Surrender or partial withdrawal of Account Value, or upon any other benefit
where certain proceeds are payable. We will make payment in a lump sum to the
beneficiary.
Rules for Payment of Policy Proceeds
o Payees must be individuals who receive payments in their own behalf unless
otherwise agreed to by us.
o We may require proof of your age or survival or the age or survival of the
payee.
o No payee may commute, encumber or alienate any proceeds under this Policy
before they are due. No proceeds are subject to attachment for any debt or
obligation of any payee.
Excel Performance VUL 32 UC
o Payment of Death Benefit Proceeds
We may pay death benefit proceeds in a lump sum by establishing an
interest bearing account for the beneficiary, in the amount of the death benefit
proceeds payable. The same interest rate schedule and other account terms will
apply to all beneficiary accounts in place at any given time. We will send the
beneficiary a checkbook within seven days after we receive all the required
documents, and the beneficiary will have immediate access to the account simply
by writing a check for all or any part of the amount of the death benefit
proceeds payable. The account is part of our general account. It is not a bank
account and it is not insured by the FDIC or any other government agency. As
part of our general account, it is subject to the claims of our creditors. We
receive a benefit from all amounts left in the general account.
TAX MATTERS
The following is only general information about federal tax law and is
not intended as tax advice to any individual. Tax laws affecting the Policy are
complex, may change and are affected by your facts and circumstances. We cannot
guarantee the tax treatment of the Policy or any transaction involving the
Policy. You should consult your own tax adviser as to how these general rules
and any applicable taxes will apply to you if you purchase a Policy.
o Life Insurance Qualification; Tax Treatment of Death Benefit
The Internal Revenue Code, as amended (the "Code") defines a life
insurance contract for federal income tax purposes. This definition can be met
if an insurance contract satisfies either one of two tests set forth in that
section. The Code and related regulations do not directly address the manner in
which these tests should be applied to certain features of the Policy. Thus,
there is some uncertainty about how those tests apply to the Policy.
Nevertheless, we believe the Policy qualifies as a life insurance
contract for federal tax purposes, so that:
o the death benefit should be fully excludable from the
beneficiary's gross income; and
o you should not be considered in constructive receipt of the Cash
Surrender Value, including any increases in Cash Surrender Value,
unless and until it is distributed from the Policy. However,
Congress has recently enacted new statutory provisions relating
to employer owned life insurance. The death benefit of life
insurance owned by an employer is taxable unless the Insured is a
certain class of employee and has been given notice and has
consented to coverage on his life. Specific statutory
requirements must be satisfied for the death benefit of employer
owned life insurance to be excluded from taxable income. Any
employer contemplating the purchase of a life insurance contract
should consult a tax advisor.
We reserve the right to make such changes in the Policy as we deem
necessary to assure it qualifies as a life insurance contract under the Code and
continues to provide the tax benefits of such qualification.
This Policy's flexibility and how you tailor it to meet your needs could cause
it to be a modified endowment contract. We recommend you consult with a tax
adviser to determine if desired Policy transactions may cause such treatment.
When a premium payment is credited which we believe causes the Policy to become
a modified endowment contract, we will notify you and offer you the opportunity
to request a refund of that premium in order to avoid such treatment. You have
30 days after receiving such a notice to request the refund.
Modified Endowment Contracts. The Code establishes a class of life
insurance contracts designated as modified endowment contracts. Distributions
from a modified endowment contract are taxed under different rules, most notably
distributions are treated as from income first (to the extent of any gain in the
contract) then from cost basis. There are other differences related to modified
endowment contracts, such as loans being treated as a distribution (see Tax
Treatment of Loans and Other Distributions below). The Code rules governing
whether a Policy will be treated as a modified endowment contract are extremely
complex. In general, a Policy is a modified endowment contract if the
accumulated premium payments made at any time during the first seven Policy
years exceed the sum of the net level premium payments which would have been
paid on or before such time if the Policy provided for paid-up future benefits
after the payment of seven level annual premiums. A Policy may also become a
modified endowment contract because of a material change. The determination of
whether a Policy is a modified endowment contract after a material change
generally depends upon
Excel Performance VUL 33 UC
the relationship of the Policy's death benefit and Account Value at the time of
such change and the additional premium payments made in the seven years
following the material change. A Policy may also become a modified endowment
contract if the death benefit is reduced.
A Policy issued in exchange for a modified endowment contract is also
treated as a modified endowment contract. However, we believe that a Policy
issued in exchange for a life insurance Policy that is not a modified endowment
contract will generally not be treated as a modified endowment contract if the
death benefit of the Policy is greater than or equal to the death benefit of the
Policy being exchanged. The payment of any premiums at the time of or after the
exchange may, however, cause the Policy to become a modified endowment contract.
You may, of course, choose to not make additional payments in order to prevent a
Policy from being treated as a modified endowment contract.
o Special Considerations for Corporations and Employers
Premium paid by a business for a life insurance Policy is not
deductible as a business expense or otherwise if the business is directly or
indirectly a beneficiary of the Policy. For purposes of the alternative minimum
tax ("AMT") that may be imposed on corporations, the death benefit from the
Policy, even though excluded from gross income for normal tax purposes, is
included in "adjusted current earnings" for AMT purposes. In addition, although
increases to the Policy's Cash Surrender Value are generally excluded from gross
income for normal income tax purposes, such increases are included in adjusted
current earnings for income tax purposes. In 2006, Congress adopted new rules
relating to Employer Owned Life Insurance. Any employer contemplating the
purchase of a new life insurance contract or a change in an existing contract
should consult a tax advisor regarding the Employee Notice and Consent
requirements to avoid the income taxation of the life insurance death benefits.
o Tax Treatment of Loans and Other Distributions
Upon a Surrender or lapse of the Policy, if the amount received plus
any outstanding Policy Debt exceeds the total cost basis in the Policy, the
excess will generally be treated as ordinary income subject to tax, regardless
of whether a Policy is or is not a modified endowment contract. However, the tax
consequences of distributions from, and loans taken from or secured by, a Policy
depend on whether the Policy is classified as a modified endowment contract.
"Cost Basis in the Policy" means:
o the total of any premium payments or other consideration paid for the
Policy, minus
o any withdrawals previously recovered that were not taxable.
Distributions from Policies Classified as Modified Endowment Contracts are
subject to the following tax rules:
o All distributions, including Surrenders and partial withdrawals, are
treated as ordinary income subject to tax up to the amount equal to
the excess (if any) of the Account Value immediately before the
distribution over the cost basis in the Policy at such time.
o Loans from or secured by the Policy are treated as distributions and
taxed accordingly. If you do not repay loan interest, the loan
interest itself is treated as a distribution.
o A 10% additional income tax is imposed on the portion of any
distribution from, or loan taken from or secured by, the Policy that
is included in income except where the distribution or loan is made on
or after the Owner attains age 59 1/2, is attributable to the Owner's
becoming disabled, or is part of a series of substantially equal
periodic payments for the life (or life expectancy) of the Owner or
the joint lives (or joint life expectancies) of the Owner and the
Owner's beneficiary.
Distributions from Policies Not Classified as Modified Endowment Contracts are
generally treated as first recovering the cost basis in the Policy and then,
only after the return of all such cost basis in the Policy, as distributing
taxable income. An exception to this general rule occurs in the case of a
decrease in the Policy's death benefit or any other change that reduces benefits
under the Policy in the first 15 years after the Policy is issued and that
results in a cash distribution to the Owner in order for the Policy to continue
complying with the Code's definition of life insurance. Such a cash distribution
will be taxed in whole or in part as ordinary income (to the extent of any gain
in the Policy).
Loans from, or secured by, a Policy that is not a modified endowment
contract are not treated as distributions. However, it is possible that reduced
rate loans could be treated as distributions rather than loans.
Distributions (including upon Surrender) and loans from, or secured by,
a Policy that is not a modified endowment contract are not subject to the 10%
additional income tax rule. If a Policy is not now but later becomes
Excel Performance VUL 34 UC
a modified endowment contract, then any distributions made from the Policy
within two years prior to the change will become taxable pursuant to modified
endowment contract rules.
o Other Policy Owner Tax Matters
Depending on the circumstances, the exchange of a Policy, a change in
the Policy's death benefit option, a Policy loan, a partial or full Surrender, a
lapse, a change in ownership, or an assignment of the Policy may have federal
income tax consequences. In addition, federal, state and local transfer and
other tax consequences of ownership or receipt of distributions from a Policy
depend on the circumstances of each Owner or beneficiary.
Interest paid on Policy loans generally is not tax deductible.
Aggregation of modified endowment contracts. Pre-death distributions
(including a loan, partial withdrawal, collateral assignment or full Surrender)
from a Policy that is treated as a modified endowment contract may require a
special aggregation to determine the amount of income recognized on the Policy.
If we or any of our affiliates issue more than one modified endowment contract
to the same Policy Owner within any 12-month period, then for purposes of
measuring the income on the Policy with respect to a distribution from any of
those Policies, the income for all those Policies will be aggregated and
attributed to that distribution.
Federal and state estate, inheritance and other tax consequences of
ownership or receipt of proceeds under the Policy depend upon your or the
beneficiary's individual circumstance.
Diversification requirements. Investments of the Separate Account must
be "adequately diversified" for the Policy to qualify as a life insurance
contract under the Code. Any failure to comply with diversification requirements
could subject you to immediate taxation on the incremental increases in Account
Value plus the cost of insurance protection for the year. However, we believe
the Policy complies fully with such requirements.
Owner control. The Treasury Department stated that it anticipates the
issuance of regulations or rulings prescribing the circumstances in which your
control of the investments of the Separate Account may cause you, rather than
us, to be treated as the owner of the assets in the Separate Account. To date,
no such regulations or guidance has been issued. If you are considered the Owner
of the assets of the Separate Account, income and gains from the Separate
Account would be included in your gross income.
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it
determined that owners were not owners of separate account assets. For example,
you have additional flexibility in allocating Policy premium and Account Value.
These differences could result in you being treated as the owner of a Pro-Rata
share of the assets of the Separate Account. In addition, we do not know what
standards will be set forth in the regulations or rulings which the Treasury may
issue. We therefore reserve the right to modify the Policy as necessary to
attempt to prevent you from being considered the Owner of the assets of the
Separate Account.
Paid-Up Life Insurance Benefit Endorsement. Electing this benefit may
have adverse tax consequences. The Internal Revenue Service has not ruled on the
use of this endorsement. We strongly urge you to consult legal counsel and your
personal tax adviser before electing this benefit.
Tax-advantaged arrangements. The Policy may be used in various
arrangements, including non-qualified deferred compensation or salary
continuance plans, split dollar insurance plans, executive bonus plans, tax
exempt and nonexempt welfare benefit plans, retiree medical benefit plans and
others. The tax consequences of such plans may vary depending on the particular
facts and circumstances of each individual arrangement. If you are contemplating
the use of the Policy in any arrangement the value of which depends in part on
its tax consequences, you should be sure to consult a qualified tax advisor
regarding the tax attributes of the particular arrangement and the suitability
of this Policy for the arrangement.
Excel Performance VUL 35 UC
LEGAL PROCEEDINGS
As of the date of this prospectus, there are no proceedings affecting
the Separate Account, or that are material in relation to our total assets.
HOW TO GET FINANCIAL STATEMENTS
Our financial statements are included in a Statement of Additional
Information ("SAI"). For information on how to obtain copies of these financial
statements, at no charge, see the STATEMENT OF ADDITIONAL INFORMATION;
REGISTRATION STATEMENT provision on the last page of this prospectus.
DISTRIBUTION OF THE POLICY
Our underwriter and affiliate, Ameritas Investment Corp., enters
into contracts with its own registered representatives to sell Policies and with
various broker-dealers ("Distributors") to distribute Policies through their
representatives. Total commission paid for the Policies and other information
about distribution compensation can be found in this Policy's Statement of
Additional Information ("SAI"). Instructions to obtain an SAI are on the last
page of this prospectus. It is also fair for you to ask a representative about
the commission they earn for the sale of a Policy. Information about
compensation we pay helps you determine whether a representative may have an
incentive to recommend our product over another. In addition to regularly
scheduled commission, which is indirectly paid for by certain Policy charges,
distribution compensation can include periodic cash incentives paid based upon
sales goals. We may enter into special compensation or reimbursement
arrangements with certain broker-dealers for, among other things, training of
sales personnel, marketing or other services they provide to our affiliates or
us. We may also pay other distribution expenses, marketing support allowances,
conference sponsorship fees and production incentive bonuses. The list of
broker-dealers to whom we pay conference sponsorship fees (typically ranging
from $10,000 to $25,000) and marketing support allowances may change from time
to time, but in calendar year 2007 the list included the following firms:
Harbour Investments, Investacorp, Inc., and Cullum & Burks. Any additional
compensation is paid out of our own assets and will not result in any additional
direct charge to you.
Excel Performance VUL 36 UC
APPENDIX A: Optional Features
This Appendix is intended to provide only a very brief overview of
additional benefits available to be added to your Policy by rider. Some of these
features are only available at the time the Policy is issued, and may not be
added later. For more information, contact your registered representative or us.
The cost for each rider, if any, is explained in the CHARGES section.
o Accelerated Benefit Rider
This rider provides the ability to accelerate the death benefit to be a
living benefit, allowing you to withdraw value from the Policy, as defined
in the rider, in the event of diagnosis of terminal illness. The amount
available as a living benefit is less than the total death benefit payable
under the Policy.
o Accidental Death Benefit Rider
This rider provides an additional death benefit, payable if the Insured's
death results from certain accidental causes.
o Accounting Benefit Rider ("ABR") *
This rider provides term insurance upon the Insured's life in addition to
the Specified Amount of insurance coverage under the Policy.
o Children's Insurance Rider
This rider provides term life insurance protection, as defined in the
rider, for the Insured's children.
o Guaranteed Insurability Rider
This rider guarantees that insurance coverage may be added at various
option dates without evidence of insurability. This benefit may be
exercised on the option dates even if the Insured is disabled.
o Insurance Exchange Rider
This rider provides the right to exchange the Policy for a new policy on
the life of a substitute insured. Exercise of the right is subject to
satisfactory evidence of insurability of the substitute insured. Costs
associated with the new policy will vary. For purposes of calculating any
surrender charges subsequently imposed on the policy acquired by exchange,
we will take into account the number of policy years that this Policy, and
the policy acquired by exchange, have been in force. Exercise of this rider
will result in a taxable exchange.
o Paid-Up Insurance Benefit Endorsement
This endorsement protects your Policy from lapsing under certain conditions
when your outstanding Policy Debt is large relative to your Account Value
and Specified Amount.
o Scheduled Increase Rider
This rider provides for automatic increases in the Specified Amount on each
Annual Date, subject to the terms of the rider. The amount of the increase
is specified in the rider. The Insured's rate class on the issue date of
the rider will be the rate class of the scheduled increases. You cannot add
this rider if you have chosen the cash value accumulation test as your tax
qualification test.
o Supplemental Coverage Rider ("SCR") *
This rider provides a supplemental death benefit that automatically adjusts
over time to maintain the total death benefit coverage you select. For
example, if your base death benefit (and any ABR term death benefit)
decreases below the total death benefit, the SCR death benefit will
increase to maintain the total death benefit amount.
o Term Insurance Rider
This rider provides term insurance upon an individual other than the
insured.
o Total Disability Benefit Rider
This rider provides that during periods of the Insured's total disability,
as defined in the rider, we will pay benefits to the Policy Owner by paying
some or all of the Policy premiums, and by waiving the Cost of Insurance
Charge for this rider. The Owner chooses the benefit level at the issue of
the rider.
o Waiver of Monthly Deduction Rider
This rider provides that during periods of the Insured's total disability,
as defined in the rider, certain Policy charges and charges for any Policy
riders will be waived.
* More information about the ABR and SCR riders is found in the Death Benefits
section of this prospectus.
Excel Performance VUL 37 UC
DEFINED TERMS
Defined terms, other than "we, us, our," "you and your," are shown
using initial capital letters in this prospectus.
Account Value / Accumulation Value / Policy Value means the sum of Net Premiums
paid, minus partial withdrawals, minus Policy charges, plus interest credited to
the Fixed Account and the loan account, adjusted for gains or losses in the
Subaccounts. The Account Value is comprised of amounts in the Subaccounts, the
Fixed Account, and the loan account.
Accumulation Unit means an accounting unit of measure used to calculate the
Account Value allocated to a Subaccount of the Separate Account. It is similar
to a share of a mutual fund.
Annual Date means the same date each year as the Policy Date.
Attained Age means the Issue Age plus the number of completed Policy years. With
respect to any increase in Specified Amount, Attained Age means the Issue Age
for the increase plus the number of complete years since the increase.
Business Day means each day that the New York Stock Exchange is open for
trading.
Cash Surrender Value means the Account Value, minus the Surrender Charge, minus
any Policy Debt.
Fixed Account is an account that credits a fixed rate of interest guaranteed by
us and is not affected by the experience of the variable Investment Options of
the Separate Account. The Fixed Account is part of our general account.
Insured means the person shown on the policy schedule upon whose life this
policy is issued.
Investment Options means collectively the Subaccounts and the Fixed Account. You
may allocate Net Premiums and reallocate Account Value among the Investment
Options.
Issue Age means the Insured's age as of the birthday nearest to the Policy Date.
With respect to any increase in Specified Amount, Issue Age means the Insured's
age as of the birthday nearest to the date of the increase.
Issue Date means the date on which the suicide and incontestability periods
begin. If we have received the initial premium from you, the Issue Date will
also be the date when you have life insurance coverage with us. If we have not
received the initial premium from you, you WILL NOT have coverage until the date
on which we receive the initial premium from you.
Minimum No-Lapse Premium means the amount that must be paid on a cumulative
basis to keep this Policy in force during the minimum no-lapse period as shown
on the Policy schedule.
Monthly Date means the same date of each month as the Policy Date.
Monthly Deduction means a charge made against the Account Value on each Monthly
Date for the coverage provided by this Policy and any attached riders.
Net Amount at Risk means the death benefit on the Monthly Date, discounted at
the Fixed Account minimum credited rate for one month, minus the Account Value
on the Monthly Date, after the Monthly Deduction has been taken except for the
cost of insurance.
Net Premium means the premium paid reduced by the premium charge, which will not
exceed the maximum premium charge shown on the Policy schedule.
Planned Periodic Premium means a level premium you intend to pay at a fixed
interval. The Planned Periodic Premium is shown on the Policy schedule.
Excel Performance VUL 38 UC
Policy Date means the date from which Policy months, years and anniversaries are
measured. The Policy Date will be determined by us unless you request a
different Policy Date that we approve. If the Issue Date is after the Policy
Date or we have not received the initial premium from you, you WILL NOT have
life insurance coverage on the Policy Date.
Policy Debt means the sum of all unpaid Policy loans and accrued interest on
Policy loans.
Pro-Rata means allocating a dollar amount among the Investment Options in
proportion to the Account Value in those Investment Options.
Right to Examine Transfer Date means 13 days after the Issue Date, or if later,
the date all requirements necessary to place the Policy in force are delivered
to us.
Specified Amount means a dollar amount used to determine the death benefit of
your Policy. It is shown on the Policy schedule. You may increase or decrease it
as provided in your Policy.
Subaccounts means the divisions within the Separate Account for which
Accumulation Units are separately maintained. Each Subaccount corresponds to a
single underlying non-publicly traded portfolio.
Surrender means termination of this Policy at your request for its Cash
Surrender Value while the Insured is alive.
Surrender Charge means the charge subtracted from the Account Value on the
Surrender of this Policy.
Valuation Period is the period commencing at the close of business of the New
York Stock Exchange on each Business Day and ending at the close of business on
the next succeeding Business Day.
We, Us, Our, Union Central means The Union Central Life Insurance Company.
Written Notice means information we have received at the Service Center, P.O.
Box 82550, Lincoln, NE 68501 (or Union Central, 1876 Waycross Road, Cincinnati,
Ohio 45240), fax 1-402-467-7335. A Written Notice must be signed by you, in good
order, and on a form approved by or acceptable to us. Call us if you have
questions about what form or information is required. When notice is permitted
and sent to us by facsimile, we have the right to implement the request if the
copied or facsimile signature appears to be a copy of a your genuine original
signature.
You, Your, Owner means the Owner as shown on the Policy schedule, unless
changed. The Insured may or may not be the Owner.
Excel Performance VUL 39 UC
IMSA
We are a member of the Insurance Marketplace Standards Association
("IMSA"). IMSA is a voluntary membership organization created by the life
insurance industry to promote ethical market conduct for individual life
insurance and annuity products. Our membership in IMSA applies to us only and
not to our products or affiliates.
THANK YOU
for reviewing this prospectus.
You should also review the fund prospectuses for the Subaccount variable
Investment Option underlying portfolios you wish to select.
IF YOU HAVE QUESTIONS,
wish to request a Statement of Additional Information,
or inquire about a Policy, including a personalized
illustration (without charge), contact your sales
representative, or write or telephone us at:
The Union Central Life Insurance Company
Service Center
P.O. Box 82550
Lincoln, Nebraska 68501
or
5900 "O" Street
Lincoln, Nebraska 68510
or
Union Central
1876 Waycross Road
Cincinnati, Ohio 45240
Toll-Free Telephone: 1-800-319-6902
Fax: 1-402-467-7335
Interfund Transfer Request Fax: 1-402-467-7923
Internet: www.unioncentral.com
REMEMBER, THE CORRECT FORM
is important for us to process your Policy elections and changes accurately.
Many service forms can be found in the "Products & Services" section of our
Internet site. Or, call us at our toll-free number and we will send you the form
you need.
ILLUSTRATIONS
Illustrations are tools that can help demonstrate how the Policy
operates, given the Policy's charges, Investment Options and any optional
features selected, how you plan to accumulate or access Account Value over time,
and assumed rates of return. Illustrations may also be able to assist you in
comparing the Policy's death benefits, Cash Surrender Values and Account Values
with those of other variable life insurance policies based upon the same or
similar assumptions. You may ask your sales representative or us (at our
toll-free telephone number) to provide an illustration, without charge, based
upon your specific situation.
STATEMENT OF ADDITIONAL INFORMATION;
REGISTRATION STATEMENT
A Statement of Additional Information ("SAI") with the same date as
this prospectus contains other information about the Separate Account and the
Policy. You may obtain a copy by calling our toll-free telephone number, at the
left. Within three Business Days after we receive your request for an SAI, we
will send your copy, without charge, by first class mail or e-mail. Information
about the Separate Account (including the SAI), is available on the SEC's
Internet site at www.sec.gov, or can be reviewed and, for a fee, copied at or
ordered from the SEC's Public Reference Room, 100 F Street, NE, Washington, D.C.
20549-0102. (You may direct questions to the SEC at 202-551-8090.)
REPORTS TO YOU
We will send a statement to you at least annually showing your Policy's
death benefit, Account Value and any Policy Debt. If your Policy activity is
limited to scheduled periodic premiums automatically deducted from your bank or
investment account, the annual report will also be the only confirmation you
have of premium payments and regular Monthly Deductions. We will confirm any
other premium payments, Policy Debt, transfers between Investment Options,
lapses, Surrender, partial withdrawals, and other Policy transactions as they
occur. You will receive additional periodic reports that the SEC may require.
(R) Ameritas Life Insurance Corp.
[Ameritas Life Insurance Corp.Logo]
A UNIFI Company
Excel Performance VUL Last Page SEC Registration #: 811-04473